[Federal Register Volume 65, Number 49 (Monday, March 13, 2000)]
[Proposed Rules]
[Pages 13512-13658]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-5723]
[[Page 13511]]
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Part III
Department of Agriculture
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Agricultural Marketing Service
7 CFR Part 205
National Organic Program; Proposed Rule
Federal Register / Vol. 65, No. 49 / Monday, March 13, 2000 /
Proposed Rules
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 205
[Docket Number: TMD-00-02-PR2]
RIN 0581-AA40
National Organic Program
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would establish a National Organic Program
(NOP or program) under the direction of the Agricultural Marketing
Service (AMS), an arm of the United States Department of Agriculture
(USDA). This national program is intended to facilitate interstate
commerce and marketing of fresh and processed food that is organically
produced and to assure consumers that such products meet consistent,
uniform standards. This program will establish national standards for
the production and handling of organically produced products, including
a National List of substances approved and prohibited for use in
organic production and handling. This proposal will establish a
national-level accreditation program to be administered by AMS for
State officials and private persons who want to be accredited as
certifying agents. Under the program, certifying agents will certify
production and handling operations in compliance with the requirements
of this regulation and initiate compliance actions to enforce program
requirements. The proposal includes requirements for labeling products
as organic and containing organic ingredients. The rule also provides
for importation of organic agricultural products from foreign programs
determined to have equivalent organic program requirements. The program
is proposed under the Organic Foods Production Act of 1990, as amended.
DATES: Comments must be submitted on or before June 12, 2000.
ADDRESSES: Interested persons are invited to submit written comments on
this proposal to: Keith Jones, Program Manager, National Organic
Program, USDA-AMS-TMP-NOP, Room 2945-So., Ag Stop 0275, PO Box 96456,
Washington, DC 20090-6456. Comments also may be sent by fax to (703)
365-0760 or filed via the Internet through the National Organic
Program's homepage at: http://www.ams.usda.gov/nop. Written comments to
this proposed rule submitted by regular mail and faxed comments should
be identified with docket number TMD-00-02-PR. To facilitate the timely
scanning and posting of comments to the NOP homepage, multiple page
comments submitted by regular mail should not be stapled or clipped.
Commenters should identify the topic and section number of this
proposal to which the comment refers.
It is our intention to have all comments to this proposal, whether
mailed, faxed, or submitted via the Internet, available for viewing on
the NOP homepage at http://www.ams.usda.gov/nop in a timely manner.
Comments submitted in response to this proposal will be available for
viewing at USDA-AMS, Transportation and Marketing, Room 2945-South
Building, 14th and Independence Ave., SW, Washington, DC, from 9:00
a.m. to 12:00 p.m. and from 1:00 p.m. to 4:00 p.m., Monday through
Friday (except official Federal holidays). Persons wanting to visit the
USDA South Building to view comments received in response to this
proposal are requested to make an appointment in advance by calling
(202) 720-3252.
FOR FURTHER INFORMATION CONTACT: Richard Mathews, Senior Agricultural
Marketing Specialist, USDA-AMS-TM-NOP, Room 2510-So., PO Box 96456,
Washington, DC 20090-6456; Telephone: (202) 205-7806; Fax: (202) 205-
7808.
SUPPLEMENTARY INFORMATION:
Background of the National Organic Program
To address problems created by inconsistent organic standards, the
organic industry attempted to establish a national voluntary organic
certification program in the late 1980's. However, that effort failed
to develop a consensus on needed organic standards. Congress was then
petitioned by an organic industry trade association to establish a
mandatory national organic program, resulting in the Organic Foods
Production Act of 1990 (the Act). Congress passed the Act to: (1)
Establish national standards governing the marketing of certain
agricultural products as organically produced products; (2) assure
consumers that organically produced products meet a consistent
standard; and (3) facilitate commerce in fresh and processed food that
is organically produced. This proposal is designed to implement the
Act.
To help readers better understand this proposal, we have provided
answers to some frequently asked questions about the proposed rule,
including some of the issues most commonly raised in public comments.
Is this the final word on National organic standards?
No. This is only a proposed rule. It is important that you take the
time to read it carefully and write to USDA to give us your
recommendations, being as specific as you can. Your comments are due by
June 12, 2000.
Your comments do matter. On December 16, 1997, the first proposed
rule was published in the Federal Register, and 275,603 people wrote to
us to explain why and how the rule should be rewritten, the largest
public response to a proposed rule in USDA history. Then, in the
October 24, 1998 Federal Register, we asked for public comment on
issues concerning livestock confinement, medications, and the authority
of certifying agents, and 10,817 people wrote to us. As you read
through this document, you will get a sense of what these comments said
because in each section we briefly summarize the relevant comments and
provide our response to them.
We expect to publish a final rule later this year, once we know
what you think about this proposal. The final rule will have, as
proposed here, an implementation phase-in period so farmers and
processors won't have to change overnight.
Has there been citizen input on this proposal beyond public comments?
Yes. The National Organic Standards Board (NOSB) is a 15-member
citizen board that advises the Secretary on all aspects of the National
Organic Program and has special responsibility for development of the
National List. Established by law in 1990, the NOSB includes 3
environmental representatives, 3 consumer representatives, 4 organic
farmers/ranchers, 2 organic processors, 1 retailer, 1 scientist, and 1
certifying agent. Currently, the NOSB comprises 14 members. The 15th
member, an accredited certifying agent, would be appointed after
certifying agents are accredited by the Secretary. Since the first NOSB
was appointed in 1993, the Board has held 19 public meetings, including
one public teleconference, crisscrossing the country to hear from the
public before making recommendations to the Secretary on national
standards. The vast majority of commenters on the first proposed rule
urged the Secretary to rewrite the proposal in line with NOSB
recommendations--and this is what we have done. More information on
NOSB
[[Page 13513]]
members, meeting minutes, and a side-by-side comparison of this
proposal with NOSB recommendations can be found at www.ams.nop/gov.
In addition, to be consistent with OMB Circular No, A-119, which
directs agencies to use voluntary consensus standards, USDA considered
adoption of the American Organic Standards, Guidelines for the Organic
Industry as a voluntary consensus standard for use in the National
Organic Program. In October 1999, the Organic Trade Association
published the American Organic Standards (AOS). The AOS standards were
developed over several months with two opportunities for comment from
interested parties. The introduction states that the standards are
written as an up-to-date compilation and codification of organic
standards and certification procedures, as they are understood and
applies in the United States. Organic Trade Association members are
expected to follow the guidelines.
USDA has determined that it would be impractical to use the
American Organic Standards in lieu of USDA developed standards for the
following reasons: (1) Not all participants in the organic industry
elected to participate in developing the AOS; (2) the AOS are new to
the industry so there has not been sufficient time for the industry to
assess their effectiveness, and (3) some certifying agents disagree
with portions of the AOS.
Why do we need national standards for organic food?
National standards for organic food production are designed to
bring about greater uniformity in the production, manufacture, and
marketing of organic products. In the absence of a national standard,
49 State and private organizations have established individual programs
and standards for certifying organic agricultural products. The lack of
consistency between these standards has created problems for farmers
and handlers of organic products, particularly if they want to sell
their products in multiple States with different standards. Lack of a
nationwide standard has also created confusion for consumers, who may
be uncertain what it really means when a food product is called
``organic.''
With a national standard, consumers across the country can go into
any store and have full confidence that any food product labeled
``organic'' meets a strict, consistent standard no matter where it was
made. Use of the word, ``organic,'' on the label of any product that
does not meet the standard is strictly prohibited.
Consumers will have that confidence, because this proposal requires
for the first time that all organic operations be certified by USDA-
approved certifying agents. Up to now, certification has been optional;
some farmers choose not to be certified at all, and others are
certified by State or private certifiers using different standards. It
can be hard for consumers to know if a product has been certified, or,
if it has, to what standard. Under this proposal, all organic
operations, except for the very smallest, would be certified to the
same standard. And all products labeled as ``organic'' would have to
comply with the production and handling standards in this rule.
Consumers can also look for the USDA organic seal, which can only
be used on products that have been certified by USDA-approved
certifying agents. This seal assures consumers that the maker of the
product is part of a rigorous certification program and has been
thoroughly reviewed by professional inspectors trained in organic
agriculture.
National standards will also bring greater predictability for
producers of organic foods. There will be no confusion about whether a
product satisfies the particular standard of any State, for example,
because all organic foods will meet the same standards.
Finally, a national standard for organic food will help our farmers
and manufacturers sell organic products in other countries. The lack of
a consistent national organic program has limited access to important
markets in other countries because of the confusion created by
multiple, independent standards. A strong national standard will help
to ensure buyers in other countries that all U.S. organic products meet
the same standards.
How can I tell how much organic food is in a product?
This proposal sets strict labeling standards based on the
percentage of organic content. If a product is 100 percent organic, it
can, of course, be labeled as such. A product that is at least 95
percent organic can be described as, for example, ``organic cereal.''
If a cereal, for example, contains between 50 and 95 percent organic
content, it can be described as ``cereal made with organic
ingredients,'' and up to three organic ingredients can be listed.
Finally, if the food contains less than 50 percent organic content, the
term, ``organic,'' may only appear on the ingredient information panel.
These four new labeling categories will provide consumers with much
greater information than they have today. [Labeling is covered in
subpart D.]
What is the National List?
The National List of Allowed and Prohibited Substances (known as
the National List) identifies specific substances that may or may not
be used in organic production and handling operations. The National
List is developed by the NOSB, through consultation with outside
experts, and forwarded to the Secretary for approval. The list
identifies those synthetic substances, which would otherwise be
prohibited, that may be used in organic production based on the
recommendations of the NOSB. Only those synthetic substances found on
the National List may be used. The National List also identifies those
natural substances that may not be used in organic production, as
determined by the Secretary based on the NOSB recommendations.
The first proposal included some substances on the National List
that were not recommended by the NOSB. This proposal contains no
substances on the approved list that were not found in the NOSB
recommendations.
This proposal also includes restrictions or other conditions on the
use of allowed substances, also known as ``annotations,'' as
recommended by the NOSB. Such annotations have been used by existing
State and private certification programs to further ensure that allowed
substances are used in a manner that is consistent with organic
production. (The National List is covered in subpart G, Secs. 205.600
through 205.607.)
Does this proposal prohibit use of genetic engineering in organic
production?
Yes. This proposal prohibits the use of genetic engineering
(included in the broad definition of ``excluded methods'' in this
proposal, based on the definition recommended by the National Organic
Standards Board) in the production of all foods and ingredients that
carry the organic label.
275,603 commenters on the first proposal nearly universally opposed
the use of this technology in organic production systems. Based on this
overwhelming public opposition, this proposal prohibits its use in the
production of all organic foods even though there is no current
scientific evidence that use of excluded methods presents unacceptable
risks to the environment or human health. While these methods have been
approved for use in general agricultural production and may offer
certain benefits for the
[[Page 13514]]
environment and human health, consumers have made clear their strong
opposition to their use in organically grown food. Since the use of
excluded methods in the production of organic foods runs counter to
consumer expectations, foods produced with these methods will not be
permitted to carry the organic label. (Excluded methods are defined in
subpart A and discussed further under Production and Handling (subpart
C), Labeling (subpart D), and the National List (subpart G).)
Will genetic engineering be allowed in the production of foods that
contain both organic and nonorganic ingredients?
No. For products with mostly organic content--those products where
more than half of the ingredients are organic and that have the word,
``organic,'' on the main product label-- excluded methods must not be
used in the production of any ingredients. Only those products, in
which fewer than half of the ingredients are organic and in which the
organic ingredients are only identified on the ingredient panel, could
contain nonorganic ingredients produced through excluded methods.
We believe consumers have expressed a clear expectation that these
methods should not be used in the production of any ingredients
contained in mostly organic products. Because prominent use of the
word, ``organic,'' on the label of such products reinforces that
expectation, we have chosen to prohibit use of excluded methods in
production of both the organic and nonorganic ingredients.
We recognize that this policy will place additional burdens on
organic food processors and certifying agents because the ability to
meet these requirements will depend largely on practices used in
conventional agricultural markets. For organic food processors, it may
be harder to find sources of nonorganic ingredients that are produced
without use of excluded methods. Similarly, certifying agents may face
greater difficulty because they will be required to ensure that
handlers have complied with this requirement. However, we believe that
the need to meet strong consumer expectations outweighs these concerns.
Furthermore, we anticipate that as marketplace practices or standards
evolve, these practices will be the basis for implementing this
provision, providing handlers and certifying agents recognize criteria
with which to evaluate sources of nonorganic ingredients in products
containing both organic and nonorganic ingredients.
Does this proposal prohibit use of irradiation in organic production?
Yes. This proposal prohibits the use of irradiation in the
production of all foods and ingredients that carry the organic label.
275,603 commenters on the first proposal almost universally opposed the
use of this technology in organic production systems. Based on this
overwhelming public opposition, this proposal prohibits its use in the
production of all organic foods even though there is no current
scientific evidence that use of irradiation presents unacceptable risks
to the environment or human health and may, in fact, offer certain
benefits. Because this rule is a marketing standard and consumers have
expressed a clear expectation that irradiation should not be used in
the production of organic foods, foods produced with this technology
will not be permitted to carry the organic label.
The prohibition on irradiation extends to nonorganic ingredients
used in mostly organic ingredients--those products where more than half
of the ingredients are organic and that have the word, ``organic,'' on
the main product label. Only those products, in which fewer than half
of the ingredients are organic and in which the organic ingredients are
only identified on the ingredient panel, could contain irradiated
nonorganic ingredients. We do not believe that this prohibition on
irradiation in nonorganic ingredients will place undue burden on either
handlers or certifiers because of current labeling requirements for
irradiated products.
Does this proposal prohibit use of sewage sludge in organic production?
Yes. This proposal prohibits the use of sewage sludge in the
production of all foods and ingredients that carry the organic label.
This prohibition extends to nonorganic ingredients used in the
production of mostly organic foods--those products in which more than
half of the ingredients are organic and that have the word,
``organic,'' on the main product label. Only those products, in which
fewer than half of the ingredients are organic and which the organic
ingredients are only identified on the ingredient panel, could contain
nonorganic ingredients produced using sewage sludge.
275,603 commenters on the first proposal almost universally opposed
the use of this technology in organic production systems. Based on this
overwhelming public opposition, this proposal prohibits its use in the
production of all organic foods, even though there is no current
scientific evidence that use of sewage sludge in the production of
foods presents unacceptable risks to the environment or human health.
We believe consumers have expressed a clear expectation that sewage
sludge should not be used in the production of any ingredients
contained in mostly organic products. Because prominent use of the
word, ``organic,'' on the label of such products reinforces that
expectation, we have chosen to prohibit use of sewage sludge in
production of both the organic and nonorganic ingredients. We recognize
that this policy may place additional burdens on organic food
processors and certifying agents. However, we believe that the need to
meet strong consumer expectations outweighs these concerns.
Does this proposal set standards for livestock production?
Yes. The proposal sets the first comprehensive standards for
production of organic animals and meat products. Under this proposal,
use of antibiotics would be prohibited in organic livestock production.
The standards also prohibit the routine confinement of animals and
require that ruminant animals have access to outdoor land and pasture,
although temporary confinement would be allowed under certain, limited
circumstances. Animals under organic management must also receive 100-
percent organically grown feed. (Organic livestock management issues
are discussed in greater detail under subpart C, 205.236 through
205.239.)
Does this proposal prohibit ``ecolabeling''?
No. This proposal only regulates use of the term, ``organic,'' on
product labels. Other labels would be allowed as long as they are
truthful and not misleading and meet general food labeling
requirements. The labeling requirements of this proposal are intended
to assure that the term, ``organic,'' and other similar terms or
phrases are not used in a way that misleads consumers. Should we find
that terms or phrases are being used to represent ``organic'' when the
products are not produced to the requirements of this regulation, we
would proceed to restrict their use. (Labeling is covered in subpart
D.)
Are organic foods pesticide-free?
No. Organic farmers can use natural pesticides to control weeds and
insects and maintain the high quality of organic products that
consumers have come to expect. Use of synthetic chemical pesticides,
however, is prohibited unless specifically allowed on the National List
as recommended by the
[[Page 13515]]
National Organic Standards Board and approved by the Secretary. (The
National List is covered in subpart G, sections 205.600 through
205.607.)
Who needs to be certified?
As a general rule, all organic production and handling operations
must be certified. The Act and this proposal, however, do provide for
some exceptions. For example, organic operations with less than $5,000
in annual sales of organic products do not require certification.
Similarly, organic operations that handle only those products with less
than 50 percent organic content or that restrict labeling of organic
ingredients to the ingredient information panel do not require
certification. Finally, we are not requiring certification of most
grocery stores and restaurants (referred to in this proposal as
``retail food establishments'') at this time.
Even where operations do not require certification, however, all
organic food products must meet the national standards as described in
this proposal. In that way, consumers can be confident that all
products labeled as ``organic'' meet the national standards, even if
they did not require certification under the NOP. (Certification is
covered in subpart E; the exceptions from certification are found in
subpart B.)
Will organic farmers have to pay fees?
Organic farmers and other organic operations will have to pay fees
for organic certification but will not be charged any fees by USDA.
Fees for certification services will be set by the private or State
certifying agents. The proposal also requires that certifying agents
make their schedule of fees publicly available so that organic
operations can plan appropriately and so that they can make informed
choices where multiple certifying agents are available. USDA will also
review fees charged by certifying agents to ensure that they are
reasonable and that they are being applied fairly to all organic
operations. Under this proposal, USDA would only charge fees for
reviewing (``accrediting'') certifying agents. These fees will
primarily be based on the actual costs of the accreditation work done
by USDA staff so that certifying agents with smaller and less complex
programs will pay lower fees. The proposal also provides for a
reduction in the accreditation fees during the first 18 months of the
program to provide an incentive for certifying agents to become
accredited under the new national program as soon as possible. (Fees
are covered in subpart G, Secs. 205.640 through 205.642.)
How do I become an accredited certifying agent?
All certifying agents must be accredited by USDA. Certifying agents
may apply for accreditation effective with publication of the final
rule and are encouraged to apply as soon after publication of the final
rule as possible. USDA will provide additional information on applying
for accreditation on or about the date of publication of the final
rule. This information will be available on the NOP website and by mail
upon request.
Applications for accreditation will be handled on a first-come-
first-served basis. Those that apply within the first 6 months
following publication of the final rule and are determined by the
Administrator to meet the requirements for accreditation will be
notified of their status in writing on or about 12 months after
publication of the final rule. This approach is being taken because of
the market advantage that could be realized by accredited certifying
agents if USDA did not announce the accreditations simultaneously.
(Accreditation is covered in subpart F.)
What are the roles and responsibilities of certifying agents in the
National Organic Program?
Certifying agents are the ``front line'' representatives of USDA
and play a critical role in the oversight and enforcement of the
national organic standards program. Once accredited by USDA, certifying
agents are empowered to make key decisions regarding the status of
organic operations. Certifying agents review the organic plans of
organic operations and are authorized to grant certification to those
operations that meet the strict national organic standards. Certifying
agents are also responsible for the continuing oversight of organic
operations-- reviewing annual updates of organic plans, conducting
residue analyses, and conducting other monitoring activities.
In cases in which a certifying agent finds that an organic
operation does not meet the national standards, the agent is empowered
to issue notices of noncompliance and to initiate suspension or
revocation of certification. Organic operations can appeal such
decisions to USDA but unless the organic operation appeals the
certifying agent's decision or can correct the problems identified by
the certifying agent, the agent's decision will stand. (Accreditation
is covered in subpart F; Compliance is covered in subpart G,
Secs. 205.660 through 205.668; and Appeals are covered in subpart G,
Secs. 205.680 through 205.681.]
How will USDA ensure that the National standards are applied fairly and
consistently by all certifying agents?
Because this proposal gives certifying agents such an important
role in enforcing the national standards, USDA oversight of those
certifying agents is particularly important. Under this proposal, all
certifying agents, both private and in State organic programs, would
have to be accredited by USDA before they could begin to certify
organic operations. It is this accreditation process, in which USDA
reviews all certifying agents to make sure they understand and can
accurately apply the national organic standards, that is USDA's main
tool to ensure that the standards are applied fairly and consistently
by all certifying agents.
The accreditation process is really one of ongoing oversight by
USDA. Accreditation must be renewed every 5 years so that we can be
sure certifying agents continue to meet the program standards. USDA
will conduct one or more site visits of certifying agents during the
period of accreditation as another mechanism of monitoring their
compliance. Finally, certified operations may file complaints with USDA
if they believe they have been treated unfairly or if a certifying
agent is otherwise not following the program requirements. We will
investigate these complaints for possible enforcement action.
Can States have organic standards that are more strict than the
National standard?
Yes. Some States may have unique environmental or other concerns
that they believe require extra conditions above the national standard.
In those cases, States would apply to USDA to have their special State
program approved by the Secretary.
However, no State would be allowed to set up a program that does
not at least meet the national standard. And States would not be
allowed to use their programs to keep out or otherwise discriminate
against organic products made in another State. (State Programs are
covered in subpart G, Secs. 205.620 through 205.622.)
What is the timeframe for implementation?
The final rule in this rulemaking process will establish a
procedure and a timeframe for implementing the NOP. We expect that the
interim period between publication of the final rule in this rulemaking
process and the effective date of the program (actual implementation of
regulations) will be 18 months. The following is a
[[Page 13516]]
preliminary list of several administrative and program issues that must
be implemented during that period. Certifying agent applications will
be evaluated and accreditation granted. Certifying agents will, in
turn, certify production and handling operations to the requirements of
these regulations. Equivalency discussions will be held with foreign
governments and foreign certifying agents. Guidelines and practice
standards on production and handling practices must be finalized and
distributed by the NOP. A petition process for recommending amendments
to the National List must be developed and distributed. The NOSB will
continue to review materials for the National List. State programs may
have to make adjustments in their organic certification programs for
consistency with the standards of this program. Producers should use
the interim period to prepare their production operations to comply
with the relevant requirements of this program. Handlers should use the
interim period to prepare for necessary changes in the labeling of
their products.
Prior Documents in This Proceeding
This proposed rule is issued pursuant to the Organic Food
Production Act of 1990 (Act or OFPA), as amended (7 U.S.C. 6501 et
seq.). This proposal replaces the proposed rule published in the
Federal Register December 16, 1997. Comments to the first proposal were
considered in the preparation of this proposed rule.
The following notices related to the NOSB and the development of
this proposed regulation have been published in the Federal Register.
Five notices of nominations for membership on the NOSB were published
between April 1991 and June 1999 (56 FR 15323, 59 FR 43807, 60 FR
40153, 61 FR 33897, 64 FR 33240). Two notices of extension of time for
submitting nominations were published on September 22, 1995, and
September 23, 1996 (60 FR 49246, 61 FR 49725). Seventeen notices of
meetings of the NOSB were published between March 1992 and October 1999
(57 FR 7094, 57 FR 27017, 57 FR 36974, 58 FR 85, 58 FR 105, 58 FR 171,
59 FR 58, 59 FR 26186, 59 FR 49385, 60 FR 51980, 60 FR 15532, 61 FR
43520, 63 FR 7389, 63 FR 64451, 64 FR 3675, 64 FR 28154, 64 FR 54858).
One notice of public hearings on organic livestock and livestock
products was published on December 30, 1993 (58 FR 69315). One notice
specifying a procedure for submitting names of substances for inclusion
on the National List was published on March 27, 1995 (60 FR 15744). A
rule proposing the NOP was published on December 16, 1997 (62 FR
65850). An extension of the time period for submitting comments to the
proposed rule was published on February 9, 1998 (63 FR 6498). One
request for comments on Issue Papers was published on October 28, 1998
(63 FR 57624). A notice of a program to assess organic certifying
agencies was published on June 9, 1999 (64 FR 30861).
This preamble includes a discussion of the proposed rule and
supplementary information, including the Regulatory Impact Assessment,
Regulatory Flexibility Act Analysis, Federalism Impact Statement, and
Paperwork Reduction Act Analysis. The Civil Rights Impact Analysis is
not included as an attachment but may be obtained by writing at the
address provided above or via the Internet through the National Organic
Program's homepage at: http://www.ams.usda.gov/nop.
National Organic Program Overview
Subpart A--Definitions
Proposal Description
This subpart defines various terms used in this part. These
definitions are intended to enhance conformance with the regulatory
requirements through a clear understanding of the meaning of key terms.
We have amended terms and definitions carried over from the first
proposal where necessary to make their wording consistent with the
language used in this proposal. We have removed the definition for the
following terms because the terms are not used in this proposal or have
been determined to be unnecessary: Active ingredient in any input other
than pesticide formulations, active ingredient in pesticide
formulations, agroecosystem, botanical pesticides, breeding, chapter,
cation balancing agent, certification activities, certification
applicant, certified facility, chapter, confirmation of accreditation,
contaminant, critical control point, cytotoxic mode of action,
degradation, detectable residue level, extract, farm, foliar nutrient,
formulated product, fungicide, generic name, incidental additive, inert
ingredient in any input other than pesticide formulations,
intentionally applied, made with certain organic ingredients, mating
disrupter, micronutrient, nonactive residues, nonorganic agricultural
ingredient or product, petition, preliminary evaluation, processing
methods, production aid, production input, proper manuring,
putrefaction, site evaluation, soil amendment, split operation,
subtherapeutic, suspension of accreditation, synergist, synthetic
volatile solvent, treated, untreated seeds, USDA seal, and weed. We
received comments on some of the definitions that have been deleted. We
have not addressed these comments here because the relevant definitions
have been deleted.
Definitions--Changes Based On Comments
This subpart differs from our first proposal in several respects as
follows:
(1) We have amended the term, ``audit trail,'' by replacing the
category, ``organic'' or ``made with certain organic ingredients,''
with ``100 percent organic,'' ``organic,'' or ``made with organic
(specified ingredients),'' or agricultural product containing less than
50 percent organic ingredients identified as organic in an ingredients
statement. We have taken this action to clarify the definition as
requested by several commenters.
(2) We have amended the term, ``buffer area,'' to ``buffer zone''
and amended the term by replacing ``a certified farm or portion of a
farm'' with ``a certified production operation or portion of a
production operation.'' A few commenters suggested including a minimum
size for the buffer zone and specifying that buffer zones must be
uncropped vegetated areas. The appropriate size and type of a buffer
zone is highly site-specific and cannot be rigidly specified for all
locations without placing unreasonable burdens on some producers.
Several commenters supported determination of the appropriate buffer
zone size and type by the producer in consultation with the certifying
agent. Additional information on this issue can be found at subpart C,
Crop Production, Changes Requested But Not Made, item 1.
(3) We have amended the definition of the term, ``certification or
certified,'' to make the language in the definition consistent with the
language of this proposal. We have also removed the language concerning
the information to be found on a certificate. Commenters suggested
amending the definition by adding the words, ``annual'' and ``based on
an on-site inspection and comprehensive review of the operation.''
Other commenters recommended deleting the reference to products on a
certificate because it is the operation, not the product, that is
certified. We have not made the suggested additions because the issues
are adequately addressed in the regulations. We have removed the
language concerning information found on a certificate because this
information
[[Page 13517]]
is adequately addressed in the regulations.
(4) We have amended the definition of ``certifying agent'' to
clarify that the term only applies to State-entity and private-entity
certifying agents. We have taken this action because there was some
confusion among commenters over whether the original definition
included a State program's governing State official.
(5) We have amended the definition of ``commercially available'' by
removing the phrase, ``to be feasibly and economically used.'' We have
taken this action because we agree with commenters that use of the
phrase provides an opportunity for producers and handlers to avoid use
of preferred inputs. We have also clarified that ``commercially
available'' applies to processors by including the words, ``or
processing ingredient.'' Additional information on this issue can be
found at subpart C, Production and Handling (General), Changes
Requested But Not Made, item 2.
(6) We have amended the definition of ``compost'' by referring to
compost as ``the product of a carefully managed process through which
microorganisms break down plant and animal materials into more
available forms suitable for application to the soil.'' We also state
that ``composting'' must use methods to raise the temperature of raw
materials to the levels needed to stabilize nutrients and kill
pathogens. Specific instructions on the production of compost for use
in organic production has been referenced to the National Resources
Conservation Service's (NRCS) practice standard for a composting
facility (Code 317). The NRCS practice Standard provides a field tested
and verifiable procedure for producing compost. We have made these
changes because commenters suggested that we clarify the meaning of
compost. Several commenters stated that the definition should include
rules about what kinds of materials are acceptable for use in compost.
Additional information on this issue can be found at subpart C,
Production and Handling (General), Changes Based On Comments, item 4.
(7) We have amended the definition of ``crop rotation'' by adding a
statement about the relationship of crop rotation to perennial crops as
suggested by an industry association.
Several commenters suggested inserting references to the use of
legumes and sod as essential to crop rotation. The benefits achieved
through the use of legumes and sod could be fulfilled through many
types of rotation plans, which could only be developed according to the
site-specific climate, soil type, and type of crops or livestock
produced on a given operation. In the interest of flexibility this
proposal does not specify what specific crops have to be included in a
crop rotation. The issue addressed in this suggestion is addressed in
the crop rotation practice standard at Sec. 205.205. Additional
information on crop rotation can be found at subpart C, Production,
Changes Based On Comments, item 5.
(8) We have amended the definition of ``disease vectors'' by adding
that disease vectors include plants and animals that transmit disease
organisms or pathogens which may attack crops or livestock. A few
commenters pointed out that the definition as originally proposed was
technically inaccurate because it did not address the transmission of
disease organisms to crops or livestock.
(9) We have rewritten the definition of ``employee'' to provide
that an employee is any person providing paid or volunteer services for
a certifying agent. A few States requested that the definition clearly
reference volunteers. A trade association recommended expanding the
definition to include any person who works for a certifying agent. We
have included volunteers in this proposal because of their substantial
use by some certifying agents. Other States suggest changing
``certification decisions'' to ``certification activities'' to include
any person who is involved in the certification process. We have
addressed the commenters' concern by referring to services provided by
the employee for the certifying agent. A few States stated that the
definition needs to clarify who is the employer of an independent
inspector. An independent inspector would not be included in the
definition of employee. Such persons are considered to be contractors.
Some States expressed concern regarding the use of volunteers from
certified production and handling operations. Section 205.501(a)(11)
requires that a certifying agent prevent conflicts of interest by not
permitting any employee, inspector, contractor, or other personnel to
accept payment, gifts, or favors of any kind, other than prescribed
fees, from any business inspected, except that a certifying agent that
is a not-for-profit organization with an Internal Revenue Code tax
exemption may accept voluntary labor from certified operations. Under
this exception all volunteers would be excluded from work, discussions,
and decisions in all stages of the certification process and the
monitoring of certified production or handling operations for all
entities in which such person has or has held a commercial interest,
including an immediate family interest or the provision of consulting
services, within the prior 12-month period. Additional information on
conflicts of interest can be found at subpart F, Changes Based On
Comments, items 4 and 5, and subpart F, Changes Requested But Not Made,
items 5, 6, 7, and 8; subpart F, Additional Provisions, item 2.
(10) We have rewritten the definition of ``fertilizer'' to provide
for the inclusion of minor nutrients and trace elements with the three
primary nutrients (nitrogen, phosphorus, potassium) contained in a
substance or a blended substance utilized in a soil fertility program.
This is a generic definition of fertilizer. Issues concerning what
substances may be present in a fertilizer for organic production are
addressed in subpart C of this proposal.
(11) We have amended the definition of ``handle'' by providing that
the term shall not include the sale, transportation, or delivery of
crops or livestock by the producer thereof to a handler. This change
was made because we found merit in a certifying agent's concern that
farmers were turned into handlers by definition. This was not our
intent.
(12) We have amended the definition of ``inspector'' to make terms
used in the definition consistent with terms used in this proposal and
to remove the phrase, ``who is qualified.'' A State certifying agent
suggested deleting the phrase, ``who is qualified,'' because the issue
of inspector qualification is more appropriately addressed in the
regulations. We concur that the definition of ``inspector'' does not
need to address the issue of qualifications, especially in light of the
fact that certifying agents are required by these regulations to use
qualified inspectors.
(13) We have amended the definition of ``livestock'' by adding
reference to the production of fiber, feed, and other agricultural-
based consumer products and by providing that ``livestock'' shall not
include fish or bees for the production of food, fiber, feed, or other
agricultural-based consumer products. A trade association and several
States recommended adding fibers to the definition. We have added
fiber, feed, and other agricultural-based consumer products to the
definition to capture all types of consumer products that would be
produced from livestock. We have excluded aquatic animals from the
definition of livestock pending future development of detailed practice
standards for specific aquatic animals. We have also excluded bees from
the definition of livestock pending future National Organic Standards
Board (NOSB or Board) review and recommendations on apiculture.
[[Page 13518]]
Additional information on this issue can be found at subpart C,
Livestock Production, Changes Based On Comments, items 3 and 4.
(14) We have amended the definition of ``market information.'' A
commenter suggested that the definitions of the terms, ``labeling'' and
``market information,'' were difficult to distinguish from one another
and needed clarification. We have added language to make a distinction
between the two terms. ``Market information'' now includes the phrase,
``distributed, broadcasted, or made available outside of retail
outlets.'' This phrase indicates that any information distributed,
broadcasted, or made available outside of retail outlets to assist in
the sale or promotion of a product falls under the ``market
information'' category. ``Labeling'' includes any information displayed
or made available in retail outlets on or about the product.
(15) We have amended the definition of ``organic'' to clarify that
the term, ``organic,'' is used as a labeling term. Commenters,
including several States, stated that the definition repeated the
proposed requirements for allowing the use of ``organic'' on a product
label. They suggested amending the definition to clarify that the term,
``organic,'' is used as a labeling term. We made the suggested change
because we agree that the definition unnecessarily repeated regulatory
information and that use of the term, ``organic,'' is intended as a
labeling term.
(16) We have amended the definition of ``producer'' to clarify that
the term includes the production of fiber and other agricultural-based
consumer products. Several States suggested that the definition of
``producer'' be amended to clarify that a producer could also be
growing or producing a fiber product. We agree that this clarification
is needed and have also added reference to ``other agricultural-based
consumer products'' to further clarify that the term includes all
agricultural-based consumer products produced by a producer.
(17) We have changed the definition of ``routine use of
parasiticide'' to the definition recommended by the NOSB. Commenters
suggested removing ``without cause'' from the definition in the first
proposal and adding such phrases as ``without an indication of illness
from parasites,'' ``administration with need based on the presence of a
diagnosed problem with parasites,'' and ``with or without cause.'' The
NOSB's definition solves the problems caused by the use of the phrase,
``without cause.'' Additional information on this issue can be found at
subpart C, Livestock Production, Changes Based On Comments, item 9.
(18) We have amended the definition of ``slaughter stock'' by
changing ``human consumption'' to ``consumption by humans and other
animals.'' A few commenters recommended deleting the word, ``human,''
to indicate that organic livestock may also be used to produce pet
food. We agree that slaughter stock may be used in the production of
products for consumption by humans and other animals.
(19) We have amended the term, ``soil quality,'' and its definition
by referencing ``water'' in the term and the definition. This change
was made because of the reference to ``soil and water quality'' in
Sec. 205.200 of this proposal. Several State commenters stated that the
definition of ``soil quality'' was too vague and would pose problems in
enforcing a requirement that addressed the effect of various practices
on soil quality. Other commenters requested expansion of the definition
to include a discussion of why soil quality is important and what
functions healthy soil serves in an organic production system. Another
State suggested expanding the definition to include water quality,
since there were several references in the regulations to effects on
soil or water quality. The importance of soil quality has been
addressed under subpart C of this proposal. We acknowledge that the
phrase, ``soil and water quality,'' is used in subpart C and have,
therefore, expanded the term, ``soil quality,'' to ``soil and water
quality'' and amended the definition accordingly. We have also added a
new phrase to the previous definition to acknowledge that one important
criterion of soil and water quality is the control of environmental
contaminants. The determination of which observable indicators to
monitor and how to interpret the observations will be subject to
documentation in the organic system plan and consultation between the
producer and the certifying agent. Guidance will be provided to
certifying agents through program manuals. Additional information on
this issue can be found at subpart C, Production and Handling
(General), Changes Based On Comments, item 2.
(20) We have amended the term, ``governing State official,'' to
``State program's governing State official'' and retained the
definition to clarify the difference between a State certifying agent
and a governing State official. We have used the term, ``State
program's governing State official,'' throughout this proposal. A trade
association and a State recommended removing the word,
``certification,'' from the definition. We have not made this change
because the term is meant to identify the person responsible for
administering the State's organic certification program. By ``State
organic certification program,'' we mean the law, regulations, and any
policies and procedures established by the State to govern the organic
certification of producers or handlers by State or private certifying
agents.
(21) We have amended the definition of ``unavoidable residual
environmental contamination.'' Commenters stated that USDA should set
levels rather than make case-by-case decisions regarding residual
environmental contamination. They suggested that background levels
could be used to determine whether land exceeds the level. Another
commenter requested a clear statement of ``unavoidable'' and
``contamination'' to facilitate enforcement. Some States stated that
there should be a level that is unacceptable for organic agriculture. A
commenter suggested that the definition read, ``The presence of a
material prohibited in organic production, processing, or handling in
soil, crop, or food that occurs as a result of factors beyond the
control of the producer, processor, or handler.'' Another commenter
suggested that the definition read, ``Background levels of prohibited
substances at a site which are clearly beyond the control of a
certified organic farm operator through notices to neighbors, careful
avoidance of abnormally precontaminated sites, and establishment of
buffer zones.'' In this proposal, we have defined ``unavoidable
residual environmental contamination'' as ``background levels of
naturally occurring or synthetic chemicals that are persistent in the
soil or present in organically produced agricultural products that are
below established tolerances.''
Definitions--Changes Requested But Not Made
This subpart retains from our first proposal terms and their
definitions on which we received comments as follows:
(1) A few commenters requested that the definition of
``Administrator'' be revised to provide that authority to administer
the National Organic Program may be delegated to a State official. We
have not made the recommended change because the definition of
``Administrator'' merely addresses the top official of the Agricultural
Marketing Service (AMS) and any AMS official to whom the Administrator
may delegate authority. The definition is not meant to address working
relationships established
[[Page 13519]]
between AMS and a State or State entity.
(2) An environmental group requested that we delete the phrase,
``other than during the manufacture of a multiingredient product
containing both types of ingredients,'' from the definition of
``commingling.'' This proposal requires that a handler prevent the
commingling of organic and nonorganic products but permits use of the
word, ``organic,'' in labeling a product made with organic and
nonorganic ingredients in accordance with these regulations. Therefore,
it is necessary to indicate that the term, ``commingling,'' does not
apply to the manufacture of multiingredient products produced in
accordance with these regulations.
(3) A farmers' association recommended that the Secretary delegate
authority for determining crop year to certifying agents because crop
year will vary from region to region. We have found no compelling
reason to make certifying agents responsible for determining crop year
and have not made the recommended change.
(4) A few commenters requested that the definition of ``handling
operation'' be amended to exclude retailers of prepackaged agricultural
products. This change is unnecessary because such retailers are
excluded by the definition of ``handling operation'' through the
phrase, ``except final retailers of agricultural products that do not
process agricultural products.''
(5) Several commenters, including a State department of
agriculture, recommended elimination of the exception for weight labels
in the definition of ``label.'' We have not made the recommended change
to the definition of ``label'' because, as used in this proposal,
``label'' is intended to represent the organic nature of the product. A
weight label that does not refer to the organic nature of the product
would not constitute a label for the purposes of this proposal.
(6) A commenter requested that the definitions for ``labeling'' and
``market information'' be amended to refer only to products produced by
the seller. We have not made this requested change because changing the
definitions to only include products produced by the seller would
severely restrict the application of the terms, ``labeling'' and
``market information.'' As defined, ``labeling'' and ``market
information'' correctly include any information that may be presented
to consumers concerning all products sold whether produced by the
seller, most likely a retail outlet, or produced by a production or
handling operation from which the seller acquired the products.
(7) A commenter requested that we include definitions for
``manure'' and ``aged or rotted manure.'' Under this proposal it is not
necessary to define either term.
(8) An environmental organization requested that a phrase be added
to the definition of ``mulch'' to indicate that acceptable mulch
materials leave no chemical or toxic residues. This proposal allows the
use of composted plant and animal wastes obtained from nonorganic
sources, such as commercial compost products. Uncomposted plant or
animal waste material which has been treated with a substance can be as
utilized as a mulch provided the substance appears on the National List
or complies with the OFPA. Off-farm plant and animal wastes from food
processing, municipal yard waste facilities, and other sources are used
extensively in existing organic operations and generally permitted by
organic certification programs. Using such organic wastes is consistent
with a system of organic production and handling, which calls for
recycling organic wastes to return nutrients to the land. We believe
that concerns about potential contaminants in plant and animal waste
materials can be addressed by the requirement in this proposal that
these materials be managed in a manner that prevents such
contamination. Accordingly, this change has not been made. Additional
information on this issue can be found at subpart C, Crop Production,
Changes Requested But Not Made, items 2 and 3.
(9) Several commenters suggested adding information to the
definition of ``National Organic Standards Board'' to address the role
of the NOSB with regard to the National List. This change is
unnecessary because the role of the NOSB is adequately covered in
section 6517, National List, of the Act.
(10) Numerous comments were received from consumers, environmental
groups, and organic producers concerning the definition of the term,
``nonagricultural ingredient.'' Commenters expressed the view that this
term represented an attempt by USDA to circumvent the intent of the Act
that synthetic ingredients not be permitted in organic processed
products. We disagree with the position that the Act prohibits the use
of synthetic ingredients in organic processed products. The use of
synthetic ingredients in organic processed products is discussed in the
preamble to the National List found in subpart G. We have changed the
term, ``nonagricultural ingredient,'' to ``nonagricultural substance''
to be consistent with the language used in this proposal. The
definition remains the same.
(11) Commenters stated their objection to the use of the term,
``nonsynthetic (natural),'' and its definition. A commenter mistakenly
stated that the term, ``natural,'' was defined in the Act. Other
commenters felt that use of any term that was not included in the Act
was a violation of the Act. Because the term, ``natural,'' is so
ambiguous and subject to differing interpretations, the term,
``nonsynthetic,'' as used throughout this regulation, represents an
important clarification of the intent of the Act, and we have,
therefore, retained it in this proposal.
(12) A few commenters requested that the definition of ``petition''
be amended by adding the phrase, ``to the National Organic Standards
Board,'' immediately following the word, ``submitted.'' We have not
made the requested change for two reasons. First, the change is
unnecessary. Second, petitions, whether addressed to the NOSB or
National Organic Program (NOP) Staff, will be received by the NOP
because the administrative functions of the NOSB are performed at the
NOP office. Petitions received will be distributed by the NOP to the
NOSB and appropriate technical reviewers.
(13) A producers association stated that the definition for
``processing'' was confusing with regard to the difference between a
handler and a processor. A handling operation that performs any of the
activities listed in the definition of processing becomes a processor.
We have found no compelling reason to revise this comprehensive
definition for processing, which comes directly from the Act. A
commenter suggested that this definition be changed to include
repackaging for weight. In addition to the definition being stipulated
by the Act, affixing a weight label to a product is a normal retail
activity that does not warrant the expense and effort necessary to
certify all retailers who routinely affix weight labels to organic
product.
(14) A few commenters requested that the definition of ``State
organic certification program'' be amended by adding a statement
indicating that a State program could have additional requirements.
This issue is addressed in subpart G, State Organic Certification
Programs, Proposal Description.
(15) A technical institute recommended including genetically
engineered organisms and their products in the definition of
``synthetic,'' and an environmental
[[Page 13520]]
group wanted the definition to include the combustion of minerals. We
have not amended the definition as given in the Act because it already
includes the combustion of minerals, which are chemically changed by
the process of combustion. We also do not consider it necessary to
classify genetically engineered organisms as either synthetic or
nonsynthetic for the purposes of this regulation, since these organisms
and their products are prohibited for use in organic production or
handling regardless of whether or not they are synthetic.
(16) A commenter recommended adding the word, ``synthetic,''
immediately preceding the word, ``substances,'' in the second sentence
of the definition of ``system of organic farming and handling.'' We
disagree with this suggestion because ``substances'' as used in this
definition could be synthetic or nonsynthetic. A few commenters
requested deletion of the word, ``extraneous,'' as a modifier of
``synthetic additives'' in the definition of ``system of organic
farming and handling.'' The commenters stated that use of the word,
``extraneous,'' implied that synthetic additives can be used in organic
processed products. Synthetics may be used in processed products if the
substance is included on the National List. Additionally, the word,
``extraneous,'' modifies the word, ``processing,'' in the definition,
and we consider use of extraneous processing to be inconsistent with
organic handling. For these reasons, we have not removed the word,
``extraneous,'' from the definition. We have, however, amended the
term, ``system of organic farming and handling,'' by deleting
``farming'' and inserting ``production.'' The definition for the term,
``system of organic production and handling,'' is unchanged. We have
taken this action to make the term consistent with the language of this
proposal. Additional information on this issue can be found at subpart
C, Production and Handling (General), Changes Requested But Not Made,
item 1.
(17) Several commenters, including a State Department of
Agriculture and a fishery association, requested that wild game and
aquatic animals be included in the definition of ``wild crop.''
Regarding aquatic animals, we intend to develop detailed practice
standards for specific aquatic species, which will be published for
comment and finalized prior to the implementation of the NOP. Given the
virtual absence of recognized certification programs for aquatic
operations, including aquaculture, there are no U.S. models on which to
base national standards. Additional information on this issue can be
found at subpart B, Changes Requested But Not Made, item 11 and subpart
C, Crop Production, Changes Requested But Not Made, item 7.
Accordingly, we have not made the requested changes to the definition
of ``wild crop.''
Definitions--Additional Provisions
Upon further review of the definitions in the first proposal, we
have decided to propose the following additions and changes.
Amended Definitions
(1) We have amended the definition of ``accreditation'' to include
foreign entities as now provided for in subpart F, Accreditation.
Additional information on including foreign entities in accreditation
can be found at subpart B, Additional Provisions, item 1, and subpart
F, Changes Based On Comments, item 1.
(2) We have amended the definition of ``allowed synthetic'' by
replacing ``for use in organic farming'' with ``for use in organic
production, or handling.'' This correction was necessary because the
National List includes synthetic substances used in organic production
and handling.
(3) We have amended the terms, ``certified organic farm,''
``certified organic handling operation,'' and ``certified organic wild-
crop harvesting operation,'' with the term, ``certified operation.''
The term, ``certified operation,'' is used throughout this proposal to
refer to a crop or livestock production, wild-crop harvesting, or
handling operation or portion of an operation that is certified by an
accredited certifying agent as utilizing a system of organic production
or handling as described by the Act and regulations in this part. We
have taken this action to simplify the regulatory language.
(4) We have amended the term, ``cultural,'' to ``cultural methods''
and amended the definition by removing all references to livestock. We
have taken this action because this proposal does not refer to cultural
methods with reference to livestock health care.
(5) We have amended the definition of ``field'' by replacing
``farm'' with ``production operation.'' This action was taken because
``farm'' has been replaced by ``production operation'' throughout this
proposal.
(6) We have amended the definition of ``handler'' by adding the
phrase, ``including producers who handle crops or livestock of their
own production.'' We have made this change to clarify that producers
who handle their own production become handlers under the regulations.
Such producer/handlers must be certified as a handler.
(7) We have amended the term, ``inert ingredient in pesticide
formulations,'' to ``inert ingredient.'' We have also amended the
definition by specifying that the pesticide product is used in organic
crop or livestock production and handling. These changes have been made
to make the term and its definition consistent with the language used
in the National List. This proposal takes a different position on inert
ingredients, as explained in subpart G, National List, Changes Based on
Comments, item 6, than was taken in the first proposal. Because of the
increased importance of inert ingredients in this proposal, we have
rejected the position of the few commenters who recommended removal of
this definition.
(8) We have amended the term, ``organic plan,'' to ``organic system
plan'' and made editorial changes to the definition to make the term
and language of the definition consistent with the language in this
proposal.
(9) We have amended the definition of ``peer review panel'' by
removing ``to assist in evaluating the performance of a certifying
agent'' and inserting ``to assist in evaluating applicants for
accreditation as certifying agents.'' This change clarifies that the
role of the peer review panel is to evaluate applicants for
accreditation. Additional information on ``peer review panel'' can be
found at subpart C, Proposal Description, Production and Handling
(General).
(10) We have amended the definition of ``person'' by adding
``contractor'' to clarify that, when the regulations use ``person,''
the meaning includes ``contractors.''
(11) We have amended the definition of ``records'' by removing the
record examples. A trade association and several States recommend
adding ``process flow charts'' to the examples of records. Another
commenter, who does not want to give USDA unlimited access to personnel
files, suggested the creation of a specific list of records to be
maintained. We have rewritten the recordkeeping provisions, removing
all references to specific records or types of records which must be
maintained. We have taken this action because we believe that it is
impracticable to specify in detail every class of records which may be
found essential in demonstrating compliance with the Act and
regulations. Different types of certified production and handling
operations will, by the very nature of their business, be required to
maintain different records to establish their
[[Page 13521]]
compliance with the Act and regulations. Additional information on the
issue of listing every class of records which may be found essential in
demonstrating compliance with the Act and regulations can be found at
subpart B, Changes Based On Comments, item 6.
(12) We have amended the definition of ``State.'' Addition of the
term, ``State entity,'' necessitated our amendment of the definition of
``State'' to clarify that State means the States of the United States
of America.
(13) We have amended the term, ``system of organic farming and
handling,'' to ``system of organic production and handling'' and
retained the original definition in this proposal. The original
definition was crafted to be consistent with the requirements of the
Act. We have changed ``farming'' to ``production'' to provide a more
encompassing term, which may come to include such diverse activities as
hydroponics, green house production, and harvesting of aquatic animals.
The purpose of the original definition was to describe practices and
substances consistent with systems of organic farming and organic
handling as required by the Act and to provide an explicit reference
point for determining which practices and substances are most
consistent with these systems. Several commenters suggested that the
definition include the concepts, ``agroecosystem health,'' ``ecological
harmony,'' and ``biological diversity.'' Commenters also suggested
including definitions for ``organic agriculture,'' ``organic farming,''
and ``transition to organic.'' This definition is intended to clarify
regulatory provisions in this proposal and is not intended as a broad
philosophical statement. The terms, ``organic agriculture,'' ``organic
farming,'' and ``transition to organic,'' are not used in this proposal
and, therefore, are not defined.
(14) We amended the definition of transplant to prevent confusion
with a related term, ``seedling.'' While the terms, ``transplant'' and
``seedling'' are often used interchangeably, the Act treats them as
distinct and establishes separate regulatory requirements. We have
determined that the physical process of moving and replanting a
seedling results in that seedling becoming a transplant. We have
created this distinction to be able to enforce the full requirements of
the Act. Additional information on ``transplant'' can be found at
subpart C, Crop Production, Changes Based On Comments, item 4.
New Definitions
(1) We have defined ``accredited laboratory.'' Information
concerning ``accredited laboratory'' can be found at subpart G,
Inspection and Testing, Reporting, and Exclusion from Sale, Proposal
Description.
(2) We have defined ``action level.'' Information concerning
``action level'' can be found at subpart G, Inspection and Testing,
Reporting, and Exclusion from Sale, Changes Based On Comments, item 2.
(3) We have defined ``agricultural inputs.'' Information concerning
``agricultural inputs'' can be found at subpart G, Inspection and
Testing, Reporting, and Exclusion from Sale, Changes Based On Comments,
item 1.
(4) We have defined ``Agricultural Marketing Service (AMS) ``
because the term is used throughout this proposal.
(5) We have defined ``breeder stock.'' We have added this
definition because this proposal establishes conditions for the
administration of an allowed synthetic parasiticide to livestock
producing offspring for incorporation into an organic operation. We
have also proposed conditions under which dairy stock, whose milk or
milk products are to be sold, labeled, or represented as organically
produced, may be treated with allowed synthetic parasiticides.
Additional information on this issue can be found at subpart C,
Livestock Production, Changes Based On Comments, item 9.
(6) We have defined ``bulk.'' Information concerning ``bulk'' can
be found at subpart D, Additional Provisions, item 7.
(7) We have defined ``claims.'' Information concerning ``claims''
can be found at subpart D, Changes Based On Comments, item 1.
(8) We have defined ``detectable residue.'' Information concerning
``detectable residue'' can be found at subpart G, Inspection and
Testing, Reporting, and Exclusion from Sale, Proposal Description and
at Changes Based On Comments, item 2.
(9) We have defined ``drift.'' Information concerning ``drift'' can
be found in subpart G, Residue Testing, changes based on comments, item
2.
(10) We have defined ``estimated national mean.'' Information
concerning ``estimated national mean'' can be found at subpart G,
Inspection and Testing, Reporting, and Exclusion from Sale, Proposal
Description and at Changes Based On Comments, item 2.
(11) We have defined ``excluded methods.'' As a result of extensive
public comment, we have revised the definition of certain methods to be
excluded from organic production systems. Many commenters suggested
that we use the definition for certain methods to be excluded from
organic production systems proposed by the NOSB. This proposal
essentially adopts that definition. ``Excluded methods'' refers to a
variety of methods used to genetically modify organisms or influence
their growth and development by means that are not possible under
natural conditions or processes and are not considered compatible with
organic production. Such methods would include recombinant DNA, cell
fusion, and micro-and macroencapsulation. Such methods would not
include the use of traditional breeding, conjugation, fermentation,
hybridization, in vitro fertilization, or tissue culture.
We recognize that the phrases, ``natural conditions or processes''
and ``not considered compatible with organic production,'' may be
subject to interpretation. We have proposed to use these phrases for
two reasons. First, ``natural conditions or processes'' is used in the
NOSB and American Organic Standards definitions, both of which were the
result of consultation with organic industry and consumer stakeholders
and, thus, accurately reflect current industry practices as well as
consumer preferences. Second, we recognize that industry and consumer
expectations regarding the products of these techniques in organic
production systems may evolve. We believe that, taken together, these
phrases allow for a degree of flexibility to ensure that our
regulations continue to accurately reflect industry practices and
consumer preferences. In cases where questions may arise regarding a
specific technique, we anticipate that such questions would be resolved
by the Administrator based on recommendations from the NOSB.
(12) We have defined ``feed additive.'' Information concerning
``feed additive'' can be found at subpart C, Livestock Production,
Changes Based On Comments, item 7.
(13) We have defined ``feed supplement'' Information concerning
feed supplement'' can be found at subpart C, Livestock Production,
Changes Based On Comments, item 7.
(14) We have defined ``forage.'' Information concerning ``forage''
can be found at subpart C, Livestock Production, Changes Based On
Comments, item 4.
(15) We have defined ``immediate family.'' Information concerning
``immediate family'' can be found at subpart F, Changes Based On
Comments, items 14 and 15; Changes Requested But Not Made, item 18; and
Additional Provisions, item 2.
(16) We have defined ``ingredient'' because the term is used
throughout subpart D.
[[Page 13522]]
(17) We have defined ``inspection'' because the term is used
throughout subparts E and F.
(18) We have defined ``lot.'' Information concerning ``lot'' can be
found at subpart D, Proposal Description and at Additional Provisions,
item 6.
(19) We have defined ``natural resources of the operation.'' This
definition has been added to provide greater context for evaluating the
``maintain or improve'' requirement for a system of organic production
and handling. Information concerning ``natural resources of the
operation'' can be found at subpart C, Production and Handling
(General), Changes Based On Comments, item 2.
(20) We have defined ``nonretail container.'' Information
concerning ``nonretail container'' can be found at subpart D, Proposal
Description and at Additional Provisions, item 6.
(21) We have defined ``practice standard.'' Practice standards have
been added to this proposal in response to commenter requests for more
specific guidelines for measuring the performance of an organic system
of production and handling. A practice standard is a series of specific
guidelines, requirements, and operating procedures through which a
production or handling operation implements a required component of its
organic system plan. For example, this proposal contains a practice
standard for soil fertility and crop nutrient management which
describes the tillage practices, sources and handling restrictions for
nutrients, and prohibited activities that a production operation must
comply with. There are specific practice standards applicable to crop,
livestock, and wild-crop production, and handling operations. We are
also proposing to incorporate the terms of the NRCS practice standard
for a composting facility into the requirements of this proposal.
Additional information on ``practice standards'' can be found at
subpart C, Production and Handling (General), Changes Based On
Comments, item 4.
(22) We have defined ``private entity'' because the term is used
throughout subpart F to differentiate between governmental (State
entity) and nongovernmental (private entity) organizations providing
certification services.
(23) We have defined ``production lot number.'' Information
concerning ``production lot number'' can be found at subpart D,
Proposal Description and at Additional Provisions, item 6.
(24) We have defined ``residue testing'' because the term is used
throughout the inspection and Testing, Reporting, and Exclusion from
Sale portion of subpart G.
(25) We have defined ``retail food establishment.'' Information on
``retail food establishment'' can be found in subpart B, Applicability,
Proposal Description and Additional Provisions, item 2.
(26) We have defined ``sewage sludge.'' This term has been added
and defined as synonymous with ``biosolids'' to incorporate the
Environmental Protection Agency's regulatory language for this category
of materials. Information concerning ``sewage sludge'' can be found at
subpart C, Crop Production, Changes Based On Comments, item 1.
(27) We have defined ``State entity.'' This proposal provides for
the accreditation of domestic, tribal government, and foreign
governmental subdivisions that provide certification services. We refer
to such an entity in this proposal as a ``State entity.'' Additional
information on ``State entity'' can be found at subpart F, Changes
Based On Comments, item 1.
(28) We have defined ``tolerance.'' Information concerning
``tolerance'' can be found at subpart G, Inspection and Testing,
Reporting, and Exclusion from Sale, Proposal Description and at Changes
Based On Comments, item 2.
Subpart B--Applicability
This subpart provides an overview of what has to be certified under
the National Organic Program (NOP), describes exemptions and exclusions
from certification, addresses use of the term, ``organic,'' and
addresses recordkeeping by certified production and handling
operations.
Proposal Description
Except for exempt and excluded operations, each production or
handling operation or specified portion of a production or handling
operation that produces or handles crops, livestock, livestock
products, or other agricultural products that are intended to be sold,
labeled, or represented as ``100 percent organic,'' ``organic,'' or
``made with organic (specified ingredients)'' must be certified.
Certified operations must meet all applicable requirements of these
regulations.
Certifying agents will begin the process of certifying organic
production and handling operations to the national standards upon
receipt of their accreditation from the Administrator. All production
and handling operations certified by an accredited certifying agent
will be considered certified to the national standards until the
certified operation's anniversary date of certification. We are
providing this phase-in procedure for production and handling
operations certified by newly accredited certifying agents because we
believe that such certifying agents will, upon publication of the final
rule, demonstrate their eligibility for accreditation by applying the
national standards to the certification and renewal of certification of
their clients. We are also providing this phase-in procedure to provide
relief to certified operations which would otherwise have to be
certified twice within a 12-month period (prior to their certifying
agent's accreditation and again following their certifying agent's
accreditation). This relief will only be available to those certified
operations certified by a certifying agent that receives its
accreditation within 18 months from the date of publication of the
final rule. We anticipate that certifying agents and production and
handling operations will move as quickly as possible to begin operating
under the national organic standards. We are providing this substantial
phase-in period because accredited certifying agents will have to
schedule on-site inspections around varying growing seasons and because
certifying agents and production and handling operations will need time
to adapt to the new national organic standards.
Exempt and Excluded Operations. This regulation establishes several
categories of exempt or excluded operations. Exempt operations derive
their exemption from the Act while excluded operations are excluded as
a result of a Departmental policy decision. An exempt or excluded
operation does not need to be certified. However, operations that
qualify as exempt or excluded operations may elect to apply for
certification. A production or handling operation that is exempt or
excluded from obtaining certification still must meet other regulatory
requirements contained in this rule as explained below.
Exempt Operations. (1) A production or handling operation that has
$5,000 or less in gross agricultural income from organic sales annually
is exempt from certification and does not need to submit an the organic
system plan to anyone for acceptance or approval. However, an exempt
producer or handler must comply with the labeling requirements of
Sec. 205.309 and the organic production and handling requirements
applicable to its type of operation. For example a producer of organic
vegetables, that performs no handling functions, would have to comply
with the labeling requirements
[[Page 13523]]
of Sec. 205.309 and the applicable production requirements in
Secs. 205.202 through 205.207. The labeling and production and handling
requirements protect the integrity of organically produced products.
(2) A retail food establishment or portion of a retail food
establishment that handles organically produced agricultural products
but does not process them is exempt from all of the requirements in
these regulations.
(3) A handling operation or portion of a handling operation that
handles agricultural products containing less than 50 percent organic
ingredients by total weight of the finished product (excluding water
and salt) is exempt from the requirements in these regulations, except
the recordkeeping provisions of Sec. 205.101(c); the provisions for
prevention of contact of organic products with prohibited substances in
Sec. 205.272; and the labeling regulations in Sec. 205.309. The
recordkeeping provisions maintain an audit trail for organic products.
The prevention of contact with prohibited substances and the labeling
requirements protect the integrity of organically produced products.
(4) If a handling operation or portion of a handling operation that
handles agricultural products containing at least 50 percent organic
ingredients by weight (excluding water and salt) does not use the word,
``organic,'' on any package panel other than the information panel, it
is exempt from the requirements in these regulations, except the
recordkeeping provisions of Sec. 205.101(c); the provisions for
prevention of contact of organic products with prohibited substances as
provided in Sec. 205.272; and the labeling regulations in Sec. 205.309.
The recordkeeping provisions maintain an audit trail for organic
products. The prevention of contact with prohibited substances and
labeling requirements protect the integrity of organically produced
products.
As noted above, exempt handling operations producing
multiingredient products must maintain records as required by
Sec. 205.101(c). This would include records sufficient to: (1) prove
that ingredients identified as organic were organically produced and
handled, and (2) verify quantities produced from such ingredients. Such
records must be maintained for no less than 3 years and the operation
must allow representatives of the Secretary and the applicable State
program's governing State official access to the records during normal
business hours for inspection and copying to determine compliance with
the applicable regulations.
Excluded Operations. (1) A handling operation or portion of a
handling operation that sells organic agricultural products labeled as
``100 percent organic,'' ``organic,'' or ``made with organic (specified
ingredients)'' that are packaged or otherwise enclosed in a container
prior to being received or acquired by the operation, remain in the
same package or container, and are not otherwise processed while in the
control of the handling operation is excluded from the requirements in
these regulations, except for the provisions for prevention of
commingling and contact of organic products with prohibited substances
in Sec. 205.272. The requirements for the prevention of commingling and
contact with prohibited substances protect the integrity of organically
produced products.
This exclusion will avoid creating an unnecessary barrier for
handlers who distribute nonorganic products and who want to offer a
selection of organic products.
(2) A retail food establishment or portion of a retail food
establishment that processes or prepares, on the premises of the retail
food establishment, raw and ready-to-eat food from certified
agricultural products labeled as ``100 percent organic,'' ``organic,''
or ``made with organic (specified ingredients)'' is excluded from the
requirements in these regulations, except for the provisions for
prevention of contact of organic products with prohibited substances as
provided in Sec. 205.272; and the labeling regulations in Sec. 205.309.
The prevention of commingling and contact with prohibited substances
and labeling requirements protect the integrity of organically produced
products.
Excluded retail food establishments include restaurants;
delicatessens; bakeries; grocery stores; or any retail outlet with an
in-store restaurant, delicatessen, bakery, salad bar, or other eat-in
or carry-out service of processed or prepared raw and ready-to-eat
food.
We have excluded such retail food establishments because comments
to the first proposal concerning the issue of certification of retail
food establishments were completely divergent. Comments ranged from the
certification of all retail food establishments to exclusion of all
retail food establishments. There is clearly a great deal of public
concern regarding the handling of organic products by retail food
establishments. Someday retail food establishments may be subject to
regulation under this NOP. Any such regulation would be preceded by
rulemaking with an opportunity for public comment. Our exclusion of
retail food establishments from this proposal does not prevent a State
from developing an organic retail food establishment certification
program or otherwise regulating retail food establishments that
prepare, package, or process organic agricultural products.
No retailer, regardless of this exclusion and the exceptions found
in the definitions for ``handler'' or ``handling operation,'' may sell,
label, or provide market information on a product unless such product
has been produced and handled in accordance with the Act and these
regulations. Any retailer who knowingly sells or labels a product as
organic, except in accordance with the Act and these regulations, will
be subject to a civil penalty of not more than $10,000 under this
program. Such retailer may also be subject to enforcement actions and
penalties under Federal statutes and their implementing regulations
administered by other agencies of the Federal government.
Recordkeeping Requirements for Certified Operations. A certified
operation must maintain records concerning the production and handling
of agricultural products that are sold, labeled, or represented as
``100 percent organic,'' ``organic,'' or ``made with organic (specified
ingredients)'' sufficient to demonstrate compliance with the Act and
regulations. Such records must be adapted to the particular business
that the certified operation is conducting, fully disclose all
activities and transactions of the certified operation in sufficient
detail to be readily understood and audited, be maintained for not less
than 5 years beyond their creation, and be sufficient to demonstrate
compliance with the Act and regulations. Certified operations must make
the records required by this regulation available for inspection and
copying by authorized representatives of the Secretary, the applicable
State program's governing State official, and the certifying agent.
Access to such records must be provided during normal business hours.
Examples of Records. Each exempt, excluded, and certified operation
should maintain the records which demonstrate compliance with the Act
and the regulations applicable to it and which it believes establish an
audit trail sufficient to prove to the Secretary, the applicable State
program's governing State official, and the certifying agent that the
exempt, excluded, or certified operation is and has been in compliance
with the Act and regulations.
[[Page 13524]]
Examples of records include: Application and supporting documents
for certification; organic system plan and supporting documents;
purchased inputs, including seeds, transplants, livestock, and
substances (fertilizers, pesticides, and veterinary biologics
consistent with the livestock provisions of subpart C), cash purchase
receipts, receiving manifests (bills of lading), receiving tickets, and
purchase invoices; field records (planting, inputs, cultivation, and
harvest); storage records (bin register, cooler log); livestock
records, including feed (cash purchase receipts, receiving manifests
(bills of lading), receiving tickets, purchase invoices, copies of
grower certificates), breeding records (calendar, chart, notebook,
veterinary documents), purchased animals documentation (cash purchase
receipts, receiving manifests (bills of lading), receiving tickets,
purchase invoices, copies of grower certificates), herd health records
(calendar, notebook, card file, veterinary records), and input records
(cash purchase receipts, written records, labels); producer invoice;
producer contract; receiving manifests (bills of lading); transaction
certificate; producer certificate; handler certificate; weigh tickets,
receipts, and tags; receiving tickets; cash purchase receipts; raw
product inventory reports and records; finished product inventory
reports and records; daily inventories by lot; records as to
reconditioning, shrinkage, and dumping; production reports and records;
shipping reports; shipping manifests (bills of lading); paid freight
and other bills; car manifests; broker's contracts; broker's
statements; warehouse receipts; inspection certificates; residue
testing reports; soil and water testing reports; cash receipt journals;
general ledgers and supporting documents; sales journals; accounts
payable journals; accounts receivable journals; cash disbursement
journals; purchase invoices; purchase journals; receiving tickets;
producer and handler contracts; cash sales receipts; cash purchase
journals; sales invoices, statements, journals, tickets, and receipts;
account sales invoices; ledgers; financial statements; bank statements;
records of deposit; canceled checks; check stubs; cash receipts; tax
returns; accountant's or other work papers; agreements; contracts;
purchase orders; confirmations and memorandums of sales; computer data;
computer printouts; and compilations of data from the foregoing.
Request for Comment. This proposal provides that all ingredients in
a multiingredient product identified as organic must have been produced
by a production or handling operation certified by an accredited
certifying agent. We are seeking comment on the following question.
Should handlers be allowed to identify organically produced products
produced by exempt production operations as organic ingredients? Such
identification would be restricted to the ingredients list on the
information panel. This may provide a wholesale outlet for organically
produced agricultural products produced by producers exempted from
certification because their gross agricultural income from organic
sales totals $5,000 or less annually.
Compliance with Federal Statutes and Regulations. Any agricultural
product that is sold, labeled, or represented as ``100 percent
organic,'' ``organic,'' or ``made with organic (specified
ingredients)'' must be produced and handled in accordance with the
requirements in these regulations. Organic agricultural products must
be produced and handled in compliance with the Federal Meat Inspection
Act, the Poultry Products Inspection Act, and the Egg Products
Inspection Act, concerning meat, poultry, and egg products; the Federal
Food, Drug, and Cosmetic Act; the Federal Insecticide, Fungicide, and
Rodenticide Act; and any other applicable Federal statute and its
implementing regulations.
Foreign Applicants. The regulations in this part, as applicable,
apply equally to domestic and foreign applicants for accreditation,
accredited certifying agents, domestic and foreign applicants for
certification as organic production or handling operations, and
certified production and handling operations unless otherwise
specified.
Applicability--Changes Based on Comments
This subpart differs from our first proposal in several respects as
follows:
(1) Exception for Handlers Serving Three or Fewer Certified
Operations. We have removed the provision that would have allowed
handlers providing services to fewer than three certified organic
producers to operate without separate certification under the NOP
(Sec. 205.201). Such handlers will now have to be certified unless
otherwise exempted or excluded from certification under Sec. 205.101 of
these regulations. We have taken this action because we believe that
the first proposal invites problems, such as making certain that the
contracted handler maintains compliance with the Act and regulations,
taking enforcement actions against persons violating the Act and
regulations, and being equitable to all handlers since large-volume
handling operations may qualify for inclusion under the provision on
the basis of few clients while small-volume handlers would be
disqualified because they have three or more clients.
More than 100 comments were received, most from consumers, in
opposition to the provision. Many of the commenters erroneously
interpreted the provision as an exemption for handlers of product for
less than three certified operations. Most of these commenters
expressed the belief that it is a violation of the Act to allow
handlers to operate through inclusion under another certified
operation's certification rather than through separate certification
under the Act and regulations. Several commenters stated that it is
unacceptable to exempt handling operations providing services to fewer
than three certified entities from separate certification. Several
commenters stated that operations that process products from a
certified producer should always be certified. Several State
departments of agriculture and others stated that the exemption for
handlers servicing fewer than three certified operations does not make
sense. They emphasized that certified operations could produce very
large quantities of organic product and a large-scale handler may
contract with only a few certified producer operations. Therefore, they
called for elimination of the exemption. A few commenters questioned
the certified operation's ability to ensure that the contracted handler
maintains compliance with the Act and regulations. They expressed their
belief that the certified operation would have no authority to maintain
compliance with the Act within a facility it neither owns nor manages.
We never intended to exempt handlers of fewer than three certified
operations from certification. Rather, we proposed a means by which
handlers of fewer than three certified operations could be covered
under the certification of a certified operation for which it provides
handling services.
Several of the commenters favored the provision that any handling
operation that provides handling services to fewer than three certified
entities that produce or handle agricultural products that are or that
are intended to be sold, labeled, or represented as organic or made
with certain organic ingredients would not be required to be separately
certified apart from the operations for which it provides such
services. However, supporters of the concept differed in their position
on the proposal. Most stated that the provision would work
[[Page 13525]]
only if it is made clear that a handler can provide services to only
one or two separate entities and qualify for the exemption and only if
included in the certifications of and inspected along with the entities
for which the handler will provide the services. They further
emphasized that all applicable standards must be met. A few supporters
recommended that there be a contract between the handler and the
certified operation and that the certified operation be responsible for
any failure of the handler to adhere to these regulations. Another
commenter stated that, if handlers are to be exempt from certification,
the qualifying parameter for exemption should be based upon economic
value similar to that for production operations.
Two commenters supported the proposal but wanted the fewer-than-
three-certified-operations limitation removed. One of the commenters, a
nonprofit agricultural organization, expressed the belief that the
limitation needlessly restricts commercial activity, invites an
excessive amount of paperwork related to certification applications,
and provides no greater assurances for quality control. This commenter,
referring to the definition of handling operation at section 6502(10)
of the Act, interpreted ``to receive or otherwise acquire'' as
synonymous with taking legal title to the product. This commenter
stated that this interpretation creates a distinct, verifiable
threshold which clearly identifies those operations needing to be
certified and those that do not need to be certified. Under the
commenter's suggested system, handlers who take legal title to organic
products assume responsibility for their subsequent handling and are
required to have their operations certified. Any handler who works on
organic products without taking legal title would have his or her
activities approved and monitored by the certifying agent responsible
for the product when it arrived at the handler's door. The commenter
believes that noncertified handlers who wanted to serve organic
customers would quickly learn to provide the quality control and
accountability requirements which certifying agents expect to see.
We disagree with the commenters who recommended removal of the
fewer-than-three-certified-operations restriction on the grounds that
the proposal to limit exemptions to handlers contracting with fewer
than three certified operations needlessly restricts commercial
activity, invites an excessive amount of paperwork related to
certification applications, and provides no greater assurances for
quality control. The primary justification given for removal of the
fewer-than-three-certified-operations restriction is the belief that
any handler who works on organic products without taking legal title
would have his or her activities approved and monitored by the
certifying agent responsible for the product when it arrived at the
handler's door. First, it is unreasonable to expect the certifying
agent to be responsible for monitoring noncertified handlers even if
they are providing services to an operation certified by the certifying
agent. Second, we disagree with the commenter's interpretation that
``to receive or otherwise acquire'' is synonymous with taking legal
title to the product. ``To receive or otherwise acquire'' involves the
possession, control, or custody of a product. Such possession, control,
or custody of a product may or may not involve the transfer of title to
the product. In other words, a handler may have possession, control, or
custody of the product under a right derived from a certified operation
but not under a claim of the handler's title to the product.
(2) Certification for a Portion of a Production or Handling
Operation. We have clarified that a portion of a production or handling
operation can be certified. We have taken this action because we agree
with the association commenter who suggested that the Department
clarify for potential applicants for certification that a portion of
their production or handling operation can be certified. The Act at
section 6506(b) authorizes the certification of specific fields of a
production operation or parts of a handling operation when: (1) In the
case of a production operation or field, the area to be certified has
distinct, defined boundaries and buffer zones separating the land being
operated through the use of organic methods from land that is not being
operated through the use of such methods; (2) the operators of such
production or handling operation maintain records of all organic
operations separate from records relating to other operations and make
such records available at all times for inspection by the Secretary,
the certifying agent, and the State program's governing State official;
and (3) appropriate physical facilities, machinery, and management
practices are established to prevent the possibility of a mixing of
organic and nonorganic products or a penetration of prohibited
chemicals or other substances on the certified area. This clarification
is found at Sec. 205.100 of this proposal.
(3) Exemption for Operations with $5000 or Less in Income. We have
clarified at Sec. 205.101(a)(1) that the producer and handler exemption
from certification applies to production and handling operations that
sell agricultural products as organic but whose gross agricultural
income from organic sales totals $5,000 or less annually. We have taken
this action because of commenter confusion over whether the $5,000
level applied to all sales of agricultural products or just sales of
organic agricultural products. This action is consistent with the
position of a State department of agriculture, which stated that the
$5,000 exemption should apply to organic sales, not sales of all
agricultural products. The commenter believes that, as originally
proposed, the regulation would limit opportunities for organic industry
development, especially for small producers and other small
agribusinesses.
(4) Applicability of Regulation to Exempt Operations. We have
revised the producer and handler exemption, provided to producers and
handlers with gross agricultural income from organic sales totaling
$5,000 or less annually, to provide that such operations are exempt
from certification and do not need to submit an organic system plan to
anyone for acceptance or approval but must comply with the requirements
for organic production and handling and the labeling requirements for
agricultural products produced on an exempt or excluded operation. We
have taken this action because the first proposal too narrowly
addressed the regulatory requirements that exempt producers must meet.
Our purpose is to exempt such production and handling operations from
the regulatory and financial burdens of certification but not to exempt
them from the standards for organic production and handling. A
fundamental concept of this regulation is to establish a label for
organic. To the extent that these entities will be using the term,
``organic,'' to describe their product, they must be truthful. If they
don't comply with the other requirements of this part, they cannot
truthfully describe their product as organic.
Several State commenters expressed the belief that the producer
exemption would be too difficult to enforce. Some expressed the belief
that exempt production operations would still require monitoring to
verify compliance with organic standards. A State department of
agriculture commented that some monitoring of uncertified operations
would still be needed to verify compliance with standards; otherwise
there would be no guarantee that standards would be met for
[[Page 13526]]
products being sold as organic. Another State, which expressed strong
disagreement with the producer exemption, asked how complaints against
such producers would be reconciled if they are exempt from the NOP and
do not have to maintain records over a multiple-year period. This
commenter stated its intent, under its State program, to require
certification of organic production operations producing less than
$5,000 in agricultural product yearly. This same commenter acknowledged
the Federal program's obligation to provide the exemption as required
by section 6505(d) of the Act.
A producer raised the issue of having exempt operations provide
affidavits of compliance with the Act and regulations except for
certification. A certifying agent made the observation that the rule as
first proposed would not permit exempt producers, whether operating
under an affidavit or not, to sell any of their products to a certified
operation for further processing unless they were fully certified. This
certifying agent stated that it did not believe excluding exempt
producers from selling any of their products to a certified operation
for further processing unless they were fully certified was consistent
with the intent of the Act.
We disagree with both commenters. First, we believe that an
affidavit program for exempt producers, opting to exercise their right
to the exemption, would impose unnecessary regulation upon entities
that the Act clearly intended not to impose such regulation upon.
Second, an affidavit program would create a regulatory burden on the
Department and certifying agents that would not be justified by the
size of such operations. We recognize, as pointed out by commenters,
that some State programs currently require organic production
operations that would be exempt under this national program to register
with the State and to comply with requirements such as filing financial
records and maintaining records of production methods and substances
used.
While we believe that an affidavit program is not appropriate at
the national level, we do believe that States would be authorized to
regulate organic operations exempted under the NOP's $5,000-or-less
organic sales exemption under an approved State program. Under this
proposal, producers and handlers exempted under the NOP's $5,000-or-
less organic sales exemption will be exempt from the certification
regulations and will not have to submit an organic system plan to
anyone for acceptance or approval but will be required to comply with
the requirements for organic production and handling and for labeling.
States may implement a program for monitoring the activities of exempt
production and handling operations and enforcing compliance with the
NOP. States will be permitted to require certification of federally
exempted producers and handlers under an approved State organic
certification program. The Department will consider any complaint of
noncompliance with these regulations by an exempt production or
handling operation and take appropriate action.
(5) Applicability of Federal Statutes. We have added at
Sec. 205.102(c) reference to a production or handling operation's
responsibility for complying with all applicable Federal statutes and
their implementing regulations as those statutes may apply to the
production and handling of agricultural products. We have made this
addition as a means of advising producers, handlers, and the public
that these regulations do not supersede or alter a producer's or
handler's responsibilities under other Federal statutes and their
implementing regulations.
A processors association urged the Department to advise the public
in this rule that food products produced and processed under the
organic standard must comply with applicable provisions of the Federal
Food, Drug, and Cosmetic Act; the Federal Meat Inspection Act; the
Poultry Products Inspection Act; and all other relevant statutes and
their implementing regulations, in all respects, especially related to
adulteration and misbranding.
(6) Recordkeeping Provisions. We have rewritten the recordkeeping
provisions removing all references to specific records or types of
records which must be maintained. In their place, we are requiring that
certified operations maintain records adapted to the particular
business that the certified operation is conducting. Such records must
disclose all activities and transactions of the certified operation in
sufficient detail as to be readily understood and audited and must be
sufficient to demonstrate compliance with the Act and regulations. We
have taken this action because we believe that it is impracticable to
specify in detail every class of records which may be found essential
in demonstrating compliance with the Act and regulations. Different
types of certified production and handling operations will, by the very
nature of their business, be required to maintain different records to
establish their compliance with the Act and regulations.
A certifying agent and a beekeepers association expressed support
for the recordkeeping requirements in the first proposal. The
beekeeping association emphasized the value of such recordkeeping in
monitoring the use of substances. A marketing association and a State
commented that the recordkeeping period for a list of substances
applied to a certified operation should be changed from 3 to 5 years to
be consistent with the requirements of section 6511(d) of the Act. A
research foundation suggested removal of the requirement for
identifying the name and address of the person who applies and who has
applied any substance to any part of the farm and any livestock or
other agricultural product. A trade association recommended the
addition of a new paragraph addressing the records required to be
maintained by crop production operations to establish an audit trail.
Specifically, the commenter recommended that the new paragraph require
that an audit trail be maintained by all organic crop production
operations, which records: (1) All sources and amounts of all off-farm
inputs; (2) the dates, rate, method of application, location, reason
for use, and name and address of applicator for all off-farm inputs;
(3) the dates, projected and actual yield, and harvest location of all
crops produced by the operation, both organic and nonorganic; (4) the
dates, quantities, and locations of all crops stored; (5) the transport
system(s) used to distribute organic crops; and (6) the product name,
date, quantity, and buyer of all products sold, both organic and
nonorganic. A State commenter stated that the maintenance of records on
a certified operation is important, but there must be restraint in
requiring redundant or irrelevant information. Approximately 50 retail
commenters, speaking on behalf of a producer handler, stated that the
recordkeeping requirements were burdensome and overly complicated.
Comments indicated that there was some concern regarding what
records had to be maintained by certified operations. Commenters were
concerned about requiring the maintenance of the correct records for
establishing an audit trail, avoiding the retention of redundant or
irrelevant records, and minimizing the burden and complexity of the
recordkeeping.
We agree with the commenters who stated that the recordkeeping
period for a list of substances applied should be consistent with the
5-year recordkeeping requirements of the Act.
[[Page 13527]]
Accordingly, this proposal at Sec. 205.103(b)(3) requires that
certified operations maintain all records applicable to their organic
operations for not less than 5 years beyond their creation. We disagree
with those commenters who called for more specifics relative to what
records need to be maintained and agree with those commenters who
expressed concern regarding the magnitude of records required to be
maintained. This proposal provides each production and handling
operation with the opportunity to decide for itself what records are
necessary to demonstrate its compliance with the Act and regulations.
(7) Exemption from Prevention of Commingling. We have removed the
requirement that a handling operation or portion of a handling
operation that handles only agricultural products that contain less
than 50 percent organic ingredients by total weight of the finished
product (excluding water and salt) that is exempt from the requirements
in this part comply with the provision for the prevention of
commingling. As noted in item 8 below, exempt handlers of agricultural
products that contain at least 50 percent organic ingredients by weight
will also be exempt from complying with the provision for the
prevention of commingling. We have taken this action because the
commingling of agricultural products is often a part of the processing
activity. Such operations must, however, comply with all of the
applicable labeling provisions of subpart D including the prohibition
on the combining of organic and nonorganic forms of the same
agricultural product. In other words, the handler must not, for
example, combine organic and nonorganic corn if corn is to be shown on
the information panel as ``organic corn.''
A commenter called for the removal of the requirement that an
exempt handler comply with the provisions for the prevention of
commingling and contact of organic products with prohibited substances.
The commenter claimed that requiring exempt handlers to prevent
commingling of organic and nonorganic products and contact of organic
products with prohibited substances is inconsistent with the Act. We do
not agree. As noted above, we have removed the prevention of
commingling requirement because the commingling of agricultural
products is often a part of the processing activity. We have not,
however, removed the requirement for the prevention of contact of
organic products with prohibited substances because the requirement is
necessary to safeguard the integrity of organic ingredients used in the
products being handled.
(8) Exemption for Handlers that Handle Product Containing at Least
50 Percent Organic Ingredients. We have provided at Sec. 205.101(a)(4)
that any handling operation or portion of a handling operation that
handles agricultural products that contain at least 50 percent organic
ingredients by weight (excluding water and salt) that chooses to not
use the word, ``organic,'' on any panel other than the information
panel is exempt from the requirements in these regulations, except the
provisions for prevention of contact of organic products with
prohibited substances as set forth in Sec. 205.272, the labeling
provisions of Sec. 205.309, and the recordkeeping provisions of
Sec. 205.101(c).
A commenter stated that the Department is required under the Act to
exempt any handling operation or portion of a handling operation that
processes agricultural products that contain at least 50 percent
organically produced ingredients by weight (excluding water and salt).
We disagree with the commenter. Section 6505(c)(1) of the Act ties the
exemption from certification to use of the word, ``organic,'' on the
principal display panel. The Secretary, in consultation with the
National Organic Standards Board (NOSB) and the Secretary of Health and
Human Services, may require certification of any operation that chooses
to use the word, ``organic,'' on the principal display panel. This
proposal provides that handlers, processing agricultural products that
contain at least 50 percent organically produced ingredients by weight
(excluding water and salt), who choose to only use the word,
``organic,'' on the information panel are exempt from certification.
Handlers processing agricultural products that contain at least 50
percent organically produced ingredients by weight (excluding water and
salt) who choose to use the word, ``organic,'' on any other panel,
including the principal display panel, must be certified. Use of the
word, ``organic,'' on the principal display panel carries with it
connotations in the minds of consumers regarding the organic nature of
the product which necessitate certification of handlers of such
products. Further, requiring certification of handlers of such products
is consistent with current industry practice.
Applicability--Changes Requested But Not Made
This subpart retains from our first proposal regulations on which
we received comments as follows:
(1) Exemptions for Handlers. Commenters stated that under no
circumstances should organic handling operations be exempt from
certification. A few environmental organizations, a certifying agent,
and an industry association commented that the first proposal exceeded
statutory authority by broadening the producer exemption in section
6505(d) of the Act to apply to handlers. An agriculture research and
education organization stated that, while the Act does not specifically
identify handling operations under the producer exemption, including
them is a reasonable and workable interpretation of the Act. The
commenter stated that the Act provides an exemption to persons who sell
no more than $5,000 annually in value of agricultural products and it
sees no reason why the exemption should not include handlers. This
commenter also recommended that the NOP develop a new category of
exemption of up to $10,000 for on-farm processing. The commenter's
recommended exemption would apply to value-added, made-on-site
products, such as maple syrup, jams, and relishes, and would allow
individuals to combine their production and handling exemptions.
We do not agree with those commenters who stated that the first
proposal exceeded statutory authority. The title of the exemption in
the Act (section 6505(d)) specifically refers to small farmers.
However, the text to the exemption provides, in full, that ``subpart
(a)(1) shall not apply to persons who sell no more than $5,000 annually
in value of agricultural products.'' ``Person'' is defined in the Act
as ``an individual, group of individuals, corporation, association,
organization, cooperative, or other entity.'' The Act defines
``agricultural product'' as ``any agricultural commodity or product,
whether raw or processed, including any commodity or product derived
from livestock, that is marketed in the United States for human or
livestock consumption. Handlers are covered by the definition of
``person'' and ``agricultural product'' and are thereby eligible for
exemption.
The financial burden of certification is no less for handlers with
sales of no more than $5,000 annually than it is for producers with
sales of no more than $5,000 annually. Therefore, since the cost of
certification is the primary reason for exempting production
[[Page 13528]]
operations with sales of no more than $5,000 annually, it is reasonable
to also exempt handling operations with sales of no more than $5,000
annually.
This proposal exempts production and handling operations that sell
agricultural products as ``organic'' but whose gross agricultural
income from organic sales totals $5,000 or less annually. Production
and handling operations exempted on the basis of organic sales of
$5,000 or less annually are exempt from certification under Subpart E
and do not need to submit an organic system plan under Sec. 205.201 but
must comply with the applicable organic production and handling
requirements of subpart C and the labeling requirements of
Sec. 205.309.
Exemptions for production operations and handling operations are
separate exemptions. Therefore, a production operation that is also a
handling operation, due to its production and sale of processed
products, must qualify for each exemption separately. The balance of
this paragraph lists exemption eligibility examples. A production
operation with gross agricultural income from organic sales totaling
$5,000 or less annually will be exempt from certification as an organic
production operation. A handling operation with gross agricultural
income from organic sales totaling $5,000 or less annually will be
exempt from certification as an organic handling operation. A
production and handling operation with gross agricultural income from
organic production sales totaling $5,000 or less annually and organic
handling sales totaling $5,000 or less annually will be exempt from
certification as an organic production operation and from certification
as an organic handling operation. A production and handling operation
with gross agricultural income from organic production sales totaling
$5,000 or less annually and organic handling sales totaling more than
$5,000 annually will be exempt from certification as an organic
production operation only. A production and handling operation with
gross agricultural income from organic production sales totaling more
than $5,000 annually and organic handling sales totaling $5,000 or less
annually will be exempt from certification as an organic handling
operation only.
Products marketed by exempt production operations and handling
operations cannot be represented as certified organic or display the
U.S. Department of Agriculture (USDA) organic seal. Products from
exempt operations may not be included as organic ingredients in a
multiingredient product produced or processed in a certified operation.
We anticipate that this exemption will be used primarily by small
market gardeners, hobbyists, and other small producers who sell produce
and other agricultural products at farmers markets and roadside stands
to consumers within their communities.
(2) Exceeding $5000 Limit for Exemption. A few commenters,
including a State, raised the concern that an organic operation might
not anticipate sales over $5,000 but could exceed its exemption due to
a bumper crop or market price increases, putting the operation in
violation. The Department believes that once an exempted operation
reaches the $5,000 maximum exemption level, it is compelled to seek
certification, which it would have to obtain and maintain if it is to
continue to sell organic products. A certified organic operation,
including one which previously lost its exempt status, could switch
from certified to exempt if its size or operations were changed such
that it no longer sold more than $5,000 annually in value of
agricultural products.
(3) Certification of Exempt Operations. A producer interpreted
``exempt'' as meaning that operations exempted from certification could
not be certified as an organic operation. This interpretation is not
correct. Any production or handling operation, including an exempt
operation, which makes application for certification as an organic
operation and meets the requirements for organic certification may be
certified.
(4) Increasing the Statutory Limitation of $5000 for Exemption. In
the first proposal, we asked for comments as to whether the $5,000
level for exemption from certification should be raised to $10,000 or
to another amount and why an increased amount would be appropriate.
Suggested levels ranged from $2,000 to $50,000. The suggested levels
and justifications for such levels are not sufficiently consistent for
us to recommend that Congress change the $5,000 level.
In addition, we requested data as to the number of operations that
may be exempt under the current $5,000 limitation for exemption and the
number of operations that may be exempt under any new monetary amount
suggested. Comments from the few States responding to the request for
data as to the number of operations that may be exempt under the
current $5,000 limitation revealed that from one-third to one-half of
organic producers in the commenting States would be exempt under the
statutorily authorized $5,000 exemption limitation.
(5) Certification of Retail Operations. A commenter said the first
proposal ignored retail operations which contract with an organic farm
to produce organic products with the store's brand on the label. The
commenter said the retail operation should be certified because it is
responsible if violation occurs in the organic production or handling
of the branded product. The commenter is incorrect in suggesting that
the retailer would be held responsible for a violation if the violation
occurred at the production or handling facility. When a retail
operation contracts for the production, packaging, or labeling of
organic product, it is the certified production or handling operation
that is responsible for meeting the applicable organic production or
handling requirements under the Act and these regulations. If a
violation occurs in the organic production or handling of the product,
the certified production or handling operation retains responsibility
for the violation even if the retailer's name is on the label.
(6) Exemption for Products Containing Less than 50 Percent Organic
Ingredients. Several commenters representing States and organic
organizations opposed the exemption of a handling operation or portion
of a handling operation that handles only agricultural product
containing less than 50 percent organic ingredients. They stated that
handling operations creating products with organic ingredients should
be certified regardless of the percentage of organic ingredients found
in the products they produce. These commenters stated that exemptions
from certification undermine audit trails and consumer confidence. Each
of these commenters called for removal of the proposed exemption.
Another commenter stated that, if a product is less than 50 percent
organic, then it is not organic and should not be labeled or sold as
such.
We disagree with the comments. Because such products consist of
less than 50 percent organic ingredients, handlers may only use the
word, ``organic,'' on the information panel of such products to
truthfully represent the organic nature of the ingredients. Such
handlers must also comply with the recordkeeping provisions of
Sec. 205.101(c), the prevention of contact of organic products with
prohibited substances provisions of Sec. 205.272, and the labeling
provisions of Sec. 205.309.
(7) Ensuring Organic Ingredients are Not Contaminated. A commenter
asked how the Department would ensure that organic ingredients are not
contaminated without certification of the handling operation creating
the final
[[Page 13529]]
product. Handling operations that handle agricultural products
containing less than 50 percent organic ingredients and at least 50
percent organic ingredients that are exempt from certification must
maintain records sufficient to: (1) Prove that ingredients identified
as organic were organically produced and handled, and (2) verify
quantities produced for such ingredients. Such operations are required
at Sec. 205.101(c) of this proposal to allow representatives of the
Secretary and the applicable State program's governing State official
access to these records for inspection and copying during normal
business hours to determine compliance with the applicable regulations.
(8) Exclusion for Handlers that Receive and Distribute Prepackaged
Product. Commenters raised several issues regarding the exclusion of
handlers who receive and distribute prepackaged organic products. At
least three certifying agents commented that all retailers should be
certified unless they handle only organic product in a ``final, sealed
retail container,'' or ``final impermeable containers.'' The commenters
are apparently seeking further assurance that nothing is added to the
organic product while under control of a distributor or retail
operation. Because of the wide variety of organic products and the
special needs of some of those products, establishing restrictions on
the kind of containers used for transportation could unfairly treat
some products and commodity industries. For example, some organic
products may require containers which ``breathe'' or allow the exchange
of air and outside temperatures. Nonpermeable containers could hasten
spoilage of some fresh and processed organic products.
A few certifying agents proposed that distributors and trucking
companies which transport agricultural products also should be
certified under this part. However, such transportation operations do
not carry out the functions specified in the definitions for handler
and handling operations. Distributors and trucking companies have
traditionally been excluded from requirements of agricultural
production regulations. The Act cannot be used to regulate activities
or entities beyond its regulatory authorities. In this case, it is the
responsibility of producers, handlers, interim handlers, and retailers
to meet the requirements of this regulation by ensuring that their
contracted shippers and distributors understand, respect, and protect
the integrity of the organic products they are transporting.
An organic association requested that proper notification of ``good
organic handling practices'' be made to the transportation, trucking,
and public warehousing sectors to inform them of their
responsibilities. The commenter stated that the notification should
include requirements for audit trail records, measures needed to
prevent commingling and contamination by prohibited substances. This
commenter expressed the belief that excluded handlers should
preregister and provide a signed statement of acknowledgment of the
requirements. Regarding enforcement of the suggested requirements, this
commenter stated that enforcement of the requirements should be funded
and administered by existing State and Federal inspection services.
We acknowledge the need for education regarding the requirements of
this rule as well as such issues as the handling of organic products.
The NOP, in cooperation with the NOSB, will provide educational
material to the public regarding the requirements of this rule. Such
educational material will include good organic handling practices made
available to the transportation, trucking, and public warehousing
sectors. However, we disagree with the suggestions calling for
preregistration of exempt and excluded handlers and enforcement of the
requirements by existing State and Federal inspection services. We
believe the suggestions create a burden, on exempt and excluded
handlers, the Department, and certifying agents, not justified by the
nature of the handling performed.
(9) Seafood Products. A marketing institute recommended that the
first proposal be revised to address seafood products in a separate
seafood section and to include provisions that apply to seafood
harvested in the wild. This commenter stated that wild-caught seafood
should be allowed to be labeled as organic. A processors association
also called for the labeling of wild-caught seafood as organic.
While the first proposal contained no standards solely for aquatic
animals in an organic operation, it did contain provisions applicable
to their production. The first proposal allowed fish and crustaceans,
among other livestock types, to be sold, labeled, or represented as
organic if such livestock had been brought into an organic operation no
later than the earliest commercially available stage of life. Several
commenters suggested that the management of aquatic animals differs
sufficiently from mammals and poultry to require separate regulatory
provisions. We concur and intend to develop detailed practice standards
for specific aquatic animals as discussed further under the production
and handling subpart.
Applicability--Additional Provisions
Upon further review of the applicability provisions in the first
proposal, we have decided to propose the following additions and
changes.
(1) Foreign Applicants. We have added a new provision at
Sec. 205.104 addressing applicability of these regulations to foreign
applicants. We have made this addition to clarify our intent that the
regulations in this part apply equally to domestic and foreign
applicants for accreditation, accredited certifying agents, domestic
and foreign applicants for certification as organic production or
handling operations, and certified organic production and handling
operations unless otherwise specified in these regulations.
(2) New Exclusions. We have excluded retail food establishments
that process or prepare raw and ready-to-eat food from most of the
requirements in these regulations. An excluded retail food
establishments must comply with the requirements for the prevention of
contact with prohibited substances provisions of Sec. 205.272 and the
labeling provisions of Sec. 205.309. We have excluded such retail food
establishments because comments to the first proposal concerning the
issue of certification of retail food establishments (restaurant,
delicatessen, bakery, grocery store, or other retail outlet) preparing,
packaging, or processing raw and ready-to-eat organic agricultural
products that are previously labeled as ``100 percent organic,''
``organic,'' or ``made with organic (specified ingredients)'' were
completely divergent. The first proposal also contained an
inconsistency which would have required a supermarket delicatessen to
be certified but would have excluded from certification a restaurant
with carry-out delicatessen products.
As the comments discussed below show, there is clearly a great deal
of public concern regarding the handling of organic products by retail
food establishments. Should we decide to regulate retail food
establishments under the NOP, we will proceed with rulemaking and
provide an opportunity for public comment.
Our exclusion of retail food establishments from this proposal does
not prevent a State from developing an organic retail food
establishment certification program or otherwise regulating retail food
establishments that prepare, package, or process organic
[[Page 13530]]
agricultural products. Texas and Maryland currently have retailer
certification programs.
No retailer, regardless of this exclusion and the exceptions found
in the definitions for ``handler'' or ``handling operation,'' may sell
or label a product as organically produced and handled or fix a label
to or provide other market information concerning an agricultural
product if such label or information implies that such product is
produced and handled using organic methods unless such product has been
produced and handled in accordance with the Act and these regulations.
Any retailer who knowingly sells or labels a product as organic, except
in accordance with the Act and these regulations, will be subject to a
civil penalty of not more than $10,000 under this program. Such
retailer may also be subject to enforcement actions and penalties under
Federal statutes and their implementing regulations administered by
other agencies of the Federal Government.
More than 90 commenters, including an organic association, stated
that the retailer exclusion in the first proposal violates the
requirement to certify all handling operations. The organic association
believes that processing, as defined in the Act, includes all the
normal culinary arts, food manufacturing, and packaging. All of these
commenters, including some States, recommended removal of the
exclusion. Several commenters, including a few States, expressed
concern that exclusions from certification eliminate effective audit
trails and undermine consumer confidence in organic products. One State
commented that it believed retail food establishments should be
certified because they are the last handler link from producer to
consumer.
Several commenters stated that retailers who receive organic
product have a high potential for loss of integrity of the organic
product due to accidental misuse of pesticides and sanitizers during
shipping or storage and to inadvertent commingling with nonorganic
product. The commenters believe that, even though a retailer may only
display and sell organic product, such retailer should be certified and
monitored for compliance to ensure proper treatment of the product in
shipment and storage. A State agency, however, cautioned against
establishing another burden on the organic industry. The commenter said
that if sorting from bulk and repackaging into smaller packages
requires certification, then many small ``natural food'' retail outlets
would find certification more costly than the economic benefits of
marketing organic products. The commenter said many small, natural food
retail food establishments would likely stop carrying organic items.
A few commenters stated there is a high potential for fraud among
retailers who have the opportunity to repackage, mislabel, and sell
nonorganic product as organic. Therefore, they believe that all
retailers must be subject to certification or some form of oversight to
assure that they are not mislabeling product.
A commenter representing a large retail grocery store operation
said that good identification procedures enable retail stores to keep
organic product separated from nonorganic product during
transportation, storage, and in-store displays. The commenter continued
that unduly rigid requirements would be burdensome on retailers. The
commenter indicated that the costs of certification and compliance may
outweigh the benefits of carrying organic product.
Another commenter from a major retail food establishment suggested
that retailers that wash and sort fresh organic produce for display
should be required to follow ``good organic handling practices'' that
would establish recordkeeping responsibilities and prevent commingling
with nonorganic products and contamination by prohibited materials. The
commenter suggested that conformance could be maintained by existing
State or local health inspectors or Federal inspectors with special
training in organic handling systems. However, there is no authority in
the Act to require the services of State or local inspectors.
Another retailer stated that retailers will comply with regulations
because consumers will hold retailers responsible for deficiencies or
illegal actions through the entire production and processing chain for
agricultural products.
A commenter stated that, if a restaurant serves organic foods, it
should be allowed to so state. The commenter went on to say that
restaurants and grocery stores have a right to state that they used
organic ingredients in preparing a given dish. This commenter believes
that restaurants and grocery stores selling organic products, even if
they prepare them, should not have to be certified. A few commenters
claimed that processing, as defined in the Act, includes all culinary
arts and food manufacturing. They stated that restaurants must be
certified or, at the very least, be required to keep records of organic
foods prepared. A State commenter who stated that exemptions undermine
audit trails and consumer confidence suggested that restaurants serving
organic foods be required to maintain records showing the origin and
certification status of raw agricultural ingredients used in the
restaurant's food products.
The Department routinely monitors compliance of various food
producers, handlers, distributors, and retailers which are regulated
under a variety of Departmental programs. The Department responds to
consumer complaints and often conducts unannounced compliance
investigations and audits of agricultural industry businesses. The
Department understands the need for and commits Departmental resources
to this organic program. In addition, oversight of these operations can
be conducted by State agencies.
Subpart C--Organic Crop, Wild Crop, Livestock, and Handling
Requirements
Proposal Description
This subpart sets forth the requirements with which production and
handling operations must comply in order to sell, label, or represent
agricultural products as ``100 percent organic,'' ``organic,'' or
``made with organic (specified ingredients).'' The producer or handler
of an organic production or handling operation must comply with all
applicable provisions of subpart C. Any practice implemented in
accordance with this subpart must maintain or improve the natural
resources, including soil and water quality, of the operation.
