In Business, Creating Sustainable Enterprises & Communities

TO CERTIFY OR NOT TO CERTIFY?

In Business, January/February, 2004, Vol. 26, No. 1, p. 20

That is the question more “organic” farmers are asking now that the federal government has gotten into the act.

George DeVault

In the beginning, back in the 1930s and early 1940s, organic farming was pure and simple: Work with Nature, not against Her. She will provide. Such was the belief and practice of organic pioneers like J.I. Rodale, Paul and Betty Keene in Pennsylvania, Frank Ford in Texas and Albert Lundberg in California as the latest chemical discoveries were turned to domestic agricultural uses after World War II.
“The original philosophy that guided organic farming emphasized the use of resources found on or near the farm,” Miguel A. Altieri and Clara I. Nicholls of the University of California in Berkeley say elsewhere in this issue (page 13)
“The idea was to rely heavily on the use of organic crop rotations, crop residues, animal manures, legumes, green manures, off-farm organic wastes and aspects of biological pest control to maintain soil productivity and tilth, to supply plant nutrients, and to regulate insect pests, weeds, and diseases.”
But a funny thing happened on the way to the farmers' market, the researchers maintain. Two funny things:
1. Suppliers came up with a myriad of manufactured products for organic growers to routinely apply in place of the conventional, chemical inputs they were not using.
“Farmers following this regime are trapped in an input substitution process that keeps them dependent on suppliers (many of a corporate nature) of a variety of organic inputs, some of questionable effectiveness and environmental soundness. Clearly, as it stands today, 'input substitution‚ has lost its 'prosustainability‚ potential,” the researchers say.
2. Organic food and farming became such big business that, after decades of often conflicting state laws and private certification standards, the United States Congress passed a “one size fits all” federal organic law in 1990. The law finally took effect Oct. 21, 2002.
STAMP OF APPROVAL OR “KISS OF DEATH?”
“Federal regulation of organic food is the kiss of death,” farmer-author Gene Logsdon predicted in The New Farm magazine - in 1993. “The main reason that big companies are now interested in mass marketing organic is because it appears people will pay a premium for it. Premium prices for organic are not sustainable. They are mischievous. They lure in hustlers. In the real world, if you try to sustain them, you - the farmer - will pay much more with taxes and fees for an army of policemen than your premiums are worth.
“I think there is one way you can sustain a slight premium, not necessarily for organic food, but for fresh, local food, and part of the fresh, local appeal will come from the known, honest reputation of the grower. Washington can't provide that. Only you can.
“You want to ship food to faraway markets?” Logsdon asked, rhetorically. “You want to join the pious hypocrites in the international grain business who like to say they are helping our balance of payments? Fine and Dandy. But stay the hell away from the word 'organic'‚ Don't let big business, mass-marketing and big government corrupt organic.”
But, that is exactly what happened, many long-time organic proponents and practitioners say. Demand for organic foods exploded in the 1990s, with sales soaring by 20 percent a year. “No longer the cuisine only of sandal-clad environmentalists, organic food is coming of age. It is clearly big business,” The New York Times reported on Oct. 26, 1996. The article, headlined “A Widening Popularity Brings Acquisitions,” detailed a long list of giant food corporations snapping up smaller organic firms in what one natural foods executive described as a “buying frenzy.”
The Natural Foods Merchandiser put it this way in 2002: “Odwalla, Boca, Cascadian Farms, Stonyfield Farms, White Wave and Kashi were gobbled up by Coke, Kraft Foods, General Mills Inc., Groupe Danone, Dean Foods Co. and Kellogg Co. But as more top brands were swallowed up by companies looking for a slice of the naturals and organic market, more consumers are left to wonder if they can still do good in the grocery store. And that might pose a dilemma for naturals retailers.”
Today, Tyson Foods sells certified organic chicken. Candy-maker Mars, Inc. is in the organic seed business. Frozen, certified organic vegetable soybeans are shipped to the United States - from China. There are organic TV dinners and organic snack foods of all description, including Frito-Lays, Tostitos made with organic corn.
“BEYOND ORGANIC”
“In my opinion, 'organic' is now dead as a meaningful synonym for the highest quality food,” Maine organic farmer-author Eliot Coleman said in an article headlined “Beyond Organic” in The Mother Earth News in late 2002. (The complete article is posted on www.motherearthnews.com and Coleman's website, www.fourseason
farm.com.)
“Although getting toxic chemicals out of agriculture is an improvement we can all applaud, it only removes the negatives. The positive focus, enhancing the biological quality of the food produced, is nowhere to be seen. The new standards are based on what not to do rather than what to do.” That's why Coleman now calls what he produces on his farm “Authentic Food.” “I encourage all small growers who believe in exceptional food and use local markets to use the word 'authentic' to mean 'beyond organic',” he said.
Another new name for food that we recently called organic is the registered trademark Certified Naturally Grown (CNG). The CNG website (www.naturallygrown.org) describes it as an “alternative ecolabeling program for small farms that grow using USDA Organic methods, but are NOT a part of the USDA Certified Organic program.
“The Certified Naturally Grown label is available to farms primarily distributing locally or directly through farmers‚ markets, farm stands, Community Supported Agriculture projects, local restaurants, co-ops, small grocery stores or through other sales channels such as the internet.
“The USDA program,” the website continued, “requires an enormous amount of record keeping - a paper trail of everything that happens from seed to sale. This is appropriate for large farms that grow only a few types of vegetables and sell in bulk to chain stores or big processing plants. But it has proven excessive and largely irrelevant for diversified small farms that may grow upwards of 200 varieties of vegetables, herbs, flowers and fruits and then sell them directly to consumers right in their own neighborhood.”
TO CERTIFY OR NOT TO CERTIFY?
That is the question we are now wrestling with at our own farm. We have farmed organically since we bought the land in 1984. It wasn't until 2000 that we finally, and somewhat reluctantly, got certified. We had two main reasons for seeking certification:
1. We knew that federal organic standards would soon be the law of the land, and we wanted to be able to continue to use the “ word”. 2. That year we also began selling produce at a farmers‚ market 50 miles away in center city Philadelphia, where no one knew us or our farming methods.
We were the only organic grower at the market. But our organic certificate probably meant more to us than to our customers. They were mainly thrilled with the freshness, incredible taste, cleanliness and variety of our farm fresh produce and cut flowers.
We are certified by the Northeast Organic Farming Association (NOFA) in New Jersey. By next year, NOFA will be out of the certification business. That is being taken over by the New Jersey Dept. of Agriculture. Cost of certification will rise to about $600 a year, roughly double what we have been paying.
And we are asking ourselves, “Is it worth it?”
I recently put that question to Chris McNichols, who operates Red Hill Farm, a Community Supported Agriculture farm with more than 100 members in suburban Philadelphia.
“We're member-certified,” he replied.
Makes sense to me. Reinforces one of the first rules of being in business: The customer is always right.

