Benjamin S. Marks
Organic Food Agreement signed by both
E.U. & U.S.
Both
the United States and the European Union have both signed the Organic Food
Agreement. This trade treaty was signed a few days ago on February 15th
2011, and allows certified products in either the United States or the EU
countries to sell to both areas.
This
is very beneficial for a number of reasons. Before this agreement had been
reached, producers (companies and growers) had to receive separate
certifications for both sides of the Atlantic if they wished to sell their
goods as organic. This translated to an inefficient system where they would
have to go through double the paperwork, double the inspections of their organic
goods, as well as a doubling of the fees needing to pay for the process. With
this trade agreement signed though, now as long as a producer is certified in
either the E.U. or the U.S. in order to sell organic to both places.
According
to both sides, this agreement is said to “help farmers by opening up new
markets to them and lowering their costs.” Furthermore, this should helps the
consumers because with more competition due to the increase of suppliers, basic
economics tell us the price should fall. This is a relatively big impact for
the industry as it allows the producers to expand their market reach, but also
provides them with more competition. Ultimately the consumers should gain the
most out of this with lower cost organic foods, even though the producers will
receive the benefit of lower costs.
Another
thing that should be noted is that while the Organic Food Agreement was signed
on February 15th , it will not be take effect until June 1st.
This will give a nice transition period for the two regions that make up the
world’s largest organic producers (a combined value of roughly $50 billion).
Cited works:
"Brussels, Washington Sign Organic Food Deal." Global
Food Industry Business News, Information, Insight and Executive Interviews.
Web. 20 Feb. 2012.
<http://www.just-food.com/news/brussels-washington-sign-organic-food-deal_id118279.aspx>.
Press, The Associated. "US Signs Organic Food Agreement
with EU - Money - MSN CA." Personal Finance, Business and
Market News - Money - MSN CA. Web. 20 Feb. 2012.
<http://money.ca.msn.com/investing/news/business-news/us-signs-organic-food-agreement-with-eu>.
You made a lot of great points in this post. Certainly in an ever global world like ours, treaties like the one just signed help everyone involved. It will be interesting to see if we as consumers see an affect this summer.
ReplyDeleteI wonder if this agreement, if following economic rule, of causing the price to fall, will make consumers more likely to buy organic products. I also wonder what the impact of this agreement is on non-organic products and what will happen to the price of non-organic produce and how it will effect suppliers.
ReplyDeleteI was surprised when you noted that this will result in lower production costs as well as lower costs for the buyers. I was mostly surprised because currently, organic food (sold at places like Trader Joe's or Whole Foods) is much more expensive than non-organic foods (sold at places like Acme).
ReplyDelete