As an Organic Crop Consultant at the Rodale Institute, we are not here to sell you anything. Our mission is simple: Rodale Institute wants to help farmers put more land in certified organic production. Part of this job title includes addressing some common misconceptions about the realities of organic certification.
If you have even thought about transitioning your land into certified organic production, you have probably heard from a neighbor that organic certification is expensive. $7,000? $10,000? Maybe someone even told you that it could cost you up to $20,000 to certify your farm as organic.
Organic certification is an additional cost on top of your farming expenses. It is charged to your operation in a lump sum in the beginning of the year. Some agencies may even break it up into separate payments to support farmers who only sell crops at the end of the calendar year. Local certification agencies are very transparent about the fees they charge. A dairy farmer in Lancaster, Pennsylvania, making $100,000 in gross organic sales would pay between $1,100 and $1,500 depending on which certification agency they are certified with. Often, certification costs are on a sliding scale: the higher your sales, the higher the certification cost you pay. Inspection fees are additional to your certification fees, and per hour rates vary between $40 and $70. Altogether, an average Pennsylvania crops or dairy farmer with 80 cattle and less than 400 acres may see certification costs around $2,000 per year. This varies from certifier to certifier and region to region, so ask your certifier about their fee structure.
Fortunately, there is an Organic Certification Cost Share Program (OCCSP) that covers up to 50%, or not exceeding $500, of their certification costs paid during the calendar year per certification scope. The Organic Foods Production Act (OFPA) defines scope as “crops”, “livestock” and the products derived from them which is characterized as “processors and handlers.”
Let’s go back to our example of our dairy farmer in Lancaster who makes $100,000 in gross organic sales. This farmer would be eligible for cost share under two scopes, crops and livestock, which allows them to receive up to $1,000, or approximately 50% of their certification costs. That reduces certification costs to a reasonable price of $1,000, or sometimes less.
The OCCSP is an easy process: there are not a lot of hoops to jump through. The application consists of the name of your operation, how much your operation paid in certification fees per scope and verification that your operation is certified organic. In certain scenarios, your certification agency may be able to provide invoices and your organic certificate directly to the administrating office, which is usually the local Farm Service Agency. This reduces the requirements of the farmer, making obtaining the funds even easier.
There are good practices that can keep your certification costs low. If you respond to your certifier when they reach out, this will keep your account from incurring additional charges. Additionally, some certifiers offer early bird discounts for farmers who submit payments and paperwork early in the season. Certifiers are reasonable and want their farmers to succeed in the organic marketplace.
Why does this certification cost exist in the first place? In part, it is because the USDA Certified Organic seal is highly recognizable in the marketplace and is coveted by consumers. Consumers put trust in the integrity of the seal. Behind that seal are farmers who are dedicated to organic practices, like building soil organic matter through cover cropping, responsible manure applications and conservation tillage, and increasing biodiversity with crop rotations and constructing habitat for beneficial insects. Also behind that seal, though, are certification professionals supporting farmers through verification of these processes with audits, inspections and annual review processes.
The certification fees you pay are not in vain. Our research at Rodale Institute has shown that certified organic farmers are receiving two to three times more revenue on organic products compared to their conventional counterparts. Here in Pennsylvania, a client in the crop consulting program reported 105% higher revenue in the corn they sold as certified organic versus the corn they sold as conventional.
If you keep following this column in Lancaster Farming, you will surely be reading more about the economics behind organic farming from our Organic Crop Consultants.
At the end of the day, the certification costs you may pay are probably lower than you would expect and do not hinder the process of becoming a certified organic operation. It is a market opportunity and opens the doors to consumers you may not have previously been able to reach.