WMT goes orgo
The Nation - September 11, 2006
Mean or Green? by LIZA FEATHERSTONE
A laughing baby is covered in baby food. He’s making a gushy mess, as
babies do, but having a grand time. A magic word reassures us–before
we’ve had a chance to worry–that the food itself is wholesome. That
word, of course, is “organic.” More surprising, to many viewers of
this advertisement, will be the origin of this virtuous feast: Wal-
Mart. This summer, the mega-retailer launched a multimillion-dollar
ad campaign with an irresistible promise: “Introducing Organics at
the Wal-Mart price.” The commercial, which cannily plays to mothers’
worries about how pesticides and additives may affect their
children’s health, has run on network and cable TV; a print version
will appear in Parenting, Real Simple, Self and Cooking Light.
Already one of the nation’s leading organics vendors, Wal-Mart
announced this past spring its intention to enter the market far more
aggressively, to double its inventory and eventually offer organics
at only 10 percent above the price of conventional food.
Food bearing the government’s organic label can be, for low- and
middle-income shoppers, prohibitively expensive. That’s why, to many
observers, an “organic Wal-Mart” represents the democratization of
healthier–and better-tasting–food. Bob Scowcroft of the Organic
Farming Research Foundation argues, too, that environmentalists
should cheer Wal-Mart’s move, which will “turn hundreds of thousands
of acres” now being farmed conventionally to organic. “Think of the
tonnage of toxins and carcinogens which will disappear from the
earth,” he says. Scowcroft also points to research by the Swiss
government showing that organic farming can reduce global warming–
actually drawing nitrogen and carbon from the atmosphere. Like the
retailer’s push for fuel-efficient trucking, Wal-Mart’s entry into
the organic sector could turn out to be another example of how one
decision by this company–however market-driven–might do tremendous
good, simply because of its scale.
But while there are potential upsides to Wal-Mart’s move, it also
offers plenty of reasons to worry. To advocates of local economies,
like Judy Wicks, founder of Philadelphia’s White Dog Cafe and co-
chair of the Sustainable Business Network of Greater Philadelphia, an
organic Wal-Mart could do “more harm than good” because of the
changes it will bring about in the organic food industry. For
example, she cites Wal-Mart’s likely impact on many small farmers. In
other industries Wal-Mart’s aggressive competition has proved
devastating to small producers, from TV manufacturers to conventional
pork farmers. Though Wal-Mart, like Whole Foods, has agreed to source
some products locally, most family-scale organic farmers will not
supply big-box retailers directly. But many farmers will nonetheless
struggle to meet Wal-Mart’s price, in order to supply competing
retailers or simply hang on to customers. “Every farmer has to
compete because Wal-Mart is in every market,” explains Mark Kastel,
senior farm policy analyst at the Cornucopia Institute, a progressive
research group that advocates for small farmers. “From an economic
justice standpoint,” he adds, Wal-Mart’s plan to go more aggressively
organic is “a disaster” because it could prove ruinous for so many
family farms.
Some of the concern over small farmers may be sentimental, a remnant
of our national identity as a land of Jeffersonian citizen-yeomen.
And some detect, in the progressive reaction to Wal-Mart’s organic
ambitions, a whiff of countercultural cliqueishness. Gary Hirshberg,
president of Stonyfield Farm, which supplies organic yogurt to Wal-
Mart, is a former hippie who lived on an organic solar- and wind-
powered farm in the 1960s and ’70s. He dismisses Wal-Mart critics in
the organic movement as “activists who don’t want to think of organic
as a segment. They think of it as a lifestyle.” To Hirshberg, organic
Wal-Mart is a sign of the movement’s success, and those who don’t
like it are elitist purists, dedicated to their own marginality.
But there are unsentimental reasons to root for small farmers in this
drama. They are important to a progressive vision, partly because
they are more likely to be farming organic out of principle than a
large corporation is and thus more inclined not to cut corners and
compromise standards. People who live on their farms with their
families also have a compelling incentive to treat the land better.
Regina Beidler is a Mennonite who lives with her dairy-farmer
husband, Brent, and 8-year-old daughter, Erin, on 145 acres with
forty cows in Randolph Center, Vermont. Because the Beidlers farm
organically–which as defined by the Department of Agriculture means
no pesticides, petroleum-based fertilizers or sewage-sludge-based
fertilizers–Erin roams the farm freely (her job is to push the
button on the grain elevator). “It’s reassuring to know she isn’t
being exposed to those [toxic] substances,” says her mother. “It’s
much more child-friendly.”
Perhaps even more convincingly, as groups like the Organic Consumers
Association point out, transporting food long distances is a
staggering waste of energy and contributes to global warming.
