Organic Agriculture in the United States: Program and Policy Issues
Congressional research reportNov 25, 2008
Ask Donna
What actually matters in this document.
Text
ȱ
ȱȱȱȱȱDZȱ
ȱȱ¢ȱ ȱ
ȱ ȱ
ȱȱȱ¢ȱ
ȱŘśǰȱŘŖŖŞȱ
ȱȱȱ
ŝȬśŝŖŖȱ
ǯǯȱ
řŗśşśȱ
ȱȱȱ
Prepared for Members and Committees of Congress
ȱ
ȱȱȱȱȱDZȱȱȱ¢ȱ ȱ
¢ȱ
Congress passed the Organic Foods Production Act (OFPA) in 1990 as part of a larger law
governing U.S. Department of Agriculture (USDA) programs from 1990 through 1996 (P.L. 101624, the Food, Agriculture, Conservation, and Trade Act of 1990). The act authorized the creation
of a National Organic Program (NOP) within USDA to establish standards for producers and
processors of organic foods, and permit such operations to label their products with a “USDA
Organic” seal after being officially certified by USDA-accredited agents. The purpose of the
program, which was implemented in October 2002, is to give consumers confidence in the
legitimacy of products sold as organic, permit legal action against those who use the term
fraudulently, increase the supply and variety of available organic products, and facilitate
international trade in organic products.
Policy issues affecting the National Organic Program since implementation largely reflect the
differences in interpretation among stakeholders of the language and intent of OFPA and the
actual operation of the program under the final rule. The NOP was challenged in 2003 by a
lawsuit claiming that many of the regulations were more lenient than the original statute
permitted. Although the issues around the lawsuit were ultimately resolved, partly by courtordered rulemaking and partly by an amendment to the OFPA that was attached to the FY2006
appropriations bill, new issues concerning program operation continue to arise.
One of these relates to USDA’s efforts to write a new regulation governing access to pasture for
organic dairy cows (and other ruminants). Tight supplies of certain organic commodities,
particularly dairy products, and the entry into the market of major grocery retailers wanting to sell
organic foods are adding pressure to this debate. Critics charge that large organic dairy operations
are not abiding by the intent of OFPA by feeding organic grain to cows in feedlots, and that the
principle of grazing is central to consumers’ concept of organic milk. Supporters of existing
regulations point to the need for flexibility in order to maintain an organic dairy sector that can
meet growing demand. USDA published its proposed rules on October 24, 2008.
The new omnibus law that will govern USDA programs and policies through FY2012 contains
several provisions affecting organic agriculture and the NOP (H.R. 2419/P.L. 110-246; the Food,
Conservation, and Energy Act of 2008). The law provides $22 million in mandatory funds to
continue a cost-share program to help farmers obtain organic certification; $5 million in
mandatory funds and $25 million in authority for appropriated funds over five years to support
the collection and analysis of organic production and marketing data; and $78 million in
mandatory funds over four years to support the organic agriculture research and extension
initiative.
This report will be revised as events warrant.
ȱȱȱ
ȱȱȱȱȱDZȱȱȱ¢ȱ ȱ
ȱ
ȱ
Background ............................................................................................................................... 1
Organic Sector Statistics ........................................................................................................... 1
The Organic Foods Production Act of 1990.............................................................................. 3
USDA Regulatory Activity ....................................................................................................... 4
Access to Pasture Controversy............................................................................................ 4
Organic Farmed Fish Controversy...................................................................................... 6
Major Organic Provisions in the 2002 Farm Bill ...................................................................... 7
Cost-Sharing Start-Up Costs............................................................................................... 7
Research.............................................................................................................................. 7
Organic Agriculture in the 2008 Farm Bill ............................................................................... 8
Certification Cost-Sharing .................................................................................................. 8
Organic Conversion Cost-Sharing ...................................................................................... 8
Research.............................................................................................................................. 8
Data Collection and Analysis.............................................................................................. 9
Crop Insurance.................................................................................................................... 9
Support for NOP Administration ........................................................................................ 9
Other Provisions ................................................................................................................. 9
ȱ
Figure 1. Certified Organic Acreage and Operations, 2005 ............................................................ 2
ȱ
Author Contact Information .......................................................................................................... 10
ȱȱȱ
ȱ
ȱȱȱȱȱDZȱȱȱ¢ȱ ȱ
ȱ
Organic farming, as defined in the final rule establishing the U.S Department of Agriculture
(USDA) National Organic Program (NOP), is “a production system that is managed in
accordance with the [Organic Foods Production] Act and regulations ... to respond to site-specific
conditions by integrating cultural, biological, and mechanical practices that foster cycling of
resources, promote ecological balance, and conserve biodiversity.”1 This definition indicates that
organic agriculture is both an approach to food production based on biological methods that avoid
the use of synthetic crop or livestock production inputs (spelled out in detail in the December
2000 rule), and a broadly defined philosophical approach to farming that puts value on resource
efficiency and ecological harmony.
