Why Organic Costs More

If organic foods don't use chemical fertilizers and pesticides, why do they cost more? I've heard the question multiple times, so let's finally discuss the answer.

To start, organic foods don't necessarily always cost more. Some products cost the same or even less than conventionally grown foods. So shop around, compare prices, and don't always assume organic will cost more.

Economic law tells us that as the demand for organic foods continues to grow, their cost will continue to decrease. In the meantime, consider the following reasons for the higher cost of organic foods:

Organic foods cost more to produce. Organic farming is more labor intensive and involves greater operational costs. Instead of using pesticides with known health and environmental risks, organic farmers rely more on hand-weeding. This also means that these farmers run a greater risk of losing all or part of a year's crop. Also, the chemical fertilizers conventional farmers use are inexpensive to buy and to transport. Organic fertilizers, like compost and animal manure, are bulkier and more expensive to ship. Even organic feed for cattle can cost up to twice as much as conventional feed.

Organic farmers rely on crop rotation to keep their soil healthy. This means that up to a quarter of their land at a time may be left to lie fallow. Most conventional farmers, on the other hand, use every available inch of land to maximize profit despite the fact that planting the same crop on every acre every year is an unsustainable practice.

Government subsidies are geared towards agricultural conglomerates that use chemically intensive farming practices. So, while you may pay less for conventionally grown foods at the supermarket you're actually already paid a price for them through your taxes.

Organic farms tend to be smaller and, despite their growth, only account for 2.5% of the U.S. food marker, so they don't benefit from the same economies of scale as larger conventional farms.

Some of organic foods' higher cost comes from the retail rather than the grower. Some organic foods do not sell as quickly as their conventional counterparts, so the retailer increases the price in order to make the same amount of money per space.

It's also important to be aware of the less obvious costs of conventionally grown foods. While many conventionally grown foods cost less at the market, you still have to factor in the cost to human health and the environment. Consider the higher incidence of some cancers and other diseases among farm workers and their families, as well as the environmental cleanup (e.g., contaminated water supplies and air pollution) paid for with our tax dollars.

According to the World Resources Institute, when measured with traditional cost analysis methods the average farm shows an $80 per acre profit. But after factoring in the external costs of soil loss, water contamination and environmental degradation caused by farming practices, the average farm shows a $29 per acre loss.

Then there is the loss of our traditional farming industry. Large corporate farms have forced millions of family farms into bankruptcy. In fact, over 4 million farmers have disappeared since the 1970s. Most of today's organic farms are are small scale operations just looking to stay solvent. When you support organic you support farmers that are putting sustainability before profit.

The organic food market is still small, but it's growing quickly. Just over the past five years there has been a significant decrease in organic food prices and that is due, in large part, to all those people making a statement with their grocery dollars and buying organic. The power of the purse.

So if anyone ever asks you why organic food costs more when it requires less chemicals, tell them it's simple: Organic food is better quality food grown in a sustainable manner that preserves human health and the environment. Hopefully that will help loosen a few purse strings.