OTA - Advocacy

The Potential of Tariffs

icardozo — Wed, 08 Jan 2025 18:53:34 +0000

January 8, 2025

The possibility of new tariffs under the incoming administration has sparked widespread discussion, especially within the food and agriculture sectors that depend on global trade to create economic opportunities and keep shelves stocked year-round. The president has broad tariff authority, which the incoming president exercised extensively in his past term, imposing tariffs on various countries. However, many of the tariffs President-elect Trump threatened during his first term never materialized as trade partners negotiated concessions to avoid them—such as Mexico on immigration issues, Vietnam over currency manipulation, and NATO allies regarding defense spending.

Some tariffs were implemented, including those on Chinese exports, which remain in place today. Others, like the steel and aluminum tariffs imposed on Mexico and Canada, were resolved after the USMCA agreement in 2019. Additionally, tariffs on imports from the EU, UK, and Japan were later rolled back by the Biden administration and replaced with quotas based on historical volumes.

Recently, media speculation has now shifted to a potential 10% tariff on all global imports under the International Emergency Economic Powers Act (IEEPA)—an authority that has never been used by any president in this context. The future of tariffs under the incoming administration remains uncertain. This report examines potential impacts and the authorities available for imposing tariffs.

Impact on Organic Food and Agriculture

If tariffs are imposed, organic food and agriculture would face similar challenges as conventional sectors. Organic imports largely mirror conventional imports, including commodities such as coffee, olive oil, chocolate, sugar, and specialty crops like bananas and avocados—most of which are not produced domestically in sufficient quantities year-round.

However, organic also differs in certain areas. For example, organic beef is the top import by value due to the underdeveloped U.S. organic beef sector. Exporters from Australia and Uruguay currently fill much of this demand. Also, while the U.S. is a net exporter of conventional soy, about 80% of organic soy—mainly used for animal feed—is imported. While not to the same degree, organic corn and wheat are also imported in significant quantities, unlike their conventional counterparts where the US is a net exporter.

Higher tariffs would likely lead to increased shelf prices for organic products, which already carry a premium due to costlier raw materials. This could place additional pressure on manufacturers, brands, and retailers to manage costs and potentially dampen consumer demand if prices inflate.

There are two key areas where the organic market may fare better than conventional markets. The U.S. organic market is less reliant on exports than its conventional counterparts. The U.S. is the world’s largest organic consumption market and imports more organic products than it exports. U.S. organic exports total approximately $3.2 billion out of a $69.7 billion market—just 5% of total value. By contrast, conventional producers are more export-dependent and vulnerable to retaliatory tariffs from trade partners. Also, this creates domestic opportunities for specific sectors. Domestic farmers producing organic soy, wheat, and corn (or those looking to transition) could benefit from increased prices and demand as imports become costlier, without facing the same export-related losses as conventional growers. However, higher prices for finished goods may dampen consumer demand, which could offset some of these benefits.

Tariff Authorities and Their Implications

If tariffs are implemented, several authorities could be invoked:

International Emergency Economic Powers Act (IEEPA)

Allows the President to regulate international commerce during national emergencies.
Though never used for tariffs, its precursor was invoked by President Nixon to impose a 10% tariff on all imports. This has been cited in media reports as the potential basis for new global tariffs.
This would likely face significant legal challenges.

National Security Tariffs (Section 232 of the Trade Expansion Act)

Permits tariffs if imports threaten national security, pending a Department of Commerce investigation.
Used by the Trump administration for steel and aluminum tariffs, justified by military and infrastructure needs. This could be invoked for the threatened 25% tariffs on Mexican and Canadian goods linked to fentanyl concerns.
Legally upheld for their usage during Trump's first term.

Unfair Trade Practices Tariffs (Section 301 of the Trade Act of 1974)

Authorizes tariffs or sanctions against countries engaging in unfair trade practices, following a USTR investigation.
Used during Trump’s first term to impose tariffs on Chinese imports, sparking a trade war with retaliatory tariffs.
Subject to ongoing legal challenges but upheld by the U.S. Court of International Trade.

Balance of Payments Tariffs Section (122 of the Trade Act of 1974)

Permits temporary import surcharges to address balance of payments issues, lasting up to 150 days unless extended by Congress.
Can be broadly applied immediately.

Section 338 of the Tariff Act of 1930

Empowers the president to retaliate against discriminatory foreign trade practices.
Aimed at countries imposing unreasonable trade barriers against U.S. goods.
Less commonly invoked but relevant during trade disputes involving targeted restrictions.

Keeping you informed and advocating for your interests.

The Organic Trade Association will continue to monitor the evolving trade situation and advocate for policies that support the growth of the organic market, benefiting producers, manufacturers, brands, and consumers alike. Staying informed about the potential use of tariff authorities is crucial as trade policies take shape under the incoming administration.

By: Tom Chapman, Co-Chief Executive Officer

What Happens to Organic Rules and Funding When Administrations Change?

icardozo — Wed, 18 Dec 2024 17:58:46 +0000

December 18, 2024

Republicans and Democrats have alternated control of the presidency five times over the last 25 years. During such transitions, policy and regulatory priorities often shift to align with the goals of the newly elected party when a new administration takes office, with the outgoing party's priorities being paused, revised or reversed.

