Cultivating a vibrant Canadian economy The contributions of crop protection products and plant biotechnology CropLife Canada 2011 www.croplife.ca
Executive summary The impacts of the crop protection/plant biotechnology sector on the Canadian socio-economic structure were examined. Specific metrics that were measured included (a) economic activity, (b) job generation, (c) tax revenue generated, (d) affordability of food and (e) the environment. Crop protection/plant biotechnology creates over $6.4 billion in value through additional yields and quality attained by producers of field crops; over $358 million in additional value through added yield and quality in 29 vegetable crops; approximately $508 million in value in added yields and quality in 13 fruit crops; and nearly $614 million in added yield and quality in potatoes adding up to over $7.9 billion in value in Canada. This additional $7.9 billion that s attributable to the deployment of innovation from the crop protection/plant biotechnology sector generates a further $6.4 billion in economic off-farm activity and 97,121 jobs (full-time equivalent). A large portion of the additional off-farm activity arises in Ontario ($1.75 billion in economic spin-offs and over 22,000 jobs across 19 sectors). About 65 per cent of Canada s $10.4 billion food trade balance (food value exported minus food value imported) arises because of production efficiencies attained through the use of plant biotechnology/crop protection products. Taxes generated for governments as a result of the economic activity generated through yield and quality gains on crops, and the subsequent rippling of those gains through the economy, total almost $385 million, the majority of which goes to provincial governments. The increased efficiency of crop production owing to crop protection/plant biotechnology has allowed us to preserve and leave uncultivated 37 million acres of forest, native grass, wetlands, etc. (Thirty seven million acres is equal to the total annual cropped area of Saskatchewan, or four times that of Ontario.) Since 1990, the reductions in tillage owing to the use of crop protection products and plant biotechnology (specifically biotech canola) have resulted in a 4.1 fold increase in carbon sequestration in cultivated land. The use of modern crop protection and plant biotechnology has resulted in 171 million less litres of diesel fuel burned on farm owing to reduced tillage and reductions in the number of equipment passes on land. For domestically grown produce, on an annual basis, the average Canadian family saves 41 to 53 per cent on vegetables and 34 to 39 per cent on fruit due to the use of modern crop protection. Savings on any food that requires wheat flour or soy products (commonly used in processed foods) may be as high as 69 per cent. Report produced by Mark Goodwin Consulting Ltd. State of the Industry Report CropLife Canada 2
Socio-economic impact of crop protection and plant biotechnology in Canada Many have quantified the socio-economic benefit of modern agriculture as a sector, both here in Canada and in other jurisdictions around the world. In many countries, such as Canada and the United States, high efficiencies on the farm have resulted in wealth gains and the development of diverse, urban-centered economies. This report will focus specifically on the role that two key technology areas within agriculture have had within this context; specifically the crop protection industry and the plant biotechnology sector. This report will attempt to quantify the benefits that accrue to the economy owing to the accomplishments of the people who have worked to develop and implement these technologies. Some background on the role of crop protection and plant biotechnology in Canadian society In recent times, agricultural practices have undergone sweeping changes. Revolutions in crop protection techniques, breeding, agronomy and farm equipment design, have led to higher yields and more efficiency with respect to how many people can be fed for every acre of farmland utilized. Canadian agriculture has participated in this revolution, and in many instances, the Canadian industry has been at the forefront of the progress that has been made. The efficiencies that growers and food workers have implemented have led to an agricultural sector that, according to Industry Canada statistics, generated over $70 billion in economic activity (8.8 per cent of our GDP) in 2008. Agriculture and the Canadian agri-food system account for one out of every eight jobs, employing two million people. One of the elements that has enabled this growth has been the use of crop protection chemistries and modern plant breeding techniques, including plant biotechnology. Modern crop protection chemistries have been used in Canada since the middle of the 20th century, with the advent of insecticides and early weed control products such as 2,4-D. Since that time, crop protection solutions have been developed and used for other serious pests such as wild oats and potato late blight. Concurrent to this, a rigorous regulatory regime developed, with the federal government demanding that crop protection products undergo exhaustive health and environmental testing. Annual crop protection sales in Canada over the past decade have risen from $1.27 billion in 2001 to $1.42 billion in 2006 (CropLife Canada Annual Report 2008). Of this total, the majority of sales went to weed control products purchased by farmers, with approximately 75 cents of every crop protection dollar spent on herbicides. Biotechnology is a more recent innovation. Biotechnology is a term covering a broad range of scientific activities used in many sectors, such as food, health and agriculture. It involves the use of living organisms or parts of living organisms to provide new methods of production and the making of new products. Of late, plant biotechnology has come to refer to modern, non-classical breeding techniques. The majority of the industry s initial growth has occurred with the advent of herbicide tolerant technologies ( HTCs ) in the early 1990s. Of late, hybrid technology has allowed for enhancements in yield and agronomy that are not specifically tied to herbicides. In 2010, there were nearly 22 million acres of biotech crops (primarily canola) in Canada. State of the Industry Report CropLife Canada 3
Measuring the socio-economic impact of crop protection products The term economic impact analysis refers to the conducting of analytical surveys, research, and modeling to estimate the direct and indirect economic effects of a sector or industry. This report will specifically examine (a) economic value added by crop protection and plant biotechnology, (b) employment arising from the use of the technologies, (c) tax revenue arising from the economic activity created by crop protection/plant biotechnology, (d) income generated by the technologies, and (e) contribution of crop protection/plant biotechnology to gross domestic product and trade balances. Typically, economic impacts fall into (a) direct impacts, (b) indirect impacts and (c) induced impacts. Direct impacts are felt by those individuals, groups and firms directly engaged in the activity being affected. Indirect impacts are the economic value generated through the act of developing the technologies and the economic activity generated as a result of the deployment of the technologies. Induced impacts are the effects of people spending the money that they earned from participating in direct and indirect activities. Diagram 1 depicts these relationships in the context of crop protection and plant biotechnology. The purpose of this report will be to measure the economic impact of the crop protection and plant biotechnology industries in Canada. The first step will be to follow benefit streams as they manifest themselves at the farm gate through deployment of crop protection and plant biotechnology by the grower. We will then follow benefits if/when they ripple out from the farm, downstream into the food chain, or upstream into farm inputs or farm services businesses. We will examine the economic impacts as they impact trade, tax revenues, jobs and other features as the benefits accrue across the economy. Diagram 1 Measuring the impact of crop protection and plant biotechnology on the Canadian economy PRE-FARM ON-FARM POST-FARM Economic value derived from researching, formulating, distributing and selling crop protection products and plant biotechnology Economic value attained on-farm through yield and quality gains in crop production as a result of using crop protection products and plant biotechnology Economic value derived from moving/handling the crop production that arises from the use of crop protection products and plant biotechnology State of the Industry Report CropLife Canada 4
Part One Value of incremental crop production produced on the farm due to the farmers use of crop protection/plant biotechnology State of the Industry Report CropLife Canada 5
I. Economic impact created at the farm gate national perspective The crop protection/plant biotechnology industries have enabled growers to attain better pest control and field performance through (a) development of crop protection chemistries and (b) development of genetics that allow for enhanced pest control options (e.g. herbicide-tolerant canola, herbicide-tolerant corn, herbicide-tolerant sugar beets, herbicide-tolerant soybeans and insect-tolerant corn). Recently, more companies have been directing efforts towards the goal of driving field performance of crops up through the use of traits that are not directly related to crop protection (e.g. high-yielding hybrids, frost tolerance and drought tolerance). The economic impact of these technologies on the farm can be quantified as a function of two sources of gain (a) incremental yield attained and (b) incremental quality attained with these two factors given final judgment in the marketplace as a combination, through the price received for the crop. To calculate the portion of crop returns that can be reasonably attributable to crop protection technology and plant biotechnology, it is necessary to ask two questions: (1) What is the current value of the crops that Canadian growers produce under management systems that use crop protection/plant biotechnology and (2) What would values be without these specific crop protection/ plant biotechnology tools? Answering the first question logically requires assembling actual production and returns per acre data to see what yields and quality metrics show. Answering the second question requires the use of a proxy that serves to reasonably function as a no crop protection/no plant biotechnology control group. Choosing a method for assessing the current value of the crops that Canadian growers produce under management systems that use crop protection/plant biotechnology Assembling the current quantities of crop production in Canada can be reliably accomplished. Yield and production figures are routinely assembled by Statistics Canada and a review of their methodology shows that it has been consistent over the years and any changes to data collection are well-documented and transparent. Attaching value to that quantity is also straight forward as there are liquid markets that regularly value crops. Quality of crops is easy to document, but the value of quality, however, is more nebulous and it is challenging to quantify empirically as a standalone factor. With many crops, standard grading processes are used on a year-to-year basis, but critical values (e.g. quality values associated with processing) that determine whether a crop is selected for a premium is a function of supply and specific business needs to the buyer. Thus it may be possible to log or record quality increases - but it is impossible to isolate and present a value for quality enhancement due to the use of plant biotechnology or crop protection or at least one that is consistently measureable from year-to-year on crops on a national basis. As well, grade definitions are subject to change, and thus isolating the dollar value of larger or long-term increases in quality is impossible. These facts notwithstanding, we do know that there is irrefutable evidence that crop protection and plant biotechnology do improve the quality of Canadian crops. As an example, a study commissioned by the Canola Council of Canada showed that the use of biotechnology/htc canola led to a six percentage point increase in the proportion of the crop that was graded as #1 (see Chart 1). Similarly, the use of desiccants or harvest management products in certain crops (lentils, beans, flax) allows for timely harvest, and with that, a reduction in quality loss due to weathering. We can measure or estimate the positive impacts of crop protection products or plant biotechnology on the quality of individual crops. Again, quantifying the value on a broad socio-economic basis apart from total crop value is impossible. State of the Industry Report CropLife Canada 6
