A Conversation with A Canadian AgTech Innovator

Mark Olson and I discuss challenges and opportunities for Canadian AgTech

This week I sat down with Mark Olson, an Alberta-based rancher and Canadian innovator working to change how cattle is traced from farm to table through Flokk Systems. Mark is a vocal advocate for fundamental changes to the way Canada approaches innovation, and brings to the table first-hand knowledge of Canadian agricultural potential and experience enacting the change for which he advocates. Our conversation covers the details of Mark’s own entrepreneurial journey, a brief history of Canadian agricultural innovation, Canada’s unique ability to contribute to global food security and thereby project power through food export, and much more.

My goal in this interview was to educate myself about AgTech and to understand the similarities and differences between AgTech and deep tech with respect to the challenges and opportunities for Canada in this space, and the conversation did not disappoint. Mark’s insights highlight several key areas where Canada needs to improve and presents both practical solutions through which this can be achieved and a compelling case for the value of doing so.

Your email client will probably truncate this post. My key takeaways are presented at the end, so be sure to read the web version if you want to get the whole story. Many thanks to Mark for taking the time to educate me on a tech sector with which I had previously not had much chance to interact.

Interviewer’s note: Mark Olson reviewed and approved the final version of the section entitled “Interview with Mark Olson” and had editorial input on that section, with the option to rephrase and expand on the ideas discussed in the interview without changing or removing any intended meaning. The key takeaways presented at the end are my own commentary, and do not necessarily represent his views.

Interview with Mark Olson

Kyle Briggs: Tell me about yourself and about Flokk Systems. How did you come to be a part of it, and what problem are you trying to solve?

Mark Olson: My background is agriculture. I moved to the farm at six weeks of age and I’ve actively been involved in the farm through my whole youth, like every farmer, then spent about 20 years in Calgary studying and then working in the IT domain. Finished up my IT career in senior project management. Then 15 years ago, my wife and I and the family decided to take over the family farm. It really comes down to basic economics–when you can acquire farmland at family rates, you do it. We actively farmed for 10 years but haven't farmed for the last three years. It's just a matter of scale. We don't have enough land to have decent equipment.

Four years ago, a neighbor and fellow lion named Bill Leask, who's still involved with the company, came back from a trade show and said, “I've found something at the trade show that almost does what I've wanted to manage my herd, but it was 3,000 bucks.” With a background in IT and particularly familiarity with open systems, I said, “bet I could build something that does that for less than 3,000 bucks.”

What ends up on your steak–two years before, it was a calf in a field on a farm. There are 8 million cattle and 60,000 ranches in Canada, a $5 billion business, and all of them are run off of little cardboard books. At the moment, we have prototype devices that we've field tested on 10 ranches, managing about 1,000 head.

Kyle Briggs: Looks like the log books pilots use.

Mark Olson: They use these for the same reason you use a pilot logbook: Affordable, not dependent on power, not dependent on infrastructure, works in the cold, works with gloves on, etc. Alternative solutions have tried to adapt phones and tablets and laptops from offices, and it just doesn't work. It's just the wrong environment for those approaches. That's why we think dedicated hardware is key to our value proposition; a handheld, purpose built computer like everyone has seen a stock person using in a store. We provide the same for a ranch, it just is simpler, more robust, and less expensive. Primarily for the user experience it gives, and second for the cost, because not only can we strip the hardware down to the minimum requirements to drive down the cost, I don't pay a 30% tariff to Tim Cook to distribute and run my software.

We also think eventually it'll give us compelling opportunities in the fact that because it's a locked down system, the operator can't intervene. This means we can make reliable and immutable records, which we think will have real opportunities in monetizing carbon credits.

We've proven that we've got the right form factor and the right functionality. We think we've got product market fit. We know we've got some issues, we need some engineering help to get it developed and manufacturable. Like every Canadian startup who has hardware components, we lack capital. The first question is always, “how much revenue do you have?” and our response was “we can't get revenue until we've got some hardware.” So we're stuck.

Kyle Briggs: That is a very familiar story, one that I lived leading up to the sale of my own company.

Mark Olson: We're not alone in this. This is a challenge we all have to solve. We’re a member of Platform Calgary, and there's dozens of ambitious, hopeful people in there building phone apps. And the reason they're building phone apps is not because it's a great solution. It's because sitting alone in your basement for four months with no capital, that's what you can produce. The problem is that you can do that in San Jose and Taiwan just as easily.

