Farmers cite numerous reasons for going organic, including environmental and lifestyle concerns. But the best rationalization could be the money, according to a new study.
A research paper written by environmental scientist Jennifer Bromm concludes that organic farming is three times more profitable than conventional chemical-based agriculture.
The results are no surprise to her.
“I know that when my dad was a conventional farmer, we almost lost the farm …. Now that he’s an organic farmer our farm is doing well.”
Her father, Norman, was part of a case study that accompanied the survey. It compared his farm to a neighbour’s conventional operation.
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“She found our yields were just about the same but he spent a lot more money on chemicals,” said the Tisdale, Sask., organic farmer.
In her thesis, the Lakehead University environmental studies graduate determined that organic prices were two to three times higher than conventional prices in 2000.
But an academic at the University of Saskatchewan said her study is flawed. Agriculture economics professor Richard Schoney said returns of $318 per acre for a crop of organic flax don’t seem realistic.
“There’s always a smell test. Occasionally, I run across things that if it were really true, it means everybody’s stupid,” said the professor.
“I look at $318 and obviously, if that were true, everybody would be doing it.”
One of the problems with Bromm’s analysis is that the organic yields she used seem out of whack with reality, said Schoney.
The organic growers Bromm surveyed got 21 bushels per acre of flax, 27 bu. of wheat and 61 of oats.
Saskatchewan Crop Insurance Corp. insured 50,000 acres of organic crops in 2000. A survey of those growers showed they attained yields of 12.5 bu. per acre for flax, 24.5 bu. for wheat and 52 for oats.
Crop insurance research analyst Arlan Frick cautions that those results represent a small portion of total organic acreage and that some of those yields came from areas outside the black soil zone.
But as a rule, the agency estimates organic oats will yield 15 percent less than conventional oats, wheat crops will be 20 percent smaller and organic flax will produce 25 percent less.
The organic flax number used in Bromm’s study was 21 bu. per acre, which was almost identical to the conventional yield of 21.2 bu. per acre. That doesn’t seem like it reflects reality, said Schoney.
He also cast doubt on some of the organic prices used by Bromm, but on that account, she seems to have been bang on.
Bromm used a flax price of $16.39 a bu., a wheat price of $8.16 and $2.96 for oats. The prices attained by organic growers in the Saskatchewan Crop Insurance survey were similar.
“Those seem fairly reasonable,” said Frick.
The prices also jibe with a report on the organic industry produced by Agriculture Canada’s market analysis division in March 2000.
In its Bi-weekly Bulletin, the department said Saskatchewan organic farmers could expect price premiums on flax of approximately 300 percent, while wheat would fetch 175 percent of conventional prices.
Later in that same bulletin the department prepared a budget that estimated profits from a 10-year organic rotation versus a 10-year conventional one.
It determined that the organic farm would outperform the conventional farm by a margin of 41 percent if the three-year organic conversion period was ignored. But if the first three years of transition to organics were devoted to growing a non-revenue producing crop like clover, the conventional farmer would make slightly more money.
Bromm sees a flaw in that approach because it is unlikely the organic farmer would generate no revenue during the first three years. He could grow a crop like hay and sell it into conventional markets.
“Everything can get skewed depending on what your perspective is. And maybe in that regard I wanted to see something that I wanted to see as well,” she admitted.
But there is no doubt in her mind that organic farming is the better way to go. She even calculated returns based on conventional prices and the organic farmer came out on top because of lower input costs.
The frustrating part for her is that many people refuse to believe her results.
“I think that generally people like to say that organic farming can’t make it, so it’s pretty easy to say those aren’t the right numbers.”
Funding pleases ethanol lobby
By Barry Wilson
Ottawa bureau
news
A federal government commitment of $100 million to support ethanol production could lead to a tripling of the industry’s size over the next few years, says the president of the renewable fuels lobby.
“I think this could take us to three-quarters of a billion litres, triple where we are now,” Canadian Renewable Fuels Association president Bliss Baker said in an Aug. 13 interview. “I think this was an important announcement, an important step forward for our industry.”
On Aug. 12, prime minister Jean Chrétien announced vague details about how Ottawa will spend another $1 billion over five years to help reduce greenhouse gas emissions and move toward meeting climate change commitments made in the Kyoto protocol signed in 1997.
He credited pressure from Liberal rural MPs for the ethanol commitment, rumoured earlier to be just $50 million.
Then Chrétien made what ethanol supporters considered the most important commitment.
“This will enable governments to consider, in the future, a mandated bio-fuel content in all gasoline sold in Canada.”
Now, the government’s non-mandated requirement is to move to 35 percent of gasoline containing 10 percent ethanol.
“That was a very important statement and I have been lobbying the prime minister’s office for three months to have that included,” said Baker. “If this industry is to grow to its potential, ethanol content must be mandated.”
For some rural Liberals, it meant the government has “embraced” ethanol. The rural Liberal caucus had asked for a $400 million commitment.
“I think this is a good start and we’ll get to the $400 million by 2010 I believe,” rural caucus chair and New Brunswick MP Andy Savoy said in an interview. “It is a strong commitment to ethanol and I believe it shows our caucus was successful.”
An aide to Canadian Wheat Board minister Ralph Goodale said the Saskatchewan-based minister remains convinced the goal should be more ambitious, a mandate for ethanol content in all gasoline sold in Canada.
“But this is an important start,” said John Embury. “There is no point setting an ambitious mandated target if you do not have the domestic capacity to achieve it. This announcement helps build the industry.”
Industry and provinces hoping to see expansion cheered the announcement, while noting that it was thin on implementation details.
The announcement was a boost, said Jeff Passmore, executive vice-president of Ottawa-based Iogen Corp., which is developing and promoting cellulose-based ethanol using straw or wood. It says these are more effective in reducing greenhouse gas emissions than grain-based ethanol.
“With this support, we hope to build the world’s first cellulose-based ethanol plant in Canada,” he said last week during a tour of western provinces looking for an appropriate site.
Tim Sole, Manitoba minister of energy, science and technology, said that Ottawa’s commitment will be “a substantial boost” for provinces like Manitoba with dreams of a homegrown industry.
“I think it shows leadership on the prime minister’s part and it will help us,” he said Aug. 13. This autumn, the Manitoba government wants to see legislation approved that will require use of ethanol in a portion of the gasoline sold in the province by 2005.
In Saskatchewan, where plans to mandate use of Saskatchewan-produced ethanol have been delayed by a lack of industry expansion, finance minister Eric Cline said the federal money could be a boost, particularly if Iogen chooses a Saskatchewan site.
Baker said the Canadian commitment to ethanol remains far more tepid than the American response, where federal and state governments have created mandates and subsidies that will see the industry expand to 20 billion litres of production by 2010.
