March 1999

To obtain a hard copy of this study, please contact the Canadian Farm Business Management Council directly at 1-888-232-3262 or visit their website at www.cfbmc.com

Executive Summary

Consumers are showing increased alarm about the possibility of harmful contamination of their foodstuffs by the use of pesticides, herbicides and genetic alteration of plants, and other man-made chemical and biological influences that are considered "non-natural". Driven by this fear, it is accepted fact today that organic and "no-spray" production is one of the fastest growing areas of agriculture in the developed world. Most knowledgeable individuals and organizations in the industry expect this rapid growth to continue for at least several more years. It is no longer considered a fad.

Indeed, even during the compilation of this report major market international volatility has been observed; first with the introduction of proposed new definitions vis-a-vis what constitutes organic food under USDA Regulations (which evoked a major public outcry) and more recently, introduction of genetically modified (GM) seeds, which is having the same result. If anything, these events would appear to strengthen, enhance and speed the move toward consumption of true organic foods in North America and Europe.

As with most areas of the developed world, organic agri-food production in Atlantic Canada is not adequately supplying its own market. Further, there appears to be a major opportunity for export of such products, especially if these provinces can "tool up" to take advantage of it. Lead times are critical -- probably in the order of five to seven years.

Quebec, California and other jurisdictions in Canada and elsewhere are already penetrating New England export markets. The industry in Atlantic Canada will not develop to export status without a concerted effort and unwavering will by both private and public interests, working in close harmony.

Export markets in New England or elsewhere are extremely demanding. A number of disciplines must be observed with slavish adherence: quality, continuity (of quality and supply), packaging excellence, professional marketing support and competitive pricing. Even when these criteria are flawlessly observed, Atlantic producers may only expect to be invited into new markets when local organic produce is unavailable. Initially, producers may find they are relegated to a "back-up" position in the supply system: "When there's no one else to go to, we'll look at your offering". However, as producers and buyers develop experience and trust, this is likely to disappear as a problem.

It will be crucial to success that Atlantic Canadian producers work in close harmony with each other for their mutual advantage and support. Further, it will be equally critical that firms and individuals chosen to represent these Atlantic Canadian organic and natural food producers are totally honourable and without blemish. The industry in some parts of the world is reputed to have unsavory elements within it. Such a tarnished image must be avoided at all cost.

This study recommends establishment of an Atlantic Provinces' specialized organic wholesaler/distributor/marketing agency, to be the focal point of all export activity. Further study will determine whether this organization should have a central place of operation in each province or one larger center, as close as possible to all. Further, this report recommends establishment of advisory support services to both organic growers and marketers to be available on a virtual instant-access basis.

This study foresees establishment within the next decade of a multi-million dollar organic export industry in Atlantic Canada capable of creating major employment of low and semi skilled workers and producing meaningful wealth to the region in perpetuity.

Furthermore, it considers that the potential for exportation of organic agri-food is just one part of the puzzle. Consumers, producers, marketers and retailers of these products within Atlantic Canada must contend with a relatively short growing season. Yet demand here and abroad is constant. Facilities established to develop exports may also assist greatly to supply more consistent distribution of organic agri-food products within the region during non-growing seasons. Atlantic growers, particularly smaller ones, may make much better use of their produce through a marketing agency available to all of them, year round.

The reality of distance, geography, climate and growing cycles here and in the southern US result in an inexorable linkage of imports and exports if organic customers in Atlantic Canada are to be supplied consistently throughout the year. It appears to make little sense to have one seasonal brokerage for export and another separate establishment for imports. Surely one distribution system could serve both functions in the best interest of both growers and consumers in Atlantic Canada.

Systems suggested in this report by which to export this specialized produce may also perform valued service by importing such produce as organic citrus fruits, etc. -- never grown here in any season -- at other times of the year. These factors may serve to strengthen bonds with buyers in New England and elsewhere who see promise in our capacity and have possible interests in two-way trade.

While the terms of this study centre on New England, the authors have recognized that within the course of their examination, markets in the UK and Europe beckon with similar allure. We submit it will be wise therefore to consider the wider horizons as well as nearby opportunities.

Development and growth of organic agriculture in the Atlantic Region will require a variety of supporting infrastructure elements. This report makes thirteen recommendations which we believe will encourage and facilitate the establishment of a strong segment of agriculture, relatively easy to access by new farmers, and capable of contributing economic spin-off benefits to the rural communities in Atlantic Canada.

This study recommends that certification standards, in accordance with international criteria, be implemented through appropriate legislation and regulations. This is a basic requirement for development of the organic agricultural industry. This study recommends that an Atlantic Region Accreditation Board be established to implement this program.

The present certification standards vary from one certifying organization to another. The standards of some, such as the Organic Crop Improvement Association (O.C.I.A.), are international in scope and enjoy acceptance across provincial and international boundaries. Those of others, such as the Nova Scotia Organic Growers Association (N.S.O.G.A.), are provincial only, and their certification is not recognized in other jurisdictions. No standards are recognized officially by the US and Canadian food inspection and regulatory agencies. Without legal standards, anyone can claim that their products are "organic", whatever they believe that this term may mean.

Accessible and affordable education and training will be required for all participants to become competitive and thus succeed in the organic agri-food industry. This study recommends that an Atlantic Organic Institute be established in the Atlantic Region as a vehicle to develop and deliver instructional as well as research services.

The organic industry is small and fragmented at present. It is very difficult for present growers to address issues and reach consensus on what goals are most appropriate in the growth and development of the industry. This study recommends the establishment of a region-wide Association, with all stakeholders eligible for membership, the purpose of which will be to focus on the development, growth and promotion of organic agriculture in the Atlantic Region.

Finally, this study recognizes that addressing the challenge and opportunity presented by the growth in demand for organic agri-food products will require financial support programs from the Atlantic Region provincial governments and the federal government. Therefore this study recommends any new support programs be directed toward provision of the missing infrastructure elements and that no financial support be provided directly to individuals or privately owned companies.