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Expanding Markets and Evolving Regulations for Canadian Certified Organic Foods

Lisa F. Clark

 

Today, organic food can be found everywhere from the local farmers’ market to the aisles of Walmart across North America. According to the 2015 International Federation of Organic Movements (IFOAM)’s annual report World of Organic Agriculture: Statistics and Emerging Trends, the global market for organic products was worth $72 billion USD in 2013, an increase of 10 billion from the previous year.1 Canada and to a greater extent the US, have been the fastest growing markets for organic foods in the world. Between 2005 and 2010, the size of the market for organic products in both countries more than doubled. The most recent statistical data for Canada’s organic food market shows that there was approximately $3.25 billion CAD in sales in 2013. According to a report published in 2013 by the Canadian Organic Trade Association, the top three reasons why Canadians buy organic foods and beverages in Canada are because they are perceived of as healthier and more nutritious than conventionally produced products, organic products are considered to be more ecologically sustainable compared to conventional agricultural methods, and because they want to avoid consuming GMOs.2 The market share of organic products sold in Canada has steadily grown since 2006, when organic products made up 1% of grocery sales. By 2012, the share of the market grew to 1.7%, consisting of mostly fresh fruits and vegetables, and organic beverages.3 Approximately 58% of Canadians purchase organic products (including food, beverages, and health & beauty products) every week. That translates into more than 20 million Canadians purchasing organic products on a weekly basis. BC is the leading retail market for organic products with 66% of British Columbians buying organic grocery items. 40% of sales of organic products in mainstream retail markets in Canada are fruits and vegetables.4 The Canadian regulatory framework for certified organic foods has played an important role in facilitating market expansion domestically and internationally.

This review explores the evolving market and regulatory framework for certified organic foods in Canada. It begins by briefly tracing the development of early organic standards in Canada. It then looks at the negotiations around establishing the Canadian organic standards that led to ratification in 2009. The review also examines current policy initiatives in the form of strengthened trade policy and evolving food safety regulations in Canada and how they relate to the certified organic food sector in Canada.

Early organic standards
Historically, organic production and product standards were developed and administered by local producer organizations made up of organic farmers. They focused on refining agricultural techniques that maintained and nurtured the health of the soil based on local climate and geographic conditions. Mandates and production standards embodied by local and regional organizations were heavily influenced by the international organic movement that materialized in Europe in the early twentieth century.5 By experimenting with agricultural techniques that prioritized returning macronutrients back to the soil, local producer organizations in Europe and eventually North America, developed codes of conduct and allowable processes for producers to respect in order to label their products ‘organic’.

Though traditionally resistant to government intervention of any kind, organic producers in the 1960s in North America developed detailed production standards that laid important groundwork for developing national organic standards that would later emerge in the US in the 1990s. Canadian producers wanting organic certification in the 1970s worked with third-party certifiers predominantly from the US (e.g., the California Certified Organic Farmers Association and Eco-Cert) largely because no provincial certifiers existed at the time. Formalized certification standards enforced at the province-level were first established in Ontario, New Brunswick and Quebec in the 1980s (Demeter, the Organic Crop Improvement Association and le Mouvement pour l’agriculture biologique respectively). But as consumer demand increased and markets for organic food products expanded, the patchwork of third-party and province-level certifiers contributed to a web of complex rules, regulations and standards that sometimes overlapped and were unevenly enforced.6 The absence of a national standard until the 2000s was largely due to the small size of the organic market in Canada, and the limited number of certified organic exports. The system of ad hoc certification standards that existed before the 2000s worked in the confines of localized markets. But once organic foods began to cross provincial borders, the need for more formalized rules for certification of agricultural production practices, food safety and quality standards for organic foods in Canada emerged. External pressure to establish a national organic standard from the European Union (one of Canada’s major trading partners in organic foods) also factored into Canada’s decision to move forward on formalizing rules for certified organic agriculture.

In developing a national organic standard, Canadian policy makers (including representatives from the Canadian National Standards Board, Canadian Food Inspection Agency and Agriculture and Agri-Food Canada), industry representatives (Canadian Organic Growers, the Organic Trade Association) and organic farming advocates negotiated and collaborated to design a national organic standard that reflected the needs and interests of Canadian producers and consumers, while harmonizing with pre-existing standards set by major trading partners like the US and the EU. It took almost a decade for Canada to pass a national organic standard, which was finally ratified in 2009. Pre-existing provincial standards administered in BC and Quebec were recognized as equivalent to the new Canadian organic standards.

The lengthy negotiation period was largely due to competing interests involved in consultative process for the regulations. It was difficult to come to a consensus regarding what the regulations should cover. For example, some involved in the consultative process wanted to limit the size of the farm that could attain certification so as to restrict industrial-sized farming establishments from becoming certified. The reasoning behind this position was that some involved in the negotiation process believed that organic agriculture should be practiced on small-scale farms that conformed to a more traditional idea of organic farming. Other objections to early versions of the organic standards surrounded whether the standards were certifying the organic agricultural processes or the organic product itself.7 In the end, the Canadian organic standards largely reflect the scope and coverage found in the standards of Canada’s major trading partners. The standards indicate allowable inputs and agricultural processes that ultimately determine whether a product can be labelled and sold in Canada as certified organic. Farm size, and other issues of process not related to the qualities of the final product were not included in the finalized certification standards.

