The Business Of Organic Regenerative Agriculture

Transitioning to organic involves a lot more than just removing agrochemicals from your fields. Often, it means completely reorganizing sections of your farm system as you develop new methods of addressing problems like weeds, pests and nutrient management. Although these new practices may require substantive investments of time and resources in the early stages, over the long term they can improve profitability, sustainability and daily workload. 

When it comes to organic farming, increased profits depend on several factors: 

• Successful access to premium prices
• High production with low inputs 
• Access to the right supports during the transition period

When developing your organic plan, thinking of your farm as a closed-circuit system can help reduce input costs, build soil strength and increase biodiversity. What kinds of waste products are you generating, and can they be used as inputs somewhere else in your system? Is it possible for you to generate some or all of your own energy? In this article, we’ll take a closer look at how to build a strong organic business model.

The Holistic Management Mindset

Planning your organic transition can be exciting. You might feel optimistic or ambitious about the potential that lies ahead. Organic practices, however, can quickly become overwhelming and exhausting without proper management. When fleshing out a business plan, consider the following factors:

• Life Goals: What do you want out of your life in regards to your relationship with your land? There are many reasons why farmers take up organic practices. Perhaps you want to create a hub for biodiversity, a research centre for alternative agriculture or provide a public service to the community. You may want to build a beautiful home for yourself and your family or a successful long-term business you can pass down to future generations. Whatever your goals, be as detailed as possible in your vision and include concrete plans about how you intend to achieve them. This will allow you to identify any overcomplicated strategies or unrealistic goals before they exhaust your efforts. An organic transition takes at least three years to complete, the soil will need to be patiently rehabilitated during that time while you learn through trial and error what organic practices work with your unique farm system and what doesn’t. Having a clear goal in mind will help you through this process.

• Overall Profit: While monetary gains are an important measure of success for any farm, an organic and regenerative farm should consider other measures of success as well, including social, environmental and personal profits. Focusing solely on monetary profits can cause you to neglect the goals you’ve identified, some of which may have no immediate monetary returns. A successful organic business plan, therefore, should think of  profits in terms of multiple positive outputs that allow you to meet your goals and build the life you want to lead.

• Address Potential Weak Points in Your Organic System: It’s important to identify the weak links or pain points in your organic system. These weak points can be financial, social or environmental, they will impact your goals in some way or another. It is important to anticipate these challenges and develop a contingency plan that addresses them.

Accessing Premium Prices

Organic farmers can experience significantly larger profit margins compared to their conventional counterparts (three to four times more in some cases). A significant reason for this is that organic products sell at premium prices—so being able to access these prices is essential for organic farmers wishing to see this significant profit increase. 
Obtaining organic certification can be a long process that requires a significant amount of paperwork. The Canada Organic Trade Association is currently administering the Support Organic Change Fund, which provides funding to help cover more than half of all certification costs for Canadian farmers. While certification is not mandatory  if a farm’s organic products are only going to be sold within Ontario, for larger-scale inter-provincial and international trade, or to use the Canadian Organic logo, certification is necessary. The Canadian Organic Standards outlines the detailed regulations that farmers need to adhere to gain certification. 

Consider Diversifying Crops

Studies have found that organic farmers will borrow money less than conventional farmers both because they require fewer synthetic inputs and they are more likely to have a diversified product portfolio. Having multiple product types allows for harvest to be more evenly distributed throughout the year and acts as a safety net in case one type of crop doesn’t perform as expected. Spreading risk across multiple niche markets will prevent a farmer’s success from becoming completely reliant on the fluctuations of a single market. Diversifying your portfolio can also cut expenses elsewhere; for example, adding legumes to a crop rotation will reduce the need for nitrogen fertilizer.  A diversification of crops will also pair better to the organic farming system, which often encourages plant biodiversity in the field. 

When choosing which new crops to try, it is important to take into account how labour intensive the new crop will be (fruit, nut or honey production usually involves intensive labour). Crops can also be selected to mitigate adverse weather conditions. Crops like amaranth, millet, safflower, sesame and sunflowers can still perform well in drought conditions. In high moisture years, alfalfa can be planted to help suppress weeds.   
The Organic Council of Ontario has conducted multiple studies that examine the cost of production for a variety of organic farming models, including organic dairy, salad greens, field crops and poultry. These Cost of Production studies offer farmers insights and financial data provided from each industry. You can look at our costs of production studies here.

Improve Resource Efficiency

When building a new organic farming system, it’s important to minimize resource expenses as much as possible. Not only is this approach more environmentally beneficial, but it will also save you time and money—which is vital during the first few years of transition when a dip in yields is expected. Our current conventional agricultural system was not built to be resource-efficient – it was built to produce high yields regardless of waste – so there are many potential opportunities for improvement.

