Fromartz - Organic, inc.: natural foods and how they grew

Copyright 2006 by Samuel Fromartz

Afterword copyright 2007 by Samuel Fromartz

All rights reserved. For information about permission to reproduce selections from this book, write to or to Permissions, Houghton Mifflin Harcourt Publishing Company, 3 Park Avenue, 19th Floor, New York, New York 10016.

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The Library of Congress has cataloged the hardcover edition as follows:

Fromartz, Samuel.
Organic, inc.: natural foods and how they grew/Samuel Fromartz.1st ed.
p. cm.
Includes bibliographical references.

1. Natural foods industry. 2. Natural foodsMarketing. 3. Farm produceMarketing. I. Title.
HD9000.5.F76S 2006
338.171584dc22 2005031533

ISBN 978-0-15-101130-8

ISBN 978-0-15-603242-1 (pbk.)

eISBN 978-0-547-41600-7
v2.1017

To my wife
Ellen Chafee

On January 26, 2005, a three-judge panel of the United States Court of Appeals for the First Circuit in Boston handed down a ruling in a case brought by a small organic blueberry farmer from Maine. Although unreported in the mainstream press, it sent shock waves through the $11 billion organic food industry, which had been growing without interruption for two decades or more. The ruling, it was feared, threatened to destabilize the entire sector by removing the ORGANIC label from a host of packaged goods or forcing the products to be reformulated. The label, which had taken effect a little over two years earlier, lay at the heart of consumer trust in organic food.

The farmer, Arthur Harvey, who was seventy-two, had waged the suit on his own, fed up with what the organic food industry had becomewith its mainstream processed and packaged goods clogging the arteries of supermarkets; with what he saw as the abusive actions of the U.S. Department of Agriculture, which oversaw the program; with the entire regulatory mess that seemed to miss the point that organic food was supposed to be pure, wholesome, natural, and small-scale, a true alternative to conventional food. Somewhere along the way, organic food had gone hell-bent for growth, taking a turn away from the ideals that had given birth to the movement.

But rather than get angry about this state of affairs, Harvey had holed up on his farm in Hartford, Maine, and decided to get even. He knew the entire body of organic regulations, since as an organic certifier it was his responsibility to make sure other farmers abided by them, however objectionable he found them. He read through all 554 pages, comparing the rules with the underlying law that governs organic practices, the Organic Foods Production Act of 1990. He found inconsistencies that were strong enough, he thought, to sue the then secretary of agriculture Ann Veneman. Harvey had several complaints, but the most potent focused on the nonorganic synthetic ingredients that the regulations allowed in the processing of organic food, to ease manufacturing. He also objected to the way the rules reduced a 100 percent organic feed requirement when transitioning a cow to organic milk production. These lax practices, he thought, contravened the underlying law and cheapened the purity of organic food.

Harveys lawyer told him the fight would cost $250,000far more money than Harvey had. The $50,000 estimated by an environmental lawyer he contacted next was still too high. But Harvey wasnt dissuaded. Since I was trained by the Maine Municipal Association to do my work on the planning board in my town, I knew enough about regulations to see what was wrong with the organic rule, he said. So he pursued the case on his own for $10,000, filing suit in October 2002, just days after the national organic regulations took effect with great fanfare.

It was not the first time Harvey had gone up against the federal government. As a tax resister opposed to military spending, especially nuclear weapons, and the export of arms and military forces to many places around the world, Harvey had refused to file or pay federal income taxes since 1959. His wife, Elizabeth Gravalos, hadnt paid federal taxes since the 1970s. Instead, they donated time and money to social service and environmental organizations. The IRS had come knocking at their door a couple of times, then seized the familys property in 1996 and demanded $62,000 in back taxes and penaltiesabout three times the annual income of the farm. When they did not pay, the IRS took the rare step of auctioning off the property at a town office across the street from their house, with protesters outside. They initially lost the blueberry field to a bidder, though luckily no one bid on the house, perhaps because it had only rudimentary plumbing and no electricity. Eventually, Gravaloss mother bought the house, and the couples daughter successfully bid on another parcel of the land, which she later swapped for the blueberry field. They were back in business.

Harvey, an affable and intelligent man with a wiry physique, perhaps owing to his vegetarian diet, said the lesson he learned from that fight was not to stop being a tax resister, but to avoid owning property in his own name that could be seized by the government. We own a couple of cars, so I guess they could go after those, but they arent worth much, he told me.

Now Harvey had taken on a battle with higher stakes, to return the organic food industry to its roots, away from crass commercialism, away from industry, away from all the compromises that two decades of growth had wrought. Whether Harvey would actually achieve that goal through the court system was an open question. But once the federal appeals court in Boston ruled in his favor on that cold day in January 2005, finding that the USDA regulations did contravene the underlying organic law, the industry perked up. Many were incensed, including those fighting on another frontto win over consumers so that more people would buy organic food, expanding the market and allowing more farmland to be converted to chemical-free organic food production. This camp was growing the industry with everything from organic candy to frozen TV dinners, along with dairy, fruits, vegetables, and meat. Craig Weakley, a longtime industry participant who was director of organic agriculture at Small Planet Foods, an organic food company owned by General Mills, said standards for organic food were not broken, but unfortunately, someone decided to fix them and was able to convince three judges.

As Katherine DiMatteo, executive director of the Organic Trade Association, said at the time: If this goes through, in the worst-case scenario, it could devastate the industry.

What was this battle about, and why did a small farmer feel compelled to take on a multibillion-dollar industry? How had organic food evolved to the point that an internal battle might rip it apart?

Questions like these had been on my mind for two years, as I traveled around the country, visiting organic farms, talking to people who had built this movement and industry, hearing their stories and learning what drove them to grow, make, and sell organic food.

I had a couple of strong motivations. I was a longtime business reporter, often gravitating toward the start-up arena, writing about people who were either naive or strong-headed enough to build new companies. I was particularly interested in people who sought to manifest their values in their businesses, who used business to extend a larger ethical or social mission. The intersection of idealism and business was not an easy place to stand, since one usually trumped the other, leading to a downward spiral of disillusionment or compromise. But I found a few who kept at it for the long haul, who managed to reach, if not success, at least enough of a balance of idealism and pragmatism to keep them going.

I wondered how this dynamic played out in the organic food industry, springing as it did from a range of motives and movements: back-to-the-land simplicity, agrarianism, anti-industrialism, environmentalism, nutritional and health concerns, and, of course, the love of fresh, whole, natural food. The foundation of the industry had been laid by strong-minded and often eccentric idealists who took their ideas extremely seriously and tried to realize them on the farm and within business, to bring them into the world, in a. way that resonated with four centuries of Utopian pursuits in America. Harvey was just one of the more volatile examples. There were many others like him on this landscape, even among the entrepreneurs who loathed him for what he was doing to the organic market. It took a while to parse the specifics of Harveys complaint and his adversaries positions, to understand what it all meanta book really to put him in context, which is why I wont return to him until the latter stages of this story.