Canada’s Farm Sector Faces a Complex Reality

First‑quarter cash receipts for Canadian farms rose to $25.6 billion, a 3.1% increase from 2024. While a nationwide “buy Canadian” campaign has delivered tangible gains, growers remain exposed to tariff‑related geopolitical risks and an escalating climate‑change burden, especially fierce wildfires.

Key Insights from the FCC Thought Leadership Report

• Canadian agriculture lags the world in farm‑tech investment, capturing only 2 % of global capital.
• Limited research spending threatens to stall productivity growth and erode Canada’s standing in ag‑tech innovation.
• Decades of diminishing R&D investment have slowed productivity and weakened the country’s global innovation posture.

Why the Shortfall Matters

Without a significant surge in research and technology spending, the report warns, Canadian producers will struggle to adapt, compete, and grow. The persistent gap in farm‑tech investment could cause productivity gains to stall, pushing Canada further behind the world in the race for ag‑tech leadership.

Moving Forward

Addressing these challenges will demand a renewed commitment to research, development, and innovation. By reinvesting in R&D, Canada can reclaim its role as a global leader in agricultural technology and secure a resilient future for its farming community.

A sector running on yesterday’s investment

Canada’s Declining Role in Agricultural Research

For thirty years, OECD data shows Canada’s spend on agricultural research and data sharing has steadily fallen. The measure, known as “agriculture knowledge generation,” tracks how much governments budget for R&D and for collecting and distributing related data.

Early 1990s: A Global Leader

• Canada was ahead of the United States, Japan, and even the OECD average.
• Its research budget made it a top name in international agriculture.

Today: A Reversed Trend

• The latest report shows Canada has fallen behind those same countries.
• According to a University of Calgary public policy study, every US$1 invested in agricultural R&D yields a return of US$10 to US$20.

Venture capital isn’t filling the gap

Canada’s Agriculture R&D Funding Landscape

Public Investment Fuels Innovation

• Government Spend hit over $829 million on science and innovation in 2023.
• That figure exceeds four times the amount that private agricultural firms invested themselves.

Venture Capital Trends Decline

• Canadian agtech deals peaked in 2021.
• Since then, deal volume and value have slipped back to near pre‑pandemic levels.
• In 2024, the United States outpaced Canada by a 6:1 ratio in volume and 23:1 in value.

Global Share Remains Small

• From 2018 to 2024, Canadian agtech companies averaged just 5% of global deals.
• They accounted for only 2% of total deal value.

Implications for Innovation and Adoption

• Canadian agtech innovators find fewer channels to scale solutions.
• Canadian producers have fewer options to adopt proven technology.

Lessons from abroad

Strategic Investment Drives Global Agritech Advantage

United States: A Funding Catalyst for Robotics & AI AgriTech

The United States boasts extensive public and private capital streams, with innovation hubs such as Silicon Valley accelerating the deployment of robotics, AI, and precision agriculture solutions.

European Union: Sustainability‑Focused Horizon Europe Initiative

Within the Horizon Europe framework, the EU prioritizes sustainable practices and climate resilience. Nations like the Netherlands spearhead controlled‑environment agriculture and collaborative research efforts.

Japan: Automation & Vertical Farming Momentum

Japan’s substantial investment in automation, vertical farming, and data‑driven systems addresses critical labour shortages and land constraints, bolstering sector growth.

Canada’s Imperative: Align Innovation with Industry Priorities

• Targeted capital must align closely with clear industry priorities.
• Canada must emulate the coordinated investment strategies of the U.S., EU, and Japan.
• Protecting export positions and capturing emerging opportunities depend on this alignment.

What Canadian businesses can do now

FCC Unveils Five Concrete Steps to Bridge the Investment Gap

In a bold move, the FCC has identified five strategic actions designed to close the disconnect between farm profits and innovation investment.

1. Propel Private R&D with a Commercial Lens

By tripling current R&D outlays, the FCC believes farm incomes could surge by billions. The focus will align with high‑impact domains such as precision agriculture, automation, biotechnology, AI, and digital platforms.

2. Import Proven Technologies Beyond Canada

Leveraging tested solutions from global markets can quickly compensate for domestic R&D deficiencies while the national research capacity ramps up.

3. Fortify Networks and Innovation Hubs

Creating robust collaboration clusters—linking researchers, startups, producer collectives, and investors—will streamline idea flow and capital allocation.

4. Eliminate Adoption Barriers

Reducing operational costs, easing integration complexities, and investing in workforce training will support seamless adoption of new tools.

5. Prioritize Sustainability

Embedding innovation funding within practices that boost yields and cut environmental footprints will align short‑term gains with long‑term stewardship.

Why it matters for business leaders

New Horizons in Canada’s Agri‑Food Landscape

The latest figures highlight a critical moment for everyone invested in Canada’s agri‑food sector. Productivity is measured not just in volume, but in how a nation competes on quality, cost, and resilience in a constantly shifting market. The time to act is now.

Key Takeaway for AgTech Innovators

• Solutions with strong commercialization potential will find a market, but scaling demands patient capital and strategic alliances.
• Agri‑business leaders must treat technology adoption as a central competitiveness strategy, not a peripheral activity.

Perspective from an Industry Leader

“Canada’s economic future hinges on an agri‑food industry that embraces advanced innovation and productivity,” says Darren Baccus, executive vice‑president of Agri‑Food, Alliances and FCC Capital. “Historically, investment dollars have been scarce and have not been scaled to meet the increasingly sophisticated needs of the sector.”

Final shots:

Bridging Canada’s AgTech Investment Gap

Canada’s dominance in global food markets hinges on a swift acceleration of agricultural research and development.

Why Closing the Gap Matters

• AgTech R&D yields some of the highest returns in the national economy.
• Missing out on foreign breakthroughs could stall Canada’s competitiveness.
• Domestic R&D scales up only after a significant investment inflow.

Leveraging International Innovations

Adopting proven technologies from overseas can deliver immediate benefits while Canada’s own research programs mature.

Strategic Planning for Leaders

Key Actions:

• Allocate additional funding to agri‑science initiatives.
• Establish partnerships with leading global AgTech firms.
• Track and measure ROI to ensure sustained growth.

Canada must close its AgTech investment gap to preserve its vital role in the world’s food supply chain.