As the chairman indicated, I'm Jim Everson. I'm vice-president of corporate affairs for the Canola Council of Canada. Thank you for the opportunity to update the committee on the priorities for the canola industry value chain.
I'd like to begin by providing a brief overview of our industry, and then outline some of the key factors that affect the competitiveness of the canola value chain.
Of course, it all starts on the farm. Canola is grown by about 43,000 farmers in Canada, mostly in the Prairies, but also in the Peace River area of B.C. and as far east as the Maritimes. Canola acreage and production have been increasing in recent years, as producers have found increasing value and profit in canola.
This year 21.3 million acres were seeded in canola. Statistics Canada has estimated a total 2012 production at 13.36 million tonnes. It's been an incredible story of growth, more than doubling production in the last 10 years.
You may know that canola is Canada's most valuable crop, generating one quarter of all farm receipts and amounting to almost $8.5 billion to producers in 2011.
The confidence that producers have in canola is being matched by the whole value chain as new investments are being made in the industry. Since 2006, investments in new and expanded crushing facilities have close to doubled the crushing capacity. Some of the most recent investments include two plants in Yorkton, Saskatchewan, a new plant in Bécancour, Quebec, expansion of plants in Altona, Manitoba and Fort Saskatchewan, Alberta, and the announcement of a new plant to be built in the Camrose area in Alberta.
The seed developers are also investing in Canada with state-of-the-art breeding facilities and research facilities in Saskatoon and Winnipeg, and of course, producers invest constantly in upgraded machinery and equipment to improve production efficiency.
The canola sector is contributing to jobs and growth. Today the industry contributes more than $15.4 billion to the Canadian economy each year and generates more than 228,000 jobs.
To comment on the value chain, through the Canola Council, seed companies, growers, crushers, and exporters all sit together at the same table to set goals for the industry and strategies to achieve them. The industry is currently working on a strategic plan, which includes a goal of creating a sustained supply and demand for 15 million tonnes of canola by 2015. We are confident we will meet that target.
Producers deliver canola to a network of primary elevators and crushing plants in their area for processing. The vast majority of canola is delivered and shipped to export terminals, mostly off the west coast, by rail, where it is loaded on vessels for export. Canola is processed into oil and meal at crushing facilities and is shipped by rail or by truck to markets overseas and in North America.
Canola is crushed to produce oil for use as a premium quality vegetable oil. After crushing, the remainder of the seed produces canola meal, which is used as an animal feed. Canola oil is also an excellent feedstock for biodiesel production, as well, and can be used to reduce greenhouse gas emissions generated by traditional fossil fuel diesel.
Canola is the healthiest vegetable oil available. It has very low levels of saturated fat, no trans fats, and high levels of the beneficial fats, to help prevent heart attacks and strokes.
Canola meal is another product with a definite advantage over its competitors. It is high in protein, palatable, and has an excellent amino acid profile. Research shows that canola meal in animal feed can increase milk production in dairy cattle by one litre per cow per day.
That, in a nutshell, is the canola industry value chain. Together we provide the world with a superior, healthier product that contributes to economic growth in Canada.
Regardless of whether canola is exported as a whole seed or first processed into oil and meal, over 85% of the crop is headed for markets beyond our borders. We rely on a strong and steady flow of product to customers in the United States, Japan, Mexico, China, and 50 other countries. This reliance on export markets means that our industry needs to constantly innovate and work to remain competitive.
The federal government policy and programs are important to setting the environment for innovation, market access, and growth. Currently, Agriculture and Agri-Food Canada is developing a Growing Forward 2 policy framework and programs, and these will play an important role for canola in the future. As this framework is being developed, there are five priorities that the Canola Council can point to for future success.
The first is innovation. Canola is a product born of innovation. Innovation is what we must pursue to increase our competitive advantage. This is an area where teamwork through a value chain has been a big advantage. Over the past four years, the Canola Council has coordinated the canola and flax science cluster under Growing Forward. This approach has brought industry, government and university researchers together and pooled knowledge and resources to make the most of every research dollar.
The science cluster is funding a total of about $20 million of research over a five-year period. It includes over 80 researchers in more than 30 institutions across Canada, and some in the United States. Research is directed to canola oil and meal and to improved production. In the production area, the research amounts to about $10 million and involves over 30 projects.
Because of this cluster approach, our industry now has a greater understanding of how to increase yields and minimize disease, and we have more scientific evidence of canola's health benefits to drive oil promotion. Looking ahead to the new Growing Forward 2 framework, we are very strongly supportive of the continuation of the science cluster approach and continued public investment in innovation.
Another priority is open markets. Our industry thrives in a trading environment that's predictable, competitive and transparent. We support the federal government's ambitious trade agenda in key markets like Europe, South Korea and Japan. Canada's entry into the trans-Pacific partnership is good news for our industry. If Canada can make the most of these trade agreement opportunities and conclude some of these trade deals, producers and the industry will have more opportunity to grow the industry.
Also on our priority list is market development and promotion. This is another area where the federal government is an important partner. Our members and Agriculture Canada cost share a $2.4 million promotion program over four years that spreads the word about canola's health and culinary benefits in key markets around the world. We're looking forward to a continuation of this program in Growing Forward 2.
Intertwined with market development is market access. Both of these priorities demand attention. Our industry is very grateful for the strong support of agriculture Minister Ritz and the federal government in maintaining and building market access. The Market Access Secretariat, which is a cooperative approach of the Canadian Food Inspection Agency and Agriculture Canada, has been instrumental in responding to difficult market access issues, such as China's concerns with blackleg.
In recent years, the industry and government have maintained markets with a value of over $1.6 billion per year by working strategically to resolve issues that threaten market access. Our efforts allow the canola industry the opportunity to earn most from international markets and we hope to build on this progress in Growing Forward 2.
Finally, an important issue is science-based regulation. Transparent and science-based regulations are critical to ensuring predictable trade and food security both in Canada and abroad. Canada needs to set a strong example. We need to build on the understanding this approach works best for all nations. In this regard, we are hopeful that major trading nations will develop policies regarding low-level presence of genetically modified products, an important goal because of a growing number of GM crops in commercial production around the world. We support Minister Ritz's efforts to develop a Canadian LLP policy and to promote the adoption of LLP policies internationally.
To sum up, Canola is one of the most exciting sources of economic development in Canada in the years ahead, and to capitalize on that potential we'd like to stay focused on innovation, open markets, market development, market access, and science-based regulation. The canola industry has enormous potential to create economic growth, jobs and wealth for Canadians if we continue to do things right. The Canola Council brings together the entire value chain, and we look forward to a continued partnership with government toward these goals.
Thank you. I look forward to answering your questions.