Halifax - Nova Scotians may be pouring their first glasses of local organic milk this coming June. It’s a big moment for organic dairy farmers, who have finally found a way to market their milk locally. Even though Nova Scotian farmers have been producing organic milk for six years, industry and political barriers have meant that it has all been getting dumped into the same big tanker truck as conventionally-produced milk.
“The main differences between organic and non-organic dairy,” according to Theresa Richards, who heads the Atlantic Canadian Organic Regional Network (ACORN), “are how the animals are raised -- what they eat and how they live-- and how the milk is processed for the final product.”
For milk, this means that a certification agency checks to make sure that the animals eat chemical, GMO, and antibiotic-free food, and that the animals’ healthcare complies with organic standards. Organic standards must also be met at the processing level, where inspectors assure “that no harmful chemical cleaners have been used to clean the lines, and therefore that no chemical residues would be present in the milk,” says Richards.
But the regulatory framework that governs Nova Scotia's milk supply management system has made it difficult for local, organic, milk to find its way to consumers.
Currently, each dairy farmer technically sells their milk to the Milk Management Board (MMB), who then sells it back for production. In this manner all farmers receive the same price per litre for their product, which is then sold back to approved processors. So, right now, any local milk (Farmer’s or Scotsburn) bought at the supermarket may have some organic milk mixed in, but you’d never know it.
“There’s organic milk out there, but it’s not local, and it’s not as fresh as what we’re going to provide,” says Mike Main. Main is working as a consultant to four organic dairy farms that have formed a cooperative in order to navigate the system. If all goes as planned, the East Coast Organic Milk Co-operative (ECOMC) will have organic milk on the shelves in a couple of months.
“It’s been a bit of a long road for the guys involved to start a business. None of them really were interested in being organic milk marketers, but they went this route because they felt it was worth doing,” says Main.
Six farms started work towards selling organic milk in 2006, forming a group called Scotia Organic Milk Producers (SOMP). With some advisory assistance, they built up their capacity by providing support to existing conventional dairy farms interested in becoming certified organic.
The group made plans to start supplying local organic milk for Organic Meadow’s established Nova Scotia market, which is substantial-- as of a few years ago, the Halifax area was the second highest per capita consumer of organic dairy in the country. Organic Meadow is among Canada's most successful, co-op model, agricultural ventures. They have over 160 members, including 100 family farms.
Working with Organic Meadow made a lot of sense—SOMP couldn’t find a way to work with the bigger established dairy processors in Nova Scotia, because organic processing would have required the processors to empty and clean their equipment to do a run of organic milk, and the scale of their facilities would have required more milk than the organic farmers could have provided. Nova Scotia organic dairy producers weren’t in a position to take on their own processing and marketing from scratch; and Organic Meadow wanted to be able to offer local products to their established Nova Scotia market.
However, according to Main, plans came to a halt when “Organic Meadow couldn’t come to terms with Dairy Farmers Nova Scotia (DFNS), which is the industry board who regulates milk quota, milk supply, milk price, and that kind of thing.”
In return for the resources it invested in building production and processing capacity for organic milk, Organic Meadow wanted to be guaranteed access to organic milk in the Province for 7-10 years. Because DFNS purchases all milk produced in Nova Scotia and decides whom to sell it to, Organic Meadow was concerned that their business plan could easily be derailed if DFNS decided to sell Nova Scotia’s organic milk supply to a different processor after Organic Meadow had invested so much in developing it. This guaranteed supply, or allocation, was refused by DFNS, as it was inconsistent with the way they dealt with other processors.
DFNS General Manager Brian Cameron concedes that navigating the regulations in the dairy industry can be a lengthy process at the best of times. These policies, which are extensive in order to ensure food safety, regulate every aspect of producing, trading, handling, transporting, processing, and marketing milk. “It would have been a two-year process for them even if everything had gone as planned,” he points out. When the first plan with Organic Meadow collapsed, it took the group some time to get back on their feet.
Then, the prospects of making local organic milk began to look a little brighter. Nova Scotia’s Dairy Industry Act was updated in 2009 and 2010 to accommodate organic milk. The organic producers persevered, and the co-op changed shape and changed name. Four of SOMP’s member farms established ECOMC in May of 2010. At that time, the co-op intended to operate its own production activities, but to contract Organic Meadow to run the processing and marketing side of the business, which would have meant building a new small-scale organic processing plant.
“Our guys were pretty loyal to Organic Meadow because they had invested some here,” says Main. ECOMC pursued hiring Organic Meadow to do their processing and marketing, but by that time the company’s focus had shifted elsewhere. Left without a processor and marketer, the cooperative began to realize that their best bet was to make it happen on their own.
“We thought that going with a local brand was going to make sense in the long run,” recalls Main. “It seemed to be the only thing that made sense after a while.”
Main says that the farmers were “A little wary of taking on the whole thing starting from scratch”, so they “talked to Just Us! Coffee Roasters along the way, and they said, ‘We’d be willing to support you in the marketing effort.’”
Main says that ECOMC didn’t want to have to get a million dollars into building a new, small-scale processing plant before they established their market, and thankfully for them Cooks Dairy in Yarmouth has agreed to take on the processing piece. As a “small, community-oriented dairy,” according to Main, they are “a good fit with the organic philosophy.”
Transportation from the farms to Yarmouth is one piece of the puzzle that is still missing. According to Main, ECOMC is “trying to work out with the Dairy Board if [they] can coordinate the trucking. Most of the trucks have two or three compartments.”
This would mean that organic milk could be transported alongside conventional milk without being mixed together. Main says it sounds like Farmers Dairy, which currently transports milk along the route to Yarmouth, may be willing to take on this task.
ECOMC is also looking to the local community as investors through Nova Scotia’s unique and internationally-renowned CEDIF program. The program, which is meant to encourage local investment and keep Nova Scotian’s money working in the province, awards investors a 35% non-refundable provincial income tax credit on their investments, and is RRSP eligible. So far, ECOMC’s CEDIF has raised $105,000, and is accepting additional investors until April 16th, 2012. The CEDIF is set up as an investment cooperative, which is governed independently from ECOMC.
“We have two co-ops,” says Main-- “the investment co-op (the CEDIF) is a separate co-op. And that co-op is a member of ECOMC (the product co-op). So there is a relationship between the two. Just Us! is also a member of the product co-op. But it’s structured so that the farmers will always have a majority of the vote.”
According to Main, ensuring that farmers are in control of the cooperative was not only desirable to the members, but also to the Natural Products Marketing Council (NPMC), which is the provincial government agency that licenses dairy processors and marketers (DFNS is only granted authority to regulate production). Main says the NPMC tends to be “reluctant to license new marketing companies who aren’t locally-owned or locally-driven by the farm community because they don’t want to see the dairy industry taken over by people just for profit. They want it to be for the benefit of the farm community.”
Through the cooperative model and community support, the organic dairy farms have finally pieced together a model that seems to please everyone, including regulators. DFNS General Manager Brian Cameron calls the failed attempts at getting organic milk into the Nova Scotia marketplace “water under the bridge.” He recognizes that “starting from scratch, which is where this group started, is a big undertaking. It’s a great thing for Nova Scotia.”
With the help of their partners and community investors ECOMC plans to have organic milk on the shelves for the first time in Nova Scotia history by mid-June.