Team Glocal: Comparing environmental and financial effects of locally distributed conventional producers and nationally distributed organic producers
Note/disclaimer: This webpage is for instructional purposes only and the scenario described below is fictional.
This page was developed as a hypothetical report of conventional local vs. national organic farms written on behalf of UW-Madison Environmental Studies 471 Course Facilitators.UW-Madison Task Force Members
Kaitlin Reiman, Major in agriculture Business
Laura Bessenecker, Major in Botany
Scenario | Abstract | Introduction | Methods | Results | Limitations | Conclusions | Citations | Acknowledgements | About the Authors |
We are 3 Task Force Members that are researching the environmental, social, and economic impacts that different types of farms have on the greater community. More specifically, the impact of traditional, but local farms compared to that of a organic national farm brand vary greatly. We are in search of an educated answer to the question: Which is better for the community when evaluating all three pillars of sustainability?
This paper provides a comparative analysis between two types of farming systems: conventionally run local farms and organically run nationwide farms in terms of the environmental, economic, and social pillars of sustainability. In order to properly compare the two systems, factors that aligned within these pillars were selected. The following 3 comparative factors chosen aimed to answer which system is comparatively ‘better’ in either a locally distributed conventional farm or a nationally distributed organic farm; (1) environmental, (2) success and stability of the business, and (3) community impact.
Shifts to be more environmentally conscious within the food production industry has tipped agriculture on its head. Quite a wide variety of traditional agriculture producers have been forced to close their businesses because of an event that has been dubbed as the ‘green agriculture’ movement. The green agriculture movement “uses well-developed modern farming and sustainability concepts to improve natural agriculture” (GreenCity 2015), resulting in the increase in alternative farming systems. In order for some farmers’ businesses to survive the altering consumer preferences that are associated with the green agriculture movement, decisions must be made in where to take their own agricultural pursuits. One decision numerous surviving producers have chosen to make in recent decades is to switch to an organic farming system. An organic farming system, according to the USDA, “consists of organic foods grown and processed according to federal guidelines addressing, among many factors, soil quality, animal raising practices, pest and weed control, and use of additives” (McEvoy et. al). This production method’s popularity has skyrocketed to such high rates in recent decades that a notable number of large scale corporations have adopted the practice too.
Organic certification in the food production sphere provides proven benefits to many concerning sectors within the three pillars of sustainability that conventional farms previously neglected. This fact has put organic farming in a position to be compared to traditional agriculture, also known as conventional farming, which can be defined as “farming systems which include the use of synthetic chemical fertilizers, pesticides, herbicides, and other concentrated production methods” (Merriam Webster Dictionary). As larger companies participate more in organic agriculture, underlying effects are being seen that did not appear when smaller organic farms emerged. Because of this, we chose to compare two types of systems: a nationally distributed certified organic farm versus a locally distributed conventional farm. In order to make a proper analysis, we chose three areas called the ‘qualifying factors’ to use as a template; environmental health, success and stability of the business, and the community impact of the business. These three qualifying factors were chosen in order to align our analysis with the three pillars of sustainability: environment, economics, and social. Although we hypothesize that nationally distributed organic farms will be a more stable business enterprise and that organic farming systems are beneficial to the environment, our analysis will demonstrate the importance of local farms in the realm of community impact and reduced distribution-related emissions, even if continuing with conventional farming practices.
The three pillars of sustainability; environmental, economic, and social, serve as the outlining guidelines for the three selected qualifying factors of our analysis; environmental health, success and stability of the business, and community impact of each type of farm, respectively. In order to collect appropriate data to compare these three factors, we viewed strictly electronically based articles. These electronic articles were mostly collected from academic journals and sources directly provided from the USDA website.
