Will organic fruit, vegetables get cheaper soon?


August 27, 2010

Many grocery stores now carry at least some types of organic fruit and vegetables, thanks to the growing demand for these products that are viewed as more environmentally friendly and safer to eat than other produce. From 2005 to 2008, organic food sales in the United States went up 53 percent. Now, a new study led by professor Timothy Richards of the W. P. Carey School of Business at Arizona State University looks at why organic produce prices have been so high, why they’re finally starting to plunge, and whether a new safety risk is being introduced.

“The demand for organic fruit and vegetables has been growing at a rate far greater than the rest of the produce industry,” says Richards, the Marvin and June Morrison Chair of Agribusiness and Resource Management at the W. P. Carey School of Business. “However, the steep cost needed for growers to buy new equipment and meet organic certification standards has meant the supply was slow to adjust, keeping organic produce prices high. That’s beginning to change.” Download Full Image

In his new study, recently published online in the journal Agribusiness, Richards and his co-authors looked specifically at apples grown in Washington State, which supplies about 70 percent of U.S. apples, as an example of the overall organic produce-price situation. Not surprisingly, the researchers found retail and wholesale prices for most organic apples were far higher than those for nonorganic apples. However, they also found that suppliers of organic apples have much greater market power and a higher profit margin than suppliers of other apples.

“This supports our idea that a shortage in organic apple supply has shifted bargaining power from retailers to suppliers for organic apples,” explains Richards. “Grocery retailers know they should charge lower prices on organic produce to induce new customers to try something that can often appear inferior in the store, but because of the lack of suppliers, they haven’t been able to do that.”

The new research shows retailers only earn 7.4 percent of the profit margin on organic apples, instead of 75.3 percent on nonorganic apples; that can leave big money for the suppliers. This realization is enticing more American suppliers to start growing organic, despite the cost of meeting certification standards, which can require investment in new production methods.

“Also, organic prices really started to fall once Walmart announced it was going to sell organic food, creating a huge new venue for the products,” adds Richards. “All of this together means prices will soon stop being an obstacle for consumers who want to buy organics.”

Still, one possible pitfall from the high profit margin centers on foreign suppliers. They are also getting into the market since they see the big profit potential and a lack of constraints from their own governments.

“Foreign suppliers are subjected to relatively weak standards, so their presence in the market is growing,” says Richards. “While this will help drive prices down, it also brings with it new food safety concerns and invasive species risk.”

Richards points out that this is important to examine as policy discussions on organic produce take place. He says it’s especially true when altering the definition of organic products, rules regarding their import, or advertising strategies by retailers and suppliers.

Richards’ co-authors on this study are assistant professor Ram Acharya from New Mexico State University and Ignacio Molina, research associate at the W. P. Carey School of Business at Arizona State University. The study can be found at http://onlinelibrary.wiley.com/doi/10.1002/agr.20251/abstract.">http://onlinelibrary.wiley.com/doi/10.1002/agr.20251/abstract">http://on...

Grad course looks at Katrina through environmental justice lens


August 27, 2010

Monica Casper’s graduate course, “Environmental Justice, Body Politics and Human Rights,” is taking her students by storm, literally and figuratively. The professor of social and behavioral sciences in Arizona State University’s http://newcollege.asu.edu" target="_blank">New College of Interdisciplinary Arts and Sciences and her 13 graduate students are exploring Hurricane Katrina and the environmental justice issues that remain five years after the costliest and one of the deadliest hurricanes in U.S. history wreaked havoc on New Orleans and its Gulf Coast surroundings.

Casper, who is the director of the New College http://newcollege.asu.edu/harcs" target="_blank">Division of Humanities, Arts and Cultural Studies, says her course will take a special approach that expands the environmental justice perspective. Download Full Image

“The EJ (environmental justice) movement and literature about it have expanded over the years,” she says. “This course offers a unique perspective by examining environmental justice struggles, such as those that have occurred in NOLA (New Orleans, LA), through the conceptual lenses of body politics and human rights. That is, the course begins with the assumption that all EJ struggles are intimately connected to the ways in which human bodies – especially racialized, gendered and classed bodies – are shaped, regulated, distorted and damaged by social structures and practices.”

