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Economic benefits of organic agriculture highlighted in new Federal Reserve book

Chapter of just-released St. Louis Fed publication on regional food systems details organic potential

Barbara Haumann
(
bhaumann@ota.com
(202) 403-8635
)
Washington , DC
US
 (
August 3, 2017
) — 

The significant and long-lasting economic benefits that organic agriculture can offer local communities are featured in an important new publication released Thursday by the Federal Reserve Bank of St. Louis and the U.S. Federal Reserve Board of Governors, The new book, Harvesting Opportunity: The Power of Regional Food System Investments to Transform Communities, is a compilation of research, essays and reports exploring how the growing popularity of locally sourced food can be harnessed to boost economic opportunities for rural and urban communities.

The feature chapter on organic, “Organic, A Solid, Beneficial, and Sustainable Investment” was co-authored by Dr. Edward Jaenicke, Associate Professor for Agricultural Statistics at Penn State University and Maggie McNeil, Senior Editor at the Organic Trade Association. The authors detail the findings of a Penn State research paper on organic hotspots summarized in the spring of 2016 in a White Paper released by the Organic Trade Association, “U.S. Organic Hotspots and Their Benefit to Local Economies,” and give real-life examples of how successful investment in organic agriculture creates jobs and business opportunities at the local level and increases the economic possibilities available in a locality.

“Organic agriculture can play a key role in growing a community’s economy, and we were pleased to be able to discuss organic’s positive role in this important and timely publication. We applaud the Federal Reserve system for its commitment to a healthy economy and financial stability,” said Laura Batcha, CEO and Executive Director of the Organic Trade Association. “And we commend the St. Louis Fed, the Fed’s Board of Governors, and the Department of Agriculture for putting together this significant body of work on the importance of investing in and developing healthy and vibrant regional food systems.”

“Regional food systems represent a promising avenue for economic growth for both rural and urban communities through the creation of new or the enhancement of existing jobs and businesses,” said Federal Reserve Board Governor Lael Brainard and St. Louis Fed President James Bullard in the book’s foreword. They continued that through the work that was conducted to develop the book, “we also learned that, with appropriately targeted policies and support, the attendant opportunities can advance the economic and financial security of low- and moderate-income households and communities.”

Contributors to the book include experts from the U.S. Department of Agriculture, financial institutions, universities, nonprofits, philanthropic organizations and other agricultural and economic sources.

The value of organic investments

The chapter on organic agriculture highlights the findings of the study on organic hotspots, which finds that on average, county poverty rates drop by 1.3 percentage points and median household income rise by over $2,000 in counties with high organic activity that neighbor other high-organic counties. 

“We know that organic agriculture benefits our health and our environment,” said Batcha. “The  groundbreaking organic hotspot research shows organic can also benefit our livelihoods and help support and revitalize our rural economies. Organic has come a long way on its own, but this research proves that if we invest in organic, the returns will be high for everyone.”

Two case studies of the broad positive implications for local communities of successful investment into organic agriculture were featured in the chapter. Farmland LP, an investment fund based in San Francisco, buys conventional land and converts it to organic using a pasture and crop rotation, and then manages the farmland with local producers to deliver environmental, societal and financial returns. Farmland now manages more than 2,000 acres of certified organic land, with thousands more acres in transition. The second, Keller Enterprises, is a Louisiana-based family company that transitioned its Inglewood Farm to organic and to what is now the largest certified organic farm in Lousiana. Through Inglewood and the family’s philanthropic funding and work with regional food projects in Louisiana, Keller Enterprises has become a major voice in the healthy food movement in the state.

“We provide the opportunity for investors to invest in sustainably managed farmland and gain exposure to both real assets and the organic sector,” said Farmland LP Managing Partner Craig Wichner. Wichner calls this a “virtuous cycle” – using sustainable agricultural practices to convert farmland to organic allows farmers to scale up and sell higher value crops; this boosts their incomes and enables them to spend more money in their local communities, stimulates the economy and all the while supporting the conversion of more land to organic.

Caroline Davis, president of Keller Enterprises sees a broad return on investment from their organic activities in Louisiana. “Through our investment in organic, in Inglewood and in our local food projects, we can see other efforts springing up and ideas spreading. It’s changing how the community thinks about food. That’s the good return for our investment. Everyone is benefitting.”

Done in partnership with the U.S. Department of Agriculture’s agencies of Rural Development and the Agricultural Marketing Service, the new book, in addition to organic, covers topics such as:

  • the prospects available in the regional food systems sector,
  • how to advance efforts to provide meaningful earnings and job opportunities for lower and middle-income households and communities,
  • the vital partnerships that are key for deploying knowledge and capital to support the sector’s continued growth,
  • examples of communities who have used regional food strategies to advance economic and other community goals, and models of collaboration between policymakers, practitioners, and the financial community,
  • examples of the how improved access to healthier foods can boost community health and lead to a more productive workforce.

For more information, see the Harvesting Opportunity website or quickly access the chapter on organic here.


The Organic Trade Association (OTA) is the membership-based business association for organic agriculture and products in North America. OTA is the leading voice for the organic trade in the United States, representing over 9,500 organic businesses across 50 states. Its members include growers, shippers, processors, certifiers, farmers' associations, distributors, importers, exporters, consultants, retailers and others. OTA's Board of Directors is democratically elected by its members. OTA's mission is to promote and protect ORGANIC with a unifying voice that serves and engages its diverse members from farm to marketplace.

The Organic Trade Association does not discriminate on the basis of race, color, national origin, sex, religion, age, disability, political beliefs, sexual orientation or marital/family status. Persons with disabilities, who require alternative means for communication of program information, should contact us.

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