[Federal Register Volume 65, Number 246 (Thursday, December 21, 2000)]
[Rules and Regulations]
[Pages 80548-80684]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-32257]
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Part IV
Department of Agriculture
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Agricultural Marketing Service
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7 CFR Part 205
National Organic Program; Final Rule
Federal Register / Vol. 65, No. 246 / Thursday, December 21, 2000 /
Rules and Regulations
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 205
[Docket Number: TMD-00-02-FR]
RIN 0581-AA40
National Organic Program
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Final Rule with request for comments.
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SUMMARY: This final rule establishes the 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 will facilitate domestic and international
marketing of fresh and processed food that is organically produced and
assure consumers that such products meet consistent, uniform standards.
This program establishes national standards for the production and
handling of organically produced products, including a National List of
substances approved for and prohibited from use in organic production
and handling. This final rule establishes 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 final
rule includes requirements for labeling products as organic and
containing organic ingredients. This final rule also provides for
importation of organic agricultural products from foreign programs
determined to have equivalent organic program requirements. This
program is authorized under the Organic Foods Production Act of 1990,
as amended.
EFFECTIVE DATE: This rule becomes effective February 20, 2001.
Comments: Comments on specified aspects of the final regulations
must be submitted on or before March 21, 2001.
ADDRESSES: Interested persons are invited to submit written comments on
specified aspects of the final regulation to: Keith Jones, Program
Manager, National Organic Program, USDA-AMS-TMP-NOP, Room 2945-So., Ag
Stop 0275, P.O. Box 96456, Washington, DC 20090-6456. Comments may also
be filed via the Internet through the National Organic Program's
homepage at: www.ams.usda.gov/nop. Written comments on specified
aspects of the final regulations should be identified with the docket
number TMD-00-02-FR. 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.
It is our intention to have all comments to this final rule,
whether mailed or submitted via the Internet, available for viewing on
the NOP homepage in a timely manner. Comments submitted in response to
this final rule will be available for viewing at USDA-AMS,
Transportation and Marketing Programs, Room 2945-South Building, 14th
and Independence Avenue, SW., Washington, DC, from 9 a.m. to 12 noon
and from 1 p.m. to 4 p.m., Monday through Friday (except for official
Federal holidays). Persons wanting to visit the USDA South Building to
view comments received in response to this final rule 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-TMP-NOP, Room 2510-So., P.O. Box 96456,
Washington, DC 20090-6456; Telephone: (202) 205-7806; Fax: (202) 205-
7808.
SUPPLEMENTARY INFORMATION:
Prior Documents in This Proceeding
This final 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
final rule replaces the proposed rule published in the Federal Register
March 13, 2000. The public submitted 40,774 comments on the proposed
rule. Comments to the proposed rule were considered in the preparation
of this final rule.
The following notices related to the National Organic Standards
Board (NOSB) and the development of this proposed regulation have been
published in the Federal Register. Six notices of nominations for
membership on the NOSB were published between April 1991 and June 2000
(56 FR 15323, 59 FR 43807, 60 FR 40153, 61 FR 33897, 64 FR 33240, 65 FR
35317). 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). Twenty notices of meetings of the NOSB were
published between March 1992 and November 2000 (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, 65 FR 11758, 65 FR
33802, 65 FR 64657). One notice of public hearings on organic livestock
and livestock products was published on December 30, 1993 (58 FR
69315). Two notices specifying a procedure for submitting names of
substances for inclusion on or removal from the National List of
Approved and Prohibited Substances were published on March 27, 1995 (60
FR 15744), and July 13, 2000 (65 FR 43259). 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). A rule proposing the NOP was published on March 13,
2000 (65 FR 13512). A notice of public meeting and request for comments
on organic production and handling of aquatic animals to be labeled as
organic was published on March 23, 2000 (65 FR 15579). One advance
notice of proposed rulemaking and request for comments on reasonable
security for private certifying agents was published on August 9, 2000
(65 FR 48642).
This preamble includes a discussion of the final rule and
supplementary information, including the Regulatory Impact Assessment,
Unfunded Mandates Reform Act Statement, Regulatory Flexibility Act
Analysis, Federalism Impact Statement, and Civil Justice Impact
Statement. The Civil Rights Impact Analysis is not included as an
attachment but may be obtained by writing to the address provided above
or via the Internet through the National Organic Program's homepage at:
http://www.ams.usda.gov/nop.
Approval of Paperwork Reduction Act Requirements for This Final
Rule
The reporting requirements and recordkeeping burden imposed by this
rule were published in the March 13, 2000, Federal Register for public
comment. The Agency addressed these comments in the final rule to
ensure that the least amount of the burden is placed on the public. The
information collection and recordkeeping requirements have been
reviewed and approved by the Office of Management and Budget under OMB
Number 0581-0191, National Organic Program.
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National Organic Program Overview
Subpart A--Definitions
Description of Regulations
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
proposed rule where necessary to make their wording consistent with the
language used in this final rule. We have revised the definitions of
the following words for greater clarity: person, practice standard,
inert ingredient, processing, tolerance. We have removed the
definitions for the following terms because the terms are not used in
this final rule or have been determined to be unnecessary: accredited
laboratory, estimated national mean, system of organic production and
handling. We received comments on some of these definitions that have
been deleted. We have not addressed those comments here because the
relevant definitions have been deleted.
Definitions--Changes Based on Comments
This subpart differs from the proposed rule in several respects as
follows:
(1) Many commenters requested changes to the definition of
``excluded methods.'' Comments included requests to use the more common
term, ``genetically modified organisms (GMO)''; to include the products
of excluded methods/GMO's in the definition; to more closely follow the
NOSB definition by adding gene deletion, doubling, introduction of a
foreign gene, and changing gene position; to include that excluded
methods are prohibited by the Act and by the regulations in this part;
to change the wording of the reference to ``recombinant DNA''; and to
add that the definition of excluded methods only covers ``intentional
use.''
We have accepted some of the comments and have modified the
definition accordingly. Specifically, we have included reference to the
``methods''--gene deletion, gene doubling, changing positions of genes,
and introducing foreign genes--that were included in the original NOSB
definition. This will make the definition even more closely parallel
the NOSB recommendation. We also refer to recombinant DNA technology,
which is technically more accurate than the proposed rules reference to
recombinant DNA as a ``method.''
We have not accepted the comments that requested adding the
products of excluded methods to the definition. The emphasis and basis
of these standards is on process, not product. We have specifically
structured the provisions relating to excluded methods to refer to the
use of methods. Including the products of excluded methods in the
definition would not be consistent with this approach to organic
standards as a process-based system. For the same reason, we have
retained the term, ``excluded methods,'' to reinforce that process-
based approach.
