The WaPo’s Tamar Haspel writes,
The USDA’s certified-organic program — from its inception a marketing program, not an environmental initiative — has given organic farmers a way to make a living (and farmers do have to make a living) by connecting with like-minded consumers willing to pay a premium for a product that is grown in a way that is often labor-intensive and lower-yielding, and produces some bona fide environmental benefits.
The fact that organic food costs more indicates to me that organic farming is environmentally damaging and not sustainable. If organic food costs more, that is because it uses more resources, as the phrase “labor-intensive and lower-yielding” indicates.
Of course, the market may be mis-pricing resources. For example, suppose that non-organic farming causes more water pollution that is not reflected in its cost. If so, then proper pricing might tilt the balance more in favor of organic farming. But I do not see people making such a case. Instead, journalists, agricultural scientists, and environmentalists seem to me to want to over-ride market information without thinking about whether or not resources are correctly priced.
There is basic illogic embedded in the phrase “farmers do have to make a living.” Work is a cost, not a benefit. Nobody is saying that we should return to the way light bulbs were made 100 years ago because “glass blowers do have to make a living.” Nobody is saying that telephony should operate the way it did 50 years ago because “telephone operators do have to make a living.”
If you really want to increase jobs in agriculture, you could go back to doing farming the way we did 100 years ago. Getting rid of all of the farm equipment and plant breeds that have been developed over the past century would do the trick.
Haspel’s piece struck me as neither better or worse than most environmental analysis. It is the norm for such analysis to be grounded in economic ignorance.
That is sort of the problem though, what do we do in the face of ignorance. How much do we error on the side of avoidance and caution and how much do we blithely ignore any uncertainty. It is unrealistic to expect people to weigh these equally just as it is unrealistic to expect people to value them the same. These are markets at work. Much of the price difference may have less to do with the features mentioned and more to do with moving the market to supply more. It may have more to say about the inexpensiveness of food and relative lack of expensive highly valued innovations, or increasing inequality of more money than use for it.
They pretend to not be ignorant.
Individual preferences probably complicate the situation, though. Suppose I put a really high value on a healthy ecosystem in the Chesapeake Bay. Should that affect my decision to pay higher prices for organic foods? Maybe. Seems plausible, anyway. Still, I agree that price signals are a better guide than, say, reading AlterNet articles or what have you.
This is part of a broader phenomenon of the righteousness price premium. People are willing to pay more for the same commodities (e.g. ‘conflict free diamonds’, or BDS of Israel) if they are believed to come from less objectionable sources. There is a deep and common psychological impulse to boycott the unholy to both punish ‘norm defectors’ and also that one doesn’t feel as if one is subsidizing or supporting some evil thereby dirtying his own hands.
I view the product being sold as being some sort of psychic utility than an actual product. Also, as society gets richer and richer, you will end up with more of such goods.
The danger probably lies more in such consumers getting laws passed to make others consume as they do. I think that also supplies a ton of psychic utility, but its harms others.
I have never understood this thing about it being environmental. And thus I don’t buy most of the econmoist (I’m just going to try twice and just leave thsee autocorrects as Tyler Cowen had commanded us to learn to work for the machines) critiques.
“The fact that organic food costs more indicates to me that organic farming is environmentally damaging and not sustainable.”
You are conflating production cost and market price, Arnold, which the article does not do. The graphic titled “Profit of organic vs. conventional crops” points out that production costs are equivalent and the difference in price is purely due to profit margins.
Its all marketing, that is, addressing the preferences/perceptions of a target customer segment (a niche one in this case). Whether you or I agree with those customer preferences is irrelevant. I would not own a Harley Davidson nor shop at Whole Foods but I think those are both sustainable specialized businesses.
I thought the article made a very good attempt at objectivity even though the author’s pro-organic bias did leak through.
I consider it simply as a type of market failure. I want organic because the pesticides we use are largely neurotoxins. Some of these are not bio-active in humans but some are. If I can get my kid to eat vegetables at all, a few extra dollars means less than nothing to me for the amounts that I could get them to ingest. The vast majority of costs goes to spoilage in any event, making the cost of organic even more utterly inconsequential.
For this no-brainer, I have to swallow whole hog all the market supply-side and demand-side failures.