Kyle Briggs: For someone who's unfamiliar with the details of cattle operations, what information is your device actually collecting? What happens to it once you've collected it?

Mark Olson: We do the basic core inventory: birth date, gender, the cow the calf was born from, weights if you want to record them. We do pregnancy checking, where you check all your cows in the fall, because if you have one that isn't pregnant, it's not going to have a calf and you don't want to incur the burden of carrying it. We do records of all the vaccinations, records of any antibiotics you have to administer.

We also collect and submit the traceability events. Livestock traceability has a long history in Canada that goes back to the 1940s and managing brucellosis. And in grossly simplified terms, what it means is you need an accurate and independent record of the location of the animal at any time. So if a problem is found, either while the animal's alive, or while you're processing the carcass, you can track back to any other animals that were in the same area so you can do what interventions are necessary, which can range from just inspecting to make sure they haven't been infected, trying to cure the infection, or sometimes, if you're dealing with something highly contagious, you have to destroy the whole herd. The key is to be able to rapidly and reliably determine where the problem is. Basically, every time the animal goes on a truck, you need to report both the departure and the arrival.

Kyle Briggs: The data that's collected, is that centralized somewhere? Is that used by regulatory agencies? Or is that specific to the farmer and used internally for their own management?

Mark Olson: The answer is both. The authoritative version of the database lives on the device itself. That's partly because that solves the data ownership issue, but also because where the cattle are, there's no connectivity, so you have to do it that way. They can then access and manage that for themselves. The traceability data goes to a central repository called the Canadian Cattle Identification Agency.

The core value proposition of Flokk is the integration and transfer of data off the farm. That's the other reason they use paper records: if it's just for your own records, paper is good enough. As soon as you've got to try and send data off the ranch, you have the problem. The traceability is kind of the pressing issue. The whole industry has got an initiative going called Canadian Round Table for Sustainable Beef. Do you ever eat at McDonald's?

Kyle Briggs: Very rarely, but occasionally.

Mark Olson: On the top of the box is the logo CRSB certified. That means that McDonald's has paid a premium price for their ground beef. Their supplier paid a premium to the cutter. They paid a premium all the the way back to the cow/calf herd to certify certain sustainable practices. It's an incentive program for superior product practice. The holdup on the whole thing is cow/calf producers. The reason they don't want to get involved is that they don't want to do the record keeping and reporting.

So that's the core of our business model: You can earn a bit more by having CRSB certification. We'll make that really easy, and we'll take a little cut of that money on the way past.

Kyle Briggs: You mentioned that farmers don't want to do the traceability. Is that just because it's difficult? Or is there another reason for it?

Mark Olson: The relationship between government and independent ranchers is always a contentious one. Add to that the fact that it's the federal government and not provincial and it becomes even more contentious. So there is an aspect of that, but really that's a minority of it.

The main reason it isn't done today is there's no reward for doing the work, and there's no penalty for not doing it. There have been known issues identified with the system since 2013. That led to some draft regulations, which is one of the reasons I got started on this. In 2020, I went to a presentation with a group of ranchers where someone from the CCIA came and talked about regulations these assured us were guaranteed to be taking effect in 2021, laying out the new requirements. Nobody had any idea how they were going to do it, but I was sitting there thinking to myself that I knew exactly how they were going to do it.

A rancher made the comment to us that “I’ll do it when the government forces me to”, and I think that sums it up.

We can't solve all of the problems in the industry. We can't address all of the challenges, but we can drive down the cost and the price using technology to at least take that issue off the table.

Kyle Briggs: You’ve written previously, and I am now seeing come up in policy debates, about issues of digitization. Flokk Systems is working toward digitizing what has been an analog process to this point and you mentioned that you are facing issues with connectivity, making it difficult to do anything digital, unless you have a system like this that can sort of take the intermediate step of working offline. To what degree is this lack of connectivity and digitization an endemic problem?