Chart 1 Example of the impact of plant biotechnology canola Grade Canola crops grown using transgenic varieties/hybrids Conventional canola #1 91% 85% #2 6% 9% #3A <1% 3% #3B 0 0 Source Canola Council of Canada An Agronomic and Economic Assessment of GMO Canola Koch et al 2001 Given these complexities, the best assessment of quality lies in addressing quality through the use of ultimate measurement that being the price that the market actually paid for the crop. Yield and quality can be assessed on a combined basis by tallying up the actual prices that the market was willing to pay for the production as a function of both quantity and quality on a national basis. Choosing a proxy for non-use to compare crop protection/plant biotechnology There are three approaches for attaining a comparison with a non-treated proxy; Approach #1 We could compile yields from peer-reviewed, Canadian trials wherein there is a valid treated versus untreated in the experiment. Such a comparison would contain treated plots being sprayed with a crop protection product, or seeded with a variety or hybrid developed through the use of biotechnology, or both. The yields and quality derived from these would be compared to untreated checks contained in the same trial. Approach #2 We could compile crop insurance data wherein treated (i.e. sprayed or biotechnology-based production) could be compared to fields where no crop protection products or plant biotechnology was used. The database would be actual fields, with yields reported by the producer to crop insurance entities. Approach #3 We could compile organic/low input trials or grower-based yield data wherein there are valid comparisons to conventional farming. In the first two instances, comparisons are not likely to be fair as they will likely overstate the value of crop protection chemistries. With Approach #1, the untreated checks often will (by design) not have any mitigating management efforts to minimize the impact of pests. An untreated check would essentially constitute abandonment as opposed to farming without crop protection chemistries/plant biotechnology. We do not want to compare the value of crop protection to the value of abandonment as this will overstate the impact of crop protection. There is a second reason that this approach would likely overstate the value of crop protection products. Use data shows that less than half of field crop acres are sprayed for wild oats (the major grass weed) and many producers go several years without spraying insecticides for grasshoppers or outbreak pests. Many pests are treated on a patch basis or on portions of fields only (e.g. patch treatment of Canada thistle, perimeter spraying for grasshoppers or flea beetles, etc.). In contrast, small plot work tends to be conducted in areas where maximum pest pressure is present. Projecting yield data attained in small plots would likely overstate yield differences because pest pressure is usually not field-wide and applications are often not field wide. State of the Industry Report CropLife Canada 7
In Approach #2 (crop insurance data), confounding effects are possible because the untreated fields constitute a mixture of fields that (a) were not sprayed because they did not require a crop protection product, and (b) fields wherein pest control failed potentially due to poor management issues. Thus we would be pooling very wellmanaged, integrated pest management (IPM) fields with very poorly managed or failed fields. It is the third approach that is the most reasonable namely the comparison between organic versus conventional production. Although not perfectly symmetrical, this approach gives the most realistic measure of the yield contribution that crop protection chemistry and plant biotechnology makes because it takes into account additional management steps that non-use producers would make in order to mitigate or lessen the yield losses due to pests. Organic producers are the most experienced in society at making do without the majority of crop protection products and plant biotechnology. This in itself guards against us overstating the value of crop protection products/plant biotechnology. The organic sector is mature enough to allow for an assumption that the current yield performance they experience is the best metric for use as a non-use control. This contrasts with the former two approaches where the absence of pest control products is not countered with the use of compensatory management steps (e.g., delayed seeding, altered crop rotations). Note, however, that the use of organic production as a non-use control is not perfect. Firstly, organic farms also tend to be smaller in scale than conventional production. Yields attained on small scale basis may not be attainable across the tens of millions of acres farmed in large tracts or management units. Secondly, organic producers actually do rely on crop protection companies for production of biologicals or organically certified pesticides that strictly meet the definition of a crop protection product. (In fact, a number of these products are produced by CropLife Canada members.) Thus organic production is not a pure non-use of crop protection products proxy. Thirdly, there are some differences in how inputs such as fertilizers are applied in organic agriculture as well. Fertilizer sources will be different in the organic production sector than fertilizer sources used in the conventional crop production sector. Organic sources of nitrogen are (a) manure and (b) nitrogen fixing crops/green manures. In the case of the former, N content is lower (N content ranges from 0.5 to 1 per cent) than synthetic fertilizer (N content of up to 46 per cent) and so access to large quantities of manure or a scale down in farm field size is required. In the case of the latter, legume based rotations are required. There is evidence that shows that on a small farm scale organic producers can maintain N levels at or near those seen in commercial dry land production. Phosphorus fertilization is markedly different in organic versus conventional production. Organic producers must rely on less available phosphorus sources (such as rock phosphate) and so a small portion of the increase in yields of conventional versus organic production may be attributable to the fact that better phosphorus fertility occurs with conventional production. In general, however, these three asymmetries all tend to err on the conservative side in estimating the incremental crop production derived from crop protection and plant biotechnology because they assume that the results that smaller scale farming as practiced in organics could be conducted over the entire Canadian agricultural sector on a large scale basis. It also values the crop protection/plant biotechnology sector because it does not credit the crop protection sector with the value that CropLife Canada members provide to organic farming. We must be aware then, that the figures that arise from this comparison will likely somewhat understate the value of crop protection and plant biotechnology. The relevant equation for deriving the value of production achieved through use of crop protection products and plant biotechnology in Canada then is as follows: Production with crop protection/plant biotechnology = 100 Production under non-use State of the Industry Report CropLife Canada 8
Where production with crop protection/plant biotechnology is the value of production that is attributable to the use of modern crop protection and plant biotechnology, and production under non-use is equal to the percentage of production attainable if crop protection products are not used the proxy for this term in the equation being organic production. Assembling the data for the current value of the crops that Canadian growers produce under management systems that use crop protection/plant biotechnology With respect to data on conventional crop production, the primary data source for this aspect was Statistics Canada compilations of yields and average annual prices. On a crop-by-crop basis, the most recent two years of total production were chosen as a measure of yields attained. The most recent two years of gross income by crop were chosen as a measurement of quality since this represents what the market was willing to pay for each year s crop. Combining these two measurements tell us what the market was willing to pay for quality and quantity combined. To measure the impact of crop protection and plant biotechnology on a broad measure of agricultural crops, these numbers were tabulated on the most commonly grown crops. The crops/crop groups included constitute 96.5 per cent of annual area cropped as presented in the 2006 Census and include; The 16 largest grain/field crops cereals, oilseeds, pulses and special crops The 13 largest fruit crops The 29 largest vegetable crops Potatoes Assembling data for use versus non-use of crop protection products and plant biotechnology reviewing organic production data Calculating a number for non-use requires the assembly of organic/low input yields and quality so that we can compare that experience to the experience of conventional agriculture. There is a broad range of data that permits a calculation for yield arising out of use of plant biotechnology/crop protection. A list of studies reviewed and evaluated is in Appendix 1. Some authors of organic versus conventional comparisons reported on actual yields attained in their studies while others used projected or theoretical values for organic production. For the purposes of this report, actual yields were considered as being more credible than theoretical. Some studies reported actual yields but did not conduct the trial with any pest pressure, while others did conduct trials with typical pest pressure. Again, studies that were conducted with meaningful pest pressure were considered more relevant than those conducted with zero pest pressure. Lastly, some studies reviewed were conducted within Canada, or in US states with production systems that approximated Canadian agricultural practices, and others consisted of comparisons within farming systems and practices that did not resemble those used in Canadian agriculture. North American studies were considered to be more relevant than studies conducted in the EU or elsewhere due to differences in agronomic practices and intensity of production, among others. State of the Industry Report CropLife Canada 9
