Canada's Role in Global Food Security: A Look at the Lentil Industry

Morad Alcakatib built a $3.2 billion agricultural empire from his basement, showing how Canada's protein powerhouse navigates tariff wars while feeding a hungry world.

Key Takeaways

• Canada exports approximately 50% of the world's lentil trade, making it crucial to global protein security as 800 million people face daily malnutrition
• AGT Food and Ingredients exemplifies extreme vertical integration, owning everything from rail cars to processing facilities across five continents
• Modern Saskatchewan farms operate at unprecedented scale with individual families managing up to 300,000 acres using precision agriculture and full-time IT departments
• The next 40 years require producing the same amount of food as the last 10,000 years of civilization, with Canada expecting 20-30% yield increases through technology
• Agricultural trade politics center on the fundamental tension between food security (requiring local production) and food affordability (requiring global trade flows)
• Tariff disruptions create supply chain pivots rather than business collapse for diversified agricultural companies with global manufacturing footprints
• Shipping container balance drives global trade flows - containers must return full, making agricultural exports dependent on manufactured goods imports
• Consolidation continues accelerating in farming, where 4,000 acres was considered large in 1978 but now requires 12,000+ acres to sustain a family operation

Timeline Overview

• 00:00–15:00 — Introduction to Morad Alcakatib and AGT's transformation from basement startup to $3.2 billion global agricultural empire; Canada's dominance in lentil exports
• 15:00–30:00 — Global protein crisis analysis; comparison of protein content across crops; world food security challenges requiring massive production increases
• 30:00–45:00 — Precision agriculture revolution in Saskatchewan; yield improvements through GPS technology, soil sampling, and sustainable crop rotation practices
• 45:00–60:00 — Vertical integration strategy including rail ownership and global processing facilities; complete supply chain from Saskatchewan farmers to Middle Eastern consumers
• 60:00–75:00 — Trade policy impacts and tariff mitigation strategies; agricultural protectionism as universal government imperative for food security
• 75:00–90:00 — Infrastructure investment needs for trade diversification; shipping container balance requirements; scale consolidation trends in modern farming

Canada's Protein Powerhouse and Global Food Crisis

Canada has emerged as the world's dominant supplier of plant-based protein at a time when global malnutrition creates urgent demand for high-protein crop alternatives to traditional grains.

• Canada controls "somewhere around 50% or more of the world trade" in lentils, representing a massive shift from traditional growing regions that "grow them and consume them" to export-oriented production systems
• The global protein crisis affects "800 million people who are malnourished on a daily basis" with "over two billion people who are food insecure" while "18% of children in India are stunted due to protein deficiency"
• Traditional staple crops provide minimal protein with "rice at 6% protein, corn 8% protein" compared to pulses offering "lentils 22% protein, faba beans 34% protein, chickpeas 26% protein" creating entirely different nutritional categories
• The scale of required production increase is staggering: "in the next 40 years we have to produce the same amount of food that the world produced in the last 10,000 years of civilization"
• Canada's competitive advantages include "northern hemisphere that ultimately is more resilient on climate change, we have arable land and water and we have the best farmers in the world with technology and innovation"
• This positioning creates "generational economic driver for this country" as global protein demand intersects with Canada's natural resource advantages and agricultural expertise

From Basement to Billion-Dollar Vertical Integration

AGT Food and Ingredients represents extreme vertical integration in agricultural supply chains, controlling everything from farmer contracts to consumer distribution across multiple continents.

