Sustainable funding for variety development is facing significant questions as the agriculture industry evolves in Canada. During the Agriculture and Agri-food Canada (AAFC) value creation consultation (and variety development discussions as a whole), barley was considered from the same perspective as wheat. There are unique challenges facing barley variety development and advancement. One of these characteristic challenges is reluctance within the Canadian market to adopt new barley varieties with enhanced characteristics. Barley breeding in Western Canada has been facing capacity pressure for the past five years. Three barley breeding centers serve Western Canada: The Field Crop Development Centre (FCDC) in Lacombe, the Crop Development Centre (CDC) in Saskatoon, and the Agriculture and Agri-Food Canada (AAFC) station in Brandon. This research attempts to answer questions on how to address variety development in Canada and build a long-term sustainable breeding model, while effectively accounting for the unique challenges of the barley sector.

Our study addresses four important questions related to investments in barley breeding in Western Canada: What has been the rate of return to the producer and public investment in barley breeding since 1995 when check-off funded research began? How much has the return to barley breeding been reduced by the slow adoption of new varieties by the malting industry? How does Canada compare relative to its major competitors in terms of investment in barley breeding and R&D? What are the future investment needs for barley investment in Canada?

These results indicate that producer funded barley breeding has been an outstanding long-run investment. A B/C ratio of 26 to 1 implies that even after accounting for long research lags, adoption lags, and the time value of money, each dollar of investment on average returned $26 of benefits. The internal rate of return of 32.0 % per year suggest this is equivalent to earning 32% annual return  (plus inflation) on an investment account.

Not surprisingly, faster adoption would substantially increase the return to barley breeding.  As reported in Table 3, Scenario C, in the most optimistic scenario where the highest yielding varieties are grown, the B/C increase 49.4 to 1 and the IRR to 45.9% per year.

Currently Australia is spending about 8 times what Canada does in barley breeding. While it is too soon to see the results of these investments it does suggest Australia is likely to continue to be a very important competitor in the international barley market.  It also suggests that if Canadian barley producers were to invest more in barley breeding they would not be outside the range of international experience.

The takeway from the report is that producers should be confident that past investments in barley breeding via check-offs have made large contributions to their bottom line. The barley commissions and other producer groups should be seeking ways to increase returns through even larger investments.

RICHARD GRAY