Clouds on the Organic Horizon

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Clouds on the Organic Horizon

 

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http://www.corpwatch.org/print_article.php? & id=11712

 

Is organic farming becoming the victim of its own

success?

by Carmelo Ruiz-Marrero, Special to CorpWatch

November 25th, 2004

 

 

 

 

Every Saturday morning at the bustling organic farmers

market in rural Point Reyes Station, California, local

residents buy food directly from the farmers who have

grown it. Though one can walk from end to end of the

market in a single minute, the diversity it offers is

bewildering: first there are the vegetables: spiky

leeks, autumn greens and warm-toned squashes. Then you

have the processed goods, everything from ice cream

and olive oil to soap. A musician plays for the crowd

and the conversation is lively.

Here Cowgirl Creamery Dairy sells Mount Tamalpais

cheese, over there Kevin Lunny of Inverness sells

grass fed beef while Warren Weber’s Star Route Farms

of Bolinas sells edible flowers and Margie McDonald’s

Wild Blue Farm sells pumpkins.

The shoppers will tell you they prefer organic foods

for both health and environmental reasons. The absence

of pesticides is generally equally important as the

guarantee that food will not contain genetically

modified organisms (GMOs), whose health effects are

still largely unknown.

Meanwhile at the other end of the North American

continent, Whole Foods, a Texas-based natural food

chain, recently opened New York’s biggest grocery

store in at Time Warner Center's new shopping mall,

touting it as 59,000 square feet of the “Ultimate

Grocery and Lifestyle Shopping Experience. "

The company promises to turn " a seemingly mundane

chore into one of New York's favorite new pastimes. "

Customers are offered Jamba Juice fruit smoothies,

Genji Express Sushi wrapped in organic seaweed; more

than 700 varieties of wine; and a Chocolate Enrobing

Station " where customers can request just about

anything covered in chocolate. "

Until a decade ago, organic foods were available only

through tiny farmers markets, health and natural food

stores, but today their growing popularity means that

more organic food is now sold by chain stores like

Whole Foods. Often, the food itself is produced by

companies ranging from General Mills to Nestle to Coca

Cola , and grown on corporate-owned farms no longer

synonymous with small farms, rural communities, social

justice and humane treatment of animals.

Small Brands, Big Owners

What have organic brands Health Valley (cereals),

Bearitos (corn chips), Bread Shop (granola) and

Celestial Seasonings (tea) have in common? These

apparently independent companies are all owned by the

Hain Celestial Group

Even though Hain Celestial is an organic giant in its

own right, it has even bigger owners. According to

research by Paul Glover and Carole Resnick of the

Greenstar Food Coop (Ithaca, New York) the company's

investors include Philip Morris, Monsanto, Citigroup,

Exxon-Mobil, Wal-Mart and aerospace military

contractor Lockheed Martin. And in September 1999 the

H. J. Heinz food conglomerate bought a 20% stake in

Hain Celestial.

Hain Celestial is by no means a unique case:

* Cascadian Farms is a subsidiary of Small Planet

Foods, which is a division of agribusiness colossus

General Mills. And General Mill's main shareholders

include Philip Morris, Exxon-Mobil, General Electric,

Chevron, Nike, McDonald's, Monsanto, Dupont, Dow

Chemical and PepsiCo.

* Silk Soy Drink is part of the White Wave

corporation, itself a Dean Foods subsidiary. And

according to Glover and Resnick, Dean Foods' main

investors include Microsoft, General Electric,

Citigroup, Pfizer, Philip Morris, Exxon-Mobil, Coca

Cola, Wal-Mart, PepsiCo and Home Depot.

* Odwalla, makers of organic orange juice, is owned by

Minute Maid, which is in turn a division of Coca Cola.

* Boca Burger is owned by Kraft, which is part of

Philip Morris.

* Arrowhead Water and Poland Spring Water, are Nestle

subsidiaries.

* Organic Cow, founded by small New England organic

dairy farmers, is now part of the Colorado-based

Horizon, whose sales just topped $200 million annually

and which controls 70% of the American organic milk

market . Horizon Holding company was itself was

acquired by the Dean Foods conglomerate in 2003.

