Are You Organic

Is your farm produce organic or naturally grown? Are your vegetables grown using environmentally friendly and sustainable farming practices? Are your farm’s marketing claims supported by certification? These are important questions that each farmer needs to consider before bringing produce to the marketplace. These questions relate to fair-marketing of farm produce using labels, web sites, brochures and other point-of-sale materials to highlight value-added farming practices.

Sometime ago, small farmers realized that using sustainable agriculture practices were not only good for the farm’s soil and environment, but customers preferred fresh, traditionally grown foods and were willing to pay more for them. This organic movement led some large-commercial growers to use false claims to get higher price for their conventionally grown food. As a result, it was decided that government standards were needed in order to regulate how “organic” labeling is used in the marketplace so as to protect consumers from false claims. So the National Organic Program came to be, along with all the many organizations necessary to gain and maintain this certification. A Small Farmer Exemption for farmers with yearly gross sales less than $5,000 was given. However, many small farmers have determined that the added-value of a USDA-Accredited Certification is not worth having considering the cost and time to administer paperwork.

The Certified Naturally Grown program brings the small farmer “grass-root” movement full circle. CNG is a non-profit alternate certification program created for small-scale organic farmers. CNG standards are based on the USDA National Organic Program standards. It minimizes paperwork and fees, and employs a simpler peer-review (farmer-to-farmer) inspection. It is designed to maintain the long-standing trust between the small farmer and consumers of small-farm products without the costs and bureaucracy of the USDA-administered program.

The Food Alliance is a third-party certification for environmental responsible farmers using sustainability agricultural practices. Food Alliance certification is not intended to duplicate the USDA-Accredited Certification program nor the CNG. Instead, this certification is designed to provide a basis for marketplace claims of being environmentally and socially responsibility.

Which of these certifications, if any are best? It is up to the farmer to decide. Farmers selling at the ‘grass-root’ level directly to customers at the farm stand, local farmer markets and local grocery stores do not need a rigorous certification program to establish trust. For those who decide to sell regionally at the larger supermarkets, produce auctions and specialty produce and health food stores might benefit from an USDA-Accredited Certification. As always, it is best to do research and get a good understanding of your intended market and then decide what is best for you and your customers.

For us, the value-added must off-set the costs for gaining any certification. The costs to us include both direct and indirect. Direct costs include application fees, operation fees and inspection fees. Indirect costs include the time to prepare, submit and maintain for reports and paperwork. With plans to sell some produce at the wholesale and regional level, we feel that the USDA-Accredited Certification is worthwhile. However, we highly recommend the Certified Naturally Grown program for its “grass-roots” approach and the Food Alliance program for its commitment to earth-friendly practices. We plan to re-evaluate our farm certification options periodically and adjust affiliations accordingly.

Our commitment to our customers matters most:

1) Business reputation using a straightforward and honest approach is of the foremost importance.

2) Our farm production rate is coupled to our marketing plan. We will prepare our markets before we set our crops production.

3) We practice traditional farming methods without the use synthetic pesticides or fertilizers. For us, the word ‘”organic” is an agricultural philosophy not a marketing tool.

The various farm certification options are analyzed :

Certification Option Description Yearly Cost Cost-Benefit Analysis
USDA-Accredited Certification The USDA requires that anyone who produces organic agricultural products must be certified by a USDA-accredited certifier. $362 per year after a State cost-share reimbursement of $750.  (See note 1) Must develop, implement and maintain an organic system plan subject to yearly inspections.  Can market, label and sell produce as “USDA Certified Organic”
USDA-Small Farmer Exemption (gross sales less than $5,000) Small farmers need not be certified by a USDA-accredited certification agency to label their produce as “organically grown”. No organic certification cost. Exempt farms must maintain records and follow the exact same production practices as certified farmers. Can use wording  “organically grown”.
Certified Naturally Grown A non-profit alternate certification program created for small organic farmers. CNG standards are the same as the USDA NOP. An annual contribution of $50 to $175. Minimizes paperwork and fees, and employs a peer-review inspection. CNG farmers agree to conduct at least one inspection of another farm annually. Can market, label and sell produce as “Certified Naturally Grown”. Cannot use the word “organic”.
Food Alliance A third-party certification for farmers using sustainable agricultural practices. Standards use “best farming practices” based on research agencies and land grant universities. $400 (0.5% of gross sales or $400 which-ever is greater) (See Note 2) Certification term is three years. Farmers complete annual reports, reporting progress towards their continual improvement goals. Can market, label and sell produce as “Grown using sustainable farming practices”.  Cannot use the word “organic”.

Note 1: The Basic Certification Fee is $605 for an annual update or $660 for a new applicant. The sales assessment is calculated on annual gross organic sales. We plan to be a “Category A” organic farm with sales between $5,001 and $100,000. For example, if the amount of our sales is $40,000, we would be charged nothing for the first $5,000 and 0.5% for the remaining $35,000 for a total sales assessment of $175.

The actual cost of our inspection would be charged at an hourly rate, plus expenses. For example, farm inspection of $80 (2 hours at $40 / hour) plus travel time of $80 (4 hours at $20 / hour) plus expenses of $162 (mileage and meals) plus inspection fee of $10 for a total inspection fee of $332.

Assuming no additional costs for special operation (dairy, beef, sheep, goats, poultry, processor / handler / broker / distributor), special review charges, administration or document fees, the total for USDA-accredited certification is a total of $1,112 per year.

There is a state-sponsored Cost Share program where farmers are eligible for a reimbursement of 75% of certification fees each year up to $750. For us, this would be $750. So, the adjusted cost is $362 per year ($1112 minus $750) or about 1% of sales. This means to recover certification costs, our customers must be willing to pay at least an average of 1% more for “USDA-accredited certification”. This amounts to a cost increase of 5¢ for wholesale and 8¢ for retail per pound of garlic sold.

Note 2: The sales assessment is calculated on annual gross organic sales for farming. For us with sales below $175,000, we would be charged $400 (0.5% of gross sales or $400 which-ever is greater).

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About wooleylot

Garlic Farmer
This entry was posted in Farm News, Marketing. Bookmark the permalink.

One Response to Are You Organic

  1. Pingback: Organic Food Blog By Anna Viola « Healthfood Tips

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