1. The incremental value created by crop protection and plant biotechnology at the farm gate the 16 most frequently grown field crops For the purposes of this report, Statistics Canada data regarding production during 2008 and 2009 of the 16 largest field crops produced in Canada include the following: Wheat Oats Barley Corn Buckwheat Dry peas Dry beans Flax Soybeans Mustard Canola Sunflowers Sugar beets Lentils Canary seed Fababeans Prices per tonne were obtained on October 14, 2009 from Agriculture and Agri-Food Canada s market website http://www.agr.gc.ca/pol/mad-dam/index_e.php?s1=pubs&s2=go-co&s3=php&page=go-co_2009-08-28 for the periods noted previously (2008-2009). Prices per tonne figures were multiplied by tonnages produced to derive a gross annual value created by producers on a Canada-wide basis. The same figures were broken down to examine regional figures for the Maritimes, Ontario, Quebec, the Prairies and British Columbia. With respect to determining what portion of this value can reasonably be attributed to the use of crop protection chemistries, a number of key resources were referred to wherein the researchers reported on yields on a comparative basis organic versus conventional. A list of studies reviewed and evaluated for this purpose can be found in Appendix 1. The most useful studies within this cohort were ones that contained the following characteristics: Canadian or US third-party studies (universities, agricultural colleges or commodity groups) Peer-reviewed journals that reported on either (a) replicated field trial data or (b) farm yield surveys Federal/provincial/state government studies with estimates wherein assumptions were transparent There was some variability in results, with some research workers finding greater differences between the crops grown using conventional crop protection versus non-use. Where there was more than one data source available, an average was derived. There were several papers that were particularly useful as sources for yield comparisons; Productivity of Organic Cropping in the Eastern Prairies: On-Farm Survey and Database Development, M. H. Entz, R. Guilford and R. Gulden Ten per cent organic in 15 years: Policy and program initiatives to advance organic food and farming in Ontario, R. MacRae, RC Martin and J Langer Safeguarding production losses in major crops and the role of crop protection. Oerke et al Vlachostergios, D. N.; Roupakias, D. G. Euphytica, Oct 2008, Vol. 163 Issue 3, p449-457 Mazzoncini et al Aspects of Applied Biology 79, 2006 J.D. Kelly, B. Long, N. Blakely, E. Wright, and J. Heilig 2008 DRY BEAN YIELD TRIALS Within these papers, the authors recorded yields for individual crops that were treated with crop protection products and yields for crops where non-chemical measures were deployed. The Entz study was performed in Western Canada and examined actual yield data from 14 organic farms in the eastern Prairie region. A total of 1078 field records were collected for the time period 1991 to 1996. The researchers (Entz, Gulden and Guildford) found that organic producers could produce an average of 75 per cent of the amount of grain produced in conventional agriculture. Peas and flax in organic agricultural systems could be produced to 54 per cent of conventional yields, and canola yields were 44 per cent of conventional canola yields. State of the Industry Report CropLife Canada 10
Similar observations were noted by Oerke et al, with this paper reporting on actual yield losses in the field in comparison with what potential yield losses would be without crop protection products. These results are compiled on a worldwide basis, and for the purposes of the current study, yield reports that appeared to be irrelevant to North America were omitted. Another key study was produced by MacRae, Martin, Juhasz and Langer in Ontario. These authors examined the yield that could be attained with conventional agriculture versus organic agriculture in Ontario. The authors data essentially agreed with Entz and Oerke regarding the scale of loss for the first season after production is switched from conventional to organic agriculture but they propose that these differences will lessen as the seasons pass. They contend that that the yield differences between organic and conventional agriculture would narrow over a three or four year period. After that period, they postulate that losses would be approximately 10 to 15 per cent for grains and 20 to 25 per cent for horticultural crops. On one hand, it must be recognized that these are modelled forecasts and not actual production. Still, the authors contentions are well-founded in that they present the data as being reasonable for small to medium-sized enterprises. Other researchers support their conclusions, noting that smaller farms have an easier time producing grains and horticultural crops without the same degree of inputs. Thus the best case figures from the third season/ small to medium farm yield comparisons of the MacRae et al study were included in the averages for this study. There were studies that looked at yield comparisons for smaller crops grown on a medium to smaller acreage basis. These included field peas, dry beans, canaryseed, lentils, and sugar beets. A grid follows (Table 1) that records which papers were used for each of the field crops noted above. At least one Canadian trial for each of these crops was identified and these are presented in Table 1 as well. The figures in Table 2 give the percentage of yield that can be conservatively attributed to the use of crop protection products, based on the range of yield differentials attained in the papers noted in the literature review. (Note that most of the crops do not currently employ biotech applications. Corn, soybeans, canola, potatoes and sugar beets are the crops that do have biotech applications). With respect to biotechnology, many of the key papers were published either before or during the wide spread adoption of plant biotechnology in Canada as it was applied to crop protection (herbicide-tolerant canola). The value of plant biotechnology as deployed through adoption of herbicide-tolerant crops generally was accounted for under crop protection as the plant biotechnology portion of this system generally requires the use of chemistry to attain the benefit of higher value per acre. Beyond the herbicide tolerant biotechnology, there have been increases in yield on the order of 20 per cent and five per cent attributable to biotech in canola and corn respectively. These were noted in estimates presented in Global impact of biotech crops: Income and production effects from 1996 through 2007 (Brookes and Barfoot). These are incremental yields owing to non-pesticidal benefits of plant biotechnology (hybridity, etc.). State of the Industry Report CropLife Canada 11
Table 1 Data sources used to develop proxies for crop yields attained when no crop protection products are used Crop Entz MacRae et al Johnson Vlachostergios Mazzoncini Kelly Oerke Wheat X X X Oats X X Barley X X X Corn X X Buckwheat Peas X X X X Beans X X Flax X X Soybeans X X Mustard Canola X X Sunflowers Sugar beets Lentils Canaryseed Fababeans (pea average used) X X X X X Table 2 Portion of crop value (in percentage) that can be attributed to the use of crop protection products/plant biotechnology Crop Proportion of crop value that can be attributed to use of crop protection/plant biotechnology Wheat 24% Oats 17% Barley 18% Corn (See Footnote 1)* 29% Buckwheat 10% Peas 30% Beans 30% Flax 31% Soybeans 35% Mustard 10% Canola (See Footnote 2)* 53% Sunflowers 34% Sugar beets 79% Lentils 19% Canaryseed 25% Fababeans 30% *FOOTNOTES Footnote 1 Figure includes 24 per cent yield enhancement due to crop protection and 5 per cent enhancement due to plant biotechnology advances (non crop protection related) Footnote 2 Figure includes 33 per cent yield enhancement due to crop protection and 20 per cent enhancement due to plant biotechnology advances (non-crop protection related) State of the Industry Report CropLife Canada 12
Using the percentages attained in Table 2, Table 3 calculates the gross value of field crop production that is attributable to the use of crop protection chemistries and plant biotechnology. For these crops, two year averages for production and prices were obtained from the CANSIM database (Statistics Canada). As an example, the two-year average production for wheat in 2008/09 and 2009/10 was over 26.5 million tonnes nationally (all wheat) and the gross value of this production (using average prices for the two crops years) was $7.22 billion. The portion of this amount that can be attributed to the judicious use of crop protection products is 24 per cent. Twenty-four per cent of this value amounts to approximately 6.4 million tonnes. At a two-year-average price of $269 per tonne, the net benefit is over $1.7 billion in value created for the Canadian economy on the farm. This number accounts for the volume and average quality of the incremental wheat produced in that year. Using a similar approach for all cereals, oilseeds, pulses and special crops, the net value created due to judicious use of crop protection products over all field crops in the table sums to a total of over $6.4 billion per year. Note that with respect to plant biotechnology, the main source of incremental value of this technology lies in (a) biotechnology directed at pest control, and (b) biotechnology deployed to drive yield enhancements (hybridization in canola). The early applications of plant biotechnology were directed towards better pest control, specifically weed control in canola. Estimates of weed control advantages attained due to biotechnology give us a figure of a 33 per cent gain in net value. To account for yield advances over and above the crop protection benefits, Canola Council of Canada data for average yields was examined for the years since 2000. There is a 20 percentage point increase in canola yields in the years from 2000 to 2009. It is assumed that these yields gains have accrued because of superior genetics largely powered by biotechnology and that this needs to be accounted for beyond the increases realized from biotechnology s contribution to crop protection. A similar adjustment is made with regards to corn and genetics that target corn rootworm. Brookes and Barfoot note that there is a five per cent incremental yield gain owing to the development of this technology and thus these five percentage points are calculated into the figures for the crop protection/plant biotechnology versus no crop protection/plant biotechnology figures. No incremental benefits were awarded for biotech soybeans or corn because yield enhancements due to these technologies are reflected in the production figures on Table 3 within the crop protection calculation. State of the Industry Report CropLife Canada 13
Table 3 The portion of Canada s field crop production that is attributable to the use of crop protection chemistries/plant biotechnology is over $6.4 billion per year. (NOTE: Due to rounding, numbers presented may not align with computed numbers) Crop Gross $ of production (in Thou $) Tonnes Two crop years avg (in Thou tonnes) % of yield attributable to the use of crop protection products/biotech Tonnes produced that are attributable to the use of crop protection products/biotech (in Thou tonnes) Ave 2 yr px ($Cdn) $ attributable to use of crop protection products/biotech (In Thou $) Wheat $7,220,588.10 26,596 24% 6,420 $269 $1,723,642.27 Oats $632,760.05 3,586 17% 613 $173 $106,072.11 Barley $1,764,691.80 10,473 18% 1,896 $167 $316,619.61 Corn (Pesticide benefit) 1,590,480.50 10,165 Corn (biotech benefit) 24% 2,454 $156 $382,766.37 5% 511 $156 $79,742.99 Buckwheat $2,449.40 7 10% 2 $331 $739.02 Peas $727,854.50 3,366 30% 745 $215 $160,137.00 Beans $183,009.75 239 30% 75 $770 $57,435.72 Flax $396,118.75 913 31% 285 $438 $124,506.81 Soybeans $1,363,338.35 3,467 35% 1,220 $394 $480,772.33 Mustard $148,263.75 190 10% 19 $770 $14,694.35 Canola (Pesticide benefit) Canola (Biotech benefit) $5,262,777.15 11,456 33% 3,802 $459 $1,743,305.46 20% 2,304 $459 $1,056,548.77 Sunflower $67,584.75 111 34% 38 $610 $23,121.83 Sugar beets $15,825.18 345 79% 274 $46 12,573.42 Lentils $866,028.00 1,225 19% 234 $698 $163,311.95 Canaryseed $87,008.25 170 25% 43 $503 $21,510.03 Fababeans $1,440.00 10 30% 2 $144 $246.20 Total gross production $20.330 billion Total crop protection/ biotech benefit $6,472 billion State of the Industry Report CropLife Canada 14