Production and handling operations which sell, label, or represent
agricultural products as organic in any manner and which are exempt or
excluded from certification must comply with the requirements of this
subpart, except for the development of an organic system plan.
Production and Handling (General). The Organic Food Production Act
of 1990 (OFPA or Act) requires that all crop, wild crop, livestock, and
handling operations requiring certification submit an organic system
plan to their certifying agent and, where applicable, the State organic
program. The organic system plan is a detailed description of how an
operation will achieve, document, and sustain compliance with all
applicable provisions in the OFPA and these regulations. The certifying
agent must concur that the proposed organic system plan fulfills the
requirements of Subpart C, and any subsequent modification of the
organic plan by the producer or handler must receive the approval of
the certifying agent.
[[Page 13531]]
The organic system plan is the forum through which the producer or
handler and certifying agent collaborate to define, on a site-specific
basis, how to achieve and document compliance with the requirements of
certification. The organic system plan commits the producer or handler
to a sequence of practices and procedures resulting in an operation
that complies with every applicable provision in the regulations.
Accreditation qualifies the certifying agent to attest to whether an
organic system plan comports with the organic standard. The organic
system plan must be negotiated, enacted, and amended through an
informed dialogue between certifying agent and producer or handler, and
it must be responsive to the unique characteristics of each operation.
An organic system plan contains six components. First, the organic
system plan must describe the practices and procedures used, including
the frequency with which they will be used, in the certified operation.
Second, it must list and characterize each substance used as a
production or handling input. Third, it must identify the monitoring
techniques which will be used to verify that the organic plan is being
implemented in a manner which complies with all applicable
requirements. Fourth, it must explain the recordkeeping system used to
preserve the identity of organic products from the point of
certification through delivery to the customer who assumes legal title
to the goods. Fifth, the organic system plan must describe the measures
to be taken to avoid contact between certified production and handling
operations and prohibited substances and document how the operation
will prevent commingling of organic and nonorganic products. Finally,
the organic system plan must contain the additional information deemed
necessary by the certifying agent to evaluate site-specific conditions
relevant to compliance with these or applicable State program
regulations. Producers or handlers may submit a plan developed to
comply with other Federal, State, or local regulatory programs if it
fulfills the requirements of an organic system plan.
The first element of the organic system plan requires a narrative
or other descriptive format that identifies the practices and
procedures to be performed and maintained, including the frequency with
which they will be performed. Practices are tangible production and
handling techniques such as the method for applying manure, the
mechanical and biological methods used to prepare and combine
ingredients and package finished products, and the measures taken to
exclude pests from a facility. Procedures are the protocols established
for selecting appropriate practices and materials for use in the
organic system plan, such as a procedure for locating commercially
available organically produced seed. Procedures reflect the decision-
making process used to implement the organic system plan.
By requiring information on the frequency with which production and
handling practices and procedures will be performed, this proposal
calls for the organic system plan to include an implementation
schedule, including information on the timing and sequence of all
relevant production and handling activities. The plan will include, for
example, information about planned crop rotation sequences, the timing
of any applications of organic materials, and the timing and location
of soil tests. Livestock management practices might describe
development of a rotational grazing plan or addition of mineral
supplements to the feed supply. A handling operation might identify
steps involved in locating and contracting with farmers who could
produce organic ingredients that were in short supply.
The second element that must be included in an organic system plan
is information on the application of substances to land, facilities, or
agricultural products. This requirement encompasses both natural and
synthetic materials allowed for use in production and handling
operations. For natural materials which may be used in organic
operations under specific restrictions, the organic plan must detail
how the application of the materials will comply with those
restrictions. For example, farmers who apply manure to their fields
must document in their organic system plans how they will prevent that
application from contributing to water contamination.
The third element of the organic system plan is a description of
the methods used to evaluate its effectiveness. Producers and handlers
are responsible for identifying measurable indicators that can be used
to evaluate how well they are achieving the objectives of the
operation. For example, production objectives could be measured through
regular tallies of bushels or pounds of product sold from the farm or
in numbers of cases sold from a handling operation. Indicators that can
identify changes in quality or effectiveness of management practices
could be relatively simple, such as the information contained in a
standard soil test. The specific indicators used to evaluate a given
organic system plan will be determined by the producer or handler in
consultation with the certifying agent. Thus, if the organic system
plan calls for improvements in soil organic matter content in a
particular field, it would include provisions for analyzing soil
organic matter levels at periodic intervals. If herd health improvement
is an objective, factors such as somatic cell count or observations
about changes in reproductive patterns might be used as indicators.
The fourth element of the organic system plan is a description of
the recordkeeping system used to verify and document an audit trail, as
appropriate to the operation. For each crop or wild-crop harvested, the
audit trail must trace the product from the field, farm parcel, or area
where it is harvested through the transfer of legal title. A livestock
operation must trace each animal from its entrance into through removal
from the organic operation. A handling operation must trace each
product that is handled and sold, labeled, or represented as organic
from the receipt of its constituent ingredients to the sale of the
processed product. In response to several comments received, this
proposal provides information, found in subpart B, Sec. 205.103, on the
records needed to establish a verifiable audit trail.
The fifth element which must be included in an organic system plan
pertains to split production or handling operations. This provision
requires an operation that produces both organic and nonorganic
products to describe the measures used to prevent commingling of
organic and nonorganic products. This requirement addresses contact of
organic products, including livestock, organic field units, storage
areas, and packaging to be used for organic products, with prohibited
substances. Requirements in the first proposal for information about
the nonorganic portion of the operation have been removed.
We do not propose to list the specific requirements to be included
in an organic system plan. We expect to publish a program manual to
provide guidance on appropriate documentation for the certification
process. In the meantime, the accreditation process provides an
assurance that certifying agents are competent to determine the
specific documentation they require to review and evaluate an
operation's organic system plan. Section 205.200(a)(6) allows a
certifying agent to request additional information needed to determine
that an organic system plan meets the requirements of this
[[Page 13532]]
subpart. The site-specific nature of organic production and handling
necessitates that certifying agents have the authority to determine
whether specific information is needed to carry out their function.
Crop Production. Any field or farm parcel used to produce an
organic crop must have been managed in accordance with the requirements
in Secs. 205.203 through 205.206 and have had no prohibited substances
applied to it for at least 3 years prior to harvest of the crop. Such
fields and farm parcels must also have distinct, defined boundaries and
buffer zones to prevent contact with the land or crop by prohibited
substances applied to adjoining land.
A producer of an organic crop must manage soil fertility, including
tillage and cultivation practices, in a manner that maintains or
improves the physical, chemical, and biological condition of the soil
and minimizes soil erosion. Crop nutrients must be budgeted and
supplied through proper use of manure or other animal and plant
materials, mined mineral substances, and other substances approved for
use under these regulations. The producer must manage animal and plant
waste materials to maintain or improve soil organic matter content in a
manner that does not contribute to contamination of crops, soil, or
water by plant nutrients, pathogenic organisms, heavy metals, or
residues of prohibited substances. Raw animal manure must either be
composted, applied to land used for a crop not intended for human
consumption, or incorporated into the soil at least 90 days before
harvesting an edible product that does not come into contact with the
soil or soil particles and at least 120 days before harvesting an
edible product that does come into contact with the soil or soil
particles. Composted plant or animal waste materials used for soil
fertility must be produced in compliance with the Natural Resources
Conservation Service's (NRCS) Conservation Practice Standard for a
Composting Facility (Code 317). Uncomposted plant and animal waste
materials may be used to amend soil fertility. A plant or animal waste
material that has been chemically altered by a manufacturing process
may be used only if it is included on the National List of synthetic
substances allowed for use in organic production. Mined substances of
low solubility may be used as sources of crop nutrients, as may mined
substances of high solubility, when justified by soil or crop tissue
analysis. Ashes of untreated plant or animal materials which have not
been combined with a prohibited substance and which are not included on
the National List of nonsynthetic substances prohibited for use in
organic crop production may be used to produce an organic crop.
Synthetic crop nutrient supplements that appear on the National List of
allowed synthetic substances may be used as a source of crop nutrients
when justified by soil or crop tissue analysis. The producer may not
use any fertilizer that contains a synthetic substance not allowed for
crop production on the National List or use sewage sludge. Burning crop
residues as a means of disposal, except for trimmings of perennial
crops burned to suppress the spread of disease, is prohibited.
The producer must use organically grown seeds, annual seedlings,
and planting stock, except that untreated nonorganic seeds and planting
stock may be used when equivalent organic varieties are not
commercially available. Seed and planting stock treated with substances
that appear on the National List of synthetic substances allowed for
use in organic production may be used when an organically produced or
untreated variety is not commercially available. Nonorganically
produced annual seedlings may be used when a temporary variance has
been established due to damage caused by unavoidable business
interruption, such as fire, flood, or frost. Planting stock used to
produce a perennial crop may be sold as organically produced planting
stock after it has been maintained under a system of organic management
for at least 1 year. Seeds, annual seedlings, and planting stock
treated with prohibited substances may be used to produce an organic
crop when the application of the substance is a requirement of Federal
or State phytosanitary regulations. Seeds, annual seedlings, or
planting stock produced through an excluded method may not be used for
organic production.
The producer is required to implement a crop rotation, including
but not limited to sod, cover crops, green manure crops, and catch
crops. The crop rotation must maintain or improve soil organic matter
content, provide for effective pest management in perennial crops,
manage deficient or excess plant nutrients, and control erosion to the
extent that these functions are applicable to the operation.
The producer must use preventive practices to manage crop pests,
weeds, and diseases, including but not limited to crop rotation, soil
and crop nutrient management, sanitation measures, and cultural
practices that enhance crop health. Such cultural practices include the
selection of plant species and varieties with regard to suitability to
site-specific conditions and resistance to prevalent pests, weeds, and
diseases. Mechanical and biological methods that do not entail
application of synthetic substances may be used as needed to control
pest, weed, and disease problems that may occur. Pest control practices
include augmentation or introduction of pest predators or parasites;
development of habitat for natural enemies; and nonsynthetic, nontoxic
controls such as lures, traps, and repellents. Weed management
practices include mulching with fully biodegradable materials; mowing;
livestock grazing; hand weeding and mechanical cultivation; flame,
heat, or electrical techniques; and plastic or other synthetic mulches,
provided that they are removed from the field at the end of the growing
or harvest season. Disease problems may be controlled through
management practices which suppress the spread of disease organisms and
the application of nonsynthetic biological, botanical, or mineral
inputs. When these practices are insufficient to prevent or control
crop pests, weeds, and diseases, a biological or botanical substance,
or a synthetic substance that is allowed on the National List may be
used provided that the producer evaluates and mitigates the effects of
repetitive use of the same or similar materials on resistance and
shifts in pest, weed, or disease types. The producer must use a pest,
weed, or disease control substance in compliance with the Federal
Insecticide, Fungicide, and Rodenticide Act. Pest control substances
produced through excluded methods are prohibited.
Any wild crop that is to be sold, labeled, or represented as ``100
percent organic,'' ``organic,'' or ``made with organic (specified
ingredients)'' must be harvested from land to which no prohibited
substances have been applied for at least 3 years prior to harvest. The
wild crop must also be harvested in a manner that ensures such
harvesting or gathering will not be destructive to the environment and
will sustain the growth and production of the wild crop.
Livestock Production. We propose that any livestock or edible
livestock product to be sold, labeled, or represented as organic must
be maintained under continuous organic management from birth or
hatching, with four exceptions. Poultry or edible poultry products must
be from animals that have been under continuous organic management
beginning no later than the second day of life. Milk or milk products
must be from animals that
[[Page 13533]]
have been under continuous organic management beginning no later than 1
year prior to the production of such products. A nonedible livestock
product must be derived from an animal that has been under continuous
organic management beginning no later than 1 year prior to the harvest
of the nonedible product. Livestock used as breeder stock may be
brought from a nonorganic operation into an organic operation at any
time, provided that, if such livestock are gestating and the offspring
are to be organically raised from birth, the breeder stock must be
brought into the organic operation prior to the last third of
pregnancy.
We also propose that, should an animal be brought into an organic
operation pursuant to this section and subsequently moved to a
nonorganic operation, neither the animal nor any products derived from
it may be sold, labeled, or represented as organic. Breeder or dairy
stock that has not been under continuous organic management from birth
may not be sold, labeled, or represented as organic slaughter stock. No
organism produced with excluded methods may be used for breeding
purposes or for the production of livestock products intended to be
sold, labeled, or represented as organic. The producer of an organic
livestock operation must maintain records sufficient to preserve the
identity of all organically managed livestock and all edible and
nonedible organic livestock products produced on his or her operation.
We are proposing that, except for feed additives and supplements
included on the National List of synthetic substances allowed for use
in organic livestock production, the total feed ration for livestock
managed in an organic operation must be composed of agricultural
products, including pasture and forage, that are organically produced.
Any portion of the feed ration that is handled must comply with organic
handling requirements. The producer must not use animal drugs,
including hormones, to promote growth in an animal or provide feed
supplements or additives in amounts above those needed for adequate
growth and health maintenance for the species at its specific stage of
life. The producer must not feed animals under organic management
plastic pellets for roughage or formulas containing urea or manure. The
feeding of mammalian and poultry slaughter by-products to mammals or
poultry is prohibited. The producer must not supply animal feed, feed
additives, or feed supplements in violation of the Federal Food, Drug,
and Cosmetic Act.
The producer of an organic livestock operation must establish and
maintain preventive animal health care practices. The producer must
select species and types of livestock with regard to suitability for
site-specific conditions and resistance to prevalent diseases and
parasites. The producer must provide organic feedstuffs, as well as
vitamins, minerals, and other supplements, sufficient to meet the
animals' nutritional requirements. The producer must establish
appropriate housing, pasture conditions, and sanitation practices to
minimize the occurrence and spread of diseases and parasites. Animals
in an organic livestock operation must be maintained under conditions
which provide for exercise, freedom of movement, and reduction of
stress appropriate to the species. Additionally, all physical
alterations performed on animals in an organic livestock operation must
be conducted to promote the animals' welfare and in a manner that
minimizes stress and pain.
The producer of an organic livestock operation must administer
vaccines and other veterinary biologics as needed to protect the well-
being of animals in his or her care. When preventive practices and
veterinary biologics are inadequate to prevent sickness, the producer
may administer medications included on the National List of synthetic
substances allowed for use in livestock operations. The producer may
not administer synthetic parasiticides to breeder stock during the last
third of gestation if the progeny is to be sold, labeled, or
represented as organically produced. After administering synthetic
parasiticides to dairy stock, the producer must observe a 90-day
withdrawal period before selling the milk or milk products produced
from the treated animal as organically produced. Every use of a
synthetic medication or parasiticide must be incorporated into the
livestock operation's organic system plan subject to approval by the
certifying agent.
We propose that the producer of an organic livestock operation must
not treat an animal in that operation with antibiotics, any synthetic
substance not included on the National List of synthetic substances
allowed for use in livestock production, or any substance that contains
a nonsynthetic substance included on the National List of nonsynthetic
substances prohibited for use in organic livestock production. The
producer must not administer any animal drug, other than vaccinations,
in the absence of illness. The use of hormones is prohibited in organic
livestock production, as is the use of synthetic parasiticides on a
routine basis. The producer must not administer synthetic parasiticides
to slaughter stock or administer any animal drug in violation of the
Federal Food, Drug, and Cosmetic Act. The producer must not withhold
medical treatment from a sick animal to maintain its organic status.
All appropriate medications and treatments must be used to restore an
animal to health when methods acceptable to organic production
standards fail. Livestock that are treated with prohibited materials
must be clearly identified and shall not be sold, labeled, or
represented as organic.
Under this proposal, a livestock producer must document in his or
her organic system plan the preventative measures he or she has in
place to deter illness, the allowed practices he or she will employ if
illness occurs, and his or her protocol for determining when a sick
animal must receive a prohibited animal drug. The standards we are
proposing will not allow an organic system plan that envisions an
acceptable level of chronic illness or proposes to deal with disease by
sending infected animals to slaughter. Neither situation can be
considered consistent with the principles of organic management. The
organic system plan must reflect a proactive approach to health
management, drawing upon allowable practices and materials. Animals
with conditions that do not respond to this approach must be treated
appropriately and diverted to nonorganic markets.
The producer of an organic livestock operation must establish and
maintain livestock living conditions for the animals under his or her
care which accommodate the health and natural behavior of the
livestock. The producer must provide access to shade, shelter, exercise
areas, fresh air, and direct sunlight suitable to the species, its
stage of production, the climate, and the environment. This requirement
includes access to pasture for ruminant animals. The producer must also
provide appropriate clean, dry bedding, and, if the bedding is
typically consumed by the species, it must comply with applicable
organic feed requirements. The producer must provide shelter designed
to allow for the natural maintenance, comfort level, and opportunity to
exercise appropriate to the species. The shelter must also provide the
temperature level, ventilation, and air circulation suitable to the
species and reduce the potential for livestock injury. The producer may
provide temporary confinement of an animal because of inclement
weather; the animal's stage of production;
[[Page 13534]]
conditions under which the health, safety, or well-being of the animal
could be jeopardized; or risk to soil or water quality. The producer of
an organic livestock operation is required to manage manure in a manner
that does not contribute to contamination of crops, soil, or water by
plant nutrients, heavy metals, or pathogenic organisms and optimizes
nutrient recycling.
Handling. This proposal permits mechanical or biological methods to
be used to process an agricultural product intended to be sold,
labeled, or represented as ``100 percent organic,'' ``organic,'' or
``made with organic (specified ingredients)'' for the purpose of
retarding spoilage or otherwise preparing the agricultural product for
market. It permits the use of nonagricultural substances and
nonorganically produced agricultural products that are included on the
National List in or on a processed agricultural product intended to be
sold, labeled, or represented as ``organic'' or ``made with organic
(specified ingredients).'' This proposal prohibits a handler from using
ionizing radiation for any purpose, an ingredient produced with
excluded methods, or a volatile synthetic solvent in or on a processed
agricultural product intended to be sold, labeled, or represented as
``100 percent organic,'' ``organic,'' or ``made with organic (specified
ingredients).''
The practice standard for facility pest management requires the
producer or handler operating a facility to use management practices to
prevent pests, including removing pest habitat, food sources, and
breeding areas; preventing access to handling facilities; and
controlling environmental factors, such as temperature, light,
humidity, atmosphere, and air circulation to prevent pest reproduction.
Permitted pest control methods include augmentation or introduction of
predators or parasites for the pest species; mechanical or physical
controls, including traps, light, or sound; and nontoxic, nonsynthetic
controls, such as lures and repellents.
This proposal permits the use of a nonsynthetic biological or
botanical substance or any synthetic substance to control facility
pests if the permitted prevention and control practices are not
effective. Any substance applied must be used in accordance with the
label provisions as approved by the appropriate authority, such as the
Environmental Protection Agency (EPA) or the Food and Drug
Administration (FDA). We propose that the handler of an organic
handling operation who uses any biological, botanical, or synthetic
substance to control facility pests must specify in the organic system
plan all measures taken or intended to be taken to prevent contact
between the substance and any ingredient or finished product intended
to be sold, labeled, or represented as organic or made with organic
ingredients. In addition to these restrictions, the handler must
include in the organic handling plan an evaluation of the effects of
repetitive use of the same or similar materials on pest resistance and
shifts in pest types.
This proposal delineates practice standards that must be followed
by an organic handling operation to prevent the commingling of organic
and nonorganic products and protect organic products from contact with
prohibited substances. An organic handling operation must not use
packaging materials and storage containers or bins that contain a
synthetic fungicide, preservative, or fumigant in handling an organic
product. The operation also must not use or reuse any storage bin or
container that was previously in contact with any prohibited substance
unless the reusable bin or container has been thoroughly cleaned and
poses no risk of prohibited materials contacting the organic product.
Temporary Variances. This subpart establishes conditions under
which operations may receive temporary variances from the provisions
contained in Secs. 205.203 through 205.207, 205.336 through 205.239,
and 205.270 through 205.272. The Administrator may establish temporary
variances due to natural disasters declared by the Secretary;
unavoidable business interruption caused by catastrophe such as wind,
fire, hail, flooding, excessive moisture, earthquake, or drought; or to
conduct research on organic production and handling techniques or
inputs. A certifying agent may recommend that the Administrator
establish a temporary variance for unavoidable business interruption.
The Administrator will determine how long a temporary variance will be
in effect at the time it is established, subject to extension as the
Administrator deems necessary. Upon notification by the Administrator
that a temporary variance has been established due to a natural
disaster, a certifying agent must inform each production and handling
operation it certifies within the affected geographical region or each
individual production and handling operation affected by the temporary
variance. Temporary variances may not be issued for any practice,
material, or procedure which is otherwise prohibited by these
regulations.
A request for issuance of a temporary variance, the justification
for it, and measures to evaluate the impact of the practice on the
operation's natural resources must be documented in the organic plan
and approved by the certifying agent. For example, if a drought
resulted in a severe shortage of organically produced hay, a dairy
operation might be permitted to substitute some nonorganic hay for a
portion of the herd's diet to prevent liquidation of the herd. The
producer must keep records showing the source and amount of the hay and
update the organic plan to describe the justification for the practice
and a timeframe for restoring the total feed ration to organic sources.
The certifying agent might also request that the plan include
contingency measures to avoid the need to resort to nonorganic feed in
case of a future shortage. A variance for experimental purposes might
be issued to permit a crop producer to undertake on-farm trials of
small quantities of a new (but not produced with excluded methods) crop
variety that was not available as organic seed.
Production and Handling (General)--Changes Based on Comments
The subpart differs from our first proposal in several respects as
follows:
(1) Genetically Engineered Organisms. In the first proposal, we
invited public comment on the use of genetically engineered organisms
(GEO's) or their products in a system of organic production and
handling. Specifically, we asked whether the use of GEO's or their
products should be permitted, prohibited, or allowed on a case-by-case
basis in organic production or handling operations. Hundreds of
thousands of public comments opposed the use of GEO's or their products
in organic production or processing. In response to these comments,
this proposal prohibits use of genetic engineering (included in the
broad definition of ``excluded methods'' in this proposal, based on the
definition recommended by the National Organic Standards Board (NOSB))
in all stages of organic production and handling. This proposal
contains a specific prohibition on the use of seeds, annual seedlings
and planting stock (Sec. 205.204(b)), pest control substances
(Sec. 205.206(f)), organisms (Sec. 205.236 (b)(3)), and ingredients
(Sec. 205.270(c)(2)) produced with excluded methods.
Products created with modern biotechnology techniques have been
tested, approved by the appropriate regulatory agencies, and can be
used safely in general agricultural production. At the same time,
[[Page 13535]]
consumers have made clear their opposition to use of these techniques
in organic food production. This rule is a marketing standard, not a
safety standard. Since use of genetic engineering in the production of
organic foods runs counter to consumer expectations, foods produced
through excluded methods will not be permitted to carry the organic
label.
We acknowledge that the broad prohibition on use of excluded
methods in organic production and handling systems may create
compliance obstacles for organic operations and certifying agents. For
example, many current certification programs allow vaccination of
animals with synthetic compounds when such treatment is mandatory.
However, while many FDA-approved vaccines are now produced using
excluded methods, we are unaware of any certification program which has
an enforcement mechanism to ensure that such substances are not used in
organic production. We do not know to what extent, if any, organic
livestock producers are currently using vaccines produced with excluded
methods or how a prohibition on the use of such substances would affect
development of the industry.
Similarly, the prohibition on the use of excluded methods in the
production of organic foods may also present challenges to organic
handlers and certifying agents. This may pose a particular problem with
respect to the nonorganic ingredients of multiingredient products with
50-95 percent organic content, to which the prohibition on use of
excluded methods also applies. For example, it may be harder for
organic food processors, who may struggle to find sources of nonorganic
ingredients that are produced without use of excluded methods and for
certifying agents, who must ensure that handlers have complied with
this requirement.
As with most elements of this program, compliance monitoring and
enforcement will rely on the ongoing oversight of organic operations by
USDA-accredited certifying agents, rather than on product testing.
Certifying agents must approve organic plans that detail procedures and
practices to be followed by organic operations and will review
extensive records maintained by organic operations to ensure that they
are complying with the approved organic plans and the regulations.
This system of compliance assurance will be particularly important
with respect to the prohibition on use of excluded methods. Producers
and handlers must be vigilant in the acquisition of materials and
products. Certifying agents should be aware of agricultural products
produced through excluded methods and must carefully review material
and product origin documentation. It will be the responsibility of
certifying agents to review the sourcing specifications and other
provisions of producer and handler organic plans to ensure the
integrity of organic and multiingredient products. We anticipate that
this system of carefully reviewed and documented organic plans, which
establishes documented procedures demonstrating good faith efforts to
diligently pursue and maintain the integrity of ingredients produced
without use of excluded methods, could satisfy the requirements in this
regulation.
With respect to the prohibition on the use of excluded methods in
production of the nonorganic ingredients in multiingredient products,
we recognize that the ability to meet these requirements depends
primarily on practices used in conventional agricultural markets. We
also recognize that practices for preserving product identity,
including segregating genetically engineered and nongenetically
engineered products, are evolving in some conventional markets.
Currently there are no consensus industry standards for product
segregation, rather contractual agreements are used to the extent
possible. As the marketplace evolves toward recognized best practices
or standards for product testing and segregation, we anticipate that
these methods and systems will become the standards for implementing
the prohibition on use of excluded methods in production of nonorganic
ingredients in multiingredient products. Linking the requirements
pertaining to nonorganic ingredients in this proposal to the evolving
practices within the marketplace will provide certifying agents with a
verifiable criterion against which to evaluate production and handling
processes, as well as providing greater certainty to handlers and
processors as they seek to identify acceptable sources of nonorganic
ingredients.
As with other prohibited substances, a positive detection of a
product of excluded methods would trigger an investigation by the
certifying agent to determine if a violation of organic production or
handling standards occurred and would not necessarily represent a
violation on its own. The presence of a detectable residue alone does
not necessarily indicate use of a product of excluded methods that
would constitute a violation of the standards.
We anticipate that these issues will be of particular interest to
commenters on the proposal, and that comments may help to shed light on
industry capabilities and expectations. We recognize that this policy
will place additional burdens on certified operations and certifying
agents, but we believe that the necessity to meet strong consumer
expectations outweighs these concerns.
(2) Measurable Degradation Standard. We are proposing that any
practice implemented in accordance with the requirements for organic
production and handling must maintain or improve the soil and water
quality of the operation. This provision is a modification of the
requirement in the first proposal that the use or application of a
practice not result in measurable degradation of soil or water quality.
Some commenters stated that the concept of measurable degradation was
too limiting and reduced the holistic principles behind organic
production to an exercise in risk assessment. In introducing the
concept of measurable degradation, we stated that its purpose was to
``clarify that all methods and substances used in an organic operation
shall be consistent with a system of organic farming and handling and
the purposes of the OFPA.'' As such, measurable degradation and the
specific indicators of soil and water quality used to monitor it were
designed as tools to evaluate compliance with the OFPA and not as ends
in themselves.
The new provision requiring that an organic operation maintain or
improve its soil and water quality retains the linkage between
production and handling practices and the natural resources of the
operation, which is a fundamental tenet of both organic production and
the OFPA. We have introduced the ``maintain or improve'' provision to
allow for consideration of a variety of environmental indicators that
contribute to the overall performance of the operation. Both the
objective of certification--establishing an organic system of
production and handling--and the standard by which it is achieved--the
requirements in this proposal--remain constant for all operations. The
environmental indicators used to establish and monitor compliance with
an approved organic system plan will depend upon the site-specific
conditions of the individual operation. For example, a producer and
certifying agent would consider the soil types, hydrology, other
environmental conditions and the specific nature of the crops and
livestock being produced to
[[Page 13536]]
determine which indicators would best reflect the performance of the
organic system plan. Site-specific conditions--high water table, soils
that are prone to erosion--combined with the operation's production
practices--the use of persistent inputs such as copper or sulfur
compounds, the type of tillage practices used--will dictate the
selection of environmental indicators. While individual indicators,
especially when signaling that significant change has occurred, remain
important, the ``maintain or improve'' provision allows a producer or
handler and his or her certifying agent to assume a broader perspective
in monitoring compliance with the OFPA.
Many commenters objected to the requirement in the first proposal
that certain production practices ``not result in a measurable
degradation of the soil.'' The purpose of the ``measurable
degradation'' requirement was solely to provide producers and their
certifying agents with quantifiable, verifiable tools with which to
evaluate compliance with the applicable regulations. While the current
proposal does not refer to ``measurable degradation'' in the practice
standards, producers and handlers must identify and incorporate into
their organic system plans specific testing and evaluation techniques
to measure the environmental impact of their production practices. In
many cases, this requirement could be filled with a standard soil
analysis, which would indicate trends in soil organic content, nutrient
composition, and physical properties. In other cases, chemical or
biological analysis of stream water entering and leaving a crop or
livestock operation could suffice to monitor compliance with the
practice standards. There is no way to substantiate the effectiveness
of the practices and materials used in an organic production system
without some form of measurable verification. Analytical procedures to
monitor the condition, over time, of an operation's resource base are a
standard feature of efficient resource management, whether or not the
operation is organically managed.
(3) Function and Content Requirements of the Organic System Plan.
We propose significant changes in the function and content requirements
of the organic system plan to solidify its role in the relationship
between producer or handler and certifying agent. Public comment on the
first proposal identified numerous perceived deficiencies in the
provisions for an organic system plan. Some commenters, including
organic certifying agents and industry associations, stated that the
proposed content requirements were a ``shadow'' of the plan intended by
the OFPA because the regulatory text did not include the words,
``management,'' ``rotation,'' or ``manure.'' Some commenters
characterized the organic system plan in the first proposal as a simple
list of materials to be used and practices to be followed and thought
that it would not adequately address why the producer or handler made
specific production choices. Echoing the recommendation adopted by the
NOSB at its June 1994 meeting in Santa Fe, NM, other commenters
suggested that each organic system plan should be required to include
key elements of organic production, such as soil and crop management,
resource conservation, crop protection, and maintenance of organic
integrity through growing, harvesting, and postharvest operations. We
fully agree with the principle that a comprehensive organic system plan
is an integral component of a certified operation and that it provides
the foundation for the working relationship between the certifying
agent and the producer or handler. This proposal contains a standard
that defines and characterizes an organic system of production and
handling and establishes the organic system plan as the centerpiece of
the relationship between producer or handler and certifying agent.
Some commenters expressed concern that the first proposal did not
link the organic system plan to specific regulatory requirements such
as proper tillage, crop rotation, and manuring. The first proposal did,
however, require operations to document compliance with all applicable
standards. The obligation to document compliance with all applicable
standards was implicit in the requirement that an organic system plan
contain a description of the practices to be performed and maintained
to establish a system of organic farming and handling. A producer or
handler intending to engage in a practice must comply with the
corresponding standards and include his or her intentions for doing so
in the organic system plan. This proposal contains a similar provision,
found in Sec. 205.200(a)(1), which requires a description of the
practices and procedures used in the certified operation, again,
without stating the specific standards with which the operation must
comply.
We acknowledge that, by providing the regulatory guidance necessary
to implement the OFPA, the Secretary is further empowering accredited
certifying agents to determine whether an operation's organic system
plan meets the requirements of the statute. The provisions for an
organic system plan in Sec. 205.200(a)(1)-(6) outline the prerequisites
for certification. Combined with the production and handling standards
in Secs. 205.201 through 205.207, 205.236 through 205.239, and 205.270
through 205.272, these requirements provide the criteria necessary for
certifying agents to determine whether to grant certification.
For similar reasons, we propose not to include in this proposal a
list of the specific requirements to be included in a particular type
of organic system plan. For example, while the first proposal required
that a farm operation submit the total acreage under organic management
as part of its organic system plan, there is no similar requirement in
this proposal. We believe that accredited certifying agents are capable
of determining the specific documentation they require to review an
application for certification. Certifying agents are granted authority
to request the information they deem essential to the performance of
their duties. Many resources are available to certifying agents for
determining the information needed to make certification decisions. The
Federal-State Marketing Improvement Program of the Agricultural
Marketing Service (AMS) helped fund a project (#12-25-G-0202) which
created an organic inspection manual and developed a whole set of
organic certification form templates. Among these templates are
detailed forms for organic farm, livestock, and handling system plans.
AMS worked with the Independent Organic Inspectors Association and the
Organic Certifiers Council on this project and supports continued
movement toward standardized certification documentation. The NOSB
provided recommendations, including sample questionnaires, for the
information it deems necessary for inclusion in an organic system plan.
Additionally, the Organic Trade Association recently released the
American Organic Standards that drew upon broad industry involvement to
create a detailed description of organic system plan requirements.
The organic system plan in the first proposal included requirements
for split farming operations--meaning farms that engage in both organic
and nonorganic production--that some commenters stated were excessive.
These commenters pointed out that the OFPA does not provide for the
organic system plan to include any production or handling practice not
consistent with the OFPA, and that the practices on the nonorganic
portion of the split-farm
[[Page 13537]]
would not be consistent with the Act. Based on these comments, this
proposed organic production system plan will not require information
about a split-farm's nonorganic operations. However, this proposal
requires that a split operation, whether a production or a handling
operation, describe the measures it is taking or will take to prevent
commingling of organic and nonorganic product and to prevent contact of
organic products, fields, or facilities with prohibited substances.
(4) Regulatory Enforcement. The National Organic Program (NOP) will
require consistent and effective enforcement of the regulations across
diverse crop, wild crop, livestock, and handling operations which are
differentiated by site-specific conditions within dissimilar geographic
regions. The resources and objectives of each certified operation are
unique, and the OFPA, accordingly, provides certifying agents with
criteria, not formulas, to determine whether the practices, procedures,
and inputs described in an organic system plan constitute compliance
with the OFPA. The flexibility implicit in this approach allows
producers and handlers to choose from a variety of production and
handling options. In addition to being flexible, a regulatory mechanism
must be clear, consistent, and enforceable. For this reason, producers
and handlers must document the choices they make in an organic system
plan and demonstrate a good-faith effort to implement the plan. For
example, the decision to use an allowed synthetic pest control
substance must be based on evidence that prevention and nonsynthetic
pest control measures are not adequate.
Public comment indicated that the regulatory mechanisms that were
introduced in the first proposal, including orders of preference,
performance standards, and provision for allowance of certain practices
``if necessary,'' provided producers and handlers too much discretion
in selecting materials and practices. These comments indicated that
insufficient oversight by certifying agents could dilute the meaning of
organic certification. Therefore, we are proposing significant changes
in the regulatory mechanisms which govern producers, handlers, and
their certifying agents in determining the materials, practices, and
procedures used in an organic operation.
One regulatory mechanism used in the first proposal was an ``order
of preference'' scheme for selecting organic practices or materials
employed in production and handling. This scheme was proposed for a
number of areas: Crop rotation; manuring practices; soil fertility and
nutrient management; seeds and planting stock selection; crop pest,
weed, and disease prevention and management; livestock health care;
selection of handling ingredients; and prevention and facility pest
management. There was also a general order of preference requirement
that mandated the use of nonsynthetic substances in preference to
synthetic substances.
Comments from at least one industry association supported using
orders of preference to assure that choices made by producers and
handlers will be as consistent as possible with organic farming and
handling principles. Others, including several organic certifying
agents, felt that the conditions for choosing a lower order of
preference were not specified clearly enough and could result in
inconsistent enforcement of the standards. Some commenters thought that
certifying agents would be overly burdened by having to review and
approve the justification in the organic plan for choosing less
preferable practices, although some stated that if the criteria for
choosing a lower order of preference were clarified and documentation
of the reasoning behind the choice was explicitly required, then this
scheme would be workable. Some noted that ranking practices and inputs
according to their suitability is analogous to the ``approved,
restricted, prohibited'' scheme which many State and private
certification programs employ. A few commenters expressed the belief
that establishing provisions to issue variances would address their
concerns and provide for adequate oversight and enforcement concerning
practices, procedures, and inputs that are considered to be acceptable
but less desirable for organic production and handling.
However, several commenters, including consumers and organic
certifying agents, asserted that ``preference'' could be interpreted as
purely based on the personal choice or convenience of the producer or
handler. Some certifying agents indicated that the soil fertility order
of preference was too complex and difficult to enforce. A number of
consumers disliked this concept because it permitted some deviation
from the most desirable standards, such as use of organically produced
seeds. Another commenter speculated that this scheme could be
interpreted as establishing different levels of ``organicness.''
Although these interpretations do not reflect the intent of the first
proposal, in the interest of clarity, we have removed references to
orders of preference in the current regulatory text. We also removed
the general requirement for orders of preference and to simplify the
scheme so that it will be less burdensome for certifying agents to
enforce. Several provisions in this proposal, including the seeds and
planting stock practice standard (Sec. 205.204) and the crop pest,
weed, and disease management practice standard (Sec. 205.206) will
allow less desirable practices or substances to be used only if the
preferred alternative is either ineffective or not commercially
available. As was true of the first proposal, justification for
choosing a less desirable alternative, such as nonorganic seeds or
planting stock, must be documented in the relevant organic system plan
and approved by the certifying agent.
Several commenters, including industry and environmental
associations, also took issue with the use in the first proposal of
performance standards, which specify the required outcome but not the
practices that must be used to achieve it. The general provision that
any practice or substance used in an organic operation not contribute
to measurable degradation of soil or water quality is an example of
such a performance standard. Objections to the use of performance
standards referred to the nature of organic production standards, which
focus on the production process and not quantifiable outcomes such as
pesticide residue levels. Some of these commenters asserted that such a
mechanism would relegate organic standards to a risk assessment model,
which is not appropriate for evaluating a system of organic management.
We agree that standards for an organic management system cannot be
reduced to measurable outcomes, and this was not the intent of the
proposed performance standards in the first proposal. The evaluation of
measurable indicators as benchmarks of the proper functioning of a
management system is compatible with the overall requirement that
practices be implemented that are consistent with a system of organic
farming and handling. Such indicators help to determine whether a given
operation is in compliance with the regulations. For example, the crop
rotation provisions in this proposal list a series of functions,
including weed management, that should be provided by an appropriate
rotation. While the possible types of rotation that could achieve this
objective are virtually limitless and could not be specifically
prescribed, recording changes in weed populations could document the
[[Page 13538]]
effectiveness of the rotation being implemented.
Another type of regulatory provision employed in the first proposal
permitted the use of certain practices or substances only ``if
necessary.'' This was proposed for the introduction of nonorganic
animals into an organic operation, for using up to 20 percent
nonorganic livestock feed, for permitting restrictions on access by
livestock to space for movement and access to outdoors, and for use of
synthetic processing aids in producing an organic processed product. A
producer or handler was required to establish his or her need to use a
particular practice or substance based on site-specific circumstances.
The basis for each such decision was to be stated in the organic system
plan and evaluated by the certifying agent. Many commenters indicated
that this provision was not appropriate because, for example, the
allowance for the use of 20 percent nonorganic livestock feed, ``if
necessary,'' left a loophole that could permit an unscrupulous producer
to use nonorganic feed without a valid reason that was consistent with
the regulations. We concur that this allowance for practices ``if
necessary'' is overly vague and have removed the provision from this
proposal. It has been replaced by more specific regulatory
restrictions, referred to as practice standards, which better reflect
the recommendations of the NOSB.
We have addressed comments that requested more specific guidelines
for acceptable organic practices by introducing the concept of practice
standards. Practice standards are a series of specific guidelines,
requirements, and operating procedures for common agricultural
practices such as crop rotation, pest management, and crop nutrient
management. The NOSB reviewed portions of the current NRCS practice
standards for crop rotation, nutrient management, pest management,
composting facilities, and cover or green manure crops at its
Washington, DC, meeting in June 1999. NRCS practice standards, while
not public health standards, contain rigorous, field-tested provisions
which provide specific benchmarks for monitoring the performance of
many required organic production techniques. A practice standard can
also serve as the foundation for an even more detailed program manual.
For example, we are proposing that composted animal and plant waste
materials which are used for soil fertility and crop nutrient
management must be produced at a facility in compliance with the NRCS
practice standard for a Composting Facility (Code 317). This document
establishes minimum acceptable requirements for the design,
construction, and operation of a composting facility. A copy of this
practice standard may be obtained from any NRCS field office. A copy of
this practice standard may be viewed at USDA-AMS-TMD-NOP, Room 2510--
South Building; 1400 Independence Ave., SW, Washington, DC 20250-0248.
The NOP intends to publish additional practice standards for public
comment in the Federal Register. We are also holding discussions with
NRCS to determine whether farming operations which comply with the
certification requirements of the NOP will have the added benefit of
being able to participate simultaneously with NRCS cost-share programs.
Incorporating NRCS practice standards into the requirements for
organic certification introduces a significantly greater degree of
specificity than most organic standards have previously contained. For
example, the Composting Facility practice standard includes
specifications for facility size, moisture content of the compost pile,
carbon-nitrogen ratio, and the interval which certain temperatures must
be sustained to achieve a finished product. The practice standard also
contains restrictions on source materials which may make it difficult
to utilize certain categories of materials which have traditionally
been allowed in organic compost production. Enforcing these additional
requirements will require far greater oversight from the certifying
agent, and expertise in this area will become another factor in
accreditation. NRCS uses its practice standards for voluntary cost-
share programs, and organic producers may find the requirements
burdensome as an added, mandatory expense. Despite the many comments we
received criticizing the provisions for performance standards in the
first proposal, organic certification schemes have traditionally
prescribed outcomes and allowed producers and handlers flexibility in
selecting practices used to achieve them. However, we received many
other comments stating that more rigorous, clearly defined regulatory
mechanisms were needed to protect the integrity of organic
certification. We have considered the use of NRCS practice standards to
provide clear, consistent, and verifiable guidelines for conducting
essential organic production practices. We are particularly interested
in receiving specific comment on the feasibility of using NRCS practice
standards for compost production and how such practice standards may
generally be used to establish organic standards.
(5) Temporary Variances. Section 205.201(b) of this proposal
provides procedures for establishing a temporary variance from certain
requirements of subpart C. The temporary variance is a mechanism for
providing regulatory flexibility that did not appear in the first
proposal. This mechanism is proposed in response to comments from an
industry association and several certifying agents who expressed the
need, in certain circumstances, to use practices that would otherwise
not comply with the applicable practice standard. Similar mechanisms
are used by most existing certifying agents to make exceptions in cases
of compelling need, when there is minimal concern for compromising the
integrity of an organic system. Temporary variances are established
from specific requirements and not, unless specified, from all
production standards. They are established for a determined period of
time, subject to extension as deemed necessary by the Administrator.
For example, the Administrator could, under appropriate circumstances,
waive the requirement that a producer must provide livestock with a
ration composed of 100 percent organically produced feed.
Temporary variances are created under very specific circumstances
and are subject to strong oversight by the Department to prevent
potential abuse. This proposal contains three situations in which the
Administrator could establish a temporary variance. These situations
are: natural disasters as declared by the Secretary in a specific
geographical area; business interruption caused by wind, flood, fire,
or other catastrophic event; or for the purpose of conducting research
or trials of techniques, varieties, or ingredients used in organic
production or handling. In the case of natural disaster declared by the
Secretary, the Administrator will establish a temporary variance
available to all organic operations within the area designated as
affected. For local catastrophic events in which the Secretary does not
declare a disaster, the certifying agent is responsible for making
recommendations to the Administrator for establishing temporary
variances. Catastrophic events must be of a sufficient magnitude and
have a direct, immediate impact such that the operation could not
continue to function without the temporary variance. Certifying agents
are responsible for making a recommendation for a temporary variance in
situations prompted by
[[Page 13539]]
research needs. Producers and handlers cannot appeal directly to the
Administrator for a temporary variance but must make such a request
through their certifying agent.
Temporary variances, as proposed here, will not extend to any
practice or substance that is expressly prohibited by any provision of
the OFPA, the applicable standards, these regulations, or any other
Federal, State, or local laws or regulations. For example, a variance
cannot be granted for use of an organism produced through excluded
methods, for use of sewage sludge as a fertilizer, or for use of
irradiation to process an organic product or ingredient. We expect to
provide additional guidelines in a program manual to assist certifying
agents in evaluating how much of an allowance is appropriate, such as
how much of the ration for which animals could come from nonorganic
sources under a variance.
Production and Handling (General)--Changes Requested But Not Made
This subpart retains from our first proposal regulations on which
we received comments as follows:
(1) Definition of ``System of Organic Farming and Handling''. The
first proposal contained a definition of a ``system of organic farming
and handling'' to provide an explicit reference point for determining
which practices and substances were consistent with such a system.
Several industry associations and certifying agents commented that the
definition was helpful but lacking in key concepts, such as
``ecological balance,'' ``agroecosystem health,'' and ``biological
diversity.'' Several thought the definition should receive greater
emphasis in the regulations as a reference point for the underlying
principles of organic production and handling and that the NOSB's
definition should be used. Although we considered many of the concepts
discussed by commenters, only the scope and not the meaning of the
original definition has been changed. The definition in this proposal
is based on the one we developed in consultation with the NOSB but is
limited to concepts that are incorporated into the OFPA. Measuring
compliance with the component-based mandates of the OFPA, such as
fostering soil fertility and preventing water contamination by manure,
does not require criteria as far-reaching as ``agroecosystem health''
or ``biological diversity.'' We also took into consideration the costs
to comply with such open-ended requirements and determined that this
could be excessively burdensome. Synergistic benefits may be associated
with organic production and handling systems, but the OFPA requires
only that individual components of the system--soil, water, wild crop
environment--be protected. Adherence to the conservation practices
found in the individual practice standards will result in cumulative
benefits to the agroecosystem, but producers and handlers would have
difficulty measuring compliance at this scale. Establishing standards
that address individual components of an organic farming system, such
as tillage practices and manure management, will directly and
beneficially impact the entire ecosystem. For the purpose of
enforcement, however, we propose retaining the component-based criteria
for evaluating a system of organic farming and handling.
(2) Commercial Availability Standard. The first proposal allowed
certain materials and practices, such as nonorganic seeds and
nonorganic minor ingredients in a product labeled organic, to be chosen
if preferable alternatives were not ``commercially available.'' We have
retained the commercial availability principle in this proposal but
have limited its use to the provisions addressing the selection of
organic or untreated seeds and planting stock. A number of producers,
consumers, and certifying agents expressed concern that producers or
handlers not be permitted to base claims of commercial unavailability
on any price difference between organic and nonorganic inputs. They
argued that the term, ``feasibly and economically,'' in the proposed
definition of ``commercially available'' were too vague to be
enforceable. Comments from an industry association supported the use of
this concept but requested a more specific definition that could be
used to assess the economic dimension of commercial availability. The
NOSB has also cited commercial availability as a valid criterion for
allowing some flexibility in the choice of inputs and stated that the
term is applicable to the quantity and quality of available product as
well as its cost.
Although commercial availability is not defined in the OFPA, the
concept is well established within current certification programs and
the commercial world in general. To be considered commercially
available, a preferred input must be known and readily available in the
sense that a producer or handler can locate and acquire the quantity
and quality of product needed to sustain his or her operation. The
producer or handler must make a good faith effort to procure the
preferred input but should not be expected to rely on an inconsistent
supply of a necessary commodity. We do not provide a formula for
determining when price difference alone is enough to justify purchase
of the less desirable input because of the multiple factors which could
affect such a decision.
By limiting the application of the commercial availability standard
to the selection of organic or untreated seeds and planting stock, we
are limiting its use to relatively narrow and well defined markets. A
producer must justify a choice based on commercial availability when
submitting an organic plan to the certifying agent, and it must be
supported by evidence of a good-faith effort to obtain the preferred
input. The attempt to source an input from known suppliers and an
investigation to discover potential new suppliers constitute the
producer's good-faith effort. Certifying agent approval of the organic
plan provides sufficient protection against abuse of this provision.
Although comments reflected concern that too many allowances for
nonorganic inputs could dilute the integrity of certification, the
organic industry has built its reputation while using the commercial
availability exemption for sourcing certain materials. Certifying agent
oversight can ensure that it works in the NOP as well.
Production and Handling (General)--Additional Provisions
Upon further review of the provisions in the first proposal, we
have decided to propose the following additions and changes.
(1) Dual Use of an Organic System Plan. Section 205.201(b) allows a
producer or handler to submit an organic production system plan
developed to meet the requirements of another Federal, State, or local
regulatory program if the plan fulfills the applicable requirements of
this section. Government agencies may have programs in place that
require participating agricultural producers or handlers to develop and
follow a management plan. For example, the NRCS Environmental Quality
Incentives Program (EQIP) requires a conservation plan. An organic
production system plan could be incorporated into such a conservation
plan and fully comply with the requirements proposed in Sec. 205.201 of
this proposal. This new provision could reduce the paperwork burden for
an operation that participates in more than one program requiring a
farm conservation plan.
[[Page 13540]]
Crop Production--Changes Based on Comments
This subpart differs from our first proposal in several respects as
follows:
(1) Biosolids. The first proposal requested public comment on the
possible use of biosolids as a means of enhancing soil fertility on an
organic agricultural operation. Our interpretation of the term,
``biosolids,'' is synonymous with the definition of sewage sludge
contained in 40 CFR part 503. In response to the comments we received,
this proposal adds biosolids to the list in Sec. 205.203(e)(2) of
substances that are specifically prohibited for use in organic
production.
The first proposal reviewed some historical information about the
Federal enforcement of biosolids use and the steps taken by EPA, FDA,
and the U.S. Department of Agriculture (USDA) to ensure that biosolids
are safe to use on crops for human consumption. Comments were solicited
as to whether biosolids should be permitted or prohibited in organic
production. The first proposal noted that the NOSB recommended that
biosolids should be classified as synthetic and were not appropriate
for use in organic crop production. The NOSB took this position at its
1996 meeting in Indianapolis, IN, and reaffirmed it at its 1998 meeting
in Ontario, CA.
We received hundreds of thousands of comments, virtually all of
which strongly opposed the use of biosolids in organic agriculture. The
vast majority of the commenters stated that biosolids can contain
synthetic substances prohibited in organic agriculture, such as
industrial waste, street runoff containing petroleum products, and
household waste contaminated with cleaning products, polychlorinated
biphenyls (PCB's) and dioxins. Commenters indicated that sewage sludge
should not be allowable because it may contain synthetic materials
prohibited in organic production which are not restricted under EPA
regulations. Many commenters stated that biosolids are not currently
allowed in organic production and that permitting their use would run
contrary to consumer expectations. Such an allowance would place
producers at a competitive disadvantage in domestic and international
markets. While sewage sludge may be safely used in conventional
agriculture, allowing its use under these standards would be
inconsistent with the historical understanding of organic fertility
management shared by producers and consumers. Therefore, this proposal
prohibits the use of sewage sludge in organic production.
(2) Tillage and Conservation Practices. While no comments objected
to the inclusion of tillage and cultivation practices in the first
proposal, a few took issue with the requirement that these practices
result in ``no measurable degradation'' of soil quality. In this
proposal, the concept of `` no measurable degradation'' has been
replaced with the requirement to ``maintain or improve'' soil quality.
We agree with commenters who suggest that prevention of soil erosion is
an important consideration for the selection of tillage and cultivation
methods and have included a requirement that tillage and cultivation
practices maintain or improve the physical, chemical, and biological
condition of soil and minimize soil erosion. We have removed other
references to preventing measurable degradation when using plant or
animal wastes in the first proposal and replaced them with a
requirement, in Sec. 205.203(c), that the producer manage these
materials to maintain or improve soil organic matter content in a
manner that does not contribute to contamination of crops, soil, or
water by plant nutrients, pathogenic organisms, heavy metals, or
residues of prohibited substances. In accordance with several comments
received, this provision frames the requirement in terms of achieving a
positive outcome rather than avoiding a negative one. This proposal
specifies the types of measurable degradation that could result from
improper or excessive application of plant or animal waste materials,
and producers, in consultation with the certifying agent, will identify
potential problems and address them in the organic system plan. The
organic system plan must also identify appropriate monitoring
activities to ensure that the ``maintain or improve'' requirement is
being met. For example, a producer who manages an on-farm composting
facility might make regular observations of the pile to check for
leaking and periodically sample a nearby stream for nitrate content.
(3) Application of Raw Manure. The first proposal requested public
comment on appropriate guidelines to ensure that use of raw animal
manure would not cause contamination of food products by pathogens that
cause foodborne illness. The OFPA restricts the use of raw manure by
requiring that a reasonable period of time elapse between its
application to a crop intended for human consumption and the harvest of
that crop. This period of time must be approved by the certifying
agent, but in no event may it be less than 60 days. The OFPA stipulates
that the certifying agent determine the interval between the last
application of raw manure and harvest of the crop to ensure the safety
of the crop. Furthermore, the OFPA prohibits raw manure from being
applied to any crop in a way that significantly contributes to water
contamination by nitrates or bacteria. The first proposal contained an
order of preference which favored the use of composted materials,
including manure, as inputs for soil fertility but allowed raw manure
applications subject to the 60-day minimum preharvest interval
contained in the OFPA.
Many public comments addressed the issue of raw manure use, and
some industry, producer, consumer, and environmental groups submitted
substantial technical information. Many of these commenters addressed
the human health risk associated with the use of manure in organic crop
production. Most of these comments suggested that a determination of
sufficient time to ensure the safety of a crop depends on soil and
climate conditions, but that the 60-day period specified in the OFPA
was not sufficient. Some commenters cited various amounts of time that
might be considered safe. Other commenters stated that no interval
between application and harvest could be considered safe and
recommended prohibiting the application of raw manure to any crop. The
NOSB had extensive deliberations on the use of raw manure in organic
crop production at its June 1999 meeting in Washington, DC.
The OFPA's requirement that raw manure be applied in a manner that
ensures the safety of the crop presents a unique regulatory challenge.
We have consistently maintained that the NOP is for marketing, not food
safety, purposes. Organic production and handling standards, which are
not based on risk assessment of public health consequences, may differ
from the requirements established by agencies that are responsible for
food safety regulations. The OFPA's requirement that the application of
raw manure ensures the safety of the food to which it has been applied
requires the NOP to move toward establishing a public health standard.
This requirement is especially challenging given that there is no
Federal oversight of the application of raw manure to any kind of crop
nor any public health standards to establish what constitutes safe use
of raw manure. Applications of raw manure are a hazardous, threatening
[[Page 13541]]
pathogenic contamination of food products, notwithstanding the use of
composted manure, which can carry similar hazards.
We have responded to the concerns regarding the application of raw
manure to organically produced crops by proposing the standards
contained in Sec. 205.203(c)(1). We propose that raw animal manure must
be composted, unless it is applied to land used for a crop not intended
for human consumption, incorporated into the soil not less than 120
days prior to the harvest of a product in direct contact with the soil
surface or particles, or incorporated into the soil not less than 90
days prior to the harvest of a product the edible portion of which does
not have contact with the soil surface or particles. However, many
site-specific variables affect the viability of pathogens in raw
manure, and we cannot determine whether this standard will be
sufficient under all conditions to fulfill the safe food requirement
contained in the OFPA. We are requesting comment on the development of
more comprehensive standards that certifying agents are capable of
enforcing. We are also requesting comment on how to regulate the
authority to determine the ``reasonable period of time'' between the
last application of raw manure and harvest of a crop which the OFPA
delegates to the certifying agent. Given the need for far greater
scientific understanding of the spread of pathogens in raw manure, we
do not consider that certifying agents should be expected to make the
determination of safety.
Several comments were received which suggest that any use of raw
animal manure could jeopardize human health and that the use of raw
animal manure by organic farmers thereby increases the risk that
organic foods may not be as safe as conventionally produced foods. We
recognize that our knowledge of the risks from foodborne pathogens has
advanced since the OFPA was passed a decade ago, and that safety
precautions have been strengthened accordingly. Therefore, we are
seeking further guidance for developing regulations that minimize the
potential for contamination of crops grown for human consumption by
pathogens from raw animal manure. This approach is consistent with the
traditional organic certification procedures which have restricted the
use of raw manure for environmental as well as health concerns. Other
Federal and State regulatory programs may impose additional
requirements on the use of raw manure in crop production which could be
applicable to organic operations.
The first proposal required that management practices for the
application and storage of raw manure be implemented in a manner that
does not significantly contribute to contamination of water by nitrates
and bacteria, including human pathogens. The use of the word,
``significantly,'' in this provision is a direct reference to the
authorizing language in the OFPA (Section 2114(b)(2) (C)). However,
commenters suggested that this language implies that ``insignificant''
contamination would be acceptable. This proposal requires that soil
management practices aim at preventing, to the extent possible, any
contamination of water by nitrates and pathogenic bacteria.
(4) Use of Treated Seed. The first proposal permitted the use of
treated seeds if the same variety was not commercially available in
untreated form or if unanticipated or emergency circumstances made it
infeasible to obtain untreated seeds. In this context, ``treated seed''
refers to the application of a pesticide to a seed prior to planting
and does not include the use of a disinfection treatment for a seed
that is intended for sprouting and food use. A number of comments from
producer and industry groups suggested that this was appropriate but
that a producer should have to choose an ``equivalent'' untreated seed
variety that was commercially available. The term, ``equivalent,''
indicates that two seed varieties have similar performance attributes,
such as resistance to drought and insects, and production traits,
including yield, size, and shape of the commodity. We agree with this
provision because it favors a nonsynthetic input over a synthetic one
and have, therefore, included it in this proposal. We are also
requiring that, when selecting a nonorganically produced seed, a
producer select an untreated equivalent variety in preference to one
which has been treated with an allowed synthetic treatment.
Some comments objected to any allowance for the use of treated
seeds or planting stock, citing the prohibition in 2109(c)(3) of the
OFPA (7 U.S.C. 6508(c)(3)) on the use of transplants that are treated
with any synthetic or prohibited material. We recognize that the use of
synthetic seed treatments, some of which are acutely toxic, may seem
inconsistent with a system of organic production and handling, but it
is an established practice in State and private certification programs
and is supported by provisions of the OFPA. We believe that retention
of the commercial availability requirement, a preference for untreated,
nonorganically produced seed over treated, nonorganically produced
seed, and the use of temporary variances in this proposal provide an
appropriate context for regulating the use of synthetic seed
treatments.
The requirement from the first proposal that all seeds, annual
seedlings, and planting stock be organically produced is retained in
this proposal. Similarly, this proposal contains a comparable exception
to the requirement so that nonorganically produced seeds and planting
stock could be used to produce an organic crop when an equivalent
organically produced variety is not commercially available. A
producer's decision to use nonorganically produced seeds and planting
stock for reasons of commercial nonavailability of equivalent organic
varieties must be included in his or her organic plan and agreed to by
the certifying agent. We decided to retain these provisions from the
first proposal after receiving comments from producer and industry
groups that acknowledged that the supplies of organic farm inputs will
not be sufficient to provide for the seed and planting stock needs of
all organic operations in the near future. We have added the
requirement that producers select equivalent untreated seed over
treated seed when commercial availability allows them to use a
nonorganically produced variety. We recognize that these provisions
could lead to certifying agents facing numerous decisions regarding
commercial availability and equivalency in the organic system plans
they review. This degree of oversight is warranted, however, to ensure
that the use of synthetic materials in organic production is kept to a
minimum. We are not extending the commercial availability exception to
the requirement for organically produced annual seedlings because the
comments indicated that the organic input suppliers are effectively
meeting this demand.
In contrast to the first proposal, we propose that any synthetic
seed treatment used in organic production must be included on the
National List of synthetic substances allowed for use in organic
production. We base this requirement on the OFPA, which identifies
``treated seed'' as a category of synthetic substances eligible for
inclusion on the National List. We believe that including specific seed
treatments on the National List will satisfy the requirement in the
OFPA that a farmer shall not apply a material to or
[[Page 13542]]
engage in a practice on seeds or seedlings that is contrary to or
inconsistent with the applicable certification program. The approach we
are proposing is also consistent with current practice in the organic
industry. The NOSB endorsed this approach at its 1994 meeting in Santa
Fe, NM, by recommending that seed treated with synthetic fungicides
appearing on the National List be allowed when nontreated varieties are
commercially unavailable.
We propose that producers or handlers may request a temporary
variance due to unavoidable natural disaster in order to use
nonorganically produced annual seedlings. The temporary variance will
be appropriate in instances in which an unexpected event such as a
frost, flooding, fire, or other catastrophic event destroyed the
producer's nontreated planting materials and no organically produced
replacements are commercially available. This provision cannot be used
to compensate for mismanagement by the producer. For example, a
producer who planted seedlings prior to the recognized frost date and
lost his or her crop to a freeze could not claim that this disaster was
unavoidable. This provision requires that the producer make all
reasonable efforts to protect his or her seeds, annual seedlings, and
planting stock before being allowed to substitute with treated
replacements.
Some commenters cited the prohibition in section 2109(c)(3) of the
OFPA against using transplants that are treated with any synthetic or
prohibited material as justification for prohibiting the use of
synthetic seed treatments. However, the statute permits the use of
seeds and seedlings treated with substances included on the National
List of allowed synthetic substances. The seemingly inconsistent
requirements for seedlings and transplants, functionally equivalent
terms, have made this a difficult issue to resolve. The first proposal
attempted to reconcile these differences by defining transplant as an
annual seedling produced on an organic farm and transplanted to a field
on the same farm operation to raise an organically produced crop. Many
commenters felt that distinguishing between annual seedlings which
originated on and off the operation was not a valid approach. We
concur, and have removed this definition, and interpret the term,''
transplant,'' as applying to any seedling which is transported and
replanted, regardless of whether it originated on the operation or not.
We interpret the prohibition on using a transplant treated with any
synthetic or prohibited material as taking effect after the seedling
has been physically transplanted. Therefore, the prohibition only
applies to materials applied after transplanting and not to the
synthetic treatment included on the National List, which may have been
applied to the seed that produced the seedling.
The application of disinfectants to seeds used for sprouting
represents a unique dimension of the seed treatment issue. Raw sprouts
pose a potential food safety risk because the conditions under which
they are produced--growing time, temperature, water activity, pH and
nutrient content--can foster the rapid growth of bacteria. In 1999, FDA
issued guidance advising sprout producers and seed suppliers of
measures to reduce microbial hazards common to sprout production. These
measures include treating seeds with one or more approved methods such
as presprout soaking with 20,000 ppm calcium hypochlorite. Based on the
recommendation of the NOSB, the Secretary has included on the National
List in this proposal three chlorine materials to disinfect and
sanitize food contact surfaces. However, these materials carry the
annotation that residual chlorine levels in water shall not exceed the
maximum residual disinfectant limit under the Safe Drinking Water Act,
which is well below the 20,000 ppm level that FDA currently advises
sprout producers to follow.
Existing State and private certification programs have diverged in
their response to the FDA guidance on chlorine treatments. While
treating food products with high concentrations of chlorine has
traditionally been prohibited, some certifying agents currently allow
sprout treatment at the 20,000 ppm level. Producers of organic sprouts
are finding it increasingly difficult to balance the FDA guidance, the
expectations of consumers, and the requirements of their certifying
agents. This proposal contains no specific guidance on the use of
chlorine treatments on seeds used in sprout production. As synthetic
compounds, chlorine materials would have to be added to the National
List at specified concentrations to be used for disinfecting sprouts.
Without a specific National List exemption, operations that treat
sprouts at the level established in the FDA guidance could not be
organically managed.
(5) Crop Rotation. The OFPA requires an organic crop production
plan to foster soil fertility through practices that include a crop
rotation. The first proposal required the establishment of a crop
rotation or other ``means'' of ensuring soil fertility and effective
pest management but did not provide explicit restrictions concerning
situations in which those means could be substituted. Producers and
producer groups sent many comments stressing the importance of a proper
crop rotation for successful organic crop production and objecting to
the vague allowance for other methods to be used in its place. Although
we have not changed the definition of crop rotation from the first
proposal, the new practice standard eliminates the possibility that an
organic producer will substitute some other practice for a crop
rotation. This proposal does, however, allow for variances from an
approved crop rotation plan due to natural disasters, including
weather.
A few commenters made the point that, although the OFPA includes a
provision for a crop rotation as a means of improving soil fertility, a
crop rotation serves other critical functions as well. We reviewed the
NRCS practice standard for crop rotation (Code 328) which addresses
many of the concerns raised in public comment. Accordingly,
Sec. 205.205 of this proposal requires the producer to implement a crop
rotation, including, but not limited to, cover crops, sod, green manure
crops, alley crops, and catch crops. These techniques serve the
following functions as applicable to the operation: maintain or improve
soil organic matter content; provide for effective pest management in
annual and perennial crops; manage deficient or excess plant nutrients;
provide erosion control to minimize soil loss; and manage subsurface
water to prevent transport of dissolved materials.
A few comments suggested requiring that rotation plans include sod
or legumes, which serve to improve soil organic matter content and
increase soil nitrogen supplies to meet the demands of a following
crop. However, all of these functions could be fulfilled through many
different types of rotation plans, which could only be developed
according to the site-specific climate, soil type, and type of crops or
livestock produced on a given operation. In the interest of
flexibility, therefore, this proposal does not specify what crops have
to be included in a crop rotation. An organic plan that meets the
criteria specified in this proposal must be developed by a producer and
approved by the certifying agent.
Proposed Sec. 205.205(b) specifically applies to perennial crops.
Under this provision, an orchard plan might include establishment of
hedgerow areas that provide habitat for beneficial insects to assist in
effective pest management. This provision was added
[[Page 13543]]
in response to comments stating that an organic farm plan should
address the functions provided by crop rotations even in the case of
perennial crops such as orchards and sod. We expect to develop program
manuals containing more detailed information on different types of
rotations, including methods to fulfill the prescribed functions for
perennial crops, that are suitable to a wide range of types of
operations and geographic conditions.
(6) Prohibition on Cytotoxic Pest Control Substances. In response
to several comments, we have deleted the provision in the first
proposal to prohibit use of a synthetic carbon-based substance having a
cytotoxic mode of action for any use as a pest control substance. Some
commenters interpreted this provision to mean that this single
criterion would substitute for those specified in the OFPA for
evaluating substances proposed for inclusion on the National List.
Other commenters, including industry groups, objected to this provision
because it has not previously been part of certification standards and
its meaning was too ambiguous. Some substances that have historically
been accepted for organic production could have cytotoxic effects when
used in inappropriate concentrations. Although this provision added to
and did not replace the evaluation criteria contained in the OFPA and
eliminated the need for the NOSB to review clearly inappropriate
substances, it has been removed from this proposal in the interest of
clarity.
Crop Production--Changes Requested But Not Made
This subpart retains from our first proposal regulations on which
we received comments as follows:
(1) Buffer Zones. Section 205.202(a)(3) of this proposal requires
that any land on which organic crops are produced have distinct,
defined boundaries and buffer zones, such as runoff diversions, to
prevent the unintended exposure of the crop to prohibited substances
from adjoining land. Several commenters suggested that the regulations
should specify a minimum size for buffer zones, as is currently
required by some organic certifying agents. Although specifying a size
for these zones would establish a more definable requirement, it could
also impose unnecessary burdens on some organic producers without
offering greater protection of organic fields and crops from unintended
contact with prohibited substances. Another commenter argued that
buffer zones should not be required for unmanaged lands such as
wilderness areas or abandoned farms. There might be no need for a
buffer zone if an organic farm were completely surrounded by wilderness
or abandoned farms, which is one reason why a the size of a buffer zone
should not be specified. This proposal leaves the determination of an
adequate buffer zone to the organic producer and the certifying agent
on a case-by-case basis. Buffer zone provisions are an important part
of each organic production system plan, and we will provide guidelines
for buffer zones in program manuals.
(2) Nonorganic Plant and Animal Waste Materials. The first proposal
permitted the use of any uncomposted plant or animal wastes. It also
allowed use of composted plant or animal wastes obtained from
nonorganic sources, such as commercial compost products. Several
consumer and environmental groups objected to permitting the use of
plant or animal wastes from nonorganic sources. Such materials, they
argued, could potentially contain residues of prohibited substances
that could compromise the integrity of the organic farm system.
However, off-farm plant and animal wastes from food processing,
municipal yard waste facilities, and other sources are used extensively
in existing organic operations and are generally permitted by organic
certification programs. Bone meal, fish meal, and seaweed meal are also
commonly used as organic farm inputs. Commercial fertilizer products
that contain mixtures of such plant and animal by-products are commonly
permitted for use in existing organic certification programs, subject
to certifying agent review. Using such organic wastes is consistent
with a system of organic production and handling, which calls for
recycling organic wastes to return nutrients to the land. We believe
that concerns about potential contaminants in plant and animal waste
materials can be addressed by the requirement in this proposal that
these materials be managed in a manner that prevents such
contamination. For example, cotton gin trash that had been treated with
a prohibited substance could only be used if the organic system plan
specified composting the material before adding it to the soil.
Composting has been shown to effectively biodegrade synthetic organic
compounds, and the organic system plan could also call for the compost
or soil to be monitored regularly for specific residues.
Finally, the first proposal and this proposal prohibit the use of
any commercially blended fertilizer product that contains a prohibited
substance, as required by the OFPA. Although a number of commenters
worried that a product containing toxic synthetic substances as inert
ingredients could be used for organic production, this prohibition
prevents such products from being used. For this reason, the use of any
composted or uncomposted plant or animal wastes to supply soil or crop
nutrient is permitted without further limitation other than preventing
contamination of soil or water by pathogenic organisms, heavy metals,
or residues of prohibited substances. The certifying agent will be
expected to have the expertise to recognize materials that might be of
concern and ensure that they are properly addressed in the organic
system plan. We expect to provide additional guidelines in program
manuals to help evaluate whether animal manure is fully decomposed, as
well as guidelines for other types of materials to address potential
soil or water quality concerns. We acknowledge the need to examine
carefully commercial blended fertilizers and soil amendments to ensure
that such products do not contain prohibited substances.
(3) Chemically Altered Plant or Animal Waste Materials. The first
proposal allowed the use of a composted or uncomposted plant or animal
waste material that had been chemically altered by a manufacturing
process--such as leather meal, newspaper, and biosolids--if the
material was included on the National List of allowed synthetics. Only
newspaper was proposed for inclusion on the National List. A few
commenters objected to this allowance, although newspaper is commonly
permitted as a mulch material or as an ingredient in compost in
existing organic certification programs and was recommended for this
use by the NOSB. The National List review process offers an adequate
safeguard to ensure that other waste materials that may be permitted in
the future will be consistent with a system of organic production and
handling, and we propose to retain this provision in Sec. 205.203(c)(5)
of this proposal.
(4) Soil and Crop Mineral Nutrients. This proposal includes
provisions for supplying soil and crop mineral nutrients that are
similar to those in the first proposal. While use of a proper crop
rotation and recycled plant and animal wastes can often provide all the
mineral nutrients required by crops, supplemental sources of these
nutrients are sometimes needed. Section 205.203(d) of this proposal
permits a producer to supply soil and crop nutrients through use of
mined minerals and other nonsynthetic sources. Synthetic micronutrients
are also allowed if they are included on the
[[Page 13544]]
National List. Ash from plant or animal materials can be used, as long
as the burned material was not treated or combined with a prohibited
substance and was not included on the National List of prohibited
nonsynthetic substances. For example, ashes from treated wood or
incinerator ash are not permitted, nor is ash from manure, which is on
the National List of prohibited nonsynthetics. The prohibition of
burning crop residues on the farm in the first proposal has been
retained, but an exception for burning trimmings of perennial crops to
control diseases has been added in response to an NOSB recommendation.
Commenters raised no objection to the proposed allowance for
mineral substances of low solubility, including lime, greensand
(glauconite), and rock phosphate, which have traditionally been
permitted in organic certification programs. However, numerous
producers and certifying agents expressed concern about the allowance
for use of mined mineral substances of high solubility or salinity.
These include substances such as sodium (Chilean) nitrate or potassium
nitrate (niter), potassium chloride (muriate of potash), langbeinite
(sulfate of potash magnesia), and potassium sulfate. Because of their
potential to degrade soil quality by contributing to soil salinization,
these substances, along with the synthetic micronutrients that are on
the National List of allowed synthetics, were allowed only when used in
cases of known nutrient deficiency. Many commenters objected to the use
of sodium nitrate and potassium nitrate in organic production, and some
contested the determination that nonsynthetic, mined sources of
potassium nitrate are available. Some also objected to allowing
potassium chloride, which has traditionally been prohibited in most
organic certification programs. Several commenters argued that no
highly soluble source of nitrogen, synthetic or not, should be
permitted for application to soil in an organic management system. They
indicated that these materials are not permitted in international
organic standards, and approval could potentially harm exports of
organic products. The NOSB reviewed Chilean nitrate in 1995 and
recommended certain restrictions on the use of this material, which is
allowed with restrictions in some existing organic certification
programs and prohibited in others. In accordance with the NOSB's
recommendation, this proposal permits these materials to be used
according to justifications in the organic system plan. More detailed
guidance will be provided in program manuals on the appropriate
justifications for the use of highly soluble nutrient sources,
including plans for discontinuing their use. Soil or tissue testing
will be an important aspect of justifying the need for any such
supplementation. Producers concerned about requirements for export
markets can request certification to the standards required by
individual contracts.
(5) Nonorganically Produced Planting Stock. The first proposal
allowed nonorganically produced planting stock used to produce a
perennial crop to be sold, labeled, or represented as organically
produced after the planting stock had been managed on an organic
operation for a period of no less than 1 crop year. This provision is
authorized by section 2107(a)(11) of the OFPA (7 U.S.C. 6506(a)(11)).
Some commenters thought this provision provided a loophole for
indiscriminate use of treated planting stock on an organic operation.
They argued that a producer could purchase treated nursery stock and
list it as organic planting stock in the organic plan after only 1
year. However, producer and industry groups supported this provision as
an important stimulus to the organic input suppliers, since it allows a
nursery operation to purchase planting stock from a nonorganic
operation and later resell this stock as organically produced. The
first proposal described an organic nursery operation which could
purchase nonorganic dwarf apple rootstock and graft it with locally
adapted varieties and then sell the resulting planting stock as
organically produced after raising it organically for at least 1 year.
We agree that the potential benefits of this provision outweigh its
possible abuses, and Sec. 205.204(d) of this proposal permits
nonorganically produced planting stock to be used as planting stock to
produce a perennial crop to be sold, labeled, or represented as
organically produced after the planting stock has been under a system
of organic management for no less than 1 crop year.
(6) Pest, Weed, and Disease Control Practice Standard. The OFPA
sets forth practices such as the use of natural poisons that persist in
the environment or plastic mulches that are prohibited or restricted in
the control of pests, weeds, and diseases in organic crops. It also
lists the following categories of active synthetic pest, weed, and
disease control substances that may be considered for exemption if they
are included on the National List: Copper and sulfur compounds; toxins
derived from bacteria; pheromones; soaps; horticultural oils; fish
emulsions; treated seed; vitamins and minerals; livestock parasiticides
and medications, and production aids, including netting, tree wraps and
seals, insect traps, sticky barriers, row covers, and equipment
cleansers. Section 205.206 of this proposal contains the practice
standard to implement the provisions of the OFPA for synthetic pest
control substances.
We have made a minor modification by eliminating one element of the
order of preference which commenters considered too difficult to
enforce. There is no distinction made in this proposal between pest
prevention and control practices in terms of preferability. However, a
provision in the first proposal that permitted application of a
botanical or allowed synthetic pest control substance only if
previously delineated methods were ineffective has been retained. This
provision is supported by public comments from producers, certifying
agents, and many consumers who emphasized that such substances, while
sometimes necessary, should only be permitted as a last resort. This
provision requires a producer to document the need for copper and
sulfur fungicides, dormant oils, or similar materials in their organic
system plan.
(7) Wild-crop Harvesting. We received few comments on the provision
in the first proposal concerning wild-crop harvesting, and, therefore,
this proposal retains similar requirements. Changing the term for the
location from which wild crops may be harvested from ``land'' to
``area'' is the only substantive difference between the first proposal
and this one. We made this change to be consistent with the language in
the OFPA. One commenter stated that maps should be required as part of
the certification process. A certifying agent could reasonably require
such maps to assist in evaluating the organic system plan, but we have
not made their inclusion a requirement.
The provisions of this section apply only to the management of wild
crops. The OFPA includes ``fish used for food, wild or domesticated
game, or other nonplant life'' in the definition of livestock, and we
are considering additional standards for animals and animal products
harvested from the wild. We received substantial public comment on the
opportunities for developing standards for marine and freshwater
aquatic animals (encompassing finfish and shellfish) and apiculture
operations. Additional comments addressed the feasibility of developing
production standards for harvesting wild terrestrial animals.
[[Page 13545]]
The certification of aquatic animals has very limited precedent
among existing certifying agents and will require additional dialogue
before credible standards can be developed. The FY 2000 Agriculture,
Rural Development, Food and Drug Administration, and Related Agencies
Appropriations Act provides funds for the NOP to convene national
meetings to consider the development of organic standards for aquatic
animals. Meetings will be held in Alaska, Alabama, and Rhode Island.
Simultaneously, the NOP will be working with stakeholders from the
aquaculture community to consider standards for the production of farm-
raised aquatic animals.
The certification of apiculture operations has some precedent among
certifying agents. However, due to many unique production
considerations, organic certification for apiculture operations has
been very limited. Public comment on the first proposal indicated that
consensus on critical apiculture issues including forage area and pest
management will require considerable additional dialogue. The NOSB has
expressed interest in leading the discussion of the key issues
pertinent to certification of apiculture operations. We will
incorporate public participation and the NOSB's recommendations into
future production standards for apiculture as well as for other wild
harvested livestock operations as needed.
(8) Practice Standards for Specialty Crop Operations. Several
organic certifying agents and producer associations commented that the
proposed rule did not sufficiently detail prescribed practices for many
specialized aspects of organic production and handling, such as
mushrooms, greenhouses, and aquaculture. We concur that such details
are lacking, and to a certain extent, this proposal addresses that gap
through the introduction of more detailed practice standards. In some
cases, more specific regulations appropriate for such specialized
operations, including aquaculture, mushroom production, and greenhouse
operations, will be filled in as recommendations are developed by the
NOSB. Beyond this, the Department expects to address the need for
greater specificity through program manuals, which will provide more
detailed guidance about site-specific decisions. For example, program
manuals could include examples of crop rotation plans suited to
different geographic regions, soil conditions, and types of
enterprises. Program manuals could also be used to provide guidance
about how indicators of the condition of the natural resource base can
be qualitatively assessed using simple field observations so that the
impact of site-specific practices on soil and water quality can be
documented in the organic plan.
Crop Production--Additional Provisions
Upon further review of the provisions in the first proposal, we
have decided to propose the following additions and changes.
(1) Mandatory Phytosanitary Treatment of Seeds, Seedlings, and
Planting Stock. Section 205.204(e) of this proposal contains a new
provision that permits the use of treated seeds, seedlings, or planting
stock in cases in which Federal or State phytosanitary regulations
require treatment. For example, some States require seed potatoes or
strawberry crowns to be treated to prevent the spread of plant
diseases. The OFPA authorizes reasonable exemptions from specific
requirements for compliance with Federal or State emergency pest or
disease treatment programs. This provision is also consistent with the
NOSB's recommendation on the use of treated planting stock.
(2) Restriction on the Use of a Synthetic Pest Control Substance.
The first proposal included a provision that any use of biological or
botanical pest control substances or synthetic pest control substances
approved for use on the National List had to be used in a manner that
did not result in measurable degradation of soil or water quality. This
provision has been removed, and Sec. 205.207(e) of this proposal
includes a new provision that further restricts use of these substances
by requiring the producer to implement measures to evaluate and
mitigate the effects of repetitive use of the same or similar materials
on pest resistance and shifts in pest types. This requirement can be
met by reviewing available research on pest resistance to the substance
being used and observing changes in pest populations following repeated
application of the substance. Public comments pointed out evidence that
nonsynthetic biological and botanical pest control substances, if
overused, pose concerns for inducing accelerated resistance in pest
populations.
Livestock Production--Changes Based on Comments
This subpart differs from our first proposal in several respects as
follows:
(1) Minimum Period of Organic Management--Nonedible Products. The
first proposal established a 90-day minimum period of organic
management for animals from which nonedible products, such as wool,
were to be harvested. Many consumers and producers said that a 90-day
period was too short and that an animal should be under organic
management for at least 1 year before a nonedible organic product could
be obtained from it. This requirement is consistent with the provision
that dairy animals receive a minimum of 1 year of continuous organic
management prior to the production of the milk or milk products to be
sold, labeled, or represented as organic. Therefore, this proposal has
been revised to state that an animal brought into an organic operation
must be under continuous organic management for 1 year prior to the
harvest of nonedible products that are sold, labeled, or represented as
organic.
(2) Origin of Mammalian Slaughter Stock. The first proposal allowed
mammalian livestock from a nonorganic source for the production of
organic meat if the livestock was brought into an organic operation no
later than the 15th day of life, if necessary. Public comment was
sought as to the specific conditions, such as commercial unavailability
of organic livestock or an emergency situation, that should be a
prerequisite for allowing mammalian livestock of nonorganic origin to
be designated as organic slaughter stock. Thousands of commenters,
along with the NOSB, strongly opposed allowing the use of cows, sheep,
or other mammals as organic slaughter stock if they were not organic
from birth. Most of them also rejected allowing such practices on an
``if necessary'' basis. Accordingly, Sec. 205.236 requires that
mammalian slaughter stock be organically raised from birth.
(3) Standard for Aquatic Animal Production. While the first
proposal contained no standards solely for aquatic animals in an
organic operation, it did contain provisions applicable to their
production. The first proposal allowed fish and crustaceans, among
other livestock types, to be sold, labeled, or represented as organic
if such livestock had been brought into an organic operation no later
than the earliest commercially available stage of life. Several
commenters suggested that the management of aquatic species differs
significantly from mammals and poultry and would require separate
regulatory provisions. We concur and intend to develop detailed
practice standards for specific aquatic species that will be published
for comment and finalized prior to the implementation of the NOP. Given
the virtual absence of recognized certification programs for
[[Page 13546]]
aquatic operations, including aquaculture, there are limited models on
which to base national standards. Therefore, we must create
opportunities for producers, consumers, certifying agents, and other
interested parties to participate in the development of practice
standards. We will hold public meetings in Alaska, Alabama, and Rhode
Island to receive comment and anticipate that the NOSB will also
provide recommendations.
(4) Apiculture Standard. The first proposal allowed bees to be
brought into an organic operation at any stage of life and required
that the predominant portion of their forage be organically produced.
Several commenters, including producer and industry groups, pointed out
that bees differ significantly from other livestock types and that the
first proposal lacked sufficient details to guide honey producers. Many
consumers stated that the provisions proposed for bee forage, which
required only that a predominant portion of the bees' forage be
organic, were too vague and lenient. Recognizing that the provisions in
the first proposal for certifying beekeeping operations were
inadequate, we removed them entirely from this proposal. We will review
the detailed production and handling standards for beekeeping
operations that several certifying agents have developed and assess the
feasibility of developing a practice standard. The NOSB has agreed to
review and recommend an apiculture practice standard for organic honey
production and hive care, including the origin of organic bees.
(5) Organic Feed Requirement. The first proposal allowed a producer
to feed livestock up to 20 percent of the total feed ration in a given
year that was not organically produced. Furthermore, in an emergency
situation, the first proposal allowed the Administrator to increase the
amount of nonorganic feed that could be provided. Thousands of comments
were received opposing any allowance for nonorganic livestock feed, and
many thought that no conditions justified providing any nonorganic feed
to organic animals. Most producer groups, organic certifying agents,
and industry groups, however, recognized that eliminating all
flexibility in this regard could seriously inhibit growth of the
organic livestock industry and reduce the availability organic
livestock products. Several existing certification programs allow some
use of nonorganic feed in emergencies, in one case specifying that up
to 10 percent of the livestock ration may be nonorganic. Commenters
made it clear that the commercial availability of certified organic
livestock feed has increased enough to eliminate exemptions based on
availability, even in regions such as the Northeast where supplies were
previously difficult to obtain. The NOSB also recommended providing an
allowance for livestock to receive nonorganic feed in emergency
situations, with strict requirements for documentation in the organic
system plan.
Based on the public comment received and the recommendations of the
NOSB, we agree that allowances for providing nonorganic feed to
organically managed livestock should be limited to emergencies, such as
fire, drought, flood, and other natural disasters. Accordingly, we have
removed the provision from the first proposal that a producer may
provide up to 20 percent nonorganically raised feed ``as necessary.''
Exemptions for emergency use of nonorganic feed must be authorized by
the Administrator through the procedures for establishing a temporary
variance. Producers will work with their certifying agents to determine
the minimum percentage of nonorganic feed needed to supply the
nutritional requirements of the livestock until the 100 percent organic
ration can be restored.
(6) New Dairy Herd exemption. The first proposal included an
exemption to allow an entire, distinct dairy herd--converted to organic
management for the first time--to be fed nonorganic feed up to 90 days
prior to the production of milk or milk products labeled as organic. A
few producer groups supported this allowance for a one-time, whole-herd
exemption to make it feasible for existing conventional dairy farmers
to convert to organic management without incurring the costs of 100
percent organic feed for 12 months prior to certification. However, in
light of the strong opposition to any nonorganic feed allowance by
consumers and its inconsistency with NOSB recommendations, we have
eliminated this provision.
(7) Synthetic Feed Additives. The first proposal prohibited the
feeding of substances containing synthetic amino acid additives and
synthetic trace elements to stimulate the growth or production of
livestock. In Sec. 205.237(c)(2), the term, ``synthetic amino acids,''
is replaced with the term, ``additives,'' which includes nutritional
substances other than amino acids. Some commenters stated that the
term, ``additives,'' more precisely reflects the intent of the OFPA,
which prohibits the use of growth stimulants. The provision in the
first proposal to permit use of synthetic amino acid additives to
fulfill the normal nutritional needs of livestock is retained in
Sec. 205.237(a).
(8) Prohibition on Antibiotics. The OFPA prohibits producers from
using subtherapeutic doses of antibiotics. While this suggests that
treatment with antibiotics at therapeutic levels is allowed, the OFPA
does not contain affirmative conditions for their use. In developing
provisions in the first proposal for treating livestock with
antibiotics, we reviewed the NOSB recommendations, public input
received at NOSB meetings, testimony presented at livestock hearings,
and existing State and private standards. We found that innovative
production practices and consumer expectations had increasingly
diminished the use of antibiotics in organic livestock since passage of
the OFPA. At its 1994 meeting in Santa Fe, NM, the NOSB recommended
prohibiting the use of antibiotics in the production of organic
slaughter stock but allowing their use with extended withdrawal
intervals for dairy and breeder stock. By its Ontario, CA, meeting in
1998, the NOSB recommended prohibiting all antibiotic use after animals
were brought into an organic operation. Other comments we reviewed
favored allowing the use of antibiotics because organic livestock might
benefit from receiving such treatments. Other commenters requested that
organic producers be prohibited from withholding treatment from sick
animals for economic reasons.
The first proposal permitted mammals raised as organic slaughter
stock to receive antibiotics in the first 21 days of life and other
species to be given antibiotics in the first 7 days of life. The
rationale for allowing antibiotic use was based on concerns about the
vulnerability of newly born or hatched livestock brought into an
organic operation from a nonorganic source. The first proposal
permitted organic slaughter stock to originate from nonorganic sources
if it was brought under organic management at an early stage of life.
Allowing the use of animal drugs could be an appropriate safety net for
young organic livestock during their first week of organic management.
We requested public comment on the use of animal drugs in the
production of organic livestock, including organic slaughter stock. We
also published an issue paper in October 1998 entitled ``The Use of
Antibiotics and Parasiticides in Organic Livestock Production,''
requesting additional public comment on this subject.
We received thousands of comments from consumers, producers, and
industry groups objecting to any allowance for antibiotic use in
[[Page 13547]]
organically produced livestock. Many of these comments supported a
comprehensive prohibition on the use of antibiotics, regardless of the
animal's age or the type of products produced from it. Based on these
public comments and the availability of alternative production
practices, this proposal prohibits selling, labeling, or representing
as organic any animal that has been treated with an antibiotic at any
dosage.
(9) Parasiticide Use. The first proposal permitted livestock in an
organic operation to receive parasiticides topically at any time of
life, provided that the producer complied with the prohibition against
routine use of a synthetic internal parasiticide. We concluded that,
while some earlier public comment favored prohibiting the use of
internal parasiticides and the NOSB recommended restricting their use,
many producers had indicated that parasiticides were essential to their
operations. These producers stated that parasites can threaten animal
health at any stage of life and that the use of parasiticides is
unavoidable in certain regions of the country. Even under highly
controlled situations, some parasites endemic to certain regions can be
carried by wild birds, water, or feed. Concerns for the overall health
of an animal warranted that parasiticides be used as soon as possible
after determining the presence of parasites at a level affecting the
health of the infected livestock.
In responding to the first proposal, a large number of commenters
stated that synthetic parasiticides should be prohibited in organic
production, especially for slaughter stock. The NOSB also recommended
prohibiting the use of parasiticides in slaughter animals. For other
livestock, the Board recommended that, in certain climates, in certain
stages of production, and for certain animals, the use of synthetic
parasiticides might be necessary. The Board stated that breeding stock,
for example, could receive parasiticides up to certain stages of
gestation specific to the type of livestock. Such use of synthetic
parasiticides would be highly restricted and include a lengthy period
of elapsed time before the animal's offspring would be eligible for use
in a certified operation. The Board proposed developing practice
standards to address specific instances in which parasiticides could be
allowed.
This proposal allows the use of synthetic parasiticides included on
the National List for use in organic production on breeder and dairy
stock provided that preventative practices and veterinary biologics are
inadequate to prevent infestation. This proposal prohibits
administering synthetic parasiticides to livestock sold for slaughter.
These provisions reflect an attempt to balance the conflicting
positions taken by consumers and producers in response to the first
proposal and the subsequent issue paper on livestock medications. We
recognize that the goal of organic production is to use management
practices and natural substances to eliminate, when possible, reliance
on synthetic materials. However, we do not believe that a comprehensive
prohibition on synthetic parasiticides is feasible for all species and
for all regions of the country at this time. Additionally, the new
requirements for access to the outdoors for organically managed
livestock contained in this proposal may exacerbate exposure to
parasites for animals in systems which previously used greater degrees
of confinement. These provisions are also consistent with the position
of the NOSB, which recommended at its October 1999 meeting to allow a
synthetic parasiticide for use on organically raised breeder and dairy
stock with the same restrictions incorporated in this proposal.
The OFPA prohibits the use of synthetic internal parasiticides on a
routine basis. In the first proposal, the word, ``routine,'' was
defined as administering an animal drug ``without cause.'' Many
commenters objected to that definition, pointing out that producers
would not administer a parasiticide unless they perceived a justifiable
cause. Commenters fear that this might lead to dependence on
parasiticides rather than a management system to reduce the number of
parasites. Therefore, this proposal adopts the NOSB-recommended
definition for ``routine'' as use of a synthetic parasiticide on a
regular, planned, or periodic basis. The prohibition on using synthetic
treatments on a routine basis is retained in Sec. 205.238(c)(4).
(10) Temporary Confinement. The first proposal provided that, if
necessary, animals could be maintained under conditions that restrict
the available space for movement or access to outdoors if other living
conditions were adequate to maintain the animals' health without the
use of permitted animal drugs. This provision considered the effects of
climate, geographical location, and physical surroundings on the
ability of animals to have access to the outdoors. We explained that a
system of organic production is soil based and that animals should be
allowed, as appropriate, access to the soil. This understanding was
considered in balance with animal health issues, such as the need to
keep animals indoors during extended periods of inclement weather. The
determination of necessity was to be based on site-specific conditions
described by the producer in an organic system plan or updates to an
organic plan, which required approval from the certifying agent. We
requested public comment as to the conditions under which animals may
be maintained to restrict the available space for movement or access to
the outdoors. We also released an issue paper in October 1998 entitled
``Livestock Confinement in Organic Production Systems'' to solicit
further public participation in preparing this proposal.
Many commenters stated that, while confinement is appropriate under
certain conditions, access to the outdoors is a fundamental tenet of
organic livestock production. Commenters cited the widespread
prohibition on confinement systems, such as raising poultry in battery
cages, contained in domestic and international standards. Producers of
organic livestock have incorporated access to the outdoors into viable
production systems for all major commercial species, and consumers
clearly identify these practices as a distinguishing characteristic of
organic products. Some commenters stated that production standards
containing broad allowances for confinement would weaken their
incentive for purchasing organic products. Some producers pointed out
that providing animals access to the outdoors can reduce stress and
diminish the risk of transmitting disease. The vast majority of
commenters strongly indicated that protection of an animal's welfare or
the soil and water resources of the operation were the only appropriate
conditions for restricting access to the outdoors. Furthermore, many
commenters stated that the condition and properties of the outdoor area
to which an animal receives access, such as the nutritional content of
pasture, must be important considerations in developing livestock
production standards.
Section 205.239(b) of this proposal specifies the circumstances
under which animals may be temporarily confined. This new requirement
proposes temporary confinement during periods of inclement weather;
certain stages of production such as when dairy animals are very young;
when the animal's health, safety, or well-being are jeopardized; or
when there is risk to soil and water quality. The NOSB specified that
the stage of an animal's production
[[Page 13548]]
is not intended to include the lactation cycle of dairy animals in
which only dry cows would be allowed access to the outside and pasture.
The NOSB recommended and we propose that when there is a risk to soil
or water quality, livestock should be temporarily confined. Practice
standards addressing when and how individual species may be temporarily
confined will be developed and published in program manuals. We are
also incorporating the NOSB recommendation that ruminants receive
access to pasture during the periods they are not temporarily confined.
(11) Physical Alterations. This proposal contains a requirement in
Sec. 205.238(a)(5) that the producer of an organic livestock operation
must perform, as needed, physical alterations on livestock to promote
the animal's welfare and in a manner that minimizes pain and stress.
Physical alterations include castration and other practices, such as
wing clipping, intended to modify or affect the animal's behavior in
confinement. We received comments on the first proposal which stated
that the performance of physical alterations is integral to a system of
organic livestock production which must be addressed in the standards.
Subsequently, some commenters on the confinement issue paper drew a
connection between certain physical alterations, such as debeaking in
poultry, and the conditions for space and mobility under which
livestock are raised We anticipate that this subject will be a
significant consideration when the NOP engages in equivalency
discussions under the Codex Alimentarius guidelines.
While many certification programs have production standards for
conducting physical alterations on animals, we cannot identify general
consensus on which practices should be approved or prohibited. Many
production variables, including breed, the number and concentration of
animals raised, and the available natural resource base, influence the
selection of production practices. Operations which raise the same
species of livestock could, due to differences in production practices,
require different approaches to whether and how to conduct physical
alterations. We do not have sufficient information at this time to
propose species-specific guidelines but anticipate working with
producers, consumers, and certifying agents to develop a better
understanding on which to act. By including the requirement for
conducting physical alterations in a manner which promotes an animal's
welfare and minimizes pain and stress in this proposal, we are
acknowledging two points. One, physical alterations have an appropriate
and at times necessary role in livestock production, and, two,
consideration for animal welfare and comfort is an integral component
of organic livestock production.
In order to use an animal's welfare and comfort as a condition for
establishing standards, we are requesting comment on techniques to
measure animal stress. Certifying agents will need objective,
verifiable methods to determine whether a producer is fulfilling the
livestock management conditions established in the organic system plan.
Such methods may include physiological or behavioral approaches to
measuring stress and may be directed at individual animals or larger
groups such as herds or flocks. The many comments addressing the well-
being of animals under organic management indicate that this issue is
central to the differentiation of organic production standards from
nonorganic practices. We need consistent, verifiable enforcement
techniques to ensure that organic producers are capable of attaining
and documenting such standards.
(12) Treatment of Sick or Injured Animals. In this proposal, any
animal that is to be sold, labeled, or represented as organic may not
be treated with a prohibited animal drug, including antibiotics,
synthetic substances that are not allowed, or nonsynthetic substances
that are prohibited. Any substance used as an animal drug in organic
livestock production must be approved by FDA or registered by EPA and
must be administered in compliance with the Federal Food, Drug, and
Cosmetic Act. This proposal simultaneously requires that sick or
injured animals must be treated with the appropriate animal medicine
regardless of whether organic status is lost as a result of doing so.
This requirement has been added in response to an NOSB recommendation.
Thousands of comments expressed concern that organic livestock would
suffer unduly if producers were not required to provide treatment,
especially to save the life of a critically ill animal, rather than
risk the suffering or death of the animal simply to maintain its
organic status. If the treatment required under this proposal includes
the use of a prohibited substance, the animal and any product derived
from it must be diverted to the nonorganic market.
(13) Feeding of Animal By-Products. Although we received thousands
of comments supporting a ban on the feeding of any animal by-products
to livestock under organic management, a broad prohibition would
prevent certain essential practices, such as feeding milk to young
mammals. This prohibition is also inappropriate in the case of
carnivorous livestock, such as many aquatic species. We believe that
the comments we received were not intended to prohibit such practices
but were, rather, motivated by concerns for food safety and the humane
treatment of animals. This proposal prohibits the feeding of poultry
and mammalian slaughter by-products to organically raised poultry or
mammals. This change is based on the thousands of comments that
expressed strong consumer preference against adding animal by-products
into feed for the same species. There was concern that this practice
could expose ruminant animals to Bovine Spongiform Encephalopathy
(BSE). FDA regulates animal feed additives and uses its authority to
address the human health considerations of animal refeeding. FDA
continually revises its regulations to ensure the highest level of
protection against known and emerging human health risks. The
prohibition on feeding poultry and mammalian slaughter by-products to
organically raised poultry or mammals contained in this proposal is
based solely on the consumer preference expressed in public comment and
is not a food safety standard. Future changes that are made to FDA
regulations will be reflected in NOP standards.
(14) Withdrawal Intervals. The first proposal required that a
producer determine that an animal was fully recovered from the
condition for which an animal drug was administered before a product
obtained from that animal could be sold, labeled, or represented as
organic. In compliance with FDA regulations, this could not have been
less than the withdrawal time specified on the label of the animal drug
administered. We received comments from producer groups that favored
extending the withdrawal times specified on animal drug labels. Many
private certification programs applied the principle of extended
withdrawal periods to the use of antibiotics in dairy and breeder stock
before innovations in production led to such substances being
prohibited. The NOSB has continued to include extended withdrawal
period annotations with its recommendations for the use of
parasiticides.
Based on consumer preference and the recommendations of the NOSB,
we are proposing an extended withdrawal interval for three animal drugs
(Ivermectin, Lidocaine, and Procaine) included on the National List in
this proposal. FDA exercises full responsibility for determining and
[[Page 13549]]
enforcing the withdrawal intervals for animal drugs. No food safety
arguments are used or implied to support the use of extended withdrawal
periods. Rather, we determined that extended withdrawal periods are
more compatible with consumer expectations of organically raised
animals. In emergency situations where the need for a synthetic
parasiticide or medicine is unavoidable, an extended withdrawal period
would indicate that such use was neither routine nor normal. This
approach is consistent with the manner in which organic certification
agencies addressed antibiotic use in livestock production. Before the
current prohibition on antibiotics became the industry norm, certifying
agents allowed their use under restricted conditions, including
extended withdrawal intervals, to demonstrate to consumers that such
use was genuinely essential.
Livestock Production--Changes Requested But Not Made
This subpart retains from our first proposal regulations on which
we received comments as follows:
(1) Feed Requirements. The first proposal required the use of
preventive health care practices, including diverse feedstuffs,
appropriate housing, well maintained pasture, and good sanitation
practices, and this proposal contains similar provisions. It also
included provisions for administering appropriate veterinary biologics,
vitamins, and minerals, and on selecting species and types of livestock
with regard to suitability for site-specific conditions and resistance
to prevalent diseases and parasites. Preventive health care practices
were generally supported by comments as being consistent with a system
of organic livestock production.
Many commenters requested an explanation of the term, ``diverse
feedstuffs,'' and some expressed concern that this provision could
permit use of feed supplements which might be prohibited by other
Federal, State, or local laws. All provisions proposed in this subpart
must be in compliance with applicable laws and regulations, including
the Federal Food, Drug, and Cosmetic Act; the OFPA; and our definition
of a system of organic production and handling. Vitamins, minerals, and
other synthetic or nonagricultural supplements, which appear on the
National List of allowed synthetic livestock products in the first
proposal are similarly permitted here, and provide a means to diversify
an animal's diet. Soybean meal and other organically produced feed
concentrates also serve this purpose. We encourage the NOSB to develop
and recommend practice standards to provide additional guidance
regarding the appropriate variety of feed for specific livestock
species. Both the first proposal and this one defer to publications of
the National Research Council's Committee on Animal Nutrition to
establish nutrient requirements for livestock. Producers and certifying
agents will use these publications to ensure that animal nutrient
requirements are met.
Handling--Changes Based on Comments
This subpart differs from our first proposal in several respects as
follows:
(1) Irradiation. In the first proposal, we requested public comment
on the compatibility of ionizing radiation (irradiation) with a system
of organic production and handling. We also asked if there are
effective alternatives to ionizing radiation, such as sanitary
practices, heat pasteurization, and incidental additives, that are
compatible with a system of organic production and handling, and, if
so, how they are compatible. We further asked whether the use of
ionizing radiation was considered an essential standard industry
practice or good manufacturing practice. Although the NOSB recommended
prohibiting the use of ionizing radiation for organic products, we
requested this information because of increasing concern about
foodborne illness and growing interest in FDA-approved ionizing
radiation as a sanitation or preservation treatment for a wide range of
agricultural products.
We received hundreds of thousands of comments from every segment of
the organic community--producers, processors, certifying agents,
consumers, environmental groups, and retailers--opposing the use of
ionizing radiation. These comments indicated that ionizing radiation
has been expressly prohibited in all existing organic certification
standards, international as well as domestic. Allowing this practice
could put domestic producers and handlers at a trade disadvantage,
disrupt international markets, and undermine consumer faith in the
integrity of the domestic organic label.