We have also rejected comments requesting that we include the
prohibition on excluded methods in the definition and, likewise, those
requesting that we refer to ``intentional use'' of excluded methods.
The final rule maintains and clarifies the prohibition on the use of
excluded methods in organic production systems. The prohibition is most
properly addressed in the appropriate provisions of the regulations,
particularly in Section 205.105, and not in the definition. Similarly,
although we recognize that a distinction between intentional and
unintentional use of excluded methods may be meaningful, particularly
as it pertains to issues of drift, this is an issue that is best
handled in the sections of the regulation governing use of excluded
methods, not in the definition. The definition for ``excluded methods''
now reads:
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 include cell fusion,
microencapsulation and macroencapsulation, and recombinant DNA
technology (including gene deletion, gene doubling, introducing a
foreign gene, and changing the position of genes when achieved by
recombinant DNA technology). Such methods do not include the use of
traditional breeding, conjugation, fermentation, hybridization, in
vitro fertilization, or tissue culture.''
(2) Many commenters objected to the definition of ``compost'' in
the proposed rule because it required that compost must be produced in
a facility that was in compliance with the Natural Resource
Conservation Service's (NRCS) practice standard for a composting
facility. We agree with these commenters and removed the requirement to
comply with the NRCS practice standard. However, the final rule
incorporates new requirements for the production of compost that are
included in the definition. The final rule requires that compost must
be produced through a process that combines plant and animal materials
with an initial C:N ratio of between 25:1 and 40:1. Furthermore,
producers using an in-vessel or static aerated pile system must
maintain the composting materials at a temperature of between 131 deg.F
and 170 deg.F for 3 days. Producers using a windrow system must
maintain the composting materials at a temperature between 131 deg.F
and 170 deg.F for 15 days, during which time, the materials must be
turned a minimum of five times. We developed the requirements in the
final rule for producing an allowed composted material by integrating
standards used by the Environmental Protection Agency (EPA) and USDA's
Natural Resources Conservation Service (NRCS). The requirements for the
carbon-to-nitrogen (C:N) ratio for composting materials is the same as
that found in the NRCS practice standard for a composting facility. The
time and temperature requirements for in-vessel, static aerated pile,
and window composting systems are consistent with those which EPA
regulates under 40 CFR 503 for the production of Class A sewage sludge.
Additionally, AMS reviewed these compost production requirements with
USDA's Agricultural Research Service (ARS). This subject is discussed
further under subpart C, Crop Production, Changes Based on Comment.
(3) Some commenters stated that allowing nonagricultural or
synthetic substances as feed supplements contradicted the definition
for ``feed supplement'' in the proposed rule. These commenters stated
that the definition stipulated that a feed supplement must, itself, be
a feed material and that the proposed definition for ``feed'' did not
include nonagricultural or synthetic substances. These commenters
stated that the definition of ``feed supplement'' needed to be amended
to accommodate nonagricultural or synthetic substances, or such
substances should not be allowed. We agree with these commenters and
amended the definition for ``feed supplement'' to read ``a combination
of feed nutrients added to livestock feed to improve the nutritional
balance or performance of the total ration.'' One commenter recommended
modifying the definition of ``feed additive'' to ``a substance added to
feed in micro quantities to fulfill a specific nutritional need; i.e.,
essential nutrients in the form of amino acids, vitamins,
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and minerals.'' We agree that this modification provides a more precise
description of ``feed additive'' and have included the change. The
changes to the definitions for ``feed supplement'' and ``feed
additive'' are further discussed under item (4) of Livestock
Production--Changes Based on Comments.
(4) One commenter stated that the definition for ``forage''
inaccurately described it as ``vegetable matter,'' and suggested that
``vegetative matter'' was a more suitable description. We agree with
the suggestion and have incorporated the change.
(5) Some commenters stated that the definition for ``mulch''
implied that all mulch materials must either be organic or included on
the National List. These commenters maintained that, if this was the
intent of the proposed rule, the provision was too restrictive. They
recommended revising the definition to clarify that natural but
nonorganic plant and animal materials, if managed to prevent
contamination from prohibited substances, could be used as mulch
without being added to the National List. This was the intent in the
proposed rule, and we have modified the definition to make this
provision clearer.
(6) Many commenters stated that the final rule should include a
definition of ``organic production'' that required that certified
operations must preserve or protect biodiversity. These commenters
stated that the preservation of biodiversity is a requirement in many
existing organic certification standards, including the Codex
guidelines. They also stated that the NOSB had included the requirement
to preserve biodiversity in its definition of organic. We agree with
the intent of these comments but prefer the term, ``conserve,'' to
``preserve'' because it reflects a more dynamic, interactive
relationship between the operation and biodiversity over time. We
included a definition for organic production as ``a production system
that is managed in accordance with the Act and regulations in this part
to respond to site-specific conditions by integrating cultural,
biological, and mechanical practices that foster cycling of resources,
promote ecological balance, and conserve biodiversity.'' We deleted the
definition for ``organic system of production and handling'' in the
final rule.
(7) Several commenters, including the NOSB, were concerned that the
definition for ``planting stock'' as ``any plant or plant tissue,
including rhizomes, shoots, leaf or stem cuttings, roots, or tubers,
used in plant production or propagation'' was sufficiently broad to be
applied to annual seedlings. We agree that it is important to establish
that annual seedlings are not covered by the definition of ``planting
stock'' and amended the definition to exclude them. The definition for
planting stock in the final rule states ``any plant or plant tissue
other than annual seedlings but including rhizomes, shoots, leaf or
stem cuttings, roots, or tubers, used in plant production or
propagation.'' The final rule retains the definition for ``annual
seedling'' from the proposed rule.
(8) Several commenters recommended that the definition of
``processing'' should be amended to include ``distilling'' as an
allowed practice. We agree with this comment and added distilling as an
allowed processing practice.
(9) Several commenters recommended that the final rule include a
definition for ``processing aid'' that is consistent with the
definition proposed by the NOSB and used by the Food and Drug
Administration (FDA). We agree with these commenters and have included
a definition for processing aid that is the same as the definition used
by FDA and found in 21 CFR Part 101.100(a)(3)(ii).
(10) Many commenters questioned whether the term, ``State organic
certification program,'' in the proposed rule included organic programs
from States that did not offer certification services. These commenters
stated that the final rule should include provisions for all State
organic programs regardless of whether they functioned as certifying
agents. We agree with these commenters and have amended the final rule
by incorporating the term, ``State organic program,'' as ``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.'' The term, ``State organic
program,'' encompasses such programs whether they offer certification
services or not.