2. The incremental value created by crop protection products at the farm gate the 29 most frequently grown vegetable crops Within the vegetable crops sector, Statistics Canada data for commercial scale vegetable production was assembled from the most recent year (2008). This production comes from Ontario, Quebec and British Columbia with only small amounts from the rest of Canada. As with the field crops calculation, the fairest available proxy for calculating the portion of production that is due to the use of crop protection products was organic production. As seen with field crops, organic production deploys alternative methods to cope with the loss of use of herbicides, insecticides or fungicides. Thus the yield or quality reduction owing to non-use is mitigated by practices that any farmer would deploy in absence of those tools. Statistics Canada data regarding production during 2008 of the 29 largest vegetable crops produced in Canada was accessed. The crops include the following: Asparagus Beans Beets Brussels sprouts Cabbage Carrots Cauliflower Celery Corn Cucumbers Onions Garlic Leeks Lettuce Melons Parsley Parsnips Peas Peppers Pumpkins Radishes Rhubarb Shallots Spinach Squash/zucchini Tomatoes Turnips Watermelon Prices were obtained from the Statistics Canada CANSIM database for 2008 on October 14, 2009. Three key resources were used to develop primary estimates with respect to determining what portion of this value can reasonably be attributed to the use of crop protection chemistries. Key papers used as sources for yield comparisons were as follows; Stats Canada Vista on the agri-food industry and the farm community Catalogue 21 004 XIE Economic impacts of reduced pesticide use in the US: measurements of costs and benefits (AFPC Paper 99-2 Texas A and M). Figures attained by crop were compiled and presented for review to the Canadian Horticultural Council, which reviewed and edited the figures to account for potential quality downgrades or other adjustments. The yield that can be attributed to use of crop protection chemistries is proportionally larger in vegetable crops than in field crops. Insect and disease pressure tends to be higher in these crops and the visual characteristics of fresh vegetables are important to the consumer. Thus there is low tolerance for quality loss and heavy price penalties for blemished or pest damaged crops. Often, single pests or diseases are endemic and so devastating in terms of inflicting damage that yield loss will frequently be total. Growers of the 29 largest vegetable crops created a total of over $553 million in value in 2008. Of this amount, $358 million of value was created because of incremental yield increases resulting from the producers being able to use crop protection tools. State of the Industry Report CropLife Canada 15
Table 4 The portion of vegetable crop production of the 29 most frequently grown vegetables that is attributable to the use of crop protection chemistries is over $358 million per year Crop Farm Value (Thousand $) Portion of yield attained due to use of crop protection products Gross $ attributable to use of crop protection products (Thousand $) Asparagus $13,320 55% $7,326 Beans $23,585 12% $2,830 Beets $5,328 56% $2,984 Broccoli $29,810 72% $21,463 Brussels sprouts $4,650 100% $4,650 Cabbage $35,113 68% $24,052 Carrots $49,760 40% $19,904 Cauliflower $17,475 77% $13,543 Celery $13,087 40% $5,235 Corn (sweet) $52,150 76% $39,634 Cucumbers $17,035 100% $17,035 Dry Onions $41,275 76% $31,231 Garlic $1,670 44% $735 Leeks $2,035 67% $1,363 Lettuce $45,215 73% $33,007 Melons $6,320 44% $2,781 Parsley $2,070 6% $124 Parsnips $1,840 6% $110 Peas $20,695 85% $17,591 Peppers $23,615 60% $14,169 Pumpkins $10,800 44% $4,752 Radishes $9,355 44% $4,116 Rhubarb $1,050 44% $462 Shallots $17,290 100% $17,290 Spinach $5,025 80% $4,020 Squash/zucchini $15,030 80% $12,024 Tomatoes $75,430 63% $47,772 Turnips $10,180 53% $5,395 Watermelons $3,505 80% $2,804 Totals $553,713 $358,404 State of the Industry Report CropLife Canada 16
3. The incremental value created by crop protection products at the farm gate the 13 most frequently grown fruit crops Within the fruit crop crops sector, Statistics Canada data (CANSIM) for commercial scale fruit production was assembled from the most recent years 2007 and 2008. As with the field crops and vegetable crops calculations, the fairest available proxy for calculating the portion of production that is due to the use of crop protection products was organic production. As with the other crops, organic production deploys alternative methods to cope with the loss of use of herbicides, insecticides or fungicides. Thus the cost of non-use is mitigated by practices that any farmer would deploy in absence of those tools. Statistics Canada data regarding production during 2007 and of the 13 largest fruit crops produced in Canada was purchased. These crops were: Apples Apricots Blueberries Cherries (sour and sweet) Cranberries Grapes Nectarines Peaches Pears Plums Raspberries Strawberries Prices were obtained from the Statistics Canada CANSIM database for 2007 and 2008 on October 14, 2009. A key paper used as sources for yield comparisons to organic production was Stats Canada Vista on the agrifood industry and the farm community Catalogue 21 004 XIE. The average value created in the Canadian economy by producers of fruit crops was $742.8 million. Of this total, $508 million is attributable to the use of modern crop protection tools. Table 5 The portion of fruit crop production in Canada that is attributable to the use of crop protection chemistries is over $508 million per year Crop Average in thou $ Portion of yield attained due to use of crop protection products Gross thou $ attributable to crop protection products Apples $177,425 74% $131,295 Apricots $1,330 100% $1,330 Blueberries $179,073 62% $111,025 Cherries sour $4,030 75% $3,023 Cherries sweet $27,575 75% $20,681 Cranberries $97,055 70% $67,939 Grapes $114,255 89% $101,687 Nectarines $4,028 74% $2,981 Peaches $36,679 70% $25,675 Pears $8,973 48% $4,307 Plums $3,265 100% $3,265 Raspberries $28,218 29% $8,183 Strawberries $60,918 44% $26,804 Totals $742,821 $508,214 State of the Industry Report CropLife Canada 17
4. The incremental value created by crop protection products at the farm gate potatoes Potatoes are a key crop for several provinces and a source of export revenue. In order to calculate the portion of potato production that can be attributed to the use of crop protection products, data for potato production for the two most recent years was obtained from the CANSIM data base on December 21, 2009 ( Statistics Canada. Table 001-0014 Area production and farm value of potatoes ). The potato producers of Canada produced $1.076 billion in value for the Canadian economy. Of this, $613.8 million is attributable to the use of crop protection tools in the production system by the producers. Table 6 The portion of potato crop production that is attributable to the use of crop protection chemistries is nearly $614 million per year Geography Farm value in thou $ Portion of yield attained due to use of crop protection products Gross thou $ attributable to crop protection Newfoundland and Labrador 2 $2,736.50 57% $1,559.81 Prince Edward Island $235,595.00 57% $134,289.15 Nova Scotia $6,037.50 57% $3,441.38 New Brunswick $127,568.50 57% $72,714.05 Quebec $129,717.00 57% $73,938.69 Ontario $91,842.50 57% $52,350.23 Manitoba $221,205.50 57% $126,087.14 Saskatchewan $42,327.50 57% $24,126.68 Alberta $174,155.50 57% $99,268.64 British Columbia 3 $45,584.50 57% $25,983.17 Canada 2,3 $1,076,770.00 57% $613,758.90 1 Crop year refers to the period August 1 to July 31. 2 Prior to crop year 1971/1972, data are not available for Newfoundland and Labrador. 3 Prior to crop year 1910/1911, data are not available for British Columbia. 4 Prior to crop year 1986/1987, excludes the potatoes fed to livestock. State of the Industry Report CropLife Canada 18
5. Summary of the incremental value created by crop protection products and plant biotech at the farm gate field crops, fruit, vegetables and potatoes The value created through enhanced yields as a result of the application of crop protection products and biotechnology for the crops discussed above (16 field crops, 29 vegetable crops, 13 fruit crops and potatoes) is over $7.9 billion dollars (see table below). Some 32 per cent of Canada s $20 billion in field crops would not exist if crop protection chemistries and plant biotechnology were not used. In the horticultural sector, 57 per cent (potatoes), 68 per cent (fruit) and 65 per cent (vegetables) of the crops value would not have been produced if not for the ability of produces to use crop protection. Table 7 The portion of crop production for the 58 most common crops that are attributable to the use of crop protection and plant biotechnology is over $7.9 billion per year Sector Value/yr at the farm gate (Thou) Value generated at farm gate resulting from use of crop protection/plant biotechnology products (Thou) Percentage of production value that exists because crop protection/plant biotechnology products were used Field crops 1 $20,330,218 $6,471,962 32% Fruit 2 $742,821 $508,214 68% Vegetable 3 $553,713 $358,404 65% Potatoes 4 $1,076,770 $613,758 57% Total $22,703,522 $7,952,338 35% 1 2008/9 and 2009/10 figures 2 2007 and 2008 figures 3 2008 figures 4 2007 and 2008 figures State of the Industry Report CropLife Canada 19
II. Economic impact created at the farm gate some regional impacts The figures outlined in Table 7 pertain to Canada as a whole. The regional picture differs from area to area owing to differences in cropping patterns and the general size of agriculture. To characterize the nature of the benefits on a regional basis, incremental values accrued due to the use of crop protection products and plant biotech were calculated for each of the 59 crops on a region-by-region basis. The following information pertains to this set of calculations. Note that figures may not total exactly to the national figure owing to rounding errors or data suppression for small acreage crops. 1. The incremental value created by crop protection/plant biotechnology for crops grown in the Atlantic provinces The Atlantic provinces cropping sector focuses on potato production, a variety of fruits (apples, blueberries, cranberries, strawberries, and raspberries, with a small amount of peaches, cherries, plums and grapes), wheat, oats, barley, and smaller amounts of corn and soybeans. The total incremental value added at the farm gate through use of crop protection/plant biotechnology for the 59 crops in the study through the use of crop protection technology/plant biotechnology is estimated to be approximately $283 million per year. Chart 1 Value of crop production produced and proportion attributable to use of crop protection/plant biotechnology in the Atlantic provinces Value generated by crop protection products/plant biotech in the Atlantic provinces Dollars $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 $ Potatoes Fruit Grain crops/ field crops Total Total Farm value in $ $371,937,500 $90,483,000 $61,411,150 $523,831,650 gross $ attributable to crop protection/biotech $212,004,375 $56,756,083 $14,530,138 $283,290,596 State of the Industry Report CropLife Canada 20
2. The incremental value created by crop protection/plant biotechnology for crops grown in Quebec Quebec s cropping sector is very diverse. The province grows corn and soybeans on a large scale. Smaller acreages of cereals are also grown. A variety of fruit crops are also produced with strawberries, blueberries and apples being the three largest. Other fruits grown in smaller quantities are grapes and stone fruits. Growers in Quebec also produced nearly $130 million in potatoes and over two dozen different vegetable crops. The total benefit in economic value added to primary production studied in the 59 crops through the use of crop protection technology/plant biotechnology is estimated to be nearly $545 million per year. Chart 2 Value of crop production produced and proportion attributable to use of crop protection/plant biotechnology Value generated by crop protection products/biotech in Quebec Dollars $1,600,000,000 $1,400,000,000 $1,200,000,000 $1,000,000,000 $800,000,000 $600,000,000 $400,000,000 $200,000,000 $ Potatoes Fruit Vegetables Grain crops/ field crops Total Total Farm value in $ $129,717,000 $113,063,000 $238,788,000 $857,223,250 $1,338,791,250 gross $ attributable to crop protection/biotech $73,938,690 $69,912,000 $150,735,000 $250,390,433 $544,976,123 State of the Industry Report CropLife Canada 21
