Speaker 1 [00:00:01] Hi, it’s John here. And today I’d like to welcome back a special co-host. Naomi Powell is our managing editor of economics and Thought Leadership. She’s at the helm of many of our teams, major research reports.

Speaker 2 [00:00:13] Thanks, John. It’s great to be back.

Speaker 1 [00:00:15] It’s great to have you.

Speaker 2 [00:00:16] So you are just back from the World Economic Forum in Davos, Switzerland. This was the first time the event has been held in-person, at least in a few years, thanks to the pandemic. I’m interested to know what it was like and what were the key moments that you took away with you when you came back to Canada?

Speaker 1 [00:00:33] Well, talk about ironies that a couple of thousand people at least flew or traveled by whatever means to this little town in the Alps when we’ve just been through a crash course in doing so much remotely. In fact, I was thinking the last major international conference in some ways was the World Economic Forum in 2020. And then the pandemic hit and everything was supposed to change, including how we approach conferences.

Speaker 2 [00:01:00] Yeah, I was thinking the same thing. COVID 19 was supposed to spell the end of conferences like this, and that didn’t happen. You’re right. We’re in more of a hybrid world and we’re still trying to figure out how that works. But I do think there’s a sense still out there, after everything we’ve been through, that if you’re going to hold a big in-person conference like the one you just described with hundreds of people flying in, it has to count. So what was accomplished, do you think, in-person that couldn’t have been accomplished virtually. Why does an in-person Davos still matter?

Speaker 1 [00:01:29] I think there is a human interaction that just doesn’t happen on Zoom or whatever your preferred platform is. You do bump into people. You do have more honest conversations in person. And while Davos has this image of being elitist and, you know, in many ways it is it also is impressive how many people from different parts of the world come and get to interact. And I’m not just talking about businesspeople, artists, community leaders, scientists who wouldn’t be on those Zoom calls with CEOs or with government folks. I’d say if there was kind of a major accomplishment at this Davos, it was a reckoning with IRA, the Inflation Reduction Act, the monumental piece of U.S. legislation that has really accelerated a lot of clean tech investing. I didn’t appreciate until I was there just how rattled the Europeans are by this. I mean, this has been an existential challenge. Europe has fought for decades that it is the leader in renewables. And suddenly America, the great champion of fossil fuels in many European minds, is the champion of renewables, while also being the champion of fossil fuels, especially of oil and gas. The commitment to Ukraine was also pretty important. And while a lot of that has advanced through electronic and digital communications, there’s nothing like people being together to really solidify that. And government leaders, especially from North America and Europe, did come together and recommit themselves to Ukraine, not just for the year ahead, but for the years thereafter. One thing that did stand out to me is that all roads lead back to technology, whether it’s the climate crisis, the war, or ensuring the world’s population is being fed and fed sustainably. The development and implementation of technology is always at the core of how we’re going to tackle global challenges. Global problems do require global solutions, and this year’s Davos theme was cooperation in a fragmented world. And from what I saw, cooperation may be more needed, but it’s also more aspirational than ever. This is Disruptors, an RBC podcast. I’m John Stackhouse.

Speaker 2 [00:03:55] And I’m Naomi Powell. John, I have a feeling you have a lot to tell us, so let’s get straight into it. Our audience, the disruptors audience is always keen to hear about technology. What can you tell us about the kind of presence that Tech had at Davos this year?

Speaker 1 [00:04:15] Well, Davos has been the great champion of the so-called fourth Industrial revolution. This idea that advanced technologies, especially artificial intelligence, are really transforming every sector and a lot of aspects of society around us. And that’s a theme we’ve been engaging with on disruptors for a number of years. That’s coming to a head with a lot of economic realities. Many in the tech world have not lived with high interest rates, and they’re now seeing that. They’re now hearing from investors that they’ve got to operate their businesses differently and they’ve got to think about innovation differently. So that kind of collision of tech ambition and economic reality was really visible in in Davos during the forum. Big tech companies like Microsoft and Amazon announced tens of thousands of layoffs, giving a indication of the mood in the tech world. And yet at the same time, there were scientists and technologists there showcasing how quickly artificial intelligence and chat are moving in all sorts of spheres. And that’s not going to slow down even in a tougher economic environment. The science and technology is that powerful. And if there was a message certainly to business operators and business leaders at Davos, it was do not take your eye off the fourth industrial revolution as you’re perhaps managing a bit more tightly through a recession or near recession because your competitors, rivals or innovators, wherever they may be, are going to be doing some pretty extraordinary things this year.

Speaker 2 [00:05:51] So what does that mean? What sorts of tools to leaders have at their disposal to spur that along?

Speaker 1 [00:05:57] Well, Chat GPT is the favorite topic, maybe topic du jour, but it is really starting to disrupt fairly basic aspects of lots of businesses call centers, for instance, where chat bots we’ve had for years, but they’re becoming much more sophisticated. And in fact, it’s during economic downturns or tight economic periods where legacy businesses start to look very aggressively at transformative technologies, not just for innovation, but for cost savings. And I suspect we’re going to see more of that in in the year ahead.

Speaker 2 [00:06:31] But exciting. So the war in Ukraine, you mentioned it before, it’s still a big global issue and it’s going to continue to be as we enter into the second year of the war. What was your sense of how leaders are looking at this second year?

Speaker 1 [00:06:44] Well, it was impressive how resolute certainly European and North American leaders are to stand with Ukraine, a common phrase as for as long as it takes. But there are concerns. There are concerns that, you know, another year of war is not only going to be costly, first and foremost to Ukraine and Ukrainians, but to the many allies who are funding the war and supplying weapons. Can that go on for another year, especially if there is a recession in the West? That question is being asked, how determined will Russia be with the expected spring offensive? Will it be an all-out assault? Will there be weapons that we all have feared might be used? What will Russia throw at us? And I think the Ukrainians are very mindful of that. But their European allies are also starting to think through the consequences of that. One aspect of the Ukrainian war that I didn’t fully appreciate until I was in some conversations at Davos is how sophisticated the fight has been in the cloud. We’ve never had a war on this scale during the cloud computing era, and we’ve got a lot of serious players who are engaged in this kind of cyber warfare, including the United States. It was interesting to hear from companies like Cloudflare, which is a major player in the cloud that has worked with Washington, with American intelligence organizations, as well as with Ukrainians, to both contain what Russia might do in the cloud, to shut down Ukrainian digital operations or the Ukrainian Internet, but also to create space for Russians who want to get beyond the cyber controls of the Kremlin. I witnessed an incredible conversation with Cloudflare’s Matthew Prince. Here’s a clip.

Speaker 3 [00:08:34] Yeah. So if we go back to a year ago today, we were starting to see in Derbyshire coming out of the region. That made us very worried that Russia was going to invade. And so we immediately reached out to authorities that we work with, got in contact with the Ukrainian government and provided our services to protect their critical infrastructure from cyber attacks. When the invasion actually happened, we terminated. Any Russian government affiliated customers from using our infrastructure. And then we worked with law enforcement and experts to say, what do we do next? And while there were some calls for us to pull out entirely what we saw when we talked to the U.S. government, when we talked to European governments, was that there was an important need for organizations like Navalny’s group Bellingcat, which is a Cloudflare customer, to be able to still get their message out. And they are themselves constantly under attack from Russian authorities. And so in order to protect them, we had to have some of our infrastructure still running inside of the country. And we made that determination that that was the right thing to do.

Speaker 2 [00:09:50] That’s incredible. So a Silicon Valley company was able to tip off the authorities of an invasion.

Speaker 1 [00:09:56] Yeah. Welcome to the second battlefield, as many people called it. And this is kind of the war of the future. It’s also the war of the present. It is being fought with artillery and humans, but is also being fought in the cloud.

Speaker 2 [00:10:09] So, John, what about energy? We’re in the midst of an energy crisis. You know, Western sanctions against Russian oil and gas has accelerated that. And it’s also complicated, an already tricky transition to greener fuels. So Europe has so far managed to avoid an energy crisis. Can you give us a sense of how it’s managed to pull that off and what’s next?

Speaker 1 [00:10:30] Well, a bit of international cooperation, some strategic planning and luck, I would say, is how Europe has pulled this off there. There was a great sigh of relief at Davos that the energy crisis has not expanded or been as acute as many had expected. In fact, gas prices are down to pre-pandemic levels in Europe, and there seem to be enough supplies to see Europe through probably this calendar year. But everyone’s worried about next winter. How did Europe get through this winter? Well, warm weather helped a lot. China being in lockdown was a huge factor because China is a major gas importer and a lot of those supplies were diverted to Europe. And then there was significant cooperation, particularly with the United States, to get not only American gas, but gas from American allies to Europe to ensure that it got through this winter. Can all that happen again? Well, maybe some of those forces can be replicated, but there’s no control over weather. And if Europe is hit by another blistering hot summer or a freezing cold winter next year, it’s going to be a lot more challenging all the more so if China is back in the international energy market.

Speaker 2 [00:11:41] So Europe’s talking about doubling its current renewable energy capacity.

Speaker 1 [00:11:45] It’s ambitious and it’s interesting to hear the Europeans, led by the Germans saying we are going to be all renewables by, you know, mid 2030s, maybe even 20, 30. But when you talk to, you know, people who have to literally get shovels in the ground, they’re reminding us as well as Europeans, that Europe doesn’t move that quickly, especially on major projects. Europe has a reckoning under way in terms of its approach to regulation, which ironically was one of the reasons Britain pulled out of out of the EU was just the heavy regulation. Well, that’s holding up some some important renewables development. There’s also supply chain challenges, which we keep hearing about, but there isn’t enough skilled labor or basic materials like steel to build new wind farms or LNG import terminals that are needed to help with that transition. But one thing that was absolutely clear from the Europeans is that they are going to spend whatever it takes to keep pace with the United States on renewables. Whether they can change regulations or not is another matter, but the money will be there. And that was said quite clearly by Ursula von der Leyen, the president of the EU Commission.

Speaker 4 [00:12:56] That means that together the European and the United States alone. Putting forward almost €1,000,000,000,000 to accelerate the clean energy economy. This has the potential to massively boost the path to climate neutrality. But. It is no secret that certain elements of the design of the Inflation Reduction Act raised a number of concerns in terms of some of the targeted incentives for companies. So this is why we have been working with our United States friends to find solutions, for example, so that EU companies and EU made electric cars can also benefit from the Inflation Reduction Act. Our aim should be. To avoid disruptions in transatlantic trade and investment. We should ensure that our respective incentive programs are fair and mutually reinforcing. And we should also set out how we can jointly benefit from this massive investment, for example, by creating economies of scale across the Atlantic or setting common standards.

Speaker 2 [00:14:21] So critical to the eBay’s and the other clean tech that von der Leyen was talking about are semiconductors. And I’m glad you raised supply chains earlier, John, because one of the things that was supposed to have happened by now after the pandemic is there were supposed to be a lot of reshoring, of manufacturing, of these goods. That hasn’t really happened.

Speaker 1 [00:14:40] You’re absolutely right. Naomi There is a gap between rhetoric and reality on a number of these files, but supply chains in particular, we have all heard the rhetoric about the need and desire to move chip production from Taiwan, particularly to the United States. Some of that is underway. Big companies like Intel are building facilities in North America and Europe. But even the CEO of Intel said it took decades to move the locus of the supply chain for chips to Asia. It’s going to take decades to get it back to to the west. And of course, the EV revolution is going to accelerate. So where will the chips come from for all these electric vehicles coming onto the market? It’s important to note that the electronic content and the chip content in EVs is significantly higher than in the current generation of automobile. So those chips are going to be critical to the EV supply chain, and the manufacturing of them is not going to be on American soil probably any time soon. So a couple of things are happening. First of all, chip companies are working with kind of the last generation of chip manufacturing, which is more prevalent in in the West and trying to upgrade that and also work with EV parts makers to make them, frankly, a little less demanding in terms of what chips can do. And then in the spirit of ensuring that word, we hear a lot of there’s other countries, India first and foremost, that are really trying to make a move on this change. India is very proud that it has been winning mandates for products like the iPhone and is spending a huge amount to get semiconductor and chip manufacturing to shift to India. So game on. It’ll be interesting to see how the the geopolitics of Chipmaking continue in the years ahead.

Speaker 2 [00:16:39] Okay. We’re going to take a quick break. But coming up, more of our conversation with John Stackhouse and his rundown of the World Economic Forum in Davos. You’re listening to Disruptors and RBC podcast, I’m Trinh Theresa Do. I’d like to share with you our latest agriculture report from RBC Economics on Thought leadership, called the Transformative Seven Technologies that Can Drive Canada’s Next Green Revolution. In it, we identify seven key agtech innovations we believe can both meaningfully reduce emissions and present opportunities for Canada to lead. Some, like anaerobic digesters, carbon capture and precision technology, are ready to scale now. Others, like vertical farms, plant science and cellular agriculture, will be key solutions.

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Speaker 2 [00:18:30] Welcome back. John, you had a front row seat at the World Economic Forum in the Alpine village of Davos. I read that China was notably absent this year, or if at least not absent that much more quiet than they have been in the past. That’s a pretty big shift in tone from, you know, pre-pandemic Davos, when Xi Jinping, sort of emboldened by this booming Chinese economy, came out swinging at the West. What can you tell us about that?