When collecting data for our research, we saw it vital to view a wide array of opinions and circumstances under each defined factor in order to limit a certain predisposed bias that could have been formed in our own minds before our research began. As consumer preferences have been tremendously changing in the past few decades, certain biases exist in today’s consumers’ minds that did not exist in the mind of consumers from previous decades. This remains true for our own personal preferences. Today's consumers have a much higher appetite for organically grown foods when compared to conventionally grown products, so we made sure when selecting our academic articles, along with our three factors, to encompass a scope that could give both the organically grown and conventionally grown products a fair chance.
The three qualifying factors of our study comparing nationally scaled organic farms and locally scaled conventional farms proved valuable in coming to our conclusion on which style of farm obtains the title as the better system while remaining conscious of the pillars of sustainability. When considering each of the three qualifying factors, subtopics were selected within each factor in order to have the ability to focus our data collection for comparison. The following were our results:
Soil Health and Management
Soil, the organic material vital to food growth, serves as one of the most crucial components in agricultural sustainability. Traditionally, conventional agriculture practices are known to participate in the “use of excessive chemical fertilizers and pesticides” (Sihi et al., 2017), something the organic food movement does not allow as much of. In the United States alone, conventional agriculture accounts for “approximately 2.1 million farms which covers roughly 373 million hectares” (Fess et al., 2018). Frequent pesticide applications that come with conventional farming systems have had large-scale negative impacts on soil and its fertility. Soil fertility can be defined as “the ability of the soil to sustain plant growth” (Merriam Webster Dictionary). Measuring certain chemical, physical, and biological indicators within soil allows us to see data that cements that organic farming systems, over time, show a higher soil fertility level than conventional farming practices. In general, studies over recent decades indicate that differences in nitrogen content and availability within soil is an example of an appropriate indicator. Tiffany L. Fess and Vagner A. Benedito accumulated various studies from several researchers. Based on their accumulated information, a conclusion was made that “organically managed soils were consistently characterized by reduced pools of instantaneous mineral Nitrogen in combination with increased microbial activities and potentially mineralizable N pools (which indicates N availability) compared to soils managed using synthetic fertilization” (Fess et al., 2018). Due to this evidence, it can be argued that the Nitrogen pools differ between the organic and conventional systems and infer that organic farms can have reduced Nitrogen pools and therefore more fertile soil.
Increased microbial activity found in organically ran farms also causes them to lose less material within the nitrogen cycle, resulting in less nutrient leaching and runoff of nitrogen and phosphorus into nearby bodies of water. “In all agricultural systems, whether under conventional or organic management, one of the major concerns regarding fertilization is the potential for nutrient leaching and runoff, particularly of nitrogen and phosphorus” (Sinha E. et al., 2017). Because phosphorus exists as a non renewable resource, the importance of reducing its run off and waste into bodies of water continues to be a pressing obstacle in the agriculture sphere. Organic systems have been proven to reduce this runoff while fostering their increased microbial activity (Sinha E. et al., 2017)
Organic farming systems and the soil health that results from them do not prevent the farm environment and its surroundings entirely from negative environmental impacts like run-off, pesticide ramifications, and other factors. We can conclude, however, that organic systems advance a healthier soil system, which, in the long-term, can reduce the environmental impact of crop production on the land it is grown on.
In the previous section concerning soil health between our two farming systems, the consideration of nationally distributed versus locally distributed did not come into play, but here, it exists as the major factor in the section of analysis. As the population around the world increases rapidly, so does the world’s demand for food. Within the food production line, transportation of food stands as one area with some of the highest emission rates. On the nationally distributed side, we must consider the packing and transportation in all areas until the customer receives it. On the local side, the consumers’ personal trips to retrieve the food must be considered as well. Researchers and scientists typically use CO2 emissions as a direct measure of environmental impact of transportation on the food production system. Since 1990, “within the agriculture sector, carbon dioxide emissions have increased by 16.2%” (USDA 2015). In 2017, the transportation sector for all goods shipped in the United States accounted for 29% of the total greenhouse gas emissions, “making it the largest contributor of U.S. greenhouse gas emissions” (EPA 2019).
