Big buyers make organic farmers feel smaller than ever
With Whole Foods continuing to dazzle Wall Street with its growth and Wal-Mart vowing to become the world’s No. 1 organic grocer, now would seem to be a wonderful time to be an organic farmer — particularly one with enough acreage to supply the corporate giants.
According to classical economics, when demand jumps, supply should follow, pulled up by the good’s rising price. But a funny thing is happening in the certified-organic fields and orchards of California, home to about 40 percent of the nation’s organic-vegetable acreage: produce is shriveling unpicked on the vine, choked by weeds and neglect.
A labor squeeze has gripped California’s farm operators. Simply put, not enough undocumented Mexican workers are sneaking across an increasingly militarized border, and the ones who do tend to be drawn to higher-paid, less-demanding urban jobs. While the labor shortage affects all of the state’s fruit and vegetable farms, organic ones bear the heaviest burden, according to a recent Associated Press report. That’s because human hands, often wielding a hoe, must do work that’s done on conventional farms by herbicides and other chemical inputs.
The AP article focuses on one prominent California organic farmer who “has been forced to tear out nearly 30 acres of vegetables, and has about 100 acres compromised by weeds.” The farmer figures this season’s dearth of workers has cost him $200,000 so far — “worse than anything he’s seen in his 31 years of farming,” AP reports.
Under perfect free-market conditions, a simple mechanism would remedy the shortage. As farmers abandoned rotting vegetables to the weeds, supply would drop. Since demand is robust, the price of organic veggies would rise — allowing farmers to raise wages without compromising profitability. Higher wages would then lure more Mexican workers to brave the U.S. marshals, minutemen, stiff “coyote” fees, and brutal desert conditions that characterize the border crossing. And then California’s large-scale organic farms would hum again, ready to stock the shelves of Wal-Marts and Whole Foods the nation over.
Yet I doubt this scenario will play out. The organic produce market once relied on direct sales between small-scale farmers and consumers — think farmers’ markets and CSAs. That meant that buyers were a diverse and numerous bunch, giving farmers some power to set prices at a level that reflected labor and cost. At the farmers’ market, I know that if one person gawks at my $3 per pound yellow heirloom tomatoes and walks away empty-handed and flummoxed, I can count on a food fanatic dropping by a minute or two later and snapping up a few pounds with a smile. We nurtured those tomatoes from seed, and staked, strung, and harvested them by hand; $3 per pound seems like a bargain to us.
Now, however, the produce market is increasingly the territory of a few big retailers. In short, a market once characterized by many buyers is transforming into one controlled by a few. And the power to name prices is being wrenched from the hands of farmers by the likes of Wal-Mart and Whole Foods. As those two titans battle it out for the title of the nation’s top organic grocer — a position Whole Foods currently owns by a wide margin [PDF] — expect them to compete over who can deliver the cheapest organic tomato. And that means large-scale organic farmers can expect to see a price squeeze even as they’re struggling to find enough workers to pick their fruit.
Sound far-fetched? Consider that while organic vegetables typically fetch prices 20 to 30 percent higher than conventionally grown fare, Wal-Mart has already announced plans to squeeze that premium to 10 percent. Most likely organic farmers, and not Wal-Mart’s profit margins, will feel the pinch more painfully.
Wal-Mart can perform this feat simply by playing large-scale U.S. organic farmers against their counterparts in Mexico and even China — a strategy that would not be completely at odds with the retail giant’s historic business model. According to AP, “Some [California] growers are moving parts of their operations to Mexico.” A few months back, BusinessWeek reported that Cascadian Farm, General Mills’ “natural” subsidiary, “buys its organic fruits and vegetables from China and Mexico.”
Some optimists see in these trends the “democratization” of organic food. As its retail price drops compared to conventional food, more people will buy it, benefiting public health and the environment alike. But I see the process of commodification at work. In commodity markets, distinctions fade. A given product’s history disappears into history’s dustbin. An organic tomato from Mexico equals an organic tomato from Chile equals one from the farmer down the road. The goal becomes not to maximize flavor or bolster local economies, but to minimize price.
Even small-scale, locally oriented farms like my own Maverick Farms have felt commodification’s pressure. Just two weeks ago, the chef/owner of a nearby posh restaurant, one that had loyally bought produce from the family who started our farm 20 years ago, called to complain about our prices. It seems Albert’s Organics was quoting him prices 20 or 30 percent lower than ours. Albert’s — a subsidiary of United Natural Foods, the self-proclaimed “largest publicly traded wholesale distributor to the natural and organic foods industry” — is evidently opening a distribution center nearby. That’s bad news for Maverick and other local farms.
Starting in the 1930s, the U.S. food system succumbed to commodification at a blistering pace. The result has been, to paraphrase T.W. Adorno, “disaster triumphant” — flavorless institutional food, declining public health, wrecked rural economies, and untold environmental wreckage. For the corporations that dominate the food industry, though, it’s just been a triumph.
And now the organic movement, which emerged as a critique of the idea of food-as-commodity, is itself hurtling down the path of commodification. Some greens, embracing a binary worldview not unlike the one prevalent in the White House, insist that everyone declare it a “good thing” that corporations are embracing organic. I respond: let’s not surrender our power to analyze just because some slick CEO talks a good game. Let Wal-Mart do what it wants. I’ll remain part of the movement to rebuild locally owned food-production institutions that benefit farmers, consumers, and the environment alike.