2013-2014 Annual Report - Ministry of Agriculture and Rural Development

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 Preface | Minister’s Accountability Statement | Message from the Minister | Management’s Responsibility for Reporting | Agriculture in Alberta | Ministry Overview | Industry Overview and Outlook | Alberta Agriculture and Agri-Food Industry | Results Analysis | Appendix A | Appendix B Financial Information |


The Public Accounts of Alberta are prepared in accordance with the Financial Administration Act and the Fiscal Management Act. The Public Accounts consist of the annual report of the Government of Alberta and the annual reports of each of the 19 ministries.

The annual report of the Government of Alberta contains ministers’ accountability statements, the consolidated financial statements of the province and Measuring Up report, which compares actual performance results to desired results set out in the government’s strategic plan.

This annual report of the Ministry of Agriculture and Rural Development contains the Minister’s accountability statement, the audited consolidated financial statements of the Ministry and a comparison of actual performance results to desired results set out in the Ministry business plan. This Ministry annual report also includes:

  • the financial statements of entities making up the Ministry including the Department of Agriculture and Rural Development, regulated funds, and provincial agencies for which the Minister is responsible;
  • other financial information as required by the Financial Administration Act and Fiscal Management Act, either as separate reports or as a part of the financial statements, to the extent that the Ministry has anything to report;
  • and financial information relating to trust funds.
Minister’s Accountability Statement

The Ministry’s annual report for the year ended March 31, 2014, was prepared under my direction in accordance with the Fiscal Management Act and the government’s accounting policies. All of the government’s policy decisions as at June 5, 2014 with material economic or fiscal implications of which I am aware have been considered in the preparation of this report.

[original signed by]

Verlyn Olson, Q.C.
Minister of Agriculture and Rural Development

Message from the Minister

Alberta’s producers certainly had a lot to celebrate in 2013. Farm cash receipts reached a total of $11.8 billion, which was the second highest on record. The quality for crops like wheat was great and we saw record yields for nearly all crops.

Unfortunately in the wake of this bumper crop, farmers faced the challenge of dealing with delays in getting their products to market. That’s why Alberta joined with its neighbours and industry partners to call on the federal government to make improvements and increase accountability in the grain-transportation system, specifically to ensure rail companies meet their shipping commitments. The Order in Council passed by the federal government in March and recent federal legislation aimed at improving rail service are successful outcomes of those actions.

We also partnered with the federal government in continuing to invest in the long-term growth of our agriculture sector through the Growing Forward 2 agreement. Over the next five years, starting in 2013, more than $400 million will be invested in strategic programs to support research and innovation, business and market development, food safety, farm safety and environmental stewardship. That’s a 50 per cent increase in funding over the previous Growing Forward agreement.

We had to make some hard choices in 2013-14. We reduced our operational budget by $100 million with the lion’s share of that realized by eliminating the six cent per litre Fuel Distribution Allowance portion of the Alberta Farm Fuel Benefit Program and the nationwide changes to the Agri-Invest and Agri-Stability programs. I am pleased to say that despite the elimination of the distribution allowance, Alberta’s farm fuel program is still among the best in Canada and our business risk programs continue to support the needs of producers.

Alberta continued to strengthen our trade relationships and explore new trade opportunities in key markets like Asia. I also travelled to Kazakhstan where I met with officials and industry groups interested in purchasing our cattle and genetic material. The Comprehensive Economic Trade Agreement with the European Union, signed in principle by Prime Minister Harper in October, will also open up the EU market to Canadian producers, especially in the beef, pork, grains and oil seeds sectors.

As we open doors to new markets, Alberta producers are also opening their farm gates and welcoming urban people to their operations. The inaugural Open Farm Days took place this past summer and was a great success as more than 40 farms and agricultural operations participated. Several thousand Albertans took in farm and dairy tours, wine tastings and sampled some fantastic locally produced foods. We are looking forward to seeing this initiative grow even bigger this coming August.

