Food prices reflect the costs of growing, harvesting, transportation, storage, processing and packaging. To be certified organic food must meet stricter regulations that govern all these steps in the process. Organic food production is usually more labour and management intensive and happens on a smaller scale i.e. on smaller farms which lack the benefit of economy of scale.
All this makes organic food more expensive than conventionally farmed food. But this is only if we don’t look at the true cost of food production. When the indirect costs of conventional food production such as replacement of eroded soils, clean up of polluted water, costs of health care for farmers, farm workers and the consumers, environmental cost of artificial pesticide production and disposal, are factored into the cost, organic food is much cheaper.
We need to look at the full lifecycle cost of production of organic vs non-organic.
Organic food is more labour intensive, hence it protects the environment against the use of toxic pesticides, herbicides and dubious land uses.
Organic farming methods means production yields are often, but not always, lower than those obtained by conventional farming methods. This is because organic food production does not involve the use of artificial fertilisers, pesticides and other technological aids.
Depending where in Australia you purchase organic produce you can expect to pay at least a 20 percent premium. A 2000 survey by Choice Magazine found organic fruit and vegetables were on average 70 percent more expensive than non-organic – but the gap was shrinking. One factor driving the prices down is the entry into the organic market of the big players such as Coles and Woolworths.
In countries where organic production is a higher proportion of the overall food production than it is in Australia, the price of organic food is coming down. This is largely due to economies of scale.