09/14/2012 06:40 EDT | Updated 11/14/2012 05:12 EST

Canadian ministers sign new 5-year deal to up agriculture innovation

WHITEHORSE - The federal government is investing $3 billion to promote innovation and trade in Canada's agricultural sector, but it is also reducing its participation in a savings account program aimed at protecting farmers from bad years.

Agriculture ministers from across the country signed the new five-year Growing Forward 2 agreement that includes plans for innovation, market development and a 50-per-cent increase in cost-sharing initiatives from the federal government.

Federal Agriculture Minister Gerry Ritz told reporters at the close of the meeting in Whitehorse that just as farmers need to constantly improve their business practices, so too have governments made adjustments to help Canada remain a world leader in agricultural innovation and trade.

"With the world population on the rise, there's an increasing demand for a high-quality and sustainable supply of food stuffs. There's limitless opportunity for our farmers and processors," Ritz said Friday. "But like many other sectors in the Canadian economy, a big part of the sector's growth rests in its ability to compete in global markets."

The new, five-year framework agreement will be implemented by April 1, 2013 and will focus on three areas; innovation, competitiveness and market development.

It means research into innovation will be accelerated with the goal to help position Canada as a world leader in innovation investment, Ritz said.

Saskatchewan Agriculture Minister Lyle Stewart said his province signed the agreement reluctantly because of its changes to the AgriInvest program.

The AgriInvest program allows producers to invest 1.5 per cent of their net sales and receive matching government funds to mitigate their risks, but the new program will reduce that to one per cent.

"The decision to sign the agreement didn't come easy as we have opposed changes to AgriInvest after consulting extensively with our stakeholders," Stewart said in a news release.

"However we are pleased funding for crop insurance remains unchanged and the increased investment in strategic initiatives, such as research and water infrastructure, will benefit our farmers and ranchers," he said.

Stewart said producers have also told his government research and innovation is critical if the industry is to grow.

He added the federal government's plan to boost strategic initiative spending by 50 per cent will mean an extra $46 million per year for the province.

Alberta's Agriculture Minister Verlyn Olson noted that the current federal budget includes a $250 million reduction in agriculture spending over the next three years for agriculture and Agri-Food Canada.

"However Alberta producers will continue to have access to a strong and effective suite of business-risk management programs."

The market development program will include developing plans to break down trade barriers, build market success and support the agriculture industry to find new markets.

Ritz said the agreement sets up an Agri-Innovators Committee that would provide expert advice, research and development.

He said the committee would consist of innovators with diverse backgrounds.

"They will undertake a range of activities such as hearing from other industry members, farmers and processors. Innovation can help mitigate risks, whether it's a better kind of irrigation or a more drought-resistant seed variety."

Meeting co-chair, and Yukon Resources Minister Brad Cathers, said the agreement can help support the transformation of the agricultural sector.

"Growing Forward 2 is important for Yukon with its emphasis on investment in innovation and market development," he said.