Comments suggested alternatives to ionizing radiation for
preventing contamination by human pathogens. Alternatives include heat
disinfection, refrigeration, moisture and oxygen reduction, packaging,
hygienic handling, and appropriate use of disinfectant substances.
Although no one suggested that any products might be unavailable if
irradiation were prohibited, many commenters expressed the willingness
to do without any product that required irradiation. In response to the
overwhelming consensus of public comment, this proposal prohibits any
use of ionizing radiation for the handling of any organic product in
Sec. 205.270(c).
(2) Incidental Additives. The first proposal included a provision
that permitted the use of incidental additives in processing, except
those extracted with a volatile synthetic solvent, if it was necessary
for the production of the product. As with previous provisions for
practices that could be used only ``if necessary,'' the preamble to the
first proposal explained that a determination of necessity was based on
site-specific conditions that were described by a producer or handler
in an organic system plan or updates to an organic system plan and
reviewed by the certifying agent. We requested comments as to the
conditions under which an incidental additive might be considered
necessary and requested comment as to whether handlers who handle only
products sold, labeled, or represented as ``made with certain organic
ingredients'' should be exempted from the restriction of using
incidental additives only if necessary. An incidental additive was
defined as an additive that is present in an agricultural product at an
insignificant level, does not have any technical or functional effect
in the product, and is not considered an active ingredient. This
definition is consistent with 21 CFR 101.100(a)(3)(ii) and is the basis
for the definition of an incidental additive in this proposal.
Although thousands of consumers objected to the use of synthetic
substances in processed organic products, many others specified that an
incidental additive that had been reviewed and approved by the NOSB
would be acceptable. Few respondents supported exempting products
labeled as ``made with organic ingredients'' from restrictions on the
use of incidental additives. The NOSB recommended that documentation be
required for use of synthetic incidental additives and that handlers
demonstrate progress over time in finding replacements. Organic
industry groups also commented that hundreds of incidental additives
are currently being used to process organic products and that
prohibiting the use of such substances would severely restrict the
choices available to consumers and limit the growth of the organic
sector. The NOSB recommended several synthetic incidental additives for
the National List, recognizing that a wide range of organic products
could not be feasiblely manufactured without the use
[[Page 13550]]
of incidental additives such as defoaming agents, adjuvants,
clarifiers, filtering agents, and equipment cleansers. Therefore, this
proposal requires that any incidental additive used to process
agricultural products that are intended to be sold, labeled, or
represented as ``organic'' or ``made with organic (specified
ingredients)'' must be included on the National List of allowed
nonagricultural (nonorganic) substances in Sec. 205.605. A product
labeled as ``100 percent organic'' could not be produced through the
use of any synthetic processing aid.
(3) Prevention and Control of Facility Pests. The first proposal
addressed the prevention and control of facility pests and authorized
the NOP to require such terms and conditions as are determined
necessary. These provisions were based on existing organic
certification programs and NOSB recommendations. The first proposal
included a three-step order of preference, which commenters found to be
overly complex and difficult to enforce. This proposal retains similar
provisions but simplifies the scheme so that there are only two levels
of distinction between preferable and less preferable practices. In
this proposal, pest prevention and control methods that do not entail
use of biological, botanical, or synthetic substances are equally
acceptable, and the producer or handler may only use biological,
botanical, or synthetic substances if other approved methods are not
effective. Paragraph (c) of Sec. 205.271 parallels the provision
proposed in Sec. 205.206(d) addressing crop pest, weed, and disease
management. Accordingly, it requires an operator of an organic handling
operation who applies any biological, botanical, or synthetic substance
for the prevention or control of pests to implement measures to
evaluate the effects of repetitive use of the same or similar materials
on pest resistance and shifts in pest types.
(4) Storage Containers. Sections 205.272 (b)(1) and (b)(2) of this
proposal contain provisions similar to the first proposal which
prohibit the use of storage containers or bins, including packages and
packaging materials, that contain synthetic fungicides, preservatives,
or fumigants. These requirements also prohibit the use or reuse of any
bag or container that was previously in contact with any substance that
could compromise the organic integrity of its contents. This proposal
adds a provision to permit the reuse of a bag or container originally
used for conventional products if the reusable bin or container has
been thoroughly cleaned and poses no risk of prohibited materials
contacting organic products. Producers and handlers commented that it
is possible and desirable to reuse some kinds of containers if
precautions are taken. This modification is consistent with the OFPA,
which requires that the organic quality of a product not be
compromised.
(5) Agricultural Fibers. Some commenters stated that the labeling
provisions in the first proposal for processed commodities containing
organically produced cotton fibers were excessively restrictive. The
OFPA provides the Secretary with the authority to implement standards
for organically produced agricultural fibers, including cotton, used
for nonfood purposes. This authority includes standards for the
production of the agricultural fiber as well as handling standards to
regulate the practices and materials that are used in the manufacture
of the nonfood commodity. State and private certification agents have
made substantial progress in developing and implementing handling
standards for organically produced agricultural fibers that are gaining
acceptance in the marketplace. We are reviewing the existing
certification guidelines and industry practices and anticipate
developing standards for processing organically produced agricultural
fibers.
Handling--Changes Requested But Not Made
This subpart retains from our first proposal regulations on which
we received comments as follows:
(1) Facility Pest Control Substances. The first proposal permitted
the use of any substance to control facility pests, as long as the
intended use was approved by the appropriate regulatory authority and
the substance was applied in a manner that prevents it from coming into
contact with any organic product. Many consumers objected to this
provision and suggested that prohibited substances should never be
allowed to be used in any organic operation. However, comments from a
number of organic handlers and one industry association stated that,
because handling operations must comply with health regulations that
require elimination of any pests that may invade food handling
facilities, prohibited substances must sometimes be used. The NOSB also
acknowledged this possibility in its recommendations, and most organic
certification programs similarly allow for such an occurrence, with
strict provisions for safeguarding the integrity of organic products.
In agreement with these comments, we have proposed a similar allowance
in Sec. 205.271(c). The handler must fully document in his or her
organic plan the evidence that such a measure was necessary and the
measures taken to protect organic products or ingredients from coming
into contact with any pest control substance.
(2) Waxes. We propose to retain the definition of packaging
included in the first proposal, which encompasses waxes used in contact
with an edible surface of an agricultural product. A number of
commenters disagreed with the inclusion of waxes in the definition of
packaging, arguing that waxes should be considered nonagricultural
ingredients and, therefore, should be required to appear on the
National List of nonagricultural (nonorganic) substances allowed as
ingredients in or on processed products labeled as ``organic'' or
``made with organic (specified ingredients).'' However, the first
proposal did require carnauba and other waxes to be on the National
List of nonagricultural ingredients allowed for use in organic
processed products, and this proposal contains a similar provision.
These provisions adequately address the concerns expressed by the
commenters that only waxes meeting the criteria for ingredients in
organic processed products be permitted. It is appropriate to include
waxes in the definition of packaging to ensure that prohibited
substances are not added to approved waxes that may be applied to the
edible surface of organic products, in accordance with the OFPA, which
prohibits use of any packaging materials that contain synthetic
fungicides, preservatives, or fumigants.
Subpart D--Labels, Labeling, and Market Information
The Act provides that a person may sell or label an agricultural
product as organically produced only if the product has been produced
and handled in accordance with provisions of the Act and these
regulations. This subpart sets forth labeling requirements for organic
agricultural products and products with organic ingredients based on
their percentage of organic composition. For each labeling category,
this subpart establishes what ``organic'' terms and references can and
cannot be displayed on a product package's principal display panel,
information panel, ingredient statement, and on other package panels.
Labeling is proposed for containers used in shipping and storing
organic product and for denoting organic bulk products in market
information which is displayed or disseminated at the point of retail
sale. Restrictions on labeling organic product produced by exempt
operations are described. Finally, this
[[Page 13551]]
subpart proposes a new USDA organic seal or shield (hereafter referred
to as the USDA Seal) and regulations for display of the USDA seal and
display of the seals, logos, or other identifying marks of certifying
agents.
The intent of these sections is to ensure that organically produced
agricultural products are consistently labeled to aid consumers in
selection of organic products and to prevent labeling abuses. These
provisions cover the labeling of a product as ``organic'' and are not
intended to supersede other labeling requirements specified in various
Federal labeling regulations. For instance, we propose that the percent
of organic ingredients and the name of the certifying agent be
displayed on the information panel of packaged products and that the
organic ingredients be identified as ``organic'' in the ingredient
statement. The Food and Drug Administration (FDA) has authority to
regulate the placement of information on package information panels
and, thus, FDA labeling requirements in 21 CFR parts 100 through 169
must be complied with by handler when affixing organic labels to
product packages. Display of the USDA Seal and certifying agent seals,
logos, or other identifying marks also must be in accordance with those
regulations. The requirements of FDA's Fair Packaging and Labeling Act
(FLPA) and the Federal Food, Drug, and Cosmetic Act (FFDCA) must be
followed. Likewise, the Federal Trade Commission has authority over
product advertising and the extent to which a handler or retail food
establishment engages in advertising as part of its market information
activities. The Federal Trade Commission (FTC) regulations in 16 CFR
must be followed. USDA's Food Safety and Inspection Service's (FSIS)
Federal Meat Inspection Act, Poultry Products Inspection Act, and Egg
Products Inspection Act also have implementing regulations in 9 CFR
which must be followed. The labeling requirements specified in this
subpart must not be applied in a manner so that they would conflict
with the labeling requirements of these and other Federal and State
programs.
While this regulation does not require labeling of an organic
product as organic, we assume that producers and handlers will choose
to label their organic products and display the USDA Seal to the extent
allowed in these regulations. They will do this to improve the
marketability of their organic product.
In this proposal, assembly, packaging, and labeling of a
multiingredient organic product are considered handling activities. The
certification of handling operations is covered in subpart C of this
regulation. No claims, statements, or marks using the term,
``organic,'' or display of certification seals, other than as provided
in this regulation, may be used. A handler which chooses not to use
these required and prohibited labeling provisions may not otherwise
label or represent a product as organic.
Once a handler makes a decision to market a product as organic or
containing organic ingredients, the handler is required to follow the
provisions in this subpart regarding use, display, and location of
organic claims and certification seals. Handlers who may produce
organic ingredients and/or assemble multiingredient products composed
of more than 50 percent organic ingredients must be certified as an
organic handling operation. Handlers of products of less-than-50-
percent organic ingredients do not have to be certified unless the
handler actually produces one or more of the ingredients used in the
less-than-50-percent product. Repackers who purchase certified organic
product from other entities for repackaging and labeling must be
certified as an organic operation. Entities which simply relabel a
product package would be subject to recordkeeping requirements to show
proof that the product purchased prior to relabeling was, indeed,
organically produced. Distributors which receive and transport labeled
product to market are not subject to certification or any handling
requirements of this regulation.
Proposal Description
The general labeling principle employed in this proposal, and to
which we think most commenters would subscribe, is that labeling or
identification of the organic nature of a product should increase as
the organic content of the product increases. In other words, the
higher the organic content of a product, the more prominently its
organic nature can be displayed. This is consistent with provisions of
the Act which establishes the three percentage categories for organic
content and basic labeling requirements in two of those categories.
Section 205.300 specifies the general use of the term, ``organic,''
on product labels. Paragraph (a) establishes that the term,
``organic,'' may be used only on labels and in market information of
agricultural products and ingredients that have been certified as
produced and handled in accordance with these regulations. The term,
``organic,'' cannot be used on a product label for any purpose other
than to modify or identify the product or ingredient in the product
that is organically produced and handled. Products not organically
produced and handled will not be able to use the term, ``organic,'' on
any package panel or in market information in any way that implies the
product is organically produced.
Categories of Organic Content. The type of labeling and market
information that can be used and its placement on different panels of
consumer packages will be based on the percentage of organic
ingredients in the product. The percentage will reflect the actual
weight or fluid volume (excluding water and salt) of the organic
ingredients in the product. Four categories of organic content are
proposed: 100 percent organic; 95 percent or more organic content; 50
to 95 percent organic content; and less than 50 percent organic
content.
100 Percent Organic
For labeling and market information purposes, this proposal allows
a ``100 percent organic'' label for an agricultural product that is
composed of a single ingredient such as raw, organically produced
fruits and vegetables. The product also may be composed of two or more
organically produced ingredients, provided that the individual
ingredients are organically produced and handled consistent with
provisions in subpart C of this regulation. No processing aids may be
used in the production of 100 percent organic products. This proposal
provides that labeling provisions for ``100 percent organic'' products
be the same as provisions for the 95 percent ``organic'' products
specified below.
Organic
Products labeled or represented as ``organic'' will contain, by
weight (excluding water and salt), at least 95 percent organically
produced raw or processed agricultural product. The organic ingredients
must be produced using production and handling practices pursuant to
subpart C of this regulation. The nonorganic (5 percent or less)
ingredients may be composed of nonorganic or nonagricultural
substances. The difference between 100 percent organic products and 95
percent-plus products is that the latter may contain up to 5 percent
nonorganic or nonagricultural products.
Multiingredient Product: 50-95 Percent Organic Ingredients
For labeling and market information purposes, the third category of
agricultural products are multiingredient products containing by weight
or fluid volume (excluding water
[[Page 13552]]
and salt) between 50 and 95 percent organic agricultural ingredients
produced pursuant to these regulations. Such products may be labeled or
represented as ``made with organic (specified ingredients).'' By
``specified,'' we mean the name of the agricultural product forming the
organic ingredient. The organic ingredients must be produced using
substances on the approved National List in subpart G and employing
organic production and handling practices consistent with subpart C of
this regulation. For instance, breakfast cereal made with 75 percent
organically produced and processed wheat and 25 percent other,
nonorganically produced grains, raisins, and nuts can be labeled as
``made with organic wheat'' on the principal display panel. To qualify
for this organic labeling, the nonorganic ingredients (grains, raisins,
and nuts) must be produced and handled without use of the first three
prohibited practices specified in paragraph (e) (excluded methods,
sewage sludge, or ionizing radiation). However, those nonorganic
ingredients may be produced or handled using practices prohibited in
paragraphs (e)(4) through (e)(7) (using substances not on the National
List; containing added sulfites, nitrates, or nitrites; using
nonorganic ingredients when organic ingredients are available; and
using organic and nonorganic forms of the same ingredient).
Multiingredient Product: Less Than 50 Percent Organic Ingredients
The final labeling category covers multiingredient products with
less than 50 percent organic ingredients (by weight or fluid volume,
excluding water and salt). The organic ingredients must be produced
using substances on the approved National List in subpart G and
employing organic production and handling practices consistent with
subpart C of this part. The remaining nonorganic ingredients (50
percent or more of the product) may be produced, handled, and assembled
without regard to these regulations (using prohibited substances and
prohibited production and handling practices). Organic labeling of
these products is limited to the information panel only as provided in
Sec. 205.305.
Prohibited Practices. This proposal prohibits labeling of whole
products or ingredients as ``organic'' if those products or ingredients
are produced using any of the following production or handling
practices: (1) Ingredients or processing aids containing or created
using excluded methods (genetically modified organisms (GMO)) or the
products of excluded methods; (2) ingredients that have been produced
using applications of sewage sludge (biosolids) as fertilizer; (3)
ingredients that have been processed with ionizing radiation; (4)
processing aids not approved on the National List; (5) sulfites,
nitrates, or nitrites added to or used in processing of an organic
product in addition to those substances occurring naturally in a
commodity; (6) use of the phrase, ``organic when available,'' or
similar statement on labels or in market information when referring to
products composed of nonorganic ingredients used in place of specified
organic ingredients; and (7) labeling as ``organic'' any product
containing both organic and nonorganic forms of an ingredient specified
as ``organic'' on the label. The prohibitions on the use of excluded
methods, sewage sludge, irradiated products, and prohibited processing
aids are included here to be consistent with the revised National List
of Approved and Prohibited Substances in subpart G.
These seven prohibitions apply to the four labeling categories of
products and are not individually repeated as prohibited practices in
the following sections. Table 1, Prohibited Production and Handling
Practices for Organic Labeling, is a summary reference of how the seven
prohibited practices must be applied in the production and handling of
organic and nonorganic ingredients of products in the four labeling
categories.
Table 1.--Prohibited Production and Handling Practices for Labeling Categories
--------------------------------------------------------------------------------------------------------------------------------------------------------
Use both
Use processing Contain added Use organic organic &
Labeling category Use excluded Use sewage Use irradiation aids not on sulfites, ingredients nonorganic
methods sludge national list nitrates, when available forms of same
nitrites ingredient
--------------------------------------------------------------------------------------------------------------------------------------------------------
``100 percent Organic''
Single/multiingredients NO.............. NO.............. NO.............. Use NO NO............. NO............. NO.
completely organic. Processing Aids.
``Organic''
Organic Ingredients (95% NO.............. NO.............. NO.............. NO.............. NO............. NO............. NO.
or more).
Nonorganic Ingredients NO.............. NO.............. NO.............. NO.............. NO............. NO............. NO.
(5% or less).
``Made with Organic
(specified ingredients)''
Organic Ingredients (50- NO.............. NO.............. NO.............. NO.............. NO............. NO............. NO.
95%).
Nonorganic Ingredients NO.............. NO.............. NO.............. OK.............. OK............. NA*............ NA*.
(49% or less).
Less-than 50% Organic
Ingredients
Organic Ingredients (49% NO.............. NO.............. NO.............. NO.............. NO............. NO............. NO.
or less).
Nonorganic Ingredients OK.............. OK.............. OK.............. OK.............. OK............. NA*............ NA*
(50% or more).
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Not applicable.
Calculating the Percentage of Organic Ingredients. This proposal
specifies procedures for calculating the percentage, by weight or fluid
volume, of organically produced ingredients in an agricultural product
labeled or represented as ``organic.''
The organic percentage of liquid products and liquid ingredients
will be determined based on the fluid volume of the product and
ingredients (excluding water and salt). When a product is identified on
the principal display panel or the information panel as being
reconstituted with water from a concentrate, the organic content will
be calculated on the basis of a single-strength concentration.
Some products may contain both dry and liquid ingredients that are
produced organically. In such cases, this proposal provides that the
percentage of total organic ingredients will be based on the
[[Page 13553]]
combined weight of the dry organic ingredient(s) and the weight of the
liquid organic ingredient(s), excluding water and salt. For example, a
product may be made using organically produced vegetable oils or grain
oils or contain organic liquid flavoring extracts in addition to other
organic and nonorganic ingredients. In these cases, the weight of the
liquid organic oils or flavoring extracts, less any added water and
salt, would be added to other solid organic ingredients in the product,
and their combined weight would be the basis for calculating the
percentage of organic ingredients. We believe this process provides the
most appropriate and least burdensome method for calculating the
organic percentage of such multiingredient products.
Only one figure providing the total percentage of all organic
ingredients will be shown on the information panel. The total
percentage will be displayed on the information panel of the consumer
package above or below the ingredient statement with the words,
``contains X percent organic ingredients,'' or a similar phrase. If the
total percentage is a fraction, it will be rounded down to the nearest
whole number. The percentage of each organic ingredient will not be
required to be displayed.
Labeling ``100 Percent Organic'' and ``Organic'' Products. This
proposal includes optional, required, and prohibited practices for
labeling packages of agricultural products that are ``100 percent
organic'' or ``organic'' (at least 95 percent organic). Only products
that are composed of a wholly organic single ingredient or entirely of
certified organic ingredients may be identified with a percentage
number (100 percent) on the principal display panel. Products between
95 and 100 percent organic composition, when identified as ``organic''
on the principal display panel, will be required to state on the
information panel the percentage of organic ingredients in the finished
product and identify each organic ingredient in the ingredient
statement.
The handler may display the following information on the principal
display panel, the information panel, and any other part of the package
and in market information representing the product: (1) The term, ``100
percent organic'' or ``organic,'' as applicable, to the content of the
product; (2) the USDA Seal; and (3) the seal, logo, or other
identifying mark of the certifying agent (hereafter referred to as
``seal or logo'') which certified the handler of the finished product.
The seals or logos of other certifying agents which certified organic
raw materials or organic ingredients used in the product also may be
displayed, at the discretion of the handler. If multiple organic
ingredients are identified on the ingredient statement, the handler of
the finished product that combined the various organic ingredients must
maintain documentation, pursuant to subpart B of this regulation,
certifying the organic content of the added ingredients.
While certifying agent identifications can appear on the package
with the USDA Seal, they may not appear larger than the USDA Seal on
the package. There is no restriction on the size of the USDA Seal as it
may appear on any panel of a packaged product, provided that display of
the Seal conforms with the labeling requirements of FDA and FSIS.
This proposal specifies three labeling practices that will be
required if a handler labels a product ``100 percent organic'' or
``organic'' on the principal display panel. If a product is labeled as
``100 percent organic'' the ingredients may also be modified with the
term, ``organic,'' but would not have to be so labeled because it is
assumed from the 100 percent label that all ingredients are organic.
For 95 percent-plus products that contain more than one ingredient,
each organic ingredient listed in the ingredient statement must be
modified with the term, ``organic.'' Water and salt in the ingredient
will not be identified as ``organic.'' Secondly, the total percentage
of organic ingredients in the product must be shown on the information
panel. The percentage statement should be placed in a manner that it
can be viewed in relation to the ingredient statement.
The handler also must display on the information panel the name of
the certifying agent which certified the handler producing the finished
product. The handler has the option to include the business address or
telephone number of the certifying agent. This information must be
placed below or otherwise near the manufacturer or distributor's name.
Labeling Products ``Made with Organic (Specified Ingredients)''.
With regard to agricultural products ``made with organic (specified
ingredients)''--those products containing between 50 and 95 percent
organic ingredients--this proposal establishes the following optional,
required, and prohibited labeling practices.
Under optional practices, the statement, ``made with organic
(specified ingredients),'' may be placed on the principal display panel
and other panels of the package. The same statement can also be used in
market information representing the product. However, the following
restrictions will be placed on the statement, ``made with organic
(specified ingredients),'' when it appears on the principal display
panel: (1) The statement cannot list more than three organic
ingredients in the product; (2) the statement cannot appear in print
that is larger than one half (50 percent) of the size of the largest
print or type appearing on the principal display panel; and (3) the
statement must appear in its entirety in the same type size, style, and
color without highlighting. Display of the statement, ``made with
organic (specified ingredients),'' on other panels must be similarly
consistent with the size of print used on those panels. These
restrictions are consistent with FDA regulations and similar to the
recommendations of the National Organic Standards Board (NOSB). This
provision will help assure that the statement, ``made with organic
(specified ingredients),'' is not displayed in such a manner as to
misrepresent the actual organic composition of the product.
We also propose that, at the handler's option, the certifying
agent's seal or logo may be displayed on the principal display panel or
other package panel.
Packages of products labeled as ``made with organic (specified
ingredients)'' will be required to display on the information panel the
total percentage of organic ingredients in the product and modify each
organic ingredient listed in the ingredient statement with the term,
``organic.'' The percentage of organic ingredients must be displayed so
that it can be viewed in relation to the ingredient statement.
The name of the certifying agent which certified the handler of the
finished product must be displayed below or otherwise near the
manufacturer or distributor's name. The statement may include the
phrase, ``Certified organic by * * *'' or ``Ingredients certified as
organically produced by * * *'' to help distinguish the certifying
agent from the manufacturer or distributor. At the handler's option,
this label may include the business address or telephone number of the
certifying agent which certified the handler of the finished product.
Labeling Products with Less Than 50 Percent Organic Ingredients.
The final labeling category covers packaged multiingredient
agricultural product containing less than 50 percent organic
ingredients.
Handlers of ``less than 50 percent'' multiingredient products, who
choose to declare the organic nature of the
[[Page 13554]]
product, may do so only on the information panel by declaring the total
percentage of organic ingredients in the product and, in the ingredient
statement, modifying the organic ingredients with the term,
``organic.'' The percentage statement must be displayed so that it can
be viewed in relation to the ingredient statement.
Products composed of less than 50 percent organic content cannot
display the USDA Seal or any certifying agent's seal or logo anywhere
on the product package or in market information.
Handlers of such products will be subject to this regulation in the
following ways. Those handlers who only purchase organic and nonorganic
ingredients and assemble a finished product of less than 50 percent
organic content do not have to be certified as organic handlers. They
will be responsible for appropriate handling and storage of the organic
ingredients prior to product assembly and for maintaining records
verifying the organic certification of the ingredients used in the
product. To the extent that the packaging process includes affixing the
label to finished product package, those handlers will be responsible
for meeting the labeling requirements of this subpart. Handlers who
produce an organic ingredient prior to assembly into a finished
product, even though the finished product contains less than 50 percent
organic content, and must be certified as to the source of the organic
ingredient(s). The nonorganic ingredients may be produced, handled, and
assembled without regard to the requirements of this part.
The handler who affixes the label to the product package will be
responsible for calculating the percentage of organic ingredients in an
organic product. As part of the certifying agent'' annual certification
of the handler, the certifier will verify the calculation and labeling
of packages.
Table 2, Labeling Consumer Product Packages, provides a summary of
the required and prohibited labeling practices for the four labeling
categories.
Table 2.--Labeling Consumer Product Packages
----------------------------------------------------------------------------------------------------------------
Principal display Ingredient Other package
Labeling category panel Information panel statement panels
----------------------------------------------------------------------------------------------------------------
``100 percent Organic'' ``100 percent ``100% Organic''.. If multiingredient ``100 percent
(Entirely organic; whole, raw organic''. product, identify Organic''.
or processed product). each ingredient
as ``organic''.
USDA Seal and Certifying agent .................. USDA Seal and
Certifying agent name (required); Certifying agent
sets(s). business address, seal(s).
tele. #
(optional).
``Organic`` (95% or more organic ``Organic''....... ``X% Organic Identify organic ``Organic''.
ingredients). Ingredients''. ingredients as
``organic''.
USDA Seal and Certifying agent .................. USDA Seal and
Certifying agent name (required); Certifying agent
seals(s). business address, seal(s).
tele. #
(optional).
``Made with Organic (specified ``Made with ``X% Organic Identify organic ``Made with
ingredients)'' (50 to 95% organic Ingredients''. ingredients as organic
organic ingredients). (specified ``organic''. (specified
ingredients)''. ingredients)''.
Certifying agent Certifying agent Identify organic ``Made with
seal of final name (required; ingredients as organic
product handler. business address, ``organic''. (specified
tele. # ingredients)''.
(optional).
Prohibited: USDA Prohibited: USDA .................. Prohibited: USDA
Seal. Seal. Seal.
Less-than 50% Organic Prohibited: Any ``X% Organic Identify organic Prohibited: Any
Ingredients (49% or less reference to Ingredients''. ingredients as reference to
organic ingredients). organic content ``organic''. organic content
of product. of product.
Prohibited: USDA Prohibited: USDA .................. Prohibited: USDA
Seal & Certifying Seal & Certifying Seal & Certifying
agent seal. agent seal. agent seal.
----------------------------------------------------------------------------------------------------------------
Misrepresentation in Labeling of Organic Products. The labeling
requirements of this proposal are intended to assure that the term,
``organic,'' and other similar terms or phrases are not used on a
product package or in marketing information in a way that misleads
consumers as to the contents of the package. Thus, we intend to monitor
the use of the term, ``organic,'' and other similar terms and phrases.
Should we find that terms or phrases are being used on product packages
to represent ``organic'' when the products are not produced to the
requirements of this regulation, we will proceed to restrict their use.
After consideration of alternative labeling terms that handlers
might wish to use to qualify or modify the term, ``organic,'' we have
determined that handlers may not qualify or modify the term,
``organic,'' using adjectives such as, ``pure'' or ``healthy,'' e.g.,
``pure organic beef'' or ``healthy organic celery.'' The term,
``organic,'' is used in labeling to indicate a certified system of
agricultural production and handling. Terms such as ``pure,''
``healthy,'' and other similar adjectives attribute hygienic,
compositional, or nutritional characteristics to products. Use of such
adjectives misrepresents products produced under the organic system of
agriculture as having special qualities as a result of being produced
under the organic system. Furthermore, use of such adjectives would
incorrectly imply that products labeled in this manner are different
from other ``organic'' products that are not so
Moreover, ``pure,'' ``healthy,'' and other similar terms are
regulated by FSIS and FDA. These terms may be used only in accordance
with the labeling requirements of FDA and FSIS. For example, the
regulations implemented by FSIS, 9 CFR 317.363, define the terms,
``healthy,'' ``health,'' and similar derivations and the conditions of
use as a nutritional claim. Also, according to FSIS regulations, 9 CFR
317.8(b)(34), the term, ``pure,'' as well as the terms, ``all,'' ``100
percent,'' and similar terms, may only be used to indicate that a
single ingredient product is composed of 100 percent of the product
ingredient and contains no other ingredients. The term, ``healthy,'' is
regulated by FDA (21 CFR
[[Page 13555]]
101.14) and can be used, with documentation, only to indicate or
characterize a relationship of the product to a disease or health-
related condition. The prohibition on use of these terms to modify
``organic'' does not otherwise preclude their use in other labeling
claims.
We also intend to monitor the use of the term, ``organic,'' in
corporate or company names and seek additional guidance from the FTC.
We do not believe that the term, ``organic,'' in a brand name context
inherently implies an organic production or handling claim or
inherently constitutes a false or misleading statement.
The determination as to whether the use of the term, ``organic,''
in a brand name conveys a message about the product's attributes must
be made by the Secretary. We will monitor use of the term, ``organic,''
in product and company names at this time. However, if we find that the
term is being used in a false or misleading way to misrepresent the
organic nature of the product, we have the authority under section
6519(b) of the Act to take action against such use. Such determinations
and actions will be taken on a case-by-case basis.
Labeling of Products Shipped in International Markets. Domestically
produced organic products intended for export may be labeled to meet
the requirements of the country of destination or any labeling
requirements specified by a particular foreign buyer. For instance, a
product label may require a statement that the product has been
certified to, or meets, certain European Union organic standards. Such
factual statements regarding the organic nature of the product will be
permitted. However, those packages must be exported and cannot be sold
in the United States with such a statement on the label because the
statement indicates certification to standards other than are required
under this program. As a safeguard for this requirement, we require
that shipping containers and bills of lading for such exported products
display the statement, ``for export only,'' in bold letters. Handlers
also will be expected to maintain records, such as bills of lading and
U.S. Customs Service documentation, showing export of the products.
Only products which have been certified and labeled consistent with the
requirements of the National Organic Program (NOP) may be shipped to
international markets without marking the shipping containers ``for
export only.''
Organic product produced under a foreign country's or international
association's organic standards deemed equivalent to these standards
and certified by a certifying agent accredited by the Secretary may be
imported into the United States provided that the product labels are
consistent with the requirements of this subpart. Any labeling on the
product package or in market representation cannot imply that the
product is also certified to other organic standards or requirements
that are more restrictive than this national program. These provisions
are consistent with international standards and will facilitate
international trade of organically produced products and, thus, benefit
the global organic industry.
Labeling Nonretail Containers. Section 205.306 provides for
labeling nonretail containers used to ship or store raw or processed
organic agricultural products that are labeled ``100 percent organic,''
``organic,'' and ``made with organic (specified ingredients).'' These
labeling provisions are not intended for shipping or storage containers
that also will be used in displays at the point of retail sale. They
would be used for easy identification of the product to help prevent
commingling with nonorganic product or handling of the product which
would destroy the organic nature of the product (fumigation, etc.).
Retail containers will have to meet labeling provisions specified in
Sec. 205.307.
Containers used only for shipping and storage of any product
labeled as containing 50 percent or more organic content may, at the
handler's discretion, display the following information: (1) The name
and contact information of the certifying agent which certified the
handler of the finished product; (2) the term, ``organic,'' modifying
the product name; (3) any special handling instructions that must be
followed to maintain the organic integrity of the product; and (4) the
USDA Seal and the appropriate certifying agent seal. This information
is optional if handlers believe display of the information helps ensure
special handling or storage practices which are consistent with organic
practices.
Containers used for shipping and storage of organic product must
display a production lot number if such a number is used in the
processing and handling of the organic product being shipped or stored.
The lot number must be included for inventory control and quality
assurance purposes. To help assure export of organic product produced
and labeled to foreign specifications, the shipping containers and
shipping documents (bills of lading) must be marked with the phrase,
``for export only,'' in bold letters. The handler also must maintain
records showing export of the product to a foreign country.
Much of the required information may overlap information that the
handler normally affixes to shipping and storage containers or
information that is required under other Federal labeling regulations.
Provisions in this proposal do not take precedence over food safety or
quality control provisions which may be required for specified products
or types of products covered by such Federal regulations. There are no
restrictions on size or display of the term, ``organic product,'' or
the certifying agent seal unless otherwise required by other Federal or
State statutes.
Labeling Products at the Point of Retail Sale Section 205.101(b)(2)
of subpart B on Applicability provides regulations regarding the
certification of retail food establishments under this program. Those
operations are subject to labeling and market information requirements
concerning products offered to consumers at the point of retail sale.
Such labeling and market information must truthfully represent the
organic nature and handling of the product.
Section 205.307 applies to organically produced products that are
not prepackaged prior to sale and are presented in a manner which
allows the consumer to select the quantity of the product purchased.
To be labeled as ``100 percent organic'' or ``organic'' at the
point of retail sale, the processing and assembly of such products must
be carried out by a certified manufacturing facility for distribution
to a retail food establishment. For instance, a tossed salad may be
labeled as ``100 percent organic tossed salad'' or ``organic tossed
salad'' (consistent with the percentage of organic ingredients in the
salad) provided the salad and ingredients have been produced and
assembled under organic certification. If the multiingredient product
is identified as ``organic'' at the point of retail sale, any
ingredient statement displayed at retail sale must identify the organic
ingredients as ``organic.'' The retail materials may also display the
USDA Seal and the seal or logo of the certifying agent. If shown, the
certifying agent seal must not be larger than the USDA Seal.
Using the same example, a product made with 95 percent or more
certified organic salad components but which is assembled at an
uncertified operation may be labeled ``tossed salad made with organic
(specified ingredients).'' The retail food establishment may not
[[Page 13556]]
display the USDA Seal or the seal or seals of cerftifying agents
involved in ingredient certifications because the final assembly of the
product was not certified pursuant to the handling requirements of this
regulation.
Our position on the applicability of these regulations to different
business entities is more completely explained in subpart B,
Applicability, of this regulation.
``Section 205.308 addresses processed products ``made with organic
(specified ingredients)'' that are not prepackaged prior to sale and
are presented in a manner which allows the consumer to select the
quantity of the product purchased. These products will include, but
will not be limited to, multiingredient products containing between 50
and 95 percent organic ingredients. Retail displays, display
containers, and market information for such products may display the
phrase, ``made with organic (specified ingredients)'' provided that the
product has been assembled by a manufacturing facility certified
pursuant to this regulation. Up to three organic ingredients may be
identified in the statement. If such statement is declared in market
information at the point of retail sale, the ingredient statement must
identify the organic ingredients as ``organic.'' Retail display and
market information of such bulk products cannot use the USDA Seal but
may display the seal or logo of the certifying agent which certified
the finished product, provided that assembly of the product was carried
out at a certified manufacturing facility. The certifying agent's seal
or logo may be displayed at the option of the retail food
establishment. If such a product has not been assembled at a certified
manufacturing facility, the retail display and market information may
not identify the product as ``made with organic (specified
ingredients).''
Prepared food products containing less than 50 percent organic
ingredients at retail sale may not be identified as organic or
containing organic ingredients. The USDA Seal and any certifying agent
seal or logo may not be displayed.
Labeling Products Produced on Exempt or Excluded Operations. This
proposal provides limited organic labeling provisions for organic
product produced or handled on exempt and excluded operations. Such
operations would include retail food establishments, certain
manufacturing facilities, and production and handling operations with
annual organic sales of less the $5,000. They are discussed more
thoroughly in subpart B, Applicability.
Under this proposal, any such operation that is exempt or excluded
from certification, or which chooses not to be certified, may not label
its products in a way which indicates that the operation has been
certified as organic. Primarily, this means that the exempt or excluded
operation may not display the USDA Seal or any seal or logo of a
certifying agent. Any packaged organic product from an exempt or
excluded operation may not use the labeling terms ``100 percent
organic,'' or ``organic,'' or ``made with organic (specified
ingredients),'' on the principal display panel. Those labeling terms
are reserved for products produced by certified operations. The organic
representation of exempt or excluded operation products may only be
made on the information panel where the organic percentage can be
displayed and the organic ingredients identified as ``organic.''
Retail displays and market representation of such products may not
indicate that the product has been certified as organic. For instance,
a whole, raw, organic product marketed directly to consumers at a
farmers market or roadside stand as ``organic apples'' or ``organic
tomatoes.'' However, no terms may be used which indicate ``certified''
organic apples, etc. No organic seal or logo may be displayed with the
product at the point of retail sale.
We propose these restrictions simply as truth in labeling
provisions because use of terms or phrases reserved for certified
operations and products and display a certification seal will indicate
that the product has been certified. We believe this requirement will
help differentiate between certified and not certified products and
help maintain the integrity of certified products while providing
limited organic labeling opportunities for exempt and excluded
operations.
Finally, this rule proposes that exempt organic producers cannot
sell their product to a handler for use as an ingredient or for
processing into an ingredient that will be labeled as ``organic'' on
the information panel. However, this restriction is raised for public
comment in subpart B, Applicability, of this part.
Small producers or handlers who qualify for exemption but who
choose to be certified pursuant to these regulations can label their
product as certified organic and can sell that product to certified
handlers for further processing as an organic ingredient.
USDA Seal. This proposal introduces a new, redesigned, USDA Seal,
that can be placed on consumer packages, displayed at retail food
establishments, and used in market information to show that products
have been produced and handled in accordance with these regulations.
The Seal can only be used to identify raw and processed products that
are labeled as ``100 percent organic'' or ``organic.'' It cannot be
used for products labeled as ``made with organic (specified
ingredients)'' (50 to 95 percent organic ingredients) or on
multiingredient products with less than 50 percent organic ingredients.
The USDA Seal presented in this proposal will consist of the
phrase, ``USDA Certified Organic,'' on a shield or badge design. When
used, the seal must be the same form and design as shown in figure 1 of
Sec. 205.310 of this proposal. The seal must be printed legibly and
conspicuously. On consumer packages, retail displays, and labeling and
market information, the Seal may be printed on a white, light colored,
or transparent background with contrasting dark colored words and
shield outline or on a dark colored background with contrasting words
and shield outline in one or two light colors. The Seal also may be
printed in the colors red, white, and blue as follows: a white
background, with dark blue shield outline, and red words. The choice of
color scheme is left to the discretion of the producer, handler, or
retail food establishment based on other colors on the product package
and other considerations.
Labeling--Changes Based On Comments
This subpart differs from our first proposal in several respects as
follows:
(1) Use of terms other than ``organic.'' The first proposal stated
that informational statements which imply ``organic'' production and
handling should be used only on products that are produced and handled
in accordance with these regulations. The proposal identified several
informational statements commonly referred to as ``eco-label'' or
``green'' terms and phrases such as: ``produced without synthetic
fertilizers,'' ``pesticide free farm,'' ``no drugs or growth hormones
used,'' ``raised without antibiotics,'' ``ecologically produced,''
``sustainably harvested,'' etc. We asked for comments on these and
other terms or phrases which directly or indirectly imply that a
product was organically produced and handled.
Commenters favored use of ``eco-label'' and ``green'' terms and
phrases on any product labels. The general consensus expressed in the
comments is
[[Page 13557]]
that producers and handlers should be able to make claims about their
product provided the claims are truthful.
While commenters did not oppose the use of eco-label terms or
phrases on nonorganic products, they made it clear that the term,
``organic,'' should only be used on products produced and handled in
accordance with these regulations. Several commented that consumers
respond favorably to the term, ``organic,'' when used on a product
label, and, therefore, proper use of the term must be closely
protected.
We also received several comments regarding use of the terms,
``biological'' and ``ecological,'' on product labels. A few comments
indicated that the terms should be allowed on nonorganic products to
truthfully describe an alternative agricultural system under which the
product was produced or processed. However, most commenters opposed use
of the terms as substitutes for the term ``organic'' on product labels.
We agree with the majority of comments received on this subject,
and we, therefore, propose to regulate the term, ``organic,'' and no
other terms. We propose that the term, ``organic,'' may only be used on
labeling and market information of products that are produced and
handled in accordance with these regulations. We understand that the
terms, ``ecological'' and ``biological,'' are a special case in that
they are used synonymously with the term, ``organic,'' in other
countries. However, they cannot be used interchangeably with the term,
``organic,'' in this country. These terms may be used as eco-labels at
this time. However, we will proceed to restrict use of these or any
other terms if we find that they are used on product packages in the
United States to represent ``organic'' when the products are not
produced to the requirements of this regulation.
(2) 100 percent organic category. Our first proposal did not
provide for a ``100 percent organic'' category because that level of
organic composition is not specifically provided for in the Act. While
the Act and the first proposal provide for a labeling category of 95
percent or higher organic content, commenters appealed for a labeling
category for product that is 100 percent organic. Many suggested that
being able to use the term, ``100 percent,'' will give handlers added
incentive to use only certified ingredients in multiingredient
products. Some commenters suggested that if a product is composed only
of organic ingredients, with no additives or other substances, it
should be allowed to be labeled and represented in market information
as 100 percent.
We agree that a ``100 percent organic'' labeling category may
increase the effectiveness of marketing efforts and may provide
incentives for handlers to use more certified organic ingredients in
their multiingredient products. Therefore, this proposal will allow the
term, ``100 percent organic,'' to be used on labels affixed to or
market information representing raw or processed organic products that
are composed entirely of organically produced agricultural product.
(3) Identification of private certifying agents. Under the first
proposal, identification of private certifying agents was not permitted
on the principal display panel with the USDA Seal and the State organic
seal. While a few commenters suggested that only the USDA Seal should
be displayed on the principal display panel, the majority of those
commenting on this topic requested that private certifying agent seals
be displayed on an equal basis with a seal of the appropriate State's
organic program. Although the number of State certifying agents is
relatively small, private certifying agents believe that State organic
programs and State certifying agents may implement measures in States
that work against the interests of private certifying agents. The
Department believes those concerns to be unfounded. Under the NOP, the
Secretary will approve all State organic programs and accredit all
State certifying agents. However, any of those programs or agents that
might discriminate or work against the interests of private certifying
agents in the State would not be approved by the Secretary.
Some commenters suggested that many private certifying agent seals
are widely recognized and respected and their seals influence consumer
choices in product purchases. It is appropriate that private certifying
agents be afforded the same treatment with regard to labeling as the
State certifying agent. We agree with commenters' requests for equal
treatment of certifying agents and that certifier seals may have
marketing potential in some areas. Therefore, we specify in this
proposal that a private certifying agent's seal or logo can be
displayed to the same extent as the seal of a State certifying agent.
This change is reflected throughout this subpart.
(4) Use of a certifying agent's seal or logo. Many commenters
believe that the certifying agent's seal, logo, or identifying mark
shown on ``100 percent organic'' and ``organic'' products should be the
seal or mark of the certifying agent that certifies the handler of
finished product. Commenters also stated that labels should not be used
to misrepresent one product as being more organic than another product,
which might happen if multiple seals are displayed on one product
package and only two are displayed on a competing product package.
While we understand the commenters' points, we believe that display of
certifying agent seals on products labeled ``100 percent organic,''
``organic,'' and ``made with organic (specified ingredients)'' should
remain optional for handlers. If two or more certifying agents are
involved in certifying raw organic agricultural product and organic
ingredients used in a finished product, the seals or marks of those
certifying agents may be displayed, at the discretion of the handler.
There should be only two restrictions to using multiple certifying
agent seals: (1) The seal of the certifier of the handling operation
producing the finished product should be displayed; and (2) only the
seals of those certifying agents actually involved with certification
of the product or ingredients may be displayed. For instance, a private
certifying agent may certify a product assembled using organic
ingredients produced in Texas and certified by the Texas State
certifying agent. The product package may, at the handler's option,
display the Texas State agent's seal in addition to the seal of the
private certifying agent which certified the operation creating other
organic ingredients and creating the finished product. Likewise,
display of a seal of a foreign country's organic program or foreign
certifying agent will be permitted only if the foreign agent certified
the finished product or a product ingredient.
Some commenters say that display of two State agent seals may
confuse consumers. However, we do not believe it is likely that
handlers will choose to display multiple certifying agent seals to
misrepresent a product. We also do not believe that possible consumer
confusion from display of multiple seals should take precedence over
the handler's right to provide product information. If multiple
certifying agent seals or marks are displayed on a product package or
in market information, the handler or retail food establishment must
maintain appropriate records showing proof of all organic
certifications.
(5) Display of certifying agent name and business address.
Commenters also suggested that the certifying agent's name and business
address be displayed adjacent to identification of the handler or
distributor of products labeled ``organic'' and ``made with organic
[[Page 13558]]
(specified ingredients).'' The commenters stated that such information
should be available for consumers who may have questions about the
organic nature of a product or product ingredients. We agree that the
name of the certifying agent should be included on a product package
but believe that display of the business address or telephone number
should be optional to the handler who assembles the finished product
and affixes the label on the package. If a consumer wants to inquire
about the organic nature of a purchased product, the consumer can
obtain contact information through the certifying agent database listed
on the NOP homepage. Finally, to clearly identify the information
provided, the statement, ``Certified organic by * * *'' or
``Ingredients certified as organically produced by * * *,'' may be used
to distinguish the certifying agent from the manufacturer or
distributor of the product.
The statement and agent identification is intended for information
purposes only and is not to promote the organic nature of the product.
The certifying agent identification may be placed below the
manufacturer or distributor information and must not interfere with
display of that information.
(6) Size of certifying agent seal. There was a general consensus
among commenters that the seals of State and private certification
agents should not be larger than the USDA Seal. To emphasize the market
value of such a national organic seal and maintain some consistency of
treatment with regard to the different organic content categories, we
propose that State and private certifying agent seals can be the same
size as but must not exceed the size of the USDA Seal on any package
label or in market information. The size of the USDA Seal on a package
is left to the discretion of the handler.
(7) Displaying the percentage of organic ingredients. The first
proposal permitted use of the word, ``organic,'' in the ingredient
statements to modify those ingredients that were produced and handled
pursuant to these regulations, but did not require the percentage of
organic ingredients to be displayed on the label. Most all commenters
responding to this labeling issue stated that identification of organic
ingredients as ``organic'' will encourage handlers to increase the
organic composition of multiingredient products. However, some
commenters did not favor any use of the word, ``organic,'' on packages
of multiingredient products containing less than 50 percent organic
ingredients. Some commenters also suggested that including the total
percentage of organic content adjacent to the ingredient statement (in
which the organic ingredients are identified) would give relevance to
the ingredient statement. We concur with commenters' recommendations
about the display of the total percentage of organic content and
propose that the percentage of organic ingredients be placed on the
information panel. The percentage statement and the ingredient
statement should be shown in a way that indicates the relationship of
the information. If a product is labeled ``100 percent organic,'' all
ingredients (except water and salt), by definition, would have to be
certified organic ingredients, and each ingredient may be but would not
have to be identified as ``organic.'' Identification of organic
ingredients would be required for products labeled ``organic'' and
``made with organic (specified ingredients),'' and for products
containing less than 50 percent organic ingredients. We did not change
the identification of organic ingredients for products containing less
than 50 percent organic ingredients because we believe the uses of the
term on the information panel and ingredient statement of such product
packages do not imply that the product is organic.
(8) Labeling of products containing 50-95 percent organic
ingredients. The first proposal specified that products with 50-95
percent organic content could use ``made with certain organic
ingredients'' on the label. Many commenters suggested that the word,
``certain,'' may appear confusing to consumers and that a stronger
statement is needed to identify the organic nature of the product. One
commenter sought clarification of whether the term, ``certain,'' is a
substitute for the name of the ingredient in a single-ingredient
product. Many requested that the statement be changed to allow specific
identification of the organic ingredients on the principal display
panel. Because that is the panel first and most often observed by
consumers, the commenters indicated that the information presented on
the principal display panel should be clear and accurate to assist
consumers in making their purchasing decisions.
After review of the comments, we believe that, if the statement is
going to be displayed on the principal display panel, it should state
the specified organic ingredient in the product; e.g., ``made with
organic (specified ingredients).'' Replacing the word, ``certain,''
with the actual organic commodity name or organic ingredient will add
the specificity sought by commenters and assist consumers in making
more informed choices. Under this proposal, the statement, ``made with
organic (specified ingredients),'' must be used on the principal
display panel and on other package panels of a product containing
between 50 and 95 percent organic ingredients.
Several commenters suggested that the size of the letters in the
phrase be limited to a fraction of the size of the product name as it
appears on the principal display panel. They stated that limiting the
size of the letters will keep the statement from making the product
appear more organic than products with 95 percent organic ingredients.
For instance, if a product contains 55 percent organic ingredients and
the statement, ``made with organic (specified ingredients),'' is
displayed on the principal display panel in large, bold letters, the
product may appear more organic than a 97-percent product simply
labeled ``organic.'' Commenters recommended letter sizes from one-half
to three-fourths the size of the product name as it appears on the
principal display panel.
We also believe that the labeling for these products should not use
typeface or letter sizes which would mislead consumers. FDA labeling
requirements in 21 CFR 101.3(d) specify that required statement of
identity of the product shall be in a size most reasonably related to
the largest printed matter on a panel. FDA enforces ``reasonably
related'' as being one half the size of the largest printed matter,
which is usually the product name. Therefore, to be consistent with FDA
labeling requirements, we have established the print size of the
statement, ``made with organic (specified ingredients),'' to be not
more than 50 percent, or one half, of the largest print size appearing
on the principal display panel. This print size is consistent with the
recommendation of many commenters but is smaller than the 75 percent
recommended by the NOSB. We propose that the statement, ``made with
organic (specified ingredients),'' appear in only one print style and
color, without highlighting.
We believe that these additional restrictions on display of the
statement will enable the message to be delivered and yet provide some
structure and consistency to display of the statement. It is our
intention that the statement not be used to disproportionately dominate
the principal display panel or other panels and not be used to
misrepresent the organic nature of the product.
(9) Limiting the number of organic ingredients listed. Some
commenters suggested limiting the number of organic ingredients that
could be
[[Page 13559]]
included in the statement ``made with organic ingredients.'' This topic
was the subject of much NOSB deliberation and public discussion.
Commenters reasoned that if the list of organic ingredients became too
long, the product could appear to be more organic than ``95 percent''
products. For instance, a product could have 10 organic ingredients,
but those 10 ingredients may comprise only 51 percent of the product.
The consensus of comments suggested that the statement should be
limited to three organic ingredients, which is the industry standard.
We believe their recommendation has merit and, therefore, propose that
up to three organic ingredients can be shown in the statement. We
encourage additional comments on the maximum number of ingredients that
should be allowed to appear in the statement on the principal display
panel. Commenters should provide reasons for the number they recommend.
(10) Qualifications for display of the USDA Seal. In the first
proposal, we permitted the display of the USDA seal on products with 50
percent or more organic ingredients. Commenters objected. They
overwhelmingly endorsed a high organic content standard for a product
to be labeled as ``organic.'' They believe products containing less
than 95 percent organic ingredients do not have sufficient organic
content to justify an ``organic'' label on the principal display panel,
and should not be so labeled under the NOP regulations. Commenters also
stated that display of the USDA Seal will be very desirable. Many
stated that a prohibition on display of the USDA Seal on 50-to-95-
percent products would encourage handlers who assemble multiingredient
products to use more organically produced ingredients and fewer
nonorganic ingredients. They suggested that the USDA Seal and the
certifying agent's seal or logo not be displayed on any package panel
of products ``made with organic (specified ingredients)'' or on
products with less than 50 percent organic ingredients.
We agree that some distinction should be made between 95 percent-
plus organic products and the 50-95 percent organic products. Handlers
of 95 percent-plus organic products may display both the USDA Seal and
the certifying agent seal or logo on the principal display panel of the
product. The commenters propose that handlers of 50-95 percent organic
products not be allowed to display either seal on the principal display
panel. However, we believe that, because handlers of 50-95 percent
organic product are required to be certified under this program, it is
appropriate that they should be allowed to display some evidence of
that certification. We propose, therefore, that handlers of 50-95
percent organic product may display the seal or logo of the certifying
agent which certified the finished product. Display of the USDA Seal
will still be restricted to only 100 percent organic products and to 95
percent-plus products. We believe this provision will provide more
equitable treatment for handlers of 50-95 percent products who are
required under this regulation to obtain and maintain organic
certification in order to label their organic product. It will also
maintain a distinction between the two product levels by continuing the
restriction on display of the USDA Seal. We believe that, while display
of the USDA Seal is less likely to be an incentive for handlers of
products at the lower end of the 50 to 95 percent range of organic
content, handlers of products at the higher end of the 50 to 95 percent
organic content range may be encouraged to increase the organic content
in order to display the USDA Seal.
An organic product produced or handled by an exempt or excluded
operation, including those with less than $5,000 annual organic sales,
may not display the USDA Seal or the seal of a certified agent because
the operation has not been certified. Even if the organic content of
the product is 95 percent or higher, the product still cannot be
labeled as ``certified'' organic or marketed using an organic seal or
logo.
(11) Design of the USDA Seal. The final change prompted by comments
is redesign of the USDA Seal. The Seal in the first proposal was a
triangular shape behind a circle of recycling arrows around a globe
figure with the word, ``organic,'' printed diagonally across the globe.
That proposed seal was opposed by hundreds of commenters. Comments
included: The triangle resembles a radioactive warning symbol or
fallout shelter sign; the diagonal line across the circle appears to be
the universal ``no'' sign (such as ``no walking,'' ``no smoking''); the
globe design doesn't show up; the globe design implies an international
program; the design is too busy; simplify the design; use the words,
``certified organic''; use a text logo; the seal will be too costly to
produce; and the triangle points will puncture or tear plastic when
printed.
Given the overwhelming negative response to the first seal, we
propose a simplified design composed of the words, ``USDA CERTIFIED
ORGANIC,'' inside a shield or badge design. This design is consistent
with comments requesting simplicity and use of the words, ``certified
organic.'' At the request of commenters, this proposal provides for
labeling on transparent material. We believe the proposed basic dark on
light or light on dark requirement is broad enough to allow handlers
the flexibility needed to match color schemes compatible with their
product packages. The alternative red, white, and blue color scheme
offers handlers what consumers may identify as a more official or
patriotic display of the Seal. We believe it is important that the Seal
be displayed in a consistent manner, within general light/dark
guidelines so that the Seal becomes easily recognizable to consumers.
Labeling--Changes Requested But Not Made
Comments reflecting different opinions on the same topic are
covered above (e.g., the number of organic ingredients listed on the
principal display panel, the size of ``organic'' letters on the
principal display panel, a recommended redesign of the USDA Seal,
etc.). Obviously, not all such conflicting recommendations can be
accepted. Two comments were received which are not accepted but which
we believe warrant further consideration by the public and the organic
community. We request additional comments regarding the following two
recommendations. Commenters should specify their recommendation
regarding each topic and provide reasons for their recommendation.
(1) Changing the ``organic'' threshold for multiingredient
products. At least one commenter suggested that the 50-95 percent
labeling category sets too low a threshold for organic labeling of
multiingredient products. The commenter suggested that, for increased
international acceptance of USDA standards, the lowest acceptable
percentage for receiving an organic label should be 70 percent organic
ingredients, based on the European Union (EU) standard which now
requires a minimum of 70 percent organic ingredients for the product to
be labeled as ``organic'' (or, ``biological'' or ``ecological'').
The EU standard allows products with a 70 percent organic content
to be labeled as ``organic,'' where our proposal will require at least
95 percent organic content before a product could be labled as
``organic.'' This 95 percent standard is in the Act. Where the two
standards differ is that the EU standard doe not have a ``made with
organic (specified ingredients)'' category proposed in this rule.
[[Page 13560]]
While the Act establishes a 50-percent minimum ingredient content,
that percentage can be adjusted upward if doing so would further the
purposes of the Act. To do so, however, the Secretary must have good
cause and justification for establishing a higher minimum organic
ingredient content. In other words, we could raise the minimum organic
ingredient content threshold to 70 percent, redefining two of our four
categories. The four categories would be: less than 70 percent, 70-95
percent, greater than 95 percent, and 100 percent. Under this scenario,
the prohibitions on excluded methods, irradiation, and sewage sludge
would not apply to the nonorganic ingredients of products with less
than 70 percent organic content. At the same time, these products would
only be able to list the organic ingredients on the information panel.
The ``made with organic ingredients'' category, to which the
prohibition would apply, would be 70-95 percent organic content. The
only products that would get the ``organic'' designation would still be
those with at least 95 percent organic content.
Because we find no compelling reason to raise the 50-percent
minimum ingredient content threshold established in the Act, we have
not accepted the commentor's recommendation in this proposal. However,
if comments on this proposal suggest an appropriate justification, the
minimum ingredient content threshold could be raised in the final rule.
(2) Minimum content requirements for organic ingredients. One
commenter suggested that a minimum percentage of the entire product
weight be established to qualify for a single ingredient to be included
in the statement, ``made with organic (specified ingredients).'' The
commenter suggested that this would help prevent misrepresentation of
the organic nature of a product. The commenter suggested that the
minimum content for any ingredient should be 15 percent. The commenter
did not justify the 15-percent minimum (as opposed to another minimum
percentage). Because such a recommendation could prevent important
ingredients from being specified on a product label, we have not
incorporated the comment in this proposal. However, we believe the
comment may have merit. One factor in establishing a minimum percentage
for any individual ingredient listed on the principal display panel
would be the established minimum percentage for all organic ingredients
in a product, the question raised in the paragraph above. For instance,
if the minimum percentage of all ingredients is established at 70
percent to conform to EU standards, should there be a minimum
percentage for any individual organic ingredient that could be listed
on the principal display panel as one of three organic ingredients in
the product? Would such a labeling restriction prevent identification
of an important organic ingredient from being displayed on the
principal display panel?
Commenters on questions (1) and (2) should state whether they think
the recommendations would further the marketing of organic products
and, if so, clearly state the recommended percentage for each question
and the reasons for their opinions regarding each issue.
(3) Labeling requirements for small operations. A majority of those
who commented on the exemption for small operations (less than $5,000
organic sales) in the first proposal stated that such operations are
not exempt from labeling requirements under the Act. In this proposal,
we provide limited labeling provisions which prohibit exempt and
excluded operations, including those with less than $5,000 in annual
organic sales, from labeling their products in a way that indicates the
operations or the products have been certified as organic. These
provisions will not allow such operations to use labeling terms and
organic seals and logos specified for certified operations. We believe
those terms, logos and seals should be reserved for operations and
products that are certified under these regulations.
Labeling--Additional Provisions
Upon further review of the label and market information provisions
in the first proposal, we propose the following additions and changes.
(1) Display of a State organic seal. Under the first proposal, each
State organic certification program would have been allowed to display
a seal or logo of its State organic program. The first preamble stated
that it was appropriate for a State to have a seal representing its
organic program, thus allowing product produced under that program to
bear the State's seal.
Currently, 13 State departments of agriculture (or other State
agency) and approximately 40 private agents certify to a variety of
private and State organic requirements. After establishing a policy
which more clearly defines the criteria for approval of a State organic
program, we believe that, in the interest of consistent and uniform
national standards, product packages should not display the seal of a
State organic program if the seal is different from the seal or mark
used by the State's organic certifying agent.
This determination is based on a proposed change in State programs.
A State organic program will be approved by the Secretary for specific,
need-based reasons particular to that State (see State Programs under
subpart G). To establish and maintain uniform national standards,
States will not be authorized to implement more restrictive organic
standards simply to promote State products that are ``more organic''
than products produced and handled in other States or under NOP
requirements. Rather, the Secretary will approve only those State
programs that need more restrictive requirements to protect or preserve
unique environmental conditions or to accommodate product and handling
practices unique to a State or portion of a State. In the absence of
such environmental conditions or production practice needs, a State's
organic program must have the same requirements as this NOP. If this is
the case and if a relatively few State programs are approved to have
more restrictive requirements, then no real purpose is served by
permitting State organic programs to display a separate and distinct
seal on a product label. Such a seal would not represent a ``more
organic'' product.
In the place of a State organic program seal, this proposal
provides for the seal or logo of a State certifying agent to be
displayed on packages, if that certifying agent certifies the organic
operation producing the product. Selection of a State or private
certifying agent is the choice of the organic producer or handler being
certified. A State's department of agriculture (or other equivalent
State agency) may establish one or more State certifying agent offices
as part of its governmental operations, or the State may license a
private certifying agent to certify organic operations on behalf of the
State. In either case, the certifying agent would certify these
national requirements and not the particular requirements of a State
organic program unless those requirements were approved by the
Secretary. Therefore, the only organic seal or mark representing a
State will be the seal or mark of a State's certifying agent or
licensed certifying agent. Any certifying agent licensed by the State
must be accredited by the Secretary pursuant to subpart F of this
proposal.
(2) Labeling for international markets. We have added two
paragraphs under section 205.300 to provide for labeling of products
intended for international markets. Domestically produced organic
products intended for export may be labeled to meet the requirements of
the country of destination or any labeling
[[Page 13561]]
requirements specified by a particular foreign buyer.
If labeled to meet foreign labeling requirements, such packaged
products cannot be sold in the United States. Pursuant to Sec. 205.306,
shipping containers and bills of lading for these products would have
to be marked ``for export only'' to assure that the product was not
distributed domestically. We are providing this exception to labeling
requirements for the convenience of exporters only. If the foreign
country or buyer does not require different product labeling, domestic
product which has been produced, certified, and labeled pursuant to
these regulations may be shipped without the statement, ``for export
only,'' on the containers and bills of lading.
Organic product produced in another country for export to the
United States may be certified to the requirements of this regulation
or to an approved foreign organic certification program that has been
recognized as equivalent to the requirements of the NOP. Such products
must be labeled pursuant to the requirements of this subpart.
(3) Product composition. Under new Sec. 205.301, Product
Composition, we have clarified the composition of organic and
nonorganic ingredients in products covered in the four labeling
categories. All ingredients labeled as ``organic'' in the ingredient
statement of the product package must be produced and handled pursuant
to these requirements. No substances prohibited on the National List in
subpart G and no production or handling practices prohibited in
Sec. 205.301(e) may be used in the production or handling of any
ingredient labeled as ``organic.'' Regulations covering the production
and handling of nonorganic ingredients varies with the labeling
category. The higher the percentage of a product's organic composition,
the more restrictive the production and handling requirements of the
nonorganic ingredients in the product. These requirements are found
under Sec. 205.301 and explained above under Proposal Description.
(4) Prohibited practices. Section 205.301(e) lists seven production
and handling practices that are prohibited from being used to produce
whole products or product ingredients that would be labeled as
``organic'' under the NOP. Some of these prohibited practices appear
for the first time in this proposal, and others were specified in the
first proposal and were supported by all those who addressed them in
their comments.
The first proposal prohibited organic labeling of a product or
ingredient produced using water that does not meet requirements of the
Safe Drinking Water Act (42 U.S.C. 300(f) et seq.). We have not
included that provision in this proposal because potable water is
required in other FDA and FSIS processing regulations and does not need
to be repeated as a requirement in this regulation.
The first three practices (use of excluded methods, sewage sludge,
and irradiation) are discussed elsewhere in this proposal and are added
as prohibited practices in this labeling section for consistency
purposes.
Only processing aids and substances on the National List in subpart
G of this regulation may be used in the production and handling of 95
percent-plus organic products and 50-95 percent organic products and in
any ingredient labeled as organic on a product package.
The first proposal prohibited use of sulfites, nitrates, and
nitrites in production or processing of organic products or
ingredients. We have amended the wording of this provision to clarify
that a handler cannot add any sulfites, nitrates, and nitrites to a
product and still label the finished product or ingredient as
``organic.'' We make this clarification because these substances are
found naturally in many substances and may appear naturally in potable
water used in processing.
The last two processing practices that would prohibit an
``organic'' label appeared in separate sections of the first proposal
and are included in this proposal in Sec. 205.301(e)(6) and (e)(7). The
first is that products and organic ingredients assembled using organic
or nonorganic forms of the same ingredient or component ingredients--
depending on availability of the organic ingredients--cannot be labeled
as ``organic when available'' or a similar phrase. Similarly, products
and organic ingredients assembled using both organic and nonorganic
forms of the same ingredient or component ingredients cannot be labeled
as organic if that ingredient is identified as organic on the
ingredient statement and included in the percentage of organic content
on the information panel.
(5) Calculating organic content. Because labeling requirements are
based on the amount of organic ingredients in a product, we have added
new section 205.302, which addresses the calculation of organic
percentages. Provisions in this new section were not included in the
first proposal. While this should be a simple mathematical procedure,
the section proposes certain guidelines for calculating and labeling
organic percentages.
Only one percentage figure for total organic ingredients will be
shown on a package. The percentage of individual organic ingredients
will not be displayed.
An organic product may be constituted completely of organic liquid
products. Therefore, this proposal adds the phrase, ``or fluid
volume,'' in several places in the proposal when referring to liquid
products and ingredients. For ingredients in liquid form that are
reconstituted with water from a concentrate, the calculation would be
based on a single-strength solution of the liquid concentrate. For
products that may contain both dry and liquid organic ingredients, the
percentage calculation would be based on the combined weight of the
organic ingredients, including the weight of the liquid ingredients,
minus water and salt.
(6) Labeling of nonretail containers. We have added new
Sec. 205.306, covering labeling of nonretail containers--those used
only for shipping and storage of agricultural products labeled as
organic or containing organic ingredients. While the same containers
are commonly used for both shipping and storage, the first proposal did
not reference storage containers or specify labeling requirements for
those containers. These provisions are proposed only for products
labeled as ``100 percent organic,'' ``organic,'' and ``made with
organic (specified ingredients).'' Some may believe that use of the
USDA Seal on a shipping container of products ``made with organic
(specified ingredients)'' may be inconsistent with other labeling
provisions prohibiting display of the Seal on consumer packages of
those products. However, in the case of shipping and storage
containers, the display of seals is not intended for marketing purposes
but would be used for easy identification of the product to help
prevent commingling with nonorganic product or handling of the product
which would destroy the organic nature of the product (fumigation,
etc.). These provisions will not apply to shipping and storage
containers of products containing less than 50 percent organic
ingredients.
(7) Retail Food Establishments. The extent of the regulatory
authority of this regulation has been the subject of intense
discussions in comments received, NOSB deliberations, and AMS
discussions. Commenters claimed that it makes no sense to regulate and
certify the production and handling of organic product but not require
certification and regulate retail food establishments where some fresh
foods containing organic ingredients are processed and
[[Page 13562]]
assembled and where they can become adulterated or misrepresented to
the consuming public.
Retail food establishments that market organic product, whether
produced in-store, in a corporate commissary, or by others, will be
subject to the labeling provisions of this subpart as that labeling
applies to: (1) Point-of-purchase, in-store displays describing the
organic nature of the product; and (2) other market information and
media advertising regarding the product being marketed at the retail
food establishment. Food retail establishments must describe the
product in in-store retail displays, market information, and media
advertising that is consistent with the organic content of the finished
product. Any labeling of a product that is inconsistent with the
percentage of organic content of the product will be considered a
violation of truth in labeling and/or truth in advertising regulations
of FDA and the FTC. Multiingredient products which are described as
organic product in retail displays and market information must be
assembled by a certified manufacturing facility, pursuant to the
Applicability subpart of this regulation.
Packaged organic products, organic fresh produce, and organic bulk
bin food items must be described in point-of-purchase displays, pricing
information, and consumer information in terms consistent with the
organic content of the product. For instance, an in-store retail
display would describe an 87 percent organic product by specifying the
percentage of organic content of the product and identifying the
organic ingredients in the ingredient statement, as may be required by
FDA. The market information for such a product must not, for instance,
label the product as ``organic'' or ``100 percent organic.'' This would
be a violation of truth in labeling and advertising regulations of FDA
and FTC. The USDA Seal and the seal of the certifying agent may be
displayed at retail sales and in market information on products
certified as containing 95 percent or more organic content.
Multiingredient products containing 50-95 percent organic ingredients
may display the seal or logo of the certifying agent of the organic
handling operation.
We believe these labeling practices will help assure appropriate
representation of bulk organic products at retail sale and will
encourage handlers to use more organic ingredients.
Products containing less than 50 percent organic ingredients at the
point of retail sale may not be identified in any way as ``organic'' or
containing organic ingredients. In addition, the USDA Seal and seal,
logo, or other identifying mark of the certifying agent is prohibited
from being used in retail displays and market information.
(8) Change in calculating the $5,000 exemption. We are proposing a
change in calculating the $5,000 exemption for producers and handlers.
The $5,000 annual exemption will be calculated on sales of organically
produced product and not on all agricultural products marketed by the
exempt producer or handler, as provided in the first proposal. This
exemption means that qualifying exempt organic producers and handlers
may annually sell up to $5,000 of organically produced products and not
be certified as an organic operation under this regulation. The
exemption could apply to a large, conventional agricultural operation
that also has a small amount of acreage designated for organic
production--the products of which, for example, is sold at a roadside
stand. Any sale of other, nonorganic products will not count against
the $5,000 sales total. The labeling and market information
requirements for organic products produced by such exempt operations
are specified in Sec. 205.309 of this regulation.
Subpart E--Certification
This subpart sets forth the requirements for a national program to
certify production and handling operations as certified organic
production or handling operations. The certification process proposed
in this subpart will be carried out by accredited certifying agents.
Proposal Description
General Requirements. Production and handling operations seeking to
receive or maintain organic certification must comply with the Act and
applicable organic production and handling regulations. Such operations
must establish, implement, and annually update an organic production or
handling system plan that is submitted to an accredited certifying
agent. They must permit on-site inspections by the certifying agent
with complete access to the production or handling operation, including
noncertified areas and structures.
As discussed in Subpart B, certified operations must maintain
records concerning the production and handling of agricultural products
that are sold, labeled, or represented as ``100 percent organic,''
``organic,'' or ``made with organic (specified ingredients)''
sufficient to demonstrate compliance with the Act and regulations.
Records applicable to the organic operation must be maintained for not
less than 5 years beyond their creation. Authorized representatives of
the Secretary, the applicable State program's governing State official,
and the certifying agent must be allowed access to the operation's
records during normal business hours. Access to the operation's records
will be for the purpose of reviewing and copying the records to
determine compliance with the Act and regulations.
Certified operations are required to immediately notify the
certifying agent concerning any application, including drift, of a
prohibited substance to any field, production unit, site, facility,
livestock, or product that is part of the organic operation. They must
also immediately notify the certifying agent concerning any change in a
certified operation or any portion of a certified operation that may
affect its compliance with the Act and regulations.
Certification Process. To obtain certification, a producer or
handler must submit a request for certification to an accredited
certifying agent. The request must contain descriptive information
about the applicant's business, an organic production and handling
system plan, information concerning any previous business applications
for certification, and any other information necessary to determine
compliance with the Act.
Applicants for certification and certified operations must submit
the applicable fees charged by the certifying agent. An applicant may
withdraw its application at anytime. An applicant who withdraws its
application will be liable for the costs of services provided up to the
time of withdrawal of the application.
The certifying agent will decide whether to accept the applicant's
application for certification. Certifying agents may decline to accept
an application for certification but may not decline to accept an
application on the basis of race, color, national origin, gender,
religion, age, disability, political beliefs, sexual orientation, or
marital or family status.
Upon acceptance of an application for certification, a certifying
agent will review the application to ensure completeness and to
determine whether the applicant appears to comply or may be able to
comply with the applicable production or handling regulations. As part
of its review, the certifying agent will verify that an applicant has
submitted documentation to support the correction of any deficiencies
identified in a previously received notification of noncompliance. The
certifying agent
[[Page 13563]]
will also review any available U.S. Department of Agriculture (USDA)
data on production and handling operations for information concerning
the applicant.
We anticipate using data collected from certifying agents to
establish and maintain a password-protected Internet database only
available to accredited certifying agents and USDA. This database would
include data on production and handling operations issued a
notification of noncompliance, noncompliance correction, denial of
certification, certification, proposed suspension or revocation of
certification, and suspension or revocation of certification.
Certifying agents would use this Internet database during their review
of an application for certification. This data will not be available to
the general public because much of the data would involve ongoing
compliance issues inappropriate for release prior to a final
determination.
After a complete review of the application, the certifying agent
will communicate its findings to the applicant. If the review of the
application reveals that the applicant may be in compliance with the
applicable production or handling regulations, the certifying agent
will schedule an on-site inspection of the applicant's operation to
determine whether the applicant qualifies for certification. The
initial on-site inspection must be conducted within a reasonable time
following a determination that the applicant appears to comply or may
be able to comply with the requirements for certification.
The certifying agent will conduct an initial on-site inspection of
each production unit, facility, and site included in the applicant's
operation. As a benchmark, certifying agents should follow auditing
guidelines prescribed by the International Organization for
Standardization Guide 10011-1, ``Guidelines for auditing quality
systems--Part 1: Auditing'' (ISO Guide 10011-1).\1\ The certifying
agent will use the on-site inspection in determining whether to approve
the request for certification and to verify the operation's compliance
or capability to comply with the Act and regulations. Certifying agents
will conduct on-site inspections when the applicant or an authorized
representative of the applicant who is knowledgeable about the
operation is present. An on-site inspection must also be conducted when
land, facilities, and activities that demonstrate the operation's
compliance with or capability to comply with the applicable production
or handling regulations can be observed.
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\1\ ISO Guide 10011-1 is available for viewing at USDA-AMS,
Transportation and Marketing Programs, Room 2945--South Building,
14th and Independence Ave., SW, Washington, DC, from 9:00 a.m. to
4:00 p.m., Monday through Friday (except official Federal holidays).
A copy may be obtained from the American National Standards
Institute, 11 West 42nd Street, New York, NY 10036; Website:
www.ansi.org; E-mail: [email protected]; Telephone: 212-642-4900;
Facsimile: 212-398-0023.
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The on-site inspection must verify that the information provided to
the certifying agent accurately reflects the practices used or to be
used by the applicant or certified operation and that prohibited
substances have not been and are not being applied to the operation.
Certifying agents may use the collection and testing of soil; water;
waste; plant tissue; and plant, animal, and processed products samples
as tools in accomplishing this verification.
The inspector will conduct an exit interview with an authorized
representative of the inspected operation to confirm the accuracy and
completeness of inspection observations and information gathered during
the on-site inspection. The main purpose of this exit interview is to
present the inspection observations to those in charge of the firm in
such a manner so as to ensure they clearly understand the results of
the inspection. The firm is not required to volunteer any information
during the exit interview but would be required to respond to questions
or requests for additional information. The inspector will raise and
discuss during the exit interview any known issues of concern, taking
into account their perceived significance. As a general rule, the
inspector will not make recommendations for improvements to the
operation during the exit interview. However, the certifying agent will
have the discretion to decide the extent to which an inspector may
discuss any compliance issue.
Notification of Approval. A certifying agent will review the on-
site inspection report, the results of any analyses for substances, and
any additional information provided by the applicant within a
reasonable time after completion of the initial on-site inspection. The
certifying agent will approve certification upon making two
determinations: (1) That the applicant's operation, including its
organic system plan and all procedures and activities, is in compliance
with the Act and regulations; and (2) that the applicant is able to
conduct operations in accordance with its organic systems plan.
Upon determining the applicant's compliance and ability to comply,
the agent will approve certification and issue a ``certificate of
organic operation.'' The approval may include restrictions regarding
minor deficiencies that would not prevent certification as a condition
of continued certification. A certificate of organic operation will
specify the name and address of the certified operation; the effective
date of certification; the categories of organic operation, including
crops, wild crops, livestock, or processed products produced by the
certified operation; and the name, address, and telephone number of the
certifying agent. Once certified, a production or handling operation's
organic certification continues in effect until surrendered by the
organic operation or suspended or revoked by the certifying agent, the
State program's governing State official, or the Administrator.
Denial of Certification. Should the certifying agent determine that
the applicant is not able to comply or is not in compliance with the
act, the certifying agent will issue a written notification of
noncompliance to the applicant. Applicants who receive a notification
of noncompliance may correct the deficiencies and submit, by the date
specified, a description of correction and supporting documentation to
the certifying agent. As an alternative, the applicant may submit a new
application to another certifying agent, along with the notification of
noncompliance and a description of correction of the deficiencies and
supporting documentation. Applicants may also submit, by the date
specified, written information to the certifying agent to rebut the
noncompliance described in the notification of noncompliance. When a
noncompliance cannot be corrected, a notification of noncompliance and
a ``notification of denial of certification'' may be combined in one
notification.
The certifying agent will evaluate the applicant's corrective
actions taken and supporting documentation submitted or the written
rebuttal. If necessary, the certifying agent will conduct a followup
on-site inspection of the applicant's operation. When the corrective
action or rebuttal is sufficient for the applicant to qualify for
certification, the certifying agent will approve certification. When
the corrective action or rebuttal is not sufficient for the applicant
to qualify for certification, the certifying agent will issue the
applicant a written notice of denial of certification. The certifying
agent will also issue a written notice of denial of certification when
an applicant fails to respond to the notification of noncompliance. The
[[Page 13564]]
notice of denial of certification will state the reasons for denial and
the applicant's right to reapply for certification, request mediation,
or file an appeal.
An applicant who has received a notification of noncompliance or
notice of denial of certification may apply for certification again at
any time with any certifying agent. When the applicant submits a new
application to a different certifying agent, the application must
include a copy of the notification of noncompliance or notice of denial
of certification. The application must also include a description of
the actions taken, with supporting documentation, to correct the
deficiencies noted in the notification of noncompliance. When a
certifying agent receives such an application, the certifying agent
will treat the application as a new application and begin a new
application process.
A certifying agent has limited authority to deny certification
without first issuing a notification of noncompliance. This authority
may be exercised when the certifying agent has reason to believe that
an applicant for certification has willfully made a false statement or
otherwise purposefully misrepresented its operation or its compliance
with the requirements for certification.
Continuation of Certification. Each year, the certified operation
must update its organic production or handling system plan and submit
the updated information to the certifying agent to continue
certification. The updated organic system plan must include a summary
statement, supported by documentation, detailing deviations from,
changes to, modifications to, or other amendments to the previous
year's organic system plan. The updated organic system plan must also
include additions to or deletions from the previous year's organic
system plan, intended to be undertaken in the coming year. The
certified operation must update the descriptive information about its
business and other information as deemed necessary by the certifying
agent to determine compliance with the Act and regulations.
Following receipt of the certified operation's updated information,
the certifying agent will arrange and conduct an on-site inspection of
the certified operation. As a benchmark, certifying agents should
follow auditing guidelines prescribed by ISO Guide 10011-1. Upon
completion of the inspection and a review of updated information, the
certifying agent will determine whether the operation continues to
comply with the Act and regulations. If the certifying agent determines
that the operation is in compliance, certification will continue. If
any of the information specified on the certificate of organic
operation has changed, the certifying agent will issue an updated
certificate of organic operation. If the certifying agent finds that
the operation is not complying with the Act and regulations, a written
notification of noncompliance will be issued as described in
Sec. 205.662.
In addition to annual inspections, a certifying agent may conduct
additional on-site inspections of certified operations to determine
compliance with the Act and regulations. The Administrator or State
program's governing State official may also require that additional
inspections be performed by the certifying agent to determine
compliance with the Act and regulations. Additional inspections may be
announced or unannounced and would be conducted, as necessary, to
obtain information needed to determine compliance with identified
requirements.
Such on-site inspections would likely be precipitated by reasons to
believe that the certified operation was operating in violation of one
or more requirements of the Act or these regulations. The policies and
procedures regarding additional inspections, including how the costs of
such inspections are handled, would be the responsibility of each
certifying agent. Misuse of such authority would be subject to review
by the Department during its evaluation of a certifying agent for
reaccreditation and at other times in response to complaints. Certified
production and handling operations could file complaints with the
Department at any time should they believe a certifying agent abuses
its authority to perform additional inspections.
Certification After Suspension or Revocation of Certifying Agent's
Accreditation. When the Administrator revokes or suspends a certifying
agent's accreditation, affected certified operations will need to make
application for certification with another accredited certifying agent.
The certification of the production or handling operation remains in
effect during this transfer of the certification. The certified
production or handling operation may seek certification by any
qualified certifying agent accredited by the Administrator. To minimize
the burden of obtaining the new certification, the Administrator will
oversee transfer of the original certifying agent's file on the
certified operation to the operation's new certifying agent.
Upon initiation of suspension or revocation of a certifying agent's
accreditation, or upon suspension or revocation of a certifying agent's
accreditation, the Administrator may initiate proceedings to suspend or
revoke the certification of operations certified by the certifying
agent. The Administrator's decision to suspend or revoke a producer's
or handler's certification in light of the loss of its certifying
agent's accreditation would be made on a case-by-case basis. Actions
such as fraud, bribery, or collusion by the certifying agent, which
cause the Administrator to believe that the certifying agent's clients
do not meet the standards of the Act or these regulations, might
require the immediate initiation of procedures to suspend or revoke
certification from some or all of its client base. Removal of
accreditation, regardless of the reason, in no way affects the appeals
rights of the certifying agent's clients. Further, a certified
operation's certification will remain in effect pending the final
resolution of any proceeding to suspend or revoke its certification.
A private-entity certifying agent must furnish reasonable security
for the purpose of protecting the rights of operations certified by
such certifying agent. This security is to ensure the performance of
the certifying agent's contractual obligations. As noted elsewhere in
this proposed rule, the specific amount and type of security that must
be furnished by a private certifying agent will be the subject of
future rulemaking by the Department. We anticipate that the amount of
the security will be tied to the number of clients served by the
certifying agent and the anticipated costs of certification that may be
incurred by its clients in the event that the certifying agent's
accreditation is suspended or revoked. We anticipate that the security
may be in the form of cash, surety bonds, or other financial instrument
(such as a letter of credit) administered in a manner comparable to
cash or surety bonds held under the Perishable Agricultural Commodities
Act.
Certification--Changes Based on Comments
This subpart differs from our first proposal in several respects as
follows:
(1) On-site Inspection Requirements. We have amended the general
requirements provision concerning on-site inspections. The first
proposal required production and handling operations to permit an
annual on-site
[[Page 13565]]
inspection by the certifying agent. A few commenters suggested that the
term, ``inspection,'' be made plural and that the section citations be
amended to include the section on additional inspections. The section
on additional inspections addressed the certifying agent's authority to
perform on-site inspections in addition to the annual on-site
inspection.
The commenters believe that ``inspection'' should apply to all
situations when on-site inspections must be or could be performed,
including the initial site inspection for a new certification as well
as, for instance, compliance inspections. Commenters believe that these
changes are needed to assure access to the certified operation and that
an applicant's agreement to permit any and all necessary on-site
inspections should be clearly stated as a general requirement for
certification.
We had intended for the general requirements provision concerning
on-site inspections to include all instances in which an on-site
inspection might be appropriate. Accordingly, we have amended the
requirement by replacing the phrase, ``an annual on-site inspection,''
with the phrase, ``on-site inspections.'' This terminology would cover
initial, annual, and additional inspections needed for certification,
continuation of certification, and to determine whether the operation
is in compliance with program requirements. To ensure complete access
to the production or handling operation for the purpose of conducting
on-site inspections and determining compliance with the requirements of
the National Organic Program (NOP), we have added a requirement that
the operation permit complete access to the production or handling
operation, including noncertified areas and structures. The general
requirements provision on on-site inspections is found at
Sec. 205.400(c).
(2) Providing Access to Records. We have clarified the meaning of
providing access to the records that the certified operation must
maintain by adding ``during normal business hours for review and
copying'' to the regulation. The first proposal required that certified
organic operations maintain records for not less than 5 years from the
date of their creation. It also required the certified operation to
allow authorized representatives of the Secretary, the applicable
governing State official, and the certifying agent access to such
records to determine compliance with the Act and regulations.
Several comments were received regarding these recordkeeping
requirements. Most of these comments were received from organic
producer organizations and certifying agents. A few commenters
questioned the necessity of maintaining records for 5 years, requested
a different period for different records, and requested clarification
on the meaning of providing access. Section 6511(d) of the Act requires
organic production or handling operations to maintain records for 5
years. Accordingly, we have made no change to the retention period in
this proposal. The clarification on the meaning of providing access to
records is found at Sec. 205.400(d).
(3) Notification of Drift. We have amended the requirement that
production and handling operations immediately notify the certifying
agent concerning any application of a prohibited substance by adding
the phrase, ``including drift.'' A few commenters suggested adding a
requirement that the certified operation notify the certifying agent
when an organically certified field is contaminated by drift. They
stated that drift is the most common reason for prohibiting the organic
label on otherwise organically produced product.
We agree that the certified operation should immediately report any
drift of a prohibited substance onto an organic field to its certifying
agent. Accordingly, Sec. 205.400(f)(1) provides that an applicant
seeking to receive or maintain organic certification must immediately
notify the certifying agent concerning any application, including
drift, of a prohibited substance. This provision applies to new
applicants as well as to ongoing certified operations. Contamination by
drift could occur during the time period between application for and
approval of certification. Accordingly, an applicant for certification
would be required to notify the certifying agent of any contact with a
prohibited substance.
(4) Applicant Requirements. We have added the requirement that
applicants for certification include other information necessary to
determine compliance with the Act and regulations. Commenters suggested
that the we add a provision to the application regulations requiring
applicants for certification to submit other information deemed
necessary by the certifying agent. They stated that this authority is
needed to assure that applicants are fully cooperative and responsive
throughout the certification process.
We believe the requested authority would be helpful to certifying
agents. However, we believe the authority for certifying agents to
request other information they deem necessary must be qualified by the
requirement that the information be necessary to determine compliance
with the Act and regulations. Accordingly, we have provided certifying
agents with the authority to request other information necessary to
determine compliance with the Act and regulations. This addition is
found at Sec. 205.401(d).
(5) Requirement for Notification of Noncompliance. We have replaced
the first proposal's section on ``preliminary evaluation of an
applicant for certification'' with a new section on ``review of
application.'' We have revised the section to clarify that certifying
agents will issue notices of noncompliance only after the initial on-
site inspection of an applicant's operations. We also allow applicants
to voluntarily withdraw their application for certification at any
time.
This change was in response to comments on the first proposal's
requirement that applicants for certification report, to the certifying
agent with whom they have applied, the receipt of a notice of
noncompliance received from another certifying agent. A State organic
growers association stated that this requirement places a stigma on
applicants who, for example, applied for certification before the
operation was ready to meet all requirements for certification. This
commenter suggested that notification of previous denial only be
required after an applicant has been denied certification. The
commenter went on to say that, if the language in the original proposal
is maintained, there should be a time limit of within the past 3 or 5
years of denial. Another commenter suggested that certifying agents
have the option of recommending that noncompliant applicants withdraw
their applications rather than be denied certification. As an
alternative, one of the commenters suggested that denial of
certification to an unprepared applicant should not have to be reported
on a subsequent application to another certifying agent unless the
first noncompliance notice led to a denial of certification.
We continue to believe that it is in the best interest of the
program and consumers to require applicants to report the receipt of
notices of noncompliance and denial of certification to any certifying
agent to whom they make application. However, we also believe that
operations should not be unnecessarily stigmatized because they applied
for certification before the operation was ready to meet all
requirements for certification.
[[Page 13566]]
Accordingly, this proposal requires that an applicant report the
receipt of a notice of noncompliance or denial of certification to any
certifying agent to whom application is made but allows applicants to
voluntarily withdraw their application at any time.
An applicant that voluntarily withdrew its application prior to the
issuance of a notice of noncompliance would not be issued a notice of
noncompliance. Similarly, an applicant that voluntarily withdrew its
application prior to the issuance of a notice of certification denial
would not be issued a notice of certification denial.
(6) Residue Testing. We have revised the verification of
information provisions to provide that the on-site inspection of an
operation must verify that prohibited substances have not been and are
not being applied to the operation. Verification would be through means
which, at the discretion of the certifying agent, may include the
collection and testing of soil; water; waste; seeds; plant tissue; and
plant, animal, and processed products samples.
Comments from certifying agents suggested adding a provision that
would allow a certifying agent to collect samples of substances from
the operation for residue testing. They stated that such testing is
necessary to detect unreported use or accumulation of prohibited
substances. Section 6506(a)(6) of the Act requires periodic residue
testing by certifying agents of products produced by certified organic
operations. It is our intent that collection of samples for residue
testing may be conducted as part of initial on-site inspections, as
well as during on-site inspections of certified organic operations. The
inspector could collect samples of soil; water; waste; seeds; plant
tissues; and plant, animal, and processed products. Collection of such
samples would be at the discretion of the certifying agent. To maintain
the integrity of the inspection process, it is necessary that the
certifying agent or inspector collect such samples first hand, rather
than receive the samples from the applicant. We have made the requested
addition at Sec. 205.403(c)(3).
(7) Postinspection Conference Requirements. We have amended the
postinspection conference requirements. We have changed all references
to ``postinspection conference'' to ``exit interview.'' We have removed
the requirement that the inspector discuss his or her observations
regarding the operation's compliance or ability to comply with the Act
and regulations. This requirement has been replaced with the
requirement that the inspector confirm the accuracy and completeness of
inspection observations and information gathered during the on-site
inspection. The inspector can use the exit interview to request any
additional information necessary to establish eligibility for
certification. Finally, this amendment requires the inspector to raise
and discuss during the exit interview any known issues of concern.
Certifying agents commented that it would be inappropriate for an
inspector to discuss observations and possible violations of compliance
at an exit interview. They stated that requiring exit interviews places
the inspector in the position of providing observations and feedback to
the applicant before the inspector is able to confer with the
certifying agent. Some certifying agents expressed concern that exit
interviews could result in inspectors providing false or misleading
information to the applicant. Some commenters requested that exit
interviews be held only for the purpose of checking the accuracy and
completeness of inspector observations made and the information
obtained during the inspection. Other commenters requested that the
exit interviews requirement be removed from these regulations.
We believe that qualified inspectors should be capable of
competently discussing an applicant's compliance or ability to comply
with these regulations. However, we also believe that a certifying
agent should have the opportunity to decide whether to allow its
inspectors to discuss issues of compliance at an exit interview.
Accordingly, we have amended the exit interview requirements as noted
above. These amended requirements are found at Sec. 205.403(d).
(8) Additional Inspections. We have added a new provision that
additional inspections may be announced or unannounced at the
discretion of the certifying agent or as required by the Administrator
or State program's governing State official. This change was made in
response to commenters who requested the addition of a requirement that
certifying agents conduct unannounced site visits in addition to the
initial and annual inspections. We believe that unannounced on-site
inspections are appropriate and valuable in both monitoring and
investigating compliance with the Act and regulations. The requested
addition is found at Sec. 205.403(a)(2)(iii).
(9) Requirements for Written Inspection Reports. We have removed
the requirement that the certifying agent require an inspector to
prepare and submit to the certifying agent, within 30 days of
completing an inspection, a written report that describes the
inspector's observations and assessments of the inspected operation's
compliance or ability to comply with the Act and regulations. A variety
of comments, pro and con, were received on this requirement. Certifying
agents questioned whether the 30-day timeframe was reasonable. Other
commenters suggested that, rather than specifying a time period, the
section should stress the need for timely reporting. A commenter
suggested that an inspector's observations and assessments on the
inspected operation include the inspector's recommendations on approval
of certification. Other commenters stated that the requirement amounted
to micro management of a certifying agent's business. This latter group
of commenters believe that the setting of a time period for inspector
reporting involves a policy matter that should be determined by the
certifying agent. We agree with the commenters who stated that setting
deadlines for the filing of inspection reports is an internal policy
matter better left to certifying agents.
We believe that policies and procedures regarding inspector
reporting are the purview of the certifying agent. Certifying agents
would be expected to develop and implement inspector reporting
requirements for on-site inspections internal to their own operations.
Such policies and procedures and a certifying agent's performance in
making timely certification decisions would be subject to review during
accreditation and reaccreditation of the certifying agent. Accordingly,
we have removed the provision.
Removal of this requirement does not eliminate the need for a
written on-site inspection report or the importance of timely
inspection reporting by an inspector to the certifying agent.
Certifying agents are expected to make timely decisions regarding
whether to certify an applicant and whether a certified operation is in
compliance with the Act and regulations. Applicants with complaints
regarding timeliness of service could forward their complaints to the
Administrator.
(10) Responsibilities of Certifier in the Application Process. We
have replaced the list of requirements to be reviewed by a certifying
agent in determining an applicant's eligibility for certification with
a general statement on determination of eligibility. Commenters
requested the addition of a provision requiring certifying agents to
verify implementation of the organic system plan. We agree that an on-
site
[[Page 13567]]
inspection of an ongoing operation must include assessment of the
operation's application of its organic system plan. Because an on-site
inspection of a new applicant's operation would be conducted at a time
when the operation can demonstrate its organic capabilities, the
operation must be able to show that it is satisfactorily carrying out
its organic system plan.
It was our intent that certifying agents would verify
implementation of the applicant's organic system plan during the
certifying agent's review of the on-site inspection report and
application. However, our list of requirements to be reviewed by a
certifying agent in determining an applicant's eligibility for
certification did not specifically reference verification of
implementation of the organic system plan. We have decided to replace
the list of requirements to be reviewed with a general statement on
determination of eligibility. This statement provides: ``If the
certifying agent determines that the organic system plan and all
procedures and activities of the applicant's operation are in
compliance with the requirements of this part and that the applicant is
able to conduct operations in accordance with the plan, the agent shall
approve certification.'' We believe this general statement, in
combination with the requirement that the certifying agent review the
application, the on-site inspection report, the results of any analyses
for substances conducted, and any additional information requested from
or supplied by the applicant, adequately addresses the commenters'
concerns. This revision to the approval of certification requirements
is found at Sec. 205.404(a).
(11) Information Included on the Certificate of Organic Operation.
We have amended the regulations specifying what information must be
included on a certificate of organic operation. Comments received from
organic operations, certifying agents, and consumers recommended that
certifying agents provide additional information on certificates of
organic operation. Specifically, they recommended that all certificates
include: (1) The certifying agent's name and address; (2) an expiration
date; (3) the physical location of certified operations, including
separate fields and facilities; (4) the name of the certified
operation's contact person responsible for compliance with program
requirements; (5) the name and address of the certified operation; and
(6) the crops and products certified. The commenters believe such
information, especially a date on which the certificate expires, to be
vital to assuring accountability and compliance with the program.
We believe it would be beneficial to persons with concerns
regarding a certified production or handling operation to have ready
access to information concerning the name, address, and telephone
number of the certifying agent. Further, because the certificate of
organic operation would be an official document of the certifying
agent, it would be appropriate for this information to appear on every
certificate. Accordingly, we have added the name, address, and
telephone number of the certifying agent to the information which must
be included on every certificate. This addition is found at
Sec. 205.404(b)(4).
We disagree with the commenters who requested that certificates of
organic operation display an expiration date. We believe annual
expiration of a certificate would place an unnecessary burden on
certifying agents and certified operations. Annual expiration of
certificates is also inconsistent with the fact that an operation's
certification does not expire. In fact, once an operation is certified
as an organic operation, its certification remains in effect until
surrendered by the certified operation or suspended or revoked by the
certifying agent, the State program's governing State official, or the
Administrator. All certified operations are required to annually update
their organic system plan. If the updated plan causes information on
the certificate to be incorrect, the certifying agent will issue a new
certificate with the correct information. This provides a mechanism for
ensuring that certificates are updated as necessary on an annual bases.
We have not included the recommended addition in this proposal.
For clarification, we have added Sec. 205.404(c). This section
provides that once certified a production or handling operation's
organic certification continues in effect until surrendered by the
organic operation or suspended or revoked by the certifying agent, the
State program's governing State official, or the Administrator.
We disagree with the commenters who requested that certificates
display the physical location of certified operations, including
separate fields and facilities, and the name of the certified
operation's contact person responsible for compliance with program
requirements. We believe that the location of a certified operation's
fields and facilities has no relationship to the operation's status as
a certified organic operation. Therefore, such information should only
be made available with the written consent of the certified operation.
The name of the certified operation's contact person would be
releasable information. We believe, however, that such detail is
unnecessarily burdensome to the certifying agent and will only serve to
clutter the certificate. By requiring the name, address, and telephone
number of the certifying agent, as noted above, the certificate would
provide interested persons with a contact for obtaining releasable
information concerning the certified operation. Further, the certifying
agent is the first line of compliance under this program and, as such,
is the person to whom all questions and concerns should be addressed
about certified operations.
We agree with the commenters who requested that certificates
display the name and address of the certified operation because such
information is potentially beneficial to consumers. Accordingly, we
have added the name and address of the certified operation to the
information which must be included on every certificate. This addition
is found at Sec. 205.404(b)(1).
The first proposal required that the certificate list the
category(ies) and type(s) of products produced by the certified
operation. Commenters were apparently confused about the meaning of
category(ies) and type(s) of products. We have, therefore, revised the
requirement to provide that a certificate of organic operation would
specify the categories of organic operation, including, crops, wild
crops, livestock, or processed products produced by the certified
operation. This revision is found at Sec. 205.404(b)(3).
(12) Certifiers Authority to Deny Certification. We have added
authority for certifying agents to deny certification to applicants who
do not meet the requirements for certification. The first proposal
required certifying agents to forward their recommendations for denial
of certification to the Administrator. Commenters stated that authority
for denial of certification should rest with the certifying agents.
They also contended that referral to the Administrator for denial of
certification establishes a bureaucratic process, which would create
unnecessary delays to the denial process and increased cost to
applicants. Many commenters suggested the appeals process is sufficient
to protect the interests of the Secretary.
We have determined that it is reasonable to authorize certifying
agents to deny certification. Denial by the certifying agent would
provide the applicant with a more timely decision on its eligibility
for certification. A more timely decision would provide an
[[Page 13568]]
earlier opportunity for applicants to appeal a denial of certification.
Authority for certifying agents to deny certification to applicants who
do not meet the requirements for certification is found at section
205.405.
This proposal requires certifying agents to evaluate the
applicant's corrective actions taken and supporting documentation or
written rebuttal submitted in response to a notification of
noncompliance. Certifying agents are authorized to perform on-site
inspections to verify corrections to deficiencies or statements
contained in a rebuttal, if necessary, to assure full compliance with
the certification requirements. The certifying agent will issue the
applicant a written notice of denial of certification if the corrective
action or rebuttal is not sufficient for the applicant to qualify for
certification.
We believe the denial of certification provisions should clearly
state an applicant's options and rights upon receiving a notice of
denial of certification. Accordingly, Sec. 205.405(c)(1)(ii) provides
that a notice of denial of certification must state the reasons for
denial and the applicant's right to reapply for certification, request
mediation, or file an appeal. An applicant who has received a written
notice of denial of certification may apply for certification again at
any time with any certifying agent, may request mediation to resolve a
dispute with the certifying agent, or may file an appeal with the
Administrator as outlined in Sec. 205.663 for mediation and
Sec. 205.681 for appeals. Applicants subject to an approved State
program would seek mediation or appeal in accordance with the rules of
the approved State program.
(13) Willful Misrepresentations or False Statements by Applicants.
We have included authority for certifying agents to deny certification
if the agent has reason to believe that the applicant has willfully
made a false statement or otherwise purposefully misrepresented its
operation or compliance with the certification requirements. Such false
statements would, in most cases, be verified during an on-site
inspection. This authority was provided to certifying agents in the
first proposal relative to certified operations. The first proposal,
however, did not reference an applicant's willful making of a false
statement or otherwise purposefully misrepresenting its operation or
compliance with the certification requirements. Certifying agents
commented that applicants for certification also may make false
statements or misrepresent facts. They suggested that the regulations
reflect a certifying agent's authority in such cases. We agree with the
commenters and have added Sec. 205.405(f). This section authorizes
denial of certification without first issuing a notification of
noncompliance when the certifying agent has reason to believe that the
applicant has willfully made a false statement or otherwise
purposefully misrepresented its operation or compliance with the
certification requirements.
Certification--Changes Requested But Not Made
This subpart retains from our first proposal regulations on which
we received comments as follows:
(1) Timeliness of Applicant's Notification to Certifiers. A
commenter suggested that ``immediately'' in the requirement that
production and handling operations immediately notify the certifying
agent concerning any application of a prohibited substance be replaced
with ``within 2 days.'' No justification was given for the recommended
change, and the change has not been made. ``Immediately notify'' means
that the applicant or certified operation must at once notify its
certifying agent upon learning that a prohibited substance has come in
contact with any portion of its operation or production. The certifying
agent will evaluate the circumstances surrounding the event and decide
whether the certified operation acted within the intent of this
requirement. This requirement is found at Sec. 205.400(f)(1).
(2) Notification of Changes to Certifying Agent. Commenters
questioned how the certified operation would know what changes in its
certified operation or any portion of its operation would require
reporting to its certifier. Certified operations are responsible for
being familiar with the requirements of the Act and these regulations.
Further, they have an obligation to contact their certifying agent when
they have questions regarding compliance with this program. As a rule,
certified operations should contact their certifying agent whenever the
change is not covered under their approved organic system plan. The
requirement that a certified operation notify its certifying agent
concerning any change in its certified operation that may affect its
compliance with the Act and regulations is found at Sec. 205.400(f)(2).
(3) Tests for Soil Fertility and Irrigation Water. Certifying
agents suggested that applicants for certification be required to
submit test results for soil fertility and irrigation water quality to
prove compliance with the NOP. We recognize that increasing soil
fertility through organic production practices is a goal of the organic
industry. However, soil fertility will not qualify or disqualify an
applicant for organic certification. An applicant who has independently
had such tests conducted may, but is not required to, include them with
the application. While the Act requires that handlers only use in their
products water that meets all Safe Drinking Water Act requirements, no
similar requirements are placed on producers and the water they use to
irrigate their crops. For these reasons, we are not requiring
applicants for certification to submit soil fertility or irrigation
water quality test results.