Interest in organic farming migrated from Europe to the United States in the early 1900s.
Beginning in the 1950s, as the U.S. public became more concerned about the potential adverse
environmental and public health effects of agricultural chemicals and so-called “factory farming”
methods, private research organizations began to conduct scientific investigations into nonchemical and non-intensive farming techniques, and a small but slowly increasing number of
farmers began to adopt organic production practices. Except for a brief period from about 1978 to
1981, USDA did not conduct any activities in support of organic agriculture until OFPA required
the Department to begin rulemaking to establish the National Organic Program in 1990.
ȱȱȱ
The annual rate of market growth for organic foods and other products has remained around the
20% rate it achieved beginning in 1990, although analysts generally expect it to moderate over
the next decade.2 The Organic Trade Association’s (OTA’s) 2007 Manufacturer Survey
determined that sales of organic food products were $16.7 million in 2006, or 2.8% of total U.S.
retail food sales.3 About 38% of organic foods are sold through conventional retailers, 44%
through natural food stores, and 16% through farmers’ markets, mass merchandisers and club
stores, restaurants, exports, and other marketing channels. Various sources of export data
estimated U.S. exports of organic foods at between $125 million and $300 million in the 20002002 period.4 The biggest export market is Canada; other major markets are Japan, the European
Union, and other countries in Asia. The OTA 2007 Manufacturer Survey reported that $938
million in nonfood organic product sales occurred in 2006. The fastest-growing categories were
organic supplements, personal care products, flowers, pet foods, and fibers.5
According to USDA’s Economic Research Service (ERS), 2005 was the first year that all 50
states reported having some certified organic farmland. Nationwide, the number of acres of
certified organic cropland and pasture/rangeland was 4 million in 2005. ERS estimated that in
1
7 CFR 205.2.
USDA, Economic Research Service (ERS), Recent Growth Patterns in the U.S. Organic Foods Market, AIB777,
September 2002, at http://www.ers.usda.gov/publications/aib777/.
3
Organic Trade Association 2007 Manufacturer Survey. Available online at http://www.ota.com/organic/mt/
business.html.
4
USDA, ERS, “Price premiums hold on as U.S. organic produce market expands,” VGS-308-01, May 2005, at
http://www.ers.usda.gov.
5
The OTA 2007 manufacturer survey is available online at http://www.ota.com/index.html under “Organic
Facts/Market Trends.”
2
ȱȱȱ
ŗȱ
ȱȱȱȱȱDZȱȱȱ¢ȱ ȱ
ȱ
2004 the number of certified operations that process and distribute organic products was just over
3,000.6
Figure 1. Certified Organic Acreage and Operations, 2005
Source:
USDA, Economic Research Service.
Fresh produce is the largest sector of the organic industry, with California having the greatest
number of acres devoted to organic fruit and vegetable production (see Figure 1). Other states
leading in certified organic crop acreage are Washington, Oregon, North Dakota, Minnesota,
Wisconsin, Montana, and Iowa. California, Texas, Alaska, and Montana have the most acreage of
organic pasture for livestock. In the Northeast, Southeast, and Upper Midwest, small-scale
growers of organic fruits, vegetables, herbs, and flowers are a significant component of individual
states’ agriculture industries.7
The high growth rate in sales of organic products can be attributed in part to the higher prices that
organic producers and processors receive for their products, according to ERS. Agency
economists speculate that part of the price premium may be due to higher production costs and to
higher demand relative to supply. For the 2000-2004 period (the most recent data available), the
annual average farmgate price premiums for fresh organic broccoli and carrots fluctuated from
75% to 133% above the prices of conventionally grown broccoli and carrots, according to ERS.
Price premiums for the two vegetables at the wholesale level never went below 125% in the same
period. The ERS study goes on to say that:
6
USDA/ERS, Organic Production Data Sets. Available online at http://www.ers.usda.gov/ Data/Organic/.
