We went to Nova Scotia (on the east coast of Canada, above Maine in the USA and one of the Maritime States). As such, my comments on agriculture in Canada will be limited to what I have seen here.

Nova Scotia was very interesting agriculturally but probably the most interesting aspect is the supply management which they use to “support” their farmers. They use quota to match domestic production to domestic consumption and hence there are very little if any exports of products that are not in quota. Products in the supply management program include dairy and chicken (both broiler and eggs). Notable exceptions are beef and pork, both of which are struggling in Nova Scotia at the moment. Nova Scotia seems to be building a competitive advantage in horticultural crops (fruit (especially apples), vegetables and to a lesser extent wine).

The climate here is very cold (still a lot of snow cover here at the moment) with temperatures between approximately -5 degrees to 5 degrees centigrade at present. However in summer it only gets to the mid 20’s with the odd day reaching 30 degrees. Rainfall is approximately 1200mm but that doesn’t include all the snow they get. Thus, it is really a cold climate agricultural zone. As such, it is very wet given the lack of evaporation and a lot of the land is “tiled”, which is when deep drainage is put in (a 6 inch pipe is laid approximately 2 feet deep to drain the excess water off the fields). There is some arable land but that mainly grows corn, soybeans, lucerne and some winter wheat. The first three are grown predominantly for the dairy and chicken industries and are either made into silage or heated to be made into palatable feed.

Canada also have a production insurance program (based on a premium of 40% I think) in addition to income insurance which is calculated based on your (or in the absence of your own farm your industries) gross margin performance and deviation from that performance. How long this is maintained in the face of WTO I am unsure, but I can’t see it being removed in the short term. This system applies to all agricultural industries as far as I can tell. In relation to marketing, a lot of their produce is marketed through co-ops or through local processors.

There has been a push recently from the community to “buy local” which seems to be supporting a lot of the prices that the farmers are receiving. In many ways it appears to be similar to Europe with a lot of domestic support and discerning local customers who are demanding not only environmentally clean and sound produce, but also a “story” behind the food. These consumers (on the whole) also seem prepared to pay for this type of food, although whether this continues in the present economic climate is yet to be seen. Thus, I witnessed a lot of niche operations and value adding type activities to try and extract more margin from the supply chain (particularly in horticultural type goods which only require minimal processing).

Dairy seems to be the main industry where people have made money but that is predominantly driven by the quota system. Farmers are being paid approximately C$0.78 per litre of milk (more than double the Australian milk price at present I think) and it has got to the stage where the quota to supply the milk is worth more than the farm itself. We saw a number of dairies milking between 30-100 cows (biggest dairy I heard of was 600 cows), all in barns (they never go outside) and they were milking over 10,000l/cow. One farm I visited would have more money invested in machinery than me to support the dairy including a self propelled forage harvester, combine harvester, 4 tractors, feed wagon, hay rakes, planters, boomspray and other miscellaneous pieces of equipment. This profitability is underpinned by the supply management or quota system and whilst it appears to be up for negotiation in WTO, I feel that it is too much of a “sacred cow” (pardon the pun) to actually be given away. Nevertheless, many Australian farmers felt that the same rules applied to the wheat single desk and we know what happened there.

One farm we saw had 20,000 laying hens and was in the process of doubling his broiler production from 60,000 to 120,000, which still are very small numbers in both case. He also had a dairy and had a closed loop system where the manures from the dairy and chickens were spread back on the farm and the grain from the farm was milled and fed back to animals. I doubt this system would be sustainable outside of Canada because the three industries were underpinned by quota and the scale of them would not fly elsewhere in the world. We also saw value adding of cheese (albeit in a small way) but probably one of the more interesting guys was a Nuffield Scholar who was growing summer savoury (a herb) and then drying/packing it and selling it under his own label to supermarkets and gift shops.

We also witnessed a lot of vegetable production but probably one of the growing industries and one able to stand on its own feet from an export point of view is the apple industry. They are increasingly growing a variety called HoneyCrisp and are getting paid 5 times/bin more (approx $500/bin v $100-$150/bin) than the prevailing market price for other varieties. There has been a lot of money made over the past few years in the apple industry out of this variety but more and more acres are being planted and also in Washington State (in the USA) which dwarves production in Nova Scotia (approximately 110m bushels in Washington v 2.5m bushels in Nova Scotia). However one of the key strengths of Nova Scotia is they grow excellent quality and they are normally the last to market (given how far north they are) and thus they don’t have to compete against much other fresh fruit (that isn’t already in cold storage). They seem to do a very good job in the apple industry here but have issues with labour (a lot of Jamaican labour is flown in contract to pick fruit) and disease because it rains so much. Land prices for country here were around C$1,000-$3,000/acre for everything from cropping to dairy to apples. Farm size is quite small on the whole (around 100ha) for orcharding but the industry is expanding. However if quota goes it could get very ugly for agriculture in this part of the world because they have such a short growing season.

The other interesting industry we saw was the wild blueberry industry. These are little shrubs that naturally grow in the poorer soils (pH CaCl of approximately 4.0) and yield up to 4t/ha. Prices were around C$0.60/lb (or C$1.50/kg if my translation is correct) and the only places in the world they are grown are the Maritime states of eastern North America. They are a biannual (ie harvest every two years) perennial crop that has expanded rapidly in Nova Scotia and also Quebec as well as Maine. Very little is sold fresh, with the majority individually snap frozen and exported to Japan, Germany and the EU. I feel the industry is somewhat controlled by the processors but in terms of a crop that is limited in terms of being able to be grown elsewhere in the world, it could be an opportunity. There are also very high antioxidant levels in the blueberries (both wild and also highbush which are the conventional type that are also grown) and they are targeting the health conscious consumer both domestically in North America and also internationally. A comment on the industry is that they are focussing on increasing production which then drives down the price and they have to increase production further. Perhaps they would be better off reverting to organic production to cut down on their operating costs and trying to extract a premium for their product that way to increase margins?

We also went to a maple syrup farm. Quite interesting in terms of production and possibly even the potential for carbon credits. However the lead time for production is approximately 80 years in Nova Scotia (40 years in Quebec) till the tree is mature enough to support being tapped for the sap to make maple syrup. It takes 40l of sap to make 1l of syrup, which retailed for C$10/l. Whilst it is not a very labour intensive crop (production and manufacture only occurs in March/April each year)

In summary, despite having very good technical skills, the dairy and chicken industries are governed by quota and it would be too expensive for outsiders to buy into these sectors. I feel that the apple, blueberry and vegetable industries offer some potential for domestic consumption and also to export into the USA, but I would have to undertake more analysis to ascertain returns on capital and profitability. Also, I feel that some of their boutique cold climate agriculture could possibly be adapted to Australia where we have a similar climate and growing season. However it is far too cold for me to want to live here!!