The Organic Trade Deficit Is Hurting Farmers—Here’s What You Need to Know

With all the news coming out of Washington right now, there’s one critical piece of legislation we’re betting you haven’t heard much buzz about: the farm bill. The trillion-dollar bill (which gets updated every five years) shapes the way we grow and consume food in America, and it’s on the table for amendments again this fall. Colin O’Neil, agriculture policy director at the Environmental Working Group (EWG), says this year’s bill needs to address a major problem in the growing organic market—a growing trade deficit caused, in large part, by unnecessary barriers American farmers face when trying to convert to organic. Below, O’Neil gives us the full-on, policy-wonk spiel on the state of affairs in American organic farming, the changes that need to be made, and what we can do to better support organic (and want-to-be-organic) farmers on home soil.

A Q&A with Colin O’Neil

Before we get into the details, what can we do to support efforts to reform the farm bill to aid organic farming?

EWG and our friends at Food Policy Action Education Fund have also recently launched a new education and outreach campaign called Plate of the Union, which seeks to inform consumers of the problems caused by agricultural policies, and empower them to take action on a number of issues, including organic transition.

Three simple things that everyone can do today are:

Sign our petition demanding that Washington fix our broken food system.
Call Congress and urge your representative and senators to support organic agriculture and support for organic transition.
Spread the word about our new Plate of the Union campaign on social media.

What is the current balance between domestic and imported organic food, and how does it compare to the same balance for conventional food?

In November 2016, US agriculture boasted a trade balance of $4.56 billion. But when it comes to organic production, the US ran a deficit. According to an analysis by the Organic Trade Association of data from the USDA’s Global Agricultural Trade System, in 2014, the US imported roughly $1.2 billion worth of organic products, while organic exports were roughly $550 million.

Which countries are we importing organic food from? Can we be sure they’re meeting rigorous standards?

The most heavily imported organic products tend to be foods grown in tropical and subtropical climates—coffee, bananas, olive oil, and avocados. But some organic staples like soybeans and corn, are ideally suited to the US and could see far greater domestic production.

In 2015, the US imported some $240 million worth of organic soybeans, making soybeans the second-leading imported organic product behind coffee. The top suppliers of organic soybeans to the US were India, Ukraine, Argentina, China, and Canada, with India and Ukraine contributing over 60 percent of the total. By comparison, the US sold only $72 million in organic soybeans that year.

While many in the organic sector and environmental community would like to see domestic production of organic food increase, the USDA’s National Organic Program (NOP) works closely with the Foreign Agricultural Service and Office of the United States Trade Representative to establish international trade arrangements for organic products. NOP protects organic integrity through audits and annual on-site inspections of certifying agents to ensure appropriate monitoring and certification of organic products is taking place.

What’s the best metric for measuring demand for organic food?

One of the best metrics for measuring demand for organic food is sales of organic foods. Over the past two decades, organic food sales have enjoyed nearly double-digit growth every year. The Organic Trade Association estimates that in 2015, total organic sales in the US hit a new record of $42.3 billion, up 11 percent from the previous year’s record level. OTA estimates that sales of organic food now account for nearly 5 percent of total food sales nationwide, with almost 13 percent of the produce sold being organic.

Can you describe the cadence of the farm bill? Do we usually see significant changes when new bills are introduced?

The farm bill guides the nation’s food and farm policy, and it’s responsible for shaping national policies for our food production, environmental conservation, and the rural development and food assistance programs like SNAP. It has to be passed every five years, and rather than a complete “repeal and replace” strategy, it typically makes lots of small changes to existing laws and programs; changes to farm policy are usually more incremental in nature.

The current farm bill expires September 30, 2018; right now, the House and Senate Agriculture Committees are already holding hearings to discuss what needs to change. Members of congress are introducing “marker” or discussion legislation that offers what they would like to see changed in the next farm bill.

Historically, much of the farm bill has centered around farm subsidies, conservation, and nutrition assistance. Depending on timing of the bill, different issues rise to the forefront.

It is high time consumers are given a seat at the table; we are hoping that this year’s iteration will address issues that are most important to eaters, like growing more organic food in the US, reducing the use of pesticides and antibiotics in agriculture, and making sure farm practices don’t pollute drinking water.

The environmental case for amending the farm bill in favor of organics is clear, but is there also a business case for doing so?

Organic farming is not just a win for the environment and for consumers—it can be quite profitable for farmers who go through the three-year federal certification process, because the prices they receive for certified-organic products are often significantly higher than those for conventional crops. As nations like Russia, Romania, and China continue to expand organic production, the US should be reducing barriers for organic transition, so we can expand organic production here at home—or run the risk of American farmers falling further behind in the international marketplace.

Another economic benefit of more organic farming involves something called organic hot spots—can you explain what they are?

An organic hotspot is a county with high levels of organic agricultural activity whose neighboring counties also have high organic activity. Research on organic hotspots by Penn State agricultural economist Dr. Edward Jaenicke found that organic hotspots boost household incomes and reduce poverty levels.

The study identified 225 counties in the United States as organic hotspots. An organic hotspot increased median household income in a county by more than $2,000, while lowering a county’s poverty rate by as much as 1.35 percentage points. Per-capita income in hotspots increased by an average of $899, and the unemployment rate at the county level was lowered by 0.22 percent.

These findings are significant because they demonstrate that organic agriculture and the businesses it supports have a tremendous benefit to local economies—and to the financial security of rural communities.

What currently prevents farmers from transitioning to organic?

Transitioning to organic requires changing farming practices, which can be costly. Whereas conventional producers rely on the use of synthetic fertilizers to provide crops with nutrients, organic crop producers must have an in-depth understanding of how to build soil fertility and manage their particular nutrient needs through the use of cover crops, crop rotations, compost, and animal manure.

Conventional producers rely on an arsenal of synthetic insecticides and herbicides to manage pests and weeds, while organic producers rely more on labor, farm management, and ecological farming practices. This often means that organic producers have higher labor costs and spend more time on farm management. We’d like to see farm bill policies amended to help support farmers through the difficult transition process.

How are farmers currently incentivized to transition to organic, and how would you like to see that process change?

The major incentive for producers to transition to organic is the understanding that after a three-year certification process, they will be able to sell their products for more money. Despite the higher price farmers can expect to receive for their organic products, the number of US organic producers has not been growing fast enough to meet the high consumer demand in the US. Some organic companies are providing transitioning growers with a premium for their products to incentivize them to go through the transition, and some states offer financial assistance as well; small changes to the bill could help address the technical and financial barriers to organic transition and further incentivize organic farming.

We’ve suggested that the Conservation Stewardship Program create specific organic-transition bundles tailored to the needs of transitioning producers to help them better take advantage of the program as they move to organic.

Here’s another small change we’d like to see: tweaking the payment limits in something called the Environmental Quality Incentives Program (EQIP). EQIP currently offers funding to organic and transitioning producers through its EQIP Organic Initiative. However, farmers who enroll in this program can only qualify to receive $80,000 in support over a six-year period, as compared to farmers who enroll through the general (not-organic) EQIP pool, who can qualify to receive up to $450,000 over a similar period.

Another small change would be to tweak current incentive payments that exist for farmers who bring land out of the Conservation Reserve Program—a federal conservation program that pays farmers not to farm the land for certain periods of time—to encourage them to start farming organically as they put the land back into production.