With produce prices rising as much as much as 34%, the effects of the California drought are placing pressure on British Columbia’s agriculture market. A reduction in disposable income is forecasted $30-60/month, to maintain the current level of consumption.
I believe the trend towards sustainable local and organic food production, combined with a dwindling supply of affordable fruits and vegetables, has led to entrepreneurial opportunities for British Columbia’s farmers and investors. Historically, a start up produce-company would finance via bootstrapping or sweat equity in a declining agricultural market, but I have confidence that in the current market, local governments would be more inclined to assist with incentives and banks willing to finance farmland business ventures. For the first time in our generation, the local agriculture market is able to expand and provide a competitive advantage over international produce markets, such as in the United States. With a new reliance on our current agriculture production, there should be a trend of moving away from under-utilizing land by developing our best farmland into box stores, and industrial parks. Instead, we should focus on job creation within the rising agriculture market and emphasize nationally produced agriculture. Drought will persist with global warming. As a result, I believe we are witnessing an influx of real estate investors into farmland in Western Canada, where investors are receiving positive cash-flow.
This focus on increased national agricultural production is a “win- win” for the economy. Increased sustainability of agriculture, entrepreneurial opportunities, job creation and a reduction of importing expenses will inject finances back into the local economy and offset the negative impact of the ongoing California drought.
References: http://www.vancouversun.com/health/California+drought+pushes+local+food+prices+higher+with+video/10278895/story.html
http://www.bloomberg.com/news/2014-08-11/california-drought-transforms-global-food-market.htm