Speaker 1 [00:18:54] You’re absolutely right. It seems like yesterday, although it was five or six years ago when President Xi was there, saying essentially we will fill the void created by Donald Trump’s America and America first thinking. You can count on China to help the world through the climate transition, to help the world through energy changes. You don’t see that. You don’t hear that in Davos. Certainly not. Not this year. In fact, the leading voice for China was there in some ways to make amends, to reach out to the West and say, we don’t want a trade war. You probably don’t want one either. But it was very interesting to hear a Chinese leader. And in this case, it was Liu Hay, the vice premier, called for a dialing down of the Cold War rhetoric to call for more open trade and investment. And to suggest that China wants to work with the West. Also interesting to hear a number of Western political voices, including from the United States. Republicans and Democrats say, no, we’ve kind of moved on and we don’t want to be as nearly cooperative with China as we were a decade or two ago. Now, some of this is politics that plays well on Main Street in a lot of countries. Business, trade and investment continues to thrive between America and China and Europe and China. So reality and rhetoric may have a bit of a gap there, too. But I think we’re going to see this chill between the West and China for a good while. In fact, one of the warnings I heard repeatedly the West was how China may be a greater security threat to the West than, let’s say, Russia. And those threats are often in cyberspace. And we’ll probably see even more concerns raised this year about what China may be doing.

Speaker 2 [00:20:37] What do you think is behind that softening in tone from China? Is it just that their domestic problems are becoming so overwhelming right now that they’re not up for posturing on the world stage?

Speaker 1 [00:20:48] We’ve heard the warning that China will grow old before it grows rich. For a number of years, and that is playing out. We’ve seen this intersection of demographics and economic growth. And the Chinese are very worried about that. How are they going to support sustain an older population? How will they keep the economy humming with fewer people? Well, it’s going to take investment. It’s going to take technology and it’s going to require trade. They will need the world’s major economies buying more sophisticated products from them in the years ahead. So that’s going to require a different and more open approach to trade.

Speaker 2 [00:21:28] So China, like a lot of countries, is very much focused on tech. China needs the West to buy the technologies that it’s working very quickly to to develop. So do other countries. We need tech to make a lot of things happen for us, the green transition and beyond. But this requires innovation and a lot of it. So who is at the forefront and where does Canada rank in terms of our innovative capacity?

Speaker 1 [00:21:53] Well, I think it’s clear that the innovation leader and the planner continues to be the United States. It is firing on all cylinders in a whole range of sectors, fueled, if you will, by that Inflation Reduction Act. It is extraordinary how much investment capital is shifting to the United States. How many people who want to be pioneers in agtech or in building technology or in artificial intelligence are shifting or returning their focus to the United States, because that’s where the greatest opportunities are. As we were discussing earlier, Europe is trying to catch up, and that’s going to be interesting to see, see what it does. And China, you know, it hasn’t shut down its innovation machine, but a couple of years of lockdown have really been a setback. So it’s got slow economic growth. It’s got a society that is no doubt scarred by those marathon lockdowns. And it’s got a whole bunch of customers and trading partners who are not as cooperative. So I suspect we’re not going to see innovation coming out of China like we might have a few years ago. And we’ll see the United States continue to really tower over a lot of a lot of global innovation. What a great opportunity for Canada. We’ve got an open border. We’ve got common cultures and a common language. We have engineers and entrepreneurs who go back and forth. We’ve got Americans investing in Canada and Canadians investing in the United States with a freedom that you don’t see. In many other parts of the world. But Canada, like Europe, is going to have to really come to grips with whether we’re doing enough to play at the level that the United States is playing at. I think we’ll see in the federal budget, presumably in March, a number of commitments that try to up Canada’s game in terms of tax incentives and fiscal spending. But one of the quiet concerns has to be our own regulatory pace. We don’t move as quickly as we need to in terms of approving projects, approving investments, scaling opportunities. There are improvements, but there’s going to have to be a lot more if we’re going to move at pace with where the U.S. is going.

Speaker 2 [00:24:17] You know, another issue that the U.S. is going all guns at is food insecurity and cutting emissions in the ag sector. That’s something you’ve looked at a lot on this podcast. What was being said about that in Davos?

Speaker 1 [00:24:29] Quite exciting to see agriculture as a point of focus for so many business leaders as well as government leaders. I think one of the Awakenings last year was how fragile food systems can be in many parts of the world, including our own. We all saw shortages on the grocery shelf and don’t want to see a lot of those in the future. At the same time, I think a lot of countries are realizing that producing more food could come with more emissions. So how do we address that? Well, the best way to address it is through agriculture, because soil, it’s the new gold soil is going to be capturing a lot more greenhouse gas emissions in the years ahead than it has in the past. And there’s a lot of innovation going on in Europe and the United States and Canada will be accelerating this, I suspect, in the in the months and years ahead that allow us to see large swaths of land and of soil used for an economic advantage, but also for a climate advantage. Fertilizer was also a big topic of conversation, as we heard from Sven Tori Hall Sutter. He’s the CEO of Yara International, a Norwegian chemical company that produces, distributes and sells nitrogen based mineral fertilizers. Here’s what he had to say.

Speaker 3 [00:25:44] What are we really as a fertilizer company? Well, we are replacing nutrients that we removed from the field when we take the crop away. Right. And if there’s no value to nature, well, then you mine the soil of its nutrients and you leave that behind. Then you move on and you destroy nature to get to the nutrient because that’s free. But if it rodders, think about it from a business perspective that we put back, that the nutrients be removed, not more, not less. And think about this more as a soil health perspective, healthy soil, healthy crops. Then we have a very different business model. And so for us, this has been a trigger, but we’ve already been preparing for this.

Speaker 2 [00:26:25] Yeah, that’s fascinating. I do think this is one area where Canada has all the assets. It needs to be a leader and a leading voice. So as we come to a close, John, how did Davos leave you feeling about 2023?

Speaker 1 [00:26:37] Well, it’s going to be a risky year, starting with the global economy. We may or may not have a recession in many parts of the world, but at the same time, we’re probably going to have higher interest rates for longer than we might have anticipated even a few months ago because of labor shortages, because of these supply chain challenges and because of the determination of central banks not to get it wrong this time in terms of fighting inflation. So that creates a bit of a tenuous economic environment for a lot of investors. But, you know, it’s at times like these where the advantage goes to the brave, to the courageous, to people who are able to look beyond the current year, to the growth that will follow in 2024 and beyond, and be making the changes, the investments, the commitments this year that will put them ahead of their competitors. There’s also geopolitical risks out there, and the one that I kept hearing about that isn’t getting a lot of headlines is Iran. We all know about the protests in Iran and perhaps the the fragility of the regime there. If Iran wobbles more in the coming year, that’s going to have a big disruption on global markets, including oil. It will destabilize the Middle East, maybe for the better, depending on your point of view. But is another risk that we have to sort of factor into how we see the year ahead.

Speaker 2 [00:27:57] It’s interesting. So it’s a year to be bold. You published a piece summing up your thinking on Davos on RBC Economics website, where you also describe it as a year to hold your ground.

Speaker 1 [00:28:07] Yes, that was a clear message from a lot of business leaders that they may not be bullish about the year ahead, but they are optimistic things will accelerate perhaps in 2024. But that’s why you hold your ground today. Don’t see ground and start to look for those critical investments and opportunities that will allow you to really make a move in the years ahead.

Speaker 2 [00:28:28] John, this is such a pleasure. It’s one thing to read about Davos and all the things that go on there. It’s a lot different to talk to somebody who’s been there and can share their impressions firsthand. Thank you for doing that today.

Speaker 1 [00:28:39] Absolutely. My pleasure, Naomi.

Speaker 2 [00:28:41] And thank you also for inviting me to co-host today. I’m Naomi Powell.

Speaker 1 [00:28:45] And I’m John Stackhouse. This is Disruptors, an RBC podcast. Talk to you soon.

Speaker 2 [00:28:52] Disruptors, an RBC Podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by JAR Audio. For more disruptors content, like or subscribe wherever you get your podcasts and visit RBC dot com, slash disruptors.

