Consuming Ethics: Voluntary Certification vs. Mandated Uniformity--Lessons From the Organic Food Industry

Yesim Yilmaz

Advisor: Tyler Cowen, PhD, Department of Economics

Hazel Hall, Market Rm.
April 20, 2004, 08:00 PM to 07:00 PM


In 2002, the National Organic Program Replaced a collection of privately administered "Certified Organic" schemes with federally mandated uniform standards. This was a poor policy choice: mandated uniform standards--such as those enforced by the National Organic Program--cannot cater to the varied preferences that characterize ethical consumption markets--such as the organic food markets--where consumers use their purchasing power to support some social and environmental goal. In building the National Organic Program, the United States Department of Agriculture had difficulty fitting ethical characteristics of organic agriculture (for example, its support for small farms and its promotion of humane treatment of animals, etc.) into its usual regulatory content. When this was not possible and the agency had to make subjective decisions on ethical characteristics, the rulemaking process became extremely open to internal and external pressures, giving way to regulatory capture. Alternatively, a comparison of the competing private organic standards, which served the US organic market before 2002, shows that private certifiers incorporated the "ethical" goals valued by consumers and producers in their definition of "organic," thereby creating a system of competing standards that collectively served a large, heterogeneous consumer base without limiting the ethical scope of the organic market.