According to market principles, the customer is always right even if they are ill-informed or irrational. It is their money and they can spend it how they like.

But what if their ignorance or irrationality leads to an outcome that is ethically or morally dubious? That’s the dilemma facing farmers considering whether to produce organic food.

Organic food is generally defined as food produced without the use of artificial pesticides or fertilisers. Certification regimes usually allow 'natural' pesticides and fertilisers such as manure, but not man-made pesticides or fertilisers produced from phosphate rock mined near Mount Isa.

Commercially oriented farmers grow organic food because there is a market for it. In nearly all developed countries it accounts for two or three per cent of the total, although it can be much more when subsidised by the government. However, the influence of organic food extends well beyond its market share. A significant proportion of the population views the consumption of organic food as a matter of virtue, comparable to recycling garbage or installing a tank to hold rainwater.

There are various perceptions underlying this. Modern agriculture is said to be unsustainable, with pesticides and fertilisers accumulating in the environment. Conventionally grown food is said to contain pesticide residues, which are blamed for a multitude of modern illnesses. Organic production, by contrast, is claimed to be not only environmentally sustainable but delivers healthier, more nutritious and better tasting (if not better looking) food.

None of these is objectively true. Modern agriculture is absolutely sustainable, with yields that increase year by year. Modern pesticides and fertilisers simply do not accumulate in the environment. There are no residues at all in most conventional food and certainly none that are remotely hazardous. And a plant neither knows nor cares whether a phosphorus or potassium molecule originated from a mine or a piece of cow manure.

Organic production does not necessarily stand up to close scrutiny either. Permitted organic pesticides such as copper, sulphur, pyrethrum and rotenone can cause worse problems than man-made pesticides, while organic cultivation techniques tend to be quite intensive, leading to the risk of erosion and either a lot of manual labour or the use of more fuel.

The suggestion that organic food tastes better may relate to the fact that plants adapted to withstand attack by insects and fungi produce their own internal pesticides. However, the claim that organic food is more nutritious is now shown to be absolutely false.

Researchers from the highly regarded and long-established London School of Hygiene and Tropical Medicine have just published a major paper in the American Journal of Clinical Nutrition that reviewed 162 scientific studies published over 50 years. The researchers found there was no significant difference between organically and conventionally produced food in terms of nutritional superiority. That is about as conclusive as it gets.

None of this means there is anything wrong with producing organic food. As long as customers will put their money where their opinions are, there is a market. But there is one extra factor to consider that relates to the concept of social responsibility. On average it takes three to four times as much land to produce the same quantity of organic food as conventional food.

If the whole world converted to organic food production, as some supporters advocate, the world would struggle to feed itself. At a minimum, the area used for farming would have to vastly expand to allow for the yield losses due to poorly controlled weeds, fungi and insects.

This is no threat to Australian consumers; our farmers produce well over twice the amount of food required to feed the population. However, it is an issue for people in countries where the price of food governs how often they eat, and where they are finally beginning to live a little more like us after decades of grinding poverty.

The reality is that for every farmer who converts to organic production and thus produces less food, there is upward pressure on food prices. Ultimately, the effect is felt in places like Bangladesh and Cambodia.

In some respects the choice facing farmers is similar to growing tobacco. There is a legal market for tobacco, and smokers have every right to smoke if they choose. Misguided or not, it should be nobody else’s business, just like choosing to consume organic food.

But land used to grow tobacco can also be used for producing food, just as land used for organic food can be used to produce much more food conventionally. There is a market need to be met, but also a moral issue to consider.

Farmers take their social responsibility quite seriously, which is why modern agriculture is sustainable and the food they produce safe to consume. There would scarcely be a farmer in Australia who did not aim to leave his or her farm in better shape than when they acquired it, and many are immensely proud of the fact that on average they each feed over a hundred people. But choosing what to grow is one thing; making that choice in the context of moral issues caused by ill-informed and irrational consumers is another.

David Leyonhjelm works in the agribusiness and veterinary markets as principal of Baron Strategic Services, which provides consulting and market information services, and Baron Senior Placements, which provides executive recruitment services. For the past 20 years he has commented on the agricultural inputs market in Rural Business magazine.

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Anonymous,

The first thing that jumps to mind is the excessive fertiliser run-off into the great barrier reef causing massive coral bleaching. Modern agriculture is sustainable?
(See Organic food loses the high-ground, June 3.)

Anonymous,

The way I understand this article is it seems to say that it is immoral to produce and/or consume organic food because this increases supposedly the cost and reduces the availability of all food.
(See Organic food loses the high-ground, June 3.)
Even if it were true that the production of organic food requires more land than conventional food: so what?
Are we to call airlines immoral for having first-class and business-class seats on their flights? Because this surely increases the cost and reduces the availability of all seats.
Are we to call the automobile industry immoral for making cars at all, instead of small scooters? Because cars use more fuel than scooters surely this increases the price and reduces the availability of fuel.
Neither our capitalist system nor our consumer society are built on what is moral, but on what makes a profit and on giving the consumer a choice.
If we want to change that and start to run things according to a certain moral perspective I would suggest that there are much bigger things to tackle first, before picking on the organic food industry.

Anonymous,

While not an advocate or consumer of organic food, the system involved in its production does propose a lot of good ideas involving sustainability, soil science, and alternative pest and disease control.
To state that most conventional food contains no chemical residues is a total fallacy. (Organic food loses the high-ground, June 3) While they are all supposed to pass an mrl (maximum residue limit), no one in their right mind would suggest they have no chemical residue.
To suggest that modern conventional farming, as it stands at this point, is the best we can do is totally stupid and poorly informed.
If you are going to be critical of organic farming please don't resort to organic principles by spreading around a load of bullshit.

