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Citation: Hou, Y.; Luo, T.; Hao, J.
Analysis of Determinants Affecting
Organic Production: State Evidence
from the United States. Sustainability
2022,14, 503. https://doi.org/
10.3390/su14010503
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Accepted: 29 December 2021
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sustainability
Article
Analysis of Determinants Affecting Organic Production: State
Evidence from the United States
Yongrui Hou 1, Tianyuan Luo 2,* and Jing Hao 1
1School of Public Affairs, Chongqing University, Chongqing 400044, China; 201901132073@cqu.edu.cn (Y.H.);
202101021002@cqu.edu.cn (J.H.)
2School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710049, China
*Correspondence: luoterry@xjtu.edu.cn
Abstract:
As the demand for organic products quickly grows in the U.S., the domestic supply of
organic commodities has stagnated and failed to meet the increasing needs. To expand the organic
supply capacity in the country, it is crucial to identify the key factors that could effectively promote
the scale of organic farming in the U.S. Using a multivariate analytic model and state level data from
multiple sources and years, this study examines a wide range of determinants that could affect organic
agriculture. The results show that research funding would significantly increase organic vegetable
production and the number of organic farms. The development of organic farming could be greatly
encouraged by the support of research institutions. In addition, the evidence shows that abundant
farm workers are essential for the organic farming sector, which is labor-intensive. Finally, a large
population base could create a more stable consumer group that would promote the development
of organic agriculture. These results suggest the importance of exploring and expanding consumer
groups for organic commodities. These findings provide insightful implications that research support,
labor availability, and a solid consumer base are crucial to boost the organic sector in the U.S. and
other countries.
Keywords: organic farming; determinants; research funding; labor availability; state level analysis
1. Introduction
Organic farming has been considered a possible model that could further advance the
development of modern agriculture which faces with many obstacles nowadays (USDA
1980). Previous literature has discussed the importance and impacts of organic farming
for human society, local economy, agricultural sustainable development, and people’s
daily lives. Firstly, organic farming could produce enough food on a global per capita
basis without increasing the burden on and pollution problems associated with local
agriculture [
1
,
2
]. Secondly, organic hotspots have a positive and significant impact on local
economic indicators. The quantity and quality of human capital will affect local wealth,
and the existence and effective utilization of resources may affect local development [
3
–
5
].
Thirdly, conversion to organic farming is not only an agroeconomic practice, but also a
multidimensional subject, involving farmers’ motivations, technical problems, natural
conditions, and government policies [
6
–
9
]. Fourthly, the development of organic farming
is influenced by multiple factors such as social, structural, and intellectual factors [
10
].
Therefore, the complexity of organic farming could notably affect the society and economy
in return.
Showing the importance of organic farming to the society and economic development,
the total sales of organic products in the US have grown from only 7.9 billion dollars in
2000 to notably 52.5 billion dollars in 2018, which can be translated to an approximately
560% increase in organic commodity sales over the years [
11
]. The rapidly expanding
demand for organic products has led the government to pay more and more attention to
the organic market and to introduce a series of policies that could promote organic farming
Sustainability 2022,14, 503. https://doi.org/10.3390/su14010503 https://www.mdpi.com/journal/sustainability
Sustainability 2022,14, 503 2 of 17
in the U.S. and increase the supply of organic products. The 2018 Farm Bill offered a total
of USD395 million funding for the Organic Research and Extension Initiative that aims to
substantially help to build a more efficient organic production system in the country [
11
].
Moreover, the 2018 Farm Bill will build a better organic market by enhancing oversight and
enforcement of the organic supply chain that could shorten the distance and time that or-
ganic products need to reach U.S. families [
12
]. Growth of the organic farming sector could
bring many benefits such as promoting agricultural sustainability, reducing environmental
pollution, increasing farmers’ income, stimulating the rural economy, diversifying market
commodities, and providing a greater variety of healthy food for consumers. Given the
growing role of organic products in people’s daily lives, it is important to understand what
are the factors and key determinants that could affect the development of organic farming
and production. This paper mainly studies the impact of USDA and state approved grants,
total farm labor, and total population. USDA and state approved grants provide technical
and financial help for organic production. Total farm labor represents human conditions.
Because organic agriculture is different from general agriculture, it needs more labor to
promote production. Total population explains the impact on organic production from the
demand side. Based on these findings, the governments and relevant stakeholders could,
therefore, develop suitable and effective policies for the organic farming sector.
First, even though the demand for organic products in the U.S. has increased over
time, the supply of organic commodities has stagnated in recent years [
13
]. The lag in
supply is largely due to the slow growth of the organic agricultural industry and makes
identifying the key factors an urgent task. Many people have explored the reasons for the
mismatch between the supply of organic products and the demand. Klonsky and Tourte
discussed the current status and direction of organic production in the United States and
found that data on the number of organic growers and amount of commodities grown are
available only for certified growers, which may underestimate the total amount of organic
production [
14
]. Due to the aging of the American population and the improvement of
living standards, people’s demand for food quality would grow and therefore increase the
market demand for organic products [
15
]. The 2002 USDA National Organic Standards
regulation in most cases requires farmland to be dedicated to organic farming for 3 years
before a farm’s products can be labeled as organic [
16
]. This creates a lag between increases
in demand and supply from farms.