The organic community experienced this firsthand in 2017 when the Organic Livestock and Poultry Practices (OLPP) rule was paused and later attempted to be rescinded. This action led the Organic Trade Association to file a lawsuit challenging the decision under the Administrative Procedure Act (APA). Ultimately, the Biden administration finalized a similar rule called the Organic Livestock and Poultry Standards (OLPS). Unlike OLPP, OLPS is not expected to face the same fate despite the action happening under the previous Trump administration.

In this post, we explain the status of organic rules finalized and pending under the Biden administration and what could happen next.

Authority of Congress and the New Administration

When a new administration takes office, it has the authority to review and potentially alter rules finalized by the previous administration. However, Congress also plays a significant role in determining the fate of these rules through the Congressional Review Act (CRA).

The CRA allows Congress to rescind any rule published within the final 60 legislative days of a congressional session. This period, known as the lookback period, is somewhat tricky to calculate because it excludes times when Congress is adjourned. Given congressional calendars one could estimate that the current lookback period applies to any rule published after August 1,2024. If Congress wants to rescind a rule during this period, at least 30 senators must sign a discharge petition to bring the issue to a vote in the Senate. If the majority votes in favor of disapproval, the rule is overturned.

It is also standard practice for a new administration to pause on a rule not yet in effect when they take office. This pause allows time to review any regulations that have been finalized in the last days of the outgoing administration. During this review, the new administration can delay the effective and implementation dates of these rules. However, if they want to make changes, roll back rules, or rescind a rule, they must follow the procedures outlined in the Administrative Procedure Act (APA), which include a new notice-and-comment rulemaking process. Rules that are still in the proposed stage can be withdrawn or altered at the new administration's discretion.

In short, the power to change or halt regulations is shared between the incoming administration and Congress, each with its own legal processes and also clear limitations.

Status of Organic Rules Under the Biden Administration

Final Rules:

Since taking office, the Biden administration has made significant progress in finalizing and implementing over 12 organic regulations. These rules fall into two main categories: those that are fully effective and those that are effective but not yet fully implemented.

Finalized and Fully Effective Rules: Many of the finalized rules under the Biden administration are routine updates to the National List of Allowed and Prohibited Substances. These updates ensure that the National Organic Program (NOP) remains current and reflects the recommendations made by the National Organic Standards Board (NOSB). These rules include various sunset reviews and amendments that address substances allowed in organic crop production, handling, and livestock management. All but one of these routine rules have been fully implemented and are now in effect.

In addition to these routine updates, the administration finalized two major rules that have a significant impact on the organic industry. The Strengthening Organic Enforcement (SOE) rule enhances oversight and enforcement to prevent fraud in organic supply chains. The Origin of Livestock (OOL) rule clarifies the requirements for transitioning dairy animals into organic production. Both of these rules have been fully implemented, providing greater integrity and transparency within the organic sector. They cannot be revised or rescinded in a CRA process.
Finalized Rules – Effective but Not Fully Implemented: One major rule, the Organic Livestock and Poultry Standards (OLPS), was finalized and became effective on January 12, 2024. However, not all parts of this rule are currently in effect. Most of the implementation requirements are scheduled for January 2, 2025. Some provisions, such as those related to indoor and outdoor stocking rates and poultry housing exits, will not be enforced until January 2, 2029. Making changes to these implementation dates would require a new rulemaking process under the Administrative Procedure Act (APA) or would face legal challenges.
Rules Subject to the Congressional Review Act (CRA): One rule falls within the scope of the Congressional Review Act (CRA), the 2025 Sunset Review and Substance Renewals. This rule was published after the estimated CRA threshold of August 1, 2024, making it eligible for congressional review. However, since it deals with routine updates to the National List of Allowed and Prohibited Substances, it is considered non-controversial. Therefore, delays or disapproval by Congress are unlikely.

Proposed Rules:

A key proposed rule under consideration is the Market Development for Mushrooms and Pet Food. On the Unified Agenda USDA estimated the completion date of this rule to be December 2024 – however these dates are often missed. If this rule is finalized before January 20, 2025, it could be subject to review by the incoming administration. The new administration might choose to delay its implementation for further review, and it would also be eligible for potential disapproval by congress under the CRA.

On the other hand, if the rule is not finalized by January 20, 2025, its fate will be in the hands of the new administration. The incoming administration could decide whether to proceed with finalizing the rule or withdraw it entirely. While this rule is less controversial compared to other organic regulations, its priority level under a new administration is uncertain.

Rules on the Unified Agenda:

Two rules currently listed on the Unified Agenda are still in the development phase. The first addresses Inert Ingredients in Pesticides for Organic Production, and the second focuses on Nitrogen Fertilizers for Crops, including substances like sodium nitrate and ammonia extracts. Because these rules are still being developed, their future will largely depend on the priorities of the incoming administration. If a new administration decides these rules are not a priority, they could delay or halt their progress.

