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Price of Organic Produce May Soon Decrease

(Beyond Pesticides, September 9, 2010) Researchers at the University of Arizona have examined the reasons for the higher cost of organic produce and predict the price will soon decrease. Many consumers would like to purchase more organic produce, but chose conventional due to the lower costs. Organic agriculture is the fastest growing sector of U.S. agriculture, and despite premium prices, organic food sales grew 53% from 2005 to 2008. Organic agriculture embodies an ecological approach to farming that does not rely on or permit synthetic pesticides, chemical fertilizers, genetically modified organisms, antibiotics, sewage sludge, or irradiation. Instead of using these harmful products and practices, organic agriculture utilizes techniques such as cover cropping, crop rotation, and composting to produce healthy soil, prevent pest and disease problems, and grow healthy food and fiber.

The study, entitled “Resale and Wholesale Market Power in Organic Apples,” examined organic apples grown in Washington State to serve as an example for overall organic agricultural production and sales. Washington State supplies 70% of U.S. apples. The demand for organic agriculture continues to grow due to the benefits to human health and the environment. In addition to the many organic food stores, most large grocery stores across the country carry at least a few varieties of organic produce resulting in high demand for organic products from food retailers.

Growers however have initially been slow to switch to organic agriculture, because of the substantial investment required to adopt a new methods of production, and gain organic certification. In order to be certified organic, foods must be produced without synthetic pesticides, fertilizers, or sewage sludge. Genetically modified crops are also not permitted in organic food. A farm must go through a three year transition phase, before it can be certified organic. The high demand and relatively low supply has allowed producers to charge retailers higher prices. Researchers found retailers earn only 7.4% of the profit margin on organic apples, versus 75.3% on conventionally grown apples. The much larger profit margin held by producers is enticing more American producers to switch to organic. As more producers switch to organic and supply increases, the bargaining power of producers will decrease causing their profit margins to decrease as well. Researchers also found prices on organic produce began to fall when Walmart announced it would sell organic food. Lead researcher Timothy Richards, PhD believes, “All of this will soon stop being an obstacle for consumers who want to buy organics.”

One concern researchers noted was the foreign suppliers eager to capitalize on the large demand for organic produce. Many foreign suppliers face few constraints from their own government. The growing number of foreign suppliers is cause for food safety concerns, as well as invasive species risk. According to Dr. Richards, this makes foreign suppliers an important aspect to examine when discussing organic policy especially rules regarding import.

The externalities or non market costs associated with organic versus conventional agriculture were not examined in this report. While consumers may pay a lower price for conventionally produced foods when compared to organic, the real cost of conventional foods are much higher when issues such as pollution, loss of biodiversity, and human illness are considered. Pesticide exposure has been linked to many diseases from cancers to ADHD. Studies suggest organic foods are more nutritious and even better tasting than conventional.

Organic farms are more complex agroecosystems than conventional farms, meaning they have higher biodiversity. Research has shown this biodiversity can help prevent many types of pests, including fungus, insects, and diseases. Organic farms are also a much safer workplace compared to conventional farms. The U.S. Department of Labor considers farm work one of the most dangerous jobs in the US yet farmworkers have little protection under current labor laws.

Beyond Pesticides supports organic agriculture as effecting good land stewardship and a reduction in hazardous chemical exposures for workers on the farm. The pesticide reform movement, citing pesticide problems associated with chemical agriculture, from groundwater contamination and runoff to drift, views organic as the solution to a serious public health and environmental threat.

For more information about why organic is the right choice, see our Organic Food: Eating with a Conscience guide.


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