Its easy to get lulled by the gentle and seemingly unstoppable ride higher that investors have been enjoying with almost all their funds. But it cant last forever.

Greg Davis, the new chief investment officer at investing giant Vanguard, isnt predicting when the next downturn for stocks will happen, but he says investors need to be ready for it given how expensive the market has become. So if swelling stock prices mean they make up a much bigger part of your portfolio than before, and you wouldnt be able to stomach a 10 percent drop without panicking, consider paring back on them.

The largest mutual fund by assets, Vanguards Total Stock Market Index fund, has returned 11.4 percent so far in 2017, for example. Thats close to its best performance for any of the past three full years.

In his role, Davis oversees more than $3.8 trillion in assets, including the stock index funds that made Vanguard famous and bond funds run by managers looking to beat the market. Thats close to the size of Germanys economy. Davis is no stranger at Vanguard. He previously oversaw its bond investments.

Davis recently talked about his outlook for markets and fund investing. Answers have been edited for clarity and length.

Q: Nearly every investment is going up, from stocks in the U.S. to bonds from emerging markets to stocks in Europe. Is it worrisome that everything is doing so well at the same time?

A: I dont see that as worrisome, those things being in sync. The bigger concern is that valuations have gotten a bit stretched, on the equity side as well as the fixed-income side. Thats a bigger concern to me than all these things moving in tandem. Much of that can be attributed to the very loose monetary policy from central banks around the world. Thats put a very strong bid across these markets.

So its not a surprise, but there is a need for caution and a need for customers to be comfortable with the amount of risk in their portfolios. Its something they should be looking at. You can never predict when a downturn will come, but it will eventually come, and investors need to make sure theyre not too far ahead of their skis.

Q: Conventional wisdom says that the U.S. stock market is more overvalued than in Europe and other countries. Do you agree?

A: If you look at Europe, those markets look a bit more attractive than the U.S. market. The way we would talk to investors is: You want to be diversified around the globe. You want to have the diversification so that if there is a downturn in the market, you dont do inappropriate things at inappropriate times.

Q: Inappropriate things means selling low whenever stocks take their next tumble?

A: Absolutely.

Q: And when youre telling people to stay diversified, that sounds like shorthand for making sure you have enough bonds in your portfolio to ease the sting of any downturn for stocks. Can bonds still be that stabilizer if yields are so low?

A: If you go back and look at the worst months for the equity markets, high-quality bonds provided a strong ballast to an investors portfolio. If youre in one of those environments where U.S. stocks go down 6 percent, you typically have high-quality bonds showing slightly positive returns.

Its an asset class thats not expected to go down, even in a low-rate environment. After the Brexit vote, even when yields (on European bonds) were negative, high-quality bonds still held up even as equities sold off. Bonds have historically done their job, even when theyre yielding low amounts or even negative yields.

Q: Investors seem to be throwing in the towel on funds run by stock pickers, and theyre choosing index funds instead. Do you think index funds will continue to be the overwhelming favorite for where investors put their new dollars?

A: Our view is that investors are clearly voting that paying high costs in an environment where returns are expected to be muted are not the best option for them, and were seeing them move to lower-cost funds. If you have a higher cost structure, its harder for you to outperform your market. And if you do, you have to take on substantially more risk to achieve those returns.

Any manager in our complex is low-cost by nature. Weve seen significant inflows into our active funds as well.

Q: Do you think the industry could ever get to a point where someone offers a fund with zero fees, to be a loss leader and bring in customers for their other funds?

A: You already have people doing loss-leader strategies now. You have companies adding new funds that are clones of existing funds that are at a lower price to try to be a loss leader. The reality is you have to look at the entire complex and ask if its enduring.

The industry broadly is still too-high cost, across the board. Theres still opportunity for many prices to go down.

More here:
Vanguard's new chief investment officer has a warning for investors - The Denver Post

Japanese tech giant SoftBank has been plowing billions of dollars into tech companies, both public and privately held, in the last year -- so much so that one investor has questioned whether SoftBank is fueling a new valuation bubble in tech.

Some of these investments are coming from the gigantic SoftBank Vision Fund, which includes funds from SoftBank as well as Saudi Arabia's sovereign wealth fund and tech companies like Apple, Foxconn, Qualcomm and Sharp. The fund announced in May that it had closed $93 billion in capital, and hopes to raise $100 billion by the end of the year.

But SoftBank has also announced many investments that don't involve the Vision Fund. According to reports and sources familiar, some of these investments will be offered to the Vision Fund, while others will not.

Here's a partial list:

Vision Fund investments:

SoftBank investments that are expected to be offered to the Vision Fund

SoftBank investments that are not currently expected to be offered to the Vision Fund

This week, SoftBank was also reported to be considering an investment of "billions" in ride-hailing giant Uber, and to be leading a $250 million investment in business messaging platform Slack.

