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The economics of organic production

 A new three-year trial will evaluate which new technologies work best in organic crop cultivation in terms of weed control, nutrient management and pest and pathogen control. Photo by Roger Henry/AAFC.

It’s no surprise the demand for organic potatoes is growing in North America and beyond, as demand for all types of organic food is on the rise. Canada’s organic potato acreage is increasing to meet the demand, but there has been little Canadian research to date on the agronomy or economics of organic potato production.

Studies from the United States have found that organic production with well-managed crop rotations can be just as – or more – profitable than conventional potato production systems. While rotation is a key integrated management technique, others include fertility management from organic sources such as manure and compost, alternative pest control, and weed management via mechanical cultivation or flaming.

To investigate further, a team at the Agriculture and Agri-Food Canada (AAFC) Harrington Research Farm in Prince Edward Island have completed a four-year study comparing the economic performance of seven different four-year organic potato rotations to a conventional potato rotation. The trial lasted from 2008 to 2011 and the results are just now being published, says Roger Henry, the senior technician involved with the project. “Seven organic rotations were developed with various crop combinations to help control pests and soil-borne diseases, and to maintain nutrient levels,” he notes. “Each rotation included at least two cash crops during the four seasons and two different pest/disease-suppressive crops, including brown mustard and buckwheat for wireworm, pearl millet and alfalfa for nematodes, canola and winter rape for rhizoctonia and sorghum sudangrass for verticillium wilt.”

The study results confirm what has been found in other studies elsewhere: despite lower tuber yields, organic potato production generally results in higher net revenues than a conventional potato system, mainly due to the high price premium received for organic potatoes and other organic crop products in P.E.I. However, the net revenues are not significantly higher.

“The rotation with the highest return in this study included carrots (potato, mixed grain, carrots and pearl millet),” Henry says. “However, while the yield and net revenue of the carrots boosted the overall revenue of that rotation, the yield and the net revenue for carrots was the most variable of all the crops studied. That’s something to think about.”

And while Henry’s study results point to organic potato farming as a viable business under the current price premium, he says the results also show conventional potato systems could produce similar economic benefits to organic when a traditional three-year potato-cereal-green manure rotation is used. “That’s assuming they continue to get good yields with three-year rotations, which does not always happen, and that yields of the organic potatoes stay at 60 per cent of the conventional,” he explains. “I believe we can achieve yields at least at 75 per cent of the conventional yield and more during some years, if we choose the right varieties and perfect our management of the crop while it’s in the ground. If we achieve these yields, then conventional three-year rotation will not be as profitable as a four-year organic one.”

Henry also stresses during the transition to organic certification, financial losses can occur because yields are lower and the producer does not have the benefit of organic price premiums until they are certified.

“This transition period is hard from a financial perspective, which is one of the reasons some producers are hesitant to go organic,” he says. “There is also more extensive management associated with organic production, with new skills to learn and knowledge to accumulate compared to conventional. There are also very few people one can talk to about production issues.”

An important caveat to this study is that it occurred in the first four years after full transition to organic was achieved. “It’s possible that differences observed in the first four years may not reflect long-term crop performance,” Henry explains. “Generally over time, if the soil is managed well, organic soils will become more productive and that would reflect in higher cash crop yields overall.”

“There is also the possibility that if not managed well, soils could become depleted of certain soil nutrients, and increased pest problems [could occur] in certain rotations,” he adds.

New research
A three-year organic study was undertaken this year in P.E.I. to evaluate which new technologies work best in organic crop cultivation, including potatoes. The trial is examining nutrient management as well as weed, pest and pathogen control, with an eye on economics. It includes more cash crops than the 2008 to 2011 trial, and is focused on developing cropping guidelines for no-till soybeans, silage, grain corn, edible beans and squash as well as potatoes.  

“Nitrogen and phosphorus are two essential nutrients which tend to be most limiting in organic systems,” says Vernon Rodd, who is heading the study with Aaron Mills at AAFC Charlottetown. “We are using anion exchange membranes to track nutrient availability during the growing season for a number of crops including forages, potatoes and corn.”

The team is also analyzing phospholipid fatty acid profiles in soil samples to measure the makeup of the functional soil community under the various rotations. In addition, the study includes a look at various organic weed control options, including flaming, mechanical control and timing of the cultivation.

“As organic demand continues to grow, we hope to provide more information on the economics and best practices,” Henry says. “Potato growers can use this, and other, information to decide if organic production is something they want to pursue.”

May 22, 2015  By Treena Hein