I believe rural Alberta has a wider tourism opportunity that holds incredible potential to add more value to our rural communities and agriculture industry. The inaugural Tour of Alberta professional cycling race, which was broadcast worldwide to 41 million viewers, provided a tremendous opportunity for us to show off our beautiful province, with a lens towards creating increased tourism into rural Alberta.

One of our biggest challenges continues to be the United States government’s mandatory Country Of Original Labelling requirements, or mCOOL. These onerous labelling rules are hurting the livestock industry on both sides of the border by imposing millions of dollars in unnecessary costs. This past year, I was in Chicago and Washington, and worked closely with the federal government to make sure that Alberta’s position on mCOOL is well-known. I feel we have made some progress on this and I will continue my advocacy efforts.

Any look back at 2013 is not complete without a mention of the unprecedented flooding in southern Alberta. While there was thankfully no widespread crop or livestock losses, the flood took a devastating toll on many communities. I’m proud of how Albertans rallied to help during the recovery efforts; it is a testament to the strength of character, compassion and sense of community that are part of our province’s core values.

So, while every year has its highlights and challenges, I believe the future of agriculture in this province is extremely bright and we look forward to building on our successes in 2014.

[original signed by]

Verlyn Olson, Q.C.
Minister, Agriculture and Rural Development

Management’s Responsibility for Reporting

The Ministry of Agriculture and Rural Development includes:
  • Department of Agriculture and Rural Development
  • Agriculture Financial Services Corporation
  • Alberta Grains Council
  • Office of the Farmers’ Advocate of Alberta
  • Irrigation Council
  • Agricultural Products Marketing Council
  • Alberta Livestock and Meat Agency Ltd.
The executives of the individual entities within the Ministry have the primary responsibility and accountability for the respective entities. Collectively, the executives ensure the Ministry complies with all relevant legislation, regulations and policies.

Ministry business plans, annual reports, performance results and the supporting management information are integral to the government’s fiscal and strategic plan, annual report, quarterly reports and other financial and performance reporting.

Responsibility for the integrity and objectivity of the consolidated financial statements and performance results for the Ministry rests with the Minister of Agriculture and Rural Development. Under the direction of the Minister, I oversee the preparation of the Ministry’s annual report, including consolidated financial statements and performance results. The consolidated financial statements and the performance results, of necessity, include amounts that are based on estimates and judgments. The consolidated financial statements are prepared in accordance with Canadian public sector accounting standards. The performance measures are prepared in accordance with the following criteria:
  • Reliability – information agrees with underlying data and the sources used to prepare it.
  • Understandability and Comparability – current results are presented clearly in accordance with the stated methodology and are comparable with previous results.
  • Completeness – performance measures and targets match those included in Budget 2013.
As Deputy Minister, in addition to program responsibilities, I am responsible for the Ministry’s financial administration and reporting functions. The Ministry maintains systems of financial management and internal control which give consideration to costs, benefits, and risks that are designed to:
  • provide reasonable assurance that transactions are properly authorized, executed in accordance with prescribed legislation and regulations, and properly recorded so as to maintain accountability of public money;
  • provide information to manage and report on performance;
  • safeguard the assets and properties of the province under Ministry administration;
  • provide Executive Council, the President of Treasury Board, the Minister of Finance, and the Minister of Agriculture and Rural Development information needed to fulfill their responsibilities; and
  • facilitate preparation of Ministry business plans and annual reports required under the Fiscal Management Act.
In fulfilling my responsibilities for the Ministry, I have relied, as necessary, on the executives of the individual entities within the Ministry.

[original signed by]

Jason Krips
Deputy Minister of Agriculture and Rural Development
June 5, 2014

Agriculture in Alberta

Farming Foundation
Foundation Alberta has experienced rapid change since joining Confederation in 1905, but one thing that has not changed is the proud tradition of hard-working Albertans tending the land and growing the economy. Our agriculture and food sector has shaped the province’s history, built communities, and will undoubtedly be an integral part of the province’s future.

