Agriculture Reference
In-Depth Information
claims that, in many circumstances, have clear value in the marketplace. The f flipside to this is
that the regulatory regimes underpinning certification preclude those who have not been cer-
tified from labelling their produce as organic.
Guthman (2004) argues that organic certification creates conditions of scarcity, by limiting
the amount of food labelled as organic in the marketplace, and thus provides the basis for farm
gate and retail price premiums. While notions of scarcity and price premiums intuitively
would suggest that certification may limit market expansion, the effects may be both positive
and negative. The cost and complexity of certification certainly does discriminate against
smaller growers, particularly those in the developing world (see
Chapter
9
). However, scarcity
and price premiums have acted to encourage those farmers and others who could afford the
cost of certification into the organic sector and have thus helped to boost organic food supply
and availability. This has been clearly demonstrated in the USA, where the implementation of
a uniform national standard in 2002 is credited with boosting consumer awareness and confi-
dence in organic produce and with clearing the way for its entry into mainstream supermar-
kets (Sahota 2004).
There are now few developed countries where mainstream supermarkets and other large
retail chains do not appear set to dominate sales of organic foods. Among the world's three
largest national organic markets, for example, supermarkets claimed 49% of organic retail
sales in 2001-02 in the USA, 40% in Germany and 80% in the UK (Sligh and Christman
2003). Four years previously, the supermarket share of organic retail sales in Germany had
been a mere 26% (Richter
et
al
. 2001). In the USA, 31% of the organic retail market in 2001-02
was held by just three natural food retail chains (i.e. Whole Foods Market, Trader Joe's and
Wild Oats Markets) that operated across multiple locations using store layouts and scales
similar to those of conventional supermarkets (Sligh and Christman 2003). Ref lecting the
assumption, whether accurate or not, that organic consumers are urban, educated and com-
paratively wealthy, European supermarket chains have been shown to concentrate the availa-
bility of organic foods in larger, higher quality urban stores (La Via and Nucifora 2002).
The increasing involvement of very large businesses, such as supermarket chains, in the
organic sector has attracted concern and criticism. The argument is that in relatively small-
scale and localised food networks, enough opportunities are afforded to consumers for direct
interaction with growers to ensure their confidence in the integrity of the foods they purchase.
By replacing direct interaction, and the trust it encourages, with codified sets of standards, the
way is cleared for organic foods to be shipped around the world at enormous cost in fossil fuels
and at the expense of values that are not easily codified such as agricultural biodiversity and
community building (see Guthman 2004). The 'conventionalisation thesis', as this has become
known, assumes that the entry of larger businesses into the organic sector first displaces the
smaller businesses that pioneered the sector and second, that these businesses do not share the
values, nor implement organic standards with same authenticity, as organic pioneers.
There can be little doubt, however, that the increased visibility and availability of organic
foods facilitated by mainstream supermarkets has been a major factor in expansion of the
organic market (Richter
et
al
. 2001). The reduced distribution costs and economies of scale
enabled by the involvement of larger retailers have contributed to lower retail price premiums,
and hence increased consumer demand, in those European countries where supermarkets
dominate organic sales (Hamm
et
al
. 2002). Further, because the total volume of organic food
sales has increased alongside mainstream supermarket involvement in the industry, the
increased market share captured by supermarkets has not come directly at the cost of absolute
sales among their competitors (Richter
et
al
. 2001). Indeed, where small retailers, such as
health food stores, have experienced declining organic food sales they have done so less because
of mainstream supermarket competition than because of competition from specialist organic
and natural food chains (Richter
et
al
. 2001).
