2003/04 – 2005/06 SERVICE PLAN Ministry of Agriculture, Food and Fisheries

Planning Context

In developing this service plan and making decisions on programs, the ministry has considered the following context, strengths and challenges.

The BC economy grew 1.9 per cent in 2002, faster than the 0.7 per cent expected at the time of last year’s budget, according to BC’s independent economic forecast council. The Council now expects growth in BC’s economy to pick up to 2.7 per cent in 2003. Further information on the BC outlook may be found in the Budget and Three Year Fiscal Plan released with the budget.

Strengths

The agriculture and seafood industries are important contributors to the BC economy in terms of jobs and generating income.

• British Columbia’s agriculture industry had a total production value of $2.2 billion (farm cash receipts) in 2001, and the sector employed 25,900 people. Total net farm income in 2001 was $325 million, a 21 per cent increase from the previous year (see appendix for graphical representation). In total, the BC agriculture industry generated $4.4 billion in manufactured shipments in 2001.
• In 2001, the primary fish sector generated $645 million in sales (landed value), and employed 6,000 people. In total, the seafood industry has averaged $1 billion in wholesale value in each of the last 5 years, and provided more than 15,000 people with full and part time employment. It has exported over 90% of the production into a highly competitive global market.
• In 2001, BC’s food and beverage processors produced $5.04 billion in sales, of which $1.7 billion was exported.

British Columbia’s rural communities and regions are relatively more impacted by the agriculture/fish economy.

• A great deal of economic activity in agriculture and food processing is located in the highly populated Lower Mainland area. However, the biggest impact and benefits of agriculture and seafood production are in rural communities where they provide stability to local resource-based rural economies.

The industry is less affected by economic downturns than are other resource-based sectors.

• During the last decade, employment and production in the agriculture sector has remained steady or continued to grow when other sectors have declined or lost markets due to trade issues or global or local recession.
• The seafood sector has been impacted by fluctuations in wild fish populations, risk averse fisheries management decisions, competition in the marketplace, and downturns in the economies of countries that have been traditional markets. Growth in the aquaculture industry has helped stabilize the overall situation.

Challenges

British Columbia’s agriculture and seafood industries face significant challenges, but in the right economic environment, are poised for growth. The ministry has considered the context in which these industries operate, and recognizes the challenges that must be addressed in order to create an environment in which these sectors can prosper while being environmentally responsible.

Global markets are highly competitive.

• British Columbia’s agriculture sector must compete in international markets with competitors that are emerging as new low cost producers and those that receive very large government subsidies (e.g.: Europe, United States). We also must deal in domestic markets that impose trade barriers in a variety of ways.
• Our agriculture industry sectors are relatively smaller than major competitors who enjoy economies of scale and therefore lower input costs, which improves their overall competitiveness.
• Similar competitive challenges face the seafood industry.

The seafood industry is in transition.

• The seafood industry is moving from a production to a more market-driven approach to business development. The focus is on innovation, diversification, value-added and greater product recovery, new product development and expanding opportunities.
• The ministry plays a key role in the transition through creating the right policy framework and business conditions in partnership with other agencies and levels of government. This involves influencing the federal government to ensure fisheries management decisions recognize industry’s economic interests, and facilitating development of industry capacity to develop and deliver services to move the industry forward.

The agriculture sector is vulnerable to weather and market risks.

• The agriculture industry will continue to be challenged with risks from unmanageable and unpredictable weather and markets. These can create wide fluctuations in income and lead to instability in the economies of local communities and often prices at retail counters.
• Government-supported risk management programs will continue, but must be more focussed to ensure that optimum effectiveness is realized for the funds available. Increased partnerships and linkages with the private sector are needed to expand the range of risk management tools available to farmers. A comprehensive set of national risk management tools would help offset unexpected income downturns and therefore reduce fluctuations and increase stability.
• Provinces are participating with the federal government in developing a national five-year, federal/provincial cost-shared Agriculture Policy Framework (APF) agreement. The federal government will contribute 60% with each province contributing 40% to implement business risk management programs nationally.
• The ministry’s challenge will be to meet its 40% contribution with the planned allocated budget over the next three years. The federal funding is significantly higher than provided under a previous agreement, which has increased agriculture industry pressure on the provincial government to match the higher funding levels. Program redesign may also increase participation and therefore cost challenges to the provincial government.

There are local and global barriers that affect long-term viability and competitiveness.

• Barriers include excessive regulations, inflexible marketing systems, outmoded labour standards, and domestic and global trade restrictions.
• Some policies and regulations of other ministries must be adjusted to allow the agriculture, aquaculture and fisheries sectors to operate effectively in local communities in order to be competitive in local and export markets.
• In order to address these challenges, the mandate of the ministry has shifted to a more outcome/results-based approach to program design and delivery, and to advocate for the agriculture and seafood industries within government.
• There is significant opportunity to improve overall competitiveness through the national Agricultural Policy Framework (APF) agreement. The APF will include funding for risk management, food safety, environmental sustainability and science/innovation in British Columbia, which all serve to improve our competitiveness.