Funding for the Organic Transition Initiative (OTI):

Concerns have been raised about whether funds allocated for the Transition to Organic Partnership Program (TOPP) and the Organic Market Development Grants (OMDG) could be clawed back by a new administration.

TOPP funding comes from the American Rescue Plan Act (ARPA). Although ARPA funds faced claw backs under the Fiscal Responsibility Act (FRA) of 2023, any funds that had already been obligated were not subject to claw backs. Since TOPP funds are already obligated and contracted, any recission would likely face legal challenges. Some OTI funds for the Natural Resources Conservation Service (NRCS) organic practice standard were not obligated by the time the FRA was passed and were clawed back. Funding for these programs continued from other sources such as the Inflation Reduction Act (IRA) and some could be at risk. This risk doesn't extend to the Organic Specialist component of NRCS funding as those funds are similarly obligated.

Similarly, OMDG funding is also protected and unlikely to be challenged. The funds have already been obligated and contracted through grants, making it legally difficult to claw them back.

Lastly, the Organic Dairy Promotion Grants were established to support organic milk purchasing in schools via Dairy Business Innovation Centers. If these grants are obligated before a new administration takes office, they will have the same legal protections as the other OTI funds, making them difficult to rescind.

Conclusion

The Organic Trade Association closely monitors these regulatory actions and funding decisions on a day-to-day basis. Our goal is to ensure that organic standards continue to meet the needs and expectations of both our members and organic consumers and work to safeguard the availability of critical funds that support the growth and integrity of the organic industry.

OTA Advocates for Organic to Congress in End-of-Year Funding

icardozo — Tue, 03 Dec 2024 20:50:34 +0000

December 3, 2024

The Organic Trade Association (OTA) has been meeting with congressional offices in Washington, D.C., to advocate for funding for organic in a Farm Bill extension and a Continuing Resolution to fund governmental operations or full FY25 appropriations. While Congress is currently considering allocating billions in additional funding for conventional operations in core commodities, organic remains underfunded relative to our economic impact.

OTA has requested funding for three “orphan” programs as well as the continuation of Organic Market Development Grants:

Organic Data Initiative (ODI)

The USDA has made progress in aggregating accurate, segregated organic data via ODI and needs stable, secure funding to continue improving. This data is essential for understanding market trends and addressing challenges faced by organic operations. USDA's reliance on conventional agriculture data has hindered effective responses, particularly in sectors like providing relief for organic dairy producers. Mandatory funding of $1 million for 2025 is critical to support this initiative.

Organic Certification Trade and Tracking Program (OCTT)

The Strengthening Organic Enforcement (SOE) rule, implemented to prevent fraudulent imports and protect consumer trust, requires continued and stable funding. Mandatory funding of $1 million in 2025 will enable the USDA to uphold organic standards and safeguard domestic farmers from market disruptions caused by fraud.

Organic Certification Cost Share Program (OCCSP)

The OCCSP helps organic operations offset annual certification costs, supporting farmers and handlers in meeting USDA organic standards. With rising inflation and increased demand, the program’s current $8 million funding falls short. We estimate $11 million is needed in 2025 to maintain reimbursement rates and avoid disruptions that could force farmers out of certification or increase reliance on imported organic products.

Organic Market Development (OMD)

In 2023, USDA announced the Organic Market Development Grant Program to support the development of critical processing infrastructure to support farmers bringing new organic products to market. This program was a success, garnering hundreds of applications and requests totaling $218 million for only $75 million in available funding. The organic industry needs market expansion and increased domestic processing to meet growing consumer demand, generate greater farm-to-retail efficiencies, and encourage the adoption of regenerative practices inherent in organic agriculture. This program provides opportunities for the U.S. to reduce its reliance on imported organic products and generate value for our farmers and business operations. As such, it should be a key priority for this administration.

To ensure the continued success of the organic sector and strengthen our agricultural economy, it is critical that we prioritize and fund these vital programs. By investing in the future of organic agriculture, we can reduce dependence on imports, support American farmers, and meet the growing demand for organic products. Stay tuned to OTA communications for the latest updates on advocacy efforts and funding developments.

Matthew Dillon, Co-Chief Executive Officer

US District Court rules to uphold critical ‘grower group’ certification empowering small organic farmers worldwide

vbatcha — Thu, 03 Oct 2024 15:25:30 +0000

October 3, 2024

On September 29, 2024, the United States District Court for the District of Oregon ruled against a pending legal challenge to organic “grower group” certification following a brief filed earlier this year by the Center for Food Safety along with the Organic Trade Association (OTA) and other organic stakeholders, including organic nonprofits, companies, certifiers and grocers, in support of USDA’s grower group certification.

“Today, the court took an important step to protect organic market access for some of the world’s smallest farmers,” said Tom Chapman, Co-CEO of the Organic Trade Association. “To grow organic and address pressing global challenges, organic certification must remain viable for farms of all sizes.”

The “friend of the court” amicus brief filed in February, highlighted industry support of organic grower group certification in the ongoing grower group lawsuit challenging the longstanding practice, which was further codified in USDA’s 2023 organic rule revisions.

