Brownfield, MO
04-24-07
Organic agriculture an unrealized opportunity for many
by Peter Shinn
Research out last week from the Iowa State University (ISU) Leopold Center for
Sustainable Agriculture again shows organic farming generates better dollar
returns for both the producer and the community. In fact, Dr. David Swenson,
the ISU rural economist who conducted the latest research, said that's true
even with high corn prices.
"Nobody gets to say, 'Ah, but $4.00 corn wipes out that difference,'" Swenson
told Brownfield. "Nope. It doesn't. The difference is still there, the economic
impacts are still much greater under the organic opportunity."
The organic ag sector has indeed grown substantially in recent years, and is
expected to grow even more explosively in the years ahead. A House Ag
Subcommittee noted those facts last week during a hearing that, for the first time
ever, focused exclusively on organic agriculture.
"Organic food is currently a $14 billion industry, accounting for about 2% of total
retail food sales in the United States," the House Ag Subcommittee noted in a
press release after the hearing. "That number is projected to grow to as much as
$23.8 billion and 3.5% of the U.S. food market by 2010."
Those figures might make it seem like there's a stampede of conventional ag
producers toward organic agriculture. But Swenson said that's not the case, and
one important reason why is that conventional farming allows more time for offfarm employment.
"They trade off a lower rate of return because they have other employment
and/or earnings opportunities," Swenson explained.
That's a very important factor, because according to a study by USDA's
Economic Research Service released in February, off-farm income now
represents more than 80% of total U.S. farm household income. Swenson also
pointed out most conventional ag producers see switching to organic production
as inherently risky.
"We think that there's a very high perception of risk associated with the organic
alternative, that we don't have a heritage of understanding that kind of diversified
farming alternative anymore, because we're, like, two generations away from that
kind of behavior," said Swenson.
One other key finding in Swenson’s research, which focused on Woodbury
County, Iowa, is that tax incentives to encourage conventional ag producers to
go organic generally don't result in a net revenue gain for the governments that
enact them. But Swenson said there are still many legitimate reasons state and
local governments may want to enact tax incentives to encourage organic
agriculture.
"You get environmental benefits. You get diversification of your economy
benefits. You perhaps have the opportunity to begin to develop an organic niche
marketing system, not just production system. As well as you may create the
opportunity to create diversification opportunities for producers that they might
not either recognize or feel hesitant to adopt just because of their own
perceptions of risk," Swenson said. "If you want to say that that's a good reason
for using that money instead of recovering your property taxes, then that's
another justification."