Evidence of meeting #22 for Agriculture and Agri-Food in the 41st Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was market.
A recording is available from Parliament.
NDP
Malcolm Allen NDP Welland, ON
I have a very brief question. In terms of the public health aspect of processed foods, do you see any place where there can be some movement that would benefit developed societies?
Associate Professor, International Relations Officer, Department of Plant Agriculture, University of Guelph
I should let my colleague Rick Yada speak to this question, but briefly put, better research into certain types of fibre or starch that have a low glycemic index or slow digestibility in processed foods can reduce rates of diabetes, as an example.
Conservative
Conservative
Bob Zimmer Conservative Prince George—Peace River, BC
Thanks for coming today, everybody.
I have a question for Dr. Raizada.
You mentioned the production of synthetic fertilizer. For the benefit of the committee, could you expand a little bit on what you said and tell us what the process is?
Associate Professor, International Relations Officer, Department of Plant Agriculture, University of Guelph
Most of the minerals in fertilizer are mined. The great exception is nitrogen fertilizer.
For nitrogen fertilizer, the process is as follows: 80% of the atmosphere that we breathe in is actually not oxygen but nitrogen gas, called dinitrogen. There is a synthetic chemical process, called the Haber-Bosch process, for which a Nobel Prize in chemistry was awarded around 1915. Briefly, the chemical bond in atmospheric nitrogen gas is broken down. It requires a lot of energy, and that energy comes from oil and natural gas. When you break that bond apart, you can then produce a compound such as ammonia. That's where the oil and natural gas comes in.
Conservative
Bob Zimmer Conservative Prince George—Peace River, BC
Is it efficient or financially viable to do this in Canada?
Associate Professor, International Relations Officer, Department of Plant Agriculture, University of Guelph
I can't assess the economics of it very well. What I'm saying is that there is a tremendous opportunity, because we have many of the other components that are required to make a complex fertilizer. We have potash and we have other minerals as well. The missing component is nitrogen, and the key component to that is oil and natural gas, which we have.
I look at it as a logical problem. Let's explore that industry, because it is a huge industry. What I'm suggesting is that we build huge industrial and intellectual capacity around fertilizers, because it will help our growers and it will create a new export market.
Associate Professor, Department of Agribusiness and Agricultural Economics, University of Manitoba
I want to comment on that market. The energy doesn't have to be natural gas.
Conservative
Bob Zimmer Conservative Prince George—Peace River, BC
Well, we get a lot of it from my riding, so I don't mind.
Associate Professor, Department of Agribusiness and Agricultural Economics, University of Manitoba
The MRAC board that I was a member of did some pilot projects with wind turbines, and the agronomists at the University of Manitoba actually think that we should be making nitrogen with alfalfa. You can use alfalfa; you grow it, and it comes into nitrogen that way.
Economically, I think they might be right about alfalfa, as long as we have a market for the alfalfa.
Conservative
Bob Zimmer Conservative Prince George—Peace River, BC
I have another question for Dr. Raizada.
You mentioned that you had a lot of good questions. For me, it would be nice to see some of these answers get to the floor where we could utilize them.
You mentioned, too, that there is only a 50% uptake of nitrogen in corn crops and the like. You said that's a problem. Is there a solution to that? Is the technology there to bring that up significantly? We've seen enormous costs with fertilizer, so it would be nice to give our farmers some cheaper options.
Associate Professor, International Relations Officer, Department of Plant Agriculture, University of Guelph
This is a problem that my lab and other labs are trying to tackle directly.
There are a few potential solutions to this problem. One solution is altering the root architecture of a corn plant, through breeding, to better take up that nitrogen. Agronomically, another solution is that our farmers generally apply fertilizer in a single dose, or as a top-up second dose, a side dressing. What we need is better information on how often and how much fertilizer should be applied.
In terms of corn, the peak nitrogen demand is actually not early on. When we apply fertilizer in the spring, it's actually when the plant starts to produce grain. That's the problem we need to bridge. The improved slow-release fertilizers that I referred to are one potentially easy solution, but another is improved machinery, high-boy type machinery, to allow you to spray fertilizers later on.
There's a suite of solutions that need to be addressed. There's not enough money in this area. It's potentially an easy fix, but there's not enough funding in this area. Some of it's just basic agronomy, but basic agronomy's not well funded in this country or in any other country in the world.
Conservative
Bob Zimmer Conservative Prince George—Peace River, BC
I was going to ask as well whether you as a university have approached manufacturers directly with this idea. You've spoken somewhat about the lack of connection with funding for these types of projects. Have you been successful in any of these approaches to industry, and said that you want to partner with them for a solution to this hugely significant problem?
Associate Professor, International Relations Officer, Department of Plant Agriculture, University of Guelph
I have two collaborations.
One is with Syngenta, the Canadian subsidiary of Syngenta, but really it's through North Carolina. They're supporting some of our research and some of my collaborators' research, and there's considerable cash on the table with Syngenta.
