Healthy soil and sustainable growing

["TradingPostPaul" <tradingpost@riseup.net>]

What's wrong with this picture? Hint: it's from Business Week ... 

paul tradingpost@lobo.net
--------------------------

The Organic Myth 
Pastoral ideals are getting trampled as organic food goes mass market  
October 16, 2006
http://www.businessweek.com/magazine/content/06_42/b4005001.htm?chan=top+new
s_top+news+index_top+story   
     
Next time you're in the supermarket, stop and take a look at Stonyfield
Farm yogurt. With its contented cow and green fields, the yellow container
evokes a bucolic existence, telegraphing what we've come to expect from
organic food: pure, pesticide-free, locally produced ingredients grown on a
small family farm.

So it may come as a surprise that Stonyfield's organic farm is long gone.
Its main facility is a state-of-the-art industrial plant just off the
airport strip in Londonderry, N.H., where it handles milk from other farms.
And consider this: Sometime soon a portion of the milk used to make that
organic yogurt may be taken from a chemical-free cow in New Zealand,
powdered, and then shipped to the U.S. True, Stonyfield still cleaves to
its organic heritage. For Chairman and CEO Gary Hirshberg, though, shipping
milk powder 9,000 miles across the planet is the price you pay to conquer
the supermarket dairy aisle. "It would be great to get all of our food
within a 10-mile radius of our house," he says. "But once you're in
organic, you have to source globally."

Hirshberg's dilemma is that of the entire organic food business. Just as
mainstream consumers are growing hungry for untainted food that also
nourishes their social conscience, it is getting harder and harder to find
organic ingredients. There simply aren't enough organic cows in the U.S.,
never mind the organic grain to feed them, to go around. Nor are there
sufficient organic strawberries, sugar, or apple pulp -- some of the other
ingredients that go into the world's best-selling organic yogurt.

Now companies from Wal-Mart (WMT ) to General Mills (GIS ) to Kellogg (K )
are wading into the organic game, attracted by fat margins that
old-fashioned food purveyors can only dream of. What was once a cottage
industry of family farms has become Big Business, with all that that
implies, including pressure from Wall Street to scale up and boost profits.
Hirshberg himself is under the gun because he has sold an 85% stake in
Stonyfield to the French food giant Groupe Danone. To retain management
control, he has to keep Stonyfield growing at double-digit rates. Yet faced
with a supply crunch, he has drastically cut the percentage of organic
products in his line. He also has scaled back annual sales growth, from
almost 40% to 20%. "They're all mad at me," he says.

As food companies scramble to find enough organically grown ingredients,
they are inevitably forsaking the pastoral ethos that has defined the
organic lifestyle. For some companies, it means keeping thousands of
organic cows on industrial-scale feedlots. For others, the scarcity of
organic ingredients means looking as far afield as China, Sierra Leone, and
Brazil -- places where standards may be hard to enforce, workers' wages and
living conditions are a worry, and, say critics, increased farmland
sometimes comes at a cost to the environment.

Everyone agrees on the basic definition of organic: food grown without the
assistance of man-made chemicals. Four years ago, under pressure from
critics fretting that the term "organic" was being misused, the U.S.
Agriculture Dept. issued rules. To be certified as organic, companies must
eschew most pesticides, hormones, antibiotics, synthetic fertilizers,
bioengineering, and radiation. But for purists, the philosophy also
requires farmers to treat their people and livestock with respect and,
ideally, to sell small batches of what they produce locally so as to avoid
burning fossil fuels to transport them. The USDA rules don't fully address
these concerns.

Hence the organic paradox: The movement's adherents have succeeded beyond
their wildest dreams, but success has imperiled their ideals. It simply
isn't clear that organic food production can be replicated on a mass scale.
For Hirshberg, who set out to "change the way Kraft (KFT ), Monsanto (MON
), and everybody else does business," the movement is shedding its
innocence. "Organic is growing up."

Certainly, life has changed since 1983, when Hirshberg teamed up with a
back-to-the-land advocate named Samuel Kaymen to sell small batches of
full-fat plain organic yogurt. Kaymen had founded Stonyfield Farm to feed
his six kids and, as he puts it, "escape the dominant culture." Hirshberg,
then 29, had been devoted to the environment for years, stung by memories
of technicolor dyes streaming downriver from his father's New Hampshire
shoe factories. He wrote a book on how to build water-pumping windmills
and, between 1979 and 1983, ran the New Alchemy Institute, an
alternative-living research center on Cape Cod. He was a believer.

