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Choosing Organic and the Collective Goods Problem

September 4, 2012
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Organic Produce at a Local Farmers Market

A new study published in the Annals of Internal Medicine on Monday concludes that organic produce is no more healthy than conventionally grown produce. According to the study’s lead author, Dr. Crystal Smith-Spangler, “We did find that organic produce, so fruits and vegetables, had a 30 percent lower risk of contamination with pesticide residues compared to conventional produce.” The study also found that non-organic pork and chicken carried a 33 percent greater risk of contamination by antibiotic-resistant bacteria than their organic counterparts. A 2010 study by the US Department of Agriculture found that 59 percent of conventional produce contained detectable amounts of pesticides even after washing. But even organic produce did not escape contamination; indeed about 8 percent of organic produce contained detectable amounts of pesticides after washing, caused either by chemical drift from nearby farmers employing pesticides, or from contamination in warehousing or processing. However, the study’s authors note that for both conventional and organic produce tested, pesticide residues fell within safety standards established by the Food and Drug Administration. 

The study concludes that for most consumers, the health benefits of organic produce may not be worth the higher price. However for some consumers, particularly for pregnant women and young children, greater caution may be warranted. And for some produce, particularly the “dirty dozen,” organic may be worth it. 

 However, it should also be noted that the study’s conclusions are focused only on the direct health benefits to the individual consumer. Left out of consideration are the broader costs borne by society as a whole. Misapplication of pesticides leads to their release into the environment, a problem recognized by the USDA’s NationalAgroforestryCenter. Similarly, fertilizer runoff rings nitrates and phosphates from farmers’ fields into rivers, lakes, and coastal waters. As this happens, eutrophication occurs, often leading to algae blooms and creating dead zones in water. Where the Mississippi River flows into the Gulf of Mexico and extending to the upper coast of Texas, for example, there exists a dead zone some 6,000-7,000 square miles in size. Similar dead zones can be found in the Baltic Sea, the Black Sea, off the Oregon coast, and in the Chesapeake Bay.

 The environmental challenges posed by the extensive use of chemical inputs in agriculture illustrates the dilemma posed by the collective goods problem. The collective goods problem (also referred to as the free rider dilemma) exists when something exhibits two characteristics: non-rivalry and non-excludability. Non-rivalry means that one person’s use of a good does not inhibit another person’s ability to use that good. Non-excludability means that it is difficult to prevent someone who hasn’t paid for a good from enjoying that good. A clean environment is a good example of a public or collective good. While everyone would like to live in a clean environment, there is little incentive individually to provide or maintain one. But if everyone behaves only in their individual interest, the open environment will gradually degrade.

 From the perspective of any individual consumer, the choice about whether to purchase conventional or organic produce is thus be reduced to a simple cost-benefit analysis. The Annals of Internal Medicine study illustrates this choice: are the health benefits associated with consuming organic produce worth their higher cost.

 But this individualized trade-off externalizes the costs of production. Environmental pollution in the form of chemical runoff do not enter into the cost of the product. They are borne by society as a whole. Consequently, the price paid for conventional produce is artificially low. The higher price of organic produce is partially the result of internalizing the environmental costs. But so long as the organic vs. conventional choice is framed only in terms of individual benefits, the larger environmental costs of conventional production remain masked. 

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