Organic consumerism

First a parable: “The Highwayman said to the traveller: pray, sir, leave your watch and money in my hands; or else, by god, you will be robbed.” That’s the kind of deal that esoteric merchandisers use to rip us off - selling us things like homeopathy, food-miles, carbon footprints or organic food. You cannot argue with these latter-day environmentalists - but the market can teach them a lesson.

One general rule of markets and consumers reads: producers who actually provide what the consumers want prosper, but others who attempt to supply what suits themselves do not. Yet the surging demand for esoteric consumer products such as homeopathy and a host of alternative quack treatments, as well as organic produce, seems to prove the opposite. They are essentially producer agendas imposed on consumers.

So is this just the exception to the rule or is it becoming the new rule?

We see a similar sort of market distortion with the rejecting of nuclear electricity or genetically modified food, given that both are now shown to be safe and in the best interests of consumers.

On the face of it one might think the rules about informed choice are being undermined by dodgy science and ideological movements - time-honoured rules alongside price and quality comparison in a competitive free market economy. Sure, market shares of esoteric products are soaring globally and thanks to favourable media coverage some have recently gone mainstream. Does that mean that the optimism about well informed consumers making smart choices is misplaced?

Given the murky record of health and other benefits of these merchandise, do we have to conclude that people under the influence of mass media are not able to look after themselves properly? I don’t think so.

Exploding the organic food market

Let’s examine this with organic food. Why are large numbers of people so fond of shopping “organic”, so much so that all major supermarkets have now filled their shelves with it?

The market was worth about US$40 billion in 2006 and is expected to keep growing. The founder of organic farming, Rudolf Steiner (1861-1925), was an Austrian, self-declared philosopher who, only in his last days, gave lectures on biodynamic agriculture to a group of German farmers in Wroclaw.

Ever since Steiner established this new branch of agriculture, biodynamic farmers claim that their crop rotations, use of manure instead of fertilisers, and avoidance of pesticides, protect the environment and result in healthier food. As is the case with most esoteric creeds, Steiner’s rules were never changed and remain the orthodoxy of organic farming to this day.

How is it possible that this anti-modern and anti-urban ideology could conquer the world food market and the big cities to boot? Well, the answer is that exactly the opposite is actually happening. Lady Balfour, herself a passionate organic farmer in England, stated in 1977 “ironically, organic farmers may have sown the seeds for their own destruction … It’s as simple as that: productivity versus permanence. There is no room for both.”

Standardisation opened the door for the corporate entrance into the organic market while competition imposed on producers the pressure of costs. Today, the largest food corporations in the world own most of the organic industry’s leading labels, which are distributed by the world’s largest food retailers.

Cunning new players are using the brand “organic” merely to detect price-insensitive consumers among their customers and to sell them the heavily overprized stuff as long as possible.

That’s all that is left, finally proving once more: you can’t fool the market with dodgy products. Only customers can fool themselves or can be scared into buying useless stuff.

Competing genetically modified food

This happens frequently, with biased government regulations under the label of “consumer protection” from supposedly harmful things such as GM food. Often lobby groups who push to regulate GM foods are also beneficiaries because they have stakes in the “alternatives”: organic is aiming to supplant GM food.

However, the market constantly outweighs and undoes all this lobbying. It has already happened that me-too labels have swamped the organic market. And, at the supply side of the market, human nature does the rest. For instance the organic requirements for mechanical rather than chemical weed extraction are not only onerous, but are costly, and increase the “carbon footprint” of organic food - if we for a moment assume that such thing is feasible. This means producers of organic food tend to drop all these onerous and costly stuff. It is, for example, well known that organic farmers have resumed the use of some brands of pesticides most of them herbal but others chemical.

Organic brand void

The true believers are now competing with the big retailers, and indicating their adherence to the traditional regime of biodynamics on their labels. Yet since true believers have the habit of forming ideological factions, competition has descended into “label wars”. The effect is confusion and diminishing consumer confidence.

Another new invention of the true believers is - fashionable in times of carbon worries - “food miles” which are intended to favour local produce. In fact this has divided the producers of organic food, for it is thwarting market penetration and their export business. This is just one of the unintended consequences of “food miles” policies.

