Organic Farming

by DON STONEMAN

Organic farmers represent just one per cent of the Ontario farm population now, no matter where you draw the line in terms of incomes, or whether they are part- or full-time farmers, according to Larry Lenhardt, a certifier based in Lindsay. In 1999, Ontario's five certifying agencies registered 492 growers working 60,000 acres of cropland and there were 83 processor-handlers, says a study conducted by the University of Windsor.

Trend watcher Shirley Roberts, president of Toronto-based Market-Driven Solutions Inc., says the organic movement may be small, but it is being watched carefully by the rest of the food industry. So far, she says, surveys show that consumers who buy organic are more concerned about food safety than they are about the environmental benefits of raising food without pesticides.

The University of Windsor study, and many other industry players Better Farming interviewed, point out that organic demand is increasing far faster than even the double-digit production increases in Ontario can match. At New Hamburg, east of Kitchener, Wolfgang and Ekkehard Pfenning grow organic vegetables and market crops for smaller scale operators. The brothers' father was an organic grower in Germany before emigrating to Canada in 1981. A sister runs a health food store nearby. Organic food production is in their blood.

Wolfgang Pfenning figures that he sells as many units of fruits and vegetables as he did 10 years ago, but the market is four times as big. Most produce in the stores is coming in from the United States, predominately California, where organic has become a big business and marketing arms are spread far and wide. Pfenning encourages other growers to raise a wide variety of crops. He's also glad to see importers bringing their products and marketing savvy into Canada. While he sees opportunities everywhere, he says "there is only so much we can do."

Lorenz Eppinger of Switch Farm, near Campbellville, east of Guelph, says government policies hinder, rather than support, organic agriculture. For example, pesticides, a conventional farming input that organic growers eschew, are zero-rated for taxes, encouraging them to continue in conventional agriculture. Eppinger still sells at local farmers' markets, but has now established a clientele and spends more time with community-shared agriculture. Starting this month, he will be delivering boxes of produce to 150 homes.

Should there be subsidies? Eppinger would like to see Ontario organic farmers have the same advantages as their conventional counterparts, and their organic competitors to the east. He looks to Quebec, where both extension services and marketing help are available and where the provincial agriculture minister is willing to attend even small conferences. "I don't think anyone from OMAFRA would do that," Eppinger says.

Not everyone agrees that the government should get involved. "I'm not complaining. I'm not sure I want them to be," says Ted Zettel, an organic grower in Chepstow. Zettel acts as a broker for a group of farmers that is producing organic beef and probably meeting only half of the demand that is there.

Recently, the group cut a deal with a distributor in Owen Sound to handle their product. There is no label for the beef and it is sold to small retail outlets with cutting rooms in back. "We aren't nearly big enough to get into a chain," Zettel says.

Zettel admits the Quebec "farm club model" with the government helping to pay for a hired agronomist, has been good for ecological farming in that province. But he feels that "in some ways we are far ahead of them." The growing awareness that manure must be handled as a resource will benefit organic production, he says. "It's not a direct organic connection, but it sends people the organic way," he says.

Top-heavy with managers
Not everyone thinks that Ontario is ready for a big boost in organic production. Bosco Bahr, an organic distributor in Toronto, doesn't see room for a big growth in domestic organic production. Bahr says there are only six family farmers in the province able to derive the majority of their income from organic fruits and vegetables. "If even one fair-sized operator came on the market at this point, it would oversupply the market. That's how tenuous is the market's ability to absorb product."

Bahr tracks chain stores carefully and says that, in some cases, they've gone backwards on organics. The National Grocers chain has reduced the number of organic items it offers in Toronto. Atlantic & Pacific and Dominion stores sell 30 to 40 organic items a week, year round. However, "the key items, and the ones they move the most of, are all of American origin," Bahr points out.

Bahr says that recently Loblaws told a grower group that it lacked the volume to sell to the chain. Two to three tractor-trailer loads of produce a week at the peak season is no longer enough. "The majors want to trim their supplier base and buy from fewer people." That makes it tougher for local farmers to find markets. The alternatives are very small health food markets, most of which don't carry fresh product. His conclusion: Anyone wanting to service this market in Ontario "should be very careful about what they choose to grow and how they capitalize it," he says.

Bahr says Ontario growers lack marketing savvy and that the growers' co-op in Ontario "hasn't been able to sell me a single bag." The growers' co-op is "top-heavy with managers and sales representatives (and has) no idea how to tap into and serve the market."

He buys grains and beans almost exclusively out of Quebec and the Midwestern United States. Bahr says he can buy cheaper, higher quality products from American processors who buy Western Canadian grain, clean it, process it and ship it into Eastern Canada.