In the beginning, our agriculture industry had to adapt quickly to Alberta’s uncertain climate, but our resilient farmers recognized the need to diversify and began transitioning to mixed farms consisting of both livestock and field crops. Their dedication and foresight allowed the industry to thrive and today farms are not only producing food for domestic markets, but also for markets around the world.

Evolution of the Industry
While the province has experienced rapid change, so too has the Ministry of Agriculture and Rural Development. The Ministry has successfully evolved alongside the agriculture industry by responding to the sector’s highs and lows, technological advances, and producer needs. The first Department of Agriculture was comprised of numerous functional areas, including vital statistics and public health, in addition to agriculture. This original grouping speaks to our founders’ understanding of the importance of agriculture to overall health and wellness. Although the Ministry’s composition has changed, our commitment to maintaining public health by enabling the production of high quality products remains untouched.

The first Ministry’s role was that of a regulator, supporter, and informer, focused on guiding farmers and providing the information required to help farmers become competitive in what might have been an unfamiliar industry. Today, our core goal of helping farmers become competitive remains, only the method of achieving that objective has evolved. We have shifted to a stewardship role, focused on research, innovation, and helping farmers, entrepreneurs, and businesses gain access to markets. As part of our stewardship role, we are also helping our producers be profitable, diversify their crops and products, develop environmentally sustainable practices, and focus on value-added processing and manufacturing.

Global Reach
By working in tangent with producers and businesses, we have helped grow Alberta’s founding industry into the province’s largest renewable industry, generating more than $8 billion in exports last year. With the industry’s rapid growth, we are experiencing a re-emergence of similar issues faced by the original Department of Agriculture. A rapid influx of settlers and increase in grain for shipment during 1906 created challenges for a new railway system that was still adjusting to meet demand. Today, we are once again faced with the challenge of transporting our commodities to market.

From the beginning, Alberta has been an export market, focused on meeting domestic and international demand for products. And while we are faced with similar challenges as our founding Ministry, we also share the same global perspective and desire to expand our export markets. Options to open Asian markets, as well as reach European markets more efficiently, were being explored in our founding years. Today we continue to look globally and are well positioned to gain a competitive advantage by identifying, pursuing, and developing markets for our high quality goods.

Our future success in the agriculture and food sector will be a result of our commitment to innovation and our desire to work in partnership with community leaders, industry, and the farmers whose business laid the foundation of our provincial economy.

Ministry Overview

Agriculture and Rural Development
Throughout the years, the Ministry has been known in many forms: Agriculture; Agriculture and Food; Agriculture, Food, and Rural Development; and currently, Agriculture and Rural Development. But no matter our title, our strong commitment to Albertans remains the same. Our Mission is to lead in the creation and transmission of knowledge and innovation; provide the frameworks and services necessary for Alberta’s agriculture and food sector to excel; to assure the public of the quality and safety of their food; and to lead the collaboration that enables resilient rural communities.

We work with industry and stakeholders to manage growth pressures, build a stronger Alberta, and improve Albertans’ quality of life. Our primary focus is to help create opportunity, which we do by enhancing value-added activity, increasing research and innovation, and working closely with our key stakeholder groups through our extension work. We work with others to promote prosperity for Alberta through a strong, competitive, sustainable agriculture and food industry and vibrant rural communities.

Our Vision is to be a trusted partner of industry and stakeholders in enabling a competitive, sustainable agriculture and food sector and vibrant rural communities across Alberta. As such, the Ministry of Agriculture and Rural Development strives for the following outcomes in our work:
  • a competitive self-reliant industry
  • environmental stewardship
  • farmed animal health and welfare, plant health, and safe food products
  • a vibrant, resilient and sustainable rural Alberta
Over the next decade and beyond, we will continue to assist industry and rural communities in seizing opportunities to reinforce economic competitiveness and build lasting prosperity, as well as reflect the interests of rural Albertans within the context of Alberta’s overall social, economic, and environmental goals. In addition, we will continue to inspire confidence in the quality and safety of Alberta produced food and inform consumers about Alberta agriculture and food products.