For a detailed graphic representation of the distribution of organic crop and pasture acreage and number of operations
per state, see http://www.ers.usda.gov/Amberwaves/Feb03/pdf/indicators.pdf.
7
ȱȱȱ
Řȱ
ȱȱȱȱȱDZȱȱȱ¢ȱ ȱ
ȱ
Laws of supply and demand, however, make it unlikely that price premiums contributing to
higher profits and market growth can coexist over the long run: as long as higher profits
exist, new suppliers will enter the market, and once market supply increases faster than
demand, price premiums and the commensurate level of higher profits are likely to decline....
Many organic industry participants and observers believe that the price premiums ... need to
decrease if organic foods are to penetrate much beyond the 2- to 3-percent level into the
mainstream.8
The consumer studies that ERS reviewed did not permit any clear estimate of future demand for
organic products. The studies showed that price, size, packaging, appearance, and concerns about
health and nutrition, taste, food safety, and the environment all play varying roles in consumer
decisions to buy organic food. Surveys on race, ethnicity, and income levels showed significant
diversity.
ȱȱȱȱȱȱŗşşŖȱ
Congress passed the Organic Foods Production Act (OFPA) of 1990 (Title 21 of P.L. 101-624, the
Food, Agriculture, Conservation, and Trade Act of 1990; the 1990 farm bill) with widespread
support from organic industry groups, the National Association of State Departments of
Agriculture, and other farm and consumer groups. The organic industry petitioned Congress to
draft the act in the late 1980s, after it had been frustrated in its attempts to come to an internal
consensus on production and certification standards. The industry maintained that federal
standards would reduce consumer confusion over the many different state and private standards
then in use, and would promote confidence in the integrity of organic products over the long term.
Manufacturers of multi-ingredient organic food products stated that uniform standards would
facilitate labeling. Others held that regulations would help the organic industry expand product
lines and increase marketing opportunities. Industry analysts asserted that a consistent U.S.
organic standard would facilitate access to a potentially lucrative international organic market.
The Organic Foods Production Act of 1990 authorized a National Organic Program to be
administered by USDA’s Agricultural Marketing Service (AMS). The act established a 15member National Organic Standards Board (NOSB) to “assist in the development of standards for
substances to be used in organic production” (referred to as the “National List”) and to “provide
recommendations to the Secretary regarding implementation.”
Under the program, producers, processors and handlers who wish to market their products as
organic are required to follow production practices as spelled out in detail in regulations (7 CFR
205). USDA accredits private and state certification agents, who visit producers, processors, and
handlers to certify that their operations abide by the standards; they conduct annual reviews to
verify continued compliance. It is illegal for anyone to use the word “organic” on a product if it
does not meet the standards set in the law and regulations.9 The presence of the “USDA Organic”
seal on a product means it is 95% or more organic. Labels on products having 70% to 95%
organic content can say “made with organic (specified ingredients or food groups),” but cannot
carry the seal. Foreign organic producers and handlers wishing to export products to the United
8
USDA, ERS, “Price premiums hold on as U.S. organic produce market expands,” VGS-308-01, May 2005, at
http://www.ers.usda.gov.
9
Farms and handling operations that sell less than $5,000 a year in organic agricultural products are exempt from
certification; however, these producers and handlers must abide by the national standards for organic products and may
label their products as organic.
ȱȱȱ
řȱ
ȱ
ȱȱȱȱȱDZȱȱȱ¢ȱ ȱ
States may be certified by a USDA-accredited certification agent in their own country, if there is
one; or USDA may accept certification by agents accredited by a foreign government; or, USDA
may negotiate an equivalency agreement with another nation’s organic program.10
The regulations under the OFPA are intended to set uniform minimum standards for organic
production. States may adopt additional requirements after review and approval by USDA.
Furthermore, private organic organizations are permitted to affix their own labels in addition to
the USDA label, indicating that the product meets their standards as well as the national ones. The
private label may indicate only that the organization’s standards are in addition to (but not
superior to) the national standards. AMS reviews certification agents for re-accreditation every
five years. AMS has the authority to revoke or suspend a producer’s certification or an agent’s
accreditation if a satisfactory solution to a program violation cannot be found.