(4) Timeliness of On-site Inspection. The first proposal required a
certifying agent to conduct an initial on-site inspection within a
reasonable time following a favorable preliminary evaluation of an
application for certification. Several commenters asked what
constitutes reasonable time between submission of an application and an
on-site inspection. Others stated that, when determining what
constitutes reasonable time, consideration should be given to factors
such as when the application was submitted relative to when activities
demonstrating compliance can be observed and when the inspection can be
scheduled to assure the presence of the applicant.
We stated in the first proposal that we did not specify a time
within which an inspection must be conducted because the time would
vary according to when the application was submitted and the type of
operation to be inspected. Timely service will be in the best interest
of certifying agents since applicants may forward complaints regarding
service to the Administrator. Such complaints could have an impact on a
certifying agent's reaccreditation or continued accreditation. Further,
our original position is consistent with those commenters requesting
flexibility in determining what constitutes reasonable time.
Accordingly, we have made no changes in this proposal regarding what
constitutes reasonable time. This requirement is found at
Sec. 205.403(b).
(5) Additional On-site Inspections. Some organic associations asked
what would trigger a decision to conduct an additional on-site
inspection. Commenters expressed the concern that certifying agents
could conduct additional, unneeded inspections at the expense of
operators who would have to pay the costs of the inspections. Other
commenters asked who would pay for the additional on-site inspections.
Some certifying agents suggested that guidelines need to be established
under
[[Page 13569]]
which additional inspections must be conducted. A certifying agent
suggested that additional inspections could be conducted based on the
inspector's observations, the certifier's recommendation, and,
possibly, third-party complaints.
The authority for on-site inspections is necessary for monitoring
and compliance purposes at the discretion of the certifying agent, the
Administrator, or a State program's governing State official. Such on-
site inspections would likely be precipitated by reasons to believe
that the certified operation was operating in violation of one or more
requirements of the Act or these regulations. The on-site inspection
would be conducted, as necessary, to obtain information needed to
determine compliance with identified requirements.
We believe policies and procedures regarding additional
inspections, including how the costs of such inspections are handled,
are the responsibility of each certifying agent. Misuse of such
authority would be subject to review by the Department during its
evaluation of a certifying agent for reaccreditation and at other times
in response to complaints. Certified production and handling operations
could file complaints with the Department at any time should they
believe a certifying agent abuses its authority to perform additional
inspections. Accordingly, we have made no changes in this proposal
based on these comments.
(6) Annual Renewal of Certification. Commenters requested annual
renewal of certification rather than updates to a continuing
certification program. Other commenters requested that the notice of
certification have an ending date or be issued for an established
period of time. An industry association commented that the proposed
continuation of certification regulations requires a certified
operation to annually certify that it is complying with the Act and
these regulations. This commenter stated that the proposed continuation
of certification procedures changes the process of recertification to
one more closely resembling self-certification. Another industry
association stated that certification until surrendered by the
certified operation or suspended or revoked would make the assurance of
compliance extremely difficult, if not impossible. This commenter
further stated that certifying agents will be unable to effectively
monitor applicants or gain needed information. This commenter
recommended that renewal paperwork include the items specified in the
continuation of certification regulations but that certifying agents
use their own discretion as to the forms and information needed.
Similarly, a certifying agent commented that certification must be
renewed with an application on an annual basis and that no operation
can be certified for life. This commenter recommended requiring a
yearly application and other documentation deemed necessary by the
certifying agent.
We disagree with the commenters. We prefer continuous certification
due to the very real possibility that the renewal process might not
always be completed before expiration of the certification period.
Expiration of the certification period would result in termination of
the operation's certification. Even a short period of interruption in
an operation's organic status could have severe economic ramifications.
Further, we believe that a regular schedule of expiration of
certification is unnecessary inasmuch as all certified operations are
required to annually update their organic system plan and submit any
changes to their certifying agent. Accordingly, this proposal retains
the provision for continuous certification.
(7) Timing of On-site Inspections. A State certifying agent and an
industry organization stated that requiring an on-site inspection after
receipt of the renewal application is not consistent with current
practice. The State certifying agent stated that it moved the renewal
date to January 1 of each year to make the renewal process less
burdensome to its certified producers. This commenter went on to say
that the annual inspection conducted during the appropriate growing or
processing season is used to evaluate the organic operation in the
renewal process. The State certifying agent further stated that an
additional inspection at renewal time would not be useful if it was not
an appropriate time to observe production practices at the organic
operation. Both commenters requested elimination of the requirement
that the certifying agent arrange and conduct an on-site inspection
following receipt of the operation's annual submission of information.
These commenters also requested that a determination of noncompliance
be based on on-site inspections conducted during the previous
certification year and a review of the information annually submitted
by the certified operation.
We disagree with the commenters. Certifying agents are required to
schedule on-site inspections for a time when land, facilities, and
activities that demonstrate the operation's compliance or capability to
comply with the applicable production or handling provisions of the NOP
may be observed. Accordingly, the initial certification must have
followed an on-site inspection performed when the operation was able to
demonstrate its compliance or capability to comply. The certified
operation, therefore, should be fulfilling its annual continuation of
certification obligations at a time when it can demonstrate its
compliance with the Act and regulations. The commenters'
recommendations are not accepted.
Certification--Additional Provisions
Upon further review of the certification provisions in the first
proposal, we have decided to propose the following additions and
changes.
(1) Requirements for Business Information. We have revised the
business information required of all applicants for certification as an
organic operation. First, the application must include the name of the
person who completed the application. Certifying agents will use this
information when following up on information within the application.
Second, we have removed the requirement that the application include
the names of personnel responsible for maintaining compliance with the
Act and regulations. We believe this information is unnecessary since
the person responsible for overseeing compliance is the certifying
agent. Third, we have added the requirement that when the applicant is
a corporation, the application must include the name, address, and
telephone number of the person authorized to act on the applicant's
behalf. Fourth, we have removed the requirement that the applicant for
certification submit a statement of compliance. We have also removed
the ``Statement of Compliance'' section which required the submission
of a statement of compliance with the application for certification. We
have removed this requirement because we have determined that it
creates an unnecessary burden upon applicants for certification.
Section 205.400(a) requires that a person seeking to receive or
maintain organic certification must comply with the Act and applicable
production and handling regulations. Accordingly, it is unnecessary to
require a separate document through which the applicant for
certification agrees to comply with the Act and regulations. The
requirements for the submission of business information with the
request for certification are found at Sec. 205.401(b).
(2) Disclosure of Previous Applications. The first proposal
[[Page 13570]]
required that the request for certification include the name(s) of any
organic certifying agent(s) to which application had previously been
made, the year(s) of application, and the outcome of the application(s)
submission. We have amended this requirement by adding ``including a
copy of any notification of noncompliance or denial of certification
issued to the applicant for certification and a description of the
actions taken by the applicant to correct the deficiencies noted in the
notification of noncompliance, including evidence of such correction.''
We have added this provision to clarify what we mean by ``the outcome
of the application(s) submitted.'' This provision is found at
Sec. 205.401(c).
(3) On-site Inspections. We have combined the arranging for
inspection, verification of information, postinspection conference, and
additional inspection regulations of the first proposal into a new on-
site inspections section, Sec. 205.403. We made this change for the
purposes of clarification and the removal of redundancies.
(4) Additional Inspections. We have revised the on-site inspections
requirements to provide that a State program's governing State official
may require a certifying agent to conduct an additional inspection of a
production or handling operation to determine the operation's
compliance with the Act and these regulations. We have provided State
program governing State officials with authority to require additional
inspections because such officials will have compliance
responsibilities under their State programs and will need such
authority to carry out their responsibilities. These requirements are
found at Sec. 205.403(a).
(5) Notifications of Noncompliance. We have added at
Sec. 205.405(b) a provision which identifies for applicants for
certification what their options are when they receive a notification
of noncompliance. Such applicants may correct the deficiencies and
submit a description and supporting documentation of correction to the
certifying agent, correct the deficiencies and submit a new application
to another certifying agent along with the notification of
noncompliance and a description and supporting documentation of
correction, or submit written information to the certifying agent to
rebut the noncompliance described in the notification of noncompliance.
(6) Reapplying After a Notice of Noncompliance or Denial of
Certification. We have added a new provision which requires a
certifying agent to treat an application for certification as a new
application when such application includes a notification of
noncompliance or a notice of denial of certification. While the new
application may contain the same organic system plan and other
information provided in the unsuccessful application for certification,
it must also provide any new information or changes in operations which
may have occurred since the filing of the unsuccessful application. The
updated information concerning the applicant's operation must include a
description of actions taken, with supporting documentation, to correct
the deficiencies identified in the notification of noncompliance. This
new provision is found at Sec. 205.405(e).
Subpart F--Accreditation of Certifying Agents
This subpart sets forth the requirements for a national program to
accredit State and private entities as certifying agents to certify
domestic or foreign organic production or handling operations. This
subpart also provides that USDA will accept a foreign certifying
agent's accreditation to certify organic production or handling
operations if: (1) USDA determines, upon the request of a foreign
government, that the standards under which the foreign government
authority accredited the foreign certifying agent meet the requirements
of this part; or (2) the foreign governmental authority that accredited
the certifying agent acted under an equivalency agreement negotiated
between the United States Government and the foreign government.
This National Organic Program (NOP) accreditation process will
facilitate national and international acceptance of United States
organically produced agricultural commodities. The accreditation
requirements in these regulations will replace the organic assessment
voluntary, fee-for-service program, established by AMS under the
Agricultural Marketing Act of 1946. That assessment program verifies
that State and private organic certifying agents comply with the
requirements prescribed under the International Organization for
Standardization/International Electrotechnical Commission Guide 65,
``General Requirements for Bodies Operating Product Certification
Systems'' (ISO Guide 65).\2\ ISO Guide 65 provides the general
requirements that a certifying agent would need to meet to be
recognized as competent and reliable. That assessment program was
originally established to enable organic certifying agents in the
absence of a U.S. national organic program to comply with European
Union (EU) requirements beginning on June 30, 1999. That assessment
program verifies that State and private organic certifying agents are
operating third-party certification systems in a consistent and
reliable manner, thereby facilitating uninterrupted exports of U.S.
organic agricultural commodities to the EU. ISO Guide 65 is used as a
benchmark in developing the accreditation program described in this
proposed rule. Certifying agents accredited under the NOP that maintain
compliance with the Act and these regulations will meet or exceed the
requirements of ISO Guide 65; therefore, the organic assessment program
is no longer needed.
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\2\ ISO/IEC Guide 65 is available for viewing at USDA-AMS,
Transportation and Marketing Programs, Room 2945-South Building,
14th and Independence Ave., SW, Washington, DC, from 9:00 a.m. to
4:00 p.m., Monday through Friday (except official Federal holidays).
A copy may be obtained from the American National Standards
Institute, 11 West 42nd Street, New York, NY 10036; Website:
www.ansi.org; E-mail: [email protected]; Telephone: 212-642-4900;
Facsimile: 212-398-0023.
---------------------------------------------------------------------------
Participation in the NOP does not preclude the accredited
certifying agent from conducting other business operations, including
the certification of agricultural products, practices, and procedures.
An accredited certifying agent may not, however, engage in any business
operations or activities which would involve the agent in a violation
of or a conflict of interest under the NOP.
Proposal Description
The Administrator will accredit qualified domestic and foreign
applicants in the areas of crops, livestock, wild crops, or handling or
any combination thereof to certify domestic or foreign production or
handling operations as certified organic operations. Qualified
applicants will be accredited for 5 years.
Application Process. Certifying agents will apply to the
Administrator for accreditation to certify production or handling
operations operating under the NOP. The certifying agent's application
must include basic business information, must identify each area of
operation for which accreditation is requested and the estimated number
of each type of operation to be certified annually, and must include a
list of each State or foreign country where it currently certifies
production or handling operations and where it intends to certify such
operations.
[[Page 13571]]
Certifying agents must also submit personnel, administrative, conflict
of interest, current certification, and other documents and information
to demonstrate their expertise in organic production or handling
techniques, their ability to comply with and implement the organic
certification program, and their ability to comply with the
requirements for accreditation.
The administrative information submitted by the applicant should
include copies of their procedures for certifying operations, for
ensuring compliance of their certified operations with the Act and
regulation, for complying with recordkeeping requirements, and for
making information available to the public about certified operations.
The procedures for certifying operations encompass the processes used
by the certifying agent to evaluate applicants, make certification
decisions, issue certification certificates, and maintain the
confidentiality of any business information submitted by the certified
operation. The procedures for ensuring compliance of the certified
operations would include the methods used to review and investigate
certified operations, for sampling and residue testing, and to report
violations.
The personnel information submitted with the application should
demonstrate that the applicant uses a sufficient number of adequately
trained personnel to comply with and implement the organic
certification program. The certifying agent will also have to provide
evidence that its responsibly connected persons, employees, and
contractors with inspection, analysis, and decision-making
responsibilities have sufficient expertise in organic production or
handling techniques to successfully perform the duties assigned. They
must also show that these employees have revealed existing or potential
conflicts of interest.
Applicants who currently certify production or handling operations
must also submit a list of the production and handling operations
currently certified by them. For each area in which the applicant
requests accreditation, the applicant should furnish copies of
inspection reports and certification evaluation documents for at least
three operations. If the applicant underwent any other accrediting
process in the year previous to the application, the applicant should
also submit the results of the process.
Certifying agents are prohibited from providing advice concerning
organic practices or techniques to any certification applicant or
certified operation for a fee, other than as part of the fees under the
certification program. The Administrator will provide oversight of the
fees to ensure that the schedule of fees filed with the Administrator
is applied uniformly and in a nondiscriminatory manner. The
Administrator may inform a certifying agent that its fees appear to be
unreasonable and require that the certifying agent justify the fees.
The Administrator will investigate the level of fees charged by an
accredited certifying agent upon receipt of a valid complaint or under
compelling circumstances warranting such an investigation. Certifying
agents are prohibited from providing advice concerning organic
practices or techniques to any certification applicant or certified
operation for a fee, other than as part of the fees under the
certification program.
Statement of Agreement. Upon receipt of the certifying agent's
application for accreditation, the Administrator will send a statement
of agreement to the person responsible for the certifying agent's day-
to-day operations for signature. The statement of agreement affirms
that, if granted accreditation as a certifying agent under this
subpart, the applicant will carry out the provisions of the Act and the
regulations in this part. Accreditation will not be approved until this
statement is signed and returned to the Administrator.
The statement of agreement will include the applicant's agreement
to accept the certification decisions made by another U.S. Department
of Agriculture (USDA)-accredited certifying agent as equivalent to its
own and the applicant's agreement to refrain from making false or
misleading claims about its accreditation status, the USDA
accreditation program, or the nature or qualities of products labeled
as organically produced. Further, the statement will include the
applicant's agreement to pay and submit the fees charged by AMS and to
comply with, implement, and carry out any other terms and conditions
determined by the Administrator to be necessary. Applicants are also
required to affirm through this statement of agreement that they will:
(1) Conduct an annual performance appraisal for each inspector used;
(2) have an annual program evaluation conducted of their certification
activities by their staff, an outside auditor, or a consultant who has
expertise to conduct such evaluations; and (3) implement measures to
correct any deficiencies in compliance with the Act and regulations
identified in an inspector performance appraisal or program evaluation.
A private entity certifying agent must additionally agree to hold
the Secretary harmless for any failure on the agent's part to carry out
the provisions of the Act and regulations. A private entity certifying
agent's statement will also include an agreement to furnish reasonable
security for the purpose of protecting the rights of operations
certified by such certifying agent. Such security will be in an amount
and according to such terms as the Administrator may by regulation
prescribe. A private entity certifying agent must agree to transfer all
records or copies of records concerning its certification activities to
the Administrator if it dissolves or loses its accreditation. A private
entity certifying agent must also agree to make such records available
to any applicable State program's governing State official.
Approval of Accreditation. Upon receiving all the required
information, including the statement of agreement, and the required
fee, the Administrator will determine if the applicant meets the
requirements for accreditation. The Administrator's determination will
be based on a review of the information submitted and, if necessary, a
review of the information obtained from a site evaluation. The
Administrator will notify the applicant of approval of accreditation in
writing. The notice of accreditation will state the area(s) for which
accreditation is given, the effective date of the accreditation, and,
for a private-entity certifying agent, the amount and type of security
that must be established.
Certifying agents who apply for accreditation and do not meet the
requirements for accreditation will be provided, in accordance with
Sec. 205.665, with a notification of noncompliance and given an
opportunity to come into compliance. After receipt of a notification of
noncompliance, the applicant may submit a description of the actions
taken to correct the noted deficiencies and evidence demonstrating such
corrections or file an appeal with the Administrator. If the applicant
is successful in its appeal or provides acceptable evidence
demonstrating correction of the deficiencies, the Administrator will
notify the applicant of accreditation. If the applicant fails to
correct the deficiencies, fails to report the corrections by the date
specified in the notification of noncompliance, fails to file an appeal
by the date specified in the notification of noncompliance, or is
unsuccessful in its appeal, the Administrator will issue a written
notification of accreditation denial to the applicant. An applicant who
has
[[Page 13572]]
received written notification of accreditation denial may apply for
accreditation again at any time.
Once accredited, a certifying agent may establish a seal, logo, or
other identifying mark to be used by certified production and handling
operations. However, the certifying agent may not require use of its
seal, logo, or other identifying mark on any product sold, labeled, or
represented as organically produced as a condition of certification.
The certifying agent also may not require compliance with any
production or handling practices other than those provided for in the
Act and regulations as a condition for use of its identifying mark.
This provision does not apply to States with more restrictive
requirements approved by the Administrator or private-entity certifying
agents certifying operations within such States.
Site Evaluations. One or more representatives of the Administrator
will perform site evaluations for each certifying agent in order to
examine the certifying agent's operations and to evaluate compliance
with the Act and regulations. Site evaluations will include an on-site
review of the certifying agent's certification procedures, decisions,
facilities, administrative and management systems, and production or
handling operations certified by the certifying agent. A site
evaluation of an accreditation applicant will be conducted before or
within a reasonable time after issuance of the applicant's notification
of accreditation. Certifying agents will be billed for each site
evaluation conducted in association with an initial accreditation,
amendments to an accreditation, and renewals of accreditation.
Certifying agents will not be billed by USDA for USDA-initiated site
evaluations conducted to determine compliance with the Act and
regulations.
As noted above, a certifying agent may be accredited prior to a
site evaluation. If the Administrator finds, following the site
evaluation, that an accredited certifying agent is not in compliance
with the Act or regulations, the Administrator will issue the
certifying agent a written notification of noncompliance. If the
certifying agent fails to correct the deficiencies, report the
corrections by the date specified in the notification of noncompliance,
or file an appeal by the date specified in the notification of
noncompliance, the Administrator will begin proceedings to suspend or
revoke the accreditation. A certifying agent that has had its
accreditation suspended may apply for accreditation again at any time.
A private-entity certifying agent whose accreditation is revoked will
be ineligible for accreditation for a period of not less than 3 years
following the date of such determination.
Peer Review Panels. The Administrator may establish a peer review
panel to assist in evaluating applicants for accreditation. Peer review
panels will be used at the discretion of the Administrator following
the site evaluation of a certifying agent, but under no circumstances
will the Administrator convene a peer review panel when the peer review
pool does not contain sufficient persons qualified to peer review the
certifying agent.
To be eligible to serve on a peer review panel, the applicant for
membership in the peer review pool must provide the Administrator with
a written description and, upon request, supporting documentation of
its qualifications to conduct peer reviews. The applicant for
membership in the peer review pool must address possible limitations on
availability to serve and include information concerning commercial
interests with any person who may seek to become or who is an
accredited certifying agent. No person who has or has had a commercial
interest, including an immediate family interest or the provision of
consulting services, in an applicant for accreditation or renewal of
accreditation will be appointed to a panel evaluating such applicant
for accreditation or renewal of accreditation. Persons accepted to the
pool may serve until notified that their appointment has been rescinded
by the Administrator or until they are no longer qualified, whichever
occurs first. Peer reviewers will serve without compensation.
Peer review panels will consist of at least three but no more than
five members. A Department representative will preside over the panel.
A peer review panel will include no fewer than two members who possess
sufficient expertise in the certifying agent's areas of accreditation.
Peer review panels may include up to two members with expertise in
other disciplines, including organizational management and finance;
member(s) from the approved State organic certification program when
the applicant is a private entity that will operate within the State;
and member(s) from a foreign government's organic program when the
applicant is a private entity that will operate within the country.
Each person on a peer review panel must individually review the
site evaluation report prepared by the Department's evaluator(s) and
any other information that may be provided by the Administrator
relevant to continuing or renewing the accreditation status of a
certifying agent. Information about the certifying agent received as
part of the review process is confidential information, and peer
reviewers must not release, copy, quote, or otherwise use material from
the information received other than in the report required to be
submitted. Each peer reviewer must agree to treat the information
received for review as confidential.
A peer review panel meeting will be held solely for the purposes of
exchanging information. Any meeting or conference call will be
conducted in a manner that will ensure the actions of panel members are
carried out on an individual basis with any opinions and
recommendations by a member being made individually. We do not believe
that it is usual to have consensus in peer review or that it is the
best use of USDA resources or the time of peer reviewers to seek
consensus under a single report. Further, requiring a consensus report
may make peer review panels subject to the Federal Advisory Committee
Act, which might stifle meaningful dialog between reviewers, increase
the cost and time required of peer reviewers for peer review service,
and result in problems obtaining volunteers for service on peer review
panels.
Peer review panel members will prepare and submit individual
reports, including recommendations, to the Administrator regarding a
certifying agent's ability to conduct and perform certification
activities. The Administrator will consider the reports when
determining whether to continue or renew the certifying agent's
accreditation. Copies of the peer review panel reports will be
provided, upon request, to the certifying agent, and written responses
from the certifying agent may be submitted for consideration by the
Administrator. Copies of peer review panel reports may be provided to
any person requesting such reports under the Freedom of Information
Act.
Continuing Accreditation. An accredited certifying agent must
submit annually to the Administrator, on or before the anniversary date
of the issuance of the notification of accreditation, the following
reports and fees: (1) A complete and accurate update of its business
information, including its fees, and information evidencing its
expertise in organic production or handling and its ability to comply
with these regulations; (2) information supporting any changes
requested in the areas of accreditation; (3) a description of measures
implemented in the
[[Page 13573]]
previous year and any measures to be implemented in the coming year to
satisfy any terms and conditions specified in the most recent
notification of accreditation or notice of renewal of accreditation;
(4) the results of the most recent inspector performance appraisals and
annual program evaluation and a description of adjustments to the
certifying agent's operation and procedures implemented or to be
implemented in response to the appraisals and evaluation; and (5) the
required AMS fees.
Certifying agents will keep the Administrator informed of their
certification activities by: (1) Providing the Administrator with a
copy of any notice of denial of certification, notification of
noncompliance, notification of noncompliance correction, notification
of proposed suspension or revocation, and notification of suspension or
revocation issued simultaneously with its issuance; and (2) on a
quarterly calendar basis, the name, address, and telephone number of
each operation granted certification.
One or more site evaluations will occur during the 5-year period of
accreditation to determine whether an accredited certifying agent is
complying with the Act and regulations. USDA will establish an
accredited certifying agent compliance monitoring program, which will
involve no less than one randomly selected site evaluation of each
certifying agent during its 5-year period of accreditation. Larger and
more diverse operations, operations with clients marketing their
products internationally, and operations with a history of problems
should expect more frequent site evaluations by USDA. Operations with
clients marketing their products internationally will be annually site
evaluated to meet the ISO-Guide 61 \3\ requirement for periodic
surveillance of accredited certifying agents. USDA may also conduct
site evaluations during investigations of alleged or suspected
violations of the Act or regulations and in followup to such
investigations. Such investigations will generally be the result of
complaints filed with the Administrator alleging violations by the
certifying agent. Compliance site evaluations may be announced or
unannounced at the discretion of the Administrator. Certifying agents
will not be billed by USDA for USDA-initiated site evaluations
conducted to determine compliance with the Act and regulations.
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\3\ ISO/IEC Guide 61 is available for viewing at USDA-AMS,
Transportation and Marketing Programs, Room 2945--South Building,
14th and Independence Ave., SW, Washington, DC, from 9:00 a.m. to
4:00 p.m., Monday through Friday (except official Federal holidays).
A copy may be obtained from the American National Standards
Institute, 11 West 42nd Street, New York, NY 10036; Website:
www.ansi.org; E-mail: [email protected]; Telephone: 212-642-4900;
Facsimile: 212-398-0023.
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An accredited certifying agent must provide sufficient information
to persons seeking certification to enable them to comply with the
applicable requirements of the Act and these regulations. The
certifying agent must maintain strict confidentiality with respect to
its clients and not disclose to third parties (with the exception of
the Secretary or the applicable State program's governing State
official or their authorized representatives) any business-related
information concerning any client obtained while implementing these
regulations except as authorized by regulation. A certifying agent must
make the following information available to the public: (1)
Certification certificates issued during the current and 3 preceding
calender years; (2) a list of producers and handlers whose operations
it has certified, including for each the name of the operation, type(s)
of operation, and the effective date of the certification, during the
current and 3 preceding calender years; and (3) the results of
laboratory analyses for residues of pesticides and other prohibited
substances conducted during the current and 3 preceding calender years.
A certifying agent may make other business information available to the
public if permitted in writing by the producer or handler. This
information will be made available to the public at the public's
expense.
An accredited certifying agent must maintain records according to
the following schedule: (1) Records obtained from applicants for
certification and certified operations must be maintained for not less
than 5 years beyond their receipt; (2) records created by the
certifying agent regarding applicants for certification and certified
operations must be maintained for not less than 10 years beyond their
creation; and (3) records created or received by the certifying agent
pursuant to the accreditation requirements, excluding any records
covered by the 10-year requirement must be maintained for not less than
5 years beyond their creation or receipt. Examples of records obtained
from applicants for certification and certified operations include
organic production system plans, organic handling system plans,
application documents, and any documents submitted to the certifying
agent by the applicant/certified operation. Examples of records created
by the certifying agent regarding applicants for certification and
certified operations include certification certificates, notice of
denial of certification, notification of noncompliance, notification of
noncompliance correction, notification of proposed suspension or
revocation, notification of suspension or revocation, correspondence
with applicants and certified operations, on-site inspection reports,
documents concerning residue testing, and internal working papers and
memoranda concerning applicants and certified operations. Examples of
records created or received by the certifying agent pursuant to the
accreditation requirements include operations manuals; policies and
procedures documents (personnel, administrative); training records;
annual performance appraisals and supporting documents; conflict of
interest disclosure reports and supporting documents; annual program
evaluation working papers, memoranda, letters, and reports; fee
schedules; quarterly reports of operations granted certification;
application materials submitted to the NOP; correspondence received
from and sent to USDA; and annual reports to the Administrator.
The certifying agent must make all records available for inspection
and copying during normal business hours by authorized representatives
of the Secretary and the applicable State program's governing State
official. In the event that the certifying agent dissolves or loses its
accreditation, it must transfer to the Administrator and make available
to any applicable State program's governing State official all records
or copies of records concerning its certification activities.
Certifying agents are also required to prevent conflicts of
interest and to require the completion of an annual conflict of
interest disclosure report by all personnel designated to be used in
the certification operation. Coverage of the conflict of interest
provisions extends to immediate family members of the certifying agent;
responsibly connected persons of the certifying agent; and any
employee, inspector, contractor, or other personnel of the certifying
agent. A certifying agent may not certify a production or handling
operation if the certifying agent or a responsibly connected party of
such certifying agent has or has held a commercial interest in the
production or handling operation, including an immediate family
interest or the provision of consulting services, within the 12-month
period prior to the application for certification. A certifying agent
may certify a production or handling operation if any employee,
inspector, contractor, or other personnel
[[Page 13574]]
of the certifying agent has or has held a commercial interest,
including an immediate family interest or the provision of consulting
services, within the 12-month period prior to the application for
certification. However, any such person must be excluded from work,
discussions, and decisions in all stages of the certification process
and the monitoring of the entity in which they have or have held a
commercial interest. The acceptance of payment, gifts, or favors of any
kind, other than prescribed fees, from any business inspected is
prohibited. However, a certifying agent that is a not-for-profit
organization with an Internal Revenue Code tax exemption or, in the
case of a foreign certifying agent, a comparable recognition of not-
for-profit status from its government, may accept voluntary labor from
certified operations. Certifying agents are also prohibited from
providing advice concerning organic practices or techniques to any
certification applicant or certified operation for a fee, other than as
part of the fees under the certification program.
No accredited certifying agent may exclude from participation in or
deny the benefits of the NOP to any person due to discrimination
because of race, color, national origin, gender, religion, age,
disability, political beliefs, sexual orientation, or marital or family
status.
Renewal of Accreditation. To avoid a lapse in accreditation,
certifying agents must apply for renewal of accreditation 6 months
prior to the fifth anniversary of issuance of the notification of
accreditation and each subsequent renewal of accreditation. The
accreditation of certifying agents who make timely application for
renewal of accreditation will not expire during the renewal process.
The accreditation of certifying agents who fail to make timely
application for renewal of accreditation will expire as scheduled
unless renewed prior to the scheduled expiration date. Certifying
agents with an expired accreditation must not perform certification
activities under the Act and these regulations.
Following receipt of the certifying agent's annual report and fees,
the results of a site evaluation, and, when applicable, the reports
submitted by a peer review panel, the Administrator will determine
whether the certifying agent remains in compliance with the Act and
regulations and should have its accreditation renewed. Upon a
determination that the certifying agent is in compliance with the Act
and regulations, the Administrator will issue a notice of renewal of
accreditation. The notice of renewal will specify any terms and
conditions that must be addressed by the certifying agent and the time
within which those terms and conditions must be satisfied. Renewal of
accreditation will be for 5 years. Upon a determination that the
certifying agent is not in compliance with the Act and regulations, the
Administrator will initiate proceedings to suspend or revoke the
certifying agent's accreditation. Any certifying agent subject to a
proceeding to suspend or revoke its accreditation may continue to
perform certification activities pending resolution of the proceedings
to suspend or revoke the accreditation.
Accreditation--Changes Based on Comments
This subpart differs from our first proposal in several respects as
follows:
(1) Equivalency of Imported Organic Products. We have removed the
regulations on equivalency of imported organic products included in the
first proposal. In this proposal, we have added foreign certifying
agents as entities eligible for accreditation as certifying agents
qualified to certify domestic and foreign organic production and
handling operations. We have also added to subpart A definitions for
private entity and State entity. We have defined ``private entity'' as
any domestic or foreign nongovernmental for-profit or not-for-profit
organization providing certification services. We have defined ``State
entity'' as any domestic or foreign governmental subdivision providing
certification services.
In commenting on the first proposal, several commenters expressed
confusion as to how the Secretary would determine equivalency of
imported organic products. They also expressed confusion as to how the
Secretary would ensure that imported products met the same requirements
as those produced domestically. We have addressed these concerns by
adding foreign certifying agents as private or state entities that may
be accredited under the NOP. We have also provided that USDA will
accept a foreign certifying agent's accreditation to certify organic
production or handling operations if: (1) USDA determines, upon the
request of a foreign government, that the standards under which the
foreign government authority accredited the foreign certifying agent
meet the requirements of this part; or (2) the foreign governmental
authority that accredited the certifying agent acted under an
equivalency agreement negotiated between the United States Government
and the foreign government. These changes ensure that all certifying
agents, including foreign private and state certifying agents, will be
required to meet the same requirements to be recognized as qualified to
certify organic production or handling operations. This change provides
foreign private and state certifying agents with transparent standards
for accreditation.
A commenter raised concerns that we acted in violation of
international agreements and domestic policy by proposing rules that
were contrary to internationally accepted organic standards and, thus,
created an unacceptable barrier to trade. The Act directs the Secretary
to establish national standards governing the marketing of certain
agricultural products as organically produced products. In accordance
with our international agreements, this proposal ensures that, with
respect to accreditation under this subpart, products imported from the
territory of any country are being accorded treatment no less favorable
than that accorded to products of U.S. origin. However, in accordance
with our international trade agreements and upon implementation of this
program, the Administrator will give positive consideration to
accepting as equivalent technical regulations of other countries, even
if these regulations differ from our own, provided such regulations
fulfil the objectives of this proposed program. Any such equivalency
agreements will be negotiated on a case-by-case basis, and ample
opportunity for public comment will be provided before and during the
negotiation process.
Two commenters requested that the Secretary recognize international
accreditation systems for foreign organic certification programs and
establish the requirements for approval of such systems in this
proposal. We have instead proposed for the purposes of this rule that
all certifying agents, regardless of their country of origin, meet the
same requirements for accreditation through the provisions of this
subpart.
One commenter requested that all imported organic products be
labeled by their respective country of origin. The purpose of this
proposal is to provide the requirements for the marketing of
agricultural products in the United States that are labeled or sold as
organic. The issue of country-of-origin labeling of imported products
is not related to this proposal or the Act. Further, regulations
pertaining to the labeling of organic agricultural products should not
be used to enforce country-of-origin labeling requirements.
Several commenters stated that the first proposal did not take into
account
[[Page 13575]]
the use of equivalency to ensure the marketing of U.S. organic products
in foreign markets. The Department will work to oppose other countries'
organic regulations that would prohibit entry of U.S. organic product
produced under the Act or these regulations. As appropriate, the U.S.
Government may represent U.S. organic interests in international
government-to-government bodies. However, neither of these objectives
is intended to be achieved by this rule.
(2) Accreditation Requirements Regarding Expertise of Employees. We
have added a new regulation to the general requirements for
accreditation. This regulation requires that the certifying agent
ensure that its responsibly connected persons, employees, and
contractors with inspection, analysis, and decision-making
responsibilities have sufficient expertise in organic production or
handling techniques to sufficiently perform the duties assigned.
Certifying agents were required under the first proposal to use a
sufficient number of adequately trained personnel, including
inspectors. They were also required to conduct an annual performance
appraisal of each inspector.
Commenters felt that the proposed rule did not sufficiently ensure
that certifying agents would employ qualified individuals. One of these
commenters requested that we require organic certification inspectors
to participate in an inspector accreditation program, such as that
offered by the Independent Organic Inspectors Association. We believe
that inspector participation in an inspector accreditation program
should be left to the discretion of the inspector and certifying agent.
However, we believe that the new requirement combined with the
requirements from the first proposal should ensure that responsibly
connected persons, employees, and contractors of an accredited
certifying agent are qualified to perform their inspection, analysis,
and decision-making duties. This new regulation is found at
Sec. 205.501(a)(5) of this proposal.
(3) Recordkeeping Requirements. We have proposed a new
Sec. 205.510(b), which identifies three categories of records and their
retention periods. This new paragraph was added to address commenter
concern that the requirement that an accredited certifying agent
maintain records about all of its activities for 10 years was excessive
and unnecessary. Commenters suggested a 5- to-7-year retention period.
We agree that for some records, a retention period of 10 years may be
excessive. Accordingly, in this proposal, we are proposing three
retention periods. First, records created by the certifying agent
regarding applicants for certification and certified operations would
have to be maintained for not less than 10 years beyond their creation.
We believe this retention period to be consistent with the Act's
requirement that the certifying agent maintain all records concerning
its activities for a period of not less than 10 years. Second, records
obtained from applicants for certification and certified operations
would have to be maintained for not less than 5 years beyond their
receipt. This retention period is the same as that required by the Act
for the retention of records by the certified operation. Since the
certified operation can dispose of its records 5 years after their
creation, the certifying agent should also be able to dispose of those
records it receives from the certified operation 5 years after their
receipt. Third, records created or received by the certifying agent for
USDA accreditation would have to be maintained for not less than 5
years beyond their creation or receipt.
(4) Conflict of Interest Provisions. We have made three changes
which we believe will strengthen the conflict of interest provisions.
We have made these changes because we concur with the comment from a
research foundation stating that the provisions for preventing
conflicts of interest needed to be significantly strengthened. First,
we have added a new Sec. 205.501(a)(11)(v), which requires the
completion of an annual conflict of interest disclosure report by all
personnel designated to be used in the certification of an operation,
including administrative staff, certification inspectors, members of
any certification review and program evaluation committees,
contractors, and all parties responsibly connected to the certifying
agent. Second, coverage of the conflict of interest provisions has been
extended to immediate family members of the certifying agent;
responsibly connected persons of the certifying agent; and any
employee, inspector, contractor (to be used in the certification of an
operation), or other personnel of the certifying agent. Immediate
family members would include the spouse; minor children, including
legally adopted children; or blood relatives who reside in the
immediate household of a certifying agent; responsibly connected person
of the certifying agent; or any employee, inspector, contractor, or
other personnel of the certifying agent. Third, this proposal lists
contractors among those persons who are prohibited from accepting
payment, gifts, or favors of any kind, other than regular fees from any
business inspected by the certifying agent. This addition, which is
found at Sec. 205.501(a)(11), was made to clarify that contractors,
including contract inspectors, are prohibited from accepting payment,
gifts, or favors of any kind, other than regular fees.
(5) Use of Voluntary Labor. We have added an exception to the
prohibition of the acceptance of payment, gifts, or favors of any kind.
The exception provides that any certifying agent that is a not-for-
profit organization with an Internal Revenue Code tax exemption or, in
the case of a foreign certifying agent, a comparable recognition of
not-for-profit status from its government may accept voluntary labor
from certified operations. Internal Revenue Code tax exemption or, in
the case of a foreign certifying agent, a comparable recognition from
its government is required as verification of the certifying agent's
status as a not-for-profit organization. This change was made to
clarify our original intent that not-for-profit certifying agents would
be allowed to accept volunteer labor from persons certified by the
certifying agent.
In the preamble to the first proposal, we stated that we would not
consider a volunteer who performs services for a not-for-profit
certifying agent as providing favors to any particular individual in
that agency and, therefore, would not consider the certifying agent as
being in a conflict of interest situation by accepting such services
from volunteers. We have made this clarification because a commenter
expressed the belief that the certifying agent should be allowed to
receive donations of time, food, and money beyond any mandatory fees
from persons they certify. The Act prohibits certifying agents from
accepting payments, gifts, or favors of any kind from a business
inspected, other than prescribed fees. Accordingly, this exception is
limited to acceptance of voluntary labor by not-for-profit certifying
agents. While Sec. 205.501(a)(11)(iii) prohibits the acceptance of
payments, gifts, or favors of any kind, other than prescribed fees,
from any business inspected for certification as a producer or handler
of organic agricultural products, the paragraph does not prohibit the
accredited certifying agent from accepting payments, gifts, or favors
of any kind, including time, food, or money, from persons for whom they
do not provide inspections for certification as a producer or handler
of organic agricultural products.
[[Page 13576]]
(6) Certification Fees. We have removed the requirement that a
certifying agent charge only such fees to applicants for certification
and operations it certifies that the Secretary determines are
reasonable. We have made this change because we concur with those
commenters who expressed the belief that certifying agents should be
permitted to set their own fees without the approval of the Secretary.
However, we continue to believe that the Administrator should retain
oversight of the fees, not for the purpose of setting the fees or of
dictating the level of the fees, but for the purpose of determining if
any certifying agent's fees are so high as to be unreasonable and to
ensure that the schedule of fees filed with the Administrator are
applied uniformly and in a nondiscriminatory manner. The Administrator
should also retain the ability to inform a certifying agent that its
fees appear to be unreasonable and to require a justification for the
level of fees set by the certifying agent. We further believe that the
Administrator should retain the ability to investigate the level of
fees charged by an accredited certifying agent if a complaint is made
or if compelling circumstances warrant such an investigation.
Accordingly, we have proposed at Sec. 205.501(a)(15) that a certifying
agent must charge applicants for certification and certified production
and handling operations only those fees and charges that it has filed
with the Administrator. We have also included at Sec. 205.642
regulations with respect to fees charged by certifying agents to
producers and handlers. Section 205.642 is discussed under fees in
subpart G of this preamble.
(7) State Standards That Vary From the National Organic Program. We
have added an exception to the regulation which prohibited certifying
agents from requiring, as a condition for use of the certifying agent's
identifying mark, compliance with any farming or handling requirements
other than those provided for in the Act and regulations. The exception
provides that the requirement does not apply to States with more
restrictive requirements approved by the Secretary or private entity
certifying agents certifying production or handling operations within
States with more restrictive requirements approved by the Secretary.
This change was made because we agree with the State commenters who
stated that the prohibition on requiring compliance with any farming or
handling requirements other than those provided for in the Act and
regulations would prohibit States from requiring that their more
restrictive standards, approved by the USDA, be met as a requirement
for use of the State's logo on organically produced products. We did
not intend to prohibit States from requiring that their more
restrictive standards be met as a requirement for use of the State's
logo on organically produced products. Including this exception in
Sec. 205.501(b)(2) will permit States with more restrictive
requirements approved by the Secretary and private entity certifying
agents certifying production or handling operations within the borders
of such States to require that the State's more restrictive standards
be met as a requirement for use of their logo or other identifying mark
on organically produced products.
Certifying agents may not require a certified operation to meet
production or handling standards greater than those established by the
Department or, when applicable, an approved State organic certification
program as a condition for using its logo or other identifying mark.
However, a certifying agent may verify, upon the request of a producer
or handler certified by the certifying agent, that the producer or
handler is meeting contractual specifications which include
requirements in addition to those of the Act and regulations.
(8) Time Period for Public Access to Information. For the
requirement that certifying agents describe the procedures they will
use for making information available to the public, we have changed the
time period from ``during the 10-year period preceding the receipt of
the request from the public'' to ``during the current and 3 preceding
calendar years.'' Commenters stated that the required 10-year period
was excessive and unnecessary. The Act requires public access to
certification documents and laboratory analyses that pertain to
certification. However, the Act does not specify that a certifying
agent must provide access to its records throughout their 10-year
retention period. We agree with the commenters that public access to
the records the certifying agent is required to keep should be limited
to a reasonable period short of the full retention period. Such a
reasonable period, we believe, would be the current calendar year and
the 3 calendar years preceding the calendar year of the request.
Accordingly, Sec. 205.504(b)(5) requires certifying agents to describe
the procedures they will use for making information available to the
public during the current and 3 preceding calendar years. This time
period will lessen the burden on certifying agents while assuring
reasonable public access to such records.
(9) Scope of Information for Public Release. We have expanded the
scope of information for public release which must be included in the
list of producers and handlers whose operations the certifying agent
has certified. Specifically, certifying agents will have to include the
name of the operation and type(s) of operation in its list of producers
and handlers it has certified. This change is included in section
Sec. 205.504(b)(5)(ii). Commenters requested that the list be expanded
to include the name of the operation, its physical location(s),
certification history, type(s) of operation, acreage (when applicable),
and person responsible for organic regulation compliance. While we
agree that the name of the operation and type(s) of operation should be
available to the public, we believe that the certified operation's
physical location(s), certification history, and acreage are
confidential information which has no relationship to the operation's
status as a certified organic operation. Therefore, such information
should only be made available with the written consent of the certified
operation. We also believe that it is unnecessary to list a person
responsible for organic regulation compliance since the applicant
ultimately has that responsibility. Therefore, these requested
additions have not been made. We have also removed the separate
requirement that certifying agents identify for the public the organic
agricultural products produced by each certified operation. We have
taken this action because the information is available on the
certificates and the list of producers and handlers required to be
released by the certifying agent to the public. These requirements are
found at Sec. 205.504(b)(5)(i) and (ii).
(10) Release of Nonconfidential Business Information. We have
removed the requirement that certifying agents provide a description of
the procedures to be used to make nonconfidential business information,
as permitted by the producer or handler and approved by the Secretary,
available to the public. This requirement has been replaced with the
requirement that the certifying agent provide a description of the
procedures to be used to make other business information, as permitted
in writing by the producer or handler, available to the public.
Commenters objected to the requirement that the Secretary approve the
release of nonconfidential business information that the producer or
handler had authorized the certifying agent to
[[Page 13577]]
release. They believed that this requirement lacked justification and
created unnecessary costs. We concur that this requirement is
unnecessary. However, we believe that the producer's or handler's
approval must be obtained in writing, which is reflected in this
proposal at Sec. 205.504(b)(5)(v).
(11) Submission of Applicant's Financial Policies and Procedures.
We have removed the requirement that a certifying agent include with
its application for accreditation a description of its policies and
procedures for collection and disbursement of funds and documents that
identify anticipated sources of income, including all fees to be
collected from producers and handlers. Commenters stated that they did
not believe the submission of applicant financial policies and
procedures was necessary. We have decided that the information
requested probably would not fully meet our needs in determining that
certification decisions were not influenced by the certifying agent's
concern for the certification decision's financial impact on the
certifying agent or in determining compliance with the conflict of
interest provisions of the Act and these regulations. Accordingly, this
requirement is not included in this proposal.
(12) Submission of Information Concerning Current Certification
Activities. We have changed the voluntary submission of information and
documents concerning current certification activities to a required
submission. Commenters stated that the submission of a list of all
farms, wild-crop harvesting operations, and handling operations
currently certified by the applicant should be required. They went on
to say that the submission of copies of the inspection reports and
certification evaluation documents for production or handling
operations certified by the applicant during the previous year should
remain optional. They also said the submission of results from any
accreditation process of the applicant's operation by an accrediting
body during the previous year for the purpose of evaluating its
certification activities should remain optional.
We agree with the commenters that a list of all operations
currently certified by the applicant should be a required submission.
We also believe that copies of inspection reports, certification
evaluation documents, and accreditation results should be a required
submission from all applicants currently certifying production or
handling operations. Accordingly, at Sec. 205.504(d) we have made the
submission of information and documents concerning current
certification activities mandatory for certifying agents currently
certifying production or handling operations.
This change has been made because of the value such information and
documents would have in assisting the Department in evaluating an
applicant for accreditation. However, we have limited the submission of
inspection reports and certification evaluation documents for
production and handling operations certified by the applicant. The
applicant is required to submit copies of at least 3 different
inspection reports and certification evaluation documents for
production or handling operations certified by the applicant during the
previous year for each area of operation for which accreditation is
requested. We have limited the submission to reduce the reporting
burden on certifying agents. The Administrator may, however, require
that the certifying agent submit additional inspection reports and
certification evaluation documents.
We recognize that a newly organized certifying agent with no
experience would be unable to supply the information. An applicant's
inability to provide the information and documentation required by the
revised paragraph due to lack of experience would not be prejudicial to
the Department's evaluation of the application.
(13) Site Evaluations. We have revised the site evaluation
provisions to clarify the scope of an evaluation, to specify that the
evaluation will be arranged and conducted by a representative of the
Administrator, and to specify when evaluations shall or may be
conducted. These changes are made in response to commenters who
suggested adding details to the regulatory text regarding the nature of
site evaluations. The revised section provides that site evaluations of
accredited certifying agents shall: (1) Be conducted for the purpose of
examining the certifying agent's operations and evaluating its
compliance with the Act and regulations; (2) include an on-site review
of the certifying agent's certification procedures, decisions,
facilities, administrative and management systems, and production or
handling operations certified by the certifying agent; (3) be conducted
by a representative(s) of the Administrator; and (4) be conducted after
application for renewal of accreditation but prior to the issuance of a
notice of renewal of accreditation. This revised section provides that
an initial site evaluation of an accreditation applicant would be
conducted before or within a reasonable period of time after issuance
of the applicant's notification of accreditation. Section 205.508 also
provides that one or more site evaluations will be conducted during the
period of accreditation to determine whether an accredited certifying
agent is complying with the general requirements for accreditation.
(14) Eligibility for Peer Review Panels. We have added a new
regulation addressing eligibility for peer review panels. Commenters
expressed concern that peer review pool applicants be free of conflicts
of interest and possess the necessary expertise in organic production
or handling. The first proposal provided that candidates for membership
in the peer review panel pool would be required to submit a letter to
the Program Manager of the NOP requesting appointment, describing their
qualifications, and identifying conflicts of interest. We believe that
there is value to the applicants for membership in the peer review
panel pool and the general public in addressing eligibility for peer
review panels in the regulatory text. Accordingly, we have added a new
regulation at Sec. 205.509(b) which provides that applicants for
membership in the peer review panel pool must provide the Administrator
with a written description and, upon request, supporting documentation
of their qualifications to conduct peer reviews. Such description must
include information concerning the applicant's training and expertise
in organic production or handling methods and in evaluating whether
production or handling operations are using a system of organic
production or handling. Applicants must also address their possible
limitations on availability to serve. Further, applicants would be
required to include information concerning their commercial interests
and those of their immediate family members, within the 12-month period
prior to application, with any person who may seek to become or who is
an accredited certifying agent. No person who has or has had a
commercial interest, including an immediate family interest or the
provision of consulting services, in an applicant for accreditation or
renewal of accreditation will be appointed to or accept appointment to
a panel evaluating the applicant. This provision was added for the
purpose of avoiding conflicts of interest by peer reviewers. This new
regulation also provides that persons accepted to the pool may serve
until notified that their appointment has been rescinded by the
Administrator or until
[[Page 13578]]
they are no longer qualified, whichever occurs first.
(15) Composition of Peer Review Panels. We have revised the
regulations concerning the composition of peer review panels.
Commenters requested that the peer review panel consist of at least two
members who are not USDA employees, rather than not AMS employees. We
agree with this suggested change, which clarifies what had been our
intent. This change is included in Sec. 205.509(c). Section 205.509(c)
provides that peer review panels shall consist of at least three but no
more than five members. This section provides that peer review panels
must include a Department representative who will preside over the
panel and no fewer than two members from the peer review pool who
possess sufficient expertise in the relevant areas of accreditation.
Additionally, section 205.509(c) provides that peer review panels may
include up to two members with expertise in other disciplines,
including organizational management and finance; member(s) from the
approved State organic certification program when the applicant is a
private entity seeking accreditation within the State; and member(s)
from a foreign government's organic program when the applicant is a
private entity that will operate within the country. We have added
authorization for these additional members to broaden the scope and
depth of expertise available to peer review panels.
Commenters also expressed concern that the peer review panels
consist of at least one member from a State organic certification
program. We do not believe that the composition of peer review panels
regulations needs to be amended to accommodate this concern. To the
extent possible, accredited private certifying agents will peer review
private certifying agents, and accredited State certifying agents will
peer review State certifying agents.
(16) Renewal of Accreditation. We have revised the renewal of
accreditation provisions to, among other things, require that an
accredited certifying agent's application for accreditation renewal be
received 6 months prior to the fifth anniversary of issuance of the
notification of accreditation and each subsequent renewal of
accreditation. The first proposal provided that an accredited
certifying agent would request renewal of accreditation on or before
the fifth anniversary of issuance of the notice of confirmation of
accreditation and each subsequent renewal of accreditation. Commenters
expressed concern about whether the accredited certifying agent's
accreditation would lapse during the renewal process. They suggested
that certifying agents should submit their application for renewal of
accreditation 6 months prior to the fifth anniversary of issuance of
the notice of confirmation.
We believe that clarification regarding the status of the
certifying agent's accreditation during the renewal process is
appropriate. We also concur with the commenters' suggestion that
certifying agents should submit their applications for renewal of
accreditation 6 months prior to the fifth anniversary of issuance of
the notice of confirmation. We have replaced ``notice of confirmation
of accreditation,'' however, with ``notification of accreditation''
because this proposal eliminates the section on confirmation of
accreditation. Accordingly, we have provided in this proposal at
Sec. 205.510(c) that: (1) An accredited certifying agent's application
for accreditation renewal must be received 6 months prior to the fifth
anniversary of issuance of the notification of accreditation and each
subsequent renewal of accreditation; (2) the accreditation of
certifying agents who make timely application for renewal of
accreditation will not expire during the renewal process; (3) the
accreditation of certifying agents who fail to make timely application
for renewal of accreditation will expire as scheduled unless renewed
prior to the scheduled expiration date; (4) certifying agents with an
expired accreditation must not perform certification activities under
the Act and regulations; and (5) following receipt of the information
submitted by the certifying agent, the results of any site evaluation,
and, when applicable, the reports submitted by a peer review panel, the
Administrator will determine whether the certifying agent remains in
compliance with the Act and regulations and should have its
accreditation renewed.
These changes would provide the Department with sufficient time to
fully process the certifying agent's application for accreditation
renewal prior to the accreditation's scheduled date of expiration. This
revised regulation also clarifies that a certifying agent's
accreditation will not expire during the accreditation renewal process
if the certifying agent has made timely application for renewal. It
also makes clear that the accreditation of certifying agents who fail
to make timely application for renewal of accreditation will expire as
scheduled unless renewed prior to the scheduled expiration date. This
regulation also provides that certifying agents with an expired
accreditation must not perform certification activities under the Act
and these regulations.
(17) Denial of Accreditation. We have revised the denial of
accreditation regulations to clarify that after receipt of a
notification of noncompliance, the applicant may submit a description
of the actions taken to correct the noted deficiencies and evidence
demonstrating such corrections, rather than submitting a new
application. We have taken this action because commenters were confused
by our reference to a new application in the denial of accreditation
regulations. The denial of accreditation regulations are found at
Sec. 205.507 in this proposal.
Accreditation--Changes Requested But Not Made
This subpart retains from our first proposal regulations on which
we received comments as follows:
(1) Durations of Accreditation and Reporting Requirements.
Commenters expressed concern regarding the duration of accreditation
and whether the interval of required reporting is adequate. An
association expressed concern regarding the economic impact of
accreditation on small certifying agents. This commenter stated that
small certifying agents should not be accredited more often than every
5 years. An international organic federation expressed the belief that
accreditation for 5 years is too long. The commenter went on to say
that certification bodies are expanding rapidly and that annual reports
cannot be relied upon to fully convey the consequent changes. This
commenter believes that many of the conditions of accreditation may
relate to operational aspects that cannot be addressed in an annual
report.
Annual reporting by the certifying agent, under this proposal,
would provide: (1) A complete and accurate update of applicant
information and expertise and ability information previously submitted;
(2) information supporting any changes being requested in the areas of
accreditation; (3) the measures that were implemented in the previous
year and any measures to be implemented in the coming year to satisfy
any terms and conditions determined by the Administrator to be
necessary as specified in the most recent notification of
accreditation; and (4) the results of the most recent inspector
performance appraisal and program evaluation and adjustments to the
certifying agent's operation and procedures implemented and intended to
be implemented in response to the appraisals and evaluations. This
proposal includes a requirement at
[[Page 13579]]
Sec. 205.501(a)(14) that the certifying agent submit to the
Administrator a copy of each notification of: (1) Denial of
certification; (2) noncompliance; (3) noncompliance correction; (4)
proposed suspension or revocation; and (5) suspension or revocation,
simultaneously with its issuance.
We believe that these reporting requirements, coupled with feedback
from applicants for certification, certified operations, and other
interested parties, will provide the Department with sufficient
information regarding the certifying agent and its operation to
determine whether a site visit is necessary to evaluate the certifying
agent's suitability to remain accredited. Under this proposal, the
Department will conduct one or more site evaluations during the period
of accreditation to determine whether the accredited certifying agent
is complying with the requirements for accreditation. Accordingly, we
believe the duration of accreditation period first proposed was
correct, and we are, therefore, reproposing this time period at
Sec. 205.500(b).
(2) Performance Appraisals and Program Evaluation. Comments from
State departments of agriculture and some certifiers indicated that the
annual inspector performance appraisal and annual program evaluation
requirements duplicated State requirements. The commenters asked what
the required scope and depth of evaluations was expected to be, whether
third party evaluators would be required to be used to assess the
performance of the operation, and whether existing performance
appraisal and program evaluation practices of a certifying agent would
be used to meet the annual inspector performance appraisal and program
evaluation requirements.
We do not intend for States to develop dual performance appraisal
and program evaluation programs. We believe that performance appraisals
and program evaluations conducted to meet State requirements will also
meet the requirements of this proposal. State and private agency
personnel performance appraisals and program evaluations would be
expected to be consistent with good management practices and
appropriate to the organization's size and structure. This could be
different for different organizations. Therefore, we are not
prescribing the specific performance appraisal system or instrument to
be used to assess inspector performance, the specific program
evaluation methods that must be used, or that third parties must
conduct the required program evaluation. Accordingly, we have not
changed the questioned provisions, which appear at
Sec. Sec. 205.501(a)(6) and (7). We have, however, revised
Sec. 205.501(a)(7) to clarify that the annual program evaluation can be
conducted by the certifying agency staff, an auditing entity, or a
consultant who has expertise to conduct program evaluations.
(3) ``Open Records'' Requirements. Commenters expressed the belief
that confidentiality requirements for certifying agents might conflict
with State requirements for ``open records.'' We recognize this
potential for conflicting requirements. Records collected and
maintained under the NOP are subject to the confidentiality provisions
of the Act and these regulations. However, a State-entity certifying
agent will be subject to its State ``open records'' laws when such laws
conflict with the confidentiality provisions of the Act and these
regulations. Records collected and maintained under the NOP by a
private entity certifying agent will always be subject to the
confidentiality requirements of the Act and these regulations.
Accordingly, pursuant to the Act, we are reproposing the
confidentiality provisions at Sec. 205.501(a)(10).
To clarify that authorized representatives of the Secretary or the
applicable State program's governing State official may act on behalf
of the Secretary or the State program's governing State official and
must be given access to the records, we have added the phrase, ``or
their authorized representatives,'' to Sec. 205.501(a)(10). Such
representative could be a member of the NOP staff, a Department
compliance officer, or other official. This provision is standard
practice and is necessary for Government oversight of a regulatory
program.
(4) List of Confidential Records. One commenter requested a
definitive list of the records that had to be kept confidential. We
cannot create such a list because it is not possible to describe every
record that would be characterized as a business-related record. Such
records would include, however, organic production and handling plans,
records that are related to trade secrets and commercial or financial
information obtained from applicants for certification, and records or
information compiled for an investigation into alleged noncompliance
with the Act and regulations.
(5) Time Period for Prohibition of Commercial Interest. We received
many comments regarding the prohibition of commercial interest in an
organic production or handling operation during the 12 months prior to
certification. Several States and industry associations stated that the
prohibition of commercial interest should apply to the 12 months after
as well as the 12 months prior to certification. These commenters
offered no reasoning for their position. A research foundation
recommended that the prohibition of commercial interest should be for 3
years before and after the application for certification. This
commenter stated that the conflict of interest provisions needed
significant strengthening. A producer commenter stated that the
prohibition of commercial interest should be for an indefinite period,
not for 12 months. Some commenters recommended that certifying agents
and responsible parties and employees of certifying agents be barred
from accepting employment for 1 to 3 years from any certified
production or handling operation in which they participated in any
manner in the operation's certification. An accreditation service
stated it believed there would be a conflict of interest should a
consulting or business connection arise between an inspector and a
production or handling operation following the site evaluation. This
commenter presented the example of an inspector being offered
employment during the site evaluation but not taking the position until
6 months after the site evaluation. Many commenters, however, supported
our proposed prohibition of commercial interest in an organic operation
during the 12 months prior to certification.
We disagree with the recommendations calling for a longer
precertification conflict of interest prohibition period and with the
recommendations for a postcertification prohibition period for those
persons no longer associated with the certifying agent. Regarding the
recommendations for a longer precertification prohibition period, we
continue to believe that 12 months is a sufficient period to ensure
that any previous commercial interest would not create a conflict of
interest situation for two reasons. First, this time period is
consistent with similar provisions governing conflicts of interest for
government employees. Second, we have added a new section,
205.501(a)(11)(v), which requires the completion of an annual conflict
of interest disclosure report by all personnel designated to be used in
the certification operation, including administrative staff,
certification inspectors, members of any certification review and
program evaluation committees, contractors, and all parties
[[Page 13580]]
responsibly connected to the certification operation. This requirement
will assist certifying agents in complying with the requirements to
prevent conflicts of interest. We also continue to believe that a
longer prohibition period would have the effect of severely curtailing
most certifying agents' ability to comply with the Act's requirement
that they employ persons with sufficient expertise to implement the
applicable certification program. Accordingly, we have decided to
repropose the prohibition on commercial interest in an applicant for
certification for a 12-month period prior to the application for
certification at section Sec. 205.501(a)(11).
Regarding the recommendations for a postcertification prohibition
period for those persons no longer associated with the certifying
agent, we believe such a period is unnecessary. We take this position
because certifying agents and their responsibly connected parties,
employees, inspectors, contractors, and other personnel are prohibited
from engaging in activities or associations at any time during their
affiliation with the certifying agent which would result in a conflict
of interest. While associated with the certifying agent, all employees,
inspectors, contractors, and other personnel are expected to disclose
to the certifying agent any offer of employment they have received and
not immediately refused. They are also expected to disclose any
employment they are seeking and any arrangement they have concerning
future employment with an applicant for certification or a certified
operation. The certifying agent would then have to exclude that person
from work, discussions, and decisions in all stages of the
certification or monitoring of the operation making the employment
offer. If a certifying agent or a responsibly connected party of the
certifying agent has received and not immediately refused an offer of
employment, is seeking employment, or has an arrangement concerning
future employment with an applicant for certification, the certifying
agent may not accept or process the application. Further, certifying
agents and responsibly connected parties may not seek employment or
have an arrangement concerning future employment with an operation
certified by the certifying agent while associated with that certifying
agent. Certifying agents and responsibly connected parties must sever
their association with the certifying agent when such person does not
immediately refuse an offer of employment from a certified operation.
Accordingly, we have decided not to include a postcertification
prohibition period in this proposal.
(6) Conflicts of Interest. Some commenters stated that they
understood the proposed conflict of interest provisions to prohibit
certifying agents from certifying any organic operation owned or
operated by a member of the certifying agent's board of directors or
from certifying any organic operation owned or operated by an employee
of the certifying agent. One commenter stated that because
certification arose from the ranks of organic farmers, there are many
certification personnel, including inspectors, who also farm or have
family who farm. This commenter stated that it should be permissible
for a certifying agent to review and certify an organic operation owned
or operated by a responsibly connected person or employee, provided
that the responsibly connected person or employee is excluded from the
decision-making process with respect to the organic operation to be
certified.
The commenters are correct in their interpretation that the first
proposal prohibited certifying agents from certifying an operation when
the certifying agent or a responsibly connected party of such
certifying agent has or has held a commercial interest in the
operation. This prohibition is limited, however, to the 12-month period
prior to the application for certification. The first proposal did not
prohibit certifying agents from certifying an operation when an
employee of the certifying agent has or has held a commercial interest
in the operation. The first proposal prohibited a certifying agent from
using an employee in any phase of the certification process when such
employee has or has held a commercial interest in an operation making
application for certification within the 12-month period prior to the
application for certification. A responsibly connected party is any
person who is a partner, officer, director, holder, manager, or owner
of 10 percent or more of the voting stock of an applicant for or a
recipient of certification or accreditation.
We believe that a certifying agent and a responsibly connected
party of such certifying agent hold positions of power and authority
which preclude the certification of an operation in which they have or
have held a commercial interest during the 12-month period prior to an
application for certification. The certifying agent's control over the
employment of an agent's employee makes it unreasonable to expect an
employee of a certifying agent to impartially carry out the employee's
duties when the certifying agent or a responsibly connected party of
such agent has an interest in the applicant. Such is not true of an
employee who is subordinate to the certifying agent or a responsibly
connected party of the certifying agent. Accordingly, we have
reproposed the requirement that a certifying agent prevent conflicts of
interest by: (1) Not certifying a production or handling operation if
the certifying agent or a responsibly connected party of such
certifying agent has or has held a commercial interest within the 12-
month period prior to the application for certification and (2)
excluding any person with a conflict of interest from work,
discussions, and decisions in all stages of the certification process
and the monitoring of certified production or handling operations for
all entities in which the person has or has held a commercial interest
within the 12-month period prior to the application for certification.
Both of these provisions are found in Sec. 205.501(a)(11).
(7) Defining Commercial Interest. A research foundation recommended
that the provisions for preventing conflicts, found in this proposal at
Sec. 205.501(a)(11), be strengthened by changing ``a commercial
interest in the operation'' to ``a commercial interest in the operation
or the marketing or distribution of its products.'' We believe that the
recommended addition is unnecessary because ``commercial interest''
covers all business transactions between the certifying agent or
responsibly connected parties, employees, inspectors, contractors, or
other personnel of the certifying agent and the applicant for
certification or certified operation. This interpretation would not
apply to voluntary labor provided, in accordance with
Sec. 205.501(a)(11)(iii), by a certified operation to a certifying
agent that is a not-for-profit organization with an Internal Revenue
Code tax exemption. Further, this interpretation would not apply to the
providing of advice, in accordance with Sec. 205.501(a)(11)(iv),
concerning organic practices or techniques to any certification
applicant or certified operation when such advice is covered by fees
under the applicable certification program established under the Act.
(8) Provision of Information to Producers and Conflicts of
Interest. Commenters were concerned about the effect that some of the
conflict of interest provisions would have on certifying agents that
provide producers with information on organic practices through forums
such as in-house publications, conferences, workshops, informational
meetings, and field days
[[Page 13581]]
for a fee. Specifically, they were concerned about the impact of the
conflict of interest provision requiring that certifying agents prevent
conflicts of interest by not providing advice concerning organic
practices or techniques to any certification applicant or certified
organic production or handling operation for a fee, other than as part
of the fees established under the applicable certification program
established under the Act. These commenters requested that the
paragraph be rewritten to clarify that such activities would not be
prohibited. We also received a comment stating that advice relating to
improving production yields, market access, etc., is not the function
of an inspector and can lead to a nonmonetary conflict of interest.
This commenter stated that advice, where given, should be restricted to
issues related to the understanding and implementation of the
standards.
Certifying agents have historically provided advice concerning
organic practices or techniques to any certification applicant or
certified organic production or handling operation for a fee through
forums such as in-house publications, conferences, workshops,
informational meetings, and field days. Such activities and their fees
would not be prohibited under the Act or these regulations, provided
that such activities were not required as a condition for production or
handling certification. Section 205.503(c) would require that the
applicant for accreditation provide a copy of the applicant's schedule
of fees for all services to be provided under these regulations by the
applicant. We would consider such activities to be voluntary
participation activities provided by the certifying agent to producers,
handlers, and other interested persons under the NOP. We also believe
that it is appropriate, as well as industry practice, during an on-site
inspection for inspectors to provide advice on a wide range of issues
related to an on-site inspection of a production or handling operation.
Accordingly, the conflict of interest provisions found at
Sec. 205.501(a)(11) have not been rewritten as requested by the
commenters.
(9) Equivalency of Certification Decisions. We received a variety
of comments suggesting changes to the requirement that accredited
certifying agents accept the certification decisions made by another
USDA-accredited certifying agent as equivalent to its own. Several of
these commenters asked whether States with more restrictive standards
could challenge certification decisions made by any accredited
certifying agents. A few commenters representing State programs stated
that States should be able to maintain control over which certifying
agents operate within their State. Other commenters suggested that the
requirement be amended to: (1) Require that a certifying agent accept
the certification decisions made by another USDA-accredited certifying
agent as equivalent to its own only after the certifying agent's
accreditation has been confirmed by the Department; (2) provide that if
a certifying agent doubts the accuracy of another certifying agent's
determination, the certifying agent questioning the accuracy can file a
complaint with the Secretary; and (3) authorize an accredited
certifying agent to request additional documentation from another
certifying agent if questions arise regarding the other certifying
agent's certification activities or the activities or product of a
production or handling operation certified by the other certifying
agent.
No organic product may be produced or handled to organic standards
lower than the standards of the NOP. To certify organic production or
handling operations to the national standards or to more restrictive
State standards approved by the Secretary, the certifying agent must be
accredited by the Administrator. While States may set more restrictive
standards than the national organic standards for product produced or
handled within their State, those requirements do not apply to organic
product produced or handled outside of such State. Further, a State
government may not prevent the marketing or sale in the State of
organic product produced in another State to this program's national
organic standards. State organic certification programs approved by the
Secretary would be required to treat all accredited certifying agents
equally. Likewise under this program, accredited certifying agents in
one State cannot refuse to recognize another State's product which is
certified to these national organic standards.
We disagree with the suggestion to allow certifying agents to
challenge the decisions of certifying agents that have not yet had
their accreditation confirmed by the Department. We believe that
allowing a certifying agent to challenge the certification decisions
made by a certifying agent that has not had its site evaluation would
create an insurmountable barrier for persons wanting to become
accredited under the NOP, especially persons establishing new
operations. The proposed accreditation procedures are sufficiently
rigorous to permit a well-founded assessment of the applicant's
capabilities and qualifications and will allow all eligible certifying
agents to receive timely accreditation. We will only accredit
certifying agents that we believe possess the expertise and ability to
implement the proposed certification program. This includes newly
established certifying agents who might require a longer period of time
between accreditation and a site evaluation to allow the certifying
agent to perform sufficient certification activities for the Department
to perform a meaningful site evaluation.
Should questions arise regarding a certifying agent's certification
activities, a certified production or handling operation's activities,
or the organic status of a certified production or handling operation's
product, the questioning certifying agent could report a complaint or
allegation of noncompliance, with the certification provisions of this
part, to the State program's governing State official or the
Administrator. As appropriate, the State program's governing State
official or the Administrator will investigate such complaints or
allegations. Certifying agents are not authorized to investigate
allegations or suspicions of noncompliance by other certifying agents,
nor are certifying agents allowed to take unilateral action against an
accredited certifying agent, such as refusal to recognize the
certification decisions made by another certifying agent.
For the above reasons, we have not changed the requirement that a
certifying agent accept the certification decisions made by another
USDA-accredited certifying agent as equivalent to its own. This
requirement is located at Sec. 205.501(a)(12).
(10) False or Misleading Claims. Commenters objected to the
requirements that an accredited certifying agent must refrain from
making false or misleading claims about its accreditation status, the
USDA accreditation program for certifying agents, or the nature or
qualities of products labeled as organically produced. A few of these
commenters stated that the requirements exceed the authority given by
the Act by introducing claims other than those concerning
representations of nonorganic product as organic. Additionally, a few
commenters believed that the term, ``misleading,'' is too broad and
could be interpreted to mean that the certifying agent could make no
negative claims about the USDA accreditation program. They suggested
that the requirements be amended by removing the reference to
misleading claims. Another commenter
[[Page 13582]]
believed that the phrase, ``or the nature or qualities of products
labeled as organically produced,'' should be deleted because it is
vague and would unduly limit the freedom of certifying agents to share
information with consumers, farmers, processors, and other interested
parties regarding the attributes of organic food and organic production
systems, including nutritional properties, freshness, taste, and less
reliance on synthetic substances.
We disagree with the commenters who stated that the requirements
exceed the authority given by the Act by introducing claims other than
those concerning representations of nonorganic product as organic.
Claims regarding accreditation status, the USDA accreditation program
for certifying agents, and the nature and quality of products labeled
as organically produced all fall under the authority of the Act. We
believe that the requirements are needed to prevent the dissemination
of inaccurate or misleading information to consumers about organically
produced products. We further believe that the changes suggested by the
commenters would undermine the goal of a uniform NOP by allowing
certifying agents to make claims that would state or imply that organic
products produced by operations that they certify are superior to those
of operations certified by other certifying agents. These requirements
would not prohibit certifying agents from sharing factual information
with consumers, farmers, processors, and other interested parties
regarding verifiable attributes of organic food and organic production
systems. Accordingly, the requirements are reproposed in this proposal
without change at Sec. 205.501(a)(13).
(11) Notification of Status of Certified Operations. Comments
received on the requirements addressing documentation to be submitted
by certifying agents to the Department regarding the status of
certified operations suggested that: (1) The public should have access
to the notification of certification status documentation; (2) annual
reporting by certifying agents of the name of each operation whose
application for certification has been approved is sufficient; and (3)
the required reporting should only include the name of those operations
certified during the quarter being reported rather than a listing of
all operations certified by the certifying agent. First, we believe
that the Freedom of Information Act adequately provides for public
access to information. Second, we need the required information to
facilitate oversight and to ensure that we have relatively current data
for responding to inquiries involving the granting of certifications by
certifying agents. It was not our intent to have certifying agents
update their list of certified entities quarterly. Our intent was to
receive on a quarterly basis a listing of all certifications granted by
the certifying agent during the quarter being reported. Accordingly, no
changes have been made on the basis of these comments to the
requirements found in this proposal at Sec. 205.501(a)(14).
(12) Certifier Compliance With Terms and Conditions Deemed
Necessary. Commenters objected to the requirement that certifying
agents must comply with and implement other terms and conditions deemed
necessary by the Secretary. This requirement is consistent with
Sec. 6515(d)(2) of the Act, which requires a certifying agent to enter
into an agreement with the Secretary under which such agent shall agree
to such other terms and conditions as the Secretary determines
appropriate. Accordingly, this requirement, found at
Sec. 205.501(a)(17), is unchanged in this proposal except to change
``Secretary'' to ``Administrator'' since the Administrator will be
responsible for administration of the NOP.
(13) Limitations on the Use of Certifying Agent's Marks. Private
certifying agents disagreed with the provision that prohibited
certifying agents from requiring, as a condition of use of the
certifying agent's identifying mark, compliance with any production or
handling requirements other than those provided for in the Act and
regulations. Private certifying agents commented that they should be
allowed to use their identifying mark to recognize additional
achievements by producers and handlers that exceed the requirements
proposed in the national organic standards. The commenters' position is
the same as that suggested by public input prior to publication of the
first proposal.
We believe that the private certifying agents' position advocating
the use of their identifying mark to recognize additional achievements
is inconsistent with Sec. 6501(2) of the Act, which provides that a
stated purpose of the Act is to assure consumers that organically
produced products meet a consistent national standard. Accordingly, we
are reproposing the provision prohibiting certifying agents from
requiring, as a condition of use of the certifying agent's identifying
mark, compliance with any production or handling requirements other
than those provided for in the Act and regulations or under an approved
State organic certification program. This reproposed provision is found
at Sec. 205.501(b).
(14) Additional Requirements for Private Certifying Agents.
Commenters expressed concern regarding the three additional
requirements for a certifying agent who is a private person. First,
private certifying agents expressed concern regarding the requirement
that private certifying agents hold the Secretary harmless for any
failure on their part to carry out the provisions of the Act and
regulations. Their concern focused on the fact that applicants for
certification can appeal a certifying agent's refusal to certify to the
Secretary and that a certifying agent's recommendation to suspend or
revoke a certification can be appealed to the Secretary. They believe
that, without the authority to independently deny, suspend, or revoke
certification, the certifying agent becomes liable for the actions of
the Secretary.
We disagree with the assertion that the certifying agent becomes
liable for the actions of the Secretary. The provision clearly states
that private certifying agents hold the Secretary harmless for any
failure on their part. This in no way would make the certifying agent
responsible for any failure on the part of the Department. Further, the
wording of this provision is consistent with Sec. 6515(e)(1) of the
Act, which provides that private certifying agents shall agree to hold
the Secretary harmless for any failure on the part of the certifying
agent to carry out the provisions of the Act. Accordingly, we are
reproposing this regulation at Sec. 205.501(c)(1).
Second, commenters expressed concern regarding the requirement that
certifying agents furnish reasonable security, in an amount and
according to terms as the Secretary may by regulation prescribe, for
the purpose of protecting the rights of production and handling
operations certified by such certifying agent. The commenters expressed
concern regarding what would be the dollar amount of the security, how
the dollar amount of the security would be determined, and in what form
the security might be furnished. Several commenters expressed concern
over the availability of errors and omissions insurance. The commenters
also expressed a belief that guidance on what reasonable security might
entail will be needed by accreditation applicants to evaluate their
costs for accreditation.
A private-entity certifying agent must furnish reasonable security
for the purpose of protecting the rights of operations certified by
such certifying agent. This security is to ensure the performance of
the certifying agent's
[[Page 13583]]
contractual obligations. As noted elsewhere in this proposed rule, the
specific amount and type of security that must be furnished by a
private certifying agent will be the subject of future rulemaking by
the Department. Such rulemaking will provide for public input and will
occur prior to the call for applications for accreditation. We
anticipate that the amount of the security will be tied to the number
of clients served by the certifying agent and the anticipated costs of
certification that may be incurred by its clients in the event that the
certifying agent's accreditation is suspended or revoked. We anticipate
that the security may be in the form of cash, surety bonds, or other
financial instrument (such as a letter of credit) administered in a
manner comparable to cash or surety bonds held under the Perishable
Agricultural Commodities Act. Accordingly, we are reproposing this
regulation at Sec. 205.501(c)(2).
Third, commenters expressed concern regarding the requirement that
a private person accredited as a certifying agent must transfer to the
Secretary and make available to any applicable State program's
governing State official all records or copies of records concerning
the private certifying agent's certification activities in the event
that the certifying agent dissolves or loses its accreditation. This
requirement is consistent with Sec. 6515(c)(3) of the Act, which
provides that if any private person that was certified under the Act is
dissolved or loses its accreditation, all records or copies of records
concerning such person's activities under the Act shall be transferred
to the Secretary and made available to the applicable State program's
governing State official. In addition to being consistent with the Act,
we believe that this regulation is necessary to ensure the continuity
and integrity of the NOP. Accordingly, we are reproposing this
regulation at Sec. 205.501(c)(3).
(15) Public Access to Applicant Information. The first proposal
included provisions regarding what information had to be submitted by
an accreditation applicant. Commenters requested the addition of a
paragraph addressing public access to this information about the
applicant's organization and intended certification activities. We have
not made this requested change because the proposed recordkeeping and
availability requirements under this program, coupled with the Freedom
of Information Act, adequately provide for public access to
information. The regulations on applicant information are found at
Sec. 205.503 and include two additions to the provisions of the first
proposal. This proposal requires the applicant to provide the name of
the person responsible for the certifying agency's day-to-day
operations and to submit a copy of its schedule of fees for all
services to be provided under these regulations.
(16) Application Requirements for States. Commenters stated that
State certifying agents should not be required to submit documents and
information regarding personnel, administrative policies and
procedures, and financial policies and procedures to demonstrate
evidence of expertise and ability. They believe that the requirements
should not apply to States that have established hiring procedures,
standard qualifications for job descriptions, and statewide policies
for training, evaluating, and supervising personnel. They also stated
that administrative policy and procedure review should be limited to
organic program administration, not to agencywide policies or
procedures such as financial policies.
We acknowledge that States have established hiring procedures,
standard qualifications for job descriptions, administrative
procedures, and statewide policies for training, evaluating, and
supervising personnel and that such policies and procedures would be
applicable to State certifying agents. This fact, however, does not
make States uniquely different from private accreditation applicants
who would have similar policies and procedures in exercising good
business practices. State certifying agents cannot be exempt from these
requirements simply because they are a government agency.
We anticipate that a State will submit its established policies and
procedures to meet the requirements for demonstrating its expertise in
organic production and handling techniques and its ability to fully
comply with and implement the national organic certification program. A
stated purpose of the Act is the establishment of national standards.
We believe such national standards extend to uniform requirements for
State and private certifying agents unless otherwise provided by the
Act. We further believe the required information is essential to enable
the Administrator to make a determination concerning approval of an
application for accreditation. Accordingly, the requirements for
demonstrating expertise in organic production and handling techniques
and an ability to fully comply with and implement the national organic
certification program remain the same for private and State certifying
agents. These requirements are found at Sec. 205.504.
(17) Public Access to Information on Certified Operations.
Commenters requested that the public be provided information about a
certified operation's farming practices, use of pesticides, and
livestock production practices. All production and handling operations
must meet the requirements of the national organic certification
program to be certified. An accredited certifying agent will determine
whether an operation meets those requirements. Certified operations can
be held to no other standards except, if applicable, the requirements
of an approved State organic certification program. Accordingly, we
believe access to the requested information is unnecessary. We also
believe the information to be confidential business information that
should not be released to the public. Therefore, we have made no
changes to the proposed rule to accommodate the commenters' request.
(18) Conflicts of Interest. The first proposal required a
description of procedures intended to be implemented to prevent the
occurrence of conflicts of interest. It also required the
identification of any food or agriculture-related business interests of
all personnel intended to be used in the certification operation,
including administrative staff, certification inspectors, members of
any certification review and evaluation committees, all parties
responsibly connected to the certification operation, and immediate
family members, that may result in a conflict of interest. Commenters
stated that existing State policies should be sufficient to prevent
conflicts of interest. They also stated that lists of the business
interests of all inspectors, program staff, and their families are
unnecessary.
We agree with the commenters that existing State policies should be
sufficient to prevent conflicts of interest. However, we disagree with
the commenters' assertion that lists of the business interests of all
inspectors, program staff, and their families are unnecessary. At
Sec. 6515(h), the Act places responsibility for the prevention of
conflicts of interest with the certifying agent. We, however, have
responsibility for ensuring that the certifying agent complies with
that responsibility. We believe these requirements will provide the
Administrator with information essential to the identification of
conflicts of interest. A stated purpose of the Act is the establishment
of national standards. We believe such national standards extend to
uniform conflict of
[[Page 13584]]
interest requirements for State and private certifying agents. Further,
for conflict of interest standards to achieve their intended
effectiveness, they must be uniformly applied to both State and private
certifying agents. The required information is also essential to the
Administrator's determination of the applicant's suitability for
accreditation. As the commenters point out, States have established
conflict of interest policies and procedures. Thus, the required
information should be readily available for submission to the
Administrator with minimal inconvenience to the certifying agent.
Accordingly, we have made no changes in this proposal based on these
comments. Regulations concerning conflicts of interest are found at
Secs. 205.501(a)(11) and 205.504(c) in this proposal.
(19) Accreditation Prior to Site Evaluation. Commenters expressed
concern that applicants could be accredited prior to a site evaluation
of the applicant's facilities and operations. Most, however, recognized
the need for accreditation decisions on written materials as opposed to
further delay to program implementation. A few of the commenters urged
USDA to complete the site evaluations during the implementation phase.
The first proposal provided that an initial site evaluation of the
operation of each certifying agent must be performed for the purpose of
verifying its compliance with the Act and regulations. Two restrictions
concerning timing were placed on the performance of an initial site
evaluation. First, the site evaluation had to be performed within a
reasonable period of time after the date on which the agent's notice of
approval of accreditation was issued. Second, the site evaluation had
to be performed after the agent had conducted sufficient certification
activities for the Administrator to examine its operations and evaluate
its compliance with the general requirements for accreditation.
We never intended that a site evaluation be required prior to
accreditation. While site evaluations could be conducted before
approval, we believe accreditation approval without a site evaluation
is appropriate. We believe that the commenters' concerns are adequately
addressed by the first proposal, which provided for a well-founded
assessment of the applicant's qualifications and capabilities through a
sufficiently rigorous review of the application and supporting
documentation. In cases where the document review raises concerns
regarding the applicant's qualifications and capabilities and the
Administrator deems it necessary, a preapproval site evaluation would
be conducted.
As noted above, a site evaluation to verify compliance with the Act
and regulations would be conducted within a reasonable time period
after the date on which the agent's notice of approval of accreditation
was issued. Following the site evaluation, the certifying agent's
accreditation would be continued provided the certifying agent is in
compliance with the Act and regulations. Should it be found that the
accredited certifying agent is not in compliance with the Act and
regulations, the Administrator will issue the certifying agent a
notification of noncompliance and afford the certifying agent an
opportunity to correct the deficiencies. If the deficiencies are not
corrected, the Administrator will begin proceedings to suspend or
revoke the certifying agent's accreditation.
We also believe that: (1) Conducting a site evaluation of a newly
established certifying agent before it had begun any certification
activities might not contribute information that would be useful for
the Department's evaluation; (2) previously existing certifying agents
also would need time to make adjustments in their operations to comply
with the NOP regulations; and (3) requiring full site evaluations and
peer reviews to be conducted prior to granting accreditation would
further delay implementation of the Act. Accordingly, we have made no
changes to the application requirements found at Sec. 205.502 or the
site evaluation requirements found at Sec. 205.508 on the basis of
these comments.
(20) Conditional Accreditation. Commenters suggested that the rule
provide for conditional accreditation of certifying agents. We disagree
with the concept of conditional accreditation. We believe accreditation
before a site evaluation to be the most effective means of providing
new certifying agents with the opportunity to participate in the NOP.
New certifying agents need to be unconditionally accredited to sell
their services to potential organic clients. Such certifying agents
need organic clients to demonstrate to the Administrator their
compliance with the Act and regulations relative to the certification
of organic producers or handlers. Furthermore, the Act does not provide
for conditional accreditation. Accordingly, the proposed accreditation
program for initial accreditation provides for: (1) Review and analysis
of the applicant's application and evidence of expertise and ability,
(2) approval of accreditation upon determination that the applicant
meets the requirements for accreditation, and (3) site evaluation to
determine compliance with the Act and regulations.
(21) Application Fees Incurred From Notifications of Noncompliance.
Commenters questioned whether a new application for accreditation,
following the correction of deficiencies identified in the notification
of noncompliance, would require a second application fee. The
commenters stated that fees paid for the initial application should
cover timely resubmission of the application after correction of
deficiencies. In this proposal, we have replaced the flat fee for
accreditation with an hourly user fee system, which will involve
billing for actual time used in the accreditation process. Accordingly,
there will be additional costs to applicants who submit a description
of the actions taken to correct the deficiencies noted in the
notification of noncompliance.
(22) Peer Review Panels. Comments were received expressing various
opinions regarding the peer review panel provisions of the first
proposal. First, commenters stated that peer review panels should
participate in site evaluations. Prior to publishing the first
proposal, the Department received some public input which also
suggested the use of peer reviewers in the site evaluation process. As
noted in the first proposal, we did not provide for such participation
because we believed that the use of peer reviewers could pose an
excessive burden on the certifying agents, would increase the costs of
conducting site evaluations, and could delay site evaluations and
because AMS staff are well qualified to perform the site evaluations.
We have made no change to our proposal as a result of this comment.
Second, commenters stated that peer review panels should
participate in the initial review of an application for accreditation.
We believe this would not be an effective use of panel members' talents
and expertise and would not be cost effective. We have made no change
to our proposal as a result of this comment.
Third, an industry association stated that section 6516(a) of the
Act clearly states that the Secretary shall consider a report, not
three to five individual reports, in determining whether to approve an
applicant for accreditation. We do not agree that the Act requires a
single report, nor do we believe that it is usual to have consensus in
peer review. We also believe that it is impractical to bring peer
reviewers together for the purpose of reviewing the information
provided and drafting a single report. The Administrator could convene
a peer review panel meeting or
[[Page 13585]]
conference call if necessary. Such meeting or conference call would be
conducted in a manner that would ensure the actions of panel members
are carried out on an individual basis with any opinions and
recommendations by a member being made individually. A peer review
panel meeting or conference call will be held solely to give and
receive information. Such meeting or conference call will not be held
for the purpose of achieving consensus by the peer review panel. The
written report of each panel member would reflect the particular
knowledge, expertise, and opinion that its author-member brings to the
panel. The Administrator will consider all points in the individual
reports in making a determination as to the continued operation of the
accredited certifying agent. We have made no change to our proposal as
a result of this comment.
Fourth, commenters stated that the peer review panel regulations
should be revised to specify what situations, other than continuation
or renewal of accreditation, would trigger a peer review; that a peer
review panel should be used in determining noncompliance with
accreditation requirements; and that a peer review panel should be
convened to review any decision of noncompliance prior to initiation of
proceedings to suspend or revoke a certifying agent's accreditation.
The first proposal provided that the Administrator may convene a peer
review panel at any time for the purpose of evaluating a certifying
agent's activities under the Act and regulations. This provision would
provide flexibility for the Administrator to seek recommendations from
peer reviewers at other times when it may be necessary to evaluate a
certifying agent's compliance with the Act and regulations. We do not
believe that it is practical or necessary to require the use of peer
review panels in determining noncompliance and decisions to suspend or
revoke an accreditation. We have made no change to our proposal as a
result of these comments.
(23) Purpose of Annual Reporting Requirements. At least one
commenter was confused regarding the purpose for having certifying
agents submit annual reports to the Administrator. The reports would
update information and evidence of expertise and ability previously
submitted by the certifying agent; support any changes being requested
in the areas of accreditation; describe the measures that were
implemented in the previous year and any measures to be implemented in
the coming year to satisfy any terms and conditions determined by the
Administrator to be necessary, as specified in the most recent
notification of accreditation or notice of renewal of accreditation;
and describe the results of the most recent inspector performance
appraisals and program evaluation and adjustments to the certifying
agent's operation and procedures implemented and intended to be
implemented in response to the appraisals and program evaluation. The
first proposal stated that this information would be reviewed by the
Administrator to determine whether the certifying agent was maintaining
its accreditation by satisfying the requirements of the Act and
regulations and to assess the need for a site evaluation. We believe
that an annual process of reviewing information submitted by certifying
agents is necessary so that the Administrator can be informed of any
changes in the procedures and personnel used by the certifying agents.
We have made no change to our proposal as a result of this comment.
Accreditation--Additional Provisions
Upon further review of the accreditation provisions in the first
proposal, we have decided to propose the following additions and
changes.
(1) Access to Records. We have added the requirement that the
records maintained by the certifying agent under the Act and
regulations be made available for copying by authorized representatives
of the Secretary and the applicable State program's governing State
official. This addition is necessary to ensure that authorized
representatives are able to obtain copies of records applicable to a
review or an investigation regarding compliance with the Act and
regulations. This addition, found at Sec. 205.501(a)(9), is authorized
under section 6506 of the Act.
(2) Conflicts of Interest. A conflict of interest regulation in the
first proposal required that certifying agents prevent conflicts of
interest by not certifying an operation through the use of any employee
that has or has held a commercial interest in the operation, including
the provision of consulting services, within the 12-month period prior
to the application for certification. This regulation was closely
related to a second regulation which required certifying agents to
prevent conflicts of interest by not assigning an inspector to perform
an inspection of an operation if the inspector has or has held a
commercial interest in the operation, including the provision of
consulting services, within the 12 months prior to conducting the
inspection. For clarification, this proposal combines the regulations
at Sec. 205.501(a)(11)(ii). This new regulation provides for excluding
any person, including contractors, with conflicts of interest from
work, discussions, and decisions in all stages of the certification
process and the monitoring of certified production and handling
operations for all entities in which such person has or has held a
commercial interest, including an immediate family interest or the
provision of consulting services, within the 12-month period prior to
the application for certification. This regulation would permit a
certifying agent to certify the operation of an employee or contractor
or an employee's or contractor's immediate family member provided the
employee or contractor was not used in certifying the production or
handling operation.
(3) Reporting Requirements for Certifying Agents. The first
proposal required a certifying agent to submit to the Administrator a
copy of each notification of noncompliance issued simultaneously with
its issuance to the certification applicant or the certified operation.
It also required a certifying agent to submit to the Administrator on a
quarterly calendar basis the name of each operation certified. In this
proposal, we have expanded the provision to provide that certifying
agents must submit to the Administrator: (1) A copy of any notice of
denial of certification, notification of noncompliance, notification of
noncompliance correction, notification of proposed suspension or
revocation, and notification of suspension or revocation issued
simultaneously with its issuance; and (2) on a quarterly calendar
basis, the name, address, and telephone number of each operation
granted certification. This information is needed to facilitate
oversight and to ensure that we have relatively current data for
responding to inquiries involving the granting of certifications by
certifying agents. These changes are included in Sec. 205.501(a)(14).
We anticipate using the data collected under Sec. 205.501(a)(14) to
establish and maintain 2 Internet databases. The first Internet
database would be accessible to the general public and would include
the names and other appropriate data on certified organic production
and handling operations. The second Internet database would be password
protected and only available to accredited certifying agents and USDA.
This second database would include data on production and handling
operations issued a notification of noncompliance, noncompliance
correction, denial of certification, certification, proposed suspension
or revocation of certification, and
[[Page 13586]]
suspension or revocation of certification. Certifying agents would use
the second Internet database during their review of an application for
certification.
(4) Requirements for Nondiscrimination. We have included at
Sec. 205.501(d) the provision that no private or State entity
accredited as a certifying agent under subpart F shall exclude from
participation in or deny the benefits of the NOP to any person due to
discrimination because of race, color, national origin, gender,
religion, age, disability, political beliefs, sexual orientation, or
marital or family status. This regulation is consistent with USDA
regulations which prohibit discrimination in its programs and
activities.
(5) Submission of Policies and Procedures. The first proposal
required an applicant for accreditation as a certifying agent to submit
documents and information to demonstrate the applicant's expertise in
organic farming or handling techniques, its ability to fully comply
with and implement the organic certification program, and its ability
to comply with the requirements for accreditation. Much of the
documentation and information required involved submission of a
description of a policy or procedure to be used by the certifying
agent. In this proposal we have changed the requirement from submission
of a description of the policy or procedure to submission of a copy of
the actual policy or procedure. This will facilitate the Department's
determination of an applicant's eligibility for accreditation by
providing more complete information. By requiring a copy of each policy
and procedure, which should already be in the possession of the
applicant, rather than a description of each, we have lessened the
burden on applicants for accreditation. This change is found in
Sec. 205.504 of this proposal.
(6) Public Access to Certification Certificates. In this proposal,
we have added the requirement that certifying agents make copies of
certification certificates issued during the current and 3 preceding
calendar years available to the public. Such documents may be useful to
consumers wishing to verify that an operation is certified to produce
and label agricultural products as organic. Copies of certification
certificates will be especially valuable in assisting handlers in
assuring that the products they receive labeled as organic were
produced and handled by certified organic operations. This requirement
is found at Sec. 205.504(b)(5)(i).
(7) Submission of Residue Testing Procedures. We believe that
applicants for accreditation should provide evidence of expertise and
ability in meeting the sampling and residue testing requirements of
these regulations. Therefore, we have added the requirement that
applicants for accreditation submit a copy of the procedures to be used
for residue testing. This requirement is found at Sec. 205.504(b)(6).
Residue testing requirements are found at Sec. 205.670.
(8) Elimination of Section on Confirmation of Accreditation. We
have amended the section on approval of accreditation by adding the
duration of accreditation provision formerly included in the first
proposal's section on confirmation of accreditation. We have also
eliminated the section on confirmation of accreditation. We have taken
this action to eliminate the confusion created by having a section on
approval of accreditation and a section on confirmation of
accreditation.
(9) Denial of Accreditation. We have amended the denial of
accreditation regulations and eliminated the section on denial of
confirmation of accreditation. We have taken this action to eliminate
the confusion created by having a section on denial of accreditation
and a section on denial of confirmation of accreditation. We have added
to the denial of accreditation regulations that a notification of
noncompliance can be issued based on the findings of a site evaluation.
Under the first proposal's denial of accreditation regulations, the
Administrator could institute proceedings to deny accreditation to an
applicant who did not correct the deficiencies noted in a notification
of noncompliance within the time specified. In this proposal, we have
amended these regulations to provide that the Administrator will
provide the applicant with a written notification of accreditation
denial or begin proceedings to suspend or revoke the certifying agent's
accreditation if accredited prior to a site evaluation. Such action
will be taken when the applicant fails to correct the deficiencies,
report the corrections by the date specified, or file an appeal by the
date specified in the notification of noncompliance.
We have also clarified that an applicant who has received written
notification of accreditation denial or had its accreditation suspended
may apply for accreditation again at any time. Additionally, we have
provided that a private certifying agent whose initial accreditation is
revoked following an initial site evaluation will be ineligible for
accreditation for a period of not less than 3 years following the date
of such determination. This period of ineligibility is consistent with
section 6519(e) of the Act. These changes are included in Sec. 205.507.
A certifying agent accredited prior to an initial site evaluation
whose site evaluation reveals that the certifying agent is not properly
adhering to the provisions of the Act or these regulations will be
subject to suspension of its accreditation. A private certifying agent
accredited prior to an initial site evaluation who's site evaluation
reveals that the certifying agent has violated the provisions of the
Act and these regulations or that falsely or negligently certifies any
production or handling operation that does not meet the terms and
conditions of this national organic certification program as an organic
operation will be subject to revocation of its accreditation. Section
205.660(b) of subpart G provides that the Secretary may initiate
suspension or revocation proceedings against a certified operation upon
initiation of suspension or revocation proceedings against or upon
suspension or revocation of the certified operation's certifying
agent's accreditation.
(10) Peer Review Panels. We have removed the provision which
provided that the Administrator may convene a peer review panel at any
time for the purpose of evaluating an applicant for accreditation or a
certifying agent's activities under the Act and regulations. This
change has been made because peer review panels will only be used to
assist in the evaluation of applicants for accreditation, amendment to
an accreditation, and renewal of accreditation.
Subpart G--Administrative
The National List of Allowed and Prohibited Substances
Proposal Description
This subpart contains criteria for determining which substances and
ingredients are allowed or prohibited in products to be sold, labeled,
or represented as ``organic'' or ``made with organic (specified
ingredients).'' It establishes the National List of Allowed and
Prohibited Substances (National List) and identifies specific
substances which may or may not be used in organic production and
handling operations. Sections 6504, 6510, 6517, and 6518 of the Organic
Foods Production Act (OFPA) of 1990 provide the Secretary with the
authority to develop the National List. The contents of the National
List are based upon a Proposed National List, with
[[Page 13587]]
annotations, as recommended to the Secretary by the National Organic
Standards Board (NOSB). The NOSB is established by the OFPA to advise
the Secretary on all aspects of the National Organic Program (NOP). The
OFPA prohibits synthetic substances in the production and handling of
organically produced agricultural products unless such synthetic
substances are placed on the National List.
The first category of the National List includes synthetic
substances allowed for use in organic crop production. The second
category includes nonsynthetic substances prohibited for use in organic
crop production. The third category of the National List includes
synthetic substances allowed for use in organic livestock production.
The fourth category includes nonsynthetic substances prohibited for use
in organic livestock production. The fifth category of the National
List includes nonagricultural (nonorganic) substances allowed as
ingredients in or on processed products labeled as ``organic'' or
``made with organic (specified ingredients).'' The final category of
the National List includes nonorganically produced agricultural
products allowed as ingredients in or on processed products labeled as
``organic'' or ``made with organic (specified ingredients).'' This
subpart also outlines procedures through which an individual may
petition the Secretary to evaluate substances for developing proposed
National List amendments and deletions.
National List (General)
The NOSB is responsible for making the recommendation of whether a
substance is suitable for use in organic production and handling. The
OFPA authorizes the NOSB to develop and forward to the Secretary a
Proposed National List and any subsequent proposed amendments. In March
1995, the NOSB initiated a petition process to solicit public
participation in identifying specific materials to be added to the
National List. The NOSB convened a Technical Advisory Panel (TAP) to
review substances identified in the petition process and made extensive
recommendations on a Proposed National List during its meetings in 1995
and 1996. In 1999, the NOSB selected materials left from the original
petition process to authorize a second round of TAP reviews. The NOSB
used these updated TAP reviews to make additional recommendations on
the Proposed National List at its October 1999 meeting. With the
exception of four substances on which the Secretary did not concur with
the NOSB recommendations and minor formatting changes, the National
List in this proposal corresponds to the recommendations on allowed and
prohibited substances made by the NOSB. The National List in this
proposal has also been developed in consultation with the Food and Drug
Administration (FDA), the Environmental Protection Agency (EPA), and
the Food Safety Inspection Service (FSIS) of USDA. Additionally, we
have made changes in response to public comment received on the first
proposal.
Nothing in this subpart alters the authority of other Federal
agencies to regulate substances appearing on the National List. FDA
establishes safety regulations on approved and prohibited uses of
substances in food production and processing. FSIS has the authority to
determine efficacy and suitability regarding the production and
processing of meat, poultry, and egg products. FDA and FSIS
restrictions on use or combinations of food additives or ingredients
take precedence over the approved and prohibited uses specified in this
proposal. Any combinations of substances in food processing not already
addressed in FDA and FSIS regulations must be approved by FDA and FSIS
prior to use. Use-of-substance requirements are proposed by FDA and
FSIS in rulemaking actions and are frequently updated with revised use
requirements. It is important that certified organic producers and
handlers of both crop and livestock products consult with FDA
regulations in 21 CFR parts 170 through 199 and FSIS regulations in
this regard. All feeds, feed ingredients, and additives for feeds used
in the production of livestock in an organic operation must comply with
the Federal Food, Drug, and Cosmetic Act (FFD&CA). Animal feed labeling
requirements are published in 21 CFR part 501, and new animal drug
requirements and a listing of approved animal drugs are published in 21
CFR parts 510-558. Food (feed) additive requirements, a list of
approved food (feed) additives generally recognized as safe substances
(GRAS), substances affirmed as GRAS, and substances prohibited from use
in animal food or feed are published in 21 CFR parts 570-571, 21 CFR
part 573, 21 CFR part 582, 21 CFR part 584, and 21 CFR part 589,
respectively. Furthermore, the Food and Drug Administration has worked
closely with the Association of American Feed Control Officials (AAFCO)
and recognizes the list of additives and feedstuffs published in the
AAFCO Official Publication, which is updated annually.
National List--Changes Based On Comments
This subpart differs from our first proposal in several respects as
follows:
(1) Genetically Engineered Organisms (GEO's). To solicit public
comment on the use of genetically engineered organisms in organic
production and handling, we included two such materials on the National
List in the first proposal. As discussed in Production and Handling--
Subpart C, we received many thousands of comments opposing the use of
substances or organisms produced through genetic engineering in organic
production and handling. Many commenters expressed strong concerns that
GEO's do not meet current consumer expectations of organic agriculture
or an organically produced product. They stated that existing national
and international organic certification standards clearly and
consistently prohibit GEO's. Accordingly, this proposal prohibits GEO's
and their derivatives and the products of GEO's and their derivatives
in any product or ingredient that is sold, labeled, or represented as
organic. As a result of the prohibition, the National List does not
contain any materials derived from GEO's.
(2) Inclusion of Substances not Recommended by the NOSB. The first
proposal allowed some synthetic substances in organic crop production
and handling that the NOSB had not included on the proposed National
List. Citing the statutory requirements of the OFPA, commenters were
overwhelmingly opposed to adding substances to the National List that
had not been recommended by the NOSB. Every substance on the National
List in this proposal was favorably recommended by the NOSB.
