Consumer demand for organic products is growing rapidly, at over 10 percent annually. This growth in demand is encouraging, but domestic production of organic crops is not keeping pace. The result is that an increasing percentage of U.S. organic food is imported to meet consumer needs. Currently, the most acute imbalance between demand and domestic supply is in organic grain production. Recent trends reveal a significant surge in U.S. imports of organic feed grains, most of which are used as feed for organic dairy, poultry and other livestock operations.
The jobs and environmental benefits associated with organic agriculture are significant, but active steps need to be taken to ensure that our country and citizens reap those benefits. If we continue to rely on increased imports of organic products to meet growing consumer demand, we are being negligent by undercutting U.S. organic farmers and relinquishing those economic and environmental benefits to other nations.
CHALLENGES LIMITING DOMESTIC ORGANIC PRODUCTION
Organic farmers face unique costs relative to their conventional counterparts. Organic farmers spend less on purchased inputs than conventional farmers, but their labor and feed costs are much higher. Organic farming is also knowledge-intensive because it relies on a systems approach, rather than the use of off-farm inputs, to manage fertility, weeds, and pests. Organic farmers are also charged with conserving biodiversity, managing complex grazing systems, and maintaining animal health without the use of antibiotics.Organic grain production lags behind, despite favorable returns. Even after the cost of production is factored in, returns average $51 to $66 more per acre for organic corn and $22 to $41 more per acre for organic soybeans, compared to their conventional counterparts.But overall adoption of organic corn, soybeans, and wheat stands at less than one percent of the total acreage for each crop. Why? Organic cropping systems often involve rotations of six or more crops, which build healthy soils and provide other ecological benefits. While the price premium for organic corn and soybeans may be significant, the markets and price premiums for other crops in an elaborate organic crop rotation may be less certain, or even non-existent. The high capital cost associated with grain production and social factors, such as opportunities for beginning farmers to start produce and other niche operations in peri-urban areas, are other likely factors.
But overall adoption of organic corn, soybeans, and wheat stands at less than one percent of the total acreage for each crop. Why? Organic cropping systems often involve rotations of six or more crops, which build healthy soils and provide other ecological benefits. While the price premium for organic corn and soybeans may be significant, the markets and price premiums for other crops in an elaborate organic crop rotation may be less certain, or even non-existent. The high capital cost associated with grain production and social factors, such as opportunities for beginning farmers to start produce and other niche operations in peri-urban areas, are other likely factors.
Consolidation within the organic industry, a rise in organic imports, and contracts that disadvantage farmers may be limiting the economic viability of domestic producers.The term “sustainable pay price” refers to the farmgate price above the cost of production and at a level which allows the farmer and his or her workers to make a reasonable living, as well as to invest in the growth of the farm. Without a sustainable pay price, US organic producers will not increase production. Organic has enjoyed a prolonged period of a sustainable pay price in many sectors, but the surge in imports and current disconnect between supply and demand may actually lead to a drop in pay price for domestic producers. Buyer consolidation trends in the conventional food and agriculture sector have taken hold in the organic sector as well. When there are fewer buyers competing for the products that farmers are selling, the bargaining power of organic farmers is negatively impacted. A growing reliance on written contracts may also be shifting risk to farmers. If large organic buyers are able to use their market power to impose unbalanced contract terms on organic farmers, it could discourage new and existing farmers from entering organic markets all together and further our nation’s reliance on imports to serve our domestic markets.
Access to land and capital is especially challenging for new farmers who want to farm organically and for existing farmers seeking to convert. USDA organic standards require land to be managed organically for three years prior to certification. To buy land that has already gone through this transition is very expensive. However, transitioning the land is also costly, because crops and livestock cannot be sold as organic during the three-year transition even though the operation is incurring the higher costs of managing the land organically. Furthermore, farmers without access to capital who choose to lease land may not invest in organic certification without secure land tenure.
Genetic drift from genetically engineered (GE) crops may interfere with and limit domestic organic production. A 2013 survey of organic grain farmers in 17 states conducted by Food & Water Watch in partnership with the Organic Farmers’ Agency for Relationship Marketing (OFARM), revealed that one out of three survey participants had dealt with genetic contamination on their farm. GE contamination can happen when winds or pollinators bring pollen from neighboring genetically engineered crops into fields planted with non-engineered crops. Because of the prevalence of GE crop plantings, particularly in the Midwest, many U.S. processors of “non-GMO” and organic grains struggle to find U.S. sources of organic and non-GE corn and soybeans that do not show some level of GE contamination as a result of genetic drift, even though the farmers selling the crops planted non-GE seeds. This has resulted in a loss of organic corn and soybean markets to other countries were GE crops are less prevalent. Farmers also incur significant costs to prevent genetic drift of GMO Organic has enjoyed a prolonged period of a sustainable pay price in many sectors, but the surge in imports and current disconnect between supply and demand may actually lead to a drop in pay price for domestic producers. traits from off-farm sources, by establishing broad buffer zones along the borders of their farm, delaying planting to avoid the most vulnerable times for genetic drift relative to their neighbor’s planting schedule, and testing their crops prior to shipment to avoid rejection by their buyers.
KEY POLICY RECOMMENDATIONS
- Funding for key organic research programs should be substantially increased by Congress through the annual appropriations process and the Farm Bill. In addition, USDA should increase the share of funding dedicated to organic research within larger competitive grant research programs, such as the Agriculture and Food Research Initiative (AFRI) to address production challenges faced by organic farmers.
