Posted inEconomics / Organic / ToMl

Organic Farming Is More Profitable Than Conventional

After years of steady growth in demand, organic food now accounts for 5 percent of US food sales. Yet organically managed land makes up just 1 percent of US farmland. Why hasn’t the craze for organics moved from the supermarket to the countryside? The problem isn’t a lack of profitability, a new paper from Washington State University researchers David Crowdera and John Reganold finds.

The authors crunched data from 44 studies involving 55 crops grown on five continents over 40 years and found that organic farming is somewhere between 22 percent and 35 percent more profitable for farmers than conventional. The reason: the higher price farmers get when they sell certified-organic crops. This “premium,” as it’s known, stands at around 30 percent, and stayed roughly equal over the four-decade period, the authors report.

They also found that organic farming would retain its profitability edge even if its price advantage dropped significantly: at a premium as low as 5 percent, they found, the two systems are equally profitable. The costs of doing business are roughly equal for the two systems: Organic farmers save on chemical inputs, but essentially substitute labor for chemicals (think hoeing weeds vs. dousing them with herbicides) and thus have higher labor costs.

According to the studies they analyzed, organic farming delivers lower yields than conventional, by somewhere between 10 percent and 18 percent (mainly driven by use of synthetic and mined fertilizers). This yield penalty, it should be noted, is not necessarily set in stone. For the purposes of this paper, the authors looked at studies comparing conventional and organic ag as they’re practiced in the field in a variety of contexts.

But agrichemical-intensive agriculture has received far more research-and-development over the decades than organic has. And when organic ag is lavished with serious research, it has proven the ability to deliver comparable yields—see, for example, the well-respected test plots at the Rodale Institute in Pennsylvania.

And farmers’ work isn’t just about generating maximum yield in any one growing season; it’s also about maintaining healthy soil and limiting pollution. Here, the Washington State authors note, organic ag delivers “greater energy efficiency; enhanced soil carbon and quality; greater floral, faunal, and landscape diversity; and less pesticide and nutrient pollution of ground and surface waters.”

These “externalities,” as they’re known, “likely make up for price premiums awarded to organic products,” the authors write. That is, when we spend more for organic food, we’re essentially paying farmers a little extra to maintain healthy soil and avoid pesticide runoff.

The question looms: If organic is more profitable, why hasn’t it spread far and wide? The authors note that the three-year transition required for certification puts farmers in a bind: Having gone cold turkey from agrichemicals, their yields drop, but they get no price premium for their trouble until year four. I’d add that farmers, like most people, are wary of change. Organic may offer higher profits; but ditching chemicals requires a radically different style of farming. Such leaps aren’t made casually.

If we want to move away from reliance on toxic chemicals, the organic premium might not be enough. We may have to think of other ways to factor those “externalities” into the price of the food we eat.

— source motherjones.com

It’s good for the world, good for our health, and now it’s also good for the bank account. The results of a new study will hopefully encourage more farmers to make the switch to organics.

There are many great reasons to buy organic food, such as reducing one’s exposure to pesticides, mitigating environmental pollution, improving soil quality, aiding pollination, and eating more nutrient-rich produce. It turns out there’s yet another reason to buy organic – it is a bigger money-maker for farmers, meaning your purchase directly helps farmers to make a better living.

The study reporting this newfound economic incentive for organics was just published this week in Proceedings of the National Academy of Sciences (PNAS). Its mission was to analyze the “financial competitiveness of organic farming on a global scale” by looking at 44 studies covering 55 crops grown in 14 countries on five continents – North America, Europe, Asia, Central America, and Australia.

The study concluded that organic farming is 22 to 35 percent more profitable for farmers than conventional agriculture.

This comes at a time when North American farmers are in great financial distress. Civil Eats reports that, in 2012, 56 percent of American farmers reported earning less than $10,000 from their farms alone, while 52 percent said it was necessary to maintain a primary job away from the farm. If organic can provide farmers with significantly more income, there’s more incentive to switch over from conventional practices.

“This makes the clearest, strongest argument we’ve yet seen in a reputable publication like this for adopting organic practices,” states Laura Batcha, executive director of the Organic Trade Association.

Organic food is sold at a premium, as most shoppers know. Interestingly, however, the study found that premiums only need to be 5 to 7 percent higher to match the profitability of conventional agriculture; so why the 22 to 35 percent increase? Are customers getting ripped off at the grocery store?

John Reganold, a co-author for the study and professor of soil science and agroecology, doesn’t think so. He encourages shoppers to think about all the things they’re paying for, in addition to the food they’re bringing home. “Straight economic figures don’t take into account a dollar value for ecosystem services.”

From Civil Eats: [Straight economic figures] are more difficult to project, partly because the benefits are often measured in terms of what is not happening – like adverse environmental and health impacts – or practices with indirect benefits, such as crop diversity.

— source treehugger.com

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