Future Governance of Alberta's Agriculture and Agri-food Industry - Discussion Paper

Background
The Marketing of Agricultural Products Act (MAPA) currently governs twenty of Alberta's primary agricultural commodities. Enacted in 1965, MAPA enables eligible commodity organizations to collect levies from producers for the purpose of establishing and regulating certain production and marketing activities through approved Plan Regulations. In a 1987 review of the legislation, major revisions included introduction of refundable levies, a new appeal process and clarification of the respective roles of Marketing Council and the Minister. The legislation was further amended in 2002 to allow for a milk marketing system.

The time has come to review the legislation once again and to ensure that new governing legislation will meet the needs of the agriculture and agri-food industry for the next ten to twenty years.

The Challenge
The Honourable Doug Horner, Minister of Agriculture, Food and Rural Development, and the Agriculture Products Marketing Council (Marketing Council), the body which oversees MAPA, see the MAPA review as an opportunity to engage agricultural boards and commissions, their industry partners and other stakeholders in discussions on what they want the agriculture and agri-food industry in Alberta to look like in the future and what governing structures should best enable industry to seize new and emerging opportunities, while improving Alberta's agricultural competitiveness within Canada and around the globe.

Alberta's Competitive Position in Agriculture
Almost everyone involved in the agriculture and agri-food industry today is aware of the increasing global competition within traditional markets, particularly in cereals and oilseeds. In time, it's possible that the World Trade Organization (WTO) will be able to improve market access and competitive forces for markets in general. Meanwhile, ever-increasing costs of production within industrialized nations mean that new ways must be found to add value to products and services, if these countries are to be competitive in future world markets.

Changing lifestyles and increasing incomes throughout developed and developing countries have increased consumer demand for and spending in processed goods versus primary products, pushing the value of trade in global processed goods from $300 billion to more than $400 billion. Canadian exports now account for just 20 percent of the North American market and 3.3 percent of world trade. The value of processed goods from the agriculture sector now exceeds the value of primary production. In Alberta, agri-food exports during the last decade was nearly five billion dollars, with a doubling in the value of exported processed products and a halving of the value of primary commodity exports.

Alberta needs to better position itself relative to other export-dependant countries if it is to compete in the global marketplace.

Worldwide, agriculture research and development is increasingly being linked to other areas of science, especially in genetic and information sciences. End-product markets and utilization are increasingly multi-sectoral. In Canada, annual investment in agriculture research and development (R&D) is approximately $580 million, or 1.6 percent of $36.5 billion invested worldwide. Public funding of agriculture R&D in third-world countries now exceeds that of developed countries. China, India, Brazil, Thailand and South America lead in this commitment. In 2000, China filed more patents on genetically modified organisms for crops and medical herbs than any other nation. One hundred and forty-one transgenic plants were developed, with sixty-five already approved for commercial use. This compared to just fifty in the United States. Australia now has a billion dollar research and development program, cost-shared 50:50 between industry and government, with one quarter of the total focused on the grains and oilseeds sector.

We are also seeing a growing trend in other jurisdictions to move to industrial product platforms (e.g. increasing feedstocks in Brazil, the United States and elsewhere are coming from ethanol and bio-diesel bi-products).

The implications of these and other changes that are occurring within the agriculture and agri-food sector need to be considered, debated and better understood if Alberta is to be competitive in future. What worked in the past may or may not necessarily work in the future, including the way in which the industry is organized and/or governed.

Possible Scope of a Review
At it's March 2006 meeting with the boards and commissions, Marketing Council announced its intent to conduct a review of MAPA and provided an overview of existing "problem areas" within the current legislation. In his address to the meeting, Minister Horner noted that MAPA is enabling legislation and that a major review is timely, not only because of current issues with the legislation and regulations, but also because of serious challenges and opportunities for the future of Alberta's agriculture and agri-food industry.

In considering a full review of MAPA, broader policy considerations suggest the need to examine industry governance in the context of possible future roles of both government and the private sector in Alberta's agri-food industry, as well as the possibility of moving beyond producer-run commodity organizations. The Minister and Marketing Council wish to engage all agriculture and agri-food industry stakeholders in the MAPA review process, to consider a range of alternatives from modifying the current legislation and regulations to accommodate current needs, to looking at industry governance from a much broader provincial or even a regional perspective.

The November 16, 2006 workshop, to which you have been invited, is the first stage in this broader consultation. The intent of the event is to encourage a progressive business-oriented approach to stimulating industry growth and development as well as greater industry responsibility and leadership with a minimum of government regulation. New models of industry governance may need to be considered in order to address future challenges to Alberta's competitiveness and the province's ability to pursue new opportunities.

We hope that you'll recognize the importance of this event to the future well being of your industry and that you will participate in setting industry direction for the future.

Proposed Process and Timelines for the Review
The intent is to review MAPA through an extensive industry-wide consultation process that will be determined by participants in the November 16/06 event.

Desired outcomes for the review are:

• Well-informed and knowledgeable stakeholders who have dialogued on/debated the issues of leadership, roles and responsibilities of government and industry, regulation and policy, research, industry development, technological change, investment, marketing, etc.
• Clarity around the scope of the legislation (i.e. is this solely producer legislation or enabling of the entire industry).

• Updates to keep stakeholders abreast of what has occurred and is still planned,
• An active flow of information, seeking reaction and response from those directly affected by proposed amendments.