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SoftBank Vision Fund investments so far - CNBC.com - CNBC

No matter what the location and what type of property, every buyer wants to feel theyre getting a great deal and arent paying the highest price, said Raifie Bass, an Aspen-based broker for Douglas Elliman.

And purchasing a property in a transitioning neighborhood is one way a buyer can optimize potential appreciation and growth. But timing the purchase depends in large part on whether the buyer is looking for a solid long-term investment or a new place to occupy as a primary or secondary residence.

Knowing when to pull the trigger on an investment in a changing neighborhood often comes down to how much risk the buyer wants to take on, said Paul Habibi, a professor of real estate at the UCLA Ziman Center for Real Estate.

If you purchase a property in an area right as it starts transitioning, a lot of people will tell you that youre taking a big risk, and I would agree, he said. But the problem is that once an investment is proven, the risk may go away, but so do the returns.

More:Geopolitical Events Have Immediate Impact on Luxury Market Activity, Not Pricing

From the investment perspective

For luxury purchasers who want a solid investment with growth potential that they likely wont live inat least at the presentMr. Habibi said that timing comes down to satisfying three criteria.

First, he said, youre looking for policy changes that impact land-use rules or increase subsidies, both of which make it easier for developers or investors to come into a neighborhood and make changes. Next, he said, youre looking for an investment in infrastructure, or big public/private partnerships that spur retail or housing development.

When you see a local government or municipality thats pro-growth, and a big investment being made, thats a real sign of change, Mr. Habibi said. This should give investors the first glimpse that something is about to happen, and let them know that gentrification is right around the corner.

Finally, with these two criteria satisfied, buyers should look for signs of private sector development and investment, he said. This could mean grocery stores, banks and other support services sprouting up where they werent before, or other types of businesses entering the scene.

A recent example of this phenomenon is downtown Los Angeles. In 1999, the city approved a policy called the Adaptive Reuse Ordinance, which made it easier and less expensive for developers to convert commercial buildings into condos, apartments, retail centers and hotels.

More:Pricing a Property Based on Comps is Still the RuleUnless Its Incomparable

Then, major capital investment was made in the area, with the 1999 opening of the multi-purpose Staples Center, a popular event venue thats also home to Los Angeless NBA, NHL and WNBA teams, and the adjacent L.A. Live event venue in 2007.

In 2006, the private sector opened the first major downtown grocery store, Mr. Habibi said, which was followed by an influx of restaurants, bars and retail establishments.

Today, Inglewood, a city of 110,000 in southwestern Los Angeles County, is on that same trajectory. After Inglewoods mayor showed that he welcomed development after his 2010 election, the citys indoor sports arena, The Forum, was renovated in 2012 by Madison Square Garden Group and re-launched in 2014.

In November, construction began on a $2.6 billion, 80,000-seat stadium, which will be home to the Los Angeles Rams and Los Angeles Chargers NFL teams when its completed in 2020. The stadium is the centerpiece of a larger 298-acre mixed-use development called the City of Champions Revitalization Project.

In addition to this cataclysmic investment, the city, which is located near Los Angeles International Airport, is undergoing infrastructure investment, as the Crenshaw-LAX rail line, which will connect to lines that reach downtown Los Angeles, is under construction. Today, these things are sure to change the face of the neighborhood, Mr. Habibi said.

Even though the Inglewood transition is still relatively new, Mr. Habibi said, prices in the area have already started increasing. In downtown L.A. and other places like Venice Beach, where gentrification has already occurred, those changes have been more pronounced.

More:The Pros (and Cons) of Purchasing in a Gut-Renovated Condo Building

While the investment might still be lucrative in these place, and theyre still growing, if youd invested in Inglewood at the first signs of change five years ago or in downtown L.A. or Venice Beach 10 years ago, you would have tripled your money by now, Mr. Habibi said.

Similar story in Brooklyn

Like Inglewood, an area of Brooklyn located southeast of Prospect Park along Flatbush Avenue also satisfies these criteria. While it was once home to the first major battle of the Revolutionary War in 1776, and was a place where affluent Irish and Jewish families settled in the 1930s, in recent years, the neighborhood has fallen off the radar of real estate investors. Slowly, thats started to change, said broker Joshua Garay of Garay Real Estate.

Two years ago, the historic Kings Theatre reopened after a massive $95 million restoration. Upcoming events include concerts by The Shins and St. Vincent, and the family-friendly Paw Patrol Live! Across Flatbush Avenue, a seven-story hotel is being raised, as boutiques are replacing outdated retail businesses, and three Starbucks have opened on the strip, Mr. Garay said.

All this led him to recommend that his developer client, Blank Property Group, purchase a mixed use, four-story building built in 1930 at 1001 Flatbush Ave., which they picked up for $2 million in cash earlier this month.