Body politics and environmental justice are among Caper’s areas of expertise, and she has taught courses in each at Vanderbilt University and the University of California at Santa Cruz. While at Vanderbilt she was the director of the women’s and gender studies program from 2004-08. As an associate professor at the university, she participated in its Hurricane Katrina Working Group, which studied the impact of the storm on the communities it hit.

“In my view, any course on EJ needs to focus on New Orleans for a number of reasons,” says Casper, who has taught at ASU’s West campus since 2008. “First, NOLA has long been ‘EJ Central,’ with some of the major figures in the EJ movement based there. Also, the city has a unique set of factors that make it particularly susceptible to catastrophe: urban poverty, an eroding shoreline, ‘natural’ phenomena such as hurricanes, institutional and governmental racism, and a legacy of corruption.

“Any ‘natural’ disasters are part and parcel social disasters, too.  Hurricane Katrina was the most visible indicator of this, and recently we’ve had the BP oil spill to add to the mix.”

Casper’s class, which has attracted students from http://herbergerinstitute.asu.edu/" target="_blank">ASU’s Herberger Institute for Design and the Arts, the justice studies program in the http://sst.clas.asu.edu/" target="_blank">School of Social Transformation, and New College’s master’s programs in http://newcollege.asu.edu/graduate/degrees/mais" target="_blank">interdisciplinary studies and http://newcollege.asu.edu/graduate/degrees/sjhr" target="_blank">social justice and human rights, will study the history of the EJ movement, major theories and ideas, principle players, zones of contention such as New Orleans, controversial issues from fenceline communities to chemical weapons and hazardous dumping, and transnational and global issues.

A two-week window during the semester coursework will focus on Katrina and include a viewing of Spike Lee’s 2005 documentary, “When the Levees Broke.” Casper is hopeful she can raise the funds necessary to send her students to New Orleans in November when she travels to the Crescent City for the annual American Anthropological Association conference.

“While the course will cover a broad range of material, being ‘in the field’ in New Orleans will provide a hands-on, direct experience and greater knowledge about one of these zones of contention,” she says. “We can explore what might have been done differently at the time, and we can learn from EJ scholars ‘on the ground’ what they are doing now, and how this can help make sense of other disasters, such as Pakistan’s flooding.”

Among the struggles faced by the impacted Gulf Coast population as a result of Hurricane Katrina, Casper points to five she will discuss with her students: the chemical contamination and toxicity of floodwaters, as a result of New Orleans’ large number of hazardous material sites, and the impact on human health; because African American communities remained flooded longer than white communities, they were put at greater risk; the interruption of public transit systems, which are predominantly used by lower income residents, African American residents, and working poor; FEMA (Federal Emergency Management Agency) mismanagement and poor leadership disproportionately affected low-income residents and communities of color who most needed emergency services; and the recovery/rebuilding efforts have been unequally distributed, reflecting the same structural hierarchies present before the hurricane – as an example, economic development focused on tourism rather than housing for the poor.

“While we’d like to think Katrina’s legacy is long past, this is simply not true,” says Casper. “The ‘recovery’ project is still ongoing, and has now been hampered by the BP disaster. Spike Lee has a new documentary out that was originally to focus on the recovery, but instead shows what hasn’t been fixed over the five years since the disaster.

“The lesson I want to impart is that water and debris can be cleaned up, and oil well holes eventually plugged, but racism, poverty, structural inequality, indifference and corruption are endemic and ongoing. If we can’t fix these ‘social’ things, then we still have the same problems.”

The students’ study of Hurricane Katrina is a perfect fit within the course goals and objectives, says Casper.

“We want the students to come out of this course and be able to understand and describe specific issues and topics related to environmental justice, and Katrina offers many examples,” she notes.

“Look at the lessons provided by Katrina. There was a lack of government initiative to provide basic services, and a complete breakdown in communication in that FEMA wasn’t talking with local government who wasn’t talking with storekeepers and food providers and responders. The most vulnerable people couldn’t get shelter, food, water and even toilet paper in the early days of the disaster. For anyone who cares about social justice or basic human needs, this sort of non-response and indifference was just unacceptable.”

Steve Des Georges

director strategic marketing and communication, Enterprise Marketing Hub

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