Second, there is an uneven distribution of organic farming across the states in the
U.S. [
17
]. Organic agriculture is concentrated primarily in metropolitan areas in the North-
east and the Pacific Coast, and in rural areas having desirable natural amenities such as the
Northern Great Lakes and the Mountain West [
18
]. The unequal development of organic
agriculture in the country deprives farmers in the southeastern region of a great opportunity
to diversify and enhance their farm incomes. A clear vision of the key determinants could
help policymakers to narrow the regional gaps in organic farming and effectively encourage
organic agriculture in lagging states. Third, an investigation of the key determinants at the
state level would complement previous studies that focused on organic production at the
farm level [
19
–
21
] or county level [
22
]. Previous literature suggested that the use of direct
marketing, the number of crops, the use of computers in production, the age of the farmer,
greater size of farm, greater productivity of labor, farmers’ motivation and perceptions
about organic farming, and policies are significant determinants of the choice to adopt
organic methods of production.
This study distinguishes itself from previous studies and contributes to the body of
literature in several significant ways. First, this study is one of the few studies that com-
prehensively examines the impact of macro-level factors on organic production in the U.S.
Specifically, this research looks at the determinants including macroeconomic factors, policy
factors, demographic factors, and agricultural input factors that cover many aspects of or-
ganic farming. Macroeconomic factors are different from micro level factors (such as farm
level factors). From the perspective of economics, macro factors are related to national macro-
control policies, which generally refer to the influence of government policies. Micro factors
Sustainability 2022,14, 503 3 of 17
relate mainly to entrepreneurs and consumers. Problems in daily life can also be classified as
micro factors. Second, this study contributes to relevant studies by looking at all states and
multiple years from 2000–2016 in the U.S. The comprehensive sample could make the results
more nationally representative, and they could more accurately reflect the trends of organic
farming in the U.S. during recent years. Generally speaking, the literature concerning the
development of organic agriculture in some areas lacks universality, because it may only be
useful for the characteristics of a certain area. Experiences in other organic settings such as in
western Uganda indicate that grassroots-organized lobbying and policy advocacy processes
have been effective in changing the perception of local government technical staff and policy
makers [
23
]. Schafer, Nolting and Engel analyze the possible effects of organic agriculture
on sustainable regional development in peripheral Eastern German regions [
24
]. In order to
promote the development of organic agriculture, farmers should explore a broader market
through marketing cooperatives, such as the research and extension center of Oregon State
University in southern Oregon [
25
]. Third, we would like to note that this study specifically
looks at different crops such as vegetables and fruits, which is rarely found in previous
studies. Due to the disparities in their labor-intensive nature and agronomic practices, some
crops may be affected differently by particular factors compared to other crops. This study
pays attention to such disparities and tries to find out the determinants for specific crops.
Some literature only considers crops in general, but cannot give specific guidance relating to
specific crops such as vegetables and fruits [20,26,27].
The remainder of the article is organized as follows: Section 2introduces the back-
ground of organic production in the U.S. Section 3discusses the data and the multivariate
model used for identifying the key determinants. Section 4presents the empirical results
and discussion. Section 5concludes.
2. Background and Conceptual Framework
2.1. Organic Commodity Demand and Supply in the U.S.
The effective organic regulatory program and labeling requirements of USDA have
triggered a fast rise in consumer demand for organic food during the past years [
28
–
30
].
The rapid expansion has highlighted the challenges that are faced by the organic sector
today: a continuously increasing consumer demand for organic products and a shortage of
new organic producers to meet the demand, which constrains and limits the growth of the
whole organic sector.
Plot A in Figure 1shows the trend since 2000 in total acreage of organic production as
well as the total number of organic farms in the U.S. As can be seen, the level of organic
production including the number of organic farms and organic production acreage has
been increasing over the years, particularly after the year 2006. The notable increase in U.S.
organic production indicates that organic agriculture is playing a more and more important
role in the farm sector and in improving the economic situation and profitability of many
farms in the U.S. However, plot A also shows that after 2010, the growth of total organic
production in the U.S. has halted and entered a plateau where the total number of organic
farms has remained at about 13,000. The total acres of organic agriculture have fluctuated
significantly across the years, with an average of about 4 million acres per year. The latest
statistics of organic production in 2016 indicate that organic production land totalled of
5.02 million acres, which is even lower than that in 2011 which had a total of 5.38 million
acres of organic farming.
Sustainability 2022,14, 503 4 of 17
Sustainability 2022, 14, x FOR PEER REVIEW 4 of 17
Figure 1. The trend of organic farms, production acres, and sales in the U.S.
While the domestic supply of organic products seems to have stagnated in most re-
cent years, the demand for organic agricultural products has increased consistently over
the past decades. Plot B in Figure 1 shows that total organic food sales in the U.S. in the
year 2000 were valued at about 7.9 billion dollars, but sales reached 43 billion dollars in
2016; total organic food sales are expected to continue to increase in the future [31]. As
more and more consumers in the U.S. become aware of the benefits of organic food [32]
such as food safety, friendliness to the environment, respect for animal rights, and stimu-
lation of the rural economy, they would be more willing to buy organic products instead
of regular farm commodities. A survey by the Organic Trade Association found that more
than 84% of U.S. households purchase organic food sometimes while 45% buy organic
agricultural products at least once a month. The rapidly growing demand for organic food
has imposed great pressure on the U.S. organic sector which, as shown in plot A, is strug-
gling to meet the needs of U.S. consumers.