In order to accomplish these goals, the Ministry works together through the following entities:
  • Department of Agriculture and Rural Development
  • Agriculture Financial Services Corporation
  • Alberta Livestock and Meat Agency Ltd.
  • Office of the Farmers’ Advocate of Alberta
  • Alberta Grains Council
  • Agricultural Products Marketing Council
  • Irrigation Council
A detailed description of each Ministry entity can be found in Appendix A, starting on page 41.

Further information about Ministry programs and services can be found at: www.agric.gov.ab.ca.

The Ag-Info Centre is also available for additional information by calling toll-free in Alberta 310-FARM (3276).

Industry Overview and Outlook

Industry Success
Agriculture in Alberta continued to thrive over the past year with a number of important successes, including one of the largest crops on record, the second highest farm cash receipts on record, and an increase in the number of Albertans employed in the agri-food industry.

Alberta’s 2013 agri-food industry experienced an increase in the number employed despite the challenge we identified in 2012 of recruiting and retaining employees with what is already the lowest unemployment rate in Canada. We are still faced with a gap in both the seasonal and non-seasonal workers required to support the agriculture industry in Canada and must continue to explore options to recruit and retain employees, and adopt technologies to improve productivity to meet industry needs.

Alberta’s crop sector experienced significant successes with strong farm cash receipts fuelled by high crop market receipts and program payments. The crop sector also experienced exceptional crop production in 2013 with provincial average yields well above their 10-year averages. This increase can be attributed to record yields for nearly all crops.

Industry Challenges
Despite these notable achievements over the past fiscal year, Alberta’s agriculture industry also faced significant challenges. Record crop production resulted in grain and commodity transportation delays; mandatory Country of Origin Labelling (mCOOL) legislation in the United States continued to be of concern; and international crop prices were down over the previous fiscal year.

The existence of mCOOL legislation in the United States has hurt Alberta’s livestock industry by increasing costs unnecessarily on beef and pork. This past year, the revised rules further increased the existing impediment to livestock trade and increased production costs on both sides of the border. Going forward we will continue to partner with industry stakeholders, the federal government and provincial counterparts to determine viable solutions and advocate for legislative changes to current mCOOL rules.

Due to Alberta’s record crop production, increased pressure was placed on railways and lengthy delays occurred in grain transportation. Looking forward, higher yields and innovative advancements could intensify commodity transportation concerns. We have partnered with provincial governments, industry leaders, and the federal government in an effort to determine short, medium, and long-term solutions to commodity transportation concerns and ensure Alberta producers can consistently and efficiently transport their products to market.

In 2013, Alberta’s hog industry saw hog prices improve substantially after weathering low prices and a decline in sow herds in recent years. However, the hog industry has been affected by concerns over the Porcine Epidemic Diarrhea Virus (PEDv) as outbreaks have continued in the U.S. and the first Canadian instances of the virus surfaced in Ontario and Manitoba. Working in collaboration with partners, we have prepared strong biosecurity measures and an emergency preparedness and response plan to mitigate the introduction and protect against the occurrence of PEDv in Alberta’s hog sector.

This past year, Southern Alberta and the Regional Municipality of Wood Buffalo experienced devastating floods that displaced over 100,000 people. To support ongoing recovery efforts, Agriculture Financial Services Corporation (AFSC) is coordinating the Alberta Flood Recovery Loan Guarantee Program, the Alberta Flood Recovery Interest Rebate Program, and the AFSC Alberta Flood Recovery Loan Program.

Global Perspective
Alberta’s agri-food industry is export oriented. What occurs globally in terms of price fluctuations and import quantities can have an effect on the value of the primary commodities and value- added products that make up our agri-food industry. In 2013, international crop prices were down significantly over last fiscal year, returning to more average levels. The drop in prices can be attributed to strong global crop production stemming from yield recovery from the previous year’s below-average levels. While crop prices decreased, the livestock sector experienced a year of strong prices.