In addition, the message is finally trickling through that the higher price for organic food is not justified by better quality. For example, free range eggs don’t always taste different from regular and cheaper eggs.

So if the superior quality of organic food has been endlessly diluted, leaving its produce as ordinary as any other, the argument for consumer choice is pointless. And even if it isn’t a pointless argument the price signals emanating from organic produce should be sufficient to guide consumers.

The huge demand that has been created by the big companies could never have been matched by the produce of traditional biodynamic farming. How is it possible to replace or emulate the venerable principles of Steiner? Well the market has done its part but science has to do the rest.

Health and environmental benefits?

In 2006 a comprehensive review of 400 scientific papers by Faidon Magkos and colleagues could not detect any evidence that organic food was healthier than conventional food.

Abraham Lincoln’s mother famously died after drinking milk from a free-range cow that had grazed on a snakeroot plant.

With regard to the hazards pesticides supposedly pose to our health, the American toxicologist Bruce Ames has stated that “a single cup of coffee contains more natural carcinogens than a year’s worth of the pesticide residues eaten on fruit and vegetables”. Anyway, traces of pesticide will still be detected in those states which have effective food quality control and protections for consumers.

All the other beneficial myths regarding environmental protection or sustainability and even conservationism have not withstood scientific scrutiny.

Canadian agronomist Vaclav Smil has shown that it is only thanks to the artificial nitrogen fertilisers that we have today that about 60 per cent of the world population are fed properly. And the inventor of high-yield plant breeding, Norman E. Borlaug, argues organic farmers could only feed the world if we all became vegetarians.

Producer or consumer-driven?

All this has not prevented the European Union’s 1992 Common Agricultural Policy (CAP) reform, which favoured organic farming by setting financial incentives.

Another disturbing example of government intervention is reported from the Netherlands. In order to shore up demand, organic producers are encouraged by the government to form marketing co-operatives that set targets and form supply chains. The ultimate goal is of course to generate a more steady flow of income for producers. The program is supposed to replace traditional farm subsidies for individual farmers.

This is only one of many examples indicating that organic food is often producer-driven and prone to change the behaviour of consumers. The original organic movement was always highly political and mostly along those lines successful - not primarily through markets.

This has changed, of course, with the entrance into the market of the big retailers. It was only then that the organic market became much more consumer driven.

But the last laugh belongs to Adam Smith, because he provided the explanation of how mutual self-interest and choice, for millions of consumers, have diluted the organic ideology, eventually shifting competition from quality to price.

Do we have to worry about advocating consumer choices elsewhere, say in health care, which is equally loaded with esoteric produce. No, because we can expect any esoteric produce or service leaving its niche and going mainstream, will be purged by the market of any esoteric content.

Challenge to our academic institutions

Organic farmers and their customers have also pioneered direct relationships with consumers because biodynamics in some regards is a proselytising church and well known for aggressive campaigning.

For instance, it has been reported that biodynamic farmers are rejecting division of labour and increasingly questioning landownership or private property rights. Whereas other methods of agriculture originate from new research (such as no-till and integrated agriculture) the organic movement was always a faith-based grass roots affair with only marginal relations to agriculture research. After all even the proponents of biodynamics describe their underlying concept as “spiritual”. Yet if we look at their “science” it soon becomes obvious that spiritual means actually self-referential.

This is not to deny that these folks have already changed part of our academic institutions. Biodynamics, homeopathy and many other esoteric belief systems have penetrated academia and became accepted in our universities. Their success has already weakened the power of our academic credentials. Triggered by the demand for esoteric acceptance through fabricated evidence, a new type of systemic research has emerged. Framed within a social context this “research” necessarily involves special interests and reflects a new set of anti-industrial values or even different standards of rationality and meaning.

Christine Watson from Scottish Agricultural College argues that the general principle of scientific objectivity should be replaced by different criteria used only in individual research disciplines. Therefore organic farming remains inherently ideological and the majority of literature on this subject is written from a strongly committed point of view. So on the market of ideas in academia and elsewhere competition between organic and enlightened concepts of agriculture and food goes on.