Value-Adding 20 Billion by 2005: Impact at the Alberta Farm Gate

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  • In recent years in Canada, direct support provided by governments to the agricultural sector has been decreasing due to international obligations under the General Agreement on Tariff and Trade/World Trade Organization (GATT/WTO) and the North American Free Trade Agreement (NAFTA). Consequently, governments and the agriculture industry are exploring ways of generating and sustaining farmers' revenue from the marketplace. In Western Canada, there is a renewed interest in the concept of \"post-harvest value adding\" and substantial investment has been made by the federal/provincial governments and the agriculture industry in value-added initiatives in the post-farm-gate sector. A greater part of farm products from western Canada is shipped and marketed as raw, bulky and unprocessed farm commodities. The value of processed food and beverages is low relative to the value of unprocesed farm commodities, reflecting a relatively lower level of value added to primary agricultural products in the prairies compared to Ontario. The annual rate of growth in processed food and beverages in the prairies is less than 5%. From 1988 to 1997, the average annual growth rate of processed food and beverages is calculated as 4.9% for Alberta, 4.4% for Saskatchewan, and 2.9% for Manitoba. Consequently, the potential for increased value-added processing has attracted much attention by both the federal and the prairie governments. In 1996, the Alberta government provided $35 million in seed money towards the establishment of a new, not-for-profit Alberta institution, the Alberta Value Added Corporation (AVAC). This corporation was created to foster research and development into the commercialization of value-added products with a focus on the agriculture and food sector. In 1996, the Saskatchewan government instituted an Agri-Value Program (AVP). The purpose of the program is to encourage the development of agriculture-related, value-added industries in that province. In 1997, Manitoba Agriculture and Agriculture and Agri-Food Canada introduced the Agri-Food Research and Development Initiative (ARDI). This initiative was meant to encourage, promote, and conduct innovative research and development projects that contribute to economic development, sustained prosperity, and successful adaptation in the changing agricultural trading environments. Post-harvest value-added activities are part of a continuous, complex economic development process within the food system. Assessing the effectiveness of value-added initiatives in the farm sector requires an understanding of the whole economic process. This includes an understanding of: 1. the growth in effective demand for value-added products and production of agricultural raw materials, 2. the multi-stage system of the food production process, 3. the structure of the food production technology, and 4. the payoffs of value-added investments to enable better policy decisions regarding alternative uses for these public funds.

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    Attribution-NonCommercial-NoDerivatives 3.0 International