3. The incremental value created by crop protection/plant biotechnology for crops grown in Ontario Ontario producers grow corn, cereals and soybeans on a large scale (nearly $2.9 billion per year). The province s growers also produce nearly $232 million per year in fruits and approximately $271.5 million in vegetables. The total benefit in economic value added to primary production studied through the use of crop protection/plant biotechnology is estimated to be approximately $1.23 billion per year. As noted in the other regional discussions, this does not include value generated as a result of further processing of the production, nor the value of economic activity generated in pursuing this incremental yield. Chart 3 Value of crop production produced and proportion attributable to use of crop protection/plant biotechnology in Ontario Value generated by crop protection products/biotech in Ontario Dollars $4,000,000,000 $3,500,000,000 $3,000,000,000 $2,500,000,000 $2,000,000,000 $1,500,000,000 $1,000,000,000 $500,000,000 $ Potatoes Fruit Vegetables Grain crops/ field crops Total Total Farm value in $ $91,842,500 $231,922,000 $271,495,000 $2,865,327,750 $3,460,587,250 gross $ attributable to crop protection/biotech $52,350,230 $166,114,000 $174,328,533 $840,934,349 $1,233,727,112 State of the Industry Report CropLife Canada 22
4. The incremental value created by crop protection/plant biotechnology for crops grown in the Prairies The Prairie provinces primarily produce grains, oilseed and pulse/special crops. Total production is nearly $16.8 billion, with almost all of this from field crops. The total benefit in economic value added to primary production studied through the use of crop protection/plant biotechnology is estimated to be over $5.6 billion per year. As noted in the other regional discussions, this does not include value generated as a result of further processing of the production, nor the value of economic activity generated in pursuing this incremental yield. Chart 4 Value of crop production produced and proportion attributable to use of crop protection/plant biotechnology in the Prairie provinces Value generated by crop protection products/biotech in the Prairie provinces Dollars $18,000,000,000 $16,000,000,000 $14,000,000,000 $12,000,000,000 $10,000,000,000 $8,000,000,000 $6,000,000,000 $4,000,000,000 $2,000,000,000 $ Potatoes Fruit Grain crops/ field crops Total Total Farm value in $ $221,205,500 $3,110,000 $16,565,877,977 $16,785,066,427 gross $ attributable to crop protection/biotech $126,087,140 $1,317,000 $5,490,889,666 $5,618,293,806 State of the Industry Report CropLife Canada 23
5. The incremental value created by crop protection/plant biotechnology for crops grown in British Columbia British Columbia is a large producer of horticultural crops chiefly fruit and mainly apples, cherries, grapes, cranberries, blueberries and raspberries. Other fruits grown include apricots, nectarines, peaches, pears, plums and strawberries. Twenty-seven vegetable crops are also grown with a value of over $43 million. Cereal and field crops make up approximately the same value as fruit with about $46 million in production. The total benefit in economic value added to primary production studied through the use of crop protection/plant biotechnology is estimated to be just over $214 million per year. As noted in the other regional discussions, this does not include value generated as a result of further processing of the production, nor the value of economic activity generated in pursuing this incremental yield. Chart 5 Value of crop production produced and proportion attributable to use of crop protection/plant biotechnology in BC Value generated by crop protection/biotech products in BC Dollars $450,000,000 $400,000,000 $350,000,000 $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $ Potatoes Fruit Vegetables Grain crops/ field crops Total Total Farm value in $ $45,584,700 $251,105,000 $43,430,000 $46,185,400 $386,305,100 gross $ attributable to crop protection/biotech $25,983,170 $148,707,000 $27,713,000 $11,930,209 $214,333,379 State of the Industry Report CropLife Canada 24
Part Two Value created in the wider economy due to the producers use of crop protection/plant biotechnology State of the Industry Report CropLife Canada 25
Downstream/upstream economic activity occurs when the incremental on-farm production that is produced as a result of the use of crop protection/plant biotechnology, makes its way through the economy. It is well-accepted that primary economic activities result in spin-off benefits to other members of society who may not be directly involved in that activity. For instance, when a farmer produces and sells a tonne of wheat, this sets off a chain of subsequent activities through the economy. The buyer of the wheat may use it to produce bread and the buyer then sells that commodity to an end user. The proceeds of this chain of transactions are used to hire bakers, janitors, accountants, delivery van drivers, etc. It is important to measure this economic activity. One way of quantifying the benefits of a basic activity (such as crop production) is to perform a standard input-output analysis using a credible model. Such a model measures the impacts through the broader economy of a specific activity. Central to the analysis technique is the administration in the model of a demand shock. Administering a demand shock involves modelling in the withdrawal of a set amount of a given economic output, and then watching the model calculate impacts of the withdrawal as they ripple through the economy. For the purposes of this study, demand shocks were entered separately for the grain sector (field crops) and for the horticultural sector (fruit/vegetable crops) into the standard input-output (I/O) model utilized by the Industry Accounts Division of Statistics Canada. The purpose of this was to examine the knock-on effects on the broader economy of each $100 million of incremental crop production that is attributable to growers access to and use of crop protection products/plant biotechnology in their farming systems. Shocks selected were $100 million for grains and $100 million for vegetables/fruits. Statistics Canada economists indicated that results can be applied in a linear fashion within the context of the amounts relevant to this study and that this figure is appropriate for this scale of input-output analysis. Impacts of the added productivity with respect to gross domestic product and jobs are summarized in Table 8. Figures (given in thousands of dollars Canadian) represent the GDP that arises out of the economic activities generated because of the incremental crop production achieved due to the use of modern pest control and plant biotechnology. The over $6.4 billion in incremental production arising in the grain sector owing to the use of crop protection/plant biotechnology generates nearly $5.4 billion in additional GDP. About $1.5 billion of this is generated within the crop/livestock sector. Some 46,514 jobs are generated within the crop/livestock sector because of the incremental value produced by the use of crop protection and plant biotechnology. The remainder of the ripple effect owing to the use of modern crop protection and plant biotechnology generates jobs through 21 other areas of economic activity ranging from the construction trade to financial services. All told, the spin-off effects of growers effectively using crop protection products and plant biotechnology leads to 86,253 full-time jobs as modelled in the Statistics Canada input-output model. The approximately $1.5 billion in production that is produced due to the use of crop protection in the horticulture sector (fruits, vegetables and potatoes) generates a further $999 million in additional GDP. A little over $491 million of this is generated within the manufacturing sector (food processing). More than 10,000 jobs are generated because of the incremental value produced by the use of crop protection in these crops. State of the Industry Report CropLife Canada 26
When combining the grains sector with the hort sector, the incremental value obtained as a result of judicious use of crop protection products and plant biotechnology amounts to approximately $6.4 billion in GDP over and above the $7.9 billion generated on the farm. Beyond direct production on the farm, more than 97,000 jobs exist because of the incremental production that results from the use of modern crop protection/plant biotechnology. Three regional snapshots how the added production arising out of the use of crop protection/plant biotechnology impacts the larger economy in Quebec, Ontario and the Prairie Provinces In Quebec, the value that the incremental production of grains/field crops delivers adds up to nearly $152 million in additional economic activity. This is over and above the approximately $250 million in value of the actual production itself. On the horticultural side, the sector delivers approximately $37.3 million in additional activity. Again, this is over and above the $294 million in value of the actual production itself. Approximately 2,500 full time jobs in Quebec owe their existence to the fact that Quebec producers were able to produce additional economic activity through more production as a result of the use of crop protection/plant biotechnology. In Ontario the value that the incremental production of grains/field crops delivers adds up to over $1.4 billion in additional economic activity. This is over and above the $841 million in value of the actual production itself. On the horticultural side, the sector delivers over $307 million in additional activity. Again, this is over and above the approximately $393 million in value of the actual production itself. Over 22,000 full time jobs in Ontario owe their existence to the fact that Ontario producers were able to produce additional economic activity through more production as a result of the use of crop protection/plant biotechnology. In the Prairies, the value that the incremental production of grains/field crops delivers adds up to nearly $3.8 billion in additional economic activity. This is over and above the $5.5 billion in value of the actual grain production itself. Job data was unavailable. State of the Industry Report CropLife Canada 27
Table 8 Canada totals GDP by industry (direct, indirect and induced) and jobs (FTE) generated as a result of the incremental crop production that occurs owing to growers utilizing crop protection/plant biotechnology figures are thousands of $Cdn NAICS CODE Description Economic value generated by the additional grain produced because of the use of crop protection and biotech Economic value generated by the additional fruit/veg/potato produced because of the use of crop protection GDP at market prices Jobs (FTE) GDP at market prices Jobs (FTE) 1A Crop and animal production $1,563,194 46,514 $25,738 798 1B Forestry and logging $6,964 68 $991 10 1C Fishing, hunting and trapping $540 8 $179 3 1D Support activities for agriculture and forestry $90,073 2,487 $1,610 43 21 Mining and oil and gas extraction $388,532 562 $27,780 43 22 Utilities $144,910 463 $21,332 68 23 Construction $104,905 1,478 $8,236 113 3A Manufacturing $460,673 3,721 $491,642 4,517 41 Wholesale trade $506,226 5,615 $69,875 774 4A Retail trade $217,030 4,419 $50,259 1,024 4B Transportation and warehousing $300,445 3,927 $38,754 512 51 Information and cultural industries $140,738 915 $28,219 210 5A Finance, insurance, real estate, rental leasing 54 Professional, scientific and technical services 56 Admin support waste management and remediation $824,402 4,093 $118,564 508 $201,365 3,020 $31,485 491 $104,203 2,143 $28,471 560 61 Educational services $5,314 148 $942 26 62 Health care and social assistance $34,131 603 $5,628 102 71 Arts, entertainment and recreation $18,661 457 $3,845 96 72 Accommodation and food services $62,133 1,759 $11,849 334 81 Other services (Except Public Administration) $88,461 2,206 $13,749 343 F1 Operating, office, cafeteria, lab services 0 $ F2 Travel, entertainment, advertising and promotion 0 $ F3 Transportation margins 0 $ Vi Non-profit institutions serving households $38,796 738 $7,277 138 GS Government sector $76,967 909 $12,920 155 Total $5,378,663 86,253 $999,347 10,868 State of the Industry Report CropLife Canada 28