With four exceptions, the National List included in this proposal
contains every substance that the NOSB recommended to allow in organic
production and handling. The Secretary has not accepted the NOSB
recommendations to allow sulfur dioxide in the production of wine
labeled as ``made with organic grapes.'' Additionally, the Secretary
has not concurred with the NOSB recommendation to allow the
antibiotics, Streptomycin and Terramycin, in organic crop production or
to allow livestock producers to administer synthetic Oxytocin for
approved organic veterinary practices. The Secretary decided not to add
sulfur dioxide to the National List because its use produces sulfites,
which are
[[Page 13588]]
prohibited in the OFPA. Streptomycin and Terramycin were not added to
the National List for use in crop production in order to be consistent
with this proposal's prohibition on the use of all antibiotics in
animal production. The Secretary's decision not to allow livestock
producers to administer synthetic Oxytocin is based on extensive public
comment that opposed the use of animal drugs including hormones in
organic livestock operations. Many certifying agencies have allowed
producers to administer Oxytocin to animals that experience severe
complications resulting from labor. While most of the public comment
strongly opposed the use of synthetic hormones in organic dairy
production, Oxytocin has some uses that do not involve lactation but
are instead related to an animal's postpartum survival. Not allowing
Oxytocin in organic operations is responsive to the public comment
opposing the use of synthetic hormones but does preclude the use of an
animal medication that some producers have previously been able to use
in emergency situations.
(3) Prohibited Nonsynthetic Substances. The National List in the
first proposal contained no prohibited nonsynthetic (natural)
substances. Many commenters requested that the four nonsynthetic
substances which the NOSB proposed to prohibit be added to the National
List. We agree with this position, and this proposal lists ash from
manure burning, mined sodium fluoaluminate, strychnine, and tobacco
dust as natural substances that are prohibited in organic crop
production and handling. In addition, we have included arsenic and lead
salts on the National List of prohibited natural substances in
accordance with provisions of the OFPA.
(4) Annotations on National List Substances. The National List in
the first proposal did not include all of the annotations originally
developed by the NOSB for the materials it recommended to include on
the National List. The OFPA stipulates that when basing the National
List upon the NOSB's recommendations, the Secretary shall include ``an
itemization, by specific use or application,'' of each synthetic
substance permitted or natural substance prohibited. This itemization,
commonly known within the organic industry as an annotation, has been
used by existing State and private certification agents to regulate the
use of allowed materials. Annotations can establish allowable sources
or procedures for obtaining a substance, specify the crops or
conditions for which it may be applied, establish use restrictions
based on environmental monitoring, or create other conditions to govern
the use of a substance.
Many commenters stated that removing annotations diminished the
NOSB's role in advising the Secretary on the content of the National
List. Commenters also stated that annotations are essential for
ensuring that substances are used in a manner which is consistent and
compatible with a system of organic production and handling.
Considering how annotations have been applied in regulating the use of
allowed substances by State and private certifying agents, we have
incorporated every feasible NOSB-proposed annotation in this proposal.
(5) Incidental Additives. The first proposal stated that a
nonagricultural synthetic substance occurring as an incidental
additive, including a processing aid, could be used in organic
production and handling without having to be added to the National
List. This position was based on FDA and FSIS regulations which require
that active ingredients, but not incidental additives, appear on a
product label. Because incidental additives were not active ingredients
in organically processed food under these regulations, the first
proposal maintained that they were not prohibited by the OFPA and would
not need to be added to the National List.
Thousands of commenters responded with varying opinions on this
subject. Many commenters approved of the proposed approach, generally
stating that processing aids are essential and needed for most
agricultural products. These commenters felt that eliminating their use
entirely would greatly limit handlers' ability to produce a wide
variety of organic products. However, other commenters strongly opposed
allowing the use of any nonagricultural synthetic substance that had
not been petitioned, reviewed, and recommended by the NOSB; published
for comment in the Federal Register; and then added by the Secretary to
the National List. Some commenters protested the use of any synthetic
incidental additives in organic handling operations. They stated that
their use is not consistent with the principles of organic agriculture
and that consumers currently do not believe that such aids and
additives are used in organically processed products.
Prior to the first proposal, the NOSB reviewed this issue and
recommended allowing both synthetic and nonsynthetic incidental
additives in processed organic products. The NOSB's 1995 recommendation
stated that nonsynthetic, nonagricultural products used as ingredients,
processing aids, or incidental food additives should be categorically
allowed in organically processed products unless specifically
prohibited and that synthetic, nonagricultural products should not be
used as ingredients, processing aids, or incidental food additives
unless specifically included on the National List. The NOSB applied
these recommendations to processed foods labeled ``organic'' and ``made
with organic (specified ingredients).'' However, the OFPA does not
allow the categorical allowance for nonsynthetic, nonagricultural
products. Section 6510(a)(4) of the OFPA requires that any
nonorganically produced ingredient added to an organic product must be
included on the National List.
The NOSB revisited this issue at its February 1999 meeting when it
adopted criteria for accepting (adding to the National List) a
synthetic processing aid or adjuvant. These criteria are an
interpretation and application of the general evaluation criteria for
synthetic substances contained in the OFPA that the NOSB will apply to
processing aids and adjuvants. To review the adopted criteria, the
public can visit the USDA NOP website: www.ams.usda.gov/nop/nosbfeb99.html or write Program Manager, Room 2945 South Building, U.S.
Department of Agriculture, AMS, Transportation and Marketing Programs,
NOP, PO Box 96456, Washington, DC 20090-6456. The NOSB adopted these
criteria as internal guidelines for evaluating processing aids and
adjuvants. The adopted criteria do not supercede the criteria contained
in the OFPA, or replace FDA's authority to regulate food additives.
We are proposing that to be used in or on a processed product
labeled as ``organic'' or ``made with organic (specified
ingredients),'' a nonagricultural substance, whether synthetic or
nonsynthetic, must be included on the National List. This position
supports the NOSB recommendation that synthetic substances be allowed
in organic processed foods but incorporates the National List
requirement reflected in public comment. We have divided the materials
on this list (Sec. 205.605) in the current proposal to reflect the
recommended distinction made by the NOSB between synthetic and
nonsynthetic substances. This distinction does not affect how the
substances may be used. We recognize that many commenters, basing their
argument on the OFPA, objected to allowing any synthetic substances in
processed organic products. However, we believe that the OFPA does
allow
[[Page 13589]]
synthetic substances, when added to the National List, to be used in
this manner. The criteria utilized by the NOSB for evaluating
processing aids and adjuvants are very restrictive and, if applied to
all incidental additives, should minimize the number of substances
added to the National List.
(6) Inert Ingredients in Formulated Products. The first proposal
addressed the presence of synthetic inert ingredients in formulated
products used as production inputs in organic crop or livestock
operations. Formulated products are multiingredient compounds including
pesticides, fertilizers, and animal drugs and feeds. In accordance with
the OFPA, we proposed that a formulated product containing an inert
ingredient could be used, provided that the substance did not appear on
EPA's List 1 as an Inert of Toxicological Concern. We also prohibited
the use of synthetic inerts not on EPA List 1 if the substance was also
used as an active ingredient that had not been added to the National
List. To review or to receive the most current listing of the EPA
Inerts, the public can visit EPA's Internet home page at http://www.epa.gov/opprd001/inerts/lists.html, or write to Registration
Support Branch (Inerts), Registration Division (Mail Code 7505C),
Office of Pesticide Programs, Environmental Protection Agency, 401 M
St., SW., Washington, DC 20460.
The first proposal interpreted the statutory prohibition on EPA
List 1 inerts as allowing the use of synthetic inert ingredients that
were not specifically prohibited. This allowed the use of products
containing synthetic inert substances (provided that they were not also
used as active substances) included on the other EPA inert lists: List
2, Potentially Toxic Inerts; List 3, Inerts of Unknown Toxicity; and
List 4, Inerts of Minimal Concern. We also applied the term, ``inert,''
to all nonactive ingredients contained in any formulated product used
in organic production. This meant that the nonactive ingredients in
animal feeds (fillers or additives), animal drugs (excipients), and
fertilizers (carriers or adjuvants) would only be prohibited if they
were classified by the EPA as List 1 inerts.
We received many comments stating that our restrictions on inert
ingredients were too permissive and would result in many traditionally
prohibited materials being used in organic production. Commenters
stated that the statutory prohibition on EPA List 1 inerts did not
imply that all other inerts should be allowed and argued that the NOSB
had the authority to prohibit additional substances. Citing the
uncertainty associated with EPA List 2 (potentially toxic) and EPA List
3 (unknown toxicity) inert ingredients, they questioned how such
substances could satisfy the criteria in OFPA for adding synthetic
substances to the National List. Commenters also opposed expanding the
definition of inert to include nonactive ingredients in all formulated
products. They stated that the EPA classifies only those inerts used in
pesticides, and that many of the substances routinely used in other
types of formulated products were not subject to review. Therefore,
substances not used in pesticides would not appear on any EPA list and
would be allowed. Finally, commenters cited the disparity between the
allowance for synthetic inert ingredients in the first proposal and the
more restrictive substance review procedures used by existing organic
certifying agents.
The NOSB responded to the provisions for inert ingredients
contained in the first proposal. At its meeting in March 1998, the NOSB
stated that synthetic compounds should not be allowed in production
inputs unless they appear on the National List. In February 1999, the
NOSB voted to prohibit EPA List 1 and 2 inerts, prohibit EPA List 3
inerts unless specifically allowed by the NOSB, and allow EPA List 4
inerts unless specifically prohibited. The NOSB also recommended full
disclosure of all ingredients in formulated products, called for an
expedited review of EPA List 3 inerts currently in common use in
organic production, and endorsed an 18-month phase-out period for EPA
List 3 inerts not ultimately allowed.
In this proposal, only EPA List 4 inerts are allowed as ingredients
in formulated products used in organic production. This would not
include varieties of EPA List 4 substances such as corn starch,
lecithin, or citric acid that are the product of excluded methods.
Additionally, the term inert is restricted to nonactive ingredients in
pesticides. Synthetic nonactive ingredients in formulated products used
as production inputs, including fertilizers, animal drugs, and feeds,
must be included the National List. While the OFPA prohibits using a
fertilizer containing synthetic ingredients or a commercially blended
fertilizer containing prohibited materials, the requirement does not
apply to synthetic substances included on the National List. The NOSB
recommended and the Secretary concurs that certain synthetic substances
used in fertilizer-formulated products should be included on the
National List. We have retained the provision from the first proposal
prohibiting the use of any formulated product containing a EPA List 1
Inert. Using the criteria established in the OFPA for evaluating
synthetic substances, the NOSB may review inert ingredients on EPA List
2 or 3 as well as other synthetic, nonactive substances used in
formulated products for inclusion on the Proposed National List it
forwards to the Secretary.
We recognize that inert ingredients in pesticides and similar
substances in other formulated products pose one of the most
problematic examples of the use of synthetic materials in organic
production. For example, verifying the use of inerts and similar
substances such as fillers, carriers, additives, and excipients has
been difficult because they are not required to appear on ingredient
labels, and formulators typically treat product formulas as
confidential information. At times, certifying agents have been unable
to determine the exact composition of formulated products proposed for
use in organic production. In other instances, organic producers have
applied formulated products containing inert ingredients and similar
substances that are not specifically allowed. We are challenged with
balancing standard practice with the strict statutory requirement that
producers and handlers apply only those synthetic substances added to
the National List. As sanctioned by OFPA, synthetic substances can be
used in organic production as long as they appear on the National List.
The development and maintenance of the National List has been and will
be designed to allow the use of a minimal number of synthetic
substances that are acceptable to the organic industry and meet the
OFPA criteria.
Two principles will be essential for responding to this challenge:
greater disclosure of the contents of formulated products and an
expedited review of inert ingredients and other nonactive substances.
The OFPA recognized the need for disclosure by requiring the NOSB to
work with formulators to obtain a complete list of ingredients in their
products. The NOSB has initiated this work, and its effort is ongoing
as of the date of this publication. It is our understanding from the
comments, hearings, and information considered by the NOSB that the
organic industry has made considerable progress on disclosure of inert
ingredients since the passage of OFPA. Formulators have responded to
the incentive to provide products using EPA List 4 inert ingredients,
and certifying agents have
[[Page 13590]]
gained greater access to information on product composition. EPA has
expressed its willingness to expedite the review of its List 2 and 3
inerts, which the NOSB identifies as particularly important in
formulated products widely used in organic operations. The organic
industry should clearly understand that NOSB evaluation of the wide
variety of inert ingredients and other nonactive substances will
require considerable coordination between the NOP, the NOSB, and
industry. Materials review can be anticipated as the NOSB's primary
activity during NOP implementation. Considering the critical nature of
this task, the organic industry should make a collaborative effort to
prioritize for NOSB review those substances which are essential to
organic production and handling.
We recognize that more work is needed for this policy to satisfy
the needs of organic producers and handlers, product formulators, and
consumers. We are requesting comment on the proposed requirements for
inert ingredients in formulated products. We are sensitive that an
abrupt prohibition on synthetic substances which may have knowingly or
unknowingly been used in the past but which are not added to the
National List may disrupt many well-established and accepted production
systems. However, our assessment is that the benefits of a clear policy
consistent with the OFPA, NOSB recommendations, and public comment
outweigh the costs. The net effect will be greater consumer confidence
in USDA's organic label and more products that are tailored to the
needs of organic producers.
(7) Use of Veterinary Medicines. The OFPA prohibits certain routine
uses of veterinary medications (specifically subtherapeutic doses of
antibiotics) but allows their administration in the presence of
illness. The first proposal added antibiotics to the National List
because their use had been evaluated and approved by applicable
regulatory agencies, pursuant to FDA requirements, and because they had
to be included on the National List to be used in organic livestock
production.
We received many comments opposing the use of antibiotics in
organic livestock production. Commenters expressed general concern over
microbial resistance to antibiotics and expressed a desire to source
food products without antibiotics. This proposal removes antibiotics
from the National List of approved synthetic substances for livestock
use.
(8) Removal of Substances from the National List. The first
proposal outlined a petition process for amending the National List and
included an extensive list of information to be provided for reviewing
a substance. Some commenters recommended that this section be amended
to include procedures for deleting substances from the National List.
The OFPA and the first proposal indicated that the NOSB would review
substances added to the National List at least on a 5-year basis and
recommend to the Secretary any substances that should be removed. We
concur with commenters that removal of a substance should not have to
wait for such a review cycle. Thus, a petition to remove a substance
from the National List may be filed at any time. The information
contained in the petition for removal of a substance will be provided
by AMS upon request. The NOSB will evaluate substance removal petitions
and forward a recommendation to the Secretary. Commenters suggested
that any changes to the National List be published in the Federal
Register for public comment. All proposed changes to the National List
will be published in the Federal Register.
(9) Use of Sulfur Dioxide. The first proposal allowed the use of
sulfur dioxide in crop production and as an ingredient in or on organic
processed products. The NOSB had recommended that sulfur dioxide be
permitted in the processing of organic wine and for smoke bombs used
underground to control rodents. Numerous commenters opposed the use of
sulfur dioxide in organic wine because its use produces sulfites, which
are prohibited in the OFPA, as a by-product. We concur with the
commenters and further believe that the trend in the organic industry,
as evidenced by the California Department of Food and Agriculture's
Preliminary Organic Materials List of September 1998, is to prohibit
all uses of sulfur dioxide except in underground rodent control.
Therefore, we are proposing to allow sulfur dioxide for underground
control of rodents and to prohibit its use as an ingredient in or
processed food including the production of organic wine.
National List--Additional Provisions
Upon further review of the provisions in the first proposal, we
have decided to propose the following additions and changes.
(1) New Additions to the National List. During the October 1999
meeting, the NOSB reviewed substances and made new recommendations to
the Proposed National List. The Secretary concurs with the
recommendations from that meeting and this proposal adds those
substances with the applicable annotations to the National List. These
substances are: Potassium Bicarbonate (205.601(d)), Glycerin
(2005.603(a)), Phosphoric Acid (205.603(a) and 205.605(b)), Ivermectin
(205.603(a)), Chlorhexidine (205.603(a)), and Ethylene (205.605(b)).
This proposal establishes conditions that allow producers to administer
the parasiticide Ivermectin to breeder stock and dairy stock in organic
livestock operations. Treating organically managed slaughter stock with
Ivermectin is prohibited. These provisions are based on the
recommendations developed by the NOSB at its October 1999 meeting. The
NOSB's recommendations from that meeting were derivative of many years
of work addressing how to establish and enforce the conditions allowing
use of synthetic parasiticides. The OFPA identifies livestock
parasiticides as a category of substances which may be included on the
National List and also prohibits the use of synthetic internal
parasiticides on a routine basis. The determination of what constitutes
a routine basis for parasiticide use has been challenging given the
diversity of animals, production systems, and environmental factors
which are covered by a national organic standard.
In this proposal, the conditions under which Ivermectin may be used
apply to the health care history of the animal prior to treatment and
the certification of products derived from the animal after treatment.
The pretreatment conditions are designed to ensure that the producer is
using a comprehensive management system to prevent the introduction and
transmission of parasites among the animals in his or her care.
Producers must document in their organic system plan preventative
practices such as quarantine and fecal exams for all incoming stock,
appropriate pasture rotation and management, culling of infested
livestock, and vector and intermediate host control. A producer may
administer an allowed synthetic parasiticide only after all applicable
management practices and nonsynthetic treatments have been employed. A
producer must receive the approval of their certifying agent before
using a synthetic parasiticide. In collaboration with the NOSB, we will
be developing program manuals detailing preventive management practices
for specific livestock species to assist producers and certifying
agents in determining when the use of synthetic parasiticides is
allowable.
This proposal also contains provisions addressing the posttreatment
condition of livestock which are administered Ivermectin. These
conditions are included as an
[[Page 13591]]
annotation to Ivermectin on the National List and are consistent with
the requirements contained in Sec. 205.238(b)(1)(2) of the regulatory
text for administering any allowed synthetic parasiticide. In
compliance with the recommendations of the NOSB, we are proposing that
a producer may not administer Ivermectin to breeder stock during the
last third of gestation if the progeny is to be sold, labeled, or
represented as organically produced. Additionally, a producer must
observe a 90-day withdrawal period before selling milk or milk products
produced from an animal treated with Ivermectin as organically
produced. The Food and Drug Administration exercises responsibility for
determining and enforcing the withdrawal intervals for animal drugs. No
food safety arguments are used or implied to support the use of
extended withdrawal periods. Rather, we determined that extended
withdrawal periods are more compatible with consumer expectations of
organically raised animals.
Ivermectin is the first synthetic parasiticide that the Secretary
has proposed adding to the National List, and allowing its use could
significantly affect organic management practices. The FDA has approved
18 animal drugs containing Ivermectin that are labeled for use on one
or more animals including beef and dairy cattle, sheep, swine, and
several minor species. A total of 11 of these drugs are not covered by
this proposed rule: three have additional synthetic active ingredients
not on the National List and eight others are labeled for nonfood uses.
(They are used on horses not for food use, dogs, and cats.) While there
are no approved uses of Ivermectin on lactating dairy animals, the
remaining seven food-use products could be administered to breeder
stock and dairy stock either prior to lactation or during a dry period.
Future NOSB meetings will consider new proposals of substances to
be added to the National List.
(2) Petition Process to Amend the National List. We are modifying
the contents of the petition for amending the National List that was
contained in the first proposal. We are proposing that any person
requesting a change in the National List should request a copy of the
petition procedures from the NOP Program Manager. The procedures will
include a list of information that has to be provided for consideration
of a change in the National List. Under the provisions in the first
proposal, the NOP would be required to go through rulemaking every time
it sought to update contents of the petition. Under this proposal, the
NOP will amend the requirements of the petition process and publish the
changes in the Federal Register. This revised process will help to
expedite amending the National List and keep the National List more
current. We anticipate that amendments to the National List will be
made on an annual basis, depending upon the number of substance
petitions filed. Substances petitioned for inclusion onto the National
List will be reviewed by the NOSB, which will forward a recommendation
to the Secretary. All amendments to the National List will be published
for comment in the Federal Register.
State Organic Certification Programs
The Act provides that each State may implement a certification
program for producers and handlers of agricultural products that have
been produced and handled within the State, using organic methods that
meet the requirements of this regulation. Each State organic
certification program must be approved by the Secretary. A State
organic certification program's organic standards and requirements
cannot exceed these National Organic Program (NOP) regulations unless
the State petitions for, and the Secretary approves, more restrictive
requirements. The sections covering State programs, beginning with
Sec. 205.620, establish: (1) The requirements for a State organic
certification program and amending such a program; and (2) the process
for initial approvals of programs and program amendments. A process for
review and approval of a State's organic certification program every 5
years will be addressed in subsequent rulemaking.
Proposal Description
There are a wide variety of organic certification programs now
operating in different States. Approximately 31 States currently have,
or are developing, their own State organic certification programs. At
least 13 of those use State government agencies or contracted private
certifying agents to certify organic operations in the State. Thus, at
least 19 States do not have State organic programs and approximately 37
States do not have State Government or State-designated private
certifying agents. Under this proposal, States may utilize these NOP
standards and requirements and not have State oversight or
responsibility for administration of the NOP in the State. On the other
hand, a State may petition the Secretary for approval to add its unique
State requirements to the NOP and agree to administer the national
program in the State.
Requirements of a State Organic Certification Program. Under the
Act and the NOP, a State, through the State program's governing State
official, must submit to the Secretary a copy of the proposed State
organic certification program. The governing State official must submit
an affidavit or memorandum of understanding agreeing to meet the 11
general requirements of an organic program, as specified in section
6506(a) of the Act. Specifically, the governing State official must
agree to: (1) Require that product sold or represented as organic must
be produced and handled only by certified organic operations; (2)
require that participating organic producers and handlers establish
organic plans for their operations; (3) allow certified producers and
handlers to appeal adverse decisions under appeal provisions of these
regulations; (4) require that certified operations certify annually
that they have complied with the NOP; (5) provide for annual on-site
inspections of certified operations by certifying agents; (6) require
periodic residue testing by certifying agents; (7) provide for
appropriate and adequate enforcement procedures which are consistent
with the NOP; (8) protect against conflict of interests as specified in
these regulations; (9) provide for public access to certification
documents; (10) provide for collection of reasonable fees; and (11)
require other terms and conditions as may be established by the
Secretary. The NOP will assume these responsibilities in States that do
not have an approved State organic certification program.
Supporting materials must be submitted addressing these general
requirements, including such documentation as: authorizing State
statutes, program goals and objectives, a description of the State's
organic program office, codified compliance and appeals processes, and
other information as may be requested by the Secretary. Written
material must assess the State organic certification program's ability
and willingness to administer the 11 general requirements for organic
programs. Administration of these general requirements may require
development of a unique working relationship between the State organic
program and the NOP.
With the approval of its State organic certification program, the
State must assume responsibility for administration of these 11 general
requirements and any approved, more restrictive requirements in the
State. For instance, a State's responsibilities will include oversight
of certified organic production and handling operations to ensure that
[[Page 13592]]
products sold or represented as organic are produced and handled
pursuant to these regulations. A State's organic certification program
must include noncompliance and appeals procedures similar in force and
effect to those outlined in the Compliance and Appeals provisions of
this subpart. We expect that every State has in place official
compliance procedures and formal appeal procedures which are used to
enforce the State's regulatory programs. Those procedures should
provide opportunity, as do the procedures in this subpart, for entities
that may not be in compliance with State regulations, to come into
compliance with those regulations. Such procedures should be clearly
addressed in the State's organic certification application.
A proposed State organic certification program and any proposed
amendment to such a program must be approved by the Secretary prior to
being implemented by the State. A State may have other organic State
sponsored projects, such as research and promotion programs, tax
incentives, or transition assistance for organic producers within the
State. Such programs would not be subject to the Secretary's approval,
provided they do not conflict with the purposes of the Act.
Under certain circumstances, a State organic program may have more
restrictive requirements in the State than corresponding NOP
requirements for production and handling of organic product and
certification of organic production and handling operations. These more
restrictive requirements must be based on unique environmental
conditions or specific production or handling practices particular to
the State or portion of the State. Any environmental condition cited in
the proposed amendment must be of a nature that implementation of these
NOP regulations will be insufficient to correct the condition. The
environmental condition must necessitate use of more restrictive
practices or requirements rather than the corresponding practices and
requirements provided in these regulations. Any such condition that is
limited to a specific geographic area of the State will be required of
organic production and handling operations active only in that
geographic area. If approved by the Secretary, the more restrictive
requirements will become the NOP regulations for appropriate organic
producers and handlers in the State or area of the State.
We do not expect that a State's request for more restrictive
requirements will cover a wide range of organic production and handling
standards. Rather, the increased requirements are likely to be limited
to a specific production or handling practice or a more restricted use
of approved National List substances to address needs or critical
conditions in a specified geographic area(s). For instance, to protect
an endangered lake or estuary, a State may have more restrictive buffer
zone requirements than are provided in this regulation. Such a State
may request that its more restrictive buffer zone requirements be
established as the minimum buffer zone requirements of this regulation.
A State's more restrictive standards will not be applied to
production and handling activities outside the State or a specified
geographic area in the State. Further, the more restrictive standards
do not apply to marketing of organic product and, thus, will not be
used to restrict access of organic product produced in other States.
Section 205.621 provides that a State program's governing State
official will submit to the Secretary a copy of a proposed State
organic program or request for approval of any substantive amendment to
a State's approved program.
State Program Approval Process. We envision the request and
approval process will occur during the period between publication of
the final rule and the projected effective date of the this national
program (which will be announced in the final rule). Because
requirements of a State organic program cannot exceed the requirements
of this program unless warranted by unique conditions in the State,
some State organic programs currently in effect may elect to
discontinue their programs when the NOP becomes effective. Those
programs simply will not request approval of their programs and their
State organic requirements, in effect under the State program, will be
superseded on the effective date of the NOP. State organic
certification programs which seek approval of their programs will
submit the required material and continue operations until the
effective date of the NOP. We envision that all approved State organic
certification programs will become effective under the NOP on the day
the program becomes effective. A State wishing to establish a new State
organic certification program under the NOP may submit the State
program request and supporting material at any time. New programs
submitted after this program becomes effective will be subject to the
same review and approval process.
The submitted copy of the State organic certification program must
be in its final form and ready for implementation. It cannot be altered
by the State during the review process unless the change is cleared
with the Secretary.
Amendments to State Programs. For amendment of a State organic
program, the State program's governing State official must submit a
copy of the proposed amendments and justification for them. The
supporting material must document the unique environmental or
ecological conditions or production practices in the State that
necessitate use of more restrictive organic requirements. The
supporting material must also explain how the more restrictive
requirements will address the environmental condition. Likewise, the
supporting material must explain how the increased requirements are
better suited to agricultural conditions in the State.
Because State organic certification program requirements cannot be
less restrictive than NOP requirements, any amendment to lower such
requirements could only entail a relaxation of a more restrictive
requirement previously approved by the Secretary. Thus, an amendment to
relax a State program's requirement also must be reviewed by the
Secretary. A decrease in a State organic certification program's more
restrictive requirements must be justified, based on documented changes
in the unique conditions or practices which warranted the increase in
requirements.
Written materials supporting an amendment must assess how the more
restrictive requirements further the purposes of and are consistent
with the Act and these regulations. The written material should
acknowledge that the more restrictive State requirements will not be
used to limit or restrict access of organic products produced in other
States or foreign countries to markets in the State. Also, supporting
materials must explain how the amended requirements would affect the
State program's governing State official's ability to administer the 11
general requirements. A request to relax a requirement also must
address these issues.
The Secretary will review each State's application based on how
closely it complies with the purposes and intent of the Act and the
provisions of the NOP and how well its administrative capabilities and
processes match up with the needs of the State's program.
The Act provides that the Secretary's review and determination of a
new State organic certification program or a
[[Page 13593]]
program amendment will take no more than 6 months. AMS will notify the
public upon approval of each State program. The public information will
be made available to national agricultural news media and to all news
media in the State. AMS will identify, among other things, any more
restrictive certification requirements that are included in the
approved State program.
A denial of a new program or program amendment will include a
written explanation of why the proposal is denied and what changes will
be needed for the program to be approved. The State may implement
needed changes and submit a new program or program amendment.
Section 205.622 establishes that State organic certification
programs will be reviewed at least once every 5 years by the Secretary
and that a determination will be made within 6 months of the
anniversary date as to continuation of the State organic certification
program. We will issue appropriate procedures regarding this
requirement at a later date, after AMS and the States have had an
opportunity to administer the NOP and State programs.
State Programs--Changes Based On Comments
There are no changes based on comments.
State Programs--Changes Requested But Not Made
(1) Allowing more restrictive State standards. About a third of
those commenting on State organic certification program provisions
complained that the first proposal gave USDA complete control over
State organic standards. A few suggested that a State with higher
organic requirements should be able to prohibit the in-State sale of
products certified only to the NOP or other State organic program
requirements. Another commented that the NOP should ``defer'' to other
State organic certification programs with higher standards.
While paragraph (b)(1) of section 6507 of the Act provides that
States may establish more restrictive organic certification
requirements, paragraph (b)(2) establishes parameters for those
requirements. More restrictive State organic program requirements must:
Further the purposes of the Act; be consistent with the Act; not
discriminate against other States' agricultural commodities; and be
approved by the Secretary before becoming effective. As noted above, we
expect that a State's more restrictive requirements are likely to cover
specific production or handling practices such as more restricted use
of approved National List substances or farming practices to address a
State or area's particular environmental conditions.
The Secretary must employ some consistent and common criteria for
approving States requests for more restrictive State organic programs.
The criteria for establishing such requirements must be consistent with
the purposes of the Act. We believe the need to preserve, protect, and
enhance unique environmental or farming conditions is a common
criterion for all States. We believe such criteria are consistent with
the stated goals of most, if not all, State organic programs and
organic trade and farming organizations.
The more restrictive standards will not be applied to production
and handling activities outside the geographic area of the State.
Further, the more restrictive standards do not apply to marketing of
organic product and, thus, will not be used to restrict access of
organic product produced in other States. Clearly, prohibiting the sale
of other States' products is prohibited by the Act as well as other
national laws covering interstate commerce in the United States. If
some States were to restrict access to State markets, the purposes and
the benefits of the national program would be lost.
Discriminatory marketing practices are prohibited under section
6507(b)(2)(c) of the Act. Thus, the purpose of more restrictive State
organic requirements cannot be, as the commenters suggest, to allow
claims of more organic or purer product. States will not be able to
promote their products as being more organic because their products
were produced under more restrictive State requirements. More
restrictive State organic requirements will be authorized only as
needed to respond to special environmental or production conditions in
the State which necessitate more restrictive requirements. Any State's
request for less restrictive or lower organic standards than are
required under this program will not be approved by the Secretary.
(2) Treatment of private and State certifying agents. Some private
certifying agents commented that the first proposal would permit
accredited State certifying agents to establish more restrictive
standards than these regulations but prohibit private certifying agents
from establishing their own more restrictive requirements. Under this
program, State certifying agents will not unilaterally establish
organic standards or requirements in a State. A State program's
governing State official may, upon approval of the Secretary, establish
a State organic certification program as an entity of the State's
department of agriculture or other similar State government agency. The
Act provides this authority to the State government and does not
provide similar authority to private certifying agents. Private
certifying agents are not government entities and have no official
regulatory or administrative authorities over agricultural activities
in the State. State certifying agents as well as private certifying
agents will act as service providers, certifying to national and, where
applicable, to particular State organic requirements.
Again, commenters appear to miss an essential point of this
national program. The only mandatory organic standards and requirements
are those of the NOP and the unique requirements approved for a State
organic certification program by the Secretary. A private certifying
agent may believe its more restrictive requirements result in a more
organic or purer product and may want to certify producers and handlers
only to those requirements. However, neither State certifying agents
nor private certifying agents will be able to require that client
operations or organic product be certified to more restrictive
standards than the standards of this program or approved State
standards. The only other more restrictive requirements that may be
certified to may be requirements made at the request of handlers or
manufacturers who are purchasing the organic product or ingredient. For
example, a producer could request a certifying agent to certify certain
production practices required for export to a foreign manufacturer.
Such certification can be made only at the request of the producer or
handler being certified. Both State and private certifying agents may
certify to the requested more restrictive contract requirements,
provided those more restrictive requirements are consistent with these
regulations and provided the certifying agents have the necessary
technical qualifications to carry out the certification.
Similarly, one commenter stated that the NOP should not prevent a
private certifying agent from having and advertising its own higher
organic standards. While a private certifying agent may have the
capability to certify to certain higher organic requirements, a handler
certified by the certifying agent may not claim on product labels or in
market information that its products are more organic, purer, or better
than product certified by other certifying agents or State organic
programs.
[[Page 13594]]
In this regard, certifying agents, whether they are State or
private certifying agents, may not use different seals, logos, or other
identifying marks to distinguish between organic operations certified
to NOP requirements and a State's approved more restrictive
requirements, the certifying agent's preferred requirements, or the
client's requested higher requirements. We believe that if certifying
agents were allowed to use more than one seal or identifying mark,
based on various standards certified to, the marketplace would be
inundated with a variety of different certifying agent seals, logos,
and identifying marks. This would add to consumer confusion, complicate
the marketplace, and jeopardize benefits of this program.
(3) Private certifying agent concerns. Several commenters expressed
concern that private certifying agents are at a disadvantage vis-a-vis
State certifying agents. They stated that a State organic program or a
State certifying agent could initiate policies that would limit the
activities or effectiveness of private certifying agents. However, this
proposed program does not alter the current situation in that State and
private certifying agents operate in the same States. If a requested
State organic certification program proposes a requirement or procedure
that will have a negative affect or discriminate against private
certifying agents operating in the State, the Secretary will not
approve the requirement or procedure.
Some commenters asked whether these national regulations will
affect a State's accreditation of private certifying agents operating
in the State. A few believe that States should be allowed to continue
or establish separate accreditation programs for private certifying
agents.
We believe accreditation of certifying agents is a core
responsibility for USDA. Establishment of a single national
accreditation program is an essential part of the NOP. States will not
accredit private certifying agents. As stated elsewhere in this
proposal, any accreditation responsibilities of a State's current
organic certification program will cease with implementation of this
program. Pursuant to the Compliance provisions of this subpart, the
governing State official or designee charged with compliance oversight
under the State program may investigate and notify the NOP of possible
compliance violations on the part of certifying agents operating in the
State. However, the State may not pursue compliance actions or remove
accreditation of any certifying agent accredited by the Secretary. That
authority is the sole responsibility of the Secretary.
If more restrictive State requirements are approved by the
Secretary, we will review certifying agent qualifications in the State
and determine whether they are able to certify to the approved, more
restrictive requirements. Our accreditation responsibilities must
include oversight of both State and private certifying agents,
including any foreign certifying agents that may operate in a State,
and to monitoring their compliance with accreditation requirements.
(4) Public comment on State applications. One commenter suggested
that USDA publish for comment in the Federal Register, a summary of
each State's proposed organic program and any requested program
amendments. The commenter claimed that an approved State organic
certification program will effectively substitute the State's program
for the NOP in the State. Thus, the commenter contends, those proposed
State programs and program amendments should be made available for
public comment. After consideration of the implications of the comment,
we do not believe that the Federal Register notification process is the
proper venue for receiving comments on a proposed State program which
is applicable only to residents and business entities in the State. We
assume that the governing State official is submitting the request on
behalf of the organic producers and handlers in the State. Further, the
appropriateness of the State's requested more restrictive requirements
should stand on the merits of each proposal and not on whether
commenters in other States believe the proposed requirements are
warranted. Certified organic producers and handlers outside the State
will not be subject to the more restrictive standards or requirements
of the State program. The more restrictive standards will not be used
to restrict market access of organic product produced in other States
or countries. Thus, there is no reason to receive public comment on
requested State requirements from individuals not directly affected by
the proposed requirements.
The commenter suggested that AMS also publish a summary of each
proposed program and any amendments to a program in a newspaper of
general circulation in the State. AMS will issue a public information
notices which will announce each approved State organic certification
program and any approved amendments of a State program. The notices
will identify the unique characteristics of the approved State program
that warranted the more restrictive organic production or handling
requirements. We also will include a summary of the new program on the
NOP homepage.
(5) State program consistencies. Several commenters asked for
clarification of the first proposal's terms, ``consistent'' and
``substantive amendments,'' used in regard to State programs operating
under the NOP. Being ``consistent'' with the NOP means that a State
program's written standards or requirements must be at least equal to
the standards and requirements of the NOP. This is provided for in the
Act. Further, in allowing State organic programs to have more
restrictive or higher standards, the Act requires that those more
restrictive standards and requirements be consistent with the purposes
of the Act. To be ``consistent'' with the purposes of the Act means
that the requested, more restrictive standards or requirements are of
such a nature that they do not undermine the application of uniform
national organic standards. Thus, if a request for more restrictive
State organic standards is determined to not be consistent with uniform
national organic standards, the State program will not be approved by
the Secretary. The administrative procedures used by the State in
administering the 11 general requirements of the State's organic
program should have the same force and effect of the procedures use by
AMS in administering this program.
The same commenters asked for clarification of the term,
``substantive amendments,'' in obtaining USDA approval of more strict
amendments for one State's organic certification program. ``Substantive
amendments'' means changes that would increase the quantitative or
qualitative standards or specific requirements for an operation's or a
product's certification under the State organic program. Once this
national program is operating, if a question arises as to whether a
desired change in a State organic certification program is considered
substantive or not, the State program's governing State official should
raise the issue with the Secretary.
State Programs--Additional Provisions
(1) State program responsibilities. This subpart establishes that a
State organic certification program which petitions for approval by the
Secretary will have increased responsibilities under the NOP. Our first
proposal did not suggest qualifying factors or other information that
had to be submitted by the State program's governing State official.
This proposal specifies the 11 general requirements, addressed above,
and the needs-based environmental
[[Page 13595]]
conditions or special production practices for establishing more
restrictive requirements. Those factors establish our revised position
that a State must agree to incurring increased responsibilities and
obligations to be approved as a State organic certification program
under the NOP. For instance, as discussed above, a State with an
approved organic certification program will oversee compliance and
appeals procedures for certified organic operations in the State. Those
procedures must provide due process opportunities such as rebuttal,
mediation, and correction procedures in this proposal. Once approved by
the Secretary, the State governing official or designee must
effectively administer the State's organic certification program in a
manner that is consistent and equitable for the certified parties
involved in compliance actions.
A State's organic certification program may include other programs
and projects which the State government may conduct to promote or
increase organic production and handling in the State. Such programs
may include organic promotion and research projects, transition
assistance, a directory of organic production and handling operations
in the State, a consumer referral program, or certifications given to
retail operations which market organic foods. This proposal will not
prohibit such State activities, provided those activities do not
establish production or handling standards that work against the
purposes of the NOP. Such programs may not advertise, promote, or
otherwise infer that the State's organic products are more organic or
better than organic product produced in other States. Such programs and
projects should be beyond the scope of this national program and, if
so, will not be subject to the Secretary's review.
(2) Renewal of State program. The final section provides that
reviews of State organic certification programs will be conducted at
least once every 5 years, as required in paragraph (c) of section 6507.
The intent of the provision is not changed in this proposal. We will
provide further information regarding reviews of State programs before
the first 5-year period is completed. We expect that, with experiences
gained from a few years of program operation, we will be able to
propose more appropriate procedures, guidelines, and requirements to
assure proper reviews of operating State organic programs.
Fees. This portion of subpart G sets forth the regulations on fees
and other charges to be assessed for accreditation and certification
services under the National Organic Program (NOP). These regulations
address the kinds of fees and charges to be assessed by the Department
for the accreditation of certifying agents, the level of such fees and
charges, and the payment of such fees and charges. These regulations
also address general requirements to be met by certifying agents in
assessing fees and other charges for the certification of producers and
handlers as certified organic operations. Finally, these regulations
address the Secretary's oversight of a certifying agent's fees and
charges for certification services.
Proposal Description
Fees and Other Charges for Accreditation. Fees and other charges
will be assessed and collected from applicants for initial
accreditation and accredited certifying agents submitting annual
reports or seeking renewal of accreditation. Such fees will be equal as
nearly as may be to the cost of the accreditation services rendered
under these regulations. Fees-for-service will be based on the time
required to render the service provided calculated to the nearest 15-
minute period. Activities to be billed on the basis of time used
include the review of applications and accompanying documents and
information, evaluator travel, the conduct of on-site evaluations,
review of annual reports and updated documents and information, and the
preparation of reports and any other documents in connection with the
performance of service. The hourly rate will be the same as that
charged by the Agricultural Marketing Service (AMS), through its
Quality System Certification Program, to certification bodies
requesting conformity assessment to the International Organization for
Standardization ``General Requirements for Bodies Operating Product
Certification Systems'' (ISO Guide 65).
Applicants for initial accreditation and accredited certifying
agents submitting annual reports or seeking renewal of accreditation
during the first 18 months following the effective date of subpart F
will receive service without incurring an hourly charge for such
service.
Applicants for initial accreditation and renewal of accreditation
must pay at the time of application, effective 18 months following the
effective date of Subpart F, a nonrefundable fee of $500.00. This fee
will be applied to the applicant's fees-for-service account.
When service is requested at a place so distant from the
evaluator's headquarters that a total of one-half hour or more is
required for the evaluator(s) to travel to such place and back to the
headquarters, or at a place of prior assignment on circuitous routing
requiring a total of one-half hour or more to travel to the next place
of assignment on the circuitous routing, the charge for such service
will include all applicable travel charges. Travel charges may include
a mileage charge administratively determined by the Department, travel
tolls, or, where the travel is made by public transportation (including
hired vehicles), a fee equal to the actual cost thereof. If the service
is provided on a circuitous routing the travel charges will be prorated
among all the applicants and certifying agents furnished the service
involved on an equitable basis. Travel charges will become effective
for all applicants for initial accreditation and accredited certifying
agents on the effective date of subpart F. The applicant or certifying
agent will not be charged a new mileage rate without notification
before the service is rendered.
When service is requested at a place away from the evaluator's
headquarters, the fee for such service shall include a per diem charge
if the employee(s) performing the service is paid per diem in
accordance with existing travel regulations. Per diem charges to
applicants and certifying agents will cover the same period of time for
which the evaluator(s) receives per diem reimbursement. The per diem
rate will be administratively determined by the Department. Per diem
charges shall become effective for all applicants for initial
accreditation and accredited certifying agents on the effective date of
subpart F. The applicant or certifying agent will not be charged a new
per diem rate without notification before the service is rendered.
When costs, other than fees-for-service, travel charges, and per
diem charges are associated with providing the services, the applicant
or certifying agent will be charged for these costs. Such costs
include, but are not limited to, equipment rental, photocopying,
delivery, facsimile, telephone, or translation charges incurred in
association with accreditation services. The amount of the costs
charged will be determined administratively by the Department. Such
costs will become effective for all applicants for initial
accreditation and accredited certifying agents on the effective date of
subpart F.
Payment of Fees and Other Charges. Applicants for initial
accreditation and renewal of accreditation must remit the nonrefundable
fee along with their application. Remittance must be made payable to
the Agricultural Marketing Service, USDA, and mailed to: Program
Manager, USDA-AMS-TMP-NOP,
[[Page 13596]]
Room 2945-South Building, PO Box 96456, Washington, DC 20090-6456 or
such other address as required by the Program Manager. All other
payments for fees and other charges must be received by the due date
shown on the bill for collection, made payable to the Agricultural
Marketing Service, USDA, and mailed to the address provided on the bill
for collection. The Administrator will assess interest, penalties, and
administrative costs on debts not paid by the due date shown on a bill
for collection and collect delinquent debts or refer such debts to the
Department of Justice for litigation.
Fees and Other Charges for Certification. Fees charged by a
certifying agent must be reasonable, and a certifying agent may charge
applicants for certification and certified production and handling
operations only those fees and charges that it has filed with the
Administrator. The certifying agent must provide each applicant with an
estimate of the total cost of certification and an estimate of the
annual cost of updating the certification. The certifying agent may
require applicants for certification to pay at the time of application
a nonrefundable fee of no more than $250.00 which must be applied to
the applicant's fees-for-service account. The certifying agent must
provide all persons inquiring about the application process with a copy
of its fee schedule.
Fees--Changes Based on Comments. This portion of subpart G differs
from our first proposal in several respects as follows:
(1) Application and Administrative Fees. We have removed the
provisions which required certifying agents to pay application and
administrative fees. These fee provisions have been replaced with
provisions for the assessment of fees for service equal as nearly as
may be to the cost of the accreditation services rendered under these
regulations. In other words, we will be assessing fees and charges only
for activities related to accreditation. These fees and charges will be
assessed and collected from applicants for initial accreditation and
accredited certifying agents submitting annual reports or seeking
renewal of accreditation. The balance of costs incurred by the NOP will
be funded through appropriations. We have retained the requirement,
with modification, that certifying agents reimburse the Department for
travel, per diem, and related other costs associated with providing
accreditation services. We have taken these actions in an attempt to
minimize the cost of this program on certifying agents. Certifying
agents will be charged for the actual time and travel expenses
necessary for the NOP to perform accreditation services.
This proposed program is similar to the Quality Systems
Certification Program (QSCP) established pursuant to 7 CFR part 54. The
QSCP is an audit-based program administered by AMS through its
Livestock and Seed Program, which provides meatpackers, processors,
producers, and other businesses in the livestock and meat trade with
the opportunity to have special processes or documented quality
management systems verified. Since the procedures used for accrediting
State and private entities as accredited organic certifying agents are
similar to those used to certify other types of product or system
certification programs under the QSCP, we have decided to use this
existing program and its staff in examining certifying agents'
operations and evaluating their compliance with the Act and these
regulations. Using the QSCP and its staff will enable the NOP to
provide the necessary services without creating a separate bureaucracy.
Hourly fees to be charged for services under this program will be the
same as those under the QSCP, currently estimated at $95.00 per hour.
This fee of approximately $95.00 is greater than the $42.20 base
rate charged under the voluntary user-fee-funded program established by
AMS to verify that State and private organic certifying agents in the
United States comply with the requirements prescribed under ISO Guide
65. This program, administered by the AMS Livestock and Seed Program,
applied the aggregate meat grading rate for services to this ISO Guide
65 verification program for State and private organic certificating
agents. The grading rate of $42.20 was the only rate for which AMS was
authorized to charge at the time that the program to assess ISO Guide
65 conformity by organic certifying agents was implemented. This was
not the actual audit rate of approximately $95.00 for such services.
The AMS Livestock and Seed Program will engage in rulemaking to
establish audit fees for its QSCP. As noted above, those fees are
expected to be approximately $95.00 per hour. The NOP will notify
accredited certifying agents of proposed rate changes and final actions
on such rates by AMS.
To minimize the economic impact of implementing the NOP on
certifying agents, we have decided to provide services for
accreditation during the first 18 months following the effective date
of new subpart F without an hourly charge for all applicants for
initial accreditation and accredited certifying agents. This represents
full subsidization of the hourly costs for accreditation by the
Department during the first 18 months of operation. This 18-month
subsidization of the hourly costs will prove especially beneficial to
any applicant for accreditation that submits a substandard application
or has difficulty establishing eligibility for accreditation.
Certifying agents will be charged for accreditation service at the
published hourly rate on the first day of the nineteenth month
following the effective date of subpart F.
Over 15,000 comments were received on fees, with all opposing the
first proposal's fee provisions. In addition to comments from
consumers, comments were received from State agencies, organic growers,
grower associations, and certifying agents. Most of these commenters
expressed the belief that the proposed fees would price small
certifying agents out of the organic industry. Almost half of the over
15,000 comments suggested a sliding-scale fee system, rather than the
flat fee system in the first proposal, to accommodate the economic
needs of small certifying agents. We have not accepted the concept of a
sliding-scale fee system. Rather, as noted above, we are proposing that
certifying agents be charged for the actual time and travel expenses
necessary for the NOP to perform accreditation services. Under this fee
system, smaller certifying agents should pay less in hourly charges to
obtain and maintain certification than larger certifying agents. This
assumption, however, is contingent on the quality of all documentation
submitted to the Department, certifying agent recordkeeping, and the
efficiency of the certifying agent in meeting the requirements of this
part. The fees and other charges for accreditation regulations are
found in Sec. 205.640.
(2) Payment by Certified Check. We have removed the requirement
that the payment of fees and charges to the Department be by certified
check or money order. We have made this change because we agree with
commenters that this requirement is unnecessary and potentially
burdensome.
Nearly all industry commenters opposed the form and method of
payments stated throughout the original fee sections. Commenters stated
that payment by certified check or money order was unnecessary and
would create an additional burden on individual producers, handlers,
and private certifiers. A few State commenters stated that it was
insulting for the U.S. Department of Agriculture (USDA) to require a
State government agency to pay for its accreditation with a certified
check.
[[Page 13597]]
(3) Producer and Handler Fees to the Department. We have removed
the provisions which required the payment of certification fees by
producers and handlers to the Department. We have taken this action
because we believe that the goal of recovering program costs through
fees and other costs charged to producers and handlers for
certification as certified organic operations should be balanced
against the Act's purpose to facilitate interstate commerce in fresh
and processed food.
We received over 15,000 comments all opposing the first proposal's
fee provisions for producers and handlers. Comments were received from
consumers, State agencies, organic growers, grower associations, and
certifying agents. Most of these commenters stated that the proposed
fees would price small producers and handlers out of the organic
industry. Hundreds of these commenters stated that the proposed fees
favor large production operations. Almost half of the over 15,000
comments suggested a sliding-scale fee system, rather than the flat fee
system proposed in the first proposal, to accommodate the economic
needs of small producers and handlers. Hundreds more suggested that
small producers and processors be exempt from the payment of fees.
Most of the State agency, organic grower, grower association, and
certifying agent (industry) commenters spoke to the very small size and
family-farm nature of the average organic production operation and how
those operations would be affected by the proposed fees. Commenters
from this group who offered estimates suggested that one-third to over
one-half of organic producers in their area or State are very small
organic producers operating at or near the exemption level of $5,000 in
annual sales. They said those operating just above the exemption level
could be forced out of organic production by the extra fee and the
increased certification charges passed down by certifying agents who
would have to pay the proposed accreditation charges.
Commenters, industry and consumer, stated that, rather than
encouraging growth and new participation in organic agriculture, the
costs of certification would stifle growth and discourage small
producer participation in organic agriculture. An industry commenter
stated that exempt producers who might want to be certified so they
could market their product as organic would be dissuaded from doing so
because of the cost of certification. Industry commenters also stated
that the additional USDA fee on small handlers would make small organic
handling operations marginal. A few State agencies commented that many
small organic producers also conduct their own on-farm handling and
that these operations would be forced out of the organic industry by
the excessive handler fee and reporting burdens.
The comment, that exempt producers who might want to be certified
so they could market their product as organic would be dissuaded from
doing so because of the cost of certification, requires clarification.
It may be true that such producers would be dissuaded from seeking
certification because of the cost of certification. It is not true,
however, that exempt producers must be certified to sell or label their
production as organic. The Act exempts small producers, those who
produce no more than $5,000 in agricultural products, from the
requirement that a person may sell or label an agricultural product as
organically produced only if such product is produced and handled in
accordance with the Act.
Industry commenters recommended complete changes to the proposed
fee structure. Most, like the consumer commenters, suggested a sliding
scale for fees based on either size or sales volume. Several industry
commenters stated that the Act does not require that USDA recover all
program costs from assessments on producers, handlers, and certifying
agents. They cited section 6522 of the Act as authorizing the use of
appropriated funds to carry out the program. Some industry commenters
suggested that appropriated funds should be used to cover all
administrative and overhead costs and that fees collected from the
industry should only be used for specific program activities such as
accreditation. A few industry commenters suggested that organic farmers
not be charged an AMS fee but that each be required to sign an
affidavit of compliance with program requirements.
After further discussions within the Department and review of the
comments, we have determined that the fee structure for the NOP should
be modified to reduce costs to all organic sectors. We acknowledge that
the fees proposed in the first proposal might have discouraged industry
growth and might not have facilitated interstate commerce of organic
products. Because we believe that fees and other costs charged to
producers and handlers for certification as certified organic
operations should be kept to a minimum to encourage industry
participation and growth, we have removed the regulations which
provided for the payment of fees to the Department by certified
production and handling operations.
(4) Estimated Cost of Certification. We have added, at
Sec. 205.642, the requirement that the certifying agent must provide
each applicant with an estimate of the total cost of certification and
an estimate of the annual cost of updating the certification.
Additionally, the certifying agent must provide all persons inquiring
about the application process with a copy of its fee schedule. We have
added these provisions to ensure that producers and handlers have early
and ready access to the information they need to consider cost in
selecting an agent to certify their production or handling operation.
We consider this to be especially important because, as noted in the
preamble to subpart F, we have removed the requirement that the
certifying agent charge only such fees to applicants for certification
and operations it certifies that the Secretary determines are
reasonable. We have removed this requirement because we concur with
those commenters who expressed the belief that certifying agents should
be permitted to set their own fees without the approval of the
Secretary. We have also removed this requirement because we concur with
the commenters' belief that production and handling operations are free
to consider cost in selecting an agent to certify their production or
handling operation.
Fees--Changes Requested But Not Made. This subpart retains from our
first proposal regulations on which we received comments as follows:
(1) Accreditation Charges Billed to State Certifying Agents.
Several State certifying agents stated that State certifying agents
should not be assessed accreditation charges. Commenters stated that
most State certifying agents could face large accreditation costs
because they have many county or regional offices which would be
considered subsidiaries of the headquarters office. They stated that
these charges would have to be passed on to producers and handlers or
paid with supplemental State funds. A few State certifying agents
stated that USDA should pay the States, rather than vice versa, because
of the State organic programs' contributions to the national program.
At least one State representative commented that accreditation fees for
State certifying agents should be less than for private certifying
agents because State certifying agents should require less review and
oversight by AMS.
We disagree with those commenters who recommended that State
certifying agents not be assessed accreditation
[[Page 13598]]
charges, be charged less for accreditation, or be paid to certify
production or handling operations. We view such actions as constituting
unacceptable preferential treatment of State certifying agents to the
detriment of private-entity certifying agents. Accordingly, under this
proposal, State-entity certifying agents will be assessed fees for
accreditation under the same fee structure as private-entity certifying
agents.
(2) Subsidization. Some industry commenters stated that national
governments in Europe provide direct subsidies and other economic
incentives for their farmers to grow organic. A few questioned why the
organic industry would be charged for services while some USDA programs
are provided without cost to other agricultural sectors, and USDA
actually pays some farmers not to grow some commodities. Industry
commenters and many consumer commenters stated that it was unfair for
this proposed program to charge all costs to a fledgling agricultural
industry composed mostly of small, family farmers and marginal
operations. Finally, a few industry commenters proposed the
philosophical argument that program fees penalize those who protect the
earth and that USDA should charge traditional producers who damage the
earth with chemical applications and nonsustainable cultural practices.
AMS is primarily a user-fee-based Federal agency. The Act at
section 6506(a)(10) requires the collection of fees from producers,
handlers, and certifying agents. We are, therefore, unable to provide
for the full subsidization of producers, handlers, and certifying
agents as espoused by some commenters. Accordingly, this proposal
provides for the payment of fees by producers, handlers, and certifying
agents. We have, however, proposed regulations in this proposal which
we believe will minimize the economic impact of the NOP on producers,
handlers, and certifying agents.
Fees--Additional Provisions. Upon further review of the fee
provisions in the first proposal, we have decided to propose the
following additions.
(1) Certification Fees Charged by Certifying Agents. We have added,
at Sec. 205.642, regulations addressing general requirements to be met
by certifying agents in assessing fees and other charges for the
certification of producers and handlers as certified organic
operations. First, fees charged by a certifying agent must be
reasonable, and a certifying agent may charge applicants for
certification and certified production and handling operations only
those fees and charges that it has filed with the Administrator. This
is a general requirement for accreditation and is also found at
Sec. 205.501(a)(15) in subpart F on accreditation. This regulation does
not prohibit certifying agents from providing and charging for services
outside the NOP. Services that certifying agents might provide outside
the NOP include in-house publications, conferences, workshops,
informational meetings, and field days. Certifying agents cannot
require participation in such activities by certified operations or
applicants for certification as a condition of certification.
Second, the certifying agent may require applicants for
certification to pay at the time of application a nonrefundable fee of
no more than $250.00 which must be applied to the applicant's fees-for-
service account. We believe that this fee will help ensure that
certifying agents are compensated for certification services provided
to an applicant that is found to be not qualified to receive
certification as an organic production or handling operation.
(2) Fees Charged to Foreign Certifying Agents. We have removed the
provisions which required the payment of fees for import programs. We
have taken this action because this proposal includes foreign State
entities and foreign private entities which provide certification
services under the accreditation requirements of this part.
Accordingly, such entities are covered under the fees for accreditation
provisions of Sec. 205.640.
Compliance
This portion of subpart G sets forth the enforcement procedures for
the National Organic Program (NOP). These procedures describe the
compliance responsibilities of the Secretary, USDA, and Agricultural
Marketing Service (AMS) officials acting on behalf of the Secretary.
These procedures also describe responsibilities of State programs'
governing State officials (governing State officials) and State and
private certifying agents for compliance under the NOP. The NOP is the
AMS office that reviews applications and initiates approvals of
accreditation of new certifying agents, conducts oversight of
accredited certifying agents, and reviews and recommends continuation
of accreditation of certifying agents. These provisions also address
the rights of certified production and handling operations and
accredited certifying agents operating under the NOP. Approval or
denial of applications for certification and accreditation are
addressed under subparts E and F, respectively.
Proposal Description
The Secretary is required under the Act to review the operations of
State organic certification programs, accredited certifying agents, and
certified production or handling operations for compliance with the Act
and these regulations. The Program Manager of the NOP may carry out
oversight of compliance proceedings on behalf of the Secretary and the
Administrator. However, most reviews and analyses of certification
noncompliance will be conducted by the certifying agent which certified
the operation. With regard to certifying agents, the Program Manager
may initiate proceedings to suspend or revoke the accreditation of a
certifying agent for failure to conduct accreditation activities or
maintain accreditation requirements pursuant to subpart F of this
regulation.
In States with an approved State organic certification program, the
State program's governing State official is responsible for
administration of the State's compliance program for certified
operations. Governing State officials also may review and investigate
complaints of certifying agents operating in the State who may not be
in compliance with the accreditation requirements of the Act and these
regulations. They must notify the Program Manager of such noncompliance
activities and make information regarding the violation available to
the NOP for appropriate action.
The Program Manager may initiate proceedings to suspend or revoke a
certified operation's certification if a certifying agent or State
program's governing State official fails to take appropriate
enforcement action or if an operation is found to be erroneously
certified by a certifying agent whose accreditation has been suspended
or revoked.
The compliance provisions of the NOP are consistent with the
requirements of the Administrative Procedure Act (APA) (5 U.S.C. 553-
559) in that this program provides for due process including an
opportunity for hearing, appeal procedures, written notifications of
noncompliance, and opportunities to demonstrate or achieve compliance
before any suspension or revocation of organic certification or
accreditation is invoked. An exception to the initial due process steps
under the APA is provided in instances of willful violations. However,
willful violations may be appealed pursuant to
[[Page 13599]]
the Appeals procedure in this subpart. A compliance action regarding
certification carried out under an approved State program's compliance
procedures will have the same force and effect as a certification
compliance action carried out under these NOP compliance procedures.
The notification process for denying applications for certification and
applications for accreditation is laid out in subparts E and F
respectively.
Noncompliance Procedure for Certified Operations. The Act provides
for the enforcement of certified operations. Statutory oversight of
production and handling operations by certifying agents includes review
of organic plans, residue and tissue testing, authority to conduct
investigations, and responsibility to report violations. Applicants for
certification must meet certification requirements of the NOP, as
determined by certifying agents.
Notification of Noncompliance. As noted above, the Program Manager
or the governing State official may review and investigate a certified
operation based on complaints and may initiate noncompliance
proceedings established in this subpart. However, we expect that most
compliance procedures will begin with a certifying agent's inspection,
review, or investigation of such certified operation. Thus, this
noncompliance procedure is proposed based on that process.
A written notification of noncompliance will be sent to the
certified operation if a certifying agent's inspection, review, or
investigation reveals any noncompliance with the Act or these
regulations. Noncompliance may include, among other things, production
or handling practices or conditions, use of substances, or labeling
which are not in compliance with subparts C, Production and Handling,
or E, Certification, of this regulation. The results of a residue test
may trigger a noncompliance notification. A noncompliance notification
may encompass the entire operation or a portion of the operation. For
instance, a violation at one farm may not warrant loss of certification
at other farms of the certified operation not affected by the
violation.
A notification of noncompliance will provide: (1) A description of
each condition, action, or item of noncompliance; (2) the facts upon
which the notification is based; and (3) the date by which the
certified operation must rebut the notification or correct the
noncompliance. A certified operation may continue to sell its product
as organic upon receiving a notification of noncompliance and
throughout the noncompliance proceeding and any appeal procedure which
might follow the compliance proceeding.
All written notifications sent by certifying agents and governing
State officials, as well as rebuttals, requests for mediation, and
notices of correction of deficiencies sent by certified operations will
be sent to the addressee's place of business by a delivery service
which provides dated return receipts. This will help assure completed
communications and timely compliance procedures.
If a certified operation believes the notification of noncompliance
is incorrect or not well-founded, the operation may submit a rebuttal
to the certifying agent, providing supporting data to refute the facts
stated in the notification. Rebuttals are provided to allow certifying
agents and certified operations to informally resolve noncompliance
notices. Rebuttals should be helpful in resolving differences which may
be the result of misinterpretation of requirements, misunderstandings,
or incomplete information. Alternatively, the certified operation may
correct the identified deficiencies and submit proof of such
corrections. When the operation demonstrates that each noncompliance
has been corrected or otherwise resolved, the certifying agent will
send the certified operation a written notification of noncompliance
resolution.
Proposed Suspension or Revocation of Certification. If the
noncompliance is not resolved and is not in the process of being
resolved by the date specified in the notification, the certifying
agent will send the certified operation a written notification of
proposed suspension or revocation of certification for the entire
operation or a portion of the operation affected by the noncompliance.
The notification will state: (1) The reasons for the proposed
suspension or revocation; (2) the proposed effective date of the
suspension or revocation; (3) the impact of the suspension or
revocation on the certified operation's future eligibility for
certification; and (4) that the certified operation has a right to
request mediation or to file an appeal. The impact of a proposed
suspension or revocation may include the suspension period or whether
the suspension or revocation applies to the entire operation or to a
portion or portions of the operation. A governing State official may
not suspend or revoke certification of an entity's certified operations
in other States. Likewise, a certifying agent may not suspend or revoke
certification of an entity's operations which the certifying agent does
not certify.
If a certifying agent determines that correction of a noncompliance
is not possible, the notification of noncompliance and the proposed
suspension or revocation of certification may be combined in one
notification of proposed suspension or revocation. The certified
operation will have an opportunity to appeal that suspension or
revocation decision.
Mediation. A certified operation may request mediation of any
dispute regarding denial of certification or proposed suspension or
revocation of certification. Mediation is not required prior to filing
an appeal but is offered as an option which may resolve the
noncompliance more quickly than the next step, which is filing an
appeal. If a State program is in effect, the mediation procedures
established in the State program, as approved by the Secretary, must be
followed. Mediation will be requested in writing to the applicable
certifying agent. The dispute will be mediated by a qualified mediator
mutually agreed upon by the parties to the mediation. The parties to
the mediation will have no more than 30 days to reach an agreement
following a mediation session. If mediation is unsuccessful, the
certified operation will have 30 days from termination of mediation to
appeal the proposed suspension or revocation to the Administrator.
Any agreement reached during or as a result of the mediation
process must be in compliance with the Act and these regulations. Also,
the Secretary reserves the right to review any mediated settlement to
assure that the terms of the settlement conform with the requirements
of the Act and the NOP.
Suspension or Revocation. The certifying agent will suspend or
revoke the certified operation's certification when the operation fails
to resolve the issue through rebuttal or mediation, fails to complete
needed corrections, or does not file an appeal. The operation will be
notified of the suspension or revocation by written notification. The
certifying agent must not send a notification of suspension or
revocation to a certified operation that has requested mediation or
filed an appeal.
The decision to suspend or revoke certification will be based on
the seriousness of the noncompliance and on whether the noncompliance
is a willful action by the certified operation. Such decisions must be
made on a case-by-case basis. Section 6519 of the Act establishes that
willful violations include making a false statement, knowingly affixing
a false label, or
[[Page 13600]]
otherwise violating the purposes of the Act. Certifying agents are
responsible for investigating whether a violation is a willful act and
advising the Program Manager or governing State official of the results
of such investigation. However, only the Program Manager or governing
State official may make the final determination that a violation is
willful.
If a suspected willful noncompliance is not a serious violation, a
proposed suspension rather than revocation may be issued. Revocation is
reserved for serious instances of willful noncompliance and other
serious violations.
The certifying agent may determine that a lesser penalty of
suspension is warranted by the noncompliance. A proposal to suspend
certification may be issued for violations that are inadvertent or
cannot be proven to be willful. A suspension may be applicable only to
one area of operation or one field or farm unit where the noncompliance
occurred.
A certified operation that has had its certification revoked will
not be eligible to receive certification for an operation in which such
operation or person has an interest for 5 years following the date of
revocation. If an individual is the owner of a certified operation or
is the principal officer or director of operations who is fully
responsible for complying with certification requirements of this part,
a suspension or revocation could be issued in the individual's name.
The effect would be that another operation would be ineligible for
organic certification if that individual is listed as a principal in
the operation. The Secretary may waive an ineligibility period when it
is in the best interests of the certification program.
Noncompliance Procedure for Certifying Agents. The Program Manager,
on behalf of the Secretary, may initiate a compliance action against an
accredited certifying agent who fails to carry out responsibilities
entrusted to the certifying agent or maintain resources sufficient to
meet accreditation requirements in subpart F. Compliance proceedings
may be initiated as a result of annual reviews for continuation of
accreditation, as a result of site visits, or as a result of
investigations initiated in response to complaints of noncompliant
activities. Compliance proceedings also may be initiated on
recommendation of a governing State official.
A written notification of noncompliance will be sent by the Program
Manager to an accredited certifying agent when an inspection, review,
or investigation of such person reveals any noncompliance with the Act
or these regulations. A notification of noncompliance will provide a
description of each noncompliance found and the facts upon which the
notification is based. Additionally, the notification will provide the
date by which the certifying agent must rebut the noncompliance notice
or correct each noncompliance described.
When documentation received by the Program Manager demonstrates
that each noncompliance has been resolved, the Program Manager will
send the certifying agent a written notification of noncompliance
resolution.
If a noncompliance is not resolved by rebuttal or correction of
violations, the Program Manager will issue a proposed suspension or
revocation of accreditation. The notification will state whether the
certifying agent's entire business, field office, or offices in a
geographic area or in a specified technical field of accreditation are
to be suspended or revoked. For instance, if a private certifying agent
with field offices in different geographic areas is cited for a
compliance violation in one area, the Program Manager could determine
that only the accreditation of the noncompliant operation should be
suspended or revoked.
If the Program Manager determines that the noncompliance cannot be
immediately or easily corrected, the Program Manager may combine the
notification of noncompliance and the proposed suspension or revocation
in one notification. The notification of proposed suspension or
revocation of accreditation will state the reasons and effective date
for the proposed suspension or revocation. Such notification will also
state the impact of a suspension or revocation on future eligibility
for accreditation and the certifying agent's right to file an appeal.
If the Program Manager has reason to believe that a certifying
agent has willfully violated the Act or regulations, the Program
Manager may issue a notification of proposed revocation of
accreditation. The proposed revocation may be for the certifying
agent's entire accreditation business, a particular field office, or a
specified technical area of accreditation. This notification, because
it involves a willful violation, will be sent without first issuing a
notification of noncompliance.
The certifying agent may file an appeal of the Program Manager's
determination, pursuant to Sec. 205.681. If the certifying agent fails
to file an appeal of the proposed suspension or revocation, the Program
Manager will suspend or revoke the certifying agent's accreditation.
The certifying agent will be notified of the suspension or revocation
by written notification.
A certifying agent whose accreditation is suspended or revoked must
cease all certification activities in each area of accreditation and in
each State for which its accreditation is suspended or revoked. Any
certifying agent whose accreditation has been suspended or revoked must
transfer to the Secretary all records concerning its certification
activities that were suspended or revoked. The certifying agent must
also make such records available to any applicable governing State
official. The records will be used to determine whether operations
certified by the certifying agent may retain their organic
certification.
A certifying agent whose accreditation is suspended by the
Secretary may at any time submit a new request for accreditation. Such
request must be accompanied by evidence demonstrating correction of
each noncompliance and actions taken to comply with and remain in
compliance with the Act and regulations. A certifying agent whose
accreditation is revoked by the Secretary will be ineligible to be
accredited as a certifying agent under the Act and regulations for a
period of not less than 3 years following the date of revocation.
State Programs' Compliance Procedures. A State program's governing
State official may initiate noncompliance proceedings of certified
organic operations operating in the State. Such proceedings may be
initiated for failure of a certified operation to meet the production
or handling requirements of this part or the State's more restrictive
requirements, as approved by the Secretary. The governing State
official must attempt to resolve the compliance violations through
State mediation and reviews of corrections to operations.
The governing State official must promptly notify the Program
Manager of commencement of enforcement proceedings initiated against
certified operations. An enforcement proceeding, brought by a governing
State official against a certified operation may be appealed in
accordance with the appeal procedures of the State organic
certification program. There will be no subsequent rights of appeal to
the Secretary.
Compliance--Changes Based On Comments
This portion of subpart G differs from our first proposal in
several respects as follows:
(1) Authority of certifying agents. We have provided accredited
certifying
[[Page 13601]]
agents with authority to initiate noncompliance proceedings which may
result in suspension or revocation of producer and handler
certifications. A certifying agent's notification of proposed
suspension or revocation of certification provides an opportunity for
the certified operation to file an appeal in accordance with the appeal
provisions of Sec. 205.681. If a noncompliance procedure initiated by a
certifying agent is not corrected, remains unresolved, and is not
appealed, the certified operation's certification will be suspended or
revoked. If the certified operation files an appeal, the action is
turned over to the Program Manager or applicable governing State
official for further resolution. The suspension or revocation will not
become effective unless upheld by a ruling on the appeal.
Commenters expressed opposition to the notification of
noncompliance with certification requirements and termination of
certification provisions of the first proposal. Those provisions
required a certifying agent to submit to the Administrator a notice of
its recommendation to terminate the certification of a certified
operation or any portion of a certified operation if the certifying
agent had reason to believe the operation had ceased to comply with the
Act and regulations. The commenters were opposed to the Secretary
assuming authority for suspension or revocation of certification. The
commenters stated that such decisions are the duty and responsibility
of certifying agents, with the Secretary providing for appeals. Some
commenters expressed the belief that the certifying agent's position is
undermined by not having authority to suspend or revoke a certification
for cause. Many commenters stated that certifying agents must have such
authority in order to: (1) Achieve producer and handler compliance with
the regulations; and (2) expedite the enforcement process. They believe
that providing certifying agents with the authority to suspend or
revoke a certification will preserve the NOP's integrity and increase
consumer confidence in the quality of the organic products they
purchase. Commenters stressed that, in addition to providing procedures
for producer and handler appeals, the Department provides a system of
checks and balances through the accreditation program.
We agree that certifying agents should have an important role to
play in the suspension or revocation of the certification of production
or handling operation that they certify. This proposal will enhance the
certifying agent's authority to ensure that any production or handling
operation it certifies is in compliance with the Act and regulations.
We also agree that providing certifying agents with a more direct role
in suspension or revocation proceedings will shorten the compliance
process.
Accordingly, as noted above, we have provided accredited certifying
agents with increased authorities in enforcement proceedings. They will
make determinations to accept or reject rebuttals submitted in response
to notifications of noncompliance. They will be responsible for
defending their determinations, which must be consistent with the
position of the NOP, in mediation processes. Finally, their decisions
to propose suspension or revocation of producer and handler
certifications will become effective unless appealed by the certified
operation. Authority for certifying agents to take enforcement actions
against certified operations is found in Sec. 205.662.
(2) Mediation. We have added a new section authorizing certified
operations to request mediation of any dispute regarding denial of
certification or proposed suspension or revocation of certification.
This section addresses the request for mediation, selection of the
mediator, the time period for reaching an agreement, requirements of an
agreement, and appealing a noncompliance decision if mediation is
unsuccessful. The parties in the procedure must make administrative
arrangements for the mediation and arrange for payment of any costs
involved in the mediation. The Department will not finance or
participate in such mediation. This additional provision is found at
Sec. 205.663.
Commenters requested that the Department authorize the use of
alternative dispute resolution procedures and mediation. We support the
idea of using mediation to resolve disputes with respect to denial of
certification or proposed suspension or revocation of certification.
Some States use mediation as a component of their appeal process. We
believe mediation could prove effective in resolving many of the
possible disputes between applicants for certification or certified
operations and certifying agents. Without mediation, such disputes
would probably be referred to the Administrator in the form of appeals.
Mediation in some cases, however, may be of limited value because all
agreements reached during mediation or as a result of the mediation
process must be in compliance with the Act, these regulations, and any
policies or procedures governing the NOP. While we presume a mediated
settlement will be in accordance with the Act, the Secretary has
authority to review and overrule a mediated settlement if the Secretary
determines the settlement is not in accordance with Act and these
regulations.
(3) State certification program. Commenters generally requested
that States administer and enforce their own organic certification
programs. We have added regulations in these provisions addressing
States' enforcement of their programs regarding certified producers and
handlers operating in the State. These regulations clarify a State's
responsibility to provide for enforcement and appeal proceedings which
are consistent with these regulations and for keeping the Secretary
informed of such proceedings. We have added these regulations because
we believe that a State must have the authority to initiate compliance
actions to enforce its organic certification program. The regulations
are found at Sec. 205.668.
Regarding accreditation authorities, commenters stated that a State
program's governing State official should have authority to suspend or
revoke the accreditation of private certifying agents operating within
the State. Sections 6515(j) and 6519(e) of the Act address suspension
and revocation of accreditation by the Secretary or governing State
official. While the Act may provide for the possibility of such
authority being used by governing State officials, it also requires the
Secretary to establish a workable accreditation program and it grants
sole authority to the Secretary to accredit certifying agents.
Therefore, the Secretary must have sole authority to suspend or revoke
that accreditation.
This does not mean that governing State officials are denied a role
in oversight of certifying agents operating in their States. If a
governing State official believes a certifying agent operating in the
State is not in compliance with the accreditation requirements of the
Act or is not properly certifying producers or handlers to NOP and the
State's approved unique organic certification requirements, the
governing State official must investigate the possible noncompliance.
If evidence of noncompliance is found, the governing State official
must notify the Program Manager of such noncompliance activities and
document those activities. The Program Manager will investigate such
complaints of noncompliance.
[[Page 13602]]
(4) Right of appeal. We have added the requirement that any
notification of proposed suspension or revocation must include a notice
to the certified operation's or certifying agent's of its right to file
an appeal. Commenters requested that the notification of proposed
suspension or revocation provisions for certifying agents reference the
appeals section. We agree with the commenters' request and add that all
recipients of a notification of proposed suspension or revocation
should be made aware of their appeal rights. Notification of appeal
rights is found in Sec. 205.662 for certified operations and
Sec. 205.665 for certifying agents.
Compliance--Changes Requested But Not Made
This subpart retains from our first proposal regulations on which
we received comments as follows:
(1) Revocation period. Commenters stated that a 5-year period of
ineligibility for certification after revocation of certification is
too harsh a punishment to apply in all cases. Some commenters suggested
that ``shall not be eligible'' should be replaced with ``may be deemed
ineligible'' so that the penalty provision would be available for
flagrant violations of the Act but would not have to be applied to all
violations. A commenter suggested a maximum period of ineligibility of
3 years be established for certified operations. The commenter's
justification was that organically produced agricultural products must
be produced on land to which no prohibited substances have been applied
for 3 years prior to harvest. This commenter also stated that the
ineligibility waiver should be a local decision with notice to the
Administrator.
Section 6519(c) of the Act requires certification ineligibility for
5 years unless reduced or eliminated by the Secretary. Revocation of a
certification is a serious action subject to due process for the
accused certified producer or handler. We believe that any
noncompliance action, combination of noncompliance actions, or history
of noncompliance activities deemed to warrant the revocation of
certification also warrants ineligibility from certification for 5
years unless reduced or eliminated by the Secretary. If the
noncompliance is not significant enough to warrant revocation of the
operation's certification, the certifying agent, State program's
governing State official, or Secretary may choose to suspend the
operation's certification for a period of time less than the 5-year
revocation period. We disagree with the suggestion that ineligibility
waivers should be decided at the local level. Actions which are
finalized by the governing State official, Administrator, or Secretary
cannot be subject to reversal or waivers by certifying agents.
Additionally, a national program such as this must have uniformity in
application, which would be less likely if individual certifying agents
were permitted to establish their own criteria for ineligibility
waivers. Accordingly, the ineligibility and waiver provisions are
unchanged in this proposal.
(2) Accreditation sanctions. Commenters stated that suspension and
revocation of accreditation should be applied fairly to both private
and State certifying agents. Governing State officials do not have any
accreditation authorities under this proposal--which may reduce private
certifying agents' concerns of unfair or unequal treatment.
Accreditation compliance actions by the Program Manager and the
Administrator will be conducted impartially and in accordance with the
Administrative Procedure Act and Department policies.
Revocation would be based on a determination that a private
certifying agent willfully violated the Act or these regulations or
falsely or negligently certified a production or handling operation as
an organic operation. The Act does not authorize the revocation of a
State certifying agent's accreditation. However, because suspension of
such entity can be established for any period of time, a suspension can
be effectively equivalent to a revocation of accreditation.
Accordingly, this proposal retains the provisions for the suspension of
accreditation for private and State certifying agents and the
revocation of accreditation for private certifying agents.
Compliance--Additional Provisions
Upon further review of the accreditation provisions in the first
proposal, we have decided to propose the following additions and
changes.
(1) Enforcement rights of the Secretary. We have added a general
section addressing specific enforcement rights of the Secretary. First,
this section clarifies that the Program Manager on behalf of the
Secretary and the Administrator may inspect and review State organic
certification programs, accredited certifying agents, and certified
production or handling operations for compliance with the Act or
regulations. The Program Manager has this oversight authority in States
with State organic certification programs as well as in States without
such programs.
Second, this section provides that the Program Manager may initiate
proceedings to suspend or revoke a certified operation's certification
when a certifying agent or governing State official fails to take
appropriate enforcement action against a certified operation that is
not in compliance with the Act or these regulations. We have added this
provision because this proposal provides certifying agents and
governing State officials with enforcement authorities, including the
suspension and revocation of certifications. However, we believe the
Secretary, through the Program Manager, must have authority to take
such actions if a certifying agent or governing State official fails to
carry out its responsibilities.
Third, this section provides that the Program Manager may initiate
proceedings to suspend or revoke a certified operation's certification
upon suspension or revocation of the operation's certifying agent's
accreditation. We have added this provision to enable the Program
Manager to suspend or revoke certification of any operation that a
certifying agent certified following procedures or practices that are
not in compliance with the Act or these regulations. This addition is
found at Sec. 205.660.
(2) Certifying agent investigations. We have added a section to
clarify that certifying agents may investigate complaints of
noncompliance with the Act or regulations concerning operations that
they have certified. This section does not authorize a certifying agent
to investigate certified operations that the certifying agent has not
certified. Such complaints should be reported to the certifying agent
that certifies the operation in question. This addition is found at
Sec. 205.661.
(3) Certified operation rebuttals. We have added a certified
operation's right to rebut any noncompliance described in a notice of
noncompliance. We believe this provision is necessary to clarify that
certified operations should be able to present facts or arguments
refuting the certifying agent's findings. We see this as an informal
process between the certified operation and the certifying agent to
clarify possible misunderstandings or misinterpretation of
requirements, data, or information. The APA requires such opportunities
prior to suspension or revocation. Certified operations that
successfully refute a finding of noncompliance will receive a
notification of noncompliance resolution. Any certified operation
unable to successfully refute a finding of noncompliance must correct
the
[[Page 13603]]
noncompliance or face possible suspension or revocation of its
certification. This addition is found at Sec. 205.662(a)(3).
(4) Certifying agent rebuttals. We also have added a certifying
agent's right to rebut any accreditation noncompliance described in a
notice of noncompliance issued by the Program Manager. This also will
be an informal process and is consistent with the intent of the APA. We
believe this provision is necessary to clarify that certifying agents
should be able to present facts or arguments refuting the Program
Manager's findings. Certifying agents that successfully refute a
finding of noncompliance will receive a notification of noncompliance
resolution. Any certifying agent unable to successfully refute a
finding of noncompliance must correct the noncompliance or face
possible suspension or revocation of its accreditation. This addition
is found at Sec. 205.665(a)(3).
(5) Willful noncompliance. We have also added authority for
certifying agents and governing State officials to move directly to a
notice of proposed revocation if a certification noncompliance is a
willful, serious violation of these regulations. This will allow
expedited action in dealing with serious violations of certification.
The due process provisions of the APA provide an exception in cases of
willful violations. Even though a noncompliance may be a willful act,
the certified operation maintains the right to file an appeal of a
proposed suspension or revocation of certification. Revocation of
certification is reserved for serious instances of willful
noncompliance and other serious violations. If a suspected willful
violation is deemed not serious, a proposed suspension of certification
rather than revocation may be issued.
Inspection and Testing, Reporting, and Exclusion From Sale
This portion of subpart G sets forth the inspection and testing
requirements for agricultural products that have been produced on
organic production operations or handled through organic handling
operations.
Based on comments received regarding the first proposal, we have
modified and restructured our residue testing requirements. Commenters
were concerned about the cost of residue testing to certified
operations and certifying agents, the determination of detectable
levels of prohibited substances, and the exclusion of contaminated
products from sale as organically produced.
Residue testing plays an important role in organic certification by
providing a means for monitoring compliance with the National Organic
Program (NOP) and by discouraging the mislabeling of agricultural
products. This testing program provides State programs' governing State
officials and certifying agents with a tool for ensuring compliance
with three areas for testing: (1) Preharvest residue testing, (2)
postharvest residue testing, and (3) testing for unavoidable residual
environmental contamination levels.
Proposal Description
Under the residue testing requirements of the NOP, we propose that
all agricultural products sold, labeled, or represented as organically
produced be available for inspection by the Administrator, State
program's governing State official, or certifying agent. Organic farms
and handling operations must be made available for inspection under
proposed Subpart E, Certification. In addition, products from the
aforementioned organic operations may be required by the State
program's governing State official or certifying agent to undergo
preharvest or postharvest testing when there is reason to believe that
agricultural products to be sold or labeled as organically produced
have come into contact with prohibited substances. The cost of such
testing will be borne by the applicable certifying party and is
considered a cost of doing business. Accordingly, certifying agents
should make provisions for the cost of preharvest or postharvest
residue testing when structuring certification fees.
Preharvest and Postharvest Residue Testing. The main objectives of
the residue testing program are to: (1) Ensure that certified organic
production and handling operations are in compliance with the
requirements set forth in this proposal; and (2) serve as a means for
monitoring drift and unavoidable residue contamination of agricultural
products to be sold or labeled as organically produced. Any detectable
residues of a prohibited substance found in or on samples during
chemical analysis will serve as a warning indicator to the State
program's governing State official or certifying agent.
The request for preharvest or postharvest residue testing is based
on the Administrator's, State program's governing State official's, or
certifying agent's belief that an agricultural product has come into
contact with one or more prohibited substances. The ``reason to
believe'' could be triggered by various situations, for example: (1)
The applicable authority receiving formal written complaint regarding
the practices of a certified organic operation; (2) an open container
of a prohibited substance found on the premises of a certified organic
operation; (3) the proximity of a certified organic operation to a
potential source of drift; (4) suspected soil contamination by
historically persistent substances; or (5) when the product from a
certified organic operation is unaffected when neighboring fields or
crops are infested with pests. These situations do not represent all of
the possible occurrences that would trigger an investigation.
Preharvest or postharvest residue testing will occur on a case-by-case
basis.
In each case, an inspector representing the Administrator,
certifying agent, or State program's governing State official will
conduct sampling. Testing for chemical residues must be performed in an
accredited laboratory, defined as a laboratory that has met and
continues to meet the requirements specified in the Food, Agriculture,
Conservation, and Trade Act of 1990 (7 U.S.C. 138) (FACT Act) for
pesticide residue analyses of fresh fruit and vegetables and/or
pesticide analysis of products derived from livestock and fowl. AMS is
currently developing a regulation for the National Laboratory
Accreditation Program (NLAP), which will accredit laboratories under
the FACT Act. We expect that the NLAP will be implemented before or at
the same time as the NOP. When conducting chemical analyses, the
laboratory must incorporate the analytical methods described in the
16th edition of the Official Methods of Analysis of the AOAC
International or other applicable validated methodology for determining
the presence of contaminants in agricultural products.
When testing indicates that an agricultural product to be sold or
labeled as organically produced contains residues of prohibited
substances, certifying agents will compare the level of detected
residues with a national mean of detection for the specific commodity/
pesticide combination generated by the U.S. Department of Agriculture's
(USDA) Pesticide Data Program (PDP). This national mean is defined as
the mean level of detected pesticide residues as described in certain
pesticide/commodity pairs or combinations established by USDA's
Pesticide Data Program. The national mean for specific commodity/
pesticide combinations will serve as a standard for the Administrator,
State programs' governing State officials, and certifying
[[Page 13604]]
agents to assist in monitoring for illegal use violations. This
information will be made available by USDA to aid State programs'
governing State officials and certifying agents in making sound
evaluations and decisions regarding detected levels of prohibited
substances.
In addition, levels of unavoidable residual environmental
contamination will be determined for crop-and site-specific
agricultural commodities to be sold, labeled, or represented as ``100
percent organic,'' ``organic,'' or ``made with organic (specified
ingredients).'' These levels will represent limits at which the
Department may take compliance action to suspend the use of the
contaminated area for organic agricultural production. Initially,
unavoidable residual environmental contamination levels will be set for
persistent prohibited substances (aldrin, dieldrin, chlordane, DDE,
etc.) in the environment. In time, they may become more inclusive of
prohibited residues as additional information becomes available.
Unavoidable residual environmental contamination levels will be based
on the unavoidability of the chemical substances and do not represent
permissible levels of contamination where it is avoidable. Historical
residue data gathered from Federal and State monitoring and testing
programs will be used to determine these levels. They will be set by
the Administrator, in consultation with the Food and Drug
Administration (FDA) and Environmental Protection Agency (EPA).
After all tests and analyses have been concluded, the results must
be provided to the Administrator. The results of analyses and tests
will be available, kept on record, and reviewed by the Department to
evaluate concentration levels of prohibited substances for specific
regions and agricultural crops. Analyses and test results will also be
available for public access, unless the residue testing is part of an
ongoing compliance investigation. Information relative to an ongoing
compliance investigation will be confidential and restricted to the
public.
Detection of Prohibited Substances. In the case of residue testing
and the detection of prohibited substances in or on agricultural
products to be sold, labeled, or represented ``100 percent organic,''
``organic,'' or ``made with organic (specified ingredients),''
detectable residues of prohibited substances that exceed the national
mean of detection for the respective commodity/pesticide combination or
unavoidable residual contamination levels cannot be sold or labeled as
organically produced. When such an agricultural crop is in violation of
these requirements, the certification of that crop will be suspended
for the period that the crop is in production. Certifying agents must
follow the requirements specified in Secs. 205.662 and 205.663 of
Subpart G, Compliance. In addition, when a State program's governing
State official or a certifying agent detects a prohibited substance in
or on agricultural products to be sold or labeled as organically
produced, the State program's governing State official or certifying
agent may conduct an investigation to determine the cause of the
prohibited substance.
If the investigation into the cause of a detectable residue level
in a product indicates that the residue was the result of an
intentional application of a prohibited substance, the Administrator is
authorized to initiate proceedings to revoke or suspend the
certification status of an operation or portion of that operation. When
testing indicates that an agricultural product contains prohibited
substances that exceed either the EPA tolerance level or FDA action
level, as applicable, for the prohibited substance, the data revealing
such information will be promptly reported to the appropriate
regulatory health agencies.
Emergency Pest Eradication or Disease Treatment Programs. When a
prohibited substance is applied to an organic production or handling
operation due to a Federal or State emergency pest eradication or
disease treatment program and the organic handling or production
operation otherwise meets the requirements of this proposal, the
certification status of the operation shall not be affected as a result
of the application of the prohibited substance, provided that: (1) Any
harvested crop or plant part to be harvested that has contact with a
prohibited substance applied as the result of a Federal or State
emergency pest eradication or disease treatment program cannot be sold,
labeled, or represented as ``100 percent organic,'' ``organic,'' or
``made with organic (specified ingredients)'; and (2) any livestock
that are treated with a prohibited substance applied as the result of a
Federal or State emergency pest or disease treatment program or product
derived from such treated livestock cannot be sold, labeled, or
represented as ``100 percent organic,'' ``organic,'' or ``made with
organic (specified ingredients).''
However, milk or milk products may be labeled or sold as
organically produced beginning 12 months following the last date that
the dairy animal was treated with the prohibited substance.
Additionally, the offspring of gestating mammalian breeder stock
treated with a prohibited substance may be considered organic if the
breeder stock was not in the last third of gestation on the date that
the breeder stock was treated with the prohibited substance.
Residue Testing--Changes Based on Comments
This portion of subpart G differs from our first proposal in
several respects as follows:
Residue Testing. (1) We have revised the first proposal's section
on residue testing and repositioned it under Sec. 205.670(b).
Commenters disagreed with the provisions in the first proposal
which required certifying agents to conduct residue testing of products
produced and handled on operations that they had certified not less
frequently than every 5 years. They stated that the first proposal's
requirements for residue testing: (1) Were in excess of what the Act
actually requires; (2) were more stringent than that of the industry
norm; (3) would create an unnecessary burden on certifying agents and
organic production and handling operations; and (4) would increase
costs for certified production and handling operations. The commenters
stated that the NOP's residue testing requirements should utilize
existing Federal and State testing programs for the detection of
pesticide residues. They also stated that residue testing should only
be required when it is known or suspected that prohibited substances
have been applied to organic products.
We disagree with the commenters' assertions regarding the first
proposal's requirements for residue testing. However, in an attempt to
minimize the burdens of residue testing, we have proposed that State
programs' governing State officials and certifying agents may test
agricultural inputs used for organic production and require preharvest
or postharvest testing of any agricultural product to be sold, labeled,
or represented as ``100 percent organic,'' ``organic,'' or ``made with
organic (specified ingredients)'' when there is reason to believe that
the agricultural product has come into contact with prohibited
substances. This change allows State programs' governing State
officials and certifying agents to perform preharvest and postharvest
residue testing on a case-by-case basis.
Commenters requested that the rule specify which laboratories are
authorized to perform residue testing and what tests each laboratory
would be accredited to perform. We have defined
[[Page 13605]]
an accredited laboratory as a laboratory that has met and continues to
meet the requirements specified in the Food, Agriculture, Conservation,
and Trade Act of 1990 (7 U.S.C. 138) for pesticide residue analyses of
fresh fruit and vegetables and/or pesticide residue analysis of
products derived from livestock and fowl. Any laboratory that meets the
specified requirements therein may be used in conducting residue tests.
We have required that accredited laboratories be used to ensure
consistency among data, testing methodology, reporting procedures, and
other testing criteria needed to maintain analytical uniformity in the
residue testing program. Validated analytical methodologies for
determining the presence of contaminants in agricultural products, such
as those described in the 16th edition of the Official Methods of
Analysis of the AOAC International, may be used.
Tolerance Levels for Pesticide Residues. (2) We have prohibited the
sale and labeling of agricultural products as organic when such
products have been tested for prohibited substances and found to
contain residues of prohibited substances at levels greater than the
national mean of detection for the specific commodity/pesticide
combination or levels greater than the unavoidable residual
environmental contamination. Such agricultural products cannot be sold,
labeled, or represented as ``100 percent organic,'' ``organic,'' or
``made with organic (specified ingredients).'' The Administrator, State
program's governing State official, or certifying agent may conduct an
investigation of the applicable production or handling operation to
determine the cause of the presence of any prohibited substance. If the
investigation reveals that the presence of a prohibited substance was
the result of intentional application of the prohibited substance, the
Administrator may initiate proceedings to suspend or revoke the
production or handling operation's certification.
(3) Commenters suggested that USDA adopt a uniform standard for the
maximum allowable residue levels. Some commenters expressed the belief
that it is impractical or too expensive to establish site-specific,
unavoidable residual environmental contamination levels for every
commodity/pesticide combination in every growing area. Others argued
that the cause of contamination is irrelevant and that crops that
exceed the maximum residue levels should not be allowed to be sold as
organic. Finally, others argued that a single standard was needed
because contaminated products would not be removed from the market
immediately, pending determination of cause.
Organic standards, including provisions governing prohibited
substances, are based on the method of production, not the content. The
primary purpose of the residue testing approaches described in this
proposal, then, is to provide an additional tool for State programs'
governing State officials and certifying agents to use in monitoring
and ensuring compliance with the NOP. We acknowledge that consumers
have a reasonable expectation that organic products will contain
minimal residues of prohibited substances. We are not allowing the use
of prohibited substances. We are making provisions for the unavoidable
occurrences of prohibited substances while ensuring that residue levels
are consistent with consumer expectations.
This proposal adopts PDP's national means of detected residue for
specific commodity/pesticide combinations and the unavoidable residual
environmental contamination levels. Both standards have been adopted
for the purpose of determining excessive prohibited substances on
agricultural products to be sold, labeled, or represented as ``100
percent organic,'' ``organic,'' or ``made with organic (specified
ingredients).''
The national mean of detected residue for a specific commodity/
pesticide combination is derived from detections in the PDP monitoring
program. As a result of mean values being based on conventional
substances, we believe that residue values that fall above this mean,
then, would be beyond reasonable consumer expectations for minimal
residues. The situation is very similar with respect to unavoidable
residual environmental contamination levels. Even though the presence
of residues of certain persistent substances may not be the result of
intentional application, we believe that excessive residue levels would
not be consistent with the intentions of the Act. Accordingly, when
levels of a persistent substance are detected above the unavoidable
residual environmental contamination level, the product cannot be sold
or labeled as organically produced.
Some commenters suggested that we use a percentage of the EPA
tolerance of FDA action level, such as 5 or 10 percent, as a uniform
standard for the maximum allowable residue level. We considered the
comments but decided not to adopt them for the following reasons. The
EPA tolerances for pesticides are defined as the maximum legal level of
a pesticide residue in or on a raw or processed agricultural commodity,
as set by the Environmental Protection Agency under the Federal Food
Drug and Cosmetic Act, section 408. FDA action levels represent limits,
at or above which FDA will take legal action against a food product to
prevent poisonous or deleterious substances from entering the food
supply. Both EPA tolerances and FDA action levels are public health-
based standards. Our rationale for residue testing, as a tool for State
programs' governing State officials and certifying agents to monitor
compliance with the NOP, is different from these public health
programs.
Accepting a percentage of EPA tolerance or FDA action levels could
also pose a significant problem for analytical laboratories trying to
analyze for prohibited substances. In some cases, pesticides have
tolerances that are set near their analytical method's Limit of
Quantification (LOQ). The LOQ is defined as the lowest level where
analytical measurement becomes quantitatively meaningful. If the EPA
tolerances are near the analytical method LOQ's, accurate determination
of the levels at 5 to 10 percent of the tolerance may not be attainable
for analytical instrumentation currently employed. Therefore, the
Department could be setting a level of concern below the LOQ for some
substances if it adopted this recommendation. As a fundamental
principle, we have chosen not to set an enforcement level that could be
below detection limits for some substances. As an alternative, we are
proposing to use the PDP national mean of detected residues for
specific commodity/pesticide combinations.
Other commenters suggested that USDA adopt a ``zero tolerance'' for
residues of prohibited substances. Under this suggestion, products
containing any detectable residues of a prohibited substance would not
be allowed to be labeled as organically produced. This proposal does
not adopt this suggestion. While standards strictly prohibit use of any
substance not found on the approved National List, we recognize that
some minimal residues may still be found in organic foods. We believe
our proposed residue testing system and compliance provisions should be
adequate to protect the integrity of agricultural products sold,
labeled, or represented as ``100 percent organic,'' ``organic,'' or
``made with organic (specified ingredients).''
Several commenters expressed opposition to the first proposal not
requiring residue testing in the event of drift. These commenters
stated that organic producers should report all incidences of drift to
their certifying agent. The commenters further stated that a crop
should be tested for the
[[Page 13606]]
presence of prohibited substances when drift has or is suspected to
have occurred. They also stated that when the test indicates levels of
residues of prohibited substances that exceed 5 percent of the EPA
tolerance level, the crop should be prohibited from being sold or
labeled as organically produced.
In response to commenters' concern about contamination from drift,
we have used some of their reasoning in the development of our residue
testing program. Drift is defined as the physical movement of
prohibited substances from the intended target site onto an organic
production operation or any portion thereof. The National Organic
Standards Board (NOSB or Board) recommended that agricultural products
exposed to drift not be sold, labeled, or represented as ``100 percent
organic,'' ``organic,'' or ``made with organic (specified
ingredients)'' or fed to livestock on organic operations. The NOSB also
recommended that preharvest tissue testing of crops suspected of
receiving drift be required to verify the presence or absence of
prohibited substances. This proposal addresses the problem of drift
through the use of preharvest testing of crops suspected of receiving
drift of a prohibited substance. Although drift may occur, especially
in those agricultural regions where pesticide use on nonorganic lands
is routine and heavy, exposure to drift does not constitute use of a
prohibited substance. Therefore, preharvest testing provisions have
been established for State programs' governing State officials and
certifying agents to test when there is a reason to believe that
agricultural products intended to be sold or labeled as organically
produced have come into contact with prohibited substances. This will
allow a State program's governing State official or certifying agent to
determine whether the integrity of the product has been affected. We
believe our proposed residue testing program and compliance provisions
should be adequate to protect the integrity of agricultural products.
Residue Testing--Changes Requested but Not Made
(1) The original proposal provided that land subject to a Federal
or State emergency disease or pest treatment program should not lose
its organic certification and should not be required to be withheld
from organic production for a period of 3 years. A few commenters
stated that a field treated under such emergency situations should lose
its certification and should be restricted for organic use for 3 years
following the emergency treatment. The commenters stated this is
necessary to maintain consumer confidence in organically produced
products. We believe the first proposal is consistent with the
requirements of the Act. The proposal provided that crops and livestock
that had contact or been treated with a prohibited substance under such
an official emergency treatment program could not be sold or labeled as
organic. This proposal retains that prohibition.
Commenters suggested that producers work with the Federal or State
agency which requires an emergency treatment program and arrange for
use of materials that are compatible with organic production. While
this may be possible under certain emergency treatment situations, it
cannot be relied on as a solution to every emergency treatment
situation. Appropriate alternative treatments may not be available, or
the jurisdiction requiring the emergency program may not grant
alternative treatments. Commenters also suggested that producers avoid
planting crops that might be subject to pests or diseases targeted by
emergency treatment programs to avoid emergency treatments. We do not
believe that is a reasonable solution for producers. Emergency
treatment programs are used in response to unforeseen infestations and
diseases. Only hindsight would help organic producers determine which
crops to produce. Further, the possibilities of damaging insect
infestations or plant or animal diseases warranting an emergency
treatment program are so numerous that an organic producer could be
left with few or no alternative crops or livestock to produce. Cultural
conditions and market factors also would limit selection of alternative
organic production. Accordingly, the commenters' recommendation that
loss of organic certification and an automatic 3-year prohibition on
organic production from land or livestock treated under an official
emergency treatment program is not accepted.
Residue Testing. (2) Commenters suggested that some of the
responsibility of residue testing be removed from certifying agent
responsibilities. They also suggested that residue testing requirements
take into account current Federal and State testing requirements
already in place for the detection of pesticide residues.
We have not adopted language that the Department would use current
Federal and State testing requirements for the detection of pesticide
residues in the residue testing program. Although State and Federal
testing provide good sources of data on pesticide residues, the data
may reflect criteria developed for different sampling purposes, showing
wide variations in sample selection and indicating different laboratory
capabilities and different levels of quantification between and within
laboratories.
Residue Testing--Additional Provisions
Section 205.670(a) has been added. It provides that the
Administrator, the State program's governing State official, and the
applicable certifying agent have access, for inspection purposes, to
all agricultural products being sold, labeled, or represented as ``100
percent organic,'' ``organic,'' or ``made with organic (specified
ingredients).'' In addition, the organic products must be made
available for examination by said authorities in the manner that they
prescribe.
Public comments did not suggest this action. However, we believe it
is necessary to officially grant the Administrator, the State program's
governing State official, and the applicable certifying agent the
authority to access all agricultural products subject to inspection
under this section. This authority will help resolve conflicts that may
arise regarding product accessibility during inspection and testing.
Adverse Action Appeal Process. This portion of subpart G sets forth
the general framework for an appeal process for persons subject to
compliance determinations under the National Organic Program (NOP). In
this proposal, we are empowering certifying agents with the authority
to make decisions concerning denial of certification and the suspension
or revocation of certified operations. This empowerment of certifying
agents makes the appeal process very important.
We envision two kinds of appeals will be filed under these
procedures: (1) Producers and handlers appealing denial of
certification and proposed suspension and revocation of certification
decisions by certifying agents; and (2) certifying agents appealing
denial of accreditation and proposed suspension and revocation
decisions by the NOP Program Manager. The Administrative Procedure Act
(APA) (5 U.S.C. 553-559) provides that entities such as certified
operations and accredited certifying agents have the right to appeal
any adverse actions taken against their certification or accreditation,
respectively. Applicants for certification and applicants for
accreditation who receive a denial of certification or accreditation
may appeal that denial following this appeal
[[Page 13607]]
procedure. The appeal process is the same for applicants as for
certified operations and accredited certifying agents.