More:How to Decide If Its Time To Take Your Listing Off the Market (For Now)

While in Manhattan, theres not as much opportunity to purchase value-added properties, in Brooklyn, you can still find emerging areas where theres a lot of opportunity for strong appreciation, Mr. Garay said.

Both he and Mr. Habibi said that investors looking to capitalize on gentrification without living in the property themselves should consider purchasing a small, two- to four-unit multi-family building. This sort of project has less risk than buying retail or office space, Mr. Habibi said. Most folks just understand the dynamics of a residential building better, and can make investments of this size with relative ease.

In terms of where buyers should look before they know if criteria like policy changes and infrastructure investment have been satisfied, Mr. Habibi said the easiest thing to do is follow the current path of development, and pick the next community or the next frontier.

You can also follow artists and progressives to see where theyre settling, as Mr. Habibi said that, a high influx of those folks into a community is like adding kindling to the fire.

More:Smart Investors Follow Developers They Trust for Best Price, Pick of Inventory and ROI

Investing in a place to live, with growth potential

For luxury buyer-occupiers, purchasing in a transitioning neighborhood often comes down to getting more for their money and expecting solid, if not slow, appreciation over the years. Unlike purchasing a multi-family development as an investment, these buyers typically buy in a transitioning market farther down the line, when the risks are minimal.

Manhattans Lower East Side is an example of a neighborhood where luxury buyers can now purchase in a new development and get all the amenities they might expect in an area like Tribeca or SoHo for a fraction of the cost.

Prices in developments like 150 Rivington and 196 Orchard, where theres an onsite Equinox gym, start around $1,750 per square foot and go up to $2,500 per square foot, said Howard Margolis and Jeff Adler of the Margolis, Espinal, Adler team at Douglas Elliman. But thats competitive in the new development space, Mr. Margolis said, because anywhere else in the city these buildings would be asking $3,000 per square foot or more.

Unlike Flatbush or Inglewood, many buyers of Lower East Side luxury condos are creative people in the arts, who moved into the area when they were younger, but now, in their 30s to 50s, want to stay put but upgrade to something a little bit nicer than the neighborhood could traditionally offer. These buildings are being built with the environment in mind to appeal to people that have always loved the Lower East Side, Mr. Adler said.

More:Time to Cut a Deal on a Mega-Mansion in New Yorks Struggling Suburbia

Even though these are the highest prices ever seen in the Lower East Side, theyre primed to keep going up, Mr. Adler and Mr. Margolis said. In terms of whether the timing is right to purchase in the area, its impossible to be sure, they said. But if you need a place to live and you can afford to buy one of these apartments, no matter where we are in the market cycle, if youre going to be there for five to seven years, youre going to do just fine financially, Mr. Margolis said.

Burgeoning new developments around the world

In Knight Franks 2017 Luxury Report, the Centro neighborhood in Madrid, Quartier des Pquis area in Geneva, and Santo Spirito and Porta Romana neighborhoods in Florence were also singled out as emerging locations where development is rippling out from more popular tourist and residential sectors.

The final neighborhood on the Knight Frank gentrification list is West Aspen, an area about a mile and a half from the much more expensive and in demand Aspen downtown core. Like the Lower East Side, where the price per square foot of condos can be about half that of similar units in more established neighborhoods, the same rules apply in West Aspen, where buyers can get much more houseand more landfor less money.

In recent years, pricing for condos and townhouses in Aspens core has pushed north of $3,000 or $4,000 per square foot, said Mr. Bass, who has worked in the area for two-plus decades. With that much pressure on the core, a lot of buyers are looking for more space and a better value proposition, he said.

More:Click for More In-Depth Analysis of Luxury Lifestyle News

By just crossing the bridge into West Aspen, lots jump in size from a range of 3,000 to 9,000 square feet on the west end of Aspen up to 15,000 square feet in West Aspen, as prices drop down to about $1,200 per square foot.

This isnt necessarily about neighborhood revitalization, because West Aspen has always had the free bus service into town and an excellent school system, Mr. Bass said. Its about taking older homes in a more established neighborhood, and building properties that are nicer and more contemporary.

You could spend $7 or $8 million in the core, or go across the bridge into West Aspen and get twice as much space with other amenities for a couple million less, Mr. Bass said. Either way, the demand is still there.

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How to Spot a Good Investment in a Changing Neighborhood - Mansion Global

The provider of a bitcoin exchange-traded note (ETN) in Sweden hassaid that it will track what the market considers to be "bitcoin" following a possible network split next week.

XBT Provider AB released a statementoutlining its plans ahead of what could be a split in the bitcoin blockchain on August 1, one pursued by the proponents of an alternative implementation called Bitcoin Cash. The first of two ETNs launched by XBT Provider went live in mid-2015 following approval by the Swedish government.

The firm said that, as the ETN holders don't actually possess any bitcoin, they won't be directly affected. But XBT Provider said it is moving proactively to protect the bitcoin holdings that the ETN tracks, steps which include safeguarding the assets themselves in the event of a chain split.

