Farm Transitions: Valuing Sustainable Practices—Organic Certification

Any or all of the practices in this publication can be part of an organic farm operation. The important aspects of crop rotations, soil fertility management, and water quality management are all mandatory for an organic farmer.

What makes a farm USDA Certified Organic, and thus qualifies the farmer to receive price premiums for farm products in the marketplace, is the use and documentation of production practices specified by the requirements of the USDA’s National Organic Program (NOP) (1). Following NOP-specified practices, developing a record-keeping system to document all practices on the farm, paying certification fees, and undergoing an annual inspection by a certified inspector is how farmers achieve organic certification (2) (see Certification Costs text box).

One of the most daunting barriers to organic cropping conversion is the three-year transition period usually required before the land can be certified. The transition period can be a difficult time for a producer to be profitable. She or he has to spend time creating an organic farm plan and interacting with the certifying agency. Converting farmland to an organic management system can cause unexpected challenges in the form of disease, insect, and weed pressure if chemical methods of controlling those are suddenly withdrawn. Eventually the system re-balances and those problems diminish, but that’s why there is a three-year transition period: it takes some time to work out the system.

An organic farmer can’t access the organic price premiums during the transition period, so for that period there may be lower yields but not yet the organic premium prices for the farm’s products—although there are some niche markets such as non-GMO (non-genetically modified organisms) that farmers can sell to during the transition. Some farmers do a gradual transition; for instance, a field at a time to organic production (2). This strategy can reduce the risk of no or low whole-farm profits during the transition phase, but it comes with its own costs of maintaining buffer areas between the organic and conventional fields, and extra procedures during and after harvest to make sure that none of the conventional crop gets mixed in with the organic.

Size and potential sales volume of a future organic farm are also factors to consider. Financial record collection and analysis for organic farms in Minnesota shows that from 2006 to 2010, organic farms that could generate at least $100,000 per year in sales were generally more profitable than smaller organic farms, although there was much variation from year to year (3). Organic farms average about 33% fewer acres than conventional farms, and require more management time per acre and more kinds of equipment (see Organic Costs text box). It’s important in a farm transition plan to make sure that the future organic farm has the right size and production capacity to give the farmer a reasonable chance to make it work, both financially and in terms of time management (see Organic Profits text box).

If part of the legacy that you want for your land is to have it farmed organically, then it is important that your farm transition plan recognizes the particular challenges of organic agriculture. It is very difficult for an organic farmer to deal with an annual cash rent situation or a short-term lease, because of the large investment of money, labor, and management time they need to make the transition to certified organic production. Organic farmers typically need a lease term of at least five years, and even longer would be better. If the land is not already certified organic and must undergo the three-year transition period to organic, then the new farmer would greatly benefit from a stepped rent arrangement with lower payments during the transition period. In a sale arrangement, lower payments in the first few years would be beneficial for giving the farmer the “breathing room” needed to complete the three-year organic transition period and become profitable.

Use the Organic Certification Cost/Benefit Table to estimate the value of organic certification for your farm.


References:

(1) National Organic Program (NOP). USDA Agricultural Marketing Service.
www.ams.usda.gov/

(2) Minnesota Guide to Organic Certification. 2007. Jim Riddle and Lisa Gulbranson. http://conservancy.umn.edu/bitstream/51829/1/MN_Guide_to_Organic_Certification.pdf (accessed 8/27/13).

(3) 2010 Organic Farm Performance in Minnesota. 2011. Dale Nordquist and Meg Moynihan. Minnesota Department of Agriculture.
www.mda.state.mn.us/~/media/Files/food/organicgrowing/organicperformance2010.ashx (accessed 8/23/13).

Further Resources:

Midwest Organic and Sustainable Education Service (MOSES).
www.mosesorganic.org/
Collection of fact sheets on organic transition and certification process, sample forms and budgets, resource directory, online organic classified ads, online bookstore with many titles relevant to organic and sustainable farming.

Organic Agriculture. Minnesota Department of Agriculture.
www.mda.state.mn.us/food/organic.aspx
Information and tools for Minnesota organic farmers, some of which would be useful to farmers in other states; including cost-share application forms, lists of accredited certifying agencies, Minnesota organic farm directory, scholarships, financial reporting, Driftwatch registry, and specific items like “No Spray” signs.

Organic Agriculture Program. Iowa State University Extension.
http://extension.agron.iastate.edu/organicag/
Iowa field day and conference information; general information on certification and production; research reports; National Organic Program standards; information on suppliers of organic farm inputs and buyers of organic products.

Organic Farming. Appropriate Technology Transfer for Rural Areas, National Center for Appropriate Technology.
https://attra.ncat.org/organic.html
Collection of informational fact sheets on organic field crop, livestock, and horticultural crop production; certification and marketing; the transition to organic; and explanation of National Organic Program guidelines.

Organic Risk Management. 2010. Editors: Kristine M. Moncada and Craig C. Sheaffer. www.organicriskmanagement.umn.edu/ (accessed 8/27/13)
Extensive research-based guide to organic crop production and management, including chapters on crop rotation; soil health and fertility; weed biology and management; transitioning to an organic system; organic corn, soybean, small grain, and forage production; cover crops; and alternative crops. Useful for non-organic farmers, too; there is a lot of good basic agronomic information in this resource.