I have been saying for quite some time that it was questionable whether Wal-Mart's push into organics was really working. Business Week now points out that it is not.
A number of organic farmers across the country say that Wal-Mart hasbacked off of aggressive plans to offer more organic foods. After placing large orders for organic apples and juices last year, the retailer is cutting back or stopping orders altogether.
So maybe the worries about Wal-Mart corrupting organics were overblown?
I'm republishing in full an excellent bit of reporting on grower group certification on Gristmill Blog - an issue I wrote about in previous posts and which may well mean the end of organic coffee in the U.S.
Fair Trade producers in Mexico depend heavily on organic certification to reap price premiums for both labels, and will be hurt on more than one front by the recently released USDA rule requiring them to change certification practices, researchers say. In a recent article in Salon, later followed by a post on Gristmill, Samuel Fromartz detailed the consequences of a USDA ruling that would force a radical change in the way grower groups in the global South certify their products. The USDA ruling, Fromartz writes:
[T]ightens organic certification requirements to such a degree that it could sharply curtail the ability of small grower co-ops to produce organic coffee -- not to mention organic bananas, cocoa, sugar and even spices.
In his blog on the subject, Fromartz says he only hit the tip of the iceberg. So I hunted around a bit, seeking to find out more about how the ruling would impact producers in developing nations. I contacted Aimee Shreck and Christy Getz, two researchers who have published on organic and Fair Trade in developing nations. And notably, I got in touch with Tad Mutersbaugh, a professor of geography at the University of Kansas. Mutersbaugh's research focuses on international certification standards, and he's worked with organic and Fair Trade certified grower groups in Oaxaca, Mexico. He was familiar with the recent USDA ruling, and expressed his concern about the implications the ruling would have for small farmers in organic and Fair Trade grower groups.
In the email exchange we had, Mutersbaugh made a distinction that I had not yet heard. It is written in the USDA ruling, and refers to grower groups' use of "internal inspectors" versus "external inspectors."
Internal inspectors generally come from the region they certify, but are specially educated by the larger grower organization in how to certify farms. They are usually true believers in the organic project, says Mutersbaugh, and work for low wages in order to get the job done, charging as little as $1 per inspection. In contrast, external inspectors cost $150 per day, and are also much slower.
"I once attended an external inspection where we managed to do four fields in a day (at $150/day rate) because the inspector simply could not take all of the walking," Mutersbaugh wrote in an email message. "I then went on an internal inspection where we literally ran down through a canyon and up a mountain, performing 10 inspections in a day at the cost of just $1 per inspection!"
But the USDA ruling prohibits use of internal inspectors, a move that, according to Mutersbaugh, will have dire consequences for small-scale producers. "The only way to do inspections is by using 'internal inspectors'," he said. "If external inspectors are used, the cost will be absolutely prohibitive."
Costs are a big deal to small growers involved in these cooperative groups. Mutersbaugh notes that the $15 organic premium per 100 pound sack can significantly help these farmers, who often earn less than $1,000 a year. He also notes that many of these farmers are indigenous women whose husbands have migrated in search of work. And, Mutersbaugh says, because only a percentage of Fair Trade coffee is actually sold as Fair Trade, since the supply of Fair Trade exceeds the demand, the organic certification is that much more important for these growers.
Organic certification, Mutersbaugh writes, "is ... the key for farmers who want to get Fair Trade market access. If they produce coffee that is 'double certified' as Fair Trade and organic, and their coffee is gourmet quality, they will gain market access. This is why farmers spend so much -- and it really is costly -- to gain access to Fair Trade Certified/organic markets."
In response to worries about organic standards being broken, Mutersbaugh admits this is a "concern" not held only by the USDA -- Mexican grower groups worry about it as well. But external certification has its own problems. Mutersbaugh cites an example where a village had been offered certification by an external inspector, but without actual inspections. "Basically," Mutersbaugh said, "the external inspector would simply invent the paperwork! These [organizations] have come to be called 'chafa' (as in wheat chaff) certifiers, but they pose a real challenge."
Mutersbaugh hammered home two points related to corruption and certification:
Mutersbaugh also tied the USDA ruling into the bigger picture of international conservation, development, and the global economy. He wondered why it took ten years for the organic price premium to increase by five cents a pound. (In June of 2007, the price for a 100-pound sack of organic coffee will jump from $15 to $20.) The cost for certification over this 10-year time period has "skyrocketed," he said, but "this price is simply not reflective of ... the cost to certify."
