Abstract

The analysis distinguishes two types of standards for defining organic produce; process standards and product standards. Process standards define organic products by the method and means of production. Product standards define organic by the physical quality of the end product. The National Organic Program (NOP) uses process standards as the basis for defining organic. However, the situation is complicated by agricultural production practices, which sometimes result in the migration of NOP prohibited substances from conventional to organic fields. When this interaction alters the value of the product or the costs of production, a production externality is said to exist. Defining organic using process, rather than product standards, influences the burden and character of production externalities. The NOP’s emphasis on process standards reduces the likelihood that production externalities will emerge