Ag in the Fall Economic Statement

Nov 22, 2023

Farm Credit Canada will have its roles reviewed

By Diego Flammini
Staff Writer
Farms.com

The federal government released its Fall Economic Statement on Nov. 21 to highlight how it is taking action to support Canadians, build homes and address affordability.

The document also included mentions of items pertinent to farmers and rural Canadians.

Here’s a breakdown of those parts.

The federal government is planning a study of Crown corporations, including Farm Credit Canada, to ensure they’re delivering for Canadians.

“The government will be reviewing their roles and taking steps to increase risk appetite where appropriate,” the document says. “Next steps will be announced in Budget 2024.”

The Fall Economic Statement highlighted higher food prices.

Multiple factors contributed to increased grocery prices.

“This increase was led by higher commodity prices stemming from the impacts of climate change and the illegal Russian invasion of Ukraine, and was compounded by higher production costs resulting from global supply chain disruptions and global labour shortages,” the economic statement says. “With demand remaining strong, businesses have passed on these cost increases, leaving consumers to bear the full brunt of higher prices.”

To minimize the effects of climate change, the government is planning to incentivize using waste biomass to generate electricity and heat, citing crop residues as a potential source.

To do this, the government is proposing to expand the eligibility of the 30 per cent Clean Technology investment tax credit “to include systems that produce electricity, heat, or both electricity and heat from waste biomass,” the economic statement reads.

Ottawa also proposes expanding eligibility for the 15 per cent Clean Electricity tax credit for similar innovations.

To ensure Canadian goods and workers can move across the country more freely, the federal government is committed to “working to eliminate other barriers to internal trade by removing unnecessary federal exceptions in the Canadian Free Trade Agreement.”

The Fall Economic Statement also highlighted recent measures the government is taking to support rural Canadians.

This includes helping families switch to electric heat pumps and doubling the rural top-up for eligible Canadians from 10 to 20 per cent, which will go into effect in April 2024.

The payment amounts for 2024-25 will be announced in the next few months.

Video: The Investment Opportunities of Industrial Hemp

The fledgling U.S. hemp industry is decades behind countries like Canada, France and China, but according to impact investor and this week’s podcast guest, Pierre Berard, it could flourish into a $2.2 billion industry by 2030 and create thousands of jobs.

To reach its potential, what the hemp industry needs most right now, Berard said, is capital investment.

Last month, Berard published a report titled “Seeing the U.S. Industrial Hemp Opportunity — A Pioneering Venture for Investors and Corporations Driven by Environmental, Social and Financial Concerns” in which he lays out the case for investment.

It’s as if Berard, with this report, is waving a giant flag, trying to attract the eyes of investors, saying, “Look over here. Look at all this opportunity.”

Berard likens the burgeoning American hemp industry to a developing country.

“There is no capital. People don’t want to finance. This is too risky. And I was like, OK, this sounds like something for me,” he said.

As an impact investor who manages funds specializing in agro-processing companies, Berard now has his sights set on the U.S. hemp industry, which he believes has great economic value as well as social and environmental benefits.

He spent many years developing investment in the agriculture infrastructure of developing countries in Latin America and Africa, and said the hemp industry feels similar.

“It is very nascent and it is a very fragmented sector. You have pioneers and trailblazers inventing or reinventing the field after 80 years of prohibition,” he said. “So I feel very familiar with this context.”

On this week’s hemp podcast, Berard talks about the report and the opportunities available to investors in the feed, fiber and food sectors of the hemp industry.

Building an industry around an agricultural commodity takes time, he said. According to the report, “The soybean industry took about 50 years to become firmly established, from the first USDA imports in 1898 to the U.S. being the top worldwide producer in the 1950s.”

Berard has a plan to accelerate the growth of the hemp industry and sees a four-pillar approach to attract investment.

First, he said, the foundation of the industry is the relationship between farmers and processors at the local level.

Second, he said the industry needs what he calls a “federating body” that will represent it, foster markets and innovations, and reduce risk for its members and investors.

The third pillar is “collaboration with corporations that aim to secure or diversify their supply chains with sustainable products and enhance their ESG credentials. This will be key to funding the industry and creating markets,” he said.

The fourth pillar is investment. Lots of it. Over $1.6 billion over seven years. This money will come from government, corporations, individual investors, and philanthropic donors.

The 75-page report goes into detail about the hemp industry, its environmental and social impact, and the opportunities available to investors.

Read the report here: Seeing the U.S. Industrial Hemp Opportunity

Also on this episode, we check in with hemp and bison farmer Herb Grove from Brush Mountain Bison in Centre County, PA, where he grew 50 acres of hemp grain. We’ll hear about harvest and dry down and crushing the seed for oil and cake.