Organic Sector Losing Ground, Bad Economy and New Regulations to Blame

SPINACHFARMLet’s face it. The economy stinks. So it makes sense that premium goods, like organic foods, would suffer as more and more Americans try to save money.

From 1990 to 2007, the Organic Trade Association says the sales of organic foods jumped from $1 billion to $20 billion, but the honey moon is now over.

For example, one expert said the growth of Whole Foods’ organic sector recently dropped from 20% to 12.5% and some worry this level of growth may never be seen again.

And here’s where the plot thickens. Many organic farmers feel new government regulations—aimed to improve food safety—may unfairly single out small farms and cripple them financially.

New legislation will require the industry to fork over a $500 registration fee for each facility to pay for increased plant inspections. It could be even more if all these extra inspections result in additional expenses.

Big corporate food producers might be able to fit the bill, but the little organic farmer will be bankrupted.

Via Reuters.

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  • Ed Howes  July 21, 2009 at 8:29 pm

    This is a rather alarmist approach to good news. Any business that fails due to a $500 fee was on its way out without the fee.. Any business that grows in a depression is a good business regardless of year to year performance. Most small growers will not comply with a law the government can’t afford to enforce. The ever growing emphasis on personal health responsibility all but guarantees the growth of the real food industry even as the masses buy less. So thanks for the encouraging news.

  • Bill Nunes  July 21, 2009 at 8:33 pm

    I just don’t understand how so many reports say organic is losing ground. Growth is at 12%, so the organic sector continues to grow. It’s not losing ground at all!

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