Organic Trade Association petitions USDA for check-off
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WASHINGTON, May 12, 2015 - The Organic Trade Association (OTA), representing over 8,500 organic businesses across the U.S., has officially petitioned USDA for a check-off program that could raise $30 million a year for research and promotion.
“The organic industry in America is thriving and maturing, but it is at a critical juncture,” Laura Batcha, CEO and executive director of OTA, said in a statement. The meaning of USDA's organic seal is not clear to many consumers and organic production is “not keeping pace with the robust demand,” Bacha said. “An organic check-off program would give organic stakeholders the opportunity to collectively invest in research, build domestic supply and communicate the value of the organic brand to advance the entire industry to a new level.”
The decision to move forward with a formal check-off proposal follows three years of planning, according to OTA, and comes just over 25 years after Congress authorized the National Organic Program.
This check-off would be wholly different than those of other sectors - for instance beef, pork and dairy - that limit support to their individual commodities, regardless of how those products are cultivated. The organic check-off would apply to all food and fiber produced in accordance with certified organic practices.
The tenets of the check-off include:
• The Check-off Board, with 16 voting members and 17 seats total, would be made up of 50 percent producers and 50 percent handlers.
• Producers will select their regional representatives through direct balloting.
• A referendum is required every seven years to decide whether or not to continue the program. Producers, processors and suppliers who have opted in to the program, will have one vote per organic certificate.
• Every single certificate holder subject to an assessment will have a direct vote - there is no bloc voting.
• Assessments would be made throughout the value chain on producers, handlers and processors, but “double assessments” on organic inputs will not be made. For instance, one-tenth of 1 percent of handlers' net organic sales (gross revenue minus the cost of certified organic ingredients) will be assessed, while primary producers will be assessed one-tenth of 1 percent of their net profit (gross revenue minus the cost of organic seed, feed and labor costs).
• Organic producers would have the option of paying an assessment based on Net Organic Sales or Producer Net Profit, whichever they prefer. If they also produce a conventional product and are assessed through its check-off, they may choose, per federal law, which program they opt-in to.
• Farmers and handlers with gross organic revenue below $250,000 will choose whether or not to pay into the program.
• At least 25 percent of funds would be earmarked for research and allocated, at least in part, according to what regional producers prioritize. Twenty-five percent of the funding would be discretionary and 25 percent would go toward information services and technical assistance that expand domestic production.
• All of the research, inventions and innovations resulting from organic check-off programing would remain in the public domain.
Supporters say the research and technical services funded by a check-off would help educate consumers about what organic certification means and encourage conventional farmers to switch to organic production.
"The … check-off is as unique as the sector it will be representing," said Melissa Hughes, director of government affairs for Organic Valley, the oldest organic dairy cooperative in the U.S. "This is not your father's check-off. This check-off contains meaningful reforms to improve upon older check-offs. It has been painstakingly designed to reflect the diverse needs of the organic community, from the smallest organic farmer to the largest organic processor, and all the organic handlers, food makers, and organic businesses in-between."
OTA says more than 5,000 organic farms and businesses weighed in on the proposal and most - 2 to 1 - offered their support. The group said there was “little or no difference in the amount of support between the size and types of operations.”
Sales of organic food are soaring, topping $39 billion in 2014, but the sector is facing a host of challenges, including consumer confusion about organic, inadequate funding for organic research and tight domestic organic supplies.
"As an industry we haven't done a great job explaining to shoppers what it means to be organic and the benefits of organic. As a result, consumers are still confused by the difference between certified organic, 'all natural' and non-GMO products," said Nicole Dawes, founder and CEO of Late July Organic Snacks.
There is still a long road to go before a check-off would be in place. USDA must complete its review of the check-off application, which could take six months. Then an official proposal will be published in the Federal Register followed by a public comment period that could last another six months. The final step will be a referendum on the proposed check-off, with all certified organic stakeholders eligible to vote. A majority has to approve the plan for it to be implemented. According to Batcha, the entire process could take 12 to 18 months.
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