Organic farming, rooted in principles that bring value back to the land, offers a more profitable approach that naturally resonates with smaller farmers committed to these strict standards. This commitment supports sustainable livelihoods and plays a crucial role in the cultivation of various crops that ultimately reach grocery shelves. 

In essence, grower groups serve as a bridge for smaller farmers to access international markets. Their collective certification not only ensures adherence to rigorous organic standards but also facilitates the sharing of resources and utilization of centralized processing facilities. The commitment to these principles is not only championed by businesses but also influencers and organizations, showcasing the widespread recognition of the importance of grower groups in sustaining organic practices and fostering fair trade. 

Ironically, this lawsuit targets the implementation of the Strengthening Organic Enforcement (SOE) rules, which took effect in March 2024. These rules, among other things, clarified and enhanced oversight and management requirements for organic grower groups. While grower group structures are important, strong and effective oversight is equally crucial. We are hopeful that the SOE rules will be sufficient in maintaining organic integrity in grower groups. However, if the SOE rules fall short, OTA is committed to working with Congress and the NOP to make additional revisions to ensure that organic products grown globally by anyone meet American consumers’ expectations and align with the same standards required of domestic producers.

Any prohibition on group certification would cause catastrophic consequences to all organic stakeholders: the lost livelihoods of small, vulnerable organic farmers around the world, the elimination of the sourcing for organic companies, and the loss of organic products like coffee, chocolate and more for organic consumers.

Learn more about the importance of grower group certification and background on the legal case here.

By: Violet Batcha, Senior Director of Marketing and Communications

Organic industry urges Congress to fund critical USDA programs amidst looming Farm Bill expiration

icardozo — Tue, 24 Sep 2024 18:25:13 +0000

September 24, 2024

With the clock running down on the Farm Bill (set to expire on October 1) and funding for key organic programs missing from the proposed Continuing Resolution to fund the Government through January, the Organic Trade Association (OTA) sent an urgent message to Congress encouraging them to find the funding to safeguard critical organic programs that support hard-working American farmers.

In a letter sent to the House and Senate Agriculture Committee leadership today, OTA shared specific concerns about organic programs slated to be orphaned due to the expiring Farm Bill and encouraged the Agriculture Committees to take action to ensure that these programs are continued. A disruption in funding for the voluntary and producer-focused programs for the Organic Certification Cost Share Program (OCCSP), the Organic Data Initiative (ODI), Organic Certification Trade and Tracking (OCCT), and the end of authority for the Organic Agriculture Research and Extension Program (OREI) for any length of time, would be detrimental to organic producers, the trade, and the rural economies in which we operate.

Here's what’s at stake:

OCCSP aids farmers in obtaining or renewing their organic certification, up to 75% or $750 dollars per certification scope. This assists smaller and mid-size operations with costs, which have risen with increased verification requirements and fraud prevention that were implemented in 2024. Without this program, organic farmers will see their costs rise.
ODI is a multi-agency organic initiative that collects information vital to maintaining stable markets, creating risk management tools, and assisting in negotiating equivalency agreements with foreign governments. Congress has historically directed the USDA to improve organic reporting, and removing this funding would move organic data collection in the opposite direction of Congressional intent. In addition, without timely access to this data, current organic farmers and those looking to transition to capture market premiums are put at a disadvantage when making decisions about farm investments or planting.
OCTT is an essential pillar of USDA’s fraud prevention activities related to organic. The data collected is foundational to the recently implemented Strengthening Organic Enforcement (SOE) rule to ensure the integrity of imported goods to the United States market and make certain consumers are receiving bona fide organic goods. SOE went into effect on March 19th, 2024, and ongoing technological updates to the database are critical and necessary. A failure to maintain that system would put trade in organic certification and oversight in perilous risk.
While OREI has mandatory funding, authority ends after 2024, potentially disrupting the next grant cycle, supporting critical organic research and extension programs without reauthorization.

The trade association recognizes that, collectively, Congress faces difficult decisions as they attempt to provide some certainty to the farming community for the remainder of this year and the upcoming calendar year. Finding the funding necessary to continue the operations of these programs at USDA will enable the organic industry to continue creating economic opportunities for producers in rural areas, contributing to environmental improvement, market diversification, and ensuring domestic agricultural resilience.

Read the full letter sent to the House and Senate Committees on Agriculture here.

By: Matthew Dillion, Co-CEO and Violet Batcha, Senior Director of Marketing and Communications

Why organic brands need a strong voice in policy making

icardozo — Wed, 11 Sep 2024 17:55:42 +0000

September 11, 2024

By Adam Warthesen, Vice President of Government & Industry Affairs for Organic Valley and Organic Trade Association Board of Directors Vice President

In today’s politically charged environment engaging in public policy seems more like a contact sport than an exercise in civic dialogue. I’ve done it; you’ve done it – turned off the TV, changed the radio station, or avoided social media altogether because you’re exhausted and frustrated by the polarizing and fractured state of political affairs.

At Organic Valley, we get it too. In phone calls, emails, and social media comments “….you lost me after working with Senator so-and-so on legislation;” and “USDA can never be trusted.” Even “…that group you co-signed a letter with or donated free product to doesn’t like farmers.”