(11) One commenter stated that the definition for ``wild crop''
only referred to a plant or part of a plant that was harvested from
``an area of land.'' This commenter was concerned that the definition
would preclude the certification of operations that produce wild
aquatic crops, such as seaweed, and stated that the OFPA does allow for
certifying such operations. We agree with this commenter and changed
the definition to refer to a plant or part of a plant harvested from a
``site.''
(12) Many commenters stated that the soil fertility and crop
nutrient management practice standard lacked a definition for
``manure.'' These commenters maintained that the different provisions
contained in the practice standard for ``manure'' and ``compost'' would
be difficult to enforce without clear definitions to differentiate
between the two materials. We agree with these comments and added a
definition for manure as ``feces, urine, other excrement, and bedding
produced by livestock that has not been composted.''
(13) Some commenters stated that the National List in the final
rule should include an annotation for narrow range oils to limit their
use to a specific subset of such materials recommended by the NOSB. We
agree with this comment but, rather than add an annotation, we have
included the specifications recommended by the NOSB in a new definition
for narrow range oils. Narrow range oils are defined as ``petroleum
derivatives, predominately of paraffinic and napthenic fractions with a
50-percent boiling point (10 mm Hg) between 415 deg.F and 440 deg.F.
(14) Many commenters maintained that the final rule needed a
definition of the term, ``pasture,'' to describe the relationship
between ruminants and the land they graze. These commenters stated that
a meaningful definition of ``pasture'' must incorporate the nutritional
component that it provides livestock, as well as the necessity to
manage the land in a manner that protects the natural resources of the
operation. We agree with these commenters and have added a definition
of ``pasture'' as ``land used for livestock grazing that is managed to
provide feed value and maintain or improve soil, water, and vegetative
sources.''
(15) Many commenters stated that a definition for ``split
operation'' was necessary to prevent commingling between organic and
nonorganic commodities on operations that produced or handled both
forms of a commodity. We agree with these comments and have included a
definition for ``split operation'' as ``an operation that produces or
handles both organic and nonorganic agricultural products.''
Definitions--Changes Requested But Not Made
This subpart retains from the proposed rule terms and their
definitions on which we received comments as follows:
(1) Many commenters objected to the definition of ``sewage sludge''
because it excluded ash generated in a sewage sludge incinerator and
grit and
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screenings generated during preliminary treatment of domestic sewage in
treatment works. We have not changed the definition for ``sewage
sludge'' because it provides the most comprehensive and enforceable
description of the types of materials that commenters wanted to
prohibit. The definition for ``sewage sludge'' in the proposed rule
arose in response to significant public comment on the first proposed
rule for national organic standards (62 Federal Register, No. 241) that
recommended prohibiting biosolids in organic production. When
incorporating those comments into the proposed rule, we did not use the
term, ``biosolids,'' because it does not have a standardized definition
under Federal regulations. The term, ``biosolids,'' is commonly used to
refer to ``sewage sludge,'' which is the regulatory term established in
40 CFR part 503. We incorporated the precise definition from 40 CFR
part 503, even though it does not include ash, grit, or screenings,
because it provided the clearest description of the types of materials
identified in public comment.
While commenters are correct that ash, grit, or screenings from the
production of sewage sludge are not prohibited by this definition,
these materials are prohibited elsewhere in the regulation. The soil
fertility and crop nutrient management practice standard in section
205.203 establishes the universe of allowed materials and practices.
These allowed materials and practices are crop rotations, cover crops,
plant and animal materials (including their ash), nonagricultural,
natural materials, and, under appropriate conditions, mined substances
of low and high solubility and synthetic materials included on the
National List. Ash, grit, or screenings from the production of sewage
sludge cannot be included in any of these categories and, therefore,
cannot be used in organic production. We retained the definition of
``sewage sludge'' because it most clearly conveys the wide array of
commercially available soil amendments that might be considered for
organic production but that the final rule expressly prohibits. We have
not added specific exclusions for sewage sludge, ash, grit, or
screenings because these materials are prohibited through other
provisions in the practice standard.
(2) The proposed rule prohibited the handler of an organic handling
operation from using ionizing radiation for any purpose. The vast
majority of commenters agreed with this prohibition and further
recommended that the term, ``ionizing radiation,'' should be defined to
identify the specific applications that are prohibited. Most commenters
supported a definition based on the FDA requirements in 21 CFR part
179.26 for the treatment or processing of food using ionizing
radiation. While agreeing with the prohibition on ionizing radiation,
these commenters favored allowing certain forms of irradiation such as
the use of X-rays to inspect for debris such as stones that were
inadvertently commingled with organically handled food. Other
commenters recommended a prohibition on all forms of irradiation, which
would include X-rays for inspection purposes, ultraviolet light, and
microwaves in addition to ionizing radiation. Finally, a number of
commenters stated that ionizing radiation is a safe and effective
process for handling food and, therefore, should not be prohibited in
organic handling.
We have not added a definition for ``ionizing radiation'' to the
final rule because we have incorporated specific references to the
applications that are prohibited in the regulatory text. The final rule
prohibits the handler of an organic handling operation from using
ionizing radiation as specified under 21 CFR part 179.26. These are the
FDA-approved uses of ionizing radiation that commenters most frequently
recommended that we prohibit in organic handling operations. They
include the use of cobalt-60, cesium-137, and other sources of
radiation for the purpose of controlling microbial contaminants,
pathogens, and pests in food or to inhibit the growth and maturation of
fresh foods. At its June 2000 meeting, the NOSB recommended prohibiting
ionizing radiation for the purpose of controlling microbial
contaminants, pathogens, parasites, and pests in food, preserving a
food, or inhibiting physiological processes such as sprouting or
ripening. The final rule does not prohibit the handler of an organic
handling operation from using the FDA-approved applications of X-rays
for inspecting food. The prohibition on ionizing radiation in the final
rule is based solely on consumer preference as reflected in the
overwhelming public comment stating that organically handled foods
should not be treated in that manner.
(3) Some commenters recommend that the final rule incorporate
definitions for the terms, ``food additives,'' ``extraction methods,''
``incidental additive,'' and ``substantially transform.'' However,
these terms are not used in the final rule and do not require a
definition.
Definitions--Clarifications
Following our review of the definitions provisions in the proposed
rule, we decided to further clarify the following provision in the
final rule:
We were concerned that ``State entity,'' the meaning of which
encompasses both domestic and foreign political subdivisions, may be
confused with ``State,'' the meaning of which is limited to the States
of the United States, its territories, the District of Columbia, and
Puerto Rico. To avoid any possible confusion as to which provisions in
this final rule apply to States and which apply to the broader
political subdivisions, we have replaced the term, ``State entity,''
with the term, ``governmental entity,'' while retaining the same
definition language in the proposed rule.
