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Do Organic Grain Growers want a Cooperative

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Do Organic Grain Growers want a Cooperative? Authors: Chantelle L'Hoir. Ellen Goddard ... Voluntary standard in Canada, over 40 certification bodies. ... – PowerPoint PPT presentation

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Title: Do Organic Grain Growers want a Cooperative


1
Do Organic Grain Growers want a Cooperative?
AuthorsChantelle LHoirEllen GoddardDesmond
NgMel Lerohl
2
Industry Overview
  • In Canada - organic sector since 1970s.
  • AAFC involved in the development of sector since
    1989.
  • Voluntary standard in Canada, over 40
    certification bodies. British Columbia and Quebec
    have provincial certification.
  • USDA mandatory national standard in April 2001,
    until October 2002 to comply.
  • U.S. is Canadas main export market. Also export
    to Europe Japan.
  • Approximately 2000 organic farmers in Canada and
    150 processors.
  • 350 organic farmers in Alberta.
  • There are approximately 832,854 acres designated
    to organic production in Canada. Alberta
    accounts for 344,587 acres of which 29,910 are
    specifically for grain production.
  • The majority of grain production is in Western
    Canada.

3
Research Problem
To assess different organizational structures
that might assist Alberta organic grain producers
in optimizing market potential.
4
Research Objectives
  • Establish what types of organizational structures
    are used in the marketing of organic grain in
    Alberta, the rest of Canada and other countries.
  • Define organizational structures that could
    potentially be used to market organic grains in
    Alberta.
  • Understand the forces creating organizational
    challenges opportunities in the Alberta organic
    grain industry producer motivations,
    opportunities obstacles, and evaluate through
    focus groups.

5
Existing Organizational Structures
  • Entire organic industry private public
    companies, sole proprietorships, cooperatives
    (traditional NGC), marketing associations,
    partnerships.
  • Most common in industry
  • Alberta Canada private companies.
  • Other countries cooperatives.
  • Most common in grain market
  • More developed markets marketing cooperatives
  • Less developed markets private companies.

6
Identifying potential organizational structures
  • Based on - existing structures
  • - producer motivations
  • - obstacles that exist in the market
  • - preliminary focus group discussions
  • . The identified options, though not a
    complete characterizations of options, appear
    to be the most relevant at the present time.

7
Potential Marketing Options
  • Individual Marketing Strategy
  • Private Corporation (Company) or Sole
    Proprietorship
  • Cooperative Marketing Strategy
  • New Generation Cooperative
  • Association (marketing)
  • Private Corporation (Company)

8
Focus Groups
  • Producers - OCIA Chapter 1
  • Government (various levels)
  • Industry members

Content of Questions
  • Producer motivations
  • Opportunities and obstacles
  • Evaluate each structural option

9
Previous Literature
  • Boehlje (1992)
  • Criteria in Selecting an Organizational Structure
  • Control
  • Cost
  • Risk
  • Maturity/permanence/liquidity

10
Critical Success Factors
11
Choice of Organizational Structure
  • Focus Group Key Criteria
  • Activities Performed
  • Financial Investment
  • Commitment to Deliver

12
Producer Motivations for Producing Organic
Products
Concerns of 1) Health 2) The
environment 3) Financial profitability
13
Findings - Obstacles
  • Lack of price and market information
  • Poor communication
  • Lack of government involvement
  • Constraining regulatory bodies
  • Lack of consensus on standards
  • Lack of local infrastructures to market to
  • Producer independence

14
Findings - Opportunities
  • Growing demand in the industry
  • Organic premium obtained from this high income
    niche market
  • Potential to work collectively
  • The Internet

15
Conclusions
  • Focus groups confirmed a lack of cooperation in
    the market stems from a lack of trust between
    participants.
  • Lack of trust influences producers choice of
    organizational structure.
  • Producers want minimal financial investment and
    delivery commitment.
  • Producers want the benefits of working
    collectively but must be willing to work together
    must form trust within new organization.
  • Association appears to be the choice of each of
    the focus groups.

16
Critical Success Factors Their Relations to
Organic Grain Producers
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