Department of Agricultural Economics Organic Project

OverviewBy Simon Weseen

Organic Market and Trade Analyst Position Background

• 4 years (through March 31st, 2006)

• Project funded by a one-time grant from SAFRR

• Project Objective:– The overall goal of the project is to provide knowledge and

information to the Saskatchewan organic industry that will aid in the development of a consistent, reliable and internationally accepted accreditation/certification system and long-term institutional and business relationships, thus allowing the organic industry to best position itself for the global market place.

Background Cont’d

• Work Plan was developed in fall, 2002– was based on feedback from industry, and

advisory committee– areas of interest were marketing, value added,

and organic regulation

Organic Regulation

• 3 papers:– Options for Improving the Efficiency of

Canada’s Organic Certification / Accreditation System

– Understanding the USDA’s National Organic Program in the Context of the Canadian Organic Industry

– An Overview of the EU Regulatory System for Organic Agriculture

Objectives of Regulatory Papers

• Provide an overview of each of the systems

• Identify problems with Canadian system

• Describe how US and EU systems function in the context of the Canadian industry

• Identify potential lessons from US and EU systems

• What needs to happen in Canada?

Major Conclusions

• Canadian system is inefficient– costly, low participation, no market access,

does not protect domestic markets

• A mandatory national standard could alleviate some of these concerns

• Do not change the system drastically

• 3rd country status is essential for market access into Europe, starting in 2006

What is being done?

• Creation of the Organic Regulatory Committee (ORC) last year– working with federal gov’t towards industry

regulation

• Action Plan– reach consensus on how regulation should occur– assist in standard revision– consult with industry across Canada– apply to EU for 3rd country status

An Analysis of Legal Issues Arising from a

National Organic Standard in Canada • Collaborative project with CSALE

• Evolved out of the need to expand upon the limited understanding of how an organic regulation would function

• Objective– Explain how organic regulations could be

introduced, in a legal context

CSALE Project Cont’d

• Major conclusions– Federal gov’t does not have power to legislate

organic production standards– Can still encourage provinces to legislate

standards through its spending power– Co-operative effort between Federal and

Provincial govt’s is necessary

Supply Chain/ Marketing Study

• Objectives– Describe vertical supply chain for wheat,

barley, oats, flax (surveys and interviews)– Identify problems for industry development

• No contracts with local retailers

• Import export ratios

• Information Asymmetry

• Value added opportunities

• Role of the gov’t

Marketing Study Objectives Cont’d

• Determine how price is arrived at various stages of supply chain– How can producers capture higher premiums?

• Identify areas for further research and development.

• Project is in the survey stage

• Marketing Guide?

Graduate Student Theses

• Shon Ferguson - Long-term Rents Accruing to Organic Farmers Under Alternative Supply Chain Governance Structures

• Erin Sawyer - International Accreditation as a Mechanism for Reducing Transaction Costs

Price Information Survey

• Objectives– Obtain farm level organic price and volume of

sales info for the prairies– Make this information available to the public

through websites

• Collaborative project of OACC/SCIC

• Survey being conducted by SRC

• Results in Feb?

Price Information Survey Cont’d

• Potential Benefits– Benchmark for producers to determine market

value– Can evaluate current and future market trends

• E.g. How does market expansion affect prices?

– Provide info to SCIC for insurance purposes– Provided price and quantity data for research

already underway• E.g. losses resulting from GM canola

Organic/ GM Co-existence Study

• Project funded by OACC/CARDS

• Primary researchers: Dan Dierker / Hartley Furtan

• Objectives– Determine if co-existence of organic and GM

wheat technologies is economically feasible on a common physical landscape

Co-existence Study cont’d

• Preliminary Results– It may be possible to create an organic club

through which organic and GM wheat technologies can co-exist

– A buffer zone is required, in which only conventional technology can be used

– Increase in total welfare over the case, where only GM technology is used (winners compensate the losers)

Organic Information Website

• Website (http://organic.usask.ca)

• Designed as a mechanism for disseminating research and providing other info– Homepage– Research personnel and topics– Graduate student research– Publications, reports and, presentations

Website Cont'd

– Discussion forum

– Upcoming events

– Contact info

– National standard update

– ORC update

– Buyers contact page

– Consumer page

– Recent news

– links

SOD Organizational Review Committee

• Created at SOD annual meeting• Reasons

– some producers feel excluded– not completely fulfilling its mandate– does not represent all producers

• Committee function– Examine alternative organizational structures that would best serve needs of

the Saskatchewan organic industry

• Project took a leadership role in research and writing of final report– Gary Storey

SOD Organizational Review Committee Cont’d

• Project took a leadership role in research and writing of final report– Gary Storey

• Recommendation highlights– re-organize as producer organization with

democratically elected board of directors– expand to industry organization (including CB’s)– investigate check-off and access to WEPA funding

SOD Organizational Review Committee Cont’d

• Report was present to SOD on January 5th

• Other proposals were presented as well

• SOD Board of Directors met on January 6th to discuss all proposals

• Board of Directors have decide to create an email discussion group to decide what to do

Organic Conference

• Scheduled for Nov 14-16, 2004• Centennial Auditorium• Industry has ownership through “Organic

Connections”• 3 components

– Conference– Tradeshow– Consumer fair (organic food presentations)

Organic Conference Cont’d

• Conference portion has 3 themes– Marketing and trade– Production and agronomics– Healthy lifestyles

• Funding through CARDS, this project, sponsorship, trade booths, registration

• See http://organic.usask.ca

Questions and Discussion?