Speaker 1 [00:00:00] Hi. It’s John here. Speaker 2 [00:00:02] And it’s Theresa. Speaker 1 [00:00:03] Theresa, I wonder if you could close your eyes for a moment and picture a farm. For a lot of people listening, the scene probably hasn’t changed too much over the years or decades. There’s a red barn, black and white cow, a tractor, even wheat waving in the wind. Speaker 2 [00:00:22] It’s an iconic Canadian image, but when you zoom in on that image these days, it’s changing fast. Speaker 1 [00:00:28] I know you spent a lot of time over the last number of months visiting farms and ag facilities as part of our research into emerging Agtech. So take us there. Speaker 2 [00:00:39] I visited a dairy farm outside of London, Ontario, where milk production has gone fully digital, with an automated system controlling flows from one step to the next. It was really high tech, and this place was also installing an anaerobic digester, which is this massive facility that turns manure. And there’s a lot of manure into biogas. Another place I visited was a vertical farm in Guangzhou, where I saw stacks on stacks and stacks of imagined seedlings that are tagged with radio frequency, ideas that are growing under LED lights and controlled air flows. There was automated robotic machinery everywhere I looked, and the farmers, they weren’t wearing overalls, but lab coats. It was all super eye opening. John And I’m sure you felt the same way when you had a chance to tour some facilities in B.C. and Alberta earlier this year. Speaker 1 [00:01:28] Yeah, some of the best high tech operations in the country are in agriculture. In fact, the best blockchain conversations I get exposed to tend to be with farmers and ag producers. They are racing ahead in the data economy. I was reminded of this on a visit earlier this year to Lethbridge in southern Alberta, where there are massive feedlots largely serving the US market and big operations like McDonald’s. And the farm operators there explained to me how data and blockchain is helping them better market their beef in the US and elsewhere. And in many ways that’s the future of agriculture. Speaker 2 [00:02:07] As we mentioned on the last episode, meat and dairy production between both burps and manure account for a large part of Canada’s agriculture emissions. So this is a big area of focus. Speaker 1 [00:02:17] There’s also huge financial stakes. Dairy production alone contributes almost $20 billion to Canada’s GDP, and beef production accounts for nearly $22 billion. These are really important strategic industries, especially at a time when countries around the world are knocking on Canada’s door, looking to us to help feed their growing populations. Speaker 2 [00:02:39] And so if we’re going to tackle this challenge in a serious way, both in Canada and around the world, a critical puzzle that we need to solve is how to maximize agriculture’s potential as a climate solution, and specifically how to make the meat and dairy sectors climate friendlier, as we’ve both seen firsthand on innovation is going to be a huge driver of that. Speaker 1 [00:02:59] Absolutely. We’ve heard this from farmers and techies around the country. Agtech is already playing a huge role in boosting productivity while reducing emissions from the meat and dairy industry. There are a number of fascinating tech revolutions underway, which is exactly where we’re going to go today. This is Disruptors an RBC podcast. I’m John Stackhouse. Speaker 2 [00:03:29] And I’m Theresa Do. This is the second in a special three part series on Disrupters that we’re calling The Growing Challenge. We’re exploring how Canada, using cutting edge technology, data, systems and smart thinking, can help feed a growing world and how we can do it sustainably. Last week we talked about what will it take for Canada to assume that leadership role? And we heard from some of the farmers who are already using technology to produce more food, more sustainably. Green farmer Kristjan Heibert told us how technology used on his farm supports both his production goals and Canada’s climate targets. Speaker 3 [00:04:13] I got weather stations with four foot soil probes that are reporting to my phone every 15 minutes now of how the water is moving through the soil. All the roots are moving through the soil. Kind of what? The yield algorithm is off of that and then correlating all the stations together, just the speed of which we can collect data and use AI to start to learn more and more than we currently know. I think the changes you’re going to see in the next decade will make what happened in the last decade small. Speaker 1 [00:04:37] So there’s clearly innovation in grain farming, and the changes on Canada’s dairy and beef farms are no less dramatic. Productivity is up, way up. If you look at a typical dairy farm, each cow produces more than two and a half times as much milk as it did in the 1960s. Speaker 2 [00:04:53] And a lot of that is thanks to the work of animal health experts who have mined the data to help transform how we raise and feed livestock. To get into this, I first want to introduce Calvin Booker, who’s witnessed Canada’s barnyard evolution firsthand. Speaker 3 [00:05:10] I’m Calvin Booker. I’m a veterinarian and work at Tulsa Agriculture and Consumer Goods, where I’m the general manager on the Animal Health Team in charge of services and research. I grew up on a farm in Saskatchewan. Our farm was located about 35 miles southeast of Saskatoon, and we had both purebred simmental cattle and a thousand or 1500 acres of grain land. Speaker 1 [00:05:33] Calvin was in the Forage Club for 11 years. He knew early on that he wanted to work with animals, but in a more scientific way, which is what drove him to attend veterinary school and then grad school. And he took a particular interest in how technology and data systems can be used to improve animal health and boost sustainability. Speaker 3 [00:05:52] When I was going to vet school, it was lots of talk about herd health programs and how veterinarians could work very closely with producers and provide consultative information and data insights and analysis that would help them make better decisions. But there weren’t that many people doing it in practice in any of the animal production species. There were some innovators in each of the species in the feedlot industry. Dr. Keith Jim was one of those innovators. Speaker 2 [00:06:18] So, John, as you know, a key Jim is the founder of Feedlot Health, the company Calvin joined in 1982, which was bought by Tell US Agriculture in 2020. Tell us realized the potential of this data driven approach, which helps calf grower and feedlot clients across North America to collect animal data. Because ultimately access to data has the potential to do three main things in Canada’s meat and dairy industry boost overall animal health, drive product efficiencies, and promote sustainable outcomes like emissions reduction and monitoring. Speaker 1 [00:06:50] Right. And for anyone who might be wondering what’s so important about feedlots, why not just keep the cows in fields? Calvin has an answer. Speaker 3 [00:06:58] In Canada, because we’re in a very temperate climate where we have winter. The majority of the beef cows calve in the first five or six months of the year and in the fall of the year we’ve got winter coming again. And so most of those calves get weaned because they’re no longer be out grazing on grasslands and need to be fed, stored feeds. So we’ve got a whole bunch of our production system that’s stacked up at once, but yet we want to have beef coming through the production system and available to go into stores for consumers 365 days a year. So we spend the rest of the time spreading that production cycle out so that we’ve got animals that are ready to come to slaughter throughout the year. I think the emphasis on the feedlot side comes because as we put animals together in bigger groups of animals and put them into these fattening operations, it gives us more opportunities to use technology. It gives us greater control over what happens. Speaker 2 [00:07:52] By the way, John, we should note that there has been a lot of discussion about whether field raised cows are better for the planet. Speaker 1 [00:07:58] Not such a straightforward question. As it turns out, it’s complicated. Speaker 2 [00:08:02] Several past studies have actually found lower greenhouse gas emissions associated with the feedlot system. And one reason is that grass fed cows gain weight more slowly so they produce more methane, mostly in the form of burps over their longer lifespans. But then again, there are other dimensions to consider soil health, carbon and landscape health, for instance. Pro pastoralists argue that grazing cattle can help restore grasslands and soil sequestering massive amounts of CO2 in the process. But how well this works really depends on the number of cows, the size of the fields and the conditions. For instance, if it’s too wet, carbon uptake is impeded. Speaker 1 [00:08:40] One thing’s for sure the reality on the ground, and we learned this from Kalvin, is that Canada has a startling geographic concentration of feedlots. Over 70% of all feedlot production takes place in Alberta, most of it in southern Alberta. Speaker 2 [00:08:54] And these are big operations. Calvin says, Telus the smallest customers in Canada hold about 500 animals at a time, while the largest can hold about 70,000 animals at once. A lot of cows in one place means a lot of methane, which makes the role of data and tech all the more important. Farmers and veterinarians need tools to get a lens onto what’s really going on with animal health and emissions. Speaker 1 [00:09:18] Today, digital tools allow Telus Agriculture to connect with feedlots across Canada, the US and Mexico. This helps their team of vets and scientists understand what’s really happening inside those operations to make them more efficient and more sustainable. But as Calvin tells it, if you go back 30 years, it was a very different story. Speaker 3 [00:09:38] I remember the first computers that we put should side in feedlots in western Canada in 1985 because $13,000 per machine and they had 64 kilobytes of RAM. So if you had a big feedlot that had more than one handling facility, animals were in one computer or the other, but you certainly couldn’t get them to talk to one another. Any information or reports that we were going to generate at that time, we had to run it off that computer where the animals records were located. So it’s come a long way today. All the systems that we work with overnight sync with our office and update all the newest data to our servers in the cloud in our office. And as veterinarians or the animal scientists, nutritionists, we can access that data anywhere in the world to help producers, anywhere in the world make decisions and understand what’s happening in their operations. Speaker 1 [00:10:27] It sounds a bit like telehealth for cows. It’s kind of similar to the growing online health care options for humans. Speaker 2 [00:10:34] And you might be wondering what cow health has to do with emissions reduction. Well, for starters, more access to remote care means less jetting around and fewer greenhouse gases. It’s a better use of the time and precious resources needed to feed these cattle and operate these farms so it becomes a more sustainable operation all around. Speaker 1 [00:10:52] But, you know, where is this all going? What’s the end goal for the meat and dairy industries? Here’s Calvin again. Speaker 3 [00:10:59] As I look to the future, I think there’s all sorts of possibilities. Technology gives us a whole bunch of different options that we didn’t have before. The ability to have technical experts, whether those are veterinarians or nutritionists, and the animal scientists connected with producers of all sizes, not just large producers, but small producers, kind of on demand on a daily basis. That excites me because that allows the expertize to connect with the farmers and ranchers that are on the ground doing things and helping them make better decisions on a daily basis. That’s got to be more efficient and more sustainable in the long run than meeting with someone once or twice a year and set them up for the best of things, and then pat them on the back and saying, Well, good luck. We’ll talk to you in six months and see how it went. Going forward, I think we have a bright new future to be able to have better outcomes. Speaker 1 [00:11:49] You know, Theresa, the sort of tech optimism that Calvin Booker has is something you hear again and again the more you talk to people in Canadian agriculture. Sure, there are a lot of farmers toiling away in their fields, but more and more of them recognize that technology can make their jobs easier, more efficient and more sustainable, reducing greenhouse gas emissions and even opening up exciting new revenue streams in some of the least glamorous aspects of their operations. Speaker 2 [00:12:14] I assume you’re talking about biogas, and we do need to talk about it because methane capture is so critical to greenhouse gas reduction. There are some cool new technologies harnessing the power of anaerobic bacteria. These little digesters that are helping us solve the big climate issues in agriculture and their Canadian businesses are at the forefront of doing this. Speaker 3 [00:12:36] So I’m Jamil Lichtenstein from Dallas. Biogas. We’ve been involved in the biogas industry since 2010. I own the company with my brother and sister, and that’s been an exciting time in the industry. Speaker 1 [00:12:47] So while Calvin Booker and tell us are very much focused on the inputs for. Wired to feed cattle and keep them healthy. John van Liechtenstein has his eyes firmly focused on, well, the outputs. Manure, to be precise. He’s literally turning it into fuel. John’s parents bought what was originally a dairy milking equipment business back in 1990. But John and his two siblings transformed it with the creation of DHL’s Biogas. Speaker 3 [00:13:13] So we are doing manure management equipment. We’re actually starting to do a scraper. As I collected the manure, brought it to the back of the barn. Then we started to get involved, the pumps, to kind of move that manure around. We were already dealing with all the pumps and the material and everything, so we started doing biogas, which was kind of like a natural fit there. Speaker 2 [00:13:31] It’s really remarkable to see how some of these agricultural operations are reinventing themselves, John. So much innovation. And it’s worth noting the farms that Dairy Lane Systems works with are not the only ones investigating the whole biogas thing. According to RBC Economics, Canada currently has 279 biogas projects capturing methane from agricultural and community waste, and they now generate enough energy to replace nine large hydro dams. Speaker 1 [00:14:00] On the other hand, I read that only 13% of available biogas energy production is actually being tapped in Canada, at least so far. So there is definitely room to grow and that growth is starting to happen. Speaker 3 [00:14:12] I would say in the last two years there has been such an uptake in discussions around putting biogas plants on farms. We are constantly getting calls, probably one per week of somebody that’s asking us to at least help them explore the feasibility of putting a biogas plant on their facility. Speaker 1 [00:14:34] It’s exciting, and for some farms it’s a clear opportunity to develop an income stream that otherwise wouldn’t exist, especially in the supply managed world of Canadian dairy. Speaker 3 [00:14:44] We talk about that next generation coming on and some of these farms are not big enough to have two kids or three kids join the family farm and split that income three ways. Biogas represents another opportunity for them to grow and keep expanding their operations so they can bring and keep another family member on the operation. So I think there’s several factors, but I do think that part of it is definitely seeing if they can help with that GHG reduction target. Speaker 1 [00:15:10] I find this so interesting, his idea of essentially running a biogas power plant on farms, which is an entirely different line of business from traditional farming. And it brings up other questions like what’s the return on investment for something like this? And how long would it take for farms to realize benefits from adding this kind of tech to their operations? Speaker 2 [00:15:29] Right. Well, I know it takes a few years for a digester to be installed. They’re huge. And then for profitability to be realized. I’ve actually visited a farm that’s installing this, and the profitability equation is critical. If the economics don’t work or if, say, government subsidies disappear, farmers will not be incentivized to undertake this. Speaker 1 [00:15:49] It really speaks to the need to invest in Canadian farms and farming