The 2008 Farm Act defines local food as “one that travels less than 400 miles from its origin, or within the state in which it is produced, with most local food not exceeding a 100 mile radius from where it was produced” (Cho et al., 2019). On the alternative side, nationally distributed foods are “often said to travel 1500 miles from farm to the plate of the consumer” (Cho et al., 2019). Clearly, more miles means more emissions directly from the various forms of transportation food takes to get to its final destination (eg. by boat, rail, air, or truck). Air and truck transport generally have much higher gas emissions than water and rail transport, according to a study by Christopher L. Weber and H. Scott Matthews. Farms that distribute on a national level are more susceptible to using air travel, which, according to Table 1, obtained from Christopher L. Weber and H. Scott Matthews’ study, surpasses other modes of transportations’ emissions by a landslide (Weber et al., 2008). The results of these authors’ study displays another reality that Table 1 doesn’t make as apparent. This is that “trucking is now responsible for the vast majority (71%) of transport-related GHG emissions due to its large share of t-km and relatively high GHG intensity” (Weber et al., 2008), which takes place in both nationally distributing farms as well as locally distributing farms. In conclusion, however, local farms’ products are much more likely to travel a smaller number of food miles than their national distributing counterparts to get to the consumers’ plates.
Producer and Distributor Direct Energy Use
Figure 1 (Fess et al., 2018) depicts an energy consumption comparison between organic and conventionally run farms after one year of annual rotation crops. The blue shades demonstrate direct energy consumption, which consists of labor, fuel, and equipment. Alternatively, the green shades represent indirect energy consumption, which consists of transportation, seed, herbicide, and soil fertility.
In the two previous subsections, we covered two components of this graph-soil fertility and transportation. In this subsection, we focused on analyzing the environmental implications of the other types of direct energy use in each system, like labor, fuel, and equipment. The striking difference between the use of fuel in organic farms when compared to conventional farms remains the defining feature of this subsection. In organic farming, fuel usage in the particular study associated with Figure 1 accounted for about 40-45% of the 5850 MJ ha-1yr-1 of total energy needed in the system. In comparison, fuel was about 20-25% of the 8000 MJ ha-1yr-1 in the conventional system. This calculates to ~2340-2632 MJ ha-1yr-1 for the organic system and 1600-2000 MJ ha-1yr-1. The type of fuel usage placed into this chart consists of mostly direct fuel used in on farm operations through equipment and machinery. According to the FAO, “ agriculture machinery can be employed in a number of field activities such as soil management, fertilization, harvesting, irrigation, etc” (FAO 2017), meaning that every farm practice can result in varying emissions amounts, but it adds up quickly.
Although the comparison between fuel usage in the two types of farms, conventional and organic, differ greatly with organic’s being much higher in terms of direct CO2 emissions, we must note the larger size of the conventional practice’s total emission output. This higher amount of emissions comes mainly from conventional farm’s lack of efficient soil fertility, which was discussed in a previous subsection.
Business Success and Stability
Organic certification, yield, and price differences
Transition periods to become an organically certified farm “usually span from three to five years” (S.A.R.E. 2003), resulting in a much lower crop yield for producers. In several surveys conducted by the USDA, “producers reported that achieving yields was one of the most difficult aspects of organic production” (USDA 2015).
The offset to these yields that allows producers of organic products to still profit is the much higher price organic products sell for. Many producers of “organic grain and soybean production systems say they are competitive with conventional production systems” (S.A.R.E 2003). Table 2 demonstrates just how much higher some organic products sold for on the market than conventional products.
Often making or breaking the bank for producers switching from conventional to organic production, the transition period of 3-5 years puts a business at major risk for a few reasons. In one study conducted on a Pennsylvania farm earning an income under conventional management of around $61,900, they experienced “a 43% reduction in income when accounting for yield decline and a 13% lower income when yield decline wasn’t a factor” (Dabbert et al., 1986). This occurred during the farm’s transition period of 3 years. For some families, 3 years without an income system can be detrimental to their financial infrastructure.
