By Thane Peterson
After a dozen years of hearings and deliberation, the U.S. Agriculture Dept. issued official standards for organic foods last October. And -- surprise, surprise -- a government agency actually did a pretty good job. For the first time, American consumers could buy food labeled "organic" and know that it was actually produced using organic growing techniques -- i.e, without growth hormones, antibiotics, chemical herbicides and pesticides, and genetically altered materials. The new regs mark a major improvement over the days when the "organic" label could be slapped on all sorts of foods that weren't much different from conventional supermarket fare.
Unfortunately, politicians can never resist fiddling with a good idea. So, in the months since the standards were passed, according to an editorial in the August issue of Consumer Reports, a number of attempts have been made to jigger the rules so that foods can carry this designation that otherwise wouldn't qualify. "Everyone wants to label their product organic because it will sell for a higher price," says Jean Halloran, director of the Consumer Policy Institute of Consumer's Union, the nonprofit organization that publishes the magazine.
Why should you care? The answer is obvious if, like me, you're leery of ingesting tasteless, rock-hard supermarket fruit and chickens raised in a space the size of a Palm Pilot. But even if you regard organic food as a whacko fringe trend, the issue is still important.
Organic food, though it accounts for less than 1% of U.S. production, is the only segment of American and Canadian agriculture that doesn't seem bent on committing hari kari in international markets. With consumers overseas increasingly resistant to food containing genetically modified organisms (GMOs), maintaining an untainted U.S. organic-food industry is like a prudent investment manager keeping a small fraction of her portfolio in gold. It's a hedge in case the worst-case scenario materializes and GMO foods turn out to have unexpected problems.
With food scares like the recent mad cow outbreak in Canada making many consumers nervous, organic food is already selling briskly. It usually costs 30% to 50% more than conventional food, according to Luanne Lohr, an agricultural economist at the University of Georgia, but U.S. sales are nonetheless soaring by 20% annually. Many consumers believe that organic meat and poultry is probably safer than conventional fare because the animals are raised without hormones, antibiotics, and feed containing animal byproducts.
FEAR OF MUCKING.
Organic food is also the one segment of the U.S. market that contains virtually no GMOs. That's not true even of kosher food, which is also enjoying robust sales as a presumably safer alternative.
Now, whatever you think of GMOs, it's quite clear that consumers in most of the world don't want them in their food. They fear that mucking around with the food chain may have unpredictable environmental and health consequences and are unwilling to turn over their food production to big U.S. companies such as Monsanto (MON ) and DuPont (DD ), which are developing bioengineered seed and agricultural chemicals.
Indeed, organic-food production is climbing around the world -- Germany even has a national plan to raise organics to 10% of its total food output by 2010. It's also why countries in Europe and Asia have been passing laws requiring that genetically altered foods be labeled. If that happens, sales of many foods from the U.S. and Canada seem likely to plunge.
The Bush Administration is casting this as a trade issue, arguing that foreigners want to keep out U.S.-grown gene-altered food as a form of protectionism. That's wrong-headed thinking. You can't force foreign consumers to eat products they -- rightly or wrongly -- don't believe are safe. And far from being protectionist, labeling requirements are a purely democratic measure and allow consumers to make their own choices. By Thane Peterson
Yet, North American agriculture is plowing ahead with expanded use of GMOs, which are already so pervasive in certain U.S. and Canadian grains that just about any nonorganic product containing corn oil, cotton oil, or soybeans -- which is to say a heck of a lot of exports -- contain them (see BW, 7/14/03, "The Outcry over 'Terminator' Genes in Food").
Legislators and food producers, however, are busily trying to water down the rules governing the only North American market segment that's entirely safe in the minds of most consumers -- the tiny organic food segment. Georgia chicken producers convinced Representative Nathan Deal (R-Ga.) to add a rider to the 2003 Omnibus Appropriations bill allowing chicken farmers to use regular feed if organic feed got too expensive. Never mind that the resulting chickens wouldn't be "organic" by any reasonable definition. Luckily, Senator Patrick Leahy (D-Vt.), a major supporter of organic agriculture, managed to get this ill-advised measure removed.
A greater challenge to organic standards is a new federal law allowing wild fish to be labeled organic -- a measure that was quietly slipped into the bill passed to fund the Iraq war, at the behest of Alaska Senators Lisa Murkowsky and Ted Stevens (both Republicans). When I spoke with the senators' staffers about their bosses' rationale, they spent a lot of time extolling the virtues of wild Alaskan salmon (which I agree is wonderful food). "We think that wild fish are the epitome of natural food," says Bill Woolf, a legislative assistant to Murkowsky. "There's nothing more organic than fish that has grown up in the wild, eating what it would eat naturally."
WILD ISN'T ORGANIC.
Sounds good, but unfortunately it isn't entirely true. Stevens had tried to get wild fish included in the original organic-foods standards -- and failed. The obvious problem is that wild fish, however delicious they may be, simply aren't organic -- which would require that they be fed organic feed under controlled circumstances. The new law's bigger shortcoming is that it potentially makes all wild fish eligible for organic labeling -- including species such as swordfish and striped bass that can be tainted with mercury or carcinogens such as PCBs.
Woolf says this could be easily dealt with by testing the fish before they're marketed, but the law doesn't contain any provision for testing. And if past experience is any indication, producers will lobby strenuously to minimize testing because it's expensive. That has certainly been the case with the beef industry. Despite the mad cow scares in Europe and Canada, only 1 in 5,000 head of cattle slaughtered in the U.S. is now tested, according to Halloran, vs. 100% of those over 18 months old in Europe.
Let's hope that Agriculture, which is charged with coming up with a system for regulating "organic" wild fish, does a better job here than it has done with beef. My suggestion: Simply market the best species as "wild" rather than organic. That's what Austin-based Whole Foods (WFMI ), the nation's biggest organic grocer, is doing with wild Alaskan salmon this summer, which is proving to be a hot seller.
PLAYING WITH FIRE.
I don't think organic food is the be-all and end-all. Nor is it the solution to all of North America's agriculture problems. For one thing, I'm skeptical of the contention -- voiced by such proponents as the Organic Trade Assn. -- that organic farming is just as efficient as conventional agriculture. I tend to agree with Glenn Helmers, an agricultural economist at the University of Nebraska, who suspects that organic food will always be more expensive to produce.
That said, I think the mainstream food industry is playing with fire -- and organic food is one of the few remaining firebreaks it has left. Lowering its standards now would be a big mistake.
Peterson is a contributing editor at BusinessWeek Online. Follow his weekly Moveable Feast column, only on BusinessWeek Online
Edited by Patricia O'Connell