Consumers are increasingly concerned about food safety.

• Recent high-profile animal disease outbreaks in Britain and bioterrorism in the U.S. have raised consumer interest in the safety and quality of their food and water and in border security. This increases the challenge on the agriculture, food and seafood sectors to provide assurance that products from farms meet recognized safety standards. Implementing systems for standards, certification and product tracking/tracing is costly and will take considerable time to put in place. At the same time, British Columbia’s direct farm marketing segment has benefited from increased consumer interest in fresh products grown locally.

Environmental values must be balanced with economic viability.

• Public concern about the environment is high. The agriculture and seafood sectors realize that environmental values must be preserved. The challenge is to achieve economic growth and viability while managing their industries in an environmentally sustainable way. Government has developed a comprehensive regulatory framework for the salmon aquaculture industry, that includes an improved and harmonized compliance and enforcement regime for the finfish and shellfish aquaculture industry, and designates the ministry as the provincial lead on all compliance issues associated with the industry. Discussions are under way with federal authorities to ensure joint opportunities are maximized for compliance monitoring and assessment of activities associated with aquaculture. The agriculture sector is further developing its ability to deal with environmental issues through on-farm environmental plans.

BC’s food processing capacity has declined.

• Competitive pressures including higher input costs, labour costs, and limitations to emerging markets have caused some major food processors to move to other provinces. This has reduced the ability of some sectors to maintain their costs in getting their raw products to market, adding value to their raw products, or reaching new markets.

Federal versus provincial jurisdiction creates challenges in maximizing program benefits.

• Agriculture: The federal and provincial governments share jurisdictions over some components of agriculture such as risk management. While this creates challenges for managing and delivering programs in the most beneficial way for British Columbia farmers, it also creates a major opportunity for accessing significant federal funds to complement provincial programs for greater benefit to our farmers.
• Fisheries and aquaculture: the provincial government has the lead jurisdiction for aquaculture while the federal government is responsible for marine fisheries. The challenge for the province is to increase the economic benefits from the seafood sector to British Columbia by increasing provincial influence over federal fisheries policy decisions.

Local governments have considerable jurisdiction and powers.

• Local governments affect both agriculture and aquaculture through their bylaws on size, location, development, or operating procedures. This is a particular challenge at the rural/urban interface where urban neighbourhoods have developed next to intensive agricultural operations. Greater investment in those communities is possible by working with local governments to change or improve bylaws that encourage responsible operations rather than restrict them. Improved relationships with local government need to be developed.

Internal to government — opportunities and challenges

A changed mandate requires a cultural shift internally.

• The ministry’s mandate has changed beginning in 2002/03. The mandate has traditionally been a dominant focus on developing production technology and transferring it to producers. While relationships and partnerships with commodity and industry organizations have always been a significant factor in carrying out ministry programs, developing and using these partnerships is now the greater focus in program delivery. Ministry services to producers are focussed on the industry’s challenges and opportunities and improving the private sector’s capacity to meet these needs.
• A greater emphasis has been placed on food safety and environmental sustainability. Staff in the ministry must shift their focus from productivity improvements to issues management and policy development.
• The change in mandate and emphasis has meant a larger role in facilitation and partnership building to enable industry to be more self-reliant in accessing programs and information from government and private sources. The government’s shift to outcome-based regulations and less government inspection in favour of a monitoring and audit (oversight) role also presents challenges, as well as opportunities, to staff in adopting new roles. These changes mean an expansion of the skill set needed among employees beyond the traditional science-based disciplines.
• Professional staff members are trained in specific management and particularly biological disciplines; however, a significant proportion is now within 5 years of retirement eligibility. A human resource management plan that develops and retains the highly skilled human resources required, including a succession plan, is a key priority in order to address these needs for the future. Development of this plan is well underway.
• There are a large number of inter-ministry issues in a number of areas. Some of the existing policies and models are ineffective or conflicting. The ministry will consult with other ministries and agencies in developing new models in order to work together most effectively.

Summary

With a good government policy framework, the agriculture and seafood industries have the ability to thrive. The industries can expect continued economic growth while managing environmental and social expectations.

The ministry is addressing the challenges and opportunities, but in ways that are different than in the past, e.g.: even more emphasis on building partnerships and relationships with organizations, influence management, effective policy and legislative frameworks, and giving industry the tools to be more self-reliant and less dependent on government. In essence, the mandate of the ministry has shifted to a more outcome/results-based approach and advocating for the industry within government.