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Summary of "Viability of organic farm practice: Second year annual report".

Saskatchewan Research Council, Regina.

Rutherford, A., M. Gimby, G. Smith, A. Mair, and E. Coxworth. 1992.

Summary

Report on year 2 of a three year study of organic viability in Saskatchewan; to assess agronomic and economic viability - monitor weed control, soil fertility, yields, costs, and returns, and compare with conventional.

Manitoba, Saskatchewa and Alberta comprise 80 per cent of Canada's farm land and nearly 50 per cent of farms; farm bankruptcies in the Prairies increased 530 per cent from 1979 to 1989 (Science Council, 1991).

Soil erosion is a concern in the dryland regions of the prairies where summer fallowing is practiced. The land is left bare during the entire season as a means of storing precipitation for the following year. Weeds are controlled either by mechanical or chemical means. Both raise some concerns (Van Kooten and Kennedy, 1990).

Government price support and crop insurance programs, transportation subsidies, CWB quota system have encouraged grain production at the expense of forage-livestock systems, encouraged the use of marginal land (Van Kooten and Kennedy, 1990) discouraged the development of sustainable systems.

Organic fields tended to be low in available phosphorous and this seems to have limited yields in some cases.

Claim that there are about 300 farms producing organically in Sask in 1991.

They are careful to downplay the significance of their results, for a number of reasons.

Chapter 5 Economic Analysis

Record keeping and economics analysis followed those used in the "Top Management Program" developed by the University of Saskatchewan

Performance of organic compared with local average yields, and a standard cost of production model for conventional published by the Saskatchewan Department of Agriculture and Food

Notes to the results

- miscellaneous income omitted - ie. payments under GRIP, WGSP

- operating interest omitted

- only direct labour included, did not account for extra time for cleaning equipment, extra management and marketing time

- cautions: small sample, conventional yields are local averages, prices are from Sask Wheat Pool, costs based on a "select" group of farms (top management program) who may inccur higher costs than average but have higher yields

- almost all the analysis is based on a single enterprise

- paired comparisons would provide more valid comparisons

Organic

20 crops grown on 13 organic farms; only one or two crops per farm analyzed - partial budgets; paired comparisons rather than averages

- study of 13 organic farms, field versus whole farm basis

- prices established through interview with the trade rather than formal survey

- does include extra markeing costs and certification costs e.g. $7.35/tonne transport and $250 certification fee

Conventional

- yields are local averages, prices are from Sask pool costs based on a select group of farms (top management program) which may have higher costs than average

Results

Wheat yields and net returns for organic similar to conventional in general for 1991, net returns were higher however even when conventional prices used:

The wheat was grown following various situations in the preceeding year

It could follow either a sweetclover or fall rye green manure, summerfallow, or another crop

1 - wheat/fallow

2 - wheat/sweetclover/green manure

3 - wheat/sweetclover/hay

e.g. 1991 results when wheat prices were low ($86/tonne), average yields were identical (1.95 t/ha),

  Yield t/ha Price $/t Income $/ha Costs $/ha Net Return $/ha
Organic 1.95 86 168 109 59
Conventional 1.95 86 168 133 34

 

* 1991 data based on 13 farms

* Adapted from Rutherford et al., (1992)

- the results for 1990 were qualitatively the same, ie. income and expenses lower for organic, returns were higher

- for 1991, in 10 out of 13 cases, the returns to organic were higher than for conventional

They also computed economic returns for lentils and flax grown on 7 farms. However, the results varied widely

Returns from Organic and Conventional Rotations

They also compared two rotations on one farm, with and without government program payments included conventional - fallow-wheat-lentil-wheat organic - fallow-wheat-fallow-lentil

Organic gave higher average returns over cash costs (profit) per year whether program payments were included or not; both systems more profitable with program payments

Table. Economic Results for Conventional and Organic Rotations

  Income $/ha/year Costs $/ha/year Returns $/ha/year Returns with Gov. Programs $/ha/year
Organic 205 92 113 157
Conventional 196 156 40 104
Org/Con 1.0 0.6 2.9 1.5

 

Organic Rotation - wheat/fallow/lentil/fallow

Conventional Rotation - wheat/lentil/wheat/fallow

Income based on conventional prices

Source: adapted from Rutherford et al., 1992

1992 Survey - SRC

 

- 99 Saskatchewan organic farmers in January 1992 telephone survey

- about half are mixed farms, half grains only

- average size about (1165 acres) 470 hectares

- about 50% are experimenting with specialty crops, buckwheat, oil radish, borage, quinoa, vegetables, herbs

- about 1/3 of area in summerfallow (31% provincial average)

- 1/3 of organic summerfallow is under some form of green manure management (legume ploughdown)

- extensive experimentation with non-chemical weed control, particularly rotations;

- common culture practices involve early season pre-till, delayed seeding; post crop emergence harrowing, high seeding rates, intercropping

- more oilseed and grain legume production than cereal production is sold into organic markets

- 42% of producers doing some value-added activity

- greates concerns expressed for inconsistent markets, marketing infrastructure, lack of secondary processing, limited access to research and extension

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