Appendix 1. Strategic Context

Vision, Mission and Values

Vision

A competitive and profitable industry that is environmentally and socially sustainable and provides safe, high-quality food for consumers and export markets.

Mission

Deliver programs that maintain a positive business climate for a competitive market-responsive agri-food and fisheries sector, promote environmental and social sustainability and safeguard B.C.'s ability to provide safe and high-quality agri-food and seafood products for consumers.

Values

The following values outline the fundamental beliefs of the ministry and describe how the organization and its employees interact with clients and each other. The ministry strives to conduct its business in a manner that is:

1. Fair and Equitable — Building and maintaining among ministry personnel an effective spirit of teamwork and co-operation based on trust, integrity, flexibility, innovation, social equity and equality of opportunity.

2. Responsible and Accountable — Emphasizing responsible use of government resources and transparency in accounting for the use of those resources.

3. Service-oriented — Responding to the needs of the public, agriculture and fisheries sector groups, communities and staff in a timely and courteous manner.

4. Partnership-Building — Promoting teamwork, good working relationships, and effective partnerships with, and co-operation among, all orders of government, First Nations, agriculture, aquaculture and fisheries sector groups and communities.

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 1.7 per cent in 2003, slower than the 2.7 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 2.9 per cent in 2004. Further information on the BC outlook may be found in the Budget and Three-Year Fiscal Plan released with the budget.

In 2003, the ministry negotiated a five-year federal/provincial plan to position the agriculture and food industry in Canada and in B.C. for greater profitability. The Agricultural Policy Framework supports service plan goals and objectives in industry competitiveness, food safety and quality, environmental sustainability and resource development, and risk management.

The Agricultural Policy Framework will provide up to $56 million a year over five years depending on the level of program participation by the industry. This creates a level playing field nationally for B.C. farms, which will receive access to risk management funding on the same basis as farmers in other provinces. The framework will be a key driver of policy and program development in the ministry as implementation proceeds.

The finding of BSE in the Canadian cattle herd has profoundly affected livestock industries and required a number of program and regulatory changes at federal and provincial levels.

Strengths

The agriculture, food and fisheries industries are important contributors to the B.C. economy in terms of jobs and generating income.

• B.C.'s agriculture industry realized farm cash receipts of $2.24 billion in 2002, and the sector employed almost 30,000 people. Total net farm income, a measure of profitability, was $356 million in 2002, a small increase from the previous five-year average.
• The primary fish sector generated $668 million in sales (landed value), and employed 6,000 people in 2002. In total, the seafood industry has averaged $1 billion in wholesale value in each of the last five years, and provided more than 15,000 people with full- and part-time employment. It exports more than 90 per cent of its production into a highly competitive global market.
• The B.C. food and beverage processing industry, which depends on raw product from the agriculture industry, generated $5.26 billion sales in 2002, of which $1.7 billion was exported. This sector employs some 27,000 people.
• B.C. agriculture has three related food chain sectors that generate considerable sales and employment in the province. They are wholesale food distributors with sales of $6.7 billion, employing 17,000; the retail grocery sector with sales of $9.8 billion and employing 68,000; and the food service sector including restaurants, with sales of $6.8 billion and employing some 133,000 people.
• The total agri-food and related industries contribute some $21 billion in consumer sales and support more than 270,000 jobs in B.C.
• Both the agriculture and seafood industries are very diverse with more than 200 commodities being produced in agriculture and some 100 species of fish and shellfish being harvested or raised in B.C. waters. This diversity provides a strong base for the industry with many opportunities for adding value and marketing.
• The B.C. aquaculture industry, consisting of 30 species of finfish, shellfish and plants on 700 marine and freshwater sites, experienced a 22 per cent growth rate in 2002 and is expected to continue growing. Farmed fish production increased and is now the most significant Canadian fish export.
• The seafood sector has reliable food inspection programs backed by government. The seafood inspection regime involves both the provincial and federal governments and is based on hazard analysis and critical control point principles to ensure safe, quality seafood products.
• More than 60 per cent of the economic activity, both sales and employment, associated with intensive agriculture (e.g., dairy, poultry, berries, vegetable greenhouses) and food/seafood processing is located in the highly populated Lower Mainland and Fraser Valley regions with established rail and road links to ports of exit to the United States and overseas.
• B.C.'s heartlands communities and regions are relatively more impacted by the agriculture and fisheries industries, which provide stability to resource-based rural economies.
• Agriculture, food and fisheries industries are less affected by economic downturns than B.C.'s 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.