 

 

" I'm all for it as long as it's for real, " says Jeremy

Rosen of Fresh Run Farm at the Point Reyes market,

whose little stand boasts vegetables ranging from

artichokes and arugula all the way through nettles and

turnips. " [but large corporations] won't be able to

put all the care into the land that small organic

farmers put in. "

Rosen's farm, located just a few miles from Point

Reyes, is in one of the first organic production zones

in the San Francisco Bay area and he doubts that large

corporate farms will ever be truly sustainable because

" conserving soil on a huge farm scale is not

possible. "

Yet, in order to meet the increasing demand for

organic food, production is increasing far beyond its

original base. Sales of organic foods and beverages in

the United States surpassed the $11 billion mark in

2002, and according to a 2003 survey sponsored by the

Whole Foods retail chain, 54% of US consumers have

tried organic foods and one third consumed more of

them than in the previous year.

America’s mega-stories like Wal-Mart, Price Chopper

and 7-Eleven are already in on the organic action,

offering organic products on their shelves, and food

corporations, such as agribusiness giant Archer

Daniels Midland and Campbell's Soup, have added

organic items to their product lines. The organic

market in the United States is expected to reach $30.7

billion by 2007, with a five-year compound annual

growth rate of 21.4% between 2002 and 2007, according

to the Datamonitor research firm.

" There are people who criticize the entry of these

megacorporations into organic... They fear that

they will jeopardize organic standards and the very

ideas organic agriculture is based upon, " says Helge

Hellberg, director of Marin Organic a non-governmental

organization that promotes sustainable agriculture.

" But it is also true that we need these companies in

order to make a nationwide movement for organic

products, " he adds.

The increasing level of consumer demand means boom

times for U.S. organic farms. The state of Vermont,

for example, had 78 organic certified producers in

1993, and by 2003 their number had grown to 289.

Certified acreage in the state has grown from 23,638

in 2001 to 30,387 in 2003. In California, Certified

Organic California Growers confirms that the state has

170,000 organically grown acres. At current growth

rates, organic sales will constitute 10% of American

agriculture by 2010.

These skyrocketing growth rates convinced the U.S.

Department of Agriculture (USDA) to set national

organic standards in October 2002, after 12 years of

delays. While some organic advocates consider USDA

recognition a triumph, according to Ronnie Cummins of

the Minnesota-based Organic Consumers Association

(OCA), the department set the standards largely at the

request of agribusiness corporations and mass

retailers. He believes they wanted uniform national

standards to speed their entry into the organic

market, replacing multiple state standards that made

it more complicated for the chains who grow in one

part of the country and sell at the opposite end of

the nation.

“The biggest problems with the USDA organic

regulations is that they say nothing about subsidized

water, animal treatment, labor standards and food

miles (organic advocates want to reduce the distance

that food travels from farm to consumer in order to

reduce fossil fuel use and promote local sustainable

development). Also the organic standards are biased in

favor of large corporations because they are

size-neutral, that is they apply equally to an

agribusiness giant and a small family farm. Large

businesses can cover the costs of these regulations

more easily,” says Cummins.

Indeed, according to a recent International Federation

of Organic Agriculture Movements (IFOAM) report, the

USDA is now investigating support for international

organic standards in order to facilitate global trade

in organic food.

The USDA itself does not certify farms or products.

Rather, it accredits institutions, be they public

agencies or private firms, to do the actual

certification. Neither growers nor sellers are allowed

to label " organic " any product that has not been

certified as such by a USDA accredited institution,

and the agency is the final authority for appeals on

just what the organic standard will mean.

Olivia Sargeant, a nutritional consultant from San

Francisco, who works at the Marin Sun Farm booth at

the Point Reyes market thinks the bigger corporate and

governmental role " has both pros and cons. " Wider

penetration " will bring some education to people, but

it's also co-opting the very term 'organic'. "

Sargeant is also concerned that large natural food

retailers like Whole Foods are putting mom-and-pop

stores out of business in the same manner as

conventional food chains like Safeway and Wal-Mart.

" My local health food store went out of business

because of Whole Foods. Large retail chains, no matter

how 'ecological' they may be, are bad for

locally-owned businesses. "

But even natural foods giant Whole Foods could

eventually lose out to conventional stores. USDA

statistics estimate that the market shares for organic

food sales are: conventional supermarkets have 49%,

natural food stores have 48% and farmers markets and

food buying clubs just three percent. And a June 2003

MarketResearch.com study, which uses stricter criteria

for what constitutes a health food and natural food

store, estimated that the percentage of sales of

organic food sold through these outlets fell from 62%

in 1998 to just 31% last year.

