Canadian Seed Trade Association | Working Together to Foster Seed Innovation

Canadian Seed Trade AssociationSnapshot of Private Innovation Investment in Canada’s Seed Sector

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Canadian Seed Trade Association | Working Together to Foster Seed Innovation

in 2017

Canadian Seed Trade Association Snapshot of Private Innovation Investment in Canada’s Seed SectorIn 2018, the Canadian Seed Trade Association (CSTA) completed its 2017-2022 Investment Survey. The survey, conducted every five years, is the most comprehensive snapshot of private seed sector research and development in Canada. The data provides insights into research investment today, projections into the future, barriers to inno-vation and demonstrates the effect of policy and market changes on investment decisions.

FINDINGS• The 2012 survey found that three crops – corn, cano-

la and soybeans – made up 89% of private research investment in Canada (and canola alone was 64% of industry expenditure). Five years later there is far greater diversification, as research investment in wheat and pulses has increased dramatically. Those two crops combined now make up almost 20% of private research investment in Canada.

• Research diversification isn’t just about cutting up the pie differently, overall research expenditures have grown significantly over the last five years. In 2012 the sector spent $101M on private research, and CSTA forecasted modest growth of 1% by 2017. However, the latest data shows that private research expenditures have grown to $171M in 2017, a 56% increase over five years ago.

• Research investment projections are strong: with projected further growth to $179M by 2022, driv-en particularly by projected growth in soybean and wheat research.

• Compared to 2012, absolute investment has in-creased for every crop kind. Major increases are found in wheat, a 237% increase over 2012 expendi-tures, and pulses, which went from almost no expen-diture in 2012 to $12.7M in 2017.

• When asked to rate the most significant barriers to further innovation respondents answered that a shortage of resources available for investment (linked to a lack of value creation models), Canada losing out to other, more attractive, international jurisdic-tions, and concerns over intellectual property are factors that must be addressed. The message is clear: collectively, we need to do more to make Canada an international destination of choice for research and development.

$171 million research investment

Total research investment historical and projected to 2022 ($M)

since 2012

56% investment growth

ABOUT THE SURVEYThis survey asked CSTA members for their current and

projected research expenditures by crop kind, descrip-

tions of the types of research activities members are

engaged in and for views on barriers to innovation.

Respondents represent the diversity of CSTA mem-

bership: with companies ranging from less than $1M

to well over $150M in annual sales in Canada. Overall,

the seed innovation industry represents over $3.2B in

annual sales in Canada, providing us with a broad and

diverse picture of seed research and development.

45,000,000

90,000,000

135,000,000

180,000,000

1987 2001 2007 2012 2017 2022

$180M

$135M

$45M

$90M

Canadian Seed Trade Association | Working Together to Foster Seed Innovation

Canola

Wheat

Soybeans

Corn

Pulses

Barley

Forages

$25,000,000.00 $50,000,000.00 $75,000,000.00 $100,000,000.00

Canadian Seed Trade Association Snapshot of Private Innovation Investment in Canada’s Seed Sector

CONCLUSIONS• Canada boasts a robust and healthy private invest-

ment landscape, with increasing investment overall and strong projections for the future.

• Research diversity is increasing, with more money being put into more crop kinds and we hope to see this trend continue.

• Small, medium and large enterprises are investing and competing. Survey results show that companies of every size are investing in innovation.

• We are seeing indications that intellectual property protection (including UPOV ‘91 ratification) can foster more investment; Canadian-based research programs and Canadian producers are benefitting.

• There is still work to be done on value creation: in-vestment levels in canola are very high, but Canada has a major gap when it comes to private investment in cereals research and development. There is great po-tential there.

Investment share by crop kind

Private Research Expenditure in CanadaBreakdown by Activity Type

Traditional plant breeding - 45%

License or royalty payments for genetics to breeders and developers within Canada - 21%

Trait development - 15%

Variety evaluation (screening for registration or commercialization) - 13%

Approval of traits - 3%

License or royalty payments for genetics to breeders and developers outside Canada - 3%

$$$$

$$

$$

$$

$

$

RESEARCH - 54%Scientists on pre-breeding - 4%

Scientists on plant breeding - 9%

Technicians - 17%

Support - 4%

Summer staff - 20%

SEED SALES - 22%

PROCESSING - 18%

PRODUCTION - 6%

Survey respondents reported that their companies employed over 2,300 people in Canada, with 54% of those positions involved directly in research.

