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OPAM trims costs to be more competitive

Streamlined operations and paperwork put Manitoba’s only homegrown 
organic certifying body back on the road to financial health

Manitoba’s own organic certification body is well on its way back to financial health.

The Organic Producers of Manitoba, founded in 2005, was hit by a cash crunch as organic’s boom years ground to a halt, said president Edward Lelond.

“We were anticipating growth before it happened, and then we hit the recession of 2008,” said Lelond, at the group’s recent annual general meeting.

After years of high prices and phenomenal growth, the organic sector in North America was hit by a “perfect storm” of economic contraction.

Premiums over conventional crops plummeted, farmers were left sitting on bins full of grain that they couldn’t sell, and many producers were forced to drop the $1,500 to $2,000 per year cost of certification.

“It was really tough. We’re really proud of our core members who have stayed with us.”

Cutbacks

OPAM, with an annual budget of just over $200,000, responded by cutting office staff from 4.5 down to two full-time workers, enlisting more volunteer help, and moving its office from Virden to a smaller space in Miniota.

With 92 members, the group is near its target level of 100 members, made up mainly of producers and a handful of processors.

In order to maintain competitiveness with out-of-province certifiers, OPAM has streamlined the inspection process and paperwork to keep costs to a minimum.

When the group first ran into trouble three years ago, the provincial government stepped in with a $150,000 line of credit guarantee.

Designed to wean the group off of financial support on a step-down basis, the guarantee now in its third year stands at $30,000, down from $60,000 last year.

By mid-April of this year, OPAM will be without a loan guarantee, but the group is lobbying government for an extension until it is able to operate on a cash basis from year to year.

“We need a guarantee of $30,000 a year for the next three years so we can go to a financial institution for our line of credit,” he said.

The cost of certification is proving to be a considerable barrier for small-scale organic farmers who might be starting out on a quarter-section farm, said Gaston Boulanger, who reported to the OPAM board on a possible solution.

“Office staff are saying that it takes almost as long to go over an application for a small producer as it does for a large producer,” said Boulanger, who added that a number of them have gone over to cheaper certifying bodies.

One solution, he added, would be for two organic farming neighbours to jointly apply for certification and halve their costs so that they can stay with OPAM.

Optimism returning

Optimism is returning to the organic sector, said Laura Telford, an organic marketing business development specialist with MAFRI.

An international trade show, at a cost of $400,000, is planned for 2014 at the Winnipeg Convention Centre to showcase Canada’s organic production to buyers from around the world.

Forage seed demand in the United States represents one particularly strong niche, she said. That market is currently served by European growers, but some estimate that there is room for 20,000 acres of forage seed crops in Manitoba.

That, and other alternative organic crops such as quinoa and hemp seed, could fill the gap left by mainstays such as hard red spring wheat, where organic premiums over conventional have been vaporized by the weak economy south of the border and in Europe.

Phosphorus

The phosphorus issue is also dogging non-niche crops, she added. Organic producers can grow their own nitrogen by adding legumes to their crop rotations, but they can’t prop up yields by buying bags of chemically based P205, and many don’t have access to manure in sufficient quantities for use as a phosphorus-rich soil amendment.

The organic ideal is to have sustainable, integrated crop and livestock farms that build soil health over the long term.

But to address the practical realities faced by Prairie organic farms — many of which are grain only — Canada’s national organic certification rules have been relaxed to allow the use of conventional manure as a kind of “last resort” in cases where a farm’s own supplies fall short, and hauling it in from a neighbouring organic farm is impractical.

When manure is brought in from conventional operations, it must not be from confined livestock production, nor can it be from animals fed genetically modified crops.

But with GMO feedstocks such as soybeans and corn dominating the spectrum of livestock feed sources, “avoiding” such manures might be impractical and composting such supplies might be the only alternative.

Organic inspectors will in such cases discuss preferred alternatives, instead of “shutting them down,” said Telford.

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