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Canadian Seed Trade Association | Working Together to Foster Seed Innovation
Canadian Seed Trade AssociationSnapshot of Private Innovation Investment in Canada’s Seed Sector
seedinnovation.ca
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
seedinnovation.ca
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