Why is the price higher for organic food?

Food prices reflect the costs of growing, harvesting, transportation, storage, processing and packaging. During all of these stages organic food must meet stricter regulations.why does organic cost more

Some of the myriad of reasons why organic is more expensive are:

  • Organic produce, meat, eggs, and dairy products simply cost more to produce than their conventional counterparts;
  • Farming that is free of artificial chemicals eg pesticides, mean more hand-weeding. More importantly farmers run higher risk of losing all or part of their crops.
  • Some of the conventional farm inputs that organic farmers can't use eg sewage sludge, and chemical fertilisers, are cheap to buy and transport. Whereas organic farmers use fertilisers such as compost and animal manure which are bulkier and more expensive to buy and transport.
  • Conventional farmers can use 100% of their land 100% of the time, whereas organic farmers use rotation and resting. Crop rotation uses a cash crop then a cover crop which is usually ploughed in to improve the soil's nutrients.
  • Organic feed for livestock can cost twice as much as conventional feed.
  • There are administrative costs involved in the certification processes.
  • Organic farmers usually are disadvantaged by economies of scale because their farms are usually smaller in scale.

All this makes organic food more expensive than conventionally farmed food. But this is only if we don't look at the true cost of food production. When the indirect costs of conventional food production such as replacement of eroded soils, clean up of polluted water, costs of health care for farmers, farm workers and the consumers, environmental cost of artificial pesticide production and disposal, are factored into the cost, organic food is much cheaper. We need to look at the full lifecycle cost of production of organic vs non-organic.why does organic cost more

Organic farming methods mean production yields are often, but not always, lower than those obtained by conventional farming methods. This is because organic food production does not involve the use of artificial fertilisers, pesticides and other technologies.

Depending where in New Zealand you purchase organic produce you can expect to pay at least a 20 percent premium. A 2000 survey by Choice magazine found organic fruit and vegetables were on average 70 percent more expensive than non-organic - but the gap was shrinking. One factor driving the prices down is the entry into the organic market of the big players such as Coles and Woolworths.

In countries where organic production is a higher proportion of the overall food production than it is in New Zealand, the price of organic food is coming down. This is largely due to economies of scale.

Demand for healthier, safer food is continuing to increase and organically grown food satisfies this demand. For growth to take place in the commercial organic production sector, it must be viable for all participants ie growers, marketers, retailers, and consumers.