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USDA Certified Organic: 28 Years of Changing Consumer Preferences

August 21, 2018

Since the passage of the Organic Foods Production Act of 1990 (OFPA), the U.S. Department of Agriculture (USDA) has had the authority to promulgate regulations that certify certain food production as ‘organic.’ These regulations were meant to make sure that organic farms wishing to certify their products as organic “must demonstrate that they are protecting natural resources, conserving biodiversity, and using only approved substances.”[1] As of 2016, over 5 million acres of farmland are certified organic by the USDA (about equally split between rangeland and crop land).[2] Furthermore, Organic product sales topped $49 billion in 2017.[3] Even though the amount of organic farmland is still less than 1% of total farm acreage in the U.S. (>900 million), organic products represent over 12% of the market value of agricultural products.[4] Over the last 28 years, USDA organic certification has not only changed farming practices, but it has also greatly affected consumer habits, subsequent regulation, and even, questionably, consumer health.

The organic movement may have started in Europe, but the popularity of organic products is widespread throughout the U.S. A 2014 poll found that 45% of Americans actively seek out organic options when purchasing food.[5] Additionally, a 2016 poll found that 68% of U.S. adults had purchased organic food within the previous month, and that 40% of that same group said most of the food they ate was organic.[6] The consuming public prefers these products at the register even though, on average, organic products are 47% more expensive than their conventional counterparts.[7] USDA organic certification can not only increase the price one can charge for their crop but can also increase demand, yet why are consumers willing to pay this premium? A study found that three main factors positively influence consumers to buy organic food: health, consumers bought organic food as an investment in positive health outcomes; availability, as organic products were carried at more ‘conventional’ supermarkets the likelihood of a consumer buying organic grew; and education, consumers with higher education were more likely to buy organic food.[8] Also, people studied were more satisfied after eating organic food, even though they thought it was more expensive.[9] Similarly, another study surveying research in the area found that the main factor driving organic consumers was health benefits followed by taste, environmental concerns, food safety, animal welfare, and a variety of other lesser factors.[10]

Image: U.S. adult produce purchasing habits Source: Pew Research CenterImage: U.S. adult produce purchasing habits Source: Pew Research Center

Many consumers pay a premium for food certified as organic due to health concerns, yet there is uncertainty among the scientific community as to the health benefits of organic food when compared to food produced through ‘traditional’ methods.[11] A review of 12 health studies found that a majority of this research had “no evidence of differences in nutrition-related health outcomes that result from exposure to organic or conventionally produced foodstuffs,” and the study concluded that there was a lack of evidence to substantiate any finding that there was a nutritional-benefit from organically produced food products.[12] However, other studies testing organic crops that also use less pesticides (something not true of all organic production) have found higher nutrient levels, which scientists suspect is linked to the lower pesticide use.[13] Even if there is scientific controversy over whether there are health benefits associated with organic food, a majority of Americans believe that organic crops provide some health benefits that other conventional food products do not.[14]

However, some groups argue that continued organic growth as a proportion of food production is not sustainable for the environment. With rising population and a subsequent need for more food, organic growing may require too much acreage. The standards set by the USDA require certain practices that are inefficient, and that loss of efficiency may prove fatal to global food systems, especially given the decline in arable land.[15] However, as the world continues to battle growing starvation, organic production may become less and less justifiable.

Image: Trends in organic food sales Source: USDAImage: Trends in organic food sales Source: USDA

Even in this age of hyper-partisanship, organic food regulation has somehow maintained bipartisan support. The most recent, bipartisan attempt at a Farm Bill included increased funding for organic oversight and research.[16] This bipartisan support likely stems from a diversified set of interest groups involved in organic food production with overlapping agendas. For example, various farmers, typically conservative leaning segment of the population, have invested large amounts of money and land into the USDA’s organic guidelines, and more left-leaning groups have traditionally advocated for organic growing methods as opposed to traditional, industrial agriculture. Unlike the hotly contested issue of genetically modified labeling, organic food certification has been able to remain out of partisan warfare.

However, consumer demand for organic products will likely slow in growth or decline in the coming decade if problems of inequality continue to proliferate. Increased price for organics can only be primarily justified by public belief in health benefits for so long. If prices of organic products continue to rise with inflation and stay at about 47% higher than traditional counterparts, then it may be quite tenuous for most Americans to choose an organic option given slow wage growth. Still, the OFPA has done far more than change farming practices. Many Americans now think about food, health and how they spend their money differently thanks in part due to organic regulation.

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  • The views expressed on the Student Blog are the author’s opinions and don’t necessarily represent the Penn Wharton Public Policy Initiative’s strategies, recommendations, or opinions.

