Tuesday, July 11, 2006

Organic demand up, standards destined to go down?

During the recent discussion of Walmart's entry into the organic food market (Gristmill post 1 and post 2, Michael Pollan), two of the major concerns raised were the internationization of the organic food supply (e.g., organic raspberries shipped from Chile to Chicago) and the potential attack on organic standards by corporations more concerned about quarterly sales targets than sustainable agriculture.

It looks like internationalization is increasing. On Thursday the 6th, the AP reported that demand for organic products is outstripping supply, and causing many manufacturers to look outside the U.S. for supply:

Growth in sales of organic food has been 15 percent to 21 percent each year, compared with 2 percent to 4 percent for total food sales.


The number of organic farms — an estimated 10,000 — is also increasing, but not fast enough. As a result, organic manufacturers are looking for ingredients outside the United States in places like Europe, Bolivia, Venezuela and South Africa.

That is no surprise, said Barbara Robinson, head of the Agriculture Department's National Organic Program. The program provides the round, green "USDA Organic" seal for certified products.

Her agency is just now starting to track organic data, but Robinson believes the United States is importing far more organic food than it exports. That's true of conventional food, too.

"We're doing a lot of scrambling," said Sheryl O'Loughlin, CEO of Clif Bar Inc. "We have gotten to the point now where we know we can get a call for any ingredient."

The makers of the high-energy, eat-and-run Clif Bar needed 85,000 pounds of almonds, and they had to be organic. But the nation's organic almond crop was spoken for. Eventually, Clif Bar found the almonds — in Spain. But more shortages have popped up: apricots and blueberries, cashews and hazelnuts, brown rice syrup and oats.


In the meantime, manufacturers like Clif Bar and Stonyfield still prefer to buy organic ingredients, wherever they come from, instead of conventional crops in the U.S.

"Anybody who's helping to take toxins out of the biosphere and use less poisonous chemicals in agriculture is a hero of mine," Hirshberg said. "There's enormous opportunity here for everybody to win, large and small."

Demand can rise dramatically over a period of days or months, but increasing supply takes much longer. Under the current USDA rules, a farmer must use organic farming methods for three years before the land can yield crops with an organic certification. When this waiting period collides with a large corporatation's desire to meet their quarterly organic sales targets, a well-funded assult on standards might be the result ("Three years is just too long, Senator. Don't you think three months would be just as good? What about three weeks?"). Recall the surreptitious attack on the rules in 2003 through a rider to a multi-thousand page spending bill that would have allowed chicken growers seeking organic certification to use non-organic feed if the price differential between non-organic and organic passed a certain threshold (after intense criticism, the attempt to change the rules failed).

To increase the supply of domestically-grown organic products, perhaps Congress could reform the agricultural subsidy program and devote some of the $1.3 billion in subsidies for non-farmers to stimulating conversion to organic farming methods. Perhaps a loan program for farmers wanting to go organic. Or new educational programs. Or increasing the organic research budget beyond its historic high of $3 million per year. A section of the Washington Post's story about the $1.3 billion:

Nationwide, the federal government has paid at least $1.3 billion in subsidies for rice and other crops since 2000 to individuals who do no farming at all, according to an analysis of government records by The Washington Post.


Most of the money goes to real farmers who grow crops on their land, but they are under no obligation to grow the crop being subsidized. They can switch to a different crop or raise cattle or even grow a stand of timber -- and still get the government payments. The cash comes with so few restrictions that subdivision developers who buy farmland advertise that homeowners can collect farm subsidies on their new back yards.

The payments now account for nearly half of the nation's expanding agricultural subsidy system, a complex web that has little basis in fairness or efficiency. What began in the 1930s as a limited safety net for working farmers has swollen into a far-flung infrastructure of entitlements that has cost $172 billion over the past decade. In 2005 alone, when pretax farm profits were at a near-record $72 billion, the federal government handed out more than $25 billion in aid, almost 50 percent more than the amount it pays to families receiving welfare.


"We're simply administering it the way Congress established," said John A. Johnson, a top official at the U.S. Agriculture Department.

That last quote is timely, as the U.S. Congress will be debating the renewal of the "Farm Bill" in 2007, and so there is a chance to change the way that USDA administers the farm subsidy program.

Indexed under Politics and Policy
Technorati tags: Food : Organic

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