The organic industry is one of the fastest growing sectors of the food industry in the United States. Organic food sales grew 11% to nearly US$40 billion in 2015, according to the Organic Trade Association (OTA), while the food market as a whole recorded a growth rate of 3% .
This growth is partly explained by the fact that organic crops command a higher price than conventional crops – as the demand for organic foods increases, so does the interest of farmers and producers in organic production.
For the first time, there is now evidence linking organic farming to economic health. Today, OTA released new research concluding that organic farming boosts local economies and that organic production creates sustainable regional economic opportunities.
The white paper, titled “US Organic Hotspots and their Benefit to Local Economies,” was compiled for OTA by Dr. Edward Jaenicke, agricultural economist at Pennsylvania State University. He finds that biological hotspots—defined as counties with high levels of agricultural activity whose neighboring counties also have high biological activity—raise median household incomes by an average of $2,000. They also reduce poverty levels by an average of 1.3%. Organic hotspots exist across the country, but a few examples include Monterey County in California, Huron County in Michigan, Clayton County in Iowa, and Carroll County in Maryland.
Furthermore, the report finds that organic farming has a greater beneficial economic effect than general farming. It also has a more positive impact than some anti-poverty programs.
Research shows that organic agriculture can also be used as an economic development tool for policy makers. Accordingly, the white paper made five policy recommendations, including promoting organic agriculture at the federal, state, and local levels; focus on rural development, biological transition, capital structures and barriers to investment; and targeting specific geographic areas for development.
Read the full report here.