Mark Olson: It's an endemic problem. It crops up all the time. We're very fortunate in that we're not very far off the Alberta number two highway corridor, which is the main highway running between Calgary and Edmonton. I have better access to connectivity than most of the province. But mobile connectivity completely dies two miles east of here. We have cell tower nodes up and down the highways and nothing in between. That doesn't stop digitization. What it means is you can't use the same tool sets and architectures here that you use in Toronto. So we work around it with local processing and local storage, which is so much more capable and, and cheaper now than a few years ago. You just have to be prepared to use different architectures and use the tools available to you.

The other basic challenge to it all is just basic availability of competent support in the digital space and rural areas. I've got two or three neighbors that I have put up a local Wi Fi network in the yard and converted them over to Starlink, and they can afford it because I do it at neighbor rates. But to bring in commercial connectivity providers is unaffordable.

The other dimension of this is that when companies claim that they can't digitize rural business without connectivity, you have to take it with a grain of salt. The reason connectivity is an issue for them is they want to hold all of the customers data on their central server. They want to have ownership of the data. They don't want to pursue a local processing model, which doesn't have the same attractiveness in terms of fees and convenience of implementation. Some of that complaining about connectivity is because it disrupts economic models, not because it technically disrupts actually being able to provide the service.

Kyle Briggs: I spend a lot of time writing about deep tech, which seems from your description to be a less regulated space than AgTech. What else sets AgTech apart as a class of technologies?

Mark Olson: One of the beauties of operating in the agriculture space is we're one of the least regulated domains in the world. We actually have quite a light regulatory burden. We look at the regulations as a motivator for our prospects to examine us.

I'm going to secure your indulgence for a minute on a bit of a history lesson.

Ag tech innovation is really a fundamental contributor to the Canada we know today. The modern Canada we know today came out of the development of Marquis wheat in the late 1800s. Marquis wheat was productive enough that it enabled surplus wheat to be produced in the prairies using horses, but was productive enough that it enabled surplus for exports. That's what really transformed Canada from a few barely self-sufficient colonies along the St. Lawrence and outposts on the Fraser to a continental and exporting nation. For much of Canada's history, Canada's commercial center was not Toronto, it was Winnipeg, because that's where the wheat from the prairies was shipped and brokered. So AgTech innovation is core to our history.

The success of that led to deep involvement of government in agriculture and AgTech innovation in the development of Canada right through into the 70s or 80s, but they've withdrawn from that role. The research aspect of it is still there. We still have the best researchers and knowledge in the world. But we've completely dropped the ball on what used to be called “extension”, the process by which the government took innovation right from the lab all the way through to the farm. That part has all disappeared, and we’ve done a poor job on commercialization.

What makes it different today? One of the themes that comes up all the time is that the default for any kind of innovation is the venture capital model. It doesn't really work well for a lot of things. It's terrible for agriculture. We only get one cycle a year to test on, so development times are much longer. Agriculture is an industry of extremely tight margins and is extremely risk averse and cost sensitive, it does not readily produce companies attractive for acquisition.

When I first got into this, there were guys coming out of the oil patch here in Alberta because the oil patch was in their doldrums and they said, “That's easy. We'll just go repackage this and sell this to agriculture.” What they don't realize is that returns that would get you laughed out of an oil and gas pitch is the best year agriculture ever had.

On the other hand, the total addressable market is huge. There's $5B worth of calves. The whole beef industry is like $50B, $60B. It's a big industry. There's huge potential, but we are struggling to find a way to address it with technology because the old government driven model has passed and the venture capital model that we keep trying to apply to everything is even worse. We have some capital providers in the space in Canada, but, like the rest of the innovation space, they're really interested in growth companies. So there is capital available at the growth stage. And if you want to do research, there’s funding, but in between those, in the commercialization and pre-revenue development phase, it’s very hard to find any capital.

Kyle Briggs: I spoke a few weeks ago to a farmer on the east coast who was developing drone technology for use in AgTech. They told me their big struggle was finding farms interested in adoption. You spoke to the risk aversion and very narrow profit margins that characterize AgTech generally. Are these the issues driving challenges with adoption? Is that consistent with your experience with Flokk Systems?

Mark Olson: One of the big advantages we have is that we came from the ranch. Everyone on the team has a ranching background. We’ve had no trouble finding people keen to pick up the product and test and evaluate it. We've been talking to thousands of ranchers and we still occasionally get an email asking if we are ready to sell them. So we do not think adoption is going to be a challenge. The key thing is that you've got to start from the rancher's perspective and the rancher's needs. A lot of companies overestimate the technical support resources and the disposable cash available. One of the AgTech innovation leaders in Canada told us that we had oversimplified our product. I'm selling to cow/calf ranches. We can’t oversimplify it. I think that kind of shows where some of the disconnect is.