communities as they grapple with these kinds of changes. It’s to everyone’s benefit and the planets. If we can reduce greenhouse gas emissions in the process. Speaker 2 [00:16:01] Something to keep talking about and keep an eye on for sure. I also think our listeners would appreciate some clarification on the actual mechanics of this technology. Speaker 1 [00:16:11] Yeah, me as well. So I asked John about that. Here’s how he explained it. Speaker 3 [00:16:15] The way I describe it is it’s basically acting like a stomach. You have a concrete tank, or it could be a steel tank that’s inserted, let’s say, between the farm and their long term storage for their manure. And that manure ends up funneling in from the barn into that digester. In that concrete tank, it’s heated up to 38 degrees, which is roughly body temperature. It’s agitated to keep it homogenized and keep stuff from settling out while you’re heating it up. You have a dome over top of this concrete tank that collects the gas that’s generated and you extract that gas, you clean it, and you can either run it through an engine. And if you run through an engine, you’re running it straight, biogas, which is about 60% methane. Or you can clean it up with biogas, upgrader to around 98% methane, which scrubs some of the impurities and then brings it up to a natural gas quality. And then you inject it into the natural gas pipeline. Simple. Speaker 1 [00:17:16] Clear as something, right? I actually learned a lot about this from John. Once the gas is extracted. They take the leftover liquid, what he calls digestate. And that either goes into storage or gets applied to the land on your farm, or in some instances, remaining fibers from the liquid are separated out and turned into bedding for the farm’s animals. Speaker 2 [00:17:36] That is very cool. But the thing I still wonder about this is the cost of the digester technology. Based on my research, it makes enough sense for operations with 500 plus milking cows, but it’s pretty hard to stomach. So to speak, for those with less than 100 animals. Speaker 1 [00:17:54] That’s true. But John thinks there is a solution, a kind of co-op model for smaller dairy farmers who want to use the digester technology, which in Canada, where the average dairy farm has only about 85 milking cows. That means most farmers. Speaker 3 [00:18:08] Yes, it’s 100% a function of scale. There’s those fixed costs that don’t change enough with volume reductions or gas volume reductions that kind of make it more difficult to help the needs of the smaller or the average sized Canadian farm. I really think it comes down to community based digesters. So having six local farms bringing their manure in. But there’s economic challenges to that as well because trucking manure is not super appealing from an economic standpoint. Speaker 1 [00:18:40] Once again, it comes down to data management, transportation and funding infrastructure. John told us a lot of the technologies in the sector right now are focused on efficiency rather than reducing emissions per se. But he thinks there is an opportunity to shift the needle with the right incentives. Speaker 3 [00:18:57] I think for any of these things to really take off, there is a certain sector of the population that will always just do it because that’s what they believe in and they think that’s the right thing to do. But I think there has to be a financial penalty or a benefit to implementing that technology. In our sector, some milk pricing based on the technology that you have on your farm or like some variable different pricing, if you did something like that, you would not see how fast people would run to implement it. Right. And same with there was like a premium product and you could opt into producing that premium product. And there is an incentive to doing that. I think you’d see a lot of uptake. Speaker 1 [00:19:38] Again, you can hear John’s ingenuity and his optimism. Speaker 2 [00:19:42] One of the most fascinating things John told us was his family’s story. His parents emigrated from the Netherlands. Speaker 3 [00:19:48] My parents, they came over from Holland in the early eighties. They kind of originally were from farming backgrounds in Holland. Not that they were necessarily farmers, but they were always involved in the industry. They came over, got some jobs. My dad started working for a dairy equipment company in 1987. The guy was kind of ready to retire, so he kind of facilitated the transition of the business to my parents. Speaker 1 [00:20:14] The Dutch are famous for doing more with less. They’re perhaps some of the most productive and hardest working farmers in the Western world. Speaker 3 [00:20:21] A lot of it’s like that immigrant mentality. A lot of them don’t have established connections here, so they really put their efforts and their life into their work when they’re first establishing themselves. So you can definitely see the really hard work ethic when these immigrant families come over to Canada. They really have something to prove to establish themselves. Speaker 1 [00:20:41] We are, after all, a nation of immigrants which has made us stronger and more innovative over the years. Coming up, we’ll speak with an Alberta based tech innovator, someone passionate about the future of Canadian livestock who also takes inspiration from the old country. So stay right there. Speaker 2 [00:21:02] You’re listening to Disruptors an RBC podcast. I’m Theresa Do. I’d like to share with you our latest second share report from RBC Economics and thought leadership called “the next Green Revolution: How Canada can produce more food and fewer emissions.” Global food demand is set to soar as the population rises to 9.7 billion people in 2050. Meanwhile, climate change is slowing the agricultural productivity of many major producers. And geopolitical upheaval from Russia’s invasion of Ukraine has destabilized the world’s food systems. Rarely has speed in the world presented such a daunting challenge. So how can Canada lead the worldwide effort to confront it? To find out, visit RBC dot com Slash Next Green Revolution. Welcome back to part two of our special series on the future of Canadian Agriculture. The Growing Challenge We’re Taking into how Canada’s beef and dairy industries can help feed a growing world and do it more sustainably. A minute ago, we heard from John Van Logtenstein, the co-owner of Dairy Lane Systems, and DLS Biogas, who is helping dairy farmers turn manure into biogas. This keeps harmful emissions out of the atmosphere and creates a whole new revenue stream in the process. John also shared the story of his parents who started drilling. They were immigrants from the Netherlands. And according to our next guest, Canada has a lot to learn from the Dutch as we look to boost our agricultural productivity. Speaker 4 [00:22:35] Hi, I’m Alison Sunstrum, general partner of The 51 Food and AgTech Fund. I grew up in Saskatchewan, so everyone is connected to agriculture in Saskatchewan. But I started life as an accountant and very quickly found computers, technology, and was really fascinated by what they could do for agriculture. Speaker 2 [00:22:57] Alison thinks that Canada has the potential to be a world leader in agricultural production and produce more valuable agribusiness products. If it invests in cutting edge technologies. Speaker 4 [00:23:08] It should be easier to grow in Agtech Company in Canada because we definitely have access to primary production here. If we take a look at the number two exporter of agri business goods in the world is Holland. And Holland has a landmass the size of Bass National Park. So if we look at ourselves as the number five producer of agricultural products and goods, why can’t we convert those products into more valuable agribusiness products? Holland can do it. What are the limiting factors here? And I would say we have to just really addressing the fact that we are an agricultural nation, that we have much to learn from the Dutch experience, and we also have the potential to be a more sustainable producer of goods and agribusiness value goods in the world. Speaker 1 [00:24:01] Canadian Agtech companies have a lot to learn from Alison, too. She’s lent her expertise to many startups, serving as both a venture partner and investment adviser. She’s also founder and CEO of Conserve-X, a Canadian company researching and applying emerging technology in agriculture. And just over two decades ago, she invested in a Calgary based startup called Grow, Save and turn it into a global leader in the Agtech space. Speaker 4 [00:24:26] In 1999, I met an amazing engineer who was reimagining how you could monitor and work with animals. And I invested and joined the company. And in 1999, we were the first people who had used RFID to tag production livestock. Speaker 1 [00:24:47] Just to interject, for those who don’t know, RFID stands for Radio Frequency Identification, which allows digital data to be transmitted wirelessly, say, between an animal’s tag and a nearby reader. Speaker 4 [00:25:00] And over the next 20 years, we built our company measuring animals, monitoring animals and really looking at three characteristics How could we use technology to improve profitability on farm, to improve animal welfare? And we were already looking at how we could reduce the environmental impact of livestock production. And basically what we built is a high speed or high volume data acquisition and analytics platform that measured the R side, which identified animals and also measured multiple biometric and environmental sensors. And with that data we developed, along with researchers using our technology, we developed a way to determine through a genetic selection method how efficient animals and livestock were. And the end result, after 20 years of research, really was, we determined which animals were more efficient in their gain and conversion at sea. And that resulted in a couple of things that improved the cost of feed for livestock producers, but it also reduced manure and methane. Speaker 2 [00:26:15] This is so, so key. What Gro Save has done with data is essentially optimize animal welfare, including diet and digestion, and that’s optimized farm costs and beautifully reduced emissions from livestock. This is the kind of technology we need to scale to meet our net zero challenge, those that improve food production and minimize their impact on the environment. Speaker 1 [00:26:37] If every dairy or cattle operation ran with this kind of connected technology to reduce methane, we could go a long way to addressing our net zero goals. Speaker 2 [00:26:47] The real time monitoring and analysis is something that Alison, in presentations she’s given over the years, calls. The Internet of livestock things. But while this kind of connectivity sounds simple enough, the reality is that many parts of this country, especially rural Canada, don’t have access to the kind of high speed Internet that city folk take for granted. Speaker 4 [00:27:07] I think the Internet has shifted, and our ability to connect to technology has shifted. Our availability, number one, education on far from, but also number two, that we can really exploit and explode our opportunities on farm with every device and every sensor and everything we can connect to the Internet can reasonably occur. It seems odd in this day and age that so many parts of rural Canada are still not connected. And I think that’s where we’re going to explode. If we can get full connectivity across the country and we think about not just connecting people to the Internet, but also connecting sensors and things that really can measure where we can make management change. So from my perspective, the smart phone and the ability to connect sensors and then therefore through automation is what will really drive our productivity change and our sustainability change in Canada. Speaker 1 [00:28:10] Alison is also looking beyond sensors and automation and is enthusiastic about the potential of a slew of cutting edge technologies, including blockchain and artificial intelligence. That’s a lot of what she focuses on in her daily work with Conserve. Still, I was curious about the limits to all this tech innovation and wondering, Alison, how much gain is still out there to be had given all the progress that we’ve seen over the last couple of decades? Speaker 4 [00:28:39] I think that’s a great question, John, because if you look at how we’ve improved our productivity from the sixties until now, we’ve actually doubled food production. And with the increasing number of population, by 2060, we’re going to have at least another 2 billion more people on the planet. I think we have to double food production again. So if we look at the amazing strides that we made from the sixties to now, and if we look at where we have to go to earn the future, we have to really take a look at how we impacted the planet and how we’re going to have to do things a little bit differently. So I think we can do two times as much or we will have to, but we need to do so sustainably. Speaker 1 [00:29:26] What are the one or two things that you think are essential for Canada to get done in the next few years if we’re going to achieve net zero agriculture? Speaker 4 [00:29:36] I think that we have to start investing in net zero. And by that I mean that if our products reach net zero, we as consumers must buy them, we must demand them. And we also must ensure that farmers are not where we place the burden of our emission reduction. So as consumers, we have a responsibility, but as a government and as policymakers, I think that we have a responsibility to really backstop our farmers in a way that they can become net zero producers. Speaker 2 [00:30:13] So, John, I feel like through these conversations, I’ve learned a lot about the technologies that could improve production and transform farming operations across Canada. We just heard from Alison Sunstrum, who obviously sees the potential for Agtech. She’s investing in a big way in a variety of technologies, from blockchain to A.I. that she thinks will revolutionize the sector and make us a world leader in sustainable agriculture. And she talks about how we need to support the farmers who are working towards net zero with our buying power, our wallets. Speaker 1 [00:30:44] We also heard from Calvin Booker about how tell us agriculture is using technology to monitor feedlots and provide virtual health care that reduces the amount of physical travel for vets and helps us gather more data to study the connection between animal health, productivity and sustainability. Speaker 2 [00:31:01] John Van Logtenstein explained how his new biogas business is helping to reduce emissions on dairy farms while creating a new revenue stream for farmers. Speaker 1 [00:31:09] And Theresa, I’m trying back to something that grain farmer Christian Heber told us in our last episode about where he sees technology going in his operation. Speaker 3 [00:31:18] I always joke that within a decade or two, I think I could run my farm from three or four computer screens anywhere in the world because we’ll literally have a technology dashboard that’s pulling in all the data. I need to make a decision. And I mean, lots of our equipment now can adjust itself on the fly. And operators are still really important. But at the same time, we can just do such a better job than we used to. Speaker 2 [00:31:36] Well, that’s automation taken to its natural conclusion in agriculture, I guess. Speaker 1 [00:31:41] The remote control farm. I love it. Speaker 2 But don’t forget about the low tech practices like cover cropping or other regenerative farming techniques that have stood the test of time or in the case of livestock, simply changing up their diet. There’s research out there, John, that suggests adding seaweed, of all things, to the diet of dairy cows to reduce emissions by up to 82%. Speaker 1 [00:33:23] And maybe we should lean into things like cellular agriculture, which Evan Fraser from the University of Guelph mentioned in the last episode that involves producing agricultural products from cell cultures, including meat and dairy products, basically lab grown food. The sci-fi possibilities are endless. Speaker 2 [00:33:44] Sadly, we are out of time for today. Big thanks to our guests and thanks to you for listening. Please join us next time for the third and final episode of The Growing Challenge. We’re going to look at the important role that consumers, producers, grocers and restaurants play in reducing waste in the food system. A big source of emissions across Canada. Until then, I’m Theresa Do. Speaker 1 [00:34:07] And I’m John Stackhouse. This is Disruptors, an RBC podcast. Talk to you soon. Speaker 4 [00:34:16] Disruptors, an RBC Podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by JAR Audio. For more disruptors content, like or subscribe wherever you get your podcasts and visit RBC dot com, slash disruptors.

