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Opportunity, Cubed, for Foreign Growers Who Go Organic

A sugar mill in Brazil found dividends beyond its dreams after making the switch. The reason? U.S. food makers can hardly meet demand.

April 09, 2006|Colin McMahon and Andrew Martin | Chicago Tribune

SERTAOZINHO, Brazil — Growing up on his family's sugar plantation, Leontino Balbo slept like a dream. The hard work, fresh air and lullaby of the sugar mill's machinery brought him peace.

Years later, the place would keep Balbo up at night. After becoming agricultural director of the farm, Balbo took a giant risk. He threw away things his family had learned. He embraced things his family had forgotten. He turned the farm organic, abandoning pesticides, chemical fertilizers and methods of planting and harvesting that had served the family's bottom line for years.

Sugar cane yields fell. Critics snickered. The men who were not just his blood but also his bosses asked, "You sure you know what you're doing?" And Balbo lay awake, asking that of himself but vowing to see the project through.

Now the Sao Francisco mill in Sertaozinho boasts higher yields than ever, some of the highest in Brazil's sugar-rich Sao Paulo state. Fellow cane growers come to Balbo for advice. And, capitalizing on a lack of organic raw ingredients in the United States, Grupo Balbo supplies several prominent American food makers, including Whole Foods' private label and Newman's Own.

"I felt the pressure so heavily," Balbo said, conducting a tour of his cane fields in a sport utility vehicle powered by ethanol produced from organic sugar. "I was so thin. I had to take medicine to sleep.... But I do not like easy things. My family does not like easy things."

The difficult conversion to organic has paid dividends beyond even Balbo's hopes. The dark green cane in the farm's rolling fields can rise 15 feet high, and yields have shot up about 20% since the farm started converting to organic in 1995.

Sugar is Balbo's chief export. Almost half of all organic sugar consumed in the United States, and nearly 40% worldwide, comes from Balbo's Sao Francisco mill. Balbo's own brand of organic food products, called Native, is beginning to appear on U.S. shelves.

Balbo's organic products join others from Brazil in American stores, as well as items such as raspberries from Chile, broccoli from Mexico and blueberries from Quebec.

Sales of organic food and beverages have increased an average of 20% a year in the United States and reached an estimated $14.5 billion in 2005. Though the number of American farmers growing organically has surged as well, they still cannot meet U.S. consumer demand. So food makers look abroad.

That dismays some in the organic movement who believe the "local" aspect of organic farming is as important as the process. But producers say they have no other choice.

"The imports aren't supplanting what we grow here," said Katherine DiMatteo of the Organic Trade Assn. in Greenfield, Mass. "People are going there because we don't have enough. It's a question of conversion of U.S. land to more organics."

A U.S. Department of Agriculture report released in February 2005 estimated that organic imports exceed exports 8 to 1. U.S. imports of organic products are estimated at $1 billion to $1.5 billion a year.

If a product is not made of at least 95% certified organic ingredients, it cannot be labeled "organic." And the supply of organic raw materials is so tight in the United States that Stonyfield Farm of Londonderry, N.H., has had to substitute ingredients and remove the "organic" label from several items in its line of yogurts, ice creams and drinks.

"It's like a morgue in here when that happens," said Nancy Hirshberg, vice president of natural resources for Stonyfield Farm, who buys her company's sugar from Balbo in Brazil. "That's exactly the direction we don't want to go."

In the dairy industry, growth is penned in by the scarcity of organic feed, said Lynn Clarkson, president of Clarkson Grain in Cerro Gordo, Ill. Dairy farmers have to look overseas, primarily to China.

Beyond that, farmers in some other countries are just better prepared to answer the demand for organic products, Clarkson said. He mentioned China, Brazil and Argentina as having fewer obstacles to organic farming, partly because their land has been less subjected to chemical fertilizers and pesticides.

"They have land that they can instantly certify as organic because they haven't put anything on it," he said. "Most U.S. land has to go through a three-year transition."

The transition for Balbo was not so easy as clearing a new patch and seeding it with cane. Balbo had to wean Sao Francisco's fields off chemicals, and he had to change the way the mill processed the sugar to meet the standards demanded by the organic industry.

To some of his fellow growers, the change was lunacy.

"People said to me, 'You are going to ruin the family business,' " Balbo recalled.

But Balbo persuaded his partners and bosses to stick with the Green Cane Project, as the conversion was called, through the 1995-97 transition years. By 2000, Sao Francisco's yields had surpassed the best harvests achieved using conventional methods. And Balbo decided to go Native.

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