Misconception Number 38: Organic farmers can only survive because they get subsidies; the system is not fit for economic competitiveness. The organic sector is eating tax-payers money and it goes into the pockets of a few manipulative individuals.
Summary of Counter-Arguments:
Details of Counter-Arguments:
First, organic farmers are not the only ones who receive subsidies. In the US, most organic farmers and those transitioning to organic farming get no subsidies at all, or very few, while huge chemical-intensive corporate farms (10 percent of US farms) get the lion’s share (80 percent) of the nation’s $20 billion in crop subsidies every year. In France, an organic farmer receives, on average, 20 to 40 percent fewer subsidies than a conventional farmer. In 2003, the EU support for Organic Agriculture was 635 million euros, whereas the total Common Agricultural Policy budget amounted to 50 billion. This means that Organic Agriculture received 1.3 percent of the agricultural support, yet, at the time it represented 3.9 percent of the total EU agricultural area.
Second, there are many “externalities” (whether positive or negative) attached to a given mode of production. “Externalities” refer to all the impacts that the mode of production has on the society at large, beyond the production system itself. For instance, if a farmer pollutes the river with nitrates, this is a negative externality. The farmer itself will not be directly financially affected by the problem, so he does not integrate the negative impact of his activities into his decision of whether or not to spread fertilizers. Yet, the cost of “cleaning up” the water and de-polluting the environment will have to be paid by society at large, which means that tax-payers will end up paying for de-polluting one way or the other. This is a case of a negative externality of the production system. On the other hand, when a farmer decides to adopt production methods that will improve the visual appearance of the landscape (e.g., planting hedges and trees or maintaining small running streams on the farm) people around him will benefit, some of them even financially (e.g., through tourism in the region). Therefore, something that can have no significant financial benefit for the farmer himself can be valuable at the society level. This is a case of a positive externality. Logically, to attain the best possible societal outcome, the state or local administration has to provide incentives to encourage positive externalities and to discourage negative externalities. This is the essence of many subsidies that organic farmers receive. For instance, organic farmers can receive a subsidy for protecting biodiversity on their farm through the application of specific production methods (e.g., cutting grass late enough in the season to allow reproduction of endangered grass species or maintaining hedges to provide habitat for birds and other animals). In addition to subsidies that are bound to the implementation of specific measures, organic farmers sometimes receive general financial support from their government because it is now widely acknowledged that organic agriculture, as a holistic production system, brings many positive externalities to society and avoids many negative impacts, such as water pollution and depletion of soil fertility. Governments have therefore started to realize that by spending a bit of extra money on organic farmers, they will avoid many other costs (e.g., pollution-related costs) and will help rural development by keeping farmers on the land and keeping the rural landscape attractive to everyone.
Other forms of financial support granted to organic producers are distributed similarly to other public support schemes (i.e., based on criteria established by the competent authority). The accusation that the organic sector is controlled by a handful of manipulative people who gather enough power to influence authorities and ultimately put tax-payers’ money in their own pockets is unsubstantiated. The organic sector is one of the most egalitarian sectors within agriculture. The organic movement started through grassroots initiatives and gradually obtained official recognition. The private organic sector at the international level and at national levels is essentially organized on the democratic principle of one organization (or farm, depending on the level of organization) = one vote. Organic Agriculture is also regulated at the public level in most countries where it is significantly developed, and the democratically elected representatives of these countries are typically the ones deciding on such public regulations and programs, ideally with consultation with private organic sector representatives.
The impressive growth of the organic production sector in developing countries, where there is virtually no public support for Organic Agriculture, is proof of the economic viability of the system in these regions. Conversion to organic farming in such areas is driven by market forces, with demand for organic products experiencing sustained growth globally.
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