Speaker 1 [00:00:00] Hi. It’s John here. Speaker 2 [00:00:02] And it’s Theresa. Speaker 1 [00:00:03] Theresa, I wonder if you could close your eyes for a moment and picture a farm. For a lot of people listening, the scene probably hasn’t changed too much over the years or decades. There’s a red barn, black and white cow, a tractor, even wheat waving in the wind. Speaker 2 [00:00:22] It’s an iconic Canadian image, but when you zoom in on that image these days, it’s changing fast. Speaker 1 [00:00:28] I know you spent a lot of time over the last number of months visiting farms and ag facilities as part of our research into emerging Agtech. So take us there. Speaker 2 [00:00:39] I visited a dairy farm outside of London, Ontario, where milk production has gone fully digital, with an automated system controlling flows from one step to the next. It was really high tech, and this place was also installing an anaerobic digester, which is this massive facility that turns manure. And there’s a lot of manure into biogas. Another place I visited was a vertical farm in Guangzhou, where I saw stacks on stacks and stacks of imagined seedlings that are tagged with radio frequency, ideas that are growing under LED lights and controlled air flows. There was automated robotic machinery everywhere I looked, and the farmers, they weren’t wearing overalls, but lab coats. It was all super eye opening. John And I’m sure you felt the same way when you had a chance to tour some facilities in B.C. and Alberta earlier this year. Speaker 1 [00:01:28] Yeah, some of the best high tech operations in the country are in agriculture. In fact, the best blockchain conversations I get exposed to tend to be with farmers and ag producers. They are racing ahead in the data economy. I was reminded of this on a visit earlier this year to Lethbridge in southern Alberta, where there are massive feedlots largely serving the US market and big operations like McDonald’s. And the farm operators there explained to me how data and blockchain is helping them better market their beef in the US and elsewhere. And in many ways that’s the future of agriculture. Speaker 2 [00:02:07] As we mentioned on the last episode, meat and dairy production between both burps and manure account for a large part of Canada’s agriculture emissions. So this is a big area of focus. Speaker 1 [00:02:17] There’s also huge financial stakes. Dairy production alone contributes almost $20 billion to Canada’s GDP, and beef production accounts for nearly $22 billion. These are really important strategic industries, especially at a time when countries around the world are knocking on Canada’s door, looking to us to help feed their growing populations. Speaker 2 [00:02:39] And so if we’re going to tackle this challenge in a serious way, both in Canada and around the world, a critical puzzle that we need to solve is how to maximize agriculture’s potential as a climate solution, and specifically how to make the meat and dairy sectors climate friendlier, as we’ve both seen firsthand on innovation is going to be a huge driver of that. Speaker 1 [00:02:59] Absolutely. We’ve heard this from farmers and techies around the country. Agtech is already playing a huge role in boosting productivity while reducing emissions from the meat and dairy industry. There are a number of fascinating tech revolutions underway, which is exactly where we’re going to go today. This is Disruptors an RBC podcast. I’m John Stackhouse. Speaker 2 [00:03:29] And I’m Theresa Do. This is the second in a special three part series on Disrupters that we’re calling The Growing Challenge. We’re exploring how Canada, using cutting edge technology, data, systems and smart thinking, can help feed a growing world and how we can do it sustainably. Last week we talked about what will it take for Canada to assume that leadership role? And we heard from some of the farmers who are already using technology to produce more food, more sustainably. Green farmer Kristjan Heibert told us how technology used on his farm supports both his production goals and Canada’s climate targets. Speaker 3 [00:04:13] I got weather stations with four foot soil probes that are reporting to my phone every 15 minutes now of how the water is moving through the soil. All the roots are moving through the soil. Kind of what? The yield algorithm is off of that and then correlating all the stations together, just the speed of which we can collect data and use AI to start to learn more and more than we currently know. I think the changes you’re going to see in the next decade will make what happened in the last decade small. Speaker 1 [00:04:37] So there’s clearly innovation in grain farming, and the changes on Canada’s dairy and beef farms are no less dramatic. Productivity is up, way up. If you look at a typical dairy farm, each cow produces more than two and a half times as much milk as it did in the 1960s. Speaker 2 [00:04:53] And a lot of that is thanks to the work of animal health experts who have mined the data to help transform how we raise and feed livestock. To get into this, I first want to introduce Calvin Booker, who’s witnessed Canada’s barnyard evolution firsthand. Speaker 3 [00:05:10] I’m Calvin Booker. I’m a veterinarian and work at Tulsa Agriculture and Consumer Goods, where I’m the general manager on the Animal Health Team in charge of services and research. I grew up on a farm in Saskatchewan. Our farm was located about 35 miles southeast of Saskatoon, and we had both purebred simmental cattle and a thousand or 1500 acres of grain land. Speaker 1 [00:05:33] Calvin was in the Forage Club for 11 years. He knew early on that he wanted to work with animals, but in a more scientific way, which is what drove him to attend veterinary school and then grad school. And he took a particular interest in how technology and data systems can be used to improve animal health and boost sustainability. Speaker 3 [00:05:52] When I was going to vet school, it was lots of talk about herd health programs and how veterinarians could work very closely with producers and provide consultative information and data insights and analysis that would help them make better decisions. But there weren’t that many people doing it in practice in any of the animal production species. There were some innovators in each of the species in the feedlot industry. Dr. Keith Jim was one of those innovators. Speaker 2 [00:06:18] So, John, as you know, a key Jim is the founder of Feedlot Health, the company Calvin joined in 1982, which was bought by Tell US Agriculture in 2020. Tell us realized the potential of this data driven approach, which helps calf grower and feedlot clients across North America to collect animal data. Because ultimately access to data has the potential to do three main things in Canada’s meat and dairy industry boost overall animal health, drive product efficiencies, and promote sustainable outcomes like emissions reduction and monitoring. Speaker 1 [00:06:50] Right. And for anyone who might be wondering what’s so important about feedlots, why not just keep the cows in fields? Calvin has an answer. Speaker 3 [00:06:58] In Canada, because we’re in a very temperate climate where we have winter. The majority of the beef cows calve in the first five or six months of the year and in the fall of the year we’ve got winter coming again. And so most of those calves get weaned because they’re no longer be out grazing on grasslands and need to be fed, stored feeds. So we’ve got a whole bunch of our production system that’s stacked up at once, but yet we want to have beef coming through the production system and available to go into stores for consumers 365 days a year. So we spend the rest of the time spreading that production cycle out so that we’ve got animals that are ready to come to slaughter throughout the year. I think the emphasis on the feedlot side comes because as we put animals together in bigger groups of animals and put them into these fattening operations, it gives us more opportunities to use technology. It gives us greater control over what happens. Speaker 2 [00:07:52] By the way, John, we should note that there has been a lot of discussion about whether field raised cows are better for the planet. Speaker 1 [00:07:58] Not such a straightforward question. As it turns out, it’s complicated. Speaker 2 [00:08:02] Several past studies have actually found lower greenhouse gas emissions associated with the feedlot system. And one reason is that grass fed cows gain weight more slowly so they produce more methane, mostly in the form of burps over their longer lifespans. But then again, there are other dimensions to consider soil health, carbon and landscape health, for instance. Pro pastoralists argue that grazing cattle can help restore grasslands and soil sequestering massive amounts of CO2 in the process. But how well this works really depends on the number of cows, the size of the fields and the conditions. For instance, if it’s too wet, carbon uptake is impeded. Speaker 1 [00:08:40] One thing’s for sure the reality on the ground, and we learned this from Kalvin, is that Canada has a startling geographic concentration of feedlots. Over 70% of all feedlot production takes place in Alberta, most of it in southern Alberta. Speaker 2 [00:08:54] And these are big operations. Calvin says, Telus the smallest customers in Canada hold about 500 animals at a time, while the largest can hold about 70,000 animals at once. A lot of cows in one place means a lot of methane, which makes the role of data and tech all the more important. Farmers and veterinarians need tools to get a lens onto what’s really going on with animal health and emissions. Speaker 1 [00:09:18] Today, digital tools allow Telus Agriculture to connect with feedlots across Canada, the US and Mexico. This helps their team of vets and scientists understand what’s really happening inside those operations to make them more efficient and more sustainable. But as Calvin tells it, if you go back 30 years, it was a very different story. Speaker 3 [00:09:38] I remember the first computers that we put should side in feedlots in western Canada in 1985 because $13,000 per machine and they had 64 kilobytes of RAM. So if you had a big feedlot that had more than one handling facility, animals were in one computer or the other, but you certainly couldn’t get them to talk to one another. Any information or reports that we were going to generate at that time, we had to run it off that computer where the animals records were located. So it’s come a long way today. All the systems that we work with overnight sync with our office and update all the newest data to our servers in the cloud in our office. And as veterinarians or the animal scientists, nutritionists, we can access that data anywhere in the world to help producers, anywhere in the world make decisions and understand what’s happening in their operations. Speaker 1 [00:10:27] It sounds a bit like telehealth for cows. It’s kind of similar to the growing online health care options for humans. Speaker 2 [00:10:34] And you might be wondering what cow health has to do with emissions reduction. Well, for starters, more access to remote care means less jetting around and fewer greenhouse gases. It’s a better use of the time and precious resources needed to feed these cattle and operate these farms so it becomes a more sustainable operation all around. Speaker 1 [00:10:52] But, you know, where is this all going? What’s the end goal for the meat and dairy industries? Here’s Calvin again. Speaker 3 [00:10:59] As I look to the future, I think there’s all sorts of possibilities. Technology gives us a whole bunch of different options that we didn’t have before. The ability to have technical experts, whether those are veterinarians or nutritionists, and the animal scientists connected with producers of all sizes, not just large producers, but small producers, kind of on demand on a daily basis. That excites me because that allows the expertize to connect with the farmers and ranchers that are on the ground doing things and helping them make better decisions on a daily basis. That’s got to be more efficient and more sustainable in the long run than meeting with someone once or twice a year and set them up for the best of things, and then pat them on the back and saying, Well, good luck. We’ll talk to you in six months and see how it went. Going forward, I think we have a bright new future to be able to have better outcomes. Speaker 1 [00:11:49] You know, Theresa, the sort of tech optimism that Calvin Booker has is something you hear again and again the more you talk to people in Canadian agriculture. Sure, there are a lot of farmers toiling away in their fields, but more and more of them recognize that technology can make their jobs easier, more efficient and more sustainable, reducing greenhouse gas emissions and even opening up exciting new revenue streams in some of the least glamorous aspects of their operations. Speaker 2 [00:12:14] I assume you’re talking about biogas, and we do need to talk about it because methane capture is so critical to greenhouse gas reduction. There are some cool new technologies harnessing the power of anaerobic bacteria. These little digesters that are helping us solve the big climate issues in agriculture and their Canadian businesses are at the forefront of doing this. Speaker 3 [00:12:36] So I’m Jamil Lichtenstein from Dallas. Biogas. We’ve been involved in the biogas industry since 2010. I own the company with my brother and sister, and that’s been an exciting time in the industry. Speaker 1 [00:12:47] So while Calvin Booker and tell us are very much focused on the inputs for. Wired to feed cattle and keep them healthy. John van Liechtenstein has his eyes firmly focused on, well, the outputs. Manure, to be precise. He’s literally turning it into fuel. John’s parents bought what was originally a dairy milking equipment business back in 1990. But John and his two siblings transformed it with the creation of DHL’s Biogas. Speaker 3 [00:13:13] So we are doing manure management equipment. We’re actually starting to do a scraper. As I collected the manure, brought it to the back of the barn. Then we started to get involved, the pumps, to kind of move that manure around. We were already dealing with all the pumps and the material and everything, so we started doing biogas, which was kind of like a natural fit there. Speaker 2 [00:13:31] It’s really remarkable to see how some of these agricultural operations are reinventing themselves, John. So much innovation. And it’s worth noting the farms that Dairy Lane Systems works with are not the only ones investigating the whole biogas thing. According to RBC Economics, Canada currently has 279 biogas projects capturing methane from agricultural and community waste, and they now generate enough energy to replace nine large hydro dams. Speaker 1 [00:14:00] On the other hand, I read that only 13% of available biogas energy production is actually being tapped in Canada, at least so far. So there is definitely room to grow and that growth is starting to happen. Speaker 3 [00:14:12] I would say in the last two years there has been such an uptake in discussions around putting biogas plants on farms. We are constantly getting calls, probably one per week of somebody that’s asking us to at least help them explore the feasibility of putting a biogas plant on their facility. Speaker 1 [00:14:34] It’s exciting, and for some farms it’s a clear opportunity to develop an income stream that otherwise wouldn’t exist, especially in the supply managed world of Canadian dairy. Speaker 3 [00:14:44] We talk about that next generation coming on and some of these farms are not big enough to have two kids or three kids join the family farm and split that income three ways. Biogas represents another opportunity for them to grow and keep expanding their operations so they can bring and keep another family member on the operation. So I think there’s several factors, but I do think that part of it is definitely seeing if they can help with that GHG reduction target. Speaker 1 [00:15:10] I find this so interesting, his idea of essentially running a biogas power plant on farms, which is an entirely different line of business from traditional farming. And it brings up other questions like what’s the return on investment for something like this? And how long would it take for farms to realize benefits from adding this kind of tech to their operations? Speaker 2 [00:15:29] Right. Well, I know it takes a few years for a digester to be installed. They’re huge. And then for profitability to be realized. I’ve actually visited a farm that’s installing this, and the profitability equation is critical. If the economics don’t work or if, say, government subsidies disappear, farmers will not be incentivized to undertake this. Speaker 1 [00:15:49] It really speaks to the need to invest in Canadian farms and farming