In addition to this, he added, certified-organic producer families are often key partners in crafting conservation infrastructure. These farmers not only produce coffee, but also habitat. Their fields and conserved lands offer water filtration services, and their conservation support preserves biodiversity and endangered species. Grassroots environmentalists in Mexico often work with networks of certified organic growers to preserve prime conservation land. "What of the songbirds protected, butterflies?" he asked.
Mutersbaugh offered a two-part compromise as a way to alleviate some of the USDA's concerns and strengthen certification processes:
But as Mutersbaugh and the other researchers I contacted noted, barriers to entry in organic production are high, and U.S. consumers need to be willing to compensate grower groups in order to help them develop the infrastructure needed to support organic. If it takes 40 dollars a sack -- well, for U.S. consumers, that's just 25 cents more per pound than we're paying now. "Imagine," Mutersbaugh says, "getting a raise only once a decade!"
It's been freezing on the East Coast lately, well below average, and farmers are taking a hit. But I did visit one farm last week, which produces a lot in greenhouses. Their produce shows up in Whole Foods stores in the mid-Atlantic and at other retail outlets as well. Here's a glimpse of Help From Above, a family farm in Pennsylvania:
One of several greenhouses
Sprouting basil in flats
“Because of the recall, people are asking more questions, wondering what is in this bag of food"
- Jen Buhler, manager of The Pet Shop Girls
This quote appeared in a New York Times story on the rise of organic pet food sales, following the huge recall last month. It was predictable. Just about every food scare in the past has produced a spike in sales of organic food, though this is the first time it has occurred with pet food. A scare over the pesticide alar, on apples, gave a major boost to the organic food industry in 1990. "A Panic For Organic" headlines read. More recently, Mad Cow disease in Europe led to a dramatic rise in demand for organic meat.
What sets off this reaction? The desire of consumers for a higher bar of food safety and a mistrust of a system that is anything but transparent, as expressed in the quote above.
But these food-scare reactions do not last. The story fades and eventually - as in spinach - people return to what they ate before, unless there's an underlying sense that an alternative is better. Some will switch to raw pet food, still others to homemade concoctions (recall that pets ate table scraps for thousands of years before the invention of the pet food industry).
But many consumers will want the convenient alternative they can pour into a bowl. Organic pet food sales were already one of the fastest growing categories before this food scare, and I expect that will continue, even after this story fades.
- Samuel Fromartz
Farm subsidies don't get a tremendous amount of news coverage and now it's clear why: a lot of the data has remained out of sight until very recently. The numbers are embarrassing, not to say, unfair.
In the US, we have Environmental Working Group to thank for enlightening us on this issue. It has an easy-to-use database to find out who is enriched by subsidies. WaPo has also done a fine series on this issue too, with a recent article this week detailing USDA guaranteed loans that paid for resort attractions near major cities.
In Europe, another project is underway that has forced open the farm welfare rolls and - surprise! - revealed that most go to large farms just as in the US. "Farmsubsidy.org, which campaigns for full disclosure about who gets what under the Common Agricultural Policy (CAP), calculates that 85 per cent of the €32.5bn handed out in direct payments went to just 18 per cent of Europe's farmers in 2005," the London Observer reported recently.
Farmsubsidy.org was started by a former UK official fed up with the secrecy surrounding subsidy payments in the European Community. According to the Guardian,
The idea that all this should become public originated in 2000 - not from a journalist but from a Labour special adviser, Jack Thurston, who worked for Nick Brown, then agriculture minister. One afternoon, fed up with a rather tedious EU agriculture negotiation, Brown demanded from his permanent secretary, Sir Richard Packer, a list of the top 20 people getting all these EU subsidies. After much trepidation Sir Richard produced the list and allowed the minister to glance at it for 10 minutes. Thurston remembers looking over his shoulder and seeing the royals and multinationals heading the list.
When Brown asked to take it away, the request was refused and he was warned that to publish such information breached the Data Protection Act. After Thurston left his job he wrote a pamphlet for the Foreign Policy Centre think-tank challenging the need for the subsidies and calling for the details to the published. At the same time, a Danish journalist, Nils Mulvad, used a provision under the Danish freedom of information act to demand the release of documents sent to the tax authorities that listed EU subsidy payments. At the third attempt, in 2004, he won his case and Denmark became the first country in the EU to release subsidy payment data. Last year he was voted European Journalist of the Year in European Voice's awards.
