Monday 28 November 2011

Organic farmers pressured by global markets

BY KELLY MALONE       

Organic grain elevator in Sask. fights the recession.
     The faltering global economy and its widespread financial crisis have landed heavily on the organic farming industry in Saskatchewan. Where the rolling hills beyond Moose Jaw, Sask. open into golden fields, many organic farmers find themselves on a plateau between their values and the ability to put bread on their own tables.


Between 2008 and 2009, 84 new certified organic farms were formed in Saskatchewan. RW Organic Ltd, based out of Mossbank, Sask., is one of the largest organic storage facilities in the world. Ron Wells, an organic farmer, imagined the company to meet the needs of the growing organic industry and to help farmers gain certification. Wells brought in 190 organic farmers between 1999 and 2000, often doing the paperwork and paying the fees out of his own pocket.

The atmosphere of cooperation and optimism was short-lived. Since 2008, the price for organic grains has been steadily decreasing due to the European financial crisis and the recession in the United States.

“Generally it used to be double the price on organic goods, so if you sell ‘em for five bucks you get 10. It’s not that way anymore; we were up to almost $30 a bushel (that) we were paying, which is quite a bit. Right now for the same grain we are paying $10, so it’s a third of what it was three years ago,” said Jason Breault, manager and head grain buyer of RW Organic.

The pricing disparity leaves a shadow over the RW elevator even as it stands tall above the small town. Trains and trucks rumble through less frequently because 90 percent of the RW’s products were being sold to the United States, which has been hit hard by a financial crisis.

“The recession has hurt. I guess down in the States if you are gonna lose your house, do you buy a $2 loaf of bread or a $4 dollar loaf? You are gonna buy the $2 loaf,” said Breault.

The frugality imposed by the recession has left the oversaturated market of organic farmers in Saskatchewan without customers. Farms that are newly certified are most likely to be adversely affected. Before gaining certification, farms need three years without spray or fertilizer. The transition causes a smaller yield and fewer products sold. Entering the organic market unstable, newly-certified farms are more susceptible to the decreasing demand.

“It is a big change. The farming techniques change, the crop rotations change, it’s more labour intensive I would say,” said Diane Sully, an organic farmer in the Mossbank area since 2003.

“We have survived,” said Sully.

Much like the aging farming community of the region, Sully feels overwhelmed by the increased labour and market uncertainty involved in the organic industry. The Sullys hope to eventually leave their farm to their daughter and her family, who are equally passionate about organic farming, and equally worried as the recession spreads to Europe.

“A lot of (the crop) goes to the States and to Switzerland or Europe. Europe buys a lot of the organic stuff. Well, Europe crashed soon after the States crashed and our market went to pieces,” said Sully.

Sully is not alone in her apprehension. RW Organic has lost business from 20 per cent of the organic farms that they deal with. Farmers have returned to conventional farming in order to turn a larger yield and break even.

“It’s a bit tough, right now they are paying on a good grade $10 and they can get around $8 for it conventionally, so there isn’t a lot of premium,” explained Breault.

Saskatchewan will be heavily affected by the price drop. Out of the 3,914 organic farms in Canada in 2009, 1,123 were located in Saskatchewan. In 2009 there were also 73 processors and 23 handlers, who will now be struggling. The drastic downturn has created both a financial and ideological struggle. Older farmers suffering from cancer blame the chemicals for their illness, invoking fear in those that remain. But for many farmers, the only feasible way to survive will be to return to conventional farming and give up on the values that initially brought them into the organic industry.

“When you gotta make a living, put bread on the table, sometimes in an economical sense it’s better to go the conventional way,” said Breault.

Many farmers have also chosen to leave the farm altogether. In Mossbank, the population has decreased as larger modernized farms replace the smaller family farms that are more likely to do organics. Although recent years have seen a population increase, between 2001 and 2006 Mossbank’s population dropped by 49 people from 379 to 330, a significant decline for a small town.

“It was busy all the time, farmers hauling their grain in and now you don’t see that,” said Shelley Canton, postmaster and long-time resident of Mossbank.

The failing market has created barriers but organic farmers remain committed to their alternative style of farming.

“It will never be totally huge, but it is growing and prices are coming back. It has a place in the world and (in) society,” said Sully.

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