"The Guarantor's group companies have moved as much of their bitcoins held on account as is practicable in the circumstances to custodian infrastructure that will support both coins should a new coin result from the anticipated fork," the company stated.

Ultimately, the firm said it will align with whichever chain the market deems to be "bitcoin", explaining:

"The Issuer wishes to further clarify that its Certificates are designed to track "bitcoin" and not any alternative coin which results from a forking event and which shared a common transaction history prior to the fork. Therefore, the Issuer's Certificates will, after a fork, be referenced to the coin which the bitcoin community and exchanges define, and consider to be, 'bitcoin'."

This approach isn't set in stone, however, as XBT Provider will undertake a three-month observation period, during which it will wait and see which chain comes to attract the most support.

Train yard imagevia Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [emailprotected].

Link:
Bitcoin Investment Vehicle Adopts Open Strategy Ahead of Blockchain Fork - CoinDesk

A member of SpaceXs board of directors will reportedly leave the Silicon Valley venture capital firm he co-founded to start an investment firm focused, at least initially, on raising funds for SpaceX.

News organization Axios reported Thursday afternoon that Luke Nosek, co-founder and partner at Founders Fund, was leaving his firm to start Gigafund, an investment firm that would be initially aimed at raising capital for the Elon Musk-led Hawthorne space company.

SEC documents filed Thursday list Nosek as a managing member at Gigafund, which has a principal place of business in Redwood City, Calif. The filing also lists Stephen Oskoui as being part of Gigafund. Oskoui is listed on LinkedIn as a venture partner at Founders Fund.

Attempts to reach Nosek were unsuccessful Thursday afternoon.

In a statement, SpaceX spokesman John Taylor said, While we wish Luke well in his new endeavors, there is no guarantee of future investment allocations in SpaceX or any other companies associated with Elon.

While at Founders Fund, Nosek led investments in SpaceX. He was also a member of the PayPal founding team, along with Musk and entrepreneur Peter Thiel, who is a partner at Founders Fund.

Brian Singerman, partner at Founders Fund, confirmed in a statement that Nosek was leaving the venture capital firm but would only say he was headed to launch a new endeavor.

His unwavering commitment to entrepreneurs and passion for technology shaped the founding ethos of Founders Fund, Singerman said. We are grateful for his contributions and we wish him well.

Founders Fund said it had no further comment.

SpaceX, a private company, was valued this month at $21.2 billion, according to Equidate, an online trading platform that specializes in large, private technology firms.

In 2015, SpaceX sold a nearly 10% stake in the company to Google and Fidelity Investments for a $1-billion investment.

samantha.masunaga@latimes.com

Twitter: @smasunaga

Link:
PayPal co-founder launches firm to raise investment funds for SpaceX, report says - Los Angeles Times

After an 8.4% sales increase from the previous year and Amazon's purchase of Whole Foods for $13.7 billion, it looks like organic food is growing into a normal part of American life. Video by Henry Taylor

Producer of organic nectarines examines the ripeness of the nectarines at his field in Saint-Genis des Fontaines(Photo: RAYMOND ROIG, AFP/Getty Images)

Organic food sales are setting records asmore mainstream Americans fill their shopping carts with everything from eggs to gummy fruit snacks.

Having shed its hippy-dippy image, organic food is among the faster-growing categories in supermarkets even though it adds to food bills and studies vary when it comes to perceived health benefits.

Organicfood producers, which now includes giants such asGeneral Mills, are capturing more consumers such asbusiness coachPatty Lennon of Brookfield, Conn.

"Its produced in ahealthier way, without pesticides, without any bad things that contaminate the growth of the food and the growth of my kids," the 45-year-old mother of two said. "Asmy kids grow up, Iwant to know Ive done everything I could to put the right things in their bodies."

Sure, organic costs more. Lennon estimates the$450 she spends on groceries weeklywould drop to $275 or $300if she bought the usual non-organic products."I have the luxury of being able to afford it," she said..

In 2016, sales of organic food was at an all-time high of $43 billion, according to the Organic Trade Association.(Photo: Eileen Blass, USAT)

There are millions of other shoppers like her.

Sales of organic food hit a record $43 billion last year, up 8.4% from the previous year, according to the Organic Trade Association, based in Washington, D.C.. Compare that to the 0.6% growth rate in the overall food category. But they still have a long way to go: Overall, organic food now represents 5.3% of total retail food sales in the U.S.

Interest in organic products is booming not only due to a more conscientious consumer, but also thanks to rising incomes in a strong economy and improved farming practices that make organic yields more robust. The demand for organic extends from supermarket aisles to the multitude of farmers markets that have sprung up.

Organic's rising importance was underscored by Amazon's offer last month to buyWhole Foods Market, the upscale grocery chain known for its expansive produceselection, for $13.7 billion.