2.2. Organic Farming Geographic Distribution
In addition to the fact that the fast-paced demand growth has led to organic food
supply shortages in the supply chain [17], Figure 2 shows that the uneven distribution of
organic farming across states may hinder organic product supply in certain areas and also
deprive a vast number of farms in some areas of the opportunity of higher farming prof-
itability. The darker the color a state has in Figure 2, the larger is the size of a state’s organic
farm industry.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
20002001 2002 2003 2004 2005 2006200720082010 2011 2014 2015 2016
A. Number of organic farms and acres
Number of certified organic operations Total acres of organic farming
0
5
10
15
20
25
30
35
40
45
50
B. Total organic food sales (billion dollars)
Figure 1. The trend of organic farms, production acres, and sales in the U.S.
While the domestic supply of organic products seems to have stagnated in most recent
years, the demand for organic agricultural products has increased consistently over the
past decades. Plot B in Figure 1shows that total organic food sales in the U.S. in the year
2000 were valued at about 7.9 billion dollars, but sales reached 43 billion dollars in 2016;
total organic food sales are expected to continue to increase in the future [
31
]. As more and
more consumers in the U.S. become aware of the benefits of organic food [
32
] such as food
safety, friendliness to the environment, respect for animal rights, and stimulation of the
rural economy, they would be more willing to buy organic products instead of regular farm
commodities. A survey by the Organic Trade Association found that more than 84% of U.S.
households purchase organic food sometimes while 45% buy organic agricultural products
at least once a month. The rapidly growing demand for organic food has imposed great
pressure on the U.S. organic sector which, as shown in plot A, is struggling to meet the
needs of U.S. consumers.
2.2. Organic Farming Geographic Distribution
In addition to the fact that the fast-paced demand growth has led to organic food
supply shortages in the supply chain [
17
], Figure 2shows that the uneven distribution
of organic farming across states may hinder organic product supply in certain areas and
also deprive a vast number of farms in some areas of the opportunity of higher farming
profitability. The darker the color a state has in Figure 2, the larger is the size of a state’s
organic farm industry.
Sustainability 2022,14, 503 5 of 17
Sustainability 2022, 14, x FOR PEER REVIEW 5 of 17
Figure 2. The distribution of organic farming across the U.S.
As can be seen from the first two top plots, most of the organic production in the U.S.
is concentrated in the Western U.S. especially in California, while some states in the Mid-
west and Southwest such as Montana and Texas also show a booming organic sector. On
the other hand, the development of the organic farm sector in the Southwestern U.S. is
lagging. The mean organic agricultural acres of the Southeastern region were about 3145
acres, which was only about 1.2% of the total organic acres in California. The uneven dis-
tribution of organic farming across states and regions was also found by Taus, Ogneva-
Himmelberger and Rogan who investigated agglomeration effects in the organic farm sec-
tor in the U.S. [17]. Other plots in Figure 2 present different types of agricultural products,
also showing similar results—that farmers in the Southeastern regions may not equally
enjoy the benefits of the booming organic sector.
Figure 2. The distribution of organic farming across the U.S.
As can be seen from the first two top plots, most of the organic production in the
U.S. is concentrated in the Western U.S. especially in California, while some states in the
Midwest and Southwest such as Montana and Texas also show a booming organic sector.
On the other hand, the development of the organic farm sector in the Southwestern U.S.
is lagging. The mean organic agricultural acres of the Southeastern region were about
3145 acres, which was only about 1.2% of the total organic acres in California. The uneven
distribution of organic farming across states and regions was also found by Taus, Ogneva-
Himmelberger and Rogan who investigated agglomeration effects in the organic farm sector
in the U.S. [
17
]. Other plots in Figure 2present different types of agricultural products, also
showing similar results—that farmers in the Southeastern regions may not equally enjoy
the benefits of the booming organic sector.
Organic production in the U.S. faces other challenges as well. First, U.S. organic
producers and manufacturers must cope with the impacts of fluctuating market conditions,
Sustainability 2022,14, 503 6 of 17
particularly the impact of a weaker U.S. economy. The growing demand for organic food is
partly based on the improved income of the U.S. household [
33
] and consumers are willing
to pay price premiums for organic products [
34
]. However, many uncertainties such as
international trade disputes, recession, natural disasters, and a series of regulatory policies
may disrupt the demand of consumers. Second, even though many U.S. consumers are
buying organic products, the industry is slow in exploring and reaching out to new or
infrequent buyers. Third, organic producers nowadays also must cope with the competition
from new labels such as “locally grown”. To promote the production of organic agriculture,
the U.S. Congress boosted grant funding for organic agricultural research through USDA
and initiated a certification cost-share program to help enhance the competitiveness of the
organic sector. However, the impact of public funding is little known so far, due to limited
studies. This study tries to fill this gap by specifically examining the impact of research
funding by USDA and state governments.
2.3. Conceptual Framework
The main purpose of this part is to discover the important factors affecting organic
agriculture or general agricultural production by referring to the previous literature, and
to put forward some hypotheses, so as to provide the basis for the empirical research
and analysis. The main influencing factors are divided into four categories, which are
macroeconomic factors, policy factors, demographic factors, and agricultural input factors.
2.3.1. Macroeconomic Factors
The macroeconomic factor studied in this paper is median household income. It refers
to the concept of median in statistics to measure the income level of ordinary people in
a certain area. Compared with the per capita income, the median income is closer to the
actual living standard of ordinary people.
Farming households with higher income gain in absolute terms more from organic
agriculture as they cultivate more land [
35
]. Nonfarm income provides households with
a form of insurance against the risks of farming, and thus enables them to adopt new
production methods and raise output [36]. In this study, our hypothesis is:
Hypothesis 1 (H1).
