Digging Deeper on Wal-Mart and Organics

BusinessWeek.com enters the fray on Wal-Mart’s plans to double its offerings of organic produce and goods with a great article by writer Pallavi Gogoi. Gogoi takes the extra (and needed) step of discussing this news with an organic farmer:

Richard DeWilde has a long history with organic farming. His grandfather, Nick Hoogshagen, adopted the organic approach five decades ago on his farm in South Dakota, well before it became popular with consumers and fueled the popularity of retailers like Whole Foods Market (WFMI).

Now, DeWilde, 57, is a working farmer himself, carrying on the family tradition of avoiding pesticides and other chemicals that can contaminate food in favor of a more natural approach. He’s co-owner of Harmony Valley Farm, which grows Swiss chard, parsnips, turnips, and kale on 100 acres in the southwestern corner of Wisconsin.

So you might think that DeWilde would be overjoyed at the news that Wal-Mart (WMT) has finally come around to his grandfather’s philosophy. The juggernaut retailer said recently that it plans to double its offerings of organic products, including produce, dairy, and dry goods.

But DeWilde isn’t thrilled. Instead, he’s dismayed at the prospect of Wal-Mart becoming a player in the organic market. He fears that the company will use its market strength to drive down prices and hurt U.S. farmers. “Wal-Mart has the reputation of beating up on its suppliers,” says DeWilde. “I certainly don’t see ‘selling at a lower price’ as an opportunity.”

Additionally, DeWilde and other organic farmers are concerned about Wal-Mart turning to cheaper markets, such as China, for their produce. Gogoi also examines Wal-Mart’s decision in light of other large corporations entering the organic market, and the combined pressure they exerted in lobbying for weaker organic standards as a part of the 2006 Agricultural Appropriations bill. I’ve seriously considered comments from earlier posts that claim the big retailers’ moves into this market will ultimately strengthen organics, but if these companies continue to use their political muscle to weaken standards, it’s hard to see how this is positive. I’ve only touched on a couple of important points — certainly read the whole article. Also check out the comments below the text, as there’s clearly some outrage brewing over the greenwashing occurring (and I don’t think that’s too strong a label). Can this end up as a watershed for more sustainable food production? Sure. There are no guarantees, however, that it will, and that worries me… One of the article’s commenter’s even suggests an alternative labeling scheme for “real” organics vs. those that meet weaker standards… it’s a shame we have to consider such moves.

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