Organic exemption expected soon

(TJ Mullinax/Good Fruit Grower photo illustration)

The U.S. Department of Agriculture will soon introduce a rule exempting organic growers from paying mandatory promotion assessments to federal marketing orders.

This will mean, for example, that organic pears will no longer be subject to an assessment of 38.5 cents a box to fund promotions by the Pear Bureau Northwest.

The Pear Bureau is one of 23 commodity check-off programs operating under federal marketing orders. Currently, only growers who produce exclusively organic products can be exempted from them. Those growing both organic and conventional cannot.

The exemption for all organic growers was authorized in the 2014 Farm Bill at the request of the Organic Trade Association (OTA), which represents 6,500 organic farmers, handlers, manufacturers, and distributors and has been proposing a national promotion and program representing all organic products.

The OTA estimates that, nationally, organic food producers pay $20 million in assessments to commodity groups for promotions and research that are not specific to organic.

Kevin Moffitt, president of the Pear Bureau Northwest, said the USDA’s Agricultural Marketing Service is expected to publish the final regulations on exempting organic growers from promotion assessments in August this year. Until then, it’s not known exactly how the exemption will work or what growers must do to opt out.

About 5 percent of the Northwest fresh pear crop (960,000 boxes) are certified organic and annual promotion assessments paid on that fruit amount to about $350,000. Organic growers will still have to pay the pear research assessment of 3.1 cents per box and might have to pay part of the administrative assessment of 3.3 cents a box.

Moffitt said it’s not known how many organic pear growers are in the Northwest. A couple of Hood River, Oregon, growers who produce only organic pears and take them to a packing house that is 100 percent organic are already exempted.

The Pear Bureau is contacting packers to find out how many organic growers they have and has sent out a newsletter highlighting promotions it has been doing either specifically for organic pears or that benefit organic as well as conventional.

A conundrum that the Pear Bureau’s board faces is what to do if some organic growers opt out while others stay in.

“I think there will be a point where, if a certain percentage of growers opt out, we might need to potentially say, ‘We’re not going to promote organic pears because it will become too complicated,’” Moffitt said.

For example, if the Pear Bureau did organic promotions or sampling at retail, it would be difficult to know whether retailers were selling fruit from growers who had opted in or not.

Petition

In May, the Organic Trade Association and the GRO Organic Core Committee petitioned the USDA to create a generic research and promotion order for organic called GRO Organic. Its vision is to increase organic production in order to promote excellence in agriculture, protect the environment, and enhance community wellbeing.

Three years ago, Gwendolyn Wyard, the OTA’s regulatory director, and board member Melody Meyer held a series of town hall meetings around the country to gather feedback on the idea.

During a presentation in Wenatchee, Washington, Meyer suggested that the assessments that organic growers pay to fund promotions that are not specific to organic amount to “taxation without representation.”

Growers wondered how a multi-commodity program would assess such diverse units of production, such as head of cattle or boxes of apples. They also thought it would be difficult to fund organic research when so many different commodities have distinct research needs.

War chest

The OTA’s proposal to the USDA states that assessments would be paid throughout the value chain. Producers, handlers, and processors would all be required or invited to contribute, depending on their gross revenue.

Organic producers could pay 0.1 percent of either their net organic sales or their net profit, whichever they preferred.

Smaller producers and handlers with gross organic revenue below $250,000 per year could choose whether or not to pay into the program.

Assessments would generate about $30 million annually, of which at least 25 percent of the funds would be earmarked for research.

On the GroOrganic website, David Bronner, president of Dr. Bronner’s Magic Soaps, says the assessments would provide “a $30-million-plus annual war chest” that will build expertise and capacity for organic farming in the United States and educate consumers about organic food and farming.

“We are up against an incredibly sophisticated agricultural machine driven by pesticides and fossil fuel that is destroying our soil and jeopardizing our short- and long-term health,” he comments.

Alternative proposals

On receiving the OTA’s proposal, the USDA issued an invitation for people to submit alternative proposals or partial proposals to assist with development of an organic promotion, research, and information program, with a deadline of June 19.

After considering submissions, the USDA will publish a proposed “Organic Promotion, Research, and Information Order” and give the public an opportunity to submit comments.

The final step will be a referendum of all certified organic stakeholders who would be assessed in the program. The process of establishing the marketing order could take a year or two.

Moffitt said he’s not heard overwhelmingly positive comments about the proposed organic checkoff, and some growers might think it makes more sense to allocate the 38.5 cents per box they were paying to the Pear Bureau to their own sales organization to use specifically to promote organic pears with the retailers they supply. •