I ran into a phrase a while ago: “when it comes to farming, logistics trump's potential each and every time”. I think that's where the problem arises, and drones are a pretty good example. The rancher looks at that and wonders if it’s really going to work every time they need it to.

Kyle Briggs: You've been a strong advocate for action, and I think emphasis on the word “action”, aimed at securing and exploiting Canada's many natural advantages in the ag tech space. You've called that Western Canada specifically as being important for global food security and an opportunity for Canada to play a key role in that. You've also pointed to the situation in the US as being a driver for urgency and addressing this. What combination of factors can you identify as being key to Canada's advantage? How are we falling short of actually using them?

Mark Olson: There are eight factors that go into determining whether a country has a significant capacity to add to global food exports.

1. Cultivatable land with capacity for production intensification

2. A small population, providing surplus food available for export

3. Located at a temperate latitude, reducing the impact of, and perhaps deriving benefit from, climate change

4. Plentiful natural gas (to manufacture fixed Nitrogen (NH3/NH4) fertilizer)

5. Commercial and governance institutions that are stable and trustworthy

6. Labour availability

7. Fresh water

8. Potassium fertilizer

9. Phosphorus fertilizer

One nation on the planet holds eight of the nine factors, and that’s Canada. The last factor is being resolved through a new phosphorus mine in Quebec. We are sixth in total cultivable acres, but our population is between a tenth and a hundredth of our competing nations. When you actually look at cultivable acre per individual, the only country in the world that is better than us is Australia, but Australia has a third of the freshwater as Canada. Canada holds all the cultivable land outside BRICS that will not be compromised by climate change.

The current situation where the enormous productivity of the American plains drives down price is driven by groundwater extracted from the Ogallala aquifer. They're already losing acres at the periphery because they've drawn it out completely. So it's not sustainable.

We are sitting here with lands whose productivity will be increased by warming. We drain an eighth of the planet. We have freshwater resources. It's going to be contentious and expensive to move it, but at least we have the option. No one else out there has the option, except Russia, and I'm not going to go into all the details of the reasons why Russia is not going to be a significant contributor to global food security. Even if they do resolve all the economic issues, they have a demographic catastrophe that there's no recovery from.

There are huge opportunities here for Canada. This morning, RBC issued a report about agriculture exports, so we're not the only ones hollering at this. [Editor’s note: see more of Mark’s thoughts on this report here].

As to why we are not pursuing this opportunity, fault number one is that agriculture has little presence in the lower mainland and the Golden Triangle. Second, our enormous bounty in food has allowed Canada to be complacent of agriculture. It doesn't matter whether we are highly productive or not relative to our potential. We've got so much land that we can cheaply serve our domestic markets and still have significant exports, but productivity is not primary to Canadian agriculture, unlike in the US, where productivity is driven by subsidization, or Europe, where it's subsidized to maintain food security.

We have huge unrealized capacity in Canada, and it will primarily come through irrigation. We have hundreds of thousands of acres where you could increase productivity by nearly an order of magnitude if you can source water for irrigation.

Kyle Briggs: So what's the bottleneck in pursuing that? Is it just a lack of will, given what you said earlier about having abundance without efficiency? Or is there a missing capital requirement, or is this just not understood by the powers that be?

Mark Olson: When Agriculture does come up in the Globe & Mail it is mostly whining because eggs and milk are a little bit more expensive because of supply management. We've had the luxury of approaching it tactically as a domestic supplier. We’re only just starting to awaken to the potential of agriculture as a strategic asset through exporting.

This is the route to gain leverage over the United States. The US is a net food importer. The US has been a net food importer since 2018 and it's been increasing rapidly. It was $50 billion in imports last year. At the moment the primary reason for this is constraints to illegal immigration that is constraining labor capacity, so it's mostly in fruit and vegetables driving their imports at the moment. But water is inevitably going to drive more and more food imports. When Donald Trump talks about wanting Canadian water, it's not the water itself at issue, it's the food.