The NOP final rule became effective on February 21, 2001; the program itself became fully
operational on October 21, 2002. In the first step toward implementation, USDA accredited
private and state certification agents, who in turn began to certify organic producers and handlers
according to the standards found in 7 CFR 205. After October 21, 2002, all products sold as
organic had to be in compliance with the regulations and carry the “USDA Organic” seal.
ȱ¢ȱ¢ȱ
ȱȱȱ¢ȱ
In January 2005 a newspaper article about a Colorado organic dairy operation shed light on a
major controversy within the organic industry and certain consumer groups.11 The article focused
on a 5,300-cow organic farm where the animals were fed almost exclusively on grain and allowed
outdoors into a feedlot for air and exercise.
The NOP regulation at the core of the dispute is 7 CFR 205.239(a)(1-2): “The producer of an
organic livestock operation must establish and maintain livestock living conditions which
accommodate the health and natural behavior of animals, including (1) Access to the outdoors,
shade, shelter, exercise areas, fresh air, and direct sunlight suitable to the species, its stage of
production, the climate, and the environment; (2) Access to pasture for ruminants[.]”
The news article cited organic dairy producers who argued that the regulation means that organic
cattle must get some of their nutrition, as well as fresh air and exercise, from grazing on pasture.
The Colorado operator maintained that his animals have outdoor access, but that in an arid state
like Colorado, providing sufficient pasturage for all his cows to graze would be an
insurmountable requirement.
10
A July 2005 audit by the USDA Office of Inspector General (OIG) states that USDA had 41 accredited certification
agents in foreign countries. The report also found that as of August 2004, AMS had negotiated only one equivalency
agreement with a foreign country (Japan). The OIG recommends implementation of internal operating procedures “to
assure that the NOP is achieving its intended objectives to ensure that organic products meet consistent, uniform
standards.” The audit report is at http://www.usda.gov/oig/audits.htm; follow links from “View Audit Reports and
News Releases” to the listing by “Agency Subject of Report.” It is under the Agricultural Marketing Service, July
2005.
11
“Organic Milk Debate; Dairies dispute ‘organic’ values; Ex-hippie farmers contest practices of big producers,”
Chicago Tribune, January 10, 2005, at http://www.organicconsumers.org/organic/milk011105.cfm.
ȱȱȱ
Śȱ
ȱȱȱȱȱDZȱȱȱ¢ȱ ȱ
ȱ
This issue illustrates an underlying tension within the organic industry. The existence of
regulatory standards for organic production and processing has allowed more conventional food
companies to create organic product lines and enter the market. Some of the older (and generally
smaller) companies in the industry hold that organic farming practices are an integral part of the
meaning of the term “organic,” particularly with respect to standards for the treatment and
feeding of livestock. These stakeholders maintain that if the pasturage in certain parts of the
nation can support only small dairy or beef cattle herds, or none at all, then such farms should be
small or nonexistent in those areas. Others, notably some of the newer entrants into the organic
market, are concerned lest the regulations become so prescriptive that they deprive producers and
processors of the opportunity to benefit from the expanding market for organic products. The
recent entry into the organic market of some large supermarket chains is putting pressure on the
industry to meet demand, particularly for organic dairy products.
At a February 2005 meeting of the National Organic Standards Board, members discussed and
recommended new language for 7 CFR 205.239, which they forwarded to National Organic
Program officials for approval.12 The emphasis in the revised language was on allowing cows at
the appropriate “stage of life” to graze pasture “during the pasture’s normal growing season.” At
the August 2005 board meeting, NOP staff rejected the recommendation, saying it lacked a “clear
and concise regulatory objective,” and asked the board to rework it.13
On April 13, 2006, AMS published an advanced notice of proposed rulemaking asking
stakeholders to respond to a number of questions concerning access to pasture, including
questions concerning whether consumers consider pasturing to be essential to organic milk
production, and whether there is science-based information on ruminant animal nutrition and
minimum pasture requirements, among other things.14 The proposed rule has not yet been
published. Critics of the NOP are expressing their concern that as more time passes without a
final rule, additional large feedlot dairy operations are being certified organic in possible violation
of the OFPA.15
On October 24, 2008, USDA published its proposed rule to amend the NOP livestock standards to
clarify the role pasture plays in the production of organic ruminants.16 Among the proposed
changes are:
•
definition of “growing season” and the requirement that all animals over the age
of six months must be on pasture throughout the growing season.
•
requirement that animals receive 30% of their dry matter intake (DMI) from
pasture.
12
NOSB meeting minutes, February 28 through March 3, 2005, at http://www.ams.usda.gov/nosb/meetings/
meetings.html.
