Fresh Facts 26: Organic Economics – Heart & Head

ladybugs

This alliance of small farms you’re participating with, Abundant Harvest Organics, was conceived in no small part as a response to farmer’s concerns regarding vertically integrated competitors and consumer’s similar concerns regarding the accessibility of responsibly produced food. I know, too many $50 words in there, so let me get clearer.

Ten years ago, when we started this AHO deal, small organic farmers were worried about getting squeezed out by the same industrialized version of organic that true organic consumers were fearful of buying from.

So, here’s a question for you: Should economics be the only driver of our food supply? Should the cheapest way to produce even an organic product be the only way that organic products are produced? If the answer is no, things like biodiversity, polyculture, animal welfare, small farm independence, and local prosperity should be rewarded; then how are you going to set that up?

Several of you sent me Michael Pollan’s NY Times piece about Wal-Mart getting into Organic with a goal of delivering Organic food at 10% over conventional, and wondering what I thought about that.

The classic definition of economics is: “the study of the use of scarce resources which have alternative uses.” In this example, the scarce resources a farmer might deploy are land, water, labor. The scarce resource for the consumer is the food budget. The latter is in control in a free market. The unspoken most scarce resource for both is time. I can see your mental gears turning out there.

This isn’t an easy subject, and there aren’t simple black and white quick answers. This is my wheelhouse and I won’t pretend to have all the answers, and even if I did, they wouldn’t be valid in 10 years.

Here’s what I know that Wal-Mart doesn’t…yet. While economics is important to the organic consumer, they’re subordinate to wholeistic (yeah, I just invented that word, but it makes more sense with the w in front) life choices of which economics are just one component and Mr. Pollan of all people should know that. Organic consumers WILL NOT stand for a dilution of the organic definition. Actually, the organic definition is tightened in several areas every year despite pressure to relax.

The second thing they don’t know yet is that organic done well is pretty difficult to produce consistently; it’s much more management intensive at all levels. I have yet to see a production company or a retailer do well with organic who viewed it as just another SKU. Quite the contrary, I watch them come and go every year. Organic takes a heart / head combination to succeed.

But there are peripheral things that farmers, retailers, and consumers are doing to make organic more economically viable. Small farmers are working together to package and present their produce. Retailers are putting normal mark-ups on organic food and consumers are rewarding these efforts with a higher percentage of their food budget.

Costco had a policy of offering organic at 15% over conventional 10 years ago and failed. Not until a heart conversion led to a head conversion did they get organic in their stores.

Finally, CA organic consumers are extremely well educated. They expect quality organic food from their neighbors at reasonable prices. The future is bright for all of us, no worries.

Eat healthy!

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Categories: Fresh Facts , Newsletter

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Your farmer Vernon Peterson grows organic stone fruit and chickens along the Kings River in Kingsburg, California.

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