For corn growers and
producers of other commodity crops, the growing public and political interest
in the use of renewable feedstocks to replace petroleum-based products in industrial
applications continues to beckon with the promise of a brighter future. The food
market grows very slowly and value-added opportunities for commodity crops are
limited, leaving potential market opportunities through industrial usage as the
most likely area for significant increases in demand.
OCPA believes that Ontario must take proactive steps to establish and promote
a business climate that is more conducive to entrepreneurial investment in order
to capitalize on the potential benefits that increased reliance on bio-based resources
offers. It’s not only good for corn farmers, but offers a broad range of
social, economic and environmental benefits as well.
The social and environmental benefits are clear: compared to their non-renewable
petrochemical-based counterparts, bio-based products offer reduced environmental
impact (in an increasingly ‘green’-conscious world) as well as a reliable
source of raw material that can readily be expanded to meet specific needs. New
industries also provide opportunities for increased economic and rural development.
Corn-based ethanol is the best established of industrial usages that provide benefit
to OCPA’s members, with demand increasing at a record pace because of the
renewable fuel’s potential for decreasing GHG emissions, improving air quality
and assisting Canada in meeting its commitments made under the Kyoto Protocol.
But there are many other possible industrial applications as well, and although
the discovery process that unveils such developments proves the vast potential,
the gap between discovery and commercial application is still wide.
Speakers at the recent Annual Meeting of Ontario Agri-Food Technologies discussed
both the potential of growing the bio-based economy within Ontario and possible
barriers to the broad adoption of renewable industrial feedstocks. A case study
of one new bio-based product derived from corn provided significant insight into
the decision-making process that leads a company to move from traditional production
technologies to new, bio-based solutions.
In that case, corn is used as the base for a polymer platform for use in clothing,
carpets and automobile interiors. The new fibres developed through the process
stretch and recover better than their petroleum-based counterparts and retain
dyes better. The monomer made from corn is purer than the petrochemical product.
And the ‘environmental footprint’ of the product is greatly reduced.
But the decision to develop the new product was based on the goal of cutting costs,
not increasing environmental sustainability.
Other speakers echoed similar sentiments in their presentations – in the
final analysis, it’s all about the money. In order to achieve any degree
of market penetration, bio-based products must be priced competitively. All other
things being equal, customers will choose renewable products, but however politically
desirable ‘green’ may be, the key drivers for business decisions are
functionality and cost.
Currently, specific demand for bio-based products that can compete with their
conventional counterparts is highest outside of North American markets, with Europe,
Japan and Australia leading the way. Companies such as Toyota, Honda, Peugeot
and Sony are actively seeking renewable replacements for traditional products
in a bid to position their companies as environmentally responsible. It makes
sense in a post-Kyoto world, but only if: 1) environmental sustainability is a
marketable concept, and 2) embracing environmentally friendlier alternatives does
not compromise the bottom line.
In their efforts to develop a new strategic vision for Canada’s agriculture
industry, federal policy makers have banked on the belief that the marketplace
will respond to environmental responsibility triggers. That’s why ‘Environment’
is one of the pillars under the Agriculture Policy Framework that is designed
to increase marketing opportunities for Canadian agri-food products.
And although Ontario’s Nutrient Management Act (see this month’s Newsletter
for the latest update on proposed regulations) makes no claim to enhancing the
desirability of Ontario products through improved environmental management, Agriculture
Minister Helen Johns has made it very clear from the outset that the competitiveness
of the agri-food industry was not to be put at risk through the added environmental
protection measures introduced through the Act.
So the question remains: who picks up the tab for the added costs involved in
meeting enhanced environmental requirements on the farm? If the industrial model
is used as a guide, it is unlikely to be the customers.
Farmers in Ontario have been active participants in the development and delivery
of current farm environmental programming. As a group, they have an exemplary
record of environmental achievement and improvement, and to date, most of the
costs have been borne by farmers themselves. But as demands and accountability
continue to increase in response to public demand, there must also be some mechanism
through which they can be compensated for increased costs and lost productivity.
Because farmers have to worry about the bottom
line too.