"There's an increasing awareness of organic products," saidRupesh Parikh, investment bank Oppenheimer's senior analyst for food, grocery and consumer products, who predicts continued double-digit annual growth. "Consumers are really looking more into what theyre eating."

The most popular organic items are fruits and vegetables, which account for close to 40% of all organic food sales, theOrganic Trade Association found. Organic produce sales grew at more than twice the rate of total fruit and vegetable sales.Almost 15% of veggies and fruit consumed in the U.S. is now organic.

With consumers' desire for more nutritious, less chemically-laden food comes a willingness to pay more. Some 44% of shoppers would pay an additional 20% or more for organic fresh vegetables, and 37% are willing to hand over that much more cash for organic poultry, found a study by the Hartman Group, a food and beverage research firm in Bellevue, Wash.

No wonder large food companies are diversifying their portfolios to include organic products.

"Finally, the conventional food and beverage industry has woken up and said, 'Why, this isnt niche anymore . Its eating into my share,' " Hartman Group senior vice president Shelley Balankosaid.

Campbell Souphas the Plum Organics baby food line and Bolthouse Farms salad dressings and juices. Coca-Cola has organicHonest Tea. Hormel's lineup includes organic meats label Applegate Farms.

General Mills'organic-only portfolio has grown more than 350% over the past fiveyears. Natural and organic sales were $1 billionthis year, growing at a double-digit clip since 2000 when the Minneapolis-based cereal makerfirst ventured into organic with the purchase of Small Planet Foods, which produces a variety of organic foods, from ketchup to granola bars. In 2014, General Mills acquired Annie's, which features fruit snacks, cereal,cookies and more.

"As the food values consumers are looking for have shifted, we always try to be responsive," said Carla Vernon, General Mills' vice president of the natural and organics portfolio.

The growing popularity of organic food has opened the door to price cutters.

The Sprouts Farmers Market chain, for instance, has become an organic alternative to Whole Foods. Andmainstream supermarket giants, such as Cincinnati-based Kroger, which operates a variety of chains around the nation, are dedicating more floor and shelf space to organic products.

With that customer migration from traditional groceries to organic goods will comelower prices for shoppers. Organic's profit margins are generally higher than on conventional groceries.

"When a product is available at more retailers, it puts pressure on gross margins and profitability," Parikhsaid. "Theres more available,so supply chain has an impact as well."

Related

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Organic food is pricier, but shoppers crave it - USA TODAY

Posted Apr. 15, 2000

Nearly three years after its first attempt, the USDA this March introduced a revised set of standards intended to clear up consumer confusion surrounding the organic foods industry, one of the fastest growing sectors of American agriculture.

The proposed National Organic Program offers a definition for the term "organic." Organic food is currently certified by various private and state organizations that use their own standards.

"A single national organic standard, backed by consistent and accurate labeling, will greatly reduce consumer confusion," said Agriculture Secretary Dan Glickman. "Consumers will know what they are buying, and organic farmers will know what is expected of them."

Estimated retail value of organic food sales for 1999 is approximately $6 billion. The number of organic farmers stands around 12,200 and has been increasing at about 12 percent per year.

The Clinton administration has proposed $5 million in the fiscal 2001 budget to promote organic agriculture. The funds would go toward conducting research on improved organic production and processing methods, evaluating economic benefits to farmers, and developing new organic markets.

Appearing in the March 12 Federal Register, the 147-page proposal details the methods, practices, and substances that can be used in producing and handling organic crops and livestock (but not aquaculture), as well as processed products. It establishes labeling criteria and rules so consumers know what they are buying when they purchase organic food.

Genetic engineering, sewage sludge, and irradiation would be prohibited in the production of organic food products. Antibiotics would also be forbidden in organic livestock production, and pure organic feed would have to be used.

Included in the proposal is an accreditation program for state officials and private persons to certify compliance with the organic standards. The revised proposal resulted from analysis of an unprecedented 275,603 comments received in response to the USDA's initial, December 1997 proposal.

The AVMA in 1992 stated its concern that animal well-being not be sacrificed through the avoidance of medical treatment to preserve organic status.

In their comments about the initial proposal, the Association and several others said the prohibition on accepted veterinary medical preventive health care procedures could result in the organic livestock being raised in less humane fashion.

Although the revised standards prohibit the use of antibiotics on any animal to be sold, labeled, or represented as organic, the standards require that sick or injured animals be treated with appropriate medicine, regardless of whether the organic status is lost as a result.

These and other issues raised by the AVMA are addressed in the National Organic Program, which the Association is currently evaluating. The deadline for comments is June 12.

Send comments by June 12 to: Keith Jones, Program Manager, National Organic Program, USDA-AMS-TMP-NOP, Room 2945-So, Ag Stop 0275, PO Box 96456, Washington, DC 20090-6456. Fax to (703) 365-0760 or file via: http://www.ams.usda.gov/nop. Comments should be identified with docket number TMD-00-02-PR.

