Putting Globalization and Concentration in the Agri-food Sector into Context

Current Agriculture, Food & Resource Issues

Number of establishments Employment Cash Receipts

Figure 11 Canadian primary agricultural statistics - number of establishments,
employment levels and cash receipts relative to 1991

Source: Strategis Canada

Where there are no countervailing forces, firms dealing in commodities have been,
and will continue to be, driven by pressures of price. Industry players must grow to
achieve economies of scale and take advantage of cost-saving technological innovations.
With the exception of very rapidly growing industries, the result is increased
concentration, as has been evident in the North American meatpacking and grain
industries. Unfortunately for the Canadian rural landscape, this phenomenon applies
across much of primary agriculture (figure 11), where output has risen while firm
numbers and employment have fallen.

However, where there are opportunities for innovation and product differentiation the
outcome is different. Although many global corporations continue to expand, new product
opportunities translate into new companies. In such industries, in spite of a significant
number of acquisitions, the number of companies continues to increase. This has been
particularly evident in the food-processing sector, which has shown considerable growth
in firm numbers (figure 12).

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