Canada’s national organic standard
All national standards for certified organic foods including Canada’s, restrict the use of Genetically Modified Organisms in production processes. Certified organic agricultural techniques and products with certified organic labels must not be cultivated or grown using any synthetic or petroleum-based pesticides, herbicides or fungicides. The Canadian Food Inspection Agency administers and enforces the regulatory protocol called the Canadian Organic Products Systems Standards: General Principles and Management Standards and, the Permitted Substances List (CAN/CGSB32.310 and CAN/CGSB 32.311),8 which cover all certified organic food production in Canada. Both of these policies were ratified in 2009. All products of Canada that carry the certified organic label must meet or exceed the protocols outlined in the Standards and must strictly adhere to the Permitted Substances List. On-site inspections of producers and processors are routinely conducted to ensure compliance.

Under the oversight of the Canadian General Standards Board, the Canadian Organic Standards, including the Permitted Substances list, underwent a comprehensive 5-year review under the direction of the technical committee made up of industry experts as well as environmental, consumer and government representatives similar to those listed above. The series of meetings, held in 2014 and early 2015 resulted in fully revised Organic Standards and Permitted Substances List published in late 2015. The revisions include adding microgreens production to the sprout production section of the Standards. The use of organic seed in this type of production is now mandatory and a minimum soil quality for greenhouse container production is now established. Some of the tables on the Permitted Substances list have been reorganized. For example, Table 4.2 now has a single listing for iron accompanied by the following annotation: The following sources of iron are permitted to correct documented iron deficiencies: ferric oxide, ferric sulphate, ferrous sulphate, iron citrate, iron sulphate or iron tartrate.9

The standing committee is also considering whether it will integrate the Canadian organic aquaculture standards penned in 2012 into the existing protocols for certified organic food or animal feed grown or raised in Canada to ensure continuity and streamlining. The new standards are mandatory under Canada’s organic regulations but will be phased in with each company or farm’s annual inspection review. Part of the motivation behind the comprehensive review is to keep Canada’s organic standards up to date with important trading partners such as the United States and the European Union, which are both important markets for Canadian organic products.

Organic production in Canada and trade-related policy
As of 2013, 870,000 hectares of land in Canada are used for organic crops and grazing lands. Saskatchewan has the highest number of organic operations, most of which are in field crops.10 Canadian Census data indicates that in 2011 there were 3,713 certified organic operations including manufacturing, distributing and handling organic products, an increase from 3,555 in 2006.11 More recent statistics collected by COTA show that there are now over 5,000 organic operations across Canada. BC gained 57 and Ontario gained 65 new organic processors/handlers in 2013. In the same year, 16 certified organic aquaculture farms managing 42 sites (mussels, caviar, finfish) were operating in Canada. This growth can be explained by the increased consumer demand for certified organic foods both in Canada and abroad, as well as diversification in the activities of the organic operators.

Canada exports a significant percentage of its domestically produced certified organic food, while importing most of the processed organic food from the US and Europe. In 2008, it was estimated that Canada imported around 74% of all retail organic products from the United States.12 This accounted for 50% of all organic products exported by the US in 2013 while Canada’s organic exports to the US only make up 4% of US imports.13 The US is an important market for Canada’s organic product exports which were valued, at more than $500 million CAD in 2013.14 The US imports 42% of Canada’s organic exports, which mainly consist of minimally processed organic foods such as produce, grains, and seeds. The majority of the remaining exports are destined for the EU and Japan.

Canada’s five equivalency agreements facilitate the export of Canadian organic foods abroad. Canada signed an equivalency arrangement with the US in 2009 and with Europe in 2011 respectively. The European Commission and the government of Canada are seeking to expand the scope of the current arrangement, while Canada and Japan announced an equivalency arrangement for organic products in September 2014. Canada is also actively exploring equivalency arrangements with Mexico and South Korea to strategically broaden into markets with strong demand and historic trade ties with Canada. When these equivalency agreements are signed, certified Canadian organic foods will have access to over 95% of the world’s organic market.15

Canadian organic food regulations continue to be amended in response to changes in regulatory requirements of importers and the motivation to make the regulations governing the food system as streamlined and efficient as possible to insure food safety, food quality and maintain high food standards. Canada is in the midst of a major overhaul of its regulatory and food safety systems as well as food labelling and nutrition information. The CFIA consulted widely in 2014 on a new comprehensive food traceability and safety rule under the ‘safe food for Canadians regulations’. This effort has some implications for certified organic foods in Canada, as the scope of the new regulations will affect nearly all food imported, sold, traded or exported from Canada. The phase-in began in 2015 and will continue until 2018. The new laws will consolidate and streamline a multitude of pre-existing food and agriculture regulations into one piece of legislation, including the previously distinct organic products regulations. The rules governing organic certification and labelling will remain substantively the same, however it is expected that the new regulations will broaden the scope of the Canada Organic Regime to include organic aquaculture, based on the new aquaculture standards. This will provide organic aquaculture products with access to the ‘Canada Organic’ logo but may also limit the import of certain products not certified to Canada’s requirements. Through streamlining and harmonizing policies covering Canadian grown organic foods, the global market for Canadian certified organic foods continues to expand.

