Organic Food And Farming: Between Market Subordination And Retailer Growth Prospects

The paper is based on research conducted for DARCOF II (Danish Research Centre for Organic Farming, www.darcof.dk). The aim of the research project is to analyze the future development of the Danish organic food sector through focusing on two agro-commodities: vegetables and pork. Emphasis is placed on identification of economic forces within the supply chains. The main conclusions of the paper – being the results from the organic vegetable chain – are that the rules and regulations, and the development of alternative transaction processes in organic food and farming have so far been founded on social counter reactions to the mechanisms of a free market economy that result in the marginalization of farmers, animals welfare and the environment. However, organic farming is also part of the same free market economy, and therefore will inevitably encounter some of the same problems currently facing conventional farmers – declining prices, concentration of production and shift in bargaining power to the retailers. Logically, this situation will lead eventually to increasing conflicts between organic values and their subordination to free market forces, i.e. conventionalization. In the same time retailers are in search for new products, and new ways of creating outlets that can enhance or boost their image in an increasing international competitive environment. The organic products have a well-respected brand of trust and quality, and thereby a very strong position to create new possibilities of gaining store space and growth among supermarkets and discounters. A report of the results is in printing. Keywords: political economy, institutional economics, supply chain management, organic food & farming, farmers’ treadmill, retail bargain power.