Organic farming has been in existence since man began utilizing agricultural practices. Over the years organic methods gave way to “conventional” methods, characterized by the use of synthetic chemical inputs. Today, however, there is renewed interest in organic farming and it is being termed by many the “alternative” method of farming. This renewed interest is a direct result of high energy prices, increased fertilizer costs, and concerns about health, pesticide residues and the environmental impacts of chemicals (1).
Many view organic farming as a primitive, inefficient method but today’s organic farmer utilizes some of the latest technologies including genetically superior plants, biological pest controls and advanced mechanization. In some situations organic farmers may be less vulnerable to natural and economic risks than conventional farmers since their systems are usually more diversified. Some claim that the widespread adoption of organic farming methods could result in rural revitalization, regional self-sufficiency in food production and changes in the existing “capital-intensive structure of agriculture.”
Due to the lack of conformity among current organic regulatory organizations and the difficulty many have in distinguishing the terms “organic,” “alternative agriculture,” “regenerative agriculture,” and “LISA” (low-input sustainable agriculture), in 1989 the United Fresh Fruit and Vegetable Association organized a task force to establish a standard definition of “organic” which could be understood by growers, retailers and consumers. Those who worked on the task force included retailers, conventional producers, state departments of agriculture and organic producers and shippers. Their work resulted in the following definition:
- Organic food production systems are based on farm management practices that replenish and maintain soil fertility by providing optimal conditions for soil biological activity.
- Organic food is food that has been determined by an independent third party certification program to be produced in accordance with a nationally approved list of materials and practices.
- Organic food is documented and verified by an accurate and comprehensive record of the production and handling system.
- Only nationally approved materials have been used on the land and crops for at least three years before harvest.
- Organic food has been grown, harvested, preserved, processed, stored, transported, and marketed in accordance with nationally approved materials and practices.
- Organic food meets all local, state, and federal regulations governing the safety and quality of the food supply.
Many farmers are discovering that organic farming methods are viable alternatives to conventional farming, while others have discovered that organic farming can be quite costly. For example, according to a recent article in Top Producer (3), Fred Kirschenmann, owner of one of the largest organic food-grain farms in the United States, believes his gross income per acre is greater than conventional farms, averaging 15 percent to 20 percent premiums for all crops. Kirschenmann also notes that his farm has an advantage over conventional farms due to its diversity. Other farmers have not fared as well and have found that organic farming can be tremendously costly. Recently, Ron Nunes of The Nunes Company stated that he lost money on his organic lettuce, and that the 10 to 15 percent premium was not enough to cover production costs (4). Nevertheless, he remains optimistic and plans to continue growing organic produce.
A common misconception farmers have about organic farming is the idea that it is low-cost and low-input. Even with the success Kirschenmann has had, he admits that his program is not low-cost given the fact that he allows every field to remain fallow every 3 to 5 years and the extra cultivation offsets the elimination of fertilizer and herbicide expenses. In another recent article in Top Producer (5), Gene Kahn, an organic specialist from Washington state, acknowledges that organic farming is anything but low-input. For example, Kahn spends $650 per acre on row covers for root maggot control in cauliflower and broccoli. Kahn feels in order to minimize costs and maximize profits farmers need to look at what crops are best adapted for a particular piece of land and not at what crops bring the greatest returns at point of sale.
Eric Sorensen, Cooperative Extension agent in Washington state, recently told The Packer (6) that many farmers in Washington are turning to organic production methods because they see a market niche opportunity with premium prices. In the same article, organic potato farmer Steve Walser indicated that marketing his product was just as complicated as growing it. like other organic operations, Walser’s farm is not low-input; he indicated that he spends more time on rigorous land preparation than other growers. He believes the major difference in terms of cost between organic farming methods and conventional methods is the increased risk of losing the crop. Walser notes that as a certified” organic grower he cannot switch to conventional methods when that suits the circumstances. Even with the challenges, Walser believes it is the only way to farm if one is concerned about the environment.
