Organic farmers watching prices fall

The organic market is the fastest-growing food sector in North America, but despite growing demand, farmers are watching prices for their produce fall.

The organic market is growing 15 to 20 per cent a year, and is worth about $1 billion in Canada, not including exports, farmers at an educational seminar in Charlottetown by the Agri-Food Canada Organic Network and the Canadian consulate in Boston heard Wednesday. 

They also heard more of what they already knew.

"Everybody else is making their margin, but the farmer's got to be the one that takes the bite, that's my concern," said Alan Hicken, an organic fruit and berry grower.

Matthew Holmes, managing director of Canadian operations for the Organic Trade Association, came to the meeting to encourage farmers to join the organic market, despite narrowing profits. Eighty five per cent of the Canadian market is filled by American farmers.

"We need you. There's an immense demand; we can't meet all of the demand globally, as well as within Canada or the North American market," said Holmes.

But much of the new demand for organic food is coming from mainstream supermarkets, and those supermarkets have made it clear they are not interested in paying premium prices for organic foods. A recent television ad featuring Galen Weston, chair of Loblaws, and touting organic baby food at the same price as regular baby food was a focus of conversation at the meeting.

"It's just mentioned here today, in terms of some of the ads that were on, not wanting any difference in price between organic and conventional," said organic farmer Reg Phalen.

"It puts the squeeze on us pretty hard if you want to play in that type of game."

Demand increasing, says farmer

Fred Dollar was the first P.E.I. farmer to grow a large acreage of organic potatoes. He's also dealing with the strange paradox of the organic food market.

"Demand is increasing every year. We're moving more product; price is dropping every year," said Dollar.

"If you want to move the product, you've got to take a little less."

One thing that won't change is the risks, and therefore higher crop loss, of growing organically.

Some farmers are considering how best to develop local markets, rather than relying on the big supermarkets. If they're going to grow more organic produce, farmers are going to want to see a reward at the farm gate.