OT: Wal-Mart Declares War on Organic Farmers
- 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" organicfood 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 manufacturersforcing 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 Chinaand the fact that the USDA has
provided little if any regulatory oversight therefood 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
"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