Link:

National standards for organic foods proposed - American Veterinary Medical Association

The organic food industry is a booming business, and with the recent sale of natural-foods giant Whole Foods to Amazon, its expected to grow even larger in the near future. While some consumers buy organic because they believe it's better for the environment, even more do so for health-related reasons, according to one 2016 survey.

What, exactly, are the health benefits of going organic? That depends on who you ask and which studies you consult. But if you do choose to buy organic foods, here are some science-backed bonuses youre likely to get in return.

Fruits, vegetables and grains labeled organic are grown without the use of most synthetic pesticides or artificial fertilizers. (The National Organic Standard Board does allow some synthetic substances to be used.) While such chemicals have been deemed safe in the quantities used for conventional farming, health experts still warn about the potential harms of repeated exposure.

For example, the commonly used herbicide Roundup has been classified as a probable human carcinogen, and the insecticide chlorpyrifos has been associated with developmental delays in infants. Studies have also suggested that pesticide residuesat levels commonly found in the urine of kids in the U.S.may contribute to ADHD prevalence; theyve also been linked to reduced sperm quality in men.

A 2014 meta-analysis in the British Journal of Nutrition found that organically grown crops were not only less likely to contain detectable levels of pesticides, but because of differences in fertilization techniques, they were also 48% less likely to test positive for cadmium, a toxic heavy metal that accumulates in the liver and kidneys.

When it comes to meat and milk, organic products can have about 50% more omega-3 fatty acids, a type of unsaturated healthy fat, than conventionally produced products, according to a 2016 study in the British Journal of Nutrition. Organic milk tested in the study also had less saturated fat than non-organic.

These differences may come from the way organic livestock is raised, with a grass-fed diet and more time spent outdoors, say the studys authors. They believe that switching from conventional to organic products would raise consumers' omega-3 intake without increasing overall calories or saturated fat.

Conventional livestock can be fed antibiotics to protect against illness, making it easier for farmers to raise animals in crowded or unsanitary conditions. The FDA limited the use of certain antibiotics for livestock earlier this year, but loopholes in the legislation still exist. And with the exception of poultry, conventionally raised animals can also be injected with synthetic growth hormones, so theyll gain weight faster or produce more milk.

But traces of these substances can make their way to consumers, says Rolf Halden, professor and director of the Biodesign Center for Environmental Security at Arizona State University. Drug residue is believed to contribute to widespread antibiotic resistance, he says, and organic foodswhich are produced without antibioticsare intrinsically safer in this respect. Organic meat and dairy also cannot contain synthetic hormones, which have been linked to an increased risk of cancer.

In a recent six-year study in the Journal of Agricultural and Food Chemistry, researchers found that organic onions had about a 20% higher antioxidant content than conventionally grown onions. They also theorized that previous analysesseveral of which have found no difference in conventional versus organic antioxidant levelsmay have been thwarted by too-short study periods and confounding variables like weather.

The research was very well done, says Guy Crosby, adjunct associate professor of Nutrition at the Harvard Chan School of Public Health. But he points out that this specific study takes just one aspect of phytochemicals and shows they can be improved under organic conditions. The question of whether organic foods are truly more nutritious is still debatable, he adds. Had the researchers chosen to measure a different vitamin or mineral, they may have found a different result.

Organic products are more expensive than conventional ones, and whether theyre really worth the extra cost is certainly a matter of choice. If you can afford all organic, that's fantastic, but it's not feasible for most people, says registered dietitian Cynthia Sass. If its not, the most important groups to buy organic, in my opinion, include foods you eat daily and produce on the Dirty Dozen listthose with the highest pesticide residues. If people eat eggs, dairy and meat, she also recommends buying those organic.

Halden says that vulnerable groupsincluding pregnant women, young children, the elderly and people suffering from allergiesmay benefit the most from choosing organically produced foods. He also points out that a strictly organic diet can still be plenty unhealthy: Eating too much sugar and meat and too few vegetables is risky, regardless of whether the shopper picks from the conventional or organic grocery selection, he says.

Its also important for consumers to make educated decisions about why they choose to buy organic, says Crosbyand not to get hung up on individual studies that havent been supported by additional research. If you're trying to reduce exposure to pesticide residues, organic is a good choice, he says. On the other hand, if youre buying them because theyre more nutritious, the evidence doesnt broadly support that," he says.

Link:

4 Science-Backed Health Benefits of Eating Organic - TIME

When some farmers in Tondoli, 35 km from Aurangabad, decided to form a group in 2000 to practise organic agriculture and sell their produce, they knew they had a long road ahead of them, particularly in convincing customers. With the help of the Institute for Integrated Rural Development (IIRD), which has been promoting organic farming in the region, they brought consumers from Aurangabad to show that they do not use chemical fertilisers or pesticides on their lands, which is why what they grow deserves a higher price.