These exchanges force us to examine: Is it worth it to be involved in the public policy arena?

Our answer is fixed both in our cooperative values and our economic reality, that as a national brand with thousands of member-owners and employees, not being involved makes our business vulnerable.

We need to know what’s coming at us in the marketplace and from the government. And we advocate for sound policy that will benefit our organic community of businesses, consumers, and farmers. Government relations is just another theater of power that businesses should not ignore – you might not need a big team, but you better have someone who wakes up every day thinking about how you succeed in this space.

With the next Farm Bill under development, USDA rulemaking for dairy pricing and organic coming forward, and a new stable of political leadership in 2025, these are the basic tenets that ground Organic Valley’s work and can help inform how others might approach food and farm policy:

Organic is primary. Protecting and advancing organic agriculture and integrity is our top priority. The business and our member-owners are certified organic, and that is where our focus – predominately at the federal level – needs to be.
Remain non-partisan. We need to work with representatives across the political spectrum. The very fact that our elected officials both vote on agricultural policy and belong to political parties (and run for office) means that if we want to influence farm and food policy, we need to work with people who have political views on any number of issues.
Maintain a separation from elections. Our co-op will not endorse candidates or political platforms for elected office. Organic Valley supports the U.S. system of democracy, and along with that, civic engagement where member-owners and employees are empowered to express support for any candidate they see fit and who represents their own personal preference, but they need to do it on their own time. As a business, it remains imperative that we avoid both the perception and reality of providing any preference for candidates in an election.
Span beyond organic. All our businesses are more than food companies. For us, that means finding our cooperative trade spirit or elevating healthy dairy or even taking a stand on environmental policy and issues that matter to consumers and farmers. Organic has changed the world, but we as an organization and as farmers showing up in more places create more, not less, opportunities.

Lean in: As companies look to build their government affairs capacity and seek to advance a collective interest in a topic/bill, the reality is you can’t do it alone.

In my experience leaning into your trade associations is a necessity. It gives you a space to test out ideas, to tap the knowledge and expertise of staff, and it provides grounding in what’s relevant in the here and now with policymakers. And perhaps most importantly it is a place to build industry cohesion around a topic and campaign efforts.

For Organic Valley, the Organic Trade Association represents that trusted anchor point, it’s where we commit our greater attention and resources to protect and grow the organic movement. As with anything in life, so too is a trade community, you get out what you put in.

I urge OTA members to join community task forces, councils and events, and meetings. My experience is the Trade wants to embrace companies and individuals ready to take action and who have an understanding that this is both a short and long game of work.

Don’t let the day-to-day noise distract or dissuade you from defining a role in public policy. Yes, it will take time and attention but it can pay dividends in helping your business plan and respond to the world that is ever changing.

Assessing the implications of recent Supreme Court Chevron Doctrine decision on USDA Organic

icardozo — Wed, 24 Jul 2024 14:20:59 +0000

July 24, 2024

Plenty of questions are emerging regarding the U.S. Supreme Court’s decision to overrule the Chevron Doctrine. The repercussions of this case strengthen the Organic Trade Association’s resolve to advocate for continuous improvement in the regulatory process, and to provide technical expertise to congressional offices that need it now more than ever. As we explore those impacts in detail, it’s important to remember the decision underlines the value of the entire organic industry working together - from seed to shelf.

Background

The Supreme Court's June decision in the cases of Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce marks a significant shift in administrative law. These cases centered on a 1976 federal law that required herring boats to carry federal observers to collect data used to prevent overfishing. Under a 2020 regulation, boat owners were also required to pay $700 a day for these observers. Fishermen in New Jersey and Rhode Island contested this fee, arguing that the National Marine Fisheries Service lacked the authority to impose it. Appeals courts in Washington and Boston ruled in favor of the government, citing the Chevron deference principle established in 1984, which mandated courts to defer to an agency's reasonable interpretation of an ambiguous statute.

In a 6-3 opinion authored by Chief Justice Roberts, the Supreme Court overruled the 1984 Chevron v. Natural Resources Defense Council decision, significantly limiting the power of federal agencies. This ruling is expected to have widespread implications, putting numerous federal rules and regulations at risk of being challenged in court. For context, approximately 70 Supreme Court decisions and 17,000 lower court decisions have relied on Chevron precedent.

Additionally, in a 6-3 opinion in Corner Post, Inc. v. Board of Governors of Federal Reserve System, the Court's ruling changed the timeframe by which USDA regulations can be challenged.

Understanding Statutory Authority

Statutory authority refers to the legal power granted to government agencies through legislation enacted by Congress. This authority allows agencies to create and enforce regulations within the scope defined by the statute. When a law is ambiguous, agencies historically had the flexibility to interpret and implement regulations based on their expertise, guided by the principle of Chevron deference. This deference allowed courts to uphold agency interpretations as long as they were reasonable.

With the Supreme Court's recent decision, the scope of statutory authority granted to federal agencies may be more narrowly interpreted. Agencies will need to ensure that their regulations are explicitly supported by the statutory language, reducing their ability to make broad interpretations. This shift could lead to more legal challenges and necessitate clearer and more detailed legislation from Congress.

