Is Organic Too Expensive? How Much is Organic worth?

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Let’s Face it. Organic is Expensive.

When I marketed Organic food to few consumers, they nodded in agreement about the goodness and health benefits. But the one question that I squirmed at was, “I heard its expensive, what’s the difference?”. At the end of the day it all boils down to the economics.

Before I entered the business, people said, that the difference would be 20%. Its only when I got about selling Organic produce that I understood the true value. It shot up to be 50% to almost 100% more expensive than the regular produce.

I could not sell. The mere thought of a consumer, “I get food for half the price in the super store with air conditioner and parking facility”, cannot compete with my humble room that held wooden shelves and bamboo baskets of organic produce. The inquisitive ones never returned and the regulars picked up a packet or two to satisfy their guilt. For weeks I went under loss and could not bear the sight of rotting vegetables and bug infested grains. I closed.

What is the benefit of making something that’s good but will not sell locally? Export is not an option I wish not to take to promote being local.

When I started to look for reasons for the exorbitant prices here are a few causes:

Organic Food is not subsidized food

After World War II countries who took to Green Revolution satisfied hunger and famine with chemical fertilizers and pesticides. Governmental policies till date stand in favour of them. So you might pay lesser for a regular veggie in the market but you still pay for the fertilizers through your taxes. There is no such subsidy for organic manure or bio-inputs.

It is labour intensive

Farmers do not use herbicides, so they control weeds by pulling them out. Many organic methods use lesser or no machinery and require great human care during seeding and plucking.

Low yields initially

Those who convert to Organic Farming lose 3 years as conversion period and yields reduce drastically. The soil is dead with chemicals that have killed essential micro-organisms. It takes that long to revive the earth and diminish the residual effect.

Misconception of niche audiences

A middle class man asked me to leave his grocery store and said “Take your organically grown rice and feed the elite, upper class who will agree with your ideologies”. People look at Organic Food as something that is delicate, precious and to be admired at a distance, but impractical for living.

Retailers are out to get your money – wrong!

Most retailers do not keep high margins on their products just because it is “Organic”. Infact those who sell Organic products know that they can never hope to make great profits and do it for the passion and dedication. When they buy it from the farmer, they procure it at the cost that you find on the store shelves of non-organic produce.

Hype on Organic

Right to the farmer level, the hype of Organic Food has also contributed to price increase, but these are proving to settled down with more competition and expansion of the market.

The need for change

Its easy to convert the soil to Organic but not the Human mind. We are conditioned to such sub-standards and mis-conceptions of science for years in the argument of feeding the masses. Organic Fields have proven this wrong with better yields. Governments are no longer dependable as they yield to the giants of agro-chemicals, bio-technology and eat up more cultivable lands for industries.

Consumerist behaviors have to change and its time we bow down to and support the producer who provides us good health.

I invite people to give suggestions to make this change happen.

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28 thoughts on “Is Organic Too Expensive? How Much is Organic worth?

  1. Most retailers do not keep high margins on their products just because it is “Organic”. Infact those who sell Organic products know that they can never hope to make great profits and do it for the passion and dedication. When they buy it from the farmer, they procure it at the cost that you find on the store shelves of non-organic produce.

    Whole Foods is one of the most rapidly growing businesses in the US. They conduct a significant percentage of their business on organic products. If they were not turning profits, they would not be growing.

    How about the simple argument that it is worth paying more to not eat poison?

  2. Growing organic food is not a problem if you have a modest garden but I cannot grow oranges, mangoes, bananas or peanuts (food I love) neither can I keep pigs or chickens and butcher them to make salami, chicken nuggets, bacon, smoked ham… the list could go on.

    Essentially I agree with you on most points but given the fact that people live in cities more than in the country and do not have the time to do home farming what can people do? They ahve to buy in large out of town shoppping centers. YOU should have considered your market better before setting up shop. I live in Hungary (uk ex-pat) and make a considerable income by retailing UK food items such as salt n vinegar crisps, english mustard, chutney etc to a small number of locals. While initially I was making a loss as the word spread that there was a shop where you could get “weird british food” the business boomed. It’s not organic but you live in America where people have been ingrained into thinking that cheaper is better. This is the wrong attitude. You need to get somewhere where people KNOW cheaper is not better.

