Agriculture Committee on Oct. 5th, 2022

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

For Mr. Thompson from Nutrien, I only have 30 seconds. Just on those two questions, do you have any thoughts you want to add?

[Mark Thompson]

I would tell the member the two things we are doing that I referenced in my prepared remarks. One, we are increasing the availability of fertilizer production globally for export to ensure that countries that need fertilizer most significantly are not left without that. Second, our retail business operates in seven jurisdictions that are producing the same crops that have been left in short supply because of the crisis in Russia and Ukraine. The most that we can do in that business is to help growers increase productivity and yields in other geographies to ensure that the food crisis is as muted as it can be by making up that shortfall.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. MacGregor.

Thank you, Mr. Thompson.

Colleagues, we were a little bit late starting because of our committee business. We are going to a second round, but it's going to be a little bit tighter. I'm going to do about three minutes for the Conservatives, three minutes for the Liberals, and about two minutes for the NDP and Bloc.

We're going to start with John for about three minutes.

[John Barlow, Conservative, Foothills, AB]

Thanks, Mr. Chair.

I have one quick question for Ian or Dennis. Has any work been done on the impact on yields? We're talking about food production and food security here. If we reduce fertilizer emissions by 30% from where we are now, what would be the impact on commodities and yields? Do we know?

[Dennis Prouse]

Mr. Barlow, I don't have anything direct on fertilizer. We did, however, commission a team of economists when we looked at our area, which is, of course, crop protection products and biotechnology. If you took those away, you would raise the food prices of Canadians by $4,500 a year. That's just saying that, in our lane, that's $4,500. That's a massive impact, and it would also require more land and more inputs.

I'll let the fertilizer people speak to their area, but I can tell you that, on crop protection products and biotech, a team of economists estimated it at $4,500 per year.

[John Barlow, Conservative, Foothills, AB]

Thanks.

Mr. Thompson, would you have any data on that?

[Mark Thompson]

I repeat the comment that I made in my prepared remarks that today, by some estimates, fertilizer accounts for 50% of global crop yield, so at the levels of reduction you're talking about, we would expect that if that were sustained on a permanent basis we would see significant impact on global crop production.

Our strategy is to help growers continue to find ways to reduce greenhouse gas emissions in farming and sequester more carbon in soils without sacrificing productivity. Our carbon program is one of the ways we are doing that, by helping growers with conservation practices like no-till farming and cover cropping as well as practices that reduce N2O emissions on the field like the use of enhanced efficiency fertilizers, nitrogen inhibitors and variable rate scripting, all of which have been shown to reduce emissions without sacrificing productivity.

As I said in my comments, cutting fertilizer straight away is just not a viable option, and we have to solve for both of these issues.

[The Chair, Liberal, Kody Blois]

Mr. Falk, you have just over a minute if you want to ask a quick question.

[Ted Falk, Conservative, Provencher, MB]

Mr. Thompson, I'd like to follow up a little bit on that. You operate a global company and you operate around the world. In what jurisdiction do you see the most opportunity to meet the growing food demand?

[Mark Thompson]

First, in the spirit of today's conversation, we see Canada in an extremely advantageous position, and I think Nutrien is a great example of that. Canada has an ability, with the right regulatory framework and attraction of investment, to increase fertilizer production.

We're doing just that, but also, when you look at the crops that have been left in shortfall by the crisis in Ukraine, Russia and Ukraine accounted for about 20% of global exports of corn and canola, about 30% of wheat and barley and over 60% of sunflower oil. When you look at what crops we have in Canada and our climate and mix, we're perfectly positioned to play a larger role on the world stage.

Exports take up about 50% of our production, so in addition to other countries that can meet that shortfall, I would say that Canada has a very significant and important opportunity.

[Ted Falk, Conservative, Provencher, MB]

Okay, and just really—

[The Chair, Liberal, Kody Blois]

Unfortunately, Mr. Falk, we're at time, and we're already a bit pressed. If you want to ask Mr. Thompson to send something in or something additional, I'm sure he would be more than willing to do that in writing.

I'm going to Mr. Louis now for about three minutes.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

Thank you very much, Mr. Chair.

Thank you to all the panellists for being here. I very much appreciate this.

Maybe I'll continue the conversation with Mr. Thompson.

It's important to hear that we can have those conservation practices that you mentioned and we can reduce emissions without sacrificing productivity. That's one of the reasons we're having this study.

In one of the things you mentioned in your opening statement, you talked about verifying carbon performances. Can you expand on that? What did you mean by how we can help in verifying carbon performance and seeing how we can measure the progress that our farmers are making and reward them for that?

[Mark Thompson]

Thank you to the member for the question.

In our carbon program that I referenced today with Nutrien, we're looking at two pathways to reduce emissions in the field. One is creating more removals, which is sequestering more carbon in soils through practices that I mentioned, like cover cropping and no-till, and then reducing nitrous oxide emissions from the application of fertilizers, which, again, can be achieved through practices like enhanced efficiency fertilizers, inhibitors and variable rate prescriptions in terms of how we use fertilizer in the field.

Part of our program today involves rigorous soil testing to start the program, and that's to establish a carbon baseline. Nutrien owns the largest U.S. soil-sampling company, and that's given us capabilities to support growers in this effort so that any outcomes we have in the program are science-based and verifiable. That was what I meant when I made that comment.