Bahr says Quebec "understands the market and produces a superior product. Ontario is not even in the game" in terms of "quality product, how to understand the market and how to capture it, and price points."

Gerald Poechman, chairman of OntarBio, the co-op Bahr criticizes, wouldn't comment on the sudden departure of the co-op's general manager in mid-April. "We're trying to get better," he said. He points to the co-op's successes, primarily in the dairy industry. There are now 20 growers across the province shipping milk to half a dozen small plants to make organic fluid milk, yogurt, cheese and butter. OntarBio's guess is that it could sell twice as much of its product if it could get the farmers to convert.

There's also a pilot project with the Ontario Egg Producers Marketing Board. Brian Ellsworth, the board's general manager, says 10 "experimental" organic quota holders have flocks of 500 hens each. Growers pay $5 a bird annually for quota for three years. The program has been renewed for a second term.

That means 5,000 hens producing an industry average of 24 dozen eggs a year annually -- small potatoes compared to the 180 million dozen eggs produced yearly in Ontario. Ellsworth says there are likely organic flocks among the 1,500 to 2,000 unregulated producers with less than 500 hens. There are already two registered quota holders producing organic eggs.

Twenty per cent annual growth
Notwithstanding his criticisms, Bahr sympathizes with the growers. He was one himself in the 1970s and figures that input costs for organic farmers have doubled in recent years. He thinks that, like conventional growers, organic farmers are gradually being squeezed between rising costs and returns that refuse to budge. "I don't see the returns increasing in a way that would take care of all of the inflationary factors and keep the grower ahead of the curve. "When you see an increase in the costs in the dairy industry, organic shadows it." He thinks imported organic milk would overwhelm the markets here if supply-managed walls came down.

Is there something the government can do? "Develop a genetically-modified-free zone where farmers can grow crops for export markets," Bahr says immediately. The value of the Canadian dollar will help that, Bahr says. However, this strategy would require "pulling the plug on the Monsantos."

Weed specialist Hugh Martin handles organic questions for the Ontario agriculture ministry. "We give some extension information, but it is quite limited," he says. "Quite often some of the best answers are farmer to farmer."

Organic Certified Producers and Processors (OCPP) and Organic Crop Improvement Association (OCIA) certify most growers. Martin says acreage and farm numbers are growing about 20 per cent per year (30 per cent in 1998, only 10 per cent in 1999.)

When University of Windsor sociologists Alan Hall and Veronika Mogyorody surveyed 256 growers in 1999, they found that the average organic farm comprises 217 acres, with 153 acres devoted to crops. The largest farm surveyed was 1,800 acres. Ten per cent of surveyed farmers worked less than 20 acres. Another 10 per cent ran to more than 500 acres. Almost half have no livestock, and 22 per cent grow only vegetables.

The average gross income before taxes was $87,509, while the average debt load was $175,680. Average input costs per acre were $99 for field crops, $101 for vegetables and fruits and $152 for fruit. Nearly 48 per cent of farmers surveyed reported that they work off the farm to earn income, while 40.5 per cent said their spouses worked off the farm.

The Hall and Mogyorody study found that about 30 per cent of farms surveyed didn't bother to certify. There are a number of reasons why farms don't certify, Martin says. Sometimes they grow products with organic techniques because "they think it's the right thing to do." In other cases, with the particular commodity, there's no marketing advantage to certification.

Certifications costs a grower between $400 and $500, plus there is often a percentage of sales "a licensing fee if I can call it that," Martin says. He notes that there are many parallels between organic and conventional agriculture. The variety in size of farms is roughly parallel, although organic farm size is somewhat smaller. There is also the matter of age of farm operators.

Only nine of the 256 farmers interviewed were less than 30 years of age. Some 78 per cent were over 40 and 34 per cent over 50, raising concerns about sustainability. That's roughly the same challenge that faces conventional agriculture now, Martin points out.

Rotations are generally more integrated. The average vegetable farm is eight acres. Soybeans are one of the larger crops. Spelt is a significant acreage. Martin says organic corn is sold regularly into the United States and there is a real potential for organic corn production, but there is an issue with pollen drift from nearby fields of genetically modified strains.

Ontario misses the trend
Martin won't argue with the widely accepted figure that 80 per cent of organic food consumed in Ontario is imported. "It's commonly accepted, just like the 20 per cent growth per year," he says.

Half of the farmers reported working 50 hours a week or more during the growing season, and 20 per cent said they worked 70 hours. Fifty eight per cent estimated that they put in 30 hours or more.