communities as they grapple with these kinds of changes. It’s to everyone’s benefit and the planets. If we can reduce greenhouse gas emissions in the process. Speaker 2 [00:16:01] Something to keep talking about and keep an eye on for sure. I also think our listeners would appreciate some clarification on the actual mechanics of this technology. Speaker 1 [00:16:11] Yeah, me as well. So I asked John about that. Here’s how he explained it. Speaker 3 [00:16:15] The way I describe it is it’s basically acting like a stomach. You have a concrete tank, or it could be a steel tank that’s inserted, let’s say, between the farm and their long term storage for their manure. And that manure ends up funneling in from the barn into that digester. In that concrete tank, it’s heated up to 38 degrees, which is roughly body temperature. It’s agitated to keep it homogenized and keep stuff from settling out while you’re heating it up. You have a dome over top of this concrete tank that collects the gas that’s generated and you extract that gas, you clean it, and you can either run it through an engine. And if you run through an engine, you’re running it straight, biogas, which is about 60% methane. Or you can clean it up with biogas, upgrader to around 98% methane, which scrubs some of the impurities and then brings it up to a natural gas quality. And then you inject it into the natural gas pipeline. Simple. Speaker 1 [00:17:16] Clear as something, right? I actually learned a lot about this from John. Once the gas is extracted. They take the leftover liquid, what he calls digestate. And that either goes into storage or gets applied to the land on your farm, or in some instances, remaining fibers from the liquid are separated out and turned into bedding for the farm’s animals. Speaker 2 [00:17:36] That is very cool. But the thing I still wonder about this is the cost of the digester technology. Based on my research, it makes enough sense for operations with 500 plus milking cows, but it’s pretty hard to stomach. So to speak, for those with less than 100 animals. Speaker 1 [00:17:54] That’s true. But John thinks there is a solution, a kind of co-op model for smaller dairy farmers who want to use the digester technology, which in Canada, where the average dairy farm has only about 85 milking cows. That means most farmers. Speaker 3 [00:18:08] Yes, it’s 100% a function of scale. There’s those fixed costs that don’t change enough with volume reductions or gas volume reductions that kind of make it more difficult to help the needs of the smaller or the average sized Canadian farm. I really think it comes down to community based digesters. So having six local farms bringing their manure in. But there’s economic challenges to that as well because trucking manure is not super appealing from an economic standpoint. Speaker 1 [00:18:40] Once again, it comes down to data management, transportation and funding infrastructure. John told us a lot of the technologies in the sector right now are focused on efficiency rather than reducing emissions per se. But he thinks there is an opportunity to shift the needle with the right incentives. Speaker 3 [00:18:57] I think for any of these things to really take off, there is a certain sector of the population that will always just do it because that’s what they believe in and they think that’s the right thing to do. But I think there has to be a financial penalty or a benefit to implementing that technology. In our sector, some milk pricing based on the technology that you have on your farm or like some variable different pricing, if you did something like that, you would not see how fast people would run to implement it. Right. And same with there was like a premium product and you could opt into producing that premium product. And there is an incentive to doing that. I think you’d see a lot of uptake. Speaker 1 [00:19:38] Again, you can hear John’s ingenuity and his optimism. Speaker 2 [00:19:42] One of the most fascinating things John told us was his family’s story. His parents emigrated from the Netherlands. Speaker 3 [00:19:48] My parents, they came over from Holland in the early eighties. They kind of originally were from farming backgrounds in Holland. Not that they were necessarily farmers, but they were always involved in the industry. They came over, got some jobs. My dad started working for a dairy equipment company in 1987. The guy was kind of ready to retire, so he kind of facilitated the transition of the business to my parents. Speaker 1 [00:20:14] The Dutch are famous for doing more with less. They’re perhaps some of the most productive and hardest working farmers in the Western world. Speaker 3 [00:20:21] A lot of it’s like that immigrant mentality. A lot of them don’t have established connections here, so they really put their efforts and their life into their work when they’re first establishing themselves. So you can definitely see the really hard work ethic when these immigrant families come over to Canada. They really have something to prove to establish themselves. Speaker 1 [00:20:41] We are, after all, a nation of immigrants which has made us stronger and more innovative over the years. Coming up, we’ll speak with an Alberta based tech innovator, someone passionate about the future of Canadian livestock who also takes inspiration from the old country. So stay right there. Speaker 2 [00:21:02] You’re listening to Disruptors an RBC podcast. I’m Theresa Do. I’d like to share with you our latest second share report from RBC Economics and thought leadership called “the next Green Revolution: How Canada can produce more food and fewer emissions.” Global food demand is set to soar as the population rises to 9.7 billion people in 2050. Meanwhile, climate change is slowing the agricultural productivity of many major producers. And geopolitical upheaval from Russia’s invasion of Ukraine has destabilized the world’s food systems. Rarely has speed in the world presented such a daunting challenge. So how can Canada lead the worldwide effort to confront it? To find out, visit RBC dot com Slash Next Green Revolution. Welcome back to part two of our special series on the future of Canadian Agriculture. The Growing Challenge We’re Taking into how Canada’s beef and dairy industries can help feed a growing world and do it more sustainably. A minute ago, we heard from John Van Logtenstein, the co-owner of Dairy Lane Systems, and DLS Biogas, who is helping dairy farmers turn manure into biogas. This keeps harmful emissions out of the atmosphere and creates a whole new revenue stream in the process. John also shared the story of his parents who started drilling. They were immigrants from the Netherlands. And according to our next guest, Canada has a lot to learn from the Dutch as we look to boost our agricultural productivity. Speaker 4 [00:22:35] Hi, I’m Alison Sunstrum, general partner of The 51 Food and AgTech Fund. I grew up in Saskatchewan, so everyone is connected to agriculture in Saskatchewan. But I started life as an accountant and very quickly found computers, technology, and was really fascinated by what they could do for agriculture. Speaker 2 [00:22:57] Alison thinks that Canada has the potential to be a world leader in agricultural production and produce more valuable agribusiness products. If it invests in cutting edge technologies. Speaker 4 [00:23:08] It should be easier to grow in Agtech Company in Canada because we definitely have access to primary production here. If we take a look at the number two exporter of agri business goods in the world is Holland. And Holland has a landmass the size of Bass National Park. So if we look at ourselves as the number five producer of agricultural products and goods, why can’t we convert those products into more valuable agribusiness products? Holland can do it. What are the limiting factors here? And I would say we have to just really addressing the fact that we are an agricultural nation, that we have much to learn from the Dutch experience, and we also have the potential to be a more sustainable producer of goods and agribusiness value goods in the world. Speaker 1 [00:24:01] Canadian Agtech companies have a lot to learn from Alison, too. She’s lent her expertise to many startups, serving as both a venture partner and investment adviser. She’s also founder and CEO of Conserve-X, a Canadian company researching and applying emerging technology in agriculture. And just over two decades ago, she invested in a Calgary based startup called Grow, Save and turn it into a global leader in the Agtech space. Speaker 4 [00:24:26] In 1999, I met an amazing engineer who was reimagining how you could monitor and work with animals. And I invested and joined the company. And in 1999, we were the first people who had used RFID to tag production livestock. Speaker 1 [00:24:47] Just to interject, for those who don’t know, RFID stands for Radio Frequency Identification, which allows digital data to be transmitted wirelessly, say, between an animal’s tag and a nearby reader. Speaker 4 [00:25:00] And over the next 20 years, we built our company measuring animals, monitoring animals and really looking at three characteristics How could we use technology to improve profitability on farm, to improve animal welfare? And we were already looking at how we could reduce the environmental impact of livestock production. And basically what we built is a high speed or high volume data acquisition and analytics platform that measured the R side, which identified animals and also measured multiple biometric and environmental sensors. And with that data we developed, along with researchers using our technology, we developed a way to determine through a genetic selection method how efficient animals and livestock were. And the end result, after 20 years of research, really was, we determined which animals were more efficient in their gain and conversion at sea. And that resulted in a couple of things that improved the cost of feed for livestock producers, but it also reduced manure and methane. Speaker 2 [00:26:15] This is so, so key. What Gro Save has done with data is essentially optimize animal welfare, including diet and digestion, and that’s optimized farm costs and beautifully reduced emissions from livestock. This is the kind of technology we need to scale to meet our net zero challenge, those that improve food production and minimize their impact on the environment. Speaker 1 [00:26:37] If every dairy or cattle operation ran with this kind of connected technology to reduce methane, we could go a long way to addressing our net zero goals. Speaker 2 [00:26:47] The real time monitoring and analysis is something that Alison, in presentations she’s given over the years, calls. The Internet of livestock things. But while this kind of connectivity sounds simple enough, the reality is that many parts of this country, especially rural Canada, don’t have access to the kind of high speed Internet that city folk take for granted. Speaker 4 [00:27:07] I think the Internet has shifted, and our ability to connect to technology has shifted. Our availability, number one, education on far from, but also number two, that we can really exploit and explode our opportunities on farm with every device and every sensor and everything we can connect to the Internet can reasonably occur. It seems odd in this day and age that so many parts of rural Canada are still not connected. And I think that’s where we’re going to explode. If we can get full connectivity across the country and we think about not just connecting people to the Internet, but also connecting sensors and things that really can measure where we can make management change. So from my perspective, the smart phone and the ability to connect sensors and then therefore through automation is what will really drive our productivity change and our sustainability change in Canada. Speaker 1 [00:28:10] Alison is also looking beyond sensors and automation and is enthusiastic about the potential of a slew of cutting edge technologies, including blockchain and artificial intelligence. That’s a lot of what she focuses on in her daily work with Conserve. Still, I was curious about the limits to all this tech innovation and wondering, Alison, how much gain is still out there to be had given all the progress that we’ve seen over the last couple of decades? Speaker 4 [00:28:39] I think that’s a great question, John, because if you look at how we’ve improved our productivity from the sixties until now, we’ve actually doubled food production. And with the increasing number of population, by 2060, we’re going to have at least another 2 billion more people on the planet. I think we have to double food production again. So if we look at the amazing strides that we made from the sixties to now, and if we look at where we have to go to earn the future, we have to really take a look at how we impacted the planet and how we’re going to have to do things a little bit differently. So I think we can do two times as much or we will have to, but we need to do so sustainably. Speaker 1 [00:29:26] What are the one or two things that you think are essential for Canada to get done in the next few years if we’re going to achieve net zero agriculture? Speaker 4 [00:29:36] I think that we have to start investing in net zero. And by that I mean that if our products reach net zero, we as consumers must buy them, we must demand them. And we also must ensure that farmers are not where we place the burden of our emission reduction. So as consumers, we have a responsibility, but as a government and as policymakers, I think that we have a responsibility to really backstop our farmers in a way that they can become net zero producers. Speaker 2 [00:30:13] So, John, I feel like through these conversations, I’ve learned a lot about the technologies that could improve production and transform farming operations across Canada. We just heard from Alison Sunstrum, who obviously sees the potential for Agtech. She’s investing in a big way in a variety of technologies, from blockchain to A.I. that she thinks will revolutionize the sector and make us a world leader in sustainable agriculture. And she talks about how we need to support the farmers who are working towards net zero with our buying power, our wallets. Speaker 1 [00:30:44] We also heard from Calvin Booker about how tell us agriculture is using technology to monitor feedlots and provide virtual health care that reduces the amount of physical travel for vets and helps us gather more data to study the connection between animal health, productivity and sustainability. Speaker 2 [00:31:01] John Van Logtenstein explained how his new biogas business is helping to reduce emissions on dairy farms while creating a new revenue stream for farmers. Speaker 1 [00:31:09] And Theresa, I’m trying back to something that grain farmer Christian Heber told us in our last episode about where he sees technology going in his operation. Speaker 3 [00:31:18] I always joke that within a decade or two, I think I could run my farm from three or four computer screens anywhere in the world because we’ll literally have a technology dashboard that’s pulling in all the data. I need to make a decision. And I mean, lots of our equipment now can adjust itself on the fly. And operators are still really important. But at the same time, we can just do such a better job than we used to. Speaker 2 [00:31:36] Well, that’s automation taken to its natural conclusion in agriculture, I guess. Speaker 1 [00:31:41] The remote control farm. I love it. Speaker 2 But don’t forget about the low tech practices like cover cropping or other regenerative farming techniques that have stood the test of time or in the case of livestock, simply changing up their diet. There’s research out there, John, that suggests adding seaweed, of all things, to the diet of dairy cows to reduce emissions by up to 82%. Speaker 1 [00:33:23] And maybe we should lean into things like cellular agriculture, which Evan Fraser from the University of Guelph mentioned in the last episode that involves producing agricultural products from cell cultures, including meat and dairy products, basically lab grown food. The sci-fi possibilities are endless. Speaker 2 [00:33:44] Sadly, we are out of time for today. Big thanks to our guests and thanks to you for listening. Please join us next time for the third and final episode of The Growing Challenge. We’re going to look at the important role that consumers, producers, grocers and restaurants play in reducing waste in the food system. A big source of emissions across Canada. Until then, I’m Theresa Do. Speaker 1 [00:34:07] And I’m John Stackhouse. This is Disruptors, an RBC podcast. Talk to you soon. Speaker 4 [00:34:16] Disruptors, an RBC Podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by JAR Audio. For more disruptors content, like or subscribe wherever you get your podcasts and visit RBC dot com, slash disruptors.

