Fair Prices for Farmers

There is a massive misunderstanding in blaming group certification for the lower prices that undercut US organic growers.

  1. There is 100% inspection of farms in group certification through the Internal Control System (ICS)
  2. The ICS is third-party certified by USDA-accredited certifiers.
  3. The majority of the world’s organic farmers are group-certified, and it has improved their lives.
  4. Banning group certification will hurt these farmers, and the organic sector will lose millions of farmers as they cannot afford third-party certification.
  5. The cheap imports will then be supplied by agribusiness that will be third-party certified.
  6. The trade sectors drive the lower prices and take the highest percentage of the final sale price.
  7. A campaign to ensure fair prices for family farmers must be launched to counter the trade sectors that take the most of the retail price.

All group certification systems have an Internal Control System (ICS) as part of their documented quality assurance system. This includes the organic standard, training to ensure compliance with the standard, and inspection procedures. Inspectors trained in the ICS procedures inspect every farmer annually.

The accredited third-party certifier (USDA accredited) checks the whole ICS, including office procedures, staff roles, standards, and records, ensuring the ICS has inspected every farmer. In addition, every year, the certifier randomly and directly inspects a percentage of farmers to ensure that they comply with the ICS. If they find non-compliance, they will continue to check more farmers, resulting in the loss of the certification.

Photo credit: Joel Caldwell

Organic group certification is one of the biggest success stories in taking family farmers out of poverty and food insecurity and into a life of well-being. Over 2 million family farmers benefit from it.

Most group certification schemes are run by not-for-profit organizations that democratically elect their boards and employ local staff to manage the operations. These organizations tend to sell their products to traders and marketing companies that import and export them. This sector determines the prices farms receive and consumers pay. This sector takes the highest percentage of the final sale price, not the farmers.

The cost of certification is not the reason imported products from developing countries are cheaper than US products. Lower labor and production costs are the reason the trade sector can undercut the prices farmers at the country of destination receive to take a larger share of the market. This applies to all products from these countries, whether third-party or group-certified.

Banning group certification will not fix the problem of cheap imports. It will only stop small family farmers, some of the poorest on the planet, from earning an income and force them into extreme poverty.

The overall cost of certifying a group is much higher per acre than certifying a single farm. Agribusiness companies can acquire and consolidate these vacated farms and have them all certified as one large farm for a lower cost per acre. They will mechanize production and employ a small percentage of the ex-farmers as low-paid landless laborers. The rest join the farming diaspora, living in poverty on the fringes of the big cities. We see this with imports of organic avocados, mangoes, wine, etc, from Latin America and grains from Eastern Europe. These are all third-party certified large-acre organic farms consolidated from previously small-family farms.

These corporations will continue to land cheap organic products on the US market, undercutting US organic farmers.

Being undercut by imports is an issue that all farmers face, not just organic farmers in the US. The loss of income from family farms is one of the driving forces for the worldwide farming diaspora. The majority of migrants crossing into the USA and Europe are farmers who have been forced off their land by poverty and food insecurity.

Cheap U.S. GMO imports have put most Mexican corn farmers out of business. Californian imports destroyed the off-season grape market in tropical Australia, bankrupting farmers. Australian and New Zealand grass-fed meat undercuts U.S. producers like Will Harris of White Oak Pastures. The list is enormous.

The key issue is that all countries, including the USA, must protect their farmers from cheap imports. In the past, tariffs were used for this purpose; however, ‘free trade’ such as NAFTA has removed them, put farmers out of business, and made massive profits for agribusiness.

It is not just imports. Organic hydroponics, CAFOs, and corporate supply chain monopolies put family organic farms out of business.

Low-cost industrial-scale monocultures and agribusiness marketing monopolies are major contributors to the farming diaspora.  This is part of the bigger issue of agribusiness destroying family farming by driving down the percentage of retail sales they receive. The percentage of the retail price farmers receive continues to decline from 80% a century ago to as low as a few percent for the highly processed toxic junk now sold as food. The traders have taken this money and continue to improve their percentage at the expense of farmers. Farmers need to get their fair percentage.

A campaign to ensure ‘Fair prices for Family Farmers’ is urgently needed. The organic sector needs to partner with our like-minded allies to develop and run this campaign. Consumers and traders must actively support their local and national organic farmers by paying fair prices rather than the lowest price for their products.