But producing yogurt amid the rudimentary conditions of the original
Stonyfield Farm was a recipe for nightmares, not nirvana. Meg, an organic
farmer who married Hirshberg in 1986, remembers the farm as cold and
crowded, with a road so perilous that suppliers often refused to come up.
"I call it the bad old days," she says. Adds her mother, Doris Cadoux, who
propped up the business for years: "Every time Gary would come to me for
money, Meg would call to say 'Mama, don't do it."'

Farming without insecticides, fertilizers, and other aids is tough.
Laborers often weed the fields by hand. Farmers control pests with
everything from sticky flypaper to aphid-munching ladybugs. Manure and soil
fertility must be carefully managed. Sick animals may take longer to get
well without a quick hit of antibiotics, although they're likely to be
healthier in the first place. Moreover, the yield per acre or per animal
often goes down, at least initially. Estimates for the decline from
switching to organic corn range up to 20%.

Organic farmers say they can ultimately exceed the yields of conventional
rivals through smarter soil management. But some believe organic farming,
if it is to stay true to its principles, would require vastly more land and
resources than is currently being used. Asks Alex Avery, a research
director at the Hudson Institute think tank: "How much Bambi habitat do you
want to plow down?"

IMPOSSIBLE STANDARD 
For a sense of why Big Business and organics often don't mix, it helps to
visit Jack and Anne Lazor of Butterworks Farm. The duo have been producing
organic yogurt in northeastern Vermont since 1975. Their 45 milking cows
are raised from birth and have names like Peaches and Moonlight. All of the
food for the cows -- and most of what the Lazors eat, too -- comes from the
farm, and Anne keeps their charges healthy with a mix of homeopathic
medicines and nutritional supplements. Butterworks produces a tiny 9,000
quarts of yogurt a week, and no one can pressure them to make more. Says
Jack: "I'd be happiest to sell everything within 10 miles of here."

But the Lazors also embody an ideal that's almost impossible for other food
producers to fulfill. For one thing, they have enough land to let their
modest-sized herd graze for food. Many of the country's 9 million-plus
dairy cows (of which fewer than 150,000 are organic) are on farms that will
never have access to that kind of pasture. After all, a cow can only walk
so far when it has to come back to be milked two or three times a day.

STEWARDS OF THE LAND 
When consumers shell out premiums of 50% or more to buy organic, they are
voting for the Butterworks ethic. They believe humans should be prudent
custodians not only of their own health but also of the land and animals
that share it. They prefer food produced through fair wages and family
farms, not poor workers and agribusiness. They are responding to tales of
caged chickens and confined cows that never touch a blade of grass; talk of
men losing fertility and girls becoming women at age nine because of extra
hormones in food. They read about pesticides seeping into the food supply
and genetically modified crops creeping across the landscape.

For Big Food, consumers' love affair with everything organic has seemed
like a gift from the gods. Food is generally a commoditized, sluggish
business, especially in basic supermarket staples. Sales of organic
groceries, on the other hand, have been surging by up to 20% in recent
years. Organic milk is so profitable -- with wholesale prices more than
double that of conventional milk -- that Lyle "Spud" Edwards of Westfield,
Vt., was able to halve his herd, to 25 cows, this summer and still make a
living, despite a 15% drop in yields since switching to organic four years
ago. "There's a lot more paperwork, but it's worth it," says Edwards, who
supplies milk to Stonyfield.

The food industry got a boost four years ago when the USDA issued its
organic standards. The "USDA Organic" label now appears on scores of
products, from chicken breasts to breakfast cereal. And you know a tipping
point is at hand when Wal-Mart Stores Inc. enters the game. The retailer
pledged this year to become a center of affordable "organics for everyone"
and has started by doubling its organic offerings at 374 stores nationwide.
"Everyone wants a piece of the pie," says George L. Siemon, CEO of Organic
Valley, the country's largest organic farm co- operative. "Kraft and
Wal-Mart are part of the community now, and we have to get used to it."