Challenges and Risks

B.C.'s agriculture, food 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.

Global markets for agricultural and seafood products are highly competitive.

• B.C.'s agriculture, food and seafood industries must compete in international markets with competitors who have similar or lower cost structures and marketable, quality products.
• B.C.'s agriculture industry has competitors that receive large government subsidies (i.e., Europe, United States, and Japan).
• B.C.'s agriculture and food industries must deal in domestic and international markets that impose various barriers that restrict market access.
• B.C.'s agriculture, aquaculture and food industries are smaller than those in other jurisdictions. Most competitor industries enjoy greater economies of scale.
• Globalization gives consumers, retailers and restaurants in B.C. immediate awareness of new/substitute products, changes in prices or higher-quality goods or services being provided by agri-food or seafood competitors outside the province.

The seafood industry is in transition.

• The seafood industry's business development is moving from a production approach to one that is more market-driven. The focus is on innovation, diversification, value-added and greater product recovery, new product development and expanding opportunities.
• The fisheries industry has been impacted by fluctuations in wild fish populations, risk-adverse fisheries management decisions, competition in the marketplace, and downturns in the economies of countries that have been traditional export markets. High turnover in skilled labour and a lack of newly trained entrants in the industry affect the sector's ability to produce diversified and higher value-added products.

The agriculture and fisheries sectors are vulnerable to unpredictable risks.

• The agriculture and fisheries industries continue to be challenged by unmanageable and unpredictable weather conditions, market situations and disease crises. As has been well demonstrated by the BSE crisis in 2003, these can create wide fluctuations in income and prices, leading to instability in the economies of local communities and of prices at the processor and retail level. Climate change may further increase the level of risk. These risks can affect investment decisions at the farm level and can lead to under-investment that may affect output and efficiencies in the long run.
• Government-supported risk management programs will continue, but will be more focused to ensure optimum effectiveness. Increased partnerships with the private sector will be developed 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 reduce income fluctuations and increase stability. These tools will include climate change strategies to reduce the levels of greenhouse gas emissions.
• Provinces are participating with the federal government in implementing a national five-year, federal/provincial cost-shared Agricultural Policy Framework (APF) agreement. The federal government will contribute 60% with each province contributing 40% to implement the new Canadian Agriculture Income Stabilization Program (CAISP). The federal funding is significantly higher than provided under a previous agreement. Program redesign may also increase participation and therefore cost challenges to the provincial government.

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

• Barriers include excessive regulations, inflexible marketing systems, outmoded labour standards, and domestic and global trade restrictions.
• Some policies and regulations of other ministries and other levels of government need to be amended to allow the agriculture, food, aquaculture and fisheries sectors to operate effectively in local communities and 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 for program design and delivery; and to being an advocate for the agriculture, food and seafood industries within government.
• There is significant opportunity to improve overall competitiveness through the national Agricultural Policy Framework agreement. The framework includes funding for risk management, food safety, environmental sustainability, renewal and science/innovation in B.C., which can serve to improve B.C. industry competitiveness.

Consumer concerns about food safety.

• Recent high-profile animal disease outbreaks in Britain and bio-terrorism fears in the United States have raised consumer interest in the safety and quality of their food and water and in border security. More recently, the discovery of a beef cow in Alberta with BSE led to the immediate closure of the border for export of livestock products with the United States and other trading partners. A second cow with BSE was also discovered in Washington State. This increases the challenge to the agriculture, food and seafood industries to provide assurance that products from farms and firms meet recognized safety standards. Implementing systems for standards, certification and product tracking/tracing is costly and will take considerable time to put in place.
• B.C.'s direct farm marketing and on-farm processing sectors have benefited from increased consumer interest in fresh and packed products grown and/or processed locally.

