As a new entrant into the organic industry, Gerald Dagenais was appalled to learn he might soon lose access to the world’s largest organic market.
After listening to a presentation by Roxan Hooshangi, agricultural affairs officer for the Canadian Mission to the European Union, Dagenais questioned his decision to move into organic production.
Hooshangi warned growers and exporters that if the industry doesn’t get a revised organic standard and regulation system in place soon, the EU’s door will close on Dec. 31, 2005.
That looming disaster sounded eerily familiar to Dagenais, who runs a mixed operation near Blaine Lake, Sask. Already pinched by the BSE crisis, he worries about being shut out of another key market.
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“If we can’t export our product, what are we going to do with it? Go look at our beef industry,” he said during an interview last week at a Saskatoon seminar on organics.
“To lose the European market would essentially be devastating to the organic industry in Canada.”
Organics account for an estimated 20 percent of Canada’s $1.5 billion in agri-food sales to the EU, said Sylvain Wilson, senior international marketing officer with Agriculture Canada.
The sector has become “the first priority” of provinces exporting agriculture commodities to the EU, said Wilson, who moderated the seminar.
Almost half of worldwide organic sales occur in Europe, where only three percent of the land is devoted to organic production.
Gaining access to that market became even more vital when 10 countries were added to the bloc on May 1, increasing the total to 25 members.
Janet Farmer, commercial officer for agriculture at the Canadian High Commission in London, said retail sales of organic goods approached $2.5 billion in the United Kingdom in 2003. Sales growth has steadied at around 10 percent per year, with 80 percent of those sales through supermarkets.
Stephan Rung, commercial officer with the Canadian embassy in Germany, said Canada ships about $100 million of organic goods to Germany, a country that is home to 30,000 producers, 80,000 manufacturers and 40,000 retailers of organic products.
Carsten Hofmann, general manager of purchasing for Davert GMBH, one of Germany’s leading importers of organic raw material, shudders to think what would happen if Canada missed the deadline.
“It is a very big problem for us.”
His company buys 20 percent of its product from Canada. The quality is good, the product is clean and the service is excellent.
But there is a tendency for Canadian growers to engage in too much market speculation.
“We cannot accept this,” said Hofmann.
Farmers held onto several thousand tonnes of organic flax last year waiting for prices to rise, forcing Davert to buy cheaper product from Argentina and China. Hofmann warned the company doesn’t like switching suppliers.
He said there’s a chance the EU will extend its Dec. 31, 2005, equivalency deadline by six months or so, but the Canadian industry shouldn’t count on it.
“It’s absolutely risky,” said the importer.
If he can’t get product from Canada, Hofmann is confident growers in places like Eastern Europe will fill the void.
Dagenais doesn’t want that to happen. He thinks the organic file needs to percolate up to the minister of agriculture’s desk.
“Government has to take this as a priority issue because we have already taken a dirty beating in the livestock industry with BSE.”