If more information is better than less information, then isn’t arguing against organic labeling a form of coercion?
Give consumers a choice and some may just choose to enable organic farmers make a living. Label GMO foods properly and many just may choose to shun Monsanto’s products and thus lower its market cap.
Of course the whole article is about the actual farming technique and the environmental impact. And it does assume away the extra labor expense, but it does very little economic analysis nor does it pretend to.
I do find it weird that many libertarian economist hate the organic farming trend in that there are consumers willing to pay more for it. (If not it would disappear.)
That’s an interesting point.
I appreciate Permaculture, for example. But I also am annoyed how the additional labor is often portrayed as a feature rather than a bug. Talk about dirty hippies! Thus, it’s not hard to figure out why libertarian economists don’t like organic as it is a mish-mash pastiche of market failures, asymmetric information and outright fraud. At times it is downright intellectually insulting.
But it’s also not hard to understand why it has some merits, particularly, to me, as a form of technology and experimentalism. When I, objectively IMHO, just observe it for what it is, I can appreciate “organic”, despite it being merely a catch-all label that is hijacked by special interests. Wouldn’t it be nice if somebody somewhere was working on alternatives to (things like) genetically modifying monocultures to express their own neurotoxins, maybe just as a risk reduction? What if the fossil-fuel-dependent farming gets dinged by global warming alarmists or just Third-World demand, synthetic fertilizers explode in price, or plants and pests develop resistance? It’s not even really a remote possibility. It’s something half the electorate wants to impose on us just because they are out of real problems. And these are the same people who are also touting organic, so I get where economists are coming from. I just feel like economists are indulging in a little bit of tribalism on the issue. But a lot of the efficiencies gained in food production seem to come at the cost of losses of diversification, and we know bubbles do happen.
> But a lot of the efficiencies gained in food production seem to come at the cost of losses of diversification, and we know bubbles do happen.
The market maximizes efficiency, but does it optimize resiliency? Of the two, I am increasingly of the opinion that the latter is most important.
Of course, I’m not critiquing markets wholesale, nor am I advocating for central planning. To my mind, it is not a matter of market vs. government, but local vs. global production.
> I do find it weird that many libertarian economist hate the organic farming trend in that there are consumers willing to pay more for it. (If not it would disappear.)
It seems to me that, at least when the topic of organic farming comes up, they avoid addressing the significant subsidies that go into modern farming. How might organics compete if there was a more truly free market in food? It seems to me that if modern agriculture, and the fossil fuels that sustain it, were not so heavily subsidized, local/decentralized food production would perform better.
But, just because one wants people to have free choice does not mean one must now refrain from criticizing those choices.
In exactly what way is “modern” agriculture more subsidized than organic?
“Modern” agriculture doesn’t use more fossil fuels than organic, the whole goal of using chemicals and genetic engineering is to grow the crop using as little energy as possible. The added “labour” in Organic farming isn’t about people, it’s about fuel. You don’t pull weeds in 100-acre corn fields by hand, if you don’t use a spray you use a machine to mechanically rip them out, which takes a lot more energy and doesn’t usually work as well. Another option available is to burn out the weeds using propane flame throwers–how Green could that possibly be?
Of course “organic” doesn’t actually mean no added pesticides or fertilizers, it just means the products meet some vague definition of “organic,” the Organic industry is full of fly-by-night operators hawking all sorts of (often literal)crap to spray on your fields that hasn’t been remotely adequately tested for safety or efficacy. I know that because I’ve seen the industry publications and events first hand, I grew up on the biggest organic farm for a couple hundred miles. My Dad fell into it by accident before it was trendy, the land is extremely good and he seemed to get adequate yields without the added chemicals, 15 or 20 years ago if the weather really cooperated he could sometimes match his “conventional” neighbors, for certain crops anyway. Not anymore, it’s not even close.
So I almost never buy organic produce because I think it’s a marketing wheeze. And also for the reasons Mr. Kling describes. My exceptional purchase is when (probably for unrelated reasons) the organic product actually tastes better.
But I don’t know what Mr. Kling means by “unsustainable.” If organic farmers are making profit, then bully for them. As long as their customers don’t catch on to the scam it’s perfectly sustainable.
In a free market consumers should be allowed to buy what they want, and then also not buy what they don’t want.