- Two key USDA surveys—the Organic Production Survey and the Organic Certifier Survey, should be conducted on a regular basis using a consistent set of questions to establish reliable organic trend data.
- NIFA should increase research funding support for public cultivar and breed development to $50 million per year. Land Grant Universities should prioritize training a next generation of public plant and animal breeders.
- Continued support for the National Organic Certification Cost-Share program is essential. Cost-share programs should be expanded to allow for reimbursement for the costs to prevent genetic contamination, the fees associated with transitioning to organic, and state certification fees.
- Federal legislation should be established to provide farmers that experience GE contamination with a legal means to pursue GE seed manufacturers for injuries that include economic loss.
- A funding mechanism, such as a fee on pesticide sales, should be established to compensate farmers whose crops are damaged from pesticide or herbicide drift from a neighboring farm.
- USDA and Congress should greatly expand resources devoted to conservation technical assistance for farmers transitioning to organic production, through programs such as the Environmental Quality Incentive Program (EQIP). In addition, to minimize bureaucratic hurdles and delays in assisting organic farmers, the designated Farm Service Agency and Natural Resource Conservation Service “Organic Specialists” in each State Office should be required to work closely together.
- To provide greater risk management options for organic farms, organic price elections should be offered on all organic crops so these crops can be insured at their full value and the Whole Farm Revenue Program should be reformed and streamlined to improve options for diversified organic farms.
- Make changes to ensure that FSA loan programs work for young and beginning organic farmers.
- Provide student loan forgiveness for young people who enter agricultural careers.
- Expand and improve training for new organic farmers by renewing and expanding the Beginning Farmer and Rancher Development Program (BFRDP), with a particular focus on farmer-to-farmer mentorship initiatives.
- Offer tax credits for selling or leasing land to a beginning organic farmer.
- Federal prohibitions against the use of certain confidentiality clauses in livestock and poultry contracts should be broadened to include organic contracts to foster a more competitive market and allow farmers greater access to information.
- The Global Agricultural Trade System (GATS) operated by USDA’s Foreign Agriculture Service should be updated to track imports of all organic products.
- Mechanisms to ensure compliance with U.S. organic standards should be enhanced to ensure the integrity of organic imports.
SOLUTIONS
Because the challenges of growing U.S. organic production are multi-faceted, so too are the solutions. Increasing funding for organic research, ensuring access to regionally adapted seeds that are bred for organic systems, maintaining the integrity of the organic standards, and providing organic farmers with additional risk management tools are key solutions to increasing domestic organic production. The National Organic Coalition has developed a comprehensive list of policy recommendations that we will advance with the new Administration, the USDA, Members of Congress, and in the next Farm Bill.
ORGANIC RESEARCH
Investing in organic research is central to increasing domestic production of organic crops. Unfortunately, over the past five years, while overall funding for agricultural research has grown significantly, funding for organic research has stagnated. For example, according to the USDA’s own data, funding for organic in the flagship competitive research grant program, the Agriculture and Food Research Initiative (AFRI), has averaged about two-tenths of one percent (0.2 percent) annually. In addition, funding for USDA’s organic-specific research programs has been stagnant for years. The National Organic Coalition is asking the USDA to make a formal policy commitment to increase organic research for topics related to production challenges faced by organic farmers.
REGIONALLY ADAPTED SEEDS FOR ORGANIC SYSTEMS
Organic farmers lack a diverse set of seed and animal breed options to meet the needs of their farming systems, soils, and changing climates. In recent decades, USDA funding for public plant and animal breeding has dwindled, while resources have shifted toward a more narrow set of major crops and breeds. We are currently losing the next generation of plant breeders given the lack of well-funded and institutionalized career paths for public plant breeders at Land Grant Universities. The National Organic Coalition has adopted a comprehensive platform to address this crisis within our nation’s public breeding infrastructure. This platform includes directing $50 million per year in total NIFA research funding to support public cultivar development, increasing coordination across USDA research agencies and programs, funding to train a next generation of public cultivar developers, and protections to ensure farmers’ rights to save and breeders’ rights to share and improve these seeds and animal breeds.
MAINTAINING ORGANIC INTEGRITY
The success of organic agriculture is built on the trust of consumers in the organic label, and their willingness to recognize the additional value of organic products, as well as to pay a price premium for them. Some have suggested that one way to encourage more domestic organic production to meet the explosive growth in demand is to relax the stringent organic standards to make it easier to produce organically. Relaxing the organic standards would be counter-productive, because it would under mine consumer confidence in the organic label. Furthermore, weaker standards would also apply to imported organic products, so little is gained from the standpoint of gaining greater organic market share for U.S. farmers.
RISK MANAGEMENT OPTIONS FOR ORGANIC AND TRANSITIONING FARMERS
Federal crop insurance programs have historically discriminated against organic farmers and have been a mismatch for diversified farms. Although the USDA no longer charges a five percent crop insurance surcharge on organic farmers and farmers transitioning to organic, and the agency has made significant progress in providing more organic crop insurance options, challenges remain. More work needs to be done to ensure that organic farmers can insure all of their crops at the full organic value (rather than at conventional prices) and to help diversified farms better manage risk. The success of organic agriculture is built on the trust of consumers in the organic label, and their willingness to recognize the additional value of organic products.
The National Organic Coalition (NOC) is a national alliance of organizations working to provide a “Washington voice” for farmers, ranchers, environmentalists, consumers and industry members involved in organic agriculture.