Work Together to Grow Ontario Organic

Most agricultural products in Ontario are represented by a commodity organization or marketing board to which a producer must pay fees. However, organic producers experience unique challenges to their operations – challenges that require dedicated supports to overcome. These challenges can be difficult for commodity associations to address while continuing to meet the needs of their majority members. That’s why OCO has developed the Grow Ontario Organic campaign: a proposal for a funding system that is fair, representative, and provides choice. OCO proposes an organic “check-off” which would pay for support programs to advance Ontario’s organic sector. We need the endorsement of organic producers to realize this plan.

What’s the rationale for stable funding in the organic sector?

Ontario’s organic market is the largest in Canada, valued at roughly $1.6 billion dollars in sales. Sales of organic products in Canada are growing at approximately 8.4% year-over-year, with some products such as poultry seeing double-digit growth. However, the number of certified organic producers and operators in Ontario is relatively low. Ontario is home to 25% of all Canadian agricultural producers, but home to only 19% of organic producers. The discrepancy between market size and domestic production indicates an opportunity for growth, especially when considering that 83% of millennials purchase organic products on a weekly basis and 75% of retailers suggest that organic sales are continually growing.  Organic production in Ontario is lagging behind market demand – but it doesn’t need to continue this way. That’s why OCO has developed the Grow Ontario Organic campaign: an initiative to establish stable funding for the organic sector. Check out the campaign website here. 

With the rate of growth of supply lagging behind demand, Ontario will increasingly rely on organic imports. Our agri-food sector will lose domestic and international market share, unless something changes. Despite its contribution to the economic and environmental health of the province, the Ontario organic sector is chronically underfunded. There is limited capacity to collect baseline data, conduct important agricultural research, affect policy decisions, engage in market development, encourage new entrants, plan for succession, support transition to organic farming, and educate consumers or market collectively. These services are often offered by commodity groups and marketing boards in Ontario, which are underpinned by a mandatory production licence or levy (colloquially known as a check-off) – a funding mechanism that is regulated by the Farm Products Marketing Act or other legislation. The organic sector has no such support.

How will we generate stable funding?

Upon initial investigation, we estimate that the organic sector is contributing anywhere from $350,000 to $1 million annually to Ontario’s commodity groups. The services and advocacy that commodity groups provide their members are invaluable to producers. However, organic producers all experience common risks and challenges that require more dedicated attention than conventional commodity groups are equipped to provide. By establishing a stable funding mechanism for the organic sector, we will be better equipped to address organic-specific challenges like standards interpretation, organic transition, and business risk management. With stable funding, the organic sector can more effectively partner with marketing boards and commodity associations for the overall development of Ontario’s agricultural industry. 

After completing consultation with over 600 experts and stakeholders in the organic sector, OCO has developed a proposal for an organic “check-off”. While the exact details are up for some negotiation, OCO’s proposal is as follows:

• Producers who already pay commodity or container fees would have the option to divert a portion of their fees from the commodity board to an organic association instead. This portion would be equivalent to 0.1% of the producer’s organic sales. Transitioning producers would also be offered an opt-in.
• The organic organization would administer an opt-in option for producers who do not already pay commodity fees, but would like to contribute to sector development and gain member benefits. 
• Producers who already pay commodity or container fees could opt-out of the organic fee diversion and continue to contribute all of their fees to their commodity groups and/or marketing boards. 
• If a producer wishes to continue to pay the full marketing board licence fee, they could opt to contribute an organic fee in addition.
• An exemption for businesses with less than $100,000 in organic sales would be allowed. However, these producers could still voluntarily opt-in.
• Producers who opt into the organic check-off would gain access to exclusive resources and programs for support. 
• A National Program is the goal, where the whole value chain would contribute. This is just the start.

OCO proposes an organic check-off that is equivalent to 0.1% of organic sales. This means the amount will only account for the price of organic products. The organic check-off amount will be different for each commodity, reflecting the value of that particular product. To calculate the fee, we find 0.1% of the average annual organic price for a particular commodity. This amount is then calculated as a percentage of the commodity levy or container fee a producers would typically pay to an association. Take asparagus for example:

• The average annual price per unit (acre) of organic asparagus might be $8289.05
• 0.1% of $8289.05 is $8.29
• Typically, asparagus farmers pay $40.00 per unit as a levy to the Asparagus Farmers of Ontario.
• $8.29 is 21% of $40.00

Only for those organic farmers who opt to divert fees as an organic check-off, 21% of their Asparagus check-off would be remitted to an organic association. The remaining 79% would stay with the Asparagus Farmers of Ontario. In this way, no additional cost is incurred by producers.

We can then use 21% as a standard rate of diversion for asparagus, since the actual price of asparagus fluctuates through time. i.e. If the price of asparagus is $8,289.05 in Year 1 but changes in Year 2 and again in Year 3, the 21% fee diversion would continue to apply. This should reduce administrative burden of the organic check-off and help streamline operations.

As time goes on and the organic check-off requires re-negotiation, “0.1% of organic sales” will continue to be the guiding principle.

This same formula would be applied for each commodity. For organic operations who do not already pay commodity or container fees but chose to opt into the organic check-off, 0.1% of their total annual revenue from organic sales would be collected. 

Full details on the fee calculation, collection method, and more are available in our Check-Off FAQs. 

What are the intended outcomes of this proposal?

We estimate that this program will likely generate approximately $300,000 for the organic sector. This amount could be more or less, depending on the buy-in of organic commodity producers. The funding would be reinvested into the sector to support priorities as defined by stakeholders. In a sector-wide survey conducted by OCO in 2016-17, producers identified six priorities:

1. Invest in technical supports and training
2. Mitigate the risks of transitioning to organics
3. Strengthen organics by improving standards and certification
4. Improve organic promotions and consumer education
5. Collect sector data and fund organic research
6. Establish a unified voice to effectively advocate for the sector

How can you help?

Our sector is growing, but not fast enough to match consumer momentum. By establishing a funding mechanism that is fair, representative, and provides producers with choice, the Grow Ontario Organic project will ensure the long-term sustainability and success of organics at home. We’ve done the research and we’ve made a plan. All we need is your endorsement. To realize the organic check-off, OCO must work with the Farm Products Marketing Commission and submit a formal proposal for designation as a Representative Association. The first step in the process is a petition in favour of support for the proposal signed by at least 15% of the total estimated number of organic producers. 

If you support Grow Ontario Organic, please endorse the plan here

If you want to provide feedback for the plan, click here

If you would like to share this proposal with your fellow organic producers, click here

Let’s work together to Grow Ontario Organic!