Organic fruit and vegetable growers are not outperforming their conventional counterparts, says Statistics Canada.
Despite achieving price premiums on 19 of the 20 types of produce that the agency analyzed during a four-year study, organic producers realized better returns than conventional farmers on only 11 of those products.
“We see a price premium but it doesn’t always offset the yield reduction,” said Bill Parsons, who wrote the study.
While organic tomatoes delivered an extra $1,950 per acre on average compared to conventional tomatoes, organic lettuce underperformed by the same amount.
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The analysis also pointed out that more than half of the fruit and vegetables grown in Canada do not have an organic equivalent, suggesting those crops are not attracting adequate premiums to entice organic growers.
Parsons’ study was limited to produce. While there is no data to show how important the sector is in Canada, a HealthFocus International survey said fruit and vegetables accounted for 42 percent of $10.4 billion US worth of organic sales generated in the United States in 2003.
However, people shouldn’t draw general conclusions about the organic sector based on this report, said Laura Telford, executive director of Canadian Organic Growers.
She said people have misinterpreted the findings of the Statistics Canada study, jumping to the incorrect conclusion that organic agriculture hasn’t lived up to its potential.
Part of the confusion stems from one sentence of the 13-page report that Parsons acknowledged left readers with the mistaken impression that farmers are not collecting organic premiums.
What it should have said is that they are not necessarily generating better revenues from premiums due to poor agronomic performance.
Even that revised interpretation doesn’t tell the whole story, Telford said, because the study compares gross revenues not net profit. If it had, she said, Parsons would have discovered that organic producers face lower costs leading to an improved bottom line.
“A lot of farmers who aren’t making a price premium on their products are still overall making more money from organics.”
Another key finding was that contrary to reports of the organic industry expanding by 20 percent per year, the fruit and vegetable sector appears to be growing slowly.
There were 640 producers marketing fresh produce when the study began in 2000. By the time it concluded at the end of 2003 there were 660 producers, a three percent increase over that four-year period. Growers who sell direct to processors were not included in the study.
“(Organics) is still an important segment of the fruit and vegetable industry but it is not growing by leaps and bounds,” said Parsons.
Telford said that growth estimate is meaningless because it didn’t consider the conventional side of the sector and it included a number of non-certified growers selling into organic markets.
Growers selling produce directly off their farms or at farmers’ markets have found there is little benefit in becoming certified because customers don’t need to see a document when they are dealing face-to-face with producers, Telford said.
“What we’re finding is the small fruit and vegetable producers don’t bother to get certified.”
If the study had included the organic grain and livestock sectors, where certification is a necessity, Parsons would have noticed impressive growth rates and higher premiums, she said.
