Candid Conversations at Canada 360- Chuck Magro

Yeah, sure. So that's a really good characterization. And the reason for that of course is that Nutrien's only actually this is our fourth year of operation as Nutrien. So we are the product of the merger between PotashCorp of Saskatchewan and Agrium. And so we have roots in Western Canada. We are the largest fertilizer producer on the planet. So we are the largest fertilizer producer with about 30 million tons of global capacity. But we're also the world's largest agricultural retailer. So the way we think about our business is, I like to say we go from the ground to the grower. So we make products and services that farmers need to grow healthy, abundant, and today now more than ever, sustainable food. And we have the distinct privilege and honor to work with about half a million growers around the world every year. We're delighted that they respect us so much to honor us to work with us. And we would be considered one of the largest – the area we call it is crop input – so we'd be considered one of the largest crop input companies in the world. And like I said, proudly centered here in Western Canada.

Yeah, for sure. So you're right the way you characterize it. Agriculture's always been very important and a major contributor to the Canadian economy. So there's no surprise there. In fact, if you look at Canada, we're really one of a few – a handful of countries globally that export food and fertilizer. So it's always been an important part of the economy and it will always continue to be an important part of the economy. I think when you look at even the global pandemic, what you will find is that most major commodities – whether you look at oil or gas or iron or nickel – most of those commodities declined pretty rapidly last year, whereas agricultural commodities and fertilizer actually demand increased during the pandemic, and we expect the demand to continue to grow actually in 2021. So this is an important part of I think Canada's recovery – it will be what we do well, right? We produce high quality safe food and fertilizer and we move that around the world. But I think there's an even more interesting opportunity for Canada to really turbocharge its economy, and it has to do with agricultural technology. So Canada is a growing what we call ag tech market, competing with many hubs around the world. And ag tech, there's tens of billions of dollars now being poured into new technology for agriculture. And I think Canada really needs to work on being a major ag tech hub. So it's not just the production of food or fertilizer, but it's how technology is being used to either drive productivity gains – so producing more food with less resources – and then of course the whole area of climate change and impacting positively how we call it sustainable agriculture. So how can we use new technology and innovation to really up our game as an industry in what we call sustainable agriculture, so producing more food with less water, less land, and most importantly now I think less carbon.

Yes, well look, I think the future is here. So I think part of the recovery will be that we're going to see a continued increase in demand for food and for fertilizer. And our existing production of both of those sets of commodities, I think, will naturally increase and that will help drive and bring the Canadian recovery out of where it's at today. But I want to be super clear: the technology that's being used in Canada – Canadian farmers today are leaders in sustainable food production. And we've been using technology that we call precision agriculture technology or variable rate technology, where we test the soil, we only give the crops what it needs when it needs it. These are tools and techniques that have been used in Canada for some time. And there's still major pockets of the world that don't use the technology. So there is a market here and now for us to move that ag tech around the world and to help developing agricultural markets become more sustainable. So I see this as a tremendous opportunity for our economy and for Canadian agriculture to be branded as a global leader, because that's where it deserves its place. And it'll be a mix of products and services that we do a very good job with, but new technology should be a growing part of that story for Canadian agriculture. It's also a critical contribution that Canada can make to the rest of the world in terms of fighting poverty and hunger around the world.

Sure. So look, we're really excited about this new program we've just launched. And just to set the stage: we've got a planet that has about seven and a half billion people on it today, and by 2050 there'll be close to 10 billion. So we have to find a way to feed two to two and a half billion more people. And we know that the answer isn't just deforestation and kind of hurting our environment, whether it comes from water usage or land. So we do need to figure out a way that we continue to drive up our productivity and to feed the world. But at the same time, we do know that agriculture is a contributor to climate change, and it's one of the largest contributors in fact. So the industry needs to think really carefully about how do we feed all these people and positively impact the environment from a climate action perspective. And we've studied this now for several years, and our view is quite clear: we need to use capitalism. We need to actually look at building a carbon framework where farmers will get paid. So carbon is not – today in most jurisdictions including Canada, carbon is a cost on their expense statements for farmers. And now we want to move that and transition it from not only being a cost to being a revenue stream. And so we call it carbon farming. So think of a world where farmers are of course paid to grow crops, the crops are healthy, they're nutritious, and of course they're needed around the world, but they're also paid to sequester or abate carbon. Because there's three and a half billion acres of farmland around the world today. So farmland represents one of the biggest carbon sinks we have as a planet. And if we can change farming behavior through capitalism and through building a proper carbon marketplace, that could really change the very fabric of farming. So we announced the program late last year. We're very excited about it. Over the last six or seven years we've built a set of tools that we believe are game-changing for farmers. So we have the capability to build a digital model of a farm where farmers can calculate and predict how much water they consume, how much carbon they emit, and how much carbon they sequester in the soil when they use sustainable farming practices. We also built up smart climate products and services for them that they can use so that they're more successful in abating and sequestering carbon. So we think we have a technology solution. And what we're doing in 2021 is we're piloting the program on about a hundred thousand acres in Western Canada and in select states in the US. And then we'll fully roll up the program in 2022. And this is an open program. So this is a program where we're actually calling on the industry to join us. We want all the upstream and downstream players to be part of this, because we know that climate is such a big opportunity and challenge for the industry that we can't go it alone. And we would welcome partnerships from the entire value chain. So we're really excited about the program. We think that this is going to be game-changing. It's also needed now. What's missing is policy. We need a framework so that we can calculate the carbon credits, and then of course we need to build the economics around those credits.

Thank you very much. It's been a pleasure.