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Here's why American farmers haven't gone organic

"The challenges of the 21st century demand a fundamental rethink of agriculture that takes environmental harm into account," says the Organic Consumers Association, the advocacy group for universal organic farming. "Promising methods and technologies like organic are in the vanguard of that effort. We cannot afford to move toward the future without such technologies."

So far, OCA's stated goal of converting 30 percent of American agriculture to organic by the start of this year has fallen short--by about 30-fold. Despite apparent strong interest in organic food, some evidence consumers are willing to pay more for it, and better crop prices for organic farmers compared to prices for conventional crops, organic's share of U.S. tillable acreage has slowed to only about 3.1 million acres, according to most recent USDA survey data, representing less than 1 percent of the country's total tillable acreas. Why aren't farmers playing along? A couple of recent studies give some meaningful indications about why they don't believe they can afford the technology.

 

Productivity still falls far short

Author and crop-technology consultant Steven Savage conducted an indepth analysis of USDA data sets on both conventional crop production and organic from 2008 and 2014, ultimately making 370 different comparisons of organic and total data for the same crop in the same state where the organic production represented at least 20 acres. His analysis covers 80 percent of US crop acreage, Savage says. He found that in 84 percent of the comparisons, organic crop yields were lower than conventional crops, most in the range of 20 percent to 50 percent lower. In addition, for the 9 percent of cropping cases where organic was more productive than conventional, most were hay or silage crop systems; that is, feed for animals and not people.

Higher prices still not worth the uncertainty?

One of the issues hampering widespread adoption of organic production, particularly for the "big three" farm crops that fill the lion's share of U.S. acres--corn, soybeans and wheat--is that data from cropping experiments suggesting farmers can make more money from organic don't play out consistently in the real world, as Savage's analysis demonstrates. USDA economists William McBride and Catherine Greene attempt to get to the bottom of this contradition in a new study from USDA.

They note several experimental studies have found that some conventional farms could in fact earn higher returns if they transitioned to organic production, yet adoption of the organic approach among U.S. field crop producers remains extremely low. The problem, they say, is that the economic analyses used with the experimental research has primarily examined only operating or variable costs while excluding the economic costs of such resources as land, labor and capital. Their study's findings, which adjusted for those hidden costs, showed the economic costs of organic compared with conventional production were roughly between $83 and $98 per acre higher for corn, $55 to $62 per acre higher for wheat, and $106 to $125 per acre higher for soybeans.

Still, the remaining mystery is why organic's relatively higher crop prices don't attract more farmers, who could expect to earn greater returns despite the higher costs if they transitioned to organic. The USDA researchers suggest even the higher returns aren't enough to encourage farmers to take the risk organic brings. Organic field-crop production is particularly challenging compared with conventional production in achieving effective weed control and crop yields. But costs are also incurred to obtain and then maintain organic certification. Before an operation is certified to sell organic crops, the cropland must be managed organically for a minimum of 36 months, meaning a farm must endure two years of selling crops--raised at organic's higher costs--into a market paying only the relatively lower conventional crop prices. But the bigger risk may follow that period, they suggest: The sunk organic production costs associated with transition are reliant upon continuing high prices for organic crops, which are not guaranteed long into the future. That uncertainty may be the risky cloud that keeps the typical farmer from adopting the movement on any acreage other than small plots.

 

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