Possible Implications for USDA Organic Programs

The 1990 Organic Foods Production Act (OFPA) is fairly specific in establishing the structure and functioning of the USDA National Organic Program, which likely provides some protection to the program itself. However, we must be vigilant about potential impacts in areas where the USDA interprets recommendations from the National Organic Standards Board (NOSB). For instance, USDA defense of producer group certification relied, in part, on standing limitations that are now reinterpreted by the Corner Post ruling. Additionally, USDA decisions to promulgate standards that are not clearly delineated in OFPA may become even more contentious and subject to litigation due to Loper Bright ruling, given the reduced agency deference.

There is also a significant risk of USDA resources being consumed by contentious lawsuits, and even greater stagnation in the ongoing renovation and refinement of rulemaking. For several years, OTA has worked with a coalition of partners to move the Continuous Improvement and Accountability in Organic Standards Act (CIAO) to support the evolution of standards to meet consumer, farmer, and industry needs. This SCOTUS decision makes it even more important for the National Organic Program to have a clear mandate for updates to the standards. CIAO would clarify that the authority to update regulations is not left to interpretation.

Federal Rulemaking and the Organic Industry

Without Chevron's deference, Congressional staff will face the challenge of drafting more specific and prescriptive legislation, leaving minimal room for interpretation. One outcome of this shift could be increased needs and opportunities for industry experts within companies and associations to play a more significant role in filling knowledge gaps within Congressional offices. While it may be desirable for congressional staff to have deep expertise in nuanced aspects across all of agriculture including organic, it’s simply not feasible. As such, OTA strongly encourages its membership to stay engaged and collaborate in the trade association’s member communities. The industry needs people with deep knowledge across sectors to best craft legislation that drives the success of organic, from farm to retail. This case is a reminder that the unique and fundamental public-private partnership of organic is a working partnership not only with the USDA, but also with Congress.

Our Commitment to Advocacy and Support

The Organic Trade Association remains steadfast in its commitment to advocating for our members and the broader organic community. In response to the Supreme Court decision, we will continue our efforts to engage with policymakers, industry leaders, and stakeholders in the development of clear and meaningful legislation that has regulatory outcomes that benefit organic producers and consumers alike.

We encourage you to stay informed and actively participate in our advocacy initiatives. By working together, we can ensure that the organic sector continues to thrive in a fair and equitable regulatory environment.

By Matthew Dillon, Co-Chief Executive Officer

Gen Z driving value-based purchasing and continuous improvement in organic

nseifu — Tue, 11 Jun 2024 18:06:51 +0000

June 11, 2024

USDA organic has an expanding fanbase in Gen Z. The Consumer Perception of USDA Organic Report released earlier this year from the Organic Trade Association, revealed that young people are driving the growth of organic as they prioritize value-based eating. 77% of Millennial and Gen Z survey respondents described organic claims as at least somewhat important to them, jumping from only 55% of Gen X and Baby Boomer consumers.

The Consumer Perception Report, available to purchase or free with OTA membership, contains over 40 pages of insight to help your company understand the organic consumer and market opportunity.

While USDA organic food sales have grown consistently since the seal was created in 2002, the organic non-food sector remains poised for growth but is hindered by regulatory uncertainty. Consumers are seeking sustainable purchasing options in several categories with underdeveloped organic regulations including personal care, supplements, pet food, and seafood. The 2024 Organic Industry Survey showed organic personal care and supplements sales have both roughly doubled in the last 9 years – demand is strong. However, lack of regulation around what it means to manufacture these products discourages companies from investing in organic product lines.

Meanwhile, in other categories, lack of regulation has stifled organic growth. Organic pet food sales shrunk by 7% in 2023, despite consumer interest in planet-friendly options. Without fully developed organic pet food standards, it is difficult for companies to distinguish themselves from their “natural” competitors. OTA recently submitted comments on the proposed organic pet food standards and applauds USDA for advancing rulemaking for the sector. Consumers are also concerned about seafood sustainability; prioritizing traceability and responsible harvesting in their purchasing. As the demand is pushing suppliers and food service operations to source sustainable seafood, USDA has been slow to advance rulemaking on establishing criteria for certifying seafood as organic in the U.S. The EU and South America have established organic standards for aquaculture operations, and those imported products are being sold as organic in the U.S.

The 2024 Organic Industry Survey, free with OTA membership and available to purchase, will empower your company to better navigate the organic marketplace.

USDA organic regulation is intended to evolve over time to incorporate new and emerging science, industry practices and consumer expectations. Unfortunately, the federal regulatory apparatus has slowed innovation and continuous improvement within the industry. One recent update to the organic rules was the Organic Livestock and Poultry Standards rule, which better aligned the standards with consumer expectations for animal welfare under the USDA organic label. It took over fifteen years of advocacy to get this rule complete, and in that time many organic producers underwent dual certifications to deliver on consumer expectation. Unfortunately, the OLPS process was not unique. In the last 20 years, the National Organic Standards Board (NOSB) has advanced 19 consensus recommendations for additional organic standards, but the National Organic Program at USDA has only completed rulemaking on 5 of them.