The informal appeal process described in this section is an
extension of the noncompliance proceeding outlined in the Compliance
section of this subpart.
For certification proceedings, the NOP and the Administrator will
oversee compliance proceedings and handle certification appeals from
operations in States that do not have an approved State organic
certification program. The Administrator will issue decisions to
sustain or deny appeals. If an appeal is denied, the Secretary will
initiate a formal administrative review process, which includes a
hearing before an administrative law judge and review by the
Department's Judicial Officer. The formal administrative review process
will be conducted pursuant to the Department's Uniform Rules of
Practice, 7 CFR 1.130 through 1.151. The formal administrative review
will be the Department's final determination on the noncompliance
proceeding. That decision may be appealed to the District Courts. This
section addresses the informal appeal process which is used to arrive
at the Administrator's decision to sustain or deny an appeal.
In States with approved State organic certification programs, the
governing State official or designee will oversee certification
compliance proceedings and handle appeals from certified operations in
the State. The governing State official or designated appeals official
will rule on appeals filed under a State organic certification program.
Further appeal of that decision may be made to the district court
system.
Proposal Description
These appeal procedures provide that persons subject to the Act who
believe that they are adversely affected by a noncompliance decision of
a certifying agent, Program Manager, or governing State official may
appeal such decision to the Administrator or to the applicable State's
appeal process. Under Compliance provision in this subpart, accredited
certifying agents initiate noncompliance proceedings. If an appeal of a
certification decision is filed, the process is referred to the
Administrator or governing State official or designee, as applicable,
to the State where the applicant or certified operation resides.
Certification Appeals
Applicants for certification may appeal a certifying agent's denial
of certification. Certified operations may appeal a certifying agent's
notification of proposed suspension or revocation of the operation's
certification. These appeals will be made to the Administrator or to
the applicable governing State official or designated official in the
approved State organic certification program.
Certification appeals may be filed only after an applicant or a
certified operation has been given opportunity to come into compliance
with these regulations or otherwise resolve the specified
noncompliance. Prior to filing an appeal, the applicant or certified
operation must have failed in rebuttal, refused to make specified
corrections, or made corrections which the certifying agent
subsequently determined to not meet certification requirements of the
NOP.
If the Administrator or governing State official sustains an
appeal, the applicant or certified operation will be granted
certification or continued certification, as applicable to the
operation's status. The applicant or certified operation will not be
required to correct the actions or conditions cited in the
noncompliance notification. The act of sustaining the appeal will not
be considered an adverse action and may not be appealed by the
certifying agent which issued the notification.
If the Administrator or governing State official denies an appeal,
a formal administrative proceeding will be initiated to deny, suspend,
or revoke the certification. Such proceeding will be conducted pursuant
to the Department's Uniform Rules of Practice or pursuant to the
State's formal appeal procedures. Certified operations may continue to
operate throughout this informal appeals process and the formal
administrative proceedings.
Accreditation Appeals
Pursuant to Sec. 205.665 of this subpart, all accredited certifying
agents are subject to the Program Manager's review of their operations
and any noncompliance actions resulting from such reviews. As provided
in Sec. 205.668, a State program's governing State official must advise
the Program Manager if an investigation of a certifying agent reveals
that the certifying agent is not in compliance with the Act or these
regulations. The appeal process for applicants is the same as for
accredited certifying agents.
An appeal may be filed with the Administrator only after the
certifying agent fails to rebut the noncompliance notice and fails to
correct the noncompliance specified. If the Administrator sustains an
appeal, the applicant or certified operation will be granted
certification or continued certification, as applicable to the
operation's status. The applicant or certified operation will not be
required to correct the actions or conditions cited in the compliance
notification. If the appeal is denied, a formal administrative
proceeding will be initiated to deny, suspend, or revoke the
accreditation.
The certifying agent may continue to operate as a certifying agent
throughout the informal appeals process and the formal administrative
proceeding.
All appeals to the Administrator must be filed in writing and sent
to: Administrator, USDA-AMS, Room 3071-S, PO Box 96456, Washington, DC
20090-6456. An appeal must include a copy of the adverse decision to be
reviewed and a statement of the appellant's reasons for believing that
the decision was not proper and not made in accordance with applicable
program regulations, policies, or procedures. A certified operation
must send a copy of its appeal, to its certifying agent. All written
communications between parties involved in appeal proceedings must be
sent to the recipient's place of business by a delivery service which
provides dated return receipts. Appeals under a State's procedure will
be filed pursuant to the State's appeal process, which should include
addresses and filing periods, etc.
An appeal must be filed within the time provided in the letter of
notification or at least 30 days from the date of receipt of the notice
to deny, suspend, or revoke certification or accreditation. The appeal
will be considered ``filed'' on the date received by the Administrator
or, when applicable, the State program's governing State official or
such official's designee. The Administrator will notify the appellant
and the appellant's certifying agent that the appeal was received.
Unless appealed in a timely manner, a notification to deny, suspend, or
revoke a certification or an accreditation will become final. The
applicant, certified operation, or certifying agent that does not file
an appeal in the time period provided waives the right to further
appeal of the compliance proceeding.
Appeals--Changes Based On Comments
These appeal regulations differ from our first proposal as follows:
(1) Decision-making. We have clarified who will be making decisions
that may be appealed to the Administrator. This proposal provides that
persons subject to the Act who, during noncompliance proceedings
described in this subpart, believe that
[[Page 13608]]
they are adversely affected by a noncompliance decision of a certifying
agent, Program Manager, or governing State official may appeal such
decision to the Administrator or the State's designated appeals
official. This clarification is found in Sec. 205.680.
Commenters stated that the proposed appeals procedures limited
appeals to decisions of the NOP staff. Commenters requested that the
appeals procedures be available for decisions by the Secretary, any
representative of the Secretary, and decisions by any certifying agent.
What we meant in the first proposal was that appeals would be filed on
decisions made by the Program Manager and certifying agents.
As noted above, we are empowering certifying agents to make
decisions concerning denials of certification and suspension or
revocation of certified operations' certifications. Certifying agents
accredited under this program act on behalf of the Secretary and the
Administrator to carry out certification services, including
noncompliance actions. The Administrator or designated governing State
official will make decisions to either sustain or deny appeals by
certification applicants and certified operations, as applicable to the
State.
The Program Manager will make decisions to deny applications for
accreditation and to suspend or revoke certifying agents'
accreditations. The Administrator will make all decisions to either
sustain or deny appeals by accreditation applicants and certifying
agents.
(2) Appeal procedures. Commenters requested detailed appeal
procedures or the use of citations to identify existing Departmental
appeal procedures which would be used for appeals filed under this
program. We acknowledge that the first proposal lacked detailed appeals
provisions. However, we believe this explanation is more informative
and helpful for the commenters. The formal administrative procedure
following the Department's Uniform Rules of Practice is required under
the APA. The rules of practice are not included in individual
rulemaking actions but may be found under 7 CFR 1.130 through 1.151.
The combination of this informal appeal procedure followed by the
formal administrative proceeding assures applicants, certified
operations, and accredited certifying agents that they will be given
full opportunity to respond to any noncompliance proceeding brought
against their application or operation. Individual State programs will
have their own, approved appeal procedures.
Commenters also recommended that the Department should use an
independent USDA appeals division to avoid conflict of interest by the
Program Manager or the Administrator in the handling of appeals. We
believe this proposed appeal procedure ensures that appeals will be
administered by persons not involved in the decision being appealed.
This appeals procedure is consistent with the requirements of the APA.
Paragraph (a)(1) of Sec. 205.681 provides that if the Administrator
sustains an applicant's or certified operation's appeal of a certifying
agent's noncompliance decision, the act of sustaining the appeal shall
not be an adverse action subject to appeal by the affected certifying
agent. We have included this provision because, as noted above,
certifying agents are accredited by the Secretary to provide
certification services as agents of the Secretary and the
Administrator. Therefore, if the Administrator overrules a decision of
an accredited certifying agent, that certifying agent cannot request an
appeal of the Administrator's decision.
Appeals--Changes Requested But Not Made
None.
Appeals--Additional Provisions
(1) State appeals procedures. We are proposing that appeal
proceedings in States with organic certification programs approved by
the Secretary will be carried out in accordance with the official
administrative appeal proceedings in each State. A State's appeal
process will be included as part of the State's organic certification
program. Because a State's appeal procedure is approved by the
Secretary, the final determination for a certification appeal arrived
at under that procedure is considered to have the effect of a decision
by the Secretary. Approved State appeal processes are unique to each
State and are not included in this regulation.
Certification appeals are made to the State program's governing
State official or such official's designee. The governing State
official or designee will administer the appeal pursuant to appeal
procedures which have been approved by the Secretary. Rulings on such
appeals, as noted in Sec. 205.668, may not be appealed to the
Secretary. The certification applicant or certified operation may make
subsequent appeal to the Court of Appeals of the United States for the
circuit in which such applicant or certified operation carries on
business or in the United States Court of Appeals for the District of
Columbia Circuit.
(2) Accreditation appeals. This proposal provides that the Program
Manager carries out all compliance proceedings on accredited certifying
agents. The Secretary has sole authority for accrediting certifying
agents and, therefore, must retain sole authority for suspending or
revoking that accreditation. A State program's governing State official
must investigate any complaints of noncompliance on the part of a
certifying agent operating in the State. If noncompliance activities or
conditions are found, the governing State official must notify the
Program Manager of those compliance violations or suspected compliance
violations.
Miscellaneous
Section 205.690 provisions the Office of Management and Budget
control number assigned to the information collection requirements of
these regulations. Sections 205.691 through 205.699 are reserved.
List of Subjects in 7 CFR Part 205
Administrative practice and procedure, Agriculture, Animals,
Archives and records, Foods, Imports, Labeling, Organically produced
products, Plants, Reporting and recordkeeping requirements, Seals and
insignia, Soil conservation.
For the reasons set forth in the preamble, it is proposed that
Title 7, Chapter I of the Code of Federal Regulations be amended as
follows:
1. Parts 205 through 209 which are currently reserved in subchapter
K (Federal Seed Act), are removed.
2. A new subchapter M consisting of part 205 through 209 is added
to read as follows:
SUBCHAPTER M--ORGANIC FOODS PRODUCTION ACT PROVISIONS
PART 205--NATIONAL ORGANIC PROGRAM
Subpart A--Definitions
Sec.
205.1 Meaning of words.
205.2 Terms defined.
Subpart B--Applicability
205.100 What has to be certified.
205.101 Exemptions and exclusions from certification.
205.102 Use of the term, ``organic.''
205.103 Recordkeeping by certified operations.
205.104 Foreign applicants.
205.105-205.199 [Reserved]
Subpart C--Organic Crop, Wild Crop, Livestock, and Handling
Requirements
205.200 General.
[[Page 13609]]
205.201 Organic production and handling system plan.
205.202 Land requirements.
205.203 Soil fertility and crop nutrient management practice
standard.
205.204 Seeds and planting stock practice standard.
205.205 Crop rotation practice standard.
205.206 Crop pest, weed, and disease management practice
standard.
205.207 Wild-crop harvesting practice standard.
205.208-205.235 [Reserved]
205.236 Origin of livestock.
205.237 Livestock feed.
205.238 Livestock health care practice standard.
205.239 Livestock living conditions.
205.240-205.269 [Reserved]
205.270 Organic handling requirements.
205.271 Facility pest management practice standard.
205.272 Commingling and contact with prohibited substance
prevention practice standard.
205.290 Temporary variances.
Subpart D--Labels, Labeling, and Market Information
205.300 Use of the term, ``organic.''
205.301 Product composition.
205.302 Calculating the percentage of organically produced
ingredients.
205.303 Packaged products labeled ``100 percent organic'' or
``organic.''
205.304 Packaged products labeled ``made with organic (specified
ingredients).''
205.305 Multiingredient packaged products with less that 50
percent organic ingredients.
205.306 Labeling of nonretail containers used for only shipping
or storage of raw or processed agricultural products labeled as
``100 percent organic,'' ``organic,'' or ``made with organic
(specified ingredients).''
205.307 Agricultural products in a form other than packages at
the time of retail sale that are labeled or represented as ``100
percent organic'' or ``organic.''
205.308 Agricultural products in a form other than packages at
the time of retail sale that are sold, labeled, or represented as
``made with organic (specified ingredients).''
205.309 Agricultural products produced on an exempt production
operation.
205.310 USDA Seal.
Subpart E--Certification
205.400 General requirements for certification.
205.401 Application for certification.
205.402 Review of application.
205.403 On-site inspections.
205.404 Approval of certification.
205.405 Denial of certification.
205.406 Continuation of certification.
205.407-205.499 [Reserved]
Subpart F--Accreditation of Certifying Agents
205.500 Areas and duration of accreditation.
205.501 General requirements for accreditation.
205.502 Applying for accreditation.
205.503 Applicant information.
205.504 Evidence of expertise and ability.
205.505 Statement of agreement.
205.506 Approval of accreditation.
205.507 Denial of accreditation.
205.508 Site evaluations.
205.509 Peer review panel.
205.510 Annual report, recordkeeping, and renewal of accredition.
205.511-205.599 [Reserved]
Subpart G--Administrative
The National List of Allowed and Prohibited Substances
205.600 Allowed and prohibited substances and ingredients in
organic production and handling.
205.601 Synthetic substances allowed for use in
organic crop production.
205.602 Nonsynthetic substances prohibited for use in organic
crop production.
205.603 Synthetic substances allowed for use in organic livestock
production.
205.604 Nonsynthetic substances prohibited for use in organic
livestock production. [Reserved]
205.605 Nonagricultural (nonorganic) substances allowed as
ingredients in or on processed products labeled as ``organic,'' or
``made with organic (specified ingredients).''
205.606 Nonorganically produced agricultural products allowed as
ingredients in or on processed products labeled as ``organic'' or
``made with organic ingredients.''
205.607 Amending the National List.
State Programs
205.620 Requirements of State organic certification programs.
205.621 Submission and determination of proposed State organic
certification programs and amendments to approved State organic
certification programs.
205.622 Review of approved State organic certification programs.
Fees
205.640 Fees and other charges for accreditation.
205.641 Payment of fees and other charges.
205.642 Fees and other charges for certification.
205.643-205.649 [Reserved]
Compliance
205.660 General.
205.661 Investigations of certified operations.
205.662 Noncompliance procedure for certified operations.
205.663 Mediation.
205.664 [Reserved]
205.665 Noncompliance prodcedures for certifying agents.
205.666-205.667 [Reserved]
205.668 Noncompliance procudures under State organic
certification programs.
205.699 [Reserved]
Inspection and Testing, Reporting, and Exclusion from Sale
205.670 Inspection and testing of agricultural product to be sold
or labeled ``organic''.
205.671 Exclusion from organic sale.
205.672 Emergency pest or disease treatment.
205.673--205.679 [Reserved]
Adverse Action Appeal Process
205.680 General.
205.681 Appeals.
205.682--205.689 [Reserved]
Miscellaneous
205.690 OMB control number.
205.691--205.699 [Reserved]
Authority: 7 U.S.C. 6501-6522.
Subpart A--Definitions
205.1 Meaning of words.
For the purpose of the regulations in this subpart, words in the
singular form shall be deemed to impart the plural and vice versa, as
the case may demand.
205.2 Terms defined.
Accredited laboratory. A laboratory that has met and continues to
meet the requirements specified in the Food, Agriculture, Conservation,
and Trade Act of 1990 (7 U.S.C. 138) for pesticide residue analyses of
fresh fruit and vegetables and/or pesticide residue analysis of
products derived from livestock and fowl.
Accreditation. A determination made by the Secretary that
authorizes a private, foreign, or State entity to conduct certification
activities as a certifying agent under this part.
Act. The Organic Foods Production Act of 1990, as amended (7 U.S.C.
6501 et seq.).
Action level. The limit at or above which the Food and Drug
Administration will take legal action against a product to remove it
from the market. Action levels are based on unavoidability of the
poisonous or deleterious substances and do not represent permissible
levels of contamination where it is avoidable.
Administrator. The Administrator for the Agricultural Marketing
Service (AMS), United States Departure of Agriculture, or the
representative to whom authority has been delegated to act in the stead
of the Administrator.
Agricultural inputs. All substances or materials used in the
production or handling of organic agricultural products.
Agricultural product. Any agricultural commodity or product,
whether raw or processed, including any commodity or product derived
from livestock that is marketed in the United States for human or
livestock consumption.
Allowed synthetic. A substance that is included on the National
List of synthetic substances allowed for use in organic production, or
handling.
Agricultural Marketing Service (AMS). The Agricultural Marketing
Service of the United States Department of Agriculture.
[[Page 13610]]
Animal drug. Any drug as defined in section 201 of the Federal
Food, Drug, and Cosmetic Act, as amended (21 U.S.C. 321), that is
intended for use in livestock, including any drug intended for use in
livestock feed but not including such livestock feed.
Annual seedling. A plant grown from seed that will complete its
life cycle or produce a harvestable yield within the same crop year or
season in which it was planted.
Area of operation. The types of operations: Crops, livestock, wild-
crop harvesting, handling, or any combination thereof that a certifying
agent may be accredited to certify under this part.
Audit trail. Documentation that is sufficient to determine the
source, transfer of ownership, and transportation of any agricultural
product labeled as ``100 percent organic,'' the organic ingredients of
any agricultural product labeled as ``organic'' or ``made with organic
(specified ingredients)'' or the organic ingredients of any
agricultural product containing less than 50 percent organic
ingredients identified as organic in an ingredients statement.
Biodegradable. Subject to biological decomposition into simpler
biochemical or chemical components.
Biologics. All viruses, serums, toxins, and analogous products of
natural or synthetic origin, such as diagnostics, antitoxins, vaccines,
live microorganisms, killed microorganisms, and the antigenic or
immunizing components of microorganisms intended for use in the
diagnosis, treatment, or prevention of diseases of animals.
Breeder stock. Female livestock whose offspring may be incorporated
into an organic operation at the time of their birth.
Buffer zone. An area located between a certified production
operation or portion of a production operation and an adjacent land
area that is not maintained under organic management. A buffer zone
must be sufficient in size or other features (e.g., windbreaks or a
diversion ditch) to prevent the possibility of unintended contact by
prohibited substances applied to adjacent land areas with an area that
is part of a certified operation.
Bulk. The presentation to consumers at retail sale of an
agricultural product in unpackaged, loose form, enabling the consumer
to determine the individual pieces, amount, or volume of the product
purchased.
Certification or certified. A determination made by a certifying
agent that a production or handling operation is in compliance with the
Act and the regulations in this part, which is documented by a
certificate of organic operation.
Certified operation. A crop or livestock production, wild-crop
harvesting, or handling operation or portion of such operation that is
certified by an accredited certifying agent as utilizing a system of
organic production or handling as described by the Act and the
regulations in this part.
Certifying agent. Any entity accredited by the Secretary as a
certifying agent for the purpose of certifying a production or handling
operation as a certified production or handling operation.
Certifying agent's operation. All sites, facilities, personnel, and
records used by a certifying agent to conduct certification activities
under the Act and the regulations in this part.
Claims. Oral, written, implied, or symbolic representations,
statements, or advertising or other forms of communication presented to
the public or buyers of agricultural products that relate to the
organic certification process or the term, ``100 percent organic,''
``organic,'' or ``made with organic (specified ingredients),'' or, in
the case of agricultural products containing less than 50 percent
organic ingredients, the term, ``organic,'' on the ingredients panel.
Commercially available. The ability to obtain a production input in
an appropriate form, quality, or quantity to fulfill an essential
function in a system of organic production or handling, as determined
by the certifying agent in the course of reviewing the organic plan.
Commingling. Physical contact between unpackaged organically
produced and nonorganically produced agricultural products during
production, transportation, storage or handling, other than during the
manufacture of a multiingredient product containing both types of
ingredients.
Compost. The product of a carefully managed process through which
microorganisms break down plant and animal materials into more
available forms suitable for application to the soil. Compost used in
an organic operation must be produced in a facility in compliance with
the Natural Resource Conservation Service's practice standard for a
composting facility (Code 317) and must use methods to raise the
temperature of the raw materials to the levels needed to stabilize
nutrients and kill pathogens.
Control. Any method that reduces or limits damage by populations of
pests, weeds, or diseases to levels that do not significantly reduce
productivity.
Crop. A plant or part of a plant intended to be marketed as an
agricultural product or fed to livestock.
Crop residues. The plant parts remaining in a field after the
harvest of a crop, which include stalks, stems, leaves, roots, and
weeds.
Crop rotation. The practice of alternating the annual crops grown
on a specific field in a planned pattern or sequence in successive crop
years, so that crops of the same species or family are not grown
repeatedly without interruption on the same field. Perennial cropping
systems employ means such as alley cropping, intercropping, and
hedgerows to introduce biological diversity in lieu of crop sequencing.
Crop year. That normal growing season for a crop as determined by
the Secretary.
Cultivation. Digging up or cutting the soil to prepare a seed bed;
control weeds; aerate the soil; or work organic matter, crop residues,
or fertilizers into the soil.
Cultural methods. Methods used to enhance crop health and prevent
weed, pest, or disease problems without the use of substances; examples
include the selection of appropriate varieties and planting sites;
proper timing and density of plantings; irrigation; and extending a
growing season by manipulating the microclimate with green houses, cold
frames, or wind breaks.
Detectable residue. The amount or presence of chemical residue or
sample component that can be reliably observed or found in the sample
matrix by the current approved analytical methodology.
Disease vectors. Plants or animals that harbor or transmit disease
organisms or pathogens which may attack crops or livestock.
Drift. The physical movement of prohibited substances from the
intended target site onto an organic operation or portion thereof.
Emergency pest or disease treatment program. A mandatory program
authorized by a Federal, State, or local agency for the purpose of
controlling or eradicating a pest or disease.
Employee. Any person providing paid or volunteer services for a
certifying agent.
Estimated National Mean. The mean level of detected pesticide
residues as described in certain pesticide/commodity pairs or
combinations established by USDA's Pesticide Data Program.
[[Page 13611]]
Excluded methods. Refers to a variety of methods used to
genetically modify organisms or influence their growth and development
by means that are not possible under natural conditions or processes
and are not considered compatible with organic production. Such methods
would include recombinant DNA, cell fusion, and micro- and
macroencapsulation. Such methods would not include the use of
traditional breeding, conjugation, fermentation, hybridization, in
vitro fertilization, or tissue culture.
Feed. Edible materials which are consumed by livestock for their
nutritional value. Feed may be concentrates (grains) or roughages (hay,
silage, fodder). The term, ``feed,'' encompasses all agricultural
commodities, including pasture ingested by livestock for nutritional
purposes.
Feed Additive. A substance or combination of substances added to
feed in micro quantities to fulfill a specific nutritional need, i.e.,
nutrients in the form of amino acids, vitamins, and minerals.
Feed Supplement. A feed used with another feed to improve the
nutrient balance or performance of the total ration and intended to be:
(1) Diluted with other feeds when fed to livestock;
(2) Offered free choice with other parts of the ration if
separately available; or
(3) Further diluted and mixed to produce a complete feed.
Fertilizer. A single or blended substance containing one or more
recognized plant nutrient(s) which is used primarily for its plant
nutrient content and which is designed for use or claimed to have value
in promoting plant growth.
Field. An area of land identified as a discrete unit within a
production operation.
Forage. Vegetable material in a fresh, dried, or ensiled state
(pasture, hay, or silage) which is fed to livestock.
Handle. To sell, process, or package agricultural products, except
such term shall not include the sale, transportation, or delivery of
crops or livestock by the producer thereof to a handler.
Handler. Any person engaged in the business of handling
agricultural products, including producers who handle crops or
livestock of their own production, except such term shall not include
final retailers of agricultural products that do not process
agricultural products.
Handling operation. Any operation or portion of an operation
(except final retailers of agricultural products that do not process
agricultural products) that receives or otherwise acquires agricultural
products and processes, packages, or stores such products.
Immediate family. The spouse, minor children, or blood relatives
who reside in the immediate household of a certifying agent or an
employee, inspector, contractor, or other personnel of the certifying
agent. For the purpose of this part, the interest of a spouse, minor
child, or blood relative who is a resident of the immediate household
of a certifying agent or an employee, inspector, contractor, or other
personnel of the certifying agent shall be considered to be an interest
of the certifying agent or an employee, inspector, contractor, or other
personnel of the certifying agent.
Inert ingredient. Any substance (or group of substances with
similar chemical structures if designated by the Environmental
Protection Agency) other than an active ingredient which is
intentionally included in any pesticide product used in organic crop or
livestock production and handling (40 CFR 152.3(m)).
Information panel. That part of the label of a packaged product
that is immediately contiguous to and to the right of the principal
display panel as observed by an individual facing the principal display
panel, unless another section of the label is designated as the
information panel because of package size or other package attributes
(e.g., irregular shape with one usable surface).
Ingredient. Any substance used in the preparation of an
agricultural product that is still present in the final commercial
product as consumed.
Ingredients statement. The list of ingredients contained in a
product shown in their common and usual names in the descending order
of predominance.
Inspector. Any person retained or used by a certifying agent to
conduct inspections of certification applicants or certified production
or handling operations.
Inspection. The act of examining and evaluating the production or
handling operation of an applicant for certification or certified
operation to determine compliance with the Act and the regulations in
this part.
Label. A display of written, printed, or graphic material on the
immediate container of an agricultural product or any such material
affixed to any agricultural product or affixed to a bulk container
containing an agricultural product, except for package liners or a
display of written, printed, or graphic material which contains only
information about the weight of the product.
Labeling. All written, printed, or graphic material accompanying an
agricultural product at any time or written, printed, or graphic
material about the agricultural product displayed at retail stores
about the product.
Livestock. Any cattle, sheep, goat, swine, poultry, or equine
animals used for food or in the production of food, fiber, feed, or
other agricultural-based consumer products; wild or domesticated game;
or other nonplant life, except such term shall not include aquatic
animals or bees for the production of food, fiber, feed, or other
agricultural-based consumer products.
Lot. Any number of containers which contain an agricultural product
of the same kind located in the same conveyance, warehouse, or packing
house and which are available for inspection at the same time.
Market information. Any written, printed, audiovisual, or graphic
information, including advertising, pamphlets, flyers, catalogues,
posters, and signs, distributed, broadcasted, or made available outside
of retail outlets that are used to assist in the sale or promotion of a
product.
Mulch. Any material, such as wood chips, leaves, straw, paper, or
plastic (on the National List), that serves to suppress weed growth,
moderate soil temperature, or conserve soil moisture.
National List. A list of allowed and prohibited substances as
provided for in section 6517 of the Act (7 U.S.C. 6517).
National Organic Program (NOP). The program authorized by the Act
for the purpose of implementing its provisions.
National Organic Standards Board (NOSB). A Board established by the
Secretary under 7 U.S.C. 6518 to assist in the development of standards
for substances to be used in organic production and to advise the
Secretary on any other aspects of the implementation of the National
Organic Program.
Natural resources of the operation. The physical, hydrological, and
biological features of a production operation, including soil, water,
wetlands, woodlands, and wildlife.
Nonagricultural substance. A substance that is not a product of
agriculture, such as a mineral or a bacterial culture, that is used as
an ingredient in an agricultural product. For the purposes of this
part, a nonagricultural ingredient also includes any substance, such as
gums, citric acid, or pectin, that is extracted from, isolated from, or
a fraction of an agricultural product, so that the identity of the
[[Page 13612]]
agricultural product is unrecognizable in the extract, isolate, or
fraction.
Nonsynthetic (natural). A substance that is derived from mineral,
plant, or animal matter and does not undergo a synthetic process as
defined in section 6502(21) of the Act (7 U.S.C. 6502(21)). For the
purposes of this part, nonsynthetic is used as a synonym for natural as
the term is used in the Act.
Nontoxic. Not known to cause any adverse physiological effects in
animals, plants, humans, or the environment.
Nonretail container. Any container used for shipping or storage of
an agricultural product that is not used in the retail display or sale
of the product.
Organic. A labeling term that refers to an agricultural product
produced in accordance with the Act and the regulations in this part.
Organic matter. The remains, residues, or waste products of any
organism.
Organic system plan. A plan of management of an organic production
or handling operation that has been agreed to by the producer or
handler and the certifying agent and that includes written plans
concerning all aspects of agricultural production or handling described
in the Act and the regulations in subpart C of this part.
Peer review panel. A panel of individuals who have expertise in
organic production and handling methods and certification procedures
and who are appointed by the Administrator to assist in evaluating
applicants for accreditation as certifying agents.
Person. An individual, group of individuals, contractor,
corporation, association, organization, cooperative, or other entity.
Pesticide. Any substance which alone, in chemical combination, or
in any formulation with one or more substances is defined as a
pesticide in section 2(u) of the Federal Insecticide, Fungicide, and
Rodenticide Act (7 U.S.C. 136(u) et seq).
Petition. A request to amend the National List that is submitted by
any person in accordance with this part.
Planting stock. Any plant or plant tissue, including rhizomes,
shoots, leaf or stem cuttings, roots, or tubers, used in plant
production or propagation.
Practice standard. The guidelines and requirements through which a
production or handling operation implements a required component of its
production or handling organic system plan. A practice standard
integrates a series of allowed and prohibited actions, materials, and
conditions to establish a minimum level performance for planning,
conducting, and maintaining a function, such as livestock health care
or facility pest management, essential to an organic operation.
Principal display panel. That part of a label that is most likely
to be displayed, presented, shown, or examined under customary
conditions of display for sale.
Private entity. Any domestic or foreign nongovernmental for-profit
or not-for-profit organization providing certification services.
Processing. Cooking, baking, curing, heating, drying, mixing,
grinding, churning, separating, extracting, cutting, fermenting,
eviscerating, preserving, dehydrating, freezing, or otherwise
manufacturing and includes the packaging, canning, jarring, or
otherwise enclosing food in a container.
Producer. A person who engages in the business of growing or
producing food, fiber, feed, and other agricultural-based consumer
products.
Production lot number/identifier. Identification of a product based
on the production sequence of the product showing the date, time, and
place of production used for quality control purposes.
Prohibited substance. A substance whose use in any aspect of
organic production or handling is prohibited or not provided for in the
Act or the regulations of this part.
Records. Any information in written, visual, or electronic form
that documents the activities undertaken by a producer, handler, or
certifying agent to comply with the Act and regulations in this part.
Residue testing. An official or validated analytical procedure that
detects, identifies, and measures the presence of chemical substances,
their metabolites, or degradations products in or on raw or processed
agricultural products.
Responsibly connected. Any person who is a partner, officer,
director, holder, manager, or owner of 10 percent or more of the voting
stock of an applicant or a recipient of certification or accreditation.
Retail food establishment. A restaurant; delicatessen; bakery;
grocery store; or any retail outlet with an in-store restaurant,
delicatessen, bakery, salad bar, or other eat-in or carry-out service
of processed or prepared raw and ready-to-eat-food.
Routine use of parasiticide. The regular, planned, or periodic use
of parasiticides.
Secretary. The Secretary of Agriculture or a representative to whom
authority has been delegated to act in the Secretary's stead.
Sewage sludge. A solid, semisolid, or liquid residue generated
during the treatment of domestic sewage in a treatment works. Sewage
sludge includes, but is not limited to: domestic septage; scum or
solids removed in primary, secondary, or advanced wastewater treatment
processes; and a material derived from sewage sludge. Sewage sludge
does not include ash generated during the firing of sewage sludge in a
sewage sludge incinerator or grit and screenings generated during
preliminary treatment of domestic sewage in a treatment works.
Slaughter stock. Any animal that is intended to be slaughtered for
consumption by humans or other animals.
Soil and water quality. Observable indicators of the physical,
chemical, or biological condition of soil and water, including the
presence of environmental contaminants.
State. Any of the several States of the United States of America,
its territories, the District of Columbia, and the Commonwealth of
Puerto Rico.
State certifying agent. A certifying agent accredited by the
Secretary under the National Organic Program and operated by the State
for the purposes of certifying organic production and handling
operations in the State.
State entity. Any domestic, tribal government, or foreign
governmental subdivision providing certification services.
State organic certification program. A State program that meets the
requirements of section 6506 of the Act, is approved by the Secretary,
and is designed to ensure that a product that is sold or labeled as
organically produced under the Act is produced and handled using
organic methods.
State program's governing State official. The chief executive
official of a State or, in the case of a State that provides for the
statewide election of an official to be responsible solely for the
administration of the agricultural operations of the State, such
official, who administers a State organic certification program.
Synthetic. A substance that is formulated or manufactured by a
chemical process or by a process that chemically changes a substance
extracted from naturally occurring plant, animal, or mineral sources,
except that such term shall not apply to substances created by
naturally occurring biological processes.
System of organic production and handling. A system that is
designed to produce agricultural products by the use of methods and
substances that maintain the integrity of organic
[[Page 13613]]
agricultural products until they reach the consumer. This is
accomplished by using, where possible, cultural, biological, and
mechanical methods, as opposed to using substances, to fulfill any
specific function within the system so as to: Maintain long-term soil
fertility; increase soil biological activity; ensure effective pest
management; recycle wastes to return nutrients to the land; provide
attentive care for farm animals; and handle the agricultural products
without the use of extraneous synthetic additives or processing in
accordance with the Act and regulations in this part.
Transplant. A seedling which has been removed from its original
place of production, transported, and replanted.
Tolerance. The maximum legal level of a pesticide residue in or on
a raw or processed agricultural commodity as set by the Environmental
Protection Agency under FFDCA, Section 408.
Unavoidable residual environmental contamination (UREC). Background
levels of naturally occurring or synthetic chemicals that are present
in the soil or present in organically produced agricultural products
that are below established tolerances.
Wild crop. Any plant or portion of a plant that is collected or
harvested from an area of land that is not maintained under cultivation
or other agricultural management.
Subpart B--Applicability
Sec. 205.100 What has to be certified.
(a) Except for operations exempt or excluded in Sec. 205.101, each
production or handling operation or specified portion of a production
or handling operation that produces or handles crops, livestock,
livestock products, or other agricultural products that are intended to
be sold, labeled, or represented as ``100 percent organic,''
``organic,'' or ``made with organic (specified ingredients)'' must be
certified according to the provisions of subpart E of this part and
must meet all other applicable requirements of this part.
(b) Any production or handling operation that has been certified by
a certifying agent on the date that the certifying agent first receives
its accreditation under this part shall be considered certified to the
national standards until the operation's anniversary date of
certification. Such recognition shall only be available to those
operations certified by a certifying agent that receives its
accreditation within 18 months from the date of publication of the
final rule implementing this part.
Sec. 205.101 Exemptions and exclusions from certification.
(a) Exemptions.
(1) A production or handling operation that sells agricultural
products as ``organic'' but whose gross agricultural income from
organic sales totals $5,000 or less annually is exempt from
certification under subpart E of this part and from submitting an
organic system plan for acceptance or approval under Sec. 205.201 but
must comply with the applicable organic production and handling
requirements of subpart C of this part and the labeling requirements of
Sec. 205.309.
(2) A handling operation that is a retail food establishment or
portion of a retail food establishment that handles organically
produced agricultural products but does not process them is exempt from
the requirements in this part.
(3) A handling operation or portion of a handling operation that
handles agricultural products that contain less than 50 percent organic
ingredients by total weight of the finished product (excluding water
and salt) is exempt from the requirements in this part, except:
(i) The provisions for prevention of contact of organic products
with prohibited substances set forth in Sec. 205.272 with respect to
any organically produced ingredients used in an agricultural product;
(ii) The labeling provisions of Sec. 205.309; and
(iii) The recordkeeping provisions in paragraph (c) of this
section.
(4) A handling operation or portion of a handling operation that
handles agricultural products that contain at least 50 percent organic
ingredients by total weight of the finished product (excluding water
and salt) that chooses to not use the word, ``organic,'' on any panel
other than the information panel is exempt from the requirements in
this part, except:
(i) The provisions for prevention of contact of organic products
with prohibited substances set forth in Sec. 205.272 with respect to
any organically produced ingredients used in an agricultural product;
(ii) The labeling provisions of Sec. 205.309; and
(iii) The recordkeeping provisions in paragraph (c) of this
section.
(b) Exclusions.
(1) A handling operation or portion of a handling operation is
excluded from the requirements of this part, except for the
requirements for the prevention of commingling and contact with
prohibited substances as set forth in Sec. 205.272 with respect to any
organically produced products if such operation or portion of the
operation only sells organic agricultural products labeled as ``100
percent organic,'' ``organic,'' or ``made with organic (specified
ingredients)'' that:
(i) Are packaged or otherwise enclosed in a container prior to
being received or acquired by the operation; and
(ii) Remain in the same package or container and are not otherwise
processed while in the control of the handling operation.
(2) A handling operation that is a retail food establishment or
portion of a retail food establishment that processes or prepares, on
the premises of the retail food establishment, raw and ready-to-eat
food from agricultural products that are previously labeled as ``100
percent organic,'' ``organic,'' or ``made with organic (specified
ingredients)'' is excluded from the requirements in this part, except:
(i) The requirements for the prevention of contact with prohibited
substances as set forth in Sec. 205.272; and
(ii) The labeling provisions of Sec. 205.309.
(c) Records to be maintained by exempt operations.
(1) Any handling operation exempt from certification pursuant to
paragraph (a)(3) or (a)(4) of this section must maintain records
sufficient to:
(i) Prove that ingredients identified as organic were organically
produced and handled; and
(ii) Verify quanities produced from such ingredients.
(2) Records must be maintained for no less than 3 years beyond
their creation and the operations must allow representatives of the
Secretary and the applicable State program's governing State official
access to these records for inspection and copying during normal
business hours to determine compliance with the applicable regulations
set forth in this part.
Sec. 205.102 Use of the term, ``organic.''
Any agricultural product that is sold, labeled, or represented as
``100 percent organic,'' ``organic,'' or ``made with organic (specified
ingredients)'' must be:
(a) Produced in accordance with the requirements specified in
Sec. 205.101 or Secs. 205.202 through 205.207 or Secs. 205.236 through
205.239 and all other applicable requirements of part 205;
(b) Handled in accordance with the requirements specified in
Sec. 205.101 or Secs. 205.270 through 205.272 and all other applicable
requirements of this part 205; and
(c) Produced and handled in compliance with the Federal Meat
[[Page 13614]]
Inspection Act (21 U.S.C. 601 et seq.), the Poultry Products Inspection
Act (21) U.S.C. 451 et seq.), and the Egg Products Inspection Act (21
U.S.C. 1031 et seq.), concerning meat, poultry, and egg products; the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301 et seq.); the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. 136 et
seq.); and any other applicable Federal statute and its implementing
regulations.
Sec. 205.103 Recordkeeping by certified operations.
(a) A certified operation must maintain records concerning the
production, harvesting, and handling of agricultural products that are
or that are intended to be sold, labeled, or represented as ``100
percent organic,'' ``organic,'' or ``made with organic (specified
ingredients).''
(b) Such records must:
(1) Be adapted to the particular business that the certified
operation is conducting;
(2) Fully disclose all activities and transactions of the certified
operation in sufficient detail as to be readily understood and audited;
(3) Be maintained for not less than 5 years beyond their creation;
and
(4) Be sufficient to demonstrate compliance with the Act and the
regulations in this part.
(c) The certified operation must make such records available for
inspection and copying during normal business hours by authorized
representatives of the Secretary, the applicable State program's
governing State official, and the certifying agent.
Sec. 205.104 Foreign applicants.
The regulations in this part, as applicable, apply equally to
domestic and foreign applicants for accreditation, accredited
certifying agents, domestic and foreign applicants for certification as
organic production or handling operations, and certified organic
production and handling operations unless otherwise specified.
Secs. 205.105--205.199 [Reserved]
Subpart C--Organic Production and Handling Requirements
Sec. 205.200 General.
The producer or handler of a production or handling operation
wishing to sell, label, or represent agricultural products as ``100
percent organic,'' ``organic,'' or ``made with organic (specified
ingredients)'' must comply with the applicable provisions of this
subpart. Practices implemented in accordance with this subpart must
maintain or improve the natural resources of the operation, including
soil and water quality.
Sec. 205.201 Organic production and handling system plan.
(a) The producer or handler of a production or handling operation,
except as exempt or excluded under Sec. 205.101, wishing to sell,
label, or represent agricultural products as ``100 percent organic,''
``organic,'' or ``made with organic (specified ingredients)'' must
develop an organic production or handling system plan that is agreed to
by the producer or handler and an accredited certifying agent. An
organic system plan must meet the requirements set forth in this
section to establish a system of organic production or handling. An
organic production or handling system plan must include:
(1) A description of practices and procedures to be performed and
maintained, including the frequency with which they will be performed;
(2) A list of each substance to be used as a production or handling
input, indicating its composition, source, and location(s) where it
will be used;
(3) A description of the monitoring practices and procedures to be
performed and maintained, including the frequency with which they will
be performed, to verify that the plan is effectively implemented;
(4) A description of the recordkeeping system implemented to comply
with the requirements established in Sec. 205.103;
(5) A description of practices and procedures to prevent
commingling of organic and nonorganic products and to prevent contact
of organic production and handling operations and products with
prohibited substances; and
(6) Additional information deemed necessary by the certifying agent
to evaluate compliance with the regulations.
(b) A producer may substitute a plan prepared to meet the
requirements of another Federal, State, or local government regulatory
program for the organic system plan: Provided, That, the submitted plan
meets all the requirements of this subpart.
Sec. 205.202 Land requirements.
Any field or farm parcel from which harvested crops are intended to
be sold, labeled, or represented as ``100 percent organic,''
``organic,'' or ``made with organic (specified ingredients)'' must:
(a) Have been managed in accordance with the provisions of
Secs. 205.203 through 205.206;
(b) Have had no prohibited substances, as listed in Sec. 205.600,
applied to it for a period of 3 years immediately preceding harvest of
the crop; and
(c) Have distinct, defined boundaries and buffer zones such as
runoff diversions to prevent the unintended application of a prohibited
substance to the crop or contact with a prohibited substance applied to
adjoining land that is not under organic management.
Sec. 205.203 Soil fertility and crop nutrient management practice
standard.
(a) The producer must select and implement tillage and cultivation
practices that maintain or improve the physical, chemical, and
biological condition of soil and minimize soil erosion.
(b) The producer must budget and supply crop nutrients by properly
utilizing manure or other animal and plant materials, mined mineral
substances, and substances approved in Sec. 205.601.
(c) The producer must manage animal and plant waste materials to
maintain or improve soil organic matter content in a manner that does
not contribute to contamination of crops, soil, or water by plant
nutrients, pathogenic organisms, heavy metals, or residues of
prohibited substances. Animal and plant waste materials include:
(1) Raw animal manure, which must be composted unless it is:
(i) Applied to land used for a crop not intended for human
consumption;
(ii) Incorporated into the soil not less than 120 days prior to the
harvest of a product whose edible portion has direct contact with the
soil surface or soil particles; or
(iii) Incorporated into the soil not less than 90 days prior to the
harvest of a product whose edible portion does not have direct contact
with the soil surface or soil particles;
(2) Other uncomposted plant or animal wastes, such as aged, fully
decomposed animal manure;
(3) A composted product produced in a facility in compliance with
the Natural Resources Conservation Service's practice standard for a
composting facility (Code 317); and
(4) A composted or uncomposted plant or animal waste material that
has been chemically altered by a manufacturing process: Provided, That,
the material is included on the National List of synthetic substances
allowed for use in organic crop production established in Sec. 205.601.
(d) In addition to crop rotations and plant and animal waste
materials, a producer may supply soil and crop nutrients by applying:
(1) A mined substance of low solubility;
(2) A mined substance of high solubility, when justified by soil or
crop tissue analysis;
[[Page 13615]]
(3) Ash obtained from the burning of a plant or animal material,
except as prohibited in paragraph (e) of this section: Provided, That,
the material burned has not been treated or combined with a prohibited
substance or the ash is not included on the National List of
nonsynthetic substances prohibited for use in organic crop production;
and
(4) A crop nutrient supplement included on the National List of
synthetic substances allowed for use in organic production, when
justified by soil or crop tissue analysis.
(e) The producer must not use:
(1) Any fertilizer or commercially blended fertilizer or composted
product that contains a synthetic substance not included on the
National List of synthetic substances allowed for use in organic
production;
(2) Sewage sludge (biosolids) as defined in 40 CFR part 503; and
(3) Burning as a means of disposal for crop residues produced on
the operation: Except, That, prunings from perennial crops may be
burned to suppress the spread of disease.
Sec. 205.204 Seeds and planting stock practice standard.
(a) The producer must use organically grown seeds, annual
seedlings, and planting stock: Except, That,
(1) Nonorganically produced untreated seeds and planting stock may
be used to produce an organic crop when an equivalent organically
produced variety is not commercially available;
(2) Nonorganically produced seeds and planting stock that have been
treated with a substance included on the National List of synthetic
substances allowed for use in organic crop production may be used to
produce an organic crop when an equivalent organically produced or
untreated variety is not commercially available;
(3) Nonorganically produced annual seedlings may be used to produce
an organic crop when a temporary variance has been granted in
accordance with Sec. 205.290(a)(2);
(4) Nonorganically produced planting stock to be used to produce a
perennial crop may be sold, labeled, or represented as organically
produced only after the planting stock has been maintained under a
system of organic management for a period of no less than 1 year; and
(5) Seeds, annual seedlings, and planting stock treated with
prohibited substances may be used to produce an organic crop when the
application of the materials is a requirement of Federal or State
phytosanitary regulations.
(b) The producer of an organic operation must not use seeds or
planting stock produced with excluded methods.
Sec. 205.205 Crop rotation practice standard.
The producer must implement a crop rotation including, but not
limited to, sod, cover crops, green manure crops, and catch crops that
provide the following functions that are applicable to the operation:
(a) Maintain or improve soil organic matter content;
(b) Provide for pest management in annual and perennial crops;
(c) Manage deficient or excess plant nutrients; and
(d) Provide erosion control.
Sec. 205.206 Crop pest, weed, and disease management practice
standard.
(a) The producer must use management practices to prevent crop
pests, weeds, and diseases including, but not limited to:
(1) Crop rotation and soil and crop nutrient management practices,
as provided for in Secs. 205.203 and 205.205;
(2) Sanitation measures to remove disease vectors, weed seeds, and
habitat for pest organisms; and
(3) Cultural practices that enhance crop health, including
selection of plant species and varieties with regard to suitability to
site-specific conditions and resistance to prevalent pests, weeds, and
diseases.
(b) Pest problems may be controlled through mechanical or physical
methods including, but not limited to:
(1) Augmentation or introduction of predators or parasites of the
pest species;
(2) Development of habitat for natural enemies of pests;
(3) Nonsynthetic, nontoxic controls such as lures, traps, and
repellents.
(c) Weed problems may be controlled through:
(1) Mulching with fully biodegradable materials;
(2) Mowing;
(3) Livestock grazing;
(4) Hand weeding and mechanical cultivation;
(5) Flame, heat, or electrical means; or
(6) Plastic or other synthetic mulches: Provided, That, they are
removed from the field at the end of the growing or harvest season.
(d) Disease problems may be controlled through:
(1) Management practices which suppress the spread of disease
organisms; or
(2) Application of nonsynthetic biological, botanical, or mineral
inputs.
(e) When the practices provided for in paragraphs (a) through (d)
of this section are insufficient to prevent or control crop pests,
weeds, and diseases, a biological or botanical substance or a substance
included on the National List of synthetic substances allowed for use
in organic production may be applied to prevent, suppress, or control
pests, weeds, or diseases: Provided, That, the producer implements
measures to evaluate and mitigate the effects of repetitive use of the
same or similar materials on pest resistance and shifts in pest, weed,
or disease types, and the substance is used in compliance with the
Federal Insecticide, Fungicide, and Rodenticide Act.
(f) The producer or handler of an organic operation must not use a
pest, weed, or disease control substance produced through excluded
methods.
Sec. 205.207 Wild-crop harvesting practice standard.
(a) Any area from which a wild crop that is intended to be sold,
labeled, or represented as organic is harvested must have had no
prohibited substance, as set forth in Sec. 205.600, applied to it for a
period of 3 years immediately preceding the harvest of the wild crop.
(b) A wild-crop must be harvested in a manner that ensures that
such harvesting or gathering will not be destructive to the environment
and will sustain the growth and production of the wild crop.
Secs. 205.208--205.235 [Reserved]
Sec. 205.236 Origin of livestock.
(a) Livestock or edible livestock products that are to be sold,
labeled, or represented as organic must be from livestock under
continuous organic management from birth or hatching: Except, That,
(1) Poultry. Poultry or edible poultry products must be from
poultry that has been under continuous organic management beginning no
later than the second day of life;
(2) Dairy Animals. Milk or milk products must be from animals that
have been under continuous organic management beginning no later than 1
year prior to the production of the milk or milk products that are to
be sold, labeled, or represented as organic.
(3) Nonedible products. Nonedible livestock products must be from
animals that have been under continuous organic management not less
than 1 year prior to harvest of the nonedible product.
(4) Breeder stock. Livestock used as breeder stock may be brought
from a nonorganic operation onto an organic operation at any time:
Provided, That, if such livestock are gestating and the offspring are
to be raised as organic
[[Page 13616]]
livestock, the breeder stock must be brought onto the facility prior to
the last third of pregnancy.
(b) The following are prohibited:
(1) Livestock or edible livestock products that are removed from an
organic operation and subsequently managed on a nonorganic operation
may be not sold, labeled, or represented as organically produced.
(2) Breeder or dairy stock that has not been under continuous
organic management since birth may not be sold, labeled, or represented
as organic slaughter stock; and
(3) No organism produced by excluded methods may be used for
breeding purposes or for the production of livestock products intended
to be sold, labeled, or represented as organic.
(c) The producer of an organic livestock operation must maintain
records sufficient to preserve the identity of all organically managed
animals and edible and nonedible animal products produced on the
operation.
Sec. 205.237 Livestock feed.
(a) The producer of an organic livestock operation must provide
livestock with a total feed ration composed of agricultural products,
including pasture and forage, that is organically produced and, if
applicable, organically handled: Except, That, nonagricultural products
and synthetic substances allowed under Sec. 205.603 may be used as feed
additives and supplements.
(b) The producer of an organic operation must not:
(1) Use animal drugs, including hormones, to promote growth;
(2) Provide feed supplements or additives in amounts above those
needed for adequate nutrition and health maintenance for the species at
its specific stage of life;
(3) Feed plastic pellets for roughage;
(4) Feed formulas containing urea or manure;
(5) Feed mammalian or poultry slaughter by-products to mammals or
poultry; or
(6) Use feed, feed additives, and feed supplements in violation of
the Federal Food, Drug, and Cosmetic Act.
Sec. 205.238 Livestock health care practice standard.
(a) The producer must establish and maintain preventive livestock
health care practices, including:
(1) Selection of species and types of livestock with regard to
suitability for site-specific conditions and resistance to prevalent
diseases and parasites;
(2) Provision of feedstuffs sufficient to meet nutritional
requirements, including vitamins, minerals, and other additives or
supplements;
(3) Establishment of appropriate housing, pasture conditions, and
sanitation practices to minimize the occurrence and spread of diseases
and parasites;
(4) Provision of conditions which allow for exercise, freedom of
movement, and reduction of stress appropriate to the species;
(5) Performance of physical alterations as needed to promote the
animal's welfare and in a manner that minimizes pain and stress; and
(6) Administration of vaccines and other veterinary biologics.
(b) When preventive practices and veterinary biologics are
inadequate to prevent sickness, a producer may administer synthetic
medications: Provided, That, such medications are allowed under
Sec. 205.603. Parasiticides allowed under Sec. 205.603 may be used on
(1) Breeder stock, when used prior to the last third of gestation
for progeny that are to be sold, labeled, or represented as organically
produced; and
(2) Dairy stock, when used a minimum of 90 days prior to the
production of milk or milk products that are to be sold, labeled, or
represented as organic.
(c) The producer of an organic livestock operation must not:
(1) Sell, label, or represent as organic any animal or edible
product derived from any animal treated with antibiotics, any substance
that contains a synthetic substance not allowed under Sec. 205.603, or
any substance that contains a nonsynthetic substance prohibited in
Sec. 205.604.
(2) Administer any animal drug, other than vaccinations, in the
absence of illness;
(3) Administer hormones;
(4) Administer synthetic parasiticides on a routine basis;
(5) Administer synthetic parasiticides to slaughter stock;
(6) Administer animal drugs in violation of the Federal Food, Drug,
and Cosmetic Act; or
(7) Withhold medical treatment from a sick animal in an effort to
preserve its organic status. All appropriate medications must be used
to restore an animal to health when methods acceptable to organic
production fail. Livestock treated with a prohibited substance must be
clearly identified and shall not be sold, labeled, or represented as
organically produced.
Sec. 205.239 Livestock living conditions.
(a) 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 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;
(3) Appropriate clean, dry bedding. If the bedding is typically
consumed by the animal species, it must comply with the feed
requirements of Sec. 205.237;
(4) Shelter designed to allow for:
(i) Natural maintenance, comfort behaviors, and opportunity to
exercise;
(ii) Temperature level, ventilation, and air circulation suitable
to the species; and
(iii) Reduction of potential for livestock injury;
(b) The producer of an organic livestock operation may provide
temporary confinement for an animal because of:
(1) Inclement weather;
(2) The animal's stage of production;
(3) Conditions under which the health, safety, or well being of the
animal could be jeopardized; or
(4) Risk to soil or water quality.
(c) The producer of an organic livestock operation must manage
manure in a manner that does not contribute to contamination of crops,
soil, or water by plant nutrients, heavy metals, or pathogenic
organisms and optimizes recycling of nutrients.
Secs. 205.240--205.269 [Reserved]
Sec. 205.270 Organic handling requirements.
(a) Mechanical or biological methods, including, but not limited
to, cooking, baking, heating, drying, mixing, grinding, churning,
separating, extracting, slaughtering, cutting, fermenting,
eviscerating, preserving, dehydrating, freezing, chilling, or otherwise
manufacturing, and the packaging, canning, jarring, or otherwise
enclosing food in a container may be used to process an agricultural
product intended to be sold, labeled, or represented as ``100 percent
organic,'' ``organic,'' or ``made with organic (specified
ingredients)'' for the purpose of retarding spoilage or otherwise
preparing the agricultural product for market.
(b) Nonagricultural substances allowed under Sec. 205.605 and
nonorganically produced agricultural products allowed under
Sec. 205.606 may be used in or on a processed agricultural product
intended to be sold, labeled, or represented as ``organic'' or ``made
with organic (specified ingredients).''
(c) The handler of an organic handling operation must not use in or
on an
[[Page 13617]]
agricultural product intended to be sold, labeled, or represented as
``100 percent organic,'' ``organic,'' or ``made with organic (specified
ingredients)'':
(1) Ionizing radiation for any purpose;
(2) An ingredient produced with excluded methods; or
(3) A volatile synthetic solvent or any other synthetic processing
aid not allowed under Sec. 205.605 as ingredients in or on processed
products labeled as organic or made with organic ingredients.
Sec. 205.271 Facility pest management practice standard.
(a) The producer or handler of an organic facility must use
management practices to prevent pests, including, but not limited to:
(1) Removal of pest habitat, food sources, and breeding areas;
(2) Prevention of access to handling facilities; or
(3) Management of environmental factors, such as temperature,
light, humidity, atmosphere, and air circulation to prevent pest
reproduction.
(b) Pests may be controlled through:
(1) Augmentation or introduction of predators or parasites for the
pest species;
(2) Mechanical or physical controls including, but not limited to,
traps, light, or sound; or
(3) Nontoxic, nonsynthetic controls, such as lures and repellents.
(c) If the practices provided for in paragraphs (a) and (b) of this
section are not effective to prevent or control facility pests, a
nonsynthetic biological or botanical substance or a synthetic substance
may be applied to prevent, suppress, or control pests: Provided, That,
the substance is applied in the manner consistent with its label as
approved by the Federal, State, and local regulatory authorities.
(d) The handler of an organic handling operation who applies a
nonsynthetic biological or botanical substance or a synthetic substance
for the prevention or control of a pest must include in the organic
handling plan a list of all measures taken or intended to be taken to
prevent contact between the substance and any ingredient or finished
product intended to be sold, labeled, or represented as ``organic'' or
``made with organic (specified ingredients).''
(e) The handler of an organic handling operation who applies a
nonsynthetic biological or botanical substance or a synthetic substance
for the prevention or control of a pest must include in the organic
handling plan an evaluation of the effects of repetitive use of the
same or similar materials on pest resistance and shifts in pest types.
Sec. 205.272 Commingling and contact with prohibited substance
prevention practice standard.
(a) The handler of an organic handling operation must implement
measures necessary to prevent the commingling of organic and nonorganic
products and protect organic products from contact with prohibited
substances.
(b) The following methods and substances are prohibited for use in
the handling of any agricultural product intended to be sold, labeled,
or represented as ``100 per cent organic,'' ``organic,'' or ``made with
organic (specified ingredients)'':
(1) Packaging materials and storage containers or bins that contain
a synthetic fungicide, preservative, or fumigant;
(2) The use or reuse of any bag or container that had previously
been in contact with any substance in such a manner as to compromise
the organic integrity of any products unless, after use for
conventional products, the reusable bin or container has been
thoroughly cleaned and poses no risk of prohibited materials contacting
the organic product.
Secs. 205.273--205.289 [Reserved]
Sec. 205.290 Temporary variances.
(a) Temporary variances from the requirements in Secs. 205.203
through 205.207, 205.236 through 205.239, and 205.270 through 205.272
may be established by the Administrator for the following reasons:
(1) Natural disasters declared by the Secretary;
(2) Damage caused by wind, flood, excessive moisture, tornado,
earthquake, fire, or other business interruption; and
(3) Practices used for the purpose of conducting research or trials
of techniques, varieties, or ingredients used in organic production or
handling.
(b) A certifying agent may recommend in writing to the
Administrator a temporary variance from a standard set forth in subpart
C of this part for organic production or handling operations: Provided,
That, such variance may only be recommended for the reasons listed in
paragraph (a) of this section.
(c) The Administrator will provide written notification to
certifying agents upon establishment of a temporary variance applicable
to the certifying agent's certified production or handling operations.
When establishing a temporary variance, the Administrator shall specify
the period of time it shall remain in effect, subject to extension as
the Administrator deems necessary.
(d) A certifying agent, upon notification from the Administrator of
the establishment of a temporary variance, must notify each production
or handling operation it certifies within the affected geographical
area or the individual organic production or handling operation(s) to
which the temporary variance applies.
(e) Temporary variances may not be requested for any practice,
material, or procedure otherwise prohibited in these regulations.
Subpart D--Labels, Labeling, and Market Information
Sec. 205.300 Use of the term, ``organic.''
(a) The term, ``organic,'' may only be used on labels and in
labeling of raw or processed agricultural products, including
ingredients, that have been produced and handled in accordance with the
regulations in this part.
(b) Products for export, produced and certified to foreign national
organic standards or foreign contract buyer requirements, may be
labeled in accordance with the organic labeling requirements of the
receiving country or contract buyer: Provided, That, the shipping
containers and shipping documents meet the labeling requirements
specified in Sec. 205.306(c).
(c) Products produced in a foreign country and exported for sale in
the United States must be certified pursuant to subpart E of this part
and labeled pursuant to this subpart D.
Sec. 205.301 Product composition.
(a) Products sold, labeled, or represented as ``100 percent
organic.'' A raw or processed agricultural product sold, labeled, or
represented as ``100 percent organic'' must contain (by weight or fluid
volume, excluding water and salt) not less than 100 percent organically
produced raw or processed agricultural product. No such product or
product ingredient may contain or be created using excluded methods or
be produced using sewage sludge or ionizing radiation. If labeled as an
organic food product, such product must be labeled pursuant to
Sec. 205.303.
(b) Products sold, labeled, or represented as ``organic.'' A raw or
processed agricultural product sold, labeled, or represented as
``organic'' must contain (by weight or fluid volume, excluding water
and salt) not less than 95 percent organically produced raw or
processed agricultural product. Any remaining product ingredients must
consist of nonagricultural substances or nonorganically produced
agricultural products approved in the National List of Allowed and
Prohibited Substances in subpart G of this part and must not
[[Page 13618]]
contain or be created using excluded methods or be produced using
sewage sludge or ionizing radiation. If labeled as an organic food
product, such products must be labeled pursuant to Sec. 205.303.
(c) Products sold, labeled, or represented as ``made with organic
(specified ingredients).'' Multiingredient agricultural product sold,
labeled, or represented as ``made with organic (specified
ingredients)'' must contain (by weight or fluid volume, excluding water
and salt) at least 50 percent organically produced agricultural
products which are produced and handled pursuant to requirements in
subpart C of this part. The nonorganic ingredients must not contain or
be created using excluded methods or be produced using sewage sludge or
ionizing radiation. If labeled as an organic food product, such
products must be labeled pursuant to Sec. 205.304.
(d) Products with less than 50 percent organic ingredients. The
organic ingredients in multiingredient agricultural product containing
less than 50 percent organic ingredients (by weight or fluid volume,
excluding water and salt) must be produced and handled pursuant to
requirements in subpart C of this part. The nonorganic ingredients may
be produced and handled without regard to the requirements of this
part. Multiingredient agricultural product containing less than 50
percent organically produced ingredients may represent the organic
nature of the product only as provided in Sec. 205.305.
(e) All ingredients identified as ``organic'' in the ingredient
statement of any product must not:
(1) Be produced using excluded methods or products of excluded
methods as ingredients or processing aids;
(2) Be produced using sewage sludge;
(3) Be processed using ionizing radiation;
(4) Be processed using processing aids not approved on the National
List of Allowed and Prohibited Substances in subpart G of this part:
Except, That, products labeled as ``100 percent organic,'' if
processed, must be processed using no processing aids;
(5) Contain sulfites, nitrates, or nitrites added during the
production or handling process;
(6) Be produced using nonorganic ingredients when organic
ingredients are not available; or
(7) Include organic and nonorganic forms of the same ingredient.
Sec. 205.302 Calculating the percentage of organically produced
ingredients.
(a) The percentage of all organically produced ingredients in an
agricultural product sold, labeled, or represented as ``100 percent
organic,'' ``organic,'' or ``made with organic (specified
ingredients),'' or that include organic ingredients must be calculated
by:
(1) Dividing the total net weight (excluding water and salt) of
combined organic ingredients by the total weight (excluding water and
salt) of the finished product.
(2) Dividing the fluid volume of all organic ingredients (excluding
water and salt) by the fluid volume of the finished product (excluding
water and salt) if the product and ingredients are liquid. If the
liquid product is identified on the principal display panel or
information panel as being reconstituted from concentrates, the
calculation should be made on the basis of single-strength
concentrations of the ingredients and finished product.
(3) For products containing organic ingredients in both solid and
liquid form, dividing the combined weight of the solid ingredients and
the weight of the liquid ingredients (excluding water and salt) by the
total weight (excluding water and salt) of the finished product.
(b) The percentage of all organically produced ingredients in an
agricultural product must be rounded down to the nearest whole number
and indicated on the information panel above the ingredient statement
with the words, ``contains X percent organic ingredients.''
(c) The percentage must be calculated by the handler who affixes
the label on the consumer package and verified by the certifying agent
of the handler.
Sec. 205.303 Packaged products labeled ``100 percent organic'' or
``organic.''
(a) Agricultural products in packages described in Sec. 205.301(a)
and (b) may display, on the principal display panel, information panel,
and any other panel of the package and on any labeling or market
information concerning the product, the following terms:
(1) The term, ``100 percent organic'' or ``organic,'' as
applicable, to modify the name of the product;
(2) The USDA Seal;
(3) The seal, logo, or other identifying mark of the certifying
agent which certified the production or handling operation producing
the finished product and any other certifying agent which certified
production or handling operations producing raw organic product or
organic ingredients used in the finished product: Provided, That, the
handler producing the finished product maintain records, pursuant to
this part, verifying organic certification of the operations producing
such ingredients, and: Provided further, That, such seals or marks are
not, individually, displayed more prominently than the USDA Seal.
(b) Agricultural products in packages described in Sec. 205.301(a)
and (b) must:
(1) On the information panel of multiingredient products and
consistent with the labeling requirements of the Food and Drug
Administration, declare the total percentage of organic ingredients in
the product.
(2) In the ingredient statement, modify each organic ingredient of
multiingredient products with the word, ``organic'': Except, That,
ingredients in multiingredient products labeled ``100 percent organic''
are not required to modified with the term ``organic.'' Any water or
salt included as an ingredient will not be identified as organic.
(3) On the information panel, below the information identifying the
handler or distributor of the product and preceded by the statement,
``Certified organic by * * *,'' or similar phrase, identify the name of
the certifying agent that certified the handler of the finished
product: Except, That, the business address or telephone number of the
certifying agent may be included in such label.
Sec. 205.304 Packaged products labeled ``made with organic (specified
ingredients).''
(a) Agricultural products in packages described in Sec. 205.301(c)
may display on the principal display panel, information panel, and any
other panel and on any labeling or market information concerning the
product:
(1) The statement, ``made with organic (specified ingredients)'':
Provided, That, display of the statement is consistent with labeling
requirements of the Food and Drug Administration and:
(i) Does not list more than three organic ingredients;
(ii) Does not exceed one-half the size of the largest type size on
the panel; and
(iii) Appears in its entirety in the same type size, style, and
color without highlighting; and
(2) The seal, logo, or other identifying mark of the certifying
agent that certified the handler of the finished product.
(b) Agricultural products in packages described in Sec. 205.301(c)
must:
(1) On the information panel and consistent with the labeling
requirements of the Food and Drug Administration, declare the total
percentage of organic ingredients in the product.
[[Page 13619]]
(2) In the ingredient statement, modify each organic ingredient
with the word, ``organic.'' Any water or salt included as an ingredient
will not be identified as organic.
(3) On the information panel, below the information identifying the
handler or distributor of the product and preceded by the statement,
``Certified organic by * * *,'' or similar phrase, identify the name of
the certifying agent that certified the handler of the finished
product: Except, That, the business address or telephone number of the
certifying agent may be included in such label.
(c) Agricultural products in packages described in Sec. 205.301(c)
must not display the USDA Seal.
Sec. 205.305 Multiingredient packaged products with less than 50
percent organic ingredients.
(a) Agricultural products with less than 50 percent organic
ingredients must:
(1) On the information panel and consistent with the labeling
requirements of the Food and Drug Administration, declare the total
percentage of organic ingredients in the product.
(2) In the ingredient statement, modify each organic ingredient
with the word, ``organic.''
(b) Agricultural products with less than 50 percent organic
ingredients must not display:
(1) The USDA Seal and
(2) Any certifying agent's seal, logo, or other identifying mark.
Sec. 205.306 Labeling of nonretail containers used for only shipping
or storage of raw or processed agricultural products labeled as ``100
percent organic,'' ``organic,'' or ``made with organic (specified
ingredients).''
(a) Nonretail containers used only to ship or store raw or
processed agricultural product labeled as containing organic
ingredients may display the following terms or marks:
(1) The name and contact information of the certifying agent which
certified the handler which assembled the final product;
(2) Identification of the product as ``organic product'';
(3) Special handling instructions needed to maintain the organic
integrity of the product;
(4) The USDA Seal;
(5) The seal, logo, or other identifying mark of the certifying
agent that certified the organic production or handling operation that
produced or handled the finished product.
(b) If not required under other Federal labeling regulations,
nonretail containers used to ship or store raw or processed
agricultural product labeled as containing organic ingredients must
display the production lot number of the product, if applicable.
(c) Shipping containers of domestically produced product labeled as
organic intended for export to international markets may be labeled
consistent with any shipping container labeling requirements of the
foreign country of destination or the container labeling specifications
of a foreign contract buyer: Provided, That, the shipping containers
and shipping documents accompanying such organic product be clearly
marked ``For export only'' and: Provided further, That, proof of such
container marking and export must be maintained by the handler,
consistent with recordkeeping requirements for exempt and excluded
operations under Sec. 205.101.
Sec. 205.307 Agricultural products in other than packaged form at the
point of retail sale that are sold, labeled, or represented as ``100
percent organic'' or ``organic.''
(a) Agricultural products labeled or represented as ``100 percent
organic'' or ``organic'' in retail display, labeling, and display
containers may use the term, ``100 percent organic'' or ``organic,'' as
applicable, to modify the name of the product: Provided, That, such
products are assembled in a manufacturing facility certified in
accordance with the requirements of this part; and, Provided further,
Than, the word, ``organic,'' is used to modify the organic ingredients
listed in the ingredient statement of the products.
(b) The retail display, labeling, and display containers may use:
(1) The USDA Seal;
(2) The seal, logo, or other identifying mark of the certifying
agent that certified the production or handling operation producing the
finished product and any other certifying agent which certified
operations producing raw organic product or organic ingredients used in
the finished product: Provided, That, such seals or marks are not,
individually, displayed more prominently than the USDA Seal.
Sec. 205.308 Agricultural products in other than packaged form at the
point of retail sale that are sold, labeled, or represented as ``made
with organic (specified ingredients).''
(a) Retail displays, display containers, and market information of
agricultural products containing between 50 and 95 percent organic
ingredients may use the phrase, ``made with organic (specified
ingredients)'' Provided, That, such products have been assembled at a
manufacturing facility certified in accordance with the requirements of
this part, and:
(1) Such statement does not list more than three organic
ingredients, and
(2) In any such display of the product's ingredient statement, the
organic ingredients must be modified as ``organic.''
(b) Such agricultural products labeled as ``made with organic
(specified ingredients)'' in retail displays, display containers, and
market information may display the certifying agent's seal, logo, or
other identifying mark.
Sec. 205.309 Agricultural products produced on an exempt or excluded
operation.
(a) An agricultural product organically produced or handled on an
exempt or excluded operation must not:
(1) Display the USDA Seal or any certifying agent's seal or other
identifying mark which represents that the production or handling
operation as a certified organic operation, or
(2) Be represented as a certified organic product to any buyer.
(b) An agricultural product organically produced or handled on an
exempt or excluded operation may be identified as an organic product or
organic ingredient in a multiingredient product produced by the exempt
or excluded operation. Such product or ingredient must not be
identified as ``organic'' in a product processed by others.
(c) Such product is subject to labeling requirements specified in
paragraph (a) of Sec. 205.300, and paragraphs (e)(1) through (e)(7) of
Sec. 205.301.
Sec. 205.310 USDA Seal.
(a) The USDA Seal described in paragraphs (b) and (c) of this
section may be used only for agricultural products (raw or processed)
described in Sec. 205.301(a) and (b).
(b) The USDA Seal must replicate the form and design of the example
in figure 1 and must be printed legibly and conspicuously:
(1) On a white, light colored, or transparent background with
contrasting dark color words and shield outline or on a dark colored
background with contrasting white or light colored words and shield
outline; or
(2) On a white background with dark blue colored words and red
shield outline.
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[GRAPHIC] [TIFF OMITTED] TP13MR00.000
BILLING CODE 3410-02-C
Subpart E--Certification
Sec. 205.400 General requirements for certification.
A person seeking to receive or maintain organic certification under
the regulations in this part must:
(a) Comply with the Act and applicable organic production and
handling regulations of this part;
(b) Establish, implement, and update annually an organic production
or handling system plan that is submitted to an accredited certifying
agent as provided for in Sec. 205.200;
(c) Permit on-site inspections with complete access to the
production or handling operation, including noncertified areas and
structures, by the certifying agent as provided for in Sec. 205.403;
(d) Maintain all records applicable to the organic operation for
not less than 5 years beyond their creation and allow authorized
representatives of the Secretary, the applicable State program's
governing State official, and the certifying agent access to such
records during normal business hours for review and copying to
determine compliance with the Act and the regulations in this part, as
provided for in Sec. 205.104;
(e) Submit the applicable fees charged by the certifying agent; and
(f) Immediately notify the certifying agent concerning any:
(1) Application, including drift, of a prohibited substance to any
field, production unit, site, facility, livestock, or product that is
part of an operation; and
(2) Change in a certified operation or any portion of a certified
operation that may affect its compliance with the Act and the
regulations in this part.
Sec. 205.401 Application for Certification.
A person seeking certification of a production or handling
operation under this subpart must submit a request for certification to
a certifying agent. The request must include the following information:
(a) An organic production or handling system plan, as required in
Sec. 205.200;
(b) The name of the person completing the application; the
applicant's business name, address, and telephone number; and, when the
applicant is a corporation, the name, address, and telephone number of
the person authorized to act on the applicant's behalf.
(c) The name(s) of any organic certifying agent(s) to which
application has previously been made, the year(s) of application, and
the outcome of the application(s) submission, including a copy of any
notification of noncompliance or denial of certification issued to the
applicant for certification and a description of the actions taken by
the applicant to correct the deficiencies noted in the notification of
noncompliance, including evidence of such correction and;
(d) Other information necessary to determine compliance with the
Act and the regulations in this part.
Sec. 205.402 Review of application.
(a) Upon acceptance of an application for certification a
certifying agent must:
(1) Review the application to ensure completeness pursuant to
Sec. 205.401;
(2) Determine by a review of the application materials whether the
applicant appears to comply or may be able to comply with the
applicable requirements of subpart C of this part;
(3) Verify that an applicant who previously applied to another
certifying agent and received a notification of noncompliance, pursuant
to Sec. 205.405(a), has submitted documentation to support the
correction of any deficiencies identified in such notification, as
required in Sec. 205.405(b); and
(4) Schedule an on-site inspection of the operation to determine
whether the applicant qualifies for certification if the review of
application materials reveals that the production or handling operation
may be in compliance with the applicable requirements of subpart C of
this part.
(b) The certifying agent shall communicate to the applicant its
findings on the review of application materials specified in
Sec. 205.402(a).
(c) The applicant may withdraw its application at any time. An
applicant who withdraws its application shall be liable for the costs
of services provided up to the time of withdrawal of its application.
An applicant that voluntarily withdrew its application prior to the
issuance of a notice of noncompliance will not be issued a notice of
noncompliance. Similarly, an applicant that voluntarily withdrew its
application prior to the issuance of a notice of certification denial
will not be issued a notice of certification denial.
Sec. 205.403 On-site inspections.
(a) On-site inspections.
(1) A certifying agent must conduct an initial on-site inspection
of each production unit, facility, and site that is included in an
operation for which certification is requested and an on-site
inspection of each certified operation annually thereafter, for the
purpose of determining whether to approve the request for certification
or whether the certification of the operation should continue.
(2)(i) A certifying agent may conduct additional on-site
inspections of applicants for certification and certified operations to
determine compliance with the Act and the regulations in this part.
(ii) The Administrator or State program's governing State official
may require that additional inspections be performed by the certifying
agent for the purpose of determining compliance with the Act and the
regulations in this part.
(iii) Additional inspections may be announced or unannounced at the
discretion of the certifying agent or as required by the Administrator
or State program's governing State official.
(b) Scheduling. The initial on-site inspection must be conducted
within a reasonable time following a determination that the applicant
appears to comply or may be able to comply with the requirements of
subpart C of this part. On-site inspections must be conducted when the
applicant or an authorized representative of the applicant who is
knowledgeable about the operation is present and at a time when land,
facilities, and activities that demonstrate the operation's compliance
with or capability to comply with the applicable provisions of subpart
C of this part can be observed, except that this requirement does not
apply to unannounced on-site inspections.
(c) Verification of information. The on-site inspection of an
operation must verify:
(1) The operation's compliance or capability to comply with the Act
and the regulations in this part;
(2) That the information, including the organic production or
handling system plan, provided in accordance with Secs. 205.401,
205.406, and 205.200, accurately reflects the practices used or to be
used by the applicant for
[[Page 13621]]
certification or by the certified operation;
(3) That prohibited substances have not been and are not being
applied to the operation through means which, at the discretion of the
certifying agent, may include the collection and testing of soil;
water; waste; seeds; plant tissue; and plant, animal, and processed
products samples.
(d) Exit interview. The inspector must conduct an exit interview
with an authorized representative of the inspected operation to confirm
the accuracy and completeness of inspection observations and
information gathered during the on-site inspection. The inspector must
also address the need for any additional information as well as any
issues of concern.
Sec. 205.404 Approval of certification.
(a) Within a reasonable time after completion of the initial on-
site inspection, a certifying agent must review the on-site inspection
report, the results of any analyses for substances conducted, and any
additional information requested from or supplied by the applicant. If
the certifying agent determines that the organic system plan and all
procedures and activities of the applicant's operation are in
compliance with the requirements of this part and that the applicant is
able to conduct operations in accordance with the plan, the agent shall
approve certification. The approval may include restrictions as a
condition of continued certification.
(b) The certifying agent must issue a certificate of organic
operation which specifies the:
(1) Name and address of the certified operation;
(2) Effective date of certification;
(3) Categories of organic operation, including crops, wild crops,
livestock, or processed products produced by the certified operation;
and
(4) Name, address, and telephone number of the certifying agent.
(c) Once certified, a production or handling operation's organic
certification continues in effect until surrendered by the organic
operation or suspended or revoked by the certifying agent, the State
program's governing State official, or the Administrator.
Sec. 205.405 Denial of certification.
(a) When the certifying agent has reason to believe, based on a
review of the information specified in Sec. 205.402 or Sec. 205.404,
that an applicant for certification is not able to comply or is not in
compliance with the requirements of this part, the certifying agent
must provide a written notification of noncompliance to the applicant
pursuant to Sec. 205.662(a). When correction of a noncompliance is not
possible, a notification of noncompliance and a notification of denial
of certification may be combined in one notification.
(b) Upon receipt of such notification of noncompliance, the
applicant may:
(1) Correct deficiencies and submit a description of the corrective
actions taken with supporting documentation to the certifying agent;
(2) Correct deficiencies and submit a new application to another
certifying agent: Provided, That, the applicant must include a complete
application, the notification of noncompliance received from the first
certifying agent, and a description of the corrective actions taken
with supporting documentation; or
(3) Submit written information to rebut the noncompliance described
in the notification of noncompliance.
(c) After issuance of a notification of noncompliance, the
certifying agent must:
(1) Evaluate the applicant's corrective actions taken and
supporting documentation submitted or the written rebuttal, conduct an
on-site inspection if necessary, and;
(i) When the corrective action or rebuttal is sufficient for the
applicant to qualify for certification, issue the applicant an approval
of certification pursuant to Sec. 205.404; or
(ii) When the corrective action or rebuttal is not sufficient for
the applicant to qualify for certification, issue the applicant a
written notice of denial of certification.
(2) Issue a written notice of denial of certification to an
applicant who fails to respond to the notification of noncompliance.
(3) Provide notice of approval or denial to the Administrator,
pursuant to Sec. 205.501(a)(14).
(d) A notice of denial of certification must state the reason(s)
for denial and the applicant's right to:
(1) Reapply for certification pursuant to Secs. 205.401 and
205.405(e);
(2) Request mediation pursuant to Sec. 205.663 or, if applicable,
pursuant to a State program; or
(3) File an appeal pursuant to Sec. 205.681 or, if applicable,
pursuant to a State program of the denial of certification.
(e) An applicant for certification who has received a written
notification of noncompliance or a written notice of denial of
certification may apply for certification again at any time with any
certifying agent, in accordance with Secs. 205.401 and 205.405(e). When
such applicant submits a new application to a certifying agent other
than the agent who issued the notification of noncompliance or notice
of denial of certification, the applicant for certification must
include a copy of the notification of noncompliance or notice of denial
of certification and a description of the actions taken, with
supporting documentation, to correct the deficiencies noted in the
notification of noncompliance.
(f) A certifying agent who receives a new application for
certification, which includes a notification of noncompliance or a
notice of denial of certification, must treat the application as a new
application and begin a new application process pursuant to
Sec. 205.402.
(g) Notwithstanding paragraph (a) of this section, if a certifying
agent has reason to believe that an applicant for certification has
willfully made a false statement or otherwise purposefully
misrepresented the applicant's operation or its compliance with the
certification requirements pursuant to this part, the certifying agent
may deny certification pursuant to paragraph (c)(1)(ii) of this section
without first issuing a notification of noncompliance.
Sec. 205.406 Continuation of certification.
(a) To continue certification, a certified operation must annually
submit the following information, as applicable, to the certifying
agent:
(1) An updated organic production or handling system plan which
includes:
(i) A summary statement, supported by documentation, detailing any
deviations from, changes to, modifications to, or other amendments made
to the previous year's organic system plan during the previous year;
and
(ii) Any additions or deletions to the previous year's organic
system plan, intended to be undertaken in the coming year, detailed
pursuant to Sec. 205.200;
(2) Any additions to or deletions from the information required
pursuant to Sec. 205.401(b); and (3) Other information as deemed
necessary by the certifying agent to determine compliance with the Act
and the regulations in this part.
(b) Following the receipt of the information specified in paragraph
(a) of this section, the certifying agent shall arrange and conduct an
on-site inspection of the certified operation, pursuant to
Sec. 205.403.
(c) If the certifying agent has reason to believe, based on the on-
site inspection and a review of the information specified in
Sec. 205.404, that a certified operation is not complying with the
requirements of the Act and the
[[Page 13622]]
regulations in this part, the certifying agent shall provide a written
notification of noncompliance to the operation in accordance with
Sec. 205.662.
(d) If the certifying agent determines that the certified operation
is complying with the Act and the regulations in this part and that any
of the information specified on the certificate of organic operation
has changed, the certifying agent must issue an updated certificate of
organic operation pursuant to Sec. 205.404(b).
Secs. 205.407-205.499 [Reserved]
Subpart F--Accreditation of Certifying Agents
Sec. 205.500 Areas and duration of accreditation.
(a) The Administrator shall accredit a qualified domestic or
foreign applicant in the areas of crops, livestock, wild crops, or
handling or any combination thereof to certify a domestic or foreign
production or handling operation as a certified operation.
(b) Accreditation shall be for a period of 5 years from the date of
approval of accreditation pursuant to Sec. 205.506.
(c) In lieu of accreditation under paragraph (a) of this section,
USDA will accept a foreign certifying agent's accreditation to certify
organic production or handling operations if:
(1) USDA determines, upon the request of a foreign government, that
the standards under which the foreign government authority accredited
the foreign certifying agent meet the requirements of this part; or
(2) The foreign government authority that accredited the foreign
certifying agent acted under an equivalency agreement negotiated
between the United States and the foreign government.
Sec. 205.501 General requirements for accreditation.
(a) A private or State entity accredited as a certifying agent
under this subpart must:
(1) Have sufficient expertise in organic production or handling
techniques to fully comply with and implement the terms and conditions
of the organic certification program established under the Act and the
regulations in this part;
(2) Demonstrate the ability to fully comply with the requirements
for accreditation set forth in this subpart;
(3) Carry out the provisions of the Act and the regulations in this
part, including the provisions of Secs. 205.402 through 205.406 and
Sec. 205.670;
(4) Use a sufficient number of adequately trained personnel,
including inspectors and certification review personnel, to comply with
and implement the organic certification program established under the
Act and the regulations in subpart E of this part;
(5) Ensure that its responsibly connected persons, employees, and
contractors with inspection, analysis, and decision-making
responsibilities have sufficient expertise in organic production or
handling techniques to successfully perform the duties assigned.
(6) Conduct an annual performance appraisal for each inspector used
by the certifying agent and implement measures to correct any
deficiencies in compliance with the Act and the regulations in this
part that are identified in the appraisal;
(7) Have an annual program evaluation of its certification
activities conducted by the certifying agent's staff, an outside
auditor, or a consultant who has expertise to conduct such evaluations
and implement measures to correct any deficiencies in compliance with
the Act and the regulations in this part that are identified in the
evaluation;
(8) Provide sufficient information to persons seeking certification
to enable them to comply with the applicable requirements of the Act
and the regulations in this part;
(9) Maintain all records pursuant to Sec. 205.510(b) and make all
such records available for inspection and copying during normal
business hours by authorized representatives of the Secretary and the
applicable State program's governing State official;
(10) Maintain strict confidentiality with respect to its clients
under the applicable organic certification program and not disclose to
third parties (with the exception of the Secretary or the applicable
State program's governing State official or their authorized
representatives) any business-related information concerning any client
obtained while implementing the regulations in this part, except as
provided for in Sec. 205.504(b)(5);
(11) Prevent conflicts of interest by:
(i) Not certifying a production or handling operation if the
certifying agent or a responsibly connected party of such certifying
agent has or has held a commercial interest in the production or
handling operation, including an immediate family interest or the
provision of consulting services, within the 12-month period prior to
the application for certification;
(ii) Excluding any person, including contractors, with conflicts of
interest from work, discussions, and decisions in all stages of the
certification process and the monitoring of certified production or
handling operations for all entities in which such person has or has
held a commercial interest, including an immediate family interest or
the provision of consulting services, within the 12-month period prior
to the application for certification;
(iii) Not permitting any employee, inspector, contractor, or other
personnel to accept payment, gifts, or favors of any kind, other than
prescribed fees, from any business inspected, except that a certifying
agent that is a not-for-profit organization with an Internal Revenue
Code tax exemption, or in the case of a foreign certifying agent a
comparable recognition of not-for-profit status from its government,
may accept voluntary labor from certified operations;
(iv) Not providing advice concerning organic practices or
techniques to any certification applicant or certified operation for a
fee, other than as part of the fees under the applicable certification
program established under the Act; and
(v) Requiring all persons identified in Sec. 205.504(a)(2) to
complete an annual conflict of interest disclosure report.
(12) Accept the certification decisions made by another USDA-
accredited certifying agent as equivalent to its own;
(13) Refrain from making false or misleading claims about its
accreditation status, the USDA accreditation program for certifying
agents, or the nature or qualities of products labeled as organically
produced;
(14) Submit to the Administrator:
(i) A copy of any notice of denial of certification issued pursuant
to Sec. 205.405, notification of noncompliance, notification of
noncompliance correction, notification of proposed suspension or
revocation, and notification of suspension or revocation sent pursuant
to Sec. 205.662, simultaneously with its issuance and
(ii) On a quarterly calender basis, the name, address, and
telephone number of each operation granted certification;
(15) Charge applicants for certification and certified production
and handling operations only those fees and charges that it has filed
with the Administrator;
(16) Pay and submit fees to AMS in accordance with Sec. 205.640;
and
(17) Comply with, implement, and carry out any other terms and
conditions determined by the Administrator to be necessary.
(b) A private or State entity accredited as a certifying agent
under this subpart may establish a seal, logo, or other identifying
mark to be used by production and handling operations certified by the
certifying agent to indicate affiliation with the certifying
[[Page 13623]]
agent: Provided, That, the certifying agent:
(1) Does not require use of its seal, logo, or other identifying
mark on any product sold, labeled, or represented as organically
produced as a condition of certification and
(2) Does not require compliance with any production or handling
practices other than those provided for in the Act and the regulations
in this part as a condition of use of its identifying mark: Provided,
That, this provision does not apply to States with more restrictive
requirements approved by the Secretary or private entity certifying
agents certifying production and handling operations within States with
more restrictive requirements approved by the Secretary.
(c) A private entity accredited as a certifying agent must:
(1) Hold the Secretary harmless for any failure on the part of the
certifying agent to carry out the provisions of the Act and the
regulations in this part;
(2) Furnish reasonable security, in an amount and according to such
terms as the Administrator may by regulation prescribe, for the purpose
of protecting the rights of production and handling operations
certified by such certifying agent under the Act and the regulations in
this part; and
(3) Transfer to the Administrator and make available to any
applicable State program's governing State official all records or
copies of records concerning the person's certification activities in
the event that the certifying agent dissolves or loses its
accreditation.
(d) No private or State entity accredited as a certifying agent
under this subpart shall exclude from participation in or deny the
benefits of the National Organic Program to any person due to
discrimination because of race, color, national origin, gender,
religion, age, disability, political beliefs, sexual orientation, or
marital or family status.
Sec. 205.502 Applying for accreditation.
(a) A private or State entity seeking accreditation as a certifying
agent under this subpart must submit an application for accreditation
which contains the applicable information and documents set forth in
Secs. 205.503 through 205.505 and the fees required in Sec. 205.640 to:
Program Manager, USDA-AMS-TMP-NOP, Room 2945-South Building, PO Box
96456, Washington, DC 20090-6456.
(b) Following the receipt of the information and documents, the
Administrator will determine, pursuant to Sec. 205.506, whether the
applicant for accreditation should be accredited as a certifying agent.
Sec. 205.503 Applicant information.
A private or State entity seeking accreditation as a certifying
agent must submit the following information:
(a) The business name, primary office location, mailing address,
name of the person(s) responsible for the certifying agent's day-to-day
operations, contact numbers (telephone, facsimile, and Internet
address) of the applicant, and, for an applicant who is a private
person, the entity's taxpayer identification number;
(b) The name, office location, mailing address, and contact numbers
(telephone, facsimile, and Internet address) for each of its
organizational units, such as chapters or subsidiary offices, and the
name of a contact person for each unit;
(c) Each area of operation (crops, wild crops, livestock, or
handling) for which accreditation is requested and the estimated number
of each type of operation anticipated to be certified annually by the
applicant along with a copy of the applicant's schedule of fees for all
services to be provided under these regulations by the applicant;
(d) The type of entity the applicant is (e.g., government
agricultural office, for-profit business, not-for-profit membership
association) and for:
(1) A State entity, a copy of the official's authority to conduct
certification activities under the Act and the regulations in this
part,
(2) A private entity, documentation showing the entity's status and
organizational purpose, such as articles of incorporation and by-laws
or ownership or membership provisions, and its date of establishment;
and
(e) A list of each State or foreign country in which the applicant
currently certifies production and handling operations and a list of
each State or foreign country in which the applicant intends to certify
production or handling operations.
Sec. 205.504 Evidence of expertise and ability.
A private or State entity seeking accreditation as a certifying
agent must submit the following documents and information to
demonstrate its expertise in organic production or handling techniques;
its ability to fully comply with and implement the organic
certification program established in Secs. 205.100 and 205.101,
Secs. 205.201 through 205.203, Secs. 205.300 through 205.303,
Secs. 205.400 through 205.406, and Secs. 205.661 and 205.662; and its
ability to comply with the requirements for accreditation set forth in
Sec. 205.501:
(a) Personnel.
(1) A copy of the applicant's policies and procedures for training,
evaluating, and supervising personnel;
(2) The name and position description of all personnel to be used
in the certification operation, including administrative staff,
certification inspectors, members of any certification review and
evaluation committees, contractors, and all parties responsibly
connected to the certifying agent;
(3) A description of the qualifications, including experience,
training, and education in agriculture, organic production, and organic
handling, for:
(i) Each inspector to be used by the applicant and
(ii) Each person to be designated by the applicant to review or
evaluate applications for certification; and
(4) A description of any training that the applicant has provided
or intends to provide to personnel to ensure that they comply with and
implement the requirements of the Act and the regulations in this part.
(b) Administrative policies and procedures.
(1) A copy of the procedures to be used to evaluate certification
applicants, make certification decisions, and issue certification
certificates;
(2) A copy of the procedures to be used for reviewing and
investigating certified operation compliance with the Act and the
regulations in this part and the reporting of violations of the Act and
the regulations in this part to the Administrator;
(3) A copy of the procedures to be used for complying with the
recordkeeping requirements set forth in Sec. 205.501(a)(9);
(4) A copy of the procedures to be used for maintaining the
confidentiality of any business-related information as set forth in
Sec. 205.501(a)(10);
(5) A copy of the procedures to be used for making the following
information available to any member of the public upon request:
(i) Certification certificates issued during the current and 3
preceding calender years;
(ii) A list of producers and handlers whose operations it has
certified, including for each the name of the operation, type(s) of
operation, and the effective date of the certification, during the
current and 3 preceding calender years;
(iii) The results of laboratory analyses for residues of pesticides
and other prohibited substances conducted during the current and 3
preceding calender years; and
(iv) Other business information as permitted in writing by the
producer or handler; and
[[Page 13624]]
(6) A copy of the procedures to be used for sampling and residue
testing pursuant to Sec. 205.670.
(c) Conflicts of interest.
(1) A copy of procedures intended to be implemented to prevent the
occurrence of conflicts of interest, as described in
Sec. 205.501(a)(11).
(2) For each person identified in Sec. 205.504(a)(2), a conflict of
interest disclosure report, identifying any food- or agriculture-
related business interests, including business interests of immediate
family members, that cause a conflict of interest.
(d) Current certification activities. An applicant who currently
certifies production or handling operations must submit:
(1) A list of all production and handling operations currently
certified by the applicant;
(2) Copies of at least 3, the Administrator may require additional,
different inspection reports and certification evaluation documents for
production or handling operations certified by the applicant during the
previous year for each area of operation for which accreditation is
requested; and
(3) The results of any accreditation process of the applicant's
operation by an accrediting body during the previous year for the
purpose of evaluating its certification activities.
(e) Other information. Any other information the applicant believes
may assist in the Administrator's evaluation of the applicant's
expertise and ability.
Sec. 205.505 Statement of agreement.
(a) A private or State entity seeking accreditation under this
subpart must sign and return a statement of agreement prepared by the
Administrator which affirms that, if granted accreditation as a
certifying agent under this subpart, the applicant will carry out the
provisions of the Act and the regulations in this part, including:
(1) Accept the certification decisions made by another USDA
accredited certifying agent as equivalent to its own;
(2) Refrain from making false or misleading claims about its
accreditation status, the USDA accreditation program for certifying
agents, or the nature or qualities of products labeled as organically
produced;
(3) Conduct an annual performance appraisal for each inspector to
be used by the certifying agent and implement measures to correct any
possible deficiencies identified in compliance with the Act and the
regulations in this part;
(4) Have an annual internal program evaluation conducted of its
certification activities by certifying agent staff, an outside auditor,
or a consultant who has the expertise to conduct such evaluations and
implement measures to correct any deficiencies identified in compliance
with the Act and the regulations in this part;
(5) Pay and submit fees to AMS in accordance with Sec. 205.640; and
(6) Comply with, implement, and carry out any other terms and
conditions determined by the Administrator to be necessary.
(b) A private entity seeking accreditation as a certifying agent
under this subpart must additionally agree to:
(1) Hold the Secretary harmless for any failure on the part of the
certifying agent to carry out the provisions of the Act and the
regulations in this part;
(2) Furnish reasonable security, in an amount and according to such
terms as the Administrator may by regulation prescribe, for the purpose
of protecting the rights of production and handling operations
certified by such certifying agent under the Act and the regulations in
this part; and
(3) Transfer to the Administrator and make available to the
applicable State program's governing State official all records or
copies of records concerning the certifying agent's certification
activities in the event that the certifying agent dissolves or loses
its accreditation.
Sec. 205.506 Approval of accreditation.
(a) Accreditation will be approved when:
(1) The accreditation applicant has submitted the information
required by Secs. 205.503 through 205.505;
(2) The accreditation applicant pays the required fee in accordance
with Sec. 205.640(c); and
(3) The Administrator determines that the applicant for
accreditation meets the requirements for accreditation as stated in
Sec. 205.501, as determined by a review of the information submitted in
accordance with Secs. 205.503 through 205.505 and, if necessary, a
review of the information obtained from a site evaluation as provided
for in Sec. 205.508.
(b) On making a determination to approve an application for
accreditation, the Administrator will notify the applicant of approval
of accreditation in writing, stating:
(1) The area(s) for which accreditation is given;
(2) The effective date of the accreditation; and
(3) For a certifying agent who is a private entity, the amount and
type of security that must be established to protect the rights of
production and handling operations certified by such certifying agent.
(c) The accreditation of a certifying agent shall continue in
effect until such time as the certifying agent fails to renew
accreditation as provided in Sec. 205.510(b), the certifying agent
voluntarily ceases its certification activities, or accreditation is
suspended or revoked pursuant to Sec. 205.665.
Sec. 205.507 Denial of accreditation.
(a) If the Administrator has reason to believe, based on a review
of the information specified in Secs. 205.503 through 205.505 or after
a site evaluation as specified in Sec. 205.508, that an applicant for
accreditation is not able to comply or is not in compliance with the
requirements of the Act and the regulations in this part, the
Administrator shall provide a written notification of noncompliance to
the applicant in accordance with Sec. 205.665(a).
(b) The applicant may:
(1) File, with the Administrator, an appeal of the deficiencies
identified in the notification of noncompliance; or
(2) Submit to the Administrator a description of the actions taken
to correct the deficiencies identified in the notification of
noncompliance and evidence demonstrating such corrections.
(c) If an applicant fails to correct the deficiencies, fails to
report the corrections by the date specified in the notification of
noncompliance, fails to file an appeal of the notification of
noncompliance by the date specified, or is unsuccessful in its appeal,
the Administrator will provide the applicant with written notification
of accreditation denial. An applicant who has received written
notification of accreditation denial may apply for accreditation again
at any time in accordance with Sec. 205.502.
(d) If the certifying agent was accredited prior to the site
evaluation and the certifying agent fails to correct the deficiencies,
fails to report the corrections by the date specified in the
notification of noncompliance, or fails to file an appeal of the
notification of noncompliance by the date specified, the Administrator
will begin proceedings to suspend or revoke the certifying agent's
accreditation. An applicant who has had its accreditation suspended may
apply for accreditation again at any time in accordance with
Sec. 205.502. A private entity certifying agent whose accreditation is
revoked will be ineligible for accreditation for a period of not less
than 3 years following the date of such determination.
[[Page 13625]]
Sec. 205.508 Site evaluations.
(a) Site evaluations of accredited certifying agents shall be
conducted for the purpose of examining the certifying agent's
operations and evaluating its compliance with the Act and the
regulations of this part. Site evaluations shall include an on-site
review of the certifying agent's certification procedures, decisions,
facilities, administrative and management systems, and production or
handling operations certified by the certifying agent. Site evaluations
shall be conducted by a representative(s) of the Administrator.
(b) An initial site evaluation of an accreditation applicant shall
be conducted before or within a reasonable period of time after
issuance of the applicant's ``notification of accreditation.'' A site
evaluation shall be conducted after application for renewal of
accreditation but prior to the issuance of a notice of renewal of
accreditation. One or more site evaluations will be conducted during
the period of accreditation to determine whether an accredited
certifying agent is complying with the general requirements set forth
in Sec. 205.501.
Sec. 205.509 Peer review panel.
The Administrator may establish a peer review panel to assist in
evaluating applicants for accreditation, amendment to an accreditation,
and renewal of accreditation as certifying agents. Peer reviewers will
serve without compensation.
(a) Peer review panel(s).
(1) A peer review panel shall review the documentation provided by
the Administrator after any site evaluation performed pursuant to
Secs. 205.508 and 205.510.
(2) The Administrator shall consider the reports received from each
individual member of a peer review panel when determining whether to
continue or renew the accreditation of a certifying agent.
(3) A peer review panel meeting shall be held solely for the
purposes of giving and receiving information. Any meeting or conference
call shall be conducted in a manner that will ensure the actions of
panel members are carried out on an individual basis with any opinions
and recommendations by a member being made individually.
(b) Eligibility for peer review panels.
(1) Applicants for membership in the peer review panel pool must:
(i) Provide the Administrator with a written description and, upon
request, supporting documentation of their qualifications to conduct
peer reviews. Such description must include information concerning the
applicant's training and expertise in organic production or handling
methods and in evaluating whether production or handling operations are
using a system of organic production or handling.
(ii) Address possible limitations on availability to serve.
(iii) Include information concerning their commercial interests and
those of their immediate family members, within the 12-month period
prior to application, with any person who may seek to become or who is
an accredited certifying agent. No person who has or has had a
commercial interest, including an immediate family interest or the
provision of consulting services, in an applicant for accreditation or
renewal of accreditation within the preceding 12-month period shall be
appointed to or accept appointment to a panel evaluating such applicant
for accreditation or renewal of accreditation.
(2) Persons accepted to the pool may serve until notified that
their appointment has been rescinded by the Administrator or until they
are no longer qualified, whichever occurs first.
(c) Composition of peer review panels.
(1) Peer review panels convened by the Administrator shall consist
of at least three but no more than five members.
(2) Peer review panels must include:
(i) A Department representative who shall preside over the panel
and
(ii) No fewer than two members, drawn from the peer review pool,
who possess sufficient expertise, as determined by the Administrator,
in the areas of accreditation described in the application for
accreditation or the notice of approval of accreditation for each
certifying agent whose operations and performance are to be reviewed.
(3) Peer review panels may include:
(i) Up to two members with expertise in other disciplines,
including organizational management and finance;
(ii) Member(s) from the approved State organic certification
program when the applicant is a private entity that will operate within
the State; and
(iii) Member(s) from a foreign government's organic program when
the applicant is a private entity that will operate within the country.
(d) Duties and responsibilities of panel members.
(1) Each person on a peer review panel must individually review the
site evaluation report prepared by the Department's evaluator(s) and
any other information that may be provided by the Administrator
relevant to continuing or renewing the accreditation status of a
certifying agent;
(2) Information about the certifying agent received as part of the
review process is confidential information, and peer reviewers must not
release, copy, quote, or otherwise use material from the information
received, other than in the report required to be submitted;
(3) Each peer reviewer must agree to treat the information received
for review as confidential; and
(4) Each person on a peer review panel must provide an individual
written report, including recommendations, to the Administrator
regarding a certifying agent's ability to conduct and perform
certification activities.
(e) Peer review panel reports. Copies of the peer review panel
reports will be provided upon request to the certifying agent, and
written responses from the certifying agent may be submitted for
consideration by the Administrator.
Sec. 205.510 Annual report, recordkeeping, and renewal of
accreditation.