• Morad's transformation began as "a 27-year-old young entrepreneur" who "quit my job in government at the government of Saskatchewan and moved to the basement of my house" to build what became a "$3.2 billion in revenue" company
• The integration strategy encompasses "46 manufacturing and processing facilities in five continents around the world" with "3,600 employees" serving "110 countries actively"
• Transportation infrastructure ownership includes "650 kilometers of shortline railway" and "the Saskatchewan government grain car fleet" plus "13 locomotives" creating competitive advantages in getting products to market
• The complete supply chain demonstrates extraordinary coordination: "farmers in Estston, Saskatchewan will deliver to our location at Estston, we'll take that grain, we'll put it into a rail car that we own" through to final processing and packaging
• Processing capabilities span the full value spectrum: "we clean them, we size them, we peel them, we split them, we can them, we package them" and "fraction them into protein, starch, fiber, flowers"
• This integration recently monetized through strategic divestiture where AGT "sold it for $192 million to an infrastructure fund in the United States and then we contracted them back to provide a service for the next 20 years"

Precision Agriculture Revolution and Productivity Explosion

Saskatchewan farming has undergone complete technological transformation, moving from intuitive farming methods to data-driven precision agriculture that dramatically increases yields while improving soil health.

• Traditional farming involved farmers who would "go out and kick the dirt, put his hand into the soil, have his wife with him and say, 'What do you think? Should we go?' And she'd say, 'Yeah, let's go'"
• Modern precision agriculture employs "soil sampling, analyzing the soil and the nitrogen in the soil, precision weather stations that are measuring moisture" combined with "GPS systems giving the farmer the exact placement of seed fertilizer in a single pass"
• Zero tillage practices use "air channels, we're putting the seed in a precision basis to maximize the yield to lower the amount of nitrogen fertilizer being used" while "saves inputs and lowers the carbon intensity of our agriculture"
• Yield improvements are dramatic: "7 to 10 million additional tons of grain from the same amount of acres" representing "20 to 30% yield increase over the next seven years" from current baseline of "30 million tons"
• Sustainable crop rotation solves historical problems where "farmers had to leave their soil to summer fallow because the nitrogen fertilizer that they used in canola was so heavy that the soil needed to replenish naturally"
• Current three-crop rotation system plants "one year wheat, next year oil seed like canola, then year after that they'll plant the legume that will fix the nitrogen" creating regenerative agriculture that has been practiced "for the last 40 years"

Agricultural Trade Politics and Food Security Imperatives

Every government faces fundamental tensions between protecting domestic farmers, ensuring food security through local production, and maintaining affordable food prices for consumers, making agriculture universally political.

• Agriculture represents "the most political business in the entire globe because farmers have to be protected by governments that are elected" while "food inflation and food security are paramount considerations in the health, wealth, and security of every nation"
• The civil stability connection is direct: "When a baby is hungry, they cry. When an 18-year-old man is unemployed and hungry, they protest" making "available food" essential for "civil obedience in the world"
• Food security drives intelligence policy since "US food security is a foundational part of US intelligence and foreign policy" requiring governments to "allow them to flow" despite protectionist pressures
• India's tariff policies exemplify sensible domestic protection where "22 million tons of production of pulses in India should become 35 million one day will still not even keep pace with their domestic consumption"
• Seasonal tariff strategies show sophisticated policy coordination: "Turkey has been doing this for decades, from May until September they have a lentil tariff on to protect their domestic price, September they take it off to protect against food inflation"
• The North American integration demonstrates agricultural interdependence where "31 US states have Canada as their largest trading partner" and "the pasta on the shelves of the US consumer come largely from durum wheat in western Canada"

Tariff Mitigation Through Global Supply Chain Flexibility

Agricultural companies with diversified geographic footprints can adapt to tariff pressures through supply chain reallocation rather than experiencing business disruption, unlike more concentrated industries.

• Market diversification provides tariff resilience since "one of the key things to having strength in a tariff or trade protectionist environment is to have alternative markets"
• AGT's preparation for US tariffs involved geographic shifting: "We have a North Dakota manufacturing facility that was going to manufacture more for the US market" while "take the western Canadian product and we were going to go out to the Middle East into other markets"
• Global manufacturing presence enables supply chain pivoting where "we have factory 7 km from the port in Turkey, we'll peel them, split them, polish them, package them, and then they'll be shipped to Iraq, Gaza refugees, Middle East region"
• The business model anticipates policy changes: "as a company we already prepared for this" through maintaining processing capabilities in multiple jurisdictions and markets
• Trade diversification becomes strategic imperative requiring "bilateral trade agreements, resolve India and China as powerhouses that balance our reliance on the US, monetize the European Union trade agreement"
• Long-term perspective recognizes that "trade diversification cannot happen in one day, one year or even in 10 years, we have created an economy that's reliant over decades, we need to diversify over the next decades"

Shipping Container Balance and Global Trade Flows

International agricultural trade depends fundamentally on shipping container availability, which requires balanced trade flows where containers arrive full of manufactured goods and return full of agricultural products.