USDA organic regulations must keep pace with consumer expectations for the organic seal to maintain integrity and relevance and maximize on the value-based purchasing driven by younger generations. The Continuous Improvement and Accountability in Organic Standards (CIAO) Act (H.R.5973) is the solution to clear the regulatory backlog. CIAO is a bipartisan bill that adds transparency and accountability to the federal regulatory process for organic. CIAO creates a regulatory process for the National Organic Program to make revisions across 5-year cycles based on public input, tangible evidence and science, and recommendations from the National Organic Standards Board. The legislation has garnered a diverse coalition of supporters across the entire organic industry. OTA is advocating for the inclusion of CIAO in the Farm Bill so that timely and transparent organic rulemaking can finally open the door for organic innovation and ensure that all generations have confidence in the USDA Organic seal in their search for transparent and sustainable products.

By Laura Holm, Legislative and Farm Policy Associate

House Farm Bill misses mark on forward-looking critical needs of organic

vbatcha — Wed, 22 May 2024 18:51:25 +0000

May 22, 2024

On Friday, May 17th, the House Agriculture Committee released the full draft of its Farm Bill in advance of the committee markup scheduled for Thursday, May 23. The Organic Trade Association commends the Committee's diligence in advancing this crucial legislation, however, the draft fails to adequately address the forward-looking critical needs of the organic sector, thereby missing a significant opportunity to bolster rural economies and support farmers seeking to participate in this rapidly expanding market.

For the past twenty years, organic food sales have consistently shown the strongest growth in the retail food sector. This preference for organic products is even stronger among the youngest generations of consumers. Currently, organic produce accounts for 15% of all produce sold in the US, while organic eggs and dairy make up nearly 10% of their categories’ performance. Despite this robust market demand, domestic organic acreage has not kept pace with the market expansion. Challenges in the organic supply chain, including a lack of processing and storage facilities, along with often uncertain market access has limited growth of the sector. These challenges highlight a critical gap that this Farm Bill must address to enable farmers to diversify production and enhance economic resilience.

A forward-looking Farm Bill is essential to invest in the future needs of both farmers and consumers. As the House Committee moves towards markup, we urge a strong commitment to the following priorities:

Organic Market Development Act: This act is vital for expanding market opportunities and providing essential support for organic farmers while shoring up our domestic food supply chain.
Increased Funding for the National Organic Program: Ensuring the integrity of the organic seal is paramount to maintaining consumer trust and market stability. NOP will be stifled in its basic functions without adequate funding to enforce the USDA organic standards. We urge the House Agriculture Committee to authorize stepped up funding for NOP over the life of the Farm Bill.
Improved Regulatory Process: Emerging sectors of the organic industry are stalled under an uncertain regulatory future. Clear organic standards are needed to maintain a level playing field and allow for product innovation. We urge the House Agriculture Committee to adopt CIAO – H.R. 5973 to create transparency and structure in organic rulemaking.

We call upon the House Agriculture Committee to address these critical gaps in the draft legislation. By doing so, they will not only support the growth of the organic sector but also ensure a more resilient and diverse agricultural economy. Investing in the organic market is an investment in the sustainable agricultural practices, rural economies, and consumer interests of today and compounding returns for tomorrow. We urge policymakers to seize this opportunity to drive organic agriculture forward, ensuring its benefits are realized by future generations of farmers and consumers alike.

Congress Funds Agriculture Programs for FY24 – looks ahead to FY25

vbatcha — Wed, 20 Mar 2024 17:40:47 +0000

March 20, 2024

On March 6, 2024, the House of Representatives passed the Fiscal Year (FY) 2024 Consolidated Appropriations Act (H.R. 4366) by a roll call vote of 339-85. Farmers and food and fiber companies across the country can finally breathe a sigh of relief with the risk of a USDA shutdown being put to bed after a series of short extensions and shutdown threats since fiscal year 2023 funding expired last September. For over 20 years, the Organic Trade Association has persistently advocated for robust funding of federal programs supporting organic. We’d like to share background on the appropriations process, an overview of current funding levels, and a preview of the funding environment for fiscal year 2025.

How it works:

Congress creates federal programs by passing legislation, such as the Organic Foods Production Act of 1990, which created the National Organic Program (NOP). However, funding for those programs follows a separate legislative path based on the Appropriations Clause of the Constitution, which allows money to be drawn from the treasury.

During the appropriations process, the House and Senate appropriations committees’ work can be influenced by the President’s budget. The President’s budget is created by the White House Office of Management and Budget (OMB) using budget requests from federal agencies. The budget for the upcoming fiscal year is typically published early in the current calendar year. The federal fiscal year runs from October 1st through September 30th.

Although the NOP was authorized in 1990, the organic standards were not finalized until October 2002, which was fiscal year 2003. In that first year, NOP was appropriated $1.2 million to regulate the USDA organic seal. Around that time, the International Trade Center UNCTAD/WTO estimated US retail sales of organically labeled products were between $9 and $9.5 billion.