    I can set you up with a small flat and shop here if you like ;)

  3. I had assumed that the comparatively meager size, number, complexity and establishment of processing and distribution facilities, organizations and networks was a major factor. basically, isolated handicrafts and small unit small business, verses giant, venerable consolidated factories, warehouses, and shipping fleets dealing in massive bulk.

  4. getting that “organic” label requires extra expenses in terms of paperwork and certification fees. Many small organic farmers can’t handle this extra work. Abandon the organic label in favor of local produce that is farmed organicatlly. Let people meet or at least virtually meet their farmers. The only way to get organic produce at good cost is to farm on a small scale. That’s the future.

  5. You are correct on all counts, especially the need to compete economically. The U.S. economy, after seven years of bad stewardship, is going in the tank. The high-paying jobs have left for other countries. Most people simply can’t pay two dollars for an organic apple. Nor do people want to face the increasingly obvious exposure to e. coli that comes with careless organic farming. When most of us are back down to subsistence food cultivation, you may be able to make a good income as an organic farming coach, if there is any money to pay you with. Until then, organic food is indeed the playground of the wealthy. If you’re in it for the money, this would be a great time to stop.

  6. I enjoyed the article and the picture was nice but don’t you think it would be more appropriate for the author of this piece to have her name attached to it? I apologize if I missed it but it is not obvious.

  7. I cannot provide many details but I will tell you this. My Dad is a CPA. His wife has many food allergies. They buy strictly organic food because her body cannot tolerate anything else. He recently told me that the US Government allows people who buy organic food to write off 50% of their annual grocery bill on their income taxes. Like I said, he’s a CPA, so he would know. So keep that in your pocket when others complain about the price of buying organic.

  8. Sorry to be the one to cry “organic fertilizer,” folks, but organic food is pseudoscientific bunk. The main reasons it’s overpriced? It’s less efficient to grow than food grown with modern farming methods, and consumers are willing to pay the higher price tag. Organic produce is big business — most organic produce sold in stores is produced by the same giant agrobusiness firms that produce regular produce. For those of you who may be more interested in the truth than in politically correct hogwash, here are a couple of links:
    (Download the episode entitled ‘Organic Food Myths’)

  9. Pingback: Health top DIGG news » Blog Archive » Is Organic Too Expensive? How Much is Organic worth?

  10. One thing that many people don’t realize is that there are coupons available for organic foods, but because they are usually smaller companies, they don’t give them out in national papers. You need to contact the companies yourself and ask for the coupons: Here is a list of some of the Organic and Natural Food Contact Numbers. If you are going to buy organic, this can save quite a bit of money over the year.

  11. If you wouldn’t use leaches to cure a headache, why would you pay a premium for food grown using 17th-century technology? In my opinion, the whole organic craze is fueled by irrational, technophobic fear mongering. Whole Foods is just as much an evil mega-corporation as Ahold, maybe more so.

  12. You need to cut costs. If costs lower as time goes on you need more capital to get you through the rough start.

    “Misconception of niche audiences”: This doesn’t matter. Lower your prices and others will come around.

    “Retailers are out to get your money – wrong!”: Retailers do in fact take my money in trade for goods. My goal is to keep my money while meeting my needs. Your goal is to get me to exchange more of my money for more of your goods. This point is nonsense.

    “Hype on Organic”: If you’re upset about this and in the organic food business you have fundamental misunderstandings about business that might mean you shouldn’t run one.

    “The need for change”: Take off the tinfoil hat, and can the rhetoric. People work hard for their money. Give them more and let them keep more of their paycheck and they will come around. If you can’t do that your idea isn’t worth squat.

  13. My number 1 suggestion – end poverty, and end the indentured servitude of many people having to spend most of the week working just to stay afloat financially and keep paying back immense debts (such as for education, a vehicle, etc.) and costly living expenses (rent or mortgage, utilities, etc.).

