How Organic Agriculture Boosts Local Economies


New research links county-level economic health to agriculture, and finds that organic food and crop production, along with the business activities accompanying organic agriculture, creates real and long-lasting regional economic opportunities. The recently completed White Paper, U.S. Organic Hotspots and their Benefit to Local Economies, was prepared for the Organic Trade Association (OTA) by Penn State Agricultural Economist Edward Jaenicke, Ph.D. It finds organic hotspots—counties with high levels of organic agricultural activity whose neighboring counties also have high organic activity—boost median household incomes by an average of $2,000 and reduce poverty levels by an average of 1.3 percentage points. The research highlights the success of organic agriculture and demonstrates, yet again, that organic agriculture can and must feed the world.

“This research systematically investigates the economic impacts of organic agriculture,” noted Dr. Jaenicke. “Its important findings show that organic contributes to the economic health of local economies. The growing market interest in organic agriculture can be leveraged into effective policy for economic development.”

The White Paper summarizes and discusses three research papers that investigate organic agriculture hotspots in the U.S. and systematically assesses the impact of organic agriculture on local economies. It identifies 225 counties across the United States as organic hotspots, then looks at how these organic hotspots impact two key county-level economic indicators: the county poverty rate and median household income. Organic activity was found to have a greater beneficial economic effect than that of general agriculture activity, such as chemically-intensive, conventional agriculture, and even more of a positive impact than some major anti-poverty programs at the county level.

According to the report, organic hotspots are diverse and represent the various kinds of organic agricultural activity and accompanying businesses: crop production, livestock production, organic processors. Organic hotspots are found throughout the country, but specific examples identified in the report include Monterey County in California, Huron County in Michigan, Clayton County in Iowa, and Carroll County in Maryland.

The report also identifies what factors create organic hotspots, how the effect of organic agricultural hotspots compare with those of general agriculture (combined organic and conventional agriculture). Specifically, the research finds that:

  • Counties within organic hotspots have lower poverty rates and higher median annual household incomes. On average, county poverty rates drop by 1.3 percentage points, and median income rises by over $2,000 in organic hotspots. The same beneficial results are not found for general agricultural hotspots. Also, organic hotspots were found to have a greater positive impact at the county level than such major anti-poverty programs as the Supplemental Nutrition Assistant Program and the Special Supplemental Nutrition Program for Women, Infants, and Children.
  • Outreach and knowledge transfer are critical in creating organic hotspots. The prevalence of outreach services by organic certifiers is found to play one of the strongest roles in organic hotspot formation. Also, whether a certifier is government-sponsored, by a state department of agriculture for example, is another key factor in enabling organic hotspots.
  • Organic agriculture can be used as an economic development tool. Policymakers at all levels—local, state and national—have a proven economic reason to support organic agriculture and to create more economy-stimulating organic hotspots.

Additionally, the report recommends specific policies to foster more organic economic hotspots throughout the nation as a result of the findings:

  • Promote organic agriculture at the federal, state and local level.
  • Focus on rural development, organic transition, capital structures and barriers to investment.
  • Expand outreach efforts and facilitate network effects.
  • Target specific geographic areas for development.
  • Build broader coalitions to help promote organic agriculture.

“We know that organic agriculture benefits our health and our environment,” said Laura Batcha, CEO and Executive Director of OTA. “This significant research shows organic can also benefit our livelihoods and help secure our financial future.”

“Organic agriculture can be used as an effective economic development tool, especially in our rural areas,” said Ms. Batcha. “The findings of this research show organic certifiers and the transfer of knowledge and information play a critical role in developing organic. And it provides policymakers with an economic and sound reason to support organic agriculture and to create more economy-stimulating organic hotspots throughout the country.”

Organic is one of the fastest-growing sectors of the U.S. food industry. Organic food sales in 2015 jumped by 11 percent to almost $40 billion, far outstripping the 3 percent growth rate for the overall food market. Organic crops command a significant price premium over conventionally grown crops. As a result, interest in organic at the production level has grown as the demand for organic has risen. More farmers are transitioning to organic production, more organic businesses are sprouting.

Many studies show that organic food is not only better for the economy, but for human health and the environment, and in fact, a study published earlier this year by researchers at Washington State University deemed organic agriculture essential to a sustainable food system. Other studies that have looked at organic produce have found better nutritional profiles. A study published in February found that organic dairy and meat were higher in essential nutrients. A similar study, also found that organic farmers who let their cows graze as nature intended are producing better quality milk, with significantly higher beneficial fatty acids, antioxidants and vitamins than their conventional counterparts.

Additionally, a ten-year University of California study, which compared organic tomatoes with those chemically grown, found that they have almost double the quantity of disease-fighting antioxidants called flavonoids. A comprehensive review of 97 published studies comparing the nutritional quality of organic and conventional foods show that organic plant-based foods contain higher levels of eight of 11 nutrients, including significantly greater concentrations of the health-promoting polyphenols and antioxidants. Also of note, studies find that consumers are exposed to elevated levels of pesticides from conventionally grown food. Organic foods have been shown to reduce dietary pesticide exposure.

Beyond Pesticides supports organic agriculture as effecting good land stewardship, and is working to strengthen organic farming systems by encouraging biodiversity and holistic management practices, and upholding the spirit and values on which the organic law was founded. It is impossible to discuss the ecological and economic benefits of organic agriculture without discussing the devastating effects of conventional agriculture. Good organic practices work to build the soil and maintain an ecological balance that makes chemical fertilizers and synthetic pesticides unnecessary.

Underpinning the success of organic in the U.S. are small-scale producers who focus on fostering biodiversity, limiting external inputs, improving soil health, sequestering carbon, and using integrated holistic approaches to managing pests, weeds, and disease.

Organic agriculture has been proven time again to be equally viable for both farmers and consumers while also providing significant health and environmental effects over conventional industrial agriculture. Meanwhile, OTA has tried to thwart efforts by Beyond Pesticides, Center for Food Safety, , a Center for Environmental Health, certifiers, and other farmer and consumer organizations to protect the integrity of the organic label under the Organic Foods Production Act (OFPA).

OTA has not stood up to USDA’s efforts to end implementation of the sunset provision of OFPA, a provision that requires the rigorous reevaluation of synthetic materials allowed in organic production. In addition, OTA has opposed public interest efforts to ensure that compost and other farm inputs are protected from contamination through a public process to establish acceptable standards, rather than allow USDA to issue standards that are not vetted. Visit Beyond Pesticides’ Keep Organic Strong webpage to learn more about organic and what you can do to support its growth. See also Save Our Organic.

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