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'; addresses
recordkeeping by certified production and handling operations; and
addresses allowed and prohibited substances, methods, and ingredients
in organic production and handling.
Description of Regulations
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 or food group(s))'' must be
certified. Certified operations must meet all applicable requirements
of these regulations.
This final rule becomes effective 60 days after its publication in
the Federal Register and will be fully implemented 18 months after its
effective date. Eighteen months after the effective date, all
agricultural products that are sold, labeled, or represented as ``100
percent organic,'' ``organic,'' or ``made with * * *'' must be produced
and handled in compliance with these regulations. Products entering the
stream of commerce prior to the effective date will not have to be
relabeled. The U.S. Department of Agriculture (USDA) seal may not be
affixed to any ``100 percent organic'' or ``organic'' product until 18
months after the final rule's effective date.
We anticipate that certifying agents and production and handling
operations
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will move as quickly as possible after the effective date of the final
rule to begin operating under the national organic standards.
Certifying agents must begin certifying organic production and handling
operations to the national standards upon receipt of their
accreditation from the Administrator. Any production or handling
operation or specified portion of a production or handling operation
that has been already certified by a certifying agent on the date that
the certifying agent receives its accreditation under this part shall
be deemed to be certified under the Act until the operation's next
anniversary date of certification. We have taken this approach because
we believe that such certifying agents will, upon the effective date 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 also believe this approach will
provide relief to certified operations which might 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 effective date of the final
rule.
Certifying agents can apply for accreditation anytime after the
effective date of the rule. Applications will be processed on a first-
come, first-served basis. Those certifying agents who apply for
accreditation within the first 6 months after the effective date of the
final rule and are determined by the Administrator to meet the
requirements for accreditation will be notified of their status
approximately 12 months after the final rule's effective date. 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.
Exempt and Excluded Operations
This regulation establishes several categories of exempt or
excluded operations. An exempt or excluded operation does not need to
be certified. However, operations that qualify as exempt or excluded
operations can voluntarily choose to be certified. 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 annual income from organic sales is exempt from certification.
This exemption is primarily designed for those producers who market
their product directly to consumers. It will also permit such producers
to market their products direct to retail food establishments for
resale to consumers. The exemption is not restricted to U.S. producers.
However, as a practical matter, we do not envision any significant use
of the exemption by foreign producers because: (1) the products from
such operations cannot be used as ingredients identified as organic in
processed products produced by another handling operation, and (2) it
is unlikely that such operations will be selling their products
directly to consumers in the United States.
An exempt producer or handler must comply with the labeling
requirements of section 205.310 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 of section 205.310
and the applicable production requirements in sections 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 only agricultural products containing less than 70 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 section 205.101(c); the
provisions for prevention of contact of organic products with
prohibited substances in section 205.272; and the labeling regulations
in sections 205.305 and 205.310. 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) A handling operation or portion of a handling operation that
uses the word, ``organic,'' only on the information panel is exempt
from the requirements in these regulations, except the recordkeeping
provisions of section 205.101(c); the provisions for prevention of
contact of organic products with prohibited substances as provided in
section 205.272; and the labeling regulations in sections 205.305 and
205.310. 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 section
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 * * *'' 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 section 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 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 * * *'' is excluded from the requirements in these regulations,
except for the provisions for prevention
[[Page 80553]]
of contact of organic products with prohibited substances as provided
in section 205.272 and the labeling regulations in section 205.310. 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.
There is clearly a great deal of public concern regarding the
handling of organic products by retail food establishments. We have not
required certification of retail food establishments at this time
because of a lack of consensus as to whether retail food establishments
should be certified, a lack of consensus on retailer certification
standards, and a concern about the capacity of existing certifying
agents to certify the sheer volume of such businesses. Retail food
establishments, not exempt under the Act, could at some future date be
subject to regulation under the NOP. Any such regulation would be
preceded by rulemaking with an opportunity for public comment.
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 per violation
under this program.
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 * * *'' 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 by
authorized representatives of the Secretary, the applicable State
organic program's (SOP) 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 SOP'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.
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.
Allowed and Prohibited Substances
A certified operation must only use allowed substances, methods,
and ingredients for the production and handling of agricultural
products that are sold, labeled, or represented as ``100 percent
organic,'' ``organic,'' or made with * * *'' for these products to be
in compliance with the Act and the NOP regulations. Use of ionizing
radiation, sewage sludge, and excluded methods are prohibited in the
production and handling of organic agricultural products.
Applicability--Changes Based on Comments
This subpart differs from the proposal in several respects as
follows:
(1) Violations of the Act or Regulations. We have amended section
205.100 by adding a new paragraph (c), which addresses violations of
the Act and these regulations. A number of commenters advocated for
provisions within the final rule describing what legal proceedings USDA
would conduct against operations or persons that violate the NOP. We
agree that this rule should include provisions addressing violations of
the Act and these regulations. Accordingly, we have added at section
205.100 the misuse of label provisions and false statement provisions
of section 2120 (7 U.S.C. 6519) of the Act. Specifically, section
205.100(c) provides that persons not in compliance with the labeling
requirements of the Act or these regulations are subject to a civil
penalty of not more than $10,000 per violation and that persons making
false statements under the Act to the Secretary, a governing State
official, or an accredited certifying agent shall be subject to the
provisions of section 1001 of Title 18, United States Code. The
provisions of the Act and these regulations apply to all operations or
persons that sell, label, or represent their agricultural product as
organic.
[[Page 80554]]
(2) Prohibition on Use of Excluded Methods. We have moved section
205.600 from subpart G, Administrative, to subpart B, Applicability,
and replaced paragraph (d), which referred the reader to section
205.301, with new paragraphs (d) through (g). As amended, this section,
redesignated as section 205.105, includes all of the provisions covered
under old section 205.600.
The vast majority of commenters strongly supported the prohibition
on the use of excluded methods in organic production and handling but
raised concerns that they could not point to one provision that
prohibited use of excluded methods in all aspects of organic production
and handling. To close what they perceived to be ``loopholes'' in the
prohibition, commenters made several suggestions for inclusion of new
provisions prohibiting use of excluded methods in particular aspects of
organic production and handling that they believed were not covered in
the proposed rule. Other commenters pointed to inconsistencies in the
way the prohibition on use of excluded methods was described in
different sections, raising concerns that these apparent
inconsistencies may create confusion for organic operations,
certifiers, and consumers.
