Organic farming is often touted as the solution to producing sustainable food that feeds the world.
However, that belief is a fallacy that isn’t supported by the numbers.
Organic farming has been an option for farmers for a long time, but the majority of farmers in the developed world are not organic despite organic food holding a premium pricing point.
There is a rational argument – the efficient market hypothesis – that can apply to the uptake of organic farming.
This argument suggests that financial markets are efficient in processing and reflecting all available information.
In other words, it posits that asset prices in financial markets always incorporate all known information, making it impossible to consistently achieve above-average returns by trading on publicly available information.
In its simplest terms, the efficient market hypothesis argues that if an activity is economically worthwhile to carry out, it would already be occurring.
Therefore, if organic farming was economically viable, farmers would already be switching to organic farming without government intervention to increase either the supply of organic produce or consumptive demand.
There are three possible arguments for why organic farming is not the preferred method within developed nations.
Economic viability of organic farming
If organic farming was significantly more economically viable (if it consistently generated higher profits or offered a better return on investment), rational farmers and entrepreneurs would have already transitioned to organic methods to capture the economic benefits.
If consumer demand for organic products was strong and growing, this would create a financial incentive for farmers to switch to organic farming.
They could command higher prices for organic crops and products in the market.
The agricultural industry is highly competitive.
If organic farming was the more profitable option, it would exert competitive pressure on conventional farmers to adapt or risk losing market share and profitability.
A substantial impact of transitioning to increased organic farming is the economic viability of organic farming versus conventional.
This is largely caused by the yield differential between conventional and organic farming.
The key factors attributing to the yield differential are outlined below.
Fertilisers and soil health
Conventional: Conventional farming often relies on synthetic fertilisers to provide essential nutrients to crops.
These fertilisers can be readily absorbed by plants, promoting faster growth and higher yields.
Organic: Organic farming uses organic matter, compost, and natural sources of nutrients to improve soil health.
While these methods can enhance long-term soil fertility and sustainability, they may not provide nutrients as quickly as synthetic fertilisers, potentially resulting in lower initial yields.
Pest and weed management
Conventional: Conventional agriculture typically employs synthetic pesticides and herbicides to control pests and weeds.
This helps protect crops from damage and competition, leading to higher yields.
Organic: Organic farming relies on natural pest control methods, crop rotation and organic-approved pesticides.
These methods may be less potent and slower-acting than synthetic chemicals, potentially allowing pests and weeds to have a greater impact on yields.
Conventional: Conventional farming often utilises high-yielding crop varieties that have been genetically modified or selectively bred for maximum productivity under conventional management practices.
Organic: Organic farming prefers open-pollinated or heirloom crop varieties that may not have the same level of yield potential as modern, genetically modified varieties.
Conventional: Conventional farming relies on herbicides to control weeds efficiently.
This reduces competition for resources such as water and nutrients, potentially leading to higher yields.
Organic: Organic farming often uses mechanical weed control methods such as cultivation or hand weeding, which can be less efficient and more time-consuming, potentially leading to reduced yields.
Conventional: Conventional farming may use fungicides and other chemical treatments to manage crop diseases effectively.
Organic: Organic farming relies on disease-resistant crop varieties and preventive measures such as crop rotation and sanitation, which may be less effective at preventing yield losses in certain conditions.
The management practices of organic farming provide a disincentive to conventional farmers to transition due to the yield differential they will experience.
Farmers produce food for profit: that is the underlying purpose.
However, they also produce food for the world, and conventional farming and science have allowed us to maintain a population of more than 7 billion.