The corporate giants have turned a fringe food category into a $14 billion
business. They have brought wider distribution and marketing dollars. They
have imposed better quality controls on a sector once associated with
bug-infested, battered produce rotting in crates at hippie co-ops. Organic
products now account for 2.5% of all grocery spending (if additive-free
"natural" foods are included, the share jumps to about 10%). And demand
could soar if prices come down.

But success has brought home the problems of trying to feed the masses in
an industry where supplies can be volatile. Everyone from Wal-Mart to
Costco Wholesale Corp. (COST ) is feeling the pinch. Earlier this year,
Earthbound Farm, a California producer of organic salads, fruit, and
vegetables owned by Natural Selection Foods, cut off its sliced-apple
product to Costco because supply dried up -- even though Earthbound looked
as far afield as New Zealand. "The concept of running out of apples is
foreign to these people," says Earthbound co-founder Myra Goodman, whose
company recalled bagged spinach in the wake of the recent E. coli outbreak.
"When you're sourcing conventional produce, it's a matter of the best
product at the best price."

Inconsistency is a hallmark of organic food. Variations in animal diet,
local conditions, and preparation make food taste different from batch to
batch. But that's anathema to a modern food giant. Heinz, for one, had a
lot of trouble locating herbs and spices for its organic ketchup. "We're a
global company that has to deliver consistent standards," says Kristen
Clark, a group vice-president for marketing. The volatile supply also
forced Heinz to put dried or fresh organic herbs in its organic Classico
pasta sauce because it wasn't able to find the more convenient quick-frozen
variety. Even Wal-Mart, master of the modern food supply chain, is humbled
by the realities of going organic. As spokesperson Gail Lavielle says: "You
can't negotiate prices in a market like that."

While Americans may love the idea of natural food, they have come to rely
on the perks of agribusiness. Since the widespread use of synthetic
pesticides began, around the time of World War II, food producers have
reaped remarkable gains. Apples stay red and juicy for weeks. The average
harvested acre of farmland yields 200% more wheat than it did 70 years ago.
Over the past two decades chickens have grown 25% bigger in less time and
on less food. At the same time, the average cow produces 60% more milk,
thanks to innovations in breeding, nutrition, and synthetic hormones.

It's also worth remembering how inexpensive food is these days. Americans
shell out about 10% of their disposable income on food, about half what
they spent in the first part of the 20th century. Producing a budget-priced
cornucopia of organic food won't be easy.

Exhibit A: Gary Hirshberg's quest for organic milk. Dairy producers
estimate that demand for organic milk is at least twice the current
available supply. To quench this thirst, the U.S. would have to more than
double the number of organic cows -- those that eat only organic food -- to
280,000 over the next five years. That's a challenge, since the number of
dairy farms has shrunk to 60,000, from 334,000 in 1980, according to the
National Milk Producers Federation. And almost half the milk produced in
the U.S. comes from farms with more than 500 cows, something organic
advocates rarely support.

What to do? If you're Hirshberg, you weigh the pros and cons of importing
organic milk powder from New Zealand. Stonyfield already gets strawberries
from China, apple puree from Turkey, blueberries from Canada, and bananas
from Ecuador. It's the only way to keep the business growing. Besides,
Hirshberg argues, supporting a family farmer in Madagascar or reducing
chemical use in Costa Rica is just as important as doing the same at home.

Perhaps, but doing so risks a consumer backlash, especially when the
organic food is from China. So far there is little evidence that crops from
there are tainted or fraudulently labeled. Any food that bears the USDA
Organic label has to be accredited by an independent certifier. But tests
are few and far between. Moreover, many consumers don't trust food from a
country that continues to manufacture DDT and tolerates fakes in other
industries. Similar questions are being asked about much of the developing
world. Ronnie Cummins, national director of the nonprofit Organic Consumers
Assn., claims organic farms may contribute to the destruction of the Amazon
rain forest, although conventional farming remains the proven culprit.

Imported organics are a constant concern for food companies and
supermarkets. It's certainly on Steve Pimentel's mind. "Someone is going to
do something wrong," says Costco's assistant general merchandise manager.
"We want to make sure it's not us." To avoid nasty surprises, Costco makes
sure its own certifiers check that standards are met in China for the
organic peanuts and produce it imports. Over at Stonyfield, Hirshberg's
sister, Nancy, who is vice-president of natural resources, was so worried
about buying strawberries in northeastern China that she ordered a social
audit to check worker conditions. "If I didn't have to buy from there," she
says, "I wouldn't."

