Organic vs. conventional food costs

11 years ago

The subject of organic vs. conventional food costs has come up in several threads recently, so I thought I'd start another thread to focus on this issue. Here is a quote from the UN Food and Agriculture Organization that I thought useful:
Certified organic food. Certified organic products are generally more expensive than their conventional counterparts (for which prices have been declining) for a number of reasons:
Ã¯Â¿Â½Organic food supply is limited as compared to demand;
Ã¯Â¿Â½Production costs for organic foods are typically higher because of greater labour inputs per unit of output and because greater diversity of enterprises means economies of scale cannot be achieved;
Ã¯Â¿Â½Post-harvest handling of relatively small quantities of organic foods results in higher costs because of the mandatory segregation of organic and conventional produce, especially for processing and transportation;
Ã¯Â¿Â½Marketing and the distribution chain for organic products is relatively inefficient and costs are higher because of relatively small volumes.

As demand for organic food and products is increasing, technological innovations and economies of scale should reduce costs of production, processing, distribution and marketing for organic produce.

Prices of organic foods include not only the cost of the food production itself, but also a range of other factors that are not captured in the price of conventional food, such as:
Ã¯Â¿Â½Environmental enhancement and protection (and avoidance of future expenses to mitigate pollution). For example, higher prices of organic cash crops compensate for low financial returns of rotational periods which are necessary to build soil fertility;
Ã¯Â¿Â½Higher standards for animal welfare;
Ã¯Â¿Â½Avoidance of health risks to farmers due to inappropriate handling of pesticides (and avoidance of future medical expenses);
Ã¯Â¿Â½Rural development by generating additional farm employment and assuring a fair and sufficient income to producers.
(Source of quote: http://www.fao.org/organicag/oa-faq/oa-faq5/en/)
Renais

Sort by:Oldest

Comments (3)

Kimmsr
11 years ago
What part in the lower cost of "conventionally " grown food does government subsidies play?
Knowing that many organic growers are classified as "hobby" farmers, and therefore ineligible for subsidies makes for interesting conversations, sometimes.
maplerbirch
11 years ago
As a farmer, I have always been opposed to gov't handouts and interference. I can understand that providing our nation with an abundant and inexpensive food source was imperative to the raising of the high standard of living we have enjoyed in the past.
One of the paradigms we may want to take a fresh look at is our centralization of food collection and distribution. The idea of buying local is a good step away from the stauts quo, but of little value for many states right now.
Another change in growing healthy food would have to do with the draconian regulations for "Certified Organic". I would much rather see the label read Herbicide Free or Dormant Spray Oils Only, to give the widest margin of options for growing high quality foods inexpensively.

Are apples sprayed in Spring when dormant carrying residual toxins into the fruit in October?
Related Professionals
Potsdam Landscape Architects & Landscape Designers · Erie Landscape Architects & Landscape Designers · Platteville Landscape Architects & Landscape Designers · Cornwall Landscape Architects & Landscape Designers · Fort Smith Landscape Contractors · Tallahassee Landscape Contractors · Madison Landscape Contractors · Pittsburg Landscape Contractors · Billings Landscape Contractors · Columbia Architects & Building Designers · Columbus Architects & Building Designers · Anniston Architects & Building Designers · South Bend Architects & Building Designers · Poughkeepsie Architects & Building Designers · Mansfield Architects & Building Designers
renais1
Original Author
11 years ago
The question was asked about what part government subsidies played the prices of conventional and organically grown products. The situation has changed quite a bit in the last 10 years, and organic agriculture is now a very substantial beneficiary of the government, including the many very small operations. In fact, government programs are oriented toward increasing organic production. One comment from Jason Lusk, a well-known and respected economist: "WeÃ¢ÂÂre often told organics donÃ¢ÂÂt get government subsidies, but thatÃ¢ÂÂs a fabrication. In Europe, organic farmers are subsidized like all other farmers. In the U.S., there are programs like the Environmental Quality Incentives Program that pay producers to transition from conventional to organic. There are other programs that use federal monies to help organic farmers pay the cost of certification. Organic farmers can receive government-subsidized crop insurance just like non-organic farmers. Organic milk is subjected to many of the same complex price-support rules imposed by the government on non-organic milk. Hundreds of millions of tax dollars are spent on research and education into organics and on marketing and monitoring programs. The food police tell us that the growth in organic food demand is the free market working at its best, while using the taxing power of the state to manipulate the market by subsidizing organic production, marketing, and research activities. You canÃ¢ÂÂt have your organic-is-libertarian cake and eat it too."
The National Sustainable Agriculture Coalition (a very much pro-organic group) notes the many benefits in the 14 Farm Bill at the link provided. The bottom line in my opinion, is that organic food is probably at least as heavily subsidized as conventional produce.
Renais

Here is a link that might be useful: NSAC