A higher median household income has a positive and significant effect on
local organic farming development.
2.3.2. Policy Factors
The policy factors studied in this paper are USDA approved grant, state approved
grant and direct government transfer. USDA approved grant and state approved grant mon-
etary or nonmonetary assets are provided by the state or government free of charge. Direct
government transfer refers to the government’s expenditure on social welfare, insurance,
poverty relief and subsidies, which is realized through the redistribution of income among
different members of society. Political factors directly and indirectly affect agricultural
production, and indirect political influence usually affects agricultural production through
funds, research cooperation, and subsidies [
37
,
38
]. Dimitri and Oberholtzer considered
that the main determinant for the fast growth of organic agriculture in the Czech Republic
is subsidies on the part of the state [39]. Our hypothesis is:
Hypothesis 2 (H2).
Support from the government including research funding and direct transfer
have a positive and significant effect on local organic farming development.
2.3.3. Demographic Factors
Demographic conditions are conducive to the production and development of organic
farming [
40
,
41
]. The demographic factors studied in this paper are percent white, percent
Hispanic, percent noncitizen, male farmers’ ratio, mean farmer age, and total population.
Percent white, percent Hispanic, and percent noncitizen respectively represent the propor-
Sustainability 2022,14, 503 7 of 17
tion of white, American, and noncitizens in the total population of the United States. Male
farmers’ ratio and mean farmer age reflect the impact of gender differences and individual
age on organic production. Gender is an important determinant of agricultural production.
According to Adebiyi and Okunlola, in Nigeria, females do more in off-farm activities such
as selling agricultural products, storing, and packing them [
42
]. This indicates that males
paid attention to farm work and could better adopt farm rehabilitation techniques, and
obtain inputs for sufficient production. In addition, age can be related to experience of
farming; as age increases farm experience increases and then input adoption as well as
production may increase up but perhaps up to a certain age limit [
43
,
44
]. Total population
reflects the size of consumer groups from the demand side. The evolution of organics relies
on the conversion of consumers to organic food [7]. Our hypothesis is:
Hypothesis 3 (H3).
A higher share of white population, a higher male ratio in the farmer popula-
tion, and a larger total population have a positive and significant effect on local organic farming
development; a higher share of noncitizens and an older age of farmer population both have a negative
and significant effect on local organic farming development.
2.3.4. Agricultural Input Factors
The agricultural input factors studied in this paper are farm size and total farm labor.
Farm size indicates the scale of organic production. It is misleading to generalize about the
existence of an inverse relationship between farm size and productivity across all farming
systems and regions [
45
]. Rather than an inverse relationship, where productivity falls as
farm size rises, a U-shaped relationship was found. For farms up to about 200 hectares,
efficiency did fall as farm size rose, but beyond this size it started to rise again [
46
]. Total
farm labor reflects labor input in organic agricultural production. In Palestine, Abugamea
revealed that a 100% increase in labor will result in a 38.1% increase in agricultural produc-
tion [
47
]. Byerlee et al. posited that there is higher agricultural production and growth per
worker where there is abundant labor force [48]. Our final hypothesis is:
Hypothesis 4 (H4).
Larger farm size and farm labor population have a positive and significant
effect on local organic farming development.
3. Data and Method
3.1. Data Sources
The data used in this research come from multiple sources. The 2000–2016 state-level
organic production data such as the number of organic farms, the total acres of organic
crop and pastureland, as well as the total acres of organic vegetable, fruit, and other crops
are available from the Certified Organic Survey provided by the USDA. Year 2016 is chosen
because it is the latest year in which the organic production data are available. The data
for some years are missing because the survey was not conducted in these years, but this
would not affect the cross-sectional analysis of this study.
Variables included in the model provide information on agricultural production condi-
tions, societal and economic conditions, research funding, demographic characteristics, and
government policies. The data on agricultural research funding are from USDA’s Current
Research Information System. Economic indicators such as median household incomes are
obtained from the Census Bureau’s Small Area Income Poverty Estimates. Agricultural
industry indicators such as the average farm size, male farmer ratio, and mean farmer’s
age are from the Census of Agriculture. Demographic information such as the Hispanic
and white population shares and the total population is from the U.S. Census Bureau’s
Annual Estimates of the Residential Population. Data on total farm workers are collected
from the Quarterly Census of Employment and Wages.Direct government payment for
agriculture is obtained from the Farm Income and Wealth Statistics. Summary statistics for
the dependent and independent variables used in this study are shown in Table 1.
Sustainability 2022,14, 503 8 of 17
Table 1. Summary statistics: state level.
Variable Mean Std. Dev. Min Max
A. Dependent variables
Total number of organic farms 191.39 333.43 0 2887
Total organic crop acres 38,992.17 57,697.94 0 497,082.7
Total organic pasture acres 28,554.32 100,398.10 0 1,460,000
Total organic vegetable acres 2155.99 9537.95 0 100,336.5
Total organic fruit acres 1952.94 9057.01 0 101,581.4
Total other organic acres 35,157.86 48,418.21 0 361,557.4
B. Independent variables
Median household income 46,277.65 8063.05 30,187 70,482
USDA approved grant 22,528.08 26,087.53 0 143,664
State approved grant 25,383.37 22,605.61 0 138,647
Farm size 560.09 697.01 56 3750
Percent white 74.01 15.09 22.94 96.41
Percent Hispanic 8.23 9.04 0.63 43.17
Total farm labor 23,650.11 55,020.12 760 391,950
Percent noncitizen 4.56 3.31 0.16 17.02
Male farmers ratio 0.48 0.01 0.45 0.51
Mean farmer age 36.31 2.91 24.94 47.67
Total population 5,923,384 6,531,182 494,423 3.77 ×10 7
Direct government transfer 321,783.4 369,826.3 1250 2,485,880
N 550
Notes: USDA denotes United State Department of Agriculture.