Organic certification can also be detrimental to certain business models because they rely on crop rotations that can include less profitable crops for part of the year instead of a continuous crop like most conventional systems use. This loss is also reflected in yield loss on organic farming systems when compared to conventional.
Despite these risks involved in producers transitioning into certified organic crops, a recent USDA report on potential profit of organic producers shows that the price markups for corn and soybeans more than outweigh the higher production costs for growing corn and soybeans organically. Table 3 shows this offset. (USDA 2015) *Note that, unlike corn and soybeans, the cost of growing organic wheat is greater than the net profit.
Grocery store vs. Farmers markets profitability
A nationally distributing organic company, like one of our model farms, could be expected to distribute their product on grocery store shelves and wholesalers within a radius of 1500 miles. Alternatively, about 85% of local farmers take their product to farmer’s markets within 50 miles of where the food was produced, according to the USDA . In economic terms, consumer perceptions tend to believe farmers’ markets are “expensive and elitist” (Salisbury et al.,2018). Locally grown conventional farms, due to this, have the potential to face limitations in their business and experience a loss in economic sustainability. Table 3, collected from Salisbury et al, compares prices between grocery stores and farmer’s markets between 23 different produce items. As the results conclude, only 8 of the 23 conventional produce items were cheaper at the farmers’ market, while organic shows slightly less of a significant difference between grocery stores and farmers’ market prices. This compelling comparison demonstrates that organic farms’ prices are generally higher, but more so at farmer’s markets than at grocery stores, which our nationally distributing store does not participate in. This means they, because of the distribution through grocery stores instead of farmers’ markets, are not realizing their full economic potential.
This leads to the next point: The price markup associated with farmer’s markets demonstrates a new tradeoff due to the experience itself. When community members shop at farmer’s markets, they are able to interact directly with those who produced the food. This interaction adds value as customers get to communicate with and get to know their producers. Each relationship formed, creates trust and interest in certain farmers, increasing the value of their produce. Although this is a trade off, it helps promote economic and social well being, while being sustainable.
Figure 2 accumulates a more comprehensible graph of the differences in prices that Table 3 establishes. What Figure 2 also reveals to us that, when comparing conventional products sold at local farmers’ markets versus organic products sold at grocery stores, the organic products are making more money. It remains important to note, though, that organic products also have a higher input cost, so profits cannot necessarily be determined from that figure because the figure is concerned with price only.
When conducting our data collection for the various subtopics of our three factors, we saw it vital to analyze farmers’ markets from both the economic viewpoint and the social viewpoint. To outsiders, as stated above, farmers’ markets often have a reputation of being elitist, but, to many local agriculture producers, “face-to-face ties between producers and consumers, are often seen as central components of local food systems” (Hinrichs C.C 2000). Community supported agriculture has, and remains to be the central feature of farmers’ markets. The social connection one gets when purchasing an agricultural product from a farmers’ market booth brings on a sense of a relationship with the land and the people who nurtured the product.
National scaled distribution consists of a type of routine endeavour, meaning most national producers automatically designate grocery stores as their main portals of distribution. The unremarkable routine of the typical consumer is to go to their grocery store and pick whichever of the several options of one type of product catches their eye the most. The disconnect between the consumer and producer in a nationally distributing system remains opposite of the local distributing farm experience.
“Small farms- with about 25 acres or less- along with family run operations, produces over 70% of the world’s food” (Drake et al., 2018) meaning that entities like farmers’ markets remain vital to the infrastructure of support in the distribution sector for local based farms. “More than 85% of farmers’ market vendors traveled fewer than 50 miles to sell at a farmers market” (About Farmers’ Markets. n.d.), resulting in the products at farmers’ markets being more directly from the source. Evidence also supports that consumers enjoy farmers’ markets with local food there because of the freshness of the food when compared to grocery store bought products, which further promotes the major positive community impact of local distributing farms.