• Container shipping operates on balance principle: "trade flow in the world is dependent on balance, we can only fill what comes in full, we send it back full"
• Historical patterns show "Asia trade into North America and a North American trade back out to Asia" creating predictable container availability for agricultural exports
• Tariff disruptions threaten this balance where reduced manufactured imports could eliminate container availability for agricultural exports, creating knock-on effects beyond direct tariff impacts
• Alternative supply chains may emerge through bulk shipping: "if we don't have container availability what you'll see is bulk supply chains getting bigger like we're shipping those lentils in a vessel to Turkey"
• Manufacturing relocation doesn't eliminate trade flows since "if it doesn't come from China, it may have to come from Korea or it might come from Indonesia" maintaining container balance requirements
• The transition period creates uncertainty: "next 5 to seven years are going to be transition years" where "supply chains will have to also transition" to accommodate changing trade patterns and container availability

Scale Consolidation and Modern Farming Realities

Agricultural consolidation continues accelerating as economic pressures require ever-larger operations to achieve viable family incomes, transforming the structure of North American farming.

• Farm size requirements have exploded over decades where "4,000 acres of farmland, that was a big farm in 1978" but "today, at 4,000 acres, a family can't farm full-time, they ultimately will need to have a second job"
• Current viability thresholds require "a mother, father, and a daughter who are farming would have to be 12,000 acres in order to sustain a family" representing tripling of minimum scale
• Extreme consolidation examples include "single farm families in West Central Saskatchewan who are seeding 300,000 acres of farmland this year" with "full-time IT departments on their farm"
• These remain family operations despite enormous scale since "we still have foreign ownership guidelines that prevent foreign ownership of farmland in Saskatchewan, so these are still family farms, they've just scaled to be something that is very large and very competitive"
• Scale advantages enable technology adoption that "you can't digitize 1-acre farms, it's not cost viable" while large operations can implement comprehensive precision agriculture systems
• Consolidation strategies beyond organic growth include recognition that companies "can build scale you can buy scale or you can partner scale" rather than being "eaten by somebody else"

Summary

The Lentil King of Saskatchewan reveals how Canada has become the world's protein powerhouse through precision agriculture, extreme vertical integration, and strategic global positioning. While tariff wars create supply chain disruptions, diversified agricultural companies adapt through geographic flexibility rather than experiencing existential threats. The conversation exposes the fundamental tension between food security and food affordability that makes agriculture universally political while demonstrating how modern farming operates at unprecedented scale and technological sophistication.

Practical Implications

• For Policymakers: Recognize that food security requires balanced approaches between domestic production support and import availability, as tariffs on agricultural products risk civil stability through food inflation
• For Investors: Understand that agricultural consolidation creates opportunities for companies with global supply chain flexibility and processing capabilities, while container shipping balance affects agricultural export viability
• For Supply Chain Managers: Prepare for continued geographic diversification requirements as trade relationships evolve, requiring processing capabilities in multiple jurisdictions and alternative market development
• For Farmers: Embrace technological advancement and consider scale strategies through building, buying, or partnering rather than attempting to maintain sub-viable operations in consolidating markets
• For Trade Strategists: Focus on bilateral agreements and infrastructure investment to support diversified export markets, recognizing that over-reliance on single markets creates dangerous vulnerabilities
• For Food Security Analysts: Monitor global protein availability and agricultural productivity trends, as population growth and climate change create unprecedented production requirements over coming decades
• For Infrastructure Planners: Invest in transportation and port capacity to handle projected agricultural output increases, recognizing that current infrastructure may be inadequate for future production volumes