Organic producers in California were recently surveyed by the Organic Marketing News and Information Service (OMNIS). One of the purposes of the survey was to determine farmers’ perceptions of the production and marketing obstacles limiting expansion of the organic industry. Roberta Cook, Extension Economist at the University of California at Davis, summarizes the survey in a paper entitled “Marketing Organic Commodities in California: Structure and Obstacles to Expansion”(7). Conclusions drawn by Cook indicate that farmers believe demand side factors are more critical to the success of the industry than supply side factors such as volume and quality. This is based on the fact that farmers ranked the factors limiting expansion as follows: (1) lack of consumer awareness of the benefits of organic produce; (2) limited distribution and availability; and (3) consumer unwillingness to pay a premium for organic produce. Farmers ranked their problems in producing organically as follows: (1) labor requirements; (2) pest problems; and (3) insufficient technical knowledge.
Another organic farmer survey, summarized in an article appearing in the American Journal of Alternative Agriculture (8), found that the ma or problems New York organic farmers face are biological factors (specifically weed management), economics, logistical/informational constraints, marketing problems, lack of appropriate tools and low prices.
In “Marketing Organic Commodities in California: Structure and Obstacles to Expansion,” Roberta Cook reports that 78 percent of California’s organic farmers utilized specific organic market outlets (outlets which distinguish organic produce, from conventional produce). The most common organic outlet used was organic wholesalers or brokers, with direct selling to consumers and retailers ranked second and third, respectively. The most popular non-organic market outlet (those which do not distinguish organic produce from conventional produce) was direct selling to consumers, with wholesalers or brokers and processors ranked second and third, respectively.
These organic market outlet leaders have mixed feelings about the success of organic produce and opportunities for expansion of the industry. Many have found it to be very lucrative, especially after the Alar–apples incident in 1989. Jennifer Miles, advertising director of alfalfa’s organic grocery in Boulder, Colorado, recently told The New Farm (9) that customers are really interested in organic produce and are wanting more information. Miles states that organic apples are selling the best but that organic carrots, lettuce and Grapefruit also are selling well. Joe Dunsmoor, founder of Organic Farms, the largest distributor of certified organically grown foods in the U.S., recently told The Packer (10) that he sees a bright future for organic produce. Officials from Organic Farms believe the strength of the industry is growing consumer demand and the weaknesses are lack of a consistent supply and a mind set among growers who have failed to recognize organic farming as a solid business. In the article, Dunsmoor stated that he felt the only limiting factor in the future of organics is to demonstrate that organic farming has a future based on proven growing systems backed by research and statistics.
Other marketers are not as impressed with organics and have said that the industry has a way to go before it will be competitive with conventional production. At a recent workshop called ‘Making Organics Work,” Harold Alston, vice president for produce procurement for Stop & Shop in Boston, stated that his firm has been carrying a line of organic produce for 3 years and that even though volume has tripled, it is still less than 1 percent of total produce sales (11). Raley’s Supermarkets, California’s first mainstream grocery chain to offer organic produce, has recently decided to quit selling organics because they cost too much and sales have stagnated due to inconsistent supply and quality (12). Several other California grocery stores are experiencing the same problems Raley’s has, and are offering organic produce depending on availability and demand.
A recent survey of organic retailers, wholesalers and processors in New Jersey conducted by the Sustainable Agriculture Project (13) indicated that the two most overwhelming problems associated with selling organic produce are lack of sufficient supply and the costliness of organics. These responses are consistent with problems experienced by supermarkets such as Raley’s. The survey also indicated that experienced organic marketers feel the three most important reasons to sell organic produce are that it lowers health risks, is better for the environment and customers want organic produce. According to the survey, the most requested organic produce items were apples, lettuce, peaches and tomatoes.
In Delaware, farm market owners and managers were recently surveyed by the Delaware Department of Agriculture. The results of this survey, which appeared in The Packer (14), indicated that 20 percent of those surveyed are involved in organic produce. In addition, 20 percent reported significant consumer interest in organics, 35 percent believed they would be involved with organic produce in the future and 79 percent believed a set of standards or regulations should exist. The survey also revealed that the major crops produced organically include peppers, squash, cucumbers, strawberries, carrots, apples, peaches, blueberries and cantaloupes.
