Supply & Demand

by Jeanne

The entire premise of the Local Food Challenge is to seek and if you don’t find, keep asking for a local equivalent food product.  While there has been public dissention and debate over the long ranging impact of this notion I do believe that collectively we can bring about change in our food system.  In fact I read somewhere recently that if we were to be attacked (remember we’re constantly being watched these days!) our "local food system" otherwise known as Albertson’s or Safeway, would keep that service area supplied for just three days at the most.

Viewed in this prism, I do get more than a little concerned. 

Conventional produce costs are low, so low that without subsidies it can’t be profitable. So, how would a family farmer expect to compete.  Most made a decision from a mix of philosophy and economics to become organic farmers. But this choice is not without its challenges and the number of fewer and fewer family-owned farms is our proof. The number of previously certified organic farmers who are still organic but not certified is growing also.

In the past month, when I’ve mentioned the Local Food Challenge I’ve received a wide mix of responses. One of the most common being, ‘Organics is so expensive, I have a family.’  All the more reason you might want to look closer.

The University of California-Davis recently conducted a study and reported that U.S. shoppers who consistently choose healthy foods spend nearly 20 percent more on groceries.  Two of the findings of this study were the following:

    • "organics represent only 2 percent of the food industry, both in the U.S. and worldwide. And less than 10 percent of U.S. consumers buy organic items regularly, according to survey data from Nutrition Business Journal and the Hartman Group, a research firm specializing in the natural-products market. The $10.8 billion industry may be booming, but it’s not even close to overtaking conventional sales."
    • "Most organic fruits and vegetables — the largest sector of the organics market — are only 10 to 30 percent more expensive than their conventionally grown counterparts."

The findings of this study and a perspective is offered in a recent Grist article.  While the author articulates it well, what’s missing is some basic grounding in economic theory.  And this is were the debate comes in. Costs will only decrease if supply is not limited to a few.  We need more producers and suppliers so that many of us don’t get annoyed at paying $6 for a half gallon of Horizon Organic milk.  It certainly does get expensive being so principled.  One commenter switched to organics and did a year to year comparison and while yes it was more expensive per item she realized that the family food bill decreased by 20%.  She had omitted a lot of impulse buying of junk food.

Interviewed in this article is Thomas Dobbs,  a sustainable-agriculture economist, who offers  "if just one-third of American shoppers bought organic foods on a regular basis, most prices would come down to that 10 to 30 percent markup we’re seeing on produce today." 

One of the reasons that organic food is more expensive is because it reflects more of the real costs of growing food.  Currently there are no subsidies in place for organic farmers. I’m not sure this is a good idea given the present practice and the intangible and tangible "rewards."  U.S. agriculture could take a lesson from our European counterparts who are approaching wider adoption of organics with  ‘agri-environmental’ measures.  The organic farmer is seen as an environmental steward. 

So what’s a hungry concerned person to do?  Keep asking for organic, for local and for quality food goods made by artisan food producers.  This will create an environment and preception of opportunity.  More producers and manufacturers will want a piece of the pie.  And who wins?  We all do.  It will also make us all heatlhy in mind, body, spirit and purse.

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