Although we intended that use of excluded methods would be
prohibited in all aspects of organic production and handling, the
structure of the proposed rule may not have made that clear. We also
share the concerns that, in attempting to identify all aspects of
organic production and handling where excluded methods might be used,
we may inadvertently have left out some provisions, creating confusion
for organic operations, certifying agents, and consumers and creating
doubt as to the scope of the prohibition on use of excluded methods.
Similarly, to the extent that the prohibition on excluded methods may
have been described differently in various sections of the proposed
rule, we also share the concern that these inconsistencies could create
confusion.
As a result of these concerns, we have created a new provision in
section 205.105 that prohibits the use of excluded methods (and
ionizing radiation and sewage sludge) generally. This provision should
alleviate perceptions that some areas of organic production may not
have been covered by the prohibitions in the proposed rule. It also
allows us to eliminate from the regulation most of the individual
references to the prohibition on use of these methods, thereby
eliminating any potential confusion where these provisions may have
appeared inconsistent. These changes do not lift the prohibition on use
of these methods in those sections. In fact, the purpose of this new
provision is to make clear that use of these methods is prohibited in
the production and handling of organic products.
(3) Animal Vaccines. The proposed rule specifically asked for
public comment on the potential impact of the prohibition on use of
excluded methods as it relates to animal vaccines. A number of
commenters raised concerns that there may be some critical vaccines
that are only available in forms produced using excluded methods.
Several commenters requested that we prohibit use of animal vaccines
produced using excluded methods but that we provide for a temporary
exemption until such time as vaccines produced without using excluded
methods are approved for use on the National List. Other commenters
requested that we prohibit use of vaccines produced using excluded
methods without exception.
We have concluded that the potential impact of prohibiting vaccines
produced using excluded methods on animal production systems is still
unknown. We do not know of any critical animal vaccine that is only
available in a form produced using excluded methods, but it is unclear
whether producers and certifying agents are tracking the possible use
of such vaccines. There also appears to be no international consensus
on the use in organic production systems of animal vaccines produced
using excluded methods, although there is precedent for such an
exemption. European Union regulations, for example, allow for use of
animal vaccines produced using excluded methods.
Based on comments received and because the potential impact of the
prohibition on use of excluded methods is still uncertain, we have
created the possibility at section 205.105(e) for the NOSB to exercise
one very narrow exception to allow use of animal vaccines produced
using excluded methods but only if they are explicitly approved on the
National List. We believe the issue of animal vaccines requires further
deliberation and that it is most appropriate to consider it through the
National List process, which mandates review by the NOSB and Technical
Advisory Panels. Consideration of animal vaccines produced using
excluded methods is appropriate for the National List review process
because animal vaccines, we believe, are most appropriately considered
synthetic materials. That is why the provision is structured so that
vaccines produced using excluded methods could only be used in organic
production if they are affirmatively included on the National List. We
do not believe that a broad-based exemption of the type suggested in
some comments, even if only temporary, is appropriate.
The Act allows use of animal vaccines in organic livestock
production. Given the general prohibition on the use of excluded
methods, however, we believe that animal vaccines produced using
excluded methods should not be allowed without an explicit
consideration of such materials by the NOSB and without an affirmative
determination from the NOSB that they meet the criteria for inclusion
on the National List. It is for that reason that we have not granted
this request of commenters but, rather, provided an opportunity for
review of this narrow range of materials produced using excluded
methods through the National List process.
It is important to make clear, however, that this provision does
not open all potential applications of excluded methods to a case-by-
case review in the context of the National List, nor are we proposing
that any particular vaccines be reviewed for inclusion on the National
List at this time. The prohibition on use of excluded methods applies
across the board to all phases of organic production and handling. We
are simply responding to comments suggesting that a narrow exception
for animal vaccines may be appropriate and providing for the
possibility that such an exception could be invoked upon thorough
review and recommendation by the NOSB.
Applicability--Changes Requested But Not Made
This subpart retains from the proposed rule regulations on which we
received comments as follows:
(1) Exemption of Handling Operations Producing Multiingredient
Products. Some commenters asserted that only certified handling
operations should be allowed to identify ingredients in multiingredient
products as organic. These commenters believe that consumers will be
misled if noncertified handling operations are allowed to identify
ingredients as organic even if the organic claim is limited to the
information panel. We do not agree with these assertions and have
retained the proposed rule provisions that do not require handler
certification when a product only identifies ingredients as organic
within the information panel. Although handling operations only making
organic claims on the
[[Page 80555]]
information panel are exempt from certification, these operations are
required to use organic product from certified operations. They are
also required to prevent contact of organic products with prohibited
substances as set forth in section 205.272, adhere to the labeling
provisions of sections 205.305 and 205.310, and maintain records in
accordance with section 205.101(c). We believe consumers will
understand the distinction between products that have the organic
nature of the product stated on the principal display panel and those
that merely identify an ingredient as organic on the information panel.
(2) Retailer Exclusion from Certification. Many commenters objected
to the provisions of section 205.101(b)(2) which exclude retail food
establishments from certification. These commenters assert that only
final retailers that do not process agricultural products should be
excluded from certification. There is clearly a great deal of public
concern regarding the handling of organic products by retail food
establishments. We have not required certification of retail food
establishments at this time because of a lack of consensus as to
whether retail food establishments should be certified, a lack of
condenses on retailer certification standards, and a concern about the
capacity of existing certifying agents to certify the sheer volume of
such businesses. In addition, most existing certification programs do
not include retail food establishments, and we do not believe there is
sufficient consensus to institute such a significant expansion in the
scope of certification at this time. However, since a few States have
established procedures for certifying retail food establishments, we
will assess their experience and continue to seek consensus on this
issue of establishing retailer provisions under the NOP. Any such
change would be preceded by rulemaking with an opportunity for public
comment. The exclusion of nonexempt retail food establishments from
this final rule does not prevent a State from developing an organic
retail food establishment program as a component of its SOP. However,
as with any component of an SOP, the Secretary will review such
components on a case-by-case basis.
(3) Producer Exemption Level. Several commenters advocated for an
increase in the producer exemption level above the $5,000 limit.
Comments supporting the exemption suggested increasing the statutory
limit for qualifying for the exemption to as high as $75,000. Other
commenters stated that all producers should be certified and opposed
the exemption even though it is required by the Act. These commenters
were concerned about maintaining the integrity of the organic product
and about the lack of verification of the exempt operations.