Hall and Mogyorody studied the Ontario organic industry as a social movement. While the Ontario industry is small, they found that it generally remains true to a founding concept of producing food for local markets. Only 11 per cent of the Ontario farmers surveyed reported selling directly to the United States, 5.4 per cent to Europe and 4.2 per cent to Japan.

Furthermore, 80 per cent of the surveyed group in Ontario believed that farm production should be sold locally. That's one of the founding tenets of the organic movement.

The sociologists concluded that while market forces in the United States are pushing organic farming towards larger, more mechanized and capitalized operations, aiming for global markets, Ontario has either missed or resisted that trend. Mogyorody says organic farmers "are not the homogenous group that people tend to think." While there are idealistic "back-to-the-landers," there are also entrepreneurs who see organic as a marketing opportunity.

It remains to be seen if organic farmers can make their way into the larger chain stores. Mogyorody agrees with Bahr that supermarkets tend to be locked into systems that keep out local produce. She and Hall intend to do further studies into how that happens.

So what's the future for organic here? It's taking off in Europe, where food quality is taken more seriously, biotechnology is viewed with suspicion at best, and one agricultural crisis after another has turned conventional agriculture onto its ear. There, organic is reported to be increasing by 40 per cent per year. Germany's agriculture minister has set a goal of 10 per cent organic production by 2010 and 20 per cent by 2020.

Back at New Hamburg, Wolfgang Pfenning says consumers have to want the product before it can be produced. That's why he doesn't mind seeing imports making their way into Ontario, for now. When the demand is created, he says, the production will follow.

We don't want to create cycles like in the pig industry, he warns. "Go and study the market," he invites. "There is plenty of room for everybody. The cake is big enough." BF

A library for organic farmers

It's a partnership between the Maitland Valley Conservation Authority, the EFAO, OntarBio, the local organic co-op, and two charitable foundations, the SCHAD Foundation and the Laidlaw Foundation. At press time, McQuail was waiting for an announcement that the Ontario agriculture ministry's Healthy Futures program would provide 40 per cent of the funding to bring the two-year budget up to $278,000.

The plan is to make the library of organic farming material housed at the conservation authority office in Wroxeter more available to farmers. There will also be a mentoring program that will link a converting grower to an experienced organic producer. The EFAO has been mentoring for a while, McQuail says. Without funding "it very quickly outgrows the resources of a volunteer farm organization."

The money will also be used to establish an office either renting space from the conservation authority, or nearby so that there is access to the library. McQuail says the conservation authority will benefit by improved water quality. The EFAO will be happy if half the farmers who take the course decide to continue on to acquire full organic certification. "Certification helps as a marketing tool. The project is broader than just that. It is environmental as well."

She says that for the purposes of the course, "southwestern Ontario" is defined as the area west of Toronto and into the Niagara Region. Later the program may be extended into eastern Ontario as well. For now, Wroxeter "is right in the middle of where all the farmers are who want the information," she says. BF

Toronto turns up its nose at organic

"There's more action in the suburbs," says food distributor Bosco Bahr, operator of EZ Organics on Adelaide Street, in the heart of the city's downtown. He handles produce going to a variety of stores in the Greater Toronto area. Sales in Toronto itself have been virtually stagnant. Bahr describes the market as both "dormant" and "under-developed."

Toronto, it seems, remains an island of indifference in a provincial organic market that, in most other ways, continues to grow at about 20 per cent annually, year after year, measured both in terms of dollars and in acreage.

In spite of all the talk about organic consumption increasing, the market in the heart of Canada's largest urban centre has increased fractionally at best since the last recession in the early 1990s. Five years ago, Bahr says, Chicago, slightly smaller than Toronto, had six natural food supermarkets of more than 25,000 square feet each "all doing incredibly large numbers on organic produce...There isn't one store half that size in Toronto five years later," Bahr says.

But don't give up on the Toronto market yet, says trend watcher Shirley Roberts, president of Market-Driven Solutions Inc. She cites a grocery industry magazine report that Whole Foods Market of Penticton, B.C., plans to open a 40,000-square foot store in Toronto's Hazelton Lanes, a very fashionable and very expensive part of Toronto. The store is scheduled to open in October. As to who supplies that market, that is anyone's guess. BF

The patchwork of organic labels on products in grocery stores is a result of a mix of certifying bodies. There are three types of certifiers -- federal governments, state /governments and private certifiers. At press time, there were no certifying bodies accredited by the Canadian General Standards Council.

