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Canadian farms are navigating a combined actuality.
Farm money receipts climbed to $25.6 billion in the first quarter of 2025, up 3.1% from final yr. And whereas a country-wide ‘elbows up’ push to purchase Canadian items has proven successful, farmers proceed dealing with tariff-related geopolitical uncertainties and worsening local weather change, together with more and more intense wildfires.
Behind the numbers, a brand new Farm Credit Canada (FCC) Thought Leadership report by enterprise intelligence analyst Bethany Lipka and senior economist Isaac Kwarteng, warns that Canada captures just 2% of global farm tech investment — a niche that leaves Canadian producers with fewer instruments to adapt, compete, and develop.
Without a surge in analysis and expertise spending, the report says, productiveness development will proceed to stall, and Canada will preserve dropping floor within the race for global agtech management.
That shortfall isn’t just a quantity on a chart. It’s half of a decades-long slide in Canada’s agricultural analysis and growth (R&D) that has slowed productiveness and eroded the nation’s once-strong place in global innovation.
For three a long time, the report says, Canada has been slipping in “agriculture knowledge generation,” i.e. the Organization for Economic Co-operation and Development (OECD) measure of budgetary spending on agricultural analysis and associated information dissemination.
Sans jargon? It’s the technical time period for a way a lot governments are budgeting for agricultural R&D and for actions like gathering and sharing associated information.
In the early Nineties, Canada was a global chief, forward of the United States, Japan, and even the OECD common. Today, in keeping with the report, it’s the other. They cite a University of Calgary School of Public Policy paper that estimates each greenback invested in agricultural R&D yields a return of $10 to $20.
Public investment stays the first supply of agricultural R&D funding. In 2023, Agriculture and Agri-Food Canada spent over $829 million on science and innovation, the report explains, which is greater than 4 instances what agricultural companies invested themselves.
Venture capital, a main purpose why new instruments make it to the farm out of a prototype, has additionally been sliding. Canadian agtech offers peaked in 2021, Lipka and Kwarteng discovered, however have since fallen again to close pre-pandemic ranges. In 2024, the United States outpaced Canada by a ratio of 6:1 in deal quantity and 23:1 in deal worth.
Between 2018 and 2024, Canadian firms averaged just 5% of global agtech offers and a pair of% of whole deal worth, the report discovered.
Ultimately, this leaves Canadian agtech innovators with fewer avenues to scale options, and fewer choices for Canadian producers to undertake confirmed expertise.
Lessons from overseas
The report factors to the United States, European Union, and Japan as examples of how coordinated investment methods can create aggressive benefit.
- United States: Large private and non-private funding streams, plus innovation hubs in areas like Silicon Valley, have accelerated adoption of robotics, AI, and precision agriculture instruments.
- European Union: Programs together with Horizon Europe emphasize sustainable practices and local weather resilience, with international locations like the Netherlands main in controlled-environment agriculture and collaborative analysis.
- Japan: Heavy investment in automation, vertical farming, and data-driven techniques helps the sector deal with labour shortages and land constraints.
Each of these areas is utilizing focused capital to align innovation with clear business priorities, one thing Lipka and Kwarteng say Canada should match if it needs to guard its export place and seize rising alternatives.
What Canadian companies can do now
FCC outlines 5 sensible strikes to shut the investment hole:
- Increase non-public R&D spending with a commercialization focus. Tripling present investment ranges may elevate farm incomes by billions, particularly if directed towards areas like precision agriculture, automation, biotechnology, AI, and digital instruments.
- Look past Canada for expertise. Bringing in confirmed options from different markets can bridge the innovation hole whereas home R&D capability grows.
- Strengthen networks and hubs. Collaboration between researchers, startups, producer teams, and traders can enhance the move of concepts and capital.
- Remove adoption obstacles. Reduce the fee and complexity of integrating new instruments into farm operations, and spend money on workforce coaching to help them.
- Prioritize sustainability. Tie innovation investment to practices that enhance yields whereas decreasing environmental affect.
Why it issues for enterprise leaders
The report’s numbers ought to catch the eye of anybody with a stake in Canada’s agri-food economic system. Productivity just isn’t solely about producing extra, it’s about competing on high quality, price, and resilience in a unstable market.
And if there’s any second to do it, it’s actually now.
For agtech entrepreneurs, the takeaway is that options with robust commercialization potential will discover a market, however scaling them would require extra affected person capital and strategic partnerships. For established agribusinesses, the message is to deal with expertise adoption as a core competitiveness technique, not a aspect venture.
“Canada’s economic future requires an agri-food industry that takes an advanced approach to innovation and productivity,” says Darren Baccus, government vice-president of Agri-Food, Alliances and FCC Capital. “Historically, investment dollars have been scarce and have not been scaled to meet the increasingly sophisticated needs of the sector.”
Final pictures:
- Closing Canada’s agtech investment hole just isn’t non-obligatory if the nation needs to take care of its position in global meals markets.
- Leveraging international improvements may ship near-term positive aspects whereas home R&D scales up.
- The return on investment for agricultural R&D is among the many highest within the economic system. Leaders ought to plan accordingly.