Agricultural Policies

Paper

EU and U.S. Organic Markets Face Strong Demand Under Different Policies

USDA, Economic Research Service, in Amber Waves p.14 - 21, February (2006)

The policy approaches adopted by the two regions are the result of the inherently dissimilar perspectives and histories that the EU and U.S. governments have concerning agriculture, the environment, and by extension, organic agriculture. From the perspective of many EU countries, organic agriculture delivers environmental and social benefits to society, and is regarded as an infant industry requiring support until it is able to compete in established markets. This view of organic farming as a provider of public goods affords an economic rationale for government intervention in the market. The U.S. Government’s approach, while acknowledging organic agriculture’s positive impact on environmental quality, treats the organic sector primarily as an expanding market opportunity for producers and regards organic food as a differentiated product available to consumers. In such cases, government-devised standards and labels facilitate market transactions and allay consumer concerns about product identity.

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