Second, we do have modelling, albeit historical and probably not up to date for today's practices, that Nutrien is working with industry partners to modernize in terms of today's practices used by Canadian farmers, as an example, and what we can expect in terms of nitrous oxide emissions in the field. We're creating baselines and performance measures for both of those things, so that we understand when we implement these practices what types of performance gains we're getting. We do see those from the early stages of our carbon pilots.

[Tim Louis, Liberal, Kitchener—Conestoga, ON]

That's important, and it's important to know that the farmers want to be part of the solution, but they also want to make sure it's accessible to them on the ground. I appreciate that you're working on that.

You also mentioned “market-based offset systems”. Is that about selling the carbon sequestration and having companies be a part of the solution?

[Mark Thompson]

That's correct.

Above all else, for growers to adopt these practices at scale, there will need to be an economic incentive. To achieve some of the outcomes I've talked about, there is an investment required, and there is a cost. In our carbon program, we've not waited for the moment for these voluntary markets or compliance markets to reach scale. Nutrien has believed over the past few years that we have to take action now to put that infrastructure in place. On the basis of our performance measurement and baselining, we're actually paying growers for their carbon performance in these pilots to create that economic incentive for practice adoption.

For this to happen at a larger scale than we're working on today, we'll need partners and policy-makers from across the ecosystem to come together and align on a set of hopefully universal standards that will allow this program to flourish. The market-based incentive will certainly be a part of that. To the extent that's there, growers make economics-based decisions and they care about sustainability. We will see those programs flourish if that incentive is there.

[The Chair, Liberal, Kody Blois]

Thank you, Mr. Thompson and Mr. Louis.

Mr. Perron, you have two minutes.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you, Mr. Chair.

Mr. Thompson, when you say that support needs to be put in place, are you suggesting that good behaviours or changes in practices that promote environmental protection should be financially encouraged?

[Mark Thompson]

We do believe that an economic incentive that compensates growers for the performance in the field, whether that's to sequester carbon or to reduce greenhouse gas emissions in the form of a carbon asset or a carbon credit, is an appropriate and needed incentive to scale up those practices. When we talk to industry partners from other industries outside of agriculture, there is a growing demand for carbon offsets, and we believe that agriculture can be a meaningful part of that equation.

Really, what we're talking about is providing the right economic incentives for growers to adopt these practices and create those carbon assets or carbon offsets that are going to be in need in a decarbonizing economy. We expect that, as this market takes shape, there will be value placed on those practices. We do believe that the OFCAF program, the on-farm climate action fund that has been set up, is a good measure to provide an initial incentive for the adoption of these types of practices so that growers can begin working on this today.

[Yves Perron, Bloc, Berthier—Maskinongé, QC]

Thank you.

Mr. Gervais, on the same topic, you talked about your rising costs. Do you have any other support measures to propose for environmental innovations?

[The Chair, Liberal, Kody Blois]

There are 30 seconds left.

[Ghislain Gervais]

Programs to support innovation are certainly always appreciated by agricultural producers. They have always embraced new technologies and are always at the forefront of lowering costs and reducing agriculture's environmental footprint. We know that agriculture emits greenhouse gases and contributes to global warming, but it is also the first to suffer the consequences.

Everything must be done to equip producers for this entire transition that will take place in the coming years.

[The Chair, Liberal, Kody Blois]

Thank you very much, Mr. Gervais and Mr. Perron.

Mr. MacGregor, you have two minutes.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you very much, Mr. Chair.

The fertilizer issue is getting a lot of airplay in the news these days. I personally think it's a laudable goal to try to find ways to reduce our emissions from fertilizer. I think if you had two farmers with the same amount of fertilizer, you could get two different emissions results based on how they apply that same amount of fertilizer. It's not about reducing the amount of fertilizer. I think it's about getting smart in how it's applied and how it's used.

I also know that a lot of farmers are leading the way in reducing their own fertilizer use. They are employing regenerative methods. They are paying attention to that important symbiotic relationship between plants and the microbiology in the soil. There is a way of doing this. There's a way of having an adult conversation about this. It will also serve to reduce farmers' input costs, ultimately.

In terms of selecting varieties of crops that can grow under conditions of less fertilizer use, paying attention to that microbiology and that important symbiotic relationship in the soil food web, is there anything CropLife can tell us about that important work that's being done?

[Ian Affleck]

There are some really exciting discoveries on the horizon. Recently, the Government of Saskatchewan invested $300,000 with the Global Institute for Food Security in nitrogen-efficient wheat. This is a wheat variety that would be able to produce similar or greater yields while using less nitrogen. That's not a focus on demonizing nitrogen; it's saying that this is a way to tailor those plans together with the variety to hit the optimal levels.

Even regular varieties we have now, they all go through trials where you look to see what the optimal level of fertilizer is. Growing up on a farm, I know that my dad never wanted to put an ounce of fertilizer on the ground that he didn't have to. They're looking to minimize inputs in every space, whether it's seed, water, fertilizer or pesticides. You're always trying to grow the most on the least with the least.

I think innovations like nitrogen-efficient wheat and other varieties that can do similar things will be very beneficial to agriculture in the future.