Organics on the Brink: Bonanza or Boondoggle

by Desmond Jolly, Small Farm Program director

Organic agriculture, as practiced in the late 1960s and 1970s, could have been regarded as part of a fugitive subculture of urban refugees and others who chose to go back to the land. It was part of a broader reaction to the bland package of a conformist, postwar lifestyle that emerged in the 1950s. The first Ecological Farming Conference I attended in the mid 1970s was held at a remote backwoods retreat above Santa Cruz, California. It had rained unmercifully and we clambered around in the muck until we were released back to "civilization."

For the next decade, at least, organic agriculture was viewed with skepticism, if not disdain, by mainstream consumers. But the momentum was maintained by practitioners armed with the faith of a quasi-spiritual movement. They wanted to heal the earth while nourishing the body. Organics fitted in with an alternative vision that embraced the 'natural' - natural foods, natural birth, and natural healing. The preference for natural foods gradually diffused into the larger mainstream culture. This increased demand necessitated the Federal Trade Commission's issuance of guidelines for the use of the word "natural" in product labeling - stating that natural foods may not contain synthetic or artificial ingredients and may not be more than minimally processed. Though it is part of a broad, difficult-to-measure concept, the natural foods market has exploded to a reported $20 billion per year, with organically produced products at a reported $3.5 million, more than tripling in sales since the early 1990s.

Growing Pains

But success typically doesn't come without costs. As a Jamaican proverb says, "Ants follow fat." One basic problem that confronted the organic industry as it grew was how to meet demand consistently, in both volume and quality. For example, in organic apple production, there was the challenge of controlling coddling moth with organic materials. Pheromones and other materials have proven fairly effective in some areas. But in some agroclimatic environments, organic apple production was and still is a risky business. Thus, short supplies led to high organic premiums, which repelled some potential organic product buyers, while also attracting entrepreneurs who saw an opportunity to take advantage of high organic premiums.

Another price of success was the pressure on certifiers. If organics was to become a mainstream, as opposed to a "fugitive" industry, the organic label would need to have consistent meaning and official standing. Several states, including California, developed legally prescribed production codes for certification. But these were not always consistent with each other, nor were they consistently enforced. Private certification became the norm.

However, contradictions in standards and enforcement were and are inherent in the certification process. If standards are set too high, they tend to restrict growth in production, to maintain high premiums, and to encourage marginally ethical operators to market regular products as organic. But if standards are set too low, the perceived differences between conventional and organic would diminish. Additionally, where private certification agencies benefit financially from increased acreage and production, there might be a strong incentive to relax the levels of scrutiny regarding certification. A 20 percent growth rate, whether real or imagined, is a seductive statistic.

For some in the industry, a general state of euphoria prevailed in the closing moments of the 1990s. In 1998, Biofact Magazine reported that McDonalds-Sweden had produced an organic milk product; Lufthansa and Swiss Air airlines had adopted organics as part of their product offerings; and Nestle and Sandoz had taken positions in the organic market. It also was reported that Mars Inc., creators of the Mars candy bar, had developed plans for an organic Mars chocolate product. Biofact summarized its report by stating that "these examples of multinationals entering the organic sector can be seen as an indicator that we may face even more than a boom - something like a big bang." The big question that occurs is whether this 'big bang' might be the sound of the organic industry shooting itself in the foot. Organics has metamorphosed from the stage of cottage industry to that of big business. It now faces all the contradictions from which the counterculture that gave birth to the movement sought to escape.

From Community to Chaos

In his 1995 keynote address to the Organic Farming Research Foundation (OFRF) conference, Garth Youngberg, of the Wallace Institute for Alternative Agriculture, cited Robert Putnam's work, "Bowling Alone," in which Putnam describes the erosion of civic participation in American social life. Americans are increasingly bowling alone (or simply not bowling).

