Munich Personal RePEc Archive

Benefits of U.S. organic agriculture

Lohr, Luanne (2002): Benefits of U.S. organic agriculture.

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This case study reviews the economic, social, and environmental benefits associated with organic agriculture in the U.S. These benefits include measurable impacts and unmeasurable impacts that affect both agricultural and consumer systems in fundamental ways. Both are discussed in this study. Measurable impacts are quantified in two ways – by comparing characteristics of organic and conventional farmers and by comparing indicators of benefits in counties with organic farms and counties without. Statistical differences in counties with and without organic farms are strong evidence that organic farms need not be numerous to generate benefits. There were 1,208 counties containing 4,868 organic farms in the U.S. in 1997, the last year for which location data are available. Findings of measurable impacts include: • Organic farmers are more likely to be female, hold a college degree, and be full-time farmers. The average organic farmer is 7 years younger than the average U.S. farmer. • Retail price premiums for organic foods average 10% to 30% higher than conventional. Farm price premiums are 70% to 250% more than what conventional farmers receive. • Counties with organic farms have stronger farm economies and contribute more to local economies through total sales, net revenue, farm value, taxes paid, payroll, and purchases of fertilizer, seed, and repair and maintenance services. • Counties with organic farms have more committed farmers and give more support to rural development with higher percentages of resident full-time farmers, greater direct to consumer sales, more workers hired, and higher worker pay. • Counties with organic farms provide more bird and wildlife habitat and have lower insecticide and nematicide use. • Watersheds with organic farms and have reduced agricultural impact and lower runoff risk from nitrogen and sediment. Findings of unmeasurable impacts include: • Organic farming under current standards avoids social and economic costs such as pesticide poisonings and costs of testing for genetically engineered foods. • The market in organic foods is more efficient than for conventional foods, because prices reflect more of the cost of producing socially desirable outputs, such as clean water, as a byproduct of food production activities. This reduces the need for government intervention through taxes or subsidies to obtain these benefits. • Innovation and openness to new ideas are necessary for growth in knowledge-based organic systems, and result in rapid development and dissemination of information on nonchemical production methods that benefit all farmers. Overall, the findings of this study are surprising in the strength of support for the hypothesis that organic farming produces more benefits than conventional farming. Nearly every indicator tested across the range of economic, social, and environmental benefits favors organic systems. Even though organic farmers are not a large percentage of the total number of U.S. farmers, their influence is felt through their innovation of management techniques and leadership in meeting the organic standards.

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