3.2. Multivariate Analytical Model
Yamamoto et al. used a multiple regression analysis to assess the impact of climate
change on principal agriculture production areas [
49
]. Zeru employed multiple regression
analysis to examine the simultaneous effects of several independent variables on the depen-
dent variable, total agricultural outputs [
50
]. The basis of this model is the OLS regression,
which is a common method for testing the correlation of variables [
51
–
53
]. This study
examines the determinants of general organic production of specific crops at the state level
using information from all states in the U.S. and multiple years of 2000–2016. The research
aims to answer the question of which determinants are significant for organic farming by
employing a multivariate regression framework. The specification of the multivariate model
is constructed as follows:
Org anic f ar mingst =α+β1X0
st +γs+δt+εst (1)
where
Org anic f ar mingst
denotes the organic farming outcomes in the U.S. and
X0
st
is a
vector of observables that have been shown in Table 1. As can be seen from Table 1, variables
containing personal biases have been controlled. It is important to control personal traits in
the empirical analysis, because these traits may affect the development of organic farming
in the regression.
β1
. is a vector of coefficients that shows the estimated impacts of different
factors on organic farming outcomes.
γs
and
δt
are state and year fixed effects that can
control for the unobservable confounding factors that do not change across years and
states. By including state and year fixed effect, the model can provide more accurate
estimates for the impacts of each factor in the regression. Given the concern that the
outcome variables examined in this study could be correlated, we introduce the seemingly
unrelated estimation to Equation (1) to address serial correlation issues across error terms
of regressions for various outcomes.
The state-level analysis offers multiple advantages for the study. First, it provides
the most recent updated information for the organic sector in the U.S. by looking at the
years of data that cover a long period. Second, instead of only focusing on one state or
region, an investigation at the state level could offer a more comprehensive perspective on
the current status of U.S. organic agriculture. An understanding of the organic industry
at the macro-level is as important as the analysis of individual farms’ organic adoption
decisions. Third, a study at the state level could be compared to other studies in the future
with a similar topic. Other agricultural research can easily compare the results of this study
with their work to check if the determinants of organic farming in the U.S. have changed
Sustainability 2022,14, 503 9 of 17
over time and if some determinants become more prominent and important as the U.S.
economy and society evolve. The estimates of this study offer important implications for
the policymaker, relevant stakeholders, and other agricultural scholars who are interested
in organic production issues.
3.3. Research Framework Flowchart
Figure 3presents the research flowchart framework of this study. As the organic
commodity market develops and integrates across the U.S., there is a greater demand
for a comprehensive understanding of the key factors’ impacts on organic farming, and
if they would effectively promote the organic supply in the U.S. This study fills in the
research gap by looking at the macro-level factors and it will complement previous studies
that focused on similar topics by looking at the farm level. The multivariate analytical
framework with multiple year data enables this study to examine whether a series of
factors can effectively promote organic farming and by how much. Meanwhile, a specific
analysis of the organic farming sector for different crops would further corroborate the
main results. This study provides evidence using state-level observations and a robust
econometric method to further support the findings of relevant literature. Moreover, it
also carries insightful policy implications for the construction and further promotion of the
organic market that currently lags behind demand in the U.S.
Sustainability 2022, 14, x FOR PEER REVIEW 9 of 17
estimates for the impacts of each factor in the regression. Given the concern that the out-
come variables examined in this study could be correlated, we introduce the seemingly
unrelated estimation to Equation (1) to address serial correlation issues across error terms
of regressions for various outcomes.
The state-level analysis offers multiple advantages for the study. First, it provides the
most recent updated information for the organic sector in the U.S. by looking at the years
of data that cover a long period. Second, instead of only focusing on one state or region,
an investigation at the state level could offer a more comprehensive perspective on the
current status of U.S. organic agriculture. An understanding of the organic industry at the
macro-level is as important as the analysis of individual farms’ organic adoption deci-
sions. Third, a study at the state level could be compared to other studies in the future
with a similar topic. Other agricultural research can easily compare the results of this
study with their work to check if the determinants of organic farming in the U.S. have
changed over time and if some determinants become more prominent and important as
the U.S. economy and society evolve. The estimates of this study offer important implica-
tions for the policymaker, relevant stakeholders, and other agricultural scholars who are
interested in organic production issues.
3.3. Research Framework Flowchart
Figure 3 presents the research flowchart framework of this study. As the organic
commodity market develops and integrates across the U.S., there is a greater demand for
a comprehensive understanding of the key factors’ impacts on organic farming, and if
they would effectively promote the organic supply in the U.S. This study fills in the re-
search gap by looking at the macro-level factors and it will complement previous studies
that focused on similar topics by looking at the farm level. The multivariate analytical
framework with multiple year data enables this study to examine whether a series of fac-
tors can effectively promote organic farming and by how much. Meanwhile, a specific
analysis of the organic farming sector for different crops would further corroborate the
main results. This study provides evidence using state-level observations and a robust
econometric method to further support the findings of relevant literature. Moreover, it
also carries insightful policy implications for the construction and further promotion of
the organic market that currently lags behind demand in the U.S.