According to research by Brian Halweil of the Worldwatch Institute,
our food typically travels 1,500 to 2,500 miles to reach our plate,
25 percent farther than in 1980. By the time we sit down to eat it, a
meal from a conventional grocery store has used four to seventeen
times more petroleum than a meal made from local ingredients. While
Wal-Mart officials have expressed concern about the “food miles”
issue, industry observers predict that most of Wal-Mart’s produce
will travel significant distances–Chile, Kenya and China are some of
the likeliest low-cost sources, according to Mary Hendrickson,
director of the University of Missouri’s Food Circles Networking
Project–raising confusing questions about whether organic Wal-Mart
will, on balance, hurt or help the planet. (Just to confuse the
environmental issue still more, Bob Scowcroft points out that
converting all those acres in China will clean up a lot of
groundwater there, which is obviously good for the Chinese.)
Most small organic farmers interviewed for this article believed that
in organics, as in many other sectors, Wal-Mart’s low prices would,
ultimately, mean lower standards. Stonyfield Farm’s Hirshberg, who
has had many discussions with Wal-Mart officials about the company’s
commitment to organics, says Wal-Mart does not plan to lower its
price by lowering standards; rather, he says, Wal-Mart is committed
to delivering the savings through efficiencies within its own system.
But Wal-Mart’s behavior as a major player in the organic dairy
industry has already suggested otherwise. It has also provided a
window on how the company will treat small organic farmers: just
fine, until they can no longer provide the lowest possible price.
When Wal-Mart began selling organic milk, one of its first suppliers
was Organic Valley, a cooperative of small farmers committed to
organic principles. Organic Valley farmers, including Regina Beidler,
were proud to be reaching Wal-Mart’s customers, people like
themselves who were struggling to make ends meet. But Organic Valley
faced a milk shortage, so when the co-op found itself outpriced by a
competitor, Horizon, which is owned by Dean Foods, the farmers
decided not to engage in a price war to stay on the Wal-Mart shelf
but to continue supplying the smaller food stores that had long
formed the backbone of their customer base. “We didn’t want to make
compromises,” says Organic Valley CEO and farmer George Siemon,
meaning that the farmers needed to get a fair price while maintaining
their product’s integrity.
Horizon, which controls 55 percent of the organic dairy market, meets
Wal-Mart’s low price in part by providing appalling conditions for
its cows. The Cornucopia Institute’s Mark Kastel, first reached for
this article as he was standing on Horizon’s 4,000-cow Idaho feedlot,
says the cows were “standing in 90-degree heat. No shade, no water.
These animals are living very short lives.” (To be considered
“organic,” animals–whether they are raised for meat, milk or eggs–
must be given some access to the outdoors. It is an irony of the
bureaucracy and inequity surrounding federal certification that by
following the letter if not the spirit of such regulations–that is,
for some of their lives Horizon’s cows are outside, even if they have
no room to move around–Horizon can call its milk organic, while many
small farmers, whose cows roam freely and munch on grass, cannot; in
many cases the farmers can’t afford the expense of the certification
process, or are put off by the paperwork.) The Organic Consumers
Association has urged shoppers to boycott Horizon. As savvy consumers
learn that sometimes the organic label tells an incomplete story,
Organic Valley stands to benefit. “Organic Valley has long been built
on the idea that family farming is a better way to give care to
animals and the land,” Siemon says diplomatically. “Consumers have a
hard time believing that large factory farms are really organic.”
To be sure, some family-scale organic farmers are benefiting from Wal-
Mart’s entry into the industry. Horizon buys at least half its milk
from hundreds of small-scale farmers, as even a dogged critic like
Kastel, author of a report called “Maintaining the Integrity of
Organic Milk,” acknowledges. And while Organic Valley isn’t supplying
Wal-Mart directly anymore, some Organic Valley milk does end up, much
transformed, in the Wal-Mart customer’s shopping cart: Stonyfield
Farm buys milk from the cooperative to make organic yogurt. Says
Stonyfield’s Hirshberg: “If you’re serious and sincere about family
farms, then your ultimate goal is to be in Wal-Mart, to be where food
is sold.”
Still, the Horizon/Wal-Mart alliance is potentially ominous for
family-scale dairy farmers, because, as Kastel points out, “there’s a
shortage today, but a year from now,” as producers rush to meet the
demands of big retailers like Wal-Mart, “you could have a surplus.” A
milk surplus could erode the organic premium and drive many small
organic dairy farmers into bankruptcy, just as it has wiped out many
of their conventional neighbors. Organic farmers, especially in the
Northeast, are already in a precarious situation because of high
fuel, grain and transportation costs. Travis Forgues, a second-
generation farmer in Alburg, Vermont, the state’s farthest-northwest
town, milks eighty grass-fed cows. A 33-year-old father of three
young children, he speaks for many small farmers when he says, “If we
didn’t have the organic market, my dad and I would have been out of
here long ago.” On the danger of a surplus fueled by demand from Wal-
Mart and other big-box stores, Forgues says, “Anyone who’s not
worried about what’s going to happen is crazy.”