The value of Alberta’s total agri-food international exports declined from 2012 but remained the second highest on record and Alberta maintained its position as Canada’s third largest exporter of agri-food products after Saskatchewan and Ontario. Exports to our primary market, the U.S., increased slightly over the previous year which helped to offset a reduction in exports to China and Japan. The drop in exports can be partly attributed to weak crop prices and reduced quantities of primary exports.

As an export oriented industry, we continued our efforts this year to target strategic markets for diversification and opportunity maximization. The Trans-Pacific Partnership (TPP) provides trade opportunities for Alberta’s agri-food products by reducing barriers and increasing access to new Asian markets. The TPP will also provide increased access to its 12 participating nations, representing an opportunity to diversify export markets for Alberta products. This past year also saw Canada and the European Union reach political agreement on the key elements of the Comprehensive Economic and Trade Agreement (CETA) which will present both additional opportunities and challenges for Alberta’s industry. Access to major markets, such as the European Union, can generate options for our agri-food industry, diversify our consumer base, increase international exports, and further reduce our reliance on the U.S.

Looking Forward
As one of the few jurisdictions positioned to be a net exporter of agri-food products over the next 20 years, Alberta’s access to global markets is essential to maintain and enhance competitiveness. Throughout the past decade, the province has successfully diversified its export markets to reduce reliance on the U.S. marketplace. Going forward, Alberta is well situated to identify, pursue, and develop new and existing markets for the province’s high quality commodities and value-added products. However, the agri-food industry’s continued success will depend on the province’s ability to capitalize on opportunities, address challenges, and respond to global trends that will impact food exports, including rapid economic growth in developing nations, increased population, changes in demand for food, and weather fluctuations.

Demand for agri-food products in developing economies is driven largely by growing populations, increasing household incomes, urbanization, and changing diets. These factors, along with the emergence of a growing middle class, are expected to impact global demand for high quality agricultural products. Emerging markets are likely to respond to changing demand by investing in their own agriculture sectors to narrow the productivity gap with advanced economies. Alberta is positioned to capitalize on this opportunity and supply a portion of the remaining production gap by developing niche products and markets. This new opportunity presents Alberta with the added challenge of increasing productivity and maintaining the quality of our products in the face of international competition.

Understanding both international and domestic consumers is critical for providing products that not only meet consumer demand, but also alleviate concerns over how food is produced and gain public trust. Domestically, shifting demographics and changing consumer preferences will continue to influence Alberta’s agri-food industry. Consumers are increasingly demanding healthy, natural, organic, and locally produced products. Immigration patterns may also influence the demand for specific products. Both international and domestic consumers are placing increased weight and significance on sustainability and producers operating in humane, safe, and socially responsible ways. With consumers able to impact the success of products, it is increasingly important to respond to long-term consumer trends.

This past year presented many challenges and opportunities beyond the scope of our control. For each of these challenges, we demonstrated strategic foresight and our ability to collaborate with industry, provincial governments, and the federal government to ensure processes, programs, and plans were in place to minimize industry disruptions and capitalize on opportunities.

Alberta Agriculture and Agri-Food Industry

(1) Estimates prepared by Alberta Agriculture and Rural Development. r - revised p - preliminary, subject to revision
(2) Federally and provincially inspected slaughter irrespective of origin.
(3) Western Canada data only; breakdown for Alberta are unavailable.
(4) Farms are classified by the commodity or groups of commodities that make up the majority of total farm cash receipts; based on the North American Industry Classification System (NAICS).
(5) Farms are classified by gross farm cash receipts and are based on the calendar year that precedes the corresponding Census of Agriculture.
Note: Per cent changes shown are based on unrounded data.
Note: Data shown in this table are current as of June 16, 2014.
Note: For more detailed information, please go to the following link for the "Alberta Agriculture Statistics Yearbook, 2012"
Sources: Statistics Canada, Agriculture and Rural Development; Agriculture and Agri-Food Canada; Census data for 2006 and 2011 are from the Census of Population and Census of Agriculture.
More detailed statistical information can be found on the Statistics page on the Ministry website www.agric.gov.ab.ca

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This information published to the web on June 16, 2014.