JOBS AND THE SEED SECTOR

55.9%

14.7%

10.2%

9.3%

5.7%

1.9%

1.3%

See chart on page 4 for complete breakdown

Canadian Seed Trade Association | Working Together to Foster Seed Innovation

Canadian Seed Trade Association Snapshot of Private Innovation Investment in Canada’s Seed Sector

BREAKDOWN OF INVESTMENT PROFILE BY CROP KIND (over $1M annually)

BARRIERS TO INNOVATIONSurvey respondents ranked the most significant barriers to further innovation, and these results provide a roadmap of the priority issues to resolve in order to stimulate even more research and product innovation in Canada.

• The most identified barrier is budget constraints. Not surprisingly there is a direct correlation between available resources and the scope of innovation, which underscores the need for effective value creation mechanisms.

• Market conditions are also a major factor, and are largely beyond control. Commodity prices shift, planted acreages fluctuate and mergers and acquisi-tions amongst companies can all affect investment decisions.

• Canada is a competitor in a global innovation investment market, and several respondents reported that their parent companies had chosen to invest in other jurisdictions. This shows that barriers to investment aren’t just a lost opportunity, they can benefit Canada’s competitors.

• Companies also reported difficulty in finding partners with whom to inno-vate, and shortages of the skilled labour required to drive advanced research.

• Finally, intellectual property concerns are viewed as an important barrier to innovation. Where intellectual property rights are not clear, not understood, or not enforced, innovation suffers.

Soybeans: $18.9M to $23.9M Wheat: $20.7M to $22.2M Barley: $2.6M to $3M

Corn: $18.3M to $19.1M Pulses: $12.7M to $13.4M Canola: $94.8M to $94M

Forages: $1.8M to $1.8M

94,815,00094,095,000

2017 2018 2019 2020 2021 2022

Canola: Projected Investment

18,398,000

19,192,600

2017 2018 2019 2020 2021 2022

Corn: Projected Investment

18,986,000

23,983,000

2017 2018 2019 2020 2021 2022

Soybeans: Projected Investment

20,759,250

22,245,400

2017 2018 2019 2020 2021 2022

Wheat: Projected Investment

2,645,000

3,029,750

2017 2018 2019 2020 2021 2022

Barley: Projected Investment

12,768,000

13,433,000

2017 2018 2019 2020 2021 2022

Pulses: Projected Investment

1,864,196

1,825,000

2017 2018 2019 2020 2021 2022

Forages: Projected Investment

Canadian Seed Trade Association | Working Together to Foster Seed Innovation

1987 2001 2007 2012 20172022

(projected)

Canola 7,100,000 30,500,000 41,900,000 64,800,000 94,815,000 94,095,000

Corn 2,800,000 7,900,000 4,800,000 16,540,000 18,398,000 19,192,600

Soybeans 700,000 2,600,000 3,900,000 9,570,000 18,986,000 23,983,000

Other Oilseeds 1,250,000 238,000 215,000

Cereals 1,500,000 2,300,000 3,300,000 8,378,000 24,175,250 26,157,150

Wheat 6,160,000 20,759,250 22,245,400

Barley 1,680,000 2,645,000 3,029,750

Other Cereals 538,000 771,000 882,000

Forages 300,000 800,000 500,000 180,000 1,864,196 1,825,000

Pulse Crops 235,000 12,768,000 13,433,000

Special Crops 100,000 400,000 1,000,000 1,850 200,000 200,000

Vegetables 100,000

Other 1,600,000 800,000 1,600,000 360,000

Total 14,200,000 45,300,000 57,000,000 101,314,850 171,444,446 179,100,750

1987 2001 2007 2012 20172022

(projected)

HISTORICAL INVESTMENT BY CROP KIND: CSTA INVESTMENT SURVEY RESULTS 1987-2022

Canadian Seed Trade Association Snapshot of Private Innovation Investment in Canada’s Seed Sector

If you have questions please contact the CSTA office at info@seedinnovation.ca

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