The investment, part of the USDA’s Know Your Farmer, Know Your Food initiative launched in September, is intended to “break down structural barriers that have inhibited local food systems from thriving,” the department said, and that includes investing in organic agricultural development in an effort to keep up with rapidly expanding demand.
Agriculture deputy secretary Kathleen Merrigan said: "Organic agriculture is one of the fastest growing segments of US agriculture and USDA and Congress, through the 2008 Farm Bill, are committed to helping this industry succeed by addressing critical organic agriculture issues through the integration of research, education and extension projects.”
A departmental report flagged up the problem of squeezed organic ingredient supply in June this year. It found that nearly half of US organic handlers found ingredients in short supply, and in 2004, 13 percent failed to meet market demand for at least one of their products.
"These grants…will help develop local and regional food systems and spur economic opportunity by assisting organic producers with new production and marketing practices to meet rising consumer demand," Merrigan said.
Indeed, demand has been rising at a far faster rate than supply. Although certified organic acreage has doubled in the US since 1997, organic food sales have quintupled over the same period, from $3.6bn to $24.6bn last year, according to USDA figures. This has led handlers to look to international markets for supplies – which can often be cheaper due to lower labor and input costs.
US organic demand has outstripped supply since the early 1990s – when many organic suppliers were forced to sell their products on conventional markets due to a lack of consumer demand. Now, the most problematic supply issues are found with coffee, soybeans, milk, seeds, corn, and nuts.
The organic sector now accounts for about three percent of total US food sales, and is forecast to experience “slowing but steady growth” of 19 percent to 2013, according to market research organization Mintel.
Last month, the USDA awarded $1,666,000 to the Organic Trade Association for projects that tackle trade issues for organic products.
Thirty universities have benefited from the latest USDA grants.