13
NOSB meeting minutes, August 15 through 17, 2005 at http://www.ams.usda.gov/nosb/meetings/meetings.html.
14
71 Federal Register 19131.
15
Center for Food Safety, National Organic Coalition, Pasture Fact Sheet.
16
USDA, AMS, National Organic Program (NOP), Access to Pasture (Livestock); Proposed Rule, 7 CFR Part 205,
Oct. 24, 2008, 73 Federal Register 63548, at http://www.ams.usda.gov/AMSv1.0/
getfile?dDocName=STELPRDC5073426&acct=n%20oprulemaking.
ȱȱȱ
śȱ
ȱȱȱȱȱDZȱȱȱ¢ȱ ȱ
ȱ
•
definition of “temporary confinement” and clarification of periods of temporary
confinement.
•
standards for pasture practice that addresses the management of pasture as a
crop.17
The proposed rule is intended to close a loophole that has allowed some larger dairy operations to
sell their milk as organic and at a price premium, even though their cows rarely graze on fresh
grass. The comment period for USDA’s proposed rule closes in December 2008.
ȱȱȱ¢ȱ
For the past few years the NOSB has been in the process of developing an independent set of
organic standards for aquaculture to allow for certain farmed fish to be labeled “organic.” In
November 2008, the NOSB, working with the Aquaculture Working Group (AWG), approved
recommendations on labeling criteria for farmed fish.18 These recommendations are expected to
serve as the basis for an upcoming USDA proposed rulemaking.
Consumer advocates criticize the NOSB recommendations, claiming these criteria would allow
for sub-par organic fish to be sold at a premium, thus undermining organic standards and
consumer confidence in the organic marketplace. Environmental groups also criticize the NOSB
recommendations for not specifying that farm fish be produced in closed, controlled production
systems. These groups criticize the NOSB recommendations for (1) allowing farmed fish to
receive feed that is not 100% organic; (2) allowing farmed fish to be fed fishmeal derived from
wild fish, which critics say has the potential to carry certain water-borne contaminants; and (3)
allowing for the use of open net cages at fish farms, which critics say are associated with
environmental problems and discharges into U.S. waterways and may also harm wild fish
supplies.19 These groups—which include the Consumers Union, the Organic Consumers
Association, the Center for Food Safety, and Food and Water Watch, among others—want only
fish that eat 100% organic feed and are produced in closed production systems to be eligible to be
certified as organic. Aquaculture producers generally support the NOSB recommendations.20
17
USDA, AMS, USDA Publishes Proposed Rule to Clarify Pasture Provisions of Organic Regulations, Press Release
AMS 200-08, October 22, 2008, at http://www.ams.usda.gov/AMSv1.0/
ams.printData.do?template=printPage&navID=&page=printPage&dDocId=STELPRDC5073342&dID=102368&wf=fa
lse&docTitle=USDA+Publishes+Proposed+Rule+to+Clarify+Pasture+Provisions+of+Organic+Regulations.
18
Preliminary meeting notes and information is posted on USDA AMS’s website. See NOSB, Livestock Committee,
Proposed Organic Aquaculture Standards: Fish Feed and Related Management Issues, September 28, 2008, at
http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5072721.
19
Consumers Union, “National Organic Standards Board (NOSB) Decision Today on ‘Organic’ Fish Sets Dangerous
Precedent to Gut USDA Organic Program,” November 20, 2008, at http://www.consumersunion.org/pub/
core_food_safety/006363.html.
20
See, e.g., comments by Wally Stevens, Executive Director of the Global Aquaculture Alliance, as reported in the
Washington Post (November 20, 2008).
ȱȱȱ
Ŝȱ
ȱ
ȱȱȱȱȱDZȱȱȱ¢ȱ ȱ
ȱȱȱȱȱŘŖŖŘȱȱȱ
ȬȱȬȱȱ
Although the OFPA requires the cost of the National Organic Program to be fully supported by
user fees collected for USDA accreditation and certification services, Congress has appropriated
funds on several occasions to help the program in its initial stages. The FY2001 USDA
appropriations act (P.L. 106-387) contained $639,000 to cover accreditation costs. In FY2002,
under the Agricultural Management Assistance Program authorized by the Federal Crop
Insurance Act (P.L. 106-224), Congress made $1 million available to state agriculture
departments in 15 designated states to help defray the costs of certification for small-scale
producers and processors.