Water Efficiency

On organic farms, soil health is everything. Healthy soil has an improved ability to absorb and hold water, reducing the need for extensive watering in dry conditions, saving on labour and equipment costs. 
Organic farming systems have been found to have more water in the soil compared to conventional farms after a five-year transition period. Adding mulch to the soil will also improve the water absorption rate during the transition period when soil organic matter is still being built up. You can also reduce your dependence on additional water sources by protecting existing water resources on the farm, such as ponds or rainwater. There are many ways to do this:

• Keeping the soil covered as much as possible through organic farming techniques like cover cropping and no-till agriculture. This reduces runoff and prevents soil erosion. 
• Avoiding any inputs that can cause significant damage to nearby water systems
• Consider recycling rainwater where possible

Nutrient Efficiency

Farmers have had a long struggle developing ways to cycle nutrients successfully from soil to plants and back again. Over the last hundred years, synthetic fertilizers were developed to significantly boost yields resulting in widespread environmental damage including algae blooms and subsequent dead zones that can’t sustain aquatic life. Being able to close this nutrient loop will not only provide environmental benefits but also offer economic opportunities since these nutrient inputs are expensive when purchased off-farm and can be wasted if overapplied. Finding alternative sources of nutrients is central to organic farming. Alternatives include:

• Using organic amendments like green manure and legumes 
• Planting crop rotations and diversity 
• Planting cover crops 
• Reducing tillage to build up soil matter 

Soil Efficiency

Soil erosion is a major problem in conventional agriculture. Most topsoil is expected to erode in the next sixty years if we do not alter our current farming practices. It is important to recognize that healthy soil is a farm’s biggest asset—with proper investment and care, it can ensure that the farm remains productive and profitable over generations. 

Many benefits that come with healthy soil, including more resilient crops, fewer weeds, greater soil nutrients, protection against soil-borne diseases and heightened ability to sequester carbon. In Ontario, farms on average have soil that is classified as moderately healthy, with the soil in farmlands on a steady decline. You can assess the health of your soil by testing for the following priorities: 

• Soil Type and Structure: Healthy soil should have good drainage, good tilth and a solid but not compact structure. While a dark colour is evident of rich organic soil matter, other evidence of soil activity such as burrows and tunnels are also acceptable.
• Field Conditions: Unhealthy soil demonstrates erosion, capping, crusting and cracking with water sitting on top of the fields in ponds for long periods.
• Crop Conditions: Signs of poor soil quality include a crop of poor colouration and changes in quality and quantity of yields.

Prioritizing soil health is a crucial first step for organic farmers, as it will help bring yields back up after first transitioning to organic agriculture. Organic farmers can rebuild soil organic matter in a few ways:

• Limit soil disturbance through limited or no-till agriculture this will also significantly reduce energy and labour costs (in some cases by 50-80 percent). 
• Consider retiring over-cultivated and heavily eroded land by converting into pastures of woodlands. This will rehabilitate the soil for future generations. 
• Keep the ground covered as much as possible using cover crops.
• Create buffer strips in areas prone to flooding and erosion.
• Plant a variety of crops with different root depths and stalk height to better fill up the soil real estate, reducing the risk of weeds and soil erosion. 
• Apply green manure and organic mulch consistently, this will reduce the chances of weeds but will also add more nutrients to the soil.

It’s easy to see how these practices can work together to build a strong holistic farm model. Using plant or animal manure as a nutrient source leads to healthier soil, which in turn reduces the need for extensive watering. Resource-efficient practices can be the foundation of a strong business management plan that allows for high productivity and profitability while leaving room for the consideration of social, environmental and other forms of flourishing as well.

Support For New Organic Farmers

Organic farming is an investment—though it requires time, labour and money at the outset, it can have amazing environmental and economic benefits for the farm, farmers and surrounding communities. 

Support during the initial transition period is critical to long-term success and growth in the organic sector. In 2015, Quebec made a strong commitment to supporting organic farmers and since then has created a robust platform of support for new organic farmers. As a result, Quebec has a booming organic industry that outpaces the other Canadian provinces in most organic sectors. Since Ontario has such a large consumer base, it is a safe assumption that similar support would similarly boost Ontario’s organic sector. If you are interested in exploring and implementing more climate-friendly farming practices, you can browse relevant grants and loans available to farmers on our website.  

This marks the end of our Organic Climate Solutions blog series. We hope you have enjoyed and learned a lot about the many different things farmers can do to adapt to the realities of climate change and mitigate further climate impacts. The science is clear: our current agricultural system is not sustainable, and if we are going to lower greenhouse gas emissions while continuing to feed the global population then we need to make systemic changes. By incorporating organic and regenerative farming practices into their management systems, Ontario farmers can take part in the climate solution while protecting themselves from increasingly unpredictable growing conditions. Farmers can become champions at sequestering carbon, protecting our water systems and supporting biodiversity to safeguard an abundant future for generations to come.