For many companies, the preferred option is staying home and adopting the
industrial scale of agribusiness. Naturally, giant factory farms make
purists recoil. Is an organic label appropriate for eggs produced in sheds
housing more than 100,000 hens that rarely see the light of day? Can a
chicken that's debeaked or allowed minimal access to the outdoors be deemed
organic? Would consumers be willing to pay twice as much for organic milk
if they thought the cows producing it spent most of their outdoor lives in
confined dirt lots?

ETHICAL CHALLENGES? 
Absolutely not, say critics such as Mark Kastel, director of the Organic
Integrity Project at the Cornucopia Institute, an advocacy group promoting
small family farms. "Organic consumers think they're supporting a different
kind of ethic," says Kastel, who last spring released a high-profile report
card labeling 11 producers as ethically challenged.

Kastel's report card included Horizon Organic Dairy, the No. 1 organic milk
brand in the U.S., and Aurora Organic Dairy, which makes private-label
products for the likes of Costco and Safeway Inc. Both dairies deny they
are ethically challenged. But the two do operate massive corporate farms.
Horizon has 8,000 cows in the Idaho desert. There, the animals consume such
feed as corn, barley, hay, and soybeans, as well as some grass from
pastureland. The company is currently reconfiguring its facility to allow
more grazing opportunities. And none of this breaks USDA rules. The agency
simply says animals must have "access to pasture." How much is not spelled
out. "It doesn't say [livestock] have to be out there, happy and feeding,
18 hours a day," says Barbara C. Robinson, who oversees the USDA's National
Organic Program.

But what gets people like Kastel fuming is the fact that big dairy farms
produce tons of pollution in the form of manure and methane, carbon
dioxide, and nitrous oxide -- gases blamed for warming the planet.
Referring to Horizon's Idaho farm, he adds: "This area is in perpetual
drought. You need to pump water constantly to grow pasture. That's not
organic."

Aurora and Horizon argue their operations are true to the organic spirit
and that big farms help bring organic food to the masses. Joe E. Scalzo,
president and CEO of Horizon's owner, WhiteWave, which is owned by Dean
Foods Co., says: "You need the 12-cow farms in Vermont -- and the 4,000
milking cows in Idaho." Adds Clark Driftmier, a spokesman for Aurora, which
manages 8,400 dairy cows on two farms in Colorado and Texas: "We're in a
contentious period with organics right now."

At the USDA, Robinson is grappling with the same imponderables. In her mind
the controversy is more about scale than animal treatment. "The real issue
is a fear of large corporations," she says. Robinson expects the USDA to
tighten pasture rules in the coming months in hopes of moving closer to the
spirit of the organic philosophy. "As programs go," she says, "this is just
a toddler. New issues keep coming up."

Few people seem more hemmed in by the contradictions than Gary Hirshberg.
Perhaps more than anyone, he has acted as the industry's philosopher king,
lobbying governments, proselytizing consumers, helping farmers switch to
organic, and giving 10% of profits to environmental causes. Yet he sold
most of Stonyfield Farm to a $17 billion French corporation.

He did so partly to let his original investors cash out, partly to bring
organic food to the masses. But inevitably, as Stonyfield has morphed from
local outfit to national brand, some of the original tenets have fallen by
the wayside. Once Danone bought a stake, Stonyfield founder Samuel Kaymen
moved on. "I never felt comfortable with the scale or dealing with people
so far away," he recalls, although he says Hirshberg has so far managed to
uphold the company's original principles.

The hard part may be continuing to do so with Danone looking over his
shoulder. Hirshberg retains board control but says his "autonomy and
independence and employment are contingent on delivering minimum growth and
profitability." Danone Chairman and CEO Franck Riboud expresses admiration
for the man he considers to be Danone's organic guru, but adds: "Gary
respects that I have to answer to shareholders."

The compromises that Hirshberg is willing to make say a lot about where the
organic business is headed. "Our kids don't have time for us to sit on our
high horses and say we're not going to do this because it's not
ecologically perfect," says Hirshberg. "The only way to influence the
powerful forces in this industry is to become a powerful force." And he's
willing to do that, even if it means playing by a new set of rules.

By Diane Brady