The 2002 farm bill (P.L. 107-171, the Farm Security and Rural Investment Act), which was
enacted in May 2002, also provided additional funds to support program start-up. Title X of the
farm act gave USDA authority to continue to defray the costs of producers and handlers seeking
organic certification through FY2007, and authorized a one-time, mandatory transfer of $5
million from the Commodity Credit Corporation (CCC) to establish a national organic
certification cost-share program under the NOP. Federal funds may not cover more than 75%
($500 maximum) of a producer’s or handler’s costs for becoming certified. The transfer occurred
in FY2002 and remained available until fully expended, which was in fall 2006.21
ȱ
The research title of the 2002 farm bill renewed expiring authority for a competitive grant
program to support research and extension activities on organic production, processing, and
international marketing. The conference report also added language calling for an emphasis on
classical and advanced research on genetics to improve organic crops; research to identify the
marketing and policy constraints on the organic industry; and expanded on-farm research. The act
authorized $3 million to be transferred annually from the U.S. Treasury to USDA in FY2003FY2007 to support this research.22 Other provisions in the research title (1) require ERS to gather
and maintain segregated data on the production and marketing of organic agriculture; and (2)
require ERS and the National Agricultural Library to make it easier for U.S. organic producers,
researchers, and extension professionals to obtain the results of organic research conducted in
foreign countries.23
Concerning the availability of production and marketing data on organic agriculture, a look at
ERS’s online economic analyses of the sector indicates that the agency still is relying on external
21
The CCC is a wholly owned government financing institution for USDA agencies that administer mandatory
programs, such as the farm commodity price and income support programs for wheat, cotton, rice, and certain other
crops; agricultural export subsidies; and certain conservation and trade programs. CCC funds are considered mandatory
funds that must be made available for the purposes authorized. In practice, however, appropriators sometimes prohibit
or place restrictions on funding for mandatory programs in the annual appropriations bill.
22
Information on Integrated Organic Program research grants are available at USDA’s website at
http://www.csrees.usda.gov/fo/funding.cfm.
23
USDA, ERS, “Market-Led Growth vs. Government-Facilitated Growth: Development of the U.S. and EU Organic
Agriculture Sectors,” August 2005, at http://www.ers.usda.gov/Briefing/Organic/. Congress has not appropriated funds
to date for a National Agricultural Library International Organic Research Collaboration.
ȱȱȱ
ŝȱ
ȱ
ȱȱȱȱȱDZȱȱȱ¢ȱ ȱ
data sources for much of its information. As of September 2006, a comprehensive USDA survey
of the entire organic sector, authorized in the 2002 farm bill, has not been conducted. USDA’s
Agricultural Marketing Service has not yet begun to provide market news on the organic sector,
which would permit up-to-date price discovery. Separate export and import data for organic
products are not being collected at the borders. These deficiencies hamper business planning and
expansion, and complicate crop insurance premium-setting and loss payments, among other
issues, according to organic sector stakeholders.
ȱȱȱȱŘŖŖŞȱȱȱ
Title X of the Food, Conservation, and Energy Act of 2008 (P.L. 110-246, the 2008 farm bill) is
the Horticulture and Organic Production title of the farm bill—the first such title in a farm bill.
The provisions related to organic agriculture focus primarily on reauthorizing some of the key
programs from the 2002 farm bill and providing mandatory funds to carry them out.
ȱȬȱ
The 2008 farm bill reauthorizes the National Organic Certification Cost-share Program and
provides a one-time transfer of $22 million in mandatory funds to support it. The amount a
producer or handler can receive is raised from $500 to $750, and the maximum amount of
certification costs that federal assistance is allowed to cover is 75%.24 In addition, Section 2801 of
the conservation title designates $1.5 million in mandatory funds under the Agricultural
Management Assistance Program specifically for providing certification cost-share assistance to
organic producers in Connecticut, Delaware, Hawaii, Maryland, Massachusetts, Maine, Nevada,
New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Utah, Vermont, West
Virginia, and Wyoming.
ȱȱȬȱ
The 2008 farm bill includes a provision from the Senate version of H.R. 2419 that makes grants
under the Environmental Quality Incentives Program (EQIP; in Title II—Conservation) to help
farmers convert from conventional to organic production. The House version of H.R. 2419 would
have authorized $50 million in appropriations over five years for a separate program providing
technical assistance and cost-sharing grants for organic conversion.
