Organic farming – can policy and markets mix?

Summary

Organic farming is an approach to agriculture that emphasises environmental protection, animal welfare, food quality and health, sustainable resource use and social justice objectives, and which utilises the market to help support these objectives and compensate for the internalisation of externalities. Since the early 1990s, the organic sector has grown rapidly across Europe and globally, thanks to a combination of strong consumer demand, developing regulatory frameworks, direct financial support and insecurity in the conventional agricultural sector. The sector’s success in utilising the market to support the broader public good goals has been seen as a role model for mixing market and public support mechanisms in agriculture, but the market has also come to dominate in many circumstances, threatening the achievement of the underlying goals and the integrity of the organic approach. With market growth slowing across Europe, has organic farming achieved its potential? Or is this just an illustration of the limits of relying on markets to support the delivery of public goods – another example of market failure in the making?