2. Organic’s further reach
In terms of number of products distributed, a nationally distributing company reaches both a higher number and wider variety of people. As mentioned early on in the analysis, the green agriculture movement has fostered a change in consumer preferences. According to recent data, “ the share of grocery shoppers specifically seeking out organic or natural foods grew by five percent over the past seven years, now also reaching nearly 30 percent” (Monaco 2018). The market for organic agriculture “was poised to reach $320.5 billion by 2025”(Monaco 2018) worldwide. As organic infiltrates into the food market more every year, the type of consumers it reaches are quite dynamic. Organic tends to encompass several types of consumers. An article by J. Chait categorizes organic consumers into three groups: periphery customers, mid-level organic consumers, and core consumers. According to the article, mid-level consumers “make up the bulk of organic consumers (65%)” (Chait 2019). This level of consumers are the ones that “are not only changing their attitudes, but who are also changing their habits and buying organic products” (Chait 2019). Mid-level organic consumers’ numbers will continue to rise at more dramatic rates than ever seen before. To match the demand for these products, a wider reach of large-scale companies will begin to participate, reaching even more people around the world. They will follow in the footsteps of companies like General Mills, whose “organic-only portfolio has grown more than 350% over the past five years” (Meyer 2017).
Comparing national scaled organic farming systems and local scaled conventional farming systems between our three qualifying factors proved to heighten an awareness of the vast scope of sustainability in agriculture. The wicked problem of choosing one of these two farming systems as the superior method cannot be answered simply, as each has pros and cons. Who is meant to determine which constitutes what ‘better’ means? What one farm has an advantage in in terms of one pillar of sustainability they lack in another pillar.
Our subtopics within each qualifying factor provided a way to organize and properly analyze which system had advantages in certain aspects. The following table summarizes our results...
The green upwards arrow indicates an area where one of the two proposed farming systems came out as superior over the opposing method based on that individual subtopic analyzed. The yellow dashed line indicates a subtopic in which a solid and confident conclusion could not be made.In the end, it remains almost impossible to state in a factual manner that, based solely on this study, it can be determined which farming system is overall ‘better’ than the other because of the limitations in our study (discussed below).
Analyzing conventional and alternative agriculture brought limitations when delved into. The most extensive section that posed limitations in our research was within the environmental section.
The environmental effects of different farming systems have widely varied depending on a number of factors, some of which we could not consider within the length of our analysis. For example, we did not discuss different types of producers in terms of animal versus plant product. Animal production produces a much higher emissions output than crop farms do. Within animal production, different animals produce different levels of emissions. “Producing beef requires significantly more resources (eg land, fertilizer, and water) than other sources of meat” (Climate Science Glossary n.d.). In order for our analysis to be significant, we must assume that the national organic farm and the local conventional farm are both producers of the same product(s).
Another environmental stipulation that was not discussed in our analysis is the issue of methane on the environment. This aspect goes hand in hand with our previous limitation because beef producers see the highest production of methane because it comes directly from the cattle. Methane remains impactful to the environment because of its harmful effects on the atmosphere and its contribution to global warming. A final environmental limitation we faced during the compilation of our data consisted of the fact we did not consider emissions from all aspects of the food production line- production, distribution, and transportation. The total accumulation of the emissions from these areas remains a much larger portion of world emissions in the world and is most definitely a significant factor in determining the state of farming systems.
On top of these limitations on presented data, there are limitations on the possible data that can be collected. One example is that there is simply a lack of information in the farming community on green agriculture. Due to this, our ability to test these variables in order to accept or reject the hypothesis is challenged. In addition, some limitations for this specific study stem from our experience as authors. Unfortunately, due to a pandemic, we were unable to visit the farm, limiting the amount of primary research we are able to conduct. Although we work for UW-Madison, there was a lack of financial aid and resources to complete a thorough, several-month study. This created a limitation on how much data we could collect in a 2 month span.
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This project would not have been successful without the contributions of the outstanding students in our Food Systems, Sustainability, and Climate Change class. We would particularly like to acknowledge the wonderful and challenging questions, and the specific knowledge that students with different areas of expertise provided.