Why the next great agricultural leap won’t come from machines.
The paradox of Canadian agriculture is that it is both a global powerhouse and a laggard. A sector that contributes over $140 billion to national GDP and feeds millions abroad is, by its own admission, underperforming.
Craig Klemmer, principal agricultural economist at Farm Credit Canada, has spent the past 15 years dissecting these contradictions. He delivers a sobering message: the only path forward is productivity — and the only way to get there is innovation.
Canada’s agricultural productivity, once the envy of its international peers, has been in slow decline since the early 2000s. From 1993 to 2000, the sector enjoyed annual productivity gains of over 2%. Today, the figure hovers between 0.8% and 1.4%. The implications are stark. If that trend continues, Canadian farms risk losing $30 billion in potential growth over the next decade. “That’s not just statistical trivia,” Klemmer says. “That’s money out of farmers’ pockets, food off Canadians’ tables, and competitiveness lost on global markets.”
A large part of the problem, he noted, is definitional. When asked what productivity means, many farmers conflate it with output. But true productivity — output relative to input — is a more nuanced metric. It encompasses not only yield but also efficiency: how much land, labour, water, and energy are required to grow a bushel of wheat or a tonne of canola. In this respect, Canadian agriculture has plateaued.
Yet the blame does not lie solely with producers. Investment in agricultural R&D, as a proportion of farm revenue, has been declining in Canada since the early 1990s. While Israel, Australia, and the United States have maintained or even increased their research investments, Canada has retrenched. “We are now punching below our weight,” Craig warned. “And in a world of climate volatility and geopolitical tension, that’s a dangerous position to be in.”
The sector’s economic footprint is substantial. According to a newly updated FCC report, plant science innovation alone contributes over $14.6 billion in value-added GDP, supports nearly 17,000 jobs in breeding, and an additional 20,000 in domestic seed trade and processing. Modern seed technologies — ranging from trait-specific hybrids to gene-edited varieties — account for $2.6 billion in output and over $1 billion in GDP. Canola, the poster child of Canadian agri-innovation, plays a dominant role in those figures.
More critically, plant science innovation plays a pivotal role in consumer welfare. Klemmer estimates that without modern seed technologies, food prices in Canada would be between 25% and 65% higher. That’s an extra $3,700 to $7,100 annually in grocery bills for the average household. “This is not just about farmers,” he said. “It’s about urban voters, food security, and economic resilience.”
Promises, Promises
But innovation is only as effective as its implementation. Canada’s agricultural sector, despite housing world-class research institutions, has been sluggish in adopting new technologies. A case in point: zero-till farming was developed in the 1950s, but widespread adoption only occurred decades later — when herbicide technologies finally caught up. Today, artificial intelligence offers similar promise. One Manitoba operation, Klemmer notes, has improved productivity by 5% using AI-driven decision tools. These technologies are less about predicting the future than empowering producers to make better decisions faster — whether that’s spraying before a pest outbreak or adjusting nitrogen levels on the fly.
Yet this progress comes with caveats. As agriculture becomes increasingly digitized, cybersecurity risks rise. Over half of all internet traffic today consists of bots — many designed to exploit unsecured networks. Farms, with their high cash flow and sensitive data, are soft targets.
Beyond technology, there is a strategic blind spot: the misallocation of capital. Canadian agri-tech investment lags far behind its southern neighbour. While the United States’ agricultural GDP is roughly six to eight times that of Canada’s, its agri-tech investment outpaces Canada’s by a factor of 23. “We’re not even close to pulling our weight,” Klemmer observes. “It’s not just about research — it’s about commercialization, and we are failing to bridge that gap.”
Indeed, Klemmer points to a cultural shift within the research ecosystem itself. Once, public and private researchers chased broad, exploratory goals. Today, funding is narrower, tied to immediate commercial returns. That might make sense for investors, but it undermines serendipity — the accidental breakthroughs that once revolutionized canola or wheat breeding.
If there is a path out of stagnation, Klemmer believes it lies in a three-pronged strategy: improving farm-level management, optimizing scale, and accelerating technical progress. Many farms, he argues, are over-capitalized and under-optimized — purchasing oversized machinery while neglecting strategic planning. “It’s like buying a mountain snowmobile when you’re never leaving the Prairies,” he quips.
The final, and perhaps most important, challenge is narrative. Canada’s agricultural sector, for all its economic heft, still struggles to communicate its value to urban politicians and voters. Regulatory bottlenecks, trade tensions, and food insecurity are converging in ways that demand a stronger voice from the sector. And that voice, Klemmer argues, must be fluent in data.
“We are not just stewards of the land,” he concluded. “We are architects of economic growth, providers of food security, and innovators in a world that desperately needs innovation. But to lead, we must invest. And to invest, we must believe the future is worth building.”
That future, as Klemmer reminds us, is still within reach. But the clock is ticking.
—This article is based on a live presentation delivered at today’s meeting of the Canadian Seed Growers’ Association in Victoria, B.C.