References:

  [1]https://www.ams.usda.gov/grades-standards/organic-standards

  [2]http://usda.mannlib.cornell.edu/usda/current/OrganicProduction/OrganicProduction-09-20-2017_correction.pdf

  [3]https://ota.com/news/press-releases/20201

  [4]https://www.agcensus.usda.gov/Publications/2012/Full_Report/Volume_1,_Chapter_1_US/usv1.pdf

  [5]https://news.gallup.com/poll/174524/forty-five-percent-americans-seek-organic-foods.aspx

  [6]http://www.pewinternet.org/2016/12/01/americans-views-about-and-consumption-of-organic-foods/

  [7]https://www.consumerreports.org/cro/news/2015/03/cost-of-organic-food/index.htm

  [8]https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2399126

  [9]https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2399126

  [10]https://onlinelibrary.wiley.com/doi/full/10.1002/cb.210

  [11]https://www.ncbi.nlm.nih.gov/pubmed/20463045

  [12]https://www.ncbi.nlm.nih.gov/pubmed/20463045

  [13]https://www.ucdavis.edu/news/organic-and-sustainable-foods-have-more-polyphenolics-linked-health-benefits

  [14] http://www.pewinternet.org/2016/12/01/the-new-food-fights/

  [15]http://www.aei.org/publication/organic-illusions/

  [16]https://www.foodbusinessnews.net/articles/12086-senate-farm-bill-draws-praise-for-risk-management-organic-programs

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RESOURCE SPOTLIGHT:

