See you in September? The Future of the Organic Check-Off

After years of public debate and months of public comments the fate of the GroOrganic check-off now lies in the hands of the USDA. Lauded by many as the answer to organic funding needs, the program is also hotly contested by some small farmers and conventional commodity groups. With the debate now quieted, the destiny of the organic check-off could come into view as early as this fall.

What can an Organic Check-Off Accomplish?

Its estimated that if every organic producer, retailer, manufacturer and importer pays in as little as 1/10 of 1% the industry would enjoy over $30 Million a year to address the two biggest challenges facing the industry: widespread consumer confusion about what it means to be organic and the need for more organic production in the US.

The Organic Check-Off is the idea that if everyone pays a little, the industry would the have funds to:

  • Differentiate organic from the many other claims and unregulated labels, like natural.
  • Facilitate a large, strong, and coordinated promotion plan such as TV and media ads and in-store promotions.
  • Confirm that organic has real environmental and public health benefits.
  • Increase organic supplies for processors and food companies by bringing new farmers into organic production through improved information and technical assistance.
  • Provide funds to match USDA research dollars at land grant universities.
  • Provide transitioning farmer the technical assistance and training to bring more acreage under organic production.
  • Educate the public on the true meaning of organic.

Despite double digit growth, organic acreage still only represents about 2% of all agricultural production in the US. There are many who believe an organic Check-Off can help change that.

The Organic Check-off – how we got here

Between 2012 and 2015 the Organic Trade Association and check-off proponents conducted public outreach on key tenets of the proposal. The final application was petitioned to the USDA in May 2015, with many key revisions and reforms included in the draft as a result of the stakeholder outreach.

Equal representation of producers and handlers on the governing board was just one idea incorporated into the proposal. The design offers a unique check-off paradigm with full value chain assessment, meaning all organic stakeholders pay in. Although farmers and handlers with gross organic revenue below $250,000 have the option to voluntarily pay into the program.

The proposal earmarks up to 75 percent of the check-off funds for research (including regional priorities), for disseminating information on organic research and studies, and for technical assistance. It also ensures that all the research, inventions and innovations resulting from organic check-off programing remain in the public domain. The balance of the funds will be used for promotional purposes such as consumer education, advertising and crisis management for the organic industry.

And if the program isn’t working there is a built in safety net that calls for an industry referendum every seven years to decide whether or not to continue the program.

On January 17, 2017 the USDA published the proposed rule and opened it up for public comment. Comments originally due on March 20th were extended by the new administration by 30 days to April 19, 2017. At closing there were 14,757 comments submitted to the federal register both in favor and against.

What’s the Future Hold?

Currently the USDA is analyzing and reviewing the comments on both sides. At this point they have several options that will ultimately decide the future of the program.

  1. The USDA could incorporate changes from the public comments, publish a final rule and conduct a referendum for the industry to vote on. If the referendum passes, an industry governed board would be appointed by USDA.
  2. They could incorporate changes from the public comments into another proposed rule that would open up another round of public comments in the federal register.
  3. The USDA could site the “no” comments and reject the rule entirely with no further action.
  4. Or they can simply do nothing because the USDA is under no obligation to move forward in any way.

Check-off proposals often endure the machinations and grindings of the federal government. It’s a little known fact that the Christmas tree check-off program took nine long years from the time the application was submitted in 2008 until the board was appointed in 2016.

The Organic Trade Association holds a bond that reimburses the USDA for the staff time spent on the application. This bond expires in September and the USDA has indicated that there will be some indication of where the decision will go at that time.

In the end the decision will need to balance the concerns of small farmers and commodity groups with an organic industry looking for funding, all within an administration that is pro-business.

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