CCOF-Oregon Tilth Merger Raises Questions

California Certified Organic Farmers and Oregon Tilth are the nation’s first- and third-largest organic certification organizations, and the announcement that they plan to merge took many by surprise. The big questions being asked are: Why merge? And why now?

Officials of both groups take pains to point out that the plan is not motivated by financial need, but is “mission-driven” to improve certification through more efficient operations, reduced paperwork and improved inspection scheduling, among other benefits.

Though the organic industry is growing at a strong pace, costs associated with certification are similarly increasing for all stakeholders in the supply chain, including certifiers.

We spoke this week with Cathy Calfo, executive director of the CCOF about the merger and what it means for the larger industry:

REFRESH: What factors are at work that caused CCOF and Oregon Tilth to seek one another out?

CALFO: I think the strategic plan goal comes from both organizations in response to growing pressures to keep the cost of certification low, especially on the part of our two organizations, which represent many, many growers and producers, many of them small.

REFRESH: Small in the sense of cost scale? Is it more difficult for them to afford all the paperwork and inspections and such that are required?

CALFO: Sixty percent of our members fall within the USDA small-producer category, so there’s pressure to stabilize certification costs and, at the same time, everyone wants great service, which is challenging in a regulatory environment that is in some ways still taking shape.

REFRESH: How will the merger address that challenge?

CALFO: Our thought was if we could combine forces in a way that made sense, build a solid foundation, that we over the long run can stabilize costs to producers, and to retailers and handlers, too.

REFRESH: Even though you’re non-profit, you still have a business to run, and services to provide.

CALFO: [There’s] pressure on certifiers to be competitive, meaning to keep costs down and to keep service levels very high.

REFRESH: Still, your groups have a strong reputation and are sought out.

CALFO: CCOF represents 13% of certified entities currently, according to the list that was recently published by the {National Organic Program], and Oregon Tilth represents 7%. So combined we’ll be a significant certifier but by no means dominant.

As Calfo points out, the bottom line is that organic certification isn’t for the faint of heart. Beside the three-year transition period when your paying for organic inputs but selling your product at commodity prices — there are multiple inspections, paperwork and related responsibilities to fulfill.

A number of state departments of agriculture have gotten out of the certification business in recent months because it just isn’t economically viable (and we all know what kind of budgetary pressure states are under these days). From that perspective, the proposed merger of CCOF and Oregon Tilth will do the industry good. We need a lively, robust certification community, because certification is the one guarantee the average consumer demands in deciding whether to buy organic — or not.