Despite the fact that most consumers are buying their

organic food from the big retailers, buried in the

2003 Whole Foods survey is another interesting piece

of information: 57% of organic consumers believe that

organic foods are grown on small farms.

While Cummins believes that this is still largely true

in practice, he says that this will change over time.

“I see some troubling trends, especially in organic

dairy. In that sector there is a major move toward

moving production from family farms to industrial

feedlot factory farms. Horizon controls 70% of the US

organic dairy market, and last year it was bought by

Dean Foods,” he told CorpWatch..

“No way in hell can you be organic if you have over a

few hundred cows. After a certain size, the operation

cannot be ecologically sound anymore, among other

things because of the amount of manure produced,”

added Cummins.

“In California there are huge organic farms that

produce organic lettuce and carrots in large

monocultures, using large energy inputs and receiving

subsidized water- three elements that are

anti-environmental and unacceptable for those who want

ecologically sound farming,” he adds.

In a 2002 study conducted at the University of

California at Davis, Karen Klonsky documents that

organic food production in California is already

concentrated. Two percent of organic farm operations,

about 27 growers, bring in over $1 million a year and

represent over half of the organic sales in the state.

Indeed while over 90% of all U.S. farms are

categorized by the USDA as small, the other 10% -- big

agribusiness -- provide approximately 60% of all food

sales.

Nationwide, two corporations, United Natural Foods and

Tree of Life, control the distribution of about

three-fourths of all-natural products. Tree of Life is

owned by Koninklijke Wessanen, a Dutch conglomerate

that is itself one of the largest food companies in

Europe.

Not all in the organic food business see these trends

as negative, Barbara Haumann, spokesperson for the

U.S. Organic Trade Association says, " The more

players, the more products will be available to

consumers, who, in turn, will buy more products. This

will result in more land under organic production,

regardless of the size of the operation. And that will

be better for the environment, local communities and

the planet. "

Another supporter of corporate entry into the market

is the pioneering organic yogurt maker Gary Hirshberg

CEO of Stonyfield Farms. He shepherded the sale of the

United State's premiere organic yogurt maker to the

France-based multinational Danone corporation while

keeping himself as CEO of the acquired company.

Hirshberg's family made an estimated $35 million on

the $125 million dollar sale. He says he believes the

end result of the deal is a win-win situation for

organic producers and consumers.

Asked if the buyout had affected Stonyfield's

practices, company spokesperson Mary Townsend says:

" Danone actually let us operate the way we always had,

contracting with small family farms and in line with

the strictest organic standards. Furthermore, Danone

is asking us to help them change their operations

worldwide to organic production. "

Laurent Sacchi, vice president of corporate

communications for Groupe Danone, tells CorpWatch:

" Danone has encouraged (and will continue to

encourage) Stonyfield to continue the practices that

have made them distinct; for example, the 10% profits

for the planet program, the support of family farming,

their support of organic. Danone is using Stonyfield

as a model for how alternative ways of doing business

and farming could be successfully developed, even

inside or in the frame of a more 'classical' company.

"

Business accounts of the sale note that since it costs

$70-80 million just to launch a national brand in the

U.S. acquiring an established name like Stonyfield is

far less risky than starting a competitor.

But Paul Cienfuegos of the California-based Arcata

Committee on Democracy and Corporations and a longtime

critic of " corporate organics " accuses large firms

like Stonyfield of using their organic subsidiaries to

infiltrate sustainable agriculture and water down

organic standards.

He cites a recent organics convention in Texas where

an OTA sponsored panel considered how organic and

genetically engineered (GE) crops could co-exist.

Cienfogos maintains that most advocates believe that

the discussion on GE crops should focus on how to get

them banned, not on how they could co-exist with

non-GE crops. " The fact that the General Mills

corporation [Owner of the Cascadian organic brand] is

a major donor (of OTA) may have had something to do

with this, " he says.

And critics such as Rich Ganis, who writes for the

online newsletter informedeating.org, contend that the

modest ecological benefits of more organic acres under

production due to corporate agriculture are being

" offset by the tremendous amount of fossil fuel,

packaging, and other resources expended in the

production and distribution of these 'value-added'

products. "

Carmelo Ruiz-Marrero, Proyecto de Bioseguridad

http://www.bioseguridad.tk

Research Associate, Institute for Social Ecology

http://www.social-ecology.org/

Senior Fellow, Environmental Leadership Program

http://www.elpnet.org/

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