Figure 3. The framework of research.
Research framework
and aims
Literature review
Research significance
Contribution
Organic farming
and production in
the U.S.
Data:
Certified
Organic Survey
USDA's Current
Research
Information
System
U.S. Census
Bureau
Methodology:
Multivariate Analytic
Model
Variables:
Organic farming
Economic factors,
policy factors,
demographic factors,
and agricultural factors
Estimates of organic farming factors
Summary
statistical
analysis
General organic
farming analysis
Specific organic
farming an alysis
Econometric test of the key
determinants of organic
farming in the U.S.
Summary and
conclusions
Figure 3. The framework of research.
4. Empirical Results and Discussion
This section first examines the determinants that could significantly affect general
organic production in the U.S. such as the number of organic farms and the total acres of
organic crop and pastureland. The section then focuses on specific crops by investigating
the production determinants of organic vegetables, fruits, and other crops.
4.1. General Organic Crop Estimation
Results in Table 2show that several variables appear to impact the number of organic
farms at the state level. Though there is little impact from the state approved funding on the
number of organic farms, the USDA approved funding is shown to significantly increase the
number of organic farms. The Agricultural Act of 2008 in the U.S. increased the mandatory
spending on agriculture by a total of approximately 100 million dollars with two major
Sustainability 2022,14, 503 10 of 17
programs including the National Organization Certification Cost-Share Program (NOCCP)
and Organic Agricultural Research and Extension Initiative (OAREI). The Agricultural Act
of 2014 has further expanded the funding to help organic producers and handlers with the
organic certification cost and increased the total funding to 57.5 million dollars for the NOCCP.
Meanwhile, the Act also increased the total organic research funding to 100 million dollars.
These farm Acts are passed to support and promote the development of organic production to
meet the increasing demand for organic commodities in the U.S. The statistically significant
estimate of USDA approved funding shows that these policies could greatly help the expansion
and stimulate the growth of the organic farming sector. The result is consistent with previous
research that emphasizes the importance of research that could significantly contribute to
solving the challenges of organic production [
54
–
56
]. Wheeler found that R&D funding would
increase the share of organic farming of total agricultural land by approximately 1.73% [
57
].
Halpin, Daugbjerg and Schvartzman examined the agricultural research funding system in
the United Kingdom and claimed that increased organic agricultural research would bring
much higher supplies of organic products to meet the increased demand [
58
]. The reasons for
success of organic farming in the individual countries of Europe are various, and the funding
of research and research institutions are important factors. For example, there is the Nordic
network; in the German language region a scientific conference takes place every two years;
and in Italy there is the network of GRAB-IT [
59
]. From the view point of India, encouragement
for organic agriculture by means of subsidies, etc. by the government is much needed [
60
].
Growth and development of the agricultural sector has been on the agenda of policy makers.
R&D expenditure has been one of the policy avenues implemented by the government of
Iran [61]. This study provides empirical findings to support these studies.
Table 2.
Estimates of the determinants of organic farms, organic pastureland, and organic crop land
in the U.S.
Number of Organic
Farms Organic Pasture Acres Organic Crop Acres
(1) (2) (3)
Median household
income 0.013 1.907 0.138
(0.007) (2.695) (1.224)
USDA approved grant 0.004 ** −0.86 0.424
(0.002) (0.689) (0.218)
State approved grant −0.002 −1.049 −0.281
(0.002) (0.688) (0.308)
Farm size 0.001 −110.135 3.018
(0.065) (68.401) (15.646)
Percent white 92.312 *** −18,649.52 7325.317
(26.230) (15,803.997) (6076.741)
Percent Hispanic 155.664 *** −32,100.103 6564.899
(50.360) (28,889.244) (9535.974)
Total farm labor 0.040 *** 12.166 *** 7.499 ***
(0.004) (2.618) (1.482)
Percent noncitizen −38.850 ** −31,028.732 ** −10,190.716 **
(18.591) (12,993.196) (4591.177)
Male farmers ratio 133.098 −825,116.881 −476,101.266
(1294.023) (588,665.062) (674,257.097)
Mean farmer age −4.705 594.465 292.75
(3.760) (1533.958) (786.098)
Total population 0.001 ** 0.033 0.042 ***
(0.000) (0.031) (0.006)
Direct government
transfer 0.000 0.023 0.015
(0.000) (0.013) (0.010)
N 332 332 332
R20.99 0.892 0.961
Notes: USDA denotes the United States Department of Agriculture. Robust standard errors are reported in the
parentheses. ** p< 0.05, and *** p< 0.01.
Sustainability 2022,14, 503 11 of 17
Some demographic factors such as the share of the Hispanic and white population
in a state are found to impose a positive impact on the growth of organic farming, while
a higher share of noncitizens is associated with lower organic farms’ numbers. Hartman
Group surveyed consumer attitudes and behaviors toward organic food and found that
Hispanics were more likely to purchase organic products [
62
]. Stevens-Garmon, Huang
and Lin also pointed out that in the U.S. there is a trend that many organic consumers are
white and have young children [
63
]. In addition, they found that among all demographic
characteristics, race is the most correlated with organic expenditure. Policymakers could
guide the organic farming industry in promoting their products to different groups and
may adopt different strategies and advertisements to attract more diverse consumers with
different ethnicities. Anderson et al. found that the odds ratio for the age of the primary
farm operator indicates that with each additional year of age, the probability that a farmer
will adopt organic methods decreases, which is consistent with the conclusion in this
study [
19
]. Ladvenicováand Mikloviˇcováconcluded that farm size has a negative impact
of 170.3% on output per hectare foran increase about 1% in area [
64
], which is inconsistent
with the conclusion in this study.