Tondoli is in the semi-arid, drought prone Marathwada region and only 2% of its cultivable area is irrigated. This means the village has to make judicious use of water by growing crops native to the region and preserve the health of the soil. The villagers are convinced that organic farming is essential to that. Kailash Garad, a farmer in the group, says they get up to twice the price of inorganic vegetables and 20-25% more in pulses.

The 20-member farmers' group, which grows tur dal (pigeon pea), maize, millets, vegetables, wheat and cotton, does not get its fields vetted by a certifying agency. As small farmers owning between two and five acres each, they cannot afford one so they follow another, cheaper system, which has been gaining ground across the developing world over the past few years.

In Participatory Guarantee Systems (PGS), farmers in a group inspect each other's land and vouch for its organic credentials. "Just by taking a fistful of soil, you can make out if chemicals have been used or not," says Radha Shelke, another farmer in the group, sitting with the other members in her house.

The inspection is carried out at the start of every sowing season and farmers visit each other almost weekly to provide counsel. If a farmer is found to be in violation, her produce is not sold through the group till she rectifies her mistake.

"Who knows a farm better than a neighbouring farmer?" asks Joy Daniel, executive director of the IIRD, which works with 3,000 organic farmers in Aurangabadand Jalna districts. He adds that PGS involve much less documentation and can be easily adopted and replicated. The farmers' groups are helped by facilitation councils, which are mostly nongovernmental organisations (NGOs) like the IIRD. Facilitation councils across the country have been working under an umbrella body called PGS Organic Council since 2011.

The Green Seals Since 2001, the government had been promoting organic farming through third party certification under the National Programme for Organic Production (NPOP). It was only in 2015 that the present dispensation officially recognised PGS. The NPOP, which is run by the Ministry of Commerce, was originally meant for exports and requires adherence to stringent standards.

There are 24 accredited certifying agencies that verify farms, storages and processing units. Products certified organic by them carry the India Organic logo. In 2015-16, the latest period for which data is available, there were 1.5 million hectares (1 hectare = 2.47 acres) of cultivable land certified under NPOP. In the same year, India exported a fifth of its certified organic production of 1.35 million tonnes.

The PGS-India programme, meanwhile, is implemented by the Ministry of Agriculture through the National Centre of Organic Farming (NCOF). Presently, there are 2.1 lakh farmers under the initiative, owning 1.5 lakh hectares, which is just a tenth of the third-party-certified area. Produce from farms that are being converted to organic carries the PGS-India Green logo during the transition period, and after three years of not using any chemicals, the farm will be eligible for the PGS-India Organic symbol. Draft regulations on organic certification are a step in the right direction but these might create some confusion in the minds of consumers initially, says N Balasubramanian, CEO, Sresta Natural Bioproducts.According to a recent report by the Research Institute of Organic Agriculture (FiBL) and the International Federation of Organic Agriculture Movements (IFOAM), India had 5,85,200 organic farmers in 2015, more than any other country and a quarter of the world total. Still, organic farming accounts for just 1.7% of India's cultivated area.

The Food Safety and Standards Authority of India (FSSAI) last month released draft regulations on organic certification, the first of its kind, which recognise both the thirdparty system and PGS. Chandra Bhushan, deputy director-general of the Centre for Science and Environment, says India is unique in that the government has taken the lead in organic certifications, while in the rest of the world it is left to autonomous bodies.

"Fake organic products are not a health issue. It's only about false claims. There are a lot of food products claiming they are 0% trans fat or 0% cholesterol. There is no mandatory certification for that."

Pawan Agarwal, chief executive of the FSSAI, counters that by saying even mislabelling falls within the Food Safety Act of 2006. "We are not getting into certification ourselves. We are only recognising certifications." He adds that if there are more valid certification systems in the future, even those might be included.

PGS vs Third Party Having two systems comes with its own hitches. Bhushan says there is no linkage between the two certification systems. For instance, exporters cannot process foods with PGS-certified ingredients because developed markets like the US, the biggest for organic products, and the European Union do not accept PGS yet. But Krishan Chandra, director, NCOF, says over a hundred countries are willing to trade in PGS products.

"Mauritius, Nepal and Taiwan are willing to import from us." PGS certification will soon cover not just farms but also food processing, he adds. Sikkim, which last year became India's first state to become fully organic, wants its land producing exportable commodities to remain under third-party certification, while introducing PGS in other areas.

Third-party certification is normally done for groups of 500 farmers each, and fields of 35-45 farmers are tested in each group.

Sandeep Bhargava, CEO of OneCert Asia, one of the largest certifiers, says it costs between Rs 150 and Rs 500 per farmer per year for certification and the cost of internal audits and documentation could be Rs 2,500 per farmer. However, he notes, the costs are defrayed by companies and through government schemes.

