wal-mart and organic food

There was an excellent article in the New York Times Magazine (no registration required) on the  ramifications of Wal-Mart so aggressively entering the organic food market.  They plan on offering a full line of organic foods at only 10% above conventional food prices.  "Cool!"  You might think.  It will bring organic foods to a wider audience, educating them in the process; it will result in a huge increase in organic farmland and thus a huge decrease in agricultural chemicals entering our water, air, and food.  This must be good. Michael Pollan, author of The Omnivore's Dilemma and The Botany of Desire, explains this is not exactly the case.

The catch is really in the economics. To price organic food so cheaply, asserts Pollan,

"...would virtually guarantee that Wal-Mart's version of cheap organic food is not sustainable, at least not in any meaningful sense of that word. To index the price of organic to the price of conventional is to give up, right from the start, on the idea...that food should be priced not high or low but responsibly. As the organic movement has long maintained, cheap industrial food is cheap only because the real costs of producing it are not reflected in the price at the checkout. Rather, those costs are charged to the environment... To say you can sell organic food for 10 percent more than you sell irresponsibly priced food suggests that you don't really get it."

The tip of this rising iceberg is already evident in the recent increasing demand for organic foods.

• The demand for organic milk has resulted in huge feedlots run by agribusiness giants where cows eat organic grain, but othewise aren't much "happier" than any other dairy cows.
• More organic foods are being shipped from far-flung places; they may be organic, but the environmental costs of the amount of fossil fuel needed to ship them is just as bad if not worse than those of conventionally-grown foods purchased locally.  This is something I always consider when I shop for food.  There are even a couple of websites/groups devoted to eating locally: Locavores and the Eat Local Challenge.

Wal-Mart's mega-buying will have other consequences:

• A high demand for organic meat will likely mean livestock raised in large Confined Animal Feeding Operations, just like they are today, only fed with organic grain and not given antibiotics.  Ironically, these animals will have a higher likelihood of illness, being packed together and not being given antibiotics.
• Wal-Mart will buy from several large producers, not lots of small farmers, in order to keep prices down.
• Wal-Mart is known for squeezing its suppliers.  At some point, we might expect corners to be cut (or laws changed) by agribusiness striving to remain competitive and profitable as Wal-Mart suppliers.

This is a thought-provoking article, and I urge you to read it. Seems like everything these days is a double-edged sword. In an article entitled "Six Rules for Eating Wisely" in Time Magazine, one tip related directly to the Wal-Mart/organic food dilemma, pointing out that, "Americans are as addicted to cheap food as we are to cheap oil. We spend only 9.7% of our income on food, a smaller share than any other nation."  When will we learn the true costs of our inexpensive food, energy, and lifestyles? More resources below the fold.

• Business Week: Wal-Mart's organic defensive.
• The Gristmill: How to make Wal-Mart's organic push not matter.
• WorldChanging: Wal-Mart going organic?

Comments

[Jordan T. Cox]

I always find statistic conclusion drawing an interesting endeavour. Simply because Americans spend 9.7% of their income on food does not mean that the food we eat is any cheaper than food in any other nation. 100% of $5000/month is more than 100% of $100/month - and so the percentage of money spent on food can increase while actual money spent remains the same.

Organic food is about spending more of our agriculturally rich land on less food - but in a better (presumably more sustainable) way. Even if Wal-Mart was to offer 100% organic food raised in the "happy" way it would have ill effects.

The supply of food available decreases when grown in an "organic" fashion. Demand remains the same, so price goes up. The kind of people who shop at Wal-Mart for groceries (as far as I understand) can't really afford price increases (they could sell their shiny TV, but that's another economics discussion). With that, food is priced out of the reach of the individuals who shopped there for their "discount food". Where do they go now?

Just a few thoughts on the matter. No matter how you slice it Wal-Mart's entrance into the organic food market would be bad.

[Nuthatch]

You raise a couple of good points, Jordan. I think perhaps the point of the 9.7% statistic was that Americans are not willing to pay more for food, even if they can afford it, in the same way we balk at paying more for gasoline. I agree that in some areas, Wal-Mart shoppers may be low income. But I guarantee that there are HOARDS of Wal-Mart shoppers that can well afford caviar and filet mignon, but just want cheap food. If Wal-Mart didn't have these shoppers, they wouldn't sell big screen plasma televisions. As a biologist, I don't make a lot of money. But whenever possible, I bite the bullet and pay a little more for sustainable goods. I don't think the majority of Americans would do the same.

[Jason Sailing]

I'm glad that many people are talking about Wal-Mart getting into organic foods, and I thank you for passing the info. along - I had not seen the article but had read a few op-ed type pieces. I also appreciate your comment about the "double-edged sword topics these days - I am pro-wind power, but as a birder, it's hard to get excited about the growth of wind farm projects that seem to crop up in the most unfortunate places, like off South Padre Island and closer to my home, near Horicon NWR.

Thanks for the great post.

[Jenn]

There was an article at TreeHugger last month about Walmart meeting with the CEO of Seventh Generation (maker of environmentally-aware cleaning products and paper products). I've noticed the supermarkets around here are expanding their store-brand products to include an organic line. Interesting to see the trend continue.

This doesn't necessarily have to result in the corruption of organic values, as long as the public demands that companies be held accountable for the decisions they make. Perhaps exposing more people than ever before to organic products will help facilitate that. As internet technology has become more widespread, we have entered an era of consumer empowerment, where consumers are more likely to voice their opinions directly to companies, and companies are more willing to listen. Education takes a long time - baby steps, right?

[Jane Shevtsov]

I posted a reply to this on my blog, Perceiving Wholes.