WASHINGTON, May 14, 2014 - Don’t expect a proposal for an organic industry checkoff to be submitted to USDA before the end of this year, says the CEO of the Organic Trade Association (OTA).
Laura Batcha told Agri-Pulse that her organization, which is the sector’s principal trade group taking the lead on formulating a checkoff proposal, will launch this summer a second round of outreach efforts – including a direct mail campaign - to the industry’s certified organic operators seeking input on how best to structure an assessment on organic sales that would be used to promote products and widen public awareness. A first round that involved mailings and “town hall” meetings in various parts of the country was undertaken last fall.
“Everyone gets a vote on how the framework for the checkoff would be set up,” Batcha said of the need for what she called “extensive” efforts to reach out to an “incredibly diverse” sector.
It’s that diversity – which ranges from “mom-and-pop” growers and retailers to 10,000-cow dairies and retail giants like Whole Foods – that has generated serious controversy over a proposed checkoff, despite the fact that it could raise an estimated $30 million annually.
Batcha and the OTA, which would receive no money from the checkoff, say the program would be instrumental in getting the industry beyond the margins of U.S. food and product consumption into the mainstream. Using industry figures, USDA estimates organic sales amount to some $35 billion annually, but only account for a little more than 4 percent of total U.S. food sales. Advocates of the checkoff say they not only want to enhance the sector’s position at the retail level, but also to change and improve U.S. eating habits.
The latest proposal released by OTA and other stakeholders in March is available for review and feedback at the proponent-sponsored website, United for More Organics.
A checkoff needs USDA approval and OTA must demonstrate that there is “substantial industry support” before the department will move any proposal forward. But there a significant portion of the organic community – small operators and retailers that focus on direct sales to local consumers – who assert the lion’s share of checkoff monies will simply go to promote the multi-million-dollar organic companies or those companies that have organic subsidiaries, such as Dean Foods (WhiteWave), General Mills and Smuckers.
“These are growers who zealously guard the standards they believe define ‘organic’ and make it a singular and forward-thinking approach to our dietary needs,” said an industry analyst. “They are not interested in being assessed to promote what they see as big corporations who have no compunction about pushing a brand, as opposed to upholding a stringent process.”
Will Fantle is co-director of The Cornucopia Institute, a self-described, organic industry watchdog group that often criticizes any move in the sector that Cornucopia believes would jeopardize the economic viability of family-scale farming. He said any effort envisioned by checkoff supporters to craft an organic-specific message would be very difficult.
“The standard to which messaging is held to is: ‘Would the Secretary of Agriculture say this?’” Fantle said. “And in the eyes of the federal government, organic agriculture and food is a process claim, not a content, food-safety or food-quality claim.”
Mark Kastel, the other Cornucopia co-director, says growers need to “hold on to their wallets… Farmers need to make clear that they don’t want to get roped into a Robin Hood-in-reverse program.”
Batcha and others say the industry is considerably more complex than the big-equals-evil versus small-equals-good conflict as those opposed to the checkoff would portray it. OTA represents some 6,500 of the 18,500 operations certified as organic by USDA and officials say it represents a membership as diverse as the industry itself, including a large number of farming cooperatives that include very small operations. Batcha believes checkoff advocates can ease the concerns held by many of the smaller growers and get them to ultimately support the initiative.
The proposed checkoff plan unveiled at the Natural Products Expo West in Anaheim in March would establish and authorize a board to collect mandatory fees from the industry that could be put toward anything from national television advertisements to regional research about citrus greening or fire blight of apples.
The proposal now on the table offers a number of options for how fees would be assessed basing the assessment on a percentage of gross profits, for example. Batcha said the proposal currently offers an exemption from the assessment for operations with less than $250,000 in gross sales, though she said that as input from growers is received, that figure may go up or down before the proposal is submitted to USDA.
Once the sponsors are able to answer questions posed by USDA for any checkoff proposal – What marketing problems will a checkoff resolve? Are there alternatives to a checkoff that have been considered? What’s the impact on small businesses within the sector? – the proposal is submitted to USDA’s Agriculture Marketing Service (AMS).
AMS officials will conduct their own review and hold public comment. If deemed to have merit, the checkoff proposal then goes to a referendum, with a “yes” vote from at least two-thirds of the industry stakeholders required to adopt the order. If adopted, the Agriculture Secretary would appoint the board charged with running the checkoff program, with the requirement that board members represent all organic stakeholder interests, including growers, processors and retailers.
Batcha says the checkoff program could be up and running by the spring of 2016.
Checkoffs are not new to organic producers. Their crops and other products used to be assessed under traditional checkoff programs, like those for dairy, blueberries, beef and cotton, among others. But to help facilitate the possibility of a singularly organic checkoff, lawmakers included language in the farm bill adopted earlier this year that also removed those traditional checkoff obligations.
Given the organics industry’s longstanding efforts to position itself as offering an alternative to conventionally grown foods with what proponents say is healthier, cleaner, more nutritious food, opponents of the checkoff say the industry’s ability to promote its products would be limited because of a statutory ban on checkoff commodities “disparaging” other products.
Batcha says the key word is “disparage.” “We will not disparage other products. The statute says that you may ‘compare’ and that any statements made in comparing products must be truthful,” she said. “Organic can do this.”
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