According to Youngberg "Increasingly, it seems, society in general is disconnecting from American agriculture. But even more troubling, the various sectors of agriculture itself are disconnecting from one another. With the acceleration of specialization and concentration, and the industrialization of American agriculture, we see a narrowing of interests and goals, increased conflict, and fewer institutional mechanisms and opportunities to act cooperatively and to think broadly about the overall goals of American agriculture." Youngberg perceives that a similar process of atomization and particularization has overtaken the organic industry "... leading to the gradual erosion of the broad consensual vision within the entire organic industry for the future role of organic farming within the larger framework of American agriculture." This breakdown of consensus is reflected in the proliferation of organizations and interests with acronyms that are mind boggling: CCOF, OMRI, OFRF, NOP, IFOAM, etc.*

The opportunities presented by the rapid growth in demand also have attracted players with little philosophical or moral commitment to organics as a core value. A flyer describing a town hall meeting on ethics at the OFRF 1995 conference noted that "Along with the tremendous growth and opportunity for the expansion of organic trade, we've also seen a recent upward trend in the amount of civil and criminal organic labeling fraud. In one Minnesota case, company owners were actually sentenced to serve jail time for organic labeling fraud. Several more California companies have been heavily fined for violating the California Organic Foods Act." The flyer continues, "How can we presume to advocate historic 'organic values' to corporate board rooms when, in fact, we have failed to clean up our own act?" Indeed! "Ants follow fat." Success has its price.

From Chaos to Community

The hope for creating community, or at least coherence, out of chaos was placed in the 1990 Organic Foods Production Act. That act mandated USDA to develop and impose national organic standards that would produce order by requiring that all producers (with exceptions for very small growers) that "grow, process, handle, and/or sell food products that are labeled organic to be certified organic." It's that simple! Or is it?

The USDA now has a National Organic Program, and a few years ago empowered a National Organic Standards Board (NOSB) to make recommendations to USDA regarding the criteria by which producers could meet the "organic" label requirements. NOSB deliberations took some time, and the subsequent development and promulgation of proposed regulations by USDA took even more. But USDA has finally issued its proposed regulations. The big question is whether these regulations, by leveling the playing field, will bring order out of chaos.

The regulations have the potential to seriously affect the structure, conduct, and performance of the industry. Some industry participants believe that the regulations will bias the industry towards large scale producers. Peter Donelan, a small grower from Elk, California, says in a letter to USDA Secretary of Agriculture Dan Glickman, "It also seems the certification requirements, accreditation, and administrative functions of the proposed rules will once again favor the large producer/processor."

The efficacy and performance of government regulatory units have come under challenge in recent decades, which has led to a downsizing of public regulatory prerogatives. The proposed regulations place responsibility for certification largely in the private domain. But some skeptics question whether the system of private certification can operate wholly in the public interest.

For example, Solomon Teklu, featured in this issue, says, "Oversight of organic operations by private certifiers is undermined by the presence and participation of organic producers and handlers within their governing bodies. Such arrangements promote dynastism, create conflicts of interests, and stifle competition. These conditions are simply unacceptable for the organic industry if it is to reach its full potential." Teklu cites, as a potential model, the agricultural commissioner system of the California Department of Food and Agriculture in California, and would propose that system as a way of providing credible certification for organic producers.

Another area in which the proposed regulations have ramifications for structure, conduct, and performance has to do with allowable practices and materials utilizable in organic production regimes. There is concern that, in general, if the allowable regimes sufficiently blur the distinction between "organic" and conventional products, consumer preferences for organic may diminish, reducing the growth of demand.

Also, if organic certification qualification becomes easier, organic production may become more amenable to large scale production systems, thus endangering smaller scale producers. Organics would quickly become not an alternative agriculture but another product line for conventional agricultural systems. Thus, the proposed rules and regulations, rather than being perceived as bringing order out of chaos have, in this iteration, seemed to contribute to an atmosphere of disarray and anxiety.

However, in some sense, this seems to be a propitious time for national organic regulations development. The current USDA administration is very supportive of family and small-scale farmers and can generally be construed as supportive of sustainable and alternative agriculture. But Secretary Glickman and his National Organic Program face a daunting task in reconciling a tangled web of conflicting interests from within and without the organic industry. A set of good regulations would enhance the prospects for continued industry growth. But a set of flawed regulations would fail to solve the problems which now bedevil the industry, and may even exacerbate them.

In sum, the proposed regulations do not appear to promise much in the way of bringing order out of chaos. We are still on the way to "bowling alone."