ȱ
P.L. 110-246 extends the authority for the organic research and extension initiative that was
established in the 1990 farm bill. The bill provides a total of $78 million in mandatory funds for
the initiative in FY2009-FY2012, and also authorizes $25 million annually in appropriations.
Both the House and Senate versions of H.R. 2419 contained provisions expressing the sense of
Congress that the level of funding for organic research conducted by USDA’s intramural science
agency, the Agricultural Research Service (ARS), should be at least commensurate with the
24
To be eligible for reimbursement, an organic production or handling operation must be located within a qualified
state, comply with NOP regulations for organic production or handling and have received certification or continuation
of certification by a USDA-accredited certifying agent during the period of Oct. 1, 2008, through Sept. 30, 2009.
ȱȱȱ
Şȱ
ȱ
ȱȱȱȱȱDZȱȱȱ¢ȱ ȱ
percentage that organic products represent of the U.S. food market—at least 2%. The enacted bill
does not contain this provision.
ȱȱȱ¢ȱ
The 2008 farm bill contains a provision to help USDA fulfill a requirement in the 2002 farm bill
to collect segregated data on organic production and marketing and provide timely market
information. The bill provides a one-time transfer of $5 million in mandatory funds for this
purpose, and requires USDA to report to Congress on the progress it is making on organic data
collection six months after passage of the farm bill.
ȱ ȱ
Organic producers have long expressed dissatisfaction with coverage for their crops under the
federal crop insurance program. Organic farmers generally must pay higher premiums to
participate because the private companies that offer the insurance are not as familiar with the risks
of organic production as they are with those of conventional production. In addition, the
insurance companies generally pay out organic farmers’ claims based on the value of
conventionally grown crops, not on the higher value that organic crops carry.
Section 12023 in the crop insurance and disaster assistance title of the 2008 farm bill calls for a
review of the underwriting, risk and loss experience of organic versus conventional crops. Based
on the review, the Federal Crop Insurance Corporation will work to reduce or eliminate premium
surcharges on policies for organic producers “unless the review ... documents the existence of
significant, consistent, and systemic variations in loss history between organic and nonorganic
crops, with collectively or on an individual crop basis....” In addition, organic producers will have
an option in their policies to choose if they want to be reimbursed for losses based on the actual
prices they receive.
ȱȱȱȱ
Congress has appropriated roughly $2 million annually in recent years to administer the National
Organic Program. Critics argue that this level of funding has led to insufficient attention to
oversight and compliance activities. The 2008 farm bill sets the annual authorization level for the
NOP at $6.5 million for FY2009, rising to $11 million in FY2012. House and Senate
appropriators will determine the actual funding available.
ȱȱ
The conservation, credit, and trade titles of the House and Senate farm bills also contain various
provisions increasing the organic sector’s access to programs in those areas. (See CRS Report
RL34696, The 2008 Farm Bill: Major Provisions and Legislative Action, by (name redacted) et al.
for additional information.)
ȱȱȱ
şȱ
ȱ
ȱȱȱȱȱDZȱȱȱ¢ȱ ȱ
ȱȱ ȱ
Renee Johnson
Specialist in Agricultural Policy
[redacted]@crs.loc.gov, 7-....
ȱȱȱ
ŗŖȱ
EveryCRSReport.com
The Congressional Research Service (CRS) is a federal legislative branch agency, housed inside the
Library of Congress, charged with providing the United States Congress non-partisan advice on
issues that may come before Congress.
EveryCRSReport.com republishes CRS reports that are available to all Congressional staff. The
reports are not classified, and Members of Congress routinely make individual reports available to
the public.
Prior to our republication, we redacted names, phone numbers and email addresses of analysts
who produced the reports. We also added this page to the report. We have not intentionally made
any other changes to any report published on EveryCRSReport.com.
CRS reports, as a work of the United States government, are not subject to copyright protection in
the United States. Any CRS report may be reproduced and distributed in its entirety without
permission from CRS. However, as a CRS report may include copyrighted images or material from a
third party, you may need to obtain permission of the copyright holder if you wish to copy or
otherwise use copyrighted material.
Information in a CRS report should not be relied upon for purposes other than public
understanding of information that has been provided by CRS to members of Congress in
connection with CRS' institutional role.
EveryCRSReport.com is not a government website and is not affiliated with CRS. We do not claim
copyright on any CRS report we have republished.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.