Wal-Mart Goes Organic: And Now for the Bad News

At the risk of sounding more equivocal than any self-respecting blogger is expected to sound, I’m going to turn my attention from the benefits of Wal-Mart’s decision to enter the organic food market to its costs. You’ll have to decide for yourself whether the advantage of making organic food accessible to more Americans is outweighed by the damage Wal-Mart may do to the practice and meaning of organic food production. The trade-offs are considerable.

When Wal-Mart announced its plan to offer consumers a wide selection of organic foods, the company claimed it would keep the price premium for organic to no more than 10 percent. This in itself is grounds for concern — in my view, it virtually guarantees that Wal-Mart’s version of cheap, industrialized organic food will not be sustainable in any meaningful sense of the word (see my earlier column, “Voting With Your Fork,” for a discussion of that word). Why? Because to index the price of organic to the price of conventional food is to give up, right from the start, on the idea — once enshrined in the organic movement — that food should be priced responsibly. Cheap industrial food, the organic movement has argued, only seems cheap, because the real costs are charged to the environment (in the form of water and air pollution and depletion of the soil); to the public purse (in the form of subsidies to conventional commodity producers); and to the public health (in the cost of diabetes, obesity and cardiovascular disease), not to mention to the welfare of the farm- and food-factory workers and the well-being of the animals. As Wendell Berry once wrote, the motto of our conventional food system — at the center of which stands Wal-Mart, the biggest grocer in America — should be: Cheap at Any Price!

To say you can sell organic food for 10 percent above the price at which you sell irresponsibly priced food suggests you don’t really get it — that you plan to bring the same principles of industrial “efficiency” and “economies of scale” to a system of food production that was supposed to mimic the logic of nature rather than that of the factory.

We have already seen what happens when the logic of industry is applied to organic food production. Synthetic pesticides are simply replaced by approved organic pesticides; synthetic fertilizer is simply replaced by compost and manures and mined forms of nitrogen imported from South America. The result is a greener factory farm, to be sure, but a factory nevertheless.

The industrialization of organic agriculture, which Wal-Mart’s entry will hasten, has given us “organic feedlots” — two words that I never thought would find their way into the same clause. To supply the burgeoning demand for cheap organic milk, agribusiness companies are setting up 5000-head dairies, often in the desert. The milking cows never touch a blade of grass, but instead spend their lives standing around a dry lot “loafing area” munching organic grain — grain that takes a toll on both the animals’ health (these ruminants evolved to eat grass after all) and the nutritional value of their milk. Frequently the milk is then ultra-pasteurized (a high heat process that further diminishes its nutritional value) before being shipped across the country. This is the sort of milk we’re going to see a lot more of in our supermarkets, as long as Wal-Mart honors its commitment to keep organic milk cheap.

We’re also going to see more organic milk coming from places like New Zealand, a trend driven by soaring demand — and also by what seems to me, in an era of energy scarcity, a rather forgiving construction of the idea of sustainability. Making organic food inexpensive means buying it from anywhere it can be produced most cheaply — lengthening rather than shortening the food chain, and deepening its dependence on fossil fuels.

Similarly, organic meat is increasingly coming not from polycultures growing a variety of species (which are able to recycle nutrients between plants and animals) but from ever-bigger organic confined animal feeding operations, or CAFO’s, that, apart from not using antibiotics and feeding organic grain, are little different from their conventional counterparts. Yes, the organic rules say the animals should have “access to the outdoors,” but in practice this means providing them with a tiny exercise yard or, in the case of one egg producer in New England, a screened-in concrete “porch.” This is one of the ironies of practicing organic agriculture on an industrial scale: big, single-species organic CAFO’s are even more precarious than their industrial cousins, since they can’t rely on antibiotics to keep thousands of animals living in close confinement from getting sick. So organic CAFO-hands (to call them farm-hands just doesn’t seem right) keep the free-ranging to a minimum, and then keep their fingers crossed.

The industrial food chain, whether organic or conventional, inevitably links giant supermarkets to giant farms. But this is not because big farms are any more efficient or productive than small farms — to the contrary. Studies have found that small farms produce more food per unit of land than big farms do). And polycultures are more productive than monocultures. So why don’t such farms predominate? Because big supermarkets prefer to do business with big farms growing lots of the same thing. It is more efficient for Wal-Mart — in the economic, not the biological, sense — to contract with a single huge carrot or chicken grower than with 10 small ones: the “transaction costs” are lower, even if the price and the quality is no different. This is just one of the many ways in which the logic of capitalism and the logic of biology on a farm come into conflict. At least in the short term, the logic of business usually prevails.

Wal-Mart’s big-foot entry into the organic market is bad news for small organic farmers, that seems obvious enough. But it may also spell trouble for the big growers they’ll favor. Wal-Mart has a reputation for driving down prices by squeezing its suppliers, especially after the suppliers have invested in expanding production to feed the Wal-Mart maw. Once you’ve boosted your production to supply Wal-Mart, you’re at the company’s mercy when it decides it no longer wants to give you a price that will cover the cost of production, let alone enable you to make a profit. When that happens, the notion of responsibly priced food will be sacrificed to the need to survive, and the pressure to cut corners will become irresistible.

Right now, the federal organic standards provide a bulwark against that pressure. But with the industrialization of organic, the rules are coming under increasing pressure, and (forgive my skepticism) it’s hard to believe that the lobbyists from Wal-Mart are going to play a constructive role in defending those standards from efforts to dilute them. Earlier this year, the Organic Trade Association hired lobbyists from Kraft to move a bill through Congress making it easier to include synthetic ingredients in products labeled organic.

(What are any synthetic ingredients doing in products labeled organic, anyway? A good question, and one that was recently posed in a lawsuit against the U.S. Department of Agriculture by a blueberry farmer in Maine, who argued that the 1990 law establishing the federal organic program had specifically prohibited synthetics in organic food. Within weeks after he won his case, the industry went to Congress to preserve its right to put synthetic ingredients like xanthan gum and ascorbic acid into organic processed foods.)

For better or worse, the legal meaning of the word organic is now in the hands of the government, which means it is subject to all the usual political and economic forces at play in Washington. The drive to keep organic food cheap will bring pressure to further weaken the regulations, and some of K Street’s most skillful and influential lobbyists will soon be on the case. A couple of years ago, a chicken producer in Georgia named Fieldale Farms induced its congressman to slip a helpful provision into an Agriculture Department appropriations bill that would allow organic chicken farmers to substitute conventional chicken feed when the price of organic feed exceeded a certain level. Well, that certainly makes life easier for a chicken producer, especially when the price of organic corn is up around $8 a bushel (compared to less than $2 for conventional feed). But in what sense would a chicken fed on conventional feed still be organic? In no sense except the Orwellian one: because the government says it is. An outcry from consumers and wiser organic producers (who saw their precious label losing credibility) put a halt to Fieldale’s plans, and the legislation was quickly repealed.

The moral of the Fieldale story is that unless consumers and well-meaning producers remain vigilant, the drive to make organic foods nearly as cheap as conventional foods threatens to hollow out the word and kill the gold-egg-laying organic goose. Let’s hope Wal-Mart understands that the marketing power of the word organic — a power that flows directly from consumers’ uneasiness about the conventional food chain — is a little like the health of a chicken living in close confinement with 20,000 other chickens in an organic CAFO, munching organic corn: fragile.