Featuring

Final Organic Rule Governs Marketing and Production

The national program, authorized under the Organic Foods Production Act of 1990, facilitates domestic marketing of organically produced fresh and processed food, and assures consumers that such products meet consistent, uniform standards. USDA's Agricultural Marketing Service (AMS) published the final rule implementing this legislation in December 2000. On October 21, 2002 the final rule went into effect, requiring that all but the smallest organic farmers and processors must be certified by a State or private agency accredited under national standards. The program establishes:

National production and handling standards for organically produced products, including a National List of substances that can and cannot be used.
A national-level accreditation program for State and private organizations who must be accredited as certifying agents under the USDA national standards for organic certifiers.
Requirements for labeling products as organic and containing organic ingredients.
Rules for importation of organic agricultural products from foreign program.

Organic Agriculture Poster—Prepared to publicize the new organic rule's implementation, this poster gives the USDA definition of organic agriculture and presents summary data on growth in organic markets and the location and size of U.S. organic production.

The Economic Research Service (ERS) has a complete program of research and publications on the economics of organic production and marketing. Recent products include:

Research Reports

Recent Growth Patterns in the U.S. Organic Market—Organic farming is one of the fastest growing segments of U.S. agriculture. As consumer interest continues to gather momentum many U.S. producers, manufacturers, distributors, and retailers are specializing in growing, processing, and marketing an ever-widening array of organic agricultural and food products. This report summarizes growth patterns in the U.S. organic sector in recent years, by market category, and describes various research, regulatory, and other ongoing programs on organic agriculture in the U.S. Department of Agriculture. AIB-777 (10/02).

U.S. Organic Farming Emerges in the 1990s: Adoption of Certified Systems—Farmers have been developing organic farming systems in the United States for decades. State and private institutions began emerging in the 1990s to set organic farming standards and provide third-party verification of label claims, and legislation requiring national standards was passed in the 1990s. U.S. producers consider organic farming systems in order to lower input costs, conserve nonrenewable resources, capture high-value markets, and boost farm income. Organic farming systems rely on practices such as cultural and biological pest management, and virtually prohibit synthetic chemicals in crop production and antibiotics or hormones in livestock production. This report updates U.S. Department of Agriculture (USDA) estimates of land farmed with organic practices during 1992-94 with 1997 estimates, and provides new State-and crop-level detail. AIB-770 (8/01)

Note: An updated report is in production for release later this year. Data for 2000 and 2001 updating AIB-770 are already available.

Organic Food Markets in Transition—For the past several years, the organic foods industry has been growing at a rate of 20 to 24 percent annually. Such growth has led to a transformation in the organic foods industry. A major focus of this report is to determine how new and established firms are faring in this entrepreneurial climate, and whether they can expect to coexist and thrive in what is a unique market.

Economics of Food Labeling—The National Organic Program is a U.S. effort in environmentally-friendly food labeling for production agriculture. Federal intervention in food labeling is often proposed with the aim of achieving a social goal such as improving human health and safety, mitigating environmental hazards, averting international trade disputes, or supporting domestic agricultural and food manufacturing industries. Economic theory suggests that the appropriate role for government in labeling depends on the type of information involved and the level and distribution of the costs and benefits of providing that information. This report traces the economic theory behind food labeling and presents three case studies in which the government has intervened in labeling and two examples in which government intervention has been proposed, including organic labeling. AER-793 (1/01).

Articles

Organic Food Industry Taps Growing American Market—American consumer interest in organically grown foods has opened new market opportunities, leading to a transformation in the organic foods industry. Organic food is currently sold in a wide variety of venues, including farmers' markets, natural foods supermarkets, conventional supermarkets, and club stores. New national organic standards will facilitate the marketing of organic products to consumers. Agricultural Outlook (10/02).

Tracking Wholesale Prices for Organic Produce—Organic agriculture is one of the fastest growing segments of the U.S. food sector. But collection of price data for this segment has lagged the industry's growth. Wholesale prices for organic produce are occasionally provided in Market News Service reports published daily by USDA's Agricultural Marketing Service covering terminal markets in 15 U.S. cities. A more complete picture of industry price patterns will emerge if and when data become available for other terminal wholesale markets. Agricultural Outlook (10/01).

Organic Marketing Features Fresh Foods and Direct Exchange—Industry sources estimate that organic food sales reached $7.8 billion in 2000. Conventional grocery stores began integrating a wider selection of organic products in the late 1990s and accounted for 49 percent of total organic sales in 2000, about the same as natural food stores (48 percent). Direct markets, such as farmers markets, captured 3 percent of total organic sales to U.S. consumers in 2000. Food Review (7/01).

Data

Certified Organic Farming—Provides data on organic acreage, and producers for crops and livestock by State, region, and nationally for 1997, 2000, and 2001, with overall trend data from 1992. These data update U.S. Organic Farming Emerges in the 1990s: Adoption of Certified Systems AIB-770, listed above, and will be published in a new report later this year.

Briefing Rooms

Organic Farming and Marketing—Offers an indepth discussion synthesizing ERS research on economic issues and data that frame analysis of organic production and marketing. Highlights recent ERS research developments, readings and data, questions and answers, and related links on organic farming.

Information Policy—This briefing room outlines the theory behind information policies such as labeling and provides links to ERS's work in this area, including work on organic certification and labeling under the National Organic Program.

Workshop on Organic Agriculture

On September 23-26, 2002, the U.S. Government hosted an OECD Workshop on Organic Agriculture, in Rosslyn, Virginia. ERS, AMS, and ARS were major government sponsors of the workshop, which examined empirical evidence on the economic, environmental and social impacts of organic agriculture in relation to "integrated" or "conventional" farming systems, and identified the conditions under which organic agricultural systems are sustainable. The workshop also reviewed the market approaches and policies used to encourage, certify and regulate organic agriculture, and explored the trade effects of different policies. The workshop contributed to OECD's work on agri-environmental issues and practical policy advice, and the U.S. location provided an opportunity for a broad spectrum of U.S.-based groups to participate. The Workshop agenda featured two and a half days of speakers and panel discussion, as well as a USDA Patio reception, a one-day field trip, including a trip to ARS/BARC's organic agriculture experimental field sites, and an organic dinner at George Washington's River Farm.