A study published Monday in Proceedings of the National Academy of Sciences found that the premium farmers can charge for organic products make it more profitable than conventional farming.
Researchers David Crowder and John Reganold from Washington State University conducted a meta-analysis of 44 studies on organic agriculture, which included 55 crops grown in 14 countries across five continents. They found that when farmers did not charge a premium for organic food, it was significantly less profitable than conventional agriculture. But when they did charge a premium, organic agriculture was 22 to 35 percent more profitable.
Crowder, lead author and assistant professor of entomology at Washington State University, says he and Reganold became interested in the topic after reading a study several years ago that indicated that organic farming produces a lower crop yield than conventional agriculture.
“We knew going into this that organic agriculture is less productive in terms of crop yields than conventional agriculture,” Crowder says. “But when [Reganold] and I really started doing this, we said, ‘Yields are really just one component of financial sustainability.’”
Still, Crowder says, he and Reganold were surprised by how much more profitable organic agriculture turned out to be. In order to match conventional profits, organic farmers would need to charge premiums of 5 to 7 percent. But in their study, Crowder and Reganold found that organic farmers were charging much more, a 29 to 32 percent premium, boosting profitability.
These bigger profits are good news for conventional farmers who are thinking of switching to organic agriculture. According to Crowder, making the transition from conventional to organic is a long and financially risky process.
There’s a “period of time where you have to document that the land was managed according to these principles of organic farming,” Crowder said. “During that time, you’re not allowed to sell your products as organic, so you don’t get those price premiums.”
In the end, having a larger profit to look forward to can make the process worth it for farmers to make the switch.
Currently, only about one percent of global agricultural land is dedicated to organic crops, so there’s room for expansion, according to the authors. And since the actual premiums applied to organic products are so much higher than the premiums needed to break even, the authors conclude that there’s enough wiggle room for organic agriculture to continue expanding even if premiums decline in the future.
This is an important point, as some consumers may be unwilling to consistently pay high premiums for organic food in the future. “One of the criticisms [of organic agriculture] is because it is more expensive, maybe it’s not as accessible to some people as conventional products, and certainly that is something that needs to be considered as well,” Crowder says.
While he cautions that his study makes no attempt to forecast future prices, Crowder adds that if organic agriculture continues to grow, prices may start to fall.
A global expansion in organic agriculture could be good news for the environment in many ways. “There’s been other meta-analyses on organic agriculture that have shown that it enhances biodiversity of ecosystems and also helps promote the quality of nutrient cycling,” Crowder says. “And it’s also been shown, of course, to have lower pesticide residues.”
But he cautions that there are downsides to consider as well. Since organic agriculture produces lower crop yields than conventional agriculture, it requires more land to produce the same amount of food. This could be a problem when it comes to feeding the world’s rapidly growing population, which is expected to exceed 11 billion people by the end of the century.
“If organic were potentially to expand too rapidly maybe we wouldn’t be able to provide enough food products for our growing population,” Crowder said.
Since organic farming currently accounts for such a small percentage of global agricultural production, Crowder said its effect on food security is not an immediate concern. But, he says, “We’re not saying that everyone needs to become an organic farmer.”
There are plenty of other sustainable forms of food production that still need to be explored, he says, including integrated farming, conservation agriculture and mixed crop and livestock farming, each of which aim to reduce environmental impacts, enhance soil quality and keep nutrient cycles balanced.
And, he adds, there should be more studies of the issues raised by sustainable food production. Future studies on organic agriculture and other sustainable farming techniques should examine not just economics, but soil quality, biodiversity impacts and other aspects of food production in order to make better comparisons between different forms of agriculture, said Crowder.
“While our study shows that organic is more financially competitive, organic is not the only system in the world that’s sustainable,” Crowder says. “Overall I think we would say that we would just like to see agriculture move in the direction of increased sustainability.”