The National Organic Program: Cleaned Up and Ready to Grow

David K. Bowles

Eleven years ago, Congress passed the Organic Foods Production Act (OFPA). In February 2001, the law will finally grow some teeth. The U.S. Department of Agriculture (USDA) has finalized its long-awaited and long-embattled National Organic Program Regulations. This article briefly explores the history and substance of those regulations.

The market for organic foods has rapidly expanded from a fringe element of the agriculture industry to a healthy market. In 1980, U.S. sales of foods designated "organic" were approximately $170 million. By 1996 that market segment had expanded to $3.5 billion, a more than 20-fold increase in 16 years. Last year’s organic market was estimated at $7.7 billion, a two-fold increase in 4 years. Predictions are that annual U.S. sales will continue to increase at a rate of 20-25% every year – a tremendous level of expansion. Sales abroad are also heavy; the organic market in the EU was estimated at U.S. $5.2 billion in 1997.

The chief problem facing this burgeoning market was an inconsistent definition of "organic." By 1998 there were at least 44 different "organic" standards in the United States alone – the word "organic" had no consistent meaning, and consumers could not be sure of what they were buying.

In 1990 Congress reacted by passing the OFPA. OFPA mandated the creation of a National Organic Standards Board. This board made its first recommendations to the USDA in 1994, and in 1997 the USDA proposed its first set of standards. These first standards met an interesting fate: they prompted 275,603 comments that were "almost universally negative," and the USDA withdrew them for reconsideration. (See Bowles, Organic Reactions: The Sad State of the National Organic Program, Special Committee on Agric. Mgmt. Newsl. (ABA Section of Environment, Energy, and Resources) Sept. 1998, at 5).

The main reason for the negative comments was the proposed allowance of three relatively new technologies in "organic" foods: irradiation, genetically modified organisms (GMOs), and the use of biosolid (sewage sludge) fertilizer. All three of these technologies are broadly approved by the government and health organizations, and yet the majority of the comments focused on the perceived damage to the "health benefits" of organic foods. Despite the lack of a scientific basis, the USDA bowed to popular opinion and barred the three technologies from the final rule.

The USDA re-proposed the National Organic Program regulations in March of 2000 (65 Fed. Reg. 13512), and the regulations were issued in final on December 21, 2000 (65 Fed. Reg. 80548). The regulations are to be codified at 7 C.F.R. Part 205.

The final rule provides very specific requirements for the production of "organic" foods. These rules are lengthy and detailed, but among the most important aspects are these: First, the inputs (seeds, shoots, feed) are to be organically produced where possible. Second, the growing areas are to have had no prohibited substances applied in the last three years. Third, no prohibited inputs (such as most pesticides or antibiotics) may be applied. Finally, the finished organic foods must be protected from commingling with non-organic foods, so as to avoid contamination.

"Prohibited" and "allowed" substances are neatly defined in a new "National List of Allowed and Prohibited Substances." The general rule is that synthetic substances are prohibited, and non-synthetic substances are allowed. There are, however, exceptions. For example, some synthetic substances (e.g., soaps, oils, ethanol) can be allowed under certain circumstances. Some non-synthetic substances (e.g., arsenic, ash from manure burning) are banned under other circumstances.

Perhaps the greatest burden from the new regulations will be in record keeping.
In order to produce foods under the new standards, a producer must be certified by a "certifying agent." An agent must in turn be accredited by USDA. The race for accreditation will be on by the time this article is in print: agents may apply to USDA as early as February 20, 2001. Once accredited certifying agents are available (which should be no earlier than February 2002 under the rule), producers can submit their "Organic System Plan" to the agent for review. The plan should establish all the producer’s methods of compliance with the National Organic Program regulations. Certifications must be renewed annually.

Producers will be subject to "residue testing," potentially by three entities: the certifying agent, the State, and USDA. The regulations prescribe a "reason to believe contaminated" basis for testing. The testing entity can conceive a reason to believe the food is contaminated by various methods; for example, by customer complaints. The standard that must be met for the tested substance is 5% of the corresponding EPA tolerance, i.e., an EPA tolerance of 20 ppb will result in an organic test limit of 1 ppb.

Perhaps the greatest burden from the new regulations will be in record keeping. The regulations suggest a long list of records that should be maintained for 5 years to document the inputs and methods used to produce the organic foods. The final list is to be developed by the producer and the certifying agent, but it appears that a massive paper trail will be necessary to document compliance with the regulations.

Once properly certified, consumers will see four categories of organic foods. The gold standard will be "100% Organic," with no synthetic inputs. The word "Organic" will designate a product with no more than 5% synthetic inputs, and "Made with Organic Ingredients" will mean that no more than 30% of the food is non-organically produced. The fourth category simply allows the identification of organic ingredients, e.g., "made with organic potatoes." Beginning in approximately August of 2002, the new "USDA Organic" seal may be applied to the first two categories of organic foods.

The regulations and the preamble to the regulations are fairly long and complex, and producers, handlers, and certifying agents should review them carefully as they develop their new programs. Given the importance of the organic market, and the rocky history of the regulations, implementation of the regulations is bound to generate controversy. The future of the organic regulations is likely to be as interesting as the past.

David K. Bowles is a vice-chair and past chair of the Special Committee for Agricultural Management. He practices environmental and agricultural law in the Los Angeles office of McCutchen Doyle Brown & Enersen LLP.