WHAT BECAME OF WALNUT ACRES?
The envelope was addressed simply to “Walnut Acres Organic Foods, Emmaus, PA,” and postmarked Feb. 4, 2004. Somehow, it wound up on my desk.
“Please send me a food catalog. Also, I want to buy whole wheat pasta. Thank you,” read the note from a man in a town of about 400 in the middle of Mississippi.
Sorry to say, the Walnut Acres he is trying to reach no longer exists. His letter is about four years too late.
Walnut Acres, both the central Pennsylvania farm and the mail order food company founded in 1946 by organic pioneers Paul and Betty Keene, went out of business in the summer of 2000. Most of its farm equipment was auctioned off that fall. On Feb. 15, 2001, the contents of its processing plant, store and offices was sold at auction.
Walnut Acres' granolas, canned soups and vegetables quietly disappeared from America's grocery shelves. Its popular catalog mysteriously stopped showing up in the mailboxes of some 40,000 loyal mail order customers.
“America's Original Organic Farm,” proclaimed a sign on the side of the old, red barn on the walnut-lined banks of Penns Creek, PA. But in reality and the words of a slick New York press release, Walnut Acres suddenly became “America's Original Organic Brand.” Once a Mecca for the organic faithful, it existed in name only.
WHAT HAPPENED?
“We needed capital to upgrade,” said Shawn Brouse, former printing and labeling supervisor at Walnut Acres. “The company enjoyed a great stand in the '80s and was resting on its laurels. Nobody looked ahead to see that in the 90s, others were going to make organic cereals. And here we stood with '50s equipment trying to compete with Campbell's. Our prices were so high and we had so much overhead. Everybody knew it was old-fashioned.”
Despite annual sales of $10 million, the company had been losing money for years. In March, 1999, David C. Cole, former president of America Online's internet services, bought controlling interest in Walnut Acres. The New York Times described him as “a venture capitalist, philanthropist and organic farmer.” Cole invested $4 million to increase Walnut Acres' online presence.
“It was 'Internet here we come! To hell with the catalog and the store,'” said Brouse.
Cole set up a company called Acirca, Inc., a group of venture capitalists that reportedly included media mogul Ted Turner and America Online founder Steve Case. Acirca took over Walnut Acres, bought other small natural food companies and spent lavishly on advertising in what Boston investment banker Scott Van Winkle told the Natural Foods Merchandiser (NFM) was “an insane strategy.”
According to NFM, “Too many investors were stirring the broth at Acirca ... with no background in the naturals industry. Said Ben James of North Castle Partners, Acirca's lead investor: 'We had the wrong business model with the wrong management team.'” On June 17, 2003, Hain Celestial Foods bought Acirca, Inc. - including the Walnut Acres “brand” soups and salsas - for an estimated $13.5 million.