Over the last two decades, the Organic Trade Association has advocated consistently for funding increases for NOP, the Organic Production and Marketing Data Initiative (ODI), and the Organic Transitions Research Program (ORG). As time has progressed and new organic programs and initiatives have arisen, OTA has pressed for funding to Organic Agriculture Research and Extension Initiative (OREI), National Organic Certification Cost Share Program (NOCCSP), Sustainable Agriculture Research and Education (SARE), and other programs.

Historically, the National Organic Program funding has been increased by about 10% each year in appropriations. OTA has advocated those funds be used to advance organic rulemaking. Appropriations is a funding process, not a policy-setting process. However, Congress uses report language to communicate priorities to the federal agencies, which often influences how the money is spent. Congress used report language several times to ask NOP to focus their growing budget on organic rulemaking. In response to the organic feedstuff crisis, OTA led a campaign to include report language in the FY23 appropriations package that led to the Organic Dairy Marketing Assistance Program.

FY24-25 organic funding:

Five months into FY24, Congress finally passed an appropriations bill - which included USDA funding - to the President’s desk. Here is a breakdown of the current funding for federal organic programs that OTA advocated for, along with FY25 priorities we are advancing right now.

National Organic Program (NOP)

OTA requested the program be funded at $26.4 million - 110% of the maximum amount authorized in the 2018 Farm Bill. In a break from tradition, NOP did not receive the 10% annual increase the program has grown accustomed to. While the flat funding keeps the pressure on industry to elevate the importance of organic, the contentious and fiscally conservative themes of FY24 made avoiding budget cuts feel like a win.

Fiscal Year 2023 Enacted	Fiscal Year 2024 President's Budget	Fiscal Year 2024 Enacted
$22.8 million	$24.044 million	$22.8 million

In FY25, OTA recommends funding NOP at $29 million. The President’s Budget requests a modest increase to $23.2 million.

Organic Transition Research Program (ORG)

OTA requested the program be funded at $10 million. ORG consistently receives more funding requests than can be accommodated. This year, Congress maintained the program at $7.5 million for the third year in a row.

Fiscal Year 2023 Enacted	Fiscal Year 2024 Budget	Fiscal Year 2024 Enacted
$7.5 million	$7 million	$7.5 million

In FY25, OTA recommends funding ORG at $15 million. The maximum award for ORG projects was recently increased to account for the growing cost of research. As a result, the program has become more competitive and less projects are awarded each year. Raising concern, the President’s Budget only requests $4 million for ORG. Organic advocates must come together this year to drive home the importance of dedicated organic research dollars. Organic research must not be lost amid other research priorities.

Organic Data Initiative (ODI)

OTA requested ODI is funded at $1 million, consistent with the last several years. Congress provided the same funding as FY23 for USDA to carry out the initiative.

Fiscal Year 2023 Enacted	Fiscal Year 2024 Budget	Fiscal Year 2024 Enacted
$1 million	No mention	$1 million

In FY25, OTA again requests ODI be maintained at $1 million. The President’s Budget does not mention the program.

Organic Agriculture Research and Extension Initiative (OREI)

Mandatory funding for OREI was one highlight of the 2018 Farm Bill. Because the program reached the $50 million threshold of mandatory funding, OREI is included in the baseline of the Farm Bill and was automatically continued in the Farm Bill extension Congress passed last November. OTA still requests additional funds be appropriated on top of OREI’s mandatory funds every year.

OTA requested an additional $10 million of discretionary funding for OREI in FY24. Congress did not appropriate any additional funds for OREI.

Fiscal Year 2023 Enacted	Fiscal Year 2024 Budget	2024 Mandatory
$0 million	$47 million mandatory	$47 million

In FY25, OTA is again advocating for an additional $10 million for OREI.

National Organic Certification Cost-Share Program (NOCCSP)

OTA requested $5 million be appropriated for NOCCSP in FY24. The program was funded at $24 million for the life of the 2018 Farm Bill, or until the money ran out. Those original funds have been exhausted, and Congress did not appropriate additional amounts to cost share in FY24. However, $8 million for NOCCSP was included in the November 2024 extension of the 2018 Farm Bill. Click here for our letter urging agriculture committee leadership to fund the organic orphan programs in the Farm Bill extension.

In FY25, OTA recommends appropriating $11 million for organic cost share. The President’s Budget does not mention the program.

Organic Market Development Grant Program

This year for the first time, OTA is advocating Congress to continue the Organic Market Development Grant Program (OMDG) in FY25. In 2023, OMDG was funded at $75 million through the Commodity Credit Corporation, and the program received $218 million in project requests. There is clear demand for this program, which serves to shore up our domestic supply chain while improving market opportunities for farmers.

OTA is also advocating to make OMDG permanent in the next Farm Bill. Learn more about the Organic Market Development Act here, download our one-pager, and sign on to endorse the bill.

How you can help:

If you wish to support our legacy of organic advocacy, OTA members are welcome to join our US Government Affairs Forum or Farm Bill Task Force. Members can also support the Organic Political Action Committee, which works to grow and support organic champions in Congress. Finally, members and non-memebrs alike can join us for Advocacy Day at Organic Week 2024 to bring your organic story to the Hill.