gE Blog Series: Agribusiness Part 2 - Organic Farming

During routine trips to the supermarket, shoppers frequently face choices between organic and conventional food products.  While these items may look nearly identical at first glance, they likely arrived on store shelves via radically different supply chains.  Global regions have had varying reactions to the organic food movement.  The future of agribusiness may well be determined by consumer preferences between organic and conventional foods.

The term “organic” is generally applied to farming methods focused on reducing pollution and conserving soil and water.  Natural methods such as composting, weeding, crop rotation, balanced animal diets, and mulching are typically substituted for chemicals used on conventional farms.  Proponents of organic farming say that the process is better for the environment and yields significantly healthier foods.  Several global organizations certify products as “organic” based on predetermined standards.

Conventional methods reduce farming costs by increasing crop yields through advanced agricultural technologies.  Chemical fertilizers, insecticides, herbicides, and animal growth hormones are commonly used on these large corporate farms.  Conventional food is sold for much lower prices and proponents argue that it will help to solve the global food crisis.  Conventional farm products are often referred to as “GMOs” or genetically modified organisms due to the genetic engineering of new species.

The European Union is one region that has shown strong support for the organic movement.  The Common Agricultural Policy (CAP) makes up nearly 50% of the EU’s annual budget and closely links subsidies to environmental measures.  By limiting payments to large farms and measuring subsidies based on acreage rather than total yield, the EU is supporting small farmers over large agribusinesses.  Environmental considerations promoting biodiversity and the maintenance of pastures are also included in proposed revisions to the policy.

SEKEM, an organic farming company in Egypt, was identified in a World Economic Forum report as one of 16 companies showing environmental awareness in the developing world.  Located just outside of Cairo, the business has grown into a several thousand hectare community focused on sustainable agriculture.  In an extremely dry region, organic waste fertilizers have proven more effective than chemical fertilizers for holding water.  If all global farms followed the systems utilized by SEKEM, the contributions of agriculture to global warming could be entirely reversed.