Cereals Canada launches process to develop country's first national wheat research strategy

By Debbie Lawes

Canada is the world's third largest exporter of wheat but its future competitiveness is at risk without a national effort to coordinate research efforts, attract world-leading scientists and increase both private and public investments in R&D, particularly longer term discovery research. Those are among a dozen recommendations contained in a study commissioned by Cereals Canada looking at how the country can develop a world-class science and innovation model that supports a profitable value chain for wheat.

The 45-page report, entitled White Paper on Research Innovation in Cereals, was written by Dr. Stephen Morgan Jones, president of Lethbridge AB-based Amaethon Agricultural Solutions Inc. and former regional director with Agriculture and Agri-food Canada's (AAFC) science and technology branch. A copy of the 2014 report, obtained by RE$EARCH MONEY, raises concerns that Canada is losing ground to its main competitors-notably Europe, Australia and the US-when it comes to innovation in wheat. Australia, for example, has had a national plan for wheat research since 2011.

"There has been an ongoing erosion of public sector research capacity over the last 20 years, and recent programming has emphasized industry driven projects that are important, but usually do not address the longer term strategic investments that can result in breakthroughs for the sector," the report states.

Cereals Canada president Cam Dahl declined to comment on the specifics of the document, describing it as a "stepping block" in a much larger process to develop Canada's first national strategy for wheat research. The beef industry went through a similar process to develop Canada's National Beef Strategy, released in December, which identifies priorities for maintaining and enhancing key research capacity in the industry. Dahl says this is one model they are examining.

As part of its process, Cereals Canada is seeking input from all participants in the wheat value chain, including life science companies, seed companies, farmers, grain holders and marketers. A market scan, slated for completion by June, will identify customer needs and research priorities that can meet those needs.

The process will culminate in a workshop this fall where researchers and funders will develop "a very explicit strategy plan for wheat, looking at where we are today and where we need to go, what do the customers need, what do producers need, and what parts of the value chain are best to fit into that," says Dahl.

The goal is to have a national strategy in place prior to the federal government's 2016 budget cycle. The strategy could also help shape the third phase of AAFC's Growing Forward funding program which supports industry-led projects. Growing Forward 2 completes its current cycle in March 2018.

No doubt the industry will be looking to boost funding for wheat research-both from the public and private sectors-but Dahl says more money is only part of the solution. "It needs to be strategic investment," he says. "We need to make sure that money is being spent effectively so there is more national coordination and less overlap."

That requires an "organizational model" for developing priorities and coordinating research investments-a role Cereals Canada hopes to take on.

Formed in 2013, Cereals Canada acts as a national coordinator to invest producer and company funds for marketing and research activities, a role traditionally filled by the Canadian Wheat Board (CWB), which has since been privatized. Cereals Canada represents a broad cross-section of industry players that includes producers and producer groups, processors, exporters and handlers and life sciences and seed companies.

The HR gap

Canada has been a world leader in developing new wheat varieties, funded primarily through universities and provincial and federal governments, with co-funding from producer check-offs, per-tonne payments allocated to farmer-directed organizations. Check-offs allow the Western Grains Research Foundation (WGRF), for example, to invest more than $5 million annually-often in partnership with government and academia-which has led to the development and release of more than 150 new wheat and barley varieties over the past 17 years.

A 2014 study by Univ of Saskatchewan agricultural economist Dr. Richard Gray showed that every dollar invested in cereals breeding returns at least $20 in value to grain producers.

Maintaining that leadership will be difficult, the report cautions, unless Canada invests more in basic research and re-builds its scientific capacity. On the human resources side, the report lists 37 scientists in Canada (mostly with AAFC and the National Research Council - NRC) who work on discovery or strategic research, namely in the areas of wheat genomics, molecules and cell biology. This compares to 80 scientists working on shorter term, industry-supported projects.

Of greater concern, it notes, are the recent staff cuts at AAFC compounded by the anticipated retirement of 30% of the department's 400 scientists over the next five years.

"Human resource capacity will continue to be a significant issue as public institutions continue to face budgetary pressures," the report states. "While some replacement of existing capacity and re-direction of resources from other areas will allow AAFC and NRC to fill some of the gaps ... it is unlikely that these federal Departments will be able to meet all the needs and other approaches will be necessary."

