The Organic Label Compound

Organic Apples

I like to have a banana with my breakfast. At my local Publix supermarket, I can pay around 69 cents a pound for ordinary bananas or somewhat more for certified organic ones.

I can afford the organics. I don’t buy them because I am unpersuaded there is any reason (at least none that matters to me) to pay more. Affluent people have the luxury of making this choice, and I do not begrudge anyone their preference. But I am mindful that there are some people in my town for whom the extra cost of organic groceries is a sacrifice, and many others who cannot afford any bananas at all.

Periodically, Publix promotes a “Food for Sharing” campaign that lets me make a donation at checkout to provide groceries and other staples to families that need help. I make a point of donating, and they even give me a nice canvas bag as a reward. That is where I would rather spend the extra dough.

The evidence of health benefits from consuming organic products rather than conventional foodstuffs is somewhere between scant and nonexistent. Still, I understand why people may wish to avoid meat from animals that have been given antibiotics (often to promote weight gain rather than to fight infection), or milk from cows that have been administered hormones, or fruits and vegetables that have been treated with pesticides and herbicides. People worry about how little we know about how much we don’t know. I get it. I think they should be free to make this choice about what goes into the food they eat, and I would like to see as many consumers as possible empowered to make an informed decision for themselves.

(My tolerance stops, however, at nonsensical demands that all foodstuffs that might possibly contain genetically modified organisms be labeled as such, which is pretty much the opposite of the “organic” regulations that already exclude GMOs. This is basically an attempt to put a warning label on products for which there is no demonstrated need for a warning and is inherently misleading. Anyone who wants to be certain of avoiding GMOs can simply refuse to buy anything not certified organic, limited though those options may be.)

On its way out of Washington last week, the Obama administration’s Agriculture Department took steps that will reduce the number of shoppers who can afford to buy meats and poultry bearing the organic label. It did this by muddying the waters over what it means to be “organic.”

Under the new rules, it will not be enough that animals be raised on feed that is also organic by the Agriculture Department’s standards and without use of growth hormones or antibiotics. Instead, farmers who wish to label their product USDA-certified organic must provide a minimum amount of space to chickens raised for both eggs and meat. The chickens, along with pigs and cattle, will need to be allowed outdoors daily for feeding times. The department also added requirements for the transport of such animals to sale or slaughter.

All of these changes are meant to promote the animals’ welfare. Any effect on the health of the humans who each such products will be incidental.

I am not quite dumb enough to come out publicly as being in favor of cruelty to animals. But what do humane conditions have to do with whether a product ought to be labeled “organic?” There is a difference between produce that has been grown without synthetic pesticides and a chicken that has been raised in a larger box. The word “organic” now has a compound meaning; it relates to both how the product is produced and what we actually get when we go through the checkout line.

In the end it makes no difference to me personally. I do not buy organic products anyway, at least not when I have a choice. Even if my preference were in favor of organics, the new rules are not going to raise prices enough to stop me from buying whatever meat or poultry I prefer. I’m fortunate; others are less so.

According to The Wall Street Journal, the USDA estimated that the new laws will cost organic farmers up to $31 million collectively. Those costs (and I would bet they are grossly understated unless they were calculated on the assumption that some farmers will just stop raising certified organic livestock) will certainly be passed along to consumers. For those who buy organic because they want to support humane livestock treatment, that is fine. But for those who buy – or would like to buy – organic because of perceived health concerns, it is less so.

We all have our own ideas about what the terms animal welfare and its inverse, animal cruelty, actually mean. Some vegetarians believe that “meat is murder” and that all carnivorous humans are cruel by definition. I know vegans who avoid all products derived from animals, including leather shoes and wallets, as much as possible.

But since our society at large is not ready to forgo hot dogs and chicken nuggets, activists and their recent allies in the departed administration have applied a chip-away strategy instead. This makes me wonder: Why is it humane to treat chickens or pigs who will be sold under the organic label one way, while handling those destined for ordinary shrink-wrap and polystyrene packaging another? If a certain practice is unacceptably cruel, why aren’t we banning it outright?

That’s the approach California took in demanding that all eggs sold in the state, even from out-of-state producers, come from hens raised in specified conditions. I may not agree with the policy, but at least it makes rational sense. The Agriculture Department doubling down on the compound definition of the word “organic” does not.

The net effect will be to narrow the range of consumers who can afford to buy something with the “organic” label. Perhaps that is, in fact, the goal; people for whom the price difference is big enough to matter probably should not be buying organics anyway. That’s only my opinion, however, and I would not try to force it on others. And that is the exactly the difference between my philosophy and that of the Obama administration. Where my bias is to respect freedom of choice, theirs was to restrict it.

About Larry M. Elkin 552 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

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