We have not increased or removed the $5,000 producer exemption
because the exemption is mandated by section 2106(d) (7 U.S.C. 6505(d))
of the Act. Our purpose is to limit the financial burdens of
certification on such operations but not to exempt them from the
standards for organic production and handling. Accordingly, exempt
production and handling operations must comply with the applicable
organic production and handling requirements of subpart C and the
labeling requirements of section 205.310.
Some of the commenters wanting a change in the producer exemption
level suggested that the NOP add provisions for restricting these
producers to marketing at farmers markets or roadside stands. We
disagree with these comments. While we believe that most producers
qualifying for the exemption are indeed likely to be small producers
who market their products directly to consumers, we do not believe it
is in the best interest of these producers to restrict their market
opportunity to a specific sales method.
A few comments suggested that we establish a sliding-scale
certification fee based upon either the size of the operation or sales
of agricultural product instead of the exemption. The NOP does not
establish fees for certification. Certifying agents may establish a
sliding-scale system as long as their fees are reasonable and applied
in a consistent and nondiscriminatory manner.
Finally, some commenters expressed concern that exempt operations
were forbidden from certification. 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) Handler exemption. Many commenters disagreed with the proposed
rule provision providing for an exemption of $5,000 to handlers. These
commenters asked the NOP to remove the phrase, ``or handlers,'' from
the exemption provision. The commenters argue that the handler
exemption is not authorized by the Act. We disagree with the
commenters, and we have retained the handler exemption in the final
rule. The Act states that the exemption is available to ``persons''
selling not more than $5,000 annually in value of agricultural
products. The Act's definition of ``persons'' includes handlers. Thus,
handlers grossing $5,000 or less qualify for the exemption.
(5) Categories of Income to Qualify for an Exemption. Some
commenters want the $5,000 producer/handler exemption to include all
sales of agricultural products, not just sales of organic agricultural
products. These commenters perceive this provision to be a loophole for
large, split operations. We disagree with these commenters, and we have
retained the $5,000 producer/handler exemption based upon total sales
of organic agricultural products. We do not believe there is a
significant number of split operations which only gross $5,000 in
annual sales of organic products and, therefore, qualify for this
exemption. In setting the exemption levels, the Department sought to
maximize the benefits to small producers afforded by the Act while
setting a threshold level that minimizes the potential of product
mislabeling.
(6) Limiting Handler Exclusions. Many commenters argued that
brokers, distributors, warehousers, and transporters should not be
excluded from certification. We do not agree with these commenters.
Brokers, distributors, warehousers and transporters do not alter the
product and, in many cases, do not take title to the product.
Certifying these handlers would be an unnecessary burden on the
industry. Traditionally, distributors and trucking companies have been
excluded from State and private certification requirements.
(7) Recordkeeping Requirements for Excluded Operations. Several
commenters argued that excluded operations should be required to comply
with the same recordkeeping requirements as exempt operations. Some
commenters expressed concern over the inability to verify compliance
for either exempt or excluded operations and asked that exempt or
excluded operations be subject to additional recordkeeping
requirements. We disagree with these commenters and have retained the
provisions from the proposed rule on recordkeeping for excluded
operations. Given the nature of these excluded operations, for example,
operations that only sell prepackaged organic products, we believe that
extensive recordkeeping requirements would be an unwarranted regulatory
burden.
(8) Recordkeeping Burden on Small Certified Operations. Some
commenters questioned whether small certified operations have the
ability to implement a recordkeeping system which complies with the
provisions of section 205.103.
[[Page 80556]]
These commenters argue that recordkeeping requirements must be tailored
to the scale of the operation. We do not believe that the recordkeeping
requirements as described in section 205.103 conflict with the
suggestions of the commenters. The recordkeeping requirements provide
that the records must be adapted to the particular business that the
certified operation is conducting and be sufficient to demonstrate
compliance with the Act and regulations. It is USDA's intent that each
production and handling operation decide for itself what recordkeeping
scheme is appropriate, given the complexity and scope of the individual
business. These provisions provide considerable latitude for each
production and handling operation to decide what records are necessary
to demonstrate its compliance with the Act and the NOP regulations.
(9) Public Access to Records. Several commenters asked that the
public have full access to any certifying agent record on organic
production and/or handling operations. Other commenters expressed
concerns about certifying agents divulging confidential business
information and asked that records containing confidential business
information not be taken from the business' physical location.
We have not changed this provision. The recordkeeping requirements
are designed to seek a balance between the public's right to know and a
business's right to retain confidential business information.
Certifying agents must have access to certain records during their
review of the operation to determine the operation's compliance with
the NOP. However, certifying agents are required to protect an
operation's confidential business information. Requiring full public
access could compromise a business' competitive position and place an
unfair burden on the organic industry.
(10) Fair Labor Practices on Organic Farms. Many commenters asked
the NOP to develop fair labor practice standards as a part of the final
rule. We have not adopted these comments. Other statutes cover labor
and worker safety standards. The Act does not provide the authority to
include them in these regulations. However, these regulations do not
prohibit certifying agents from developing a voluntary certification
program, separate from organic certification, that address fair labor
and worker safety standards.
(11) ``Transitional Organic'' Label. Several commenters requested
that the NOP adopt regulations on the conversion of operations to
organic production and create a ``transitional organic'' label. We have
not included provisions within the final rule that provide for
``transitional organic'' labeling. Although many commenters requested
that we provide for transition labeling, there does not appear to be
sufficient consensus to establish such a standard at this time. Given
this lack of consensus, it is unclear what marketplace value such a
label might have, and we are concerned that allowing such a label at
this point might lead to greater consumer confusion rather than
providing clarity.
Applicability--Clarifications
Clarification is given on the following issues raised by commenters
as follows:
(1) ``Genetic'' drift. Many commenters raised issues regarding
drift of the products of excluded methods onto organic farms. These
commenters were concerned that pollen drifting from near-by farms would
contaminate crops on organic operations and that, as a result, organic
farmers could lose the premium for their organic products through no
fault of their own. Many commenters argued that we should use this rule
to somehow shift the burden to the technology providers who market the
products of excluded methods or the nonorganic farming operations that
use their products. Some, for example, suggested that this regulation
should require that the nonorganic operations using genetically
engineered varieties plant buffer strips or take other steps to avoid
drift onto organic farms. Others suggested that the regulation could
provide for citizens' right to sue in cases of drift.
While we understand the concerns that commenters have raised, the
kind of remedies they suggested are outside the scope of the Act and
this regulation. The Act only provides for the regulation of organic
operations. We cannot use this regulation to impose restrictions, such
as requiring buffer strips or other measures, on operations that are
not covered by the Act. Similarly, while citizens may have the ability
to bring suit under other laws, the Act itself does not provide for the
right to bring suit as a Federal cause of action, and we could not
grant it through this regulation.
