Thank you, and thank you for the opportunity to present to you today.
My name is Martin Unrau and I am the president of the Canadian Cattlemen's Association, which represents over 80,000 beef producers in Canada. Also with me is Andrea Brocklebank, who is a research manager for the Canadian Cattlemen's Association. I have asked her to come in if there are some questions we will need to address.
Canada's beef cattle industry has been through several years of financial turmoil, but until recently was in a strong recovery with tremendous opportunity, owing to strong global demand for beef and positive prices. In 2012 farm cash receipts from cattle and calves, combined with the multiplier effect from downstream economic activity, contributed $26 billion to Canada's GDP.
However, global food demand is expected to double by 2050, which would require a 1.75% increase in productivity per year. Currently productivity is increasing by only about 1.4% per year. This, in combination with increased competition for land and water resources, has resulted in rising and volatile commodity prices. This challenges our industry's ability to maintain positive margins, and more importantly, to fulfill increased demand for food in a sustainable manner.
Increased investments in research and innovation are critical for our industry. This will ensure the long-term sustainability and growth of the Canadian beef industry and allow us to use limited resources more efficiently.
Research investments made over the past 30 years have transformed North American beef production. The beef industry has seen a 14% reduction in water use, a 34% reduction in land use, a 20% reduction in manure production, and an 18% reduction in our carbon footprint per pound of beef produced in the last 30 years.
In tandem, research has assisted in providing consumers with high-quality, nutritious, and safe beef products. Research also provides the science necessary to demonstrate the integrity of animal health and food safety systems, which is increasingly important in trade negotiations and integral to reducing food safety incidents and to growing consumer demand. Continued improvements in production efficiencies through research are also required to ensure industry can compete with other protein sources globally.
Although the need for continued advances in research is clear, we are very concerned that a considerable loss of Canadian research infrastructure, project funding, and scientific expertise may hamper further progress. Despite an increased focus on innovation over the last several years owing to budget cuts, federal research funding for beef over the past two decades has seen a net decline on an inflation-adjusted basis of 35% to 40%, by our estimates. Ongoing cuts have seriously and negatively impacted research programs and scientific expertise. The viability of some critical research programs in areas such as animal health, food safety, and plant breeding are currently in question. Not only does this place future progress at risk, but it is a significant deterrent in attracting new expertise.
One of the most significant recent industry and government investments is the development of a beef cattle industry science cluster. This initiative brings together Canada's largest industry and public beef research funders, which are the Beef Cattle Research Council and Agriculture Canada, respectively, to deliver priority research. I am convinced that the beef science cluster approach will result in a very coordinated, efficient research model; however, cluster funding needs to be increased to ensure meaningful results. This should not come at a cost to the maintenance of basic long-term federal research programs outside of the clusters in core areas.
To summarize, we have three recommendations relating to research. First, investment in beef research needs to be increased to more appropriately reflect its important contribution to the industry and broader public good.
Second, federal research funding must be delivered on a minimum five-year basis. Program delivery has typically resulted in a three-year funding cycle, with gaps in funding. Longer-term, more predictable funding commitments are necessary to maintain strong research programs, attract new scientific expertise, and deliver meaningful research results.
Third, federal government research programs outside of the science clusters must be maintained in core areas, including animal health and welfare, environment, plant breeding, and food safety. This is critical not only for our industry's competitiveness but also to ensure scientific expertise is available to respond promptly and effectively to issues and opportunities that arise.
I would also like to briefly mention increasing investments in market development. This is a critical competitive piece for Canada, which exports 45% of its beef production.
Growth in exports of U.S. beef to Canada and the rest of the world over the past few years has been phenomenal. Some of this is due to currency exchange levels, but some is also due to the USDA's investment in export promotion. A report from the Office of Management and Budget puts returns on market promotion spending at $35 per dollar—