Kyle Briggs: In your experience as an AgTech innovator, what resources are available to you in Canada and where are the key gaps?

Mark Olson: We are fortunate here in Alberta to have an organization called Results Driven Agriculture Research (RDAR). The origins of RDAR is that our provincial department of agriculture used to invest directly in research. You can draw a line from that back to 1896 and Marquis wheat. That's why the Department of Agriculture was funding research.

The beauty of RDAR is that they moved it to an independent organization with a blended public-private governance body. They are doing really good quality research because they are balancing the academic side with the need to derive downstream value.

We got $50,000 funding from RDAR. There is a model there that starts to show us how to get to success. What we need to do is find a way to move that model of blended governance and blended resources into the early stage capital side. RDAR is doing all this great research, but just like us, it sits there because there's no risk-tolerant capital to do the pre-revenue commercial development.

We have Startup TNT, which is an early stage capital club. They've done some AgTech stuff and are making sincere efforts, but like everyone, they struggle to attract the money to get it done.

The real issue is that early stage, is that pre-revenue capital. We're not alone in that regard. You have alluded to the same thing in all of Canadian innovation. We need to do a much better job of starting from the commercial need and from there working back to the capital and research. Because we're coming up with great notions, but we can't actually get them to market.

Kyle Briggs: Digging a little bit more into RDAR, you mentioned this is a public-private governance. Is this research being done at universities or by industry partners?

Mark Olson: They are a funding body, they cut checks. So the research can be done anywhere. A lot of it is done at universities, but we're a perfect example of the kind of thing they support. We were a three person company and they funded validation of our product on the ranch. We wouldn't be ready to start pitching to investors without RDAR investment. RDAR has programs that will directly fund producers to evaluate products on the farm, which as far as I know is unique in Canada, and enormously valuable. That's how you get over the problem of the example of your entrepreneur with the drone based system: provide some money to buy the thing and actually try it. Because ultimately, in agriculture, word of mouth is what drives the market. The first 100 sales of Flokk are going to be tough. But as long as the product works, word of mouth will take it from there. You've got to get over that first first hump, and to RDAR’s credit, they're helping do it.

Kyle Briggs: You mentioned RDAR used to go a bit further toward commercialization. What were they doing previously that they're no longer doing in terms of getting innovations to market?

Mark Olson: To be clear, that would be the government of Alberta, not RDAR. RDAR was formed to take the research side out of direct control of the government.

I can remember as a kid, half hour drive away, in Olds, there was a district agriculturalist (DA). If you had a problem with a weed or a crop issue, you'd call the DA they would come assess and give advice. During the winter, the DA ran seminars on new crop varieties and advances in agriculture. They were that direct connection to get innovation from the lab and from the test farm onto the field.

The other aspect of agriculture is that historically it was an almost IP-free domain. Public investment developed new crop varieties and those were passed on to anyone who could then produce it. You could get new genetics for an incremental cost over the old varieties. There wasn't that much cost over regular grain, and once you grew the first crop, you could keep the seed yourself. It's all IP protected now, so the opportunity for that kind of public involvement has gone away, but Canada hasn't stepped in to provide the private capital to replace it.

Kyle Briggs: Digging a little bit deeper on the “IP-free” comment, is IP relating to crop genetics something that has historically been unnecessary simply because Canada is uniquely positioned to use it? Is this a space where there is less need for IP protection than in other areas of technology simply because we are better positioned to benefit from its use than anyone else?

Mark Olson: That's an interesting question. It comes back to the historic role that agteAgTech innovation took in the building of this country, which established what was for a long time an unquestioned perspective that AgTech innovation should be developed using public funds and then be IP-free for the broader good.

The original model was that the quicker we get higher productivity into the farms, the more surplus there is available for export, the more we're going to make as a country. That basic premise holds true today. It's just that agriculture relative to oil and gas, for example, has become economically and culturally less significant. When the population was 60-70% rural, there was a lot to be gained in AgTech innovation. Now, votes get lost if you start trying to talk about AgTech innovation.

As far as IP protected crops go, it happens to all be controlled by US companies. If we're going to use our potential in agriculture strategically to capture an enormous economic opportunity, that's great. But if we're going to use this to gain some leverage over the Americans, we're going to have to develop alternate products that are optimized for our needs and for which Canadians own the IP.