Journalistic sleuthing through the farm subsidy rolls has also won attention in the US. Last month, the IRE, Investigative Reporters and Editors, awarded Farmsubsidy.org its highest medal for investigative reporting. IRE published the following judges comments:
Nils Mulvad, a Danish investigative journalist, led a two-year effort to open archives all over Europe to expose the closely guarded secrets of farm subsidies. With help from journalist Brigitte Alfter and researcher Jack Thurston, records on subsidies were acquired from 17 of 25 of the European Union countries. The resulting information was put on a website and made available to reporters and others throughout the EU. It resulted in a number of important stories, including showing how millionaires were among the top recipients and how dairy subsidies were undermining farmers in the Third World. A truly important and groundbreaking effort that will pave the way for the opening of other European Union records to the benefit of journalists worldwide.
And not just journalists, I would add, but also farmers and the public.
- Samuel Fromartz
The Wall Street Journal, in a wide-ranging round-up, has a page one story (subscription required) on the growing tensions between demand for food and fuel:
Soaring prices for farm goods, driven in part by demand for crop-based fuels, are pushing up the price of food world-wide and unleashing a new source of inflationary pressure.
The rise in food prices is already causing distress among consumers in some parts of the world -- especially relatively poor nations like India and China.
The article points out that biofuels are altering food economics, since ethanol and biodiesel can be made from corn, palm oil, sugar and other crops. Food inflation in Hungary is running 13 percent a year, in China, 6 percent, triple the rate of a year ago. China has only about 2-3 months of surplus food, meaning a bad crop could be disastrous.
Some economists say China will have to take moreaggressive steps to prevent future food problems. These changes could include allowing the proliferation of large -- but more efficient -- corporate farms similar to the ones that drove many small growers out of business in the U.S. in recent decades. Such a push would be extremely difficult for China because it needs to preserve jobs for the tens of millions of people who live in rural areas.
It's interesting though not surprising that large-scale farms are viewed as the unquestionable answer to this issue rather than the small-scale farms which are far more productive per acre of output. (Grains in large-scale farms go to produce other foods or animal feed rather than being eaten directly by people -- not a terribly efficient food chain or use of an abundant labor pool).
Meanwhile in the U.S.,
... consumers are likely to see higher prices at the supermarket for everything from milk to cereal to soda pop, since corn is used to feed livestock and make high-fructose corn syrup, a key ingredient in many soft drinks. A spokesman for the National Chicken Council, a poultry-industry group, recently testified to a congressional subcommittee that Americans should expect higher chicken prices because of what the group described as "the ethanol crisis."
The somewhat silver lining to the trend is that the higher prices "could help boost incomes for the rural poor in developing nations, who have been bypassed by gains in the manufacturing and service sectors." But I wonder if that's the way it will shake out -- whether the benefits will, indeed, trickle down, or whether the farmers will be bypassed on the upswing as they have been when prices tank.
- Samuel Fromartz
I blogged about the coffee story on Grist and an interesting discussion thread started. The question I now have is whether any other media will pick it up and run with it - I think the implications are quite large and I only hit the tip of the iceberg. Any enterprising reporters in the global south might be able to fill out the picture substantially.
The specialty coffee industry is waking up to USDA's decision to revamp organic inspections for small farmers in the Third World - an issue I wrote about at Salon. The decision is expected to curtail organic coffee supplies in the U.S. and choke off a market for poor farmers. Here's an excerpt of a letter from two coffee companies sent to industry associations:
Given a little careful reflection, I think this pending USDA actionamounts to disastrous unintended consequences. As you know, small farmer groups are supplying the U.S. coffee industry with many great and interesting coffees from around the globe. From Timor, Ethiopia, Indonesia, Colombia, El Salvador and Mexico just to name a few.
The U.S. Coffee Industry and American consumer has benefited considerably from these certified small farmer groups. But the benefits of organic certification go far beyond providing us with coffee.
Organic certification is often a keystone around which communities can organize. In my personal experience I have seen health clinics built in Timor, schools in Colombia, improvements crop in yield and income, better environmental practices, access to micro-loans and pre-crop-financing throughout the coffee growing world---all as a result of organic certification.These farmers are on a playing field that will never be level. As far as I know, this USDA action comes without any consultation or input from the coffee industry.