That's the name of the game when it comes to organic production for both domestic and export use. Canada has fallen behind but is trying hard to catch up. In April 1999, the Canadian General Standards Board approved standards for Canadian organic growers, standards that will meet the 65 minimum requirements the International Standards Organization (ISO) sets for use of the word "organic" around the world. However, at this point, none of the 46 organizations using the term organic are yet accredited by the CGSB, says Paul Sereda, Market and Industry Services Branch, Agriculture and Agri-Food Canada, Ottawa.

Lindsay-based Larry Lenhardt hopes to get that certification shortly. Lenhardt founded the not-for-profit Organic Certified Producers and Processors (Ontario) Inc. (OCPP) in 1991 and it is generally considered to be the largest certification body in the province. Federal accreditation is in the works, says Lenhardt. "It's just a matter of getting the process done," he says. Meanwhile, OCPP has been certifying that its products are organic because the private German accreditor VBP recognizes its standards.

Lenhardt says a federally accepted accreditation process is more than just a way of clearing the market of organic wannabes. "Once you have federal accreditation, your government speaks for you," says Lenhardt. The federal government will work out "equivalencies" with other countries, some of which prefer to operate government to government. OCPP will have more marketing clout.

A case in point is Fun Guy Farm, at Goodwood, north of Toronto, a producer of organic Shittake mushrooms. Fun Guy's owners, Paula Vopni and Bruno Pretto, were certified first with OCPP. Later, they switched to Organic Crop Improvement Association. OCIA, based in California, is accredited by the United States Department of Agriculture. USDA approval gives a producer the opportunity to export to countries such as Japan, which prefer to deal bilaterally, government to government, through the Japan Accreditation Service. (JAS).

Sadly, says mushroom grower Vopni, Fun Guy isn't trying to export to Japan any more. She says the market there wants a bigger shipment than Fun Guy Farm was able to marshal. Furthermore, the Japanese aren't willing to cut their traditional middlemen out of transactions.

Japan appears to have taken its own course anyway, says Almonte organic grower Janet Duncan, who recently stepped down from the board of the Canadian Organic Advisory Board (COAB). It was the COAB, which negotiated with the Canadian General Standards Board to develop the organic standards, a process that took nearly a decade.

Now, she says, it seems that Japan is going its own way. "Things have changed in the Japanese market," she says. "My understanding is it expects to have its own inspectors check farms. It sounds like an overwhelming thing they are trying to do. Exporting into Japan is very difficult now."

It appears that switching certifiers becomes a little bit like a game of musical chairs. Pfenning's Organic Vegetables, at New Hamburg, is abandoning OCIA certification in favour of OCPP just as soon as the farm's supply of packing is used up. The reason: OCPP recognizes OCIA growers, but not the other way around, says Wolfgang Pfenning. Under OCPP, more small local growers can add their produce to his in order to make bigger truckloads.

Accreditation gets more complicated yet. Certifiers are battling over the right to use an organic trademark that was developed while organic standards were being developed. At that time, the Canadian Organic Advisor Board (COAB) represented organic certifiers. There has since been a schism that started in 1999. COAB "does not speak for us," says Lenhardt, a former president of the organization.

It was been widely reported that, at its 1999 Annual General meeting, COAB changed its mandate and tried to become a certifying body itself. Lenhardt says COAB broke its own bylaws by failing to give notice of the meeting to members who might have opposed the move.

At the 2001 COAB meeting in March, the organization abandoned plans to form the secretariat, but still was ready to hang onto the organic trademark. The trademark's ownership "is now under discussion," Lenhardt says, and lawyers' letters have been going back and forth. "You don't want to go there," he says.

Almonte's Duncan says COAB had intended to be one of the certifiers "not by choice" but because it had negotiated the national standard. She says COAB wants to complete the certification model it was working on and sell it to any organization that is interested in using it. That decision means COAB will go back to its advisory role and will oversee the standard to make sure it is up to date.

She says certifiers will be able to join a co-op and use the COAB model for certification, or just apply to the standards council for accreditation. COAB might also collect information about the size and growth of the organic industry, something that is currently lacking, even Lenhardt admits.

Still, OCPP isn't interested in COAB's proposal. "A good percentage of us say that COAB does not represent the industry," Lenhardt says, vowing that he won't work with an organization that violates its own bylaws.

Certification with the Canadian General Standards Council isn't cheap. Lenhardt says it costs the OCPP a fee of $16,000. By contrast, the Quebec Standards association fee is $1,000, plus a percentage based on the amount of product sold. The USDA fee is about half that, plus a percentage, and the certification process is fast, taking between four and six weeks. Lenhardt says OCPP has already paid the federal and Quebec certification agencies' fees.

OntarBio's Poechman resents that fee for service. "We know that, out there on the farm, it's another layer of bureaucracy we all have to pay for."BF