(a) Annual report and fees. An accredited certifying agent must
submit annually to the Administrator, on or before the anniversary date
of the issuance of the notification of accreditation, the following
reports and fees:
(1) A complete and accurate update of information submitted
pursuant to Secs. 205.503 and 205.504;
(2) Information supporting any changes being requested in the areas
of accreditation described in Sec. 205.500;
(3) A description of the measures implemented in the previous year
and any measures to be implemented in the coming year to satisfy any
terms and conditions determined by the Administrator to be necessary,
as specified in the most recent notification of accreditation or notice
of renewal of accreditation;
(4) The results of the most recent inspector performance appraisals
and annual program evaluation and a description of adjustments to the
certifying agent's operation and procedures implemented or to be
implemented in response to the appraisals and evaluation; and
(5) The fees required in Sec. 205.640(a).
(b) Recordkeeping. Certifying agents must maintain records
according to the following schedule:
(1) Records obtained from applicants for certification and
certified operations must be maintained for not less than 5 years
beyond their receipt;
(2) Records created by the certifying agent regarding applicants
for certification and certified operations must be maintained for not
less than 10 years beyond their creation; and
[[Page 13626]]
(3) Records created or received by the certifying agent pursuant to
the accreditation requirements of this subpart F, excluding any records
covered by Secs. 205.510(b)(2), must be maintained for not less than 5
years beyond their creation or receipt.
(c) Renewal of accreditation.
(1) An accredited certifying agent's application for accreditation
renewal must be received 6 months prior to the fifth anniversary of
issuance of the notification of accreditation and each subsequent
renewal of accreditation. The accreditation of certifying agents who
make timely application for renewal of accreditation will not expire
during the renewal process. The accreditation of certifying agents who
fail to make timely application for renewal of accreditation will
expire as scheduled unless renewed prior to the scheduled expiration
date. Certifying agents with an expired accreditation must not perform
certification activities under the Act and these regulations.
(2) Following receipt of the information submitted by the
certifying agent in accordance with paragraph (a) of this section, the
results of a site evaluation, and, if applicable, the reports submitted
by a peer review panel, the Administrator will determine whether the
certifying agent remains in compliance with the Act and the regulations
of this part and should have its accreditation renewed.
(d) Notice of renewal of accreditation. Upon a determination that
the certifying agent is in compliance with the Act and the regulations
of this part, the Administrator will issue a notice of renewal of
accreditation. The notice of renewal will specify any terms and
conditions that must be addressed by the certifying agent and the time
within which those terms and conditions must be satisfied.
(e) Noncompliance. Upon a determination that the certifying agent
is not in compliance with the Act and the regulations of this part, the
Administrator will initiate proceedings to suspend or revoke the
certifying agent's accreditation.
Secs. 205.511--205.599 [Reserved]
Subpart G--Administrative
The National List of Allowed and Prohibited Substances
Sec. 205.600 Allowed and prohibited substances and ingredients in
organic production and handling.
To be sold or labeled as ``organic,'' or ``made with organic
(specified ingredients),'' the product must be produced and handled
without the use of:
(a) Synthetic substances and ingredients, except as provided in
Sec. 205.601 and Sec. 205.603.
(b) Nonagricultural substances used in or on processed products,
except as otherwise provided in Sec. 205.605;
(c) Nonsynthetic substances prohibited in Sec. 205.602 or
Sec. 205.604; and
(d) Materials, processes, or techniques prohibited in Sec. 205.301.
Sec. 205.601 Synthetic substances allowed for use in organic crop
production.
In accordance with restrictions specified in this section and
Sec. 205.102 and Sec. 205.200 through Sec. 205.207, the following
synthetic substances may be used:
(a) As algicides, disinfectants and sanitizers, including
irrigation system cleaning systems
(1) Alcohols
(i) Ethanol
(ii) Isopropanol
(2) Chlorine Materials--Except, That, residual chlorine levels in
the water shall not exceed the maximum residual disinfectant limit
under the Safe Drinking Water Act.
(i) Calcium Hypochlorite
(ii) Chlorine Dioxide
(iii) Sodium Hypochlorite
(3) Hydrogen Peroxide
(4) Soap-Based Algicides/Demossers
(b) As herbicides, weed barriers, as applicable.
(1) Herbicides, Soap-Based--for use in farmstead maintenance
(roadways, ditches, right of ways, building perimeters) and ornamental
crops
(2) Mulches
(i) Newspaper or other recycled paper, without glossy or colored
inks.
(ii) Plastic mulch and covers (petroleum-based other than polyvinyl
chloride (PVC))
(c) As compost feedstocks--Newspapers or other recycled paper,
without glossy or colored inks
(d) As animal repellents--Soaps, Ammonium--for use as a large
animal repellant only, no contact with soil or edible portion of crop
(e) As insecticides (including acracides or mite control)
(1) Ammonium Carbonate--for use as bait in insect traps only, no
direct contact with crop or soil
(2) Boric Acid--structural pest control, no direct contact with
organic food or crops
(3) Elemental Sulfur
(4) Lime Sulfur--including calcium polysulfide, fungicides, or
insecticides if no alternatives
(5) Oils, Horticultural--as dormant, suffocating, and summer oils
(6) Petroleum-Based Oils--on woody plants for dormant and summer
pest control, Except, That, a petroleum-based material allowed as a
pesticide is prohibited for use as a herbicide. Aromatic petroleum
solvents as a subclass of petroleum-based oils are prohibited.
(7) Soaps, Insecticidal
(8) Sticky Traps/Barriers
(f) As insect attractants--Pheromones
(g) As rodenticides
(1) Sulfur Dioxide--underground rodent control only (smoke bombs)
(2) Vitamin D3
(h) As slug or snail bait--[Reserved]
(i) As plant disease control
(1) Coppers, Fixed--Copper Hydroxide, Copper Oxide, Copper
Oxychloride, Includes products exempted from EPA tolerance, Except,
That, copper-based materials shall be managed in a way that prevents
excessive accumulation in the soil and shall not be used as herbicides.
(2) Copper Sulfate--Substance must be used in a manner that
minimizes accumulation of copper in the soil.
(3) Hydrated Lime--not permitted for soil application or to
cauterize mutilations or deodorize animal wastes
(4) Hydrogen Peroxide
(5) Oils, Horticultural, as dormant, suffocating, and summer oils,
insecticides only
(6) Petroleum-Based Oils--Except, That, aromatic petroleum solvents
as a subclass of petroleum-based oils are prohibited.
(7) Potassium Bicarbonate
(8) Elemental Sulfur
(j) As plant or soil amendments.
(1) Aquatic Plant Extracts (other than hydrolyzed)--Extraction
process is limited to the use of Potassium Hydroxide or Sodium
Hydroxide; solvent amount used is limited to that amount necessary for
extraction.
(2) Humic Acids--naturally occurring deposits, water and alkali
extracts only
(3) Lignin Sulfonate--chelating agent, dust suppressant, floatation
agent
(4) Micronutrients--not to be used as a defoliant, herbicide, or
desiccant. Those made from nitrates or chlorides are not allowed. Soil
deficiency must be documented by soil or tissue test.
(i) Soluble Boron Products
(ii) Sulfates, carbonates, oxides, or silicates of zinc, iron,
magnesium, manganese, molybdenum, selenium, and cobalt
(5) Liquid Fish Products--can be pH adjusted with sulfuric, citric
or phosphoric acid. The amount of acid used shall not exceed the
minimum needed to lower the pH to 3.5
(6) Vitamins, B1, C, and E
(k) As plant growth regulators--[Reserved]
[[Page 13627]]
(l) As floating agents in postharvest handling
(1) Lignin Sulfonate
(2) Sodium Silicate--for tree fruit and fiber processing
(m) As synthetic inert ingredients as classified by the
Environmental Protection Agency (EPA), for use with a synthetic
substance listed in this section and used as an active ingredient in
accordance with any limitations on the use of such synthetic
substances--EPA List 4--Inerts of Minimal Concern
(n)-(z) [Reserved]
Sec. 205.602 Nonsynthetic substances prohibited for use in organic
crop production.
(a) Ash from manure burning
(b) Arsenic
(c) Lead salts
(d) Sodium Fluoaluminate (Mined)
(e) Strychnine
(f) Tobacco Dust
(g)-(z) [Reserved]
Sec. 205.603 Synthetic substances allowed for use in organic livestock
production.
Any substance in the following categories may be used in organic
livestock production in accordance with any restrictions specified in
this section and Sec. 205.102 and Sec. 205.236 through Sec. 205.239.
(a) As disinfectants, sanitizers, and medical treatments as
applicable
(1) Alcohols
(i) Ethanol--disinfectant and sanitizer only, prohibited as a feed
additive
(ii) Isopropanol--disinfectant only
(2) Aspirin--approved for health care use to reduce inflammation
(3) Chlorine Materials--disinfecting and sanitizing facilities and
equipment. Residual chlorine levels in the water shall not exceed the
maximum residual disinfectant limit under the Safe Drinking Water Act
(i) Calcium Hypochlorite
(ii) Chlorine Dioxide
(iii) Sodium Hypochlorite
(4) Chlorohexidine--Allowed for surgical procedures conducted by a
veterinarian. Allowed for use as a teat dip when alternative germicidal
agents and/or physical barriers have lost their effectiveness
(5) Electrolytes--without antibiotics
(6) Glucose
(7) Glycerin--Allowed as a livestock teat dip, must be produced
through the hydrolysis of fats or oils
(8) Iodine
(9) Hydrogen Peroxide
(10) Magnesium Sulfate
(11) Parasiticides--Ivermectin--Prohibited in slaughter stock,
allowed in emergency treatment for dairy and breeder stock when organic
system plan-approved preventive management does not prevent
infestation. Milk or milk products from a treated animal cannot be
labeled as provided for in subpart D of this part for 90 days following
treatment. In breeder stock, treatment cannot occur during the last
third of gestation if the progeny will be sold as organic
(12) Phosphoric Acid--allowed as an equipment cleaner
(13) Vaccines and Biologics
(b) As topical treatment, external parasiticide or local anesthetic
as applicable.
(1) Iodine
(2) Lidocaine--as a local anesthetic. Use requires a withdrawal
period of 90 days after administering to livestock intended for
slaughter and 7 days after administering to dairy animals
(3) Lime, Hydrated--(Bordeaux mixes)
(4) Mineral Oil--for topical use and as a lubricant
(5) Procaine--as a local anesthetic, use requires a withdrawal
period of 90 days after administering to livestock intended for
slaughter and 7 days after administering to dairy animals
(6) Copper Sulfate
(c) As feed supplements--Milk Replacers--without antibiotics, as
emergency use only, no nonmilk products or products from BST treated
animals
(d) As feed additives
(1) Trace Minerals, including:
(i) Copper Sulfate
(ii) Magnesium Sulfate
(2) Vitamins--accepted for enrichment or fortification, limited to
those approved by the FDA for livestock use
(e) As fillers and excipients
(f)-(z) [Reserved]
Sec. 205.604 Nonsynthetic substances prohibited for use in organic
livestock production. [Reserved]
Sec. 205.605 Nonagricultural (nonorganic) substances allowed as
ingredients in or on processed products labeled as ``organic'' or
``made with organic (specified ingredients).''
The following nonagricultural substances may be used only in
accordance with any restrictions specified in this section and
Sec. 205.102, Sec. 205.270, and Sec. 205.300 through Sec. 205.310.
(a) Nonsynthetics allowed:
(1) Agar-agar
(2) Acids
(i) Alginic
(ii) Citric--produced by microbial fermentation of carbohydrate
substances
(iii) Lactic
(3) Baking Powder--aluminum-free
(4) Bentonite
(5) Calcium Carbonate
(6) Calcium Chloride
(7) Carrageenan
(8) Cornstarch (Native)
(9) Dairy Cultures--non-EM
(10) Diatomaceous Earth--food filtering aid only
(11) Enzymes--must be derived from edible, nontoxic plants,
nonpathogenic fungi, or nonpathogenic bacteria
(12) Gums--Water extracted only (arabic, guar, locust bean, carob
bean)
(13) Kaolin
(14) Kelp--for use only as a thickener and dietary supplement
(15) Lecithin--unbleached
(16) Nitrogen--Oil-free grades
(17) Oxygen--Oil-free grades
(18) Pectin (high-methoxy)
(19) Perlite--for use only as a filter aid in food processing
(20) Potassium Chloride
(21) Potassium Iodide
(22) Sodium Bicarbonate
(23) Sodium Carbonate
(24) Yeast--Nonsynthetic, non-EM
(i) Autolysate
(ii) Bakers
(iii) Brewers
(iv) Nutritional
(v) Smoked--growth on petrochemical substrate and sulfite waste
liquor prohibited. Nonsynthetic smoke flavoring process must be
documented
(b) Synthetics allowed:
(1) Alginates
(2) Ammonium Bicarbonate--for use only as a leavening agent
(3) Ammonium Carbonate--for use only as a leavening agent
(4) Ascorbic Acid
(5) Calcium Citrate
(6) Calcium Hydroxide
(7) Calcium Phosphates (monobasic and dibasic)
(8) Carbon Dioxide
(9) Chlorine Materials--disinfecting and sanitizing food contact
surfaces, Except, That, residual chlorine levels in the water shall not
exceed the maximum residual disinfectant limit under the Safe Drinking
Water Act.
(i) Calcium Hypochlorite
(ii) Chlorine Dioxide
(iii) Sodium Hypochlorite
(10) Ethylene--allowed for post harvest ripening of tropical fruit
(11) Ferrous Sulfate--for iron enrichment or fortification of foods
when required by regulation or recommended (independent organization)
(12) Glycerides (mono and di)--for use only in drum drying of food
(13) Glycerin--produced by hydrolysis of fats and oils
(14) Hydrogen peroxide
[[Page 13628]]
(15) Lecithin--bleached
(16) Magnesium Carbonate--for use only in agricultural products
labeled ``made with organic (specified ingredients),'' prohibited in
agricultural products labeled ``organic''
(17) Magnesium Chloride--derived from sea water
(18) Magnesium Stearate--for use only in agricultural products
labeled ``made with organic (specified ingredients),'' prohibited in
agricultural products labeled ``organic''
(19) Magnesium Sulfate
(20) Nutrient vitamins and minerals, in accordance with 21 CFR
104.20, Nutritional Quality Guidelines For Foods
(21) Ozone
(22) Pectin (low-methoxy)
(23) Phosphoric Acid--cleaning of food-contact surfaces and
equipment only
(24) Potassium Acid Tartrate
(25) Potassium Tartrate made from Tartaric acid
(26) Potassium Carbonate
(27) Potassium Citrate
(28) Potassium Hydroxide--prohibited for use in lye peeling of
fruits and vegetables
(29) Potassium Iodide--for use only in agricultural products
labeled ``made with organic (specified ingredients),'' prohibited in
agricultural products labeled ``organic''
(30) Potassium Phosphate--for use only in agricultural products
labeled ``made with organic (specific ingredients),'' prohibited in
agricultural products labeled ``organic''
(31) Silicon Dioxide
(32) Sodium Citrate
(33) Sodium Hydroxide--prohibited for use in lye peeling of fruits
and vegetables
(34) Sodium Phosphates--for use only in dairy foods
(35) Tocopherols--derived from vegetable oil when rosemary extracts
are not a suitable alternative
(36) Xanthan gum
(c)-(z) [Reserved]
Sec. 205.606 Nonorganically produced agricultural products allowed as
ingredients in or on processed products labeled as organic or made with
organic ingredients.
Any nonorganically produced agricultural product may be used in
accordance with any restrictions specified in this section and
Sec. 205.102, Sec. 205.270, and Sec. 205.300 through Sec. 205.310.
Sec. 205.607 Amending the National List.
(a) Any person may petition the National Organic Standard Board for
the purpose of having a substance evaluated for recommendation to the
Secretary for inclusion on or deletion from the National List in
accordance with section 6517 of the Act.
(b) A person petitioning for amendment of the National List should
request a copy of the petition procedures from the USDA at the address
in Sec. 205.607(c).
(c) A petition to amend the National List must be submitted to:
Program Manager, USDA/AMS/TM/NOP, Room 2945 South Building, PO Box
96456, Washington, DC 20090-6456.
(d) A substance may be added to the National List only in the
following categories:
(1) Synthetic substances allowed for use in organic crop or
livestock production;
(2) Nonsynthetic substances prohibited for use in organic crop or
livestock production; or
(3) Nonagricultural substances allowed for use as ingredients in or
on processed products labeled as ``organic'' or ``made with organic
(specified ingredients).''
State Programs
Sec. 205.620 Requirements of State organic certification programs.
(a) A State may establish a State organic certification program for
production and handling operations within the State which produces and
handles organic agricultural products.
(b) A State organic certification program must meet the general
requirements for organic programs specified in the Act and be at least
equivalent to the regulations in this part.
(c) A State organic certification program may contain more
restrictive requirements based on unique environmental conditions or
specific production or handling practices particular to the State or
region of the United States, which necessitates the more restrictive
requirement. Such additional requirements must further the purposes and
be consistent with the Act and regulations in this part.
(d) A State organic certification program must assume enforcement
obligations in the State for the requirements of this part and any more
restrictive requirements approved by the Secretary.
(e) A State organic certification program and any amendments to
such program must be approved by the Secretary prior to being
implemented by the State.
Sec. 205.621 Submission and determination of proposed State organic
certification programs and amendments to approved State organic
certification programs.
(a) A State program's governing State official must submit to the
Secretary a proposed State organic certification program and any
proposed amendments to such approved program.
(1) Such submission must contain supporting materials that include
statutory authorities, program description, a statement of acceptance
of the general requirements for organic programs specified in the Act,
documentation of unique environmental or ecological conditions or
specific production practices particular to the State which necessitate
more restrictive requirements than the requirements of this part, and
other information as may be required by the Secretary.
(2) Submission of a request for amendment of an approved State
organic certification program must contain supporting material that
includes an explanation and documentation of the unique environmental
or ecological conditions or specific production practices particular to
the State or region, which necessitates the proposed amendment.
Supporting material also must explain how the proposed amendment
furthers and is consistent with the purposes of the Act and the
regulations of this part.
(b) Within 6 months of receipt of submission, the Secretary will:
(1) Publish in the Federal Register for public comment, a summary
of a proposed State organic certification program, and a summary of any
proposed amendment to such program.
(2) After review of materials and documentation accompanying the
proposal and consideration of comments received, notify the State
program's governing State official of approval or disapproval of the
proposed program or amendment of an approved program and, if
disapproved, the reasons for the disapproval.
(c) After receipt of a notice of disapproval, the State program's
governing State official may resubmitt a revised State organic
certification program or amendment of such a program at any time.
Sec. 205.622 Review of approved State organic certification programs.
The Secretary will review a State organic certification program not
less than once during each 5-year period following the date of the
initial program approval. The Secretary will notify the State program's
governing State official of approval or disapproval of the
[[Page 13629]]
program within 6 months after initiation of the review.
Fees
Sec. 205.640 Fees and other charges for accreditation.
Fees and other charges equal as nearly as may be to the cost of the
accreditation services rendered under the regulations, including
initial accreditation, review of annual reports, and renewal of
accreditation, shall be assessed and collected from applicants for
initial accreditation and accredited certifying agents submitting
annual reports or seeking renewal of accreditation in accordance with
the following provisions.
(a) Fees-for-Service.
(1) Except as otherwise provided in this section, fees-for-service
shall be based on the time required to render the service provided
calculated to the nearest 15-minute period, including the review of
applications and accompanying documents and information, evaluator
travel, the conduct of on-site evaluations, review of annual reports
and updated documents and information, and the time required to prepare
reports and any other documents in connection with the performance of
service. The hourly rate shall be the same as that charged by the
Agricultural Marketing Service (AMS), through its Quality Systems
Certification Program, to certification bodies requesting conformity
assessment to the International Organization for Standardization
``General Requirements for Bodies Operating Product Certification
Systems'' (ISO Guide 65).
(2) Applicants for initial accreditation and accredited certifying
agents submitting annual reports or seeking renewal of accreditation
during the first 18 months following the effective date of subpart F of
this part shall receive service without incurring an hourly charge for
service.
(3) Applicants for initial accreditation and renewal of
accreditation must pay at the time of application, effective 18 months
following the effective date of subpart F of this part, a nonrefundable
fee of $500.00 which shall be applied to the applicant's fees-for-
service account.
(b) Travel charges. When service is requested at a place so distant
from the evaluator's headquarters that a total of one-half hour or more
is required for the evaluator(s) to travel to such place and back to
the headquarters or at a place of prior assignment on circuitous
routing requiring a total of one-half hour or more to travel to the
next place of assignment on the circuitous routing, the charge for such
service shall include a mileage charge administratively determined by
the Department and travel tolls, if applicable, or such travel prorated
among all the applicants and certifying agents furnished the service
involved on an equitable basis or, where the travel is made by public
transportation (including hired vehicles), a fee equal to the actual
cost thereof. Travel charges shall become effective for all applicants
for initial accreditation and accredited certifying agents on the
effective date of subpart F of this part. The applicant or certifying
agent will not be charged a new mileage rate without notification
before the service is rendered.
(c) Per diem charges. When service is requested at a place away
from the evaluator's headquarters, the fee for such service shall
include a per diem charge if the employee(s) performing the service is
paid per diem in accordance with existing travel regulations. Per diem
charges to applicants and certifying agents will cover the same period
of time for which the evaluator(s) receives per diem reimbursement. The
per diem rate will be administratively determined by the Department.
Per diem charges shall become effective, for all applicants for initial
accreditation and accredited certifying agents on the effective date of
subpart F of this part. The applicant or certifying agent will not be
charged a new per diem rate without notification before the service is
rendered.
(d) Other costs. When costs, other than costs specified in
paragraphs (a), (b), and (c) of this section are associated with
providing the services, the applicant or certifying agent will be
charged for these costs. Such costs include, but are not limited to,
equipment rental, photocopying, delivery, facsimile, telephone, or
translation charges incurred in association with accreditation
services. The amount of the costs charged will be determined
administratively by the Department. Such costs shall become effective
for all applicants for initial accreditation and accredited certifying
agents on the effective date of subpart F of this part.
Sec. 205.641 Payment of fees and other charges.
(a) Applicants for initial accreditation and renewal of
accreditation must remit the nonrefundable fee, pursuant to
Sec. 205.640(a)(3), along with their application. Remittance must be
made payable to the Agricultural Marketing Service, USDA, and mailed
to: Program Manager, USDA-AMS-TMP-NOP, Room 2945-South Building, PO Box
96456, Washington, DC 20090-6456 or such other address as required by
the Program Manager.
(b) Payments for fees and other charges not covered under paragraph
(a) of this section must be:
(1) Received by the due date shown on the bill for collection;
(2) Made payable to the Agricultural Marketing Service, USDA; and
(3) Mailed to the address provided on the bill for collection.
(c) The Administrator shall assess interest, penalties, and
administrative costs on debts not paid by the due date shown on a bill
for collection and collect delinquent debts or refer such debts to the
Department of Justice for litigation.
Sec. 205.642 Fees and other charges for certification.
Fees charged by a certifying agent must be reasonable, and a
certifying agent shall charge applicants for certification and
certified production and handling operations only those fees and
charges that it has filed with the Administrator. The certifying agent
shall provide each applicant with an estimate of the total cost of
certification and an estimate of the annual cost of updating the
certification. The certifying agent may require applicants for
certification to pay at the time of application a nonrefundable fee of
no more than $250.00, which shall be applied to the applicant's fees-
for-service account. The certifying agent shall provide all persons
inquiring about the application process with a copy of its fee
schedule.
Secs. 205.643--205.649 [Reserved]
Compliance
Sec. 205.660 General.
(a) The National Organic Program's Program Manager, on behalf of
the Secretary, may inspect and review certified production and handling
operations and accredited certifying agents for compliance with the Act
or regulations in this part.
(b) The Program Manager may initiate suspension or revocation
proceedings against a certified operation:
(1) When the Secretary has reason to believe that a certified
operation has violated or is not in compliance with the Act or
regulations in this part.
(2) When a certifying agent or a State program's governing State
official fails to take appropriate action to enforce the Act or
regulations in this part; or
(c) The Program Manager may initiate suspension or revocation of a
certifying agent's accreditation if the certifying agent fails to meet,
conduct, or maintain
[[Page 13630]]
accreditation requirements pursuant to the Act or this part.
Sec. 205.661 Investigation of certified operations.
(a) A certifying agent may investigate complaints of noncompliance
with the Act or regulations of this part concerning production and
handling operations certified as organic by the certifying agent. A
certifying agent must notify the Program Manager of all compliance
proceedings and actions taken pursuant to this part.
(b) A State program's governing State official may investigate
complaints of noncompliance with the Act or regulations in this part
concerning organic production or handling operations operating in the
State.
Sec. 205.662 Noncompliance procedure for certified operations.
(a) Notification. When an inspection, review, or investigation of a
certified operation by a certifying agent or a State program's
governing State official reveals any noncompliance with the Act or
regulations in this part, a written notification of noncompliance shall
be sent to the certified operation. Such notification shall provide:
(1) A description of each noncompliance;
(2) The facts upon which the notification of noncompliance is
based; and
(3) The date by which the certified operation must rebut or correct
each noncompliance and submit supporting documentation of each such
correction when correction is possible.
(b) Resolution. When a certified operation demonstrates that each
noncompliance has been resolved, the certifying agent or the State
program's governing State official, as applicable, will send the
certified operation a written notification of noncompliance resolution.
(c) Proposed suspension or revocation. When rebuttal is
unsuccessful or correction of the noncompliance is not completed within
the prescribed time period or is not adequate to demonstrate that each
noncompliance has been corrected, the certifying agent or State
program's governing State official shall send the certified operation a
written notification of proposed suspension or revocation of
certification of the entire operation or a portion of the operation, as
applicable to the noncompliance. When correction of a noncompliance is
not possible, the notification of noncompliance and the proposed
suspension or revocation of certification may be combined in one
notification. The notification of proposed suspension or revocation of
certification shall state:
(1) The reasons for the proposed suspension or revocation;
(2) The proposed effective date of such suspension or revocation;
(3) The impact of a suspension or revocation on future eligibility
for certification; and
(4) The right to request mediation pursuant to Sec. 205.663 or to
file an appeal pursuant to Sec. 205.681.
(d) Willfull violations. Notwithstanding paragraph (a) of this
section, if a certifying agent or State program's governing State
official has reason to believe that a certified operation has willfully
violated the Act or regulations in this part, the certifying agent or
State program's governing State official shall send the certified
operation a notification of proposed suspension or revocation of
certification of the entire operation, or a portion of the operation,
as applicable to the noncompliance.
(e) Suspension or revocation.
(1) If the certified operation fails to correct the noncompliance,
to resolve the issue through rebuttal or mediation, or to file an
appeal of the proposed suspension or revocation of certification, the
certifying agent or State program's governing State official shall send
the certified operation a written notification of suspension or
revocation.
(2) A certifying agent or State program's governing State official
must not send a notification of suspension or revocation to a certified
operation that has requested mediation pursuant to Sec. 205.663 or
filed an appeal pursuant to Sec. 205.681.
(f) Ineligibility. A certified operation or a person responsibly
connected with an operation whose certification has been revoked will
not be eligible to receive certification for a period of not more than
5 years following the date of such revocation, as determined by the
Secretary.
Sec. 205.663 Mediation.
Any dispute with respect to proposed suspension or revocation of
certification under this part shall, at the request of the applicant
for certification or certified operation, be mediated by a qualified
mediator mutually agreed upon by the parties to the mediation. If a
State Program is in effect, the mediation procedures established in the
State Program, as approved by the Secretary, will be followed.
Mediation shall be requested in writing to the applicable certifying
agent. The parties to the mediation shall have no more than 30 days to
reach an agreement following a mediation session. If mediation is
unsuccessful, the applicant for certification or certified operation
shall have 30 days from termination of mediation to appeal the
certifying agent's decision to the Administrator, pursuant to
Sec. 205.681. Any agreement reached during or as a result of the
mediation process shall be in compliance with the Act and these
regulations. The Secretary may review any mediated agreement for
conformity to the Act and these regulations.
Sec. 205.664 [Reserved]
Sec. 205.665 Noncompliance procedure for certifying agents.
(a) Noncompliance. When an inspection, review, or investigation of
an accredited certifying agent by the Program Manager reveals any
noncompliance with the Act or regulations in this part, a written
notification of noncompliance shall be sent to the certifying agent, as
applicable. Such notification shall provide:
(1) A description of each noncompliance found;
(2) The facts upon which the notification of noncompliance is
based; and
(3) The date by which the certifying agent must rebut or correct
each noncompliance when correction is possible.
(b) Resolution. When each noncompliance has been resolved, the
Program Manager shall send the certifying agent a written notification
of noncompliance resolution.
(c) Proposed suspension or revocation. If rebuttal is unsuccessful
or if correction of the noncompliance is not made within the prescribed
time period or is not adequate to demonstrate that each noncompliance
has been corrected, the Program Manager shall send a written
notification of proposed suspension or revocation of accreditation to
the certifying agent. The notification of proposed suspension or
revocation shall state whether the certifying agent's accreditation or
specified areas of accreditation are to be suspended or revoked. When
correction of a noncompliance is not possible, the notification of
noncompliance and the proposed suspension or revocation may be combined
in one notification. The notification of proposed suspension or
revocation of accreditation shall state:
(1) The reasons for the proposed suspension or revocation;
(2) The proposed effective date of the suspension or revocation;
(3) The impact of a suspension or revocation on future eligibility
for accreditation; and
[[Page 13631]]
(4) The right to file an appeal pursuant to Sec. 205.681.
(d) Willfull violations. Notwithstanding paragraph (a) of this
section, if the Program Manager has reason to believe that a certifying
agent has willfully violated the Act or regulations in this part, the
Program Manager shall send a written notification of proposed
suspension or revocation of accreditation to the certifying agent.
(e) Suspension or revocation. When the accredited certifying agent
fails to file an appeal of the proposed suspension or revocation of
accreditation, the Program Manager shall send a written notice of
suspension or revocation of accreditation to the certifying agent.
(f) Cessation of certification activities. A certifying agent whose
accreditation is suspended or revoked must:
(1) Cease all certification activities in each area of
accreditation which its accreditation is suspended or revoked.
(2) Transfer to the Secretary and make available to any applicable
governing State official all records concerning its certification
activities that were suspended or revoked.
(g) Eligibility.
(1) A certifying agent whose accreditation is suspended by the
Secretary under this section may at any time submit a new request for
accreditation, pursuant to Sec. 205.502. The request must be
accompanied by evidence demonstrating correction of each noncompliance
and corrective actions taken to comply with and remain in compliance
with the Act and the regulations in this part.
(2) A certifying agent whose accreditation is revoked by the
Secretary shall be ineligible to be accredited as a certifying agent
under the Act and the regulations in this part for a period of not less
than 3 years following the date of such revocation.
Secs. 205.666 and 205.667 [Reserved]
Sec. 205.668 Noncompliance procedures under State organic
certification programs.
(a) A State program's governing State official must promptly notify
the Secretary of commencement of any enforcement proceeding against a
certified operation and forward to the Secretary a copy of each notice
issued.
(b) A noncompliance proceeding, brought by a State program's
governing State official against a certified operation, shall be
appealable pursuant to the appeal procedures of the State organic
certification program. There shall be no subsequent rights of appeal to
the Secretary. Final decisions of a State may be appealed to the United
States District Court for the district in which such certified
operation is located.
(c) A State program's governing State official may review and
investigate complaints of noncompliance with the Act or regulations
concerning accreditation of certifying agents operating in the State.
When such review or investigation reveals any noncompliance, the State
program's governing State official shall send a written report of
noncompliance to the Program Manager. The report shall provide a
description of each noncompliance and the facts upon which the
notification of noncompliance is based.
Sec. 205.669 [Reserved]
Inspection and Testing, Reporting, and Exclusion from Sale
Sec. 205.670 Inspection and testing of agricultural product to be sold
or labeled organic.
(a) All agricultural products that are to be sold, labeled, or
represented as ``100 percent organic,'' ``organic,'' or ``made with
organic (specified ingredients)'' must be made accessible by certified
organic production or handling operations for examination by the
Administrator, the applicable State program's governing State official,
or the certifying agent.
(b) The Administrator, applicable State program's governing State
official, or the certifying agent may require preharvest or postharvest
testing of any agricultural input used or agricultural product to be
sold, labeled, or represented as ``100 percent organic,'' ``organic,''
or ``made with organic (specified ingredients)'' when there is
reasonable cause to believe that the agricultural input or product has
come into contact with a prohibited substance. Such tests must be
conducted by the applicable State program's governing State official or
the certifying agent at the official's or certifying agent's own
expense.
(c) The preharvest or postharvest tissue test sample collection
pursuant to paragraph (b) of this section must be performed by an
inspector representing the Administrator, certifying agent, or
applicable State program's governing State official. Sample integrity
must be maintained in transit, and residue testing must be performed in
an accredited laboratory. Chemical analysis must be made in accordance
with the methods described in the 16th edition of the Official Methods
of Analysis of the AOAC International or other applicable validated
methodology determining the presence of contaminants in agricultural
products.
(d) Results of all analyses and tests performed under this section:
(1) Must be provided to the Administrator promptly upon receipt;
and
(2) Will be available for public access, unless the testing is part
of an ongoing compliance investigation.
Sec. 205.671 Exclusion from organic sale.
(a) When residue testing detects prohibited substances at levels
that are greater than the estimated national mean of detected residues
for specific commodity/pesticide pairs, as demonstrated by USDA's
Pesticide Data Program, or unavoidable residual environmental
contamination, as determined by the Administrator, the agricultural
product must not be sold, labeled, or represented as organically
produced. The Administrator, the applicable State program's governing
State official, or the certifying agent may conduct an investigation of
the certified operation to determine the cause of the prohibited
substance residue.
(b) If test results indicate a specific agricultural product
contains pesticide residues or environmental contaminants that exceed
the Food and Drug Administration's or the Environmental Protection
Agency's regulatory tolerances, the data must be reported promptly to
the appropriate public health agencies.
Sec. 205.672 Emergency pest or disease treatment.
When a prohibited substance is applied to a certified operation due
to Federal or State emergency pest eradication or disease treatment
program and the certified operation otherwise meets the requirements of
this part, the certification status of the operation shall not be
affected as a result of the application of the prohibited synthetic
substance: Provided, That:
(a) Any harvested crop or plant part to be harvested that has
contact with a prohibited substance applied as the result of a Federal
or State emergency pest eradication or disease treatment program cannot
not be sold, labeled, or represented as organically produced; and
(b) Any livestock that are treated with a prohibited substance
applied as the result of a Federal or State emergency pest or disease
treatment program or product derived from such treated livestock cannot
be sold, labeled, or represented as organically produced: Except, That:
(1) Milk or milk products may be sold, labeled, or represented as
organically
[[Page 13632]]
produced beginning 12 months following the last date that the dairy
animal was treated with the prohibited substance; and
(2) The offspring of gestating mammalian breeder stock treated with
a prohibited substance may be considered organic: Provided, That, the
breeder stock was not in the last third of gestation on the date that
the breeder stock was treated with the prohibited substance.
Secs. 205.673--205.679 [Reserved]
Adverse Action Appeal Process
Sec. 205.680 General.
Persons subject to the Act who believe they are adversely affected
by a noncompliance proceeding decision of the National Organic
Program's Program Manager or a certifying agent may appeal such
decision to the Administrator.
Sec. 205.681 Appeals.
(a) Certification appeals. An applicant for certification may
appeal a certifying agent's notice of denial of certification, and a
certified operation may appeal a certifying agent's notification of
proposed suspension or revocation of certification to the
Administrator: Except, That, when the applicant or certified operation
is subject to an approved State organic certification program and the
decision to deny, suspend, or revoke a certification is made by a
certifying agent or a State program's governing State official, the
appeal must be made to the State program's governing State official or
such official's designee who will carry out the appeal pursuant to the
State program's appeal procedures approved by the Secretary.
(1) If the Administrator sustains a certification applicant's or
certified operation's appeal of a certifying agent's decision, the
applicant will be issued organic certification, or a certified
operation will continue its certification, as applicable to the
operation. The act of sustaining the appeal shall not be an adverse
action subject to appeal by the affected certifying agent.
(2) If the Administrator denies an appeal, a formal administrative
proceeding will be initiated to deny, suspend, or revoke the
certification. Such proceeding shall be conducted pursuant to the
Department's Uniform Rules of Practice.
(b) Accreditation appeals. An applicant for accreditation and an
accredited certifying agent may appeal a Program Manager's denial of
accreditation or proposed suspension or revocation of accreditation to
the Administrator.
(1) If the Administrator sustains an appeal, an applicant will be
issued accreditation, or a certifying agent will continue its
accreditation, as applicable to the operation.
(2) If the Administrator denies an appeal, a formal administrative
proceeding to deny, suspend, or revoke the accreditation will be
initiated. Such proceeding shall be conducted pursuant to the
Department's Uniform Rules of Practice.
(c) An appeal of a noncompliance decision must be filed within the
time period provided in the letter of notification or at least 30 days
from the receipt of the notification. The appeal will be considered
``filed'' on the date received by the Administrator or by the State
program's governing State official or such official's designee as
provided in the State's approved appeal procedures. A decision to deny,
suspend, or revoke certification or accreditation will become final and
nonappealable unless the decision is appealed in a timely manner.
(d) All appeals to the Administrator must be filed in writing and
addressed to Administrator, USDA-AMS, Room 3071-S, PO Box 96456,
Washington, DC 20090-6456, and be copied to the certifying agent
completely and simultaneously with submission to the Administrator.
Appeals must include a copy of the adverse decision and a statement of
the appellant's position that the decision was not made in accordance
with applicable program regulations, policies, or procedures.
Secs. 205.682--205.689 [Reserved].
Miscellaneous
Sec. 205.690 OMB control number.
The control number assigned to the information collection
requirements by the Office of Management and Budget pursuant to the
Paperwork Reduction Act of 1980, Public Law 96-511, is OMB number 0581-
0181.
Secs. 205.691--205.699 [Reserved]
PARTS 206-209--[RESERVED]
Dated: March 3, 2000.
Kathleen A. Merrigan,
Administrator, Agricultural Marketing Service.
Appendices to the Preamble
Appendix A.--Regulatory Impact Assessment for Proposed Rules
Implementing the Organic Foods Production Act of 1990 (Executive Order
12866)
The following regulatory assessment is provided to fulfill the
requirements of Executive Order 12866. This assessment consists of a
statement of the need for the proposed action, a description of the
baseline for the analysis, an examination of alternative approaches,
and an analysis of the benefits and costs. Much of the analysis is
necessarily descriptive of the anticipated effects of the proposed
rule. Because basic market data on the prices and quantities of
organic goods and services and the costs of organic production are
limited, it is not possible to provide quantitative estimates of all
benefits and costs of the proposed rule. The cost of fees and
recordkeeping proposed by U.S. Department of Agriculture (USDA) are
quantified, but the anticipated benefits are not. Consequently, the
analysis does not estimate the magnitude or the direction (positive
or negative) of net benefits.
The Need for the Proposed Action
The Organic Foods Production Act of 1990, Title XXI of the Food,
Agriculture, Conservation and Trade Act of 1990, U.S.C. Title 7,
mandates that the Secretary of Agriculture develop a national
organic program. The OFPA states that the Secretary shall establish
an organic certification program for farmers, wild-crop harvesters,
and handlers of agricultural products that have been produced using
organic methods as provided for in the OFPA. In addition, section
6514 of the OFPA requires the Secretary to establish and implement a
program to accredit a State program's governing State official or
any private person, who meets the requirements of the Act, as a
certifying agent to certify that farm, wild-crop harvesting, or
handling operations are in compliance with the standards set out in
the regulation. As stated by the OFPA in section 6501, the
regulations are proposed for the following purposes: (1) to
establish national standards governing the marketing of certain
agricultural products as organically produced products; (2) to
assure consumers that organically produced products meet a
consistent standard; and (3) to facilitate interstate commerce in
fresh and processed food that is organically produced.
The OFPA was introduced at the request of the organic community
after it experienced a number of problems in the marketing of
organic products. Many consumers are willing to pay price premiums
for organic food; hence, producers (farmers, ranchers, and wild-crop
harvesters) and handlers have an economic incentive to label their
products
[[Page 13633]]
organic. Because organic products cannot be distinguished from
conventionally produced products by sight inspection, consumers rely
on verification methods, such as certification by private entities
or verification by retailers to ensure that organic claims are true.
Where there has been no mandatory certification, consumers have been
unable to verify organic product claims on their own, and may have
been vulnerable to fraud from the mislabeling of organic products.
As organic production became better established in the 1980's,
new certifying agencies were formed, and some States passed laws
establishing standards for organic production. However, the
standards for organic production, processing, handling, and labeling
were different to some degree, causing disagreements between
certifying agents over whose standards would apply to ingredients
used in multi-ingredient organic processed products. Disagreements
about standards also created sourcing problems for handlers of these
multiingredient products.
Certifying agents are able to negotiate and maintain reciprocity
agreements at some cost. These reciprocity agreements specify the
conditions under which certifying agents recognize each others'
standards. The current system of variable standards has led the
organic industry to take on costs of private accreditation or
shipment-by-shipment certification, required to gain access to some
foreign markets such as the European Union (EU). These costs would
be avoided if a national program were in place.
Baseline
The organic industry is characterized by an array of production
and handling practices, self regulation and state regulation, and
consumer perceptions. However, there are commonalities throughout
the industry.
Certification
The United States currently has 49 certifying agents. There are
36 private certifying agencies and 13 States which have
certification programs. Private certifying agents range from small
nonprofit associations that certify only a few growers to large for-
profit businesses operating in numerous States and certifying
hundreds of producers. Typically, certifying agents review
producers' organic production plans, inspect the farm fields and
facilities to be certified, periodically reinspect, and may conduct
soil tests and tests for residues of prohibited substances. In some
cases, certifying agents negotiate reciprocity agreements with other
agents.
State laws vary widely on organic certification and
registration. Some States require only that an organic producer
register and make certification voluntary. California is an example.
Other States require certification by the State's own agents, while
others accept certification by a private certifying agent. The least
stringent requirement among States with organic legislation is that
products marketed as organic comply with their definition of organic
but both registration and certification are voluntary. Approximately
half of the States have laws which regulate organic production and
processing. Thirteen States operate programs to certify organic
production. In many States producers may claim their product is
organic but operate without certification or well-defined standards.
On the other hand, many organic producers operate in States with no
program and voluntarily secure third party certification to well-
defined standards. Certification costs vary with farm size and
across certifying agents. Illustrative certification costs are
presented in Tables 2A and 2B.
Very few certifying agents operate with an external
accreditation. There is no law which requires them to be accredited:
The price may be unacceptably high in relation to expected benefits;
the certifying agent may be unable to find an accrediting party
willing to accredit the particular organic program the certifying
agent is marketing; and State programs may believe that their status
as a government entity obviates the need for external accreditation.
In 1999 USDA began verifying certifying agents to International
Organization for Standardization (ISO) Guide 65. It is a valuable
recognition that the certifying entity satisfies the business
capacity standards of ISO Guide 65. European Union authorities have
accepted verification of certifying agents to ISO Guide 65 as an
interim measure to facilitate exports pending the establishment of a
national organic program.
Organic Food Production
Organic production occurs in all States. An estimated 12,000
organic producers are operating in the United States. Most organic
producers are small both in terms of value of sales and acreage.
Small producers do not necessarily farm full-time, and may not
depend solely on farm income for a livelihood. Some organic
production occurs as a distinct part of a larger operation that
includes conventional production practices.
Key production practices followed by certified organic producers
include: abstaining from use of certain crop chemicals and animal
drugs; ecologically based pest and nutrient management; segregation
of organic fields and animals from nonorganic fields and animals;
following an organic production plan with multiple goals, including
sustainability; and record keeping to document practices and
progress toward the plan's goals. Specific elements of organic
production will vary, but organic systems generally share a core set
of practices. For example, the certification standards of virtually
all State and private U.S. certifying agents prohibit the use
synthetic chemical herbicides and insecticides or animal growth
hormones. And most certification standards include a three year ban
on the use of prohibited substances on cropland before production
can be certified as organic.
On the other hand, certification standards for organic livestock
production have been more variable, for pasture, feed, and other
practices. Until 1999, the USDA Food Safety and Inspection Service
(FSIS) withheld approval for the use of organic labels on meat and
poultry products pending the outcome of this rulemaking. However,
the Secretary announced a change in policy in January 1999. Meat and
poultry products may be labeled ``certified organic by (name of the
certifying agent)'' if processors obtain prior label approval from
FSIS and the claim meets certain basic criteria. However, many
private and State certifying programs have not developed standards
for livestock production.
The provisions of the New Hampshire organic program are
summarized below to illustrate key elements of current organic
standards. The New Hampshire program provisions are not
substantially different from provisions in some State programs,
private programs, and mirror provisions of USDA's proposed national
program. Soil tests are required for initial certification and every
three years afterward. Soil testing measures the quality of the soil
for agricultural production and is different from residue testing.
New Hampshire requires residue testing ``if the department believes
that the produce or soil which certified produce was grown may have
become contaminated with prohibited substances.'' (New Hampshire
Rule AGR 906 Certification of Organically Grown Food, Agr 906.05
Laboratory Analysis) Other production standards include a written
rotation plan, tillage systems that incorporate organic matter
wastes into the topsoil, compliance with limits on the sources of
manure and the timing of its application, prohibitions on the use of
certain substances (e.g., sewage sludge, synthetic sources of
nitrates, synthetic growth regulators, and anhydrous ammonia), a
list of accepted and prohibited weed and pest control practices,
segregation of organic and nonorganic production, record keeping
regarding fertilization, cropping, and pest management histories,
separate sales records for organic and nonorganic production, and
records of all laboratory analyses.
The New Hampshire program requires growers to pay a $100 annual
inspection fee, and to provide a written description of their farm
operation including the size of the farm, a field map, a three-year
history of crop production, pest control, and fertilizer use, a crop
rotation and a soil management plan, and a description of post-
harvest storage and handling methods. Applicants for certification
must also agree to comply with regulations controlling the use of
the New Hampshire certified organic logo.
Organic Food Handling
In addition to growers, who actually produce and harvest
products to be marketed as organic, there are handlers who transform
and resell the organic products. Not all certifying agents have
standards for handling organic products. Some have standards for
parts of the food marketing system, such as retail food
establishments, that are not explicitly covered by the OFPA or by
the proposed regulation.
Definitions of processing and handling differ across certifying
agents and State laws. Some States, such as Washington, distinguish
between a processor and a handler, specifying 21 actions which
constitute processing and defining a handler as anyone who sells,
distributes, or packs organic products. Washington does not consider
retail grocery stores and restaurants to be organic handlers or
processors.
[[Page 13634]]
Marketing of Organic Food--Domestic and International
The marketing practices of organic producers range from roadside
stands marketing directly to consumers, to marketing through
wholesale markets, to direct marketing to restaurants and
supermarkets. USDA does not have official national level statistics
on organic retail sales. An industry trade publication reported
estimates of retail sales of organic foods for a number of years in
the 1990's (Table 1). The last published estimate was $3.5 billion
in 1996 ($3.6 billion in 1998 dollars). To put this figure in
context, total food expenditures by families and individuals were
$606 billion in 1996 ($629 billion in 1998 dollars).
The United States is both an importer and an exporter of organic
foods. The United States does not restrict imports of organic foods.
In fact, U.S. Customs accounts do not distinguish between organic
and conventional products. The largest markets for organic foods
outside the United States are in Europe, Japan, and Canada. There is
increasing pressure, particularly in Europe and Japan, for U.S.
exports to demonstrate that they meet a national standard rather
than a variety of private and State standards.
The EU is the largest market for organic food outside the United
States. The organic food market in the EU was estimated to be worth
$5.2 billion in 1997 (International Trade Centre UNCTAD/WTO 1999).
The largest organic retail sales markets in the EU in 1997 were
Germany ($1.8 billion), France ($720 million), and Italy ($750
million). Large organic markets outside the EU include Canada and
Australia, with approximately $60 million and $68 million,
respectively, in organic retail sales in 1997 (Lohr 1998). Import
share of the organic food market in Europe ranged from 10 percent in
France to 70 percent in the United Kingdom, was 80 percent in
Canada, and varied from 0 to 13 percent in various Australian
states.
Japan is another important market for U.S. organic products.
Currently, Japan has voluntary labeling guidelines for 6 categories
of non-conventional agricultural products: organic, transitional
organic, no pesticide, reduced pesticide, no chemical fertilizer,
and reduced chemical fertilizer. Total sales, including foods
marketed as ``no chemical,'' and ``reduced chemical'' are forecast
to jump 15 percent in 1999 to almost $3 billion. Imports of organic
agricultural products were valued at $90 million in 1998. Given
Japan's limited agricultural acreage, imports will likely provide an
increasingly significant share of Japan's organic food supply (USDA
FAS 1999a).
Recently, these markets have adopted or are considering to adopt
procedures that may impede the importing of organic food. The EU
regulations establishing the basis for equivalency in organic
production among EU members and for imports from outside the EU were
adopted in 1991 (Council Regulation 2092/91). The EU regulations
only allow imports from non-EU countries whose national standards
have been recognized as equivalent to the EU standards (Commission
Regulation 94/92).
The Ministry of Agriculture, Forestry, and Fisheries (MAFF) in
Japan recently announced proposed standards and third-party
certification requirements. Under Japan's proposed standards,
certifying agents from countries without national organic standards
administered by a federal government will have to be accredited
(registered) with MAFF to obtain approval to certify products
destined for the Japanese market. The Japanese proposal includes
provisions for country-to-country equivalency recognition of other
national programs.
The Proposed Rule
The proposed rule follows the structure established in the OFPA.
By adopting this alternative, the Department would follow
legislative direction in the OFPA. All products marketed as organic
will have to be produced and handled as provided in the OFPA and the
regulations. Compared to current organic practices, the proposed
rule sets a more stringent system of requirements.
Accreditation and Certification
The rule specifies the accreditation and certification process.
Persons providing certification of organic production and handling
must be accredited by USDA through the NOP. Applicants for
accreditation must document their abilities to certify according to
the national standards and to oversee their clients' compliance with
the requirements of the OFPA and NOP regulations. Producers and
handlers of organic products must be certified by an accredited
certifying agent. Producers and handlers are required to document
their organic plans and procedures to ensure compliance with the
OFPA.
All certifying agents would have to be accredited, and
certification by producers and handlers would not be voluntary. The
exceptions are: (1) Growers and handlers with gross organic sales of
$5,000 or less would be exempt from certification; and (2) a
handling operation may be exempt or excluded from certification
according to provisions described in the rule's subpart B,
Applicability. For example, a handling operation that is a retail
food establishment or portion of a retail food establishment would
be exempt if it handles organically produced agricultural products
but does not process them, and would be excluded from the
requirement to be certified if it processes or prepares, on the
premises of the retail food establishment, raw and ready-to-eat-food
from agricultural products that are previously labeled as ``100
percent organic,'' ``organic,'' or ``made with organic (specified
ingredients).'' However, this exemption does not extend to other
provisions of the proposed rule such as prevention of contact with
prohibited substances.
USDA will charge applicants for accreditation a $500 fee at the
time of application. USDA will also charge applicants for costs over
$500 for site evaluation of the applicant's business. The applicant
would be charged for travel costs, per diem expenses, and any
miscellaneous costs incurred with a site evaluation. Review of
documents for renewal of accreditation will be charged at an hourly
rate.
Producers and handlers will not pay certification fees to USDA.
Certification fees will be established by the accredited certifying
agents. USDA will not set fees. The rule requires certifying agents
to submit a copy of their fee schedules to USDA, post their fees,
and provide applicants estimates of the costs for initial
certification and for renewal of certification.
Production and Handling
The rule establishes standards for organic production of crops
and livestock and handling of organic products. These standards were
developed from specific requirements in the OFPA, recommendations
from the National Organic Standards Board (NOSB), review of existing
organic industry practices and standards, public comments received
on the 1997 proposal and subsequent issue papers, and public
meetings.
The proposed rule establishes a number of requirements for
producers and handlers of organic food. These requirements will
affect farming operations, packaging operations, processing
operations and retailers. Some of the major provisions are: (1) Land
requirements; (2) crop nutrient requirements; (3) crop rotation
requirements; (4) pest management requirements; (5) livestock
management requirements; (6) processing and handling requirements;
and (7) commingling requirements.
National List
The National List lists allowed synthetic substances and
prohibited non-synthetic substances that may or may not be used in
organic production and handling operations. The list identifies
those synthetic substances, which would otherwise be prohibited,
that may be used in organic production based on the recommendations
of the NOSB. Only those substances on the National List may be used.
The National List also identifies those natural substances that may
not be used in organic production, as determined by the Secretary
based on the NOSB recommendations.
Testing
When certifying agents have reason to believe organic products
contain a prohibited substance, they may conduct residue tests. The
rule incorporates the national mean of detected residues for
specific commodity/pesticide pairs and clarifies how unavoidable
residual environmental contamination would be used in residue
testing.
Labeling
The rule also states how organic products may be labeled and
permitted uses of the USDA organic seal. In addition to the USDA
seal and the certifying agent's seal, information on organic food
content may be displayed. It is important to note that small
businesses who are certified may use the USDA seal.
Recordkeeping
The rule will require certifying agents, producers, and handlers
to keep certain records. Certifying agents will be required to file
periodic reports with USDA. Producers and handlers will be required
to notify and submit reports to their certifying agent. While
recordkeeping is a standard practice in
[[Page 13635]]
conventional and organic farming, the proposal adds recordkeeping
and reporting requirements which do not exist for growers and
handlers operating without certification. Similarly, certifying
agents would face additional recordkeeping and reporting
requirements, particularly those certifying agents operating without
external accreditation. State and private certifying agents regulate
the use of organic seals and logos. The proposed rule permits
certifying agent logos and requires the name of the certifying agent
on processed organic foods.
Alternatives to the Proposed Rule
As required by E.O. 12866, alternatives to the proposed rule
were considered. The identified alternatives were the Status Quo and
Industry-Developed Standards. The costs and benefits of each
alternative were assessed to the extent possible.
Status Quo: The Organic Market in the Absence of Federal Regulation
This is the no program alternative. There would be no national
standard or national program of accreditation and certification.
Certification would be voluntary and certifying agents would not
have third party accreditation. Some producers and handlers would
operate with certification provided by private organizations or
State programs. Other producers and handlers would characterize
their foods as organic but would not be certified.
A mix of State and private programs may continue to operate
according to varying standards. In States without organic laws or
States where certification is voluntary, goods would be marketed as
organic without third party certification. Even under this scenario,
organic food produced in States with production standards and
certification may be produced using similar practices because most
State standards follow similar requirements: A 3 year transition,
prohibited use of certain substances (lists of substances tend to
overlap), practices which prevent commingling with conventional
products, and where livestock standards exist, organic feed.
In addition, at the time the OFPA was enacted, the industry had
been unable to agree on organic standards. Recently, there has been
movement toward shared standards partly in response to efforts to
develop national organic standards including the 1997 proposal and
the public NOSB process. The Organic Trade Association (OTA) has
developed ``American Organic Standards'' which the OTA Board
recently ratified. The OTA describes itself as `` * * * a national
association representing the organic industry in Canada, the United
States and Mexico. Members include growers, shippers, processors,
certifying agents, farmer associations, brokers, consultants,
distributors and retailers. Established in 1985 as the Organic Foods
Production Association of North America, the Organic Trade
Association works to promote organic products in the marketplace and
to protect the integrity of organic standards.'' (OTA website).
Although there is substantial consensus on the draft standards,
acceptance is not unanimous.
The draft standards developed through OTA correspond closely to
many elements in the proposed national organic program. OTA
envisions a system of accreditation and certification of producers
and handlers but not restaurants and grocery stores. The list of
allowed and prohibited substances mirrors the list developed by the
NOSB. Production practices for crops and livestock include the
common features in most State and private programs--a 3 year
transition, no commingling, use of organic feed, limits on the use
of antibiotics, requirements for an organic plan and recordkeeping.
Hence, even in the absence of a national program, the organic
industry may be moving toward a common standard.
Under the status quo-no national program alternative, producers
and handlers who chose to be certified, or who are required by State
laws to be certified, would pay fees that would vary depending on
the market for the particular private certifying agent's service and
whether a State certification program was operating with subsidized
fees.
No federal funds would be used, there would be no transfer from
federal taxpayers at large to organic market participants, and there
would be no federal regulatory barriers to entry into organic
production and handling.
International access for domestic organic products may be very
influential on development of the organic industry in the United
States. A food trade publication (The Natural Foods Merchandiser)
tracked organic sales for a while in the 1990s showing annual growth
in retail sales of 20-25 percent between 1990 and 1996 (Table 1).
This growth took place in the absence of a national program.
In the absence of national standards, U.S. organic producers
have been able to access European markets only by obtaining specific
product permissions granted to individual importers by organic
regulatory authorities in an EU member state (Byng, p. 27-28 1994).
This process has required the importer to satisfy the authorities,
through documentation and possible site inspection, that the product
in question has been certified to and produced under equivalent
standards of production and inspection. This case-by-case process of
approving imports was intended as a temporary arrangement to
accommodate non-EU countries that had not yet established government
systems regulating organic production and certification. Another
step State and private organic certifying agencies have taken to
access international markets in the absence of a national program
has been a voluntary, fee-for-service program to verify that they
comply with the requirements prescribed under ISO Guide 65.
Governments in foreign markets and foreign private processors
and retailers are expected to insist on additional verification that
goods have been produced to acceptable organic standards. This would
likely lead to an increased use of private accreditation services
and of USDA's ISO Guide 65 verification service. USDA's ISO Guide 65
verification services are provided on a user fee basis with full
cost recovery. These private accreditations and USDA's verifications
would increase costs for certifying agents and producers and
handlers. In addition, establishing reciprocity between certifying
agents in the domestic organic market involves some cost and may
stifle growth in trade of organic products, although the magnitude
of these costs and their effects on growth is unknown.
Under the proposed national program, all applicants for
accreditation will be assessed against ISO Guide 65, eliminating the
need for a separate ISO Guide 65 assessment that exists for those
exporting to the EU in the absence of a national program. Growth in
the trade of organic products, particularly exports, may be
jeopardized by a status quo-no program alternative because there
would be no national program upon which to establish equivalency.
Industry-Developed Standards
As an alternative to the proposed national program, another
national program could adopt industry-developed standards. For
example, USDA could adopt the standards recently developed by the
Organic Trade Association or other consensus standards and enforce
those standards. Certification to these standards could be performed
as it is currently, by private certifiers or by state programs.
There could be variation among certifiers' standards, but producers
and certifiers would not be able to prohibit use of a product
meeting the national standard from the production of other
``organic'' products.
There are various enforcement mechanisms that are available
under this alternative. The USDA could choose to enforce the adopted
standards. Enforcement could be left to other federal agencies or
State governments. For example, the Federal Trade Commission could
regulate truth in advertising with respect to organic food; the USDA
Food Safety Inspection Service could regulate labeling of organic
meat and poultry products.
Adopting the industry standard as the USDA standard, the USDA
could provide an acceptable national standard that would be
necessary in establishing equivalency to access international
organic markets, and eliminate the problems associated with
establishing reciprocity in the domestic organic market.
It is important to note that it may be difficult to develop
consensus industry standards. For example, while standards recently
proposed by OTA were developed with significant industry input they
may not represent the kind of consensus that is the result of this
proposed rule.
Number of Affected Parties and Projections
In assessing the impacts of the rule, we have attempted to
determine the number of certifying agents, private and State, that
are currently operating, and considered the factors likely to affect
the number of certifying agents after the rule is implemented. We
have attempted to determine the number of currently operating
producers and handlers that would be affected. And, we have
considered the factors which might affect the number of producers
and handlers after the program has been implemented.
[[Page 13636]]
For the analysis, the USDA assumes the following:
1. Forty-nine domestic certifying agents and ten foreign
certifying agents will be affected by the proposed regulation.
2. Approximately 12,200 certified and non-certified organic
producers will be affected by the proposed regulation. With the
assumed growth rate of 14% for certified organic producers and
approximately 8% for non-certified organic producers, the number of
organic producers will grow to 17,150 in 2002.
3. Approximately 1,250 processors and handlers of organic food
will be affected by the proposed action. This number will grow to
2,150 by 2002.
4. The number of retailers affected by the proposed action is
not quantified.
Certifying Entities
We place the number of certifying agents currently operating at
49, including 13 State programs. The number of certifying agents has
remained fairly stable, between 40 and 50, for some years, with
entries and exits tending to offset each other. For purposes of
estimating the paperwork burden described elsewhere, we assume no
growth in the number of domestic certifying agents but project 10
foreign certifying agents in the first 3 years of the program.
Organic Producers
It is more difficult to establish the number of organic
producers. Organic farming was not distinguished from conventional
agriculture in the 1997 Census of Agriculture. Among the sources
which give insight into the number of producers, the Organic Farming
Research Foundation (OFRF) has conducted nationwide surveys of
certified organic producers from lists provided by cooperating
certifying agents (OFRF 1999). OFRF sent its 1997 survey to 4,638
organic producers.
Because OFRF did not obtain lists from all certifying
organizations or their chapters (55 out of a total of 64 identified
entities provided lists), its list count of 4,638 producers is
likely an underestimate of the number of certified organic farms. If
the average producer-to-certifying agent ratio (55 certifying agents
to 4,638 producers) holds for the 9 certifying organizations that
did not provide the list (9 certifying agents out of a 64 certifying
agents), then the number of producer grows to 5,397 producers.
The different estimates of the number of certifying agents
should be noted. The USDA estimates 49 certifying agents; the OFRF
estimates 64 certifying agents. The difference stems from the USDA's
not counting different chapters of certifying organizations
separately.
The California Department of Food and Agriculture's organic
registration program suggests that, at least for California, most
organic producers are not certified. For the 1994-95 reporting
period, CDFA reported that 1,372 farms registered as organic
producers but only 517 of these farms were certified (Klonsky and
Tourte, 1998a). Thus, one approach to projecting national totals
from OFRF survey lists of certified producers would be to apply the
1994-95 ratio between producers registered and certified in
California to the OFRF 1997 list count. This would suggest the
number of non-certified producers to be 8,918, resulting in the
total number of organic producers to be 14,315. However, it is
important to note that California's structure of organic production
may not be representative of the national profile. The number of
non-certified producers may be higher or lower.
CDFA also reports the number of registered and certified
producers by sales class. Many producers would likely be eligible
for the small farm (sales less than $5,000) exemption provided for
in the OFPA. Of 1,372 registered organic farms in California, 907
had sales of less than $10,000. Of the 517 certified farms, 188 had
sales of under $10,000. If these ratios are applied to the number of
producers calculated, then the number of certified producers with
sales under $10,000 would be 1,962, and the number of organic
producers in general with sales under $10,000 would be 9,463. Thus,
there are potentially a large number of farms which could be exempt
from certification requirements.
Dunn (1995a, 1995b, and 1997) has estimated the number of
certified organic producers in the United States. Dunn (1995a,
1995b) estimated the number of certified producers at 4,060 in 1994.
Dunn (1997) reported 4,856 certified organic farms in 1995. USDA's
1997 proposal relied on Dunn's 1995 estimate of 4,060 total
certified producers. Dunn's numbers have been used because Dunn's
1995 work was an official USDA study. The methods used were reviewed
by USDA and the resulting estimates are official USDA statistics.
Although Dunn's 1997 estimates were not a USDA study, the 1997 study
used the same approach as the 1995 study.
An adjustment is needed to account for the number of producers
who are practicing organic agriculture but who are uncertified and
would be affected by this proposed rule. We reject the idea of
expanding by the certified-to-registered ratio reported in
California for reasons previously stated. We assume that the number
of organic-but-not-certified producers in 1999 is about 4,000. We
adopt this figure recognizing that there may be 1,000 such farms in
California, given that there were 855 in CDFA's report on 1995
registrations. The total number of organic farms for assessing the
impact of the rule is 12,200 in 1999.
Data collected by AMS indicate that the number of certified
organic farmers increased about 12 percent per year during the
period 1990 to 1994. OFRF survey efforts indicate that growth has
continued, though it is not clear whether the growth rate has
changed. We use the average growth rate from Dunn's time series from
1991-1994, which was about 14 percent. The true rate of growth could
be higher or lower. By applying the 14-percent growth rate to Dunn's
(1995) estimate, the number of certified organic producer
potentially affected in 1999 is 8,200 and 12,150 in 2002.
We have no national-level growth rates for not-certified organic
farms. The limited times series from CDFA is of limited value in
estimating a growth rate. We suspect it is less than the rate for
certified farms because certification has value and organic
producers would be expected to take advantage of the marketing
advantages of certification. Furthermore, the emergence of State
certification programs that appear to have lower certification fees
than private certification entities may have encouraged more organic
producers to be certified. Therefore, for purposes of analyzing the
impacts of the rule for the Paperwork Reduction Act, we assume
growth of non-certified organic producers from 4,000 in 1999 to
5,000 non-certified farms by 2002, making the total number of farms
potentially affected by the rule, 17,150 farms. However, we request
comment and/or data on the number and the growth of certified and
non-certified organic farms.
Organic Handlers
Little information exists on the number of handlers. They
include processors such as organic soup manufacturers, organic food
packaging operations, and organic food wholesalers. USDA has
estimated that there were 600 entities in this category in 1994
(Dunn 1995b). AMS estimated that the growth rate was 11 percent from
1990 through 1994 (Dunn 1995b). More recent data from CDFA
registration records suggest a growth rate of about 28 percent
(California Department of Health Services 1999). For projection
purposes, we use a growth rate of 20 percent, which makes the number
of handlers for 1999 1,250 and for 2002 2,150. Reasons for growth
include the general increase in organic production and growth in the
market for processed organic foods, including multiingredient
products. Again, these projections are based on limited data from
the early 1990's, and growth may have slowed or increased. We
request comment and/or data on the number and the growth rate of
processors and handlers in the organic industry.
Retail Food Establishments
Retailers of organic food are grocery stores, bakeries,
restaurants and other establishments that process or prepare raw and
ready-to-eat food. Most are not currently subject to either
voluntary practices or mandatory standards of the organic industry.
Although they are excluded from the certification requirements, they
are subject to other processing, handling, and other production
related requirements of the proposed rule. Hence, a new stratum of
the organic industry will be regulated by the proposed rule.
Dunn's (1995a) estimates the number of certified retailers to be
31 in 1995. It is not clear whether Dunn's (1995a) definition of
retailers and the proposed definition stated above are consistent.
Hence, the total number of retailers that may be regulated remains
unknown. USDA's Economic Research Service (ERS) reports there were
161,707 grocery stores in 1997 (ERS website). Many of these stores
sell organic products and may be affected by the proposed rule. The
effect of the proposed regulation on the growth of retailers remains
unknown. We request comment and/or data on the number and the growth
rate on the retailers of organic food.
[[Page 13637]]
Foreign Entities
The discussion of the number of affected parties has focused on
domestic certifying agents, producers, and handlers. We recognize
that foreign entities may apply for accreditation and foreign
producers and handlers may be certified under the NOP. Furthermore,
upon request of a foreign government, a foreign certifying agent may
meet the requirements for accreditation when the Administrator
determines that the certifying agent meets the requirements of the
NOP.
At this time, we have no information regarding the number of
foreign entities which may enter the NOP. We do not know how many
foreign producers and handlers are marketing goods as organic, nor
do we know how many will seek to be certified under the NOP.
Accredited certifying agents will be able to certify operations
outside the United States and foreign certifying agents may become
accredited by USDA. It is likely that the costs for accreditation
will be higher for foreign applicants for accreditation. Foreign
applicants will face the same costs as domestic applicants but the
levels of cost would reflect generally higher costs of foreign
travel and per diem expenses for site evaluation and miscellaneous
costs such as for translation of documents. For purposes of
estimating the paperwork burden described elsewhere, we assume 10
foreign certifying agents in the first 3 years of the program. We
request comment and/or data on the number and the growth rate of
foreign entities that may export to the U.S. organic market.
Benefits of the Proposed Rule
The benefits from implementation of the proposed rule are: (1)
Improved protection of buyers from misleading claims and more
information on organic food; (2) reduced administrative costs; and
(3) improved access to international organic markets. Not all
benefits that may arise from the rule are quantifiable. Where
economic data are available, they may relate to costs and are
generally not adequate to quantify economic benefits.
Information
Potential benefits to consumers as a result of the proposed rule
include more information on organic food, and protection from false
and misleading organic food claims. Consumers may be misled by
labels on processed and raw products claiming to be organic. In
particular, with processed food, some of the ingredients may not be
organically produced, or the product may contain less organic
content than the consumer assumes. The USDA organic seal will
provide consumers a quick tool to verify that goods offered for sale
as organic are in fact organic. To the extent that consumers view
the seal as an important information too, that is, product with the
seal is perceived as more desirable, they may enhance the ability of
producers to realize the price premiums associated with certified
products.
There is anecdotal evidence to suggest that consumer fraud
involving organic food does occur (Mergentime 1997). Criminal
prosecutions involving felony pleas and fines have taken place
(Mergentime 1997). However, we have no evidence to suggest that this
problem is wide-spread (Mergentime 1995). Also, it is important to
recognize that the organic industry's effort to police itself and
the remedies provided by the judicial system may be adequate to
address consumer fraud. Mergentime (1997) documents the effect of
litigating fraud cases on the industry. However, we request comment
and/or data on the extent and the severity of consumer fraud that
may exist.
Some producers may have limited their organic livestock
production because of uncertainty regarding the standards that would
be used in the NOP. By removing the uncertainty, producers may
increase production, thereby increasing the quantity of livestock
products.
Reduced Administrative Costs
The proposed rule addresses the problem of existing certifying
agents using different standards and not granting reciprocity to
other certifying agents. By accrediting certifying agents, the rule
would establish the requirements and enforcement mechanisms that
would reduce inconsistent certification services and lack of
reciprocity between certifying agents. In the current system, the
certifying agent of a final product is not required to recognize the
certification of an intermediate product. Both primary farmers and
food handlers may face a risk of being unable to sell a certified
organic product when more than one certifying agent is involved. By
imposing a uniform standard of certification and production, costs
associated with establishing reciprocity between certifying agents
will be eliminated. However, the magnitude of this benefit cannot be
gauged without quantification. In particular, with the increasing
consensus within the organic industry, the benefit may not be large.
It is important to distinguish between consensus with respect to
standards of production and consensus with respect to certifying
agents practices. There is growing consensus regarding crop
standards, livestock standards are more problematic. And, consensus
is least evolved regarding standards of conduct and practice for
certifying agents. There is no consensus regarding whether
certifying agents should be accredited or who the accrediting body
should be.
Industry-wide training costs may decrease. The proposed uniform
standards of production, certification should enable organic
inspectors to move more easily from one certifying agent to another
than the current system.
In addition, USDA accreditation of certifying agents would
present opportunities for sharing information about standards,
practices, and the general requirements of the program through the
NOP staff. USDA will undertake a number of outreach and education
efforts in connection with the launch of the NOP. Compliance guides
and other printed material will be prepared which will be more
readily understood than the Federal Register document. NOP staff
will participate at industry meetings and will likely host public
information exchange meetings.
International Markets
The final national program rule is expected to lead to EU
acceptance of NOP certified organic products. That is, it is
anticipated that the EU would determine that the NOP is acceptable
vis-a-vis EU regulation 2092/91. Article 11 of EU Reg. 2092/91
establishes the conditions under which organic products may be
imported from third countries and addresses the framework for
equivalency. The NOP is a national program that should be acceptable
to the EU and other governments. The result would be the removal of
trade restrictions, thereby possibly increasing the growth in
exports of organic food products.
Currently, despite restricted access to the European market, the
United States is the most important non-EU supplier of organic
products to EU countries (Foreign Agriculture Service (FAS), 1995).
Import authorizations have been granted for a number of raw and
processed commodities, including sunflowers, buckwheat, beans,
sugar, and apples. Demand is strong throughout the European market,
and the organic market share was 1-2 percent of total food sales in
1997 (Collins).
Lohr (1998) cites several growth projections:
Annual growth rates of 25% to 30% have been experienced in the
EU, the United States, and Japan for over five years, but growth is
already slowing in some product categories (PSC, Scott) * * * Segger
projects that the EU market will reach $58 billion and the U.S.
market $47 billion by 2006. Ahmed suggests that the Australian
market could grow to $571 million by 2000, whereas LaFond projects
that the value of Canadian organics will reach $145 million by 2006.
Mergentime forecasts the Japanese market will reach $2.6 billion by
2000 (Lohr, 1126).
Lohr further states that these projected future growth rates are
based on straight-line extrapolations of current sales and growth
rates without understanding the underlying market mechanisms and
price elasticities (Lohr 1998).
Foreign acceptance of the U.S. national standard can be expected
to expand the universe of consumers for U.S. producers and reduce
costs of negotiating and documenting shipment by shipment.
Costs of the Proposed Rule
The costs of the proposed regulation are the direct costs of
complying with the specific standards. It is important to note that
while some costs associated with accreditation and certification are
quantified, costs stemming from other provisions of the proposed
regulations are not. In addition, this is a short-run analysis. The
analysis examines the costs that may be incurred from 1999 to 2002.
It is not possible at this time to conduct a longer-run analysis
because we do not know enough about the fundamental supply and
demand relationships to make economically sound long run
projections.
Accreditation Costs
USDA has identified 36 private certifying agents and 13 State
programs providing certification. These 49 entities are considered
likely applicants during the first 18 months
[[Page 13638]]
during which USDA will not charge application fees or hourly fees
for accreditation. An unknown number of new entrants to the
certifying business may also apply. However, over the last 10 years,
the number of certifying agents does not appear to have grown
significantly, with the net effect of entries and exits maintaining
a population of certifying agents at about 40-50.
The proposed rule would allow USDA to collect fees from
certifying agents for USDA accreditation. Collecting fees from
certifying agents only is administratively simpler and will enable
State programs that want to keep client costs low to do so.
Applicants for accreditation will be required to submit a
nonrefundable fee of $500 at the time of application, which is
applied to the applicant's fees for service account. This means that
the $500 fee paid at the time of application is credited against any
subsequent costs of accreditation arising from the site evaluation.
The $500 fee is the direct cost to applicants who are denied
accreditation based on the initial review of the information
submitted with their application. Charges for the site evaluation
visit will cover travel costs from the USDA employees' duty station,
per diem expenses for USDA employees performing the site evaluation,
an hourly charge that we anticipate will not exceed $95 per hour
(per each employee) for services during normal working hours (higher
hourly rates will be charged for overtime and for work on holidays),
and other costs associated with providing service to the applicant
or certifying agent.
The anticipated hourly rate is the rate that USDA will charge
for services under the Quality Systems Certification Program (QSCP).
A separate rulemaking will establish the precise hourly rate that
will be charged. Our preliminary estimate that the fee will be no
more than $95 per hour is presented to give the public some
indication of the rate that will be charged following the 18-month
transition period. QSCP is an audit-based program administered by
AMS, which provides meat packers, processors, producers, and other
businesses in the livestock and meat trade with the opportunity to
have special processes or documented quality management systems
verified. The procedures for accreditation evaluation are similar to
those used to certify other types of product or system certification
programs under QSCP.
At present, the base per diem for places in the United States is
$80 ($50 for lodging and $30 for meals and incidental expenses). Per
diem rates are higher than $80 in most large cities and urbanized
places. Travel costs will depend on where the certifying agent is
located.
USDA estimates the costs of a site evaluation visit after the
transition period will average $3,070-$4,850 depending on the
characteristics of the applicant. This estimate is based on
experience with the QSCP and more limited experience performing
audits verifying that certifying agents meet ISO Guide 65. The cost
of a site evaluation visit will vary with the cost of travel from
the USDA reviewer's duty station to the applicant's place of
business. In general, more distant and more remote locations will
involve higher travel costs.
Accreditation will include verification of adherence to ISO
Guide 65. Recent experience with USDA's program to verify organic
certifying agents to ISO Guide 65 indicates that roughly 32 staff
hours are required. Although much of the accreditation site
evaluation will involve comparisons against ISO Guide 65, additional
hours will be required because USDA will be evaluating additional
aspects of the applicant's operation to determine if the applicant
is qualified to perform as an accredited agent for the NOP. Based on
experience with ISO Guide 65 verifications, we project that small
applicants with a simple business structure will require 3 days and
large applicants with more complex business structure will require 5
days. Thus, the total number of hours to be charged would range from
24 to 40 hours. At the base rate of $95.00, the charge for hours of
service would be $2,280-$3,800.
Per diem costs would cover 3 to 5 days, totaling $240-$400. A
review of domestic travel by USDA staff during fiscal year 1999,
indicates that transportation costs ranging from $500-$600.
Miscellaneous costs are estimated to add another $50 to each site
visit. Thus, the total site visit cost would range from $3,070 to
$4,850.
During the 18-month transition period, USDA intends to use 2
reviewers for site evaluation visits. One reviewer will come from
the QSCP audit staff and will be familiar with the ISO Guide 65
verification; the other reviewer will come from the NOP staff and
will be familiar with requirements of the organic program. The two
will conduct the site evaluation jointly. We anticipate only one
reviewer will be required after the transition period. During the 18
month transition period, applicants will be charged for travel and
per diem costs for two persons, but not application fees or hourly
fees. Thus, the estimated expenditures (travel and per diem) for
these initial accreditations will be $1,530-$2,050. Table 3
estimates the total initial costs for an applicant to become
accredited.
Currently few private certifying agents are operating with third
party accreditation. Fetter (1999) reports that in a sample of 18
certification programs four programs were accredited and one had
accreditation pending. All of these were large, private certifying
agents. Those certifying agents currently accredited by third
parties will likely pay less for USDA accreditation. In its first
proposal, USDA stated at FR 62:65860, ``We are aware that certifiers
currently may pay in excess of $15,000 for accreditation by a
private organization.'' Commenters thought this figure was too high.
One commenter, which operates the International Federation of
Organic Agriculture Movements (IFOAM) Accreditation Programme under
license to IFOAM, stated ``It is possible that the largest programme
operating a chapter system with activities in many countries (which
is included in their IFOAM evaluation) paid this amount in their
first year. On the other hand the average cost to a medium sized
certifier works out at around $3000 to $4000 per year.'' Another
commenter stated ``At the present time IFOAM accreditation costs
less than $10,000/year for the largest certifier and $3-5,000 for
smaller certifiers.''
The direct costs of accreditation, if all currently operating
certifying agents become accredited during the first 18 months
following the final rule, is approximately $75,000 to $100,000. This
figure is derived from the per firm costs in Table 3. After the
first 18 months, the direct cost for accrediting 49 certifying
agents would be approximately $150,000 to $238,000.
The 18 month period affects the distribution of program costs
between the organic industry and the taxpayer. Some of the costs of
accreditation would be absorbed by the NOP operation budget
appropriated by Congress. In effect, the taxpayers are subsidizing
the organic industry. Without this subsidy, the total cost of
accreditation may approach $1 million.
Private certifying agents and state programs that do not mirror
the proposed regulation may incur additional costs to change their
programs to adopt the proposed national standards. The discussion on
the effect of the proposed regulation on existing state programs is
in ``State Program Costs.'' The cost associated with changing
existing private certifying programs is not quantified.
Also, certifying agents who have been operating without third
party accreditation will face new costs. Compared to the direct
costs of $3,000-$5,000 per year indicated by the commenters, the
direct costs of USDA accreditation will be smaller. The direct costs
for certifying agents obtaining accreditation during the first 18
months, when USDA will not impose an application fee or hourly
charges, will be limited to travel and per diem costs. Furthermore,
USDA's charges are imposed every 5 years, not annually.
A national accreditation program may shrink the market for a
third-party accreditation. Certifying agents will have little
incentive to maintain or seek a second accreditation by a private
organization unless that accreditation sufficiently enhances the
market value of the certifying agent's services. Thus, the market
will determine whether other accrediting entities continue to have a
U.S. market for their services.
Training programs are currently offered by the Independent
Organic Inspectors Association (IOIA), an organization of
approximately 165 organic certification inspectors, and by some of
the larger certifying agents (IOIA, p. 1). Costs to existing
certifying agents to provide additional training to other staff are
difficult to measure in the absence of information on current staff
skill levels or the existence of formal training other than
inspector training. Some agencies rely on volunteer staff who may
have had no formal training, but the extent of this practice is
unknown. AMS intends to offer assistance to certifying agents,
producers, and handlers by providing guide books and other printed
material that would enable participants to better understand the
regulations. In addition, AMS intends to continue open and frequent
communication with certifying agents and inspectors to provide as
much information as possible to aid them in fulfilling the
requirements of the regulations.
[[Page 13639]]
The OFPA requires that private certifying agents furnish
reasonable security, such as a bond, for the purpose of protecting
the rights of participants in the organic certification program.
Specifics requirements regarding reasonable security have not yet
been established. It is expected that there will be costs to
certifying agents from these requirements.
Certification Costs
State laws vary widely on organic certification and
registration. Some States require only that an organic producer
register and make certification voluntary. Other States require
certification by the State's own agents, while others accept
certification by a private certifying agent. The least stringent
requirement among States with organic legislation is that products
marketed as organic comply with their definition of organic but both
registration and certification are voluntary. Thirteen States
operate programs to certify organic production. In many States
producers may claim their product is organic but operate without
certification or well-defined standards. On the other hand, many
organic producers operate in States with no program and voluntarily
secure third party certification to well-defined standards.
Under the proposed rule, USDA will not impose any direct fees on
producers and handlers. Certifying agents will establish a fee
schedule for their certification services that will be filed with
the Secretary. Certifying agents will provide all persons inquiring
about the application process with a copy of their fees. The
certifying agent will provide each applicant with an estimate of the
total cost of certification and an estimate of the annual costs of
updating the certification. However, the certifying agent may
require applicants to pay at the time of application a nonrefundable
fee of no more than $250 which must be applied to the applicants'
fee-for-services account. The $250 limit is proposed as a reasonable
figure considering the interests of certifying agents and
applicants.
The proposed maximum nonrefundable fee protects certifying
agents by ensuring that they receive some payment for their work for
applicants should the applicant lose interest or be found
unqualified for certification. For the purposes of estimating the
cost of the paperwork burden on certifying agents, USDA has valued
their time at $27 per hour. Thus, the $250 limit, if the certifying
agent chooses to require it, would cover approximately 9 hours of
work. The $250 limit protects applicants from paying large fees up
front when their ultimate eligibility for certification is unknown.
The $250 limit is believed to be low enough to ensure producers and
handlers can afford to take the first steps for certification but
high enough to ensure certifying agents will have an incentive to
initiate certification when the prospects that the applicant will
qualify are unknown.
Some States charge minimal fees for certification by subsidizing
operating costs from general revenues. The majority of certifying
agents structure their fee schedules on a sliding scale based on a
measure of size, usually represented by the client's gross sales of
organic products but sometimes based on the acres operated (Fetter
1999 and Graf and Lohr 1999). Some certifying agents charge an
hourly rate for inspection and audit services.
Graf and Lohr have applied fee schedules provided by nine
certifying agents to four hypothetical farms--small, medium, large,
and a super farm. Tables 2A and 2B summarizes the fees that Graf and
Lohr found by applying schedules of each certifying agent to
hypothetical farms. Total first-year costs and subsequent (renewal)
year costs for certification are shown. The average cost for each
size class should be interpreted with care because the reported
average is not weighted by the number of clients certified. In their
study, the Texas Department of Agriculture program is the low-cost
certifying agent for all-size operations. The high-cost certifying
agent differs across farm sizes. None of these certification
programs mentions costs for residue testing, which the NOP will
require in the form of preharvest testing when there is reason to
believe that agricultural products have come in contact with
prohibited substances. Preharvest testing is expected to be
infrequent. Some certifying agents currently require soil nutrient
testing and water quality testing. The estimated total initial costs
for a producer or handler to become certified are presented in Table
3.
We have not extended the average costs reported in Tables 2A and
2B to aggregate certification costs for all organic farms because
the number of organic farms is not known with precision, nor is
their geographic location and there are no data to distribute the
population of organic farms across size classes. Like conventional
agriculture, the largest percentage of farms would be expected to
fall in the smallest sales class. Many of the smallest farms would
qualify for the small farm exemption from certification.
In addition, organic producers and handlers would incur the
costs associated with becoming familiar with the national program.
We request comment and/or data on the certification costs that may
be imposed on the organic producers, handlers, processors, and
retailers.
Production and Handling Costs
Producers and handlers currently active in the organic industry
may bear costs under the proposed national standards. We believe
that while some provisions of the proposed program mirror current
industry practices, others differ. In addition to the cost
associated with becoming familiar with the national program, any
adjustments stemming from these differences will result in costs.
These costs are only qualitatively discussed. This assessment does
not include a provision-by-provision analysis of possible
alternatives.
Producers
Producers of organic food will face numerous provisions that
will regulate their production methods. As indicated in the Baseline
section, many of the requirements are currently practiced by
certified organic farmers. Farming operations that are not
certified, but are registered with a State government such as
California, receive copies of the State laws to which they must
comply. Some organic producers are neither certified nor registered
and therefore may not practice the requirements proposed. Major
provisions are discussed to illustrate costs; other provisions may
also impose additional costs. We request comment and/or data on the
costs that may be imposed on the producers of organic products. In
addition, we request comment and/or data on the similarities and
differences between the current practices of private and State
programs and the proposed requirements.
Land Requirement. The transition period, which would specify the
time during which prohibited materials cannot be applied before a
field can be certified as organic, is included in many private and
State organic standards. The OFPA specifies a required transition
period of 3 years before certifying a field. The effect of this
provision on the currently certified organic farming operations may
be minimal. Certifying agents currently enforce the 3 year
transition period required by the OFPA. Producers who are registered
in States requiring registration, receive copies of the State laws
governing organic production which generally require a 3 year
transition period.
The effect on small farming operations that are neither
certified or registered may be significant. Small farming operations
that have completed a 3 year transition period and can document the
transition will not be affected by this requirement. To stay in the
organic industry, those who have not completed the 3 year transition
period must comply with the transition period requirement. They may
incur the cost of organic production for a significant length of
time, yet not be allowed to sell their products as organic. Hence,
some small organic operations may exit the industry. We request
comment and/or data on the magnitude of the cost associated with the
provision. In addition, we request comment and/or data on the
similarities and differences between the current practices of
private and state programs and the proposed requirements.
Soil fertility and crop nutrients. Lacking information, we have
not quantified the cost associated with this provision, but we
assume that it may have costs Organic production historically rests
on soil fertility management. Private and State certifying agents
have well developed standards addressing care and treatment of the
soil. The proposed rule includes requirements for the use of manure
and a practice standard for composting which may impose additional
costs to producers. However, not all organic farmers use manure for
soil fertility and many farmers use composting practices that are
consistent with the proposed rule. We believe that this requirement
will have minimal impact on certified or registered organic
producers. We request comment and/or data on the magnitude of the
cost associated with the provision. In addition, we request comment
and/or data on the similarities and differences between the current
practices of private and State programs and the proposed
requirements.
Materials list. Lists of approved synthetic materials, including
soil amendments and
[[Page 13640]]
pesticides, vary from one State program to another. A detailed
analysis of specific differences in the various existing materials
lists shows them to be overlapping in most cases. The impact of the
national program will be determined by how the national standards
differ from current certification standards and from actual
practice.
Farming operations, both certified and registered, may need to
adjust their production methods to comply with the list. These
adjustments will impose costs on these operations. However, most
currently certified operations and those operating under a State
program already adhere to a materials list. These lists overlap in
most cases with each other and the National List in this proposal
which should mitigate the costs for these operations. The magnitude
of the costs resulting from these adjustments is not quantified. We
request comment and/or data on the magnitude of the costs associated
with the provision. In addition, we request comment and/or data on
the similarities and differences between the current practices of
private and state programs and the proposed requirements.
Animal drug use. Another common feature of organic standards is
the restricted use of animal drugs for livestock. Where livestock
standards have been adopted by existing State programs and by
private certifying agents, most prohibit the use of animal drugs
except for the treatment of a specific disease condition, and use of
animal drugs is generally prohibited within 90 days prior to the
sale of milk or eggs as organic. Some State and private certifiers
allow the use of animal drugs in animals for slaughter if the
producer extends the withholding period. Others prohibit the use of
animal drugs. The standards in the proposed rule would prohibit the
sale as organic of an edible products derived from an animal treated
with antibiotics or other unapproved substances.
The proposed standards may not differ from existing State or
private standards in prohibiting the use of drugs on healthy
animals. However, the effect of this provision may differ among
certified and registered organic farms. The effect on the certified
farming operations is unknown. We assume that this provision may
have costs, but the magnitude of these costs is not quantified. We
request comment and/or data on the magnitude of the costs associated
with the provision. In addition, we request comment and/or data on
the similarities and differences between the current practices of
private and state programs and the proposed requirements.
Other livestock requirements. Lacking information, we have not
quantified the cost associated with this provision, but we assume
that this provision may have costs due to the variability in current
housing, feed and health care practices. We request comment and/or
data on the magnitude of the costs associated with the provision. In
addition, we request comment and/or data on the similarities and
differences between the current practices of private and state
programs and the proposed requirements.
Residue Testing. Lacking information, we have not quantified the
cost associated with this provision, but we assume that this
provision may have costs. We request comment and/or data on the
magnitude of the costs associated with the provision. In addition,
we request comment and/or data on the similarities and differences
between the current practices of private and state programs and the
proposed requirements.
Handling requirements. These requirements prohibit a handler
from using ionizing radiation for any purpose, an ingredient
produced with excluded methods, or a volatile synthetic solvent in
or on a processed agricultural product intended to be sold, labeled,
or represented as ``100 percent organic'', ``organic'' or ``made
with organic (specified ingredients).'' We believe, however, that
the additional costs associated with compliance may be small. We
base this assumption on the thousands of comments on the first
proposal, including comments from the organic industry, indicating
that these practices are widely considered to be inconsistent with
organic production and handling. Lacking information, we have not
quantified the cost associated with this provision. We request
comment and/or data on the magnitude of the costs associated with
the provision In addition, we request comment and/or data on the
similarities and differences between the current practices of
private and state programs and the proposed requirements.
Handlers
Handlers of organic food may be defined and regulated
differently across different certifying agents and States. Handlers
may incur some cost associated with complying with the requirements
of the proposed regulation. We request comment and/or data on the
costs that may be imposed on the retailers of organic products. In
particular, we request comment and/or data on costs associated with
excluded methods, residue testing, and labeling. In addition, we
request comment and/or data on the similarities and differences
between the current practices of private and state programs and the
proposed requirements.
Retail Food Establishments
Largely, retailers of organic food are not regulated. However,
they are still subject to other requirements such as prevention of
contamination of organic products with prohibited substances, and
commingling organic with non organic products. Complying with these
provisions may incur some cost. We request comment and/or data on
the costs that may be imposed on the retailers of organic products.
Labeling Costs
Certified handlers will have to comply with requirements
regarding the approved use of labels. The estimated annual cost for
1,977 certified handlers to determine the composition of 20 products
to be reported on labels is $948,960. This figure is based on an
average of 1 hour per product and an hourly cost of $27. Similarly,
certified handlers will have to design their labels to comply with
the regulation. This is expected to take 1 hour per label at $27 per
hour for a compliance cost of $948,960. Total label costs for
certified handlers are $1.9 million.
Any producers, processors, and retailers who are not currently
certified but who package organic products are also subject to the
labeling requirements. Any changes to existing labels and new labels
that need to conform to the proposed regulation will incur a cost.
The costs associated with these activities are not quantified.
Hence, the lower bound on the labeling cost is approximately $2
million. We request comment and/or data on the extent the current
labels will need to change to conform to the proposed regulation. In
addition, we request comment and/or data on the similarities and
differences between the current practices of private and state
programs and the proposed requirements.
State Program Costs
A national program may impose additional costs on States by
requiring changes in their existing programs. The proposed rule
encompasses most of the principles of existing State programs.
However, there are also departures.
Where State standards are below Federal standards or where
elements of the Federal standards are missing from a State program,
these States would be required to make changes in their programs
that they might otherwise not make. Where State programs have
standards in addition to the Federal standards and they are not
approved by the Secretary, States also would be required to make
changes in their programs. States without organic standards or whose
current standards either would conform to those of the national
program or would be approved by the Secretary would not incur
additional costs resulting from required changes. Currently, USDA
cannot predict which States may be required to adjust their existing
programs.
States will be charged for accreditation, something none of them
pay for now. The cost associated with this provision is discussed in
the Accreditation Section.
Enforcement Costs
Enforcement costs will fall upon USDA's NOP, States operating
State programs, and on certifying agents. Certifying agents will
review clients' operations and will notify clients of deficiencies.
Certifying agents can initiate suspension or revocation of
certification. Certifying agents will be aware of these overhead
costs and we assume that they will establish fee schedules that will
cover these costs. Actual costs to certifying agents for enforcement
activities will depend on the number of clients, how well informed
clients are of their obligations, and client conduct. State programs
will face the same obligations and types of costs as private
certifying agents.
USDA's enforcement costs are costs associated with ensuring
private certifying agents and State programs fulfill their
obligations. USDA will bear costs of investigating complaints,
monitoring use of the USDA organic seal and organic labeling, and
taking corrective action when needed. USDA will bear costs related
to reviewing an applicant's or certified operation's appeal and for
administrative proceedings. We request comment on the costs of the
[[Page 13641]]
enforcement provisions of the proposed regulation.
Reporting and Recordkeeping Costs
The Paperwork Reduction Act of 1995 requires an estimate of the
annual reporting and recordkeeping burden of the proposed NOP.
Detailed descriptions of individual elements of that burden are
presented in the proposal under the heading Paperwork Reduction Act
of 1995. The estimated annual reporting and recordkeeping burden
reported is approximately $6.8 million. This figure should be
understood within the context of the requirements of the Paperwork
Reduction Act. The Paperwork Reduction Act requires the estimation
of the amount of time necessary for participants to comply with the
proposed regulation in addition to the burden they currently have.
Information gathered by AMS in auditing activities in conjunction
with ISO Guide 65 verifications, leads us to believe that the
paperwork burden on current certifying agents and certified
operators will be 10 to 15 percent greater than their current
business practices as a result of this proposal.
Certifying Agents. The regulation will impose administrative
costs on certifying agents for reporting and recordkeeping. The
actual amount of the additional administrative costs that would be
imposed by the proposed rule is expected to be different for those
entities which would begin their activities only after the national
program is implemented. Certifying agents that currently are active
in the organic industry already perform most of these administrative
functions; therefore, the additional costs to them would depend upon
the extent to which their current practices are different from the
requirements of the proposed regulation. An estimate of the cost of
compliance is the annual reporting and recordkeeping burden
documented in the Paperwork Reduction Act of 1995 analysis. Table 4
shows the estimated annual costs for State certifying agents and for
private or foreign certifying agents. Based on the projected number
of States agents (13) and private or foreign agents (46) the total
reporting and recordkeeping cost, which captures much of the
compliance costs of the rule, is $1,113,192.
The following list describes several of the most significant
proposed administrative requirements or optional submissions and the
probable resources required for compliance. Details on the reporting
and recordkeeping burdens estimated for each item are in the
paperwork analysis.
1. A list of farmers, wild crop harvesters and handlers
currently certified. This information can be compiled from existing
records. After implementation, certifying agents will be required to
submit on a quarterly basis a list of operations certified during
that quarter.
2. A copy of procedures used for certification decisions,
complying with recordkeeping requirements, maintaining
confidentiality of clients' business-related information, preventing
conflicts of interest, sampling and residue testing, training and
supervising personnel, and public disclosure of prescribed
information concerning operations they have certified and laboratory
analyses. These policies may have to be created or modified to
conform to the regulation.
3. Documentation on the qualifications of all personnel used in
the certification operation, annual performance appraisals for each
inspector and personnel involved in the certification, and an annual
internal program evaluation. Existing certifying agents may already
perform these operations. New certifying agents will have to
establish procedures to achieve these things.
4. Documentation on the financial capacity and compliance with
other administrative requirements (e.g., fee structure, reasonable
security to protect the rights of the certifying agents' clients as
provided in the NOP, and business relationships showing absence of
conflicts of interest). Some of this information can be compiled
from existing records, e.g., fee schedules, and some may be
generated from other sources.
5. Copies, submitted to USDA, of notices issued involving
denials of certification, noncompliance, and suspension or
revocation of certification. This requirement will be fulfilled
simultaneously with sending notices to applicants or clients.
6. An annual report to the Administrator including an update of
previously submitted business information, information supporting
any requested changes in the areas of accreditation, and steps taken
to respond to previously identified concerns of the Administrator
regarding the certifying agent's suitability for continued
accreditation. The annual report requirement will draw on records
created in the normal course of business.
7. Retention of records created by the certifying agent
regarding applicants and certified operations for not less than 10
years, retention of records obtained from applicants and certified
operations for not less than 5 years, and retention of other records
created or received for USDA accreditation for not less than 5
years. This activity requires records and database management
capabilities and resources (storage space, file cabinets, electronic
storage, etc.). In an informal inquiry, AMS found that most existing
certifying agents currently retain records for at least 10 years and
use both electronic and paper storage. We believe that this
requirement will not pose an additional burden on existing
certifying agents.
8. Public access to certification records, such as a list of
certified farmers and handlers, their dates of certification,
products produced, and the results of pesticide residue tests. This
requirement will have minimal impact given the requirements for
retaining records.
9. Providing program information to certification applicants. To
comply with this requirement, certifying agents may need to modify
existing standards and practices. The criteria for qualified
personnel in the proposed rule may likely result in an increase in
labor costs for some existing certifying agents and, initially, an
increase in training costs. The amount of additional costs to these
certifying agents would depend on the level of expertise among
current certification agency staff, the extent to which certifying
agents currently rely on volunteers, and the current costs of
training certification staff.
Producers and Handlers. The regulation will impose
administrative costs on producers and handlers for reporting and
recordkeeping. The actual amount of the additional administrative
costs that would be imposed by the final rule is expected to be
different for those entities that would begin their activities only
after the national program is implemented. Producers and handlers
who currently are active in the organic industry already perform
most of these administrative functions; therefore, the additional
costs to them would depend upon the extent to which their current
practices are different from the requirements of the final
regulation. An estimate of the cost of compliance is the annual
reporting and recordkeeping burden documented in the Paperwork
Reduction Act of 1995 analysis.
The following list describes several proposed administrative
requirements or optional submissions and the probable resources
required for compliance.
1. Establish, implement, and update annually an organic
production or handling plan. Organic plans are a standard feature in
the organic industry and are required by certifying agents. Thus,
producers and handlers who are already involved in organics, can
rely on their current plan with revisions as needed to meet elements
of the national program which are new to them or differ from their
current practice. Although producers and handlers are generally
aware of the goals of organic plans, current practice may fall short
of the rigor that will be required by the national program. New
producers and handlers will have higher costs because they will have
to prepare a plan from scratch.
2. Maintain records pertaining to their organic operation for at
least 5 years and allow authorized representatives of the Secretary,
the applicable State program's governing State official, and the
certifying agent access to records. Existing organic producers and
handlers maintain records. New producers and handlers will have to
develop records systems. Access is expected to be infrequent, will
require little time of the certified entity, and will not require
buildings or equipment other than what is required for storing
records.
3. Notify the certifying agent as required, e.g., when drift of
a prohibited substance may have occurred, and complete a statement
of compliance with the provisions of the NOP. Notifications are
expected to be infrequent.
The total reporting burden includes creation and submission of
documents. It covers the greatest amount of reporting burden that
might occur for any single creation or submission of a document
during any one of the first 3 years following program
implementation, i.e., 2000, 2001, and 2002. The total estimated
reporting burden reflects the average burden for each reporting
activity that might occur in 1 year of this 3-year period.
The total recordkeeping burden is the amount of time needed to
store and maintain records. For the purpose of measuring the
recordkeeping burden, the year 2002 is used
[[Page 13642]]
as the reporting year for which the largest number of records might
be stored and maintained. The annual reporting and recordkeeping
burdens on producers, handlers, and certifying agents is summarized
in Table 4.
Certified operations. The annual burden on certified producers
is estimated at 10 hours and $229. Certified handlers have an
estimated burden of 50 hours valued at $1,189. Certifying agencies
have an estimated burden of 700 hours valued at roughly $18,900.
Exempt operations. The burden on small producers and handlers,
who choose to operate as exempt entities, is minimal, 0.5 hour of
recordkeeping valued at $12. Exempt operations are exempt from
reporting and recordkeeping burdens. However, small producers and
handlers will have to invest some time and review documents to
determine whether they qualify for exemption or exclusion. Exempt
operations that produce multiingredient products containing less
than 50 percent organic ingredient will be required to maintain
records documenting the organic ingredients purchased. Since records
of purchases would be part of the normal recordkeeping for handlers,
we do not consider this a recordkeeping burden.
Based on the projected number of producers (17,150) and handlers
(2,150), the total reporting and recordkeeping cost, which captures
much of the compliance costs of the rule for this group, is
$5,200,721. We request comment and/or data on the costs that may be
imposed by the recordkeeping requirements of the proposed
regulation. In addition, we request comment and/or data on the
similarities and differences between the current practices of
private and state programs and the proposed requirements.
Barriers to Entry--Importers of Organic Products
Currently, there are no federal restrictions on importing
organic products to the United States in addition to those
regulations applying to conventional products. However, some States
require organic products sold within the State to be produced
according the State's standards. Thus, some State programs are
barriers to importers. The proposed regulation imposes a national
standard that these importers must meet, and may incur some cost. We
request comment and/or data on the extent of the organic food
imports and the costs that may be imposed on these importers to meet
the proposed standards.
Small Business Ramifications
USDA has proposed an 18-month period during which applicants for
accreditation would not be billed for hourly services. The rationale
for this transition period is to reduce the costs to certifying
agents and, thus, increase the prospect that certifying agents,
producers, and handlers will be able to afford to participate in the
national program. The choice of 18 months is intended to provide
sufficient time for parties desiring accreditation to submit their
application and prepare for a site evaluation.
USDA has proposed to operate the program partially with
appropriated funds, in effect sharing the cost of the program
between taxpayers and the organic industry, to respond to public
concerns regarding the effects of the proposed regulation on small
businesses. Thousands of comments were received opposing the first
proposal's fee provisions with most focusing on the substantial
impact on small certifying agents.