Table 9 Quebec GDP by industry (direct, indirect and induced) and jobs generated as a result of the incremental crop production that occurs owing to growers using modern crop protection/plant biotechnology figures are thousands of $Cdn NAICS CODE Description Economic value generated by the additional grain produced because of the use of crop protection and biotech Economic value generated by the additional fruit/veg/potato produced because of the use of crop protection GDP at market prices Jobs (FTE) GDP at market prices Jobs (FTE) 1A Crop and animal production $112,254 1,491 $1,394 22 1B Forestry and logging $183 2 $30 0 1C Fishing, hunting and trapping $0 0 $0 0 1D Support activities for agriculture and forestry $1,950 94 $31 1 21 Mining and oil and gas extraction $67 1 $19 0 22 Utilities $1,613 5 $918 3 23 Construction $2,168 26 $148 2 3A Manufacturing $5,159 61 $25,099 269 41 Wholesale trade $7,306 99 $2,217 30 4A Retail trade $2,034 46 $1,869 42 4B Transportation and warehousing $2,987 49 $907 14 51 Information and cultural industries $1,131 8 $586 5 5A Finance, insurance, real estate, rental leasing 54 Professional, scientific and technical services 56 Admin support waste management and remediation $8,952 67 $1,419 11 $2,248 38 $866 15 $1,052 21 $927 17 61 Educational services $38 1 $16 0 62 Health care and social assistance $188 2 $24 0 71 Arts, entertainment and recreation $65 1 $48 1 72 Accommodation and food services $187 6 $106 3 81 Other services (Except Public Administration) $1,254 30 $382 10 F1 Operating, office, cafeteria, lab services $ 0 $ 0 F2 Travel, entertainment, advertising and promotion $ 0 $ 0 F3 Transportation margins $ 0 $ 0 NP Non-profit institutions serving households $12 0 $3 0 GS Government sector $1,071 13 $261 3 Total $151,919 2,061 $37,270 449 State of the Industry Report CropLife Canada 29
Table 10 Ontario GDP by industry (direct, indirect and induced) and jobs generated as a result of the incremental crop production that occurs owing to growers using modern crop protection/plant biotechnology figures are thousands of $Cdn NAICS CODE Description Economic value generated by the additional grain produced because of the use of crop protection and biotech Economic value generated by the additional fruit/veg/potato produced because of the use of crop protection GDP at market prices Jobs (FTE) GDP at market prices Jobs (FTE) 1A Crop and animal production $284,312 5,730 $2,672 64 1B Forestry and logging $925 10 $84 1 1C Fishing, hunting and trapping $0 0 $0 0 1D Support activities for agriculture and forestry $23,231 593 $176 6 21 Mining and oil and gas extraction $3,056 18 $814 5 22 Utilities $59,169 237 $4,816 21 23 Construction $63,972 996 $1,853 28 3A Manufacturing $164,142 1,521 $204,123 1,747 41 Wholesale trade $231,804 2,530 $22,987 259 4A Retail trade $46,248 923 $9,125 236 4B Transportation and warehousing $107,916 1,622 $8,435 118 51 Information and cultural industries $39,900 267 $8,171 79 5A Finance, insurance, real estate, rental leasing 54 Professional, scientific and technical services 56 Admin support waste management and remediation $234,465 1,597 $16,581 122 $89,014 1,248 $11,539 184 $31,954 669 $9,697 220 61 Educational services $1,151 29 $124 4 62 Health care and social assistance $5,323 60 $163 2 71 Arts, entertainment and recreation $1,395 36 $378 13 72 Accommodation and food services $4,938 144 $841 31 81 Other services (Except Public Administration) $25,264 570 $2,125 45 F1 Operating, office, cafeteria, lab services $ 0 $ F2 Travel, entertainment, advertising and promotion $ 0 $ F3 Transportation margins $ 0 $ NP Non-profit institutions serving households $496 8 $34 1 GS Government sector $25,462 282 $2,467 31 Total $1,444,138 19,090 $307,205 3,215 State of the Industry Report CropLife Canada 30
Table 11 Prairie Province GDP by industry (direct, indirect and induced) as a result of the incremental crop production that occurs owing to growers utilizing modern crop protection/plant biotechnology in grain production figures are thousands of $Cdn NAICS CODE Description GDP at market prices 1A Crop and animal production $1,166,628 1B Forestry and logging $5,856 1C Fishing, hunting and trapping $539 1D Support activities for agriculture and forestry $64,892 21 Mining and oil and gas extraction $385,409 22 Utilities $84,128 23 Construction $38,764 3A Manufacturing $291,372 41 Wholesale trade $267,116 4A Retail trade $168,748 4B Transportation and warehousing $189,543 51 Information and cultural industries $99,707 5A Finance, insurance, real estate, rental leasing $580,985 54 Professional, scientific and technical services $110,103 56 Admin support waste management and remediation $71,197 61 Educational services $4,125 62 Health care and social assistance $28,620 71 Arts, entertainment and recreation $17,201 72 Accommodation and food services $57,009 81 Other services (Except Public Administration) $61,944 F1 Operating, office, cafeteria, lab services $ F2 Travel, entertainment, advertising and promotion $ F3 Transportation margins $ NP Non-profit institutions serving households $38,289 GS Government sector $50,434 Total $3,782,608 2 Calculated by apportioning Canadian processing centers by province, using Employment Pesticide and Other Agricultural Chemical Manufacturing(NAICS 32532) http://www.ic.gc.ca/cis-sic/cis-sic.nsf/ide/cis-sic3112empe.html 3 Calculated by apportioning Canadian processing centers by province, using Employment Pesticide and Other Agricultural Chemical Manufacturing(NAICS 32532) http://www.ic.gc.ca/cis-sic/cis-sic.nsf/ide/cis-sic3112empe.html 4 Calculated by apportioning Canadian processing centers by province, using Value of Manufacturing Production: 1998-2007* Manufacturing Revenues and Manufacturing Value-Added Pesticide and Other Agricultural Chemical Manufacturing(NAICS 32532) http://www.ic.gc.ca/cis-sic/cis-sic.nsf/ide/cis-sic32532prde.html State of the Industry Report CropLife Canada 31
Part Three Value created in Canada s trade balances State of the Industry Report CropLife Canada 32
Part of Canada s prosperity lies in our history as an efficient exporter. A major part of the wealth derived from exporting comes from the efficiency of our farmers and their capacity to provide food for export to 150-plus countries around the world. Our nation s trade balance has been positive over the past decades and that is one key reason for the relative prosperity in which we live. It is useful to put our trade balance in context with respect to the contribution that modern crop protection/plant biotechnology contributes to wealth generation within the country. Over the past two years, Canadian growers have grown enough grains, oilseeds, fruit and vegetables to export $18.6 billion worth of food annually (largely as grains but not exclusively) to the world. During that same time period, we imported $8.17 billion of food per year largely vegetables and fruit. This means that our food trade balance has been a net positive of $10.4 billion, meaning that our growers have produced enough food wealth to offset our imports over the winter and leave us $10.4 billion left over to deploy within our economy. From Table 7, we know that conservatively, $7.9 billion in crops are grown owing to the use of crop protection/plant biotechnology. To be even handed, it is important to net out the $1.15 billion in crop protection chemistries that are imported into the country. After accounting for this, the proportion of Canada s food surplus that exists because of the use of crop protection products and plant biotechnology is about 65 per cent. See Table 12 for a summary of these figures. Table 12 Proportion of Canada s food trade balance that is due to crop yields attributable to use of crop protection/plant biotechnology (data derived from Industry Canada databases) Measurement Canadian $ Food exports (Total value of Canadian exports of field crops, fruits, vegetables, potatoes (HS codes 06, 07, 08, 10, 11, 12) average for 2008, 2009) Food imports (Total value of Canadian imports of field crops, fruits, vegetables, potatoes (HS codes 06, 07, 08, 10, 11, 12) average for 2008, 2009) Export/import balance (exports minus imports) Trade balance value of Canadian exports of field crops, fruits, vegetables, potatoes (HS codes 06, 07, 08, 10, 11, 12) average for 2008, 2009 Contribution of crop protection/biotech to food production in Canada (Total value of the portion of Canadian producers production that is attributable to judicious use of crop protection products averaged from pest loss prevention from most recent two crop years averaged.) Pesticide imports (Total value of pesticides imported into Canada (HS code 3808) average for 2008 and 2009) Proportion of food trade balance that is due to crops produced that are attributable to judicious use of crop protection products (net of imports of crop protection products) $18,608,840,947 $8,172,882,710 $10,435,958,237 $7,948,123,393 -$1,152,064,399 65% Source Industry Canada trade databases State of the Industry Report CropLife Canada 33
Part Four Contribution of crop protection/plant biotechnology to public finances and taxes State of the Industry Report CropLife Canada 34
At all stages of the value chain, participants pay taxes in order to fund public programming. For the purposes of this study, net contribution to public finances owing to the activities of the crop protection/plant biotechnology industry was examined. Taxes generated as a result of the incremental production of crops as a result of pest prevention, and subsequent economic activity was calculated. Data was calculated using demand shock methodology and subsequent impact on federal, provincial and municipal taxes collected, with statisticians from Stats Canada conducting the simulation. In the case of the latter, the net impact of the industry was estimated by conducting the following steps: Incremental crops produced by growers as a result of their ability to protect the crop from pests was calculated (see Table 7). A $100 million demand shock was modelled into Statistics Canada s input-output model, with the shock generated for (a) the field crops sector and (b) the fruit/vegetable sector. Resultant impacts on taxes at several levels of government were calculated based on the Statistics Canada model calculations extrapolated over the amounts generated from Table 7. Table 7 shows that $6.47 billion in incremental field crops are produced as a result of the use of modern crop protection/plant biotechnology. Table 10 (follows) calculates how much tax revenue is realized from this incremental production. The table shows that every $100 million in incremental grain produced as a result of the use of crop protection products and plant biotechnology adds $5,313,000 in tax contributions to federal, provincial and municipal tax collections. Thus the taxes generated from the $6.47 billion in field crops as a result of growers using modern technology for crop protection are $343.7 million. In the horticultural sector, crop protection resulted in incremental production of fruit ($508 million), vegetables ($358 million) and potatoes ($614 million). Total taxes generated by the incremental production for fruits, vegetables and potatoes are $41.3 million. Again, this figure represents the taxes generated as a result of the economic activity from the incremental fruit/vegetable/potato production arising from the use of crop protection. State of the Industry Report CropLife Canada 35
Table 13 Taxes generated as a result of the incremental crop production that occurs as a result of crop protection/plant biotechnology Tax category Taxes generated per $100 million of crop produced (Thou) Taxes generated as a result of incremental crop production attributable to crop protection (Thou) Grains Fruit vegetable Grains 1 Fruit vegetable 2 Total federal $1,983.03 $1,080.93 $128,257 $16,002 Federal trading profits-lotteries, etc. $2.43 $2.04 $157 $31 Federal gas tax $899.34 $210.16 $58,167 $3,112 Federal excise tax $5.16 $4.32 $334 $63 Federal duty tax $116.50 $97.67 $7,535 $1,446 Federal air tax $15.01 $12.24 $971 $181 G.S.T $944.58 $754.50 $61,093 $11,169 Total provincial $3,322.10 $1,705.48 $214,865 $25,247 Provincial gallon tax $20.25 $17.00 $1,310 $251 Provincial trading profits $354.65 $297.28 $22,938 $4,401 Provincial gas tax $1,547.43 $336.19 $100,084 $4,978 Provincial amusement tax $16.78 $14.02 $1,085 $208 P.S.T $1,313.81 $985.15 $84,974 $14,585 H.S.T $69.17 $55.84 $4,474 $826 Total municipal $8.23 $4.76 $532 $70 Municipal amusement tax $0.23 $0.19 $15 $3 M.S.T. $8.00 $4.57 $517 $68 Total all taxes $5,313 $2,791 $343,655 $41,318 1 This figure is calculated as taxes per $100 million in production X incremental production that occurs as a result of use of producers using crop protection/plant biotechnology in field crops 2 This figure is calculated as taxes per $100 million in production X incremental production that occurs as a result of use of producers using modern crop protection in hort crops State of the Industry Report CropLife Canada 36