Speaker 1 [00:00:02] Hi. It’s John here. Speaker 2 [00:00:03] And it’s Theresa. Speaker 1 [00:00:04] Theresa? If I were to ask you to name one of the top challenges facing the world today, one of them would have to be climate change, right? Speaker 2 [00:00:11] Oh, without a doubt. Mother Nature is sending us some serious warning signs, John. Speaker 1 [00:00:17] Pretty hard to ignore wherever you are on the planet. But how often do you sit down to dinner and consider the climate impact of the actual food on your plate? Speaker 2 [00:00:27] Yeah, that’s a good point. Probably not often enough. I think sometimes it’s hard to remember what’s good or not good for the environment amidst the day to day stresses of life. But I know that beef is by far the most carbon intensive food to produce, followed by seafood, pork, chicken. And I also know that plant based foods are the least carbon intensive things like tofu, beans and nuts. Speaker 1 [00:00:50] And let’s not forget that a lot of the stuff we grow or produce doesn’t even make it to our stomachs. It expires or goes bad or gets left on the table and thrown out. Yeah. Speaker 2 [00:01:00] I really hate food. Waste the silent shame of our kitchens. The fact is that the food we produce and the food we consume comprises 10% of our country’s total greenhouse gas emissions. And to reach our larger carbon reduction goals, we’re up against a ticking clock. Speaker 1 [00:01:16] The other consideration, Theresa, is that we’re going to need to produce a lot more food in the coming years. Just think about the conflict in Ukraine. It’s laid bare, how fragile the world’s food systems can be. Or remember back to the depths of COVID and lockdowns how precarious food supplies became. That will be a growing challenge, as we say in the title of this podcast series. As the global population grows and that means more mouths to feed, which comes with added costs, both financial and environmental. Speaker 2 [00:01:45] Yeah, and it’s a huge challenge, John, one that we’ve been spending a lot of time thinking about lately here at RBC. Speaker 1 [00:01:51] At this moment, Canada has a unique opportunity. We have a huge supply of arable land and water. Our farmers already produce $75 billion worth of food each year. We’re top exporters of wheat, canola and beef. And we’re also a land overflowing with innovation. Speaker 2 [00:02:09] RBC Economics predicts that Canada will need to spend about $2 trillion in the next three decades to transition to a net zero economy. So, yes, on the one hand, we need to feed more people almost 10 billion by 2050. But at the same time, we have to reduce our current emissions levels while also producing more food in order to meet our net zero goals for the sector. So how do we do it? Speaker 1 [00:02:33] That’s the $10 billion question. Or maybe you’d like to call it the 10 billion person question that we’re going to try to tackle in the coming weeks. This is Disruptors and our VC podcast. I’m John Stackhouse. Speaker 2 [00:02:51] And I’m Trinh Theresa Do. It’s my pleasure to welcome you to the first in a special series we’re calling “The Growing Challenge”. Over the next three episodes, we’re going to explore how Canada can lead the world in clean, green agriculture using cutting edge technology, data systems and smart thinking to increase yields while reducing the environmental impact. In other words, more food with fewer emissions in line with our nation’s net zero goals. Speaker 1 [00:03:23] Here at RBC, we’ve embarked on a signature research project in partnership with Barclays Center for Canada’s Future and the Aral Food Institute at the University of Guelph. Sonja, who is a managing director and partner in BCG, is Washington, D.C. office and a global expert on agriculture. She says the magnitude of the challenge cannot be understated. Speaker 2 [00:03:46] Agriculture accounts for over 10% of emissions in Canada, and at the same time we expect global demand for food to increase by 26% by 2050. And to be honest, Canada is in a great position to address that demand. But at the same time, it needs to do so in a way that isn’t going to also increase the emissions, given the challenge that we have in the world. Speaker 1 [00:04:14] We’ll hear more from Sonja a bit later in the series. Canadians right across the country have an opportunity to be leaders in food innovation and help people working up and down the supply chain improve their efficiency. To do that, we need to attract a new generation of farmers, innovators and scientists to the field or fields. And one of the people leading the charge, Ogwell, is this man. Speaker 3 [00:04:37] My name’s Evan Fraser. I’m director of Arrell Food Institute at the University of Guelph. Speaker 1 [00:04:42] Evan is one of Canada’s top social scientists working on food and sustainability. I started out by asking him our central question How can Canada help feed the world sustainably? Speaker 3 [00:04:52] I think the answer to that question is good policy and technological innovation, and I think those two things are the reasons that I remain optimistic. So we know we have to increase production. Some people think we need to increase production by 70% by 2050. And The Economist ran an article a few years ago on this topic, and the stand out pull quote from that article was that the farmers of this planet need to produce more food over the next generation than all farmers have ever in the last 10,000 years cumulatively. The scale of the production challenge is huge, and at the same time we have to not only take greenhouse gas emissions out of agriculture, we actually have to turn the arrow around and make agriculture absorb greenhouse gases. So we’re not trying to reduce emissions in agriculture. We’re trying to make agriculture a net sink for greenhouse gases. Those are formidable challenges. At the same time, of course, water is scarce in many parts of the world and likely to become scarcer. At the same time, weather patterns are less stable and less predictable, and at the same time, soil erosion is real and major parts of the world are experiencing a degradation. Speaker 1 [00:05:53] So against that backdrop, I asked Evan where the opportunities for improvement lie. Speaker 3 [00:05:58] First of all, we have a leaky food system. We produce enough calories right now for everybody to eat. If you use the United statistics and you take all the world’s food and you divide it by all the world’s people, there’s about 2700 calories produced per person per day, which is actually more than enough. Second, we waste a lot of food. About a third of the world’s food is wasted. So we’ve got gargantuan rooms for efficiency gains in the current system. Speaker 2 [00:06:20] By the way, we’re going to talk a lot about food waste in the third episode of the series. But like Evan, we’re also focused on the technological solutions. Speaker 3 [00:06:28] We have only just started to apply digital technologies to agriculture. So the same tech that produced the Internet, the same tech that transforms medicine in the last ten years, the same technologies that that allowed us to go from no idea about coronavirus to four or five or six vaccines in 18 months. Those same technologies are only now being applied to food production, distribution, food processing. And so not only do we have a system that’s actually quite leaky or inefficient to begin with in terms of waste and surplus calories and things like that. We’ve also got an area where we haven’t done a lot of technological innovation. Much of the world’s farming community still uses sometimes 19th century and certainly 20th century technologies, let alone 21st century technologies. So I think there’s some very, very big vistas of productivity to be gained by artificial intelligence and satellites and genomics. And we can get into very specific, granular examples of cool technologies. But I think overall, agriculture is ripe for a wave of innovation to come crashing down on it. Waves of innovation can be highly disruptive, and they can dislocate rural communities and they can disenfranchize people so that they’re not all good. But I think the potential to boost production while shrinking environmental impact with technology is very real. Speaker 1 [00:07:48] Evan has spent a ton of time thinking about out there tech solutions to the world’s food problems. In fact, he just co-wrote a book called Dinner on Mars The Technologies That Will Feed the Red Planet and Transform Agriculture on Earth. He thinks growing food on Mars is a good thought experiment for us here on Earth. Speaker 2 [00:08:06] And it makes sense, right? Because resources are scarce on Mars, which means you have to make the most of what you have. In other words, you have to perfects the idea of a circular economy where waste from one section feeds into another. What he’s basically saying, I think, is that we could actually survive on Mars, at least when it comes to growing food. Speaker 1 [00:08:25] But I pressed him to explain how this Martian thought experiment could be applied here on Earth. I wanted to know how close we are really to replicating a system like this. Speaker 3 [00:08:34] We don’t have all the technologies, but let’s just take something like cellular agriculture, the ability to produce livestock proteins from laboratory settings. We’re close. We’re really close on a number of key areas. I think properly designed. A lot of those bioreactors that produce those, those livestock proteins, ultimately they’ll be fed on wasted organics. So you think of all the spent grains from a brewery, for instance? Well, those should go into bioreactors to produce higher value proteins. Or you take the Canadian prairies and we start thinking about Canada’s role in this fractured global food system. The Canadian prairies are unbelievably efficient at producing peas and plant based proteins. But once you take that pea and you fractionated out the water and the. Starches and the proteins, and you used the proteins as a food substance. You’ve got a lot of starches. Well, those starches could go into a fermentation bioreactor, reproduce other kinds of protein. And so I think starting with the idea of the circular economies of Mars and moving forward, we actually start imagining a vision for our country’s agri food future and our position on the global stage. Speaker 2 [00:09:39] Of course, a lot of farmers are already laser focused on building the tools we need to eat far more sustainably today, right here on planet Earth, and we’ll need their expertize. We know that Canada will need to grow more food without adding substantially more farmland. If we want to reach net zero. For many farmers, faced with expensive real estate, labor shortages and other existential challenges. Doing more with less is not a recent imperative. For some, it’s actually the animating focus that’s driven their farms for generations. Speaker 4 [00:10:15] I am a Kristjan Hebert. I farm at Moose in Saskatchewan, right in the southeast corner of the province. Most of it’s kind of the halfway point between Brandon, Manitoba and Regina, Saskatchewan. It’s only about 30 miles past the Manitoba border, and agriculture is really large in this area. So we spent about 3500 people, but within a 80 kilometer radius, two trains with about 70,000. Speaker 1 [00:10:37] Kristjan, you’ve got a really big farm. Can you describe it for us? Speaker 4 [00:10:41] We currently operate around 30,000 acres and obviously for for listeners that don’t know and acres about eight feet wide and a mile long. So a few football fields in our terms and we grow wheat, barley, canola peas, oats and sometimes some hybrid. RYAN As far as a few people may know, we do a fair bit with data and technology, and that really helps drive our farm operation. Speaker 2 [00:11:03] 30,000 acres. It’s a lot of work to keep a farm like that going. Speaker 1 [00:11:06] Kristjan is a third generation farmer working the same soil where his grandfather put down stakes in the early 1960s. But the challenges he faces are new acute labor shortages and difficulty attracting specialized talent to small town Canada because new farming techniques require different kinds of skills. Speaker 2 [00:11:25] Meanwhile, there’s also growing volatility in interest rates and foreign exchange rates and rising prices for a variety of inputs and equipment. And of course, farms like Christians across western Canada have faced more and more extreme weather in recent years. Droughts, floods and more droughts. Speaker 1 [00:11:43] Exactly. So given all this, I asked him what role sustainability played in his farm operations. As you’ll hear, it’s pretty integral. Speaker 4 [00:11:51] I’ve got a picture that hangs on my wall that says our you know, our legacy statement is is our sustainability statement. And that’s that the financial statements, the land, the community and the industry should be handed, you know, generation to generation in a better state. But all four of those need to improve each generation, not just one, when it comes to the land. I mean, it’s everything to us. It’s our asset. It’s like somebody’s home. You don’t let your home deteriorate generation to generation. It’s one thing that helps build family wealth, and that’s really our land. But not only is it like our home, it’s our engine. It generates everything on the farm. So, I mean, in today’s world, if you were to come to our farm, I could show you we’re taking soil tests every four acres on our farm. And I like to compare that to no different than a human taking a blood test to see what they need from their doctor to be healthy. Speaker 2 [00:12:35] I love that analogy of a soil test being like a blood test, a health check for the land, for sure. Speaker 1 [00:12:41] Everything, everything starts with the soil. But according to Kristjan, the key is to pay attention to what the soil is telling you. That’s your biggest data source. You need to learn from it. Speaker 4 [00:12:52] So we take soil tests to see exactly what nutrition our crops are going to require that year to hit the yield targets to allow us to produce the grain we need to feed the world so that we add the nutrition we need, which is in today’s world is called fertilizer. Fertilizer is really just food or calories that goes into a human body. A crop is no different. We give it food and nutrition to allow it to reach its full potential by the end of the growing year, which is only 100 or 120 days. Next step is we use a lot of data to determine which weeds, etc. and pasture in the crop and we remove them with our herbicide in order to to allow it to be healthy. And then lastly, we get to harvest and we collect all the data too on our yield data. We take all of this that we’ve collected all year, our soil test data, the nutrition we put down in the harvest data to create next year’s map to do a better job again. Speaker 1 [00:13:41] Christian said that the ability to collect data from farms has really improved in the last decade or so. Before that, he says, farmers had to rely more on gut feel and hunches for how to get better. Speaker 4 [00:13:52] And farmers did. An amazing job of that was with things like Zero Tail, etc. But as data is able to be collected, we can make a lot more changes in season and annually than we could in the past. And of course, the land is something I’m going to take care of. And my kids could come up to the Harvest crew right now and grab a handful of any grain I grow and throw it directly in their mouth and eat it and it would be safe and nutritious and I’d be happy with that. Speaker 2 [00:14:15] He mentioned zero till there, John. Basically a way of farming that causes less soil erosion. Speaker 1 [00:14:21] Right. And we’re going to explain more on that in a minute. Speaker 2 [00:14:24] What jumps out to me is how much passion he puts into what he grows and the precision with which he does it. Speaker 1 [00:14:29] Absolutely. And that reliance on data is core to how Kristjan Hebert and Hebert Green Ventures has achieved more sustainable results. But sustainability, as he explained to us, is nothing new to the family business. They’ve been on that path for decades, practicing no till farming and using technology such as air seeders which allow crops to be seeded and fertilized without disturbing the soil. Speaker 4 [00:14:53] Zero tilled came in because of erosion, working the fields in dry land. Farming was really tough on the fields you literally deteriorated your land. So we’ve been doing Zero Tillage since, I think it was the early nineties. The dad bought the first drill. I mean, I’d have been ten years old at the time, so we’ve done zero till forever. But then you look at little pieces like sectional control. We run 80 foot air sinas and he. Section shuts off as it starts to overlap. Where ten, 20 years ago it didn’t. You’d overlap half that air seeder on the way down. Whether you’re going around a slower a curve or turning around, it used to be 13% of your field would be overlapped. Now it’s down close to 1%. You know, 99% of our field gets exactly what it should for nutrition. So that was a huge move forward. I look at nitrogen inhibitors. I mean, that was just once again, we did testing to find out if any of our nitrogen was gassing off. And at times we did find there was conditions that allowed it. So we started using nitrogen inhibitors a number of years ago, but for two reasons. One, it’s better for the climate. The other thing is I don’t want my fertilizer to gas off my crop needs that like that. That’s supper for my crop. So if I only seed my crop two meals a day, it’s not going to be as healthy as if it gets three. So, I mean, the goals of the crop and of the climate are actually extremely intertwined and, and on the same page. And those things both hit my financial statements. And then I think lastly, we just use the ability to collect data alive and all the equipment. And, you know, I got weather stations with four foot soil probes that are reporting to my phone every 15 minutes now of how the water is moving through the soil. All the roots are moving through the soil, kind of what the yield algorithm is off of that and then correlating all the stations together, just the speed of which we can collect data and use AI to start to learn more and more than we currently know. I think the changes you’re going to see in the next decade will make what happened in the last decade small. Speaker 2 [00:16:39] So, John, it seems like anyone who’s lived and farmed on the prairies over the past decade or two has likely already seen some pretty profound changes