Every year, U.S. supermarket shelves are increasingly stocked with organic food products from farmers in foreign countries. As a result, more American consumers than ever are purchasing organic imports, whether Canadian grains, South American produce or European dairy. Imports already make up a growing share of organic corn and soybeans, too.
The U.S. share of the global organic food market is estimated at 40%. In short, the U.S. is heavily dependent on other countries for 60% of these goods. This glaring trade imbalance means dollars that could support American farms and rural communities are flowing to foreign producers overseas. It represents billions of dollars in lost revenue left on the table here at home.
This is a monumental untapped economic opportunity for American farmers – and, by extension, American consumers. The global organic market is projected to hit $120 billion by 2030. Unless American farmers can meet consumer demand, others clearly will.
The longer we delay scaling up our domestic organic production, the harder it becomes to reclaim that ground. This lag is unfolding as freshly imposed tariffs on countries around the world are raising the cost of food for Americans, according to a recent analysis from the nonpartisan Tax Foundation.
Here’s the gist of the problem: Less than 1% of U.S. farmland is certified organic. That gap is largely if not singularly responsible for the U.S. straggling competitively.
Meantime, consumer demand for organic food in the U.S., whether in grocery chains or school cafeterias, is no fad. It’s soaring. Last year, U.S. organic food sales, despite inflation pressures cooling and other food categories stagnating, grew 5.2% to hit a record $71.6 billion.
Nearly 90% of American shoppers say they recognize the U.S. Department of Agriculture’s Organic seal, and more than 70% trust it, making organic one of the country’s most credible food labels. Further, emerging research suggests that the nutrient density in organic food is higher than in non-organic.
The disconnect
Yet here’s the disconnect. Some critics claim that organic farming is geared toward a luxury market and thereby unsuitable for mainstream agriculture. And granted, organic food is priced at a premium, whether it’s domestic or international. Others argue that the protocol in place now for working farmers to transition to certifiably organic is not only complicated but also risky.
As research shows, organic farming can be financially fruitful. A meta-analysis from Washington State University examining farms across multiple regions and crop types found that organic operations are, on average, 22 to 35 percent more profitable than conventional farms.
Organic corn serves as a case in point, too: It typically commands premiums of two to four dollars per bushel more than conventionally grown corn. Organic milk producers charge prices 30 to 50 percent higher. And while livestock producers of organic beef and poultry can generate 40 to 60 percent more revenue per pound.
Such competitive advantages are hardly marginal. Rather, they’re transformational.
Also important, and to consumers and farmers alike, organic markets are resilient. The University of Minnesota concluded that organic farmers consistently achieve higher margins not only thanks to premium pricing but also due to consumer demand that’s more consistent and stable than the average. Unlike the volatility in conventional commodities, with prices swinging wildly according to the flux in global supply chains and speculation, organic prices remain relatively steady, establishing certainty and predictability for all parties concerned. .
At issue here as much as any other single factor is that American farmers often struggle to earn the federal certifications required to grow organic food. They must go through a taxing three-year transition period.
In the process, farmers are compelled to adopt the more expensive organic practices, but keep selling at conventional prices, all while unable as yet to label themselves organic. Because nothing can accelerate this procedure, the resulting gap in cash flow stops many from even attempting the switch. No wonder we’re still playing catch-up.
The first steps toward progress
This is where targeted programs cancreate real returns for farmers. The first step is to help farmers bridge that transition, easing the degree of difficulty.
The good news here is that we already know what works. The USDA has invested $300 million in its Organic Certification Cost Share Program to help, but so far has reached only a small fraction of eligible farmers.Transition support modeled on programs already succeeding at the state level could be expanded and unlock a wave of new domestic production. Rather thansubsidies, these are high-leverage investments to power American agricultural competitiveness.
We’ve privately developed just such an initiative that’s now under way. Our foundation issues grants, of $10,000 per year for three years, that serve as urgently needed strategic capital for farmers and ranchers in California. The program also provides mentorship and technical support.
To date, the grants have gone to 176 farmers. One such grantee funneled the funds toward testing soil and paying for crop seeds. Another invested in installing fences for livestock expressly to meet organic standards. Lending a hand holds the potential to open doors for individual farmers to markets worth hundreds of thousands of dollars in additional annual revenue.
The infrastructure for these improvements is already in place. Land-grant universities and agricultural extension offices, accompanied by certification groups like ours, have the expertise to guide farmers through the transition. What’s needed now is for more transition funding channeled from state and federal government sources. This capital can minimize therisks inherent in the transitions and scale up these production efforts nationally.
American farmers are uniquely positioned to lead the global market for organic food. They’re equipped with the entrepreneurial savvy and technological innovation to turn organic food from a niche lifestyle choice into a mainstream economic opportunity. The payoff will be big: more robust rural economies, improved soil health, and drastically lower dependency on imports.
This much we know for sure: the boom in organic food is going to keep happening either with or without us. The question is whether we’ll help American farmers lead the charge or get left behind while let other countries reap the rewards.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