Part Five Contribution of crop protection/plant biotechnology to the environment State of the Industry Report CropLife Canada 37
1. The contribution of the crop protection/plant biotechnology industry to retention of forests and non-agricultural lands Canada has transitioned from a primarily agricultural society to one in which only three per cent of the population are required to produce the food that we either consume or trade internationally. Doing so required massive increases in efficiencies so that the few people who remained on the farm could produce the food the rest of the population requires. Most Canadians know this but they likely do not realize that growers in Canada have also accomplished this without dramatically increasing the land base required to accomplish the task in the last 40 years. Technology has powered yield increases, with the main enhancements coming from (a) plant breeding, (b) fertilizer use and (c) the development of crop protection products. Enhancements in machinery and information technology have also added to yields. Since 1970, nitrogen nutrient use in Canada has increased by six fold, Canadian phosphate consumption grew by 2.3 times and consumption of potash has almost doubled. Thus fertilizers play a clear part in the increases in yields we have seen on a per acre basis. In 1951, herbicides were just being adopted widely following the introduction of 2,4-D in the late 1940s. Prior to that year, wheat yields as measured by bushels per acre were 17 to 18 bushels per acre on average. Starting in 1951, yields began a steady upward increase as growers began to adopt modern technologies, with crop protection products allowing better weed control, providing relief when catastrophic insect infestations showed up, and allowing for enough yield stability to justify increased expenditures on fertilizer. Canadian producers were able to meet world demand for their wheat that went from 553 million bushels in 1951 to over 1 billion bushels in the early years of the 21st century. Statistics Canada data on land use patterns show that farmers were able to achieve this production without increasing the acreage base required for the resultant production. Trends show that net new land ploughed, disturbed or cultivated and net deforestation due to agriculture are essentially flat over the six decade period. There is historical data that points to the use of crop protection products helping to enable more production on less land so that additional land need not be brought into agricultural use. It is difficult to apportion the credit that is due to the use of crop protection versus the credit from enhancements such as better breeding, higher fertilizer use, etc. since these all arose in tandem. One can easily calculate the added land base we would need if we had to produce at our current output nationally without the increased efficiency attained through the use of crop protection products and plant biotechnology. Table 14 lists the acreages (by crop) that were harvested in 2009 as drawn from CANSIM database. (These numbers are in Column B). The Table also gives (Column A), a measure of the incremental production of the crop that is due to the application of modern crop protection technology/plant biotechnology (discussed and presented in Table 2 of the section Part One Value of Incremental Crop Production Produced on the Farm Due to the Farmers Use of Crop Protection/Plant Biotechnology ). Column C presents the acreage that would be required to produce the same amount of crop if growers were unable to access crop protection and plant biotechnology. Note that it would require 106.9 million acres of land to produce the same crops that Canadian growers currently produce on 69.9 million acres if the growers did not have access to crop protection products/plant biotechnology and if we wanted to maintain the same basket of diverse crops that we grow. The difference 37 million acres represents additional land that would need to be cultivated to maintain current production if it were not for the availability and widespread use of crop protection/plant biotechnology. To put the 37 million acres in perspective, this equates to the amount of cropland that is currently cultivated in Saskatchewan, or four times the cropland in Ontario. State of the Industry Report CropLife Canada 38
Table 14 Tabulation of additional acreage that would be required if Canadian growers did not have access to crop protection/plant biotechnology tools Crop Column A Proportion of crop value that can be attributed to use of crop protection/ biotechnology Column B Acres harvested 2009 (thou acres) Column C Acreage (Thou) required to produce the same amount if growers could not use modern crop protection/ biotechnology (=Col B*[1/ (1-ColA)] Wheat 24% 24,827 32,667 Oats 17% 3,732 4,496 Barley 18% 8,663 10,565 Corn 29% 2,974 4,189 Buckwheat 10% 5 6 Peas 30% 3,760 5,371 Beans 30% 279 399 Flax 31% 1,710 2,478 Soybeans 35% 3,445 5,300 Mustard 10% 515 572 Canola 53% 16,200 34,468 Sunflowers 34% 157 238 Sugar beets 79% 27 129 Lentils 19% 2,380 2,938 Canaryseed 25% 270 360 Fababeans 30% 15 18 Vegetables/Fruit/potatoes 62% 918 2,416 Totals 69,876 106,610 Total land not under cultivation due to us of crop protection/biotech (Thou acres) 37,057 State of the Industry Report CropLife Canada 39
2. The contribution of the crop protection/plant biotechnology industry to greenhouse gas mitigation Greenhouse gas data has shown that agricultural practices can lead to emissions of CO 2. But this negative environmental effect can be turned into a positive if certain agricultural practices are adopted, specifically the use of conservation tillage and reduction of summer fallow. In conservation tillage, crops are grown with minimal cultivation of the soil. When the amount of tillage is reduced, the stubble or plant residues are not completely incorporated, and most or all remain on top of the soil rather than being cultivated into the soil. This keeps carbon locked up in the soil. Herbicides are absolutely essential to conservation tillage because weed control through use of mechanical cultivation is not an option. Summer fallowing leads to greenhouse gas emissions and the practice had been used in millions of acres in the Canadian Prairies for several reasons, the chief of which were (a) as a way to conserve soil moisture and (b) as a way to reduce weed populations through cultivation. The practice of summer fallowing has dramatically fallen. Modern herbicides used in concert with minimum till machinery allowed for weed control and soil moisture conservation without summer fallowing, and this led to growers decreasing their summer fallow acres through the 1980s and early 1990s. This trend accelerated once biotechnology allowed canola to be grown using herbicides conducive to minimum till operations. As with conservation tillage practices as a whole, herbicides and plant biotechnology have been the technological catalysts for reductions in summer fallow and with that a reduction in both greenhouse gas emissions and soil erosion. In 1990, agronomic management of mineral soils led to a net removal of about -2,000 Gg CO 2 (Greenhouse gas equivalents of CO 2 ). This net removal of CO 2 increased to -12,000 Gg CO 2 in 2008. The largest source of this six fold increase in environmental benefit occurred because of increasing conservation tillage and decreasing summer fallow. Both of these trends are enabled by the use of crop protection and plant biotechnology and would be impossible without crop protection tools. This net carbon sink due to the adoption of conservation tillage practices (from -1,370 t in 1990 to -5,670 t in 2008) is substantiated by a net total increase of over 25 million acres under no-till and reduced tillage over the 1990 2008 period. State of the Industry Report CropLife Canada 40
Table 15 Crop protection products/plant biotechnology has enabled soil conservation practices that lead to net benefits in CO 2 emissions Categories Land Mgmt Change (LMC) Emissions/Removals (Gg CO2) (See Note 1) 1990 2005 2006 2007 2008 Total cropland that remains cropland 1,400 9,700 10,000 11,000 12,000 Cultivation of Histosols 300 300 300 300 300 Liming 200 290 290 290 290 Perennial woody crops 50 30 20 20 10 Total mineral soils 2,000 10,000 11,000 12,000 12,000 Change in crop mixture Change in tillage Change in summer fallow Increase in perennial 1,200 4,500 4,800 5,100 5,500 Increase in annual 3,500 3,800 3,800 3,800 3,700 Conventional to reduced Conventional to no-till Land conversion Residual admissions (See Note 2) 850 870 840 820 790 520 3,600 3,800 3,900 4,100 Other NO 570 640 710 780 Increase in SF 1,700 1,300 1,200 1,200 1,200 Decrease in SF 4,800 7,600 7,700 7,800 7,800 150 1,700 1,800 1,800 1,800 Source Canada National Inventory Report 1990-2008 Part I of Canadian Submission to the UN Framework Convention on Climate Change Note 1. Negative sign indicates removal of greenhouse gases (Gg) in CO2 equivalents from the atmosphere. Note 2. Net residual CO2 emissions from the conversion of forest land and grassland to cropland that occurred more than 20 years prior to the inventory year, including emissions from the decay of woody biomass and DOM. 3. The contribution of the crop protection/plant biotechnology industry to reductions in fossil fuel use It is difficult to assess and model fuel savings attained through the use of crop protection/plant biotechnology products over a time frame consisting of many decades. The fuel picture is confounded with trends that include major changes in fuel efficiency in farm machinery technology and scale of equipment. It is, however, possible to examine fuel use in two major trends in order to get a sense of the degree of the contribution that modern crop protection and plant biotechnology has made to reductions in fossil fuel use in Canada. Extension services routinely gather production costs and monitor inputs. Two provinces, Ontario and Saskatchewan, have current information on fuel usage on a per acre basis that differentiates between fuel consumption for conventional tillage and fuel consumption for conservation tillage. State of the Industry Report CropLife Canada 41
Ontario puts the fuel consumption at 16 L per acre for conventional tillage and 12 L per acre for conservation tillage regimes a savings of 25 per cent of total fuel consumption due to switching to conservation tillage. Saskatchewan puts fuel usage for cropped acres at 20 L per acre for conventional tillage and 14 L per acre for direct seeding systems a total of 30 per cent reduction in consumption of fuel. For fallow acreage, fuel use drops from 10 L per acre down to two L per acre if crop protection products are used to control weeds as opposed to tillage. According to Statistics Canada data, there were are an average 71 million acres of land devoted to growing field crops (including special crops) for the period 1991 through 2006. If we use the more conservative fuel use case (Ontario s estimates for fuel usage per acre) and assume that conventional acres require 16 L per acre and that conservation tillage requires 12 L per acre, we can model the fuel saving achieved through use of conservation tillage. Table 16 compares the acreages tilled by tillage regime for 1991 to the acreages tilled by different tillage regimes in 2006. Applying the fuel usages derived from Ontario, conservation tillage and no-till systems have led to a reduction of the use of fossil fuels in Canada per year from a level of 1.058 billion liters per year to 941 million L per year a savings of 116 million L per year. (This is a conservative number; savings would be higher if fuel consumption estimates from Saskatchewan s budgeting numbers were used). These fuel savings are comparable to the amount of fuel used annually by 24,000 vehicles. On top of this total, there are fuel savings that come from the reduction in summer fallow and the adoption of chem fallow. Traditional summer fallow is conducted using annual fuel consumption of 10 liters of fuel per acre (Saskatchewan Ministry of Agriculture) while chem fallow requires only two L per acre. Averaged over the seven million acres of summer fallow still conducted annually, this savings adds up to 56 million liters per year. In summary, conservation tillage, enabled by the use of crop protection products and plant biotechnology, saves 116 million litres of fuel per year (see Table 16 below). Reductions in summer fallow enabled by crop protection products save 56 million liters per year. The total reduced use of diesel fuel is therefore 171 million liters per year. Table 16 Tillage type 1991 2006 Acres Fuel required per acre Fuel required for land base Acres Fuel required per acre Fuel required for land base Fuel savings Conventionally tilled land Conservation tillage land No-till seeding or zero-till seeding 49,387,997 16 790,207,952 20,114,443 16 321,831,088 17,522,247 12 210,266,964 18,354,767 12 220,257,204 4,821,406 12 57,856,872 33,311,822 12 399,741,864 Total 71,731,650 1,058,331,788 71,781,032 941,830,156 1,058,331,788 minus 941,830,156 116,501,632 State of the Industry Report CropLife Canada 42
