USDA's Proposed Program Regulates Organic Food Labeling

After seven years, the U.S. Department of Agriculture (USDA) has finally released a proposal to establish uniform national standards to govern the production, handling, labeling and marketing of organic foods and ingredients in accordance with the Organic Foods Production Act of 1990 (OFPA).

USDA explains that a National Organic Program will benefit consumers by providing (1) protection from false and misleading organic food labels; and (2) a choice of a wider variety of organic foods that meet a consistent standard. USDA hopes that the supply and variety of organic products will increase after establishment of a national standard, but others might debate that, especially in light of the complexity of the proposed rules.

Significant provisions of the proposal address labeling rules, state certification programs, fees, a mechanism for appeals and a "National List" of substances allowed and prohibited for use in organic farming and handling operations. With a few exceptions, farms or handling operations that produce or handle agricultural products intended to be sold, labeled or represented as "organic" would be required to obtain certification from a USDA-accredited certifying agent.

Noticeably absent from the proposal, however, are provisions that would govern irradiation, sludge or the use of genetically modified organisms in organic products. On these issues, USDA chose simply to solicit public comments at this time.

You can view the proposed rule at http://www.ams.usda.gov/nop or in the December 16, 1997, edition of the Federal Register (62 Fed. Reg. 65935). Comments are due on or before April 30, 1998. It appears that the proposal has stirred considerable controversy, based on some of the comments already filed.

After a final rule is implemented, the Agency anticipates that all provisions of the National Organic Program (NOP) would become effective within 18 months. Only time will tell if it takes another seven years to finalize the proposal.

Certification and Fees

Under the OFPA, an agricultural product sold or labeled as organically produced must be "produced only on certified organic farms and handled only through certified handling operations" in accordance with standards provided by USDA.

Under the proposed rule, an "agricultural product"--including crops, livestock and certain processed products containing agricultural commodities--may be marketed as "organic" if organic ingredients provide no less than 95% of the weight of the product. A product may be labeled and marketed as "made with certain organic ingredients" if 50% to 95% of the weight of the product is from organic ingredients. Product weights are calculated exclusive of water and salt.

The proposed regulations define a "handling operation" as "any operation or portion of an operation ... that receives or otherwise acquires agricultural products and processes, packages or stores such products." Accordingly, unless one of several exemptions in the proposed rule applies, operations that process, package or store organic products must obtain certification.

To obtain certification, eligible producers and handlers would need to:

* comply with the applicable production and handling standards;

* establish and implement an Organic Plan;

* permit annual inspections by accredited certifying agents;

* maintain records;

* submit applicable fees;

* agree to notify the certifying agent of specified occurrences that would affect the certified operation's compliance with the National Organic Program.

The proposal contains several provisions to help producers and handlers determine whether the requirements for certification have been met, as well as to help them maintain certification.

Certifying agencies are also charged with enforcing most of the rule's requirements and must conduct annual audits of producers and handlers an periodic product sampling.

Processing

A central requirement of organi certification is complying with the uniform national standards for the production and handling of organic products.

Production standards direct how crops and livestock are to be produced if they are to be called organic.

In the handling context, the proposed rule expresses a preference for biological and mechanical methods of retarding spoilage or otherwise preparing a product for market. If necessary, substances classified as "incidental additives" may be used following review and acceptance by a USDA-accredited certifying agent. Examples of incidental additives listed by USDA include defoaming agents, adjuvants, clarifiers, filtering agents and equipment cleansers.

The proposed handling standards specifically prohibit three types of processing practices:

1. The storage, coating or packaging of agricultural products in containers, bins, packages or packaging materials (including waxes) that contain synthetic fungicides, preservatives or fumigants.

2. The use or reuse of any bag or container that previously had been in contact with a substance that could compromise the organic integrity of a product.

3. The use of any volatile synthetic solvent.

Labeling

Products that conform to the requirements for marketing as "Organic" may use that term on the Principal Display Panel (PDP) in connection with the product name, such as "Organic Rice." The PDP of "Organic" products also may display the certification seals of USDA and any state programs approved by USDA (see illustration).

[ILLUSTRATION OMITTED]

Products that conform to the requirements for marketing as "Made with Certain Organic Ingredients" can only use that phrase on the PDP and then use the term "organic" in the ingredients statement to identify the organically produced ingredients.

The rule seems to prohibit specific organic ingredients from being identified on the PDP (such as "Made with Organic Rice"). The logic behind this is not clear. Producers should have the flexibility to identify the specific name of the organic ingredient on the PDP. Products marketed as "Made with Certain Organic Ingredients" would not be permitted to display USDA's organic certification seal.

The proposal expressly prohibits several labeling statements:

* The term "one hundred percent" cannot appear on the label of an organic product in any form in connection with the word "organic."

* Label and marketing information cannot include the percentage of any organic ingredient contained in a product.

* The use of "organic when available" is prohibited.

* Finally, statements that USDA contends might lead a person to believe a product is organic cannot appear on products that otherwise would not qualify as organic. For example, products that otherwise do not qualify for organic could not be called "pesticide free," "drug or growth hormone free," "ecologically produced," "sustainably harvested," "humanely raised," and similar terms.

RELATED ARTICLE: USDA Mandates Organic Ingredient Selection

The handling standards of USDA's proposed National Organic Program mandate an ingredient selection process for products marketed as "organic." Products marketed as "made with certain organic ingredients" are exempt, however, from rules of preference that affect ingredient selection.

The proposal requires that organically produced ingredients be selected over other ingredients. Further, nonorganic agricultural products must be selected over listed products that are not agricultural.

The National List of Approved and Prohibited Substances includes individual substances, categories of substances and formulated products. Any substance intended for use in a "system of organic farming or handling" must fall into one of these two categories:

1 Substances Permitted ill Organic Production Operations

* Non-synthetic (that is, "natural") substances that are not listed as prohibited

* "Active synthetic substances" that appear on the National List

* Synthetic substances that are not "active" in an organic fanning system

* Formulated products containing inert ingredients, so long as the product does not contain an unlisted active synthetic substance or a synthetic inert that the Environmental Protection Agency has classified as an inert "of toxicological concern"

2 Ingredients and Substances Permitted in Organic Handling Operations

* Any agricultural products, including non-organically produced agricultural products

* Non-agricultural ingredients that appear on the National List

* Synthetic substances that are not "active" in an organic handling system

* Synthetic substances that are not an active ingredient in a processed product; incidental additives are permitted in processed products if justified in the Organic Plan

Ann Boeckman, an associate at Keller and Heckman, helped prepare this article.

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