There has been no national priority setting mechanisms for wheat or agricultural research since the disbandment of the Canadian Agricultural Research Council in 2007 - White Paper on Research Innovation in Cereals

Possible approaches identified in the report include: creating public sector Canada Agricultural Research Chairs (potentially funded through Growing Forward 3) and expanding the NSERC Industrial Research Chair program. Current programs like the Canada Research Chairs fall short when it comes to agriculture research, with just two Tier 1 chairs in plant sciences out of 1,800 CRC chairs, the report notes.

The need for basic research

Public funding for cereals research, particularly public plant breeding programs, has been steadily dropping since the mid-1990s. Investments have also shifted too far to applied, short-term research, the paper contends, with few programs supporting "high risk/high rewards areas" that tend to rely more on discovery research.

The report goes on to point out that many of these breakthroughs are happening at the molecular level, yet even in the area of genomics, most projects focus on practical applications. Last year, for example, Genome Canada and the WGRF partnered on a $90-million competition to support large scale applied research projects in agri-food, fisheries and aquaculture that create new knowledge and inform public policy.

The NRC also has a major flagship program called the Canadian Wheat Alliance, but again the emphasis is on applied research aimed at developing new varieties, sustaining yields and increasing productivity. The partnership with AAFC, the Government of Saskatchewan and the Univ of Saskatchewan has committed $97 million over the first five years of the 11-year program. (R$, May 23/13).

The majority of Canada's discovery research has been led by AAFC, which has seen both its research budgets and scientific staff significantly eroded over the past several years. In 2014, the federal government closed the Cereal Research Centre at the University of Manitoba as part of a wide range of job cuts across the civil service. Today, AAFC scientists do very little intramural research.

What research remains at AAFC has tended to focus on low-risk, industry-focused research. According to the report, the biggest funding source, Growing Forward 2, provides $20 million annually for AAFC scientists to support industry-led projects (clusters and ag-science projects).

"Much of this work, while necessary to support optimization of field practices and improved crop productivity, will not lead to the breakthroughs that are needed to fuel the innovation to give Canadian cereal producers a competitive advantage in world markets," the report states.

In response, the paper suggests that 30-40% of all cereals R&D be public investments in longer-term discovery and strategic projects, such as hybrid wheat and low gluten wheat. Industry, in turn, would primarily fund shorter-term applied projects.

It's not just governments that need to invest more in cereals R&D. The paper notes that "Canada is unique among the major wheat producing countries in having very little private investment in wheat variety development."

One solution for increasing industry investment and participation in R&D, the report recommeds, is to restructure AAFCs Science and Technology Branch "to make research a central focus of a new organization and to remove the current policy impediments that stifle innovation and the generation of new ideas". The document notes that many AAFC research centres were established more than a century ago, and with a single investor: the federal government.

The paper proposes replacing AAFC's 19 research centres with three-to-five large research facilities, each with about 60 scientists focused on discovery/strategic projects, with other existing centres converted into lower cost innovation hubs aimed at applied research. Another recommendation would see the establishment of a pilot research centre that is industry-managed but government-owned, "to test the merits of lowered bureaucracy" and to increase industry input into management planning and development of research priorities.

The changing landscape

The end of the CWB's monopoly, combined with policy changes such as the new Agricultural Growth Act (Bill C-18) which came into effect in February, are triggering fundamental changes in the operating environment for cereal production.

The law, which amends the Plant Breeders Rights Act, is intended to encourage more private sector investment in R&D by allowing public and private breeders to earn additional revenue (called end-point royalties) from breeding activities.

"Given the lack of public support for public research and the high returns to research, the bill will provide much-needed plant breeding resources," Gray told the Standing Senate Committee on Agriculture in January.

But Gray also cautioned legislators not to expect a "cascade of private research investment" anytime soon. Gray said Australia's experience with such an approach showed it took 16 years before the royalties were high enough to fully fund a breeding program.

"There is a real danger that we could make a situation that's not great a lot worse if we actually withdraw more from public research before the private research is able to generate enough revenue," Gray told the Senate committee. "You need the revenue model first. You have to actually see the private investment before the government should be making any moves to make room for the private sector."

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