As the size of the total population increases, there would also be an increase the
number of organic farms. Kostandini, Mykerezi, and Tanellari used the county level
organic farming data and suggested that an increase of local population would increase
the number of organic farms by 0.013 [
22
]. This is expected because a larger population
suggests a larger consumer base which would provide the local organic growers with
a stable demand for their products. The estimates suggest that policymakers should be
more aware of the importance of cultivating a large and stable consumer group to ensure
the steady development of local organic farming. One more factor that would affect the
number of organic farms is the total number of farm workers in a state. Even though many
sectors in agriculture nowadays have adopted mechanization, the organic production sector
may be still labor-intensive due to its unique agronomic practices that prevent the use of
many chemical and polluting inputs. As a result, abundant labor is an essential factor
for an organic farm to sustain itself and make a profit [
65
]. Lohr and Park found that an
expansion of farm labor employment would raise rates of return to organic production
and therefore would increase the organic acreages [
66
]. Schneeberger, Darnhofer and Eder
further pointed out that farm labor, including family and hired labor, are essential for
organic farms due to their labor-intensive nature [67].
However, multiple factors nowadays seem to jeopardize a stable supply of farm labor
to organic agriculture in the U.S., such as reduced migration from other countries (such
as Mexico), more stringent immigration policies across states, and a notable shift of labor
from the farm sector to other sectors with higher salaries. The estimates in Table 2suggest
that farm labor is positively connected to the expansion of the organic farming sector and
that a labor shortage that may happen in the future may become a critical issue for organic
farming in the U.S. Aubert and Enjolras found that labor appears as a key factor insofar as
organic farming practices differ from conventional farming, with several implications in
terms of activities and marketing channels [65,68].
The estimates in column (2) and (3) report the determinants of organic pasture and
crop land. We find fewer significant determinants than for the number of organic farms.
However, we still find that the total population size and noncitizen population would
increase and decrease the total acres of organic crops, respectively. Pasture and crop have
different features, which leads to the different influence of various factors on them, and the
degree of influence is also different. In temperate and arid zones, animal husbandry plays
an important role in the recycling of nutrients, while it is less emphasized in the humid
tropics. However, fruit growing is more popular in the humid tropics. Jingzhong et al.
found in the past three years, the herds in Sanggang village in China have been growing
steadily and the development of these herds is also driven by labor investments [
69
]. Zegler
et al. pointed out that prioritizing management of residual height and improved legume
and non-improved grass cover are critical for high milk production from organic pastures
Sustainability 2022,14, 503 12 of 17
in the Upper Midwest [
70
]. Demographic aspects such as age of household head affect only
infra-specific diversity of cereals [
71
]. Moreover, the availability of farm labor is found to
be important for all three dependent variables [72], which, as a result, further emphasizes
the importance of maintaining a stable and reliable farm worker population to promote
organic production in the future.
4.2. Specific Organic Crop Estimation
One of the contributions of this study is that we study the determinants of organic
production by different types of crops. We examine vegetable and fruit crops separately
from other crops because they are in general less mechanized and labor-intensive than other
crops. Column (1) Table 3shows the key determinants of organic vegetable production. As
can be seen, they share some similarly significant estimates as those in Table 2. USDA grant
funding positively affects the organic vegetable acres while the state approved funding is
not statistically significant. It appears that USDA is playing an important role in promoting
the production of vegetables, which are the organic products most seen in people’s daily
lives in the U.S. Organic vegetables also are found to have their target population, as a
higher percentage of the white and Hispanic populations increases the organic vegetable
acres. Dubowitz et al. found that the black population consumed 0.42 fewer daily servings
of fruit and vegetables combined and 0.50 fewer daily servings of vegetables than did
whites [
73
]. The estimates in column (1) Table 3again indicate that increased total farm
worker population promotes the expansion of organic vegetable production, and this is
particularly true for labor-intensive vegetables such as lettuce and melons. This result is
consistent with Jansen et al. and Hassan et al. [
74
,
75
]. Jansen et al. suggested that labor is
a factor limiting vegetable production enterprises according to the result of the negative
correlation between farm size and cropping intensity [
75
]. Hassan et al. concluded that
a positive relationship has been achieved between the amount of wheat production and
the cultivated area of wheat (estimated per feddan), the rates of rainfall (mm/year), and
the number of workers [
75
]. Estimates in column (2) show that the total acres of organic
fruits are affected by the total number of farm workers and the total population size in a
state. Mpawenimana has investigated the socio-economic factors affecting the production
of bananas in Rwanda; the results showed that acreage of land has a positive relationship
with output [
76
]. However, we do not see factors such as USDA grant funding affecting
organic fruit production. The reasons could be that USDA research puts more emphasis on
organic vegetables or that the funding for organic fruit does not have a similarly prominent
influence like that on organic vegetables. This is an interesting topic that could be taken
up in future research that specifically examines how public-funded research could affect
organic farming.