Kyle Briggs: You've expressed frustration with a lack of a cohesive strategy with respect to agriculture innovation at the levels of provincial and federal government. Specifically, I've seen you talk about the fact that the organizations that are discussing these challenges rarely engage with innovators and farmers directly. Could you elaborate a little bit on what's driving that fragmentation and what we need to to bridge that gap?

Mark Olson: There's absolutely a disconnect, and there's a disconnect between the academic community and the things they find interesting and the harsh realities of what is realizable on a farm today. It's a very different set of problems. It's one of the reasons I keep hammering away on the opportunity with RDAR, because I think the problem lies in the governance. If you get a group of academics to evaluate proposals, the proposals that are attractive are the ones that are intriguing to academics. There’s often not much connection to the urgency perceived from the producer, practical capacity to actually apply the results of research, or the pressing problems of the moment.

We have seen about $2 million going to research projects in the livestock digitization space that’s either redeveloping stuff that's already available or building strategies for problems we've already solved. If those funds had come to us as a pre-revenue investment, we'd have solved it in a few months by putting products into producers hands.

I think another dimension of this is a kind of willful ignorance about how all this research actually gets onto farms, as though it's some magic thing that doesn’t need to be thought about in advance. I think that there's a core message you and I are both hammering, which is that Canada can't afford this anymore. We all have to think about how to actually get it onto the farm and into production.

The last piece of it is that a lot of research is still operating under the old model. They didn't have to worry about getting the innovation onto the farm previously because there were 400 Department of Agriculture staff that worried about getting innovation out onto the field. Well, they're all gone.

Kyle Briggs: That disconnect persists across pretty much every academic field. As you said at the start, there's no reward for doing the commercialization, and there's no punishment for not doing it. Until that changes, it's going to continue to be a problem.

Mark Olson: There’s this Pollyanna idea that one way to launch Canadan companies is to tweak procurement so bureaucrats will purchase in-development products, or that we’ll give money to government startup investors to do it. Anyone believing that has never actually dealt with bureaucrats–they're the most risk averse creatures on the planet. It's not to say it can't be done, but you’re dealing with a whole different culture and perspective.

The idea I've floated is that we need to turn the whole thing upside down. Government funding bodies need to have someone like me come along and say, “I can prove product market fit. I can identify 60,000 potential customers.The entrenched competitor thinks this is a hundred million dollar opportunity, and I’ve got the best widget to do it.” And they say, “yep, here's three million dollars.”

$2M is for commercialization. The other million is for me to go hire researchers to figure out how to do it, which is to say to drive the research starting from the needs of the innovators and the end users. I can hear the cries of anguish from faculty clubs across the country from here.

Kyle Briggs: That gets into an important discussion around demand-driven support for innovation. One of the things that makes the SBIR so effective in the US is that it is driven by pull arising from specific needs. If I understand where you’re coming from correctly, the idea is basically to stop coming up with a solution and then going to find a problem to apply it to, and instead use problem-driven demand to guide investment.

Mark Olson: Absolutely. Every city in Calgary thinks they can replicate Silicon Valley in Canada, but think that some mediocre hot desking and a few courses is all it takes. Silicon Valley wasn't the creation of a few brilliant nerds. Silicon Valley was the outcome of billions of dollars in Cold War research funding. You had a bunch of newly minted millionaires who had all these nifty tools that wanted to find something else to do with them and had the money to go find that something. If you don't have that aspect of Silicon Valley, if you don't have substantial capital, aggressively looking for opportunities, it will not work. All the warm fuzzies and half-assed courses trying to turn people into MBAs overnight ain't going to do it.

Kyle Briggs: On that note, are there programs or groups or even countries that are effective in delivering AgTech innovation? What are they doing differently that makes them effective?

Mark Olson: There's certainly American efforts in this space. I'm not that familiar with them, but the risk tolerant capital aggressively seeking opportunities makes a huge difference in what they can accomplish. Within Canada, Saskatchewan is taking this much more seriously and doing a better job. Their early stage investor tax credit relative to Alberta makes a big difference. I’ve been out to a few of their Cultivator events–very impressed. They're much better connected in their innovation processes with the actual companies.

Kyle Briggs: What could both the private and public sectors be doing differently? Are there specific policy initiatives that could be put in place that would increase Canada’s ability to deliver on AgTech innovation?

