The Economic Cost of Food Monopolies
<http://www.foodandwaterwatch.org/reports/the-economic-cost-of-food-monopolies/>
Read the Full Report
<http://documents.foodandwaterwatch.org/doc/CostofFoodMonopolies.pdf>
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http://www.commondreams.org/view/2012/12/03-9
Published on Monday, December 3, 2012 by Civil Eats
How Consolidated Agribusiness Harms The Organic Sector
by Wenonah Hauter
The pioneers of organic agriculture probably did not foresee the day
when consumers could buy organic junk food at the supermarket. But
now organic is a $31 billion a year big business and the biggest food
companies are eagerly moving to capture the profitable and
high-priced organic food label. Although many consumers and farmers
moved to organic to avoid corporate-controlled and unsustainable
industrial food production, the Big Food monopoly is catching up.
<http://www.foodandwaterwatch.org/reports/the-economic-cost-of-food-monopolies/>
In the past decade, the organic food sector has consolidated rapidly,
and it now closely resembles the conventional food industry. Major
food companies have snapped up organic brands and launched their own
organic versions of popular foods. Between 1997 and 2007, a third of
the 30 largest food-processing companies purchased organic brands,
and half introduced organic versions of their conventional food
brands.
These conglomerates are also diluting the definition of organic and
selling meaningless "natural" substitutes for organic foods. Giant
food manufacturers and agribusinesses with valuable organic lines
(like General Mills, Campbell's Soup and Driscoll Strawberry
Associates) have had company representatives on the USDA advisory
board that establishes the standards for organic farming and food
manufacturing. Perhaps unsurprisingly, the number of non-organic
substances approved for organic food has tripled over the past decade.
But some companies can just sidestep the tedious process of weakening
organic standards by capitalizing on consumer enthusiasm for organic
without living up to them. Typically, that effort involves
substituting a self-defined "natural" brand for the more tightly
regulated "organic" counterpart. Dean Foods and its WhiteWave-brand
Silk Soymilk provide an example of how costly such actions can be to
the organic sector.
WhiteWave was founded in the 1970s driven by a vision that soy foods
could help solve world hunger, but it grew into a major player. And
soymilk became one of the only grocery products where organic was the
norm, not a niche. Organic soymilk was the third largest segment of
organic food sales in 2007, behind only dairy and fresh produce. In
2002, the nation's largest dairy processor Dean Foods bought
WhiteWave for $193 million.
In 2009, Dean Foods began to blur the integrity of organic soymilk.
It began offering soymilk made with non-genetically engineered
soybeans, which allowed Dean to shift from expensive organic to
cheaper non-GE soybeans. Although Dean changed its ingredient list
and removed the word organic from the label, most consumers and
retailers still assumed Silk was organic.
This insidious transition from organic to "natural" had huge
implications for consumers, farmers and the environment because of
Dean's market dominance. Dean was the biggest seller of organic
soymilk and a huge buyer of organic soybeans. By 2004, Silk sold
three-quarters of all soymilk in the United States and it was
organic. Dean's 2009 "natural" soymilk shell game helped reduce
organic soymilk consumption by almost 50 million gallons the first
year.
Since it takes a pound and a half of soybeans to make every gallon of
soymilk, the steep drop in organic soymilk reduced the market for
organic food-grade soybeans by 1.2 million bushels. In their place,
Dean used conventional, non-biotech soybeans for the "natural"
soymilk, which were about $7.25 cheaper per bushel than organic
soybeans in 2009. This meant that Dean saved - and organic farmers
lost - about $9 million.
When the soymilk demand for food-grade organic soybeans evaporated,
it amounted to a 32,400-acre drop in organic production between 2008
and 2009. Those acres could have reverted to non-organic soybeans.
Even non-genetically engineered soybeans can and probably do use
pesticides and herbicides if they are sold as non-organic. Although
Dean promised consumers that it tested non-genetically engineered
soybeans for agrochemical residues and even suggested that the
soybean pod "naturally shields" it from pesticides, the reality is
that agrochemical applications likely increased significantly.
The Silk Soymilk saga offers a cautionary tale of consolidated
agribusiness power over the organic sector. Dean has described its
specialty, organic and soybean-based beverages as "a $2 billion brand
powerhouse." In the case of soymilk, that power was used to undermine
organic farmers, the environment and consumers.
For more information, read the new Food & Water Watch report, The
Economic Cost of Food Monopolies.
<http://www.foodandwaterwatch.org/reports/the-economic-cost-of-food-monopolies/>
© 2012 Civil Eats
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