While the consumer of organically grown foods may be more sensitive to
production methodologies, in the end he/she is probably not much
different from any other consumer of foods especially in how they
conceive of the farm price structure. Agriculture, be it organic, low
input, sustainable, conventional, or otherwise, is an example of an
oligopsony. The markets are controlled by a few (sometimes only one)
buyer. Processors and marketers each add value (I realize this is
sometimes questionable) and add their markup. If there is a problem with
the profit margin organic farmers are receiving today it is a problem that
is basically shared with other producers across the board.
There are not many ways to change the oligopsonistic aspects of the
market. However, the CSA, regional and community marketing and
sufficiency approaches, and direct markets are alternatives that offer
hope. The key point to remember about these is that as conditions
change and markets evolve, there will be pressures to change
production and marketing approaches. The large, conventional ag
production and marketing cooperatives that exist today may not have
begun with national market domination in mind, yet that is where they are
now positioned.
Marc Safley
msafley@usda.gov