Mark Olson: The fundamental change needed is the same here as in all other areas of innovation: it's risk tolerant, reasonably patient, early stage capital. We've got the same problem as everyone else. As for public money, we tried that, but STDC ended up an out of control monster that we had to take out behind the barn and shoot. You've identified many domains that do a blended public-private capital and governance approach, and I think that's the route to explore.

I can remember, as my kid, my dad proudly showing me his Alberta Energy Company certificate. Alberta was the poorest province in Canada. We had gas reserves but there was no capital to develop it. Peter Lougheed established a company called the Alberta Energy Company, and it was a blended 50/50 public-private capital partnership. Alberta Energy Company basically created modern Alberta.

In many ways we don’t have to figure this out. Peter Lougheed figured it out for us 50 years ago, we have the model. Public money diminishes the risk and pulls in private money into the space.

Share the risk, but have private sector evaluation to provide pragmatism in terms of the actual products. There's huge federal money that has gone into the sustainability space in agriculture, but it's all gone into the research. The challenge of sustainability is not on the research side, it's in adoption. If you think Alberta farmers are resistant in general government, try to get them to engage with a federal bureaucrat about sustainability issues. The research is pointless, it all comes down to the implementation. As I keep telling people, if you are trying to engage farmers in sustainability, you'll find a lot of principled objections disappear in a hurry once you put hard money on the table.

Kyle Briggs: In one of your previous articles you commented that it's unfortunate that you can't unconditionally recommend that your son stay in Canada and continue in your footsteps in farming. As a mentor of startups, I've had a similar experience where the best advice I can give someone is to do it elsewhere. Putting a more positive spin on it, as someone who has stayed and built and tried to innovate in AgTech in Canada, what advice would you give others who are determined to do the same?

Mark Olson: Start from a need. Go talk to a rancher, go talk to a farmer. They know their frustrations, they know their needs are and so on. You're going to end up back there selling to them, so you need to start by talking with them. The fact that their need is not trivially easy to address is where the opportunity lies. That's not unique to agriculture and frankly where a lot of tech falls off the rails.

There's a huge change happening in our rural communities and the foundation of it is that the cost of land used to be directly related to what the debt a family could carry through producing food on it. That relationship is completely broken. There's no way to earn enough from the productivity of land to start paying for it. That is utterly changing the nature of rural Canada and rural communities.

The flip side of it is if our thesis is correct that there is huge opportunity in food production, which is mostly in rural Canada, then there are huge opportunities in rural Canada, but we have to figure out how to disconnect wealth creation in rural communities from land ownership.

If we're going to maintain vital rural communities and have the people in place to serve these opportunities, we have to find other ways to have quality, fulfilling, wealth generating activities in rural areas. That's why I'm here and that's why my son is studying digital agriculture at Olds college. We're trying to find a new path to build strong and viable companies in rural areas that are not directly involved with farming, because we think there are huge opportunities there, but the support mechanisms are not well set up to assist. If I was sitting in a university lab trying to do this work, I'd find way more support. That’s backwards.

The Beringer government report on innovation in rural Alberta was very well done. Lots of potential, but commissioned by the NDP, so the UCP has buried it so deep no one will ever find it.

Kyle Briggs: Is there anything you wish I had asked that I didn't or anything you'd like to dig into based on what we talked about and elaborate on?

Mark Olson: One of the things we struggle with in securing this huge opportunity for Canada in terms of food and food exporting and AgTech is a cultural disconnection. Our media companies, our politicians, even those that serve rural areas, all live in urban centres. Primary agriculture has become such a small percentage of the population that we don't have the numbers or voice vice to bring forward the potential we see economically in pursuing this opportunity, and strategically in establishing Canada as a food power. There’s an article on Wikipedia that talks about food power, and Canada is one of three nations in the world that could leverage food as a power because of our export capacity. If I have two minutes on a soapbox, it is to get across that while Canadian agriculture and food has served our domestic market well, and will continue to serve that domestic market well, there's a huge strategic opportunity where Canada holds sustainable and irreplaceable competitive advantage and there are not many domains where we hold that.