  • <h3>National Bureau of Economic Research (Public Use Data Archive)</h3><p><img width="180" height="43" alt="" src="/live/image/gid/4/width/180/height/43/478_nber.rev.1407530465.jpg" class="lw_image lw_image478 lw_align_right" data-max-w="329" data-max-h="79"/>Founded in 1920, the <strong>National Bureau of Economic Research</strong> is a private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works. The NBER is committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community.</p><p> Quick Link to <strong>Public Use Data Archive</strong>: <a href="http://www.nber.org/data/" target="_blank">http://www.nber.org/data/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Reserve Economic Data (FRED®)</h3><p><strong><img width="180" height="79" alt="" src="/live/image/gid/4/width/180/height/79/481_fred-logo.rev.1407788243.jpg" class="lw_image lw_image481 lw_align_right" data-max-w="222" data-max-h="97"/>An online database consisting of more than 72,000 economic data time series from 54 national, international, public, and private sources.</strong> FRED®, created and maintained by Research Department at the Federal Reserve Bank of St. Louis, goes far beyond simply providing data: It combines data with a powerful mix of tools that help the user understand, interact with, display, and disseminate the data.</p><p> Quick link to data page: <a href="http://research.stlouisfed.org/fred2/tags/series" target="_blank">http://research.stlouisfed.org/fred2/tags/series</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>MapStats</h3><p> A feature of FedStats, MapStats allows users to search for <strong>state, county, city, congressional district, or Federal judicial district data</strong> (demographic, economic, and geographic).</p><p> Quick link: <a href="http://www.fedstats.gov/mapstats/" target="_blank">http://www.fedstats.gov/mapstats/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>USDA Nutrition Assistance Data</h3><p><img width="180" height="124" alt="" src="/live/image/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg" class="lw_image lw_image485 lw_align_right" srcset="/live/image/scale/2x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 2x, /live/image/scale/3x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 3x" data-max-w="1233" data-max-h="850"/>Data and research regarding the following <strong>USDA Nutrition Assistance</strong> programs are available through this site:</p><ul><li>Supplemental Nutrition Assistance Program (SNAP) </li><li>Food Distribution Programs </li><li>School Meals </li><li>Women, Infants and Children </li></ul><p> Quick link: <a href="http://www.fns.usda.gov/data-and-statistics" target="_blank">http://www.fns.usda.gov/data-and-statistics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Aviation Administration: Accident & Incident Data</h3><p><img width="100" height="100" alt="" src="/live/image/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg" class="lw_image lw_image80 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 2x, /live/image/scale/3x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 3x" data-max-w="550" data-max-h="550"/>The NTSB issues an accident report following each investigation. These reports are available online for reports issued since 1996, with older reports coming online soon. The reports listing is sortable by the event date, report date, city, and state.</p><p> Quick link: <a href="http://www.faa.gov/data_research/accident_incident/" target="_blank">http://www.faa.gov/data_research/accident_incident/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>NOAA National Climatic Data Center</h3><p><img width="200" height="198" alt="" src="/live/image/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg" class="lw_image lw_image483 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 3x" data-max-w="954" data-max-h="945"/>NOAA’s National Climatic Data Center (NCDC) is responsible for preserving, monitoring, assessing, and providing public access to the Nation’s treasure of <strong>climate and historical weather data and information</strong>.</p><p> Quick link to home page: <a href="http://www.ncdc.noaa.gov/" target="_blank">http://www.ncdc.noaa.gov/</a></p><p> Quick link to NCDC’s climate and weather datasets, products, and various web pages and resources: <a href="http://www.ncdc.noaa.gov/data-access/quick-links" target="_blank">http://www.ncdc.noaa.gov/data-access/quick-links</a></p><p> Quick link to Text & Map Search: <a href="http://www.ncdc.noaa.gov/cdo-web/" target="_blank">http://www.ncdc.noaa.gov/cdo-web/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Center for Education Statistics</h3><p><strong><img width="400" height="80" alt="" src="/live/image/gid/4/width/400/height/80/479_nces.rev.1407787656.jpg" class="lw_image lw_image479 lw_align_right" data-max-w="400" data-max-h="80"/>The National Center for Education Statistics (NCES) is the primary federal entity for collecting and analyzing data related to education in the U.S. and other nations.</strong> NCES is located within the U.S. Department of Education and the Institute of Education Sciences. NCES has an extensive Statistical Standards Program that consults and advises on methodological and statistical aspects involved in the design, collection, and analysis of data collections in the Center. To learn more about the NCES, <a href="http://nces.ed.gov/about/" target="_blank">click here</a>.</p><p> Quick link to NCES Data Tools: <a href="http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4" target="_blank">http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4</a></p><p> Quick link to Quick Tables and Figures: <a href="http://nces.ed.gov/quicktables/" target="_blank">http://nces.ed.gov/quicktables/</a></p><p> Quick link to NCES Fast Facts (Note: The primary purpose of the Fast Facts website is to provide users with concise information on a range of educational issues, from early childhood to adult learning.): <a href="http://nces.ed.gov/fastfacts/" target="_blank">http://nces.ed.gov/fastfacts/#</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Internal Revenue Service: Tax Statistics</h3><p><img width="155" height="200" alt="" src="/live/image/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg" class="lw_image lw_image486 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg 2x" data-max-w="463" data-max-h="596"/>Find statistics on business tax, individual tax, charitable and exempt organizations, IRS operations and budget, and income (SOI), as well as statistics by form, products, publications, papers, and other IRS data.</p><p> Quick link to <strong>Tax Statistics, where you will find a wide range of tables, articles, and data</strong> that describe and measure elements of the U.S. tax system: <a href="http://www.irs.gov/uac/Tax-Stats-2" target="_blank">http://www.irs.gov/uac/Tax-Stats-2</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Congressional Budget Office</h3><p><img width="180" height="180" alt="" src="/live/image/gid/4/width/180/height/180/380_cbo-logo.rev.1406822035.jpg" class="lw_image lw_image380 lw_align_right" data-max-w="180" data-max-h="180"/>Since its founding in 1974, the Congressional Budget Office (CBO) has produced independent analyses of budgetary and economic issues to support the Congressional budget process.</p><p> The agency is strictly nonpartisan and conducts objective, impartial analysis, which is evident in each of the dozens of reports and hundreds of cost estimates that its economists and policy analysts produce each year. CBO does not make policy recommendations, and each report and cost estimate discloses the agency’s assumptions and methodologies. <strong>CBO provides budgetary and economic information in a variety of ways and at various points in the legislative process.</strong> Products include baseline budget projections and economic forecasts, analysis of the President’s budget, cost estimates, analysis of federal mandates, working papers, and more.</p><p> Quick link to Products page: <a href="http://www.cbo.gov/about/our-products" target="_blank">http://www.cbo.gov/about/our-products</a></p><p> Quick link to Topics: <a href="http://www.cbo.gov/topics" target="_blank">http://www.cbo.gov/topics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>HUD State of the Cities Data Systems</h3><p><strong><img width="200" height="200" alt="" src="/live/image/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg" class="lw_image lw_image482 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 3x" data-max-w="612" data-max-h="613"/>The SOCDS provides data for individual Metropolitan Areas, Central Cities, and Suburbs.</strong> It is a portal for non-national data made available through a number of outside institutions (e.g. Census, BLS, FBI and others).</p><p> Quick link: <a href="http://www.huduser.org/portal/datasets/socds.html" target="_blank">http://www.huduser.org/portal/datasets/socds.html</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The World Bank Data (U.S.)</h3><p><img width="130" height="118" alt="" src="/live/image/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg" class="lw_image lw_image484 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 2x, /live/image/scale/3x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 3x" data-max-w="1406" data-max-h="1275"/>The <strong>World Bank</strong> provides World Development Indicators, Surveys, and data on Finances and Climate Change.</p><p> Quick link: <a href="http://data.worldbank.org/country/united-states" target="_blank">http://data.worldbank.org/country/united-states</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The Penn World Table</h3><p> The Penn World Table provides purchasing power parity and national income accounts converted to international prices for 189 countries/territories for some or all of the years 1950-2010.</p><p><a href="https://pwt.sas.upenn.edu/php_site/pwt71/pwt71_form.php" target="_blank">Quick link.</a> </p><p>See all <a href="/data-resources/">data and resources</a> »</p>