Over the past few years consumers have changed their perceptions regarding organic food items. This change is a direct result of consumer awareness of food safety issues, particularly those involving chemical residues. Concerns over chemical residues have existed for quite some time but it was not until the Alar-sprayed apples incident in 1989 that chemical residue issues received widespread attention.
Recent surveys confirm the fact that consumers are concerned about chemical residues. A 1989 national survey appearing in The Packer Focus (15) found that 49 percent of those surveyed reported being more concerned with residues, and 26 percent of respondents said they were concerned with chemical residues on produce and that concern has prompted them to change their buying habits. This compares to 18 percent who reported changed buying habits in the 1988 and 1987 surveys.
Chemical residue concerns are not limited to consumers in higher income brackets. In fact, the survey reports that consumers in lower income brackets are more concerned. For example, 35 percent of households in the $10,000 or less bracket reported that they had altered purchasing habits, while 23 percent in the $30,000 plus bracket reported altered purchasing habits.
The survey indicated that 11 percent of consumers made a point of seeking and buying organic produce, compared to 8 percent the previous year. The survey also showed that of those who reported purchasing organic items, 34 percent purchased tomatoes, 28 percent purchased various other vegetables and 22 percent purchased apples. Other items were listed, but by very few respondents. Also, 57 percent of respondents said they would, regardless of cost, buy organic produce grown without the use of chemical fertilizers and pesticides. But though parts of the survey indicate shoppers are interested in organics, a look at shopping behavior indicated a moderate response to organic produce offerings.
A Georgia consumer survey appearing in a recent Consumer Information Management System (CIMS) newsletter (16) reported that when asked what “food concerns” are most important, respondents indicated “foods grown using pesticides.” When asked if they have changed their buying habits, because of increased media exposure about pesticide use, 56 percent of consumers said they have made no change at all.
Thirty percent indicated they were buying pesticide-free produce if available, while 11 percent indicated they were purchasing less produce. . The majority of respondents indicated they do not perceive pesticide residues to have any greater health risk than smoking or eating foods high in cholesterol, fat and salt.
Fifty-seven percent of the respondents were in favor of testing for pesticide residues and certifying food as in compliance with allowable tolerances. However, a majority said they would prefer the testing be conducted by independent testing laboratories, not government agencies.
A large majority of respondents indicated that they would prefer to buy organically grown produce but only 25 percent said they were willing to accept produce with sensory defects such as insect holes, blemishes and soft spots. Consumers responding to this survey were clearly concerned about pesticide residues, but unlike those surveyed by The Packer, their concern has not motivated them to change their buying habits.
The authors of a paper entitled “Economic Comparison of Organic and Conventional Production Methods for Fruits and Vegetables” (17) say it is difficult to reach a conclusion about the comparative profitability of conventional and organic agricultural production practices because of the wide range of production methods used in different regions and with different crops, and because of the variable organic price premiums. The authors found that costs per acre were generally, but not always, higher for conventional methods. However, when analyzed on a per unit basis (e.g., carton or ton), the authors found that “…costs were almost always higher due to the yield penalty associated with those organic methods.” The authors referenced one study that indicated that the profitability of organic methods usually depends on price premiums. The same study indicated that all organically grown vegetables except sweet corn were profitable when sold at premium prices. However, according to the authors, the study showed that at conventional prices “…only tomatoes, eggplant, and cucumbers were profitable, and were considerably less profitable than their conventionally grown counterparts.”
A study appearing in the American Journal of Alternative Agriculture (18) found that when comparing grain farms in the central and northern states, organic farming equaled or exceeded conventional farming in economic performance. The study also indicated that organic farmers are less vulnerable to natural and economic risks since organic farms are generally more diversified.
Another organic related study, appearing in the Journal of Soil and Water Conservation (1), noted some of the potential macroeconomic effects. of organic farming. According to the abstract, “…widespread adoption of organic farming methods in the United States would increase national net farm income and satisfy domestic demand for agricultural products.” However, the authors also concluded that food costs would increase, export levels would decline, and production would experience regional shifts.
This section of the handbook has provided a brief overview of the issues surrounding organic produce. The remaining sections of the handbook provide information regarding market outlets, market characteristics, planning procedures, certification and information sources.
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