Starting an Organic Farm
|Publication Date:||December 2009|
|Written by:||H. Martin - Organic Crop Production Program Lead/OMAFRA; D. Collins - Marketing and Customer Service Program Lead/OMAFRA|
Table of Contents
- What are your assets for organic farming?
- Ownership or tenancy of land
- Characteristics and limitations of the soil on your farm
- Strategies to improve soil
- Climate limitations for your location
- Financial resources available for enterprise changes
- Knowledge and experience
- Time management and time availability
- Equipment and buildings available
- Business planning
- Basic components of a business plan
- Contacts and support network
- Other links
Organic farming involves more than just farming without chemicals. It requires changes to many parts of the crop and livestock production system such as enhanced use of integrated pest, weed and nutrient management techniques. These include using such preventative measures as crop rotations, cover crops, improved genetics, optimum populations, stress management and sanitation. They are essential to improving plant and herd health since many chemical tools for pest and disease control are not used in organic production. Organic farmers choose not to use synthetic pesticides, fertilizers and antibiotics.
Consider the transition to organic carefully. Making the transition too quickly can create financial hardship. During the first years of the transition yields will be decreased and there are few premiums for transitional organic products. Over time and with good management, profit levels should increase. Profits in organic agriculture will depend in part on the availability of market premiums.
Evaluate your reasons and goals for making changes. The transition to organic takes several years depending on the commodity and on the approach taken. The requirements for organic certification must be considered throughout the process of transition.
Many assets are required to be a successful organic farmer. Evaluate the availability of each of the following assets, according to your farm situation, before making the transition to organic production:
- ownership or tenancy of land
- characteristics and limitations of the soil
- climate limitations
- financial resources available for enterprise changes
- experience growing and marketing crops and/or livestock
- time management and time availability
- equipment and building assets
- business plan
- contacts and support network
Organic farming is a long term choice and one that is not easy to move locations. Consider the following questions when making your decisions. What are your financial obligations on the property? What is your ownership status? How many acres do you have management control over? If you do not own this land, what is the long term status for tenancy?
The financial viability of an organic farm depends on the producer having control of sufficient assets to produce an economically viable quantity of product. A small farm may not be adequate for producing field crops such as grains or soybeans due to the economies of scale required for profitability such as when using equipment or marketing. Livestock operators need the appropriate area of land as required by a nutrient management plan. Financial stability during the transition period will protect the ownership of land and other farm assets from the risk of adverse cash flow.
Soil type (sand, loam or clay), stoniness, slopes, drainage, fertility levels all influence what types of crops can be grown on the property. Some vegetable crops are well suited to sandy or high organic matter soils but less suited to heavier clay soils. Some sandy soils are prone to summer drought and not well suited to some field crops. Field stone or bedrock near the surface can limit the usefulness of some tillage and planting equipment. Stony soils are not suitable for many crops but may still be appropriate for pasture. Slopes greater than two per cent (2 m of vertical fall per 100 m across the field) make the soil more prone to erosion and some conservation management strategies will be needed. Slopes greater than six per cent will make the fields challenging for good crop production. Note the variability within the field. In some cases while the majority of the field is unsuitable for certain crops there may be parts of the field, such as the lower areas, that can be utilized for small acreage, high value crops.
- Improve poor soil drainage by installing subsurface drainage. This can cost $1,250–$2,500 per hectare ($500–$1,000 per acre) and assumes that suitable outlets for the drainage water are available.
- Correct low pH soils with agricultural lime.
- Build up low organic matter soils with improved cropping practices. This is an ongoing strategy, taking up to 10 years. Soil organic matter levels can be increased by only 0.1–0.2 per cent per year.
- Manage nitrogen with legumes.
- Manage other nutrients with cropping practices, but if current levels of nutrients such as phosphorous or potassium are very low this can present some challenges
- Using suitable livestock manure makes it easier to maintain nutrient levels. Manure management will change on most farms to include on-farm composting
Healthy soils and farming practices that enhance the soil flora and fauna are essential on organic farms. Crop rotations should include both grass crops and broadleaf crops especially legumes to build up soil nitrogen. When planning the crop sequence consider how the needs and residues of one crop affect the next. Consider pest and nutrient management issues when planning the crop rotation. Use cover crops to reduce soil erosion. Cover crops also build soil organic matter and a diversity of soil bacteria, fungi, earthworms and other soil flora and fauna essential for recycling nutrients and building good soil structure.
In general, the warmest areas of Ontario are the counties in south western Ontario, those adjacent to Lake Erie and Prince Edward County. The climate is generally cooler in areas away from the lower Great Lakes. In these areas fewer heat units are available and some warm season crops, such as tomatoes and tender fruit, may not have suitable varieties. Cooler season crops, such as spring grains and crucifer crops, grow better in the cooler parts of southern Ontario. Cold winter temperatures influence the survival of perennial fruit crops as well as winter cereal and forage crops. The summer frost-free period is influenced by the timing of spring and fall frosts which are mainly influenced by location within the province although local soil type, slopes and some crop management practices can provide microclimates. See the OMAFRA website for information on Ontario climate.
Available capital is important for start-up and business growth. Money is needed for land and equipment, and handling and storage facilities especially if developing new or expanded crop or livestock production systems. Current assets can be used as security for loans. On smaller operations it is often more economical to hire custom operators and equipment for fieldwork. Trading or bartering with a neighbour for services may also be a viable option.