To me, the more exciting partnership—I guess I'll put this on the record—is with Novozymes, which is a Danish company. We've been in talks with them for two years to support our microbial work in using microbes that can biologically convert atmospheric gas into ammonia, rather than using oil and natural gas. Because it's the Canadian subsidiary of the Danish company, they're reluctant to put cash on the table, as my colleague Rick Yada said. They're happy to put a million dollars in kind, but putting $100,000 in real cash is tough.
Conservative
Liberal
Frank Valeriote Liberal Guelph, ON
I don't want to sound alarmist, but what I'm hearing from you and what I'm seeing in action are two different things. I think the juxtapositioning.... Derek, I think you say in your article that we spend $200 million in market-related activities and $1.3 billion on BRM programs. That's very telling.
What I'm hearing is something all of you have said, and I think you said it, James. You asked whether trade promoters should be asking what products and attributes are demanded in foreign markets. I don't think it's just wheat and I don't think it's just our oil or our minerals; I think we're talking about all those wonderful things that you guys are innovating all the time.
Our business expenditure in R and D has gone down, down, down in the last six years. We are now at 1% of GDP, as compared to the average of 1.6% of GDP in the other 34 OECD countries. While it's appreciated that new markets are being opened in places such as Korea, and those are important things, what we're forgetting is that if we keep this course, we're going to be the Nortels and we're going to be the RIMs, the people who could have but didn't.
I'm going to ask you very directly, and AFMNet is a perfect example of this. Here you are on the cusp of some work with sodium, and all of a sudden your funding is pulled. There's no excuse for it, no reason for it, other than we're not going to invest in food technology any more. What I'm hearing from Manish and you, Rickey, and others, Derek, is that we've got to invest in innovation and technology and make the products that people are going to want.
I'm going to ask the other three. I don't want to put you on the spot, but I'm going to. Do you feel that funding for AFMNet, for instance, should be restored? Is it a mistake to walk away from programs like this?
Can we start at this end, James?
Professor, Department of Resource Economics and Environmental Sociology, University of Alberta
I'm going to pass on commenting on that sort of argument. I still think the first question you always have to ask is why the private sector is not doing it in the first place, and then figure out the reasons and go forward, but in terms of research questions, I'll pass.
Liberal
Frank Valeriote Liberal Guelph, ON
In responding to that, let me supplement my question with a second question.
Let's talk about flow-through shares, for example, that they use to stimulate the mining industry. When you're answering the AFMNet question, would you also tell us other things that the market or private industry would welcome as a stimulus and an incentive to this kind of activity?
Associate Professor, International Relations Officer, Department of Plant Agriculture, University of Guelph
The bottom line is that we have a cultural problem in Canada, which is that we're not risk-takers. The private sector is not and the government is not as much as it should be. We need to take a venture capital approach, which is basically to fund 10 things knowing that one will succeed. As well, it's not only to fund 10 things for three or five years; we need to fund 10 things for 10 years or longer, because research takes time, particularly when you involve graduate students and post-docs. They have to publish, they have to write theses, they have to take courses, so there are setbacks.
How long did the Internet take to develop? It didn't take five years; it's hard to even piece that together. We need long-term stable funding and a venture capital approach and then we can hope to have a winner. We will have one winner out of the 10 or 20, and it will be a huge winner.
Associate Professor, Department of Agribusiness and Agricultural Economics, University of Manitoba
I think there are reasons that the private sector doesn't get involved in commercialization and research in Canada. It's a relatively small market, and even if it has the same regulatory conditions as the U.S., if you have to pay to meet those regulatory conditions here in Canada, you've met the conditions for a small market compared to the U.S.
That's an expense that makes it hard for us to compete just on a private basis, and agricultural research has this very problem in trying to benefit all these farmers who can't afford to make the actual investment themselves. I've talked about the returns for research in front of farm groups, and they're willing to pay a check-off. They're willing to pay for this now. I've heard that testimony in this committee, testimony that agricultural producers are willing to pay for some form of agricultural research as long as it's done well.
I think what Rickey said about the universities generating a lot of research and then having a problem commercializing it afterward is true, and I think we have to be careful when we look at returns at over 40 to 1 and then never do anything with the A-base stuff that we've done, so there's a commercialization challenge.
Professor, Department of Food Science, University of Guelph
Thank you, Mr. Chair.
Thank you, Frank, for bringing up those issues.
I think we have a challenge not just in the food area but with agriculture in general to fund more research. The biggest challenge, as I've identified, is taking that good idea and converting it into a usable product or technology. We need greater funding in that proof-of-concept area, and that's a challenge worldwide. From where Canada is positioned right now, it has a huge opportunity to take the lead on things like sodium reduction and trans fat substitution. Your colleague brings the issue of public health; those are issues that we can work on and make a difference in, but we need that money.
Conservative
February 6th, 2012 / 4:25 p.m.
Conservative
LaVar Payne Conservative Medicine Hat, AB
Thank you, Chair, and welcome to all our witnesses here today. There have been some very interesting comments in your presentations.
I want to do a little follow-up. You just talked about the regulations, Derek. I know that the Prime Minister and the President have been talking about some harmonization. Could you just give your spin on what that it might mean if those regulations could be harmonized? What would it do for our industry here to be able to do some of that research?