Finally, it can be seen from column (3) Table 3that USDA funding, the total farm worker
population, and the total population size in a state might positively affect the organic production
of other crops. These results are consistent with Wheeler, Abugamea and Lamine & Bellon,
respectively [
7
,
47
,
57
]. Policymakers who would like to expand the production of other crops
such as grain and feed crops should pay more attention to cultivating a stable farm labor pool,
expanding the consumer base, and improving the use of research funding as some efficient
measures to increase the production of other organic crops.
Sustainability 2022,14, 503 13 of 17
Table 3.
Estimates of the determinants for organic vegetable land, fruit crop land, and other organic
lands in the U.S.
Organic Vegetable
Acres Organic Fruit Acres Organic Other Acres
(1) (2) (3)
Median household
income 0.155 0.013 0.014
(0.165) (0.067) (1.141)
USDA approved
grant 0.074 *** −0.052 0.505 ***
(0.028) (0.054) (0.185)
State approved grant −0.012 −0.095 −0.078
(0.032) (0.073) (0.275)
Farm size −3.297 1.558 9.016
(4.968) (1.275) (13.694)
Percent white 3182.635 *** 190.283 6390.136
(972.070) (346.819) (5350.674)
Percent Hispanic 5217.981 *** 58.418 4730.278
(1993.801) (946.138) (8814.128)
Total farm labor 0.944 *** 1.033 *** 4.817 ***
(0.319) (0.273) (1.238)
Percent noncitizen −239.711 −530.005 −5082.976
(446.338) (496.138) (3438.659)
Male farmers ratio 39,707.497 −30,848.926 −360,380.833
(34,826.788) (27,259.720) (661,125.381)
Mean farmer age 147.244 24.128 −39.016
(112.932) (84.081) (731.546)
Total population −0.005 0.005 *** 0.031 ***
(0.004) (0.002) (0.005)
Direct government
transfer −0.001 0 0.012
(0.001) (0.001) (0.009)
N 331 328 328
R20.996 0.96 0.917
Notes: USDA denotes the United States Department of Agriculture. Robust standard errors are reported in the
parentheses. *** p< 0.01.
5. Summary and Conclusions
This research examines the determinants of organic farming at the state level using data
collected from multiple sources. The results show that the scale of organic production may
change according to the ethnicity composition in a state as well as the share of noncitizens
in a state. Some other factors such as median household income and direct government
payments are not statistically significant in this study. Moreover, we find that the key
determinants of organic farming differ for different crops.
Most importantly, the results provide suggestive evidence showing that there is a
positive relationship between USDA funding and organic farming development. This
indicates that it could be possible for USDA research support to promote and encourage
organic production and supply to a notable extent. However, we would like to note that
the cross-sectional analysis conducted in this study cannot help build a causal link between
USDA funding and organic farming expansion. A quasi-natural experiment analysis could
help alleviate such concerns as more data become available in the future.
Another critical factor that is found to play an important role in organic farming is
the total number of farm workers. As the organic farming sector continues to expand,
it will increase the need for more workers. However, the supply of farm workers is
expected to further decrease [
77
] as more stringent immigration policies are adopted. Those
immigration policies may severely undermine the labor pool of organic agriculture in
the U.S. and notably increase the labor cost for organic farming, which in turn would
Sustainability 2022,14, 503 14 of 17
increase the prices of organic commodities, decrease the profit margins of organic farms,
and diminish the competitiveness of the U.S. organic agricultural industry. Organic farming
policymakers need to cooperate with policymakers in immigration and other sectors to
ensure the labor sustainability of the organic sector.
This study examines data on the growth of organic farming at the state level that
includes all U.S. states and spans almost two decades. The results of this study can be
insightful for the state sector, the farm sector, and organic farmers that would like to have a
more comprehensive and clearer vision of the factors that might affect organic production
in the country. First, the state sector should deal with the relationship between agricultural
development and immigrants. For example, giving appropriate benefits to the immigrant
population might increase the labor force and consumers needed for the development of
organic farming. Second, USDA should increase financial support for organic farming,
especially in Southwestern U.S. where organic farming is relatively backward. Third, the
organic farmers themselves need to make full use of government funds and establish an
appropriate wage incentive system to improve the enthusiasm of the farm workers in
the case of labor shortage. Moreover, this study also provides important implications for
other countries that seek to promote domestic organic production. Finally, this study offers
insights for more research of this genre as the organic product market continues to grow
and expand.
We would like to note some limitations of this study. First, some information such as
the prices of organic products and other relevant market conditions are not included in
the model due to data unavailability. Research that has access to such information in the
US or other countries should consider controlling these covariates. Second, as mentioned
before, the cross-sectional data structure of this study constrains the investigation of a
causal link between different determinants and organic production. As more longitudinal
data or quasi-natural experiments become available, research may establish a robust causal
relationship in the future. Third, even though state-level data bears many advantages,
it may lack the details that can be captured by the county level or farm-level data. One
solution to this is to combine the state level, county level (e.g., Census of Agriculture county-
level data), and farm level (e.g., Agricultural Resource Management Survey) information
to evaluate the organic farming industry in the future.
Author Contributions:
Conceptualization, Y.H.; data curation, T.L.; formal analysis, Y.H., T.L. and
J.H.; methodology, Y.H.; software, T.L. and J.H.; writing—original draft, T.L. and J.H.; writing—review
and editing, Y.H. All authors have read and agreed to the published version of the manuscript.
Funding: This research received no external funding.
Institutional Review Board Statement: Not applicable.
Informed Consent Statement: Not applicable.
Data Availability Statement: Not applicable.
Conflicts of Interest: The authors declare no conflict of interest.
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