Part Six Contribution of crop protection to affordability of food in Canada State of the Industry Report CropLife Canada 43
Assessing the impact of efficient production of food is complex because the food supply system is global in nature. In certain seasons much of our fresh food is imported and thus whether or not Canadian producers can bring abundant supplies to market are irrelevant through parts of the year. As an exercise that provides some instruction as to what contribution modern crop protection makes to affordable food, it is useful to compare food prices for a basket of foods grown under conventional agricultural methods versus foods grown without the use of crop protection. Again, as with the production statistics, the nearest thing to a non-use proxy is organic production. Organic producers have been supplying Canadians with organic food for a number of years. In general, the production they provide extracts a premium in the market place. This premium arguably comes as a result of two forces: (a) supply versus demand and (b) cost of production per unit of food is higher and thus the price attained must compensate the producer for this. Two data sources were examined to see what impact modern crop protection has on the family grocery bill. Impact of modern crop protection on family grocery bills Study #1 The first data source was a Statistics Canada study on the price attained by producers for fresh produce in three provinces. To assess the degree of savings that modern crop protection confer on an average Canadian family, statistics on consumption of a number of key fruits and vegetables were collected. The average selling prices for 12 vegetables, and four domestically grown fruits were collected for organic and conventional production. Prices for organic versus conventional production were sourced from Statistics Canada s Vita report Vista on the Agri-Food Industry and the Farm Community Catalogue no. 21-004-XIE Organic fruit and vegetable production in Canada. Ratios of the cost of organic versus conventional food were derived from data that compared the price of organic production versus conventional production in Ontario, B.C. and Quebec. These figures were then applied to average consumption patterns for each foodstuff as consumed by Canadian families. If we can assume that there is a linear relationship between the price the producer received and the price charged by the retailer at the store, the average savings resulting from the use of conventional production techniques by fruit growers for Canadian families is 39 per cent. The average savings by Canadian families on fresh vegetables is 41 per cent. These savings are owing to the efficiency with which Canadian producers can produce fresh produce using modern crop protection techniques. (See Tables 17 and 18). State of the Industry Report CropLife Canada 44
Table 17 Crop protection products usage by Canadian growers results in family grocery savings of 41 per cent on vegetables Vegetables Organic to Conventional Price Ratio in BC Organic to Conventional Price Ratio in Ont Organic to Conventional Price Ratio in Quebec Organic to Conventional Ratio Unweighted Average BC, Quebec, Ont Expenditures per family of four per year in Canada (Canada Food Stats) Modelled price if not for the use of modern crop protection Per cent savings in family vegetable bills due to modern crop protection Broccoli 1.54 1.55 1.54 $20.96 $32.38 35% Sweet Corn 1.88 1.19 1.46 1.51 $8.92 $13.47 34% Cabbage 1.33 2.40 1.87 $8.92 $16.65 46% Carrots 2.40 1.67 2.03 $44.52 $90.52 51% Cauliflower 1.26 $12.96 $16.33 21% Cucumber 1.32 1.54 1.43 $27.52 $39.27 30% Lettuce 1.15 2.00 1.57 $47.76 $75.13 36% Dry Onions 4.16 1.77 1.81 2.58 $35.60 $91.84 61% Peppers 1.08 1.18 1.13 $38.04 $43.02 12% Radish 1.24 1.24 $4.84 $6.01 19% Spinach 1.55 1.55 $8.08 $12.53 36% Tomatoes 2.36 0.86 1.91 1.71 $75.28 $128.56 41% Total price of this basket of vegetables $333.40 $565.73 41% Table 18 Crop protection products usage by growers results in family grocery savings of 39 per cent on fresh fruits Fruits Organic to Conventional Price Ratio in BC Organic to Conventional Price Ratio in Ont Organic to Conventional Price Ratio in Quebec Organic to Conventional Ratio Unweighted Average BC, Quebec, Ont Expenditures per family of four per year in Canada (Canada Food Stats) Modelled price if not for the use of modern crop protection Per cent savings in family food bills due to modern crop protection Apples 1.43 1.33 0.80 1.73 $76.08 $131.62 42% Pears 1.83 1.83 $21.84 $39.91 45% Plums/prunes 1.32 1.32 $10.52 $13.87 24% Strawberries 1.28 0.91 1.63 1.28 $24.28 $30.96 22% Total price of this basket of fruit $132.72 $216.36 39% State of the Industry Report CropLife Canada 45
Impact of modern crop protection/plant biotechnology on family grocery bills Study #2 A comprehensive survey by USDA on the retail costs of cereal products, vegetables and fruits was conducted in the Boston and San Fransisco area over the course of four years. Prices were surveyed monthly for both organic and conventionally grown vegetables and fruits. USDA also ran comparative costs on organically produced staples including wheat and soybeans. Costs were used in this survey to arrive at a ratio of the cost of produce grown without the use of modern crop protection techniques versus produce grown using modern crop protection techniques. These ratios were then applied to figures from Canada Food Stats data on average weekly expenditures per family on (a) vegetables and (b) fruits. This data shows a larger saving to an average family owing to the fact that conventional production can be produced more efficiently than food produced without the use of these tools. Table 19 summarizes the savings calculated by USDA and then applied on the average weekly expenditures as calculated from the Canada Food Stats publication. Note that the savings calculated in this method are somewhat higher than those noted in Study #1. Savings on vegetables amount to $28.74 per week, savings on fruits amount to $10.03 per week. These trends are likely to be seen across a wide range of foods beyond fruits and vegetables. Initial surveys of the costs of organic production of some staple ingredients (wheat, soybeans) show that the costs of these two ingredients were more than three-fold higher (wheat) and two and a half times higher (soybeans) without the use of modern crop protection/plant biotechnology. These increases in food costs would be transmitted across any food produced with one of these as an ingredient (i.e. most processed foods). One caveat that must be inserted relates to reliability of food supply. The above comparisons price out and compare organic versus conventional food process in an overall food environment where abundance has prevailed for society as a whole for a long time. Since our society adopted modern crop protection techniques, we have never had a pest-induced famine. However, history is riddled with instances of famine during the thousand year era where organic tactics failed to combat pestilance. That said, part of the value of crop protection products and plant biotechnology lies in the stability of food supply and not just the cost. Table 19 Crop protection/plant biotechnology usage by growers results in family grocery savings of 58 per cent across three food categories Product category Weekly household expenditure ($Cdn) Expenditure if modern crop protection products not used ($Cdn) Savings per week ($Cdn) Per cent savings Cereal Products 13.00 41.74 28.74 69% Vegetables 9.00 19.03 10.03 53% Fruits 10.00 15.06 5.06 34% Total of three categories 32.00 75.83 43.83 58% State of the Industry Report CropLife Canada 46
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23 Pimental, David. 1992. Pesticides and World Food Supply. Chapter 15:309-323. American Chemical Society. ISBN 13:9780841221970. 24 Pimental, David, H. Acquay, M. Biltonen, P. Rice, M. Silva, J. Nelson, V. Lipner, S. Giordano, A. Horowitz and M. D Amore. 1992. Environmental and Economic Costs of Pesticide Use. BioScience. Vol. 42. No 10:750-758. 25 Pimental, David. 2002. Encyclopedia of Pest Management. ISBN 978-0-8247-0632-6. 26 Rajendran, Somiahnadar. 2002. Encyclopedia of Pest Management. ISBN 978-0-8247-0632-6. 27 Ridsdill-Smith, James. Crops and Pest Control. May 7, 2010. www.natsoc.org.au/html/papers/rsmith.pdf. 28 Swanton C.J., K.N. Harker, and R.L. Anderson. 1993. Crop Losses Due to Weeds in Canada: Weed Technology. Vol. 7:537-542. 29 Tolman, J.H., D.G.R. McLeod, and C.R. Harris. 1986. Yield losses in potatoes, onions and rutabagas in Southwestern Ontario, Canada the case for pest control. Crop Protection. Vol. 5 Issue 4:227-237. 30 Vista on the Agri-Food Industry and the Farm Community. 2002. Statistics Canada. May 8, 2010. www.statcan.gc.ca. 31 Yudelman, Montaque, Annu Ratta, and David Nygaard. 1998. Pest Management and Food Production Looking to the Future. Food, Agriculture and the Environment Discussion Paper 25. May 7, 2010. http://books.google.ca/ books?id=vaqivdyp5_ac&dq=pest+management+and+food+production&printsec=frontcover&source=bn&hl=en&ei=yrp hs-lpjo6knudhtz8d&sa=x&oi=book_result&ct=result&resnum=4&ved=0cbkq6aewaw#v=onepage&q&f=false. 32 Canola Council of Canada An Agronomic and Economic Assessment of GMO Canola Koch et al 2001. 33 Statistics Canada CANSIM database download Crops and horticulture at http://www5.statcan.gc.ca/cansim/subject-sujet; jsessionid=1b0841fdff74b65c38830723fbdb7a92?lang=eng&spmode=master&themeid=920. 34 Agriculture and Agrifood Canada: Grains and Oilseeds Outlook Prices Oct 14, 2009 at http://www.agr.gc.ca/pol/mad-dam/ index_e.php?s1=pubs&s2=go-co&s3=php&page=go-co_2009-08-28. 35 Productivity of Organic Cropping in the Eastern Prairies: On-Farm Survey and Database Development, M. H. Entz, R. Guilford and R. Gulden. 36 Ten per cent organic in 15 years: Policy and program initiatives to advance organic food and farming in Ontario, R. MacRae, RC Martin and J Langer. 37 Safeguarding production losses in major crops and the role of crop protection. Oerke et. al. 38 Global impact of biotech crops: Income and production effects from 1996 through 2007 (Brookes and Barfoot). 39 Statistics Canada Vista on the agrifood industry and the farm community Catalogue 21 004 XIE. 40 Statistics Canada CANSIM database download Table 001-0014 Area production and farm value of potatoes. 41 Employment Pesticide and Other Agricultural Chemical Manufacturing(NAICS 32532) http://www.ic.gc.ca/cis-sic/cis-sic.nsf/ IDE/cis-sic3112empe.html. 42 Value of Manufacturing Production: 1998-2007* Manufacturing Revenues and Manufacturing Value-Added Pesticide and Other Agricultural Chemical Manufacturing (NAICS 32532) http://www.ic.gc.ca/cis-sic/cis-sic.nsf/ide/cis-sic32532prde.html. 43 Industry Canada Trade Database Online (TDO) download from http://www.ic.gc.ca/eic/site/tdo-dcd.nsf/eng/home. 44 Canada National Inventory Report 1990-2008 Part I of Canadian Submission to the UN Framework Convention on Climate Change. State of the Industry Report CropLife Canada 48