Tim Worstall

The Organic Industry

Guardian Leader:

Sales of organic food grew by nearly a third last year – although it
still accounts for less than 1% of all UK food sales. The sector has in
the past few years gone from being the province of the enthusiast
farmer to an industry of some scale.

An industry of some scale? Really? Let’s ignore, just for a moment, the vastly higher retail margins on organic and look purely at the size of the farming part of organic, shall we?

Total income from farming in 2002 in the UK was £2.4 billion (including subsidies). This, note, is income, net of costs. Organic is 1% of this? £24 million?

Not, I think, something that we would call an industry of some scale.

In

8 responses

  1. jameshigham Avatar
    jameshigham

    Doesn’t “industry of some scale” depend less on percentage of total market than on overall volume?

    Reply
  2. The Remittance Man Avatar
    The Remittance Man

    Well, strictly speaking it is an industry of some scale. Just a very small scale.

    Reply
  3. Tim almond Avatar
    Tim almond

    24 million sounds a bit low.
    Is that retail and does it include the likes of green and blacks?

    Reply
  4. Matthew Avatar
    Matthew

    Isn’t TIFF more akin to a measure of profits (plus income paid to farmers) than ‘the size of the industry’ – I thought was more like 0.7% of GDP, or something like £10bn
    Tim adds: Yes, I know, I was playing with figures. TIFF though is the value added…profits plus incomes, no? So should be the GDP component? Or have I missed out the labour paid to workers?

    Reply
  5. Helen Avatar
    Helen

    Actually, that figure does sound a bit low. However, a very big proportion of organic food sold in this country is brought in from elsewhere, which raises its own problems. So that calculation is inaccurate.
    What I cannot understand, Tim, with the greatest respect in the world, is why you are conducting this campaign against organic food. Surely, it is all market driven. If people want to buy organic and pay the premium on it, well, what is the problem?
    Tim adds: I’ve no problem with people buying organic. Just as I have no problem with people buying petrol or plane flights. However, it’s a fairly standard economic assumption that people should pay for the external effects of their actions. Thus the fliers and the petrol heads should pay for the noise, CO2 and congestion caused by their purchases, as those buying organic should pay for the increased CO2 emissions, greater use of land and so on of their purchases.

    Reply
  6. Matthew Avatar
    Matthew

    I think it exludes non-farm owner worker payments, as the government still reports something like 0.7% of GDP.
    “as those buying organic should pay for the increased CO2 emissions, greater use of land and so on of their purchases”
    Surely they do?
    Tim adds: I haven’t noticed that we have a carbon tax yet, nor are farms included in EUTS, so no, they don’t.

    Reply
  7. sanbikinoraion Avatar
    sanbikinoraion

    Tim, in reply to your comment on Helen’s comment:
    Even if your ludicrous claim that organic produces more CO2 is true – even then – organic buyers are paying 30-300% extra in the shops for their goods, depending on how much the supermarket is gouging them for today. Surely that is a sufficient Pigouvian “tax” on organic.
    Second, on your contention that organic produces more CO2, you seem to be referencing a single report featured in the Indy last year, which basically found the chickens and milk were “worse” organically, and that inorganic tomatoes from Spain were “better” than UK organic tomatoes, but *only* when UK organic was out of season. This is hardly a sound basis for claiming that organic == more CO2.
    Indeed, I have seen studies that show the reverse, particularly for arable products (grain, soya, etc), largely due to reduced pesticide use (which needs to be manufactured and shipped to farmers and potentially cleaned out of the rivers).
    If you have sounded evidence for organic == more CO2, I’d be very interested. You know my email.
    Tim adds: The Indy was quoting a Defra report. It is sound evidence.

    Reply
  8. sanbikinoraion Avatar
    sanbikinoraion

    Here’s the chap at MBS talking about that DEFRA report (can’t find the actual report online, unfortunately):
    http://www.mbs.ac.uk/research/casestudies/defra.aspx
    At best you can have “the environmental benefits of organic food production are not clear-cut”. That’s not the same as saying that organic is worse. If you look at another DEFRA report from 2002, they give organic farming a pretty comprehensive treatment. The part on CO2 is on page 53, but there’s a summary pages 4-6 that basically say “organic farming is good, m’kay?”.
    http://www.defra.gov.uk/farm/organic/policy/research/pdf/env-impacts2.pdf

    Reply

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