Summary
The continued increase in consumer demand for certified organic foods paired with a robust regulatory framework facilitate growth and diversification of the Canadian certified organic food sector. Before the mid-1990s, organic food was considered just another ‘food fad’ by sceptics of organic agricultural techniques who questioned the nutrition claims attributed to organically grown foods, and why anyone would pay a premium price for what appeared to be on the surface, products with similar attributes to conventionally produced foods. Though these questions are still posed by critics of organic methods, and by those who question the validity of label claims, the market for Canadian certified organic products continues to expand to meet rising consumer demand both home and abroad.

References

[1]
Forschungsinstitut fur biologischen Landbau (FiBL) and IFOAM (2015). The World of Organic Agriculture: Statistics and Emerging Trends 2015. FiBL-IFOAM Report. Research Institute of Organic Agriculture (FiBL), Frick and IFOAM-Organics International, Bonn: 23. (accessed 12/15: https://www.fibl.org/fileadmin/documents/shop/1663-organic-world-2015.pdf )

[2]
Canadian Organic Trade Association (COTA) (2013). Canada’s Organic Market: National Highlights: 6. (accessed 12/15: http://www.certifiedorganic.bc.ca/programs/osdp/I-154_Market_Research_National_Highlights.pdf)

[3] COTA: 3.

[4]
Cyberhelp for Organic Farmers (2016). Canadian Organic Sown by Farmers, Grown by Consumers (accessed 01/16: http://www.certifiedorganic.bc.ca/rcbtoa/)

[5] Conford, P. (2001). The Origins of the Organic Movement. Edinburgh: Floris Books.

[6]
Vossenaar, R. (2003). Promoting Production and Exports of Organic Agriculture in Developing Countries. In Westermayer, C. and Greier, B. (eds.) The Organic Guarantee System: The Need and Strategy for harmonisation and equivalence. Bonn: IFOAM: 12-13.

[7]
Clark, L.F. (2015). The Changing Politics of Organic Food in North America. Cheltenham: Edward Elgar: 103-105.

[8]
Canadian General Standards Board-National Standard of Canada (CGSB) (2006). Organic Production Systems: General Principles and Management Standards. (accessed 10/15: available at http://www.pwgsc.gc.ca/cgsb/on_the_net/organic/032_0310_2006-e.pdf ); Canadian General Standards Board-National Standard of Canada (CGSB) (2006). Permitted Substances List. (accessed 10/15 http://www.tpsgc-pwgsc.gc.ca/ongc-cgsb/programme-program/normes-standards/internet/bio-org/permises-permitted-eng.html)

[9]
Info-bio (Organic Federation of Canada) (2015). The 2015 Canadian Organic Standards has been published! (accessed 02/16: http://organicfederation.ca/sites/documents/151125%20InfoBio%20eng%20rev_0.pdf)

[10] Cyberhelp for Organic Farmers (2016).

[11]
Statistics Canada (2015). 2011 Farm and Farm Operator Data. Highlights and Analysis: Chapter 5. (accessed 12/15: http://www.statcan.gc.ca/pub/95-640-x/2011001/p1/p1-05-eng.htm#XVI)

[12]
ACNielsen Canada (2009). Grocery Label Scan Study, February 2009. (accessed 12/15: http://www4.agr.gc.ca/AAFC-AAC/display-afficher.do?id=1285870839451&lang=eng)

[13]
Greene, C. (2014). U.S. Organic Trade includes Fresh Produce Exports and Tropical Imports. (accessed 11/15: http://www.ers.usda.gov/amber-waves/2014-august/us-organic-trade-includes-fresh-produce-exports-and-tropical-imports.aspx#.VpQcTmQrJdh)

[14]
Haumann, B.F. (2015). North America: Organic Data. Willer, H. and Lernourd, J. (eds.) The World of Organic Agriculture: Statistics and Emerging Trends 2015. FiBL-IFOAM Report. Research Institute of Organic Agriculture (FiBL), Frick and IFOAM-Organics International, Bonn: 241. (accessed 12/15: https://www.fibl.org/fileadmin/documents/shop/1663-organic-world-2015.pdf)

[15]
Holmes, M. & Levert, M.E. (2015). Canada. in Willer, H. and Lernourd, J. (eds.) The World of Organic Agriculture: Statistics and Emerging Trends 2015. FiBL-IFOAM Report. Research Institute of Organic Agriculture (FiBL), Frick and IFOAM-Organics International, Bonn: 247. (accessed 12/15: https://www.fibl.org/fileadmin/documents/shop/1663-organic-world-2015.pdf)

 

Lisa F. Clark

Department of Agricultural and Resource Economics,
University of Saskatchewan, Saskatoon, SK

 

(*Corresponding author email: lisa.clark@usask.ca)

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