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OT: Wal-Mart Declares War on Organic Farmers

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  • Annette
    Wal-Mart Declares War on Organic Farmers Partners with Agribusiness for Corporate Takeover CORNUCOPIA, WISCONSIN: A report released today by The Cornucopia
    Message 1 of 1 , Sep 30, 2006
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      Wal-Mart Declares War on Organic Farmers
      Partners with Agribusiness for Corporate Takeover

      CORNUCOPIA, WISCONSIN: A report released today by The Cornucopia
      Institute, the nation's most aggressive organic farming watchdog,
      accuses Wal-Mart of cheapening the value of the organic label by
      sourcing products from industrial-scale factory farms and Third
      World countries, such as China.

      Wal-Mart announced earlier this year that they would greatly
      increase the number of organic products they offered and price them
      at a target of 10% above the cost for conventional food.

      "We have received scores of press inquiries over the past few months
      asking us if Wal-Mart's organic expansion was `good news or bad
      news' for the industry," stated Mark Kastel, Senior Farm Policy
      Analyst for the Wisconsin-based farm policy research group. "My
      stock answer has been: If Wal-Mart lends their logistical prowess
      to organic food both farmers and consumers will be big winners by
      virtue of a more competitive marketplace. However, if Wal-Mart
      applies their standard business model, and in essence Wal-Marts
      organics, then everyone will lose."

      The Institute's white paper, Wal-Mart Rolls Out Organic Products—
      Market Expansion or Market Delusion?, makes the argument that Wal-
      Mart is indeed poised to drive down the price of organic food in the
      marketplace by inventing a "new" organic—food from corporate
      agribusiness, factory farms, and cheap imports of questionable
      quality. "Organic family farmers in this country could see their
      livelihoods disintegrate the same way so many industrial workers saw
      their family-supporting wages evaporate as Wal-Mart and other big-
      box retailers put the screws to manufacturers—forcing a production
      shift to China and other low-wage countries," Kastel added.

      Wal-Mart, already the nation's largest organic milk retailer,
      partnering with the giant milk processor Dean Foods (Horizon
      Organic), recently introduced their own private-label organic milk
      packaged by Aurora Organic Dairy. Aurora, based in Boulder,
      Colorado, has faced a maelstrom of organic industry criticism and
      negative press for operating a number of industrial-scale dairies
      with thousands of cows confined in feedlot-like conditions. They
      are also the subject of two current USDA investigations into their
      organic management practices.

      "If there was any previous doubt as to their intentions, partnering
      with Dean/Horizon and Aurora should leave no question in anyone's
      mind as to how Wal-Mart is approaching its organic initiative,"
      proclaimed Steve Sprinkel long-time industry observer and columnist
      for the nation's leading sustainable agricultural journal, Acres
      USA. Large percentages of milk from Horizon and Aurora come from
      factory farms, milking as many as 10,000 cows, allegedly without the
      required access to pasture. The two companies have also been
      accused of bringing nonorganic cows onto their farms. "Because of
      the intense media scrutiny there is no doubt that Wal-Mart entered
      into these relationships in blatant disregard to the ethical
      expectations of the consumers who have helped build organics into a
      lucrative $16 billion industry," Sprinkel added.

      This April, The Cornucopia Institute released a rating of the
      nation's approximately 70 organic namebrand and private-label
      organic dairy products (www.cornucopia.org). Although almost 90%
      received a very high rating, Horizon and Aurora refused to
      participate in the study and received the Institute's lowest score.
      And in a subsequent poll of their over 800,000 members, the Organic
      Consumers Association moved to boycott Horizon and Aurora dairy
      products. "It's hard to believe that at this time Wal-Mart would
      embrace these products," said OCA director Ronnie Cummins.

      In addition to the report's documentation of the Wal-Mart/factory-
      farm connection, the study also highlighted the company's decision
      to lower the per unit cost basis on organic products by
      collaborating with its long-time trading partner China.

      "Even if it were not for many serious concerns about the propriety
      of the certification process in China—and the fact that the USDA has
      provided little if any regulatory oversight there—food shipped
      around the world, burning fossil fuels and undercutting our domestic
      farmers, does not meet the consumer's traditional definition of what
      is truly organic," Kastel stated.

      While Wal-Mart sources Chinese organic products, the industry's
      largest organic and natural foods retailer, Whole Foods Market,
      announced plans this summer to greatly expand their offerings of
      locally grown produce in deference to organic consumer sentiments.

      "Between Whole Foods and hundreds of the nation's cooperatively
      owned natural foods groceries, we are certainly set up for a clash
      of the titans," said Cummins. "Will consumers choose cheap
      industrial food, be it from factory farms or questionable Third
      World imports, or will they continue to support ethical processors
      and family farmers?"

      Wal-Mart also depends on Natural Selection Foods, Earthbound Farms,
      a giant industrial enterprise farming tens of thousands of acres in
      California, Arizona, Mexico and Chile as their prime vendor for
      organic vegetables.

      "I don't think (consumers) have any idea just how industrialized
      it's becoming (mainstream organics)," said journalism professor and
      author Michael Pollan in a recent interview with the St. Paul
      Pioneer Press. Pollan's book, "The Omnivore's Dilemma" has been a
      national bestseller. "There are some real downsides to organic
      farming scaling up to this extent," Pollan added during the
      interview. He and others worry that the expansion of "Big Organic"
      will lower food quality, weaken standards and hurt small family

      This month The Cornucopia Institute sent a letter to Wal-Mart CEO
      Lee Scott suggesting that Wal-Mart's approach to organics would
      likely undermine the corporation's campaigns to attract upscale
      shoppers to their stores and to help cleanse the reputation of
      world's largest retailer in terms of the widespread criticism that
      it has endured due to its labor and environmental practices.

      "We are afraid that you are grossly miscalculating your move into
      organics and underestimating the knowledge and commitment of the
      organic consumer. Those buying organic food are comfortable paying
      the historic premiums because they think that part of their purchase
      dollar supports a different kind of environmental, animal husbandry,
      and economic justice ethic," the letter from Cornucopia read in

      The letter also cited an example of Wal-Mart selling mislabeled
      conventional yogurt as organic. In addition, the Institute's report
      red-flagged the retailer selling organic baby formula made with both
      questionable synthetic ingredients and processing materials. The
      report also suggests that Wal-Mart might lack the qualifications or
      commitment to oversee what promises to be one of the nation's
      largest organic manufacturing, distribution, and retail networks.

      "Wal-Mart's move into organics is worrisome to investors who realize
      that the credibility of organic label, and the sustainability of
      organic farming, is of greater significance to their returns than
      the mere branding of the term `organic,'" said Daniel Stranahan,
      Investment Committee Chair of the Toledo-based The Needmor
      Fund. "If we undermine the legitimacy of organic label then we also
      undermine the investor and consumer confidence that have brought
      historic premiums to organic products."

      EDITOR'S NOTE: The Cornucopia Institute's White Paper, Wal-Mart
      Rolls Out Organic Products. Market Expansion or Market Delusion?,
      along with a photo gallery containing images of some of the organic
      items now being offered for sale at Wal-Mart stores, and the letter
      sent by The Cornucopia Institute to Wal-Mart's CEO, can be found on
      the organization's Web page at www.cornucopia.org
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