Environmental values must be balanced with economic viability.

• Public concern about the environment is high, and industry growth must be managed in an environmentally sustainable way. Government has developed a comprehensive regulatory framework for the salmon aquaculture industry. This 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.

B.C.'s food processing capacity has declined.

• Competitive pressures including higher input costs, higher 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.
• Food processors in B.C. have no effective organization to bring their policy concerns to the attention of any level of government, which results in regulatory decisions that can unintentionally affect the investment climate.

Federal versus provincial jurisdiction creates challenges in maximizing program benefits.

• Agriculture: The federal and provincial governments share jurisdiction over some components of agriculture such as risk management. While this creates challenges for managing and delivering programs in the most beneficial way for B.C. farmers, it also creates a major opportunity for accessing significant federal funds.
• Fisheries and aquaculture: The provincial government is the lead for aquaculture while the federal government is responsible for wild fisheries. The challenge for the province is to increase 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 where urban neighborhoods have developed next to intensive agricultural operations. Greater investment is possible by working with local governments to change or improve bylaws that encourage responsible operations rather than restrict them.

Internal to the Ministry — opportunities, challenges and risks

A changed mandate requires a cultural shift internally.

• The ministry's mandate changed beginning in 2002/03. The mandate traditionally focused 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, processors and other industry partners now focus on the challenges and opportunities facing the agriculture, food and fisheries industries and improving the private sector capacity to meet these challenges and opportunities.
• A greater emphasis has been placed on food safety and environmental sustainability, with the focus shifting from productivity improvements to issues management, policy influence and increasing overall industry competitiveness.
• 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 presents both challenges and opportunities for staff as they adopt new roles.
• A significant proportion of professional staff members are within five years of retirement eligibility. Implementation of a human resource management plan that develops and retains the highly skilled human resources, including a succession plan, is well underway.
• There are a large number of inter-ministry issues. The ministry will consult with other ministries and agencies in developing new models in order to work together most effectively and advocate on behalf of the agriculture, food and fisheries sectors.

Summary

With a good government policy framework, B.C.'s agriculture, food 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 in ways that are different from the past. There is 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 where it advocates for the industry within government. Integrating and co-ordinating the efforts of staff to harness their strengths and pursue key opportunities will be essential to succeeding in this new environment.

Highlights of Strategic Shifts and Changes from the Previous Service Plan

This year's service plan continues to chart the course established following the ministry's core review. The contents of this year's plan are consistent with the ministry's previous service plan and build on successes realized in the last year. For example, with the successful negotiation of the federal-provincial Agricultural Policy Framework, the ministry has adjusted some strategies to reflect a focus on implementation.

Consistency with Government's Strategic Plan

Each core business area indicates specific linkages with the provincial government's strategic plan "A New Era for British Columbia". The business area descriptions also note linkages to the Premier's letter to the Minister where applicable.

Specifically, the government's broad goals are:

Goal 1: A strong and vibrant provincial economy.

Goal 2: A supportive social infrastructure.

Goal 3: Safe, healthy communities and a sustainable environment.

The ministry's focus is on creating the conditions that will lead to growth in the agriculture, food and fisheries sectors. Supporting goals, objectives and strategies are designed to promote economic growth within a broader framework that maintains safe, healthy communities and a sustainable environment. The core business areas and supporting goals of the ministry support the province's goal of "a strong and vibrant economy". Through food safety and quality, and environmental sustainability and resource development, the ministry supports the province's goal of "safe, healthy communities and a sustainable environment".

Deregulation

This service plan indicates how the ministry will reduce regulatory impediments to competitiveness of the B.C. seafood and agrifood sectors. The target is to reduce regulations by one-third within three years. The ministry has made significant progress toward this target, and could achieve it ahead of schedule. (Please see specific targets under Goal One, Objective Two.) Legislation and regulations inconsistent with the new mandate of the ministry will be repealed. It will be also achieved by shifting to outcome-based regulations.