Key Takeaways

Many of the challenges that Mark identifies in AgTech innovation are universal to Canadian innovation generally. As with almost all low-TRL technologies, the lack of a capital bridge in the pre-revenue development phase is a barrier to getting research out of the lab. Mark also identified regulatory uncertainty and failure to directly engage as an early adopter on the part of the various levels of government as key issues preventing agricultural innovation from achieving its potential impact in Canada, issues that came up in my previous interview with Lisa Lambert on quantum technologies.

While any deep tech sector requires patience, the agriculture sector takes this to its logical extreme, being limited in pace by the seasonal cycle that governs agriculture. Patience is key, and venture capital model that is so often the default funding source for innovation is poorly suited, especially given the relatively low margins available in agriculture. On the other hand, the value of AgTech innovation at the level of the country is not limited to monetary return on investment for a few investors: as we discussed, Canada is uniquely positioned to project power through food export, a fact that is only very recently even being discussed. With our neighbours to the south in chaos, there has never been a more important time for Canada to be able to project non-military power. Taken together, these all point to the necessity for the public sector to provide the bridge by which agricultural innovations makes it to market.

While this is easier said than done, Mark’s commentary gives clues as to the path forward.

While much of the innovation debate in recent months has centered around the use of demand-side levers such as procurement as a means to support innovative businesses, the Canadian government has not historically been particularly effective in this way, and procurement is functionally useless in the pre-revenue stage or for areas, like farming, where the government has no active need for solutions.

In these cases, a modern, digitized version of the “district agriculturalist” that Mark remembers from his childhood may be the answer. The role of government in innovation at the time was to provide a central touchpoint where innovators were connected with farmers. By partnering with the granting agencies that fund the research and RDAR and equivalent organizations that are funding the innovation directly to maintain and make publicly available a comprehensive ecosystem map of emerging technologies, the Canadian federal and provincial governments could be powerful forces to connect innovators with early adopters, effectively driving procurement without necessarily actively procuring solutions themselves.

This approach generalizes to innovation technologies in any field, which so often suffer from issues of discoverability. Even in cases where the government has no direct need for procurement, a secondary form of procurement that involves providing a single source of information and connection between innovators and early adopters would be tremendously valuable if (and only if) built in close collaboration with both the innovators and the early adopters.

Mark is also a proponent of public-private partnerships in driving increased risk tolerance on both sides of the table, a topic about which I have written extensively in other contexts. None of this is new. It works elsewhere presently, and it clearly worked in Canada in the past. Models exist that can be imported and easily adapted, or updated from past practices, if only the will can be found in the public sector to do so.

The discussion around old means of bringing AgTech innovation to the field also touched on a key issue that finds its way into any innovation conversation: IP retention versus open innovation. While the current focus of most of the debate is on finding ways to ensure that Canada keeps control of IP, Mark raises an interesting counterpart that suggests a more nuanced approach is warranted in pointing to a history of open innovation.

IP has no intrinsic value. Rather, value creation from IP is gated by the means to operationalize it. Given the inevitability of some degree of foreign direct investment given Canada’s relatively small, open economy, it seems wise to consider taking an open approach to development of technologies in which Canada has a competitive advantage with respect to its use, while taking a more control-oriented position on technologies in which we lack that advantage domestically. Because of Canada’s many natural advantages in agriculture, an open approach to AgTech innovation may make sense. As long as the IP relating to a new crop variety, for example, is accessible (as opposed to controlled), Canada could in principle use it to greater effect than any other country.

This idea of competitive advantage and the ease with which IP can be operationalized seems like a reasonable litmus test for the necessity of IP retention.

All of this comes to a head in the face of American threats (a sentence I honestly did not expect to ever have to write down, but here we are). As Mark points out, food security is key to gaining leverage over the United States, as we have vast untapped capacity for production while that of the United States will decline. RBC’s recent report, referenced by Mark above, tells the story clearly, and puts AgTech innovation at the top of the list in terms of what needs to be done to realize this potential.

Finally, Mark raised a key point on farmers and innovators having a relatively weak voice. Efficiency drives a weakening of sectoral voices as fewer people and organizations are required to deliver results. If there is any lesson to be learned from the chaos to our south, it is that we should be careful to not conflate the value of an idea with the volume with which it is expressed.

Agriculture is core to Canada’s past, present, and future. We would be wise to listen to what our producers are telling us, at any volume.