Farm Credit Canada

Farm Credit Canada

November 01, 2011 04:30 ET

Effects of globalization accelerating, says new FCC publication

REGINA, SASKATCHEWAN--(Marketwire - Nov. 1, 2011) - Changes in international trade and globalization of markets have occurred faster than anticipated, according to Farm Credit Canada (FCC). The latest issue of the FCC Knowledge Insider (which shares insights about how farmers and agribusinesses can prepare for success in a changing world) revisits the topic of globalization with industry experts and business owners.

"We decided to revisit the topic because so much has changed since our first Knowledge Insider on globalization in 2008. There have been changes in export patterns, how international business is affecting business here in Canada, and growth in exports to the BRIC (Brazil, Russia, India and China) countries. We have also found that very credible expert opinions have shifted significantly. Canadian producers and agribusiness and agri-food operators are navigating a complex and dynamic industry that demands 24/7 attention," says Kellie Garrett, Senior Vice-President of Strategy, Knowledge and Reputation at FCC.

Garrett says that in today's world, staying on top of your game and being agile are crucial – no matter what industry you're in. This is particularly true for the agriculture and agri-food industry. The FCC Knowledge Insider publication offers farmers and agribusinesses access to information from varied sources to help them make good decisions and plan for the future.
Highlights from the publication include the following:

  • Canada's top ten agriculture exports have shifted in the past three years, with growth in bulk exports rather than value-added products.
  • Based on GDP, Goldman Sachs now suggests that Brazil, India and China could become as big as the G7 by 2032, about seven years sooner than earlier predictions.
  • According to a 2010 FCC Vision Panel survey of Canadian producers who export products, 80% of respondents said they plan to add further value to their products over the next five years.
  • Domestic and international businesses are transforming how they do business to meet the new global marketplace.

In Quebec, Semences Prograin Inc. – which began as a local seed business in 1980 – is now a global exporter, specializing in soybean seed and food-grade soybeans.

"We saw the opportunity to become a more global company when we recognized that the specialized seed we were producing for our Canadian climate would also sell in places with similar climates, such as Germany, Italy and Ukraine, to name a few," says Marc Ham, Director of International Marketing for Semences Prograin Inc. "We now have a global export business focused on research and development, specializing in soybean seed and food-grade soybeans. This has enabled us to move from shipping 500 metric tons of soybean seed in 1987 to developing new varieties of soybeans, treating them a food ingredient, and shipping 60,000 tons today, enough to feed about seven million people around the world."

In 10 years, Saskatchewan-based Alliance Grain Traders Inc. has grown from a start-up to a company that handles about 40 per cent of Canada's lentil exports, as well as other staple foods from facilities around the world.

"From day one, we focused on global markets. Our core lentil products have always been grown here, but consumed elsewhere, however, we choose to process them here at the source, and ship finished product. We do this with lentils, peas, chickpeas and beans, as well as other staple foods like pasta and rice and have located our 27 worldwide facilities with the same philosophy – take locally grown products from producers, process them to add value locally and ship finished food products to the world," says Murad Al-Katib, President and CEO of Alliance Grain Traders. "While we began as a lentil exporter in Canada, we have grown to being a global business that trades, produces and distributes pulses and value-added staple food products internationally."

"The global landscape is being redefined, with new trade agreements, changing regulations and exchange rates. While change brings risk, there are also opportunities – with income growth in emerging markets and increasing investment in agriculture. This suggests a bright future for the industry," says Jean-Philippe Gervais, FCC Senior Agriculture Economist. "We have great expertise and knowledge in Canada. We not only sell commodities and processed food, we also successfully export technology. It is important that we also keep developing our own technology and productivity."

A complete copy of the Knowledge Insider as well as useful tools to help producers and agribusinesses consider the impact of globalization on their operations can be found on the FCC website at www.fcc.ca/insider.

As Canada's leading agriculture lender, FCC is advancing the business of agriculture. With a healthy portfolio of more than $21 billion and 18 consecutive years of portfolio growth, FCC is strong and stable – committed to serving the industry through all cycles. FCC provides financing, insurance, software, learning programs and other business services to producers, agribusinesses and agri-food operations. FCC employees are passionate about agriculture and committed to the success of customers and the industry. For more information, visit www.fcc.ca.

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