Canada’s new organic regulation will likely exacerbate the industry’s supply crunch problem, says an industry spokesperson.
Matthew Holmes, managing director of the Organic Trade Association in Canada, said the regulation will almost certainly increase demand for organic products as consumers gain confidence in the Canada Organic logo.
That happened in the United States after it implemented a similar national organic regime.
A demand increase will widen the substantial supply and demand gap. Consumers already buy about $2 billion worth of organic foods and beverages annually.
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“We’re just always facing really low supply,” said Holmes.
The regulation will also make it more difficult to import product because it will have to meet the requirements of Canada’s new organic regime.
“That kind of limits supply even more than it already is and supply is tight internationally,” said Holmes.
Laura Telford, national director of Canadian Organic Growers, agreed the industry has a supply problem.
“That’s the $10,000 question. If we really do have such big markets, why are farmers so slow to get on board?”
She has a few theories. Farmers might be reluctant to go through the three-year transition period in which they incur more costs and risks than conventional farming but don’t receive premiums for their crops.
Telford said Ontario and Manitoba have programs to help offset transition costs and she hopes other provinces follow suit.
Another issue is the age of the average Canadian farmer at 52.
“It’s not really the best time of your life to take up a new production process where you won’t get through your first crop rotation for another seven years,” she said.
As well, there are geographic problems. Most organic food is consumed in major centres but is produced largely in Saskatchewan.
Farmers are unfamiliar with these markets or are unable to reach them without incurring huge costs so they grow grains for export rather than food for the domestic market, which further contributes to the supply shortage.
Until Canada can sort out that disconnect, it will continue to rely on imported organic foods.
The organic industry plans to encourage the Canadian Food Inspection Agency to help international certifiers pick up the Canadian standard and negotiate equivalency agreements between Canada and its trading partners.
Canada signed an equivalency agreement with the United States on June 17 and is negotiating with the European Union. Those agreements should help organic food manufacturers get their hands on the ingredients they need for their products.
Telford said food manufacturers will be aided by a two-year grace period designed to help the industry make the necessary adjustments to be in compliance with the new regulation.
During that transition period, the agency will take an educational rather than a rigid approach to enforcement.