Drift has been a difficult issue for organic producers from the
beginning. Organic operations have always had to worry about the
potential for drift from neighboring operations, particularly drift of
synthetic chemical pesticides. As the number of organic farms
increases, so does the potential for conflict between organic and
nonorganic operations.
It has always been the responsibility of organic operations to
manage potential contact of organic products with other substances not
approved for use in organic production systems, whether from the
nonorganic portion of a split operation or from neighboring farms. The
organic system plan must outline steps that an organic operation will
take to avoid this kind of unintentional contact.
When we are considering drift issues, it is particularly important
to remember that organic standards are process based. Certifying agents
attest to the ability of organic operations to follow a set of
production standards and practices that meet the requirements of the
Act and the regulations. This regulation prohibits the use of excluded
methods in organic operations. The presence of a detectable residue of
a product of excluded methods alone does not necessarily constitute a
violation of this regulation. As long as an organic operation has not
used excluded methods and takes reasonable steps to avoid contact with
the products of excluded methods as detailed in their approved organic
system plan, the unintentional presence of the products of excluded
methods should not affect the status of an organic product or
operation.
Issues of pollen drift are also not confined to the world of
organic agriculture. For example, plant breeders and seed companies
must ensure genetic identity of plant varieties by minimizing any
cross-pollination that might result from pollen drift. Under research
conditions, small-scale field tests of genetically engineered plants
incorporate various degrees of biological containment to limit the
possibility of gene flow to other sexually compatible plants. Federal
regulatory agencies might impose specific planting requirements to
limit pollen drift in certain situations. Farmers planting
nonbiotechnology-derived varieties may face similar kinds of questions
if cross-pollination by biotechnology-derived varieties alters the
marketability of their crop. These discussions within the broader
agricultural community may lead to new approaches to addressing these
issues. They are, however, outside the scope of this regulation by
definition.
(2) Additional NOP Standards for Specific Production Categories.
Many commenters asked that the NOP include in the final rule
certification standards for apiculture, greenhouses, mushrooms, aquatic
species, culinary herbs, pet food, and minor animal species (e.g.,
rabbits) food. The NOP intends to provide standards for categories
where the Act provides the authority to promulgate standards.
[[Page 80557]]
During the 18-month implementation period, the NOP intends to publish
for comment certification standards for apiculture, mushrooms,
greenhouses and aquatic animals. These standards will build upon the
existing final rule and will address only the unique requirements
necessary to certify these specialized operations.
Some of the other questions raised by commenters are already
addressed in the final rule. For example, feed for minor species is
covered by livestock feed provisions within subpart C and the livestock
feed labeling provisions within subpart D. The production and
utilization of culinary herbs, including herbal teas, is covered by the
provisions of the final rule. We do not envision needing to do
additional rulemaking on these two categories.
Other requests by commenters have not been addressed. We have not
addressed the labeling of pet food within this final rule because of
the extensive consultation that will be required between USDA, the
NOSB, and the pet food industry before any standards on this category
could be considered.
(3) Standards for Cosmetics, Body Care Products, and Dietary
Supplements. A few commenters asked that the NOP include in the final
rule certification standards for cosmetics, body care products, and
dietary supplements. Producers and handlers of agricultural products
used as ingredients in cosmetics, body care products, and dietary
supplements could be certified under these regulations. Producers and
handlers of these ingredients might find an increased market value for
their products because of the additional assurance afforded by
certification. The ultimate labeling of cosmetics, body care products,
and dietary supplements, however, is outside the scope of these
regulations.
(4) Private Label Products. Many commenters asked about the
certification status of so-called ``private label products.'' Private
label products are items for which a retailer contracts with a
processor to produce the product to the retailer's specifications and
to be sold under the retailer's name. Commenters believe the proposed
rule was unclear on the certification requirements for these products.
Any product labeled as ``100 organic,'' ``organic,'' or ``made with * *
*'' must be certified regardless of the business arrangements under
which the product was produced. 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
complying with the applicable organic production or handling
regulations.
(5) State Oversight of Exempt and Excluded Operations. Many
commenters asked for clarification on the State's enforcement
responsibility for exempt and excluded operations. The NOP is
ultimately responsible for the oversight and enforcement of the
program, including oversight of exempt and excluded operations and
cases of fraudulent or misleading labeling. We expect, however, that
States would want to monitor for false claims or misleading labeling
under these regulations and would forward any complaints to the NOP.
States that have an approved SOP which includes regulation of
operations excluded under the NOP would be required to enforce those
provisions.
(6) Nonedible Fibers Products in the NOP. Some commenters asked the
NOP to clarify the certification status of fibers such as cotton and
flax. The final rule allows for certification of organically produced
fibers such as cotton and flax. However, the processing of these fibers
is not covered by the final rule. Therefore, goods that utilize organic
fibers in their manufacture may only be labeled as a ``made with * *
*'' product; e.g., a cotton shirt labeled ``made with organic cotton.''
(7) Recordkeeping for Operations That Produce Organic and
Nonorganic Product. Several commenters recommended that ``split
operations,'' which are operations producing organic and nonorganic
agricultural products, be required to maintain separate records. These
commenters believe that the proposed rule did not provide adequate
provision for the maintenance of separate recordkeeping. The provisions
within section 205.103(b)(1) and (b)(2) do indicate that operations
which produce both organic and nonorganic agricultural products must
maintain a recordkeeping system that differentiates the organic portion
of the operations from the records related to other portions of
operations.
(8) NOP Program Manual. A few commenters, particularly States,
noted that the proposed rule made several references to program manuals
as a mechanism for further clarifying certain portions of the rule.
These commenters asked whether certifying agents should consider
information contained in these manuals as enforceable regulations. NOP
program manuals cannot be and are not intended to be the equivalent of
regulations. Rather, the NOP envisions development of a program manual
to serve as guidance for certifying agents regarding implementation-
and certification-related issues. Material contained within the program
manual will be designed to address the organic agriculture principles
of each final rule section, as appropriate, and to offer information
that certifying agents should consider in making certification
decisions that will be reliably uniform throughout the country. The use
of program manuals as guidance to assist in developing uniform
certification decisions is a standard industry practice, and the NOP
has compiled examples of program manuals from both large and small
certifiers. Because the NOP intends to use the examples it has acquired
as the basis for any NOP guidance manual, we believe that most
certifying agents will find such NOP manual, when developed, familiar
and useful. Additionally, we will use the NOSB public meeting process
to seek guidance from industry and the public on what information would
be useful in a program manual and to provide input on the program
manual as it is developed. Of course, if in developing program
guidance, it appears that modifications or changes in the NOP final
rule are required, such modifications would be made through notice and
comment rulemaking.