With Wal-Mart on the scene, the strength of alternative and local
economic institutions will determine whether small farmers like
Forgues survive. With 871 farmers and growing, Organic Valley, the
largest organic farmers’ cooperative in the country, is still going
strong even without Wal-Mart’s business, maintaining farmer control
while still distributing on an impressive scale. (In the grocery
store on my corner in New York City, which is not a natural-food
store or a food co-op, Organic Valley milk is sold right next to
Horizon, and that’s the case in stores all over the country.) Farmers
agree that the co-op model is critical, helping them maintain some
power in an increasingly concentrated market. “The farmer has to be
in the driver’s seat,” says Forgues. Because of the organic milk
shortage and the Organic Valley cooperative, he continues to get a
fair price and has survived a difficult season far more easily than
most of his farmer neighbors. Of Wal-Mart, he says, “We’re not going
to cut our price so we can get onto that shelf. We have to make sure
farmers don’t get removed from the process, as happened in the
conventional food market.”
In a nod to the savvy consumer’s growing interest in nearby food,
Organic Valley is in the process of regionalizing many of its
operations, so that even though farmers in twenty-three states belong
to the co-op, customers in New England buying Organic Valley milk
will be, increasingly, buying from New England farmers. Farmers’
markets, which are growing in popularity, will also be critical
institutions in the organic Wal-Mart era. Jim Goodman, a Wisconsin
dairy farmer who tends 400 certified-organic acres with his brother,
sells to a local cheesemaker (as well as directly to customers
through mail order) but also relies on the weekly farmers’ market in
Madison, where he sells beef. He doesn’t think Wal-Mart is going to
affect his business. “People who come to the farmers’ market are
shopping there because they want to deal directly with the farmer,”
he says. “They want to meet the person who raised it, put it in their
hand. When they get home they can say, ‘This came from Mike, this
came from Jim.’ When you’re sitting down to dinner that makes so much
difference. I’d be surprised if they would go to Wal-Mart just
because it’s cheaper.”
For local food to become more than a niche market and begin to
transform our relationship to the environment, however, energy is
going to have to be a lot more expensive. For the majority of
Americans to have the incentive to buy local, the cost of food
transport would have to reflect its true environmental costs. Many
local food advocates speak–half with alarm, half wishfully–of “peak
oil,” the notion that we are running out of oil and will soon be
forced to grow our own food and cooperate with our neighbors. That
neo-primitivist scenario, if it ever comes to pass, is not going to
arrive nearly quickly enough to substitute for the necessary work of
persuading Americans to change our lifestyles, and advocating
policies that conserve energy.
“Consumers have to be more educated,” says Goodman. He thinks it’s
important to tell people why the prices are higher: Organic is not
overpriced; rather, conventional food is cheap because its costs are
passed along to the environment, small farmers and the health of
those who eat it. “If people can’t afford to buy organic,” he says,
“it’s because they are not paid enough in their jobs, and don’t have
health insurance.” That, Goodman insists, should be part of a broader
economic justice agenda: A living wage should allow a person to buy
responsibly grown, healthy food for her family. “With organic food,”
he explains, “there’s no hidden cost.” It’s also true that at
farmers’ markets and roadside stands, organic food is often cheaper
than in stores, because there’s no profiteering middleman.
Taking their case to the shopper, Organic Valley farmers like Travis
Forgues have been traveling the country on speaking tours. The
Organic Consumers Association is working to create a domestic fair-
trade group, whose label would assure the consumer that food was
produced in a way that was environmentally and socially responsible–
giving an edge to smaller, more conscientious producers over Dean
Foods. With the goal, too, of making local organic produce affordable
to the poorest Wal-Mart shoppers–those who will probably never be
able to afford a meal at the White Dog Cafe, which runs around $50–
the OCA is also working to broaden a program making it easier for
farmers’ markets to accept food stamps.
Many organic farmers are social activists and idealists who care
about the environment, animal rights and economic justice. But many
are also entrepreneurial–and that’s how they will survive the new
era of big-box organic. The challenge Wal-Mart poses, says Bob
Scowcroft, is “to get consumers who discover organics at the Wal-Mart
to get out of their car and to the farmers’ market.”