Congress has expressed public policy concern with the impacts of
regulations on small entities generally and with the impacts on the
NOP regulations on small entities particularly. The Small Business
Regulatory Enforcement Fairness Act of 1996 and the Regulatory
Flexibility Act express Congressional concern regarding regulatory
burden on small businesses. The Report from the Committee on
Appropriations regarding the Agriculture, Rural Development, Food
and Drug Administration, and Related Agencies Appropriations Bill,
2000, includes the following language (U.S. Senate 1999):
``The Committee continues to recognize the importance of organic
markets for small farmers and fishermen. The Committee expects the
Secretary to construct a national organic program that takes into
consideration the needs of small farmers and fishermen. * * *
Furthermore, the Committee expects that of the funding available for
the National Organic Program, necessary funds should be used to
offset the initial costs of accreditation services, a subsidy
necessary due to the lack of expertise in the Department of
Agriculture in the areas of organic accreditation and insufficient
data on the industry.''
Certifying agents applying for accreditation during the first 18
months following the final regulation will face lower direct costs
than subsequent applicants. The cost for later applicants for
accreditation will be higher because they will have to pay a $500
application fee and hourly charges for completing their site
evaluation. The requirement for accreditation was established in the
OFPA in 1990 and the proposed accreditation program was part of the
1997 proposal. Because in this proposal USDA is using appropriated
funds to cover some of the costs of initial accreditation during the
first 18 months of the program, certifying agents may set lower fees
initially benefitting the producers and handlers who are certified
during this period.
It is important to note that many small organic operations may
not be certified currently. In California, for example, many small
farms are registered, but not certified. Even if certifying agents
pass on the cost savings of the 18 month period provision to
applicants for certification, the cost of certification may be
higher than the cost of registration. Hence, becoming a certified
operation for small organic producers and handlers may be more
costly than the current practices.
The costs imposed on small operations may be mitigated by a
$5000 certification exemption to aid the smallest organic
operations. However, these operations are still subject to other
requirements of the proposed regulation. To the extent that these
requirements differ from their current practices, complying with the
national standards may be costly for exempt operations.
In addition, the certification exemption allowed under the
proposed regulation includes limits on what an exempt operation may
do. Without the certification, small organic operations may not
display the USDA seal and may not use a certifying agent's seal.
However, we are asking for public comment on whether exempt
operations should have the marketing option of selling their
products to handlers who can claim the products as organic in multi-
ingredient products. If the consumers of organic food view the seals
as important information tools on organic food, that is, if
consumers of organic products insist on only certified organic
products, the inability of small operations to display these seals
may prevent them from realizing the price premiums associated with
certified organic products.
Industry Composition
The imposition of the national standards may change the
composition of the organic industry. Even with the small business
exemptions, some small organic operations may choose to exit the
industry and small organic operations may also be discouraged from
entering the industry, resulting in a higher concentration of larger
firms. On the other hand, it may be easier for small operations to
comply with certain NOP standards, such as the livestock standards
which prohibit confinement production systems and require 100
percent organic feed.
Conclusion
Ideally, the net benefits of the proposed rule would be
estimated by employing a welfare analysis. In a welfare model, the
quantitative assessment of benefits would be represented by net
changes in consumer and producer surplus, i.e., the difference
between the willingness to pay (or firm cost structure in the case
of producers) and the market price of organic food. These net
changes would be estimated using information about the cost
structure of the industry, the demand for organic food, and
projected shifts in supply and demand resulting from the various
factors discussed in the assessment. Although researchers have
conducted numerous small-scale studies to determine consumers'
willingness to pay for certain organic products (primarily fresh
produce) and to identify reasons why conventional food buyers do not
choose organic food products (Hammitt, 1990 and 1993; Jolly; Misra
et al.; Park and Lohr; Weaver et al.), the available data are
insufficient to support a quantitative assessment of this type. A
1998 review of studies of consumer demand for organic foods
concluded, ``Attitudes, motives, and willingness to pay for organic
products have been measured, but apparently no retail data have been
available to estimate own-price, cross-price, and income
elasticities.'' (Thompson 1998).
USDA has identified the entities that may be affected by the
proposed rule and has analyzed the anticipated business-associated
impacts on them of the rule based on our knowledge of the industry
and limited data. We have drawn on industry studies, including
studies completed since the 1997 proposed rule was published, and
[[Page 13643]]
information provided in comments on the 1997 proposed rule.
The primary benefits from implementation of the proposed rule
are improved protection of buyers from a reduction in market
confusion including protection from false and misleading claims, and
improved access to markets from the reciprocity inherent in national
standards. These benefits have not been quantified.
The costs of the proposed regulation are the direct costs for
accreditation and the costs of complying with the specific standards
in the proposal including the reporting and recordkeeping
requirements. Other than accreditation fees, recordkeeping and
reporting costs, we did not quantify the magnitude of the compliance
costs or the costs of adhering to other provisions of this
regulation. We have also not quantified the impact of all these
provisions on small business but we believe there impact to be
significant.
The direct costs of accreditation if all currently operating
certifying agents become certified during the first 18 months
following the final rule is approximately $75,000 to $100,000. After
the first 18 months, the direct cost for accrediting would be
approximately $150,000 to $238,000. During the 18-month period
during which the NOP is not recovering the full costs of
accreditation services, the organic industry is being subsidized
with appropriated funded derived from the taxpayers. For existing
certifying agents compliance costs include costs to become familiar
with and adopt NOP standards. The aggregate cost of complying with
reporting and recordkeeping requirements of the rule are
approximately $6.8 million. Appropriated NOP funds used to operate
the National Organic Program are transfers from the taxpayers to the
participants in the organic sector.
References
Byng, John. 1994. UK and European Community (EC) Legislation. In,
Handbook of Organic Food Processing and Production. Simon Wright
(ed.). pp. 17-30. Glasgow: Blackie Academic and Professional.
California Department of Health Services (DHS). 1999. Report on the
Registration of California Organic Processed Food Firms. Sacramento:
State of California. September 1999. Figures obtained via personal
communication with DHS.
California Department of Health Services. 1995. Report on the
Registration of California Organic Processed Food Firms. Sacramento:
State of California.
Collins, Shane. 1999. ``Rosy future forecast for Europe's organic
market,'' Eurofruit Magazine, September.
Dunn, Julie Anton. 1995a. Organic Food and Fiber: An Analysis of
1994 Certified Production in the United States. U.S. Department of
Agriculture, Agricultural Marketing Service.
Dunn, Julie Anton. 1995b. ``Organic Foods Find Opportunity in
Natural Foods Industry,'' Food Review, Vol. 18, Issue 3, Sep.-Dec.
Dunn, Julie Anton. 1997. AgriSystems International Reports Certified
Organic production in the United States: Half a Decade of Growth.
AgriSystems International: Wind Gap, PA.
Emerich, Monica. 1996. Industry Growth: 22.6%. Natural Foods
Merchandiser (June):1-39.
Fetter, Robert T. 1999. Economic Impacts of Alternative Scenarios of
Organic Products Regulation. Senior Honors Thesis. University of
Massachusetts, Amherst, MA.
Graf, Anita and Luanne Lohr. 1999. ``Analysis of certification
program costs,'' Working Paper, Fund for Rural America project,
Market Development for Organic Agriculture Products, Grant No. 97-
36200-5.
Hammitt, James K. 1990. Risk Perceptions and Food Choice: An
Exploratory Analysis of Organic--Versus Conventional-Produce Buyers.
Risk Analysis, Vol. 10, No. 3: 367-374.
Hammitt, James K. 1993. Consumer Willingness to Pay to Avoid
Pesticide Residues. Statistica Sinica, 3.
Independent Organic Inspectors Association. 1996. IOIA 1996
Membership Directory. Winona, MN.
International Trade Centre UNCTAD/WTO. 1999. Organic Food and
beverages: World Supply and major European Markets. Geneva: ITC,
xiv, 271 p.
Jolly, Desmond A., Howard G. Schutz, Katherine V. Diaz-Knauf, and
Jagjeet Johal. 1989. Organic Foods: Consumer Attitudes and Use. Food
Technology (November): 60-66.
Jolly, Desmond A. 1991. Differences Between Buyers and Nonbuyers of
Organic Produce and Willingness to Pay Organic Price Premiums.
Journal of Agribusiness (Spring): 97-111.
Klonsky, Karen and Laura Tourte. 1995. Statistical Review of
California's Organic Agriculture, 1992-93. Report prepared for the
California Department of Food and Agriculture Organic Program.
Cooperative Extension, Department of Agricultural Economics,
University of California, Davis.
Klonsky, Karen and Laura Tourte. 1998a. Statistical Review of
California's Organic Agriculture, 1992-95. Report prepared for the
California Department of Food and Agriculture Organic Program.
Cooperative Extension, Department of Agricultural Economics,
University of California, Davis.
Klonsky, Karen and Laura Tourte. 1998b. Organic Agricultural
Production in the United States: Debates and Directions. Amer. J.
Agr. Econ. Vol. 80, No. 5: 1119-1124.
Lohr, Luanne. 1998. Implications of Organic Certification for Market
Structure and Trade. Amer. J. Agr. Econ. Vol. 80, No. 5: 1125-1129.
Mergentime, Ken. 1997. ``Organic Fraud Case Deepens; Possible Link
Causes OCIA Turmoil'', the Natural Foods Merchandiser, March.
Mergentime, Ken and Monica Emerich. 1995. Organic Sales Jump Over $2
Billion Mark in 1994. Natural Foods Merchandiser (June): 74-76.
Mergentime, Ken and Monica Emerich. 1996. Widening Market Carries
Organic Sales to $2.8 Billion in 1995. Natural Foods Merchandiser
(June): 36-38.
Misra, Sukant, Chung L. Huang, and Stephen L. Ott. 1991. Georgia
Consumers' Preference for Organically Grown Fresh Produce. Journal
of Agribusiness (Fall): 53-65.
Natural Foods Merchandiser. 1995. Organic Update: Reciprocity
Controversies Intensify, Exacerbating Certifier/Manufacturer
Tensions. April.
Organic Farming Research Foundation. 1999. Final Results of the
Third Biennial National Organic Farmers' Survey. E. Walz, Program
Coordinator. Santa Cruz, CA.
Park, Timothy A. and Luanne Lohr. 1996. Supply and Demand Factors
for Organic Produce. American Journal of Agricultural Economics,
Vol. 78 (August): 647-655.
Thompson, Gary D. 1998. Consumer Demand for Organic Foods: What We
Know and What We Need to Know. Amer. J. Agr. Econ. Vol. 80, No. 5:
1113-1118.
Underhill, S. E. and E. E. Figueroa. 1993. Consumer Preferences for
Non-Conventionally Grown Produce. Paper presented at the Valuing
Food Safety and Nutrition Conference, organized by the NE-165
Regional Research Project. Alexandria, VA, June 2-4.
USDA Foreign Agricultural Service. 1995. Agricultural Situation:
Agricultural Highlights, Winter 1995. Report from Austria. Code 24,
Sequence No. 007.
USDA Foreign Agricultural Service. 1995. Agricultural Situation:
Organic Food. Report from Germany. Code 24, Sequence No. 011.
USDA Foreign Agricultural Service. 1996. Agricultural Situation:
Organic Food Market Potential and Regulations. Report from France.
Code 24, Sequence No. 002.
USDA Foreign Agricultural Service. 1999a. Report on organic
agriculture in Japan. Attache report JA91234. October 5.
USDA Foreign Agricultural Service. 1999b. Report on organic
agriculture in France. Attache report FR9070. October 18.
U.S. Senate. 1999. Report 106-80. Agriculture, Rural Development,
Food and Drug Administration, and Related Agencies Appropriation
Bill 2000. Committee on Appropriations. Page 56.
Weaver, Robert D., David J. Evans, and A. E. Luloff. 1992. Pesticide
Use in Tomato Production: Consumer Concerns and Willingness-to-Pay.
Agribusiness, Vol. 8 No. 2: 131-142. Table 1.
Table 1.--Organic Food Sales
[$ billions]
------------------------------------------------------------------------
Sales
Year Sales (1998
dollars)
------------------------------------------------------------------------
1990.............................................. 1.000 1.25
1991.............................................. 1.250 1.50
1992.............................................. 1.540 1.79
1993.............................................. 1.890 2.13
1994.............................................. 2.310 2.54
1995.............................................. 2.800 2.99
1996.............................................. 3.500 3.64
------------------------------------------------------------------------
Source: Mergentime and Emerich in Natural Foods Merchandiser.
[[Page 13644]]
Table 2A.--First Year Certification Costs, From Graf and Lohr Analysis
[In dollars]
------------------------------------------------------------------------
Small Medium Large Super
Certifying agent farm farm farm farm
------------------------------------------------------------------------
CCOF........................ 750 1,650 4,750 51,150
FVO......................... 585 1,624 5,101 51,437
FOG......................... 325 845 2,525 25,525
NOFA-VT..................... 335 535 585 585
OTCO-In..................... 608 1,766 2,517 11,518
OTCO-Out.................... 568 1,498 2.352 11,353
OCIA-WI..................... 315 1,590 6,090 75,090
OCIA-VA..................... 258 320 495 1,745
TDA......................... 90 155 200 515
WSDA........................ 330 1,375 2,800 12,000
NC/SCS...................... n/a n/a n/a n/a
Average cost................ 416 1,136 2,742 24,092
------------------------------------------------------------------------
Notes:
CCOF--California Certified Organic Farmers
FVO--Farm Verified Organic
FOG--Florida Certified Organic Growers & Consumers
NOFA-VT--Northeast Organic Farming Association-Vermont
OTCO-In--Oregon Tilth Certified Organic, inside Oregon
OTCO-Out--Oregon Tilth Certified Organic, outside Oregon
OCIA-WI--Organic Crop Improvement Association, Wisconsin chapter
OCIA-VA--Organic Crop Improvement Association, Virginia chapter
TDA--Texas Department of Agriculture
WSDA--Washington State Department of Agriculture
NC/SCS--NutriClean/Scientific Certification Systems
Small farm--25 acres with annual sales of $30,000.
Medium farm--150 acres with annual sales of $200,000.
Large farm--500 acres with annual sales of $800,000.
Super farm--3,000 acres with annual sales of $10,000,000.
Table 2B.--Subsequent Year Certification Costs, From Graf and Lohr
Analysis
[In dollars]
------------------------------------------------------------------------
Small Medium Large Super
Certifying agent farm farm farm farm
------------------------------------------------------------------------
CCOF........................ 425 1,300 4,350 50,550
FVO......................... 510 1,499 4,851 51,187
FOG......................... 325 845 2,525 25,525
NOFA-VT..................... 300 500 550 550
OTCO-In..................... 454 1,611 2,362 11,363
OTCO-Out.................... 424 1,353 2,207 11,208
OCIA-WI..................... 290 1,565 6,065 75,065
OCIA-VA..................... 233 295 470 1,720
TDA......................... 90 155 200 515
WSDA........................ 330 1,375 2,800 12,000
NC/SCS...................... 700 900 1,000 2,000
Average cost................ 371 1,036 2,489 21,971
------------------------------------------------------------------------
Notes:
CCOF--California Certified Organic Farmers
FVO--Farm Verified Organic
FOG--Florida Certified Organic Growers & Consumers
NOFA-VT--Northeast Organic Farming Association--Vermont
OTCO-In--Oregon Tilth Certified Organic, inside Oregon
OTCO-Out--Oregon Tilth Certified Organic, outside Oregon
OCIA-WI--Organic Crop Improvement Association, Wisconsin chapter
OCIA-VA--Organic Crop Improvement Association, Virginia chapter
TDA--Texas Department of Agriculture
WSDA--Washington State Department of Agriculture
NC/SCS--NutriClean/Scientific Certification Systems
Small farm--25 acres with annual sales of $30,000.
Medium farm--150 acres with annual sales of $200,000.
Large farm--500 acres with annual sales of $800,000.
Super farm--3,000 acres with annual sales of $10,000,000.
[[Page 13645]]
Table 3.--Costs of Accreditation and Certification
------------------------------------------------------------------------
------------------------------------------------------------------------
Estimated costs to certifying agents during first 18 months
------------------------------------------------------------------------
Application fee 1 $0
Site evaluation costs (two person
team):.
Per diem (3 to 5 days)............. $480 to $800
Travel (domestic).................. $1,000 to $1,200
Hourly charges (not billed)........ $0
Miscellaneous charges (copying, $50
phone, and similar costs).
------------------------------------------------------------------------
Total............................ $1,530 to $2,050
------------------------------------------------------------------------
Estimated costs to certifying agents for initial accreditation after
first 18 months
------------------------------------------------------------------------
Application fee 1.................... $500
Site evaluation costs (one person):
Per diem (3 to 5 days)............. $240 to $400
Travel (domestic).................. $500 to $600
Hourly charges (24 to 40 hours at $2,280 to $3,800
$95/hour)).
Miscellaneous charges (copying, $50
phone, and similar costs).
Total............................ $3,070 to $4,850
Annual review fees for certifying $190 to $760
agents (2 to 8 hours at $95/hour) 2.
------------------------------------------------------------------------
------------------------------------------------------------------------
Estimated costs to producers for certification 3
------------------------------------------------------------------------
Certification fee (initial $800
certification).
Certification fee (renewals)....... $730
------------------------------------------------------------------------
Estimated costs to handlers for certification 4
------------------------------------------------------------------------
Certification fee (initial $1,825
certification).
Certification fee (renewals)......... $1,665
------------------------------------------------------------------------
1 Nonrefundable fee that will be applied to the applicant's fee for
service account.
2 Certifying agents are required to submit annual reports to USDA.
Review of these reports is expected to range from 2 to 8 hours at an
approximate rate of $95 per hour.
3 Estimated certification fees are calculated from Graf and Lohr 1999
which, for a selection of certification agents, provides certification
costs for four hypothetical farm sizes: (1) Small Farm (``Family
Farm''): 25 acres, $30,000 annual sales, 5 hours to certify; (2)
Medium Farm (``Cottage Industry''): 150 acres, $200,000 annual sales,
6 hours to certify; (3) Large Farm (``Commercial Farm''): 500 acres,
$800,000 annual sales, 8 hours to certify; and (4) Super Farm: 3,000
acres, $10,000,000 annual sales, 16 hours to certify. Our estimated
certification fees only include those charged for small and medium
farms, because most organic producers fall into these categories as
defined by Graf and Lohr. In the 1997 OFRF survey, 90 percent of
respondents had gross organic farming income less than $250,000, with
82 percent less than $100,000.
The average current certification cost for most organic producers is
about $775 for the first year of certification ($416 for small and
$1,136 for medium farms) and about $705 for subsequent years ($371 for
small and $1,036 for medium farms). Approximately $25 is added to
cover the costs associated with the National Organic Program for an
estimated first year certification fee of $800 and subsequent year
certification fee of $730 for producers. Larger producers could expect
higher fees.
4 Because Graf and Lohr do not estimate certification fees for handlers,
we estimate these fees by applying a ratio of handler-to-producer
certification fees from the regulatory impact assessment from 1997.
The ratio is 2.28 results in estimated fees of $1,825 and $1,665,
respectively.
Table 4.--Estimated Annual Reporting and Recordkeeping Burden
------------------------------------------------------------------------
Annual
Type of respondent hours per Hourly rate Annual cost
respondent
------------------------------------------------------------------------
Certified producer............... 10 $24 $229
Exempt producer.................. 0.5 24 12
Certified handler................ 50 24 1,189
Exempt handler................... 0.5 24 12
State certifying agency.......... 696 27 18,778
Private or foreign certifying 700 27 18,893
agency..........................
------------------------------------------------------------------------
Note: Estimates derived from Paperwork Reduction Act of 1995 analysis.
Appendix B.--Unfunded Mandates Reform Act
This proposed rule has been reviewed under the Unfunded Mandates
Reform Act (P.L.104-4). The Act requires that agencies prepare a
qualitative and quantitative assessment of the anticipated costs and
benefits before proposing any rule that may result in annual
expenditures by State, local, and tribal governments, in the
aggregate, or by the private sector, of $100 million (adjusted
annually for inflation) in any one year. According to the Act, the
term Federal mandate means any provision in legislation, statute, or
regulation that would impose an enforceable duty upon State, local,
or tribal governments, or the private sector, except a duty arising
from participation in a voluntary Federal program.
The National Organic Foods Production Act (OFPA) of 1990
mandates that the Secretary develop a National Organic Program (NOP)
to accredit eligible governing State officials or private persons as
certifying agents who would certify producers or handlers of
agricultural products that have been produced using organic methods
as provided for in the OFPA. The OFPA also permits a governing State
official to voluntarily establish a State organic certification
program if the program is approved by the Secretary and meets the
requirements of the OFPA. The OFPA does not require that States
establish their own organic certification programs or that State,
local or tribal governments, or the private sector, become
accredited; therefore, the OFPA is not subject to the Unfunded
Mandates Reform Act because it is a voluntary program.
Although USDA has determined that this proposed rule is not
subject to the Unfunded Mandates Reform Act, USDA has sought to
consider the rule's impact on various entities. USDA prepared a
Regulatory Impact Assessment (RIA) that is discussed in the section
titled ``Executive Order 12866'' (also attached as an appendix to
this proposed regulation). The RIA consists of a statement of the
need for the proposed action, an examination of alternative
approaches, and an analysis of the benefits and costs. Much of the
analysis is necessarily descriptive of the anticipated impacts of
the proposed rule. Because basic market data on the prices and
quantities of organic goods and services and the costs of organic
production is limited, it is not possible to provide quantitative
estimates of all benefits and costs of the proposed rule. The cost
of fees and recordkeeping proposed by the USDA are quantified, but
the anticipated benefits are not. Consequently, the analysis does
not contain an estimate of net benefits.
The analysis employed in reaching a determination that this
proposed rule is the least costly and least burdensome to the
regulated parties is discussed in the sections titled ``The
Regulatory Flexibility Act and the Effects on Small Businesses'' and
``Paperwork Reduction Act of 1995.'' The
[[Page 13646]]
proposed rule has been designed to be as consistent as possible with
existing industry practices, while satisfying the specific
requirements of the OFPA.
We have had numerous occasions to communicate with various
entities during the development of the proposed rule; States, for
example. Currently there are 27 States with some standards governing
the production or handling of organic food and 13 States with
organic certifying programs. Representatives of State governments
have participated in public meetings with the NOSB, while the NOP
staff has made presentations, received comments, and consulted with
States and local and regional organic conferences, workshops, and
trade shows. States have been actively involved in training sessions
for organic inspectors; public hearings concerning standards for
livestock products during 1994; a national Organic Certifiers
meeting on July 21, 1995; a USDA-hosted meeting on February 26,
1996; a State certifiers meeting in February 1999; and an ISO 65
assessment training session for certifiers in April-May 1999. It is
unknown at this time how many States, if any, might voluntarily
establish their own organic certification programs pursuant to the
OFPA and the regulations.
Appendix C.--The Regulatory Flexibility Act and the Effects on Small
Businesses
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (Act)
requires agencies to consider the economic impact of each proposed
rule on small entities and evaluate alternatives that would
accomplish the objectives of the rule without unduly burdening small
entities or erecting barriers that would restrict their ability to
compete in the market. The purpose is to fit regulatory actions to
the scale of businesses subject to the action.
In the first proposal published in December 1997, the initial
Regulatory Flexibility Analysis (RFA), describing the impact of the
National Organic Program and evaluating the alternatives, was
written with guidance from the U.S. Small Business Administration
(SBA). The RFA of this proposal was written following consideration
of comments received in response to the first proposal, other
information that has become available since the first proposal, the
Regulatory Impact Assessment (RIA) that is discussed in the section
entitled ``Executive Order 12866'' (also attached as an appendix to
this proposal), and the information collection burden discussed in
the section entitled ``Paperwork Reduction Act of 1995'' (PRA).
Reasons for Proposal
Currently, organic certification is voluntary and self-imposed.
Members of organic industries across the U.S. have experienced
numerous problems marketing their organically produced and handled
agricultural products. Inconsistent and conflicting organic
production standards may have been an obstacle to the effective
marketing of organic products. There are currently 36 private and 13
State organic certification agencies (certifying agents) in the
United States, each with its own standards and identifying marks.
Some existing private certifying agents are concerned that
States might impose registration or licensing fees which would limit
or prevent private certification activities in those States.
Labeling problems have confronted manufacturers of multi ingredient
organic food products containing ingredients certified by different
certifying agents because reciprocity agreements have to be
negotiated between certifying agents. Consumer confusion may exist
because of the variety of seals, labels, and logos used by
certifying agents and State programs. Also, there is no industry
wide agreement on an accepted list of substances that should be
permitted or prohibited for use in organic production and handling.
Finally, a lack of national organic standards may inhibit organic
producers and handlers in taking full advantage of international
organic markets and may reduce consumer choices in the variety of
organic products available in the marketplace.
To address these problems in the late 1980's, the organic
industry attempted to establish a national voluntary organic
certification program. At that time, the industry could not develop
consensus on the standards that should be adopted, so Congress was
petitioned by the Organic Trade Association to establish national
standards for organic food and fiber products.
Recently, the Organic Trade Association published American
Organic Standards, Guidelines for the Organic Industry (AOS).
However, not all participants in the organic industry elected to
participate in developing the AOS. Many certifying agents preferred
to wait for implementation of the National standards, and some
certifying agents disagree with portions of the AOS. For these
reasons, the USDA is proposing a regulation for the National Organic
Program.
Legal Basis for and Objectives of Proposal
In 1990, Congress enacted the Organic Foods Production Act of
1990, as amended (7 U.S.C. 6501 et seq.) (OFPA). The OFPA requires
all agricultural products labeled as ``organically produced'' to
originate from farms or handling operations certified by a State or
private agency that has been accredited by USDA.
The purposes of the OFPA, set forth in section 2102 (7 U.S.C.
6501), are to: (1) Establish national standards governing the
marketing of certain agricultural products as organically produced
products; (2) assure consumers that organically produced products
meet a consistent standard; and (3) facilitate commerce in fresh and
processed food that is organically produced. The National Organic
Program, which this rule proposes, is the result of the OFPA.
Applicability of Proposal
This proposal will directly affect three sectors of the organic
industry: certifying agents, producers, and handlers. The OFPA
provides for the collection of reasonable fees by USDA from
producers, handlers, and certifying agents who participate in the
national program. This proposal will impose direct costs on
certifying agents in the form of a fee paid to the Federal
Government for USDA accreditation. This proposal does not impose
direct costs in the form of fees on producers and handlers.
Certifying agents will establish a fee schedule for their
certification services for producers and handlers. All three sectors
are subject to indirect costs of compliance.
The term, ``certifying agent,'' means the chief executive
officer of a State or, in the case of a State that provides for the
statewide election of an official to be responsible solely for the
administration of the agricultural operations of a State, such
official and any person (including private entities) who is
accredited by the Secretary as a certifying agent for the purpose of
certifying a farm or handling operation as a certified organic farm
or handling operation. The term, ``producer,'' means a person who
engages in the business of growing or producing food or feed. The
term, ``handler,'' means any person engaged in the business of
handling agricultural products, excluding final retailers of
agricultural products that do not process agricultural products.
Subpart B, section 205.101 in the proposed regulation provides
information about exemptions and exclusions from certification.
According to the most complete data available to USDA's
Agricultural Marketing Service (AMS), there are 49 certifying agents
(36 private and 13 State) in the U.S. Over half of the private and
State certifying agents certify both producers and handlers, while
the others certify only producers. Over three-fourths of private and
State certifying agents each certify fewer than 150 producers and 20
handlers. The number of certifying agents has remained fairly stable
between 40 and 50 for some years, with entries and exits tending to
offset each other. The National Organic Program staff anticipates
that, in addition to the 49 domestic certifying agents, 10 foreign
certifying agents may seek accreditation during the initial phase of
the program.
It is more difficult to establish the number of organic
producers. Organic farming was not distinguished from conventional
agriculture in the 1997 Census of Agriculture. There are sources
which give insight into the number of producers. The Organic Farming
Research Foundation (OFRF), a California-based nonprofit
organization, has conducted three nationwide surveys of certified
organic producers from lists provided by cooperating certifying
agents. The most recent survey applies to the 1997 production
year.\1\ OFRF sent its 1997 survey to 4,638 names and received 1,192
responses. Because OFRF did not obtain lists from all certifying
organizations or their chapters (55 out of a total of 64 identified
entities provided lists), their list count is likely an
understatement of the number of certified organic producers. Note
that the estimated number of organic producers includes only
certified organic farms. Comments filed in response to the first
proposal and studies indicate that the total number of organic farms
is higher.
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\1\ Organic Farming Research Foundation. 1999. Final Results of
the Third Biennial National Organic Farmers' Survey. Santa Cruz, CA.
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[[Page 13647]]
Dunn has estimated the number of certified organic producers in
the U.S.\2\ \3\ Dunn's 1995 work, a USDA study, estimated the number
of certified producers at 4,060 in 1994; this estimate was used in
the first proposal. Dunn's 1997 work reported 4,060 certified
organic farms in 1994 and 4,856 in 1995.
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\2\ Dunn, Julie Anton. 1995. Organic Food and Fiber: An Analysis
of 1994 Certified Production in the United States. U.S. Department
of Agriculture, Agricultural Marketing Service.
\3\ Dunn, Julie Anton. 1997. AgriSystems International Reports
Certified Organic Production in the United States: Half a Decade of
Growth. AgriSystems International: Wind Gap, PA.
---------------------------------------------------------------------------
Data collected by AMS indicate that the number of organic
farmers increased about 12 percent per year and the number of
organic handlers increased at about 11 percent per year during the
period 1990 to 1994. OFRF survey efforts indicate that growth has
continued, although it is not clear whether the growth rate has
changed. Similarly, growth in retail sales, the addition of meat and
poultry to organic production, and the possibility of increased
exports suggest that the number of operations has continued to
increase. Lacking an alternative estimate of the growth rate for the
number of certified organic producers, we use the average growth
rate of about 14 percent from Dunn's 1997 study. The true rate of
growth could be higher or lower. Applying the 14-percent growth rate
to Dunn's estimate of certified producers in 1995 gives an estimate
of 8,200 organic producers for 1999.
An adjustment is needed to account for the number of producers
who are practicing organic agriculture but who are not certified and
who would be affected by this proposal. We assume that the number of
organic but not certified producers in 1999 is about 4,000. This
assumption is based on very limited information about the number of
registered but not certified organic producers in California in
1995. Thus, the total number of organic producers used in assessing
the impact of the rule is 12,176 in 1999.
Little information exists on the numbers of handlers and
processors. USDA has estimated that there were 600 entities in this
category in 1994. In California, there were 208 registered organic
processed food firms in 1995 and 376 in 1999, a growth rate of 20
percent.\4\ We assume that this growth rate is applicable to the
U.S. and project 1,250 handlers in 1999. Again, the rate of growth
could be higher or lower.
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\4\ California Department of Health Services (DHS). 1995. Report
on the Registration of California Organic Processed Food Firms.
Sacramento: State of California. September 1999 figures obtained via
personal communication with California DHS.
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SBA Definitions of Small Entities
Small business size standards, Standard Industrial Code (SIC)
(13 CFR part 121), are developed by an inter-agency group, published
by the Office of Management and Budget, and used by SBA to identify
small businesses. These standards represent the number of employees
or annual receipts constituting the largest size that a for-profit
enterprise (together with its affiliates) may be and remain eligible
as a small business for various SBA and other Federal Government
programs.
Small businesses in the agricultural services sector, such as
certifying agents, include firms with average annual revenues of
less than $5 million (SIC Division A Major Group 7). Producers with
crop production (SIC Division A Major Group 1) and annual average
revenues under $500,000 are small businesses. Producers with
livestock or animal specialities are also considered small if annual
average revenues are under $500,000 (SIC Division A Major Group 2),
with the exception of custom beef cattle feedlots and chicken eggs,
which are considered small if annual average revenues are under
$1,500,000. In handling operations, a small business has fewer than
500 employees (SIC Division D Major Group 20).
Based on SBA's small business size standards for the
agricultural services sector, it is not likely that many, if any, of
the 49 domestic certifying agents have annual revenue greater than
$5 million. Based on anecdotal information, only a few private, for-
profit, certifying agents might be categorized as a large business.
All private, non profit, and State certifying agents would be
considered small by SBA's standards. Even if State certifying agents
do not exceed the revenue threshold, they would not be considered to
be small entities under the Act if the agents are an arm of state
government. Only government jurisdictions with populations under
50,000 are considered to be small entities under section 601(5) of
the Act.
Based on SBA's small business size standards for producers, it
is likely that almost all organic producers would be considered
small. The OFRF survey asked for the producer's total gross organic
farming income during 1997. Only 35 (less than 3 percent) of the
survey respondents reported gross income greater than $500,000, the
SBA's cutoff between small and large businesses. Over 70 percent
reported gross income of less than $50,000. The OFRF survey does
caution readers about potential survey ``errors.'' It is
particularly important to emphasize potential ``non-response
error,'' that is, it is unknown if those who responded to the survey
accurately represent the entire population of certified organic
growers. Also, some producers combine organic and conventional
production on the same operation, some with total sales that may
exceed $500,000. However, it is likely that a majority of organic
producers would be considered small.
It is also likely that the vast majority of handlers would be
considered small, based on SBA's small business size standards for
handlers. Based on informal conversations with organic certifying
agents, about 25 (about 2 percent) of the estimated 1,250 organic
handlers have more than 500 employees. This includes firms that
handle or process both organic and conventional foods.
Costs of This Proposal
Several requirements to complete this RFA overlap with the RIA
and the PRA. In order to avoid duplication, we combine some analyses
as allowed in section 605(b) of the Act. This RFA provides
information specific to small entities, while the RIA or PRA should
be referred to for more detail. For example, the RFA requires an
analysis of the proposed rule's costs to small entities. The RIA
provides an analysis of the benefits and costs of this proposal.
This RFA uses the RIA information to estimate the impact on small
entities. Likewise, the RFA requires a description of the projected
reporting, recordkeeping, and other compliance requirements of the
proposed rule. The PRA section estimates the reporting and
recordkeeping (information collection) requirements that would be
required by this proposal from individuals, businesses, other
private institutions, and State and local governments. The burden of
these requirements is measured in terms of the amount of time
required of program participants and its cost. This RFA uses the PRA
information to estimate the burden on small entities.
The estimated direct costs of accreditation for certifying
agents and certification for producers and handlers under the first
proposal issued in December 1997 and this proposal are shown in
table 1 and discussed in the following sections. More specific
details regarding these costs are found in the RIA.
Table 1.--Estimated Direct Costs of Accreditation and Certification
----------------------------------------------------------------------------------------------------------------
First proposal This proposal
---------------------------------------------------------------
1st year cost 2nd year cost 1st year cost 2nd year cost
----------------------------------------------------------------------------------------------------------------
Certifying Agents:
Accreditation application fee............... $640 $640 $0 $0
USDA administrative fee..................... 2,000 2,000 0 0
Estimated site evaluation fee............... 3,500 1 1,530 to 3 1
2,050
Annual review fee........................... 2 2 190 to 760
---------------------------------------------------------------
[[Page 13648]]
Total Fees.............................. 6,140 min. 2,640 min. 1,530 min. 190
===============================================================
Producers:
Estimated certification fee 4............... 413 413 800 730
USDA fee.................................... 50 50 0 0
---------------------------------------------------------------
Total Fees.............................. 463 463 800 730
===============================================================
Handlers:
Estimated certification fee 4............... 943 943 1,825 1,665
USDA fee.................................... 500 500 0 0
---------------------------------------------------------------
Total Fees.............................. 1,443 1,443 1,825 1,665
----------------------------------------------------------------------------------------------------------------
1 Should certifying agents wish to become accredited in additional areas for which they have not been accredited
previously, site evaluation fees will be charged.
2 First proposal: Included in application and administrative fees. This proposal: Certifying agents are required
to submit annual reports to USDA. Review of these reports is expected to range from 2 to 8 hours at an
approximate rate of $95 per hour.
3 During the first 18 months, site evaluation for initial accreditation will involve two reviewers. One reviewer
would come from the Quality Systems Certification Program audit staff and would be familiar with ISO Guide 65
verification; the other reviewer would come from the National Organic Program staff and would be familiar with
requirements of the organic program. The two would conduct the site evaluation jointly. We anticipate only one
reviewer would be required after the 18-month transition period. The estimated site evaluation fee shown here
includes per diem and travel costs for two reviewers plus miscellaneous charges related to accreditation. Site
evaluations for smaller certifying agents are estimated to take 3 days, with 5 days for larger certifying
agents.
For the first 18 months after implementation of the NOP, hourly rates will not be charged to certifying agents
for accreditation. The estimated fee shown here includes only travel and per diem expenses. At an approximate
rate of $95 per hour, hourly charges would add an estimated $4,560 to $7,600 for 2 reviewers during the first
18 months, and $2,280 to $3,800 for 1 reviewer after the first 18 months or for renewal of accreditation.
4 First proposal: Estimated certification fees at that time were based on the average of fees charged by a
representative group of certifying agents (private non-profit, private for-profit and a State agency).
This proposal: Estimated certification fees are calculated from a 1999 study by Graf and Lohr 5 which, for a
selection of certification agents, provides certification costs for four hypothetical farm sizes: (1) Small
Farm (``Family Farm''): 25 acres, $30,000 annual sales, 5 hours to certify; (2) Medium Farm (``Cottage
Industry''): 150 acres, $200,000 annual sales, 6 hours to certify; (3) Large Farm (``Commercial Farm''): 500
acres, $800,000 annual sales, 8 hours to certify; and (4) Super Farm: 3,000 acres, $10,000,000 annual sales,
16 hours to certify. Our estimated certification fees only include those charged for small and medium farms,
because most organic producers fall into these categories as defined by Graf and Lohr. In the 1997 OFRF
survey, 90 percent of respondents had gross organic farming income less than $250,000, with 82 percent less
than $100,000.
The average current certification cost for most organic producers is about $775 for the first year of
certification ($416 for small and $1,136 for medium farms) and about $705 for subsequent years ($371 for small
and $1,036 for medium farms). An estimated $25 is added to cover the costs associated with the National
Organic Program for an estimated first year certification fee of $800 and subsequent year certification fee of
$730 for producers. Larger producers could expect higher fees.
Because Graf and Lohr do not estimate certification fees for handlers, we estimate these fees by applying the
December 1997 ratio of handler-to-producer certification fees, 2.28, to the estimated first and subsequent
year certification fees for producers, resulting in fees of $1,825 and $1,665, respectively.
Direct Costs to Certifying Agents
We have identified 36 private certifying agents and 13 State
programs providing certification. These 49 domestic entities are
considered likely applicants during the first 12 months, as are an
estimated 10 foreign certifying agents. An unknown number of new
entrants to the certifying business may also apply. However, over
the last 10 years, the number of certifying agents does not appear
to have grown significantly, with the net effect of entries and
exits maintaining a population of U.S.-based certifying agents at
about 40 to 50. Of the 49 domestic certifying agents, based on
information discussed previously, we estimate that the 36 private
certifying agents are small.
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\5\ Graf, Anita and Luanne Lohr. 1999. Analysis of certification
program costs. Working Paper, Fund for Rural America project, Market
Development for Organic Agriculture Projects, Grant No. 97-36200-5.
---------------------------------------------------------------------------
In order to identify the certifying agents that might be
expected to face more significant impacts as a result of this
proposal, we analyzed the amount of revenues from certification fees
received by certifying agents. Total certification fees collected by
the certifying agents in 1994 ranged from about $2,500 to about
$400,000, with most certifying agents clustered around the low or
high end of this range. This amount is based on information
collected by AMS from a sample of 16 private and State certifying
agents for certification fees collected in 1994. To determine a
cutoff point for small certifying agents, the State certifying
agents were eliminated from the sample because these agents are an
arm of State government and are not considered small entities. Of
the remaining 11 private certifying agents, 6 (or 55 percent)
collected less than $25,000 each in total certification fees, and
the other 5 (45 percent) each collected more than $200,000. Based on
this information and knowledge of the organic industry, for purposes
of analyzing the cost of accreditation, we estimate that about 55
percent of private certifying agents are small with total annual
revenue from certification of less than $25,000.
Certification fees probably do not constitute total income for
most private certifying agents and, thus, are not a complete measure
of economic size. Some certifying agents also earn revenue from a
number of other sources, such as sale of publications, membership
dues, training workshop and conference fees, farmers markets,
grants, or donations.
Certifying agents will be assessed for the actual time and
travel expenses necessary for the National Organic Program to
perform accreditation services. The National Organic Program will
charge the same hourly fees as are charged for the voluntary, fee-
for-service program provided by AMS to certification bodies
requesting conformity assessment to the International Organization
for Standardization (ISO) Guide 65, ``General Requirements for
Bodies Operating Product Certification Systems.'' We expect that at
the time the National Organic Program's final rule is implemented,
the fees will be approximately $95 per hour, with higher overtime
and holiday rates. Certifying agents will be charged for travel, per
diem, and other related costs associated with accreditation.
Applicants for accreditation will be required to pay at the time of
application a nonrefundable fee of $500, which is applied to the
applicant's fee for services account. This fee is credited against
[[Page 13649]]
any subsequent costs of accreditation arising from the site
evaluation.
During the first 18 months after the National Organic Program
has been implemented, USDA will not impose hourly charges on
certifying agents. The direct costs for certifying agents to obtain
accreditation will be limited to per diem and transportation costs
for the site evaluation, which is required every 5 years. We
estimate these costs to be $1,530 for a small certifying agent and
$2,050 for a larger certifying agent. These estimates are based on,
for small and larger certifying agents, two reviewers with 3 and 5
days of per diem, $500 to $600 in transportation costs, and $50 in
miscellaneous charges related to accreditation. \6\ In subsequent
years, certifying agents will be required to submit an annual
report. Review of this report is anticipated to range from 2 to 8
hours at the ISO Guide 65 hourly rate. If certifying agents wish to
become accredited in additional areas for which they were not
accredited previously, site evaluation fees will be charged.
---------------------------------------------------------------------------
\6\ During the first 18 months, site evaluation for initial
accreditation will be conducted jointly by two reviewers. Two
reviewers offers: (1) anticipated faster turn-around; (2) different
areas of expertise--one reviewer would come from the Quality Systems
Certification Program audit staff and would be familiar with ISO
Guide 65 verification, while the other reviewer would come from the
National Organic Program staff and would be familiar with the
requirements of the program; and (3) consistency with the organic
industry's desire to have reviewers from both areas of expertise
during ISO Guide 65 assessments. AMS would consider sending one
reviewer, rather than two, for the site evaluation of small
certification agents if an individual possessing both reviewing
skill and knowledged of the NOP is available. We anticipate only one
reviewer would be required after the 18-month transition period.
---------------------------------------------------------------------------
After the first 18 months of the National Organic Program, USDA
estimates that the costs of a site evaluation visit, required every
5 years, could be $3,070 for small certifying agents and $4,850 for
larger certifying agents. These estimates are based on, for small
and larger certifying agents, one reviewer with 3 and 5 days of per
diem, $500 to $600 in transportation costs, $50 in miscellaneous
charges related to accreditation, and 24 to 40 hours (3 to 5 work
days) at an anticipated maximum hourly rate under ISO Guide 65 of
$95. Higher hourly rates will be charged for overtime and for work
on holidays.
The cost of a site evaluation will vary with the cost of travel
from the auditor's work station to the applicant's place of
business. Auditors live in different parts of the country, and
travel costs might be reduced when the distance traveled is reduced.
The lowest cost airfare would be used whenever possible. In some
cases, site evaluations might be grouped geographically in order to
reduce travel expenses. The per diem rate will also vary depending
on the rate set for the certifying agent's location as established
by the General Services Administration.
Several factors will influence the amount of time needed to
complete an accreditation audit. An operation in which documents are
well organized and that has few nonconformities within the quality
system will require less time for an audit than an organization in
which documents are scattered and there are many nonconformities.\7\
Similarly, in a follow up audit, operations that lack organization
in their documents and that had a large number of nonconformities
during previous audits will require a greater amount of time. The
scope of a follow up audit is to verify the correction of
nonconformities and to evaluate the effectiveness of the
corrections. Certifying agents are able to control these cost
factors by making certain that documents are well organized and by
educating themselves about quality systems.
---------------------------------------------------------------------------
\7\ Adequate advance notice will be given to certifying agents
to allow them the opportunity to organize their records prior to the
audit and minimize the costs of accreditation.
---------------------------------------------------------------------------
The complexity of an certification agency's organization also
will affect the time needed to complete an audit. An agency with a
central office in which all certification activities take place will
require less time for document review and site evaluation than a
chapter organization or a business structured so that responsibility
for making certification decisions is delegated outside of the
central office. In the latter cases, the auditors' document review
would require additional time and site evaluation that would extend
from the central office to one or more of the chapters or to the
site to which the certification decision making is delegated.
Other factors determine the amount of time needed to complete an
accreditation audit. For an agency with numerous clients, auditors
may need to spend more time reviewing client files or examining
business operations than they would have to spend for a smaller
agency. Audit of an agency with a large number of processor clients
may require an extended amount of time to follow audit trails,
confirm that organic ingredients remain segregated from nonorganic
ingredients, and establish that foreign-produced ingredients
originate from approved entities. Finally, the complexity of the
agricultural practices certified could influence the amount of time
necessary to complete an accreditation audit. An agency whose
certification covers only producers who grow and harvest one crop
per field per year, such as wheat or sugar beets, could quickly be
audited. An agency whose producers grow several different crops per
field per year or an agency that certifies producers of crops and
livestock as well as handlers would require a greater amount of
time.
All of these factors will impact both small and large certifying
agents. A small certifying agent could be assumed to have a less
complex organization or have fewer clients, and, thus, potentially
less time would be necessary for review. However, other factors,
such as the degree of paperwork organization or the complexity of
the agricultural practices certified, may influence the time needed
for review for any size of business.
Comments from the first proposal indicate that the average
accreditation cost for a certifying agent may range from $3,000 to
$5,000 per year for small to medium-size certifying agents to less
than $10,000 per year for the largest certifying agents.
Currently, relatively few certifying agents have third party
accreditation because accreditation of certifying agents is
voluntary. Fetter reports that in a sample of 18 certification
programs, selected to include six large, private programs, six
smaller private programs, and six State programs, four programs were
accredited and one had accreditation pending.\8\ All of these were
large private certifying agents. Three of the certifying agents
identified by Fetter as accredited requested ISO Guide 65
assessments by USDA and have been approved for selling organic
products into the international market. Those certifying agents
currently accredited by third parties will likely pay less for USDA
accreditation because their documents are organized and they have
fewer nonconformities.
---------------------------------------------------------------------------
\8\ Fetter, Robert T. 1999. Economic Impacts of Alternative
Scenarios of Organic Products Regulation. Senior Honors Thesis.
University of Massachusetts, Amhearst, MA.
---------------------------------------------------------------------------
Those certifying agents who have been operating without third
party accreditation will face new costs--the costs of
accreditation--under this proposal. Compared to the direct costs of
$3,000 to $5,000 per year indicated by the commenters, the direct
costs of USDA accreditation will be smaller, with estimated site
evaluation fees (covering 5 years) ranging from $3,070 to $4,850 for
the first year and an annual review fee ranging from $190 to $760
for subsequent years. Furthermore, the direct costs would be
substantially less for those certifying agents obtaining
accreditation during the first 18 months while USDA does not impose
an application fee or hourly charges and limits direct costs to
travel and per diem costs.
It is expected that all certifying agents will set their fee
schedule to recover costs for their certification services,
including the costs of accreditation. The larger the number of
clients per certifying agent, the more fixed costs can be spread
out. It is possible, however, that small certifying agents could be
significantly impacted by this proposal and may not be able to
continue in business from a financial standpoint.
Projected Reporting, Recordkeeping, and Other Compliance
Requirements of Certifying Agents
In addition to the direct costs, the regulation will impose
administrative costs on certifying agents for reporting,
recordkeeping, residue testing, and other compliance requirements.
The actual amount of the additional administrative costs that would
be imposed by the final rule is expected to be different for those
entities that would begin their activities only after the national
program is implemented. Certifying agents that currently are active
in the organic industry already perform most of these administrative
functions; therefore, the additional costs to them would depend upon
the extent to which their current practices are different from the
requirements of the final regulation. Projected reporting,
recordkeeping, and other compliance requirements of certifying
agents are discussed in greater detail in the PRA and the RIA.
[[Page 13650]]
Costs to Producers and Handlers
Under this proposal, USDA will not impose any direct fees on
producers and handlers. Certifying agents will establish a fee
schedule for their certification services that will be filed with
the Secretary and posted in a place accessible to the public.
Certifying agents will provide all persons inquiring about the
application process with a copy of their fees. The certifying agent
may only charge those fees that it has filed with the Secretary.
Furthermore, the certifying agent will provide each applicant with
an estimate of the total cost of certification and an estimate of
the annual costs of updating the certification. However, the
certifying agent may require applicants to pay at the time of
application a nonrefundable fee of no more than $250 which must be
applied to the applicant's fee for services account.
Currently, supply and demand for certification services
determine the fees charged in most areas. Some States charge minimal
fees for certification and instead subsidize operating costs from
general revenues. According to separate studies by Fetter, and Graf
and Lohr, the majority of certifying agents structure their fee
schedules on a sliding scale based on a measure of size, usually
represented by the client's gross sales of organic products but
sometimes based on the acres operated. Some certifying agents charge
an hourly rate for inspection and audit services.
Graf and Lohr have applied fee schedules provided by nine
certifying agents to four hypothetical farms--small, medium, large,
and a super farm. They define ``small'' as a 25-acre farm with
annual sales of $30,000 that would take 5 hours to certify. Note
that our alternative definition of small (under $5,000) is
different. Table 2 shows the total first-year cost and subsequent-
year cost for certification for small farms; the RIA shows detail on
other size farms.
Table 2.--Certification Costs Among a Selection of Certifying Agents
[For a small farm: 25 acres, $30,000 annual sales, 5 hours to certify]
------------------------------------------------------------------------
Total cost to
Total cost to certify in
Certifying agent certify in subsequent
first year years
------------------------------------------------------------------------
California Certified Organic Farmers.... $750 $425
Farm Verified Organic................... 585 510
Florida Certified Organic Growers and 325 325
Consumers..............................
Northeast Organic Farming Association-- 335 300
Vermont................................
Oregon Tilth Certified Organic:
--Inside Oregon..................... 608 454
--Outside Oregon.................... 568 424
Organic Crop Improvement Association:
--Wisconsin chapter................. 315 290
--Virginia chapter.................. 258 233
Texas Department of Agriculture......... 90 90
Washington State Department of 330 330
Agriculture............................
NutriClean/Scientific Certification n/a 700
Systems................................
Average cost............................ 416 371
------------------------------------------------------------------------
The Texas Department of Agriculture program is the low-cost
certifying agent. The high-cost certifying agent differs from first-
year to subsequent-year certification. Graf and Lohr's study
indicates that even small farms require significant time for the
certification process and this time does not increase
proportionately as farm size increases. None of these certification
programs mentions costs for residue testing which the National
Organic Program will require in the form of preharvest testing when
there is reason to believe that agricultural products have come in
contact with prohibited substances. Preharvest testing is expected
to be infrequent. Certifiers will recover the costs of preharvest
testing through explicit charges to the producer whose crop is
tested, or through a generally higher fee structure that spreads the
expected costs of tests over all clients.
Certifying agents will continue to set their own fee schedules
under the organic program. Certifying agents will have to set fees
to cover any net additional costs of doing business under the
National Organic Program. Accreditation and administrative costs are
incremental costs to existing certifying agents' businesses. Some
certifying agents might drop their third party accreditation saving
perhaps $3,000 to $5,000 per year, but most certifying agents are
not currently paying for accreditation.
This proposal imposes no requirements that would cause
certifying agents that are presently using a sliding scale type fee
schedule to abandon their current fee system. Certifying agents
could recover their net additional costs by increasing their flat
fee component, their incremental charges, or both. Because
accreditations are renewed only every 5 years, certifying agents
will have 5 years to recover their net new costs. Certifying agents
who become accredited during the first year of the program would
have fewer direct costs to recover, because they will not be charged
the application fee and hourly charges for accreditation services.
The OFPA established a small farmer exemption from certification
and submission of organic plans for small producers with a maximum
of $5,000 in gross sales of organic products. For purposes of the
exemption, the OFPA defines a ``small farmer'' as those who sell no
more than $5,000 annually in value of agricultural products. In this
proposal, we have clarified that the exemption applies to those who
sell no more than $5,000 annually in value of organic products.\9\
According to the OFRF survey, 27 percent of currently certified
farms that responded to the survey would fall under this exemption.
This percentage does not take into account those organic farms that
are not currently certified by a private or State certifying agent.
A study of California organic farms found that, of all organic farms
\10\ in 1994-95, about 66 percent have revenues less than
$10,000.\11\ If California is representative and the distribution
within the sub-$10,000 category is uniform, then a third of the
farms would be classified as small for purposes of the statutory
exemption with annual sales less than $5,000. Based on the
California study and the OFRF survey results, we estimate that
between 25 and 33 percent of organic producers are small and would
qualify for exemption from the certification requirements.
---------------------------------------------------------------------------
\9\ We asked for comments on the first proposal as to whether
the current statutory limitation of $5,000 for exemption from
certification should be raised to $10,000 or to another amount and
why such an increased monetary limitation for exemption from
certification would be appropriate. Few commenters offered
recommendations as to a maximum sales volume to exempt producers.
Amounts ranged from $2,000 to $50,000, with a few suggesting $10,000
and $20,000 exemptions. These proposed exemption levels and
justifications in comments received are not sufficiently consistent
enough for us to recommend changing the statute requirement of the
$5,000 maximum sales volume exemption.
\10\ California State law requires organic farmers to register
with the State. Certification is voluntary at the current time.
\11\ Klonsky, Karen, and Laura Tourte. 1998. Statistical Review
of California's Organic Agriculture, 1992-95. Report prepared for
the California Department of Food and Agriculture Organic Program.
Cooperative Extension, Department of Agricultural Economics,
University of California, Davis.
---------------------------------------------------------------------------
We have estimated that there are between 3,000 and 4,000 small
organic producers that will be exempt from certification. These
producers would be required to comply with
[[Page 13651]]
the production and handling standards and labeling requirements set
forth under the National Organic Program. We anticipate that this
exemption will be used primarily by small market gardeners and
hobbyists who sell produce and other agricultural products at
farmers markets and roadside stands to consumers within their
communities. By being exempt from certification, the current
certification costs (table 2) estimated at an average $416 for the
first year and an average $370 for subsequent years have been
eliminated.
Exempt producers will be allowed to market their products as
organically produced without being certified by a certifying agent.
Products marketed by exempt producers cannot be represented as
certified organic or display the USDA organic seal. Products
produced or handled on an exempt operation may be identified as
organic ingredients in a multiingredient product produced by the
exempt operation, but they may not be identified as organic in a
product processed by others. These limitations may discourage some
small producers from seeking exemption, who instead may choose to
become certified. In this case, the costs of certification would
apply. The value associated with having organic certification may
outweigh the costs of certification.
Those currently receiving voluntary certification will likely
see a modest increase as the certifying agent passes on its cost
incurred under the National Organic Program. Those not currently
receiving certification and producing over $5,000 annually in
organic products will be required to become certified, and they will
incur the actual costs of certification.
We have estimated that there about 98 percent of the 1,250
organic handlers are small. A handling operation or a portion of a
handling operation is exempt from certification requirements if it
has annual gross sales of less than $5,000; is a retail food
establishment that handles organically produced agricultural
products but does not process them; handles agricultural products
that contain less than 50 percent organic ingredients by weight of
finished product; or does not use the word, ``organic,'' on any
package panel other than the information panel if the agricultural
product contains at least 50 percent organic ingredients by weight
of finished product. A handling operation or specific portion of a
handling operation is excluded from certification if it handles
packaged certified organic products that were enclosed in their
packages or containers prior to being acquired and remain in the
same package and are not otherwise processed by the handler, or it
is a retail food establishment that processes or prepares on its own
premises raw and ready-to-eat food from certified organic products.
Otherwise, to be certified organic, handlers must pay for
certification fees estimated at $1,800 per year and fulfill
recordkeeping requirements.
In order to identify handlers that might be expected to face
more significant impacts as a result of this proposal, we attempted
to analyze handlers' revenue from organic sales. Sales data indicate
that gross sales of organic production total less than $500,000 per
firm for most certified handlers. Information from the California
DHS, where State law requires organic processors to register, gives
some indication of the size distribution. Of the 208 processors
registered with the State in 1995, 80 firms (38 percent) reported
gross sales of $50,000 or less, and 50 firms (24 percent) had gross
sales exceeding $500,000. In mid-September 1999, 376 processors were
registered with the State, with 107 firms (28 percent) reporting
gross sales of $50,000 or less and 112 firms (30 percent) reporting
gross sales exceeding $500,000. We use this California information
to estimate that 25 to 30 percent of handlers have gross sales of
$50,000 or less and could be significantly impacted by this
proposal. Information needed to estimate the number of exempt or
excluded handlers is not available.
Some States, such as Texas and Washington, charge producers and
handlers nominal fees for certification, and it is possible that
more States might provide certification services as the National
Organic Program is implemented. Other States, such as Minnesota,
have cost-share programs to help offset costs for organic producers.
Projected Reporting, Recordkeeping, and Other Compliance
Requirements for Producers and Handlers
In addition to the fees for certification, the regulation will
impose administrative costs on producers and handlers for reporting,
recordkeeping, residue testing, and other compliance requirements.
The actual amount of the additional administrative costs that would
be imposed by the final rule is expected to be different for those
entities that would begin their activities only after the national
program is implemented. Producers and handlers who currently are
active in the organic industry already perform most of these
administrative functions; therefore, the additional costs to them
would depend upon the extent to which their current practices are
different from the requirements of the final regulation. Projected
reporting, recordkeeping, and other compliance requirements of
certifying agents are discussed in greater detail in the PRA and the
RIA.
Federal Rules
No other burdens are expected to fall upon the organic industry
as a result of overlapping Federal rules. This proposed regulation
would not duplicate, overlap or conflict with any existing Federal
rules. In preparing this proposed regulation, AMS consulted other
Federal agencies such as the Food and Drug Administration (FDA), the
Environmental Protection Agency (EPA), the Bureau of Alcohol,
Tobacco and Firearms (ATF), and the USDA's Food Safety and
Inspection Service (FSIS) to ensure that this proposed regulation
would complement existing regulations.
Alternatives to This Proposal
We believe that our proposed regulation could have a significant
impact on a substantial number of small businesses. However, we have
considered several options with the intention of mitigating negative
economic impacts of the fees. We did not consider alternatives,
beyond the previously discussed exemptions, that would mitigate the
indirect costs of this rule on small entities. The following options
were considered by AMS prior to and during the development of this
proposal:
Option 1: First Proposal Issued December 1997
The first proposal suggested a fee for direct services model
which combined a fixed fee for all farmers, handlers, and certifying
agents, with a variable fee for certain direct services provided by
AMS in the accreditation of certifying agents.
Table 1 includes estimated direct costs of accreditation and
certification for the first proposal and this proposal; the fees in
this proposal are discussed in prior sections of this RFA. The fee
provisions in this proposal have been changed significantly, due in
large part to comments received regarding the first proposal.
In overall design, the first proposal is similar to this
proposal. USDA would accredit certifying agents who would in turn
certify producers and handlers. USDA proposed to charge certifying
agents a $640 application fee, costs for a site evaluation fee that
were estimated at $3,500, and a $2,000 administrative fee. Producers
would be charged a $50 USDA fee in addition to the fees imposed by
the certifying agent. Handlers would be charged a $500 USDA fee on
top of the certifying agent's fees. The fee structure was intended
to recover the full costs of operating the National Organic Program,
which was estimated at $1 million annually. Producers with $5,000 or
less in annual gross sales of agricultural products and handlers
with annual gross sales of less than $5,000 were exempt from
certification as provided for in the OFPA.
The OFPA permitted but did not obligate USDA to charge fees. The
first proposal sought to set fees to recover the full costs of the
National Organic Program. Public comment generally stressed that the
fees were too high. Most certifying agents have operated without
third party accreditation. Thus, USDA fees were a substantial
increase in the costs of doing business for most certifiers. For
producers the direct fee of $50 was a 12 percent increase over the
estimated average fee paid for certification. For certifying agents
the $500 fee would have been a 53 percent increase over estimated
average certification fees. To the extent the program raised
certifying agent costs, these costs would have been passed through
to producers and handlers. Commenters stated that many certifying
agents had few clients and to pass through the estimated direct
costs of accreditation ($6,140) would make the costs of
certification higher than producers could afford.
Comments were received opposing fee provisions in the first
proposal. Most of these commenters expressed the belief that the
proposed fees would price small farmers, handlers, and certifying
agents out of the organic industry. Many commenters stated that the
proposed fees favored large farming operations and suggested a
sliding scale fee system, rather than the flat fee system discussed
in the first proposal, to
[[Page 13652]]
accommodate the economic needs of small farmers, handlers, and
certifying agents. Most suggested that small farmers and processors
be exempt from the payment of fees. A more comprehensive review of
the comments appears in subpart G entitled ``Administrative'' of
this proposal.
Additional comments were received that specifically referred to
the section entitled ``Regulatory Flexibility Act and Effects on
Small Businesses'' in the first proposal. Most of these commenters
expressed the belief that costs were understated and benefits were
overstated. Commenters thought the proposed fees were excessive,
unacceptable, and burdensome and would price many small farmers,
handlers, and certifying agents out of the organic industry. Some
thought that this appeared to be the actual intent of the first
proposal. They also supported a sliding scale fee system, rather
than the flat fee system originally proposed. Some stated that the
$5,000 exemption level was much too low. Producers objected to
having to pay the certification and inspection fees prior to knowing
whether they would actually set a crop, if the crop would grow, or
what percentage of the crop might be harvested.
Compared to this proposal, the first proposal would have been
more costly to the organic industry in terms of direct costs for
accreditation, and to producers and handlers in terms direct fees
and the costs which certifying agents would have attempted to pass
through. However, the current proposal has not set fees at levels to
recover all program costs and during an 18 month transition period
will not require application fees or charge for hourly services.
Costs that are not recovered through fees will be covered by
appropriated funds, meaning that taxpayers at large will bear some
of the costs of the proposed organic program. Thus, in terms of fees
and other direct costs, the first proposal was more burdensome on
the organic industry.
The first proposal also contained new information collection
requirements, a description of those requirements, and an estimate
of the annual economic burden on the organic industry. We received
responses specifically referring to the information collection
requirements of the first proposal. Among the comments made were
that the requirements would be unaffordable by small businesses and
that paperwork requirements should be kept small, simple, and to a
bare minimum, especially for small producers.
Recordkeeping requirements for certifying agents in the first
proposal that required certifying agents to maintain all records
concerning their activities for 10 years have been changed to reduce
the burden. Commenters expressed concern that this requirement was
excessive and unnecessary. We agree and are instead proposing that
there be three categories of records with retention periods: (1)
Records created by certifying agents regarding applicants for
certification and certified operations to be maintained 10 years,
consistent with OFPA requirement for maintaining all records
concerning activities of certifying agents; (2) records obtained
from applicants for certification and certified operations to be
maintained 5 years, the same as OFPA requirement for the retention
of records by certified operations; and (3) other records created or
received by certifying agents to be maintained for five years.
Option 2: Fee per Certification Model
A fee per certification model was considered but not used. This
model would have based accreditation fees on the numbers of farmers
and handlers certified. Specifically, certifying agents would pay a
fee to USDA for each certification performed. The smallest one-half
of certifying agents, who certify about 10 percent of organic
operations, would pay about 10 percent of the estimated costs
associated with accreditation. The largest 10 percent of certifying
agents, who certify about 45 percent of organic operations, would
pay about 45 percent of accreditation costs. The remaining 40
percent of certifying agents in the middle would pay 45 percent of
the costs. The fee per certification would be fixed, regardless of
the size of the operation being certified. This feature has the
potential to create a barrier to market access for the smaller
operations. Certifying agents who charge farmers and handlers for
certification based on size and scope of the operation would
maximize their profits by certifying only the larger farmers and
handlers from whom they would realize a higher return. If certifying
agents were to discriminate in this manner in favor of larger
operations, smaller farmers and handlers would find the
certification services available to them to be relatively limited
and possibly more expensive than under the fee for direct services
model that includes a variable fee for site visits. A fixed fee per
certification also would not take into account, in the distribution
of costs, the large difference in size between processors and
primary producers. Processors are generally much larger than primary
producers in terms of both total output and total revenue.
Option 3: Exemption of Small Certifying Agents From Accreditation
Small certifying agents (those with annual revenues of $25,000
or less) may not have the resources to meet all of the requirements
of the rule, such as accreditation fees, administrative and
personnel requirements, and conflict of interest restrictions, based
on their current structure and revenues. Therefore, exempting the
smallest certifying agents from the accreditation requirement,
similar to small producers being exempt from certification
requirements, could mitigate any potential adverse impact of the
rule on this group. This option, however, would require a
legislative amendment to the OFPA.
The exemption of the smaller certifying agents from
accreditation would carry with it many of the limitations resulting
from the absence of Federal oversight. International trade would
likely be limited to products certified by accredited certifying
agents. Protecting domestic consumers from inappropriate organic
claims on the labels of products certified by exempt certifying
agents would likely lead to greater confusion over labels in the
marketplace. Federal enforcement agencies such as the FDA, the ATF,
and FSIS might wish to distinguish accredited certifying agents from
those certifying agents who are exempt, perhaps by requiring
accredited certifying agents' clients to include the USDA seal on
their product labels.
One of the purposes of the OFPA described in the statute is to
assure consumers that organically produced products meet a
consistent standard. Without Federal oversight of certifying agents,
it would be difficult to ensure that one national standard of
production and handling for agricultural products would be employed.
The result could be the continuation of reciprocity agreements
between small, exempt certifying agents and large accredited ones.
This could result in a cost for small entities, while providing less
benefit to certified producers and handlers than would be provided
them by accreditation of all certifying agents.
We request comments from all interested parties, particularly
small businesses, as to whether a small certifier exemption would be
beneficial or practical given the constraints explained in this
option.
Option 4: This Proposal
The new proposal includes provisions that will mitigate the
impact of the National Organic Program, especially for small
businesses. Fixed administration fees for producers, handlers and
certification agents have been eliminated. The fixed application fee
for accreditation also has been eliminated. This will positively
affect small producers and handlers because fixed fees expend a
larger percentage of a smaller operation's total revenue.
As indicated earlier in this discussion, certifying agent
evaluation fees would reflect actual costs for the time and travel
required to do the evaluation. It is anticipated that smaller
certification agents would benefit because they are small and less
complex than larger certification agents. The proposed accreditation
costs would be proportional to the actual time required to perform
the service. Several small operations could be grouped by area to
reduce travel expenses of the evaluators.
The new labeling requirements that allow the use of a
certification agent's seal on the principal display panel and on the
information panel of processed product labels also may benefit small
operations. Certification agents that have an established consumer
base may benefit by displaying their identifying seal. Small
certification agents, whose clients more likely produce ingredients
for processed products, could also be identified and thus share in
this benefit. Certification agents also may wish to expand their
operation by offering verification of truthful labeling claims which
will be allowed under this proposal.
This proposal has three elements of flexibility that are
advantageous to small entities: performance-based production and
handling standards and certifying agent requirements; production and
handling standards that contain a range of allowable practices; and
temporary variances.
The standards in this proposal are performance standards based
on the results of a management system, rather than prescriptive or
design standards that prescribe specific technology or a precise
[[Page 13653]]
procedure for compliance. Performance standards allow for
flexibility in compliance, which is especially important to organic
farmers, handlers and certifying agents with limited resources.
Performance standards promote innovation and the development of new
technologies which would help the industry as a whole be more
efficient. Finally, they provide a less costly means of compliance
than design standards. Small entities, in particular, benefit
because compliance with performance standards allows for the
adaptation of existing systems without costly capital investment.
This proposal allows for flexibility by providing a range of
production and handling practices that can be used to maintain the
organic integrity of the operation. The use of an allowed practice
or substance must be described in the organic plan as a record for
consideration by the certifying agent during a certification review.
The proposal provides temporary variances in the case of natural
disasters, damage from wind, floods and the like, and for research
trials. The benefit of variances is that a producer or handler would
not lose its investment in an organic operation because of certain
conditions that are beyond the producer or handler's control.
Variances also enhance performance standards by allowing additional
innovation and experimentation. This is especially important to
producers and handlers who depend on the organic price premium.
Conclusion
USDA has identified the entities that may be affected by this
proposal and has analyzed the anticipated impacts of the proposal on
them based on our knowledge of the industry and limited data. We
have drawn on industry studies, including studies completed since
the first proposal was published in 1997, as well as information
provided in comments on the first proposal. However, we lack data to
thoroughly and quantitatively describe the existing organic industry
and quantitatively analyze the effects of this proposal.
Whether using SBA's small business size standards by SIC or the
alternative definitions created for this analysis, we believe that
this proposal could have a significant impact on a substantial
number of small businesses. Even with the flexibility proposed in
the regulation and the expanded market opportunities brought about
by implementation of the National Organic Program, some small
certifying agents may choose not to become accredited to provide
certifying services, and some small producers and handlers may
choose not to continue being certified organic because the proposed
fees would be passed down to them as certification fees. We invite
comments about the expected benefits and costs to small entities as
presented in this analysis. Specifically, we invite comments
regarding the impact of the proposed National Organic Program on
small certifying agents, producers, and handlers so that we might
uncover potential unintended negative impacts on small entities.
The proposed structure of user fees outlined in this proposal
attempts to minimize the burden of administrative costs which will
be assumed by small-scale organic certifying agents and the
producers and handlers who use these certification services.
Certifying agents already performing organic certification services
in a State or private capacity on the date that the proposed
national accreditation program for organic certification is
implemented will not be required to pay the administrative costs of
applying for initial national accreditation status; the
administrative costs involved in evaluating the accreditation status
of these agents will be absorbed by a portion of the National
Organic Program operating budget appropriated by Congress. They will
be required to pay travel expenses for the reviewers. New applicants
seeking national accreditation for organic certification services
will be charged a fee to cover the administrative costs of
evaluating their suitability for accreditation, their application
fees will be structured to reflect the actual hourly costs of having
an AMS evaluator conduct a site visit (including travel time to and
from the evaluator's duty station and per diem travel expenses). The
departures from the first proposal--which would have imposed a
uniform flat fee on all applicants for national accreditation--along
with the adoption of an application fee structure which attempts to
relate the imposition of fees to the actual costs involved in
administering the national accreditation program, should contribute
to a less burdensome and more equitable distribution of
administrative costs across all segments of the organic industry.
Appendix D--Paperwork Reduction Act of 1995
The Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506 and
3507) is designed to minimize the burden of reporting and
recordkeeping (information collection requirements) required by
Federal regulations on individuals, businesses, other private
institutions, and State and local governments. The burden is an
estimate of the amount of time and the cost required of program
participants to fulfill the information collection requirements.
Information collection requirements must have Office of
Management and Budget (OMB) review and approval before they can
become effective. They must also be made available for public
comment, and the comments become part of the public record. This
notice requests comments on the proposed information collection
requirements of this proposal.
Title: National Organic Program.
OMB Number: New collection.
Expiration Date of Approval: Three years from date of approval.
Type of Request: New.
Abstract: The Organic Foods Production Act (OFPA) of 1990
mandates that the Secretary develop a National Organic Program (NOP)
to accredit eligible State program's governing State officials or
private persons as certifying agents who would certify producers or
handlers of agricultural products that have been produced using
organic methods as provided for in the OFPA. This regulation is
proposed: (1) To establish national standards governing the
marketing of certain agricultural products as organically produced
products; (2) to assure consumers that organically produced products
meet a consistent standard; and (3) to facilitate interstate
commerce in fresh and processed food that is organically produced.
The OFPA was requested by the organic community because of
problems encountered in the marketing of organic products. First,
there was fraudulent use of the term, ``organic,'' resulting in the
mislabeling of products, caused in part because many consumers are
willing to pay premium prices for organic foods. Second, there was a
lack of uniformity in standards defining organic production, causing
trade disruption and confusion among buyers, sellers, and users of
organic products. Third, there was constraint on market growth due
to the prohibition on labeling meat and poultry products as organic.
After implementation of the NOP, any agricultural product labeled
``organic'' will have to be from a production or handling operation
that is certified by a certifying agent who is accredited by the
U.S. Department of Agriculture (USDA).
A proposed rule to implement the OFPA was published in December
1997. It contained information collection requirements, an estimate
of the annual economic burden on the organic industry, and a request
for comments about the burden. A few general comments were received
about the burden and they were considered when this proposal was
prepared. Also taken into account was other information about
existing industry practices and documents, the Initial Regulatory
Flexibility Analysis that is discussed in the section entitled
``Regulatory Flexibility Act and the Effects on Small Businesses,''
and the Regulatory Impact Assessment (RIA) that is discussed in the
section entitled ``Executive Order 12866.'' The numbers of entities
affected by this proposal are estimated in the RIA. The RIA is
attached as an appendix to this proposal.
Reporting and recordkeeping are essential to the integrity of
the organic certification system. They create a paper trail that is
a critical element in carrying out the mandate of the OFPA. They
serve the Agency mission, program objectives, and management needs
by providing information on the efficiency and effectiveness of the
program. The information affects decisions because it is the basis
for evaluating compliance with the OFPA and the regulations, for
administering the program, for management decisions and planning,
and for establishing the cost of the program. It supports
administrative and regulatory actions in response to noncompliance
with the OFPA and the regulations.
In general, the information collected will be used by USDA,
State program's governing State officials, and certifying agents. It
will be created and submitted by State and foreign program
officials, peer review panel members, accredited certifying agents,
organic inspectors, certified organic producers and handlers, those
seeking accreditation or certification, and parties interested in
changing the National List. Additionally, it will necessitate that
all of these entities have procedures and space for recordkeeping.
[[Page 13654]]
The burden on each entity is discussed below. One major estimate
made about each entity is the number of entities likely to
participate in the NOP. The information collection burden attempts
to incorporate the burden that will be in addition to the burden
that current organic marketers have with the burden required of new
entrants into the field.
USDA. USDA will be the accrediting authority. USDA will accredit
domestic and foreign certifying agents who will certify domestic and
foreign organic producers and handlers, using information from the
agents documenting their business operations and program expertise.
USDA will also permit State program's governing State officials to
establish their own organic certification programs after the
programs are approved by the Secretary, using information from the
States documenting their ability to operate such programs and
showing that such programs meet the requirements of the OFPA and the
regulations.
States. State program's governing State officials may operate
their own organic certification programs. State officials will
obtain the Secretary's approval of their programs by submitting
information to USDA documenting their ability to operate such
programs and showing that such programs meet the requirements of the
OFPA and the regulations. More than half of the States currently
have some standards governing the production, handling, or labeling
of organic food and 13 States have organic certifying programs.
These programs require reporting and recordkeeping burdens similar
to those required by the NOP. It is unknown at this time how many
States, if any, will establish their own organic certification
programs pursuant to the OFPA and the regulations. Estimates: 13
States will operate their own certification programs. The annual
burden for each State will be an average of 52.308 hours or if
calculated at a rate of $27 per hour, (rounded up to the next
dollar), it would be $1,413.
Peer review panels. Panels will assist the Agricultural
Marketing Service (AMS) Administrator in evaluating applicants for
accreditation as certifying agents. Individuals will apply to USDA
for membership in a pool from which the panels are selected,
submitting to USDA information documenting their qualifications to
conduct such reviews. This will be a new burden for those serving on
the panels. Estimates: 40 people will participate in peer review
panels. The annual burden for each panel member will be an average
of 10 hours or if calculated at and $27 per hour, it would be $270.
Certifying agents. Certifying agents may be State program's
governing State officials, private entities, or foreign entities who
are accredited by USDA to certify domestic and foreign producers and
handlers as organic in accordance with the OFPA and the regulations.
Each entity wanting to be an agent will seek accreditation from
USDA, submitting information documenting its business operations and
program expertise. Accredited agents will determine if a producer or
handler meets organic requirements, using detailed information from
the operation documenting its specific practices and on-site
inspection reports from organic inspectors. Estimates: 59 entities
are expected to apply for certification (13 State programs, 36
private entities, 10 foreign entities). The annual burden for each
State program will be an average of 695.428 hours or if calculated
at $18,778. The annual burden for each private or foreign entity
will be 699.678 hours or $27 per hour (rounded up to the next
dollar) it would be $18,893.
Administrative costs for reporting, disclosure of information,
and recordkeeping are expected to vary among certifying agents.
Entities which begin their activities only after the national
program is implemented would be expected to incur the greatest cost
as they set up an operation that conforms to the OFPA and the
regulations. For agents who are currently active in the organic
industry, follow ISO guidelines, and already perform many of these
administrative functions, costs will vary depending upon the extent
to which their current practices are different from requirements in
the OFPA and the regulations. Agents will be expected to provide the
public with information concerning their clients. Efforts were made
to incorporate existing industry practices and documents into this
proposal. A list of several proposed administrative requirements and
the probable resources required for compliance is included in the
Regulatory Impact Assessment.
When an entity applies for accreditation as a certifying agent,
it must provide a copy of its procedures for complying with
recordkeeping requirements (Sec. 205.504(b)(3)). Once certified,
agents will have to make their records available for inspection and
copying by authorized representatives of the Secretary
(Sec. 205.501(a)(9)). USDA will charge certifying agents for the
time required to do these document reviews. Audits will require less
time if the documents are well organized and centrally located, than
if they are in disarray and in several locations. Certifying agents
will have control over these conditions, but making documents
accessible to the public may bring about a substantial change in the
way some agents currently operate.
Recordkeeping requirements for certifying agents in the first
proposal were changed to reduce the burden. They required certifying
agents to maintain all records concerning their activities for 10
years. Commenters expressed concern that this requirement was
excessive and unnecessary. We agree and are instead proposing three
categories of records with varying retention periods: (1) records
created by certifying agents regarding applicants for certification
and certified operations, maintain 10 years, consistent with OFPA's
requirement for maintaining all records concerning activities of
certifying agents; (2) records obtained from applicants for
certification and certified operations, maintain 5 years, the same
as OFPA's requirement for the retention of records by certified
operations; and (3) records created or received by certifying agents
regarding accreditation, maintain 5 years, consistent with OFPA's
requirement for renewal of agent's accreditation (Sec. 205.510(b)).
Residue testing requirements in the first proposal were changed
to reduce the burden. They required certifying agents to undertake
residue testing every 5 years to determine if products from
certified operations contained a detectable residue level of a
prohibited substance and to report such findings to appropriate
authorities. Commenters expressed concern that the requirement was
too costly. We agree and are instead proposing that the State
program's governing State officials or certifying agents may conduct
testing at their own expense only if they suspect a crop has come
into contact with a prohibited substance. Test results must be
submitted to the Administrator (Sec. 205.672(b)).
Organic inspectors. Inspectors will conduct on-site inspections
for the certifying agents of each applicant for certification and
annually of each certified operation. They will determine whether or
not certification should continue and will report this finding to
the certifying agent. Inspectors will be the agents themselves,
employees of the agents, or individual contractors. We estimate that
about half will be certifying agents and their employees and half
will be individual contractors. Individuals who apply for positions
as inspectors will submit to the agents information documenting
their qualifications to conduct such inspections. Estimates: 293
inspectors (147 certifying agents and their employees, 146
individual contractors) will be used. The annual burden for each
inspector will be an average of 48.304 hours or if calculated at $27
per hour (rounded up to the next dollar), it would be $1,305.
Producers and handlers. Producers and handlers, domestic and
foreign, will apply to certifying agents for organic certification,
to renew their certification, or to report changes in their
practices, submitting to the agents detailed information documenting
their specific practices. Producers include farmers, livestock and
poultry producers, and wild crop harvesters. Handlers include those
who transport or transform food and may include millers, bulk
distributors, food manufacturers, processors, repackagers, or
packers. Some handlers may be part of a retail operation that
processes organic products in a location other than the premises of
the retail outlet.
The OFPA requires certified operators to maintain their records
for 5 years. Estimates: 19,300 total operators (14,153 certified and
5,147 exempt), including 17,150 producers (12,176 certified and
4,974 exempt) and 2,150 handlers (1,977 certified and 173 exempt).
We do not have an estimate of the number of foreign producers and
handlers that will apply for organic certification. The annual
burden for each domestic operator will be: certified producer--
average of 9.521 hours or if calculated at $24 per hour, it would be
$229; certified handler--average of 49.521 hours or if calculated at
$24 per hour, it would be $1,189; exempt/excluded operator--average
of 0.5 hour or if calculated at $24. per hour, it would be $12.
The proposed regulation exempts certain operations from
certification: (1) Producers and handlers whose gross agricultural
income from organic sales totals $5,000 or less annually; (2)
handlers selling only agricultural products that contain less than
50 percent organic ingredients by total
[[Page 13655]]
weight of the finished product; (3) handlers that handle
agricultural products that contain at least 50 percent organic
ingredients and choose to use the word ``organic'' only on the
information panel of a packaged product; and (4) handlers that are
retail food establishments that handler organic food but do not
process it. The proposed regulation also excludes certain operations
from certification: (1) Handlers selling only agricultural products
labeled as organic or made with organic ingredients that are
enclosed in a container prior to being received, remain in the same
container, and are not otherwise processed while in the control of
the operation; and (2) handlers that are retail food establishments
that process or prepare, on the premises, raw and ready-to-eat food
from organic agricultural products.
Administrative costs for reporting and recordkeeping are
expected to vary among certified operators. Entities which begin
their activities only after the national program is implemented
would be expected to incur the greatest cost as they set up an
operation that conforms to the OFPA and the regulations. For
operators who are currently active in the organic industry and
already perform many of these administrative functions, costs would
vary depending upon the extent to which their current practices are
different from requirements in the OFPA and the regulations. Efforts
were made to incorporate existing industry practices and documents
into this proposal. A list of several proposed administrative
requirements and the probable resources required for compliance is
included in the Regulatory Impact Assessment.
Research studies have indicated that operations using product
labels containing the term ``organic'' handle an average of 19.5
labels annually, that there are about 16,000 products with the term
organic on the label, and that the number of such products increased
by 250 annually from 1994 through 1996. We estimate that by the year
2001, 17,000 products will be marketed with the term ``organic'' on
the label. This proposal includes an estimate of the time needed to
develop labels for products sold, labeled, or represented as ``100
percent organic,'' ``organic,'' ``made with organic (specified
ingredients),'' or which use the term organic to modify an
ingredient in the ingredients statement. Also included is the time
spent deciding about use of the USDA seal, a State emblem, or the
seal, logo, or other identifying marks of a private certifying agent
(Sec. 205.300-Sec. 205.310). Because the labeling requirements in
this proposal are in addition to FDA and FSIS requirements, the
burden measurement does not include the hours necessary to develop
the entire label. For purposes of calculating the burden, it was
estimated that each handler will develop 20 labels annually.
Interested parties. Any interested party may petition the NOSB
for the purpose of having a substance evaluated for recommendation
to the Secretary for inclusion on or deletion from the National
List. Estimates: 25 interested parties may petition the NOSB. The
annual burden for each interested party will be an average of 104
hours and $2,496 ($24 per hour).
Cost. The following table shows the salary rates used to
calculate the cost of the burden. We believe the increased rates for
this proposal over the first proposal are more realistic in terms of
the responsibilities and requirements of each entity.
------------------------------------------------------------------------
First This
Estimated hourly rates proposal proposal
------------------------------------------------------------------------
Certified and exempt operators, interested $10 $24
parties......................................
State program's governing State officials, 20 27
peer review panel members, certifying agents,
organic inspectors...........................
------------------------------------------------------------------------
Annual Reporting and Recordkeeping Burden:
Estimated Number of Respondents: 19,730.
Total Annual Hours: 269,622.
Total Cost: $6,780,348.
Comments. Comments are requested on these proposed information
collection requirements. Comments are specifically invited on: (1)
Whether the proposed collection of information is necessary for the
proper performance of the functions of USDA, including whether the
information would have practical utility; (2) the accuracy of USDA's
estimate of the burden of the proposed collection of information,
including the validity of the methodology and assumptions used; (3)
ways to enhance the quality, utility, and clarity of the information
to be collected; and (4) ways to minimize the burden of the
collection of information on those who are to respond, including the
use of appropriate automated, electronic, mechanical, or other
technological collection techniques or other forms of information
technology.
Comments should be submitted by the date stated in the section
entitled Dates at the beginning of this proposal. However, they
should be sent to (1) Office of Management and Budget, New Executive
Office Building, 725 17th Street, NW, Room 725, Washington, D. C.
20503, Attention: Desk Officer, and to (2) Clearance Officer, USDA-
OCIO, Room 404W, Jamie Whitten Building, STOP 7602, 1400
Independence Avenue, SW, Washington, D.C. 20250-7602. Additionally,
comments may be sent by fax to (202) 690-4632 or submitted via the
Internet through the National Organic Program's homepage at http://www.ams.usda.gov/nop.
Appendix E.--Executive Order 12988, Civil Justice Reform
Executive Order 12988, Civil Justice Reform, instructs each
executive agency to adhere to certain requirements in the
development of new and revised regulations in order to avoid unduly
burdening the court system. The first proposal was reviewed under
this Executive Order. No comments were received on that review and
no additional related information has been obtained since then. This
rule is not intended to have retroactive effect.
States and local jurisdictions are preempted under section 2115
of the OFPA (7 U.S.C. 6514) from creating programs of accreditation
for private persons or State officials who want to become certifying
agents of organic farms or handling operations. A governing State
official would have to apply to the USDA to be accredited as a
certifying agent, as described in section 2115(b) of the OFPA (7
U.S.C. 6514(b)). States also are preempted under sections 2104
through 2108 of the OFPA (7 U.S.C. 6503 through 6507) from creating
certification programs to certify organic farms or handling
operations unless the State programs have been submitted to, and
approved by, the Secretary as meeting the requirements of the OFPA.
Pursuant to section 2108(b)(2) of the OFPA (7 U.S.C.
6507(b)(2)), a State organic certification program may contain
additional requirements for the production and handling of
organically produced agricultural products that are produced in the
State, and for the certification of organic farm and handling
operations located within the State, under certain circumstances.
Such additional requirements must: (a) Further the purposes of the
OFPA; (b) not be inconsistent with the OFPA; (c) not be
discriminatory towards agricultural commodities organically produced
in other States; and (d) not be effective until approved by the
Secretary.
Pursuant to section 2120(f) of the OFPA (7 U.S.C. 6519(f)), this
proposal would not alter the authority of the Secretary under the
Federal Meat Inspection Act (21 U.S.C. 601 et seq.), the Poultry
Products Inspections Act (21 U.S.C. 451 et seq.) or the Egg Products
Inspection Act (21 U.S.C. 1031 et seq.), concerning meat, poultry,
and egg products, nor any of the authorities of the Secretary of
Health and Human Services under the Federal Food, Drug and Cosmetic
Act (21 U.S.C. 301 et seq.), nor the authority of the Administrator
of the Environmental Protection Agency (EPA) under the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 136 et seq.).
Section 2121 of the OFPA (7 U.S.C. 6520) provides for the
Secretary to establish an expedited administrative appeals procedure
under which persons may appeal an action of the Secretary, the
applicable governing State official, or a certifying agent under
this title that adversely affects such person or is inconsistent
with the organic certification program established under this title.
The Act also provides that the U.S. District Court for the district
in which a person is located has jurisdiction to review the
Secretary's decision.
Appendix--Executive Order 13132, Federalism
This proposal has been reviewed under Executive Order 13132,
Federalism. This
[[Page 13656]]
Order requires that regulations that have federalism implications
provide a federalism impact statement that: (1) Demonstrates the
Agency consulted with the State and local officials before
developing the proposed regulation, (2) summarizes State concerns,
(3) provides the Agency's position supporting the need for the
regulation, and, (4) describes how the concerns of State officials
have been met. The Order indicates that where National standards are
required by Federal statutes, Agencies shall consult with
appropriate State and local officials in developing those standards.
Further, Agencies are required to interpret Federal statutes to
preempt State law only where the statute contains an express
preemption provision. In such a case, any regulatory preemption of
State law shall be restricted to the minimum necessary to meet the
objectives of the statute.
The Organic Foods Production Act (OFPA) of 1990 (7 U.S.C. 6514)
establishes national standards regarding the marketing of
agricultural products as organically produced, assures consumers
that organically produced products meet a consistent standard, and
facilitates interstate commerce in fresh and processed food that is
organically produced. In carrying out these purposes, the Act
contemplates a significant role for the States and, in fact,
envisions a partnership between the States and the Federal
Government in meeting the requirements of the Statute. The Act
specifies the State role and gives States recognition for their
activities in organic agriculture in several ways. First, 7 CFR 6507
provides that States may establish a State organic certification
program consistent with the national program. Second, these programs
may contain more restrictive requirements than the National Organic
Program established by the Secretary of Agriculture. To be more
restrictive, State Organic programs are required to: further the
purposes of the Act, be consistent with the Act, not discriminate
against organic products of another State, and be approved by the
Secretary. Third, States can choose to be accredited as certifying
agents under the Act and carry out a State organic program. Fourth,
the Act allows the States to determine the manner in which they
choose to be involved in the organic program. States may choose to
carry out the requirements of the Act by establishing a State
program and becoming accredited as certifying agents, they may
establish a State program and utilize private certifying agents to
implement the program, or they may choose to utilize the national
organic program as implemented by the Secretary.
In recognition of their role in carrying out the provisions of
OFPA, the Department has reached out to States and actively sought
their input throughout the entire process of developing the proposed
organic rule. The Department drew extensively on the organic
expertise of States and the organic industry by working closely with
the National Organic Standards Board. The National Organic Standards
Board, established under Section 2119 of the OFPA (7 CFR 6518), has
provided a broad and inclusive forum for public participation in
developing the recommendations and concepts that underpin the
proposed organic rule. Section 2104(c) of the OFPA (7 CFR 6503(c))
requires the Secretary to consult with the National Organic
Standards Board in developing the organic program and the National
List set forth in Section 2118 of the OFPA (7 CFR 6517).
The Secretary has received extensive input from the Board,
interested persons, and the States regarding the establishment of
the National Organic Program and this reproposal. The Board met 12
times before publication of the proposed rule on December 16, 1997,
and has met five times during 1998 and 1999. States were invited to
attend each of these meetings, and official State certifier
representatives participated in Board deliberations in meetings held
in July 1998 and July 1999. Public input sessions were held at each
meeting to gather information from all interested persons, including
State and local jurisdictions.
Section 2110(g) of the OFPA (7 U.S.C. 6509(g)) requires the
Secretary to hold public hearings to gather information to guide
development of standards for livestock products. Four hearings were
held during 1994 in Washington, D.C.; Rosemont, IL; Denver, CO; and,
Sacramento, CA. States were invited to participate in each of these
hearings.
National Organic Program staff also received comments and
consulted with States at public events. They made presentations,
received comments, and consulted with States at local and regional
organic conferences and workshops and at national and international
organic and natural food shows.
Further, States were provided the opportunity to comment
specifically on State issues at a National Organic Certifiers
meeting held on July 21, 1995, to discuss accreditation issues; a
meeting held on February 26, 1996, to discuss the role of States in
the National Organic Program; and a February 1999 State Certifiers
meeting to discuss State issues. Further, States were consulted in
training sessions held for organic inspectors, as well as numerous
question and answer sessions at speaking engagements of the
Agricultural Marketing Service Administrator, the National Organic
Program Program Manager, and the staff.
On publication of the first proposal on December 16, 1997, an
announcement and information packet summarizing the first proposal
were sent to over 1,000 interested parties, including State
governors and State department of agriculture secretaries,
commissioners, or directors. Subsequent to publication of the first
proposal, State and local jurisdictions had the opportunity to
provide input at four listening sessions held in February-March 1998
on the first proposal in Austin, TX; Ames, IA; Seattle, WA; and New
Brunswick, NJ.
Finally, States had the opportunity to comment on the first
proposal. More than 275,000 comments were received on the first
proposal, including State commenters.
Through this extensive outreach and consultation process, States
identified a number of issues with the first proposal. States
expressed several specific concerns regarding accreditation
requirements as they affect State programs. These issues are
described below, along with the Department's response in the
reproposal.
(1) Under OPFA 2108 (7 CFR 6507), States may establish
additional standards, approved by the Secretary. First, State
commenters objected to the provision in the first proposal that
would have prohibited States from requiring compliance with these
additional standards as a condition for use of the organically
produced State logo on products within the borders of such State. We
agree with the commenters, as we did not intend to prohibit States
from requiring that these more restrictive standards be met as a
requirement to the State's logo on organically produced products.
Accordingly, this proposal will permit States with more restrictive
requirements approved by the Secretary and private certifiers
certifying production and handling operations within these States to
require that the State's more restrictive standards be met in order
to use the State logo.
(2) The first proposal required annual organic inspector
performance appraisal and annual program evaluations for certifying
agents. State commenters objected that these requirements would
duplicate State requirements. We do not intend for States to develop
dual performance appraisal and program evaluation systems because we
believe that programs already conducted by the States will meet the
requirements of this proposal. These programs would be expected to
conform with good management practices appropriate to an
organization's size and structure. The questioned provisions have
not been changed, but this proposal has been revised to clarify that
the annual program evaluation can be conducted by the certifying
agency staff, an auditing entity, or a consultant with appropriate
expertise.
(3) The first proposal set forth confidentiality requirements
for certifying agents. Commenters stated that these confidentiality
requirements might conflict with State requirements for ``open
records.'' While we recognize this potential for conflicting
requirements, records collected under the National Organic Program
would be subject to the requirements of the Act. Where the Act and
State requirements conflict, the Act would take precedence. There is
no change to the confidentiality provision.
To clarify that authorized representatives of the Secretary or
the applicable Stae program's governing State official may act on
their behalf and must be given access to the records, this proposal
adds the phrase ``and their authorized representatives.''
(4) This proposal will require that accredited certifying agents
accept certification decisions made by another USDA-accredited
certifying agent as equivalent. State commenters said that States
should be able to control which certifying agents operate within
their State.
The first proposal provided that accredited certifying agents
accept the certification decisions made by another USDA-accredited
certifying agent as equivalent to their own. Commenters representing
State programs said that States should be able to control which
certifying agents operate within their
[[Page 13657]]
State. Several commenters asked whether States with more restrictive
standards could challenge certification decisions made by other
accredited certifying agents. Under the Act, no organic product may
be produced or handled to organic standards lower than the standards
of the National Organic Program. A State Government may not prevent
the marketing or sale within a given State of organic product
produced in another State according to this proposal. While States
may, with the approval of the Secretary, set more restrictive
standards than the national organic standards for product produced
or handled within their State, these requirements do not apply to
products produced or handled in another State.
State programs approved by the Secretary will be required to
treat all accredited certifying agents equally, and accredited
certifying agents in one State cannot refuse to recognize another
State's product certified to national standards. Accordingly, the
requirement remains unchanged that a certifying agent accept
certification decisions by another USDA-accredited certifying agent
as equivalent.
(5) The first proposal required all certifying agents to submit
documents and information on personnel, administrative, and
financial policies and procedures to demonstrate organic expertise
and ability to implement the National Organic Program. States
commented that State certifying agents should not be required to
submit such information, stating that these requirements should not
apply to States with established personnel, administrative, and
financial procedures. They also indicated that the review should be
limited to organic program administration only, not to agencywide
policies and procedures. We recognize that States have established
personnel, administrative, and financial procedures and that these
procedures would apply to State certifying agents. However, a stated
purpose of the Act is establishment of national standards. Such
standards should extend to uniform requirements for State and
private certifying agents unless otherwise provided in the Act.
Further, such information is necessary for the Administrator to make
a determination on approval of an application for accreditation.
Accordingly, the requirements for demonstrating organic expertise
and ability to implement the National Organic Program remain the
same for private and State certifying agents.
(6) The first proposal required a certifying agents to provide a
description of procedures to prevent conflicts of interest and the
identification of any food or agriculture-related business interests
of all personnel intended to be used in the certifying operation.
Commenters stated that existing State policies should be sufficient
to prevent conflicts of interest for a State certifying agent and
that lists of the business interests of all inspectors, program
staff, and their families are not necessary.
We agree that existing State policies should be sufficient to
prevent conflicts of interest but disagree that lists of the
business interests of all inspectors, program staff, and their
families are unnecessary. The Act (CFR 6515(h)) places
responsibility for the prevention of conflicts of interest with the
certifying agent. However, the Department is responsible for
ensuring that the certifying agent complies with that
responsibility. The requirement to provide such a listing provides
the Administrator information essential to identifying conflicts of
interest. In addition, a stated purpose of the Act is to establish
uniform national standards. These uniform standards should extend to
uniform conflict of interest requirements for State and private
certifying agents. The commenters have said that most States already
have established conflict of interest policies and procedures so
that the required information should be easily available for
submission to the Administrator. Accordingly, no change has been
made in this proposal.
Certification, the process of qualifying a producer or handler
to sell agricultural products labeled as organic, raised several
issues for States.
(1) The first proposal required an applicant for certification
to supply required documentation to provide information necessary to
allow a certifying agent to evaluate the application. State
commenters suggested a provision be added to allow a certifying
agent to require documentation from applicants in addition to that
required by the first proposal.
A certifying agent can, if necessary, follow up on an initial
application with requests for additional information, provided that
information is needed to evaluate the application and determine
compliance with the Act and regulations. We did not make the
suggested change, as the existing language already allows the
certifying agent to request additional information necessary to
determine compliance with the Act and regulations.
(2) The first proposal laid out a certification program that
provided for updates to a continuous organic certification. To meet
continuation of certification requirements, the first proposal
required an on-site inspection after receipt of the update to the
application. A State certifying agent objected, saying that an on-
site inspection after receipt of a renewal application is not
consistent with current practice. Currently, on-site inspections
conducted during the prior year are used to determine compliance
with certification requirements at the time of renewal, along with a
review of information submitted by the certified operation. The
State certifying agent stated that an additional inspection at
renewal time would not be useful if it was not an appropriate time
to observe the certified unit in operation.
We disagree with the commenters, since certifiers are required
to schedule on-site inspections when the certified operation can be
observed for its compliance or ability to comply with the provisions
of the National Organic Program. The initial certification,
therefore, should have been granted when the on-site inspection
verified compliance with certification requirements. The certified
operation should be fulfilling its annual continuation of
certification at a time when it can demonstrate its compliance with
the Act.
States commented on several compliance issues included in the
first proposal.
(1) The Administrator had sole authority to suspend or revoke
the accreditation of certifying agents in the first proposal.
Commenters indicated that State program's governing State officials
should have the authority to suspend or revoke the accreditation of
private certifying agents.
We agree that in a State with a program approved by the
Secretary, the State program's governing State official should be
authorized to suspend or revoke an accreditation granted by the
Secretary to certifying agents operating within the State. We concur
because of the Department's role in providing oversight to the State
program, including its enforcement procedures, and have made that
change in this proposal.
(2) Many commenters stated that the first proposal lacked
adequate enforcement provisions, including enforcement by States
with an approved State program.
We agree with the commenters that additional enforcement
provisions are necessary for the National Organic Program. The
following changes have been made in this proposal.
(a) As noted above, the State program's governing State official
will now be authorized to suspend or revoke accreditation granted by
the Secretary to certifying agents operating in the State.
(b) An enforcement proceeding brought by a State program's
governing State official against a certified operation or certifying
agent shall be appealable pursuant to the appeal procedures of the
State program with no subsequent appeal rights to the Secretary.
States commented on several fees provisions in the first
proposal.
(1) The first proposal required that payment of fees and charges
to the Department be by certified check or money order. State
commenters objected, saying it was insulting for USDA to require a
State government agency to pay for its accreditation with a
certified check.
Accordingly, we have removed this requirement, simply requiring
that payments for fees and other charges for accreditation must be
made payable to the Agricultural Marketing Service.
(2) Several State agencies objected to the fee provisions in the
first proposal, expressing the belief that the proposed fees would
price small producers and handlers out of the organic industry. Some
State agencies commented that those small organic producers
conducting their own on-farm handling would be forced out of the
organic industry by the excessive handler fee and reporting burdens.
After review of the comments, we acknowledge that the fees
charged in the first proposal may have discouraged industry growth
and may not have facilitated interstate commerce of organic product.
We have thus, modified the fee structure to reduce costs to all
organic sectors and have removed the requirement that provided for
payment of fees to the Department by certified production and
handling operations. Instead, the Department will charge certifying
agents only for fees and charges related to accreditation, with the
balance of the costs of the program to be funded through
appropriations.
[[Page 13658]]
(3) Some State certifying agents commented that State certifying
agents should not be assessed accreditation fees. They stated that
most State certifying agents could face large accreditation costs
because they have many county or regional offices which would be
considered subsidiaries, adding that these costs would be passed on
to producers and handlers or paid with supplemental State funds. A
few State certifying agents asserted that USDA should pay the States
because of the State's contribution to the national program. One
State representative said that accreditation fees for State
certifying agents should be less than for private certifying agents,
as State certifying agents should involve less AMS review and
oversight.
We disagree with those commenters who say that State certifying
agents should not be assessed accreditation charges, be charged
less, or be paid to certify production and handling operations.
These actions would constitute unacceptable preferential treatment
of State certifying agents to the detriment of private certifying
agents. This proposal will assess State certifying agents the same
fees for accreditation under the same fee structure as private
certifying agents.
We invite States and local jurisdictions to comment on the
issues raised in this Federalism impact statement. We also encourage
States and local jurisdictions to review and comment on this
proposal as it relates to the operation of State organic programs.
[FR Doc. 00-5723 Filed 3-7-00; 10:42 am]
BILLING CODE 3410-02-P