"Got Milk" and "Beef, It's What's for Dinner" ad campaigns have become part of the American culture, but few realize they are paid for by the USDA Checkoff programs. USDA Check-off programs generate revenues by assessing fees on agricultural producers and distributors, which are then invested into research to improve commodity production and to support those ad campaigns. Back in 2011, USDA estimated returns from Check-off programs at 8:1 for the Fluid Milk Board and 37:1 for the Lamb Board (USDA Benefits of Research and Promotion Boards).
The 2014 Farm Bill proposed a Check-off program focused on organic food. This is a very innovative idea as past Check-off Programs focus on specific commodities (e.g., the incredible edible egg) rather than a farming practice generating several different commodities. Even without a Check-off Program, the organic industry has been growing aggressively.
The charge for the new Check-off has been led by the Organic Trade Association, but has received mixed support from the organic industry. Concerns center on the inability of a national scale program to adequately support a diverse industry with many small producers focused on local markets. Large scale organic production and distribution is on the rise. Though large scale distribution of certain commodities can't be avoided, a resilient food system may be best achieved by diverse, local production. The debate has led the USDA to extend the deadline for partial or complete proposals from June 19th to July 20th.
The stated goals of OTAs Check-off proposal (May 12, 2015) to USDA are laudable, promote organics, fill in supply gaps, and increase organic production through technical assistance and research. But what is the most appropriate spatial scale for the greatest economic and environmental returns? I argue that there is a missed opportunity here to grow an industry that can enhance public health and environmental stewardship using market forces.
Natural capital, that is ecosystems and the goods and services they provide, is a common factor of production for organic farms. The magnitude of public and private returns possible when agricultural practices are linked to nature's services such as carbon sequestration, water filtration and retention, and habitat for pollinators and biological control species is an active area of research. The state of knowledge is best described elsewhere. However, there is sufficient weight of evidence to justify including research into links between natural capital and organic food production within an organic Check-off Program.
The OTA's proposal stresses a national program able to create a single large fund adequate for paying administrative costs of such a large program, capped at 15%. However, given organic farmers' disinterest in paying for national administrative costs, regional programs including voluntary efforts from an industry committed to quality food and stewardship of nature's services is a plausible alternative. Review of OTA's proposal suggests that they did not consider regional programs including nature's services.
Such a regional approach can create and keep financial returns local while generating the human capital needed to foster the industry. This human capital is critical as understanding how best to link nature's services to organic food production will likely vary regionally. Think about it this way: farms that rely on petroleum-based fertilizers and pesticides can achieve similar results regardless of their size and location in the landscape thanks to the homogenous input provided by natural capital from ecosystems that existed millions of years ago (Petroleum from the Jurassic epoch, for example. You might recall the green dinosaur on the Sinclair Oil Corp.'s logo). In contrast, native biological control species present in our current epoch (i.e., Cenozoic) will benefit from natural habitat to survive. Therefore, replicating research across the nation to understand how patterns of habitat for biological control species affect the value of services from Cenozoic natural capital will be important. This is just one example. Protecting habitat can create positive externalities including carbon sequestration, water filtration and retention, habitat for other species, and recreational opportunities. In contrast, extraction of natural capital from pre-history includes a variety of negative externalities (pollution, climate change, and earthquakes due to fracking).
Check-off's historic focus on advertising could be used to advertise the benefits of land stewardship projects that enhance organic food production and nature's services. "Reduce fecal runoff with riparian buffers". OK, Madison Avenue will not be calling my office, but the line may work if announced by Don Pardo.
The impressive growth of the organic industry indicates public demand to enhance inputs from Cenozoic natural capital and to reduce fossil fuel and other industrial inputs, but meeting this demand presents economic challenges. It will require continued innovation and increased cooperation among producers and scientist. Therefore, we should be using every policy tool at our disposal to improve the health and sustainability of our agricultural system. A Regional Organic Checkoff Program including Ecosystem Services (ROCES) would be an effective way to use markets to minimize negative externalities while enhancing regional economic development. I hope the spatial scale of these policies is considered further.