    If people have plenty of money to spare, they won’t mind spending a bit extra for good, healthful food.

    So, that leaves the question of how to end poverty, and the indentured servitude of endless debt and overly costly living expenses.

    Well, that’s a tough one, but, I think ending usury – high interest, high fee debt – might be a good start. Perhaps student grants, not student loans, should be given out. Maybe there could be student loan amnesty for any existing student loans. And if there’s any way for the government to get by without collecting any income taxes, I think that would help a lot as well.

  14. How about eating less? Better nutrition should require less bulk, less calories. And more exercise will require fewer even less food to support our “overweightedness”. I love organically grown food and have found a delivery service that is like a CSA (community supported agri) in that they include in their bulk delivery seasonal foods, and some odd sizes and shapes of apples and raddishes. Part of the high cost of groceries is the “perfect” specimens. Locally grown foods come is all sizes, many odd shapes and they can’t be sold in the perfect grocery story. We consumers have to get over “perfect” and accept reality — odd shapes just might mean better nutrition. IE, small potatoes and apples actually have more nutrition than large ones. As we rethink our priorities, organic becomes an even better deal…but we have to think beyond the obvious.

  15. ‘”Green Revolution’” is a nostalgic word. It has the memory of hearing this word frequently when I was a university student (about 35 years ago). At that time it was one of the methods for the solution of the population problem of the world. I think that whether organic farming is selected or inorganic cultivation is selected is different the opinion according to each country now. For instance, this selection is difficult in countries of populous Asia. Japan is fortunately a country that can supply safe food by using biotechnology. I feel that uniting biotechnology is necessary for agricultural sector. We think that we should share the way of farming that any country all over the world produces safe food.

  16. Thank you for such an easy to read digest of the important considerations regarding organic food.

    I have a client that we did a blog for, Naturally Yours, a health food store and organic grocery. It’s hard to drive traffic to the blog, when there seem to be so few organic blogs that are professional and family oriented.

    I will link to this post over at my client’s blog.

    Naturally Yours Blog

  17. Over a certain income level, and all these arguments for organic food make sense, however, if you live with a low income, the only criteria that matters is the immediate pay check to pay check spending power you have to feed your family. I live in the UK and if you go into one of the larger supermarkets here, like Tesco, and organic produce is almost 50% more expensive than regular. It comes down to basic math in the end.

    I raised my two daughters on my own and when they were younger, either could not work or was only able to take short term part time jobs. Going to the supermarket 15 minutes before closing time to get any reductions they were offering, and taking advantage of whatever Buy One Get One Free offers they had wasn’t an option, it was a necessity.

    It’s not like people on low incomes care less about their kids health, or what we are doing to the planet, they just don’t have the luxury of an option. If the only choice I have is feeding my kids vegetables every day of the month, or feeding them organic for half the month, but no vegetables the rest of the month, I don’t have to think about what choice to make.

    I am aware of the reasons that make organic more expensive to produce and I in no way argue against that. I simply state that for a lot of people, it’s completely irrelevant.

  18. From my experience in the UK, you’re looking at more like a 10-20 per cent mark-up on organics – not 50.

    Obviously, organic food is inherently more expensive and if you’re on a low income, paying extra for organic grub is not going to be a priority – price will be. I’d like to see that change. Here’s an interview with a guy who’s thinking along similar lines:

  19. Nice article there, thanks for writting.

    I personally find in the uk that organic products in super markets are priced rather expensive. Found its cheaper to either go for a hamper schemes or found theres a few organic pick your own.

  20. Thanks for the article. I think the problem w/ organic foods breaking through now is based on a big flaw in human nature: people prefer to have something right now than something worth more in the future. In other words, there is no long term vision. People know they need to eat right now; the extra costs for organic are not worth to most people the long term benefits. This is quite unfortunate in my opinion, because in this case people’s poor decision not only affects their own health, but the health of environment and by extension many more people. I think without changing human nature, or the system of gov’t subsidies and retailers out there that favor non-organic foods, organic food will still be a ‘niche’ market.

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