in terms of emissions and technology with more to come. Speaker 1 [00:16:53] And if there’s one thing I learned from talking with Christian, it’s the farmers like him have been innovating for decades and will continue to innovate. Speaker 2 [00:17:04] John, I want to introduce another person now, someone else who’s had a front row seat to all this change. Meet Murad Al-Katib. Speaker 5 [00:17:12] We were community leaders. That’s how we grew up and agriculture in our community. I grew up in a time where the country elevators were closing and it was the race for the concrete elevators, you know, the terminals that would be built and those communities that secured those would survive their schools, their hospitals, you know, the communities on Main Street with Thrive, those that didn’t may not survive. Speaker 2 [00:17:33] Murad’s family moved from Turkey to rural Saskatchewan in the 1960s, ultimately settling in DAVIDSON In 1975, his father was a family doctor and his mother served as councilor for the regional municipality of Willmar. Speaker 5 [00:17:46] I had to go to my father and tell him that after five generations of doctors, I would disappoint him and go to business school. And I remember him saying, you know, son, is that an honorable profession, you know, going into business? And, you know, again, he supported my development. And, you know, 21 years ago, I founded the company. And it’s been a crazy ride to a couple of billion dollars in revenue and building something that I think has made a bit of a difference in western Canada. Speaker 2 [00:18:12] So Murad is the founder and CEO of AGT Food and Ingredients. Based in Regina, they’ve got over 2000 full time employees, so it’s one of the largest suppliers of value add pulses, staple foods and food ingredients in the world mirrored by his lentils, peas, beans and chickpeas from farmers in Canada, the U.S., Turkey and beyond processes them and then shipped the final products to customers in more than 120 countries around the globe. I asked him to talk about what motivated him to enter this famously volatile industry and how he thinks Canada can rise to the challenge of growing and exporting more food, more value added food while still cutting emissions. Speaker 5 [00:18:53] I think it’s all about technology and innovation. I mean, try, you know, implementing digital agriculture on one acre farms in India. We have farm families now with, you know, corporate entities, just farm families themselves that are producing 2 to 300000 acres of production sensors and data collection are going to allow us to do a lot more with a lot less. And I’ll give you a great example. The drought of 2021 was a historically bad drought in western Canada as a result of that drought. You know, nitrogen fertilizer wasn’t utilized like the nitrogen in the soil wasn’t taken by the crops because of the drought. In 2022, we had regions of Saskatchewan where there were enough nitrogen stores in the soil to grow a complete crop without the application of nitrogen fertilizer. In my days growing up in Davidson, we didn’t know that, right? People were farming by gut. Today we’re farming with data. Data is going to be the key to emission reduction. We’re going to have yield gains. We’re going to be using the same amount of nitrogen or last nitrogen, and we’re going to be growing more yield. Speaker 1 [00:19:58] Interesting to hear him echo Kristjan there on the importance of data. Speaker 2 [00:20:02] Yeah, he’s super happy. We’re now able to use data to monitor things like the nitrogen levels in the soil. He’s also excited about advances in irrigation technology. Speaker 5 [00:20:11] The Lake Diefenbaker Irrigation Project in Saskatchewan, which is again, another generational project that we’re going to see freshwater resources brought into irrigation, you know, development that could be 5 million acres of irrigation that doesn’t exist today. The government’s talking about emission reduction, GHG footprint, water use, efficiency. All these things are achievable with technology and innovation and our farmers have the ability to do that. That’s how I think Canada is going to be one that will step outside the crowd and be very relevant to the new consumer that’s going to demand this profile from the food industry. Speaker 2 [00:20:51] Coming up, we’ll hear more from Iraq on how Canada can lead the world in building a sustainable agricultural advantage. So stay right there. You’re listening to Disruptors and RBC podcast. I’m Theresa Do. I’d like to share a bit about our latest report from RBC Economics and Thought Leadership. It’s called The Price of Power. And in it, we outline the scale of the challenge facing our policymakers over the next three decades to reach a net zero electricity grid by 2035. Is Canada ready to meet a 50% surge in electricity consumption over the next decade? It’s a tall order, even unlikely at our current pace of decision making. If we get it wrong, Canada could suffer Europe’s fate of a hobbled, energy insecure grid that leaves consumers with soaring bills. To learn more, visit our BBC.com thought leadership. Welcome back. Today, we’re talking about how Canada’s farmers and agricultural innovators can lead and feed the world in an age of climate disruption. We just heard from Murad Al-Katib, the CEO of AGT Foods, a leading exporter of Canadian agricultural goods. Canadian farmers already punch above their weight as exporters. We’re a global leader in the production of wheat, barley and canola. A Canadian invention, by the way. But Murad thinks that looking forward, Canada still has so much more potential. Speaker 5 [00:22:24] You know, I see when a baby is hungry, they cry. And when a 19 year old man is hungry and unemployed, they protest. And what we’re going to see in the world is, I think over the next decade, a resurgence of Canadian geopolitical importance. We’re going to see Canada as a big part of the solution in a Russia, Ukraine, you know, post-conflict, we hope a post-conflict soon. But, you know, Canada is going to be an important part of filling that gap, you know, as infrastructures are rebuilt and food systems in those regions start to recover. So, you know, I’ve kind of seen that, you know, a renaissance of food. Speaker 1 [00:22:57] A renaissance of food. Sounds promising. Speaker 2 [00:23:00] Agreed. And I wanted to know more about that. What does that Renaissance look like? Exactly. Speaker 5 [00:23:05] Governments are again thinking of buffer stocks. They’re thinking of food policy again. That’s important to recognize that we have in Canada the two scarcest resources in the world, land and water. And then I want to probably throw in that early adopters of technology, the farmers. You know, that is, for us, a recipe for success if we get it right in terms of the governmental policy and, you know, the the trends we’re seeing in plant based protein, renewable fuels, I see today the canola transformation that we saw was let’s grow canola and make oil. And canola oil will become one of the most important oils in North America and in the world. Well, now, you know, the renewable fuel side is going to take the canola fields of western Canada and make them synonymous with the Saudi Arabian oil fields. But they just renew annually. Every time we harvest the new crop, pulses are going to go through a similar renaissance where, you know, milling of pulses into protein starch, fiber fractions and flour are going to provide very nutritious protein ingredients to a growing population in the world that’s demanding clean, sustainable ingredients for the development of the food sector. Speaker 1 [00:24:20] Clean, sustainable ingredients to feed the world. I love that vision. But to achieve that field of dreams, Canada needs to put some serious thought into how we will get agricultural products to markets efficiently. Speaker 2 [00:24:32] Right. And so Murad says that means a serious rethink of our transportation infrastructure. Speaker 5 [00:24:39] Our railways need to be relocated from the centers of cities around this country to allow us to reserve the lands to develop the trade infrastructure required for ten, 20, 30 and 40 years from now. We are a trading nation that is blessed with a productive capacity that’s only going to increase our average crop size was, you know, call it 55 million. You know, I think that 70 to 75 million tonnes is going to be more the norm in the future. And that’s again because of the use of technology and agronomy, new varieties, better farm management practices and data. So, you know, we’ve got to get serious about recognizing that potash demand is going to continue to rise. The demand for forestry products is rising. Agricultural production is going through the roof. And we have two national railways that have to share certain infrastructure through mountains and other areas. We’ve got to get serious about developing it, and we’ve got to get serious about a multi-modal strategy in this country. It can’t just be the Port of Vancouver all in the same period. We got to use the Great Lakes better. We’ve got to use Prince Rupert better. We’ve got to use containers as a surge capacity to get our products to market. And as we start out valuing, it’s not all going to be bulk vessels and bulk railcars anymore. We’re going to need intermodal and containers to get food products and ingredients to the world. We have one advantage a neighbor to the south called the United States, which is providing us with containers that come in full of consumer goods for them, which gives Canada an opportunity to fill them up and send them back to Asia to meet the growing middle class spending demand. So these are part of the infrastructure challenges that have to be solved. Speaker 1 [00:26:19] And from what we’ve heard today, Theresa, it’s about transportation, it’s about data. It’s about sustainable practices with the soil and water. It’s about technology and learning lessons from Mars. A common refrain from farmers we talk to is that there’s no one size fits all strategy to boost productivity, while cutting emissions will require a tailored approach, one that fits both the individual farm and its location. Here’s Kristjan Hebert again. Speaker 4 [00:26:45] The biggest thing I’ve learned is that we need to have a global theory and regional strategies. And what I mean by that is the global theory can absolutely be GHG emissions reduction. But what regional theories and global theories one would be, we probably need to stand up to some countries around the world that are willing to do anything about it before we focus on completely changing our 1%. You know, Russia and China might be two. That government should make sure everybody’s on board. Speaker 2 [00:27:12] Christian is driving at the fact that Russia and China have been slow to adopt globally accepted climate treaties, and he feels they should be held more accountable. But he also knows there’s a lot more work to be done here. At home to make farming more sustainable. And the nature of that work is going to vary depending on where you’re standing. Speaker 4 [00:27:30] A few years to scratch when I got eight feet of frost and three feet of snow from November till March. So I’m not going to get as much of a bang for my bark on our climate positive practices of cover cropping as south west Ontario. And I’m definitely not going to compare to Brazil. In Brazil, a cover crop is an absolute must wear zero. In western Canada, it’s an absolute. We almost have to do it. It’s so much better for our soil. And so that’s what I mean, is that we need a global theory of a reduction, but we need to understand that it’s going to be regional strategies and the data and science behind each of those regional strategies so that we don’t use one paint, brush and paint everybody into having to use certain management practices that might actually make no sense in their region. Speaker 1 [00:28:10] Christian feels more attention needs to be paid to the sustainability of regional economies which are struggling due to urbanization and what he calls the brain drag into the cities. He’s been very outspoken on this issue, speaking to media and governments right across the country. Speaker 4 [00:28:26] The one group of people that gives me anxiety is the current agriculture ministers and policymakers, because policy is the only thing that could bankrupt my farm. And so I look them in the face and said, You guys are worried about GHG emissions and all these buzzwords of sustainability, which don’t get me wrong. We’ve cared about sustainability and environment forever in agriculture. If we wreck our land or only screwing our own generation like our kids. But I said, the one thing you haven’t talked about is the sustainability of rural economies. Because if you can’t hire people on a farm and we can’t convince people to live in small towns of 500 or a thousand or 3000 people, there is going to be nobody here to partake and get the sustainable practices you want done. So until we challenge that and quit what I call the brain drag into the cities, well, we’re going to have a problem in agriculture and small business in general in rural areas for a long time. And yet the majority of Canadian GDP comes from natural resources, which are in the middle of cities. Speaker 2 [00:29:21] So listening to that, Christian clearly feels there needs to be some more incentivization for workers to move to farming communities. Speaker 1 [00:29:29] And not just any workers, but people can deliver on the newest farming techniques. So just before we wind up, I want to bring Evan Fraser back for a minute. He’s the director of the Arrow Food Institute, who we heard from earlier, the guy from the University of Guelph doing experiments about growing food on Mars. Evan says we need to encourage the next generation to think differently about what a career in agriculture can look like. Speaker 3 [00:29:53] While ag and food is a huge growth industry, the jobs in agriculture are not spending your life spent pulling weeds out of a strawberry patch anymore. They’re high tech jobs. They’re knowledge economy jobs. They’re jobs that involve lab coats just as often as they involve tractors. So, yes, we need people to go into the sector. We desperately do. And I’m now speaking as an educator and a University of Guelph employee who trains the next generation. We really need to get young people energized by the sector, but we need to remind people that this is part of the knowledge economy. This is just as cool as aerospace. In fact, I know a lot of kids that trained as aerospace engineers and have found better work working for greenhouses, applying their skills of robotics and sensor and artificial intelligence to make greenhouses more efficient because frankly, greenhouses employ more people than aerospace does. So I think there’s a sales job that we’ve got this impression that ag and ag employment is in a rural environment with a red barn and a straw hat and a pitchfork. And we’ve got those sort of impressions for historic reasons. But to any young people that might be listening to this conversation, I would say two things. One, there are jobs in agriculture. There is good jobs in agriculture, their knowledge, economy, jobs. And two, you can actually participate in this workforce, in this sector of the economy, and also be contributing to a huge moral mission, which is to sustainably feed the world’s growing population without wrecking the planet. Speaker 2 [00:31:22] Fascinating conversations, John, and certainly a lot to chew on. Speaker 1 [00:31:27] Oh, no, not food jokes. Speaker 2 [00:31:30] If Canada hopes to cut 85% of emissions from the agricultural supply chain by 2050, it’s becoming clearer that certain things will need to be done. We have to take advantage of available and emerging technology and mobilize finance and policy to support growers. Speaker 1 [00:31:46] To do this will need to invest in emissions reducing technologies that address the critical drivers of our agricultural emissions. We need to do better with fertilizer production and use methane in manure and from cattle digestion, all of which we’re going to get into in the next episode. Speaker 2 [00:32:02] And don’t forget regenerative agriculture practices like the No till farming use by Christian, which can help transform farming into a carbon sink rather than a source of carbon emissions, which, by the way, is also an important reframe. Agriculture and growers are an essential part of the climate solution and need to be viewed as such. Speaker 1 [00:32:21] Exactly. Getting the right people in place with the right skills to get the job done. I think about what Evan had to say about the extraordinary shifts going on in farm technology and the skills required to work a farm or in fact, work through the food supply chain. Often think of my own grandfather, who was a potato farmer in New Brunswick, and how he would see farming today. With all the technology, artificial intelligence sensors in every field, drones and data systems that every farmer has to be advanced with is really making it one of the most exciting fields for anyone to aspire to. Speaker 2 [00:32:58] And then with Murad, he talks about getting out of the commodity cycle into the ingredient and food cycle. How do we upscale? How do we capture value, and how do we leave that value in our communities? Speaker 1 [00:33:08] And how do we convince people to live in small towns of 500 or a thousand people? I think back to what Christian had to say about the glue of communities. Even in this digital work from anywhere world, we all want places where we can gather, whether it’s a coffee shop or a community center or a hockey rink. Small towns thrive when they have that community infrastructure, and we need to appreciate that an agriculture economy is only going to thrive when there is that community infrastructure right across the country. Speaker 2 [00:33:40] Well, that’s all for now. Thanks to our guests, Kristjan Hebert, Murad Al-Katib and Evan Fraser. Join us next time for part two of The Growing Challenge, when we’ll look at the important role that dairy and beef producers play in feeding the world while helping to reduce Canada’s greenhouse gas emissions in the process. Until then, I’m Theresa Do. Speaker 1 [00:34:00] And I’m John Stackhouse. This is Disruptors, an RBC podcast. Talk to you soon. Speaker 2 [00:34:09] Disruptors, an RBC podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by JAR audio. For more disruptors content, like or subscribe wherever you get your podcasts and visit rbc dot com slash disruptors.