Organic farming: Squeezing out the small guys
A fascinating piece on Salon called “The not-so-sweet success of organic farming” details problems in the growing organic food market. The authors argument is that the organic food industry has been “coopted by big business.” The organic food market has drifted away from small farmers to large corporations.
In California, five giant farms control half of the state's $400 million organic produce market. Horizon Organic, a publicly traded Colorado-based company, controls more than 70 percent of the nation's organic milk market. More than 30 percent of its milk is produced at two industrial-size dairies, one of which milks close to 5,000 cows. Corporate food giant General Mills now owns leading organic manufacturer Cascadia Farms, Kraft Foods owns Boca Burgers, and Heinz, reported the Wall Street Journal this June, is seeking to develop an organic ketchup to sell at Whole Foods and Wild Oats, the nation's biggest natural foods supermarkets.
Distribution, as so often, is the big issue. You need to be big to get shelf space, to get the attention of the supermarkets and the food brokers, to keep supply levels constant year round. The costs of getting certified and staying certified are high, as well. All these factors cut out the small entrepreneur.
And now that big companies are involved, they are busily lobbying for exceptions to the government organic certification process. Standards are constantly being eroded, as companies use political muscle to change the rules of the game. “Last month, for example, Fieldale Farms, a Georgia chicken processor that slaughters several hundred thousand organic chickens a month, sought a waiver from USDA regulations requiring organically grown chickens be fed 100 percent organically grown feed. Not enough organic feed was available to meet company demands, a Fieldale spokesperson told The Atlanta Journal Constitution.”
And the worst part is that small producers who do really follow pure organic and sustainable agricultural practices cannot advertise that they outdo the standards if they decide to accept the government's organic certification. For that reasons, some of the best organic producers have opted out of the expensive and increasingly meaningless USDA organic labels. [Oligopoly Watch]