Organic producers and society at large are in line for a healthy premium if a proposed new federal regulation becomes law, says the Canadian Food Inspection Agency.
According to an analysis conducted by the agency, government regulation would inject an additional $1.26 billion into the Canadian economy over the next 10 years compared to operating under the status quo.
The biggest beneficiaries would be Canadian farmers, who are projected to lose an estimated $752 million in sales, primarily to the European Union, if Canada continues to operate with an unregulated system. If the proposed regulation becomes law, not only will farmers make that money back, they will generate an extra $113 million by gaining increased access to other important markets like the United States.
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The only negative under the new system will be the estimated $27.3 million price tag that comes with government involvement in the industry.
“Fees may be applied in the future to producers, importers-exporters, processors, retailers and other individuals and organizations who choose to participate in the Canadian Organic Regulation,” said the CFIA in its preamble to the regulation.
How much those extra fees will be and who will pay for them has been the subject of much confusion.
“I think the government has been oblique on this because they know it’s a huge issue,” said Laura Telford, executive director of Canadian Organic Growers, the country’s largest national organic organization.
“It hasn’t been clear to me what the true costs are going to be. We’ve heard many different things.”
If the industry is on the hook for the entire tab, which is unlikely, that would mean an extra $675 in annual certification fees for each of the country’s 4,000 organic growers.
Michel Saumur, project manager for the CFIA’s Organic Production System Task Force, said the agency is working on a proposal that would alleviate the industry’s concerns.
It has applied for federal government funding that would temporarily cover the estimated $2.7 million annual cost of the program.
“There won’t be any cost recovery scheme introduced, I hope, for the next two years. If there is one, it is going to be in the third year of operation.”
Saumur was more circumspect on what will happen after the proposed two year funding runs out, although he indicated there is the potential for an ongoing government subsidy.