Carefully manage cash flow during the transition when crop yields usually decline. Product quality may also decline, especially for fresh fruits and vegetables where the percentage of unmarketable produce may increase. Some of the lower quality products can be used in other value-added markets such as processed products, but these markets may need development. During the transition it is unlikely organic premiums will be available. The reduction in yield, combined with the lack of premiums, can result in gross revenue reductions of up to 50 per cent.
Consider a staged transition to organic production. This involves moving part of the farm into organic production and maintaining some commodities or enterprises as non-organic. It can complicate certification and record keeping but may be the most economically viable option.
Knowledge and experience are key to understanding the growth of plants, animals and pests on the farm. Marketing skills are essential, particularly when markets need to be developed. Farmers need to be extremely knowledgeable about each of the crops and livestock species being produced to be able to recognize problems. They also need to know how to find the needed information to solve the challenges of production.
Transitioning to organic production involves a change in attitude and mindset. The ability to anticipate and solve production problems proactively will save both time and money later on. Research various crop/livestock species to determine their organic production requirements. Reading books, searching the Internet, going to meetings and listening to others are key ingredients to build knowledge. Managing pests and nutrients on organic farms requires considerable understanding to replace chemicals. See the OMAFRA website for information on various aspects of production and marketing.
Having the confidence to know what action to take and when to take it comes with experience. Keen observation and a solid knowledge base are essential to successfully raising animals, and to recognizing disease and insect problems or to identifying weeds early. Since disease prevention is the cornerstone of a successful livestock operation, expertise in animal husbandry is very important. Growing new crops or raising new livestock species requires new techniques. Experience with one group of crops may help with others but each species has its own challenges. The art of operating and adjusting farm equipment to achieve optimum performance is acquired through experience and learning from machinery dealers and experienced farmers.
The biggest challenge in transitioning to organic production may be developing a market for the products. Marketing organic products takes considerably more effort than conventional ones, since in many cases the market is less developed. There may be less support from marketing agencies and commodity organizations. Learning the requirements and nuances of the market can be challenging, especially for growers who have no prior marketing experience. The sale of fresh produce, animals and products of animal origin such as meat, milk or eggs are regulated in various ways. It is important to investigate and understand the marketing structure and regulations specific to each commodity.
Successful marketing requires market research. It is important to understand how markets will respond. Keep in mind that products already in the marketplace will be difficult to displace. Conduct market research before:
- starting a new business
- expanding or moving to another location
- introducing a new product or service
- making adjustments to market plans
- maintaining business or discovering why the demand for a product or service is declining
Do a self-assessment. Ask these basic questions.
- Who will be, or is, buying and using your products or services?
- Who are your competitors and what products are competing with yours?
- What benefits are you selling to the customer?
- What is the customer prepared to pay?
- What does the customer like?
- Where does the customer come from?
- How much product does the customer need?
- How can you build market share?
Review the labour and management time requirements for each part of the farm and what personnel is available. Each crop and livestock enterprise has different timelines for each component of the production and marketing cycle. When choosing crops or livestock species to include in the farm select complementary enterprises. Too many activities scheduled for the same day or week will mean something will be delayed. Weather must also be factored in since rain and inclement temperatures will make some days unsuitable for some activities, resulting in more delays that can compromise yield and/or quality and therefore, income.
Part or full-time work commitments away from the farm reduces the time and energy available for farming. Choose crops or livestock that are less time sensitive and are complementary to off-farm and personal schedules. When including partners or paid labourers determine the collective ability to manage and schedule the labour requirements for the farm.
Review the performance and capacity of the equipment and buildings available for the proposed crops and livestock. Determine what new purchases, repairs or expansion of assets are required.
Determine personal skills; farmers are often considered the "Jack of all Trades". The ability to make minor repairs and appropriate adjustments to machinery without delay is a key factor to success. Take the time to become familiar with the operation of newly acquired equipment. On-going preventative maintenance is crucial to the performance of farm equipment.
Those with little or no farm experience will find the transition to organic production difficult. Many factors must be considered to ensure the success of the organic venture. A strong business plan is essential. A business plan is a written document that describes who you are, what you plan to achieve, what you are going to produce and how, when you expect to get started, and how you will overcome the risks involved and provide the returns anticipated.
Executive Summary or Business Description – describes the product or service you plan to develop and market.
Marketing Plan – identifies the marketplace through market research, showing your competitive advantage, price and positioning to gain market share.
Management and Operational/Production Plan – identifies who will manage the new business venture, day-to-day production and delivery activities.
Human Resource Plan – describes staff requirements including recruitment, training, and employment standards.
Financial Plan – includes expenses, revenue, pricing, and future projections.
Risk Management Strategy – describes strategies for each component of the business plan outlined above in the event things do not go as planned. Examples of some risks that may be encountered:
- a product or service has little marketplace/consumer uptake or sales
- expenses are far greater than you anticipated
- a key employee leaves for another job
- a competitor overtakes market share
- a regulatory requirement was not met.
- Products must be recalled and/or production must cease until requirements are met.
Organic organizations provide crucial network contacts, support and information. Key conferences in Ontario are the annual Organic Conference in Guelph in late January and Eco-Farm Day in Cornwall in late February. Other events may be specific to individual sectors such as the annual Organic Dairying Conference usually held in April at Alfred, Ontario. Research the local, regional and provincial non-organic events. The following associations provide helpful information:
The OMAFRA website contains information on topics related to agriculture in Ontario.
For more information:
Toll Free: 1-877-424-1300