WASHINGTON, Jan. 6, 2016 - Short supply – the biggest issue facing the organic agriculture sector in 2015 – will undoubtedly hinder growth in the sector through 2016. But the CEO of the Organic Trade Association (OTA), Laura Batcha, says her group has a three-part plan that will help increase organic production in the coming year.
USDA’s most recent Census of Agriculture, released in 2012, showed demand for organic products far outpacing the adoption rate of organic acreage. Anecdotally, and through its own research, OTA knows the organic supply crunch has continued since then, but evidence on how the sector is performing is often hard to come by, Batcha told reporters at a recent briefing in Washington, D.C.
“It’s a very opaque marketplace,” Batcha said. “We did a lot of work in 2015 to pick apart that issue, to find out what the dynamics are, to bring some data to the table about long-term solutions” to the supply problem. After some soul searching, OTA developed the following three policy objectives for 2016:
Create a Process Verified Program. OTA is currently drafting a proposal for a Process Verified Program that it hopes to submit to USDA early this year, allowing producers to receive transitional certification for land that’s being shifted from conventional to organic production.
According to Batcha, organic suppliers are willing to enter into long-term contracts with farmers who are transitioning acreage to secure the organic product they need, in some cases, up to six years in advance from when the land could be used to grow certified organic crops. Under the contract, the supplier would be required to pay “a modest premium” to the farmer for the years the land is in certified transition.
“We know that the economics of the transition period is not a great formula for farmers – the payoff happens a few years into the (new) system,” Batcha said. This program certification would provide “some assistance to farmers (as) they get their organic systems up and running” and would ensure suppliers “have the product on the other side.” The accreditation program would also make it easier for farmers to establish eligibility for transition-support programs offered by USDA, Batcha noted.
Establish an organic checkoff. OTA submitted its organic checkoff program proposal in May to USDA after years of preparation and heated debate. Batcha says she thinks the public comment process on the proposal will be completed during 2016. But before the program is instituted, it will also have to be approved by a simple majority of organic certificate holders in a referendum vote.
Batcha said the latest version of the checkoff has sufficient support to pass. Over 500 organic businesses – 80 percent of which were producers – have signed on in support – and a series of OTA surveys have found that organic farmers and business owners support instituting an organic checkoff by a 2-to-1 margin. For years, most organic research and outreach has either gone unfunded, or was funded by a small group of the same people, and “that’s not fair,” Batcha said.
“Other industries fund (marketing, research, and education) in a coordinated way through their checkoff programs,” she said. “You have to have a vehicle to invest. Whether you like the (checkoff) vehicle or not – this is the vehicle that drives down the road for agriculture.”
Amend the Federal Milk Marketing Orders. OTA hopes to learn the fate of its request to amend the Federal Milk Marketing Orders (FMMOs) sometime in 2016, too. The group’s amendment would set up an alternative way for organic milk handlers to meet their minimum price obligations under the FMMOs.
The existing FMMO program requires milk handlers, organic as well as conventional, to pay a minimum price to farmers for the milk they purchase. In theory, those minimum prices – assigned by USDA’s Agricultural Marketing Service (AMS) on a monthly basis according to milk class – help to stabilize fluid milk prices, facilitate orderly marketing nationwide, and ensure a sufficient quantity of milk is available to consumers at affordable prices.
“The benefits this program provides are important to conventional dairy farmers” Batcha, said, however, “it does not benefit organic.”
A minimum price for organic milk is secured through long-term contracts and the organic dairy sector’s distinct supply chain, Batcha argued. And the FMMOs do not distinguish between organic milk, which often commands a price premium, and conventional milk, which makes up the vast majority of milk marketed through FMMOs.
Milk handlers can, and do, pay milk prices above what AMS sets as minimums. The difference between the actual prices paid and the minimum prices for milk is pooled, and later redistributed out to milk producers. Batcha estimated organic handlers contribute around $40 million a year to that pool – money she says should be invested into “helping new dairy farmers convert to organic” instead of being “distributed out to conventional dairy farmers.”
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