Should Taxpayers Back the ‘Organic’ Label?

Why are consumers willing to pay almost double for food labeled organic?  The average consumer probably believes that the “USDA Organic” label issued by the U.S. Department of Agriculture implies the food comes from small local farms that use production techniques that are environmentally friendly and result in food that is better for human health.  The Washington Post published an article recently about an organic farm that does not seem to be consistent with such perceptions.  The High Plains dairy complex in Colorado, the main facility of Aurora Organic Dairy, has over 15,000 cows. In the organic dairy industry 87 percent of farms have less than 100 cows, but farms with 100 or more cows produce almost half of organic dairy products.

The Post article argues that these large dairy operations may be violating the USDA’s regulations for organic milk. Though Aurora officials maintain that they meet all the requirements for the USDA Organic label, the article contends that satellite images, visual inspections by Post reporters, and tests of milk from High Plains all indicate that the company may not be complying with the natural grazing standards of the organic regulations.

But the Post article misses the important point that even if Aurora were in technical compliance with the grazing regulation, the label does not convey any information about health and environmental benefits. As then-secretary of agriculture Dan Glickman stated at the release of the final standards for organic foods in 2002:

Let me be clear about one thing: the organic label is a marketing tool. It is not a statement about food safety. Nor is ‘organic’ a value judgment about nutrition or quality.

John Cohrssen and Henry Miller, in the spring 2016 issue of Regulation, argue that on average, organic foods are neither safer nor better for human health than non-organic foods. And the USDA has located the National Organic Program in the department’s Agricultural Marketing Service, a service that is exempted from environmental analysis because its “programs and activities have been found to have no individual or cumulative effect on the human environment.” In fact, organic farms may cause more harm to the environment because they require the use of more land and water than conventional farming.

Though the touted benefits of organic foods may be non-existent, federal spending on organic agriculture under the 2014 Farm Act was over $160 million dollars and customer perceptions of organic food safety and quality persist. As Cohrssen and Miller note, a 2014 Academics Review analysis concluded that because of the USDA Organic label, “the American taxpayer-funded national organic program is playing an ongoing role in misleading consumers into spending billions of dollars in organic purchasing decisions based on false and misleading health, safety, and quality claims.”

Whether or not Aurora has been following the standards of organic labeling or organic foods live up to their supposed benefits, the organic label itself has been very useful for farmers. But should government aid producers at the expense of consumers and taxpayers?

Written with research assistant David Kemp.