Joy Daniel of the IIRD says in PGS if the contribution of volunteers working with NGOs were to be monetised, the cost could be Rs 1,000 per farmer in the first three years and a tenth of that there on. Supporters of PGS question the veracity of third-party certification, given its small sample sizes N Balasubramanian, CEO of Sresta Natural Bioproducts, says the company foots the cost of certification of the farmers it sources from. Sresta, which sells the 24 Mantra Organic brand of products, is India's largest organic foods company, accounting for 28% of the Rs 3.2 billion packaged organic foods and beverages market in 2016.

Since 40% of its business comes from exports, which necessitates third-party certification, it follows the same for the domestic market.

"The draft regulations are a step in the right direction but PGS will have to be handled with care," says Balasubramanian, adding that a dual certification system might create some confusion in the minds of consumers initially. Shrikant Sharma, CEO of Sanjeevani Agro Foods, another organic foods company, says they experimented with PGS a few years ago but gave up owing to the lack of a viable market for the same.

"Consumers don't believe PGS as it is self-certification." Madhav Pandit, who used to be with the Maharashtra Organic Farming Federation, says PGS' biggest failure is its inability to create a market for the produce. "Whatever prices farmers get is because of their own efforts and individual identity and not because of PGS."

Kalyan Paul, president of the PGS Organic Council, says while small retail stores are open to selling PGS products, it's not easy convincing big retail chains. Future Group, which owns Big Bazaar and Foodhall, a premium store, and Godrej Nature's Basket did not respond to requests for comment. But Seshu Kumar, head of merchandising, Bigbasket, an online grocer, says the company spent a lot of time trying to decide where to source its organic produce from.

"We met people working in the organic field who believed PGS is more attuned to the Indian farming conditions and it can get a lot of farmers into the system."

While Bigbasket sources vegetables and fruits from around 100 PGS-certified small farmers in Mysuru and Gokak in Karnataka, for its in-house brand of organic rice and pulses, it has tied up with a couple of third-party-certified farmers' cooperatives in the state. There are sound arguments to be made to favour third-party certification over PGS and vice versa. But both are here to stay while exporters will always prefer third-party certification, given the conflict of interest in farmers certifying each other in PGS, the only way for small organic farmers producing fruits and vegetables to have some sort of label is through PGS. The need of the hour is for both systems to be linked seamlessly so that India's efforts to promote organic farming do not get lost in a tussle over which logo should be on the back of a pack.

Original post:

Is the two certification system harming India's organic food market? - Economic Times

Organic food can be more expensive at the grocery store but some experts say investing in your health is worth the cost. In the fifth episode of ABC News' "Healthy Living for Summer" series, we spoke with chef Tara Punzone from Real Food Daily, a Los Angeles-based organic restaurant.

But first, what does organic mean?

"The word 'organic' refers to the way farmers grow and process agricultural products, such as fruits, vegetables, grains, dairy products and meat," the nonprofit Mayo Clinic states on its website. Organic farming does not permit certain things, such as synthetic fertilizers, sewage sludge as fertilizer, most synthetic pesticides, genetic engineering and antibiotics or growth hormones for livestock.

The U.S. Department of Agriculture also sets specific standards for what is certified organic. Food that is organic will carry a USDA Organic seal.

Punzone said eating organic is better because "you're avoiding chemicals that they're spraying on foods and chemicals in soil and all kinds of pesticides, and things they have no idea what it does to your health."

"Research shows people have lower levels of pesticides when eating mostly organic," according to Karen Smith, senior manager of clinical dietetics at the Physicians Committee for Responsible Medicine. "But there is no research linking that to disease risk or disease incidence."

But she did point out that there appears to be a health correlation between pesticides and people working or living in areas with high exposure to them.

"People living in areas where theyre spraying fields with pesticides or working in areas with high pesticide exposures - there are studies showing higher rates of cancer or children having increased risks of birth defects and other diseases," Smith said.

Punzone warns consumers to avoid non-organic soy, corn and wheat.

"Those three things they're tying to turn out at mass production and speed, they're inundating these crops with all kinds of chemicals to grow faster and be edible faster and they're using these products in everything," she said.

Below is advice Punzone and experts gave ABC News.

While higher prices may hinder some consumers from buying organic, Punzone said organic vegetables and fruits are worth the cost because they have more nutrients and enzymes.

"You [may be] saving money on non-organic now, but think about what will happen in the future [if you get] sick and you have issues to deal with," she said.

Overall, if you can eat organic, "go for it, because we dont know the potential risks associated with consuming foods high in pesticides and if youre able to afford and have access to organic foods then I think thats a great option, but it definitely isnt the only option," Smith said.

And just because a cookie is labeled organic, it doesn't mean it's healthy.

"You have to weigh the risks versus the benefits," Smith said.

Watch ABC News discuss organic foods in the video above.This weekly health series will continue throughout the summer.

See the rest here:

'Healthy Living for Summer': Eating organic - ABC News