Anonymous,

My first question would be who funded the research paper you mention?
(See Organic food loses the high-ground, June 3)
This would be interesting to know as I'm sure you're cognisant of the fact that final conclusions in any research program are highly dependent on who funds it. Additionally, if the paper you've referenced is indeed a conclusively independent paper, I'm sure there will be just as many scientific studies indicating that the quality of food produced is dependent on what food animals are fed, how they're reared, pesticides used and the scale of production. There is no way that it can be a good thing that a handful of global multinational companies (who clearly adopt the "sustainable" mass production techniques you endorse) control over 80 per cent of the conventional food on our supermarket shelves and thus exhibit way too much control over what we eat and the farming practices adopted. This is where the real consumer misinformation lies.

Anonymous,

David, where to start? Perhaps with the paragraph beginning, "Modern agriculture is absolutely sustainable, with yields that increase year by year…."
(See Organic food loses the high-ground, June 3)
Perhaps before making this and other unsubstantiated claims in this paragraph, you should first do a little more research. There are literally hundreds of books on the unsustainability of today's industrial farming.
Aside from the many environmentally unsustainable practices, such as rapidly depleting top soil and nutrients, the fertilisers, pesticides, machinery, transport, marketing and distribution centres essential to the ongoing viability of today's farming enterprises are reliant at every step of production on cheap, plentiful supplies of fossil fuels. Perhaps, David, you need only look no further than to Deepwater Horizon to ask a few questions relating to the continued reliability and availability of these. But if that is too difficult a leap, then perhaps The End of Food, the Coming Crisis in the World Food Industry by Paul Roberts, is a good place to start to find out just how sustainable today's agriculture is.
Perhaps Business Spectator, before publishing any more such absurd articles, would also like to do a little more research. After all, even economists need to eat.

Anonymous,

I agree that organic food has little additional nutritional value, if any.
(See Organic food loses the high-ground, June 3.)
I do not agree that commercial crops like corn which have been boosted by artificial fertilisers and genetic engineering are 'conventional' farming. That is misleading.
This type of farming began after WW2 when we needed to find an alternative use for the stockpiles of chemicals previously used for weapons manufacture. A better term might be '20C tech farming'. Most of these commercial corn crops are used in processed foods (Coca-Cola) rather than 'conventional' food (i.e fresh produce).
Let me put that more succinctly: 20C tech farming isn't conventional farming and does not produce conventional food.

Anonymous,

Year-on-year yield increases are based on turning ever increasing amounts of oil (in various forms) into food (variously enumerated as 7-10 calories of oil per calorie of food energy).
(See Organic food loses the high-ground, June 3.)
No system that involves increasing yields beyond a certain level can be considered 'sustainable' so the attempt to use 'yields that increase year by year' as evidence of sustainability shows a complete lack of understanding of the concept.
Fertilisers and pesticides that don't accumulate in the environment, contrary to the evidence of blue-green algae blooms, dead-zones in the sea, toxic fish and dying frogs? Perhaps you're naively equating flow through the environment as evidence for lack of accumulation. Trouble is you don't stop to consider the impacts while those excess materials are making their way through our ecosystems.
The major paper on the difference between organic and conventional food 'only' considered the major elements and energy content, and explicitly excluded consideration of pesticide and herbicide residues, so it explicitly disregarded the most important differentiating factors.
The foundations of this commentary are certainly ethically and morally dubious, ill-informed, and maybe even bordering on irrational.

Anonymous,

As a certified organic producer for 15-year I can tell you that you are right on the money with organics being quarter as efficient as conventional. (See Organic food loses the high-ground, June 3.)
As to cost, our organic potatoes are returning 40 per cent less per kg than our conventional. Simple supply and demand.
Too many wealthy lifestyle farmers have flooded the small market and to exacerbate that problem major supermarkets are refusing to lose any more money on stock they eventually have to mark down below cost to move. Any extra cost to consumers is left in the pockets of wholesalers and small retailers. On production land, there is so much potentially productive land in the world that only major climate shifts taking some out of production will save farmers from a universal glut and eventual bankruptcy.

Anonymous,

You have made a lot of unsupported claims here. Piggy-backed them all to one finding about nutrition. Even if true, there are many other issues to organic food production that are beneficial.eg. farming techniques that reduce soil degredation and pollution.
(See Organic food loses the high-ground, June 3.)
You forgot to mention how bio-fuel crops are threatening the world's poor by pushing up food prices!

Anonymous,

"Modern pesticides and fertilisers simply do not accumulate in the environment. There are no residues at all in most conventional food and certainly none that are remotely hazardous."
Do you have a reference for this claim?
(See Organic food loses the high-ground, June 3.)

Anonymous,

Despite the opinions of the believers and the non-believers, organic farming has probably contributed heavily to the ongoing focus and practices on land-care and environmental care by farmers.
(See Organic food loses the high-ground, June 3.)
It possibly has also contributed some moderation to issues about rapid and uncontrolled progress in farming techniques, e.g. genetically modified may have expanded much more rapidly with less scrutiny if organic farming was less established in our community.
Organic produce may not offer substantial benefits on the table but organic farming beliefs and techniques have an important place in industry policy formation.

Anonymous,

Perhaps non-organic food uses less land, but on the other hand, people should eat less.
(See Organic food loses the high-ground, June 3)
Look at the growing global obesity epidemic. We eat organic because it tastes far better and because we don't like the thought of chemical sprays. We also note that when we do our weekly organic shop we rarely see overweight people in the same store. Compare this to your conventional supermarkets and you will see what I mean. So, it's not all about whether organic is better for us than conventional agriculture, it's more about people eating the right kinds of food and the correct portion sizes.