by Roger Blobaum · Inside Organics · March, 2007
A strong push is underway to line up new funding to enable the National Agricultural Statistical Service (NASS), the Agricultural Marketing Service (AMS), and other government agencies to collect and report much more organic price, acreage, sales, and other current data.
The main effort will press Congress to renew authorization of the 2002 Organic Production and Marketing Data Initiative this year when it puts a new farm bill together. Specific farm bill data proposals being pushed would provide AMS with funding for regular nationwide reporting of organic prices, enable the Economic Research Service (ERS) to continue and accelerate collection of market trends and other organic sector data, and support NASS organic sector surveys.
Along with this farm bill initiative is a new push for more organic data money in the U.S. Department of Agriculture budget for the fiscal year that starts October 1. The National Organic Coalition, the Sustainable Agriculture Coalition, and other organizations pressed appropriators last year to provide $1 million for AMS national price collection, another $1 million for NASS Census followup surveys, and an increase to $750,000 for ERS collection and analysis of organic economic data.
The Administration did not request any organic data funding a year ago and the continuing resolution that resulted from the recent USDA appropriations meltdown left the ERS at its year-earlier $500,000 level. NASS and AMS are again left with no direct data funding. Organic sector organizations are expected to begin working this month on data-related requests for at least $1 million for AMS, $1 million for NASS, and$750,000 for ERS for the coming fiscal year.
It has been generally assumed that strengthening organic data gathering and reporting benefits policymakers as well as farmers, retailers, processors, and others in the organic sector. Official price and other data also is needed by farmers applying for credit, documenting crop insurance and disaster program claims, and pursuing legal remedies involving organic crop damage from pesticide drift or GMO contamination. The goal is to make sure organic prices are paid for organic losses.
But the USDA appropriations bills passed by the House and left unfinished in the Senate, even if passed, would not have provided any additional data gathering and reporting money for this fiscal year. However they did include report language urging NASS, AMS, and ERS to expand and strengthen this work.
Report Language Supports Data Efforts
Both the House and Senate reports cited efforts by NASS to expand the number of organic questions to be included in the 2007 Census of Agriculture and to continue to carry out 2002 Census of Agriculture followup surveys. Both encouraged the agency “to take all necessary steps, including a followup survey, to collect in-depth coverage on acreage, yield, production, inventory, production practices, sales and expenses, marketing channels, and demographics of the organic industry.”
The Senate report language also encouraged AMS “to continue collection of organic price information.” The current AMS effort has no direct funding but is supported this year under provisions of an interagency memorandum of understanding. It provides AMS with $1.3 million in Risk Management Agency money for immediate expansion of the collection and reporting of grain and livestock price information.
The AMS market news effort appears to have strong support from growers and others in the fruit and vegetable sectors. Produce price data is gathered and reported by the AMS from the Boston and San Francisco wholesale markets. Other price information is gathered and made available online through the Organic Price Index, a file of prices for about 40 organic products maintained and made available free by the Rodale Institute, and by subscription through a private firm.
Farmers Challenge Price Data Push
Recent events suggest, however, that some organic farmers in the grain and livestock sectors are challenging the push to get USDA much more involved in price discovery and reporting. These concerns received increased public attention recently when a representative of the University of Minnesota appealed to organic farmers in the upper Midwest to be much more cooperative in responding to AMS surveys seeking price and other data.
“Certified organic growers of grains, beans, oilseeds, and hay are sought to participate in a new commodity price reporting service,” according to a published report. It noted that the new AMS price reporting service would make available high, low, and weighted average prices for organic commodities in the Upper Midwest.
“Prices will be gathered from buyers and sellers on a daily basis and reported monthly or weekly, depending on the volume of available data,” the appeal continued. “Once collected, all data will be available in a report format and through the AMS searchable online database.”
The appeal was met by a negative response from Organic Farmers’ Agency for Relationship Marketing (OFARM), a network of eight organic marketing cooperatives with members in 20 states and Ontario. It engages in price discovery on behalf of its members and establishes price targets for 14 individual organic crops that reflect production costs. OFARM contends this kind of reporting would be another step in the “conventionalization” of organic marketing, that it will work against the interests of farmers, and that it would give many of the large companies moving into organic a government organic market report over which they could exercise some control.
Oren Holle, a Kansas organic wheat producer who heads OFARM, contends current AMS market reports are formulated by agribusiness influence and input rather than by producer input. “These same agribusiness giants would probably like nothing more than to see organic marketing move in this direction,” he noted recently, “and eventually tie organic prices to some formula which would offer growers only negligible premiums over conventional prices.”
It is difficult to argue against expanding and strengthening organic data collection and reporting. Policymakers and others have been forced to rely largely on industry estimates and a series of farmer surveys conducted by the Organic Farming Research Foundation to find out what is actually happening in the organic sector. As late as 2000, when the final rule implementing the Organic Foods Production Act was proposed, USDA was still clueless regarding how many certified organic farmers would be impacted, where they were located, and how much land was under organic management.
The need for official data is pressing again now as lawmakers consider both new organic farm bill proposals and a request for $25 million authorization for another five years of certification cost share payments. It is important to have reliable estimates of how many certified organic farmers are likely to be eligible for cost share payments in each of the next five years, how many organic operations are small enough to be exempt from certification requirements, and how many are in transition.
New problems also strongly suggest the need for more organic data. Wal-Mart’s new organic initiative, for example, is raising concerns about imports from China and other low-wage countries. Rumors in the past about the arrival of containers of organic soybeans from China have focused attention on the lack of reliable information and the possible adverse impact on organic farm gate prices by unconfirmed rumors.
It has been suggested that USDA’s Foreign Agricultural Service should provide import information since it deals with trade on a daily basis. But FAS facilitates organic sales overseas does not collect import data. This data is compiled by the Commerce Department and it uses hundreds of 10-digit codes to track and report imports. But there is no code to identify organic imports. As a result, no official data is available and both USDA and the Commerce Department remain in the dark about how much organic food is being imported, whether it is soybeans or something else, or its country of origin. The Organic Trade Association deserves support for pushing a farm bill provision that would authorize development of an organic import code.
The growing need for more organic data was first highlighted eight years ago at an organic marketing workshop co-sponsored by USDA, the Organic Farming Research Foundation, and the Wallace Institute. ERS economist Catherine Greene led the data sessions and it was clear that ERS, NASS, and AMS professionals were prepared to do much more to develop and expand organic data collection, reporting, and analysis.
ERS since then has received funding for this work and a team of economists, led by Greene, has been turning out a series of excellent reports. In 2003, for example, ERS for the first time was able to publish a comprehensive report documenting the number and location of the nation’s certified organic farms and the number of certified organic acres in each state. A year earlier NASS for the first time included organic questions in the Census of Agriculture.
Organizations helping shape organic provisions in the new farm bill are certain to push hard for new and expanded funding authority for data gathering and reporting by AMS, NASS, and ERS. However this should not be done without considering possible price reporting problems organic farmers have raised. The concerns raised by OFARM and others about possible adverse impacts on farm gate prices of AMS market reporting in the Midwest need to be included in this year’s farm bill debate and consensus reached on market reporting refinements that will alleviate these concerns.
by Roger Blobaum
This article was first printed in the March, 2007 issue of the Organic Broadcaster, published by the Midwest Organic and Sustainable Education Service