Thank you very much.
I wish it were sunny. It was sunny all winter, although maybe not warm as you mentioned.
Good afternoon and thank you very much for this opportunity to present our opinions regarding innovation in agriculture in Canada. I'm honoured to have this opportunity to meet with you today.
My name is Rex Newkirk, and I am vice-president of research and innovation at the Canadian International Grains Institute, an independent, not-for-profit institute that provides technical support to buyers of Canadian field crops from around the world. We've done this since 1972.
During my introductory statements, I would like to briefly introduce a few key points regarding innovation. I'd like to speak to the importance of innovation in agriculture and the role it has played in the success of the industry. I would also like to discuss the potential for innovation in the future and what needs to be done to meet this potential.
Innovation has been a key part of agriculture and will continue to be for the foreseeable future. Farmers have had to be very innovative to be productive and profitable, given the challenges of our environment and the distance to our key markets. Canadians have been at the forefront of things such as conservation and the implementation of direct seeding. Agriculture and Agri-Food Canada and university scientists have developed the principles and conducted the basic science required for this innovation. Once producers were introduced to the potential, they were often the ones who, with the assistance of Agriculture Canada and university scientists, developed the methods to adopt the technology. They started companies to produce the equipment required and have steadily made improvements and increased this productivity.
Life science companies have developed the chemistry required to use this technology, and the government, university and industry researchers have refined rotations to minimize disease and maximize profitability. Grain companies have been innovative in their approach to increase handling and transportation efficiencies resulting in one of the most efficient grain handling systems in the world.
Underpinning this market are the developments of new varieties of crops that combat disease and maximize productivity. The majority of grain varieties in the past have been developed by Agriculture and Agri-Food Canada, the Crop Development Centre, and other university and provincial breeding programs.
Going forward, as we heard from the previous speaker, many commercial entities are investing in new variety development, and they continue to develop new and improved varieties. These are just a couple of examples of the innovations we've seen in agriculture, and there have been many. The industry should be proud of its achievements with regard to production and grain handling.
Many would argue, however, that Canada is an expert at production, but that in the future we will need more innovations in food product applications to increase future markets and to promote processing of these commodities prior to export. We feel that innovations in production and grain handling efficiencies must continue, but much of the future prosperity is also reliant on innovation in food, feed, and industrial product applications.
The question becomes what must be done to ensure that research investments made result in innovations that benefit producers, customers, and Canadians. Recently, with the support of the Government of Canada and grain producers, CIGI has been doing a great deal of research on product applications leading to new innovations. Also, prior to joining CIGI, I developed a new product from canola and co-founded a technology company to take this product to market. This technology has now been bought by a multinational company and is being implemented as we speak.
Based on these experiences, we feel we can provide some insights into what we feel must be done to see successful innovations in the area of product application and processing.
First, an important and surprising observation is that food and feed companies do not usually drive the initial innovations. They are not risk-takers, but they will certainly capitalize on an opportunity once they understand it and see the value. The investments made by government and producer associations are best directed to the initial stages of development, in our opinion.
CIGI works closely with food companies to determine what the opportunities are and to identify potential product applications that would benefit these companies. Using public and producer funds, we collaborate with food centres and other researchers to start the product development. We demonstrate the new products to food companies and attempt to introduce the opportunities to them. If the company is sufficiently interested, it is asked to invest in refining the product to meet its needs and to refine the process. We work side by side with it, but under a confidentiality agreement, to move the product to market. We are currently in this process with several very large companies, and this process seems to be working well for us.
We feel the key to the success of new food product development innovations in the future encompasses these two components: initial public and producer investment, followed by commercial investment and partnerships. The key is to ensure that this transition happens at the right time, and that the right resources are in place to ensure the innovations being developed initially are commercially relevant.
One question you may be asking is what the role of government is in this innovation pathway. Certainly the investment, initial research, and product development is very important. This should be done in partnership with those with a vested interest in the success of the research. In our example this would be agricultural producers.
The research should also be driven by real needs and market opportunities. Organizations like CIGI, that have close working relationships with customers, make excellent collaborators on this research, as they bring the customers' insight to the table.
The government investment and research capacity is also very important. Without the right type of facilities and people with experience, the quality of the research will not meet the needs of the customer.
In my own example of developing a canola protein concentrate, without access to the research facilities such as Innovation Place bioprocessing in Saskatoon, as well as the food development centres, this technology would never have been proven to the point that it could be adopted by the industry, and therefore it would not have succeeded.
The investment of the governments, both federal and provincial, and the organizational capacity to develop and introduce innovations is very important in the future. I would also suggest it is very important that public investment should be sufficient to allow the development to a stage so that they can be introduced to the companies.
In the end, company investment is very important to the transition, as I discussed earlier. It is key. However, if public investment doesn't allow the product to be developed sufficiently so that these companies could then take on the next stage, the initial investment would be lost.
It is our belief that Canadian agriculture will continue to grow and be profitable, and that this growth will be based on innovation. With this approach that we've presented, we believe that we will see significant growth not only in commodity production, but also in new food and product applications as well as industrial and feed. This will result in additional ingredient processing as well.
Thank you very much for this opportunity. I welcome any questions you have regarding our proposal for the innovation pathway that we've identified.