“We all left the old system (conventional agriculture) because we wanted something different. Now, we are becoming just like the old system.”
This was the comment that made the biggest impression at the Protecting Farmer Prices discussion, a panel that I moderated last week at the Organic Trade Association’s Bold Ideas and Critical Conversations Conference in Washington, D.C.
As organic has evolved from niche to mainstream, the rush of companies entering the sector has been non-stop. We are now faced with a “race to the bottom” environment, where the largest retailers are in a constant quest to lower prices in order to grow and maintain market share.
Further exacerbating the problem is that the USDA has failed to enforce the rules, allowing things such as hydroponics and ‘factory dairy farms’ to operate in organic. This has created an unfair competitive environment, which has pushed prices to artificially low levels and made life brutally challenging, if not impossible, for many small and mid-sized, soil-based organic farmers.
With no clear and easy answer to this problem, panelist Doug Crabtree, an organic farmer and owner of Vilicus Farms in Montana, correctly said, “We have to be more creative.”
Other industry stakeholders agree, and out-of-the-box solutions must be considered.
“There needs to be a paradigm shift,” echoes Errol Schweizer, organic entrepreneur and former Executive Global Grocery Coordinator at Whole Foods Market, who was not at the conference.
“We have to stop relying solely on the marketplace. Why, when there is all of this demand for organic, are farms going out of business? We have experienced a catastrophic displacement of farmers over the last few decades, with huge hurdles for new farmers. We need to start thinking about or working on ways to better control the price and supply of crops, and actively transition farmers into growing crops that meet the current needs of consumers. This could lead to supply management or a hybrid model based on the Norwegian cooperative system.”
This, he suggested, could be managed by the public, similar to a public utility, and not by industry, with legal protections in place for farmers that would transition them to regenerative farming systems and keep them on the land. It would have to start with a grassroots effort led by consumers in order to become policy.
“At a time when the current administration has spent $28 billion in the past 24 months to subsidize farmers who are mostly producing GMO crops for export, organic needs to think boldly about protecting its current and future farmers for practices that matter — practices that enhance soil health and do not poison the environment with cancer-causing chemicals,” said Errol Schweizer.
He also said that companies can start addressing this problem by looking at their own supply chain, coming together with other brands to pressure retailers to maintain margins for farmers, and helping to fund consumer groups for who will advocate for policy change.
One organization that is addressing procurement in a novel way is The Good Food Purchasing Program, which is designed to do for the food system what LEED certification did for energy efficiency in buildings.
It now operates in 15 cities throughout the U.S. with 28 institutions participating, including school districts, recreation and parks departments, airports, and convention centers.
The program provides a metric-based, flexible framework that encourages large institutions to direct their buying power toward five core values: local economies, environmental sustainability, valued workforce, animal welfare and nutrition.
“The whole idea was to create more market demand for well-produced food. We have made progress in helping organic farmers and want to figure out ways to get organic farmers more of this market share. Cost is certainly an issue, which is why we are looking for funding for school districts so they can purchase more organic,” said Paula Daniels, Co-Founder of The Center for Good Food Purchasing.
Other possibilities to help alleviate the margin pressure on organic farmers are the soon-to-be-introduced, add-on labels — Regenerative Organic Certification and The Real Organic Project. Neither program has released certified products just yet, so it is hard to ascertain how big and how quick of an impact each will have on the marketplace.
Protecting prices for farmers is a complex yet critical issue.
The only thing that we can be certain of is that if the industry does not tackle this in a bold way — and very soon — we will end up becoming the system we wanted to avoid.
(Photo above courtesy of the Organic Trade Association/Erika Nizbroski)
While in Washington, D.C. last week, I met up with my fraternity brother from college, Representative Dean Phillips (D-MN) — someone that I hadn’t seen in 28 years.
Rep. Phillips is the most accomplished organic food entrepreneur we have in Congress. He founded Prairie Organic Spirits, the country’s leading organic vodka brand, and invested in and helped managed Talenti, a gelato brand with certified organic SKUs that was eventually sold to Unilever.
Among other issues, I spoke with him about the USDA illegally allowing hydroponics in organic and glyphosate being sprayed on land of hydroponic organic farms. I look forward to continuing the dialogue with him about important matters facing our industry, as I know he cares deeply about organic.
Have a great day!
Max Goldberg, Founder
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