I think it is extremely important that the SCAA, the Pacific Coast Coffee Association and The Roaster’s Guild come out strongly in support of these small farmer groups and we oppose these pending changes to USDA law. (Emphasis added)
Letters have also been written to Congress. Although the coffee industry is organizing, this will also effect tea producers, banana growers and cocoa bean farmers. All those specialty organic chocolate bars people have been gobbling up may be a thing of the past due to this USDA ruling.
Addendum -- The Salon story was picked up in the Wall Street Journal's Informed Reader (subscription required) column yesterday, p. B9 . (Thanks to Sandy at Green Mountain Coffee Roasters for pointing it out),
- Samuel Fromartz
I'm always a bit torn whether to break news on the blog or on an outlet with larger distribution. In the case of a USDA ruling that could severely impact organic coffee supplies - as well as other organic agricultural products from the Third World - I chose the latter. Check it on on Salon.com.
The collapse of bee populations has been in the news lately, but a recent thread has suggested that this may be the result of genetically modified crops. Der Spiegel in Germany reports (March 22): "No one knows what is causing the bees to perish, but some expertsbelieve that the large-scale use of genetically modified plants in the US could be a factor."
How so? GM crops have been created by inserting the gene of a bacterial insecticide - Bt - so that they resist certain pests. But the pollen also contains Bt and bees pick it up. One study found a relationship between the Bt toxin and bee deaths. Der Spiegel says:
The study in question is a small research project conducted at the University of Jena from 2001 to 2004. The researchers examined the effects of pollen from a genetically modified maize variant called "Bt corn" on bees. A gene from a soil bacterium had been inserted into the corn that enabled the plant to produce an agent that is toxic to insect pests. The study concluded that there was no evidence of a "toxic effect of Bt corn on healthy honeybee populations." But when, by sheer chance, the bees used in the experiments were infested with a parasite, something eerie happened. According to the Jena study, a "significantly stronger decline in the number of bees" occurred among the insects that had been fed a highly concentrated Bt poison feed.
According to Hans-Hinrich Kaatz, a professor at the University of Halle in eastern Germany and the director of the study, the bacterial toxin in the genetically modified corn may have "altered the surface of the bee's intestines, sufficiently weakening the bees to allow the parasites to gain entry -- or perhaps it was the other way around. We don't know."
Of course, the concentration of the toxin was ten times higher in the experiments than in normal Bt corn pollen. In addition, the bee feed was administered over a relatively lengthy six-week period.
Kaatz would have preferred to continue studying the phenomenon but lacked the necessary funding. "Those who have the money are not interested in this sort of research," says the professor, "and those who are interested don't have the money."
Big win for the anti-cloning organic camp Thursday.
The National Organic Standards Board, which previously had a draft recommendation to ban clones in organic livestock but which left the issue of their progeny unresolved, did what many consumer groups and farmers wanted: they banned the progeny too. (See our previous post for background on the issue and also organic dairy farmers' response).
The livestock committee of the NOSB - the citizens advisory panel to the USDA on organic regulations - apparently kept their pencils sharpened Wednesday night to get the language right and passed the recommendation at their meeting in Washington Thursday. So not only will clones be banned from organic systems, but also any of their offspring - which is the main way that they will enter the food supply.
The vote was 12-0 with one abstention.
Just shows what a little activism will do.
Just about every public comment at the hearings of the National Organic Standards Board begins with a thank you to the panelists. For their hard work. For all the time they put in on complicated issues. For the members who do this in their spare time. For sifting through issues and then making recommendations to the USDA on organic regulations.
Then the speakers, who have five minutes (and amazingly try to do power point presentations in that time) invariably turn to the USDA's National Organic Program staff who sit at a side table at the meeting. They thank them too. Because you are understaffed. Because we understand why it takes so long to get things done.
And then they make their comments.
One issue, though, has taken a particularly long time to get completed, trying the patience of even the most patient petitioners. Two years ago, perhaps a hundred or more dairy farmers descended on an NOSB meeting in Washington, DC, and asked that the regulations on pasture be refined so that all cows meet a minimum hurdle on grazing (preventing feedlot organic farms). This followed recommendations made since at least 2000 for the same regulation.
Two years ago, the NOSB sent its most recent recommendation on the issue to the National Organic Program: That cows graze for at least 120 days a year and obtain 30 percent of their nutrition from fresh grass.
Then the farmers waited ... and waited.
They were told last year that the regulation would be completed soon. Now, the National Organic Program said at this week's NOSB meeting that the pasture regulation should be complete by the end of the year.
To which one cynic whispered to me: "Which year?"