(9) Use of Products from Exempt Operations as Organic Ingredients.
A few commenters responded to the question in the proposed rule in
which we asked whether handlers should be allowed to identify
organically produced products produced by exempt production operations
as organic ingredients. The proposed rule provided that all ingredients
identified as organic in a multiingredient product must have been
produced by a production or handling operation certified by an
accredited certifying agent.
The commenters supported this position. These commenters believe
that the potential for mislabeling outweighed any financial benefit
that might accrue to exempt producers through expanded market
opportunities. We concur, and, therefore, have retained the prohibition
on using products produced by an exempt production or handling
operation as organic ingredients.
(10) Exemption of Handling Operations Producing Multiingredient
Products. We have amended section 205.101(a)(3) by changing ``50
percent'' to ``70 percent'' to make it consistent with the amendments
to the labeling provisions. We have also edited section 205.101(a)(4)
for clarification purposes. Additionally, we amended sections
205.101(a)(3) and 205.101(a)(4) by citing the labeling requirements of
section 205.305. These amendments have been made to clarify that
handling operations exempted under these sections are
[[Page 80558]]
subject to the labeling requirements of section 205.305.
(11) Production and Handling in Compliance with Federal Statutes.
We have amended section 205.102 by removing paragraph (c). This
paragraph provided that 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
compliance with applicable Federal statutes and their implementing
regulations. We have taken this action because the provision is an
identical restatement of section 2120(f) (7 U.S.C. 6519(f)) of the Act.
The Act makes clear that all production and handling operations are to
comply with all applicable Federal statutes and their implementing
regulations. Therefore, it is unnecessary to repeat the requirement in
these regulations.
(12) Foreign Applicants. We have removed section 205.104, which
provided that 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. These regulations, as written, apply equally to all
applicants for accreditation, accredited certifying agents, applicants
for organic certification, and certified organic operations.
Accordingly, we have determined that section 205.104 is not necessary.
Subpart C--Organic Crop, Wild Crop, Livestock, and Handling
Requirements Description of Regulations
General Requirements
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 or food group(s)).'' The
producer or handler of an organic production or handling operation must
comply with all applicable provisions of subpart C. Any production
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 (SOP). 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.
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, including the documentation of commercial
availability, as applicable. 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
management practices and physical barriers established to prevent
commingling of organic and nonorganic products on a split operation and
to prevent contact of organic production and handling operations and
products with prohibited substances. 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, the final rule
requires an 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,
[[Page 80559]]
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.
A producer and handler who bases the selection of seed and planting
stock material under section 205.204 or an agricultural ingredient
under section 205.301 on the commercial availability of that substance
must provide documentation in the organic system plan.
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.
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 management practices and physical barriers
established 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.
The specific requirements to be included in an organic system plan
are not listed here. 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 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 sections 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. The producer must manage crop nutrients and
soil fertility through rotations, cover crops, and the application of
plant and animal materials. The producer must manage plant and animal
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. Plant and animal materials include
raw animal manure, composted plant and animal materials, and
uncomposted plant materials. 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 materials must be produced through
a process that establishes an initial carbon-to-nitrogen (C:N) ratio of
between 25:1 and 40:1 and achieves a temperature between 131 deg.F and
170 deg.F. Composting operations that utilize an in-vessel or static
aerated pile system must maintain a temperature within that range for a
minimum of 3 days. Composting operations that utilize a windrow
composting system must maintain a temperature within that range for a
minimum of 15 days, during which time the materials must be turned five
times.
In addition to these practices and materials, a producer may apply
a crop nutrient or soil amendment included on the National List of
synthetic substances allowed in crop production. The producer may apply
a mined substance of low solubility. A mined substance of high
solubility may only be applied if the substance is used in compliance
with the annotation on the National List of nonsynthetic materials
prohibited in crop production. 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. A plant or animal 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. The producer may not use any fertilizer or composted plant
and animal material 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 is prohibited, except that burning may
be used to suppress the spread of disease or to stimulate seed
germination.
The producer must use organically grown seeds, annual seedlings,
and planting stock. The producer may use untreated nonorganic seeds and
planting stock when equivalent organic varieties are not commercially
available, except that organic seed must be used for the production of
edible sprouts. Seed and planting stock treated with substances that
appear on the National List 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
[[Page 80560]]
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.
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 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
conditions for using the substance are documented in the organic system
plan. The producer must not use lumber treated with arsenate or other
prohibited materials for new installations or replacement purposes that
comes into contact with soil or livestock.
A wild crop that is to be sold, labeled, or represented as ``100
percent organic,'' ``organic,'' or ``made with organic (specified
ingredients or food group(s))'' must be harvested from a designated
area that has had no prohibited substances applied to it for a period
of 3 years immediately preceding the harvest of the wild crop. 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
Any livestock product to be sold, labeled, or represented as
organic must be maintained under continuous organic management from the
last third of gestation or hatching with three 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 have been under
continuous organic management beginning no later than 1 year prior to
the production of such products, except for the conversion of an
entire, distinct herd to organic production. For the first 9 months of
the year of conversion, the producer may provide the herd with a
minimum of 80-percent feed that is either organic or produced from land
included in the organic system plan and managed in compliance with
organic crop requirements. During the final 3 months of the year of
conversion, the producer must provide the herd feed in compliance with
section 205.237. Once the herd has been converted to organic
production, all dairy animals shall be under organic management from
the last third of gestation. 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
gestation.
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 the last third of gestation may not
be sold, labeled, or represented as organic slaughter stock. 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.
Except for nonsynthetic substances and synthetic substances
included on the National List that may be used as feed supplements and
additives, 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 a feed ration including vitamins,
minerals, protein, and/or amino acids, fatty acids, energy sources,
and, for ruminants, fiber. 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
[[Page 80561]]
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 or during lactation 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.
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 for growth promotion 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.
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. These standards 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.
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 the outdoors, 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; 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
Mechanical or biological methods can be used to process an
agricultural product intended to be sold, labeled, or represented as
``100 percent organic,'' ``organic,'' or ``made with organic
ingredients'' for the purpose of retarding spoilage or otherwise
preparing the agricultural product for market. Processed
multiingredient products labeled ``100 percent organic,'' may only use
wholly organic ingredients, pursuant to paragraph (a) of section
205.301. Nonagricultural substances that are allowed for use on the
National List and nonorganically produced agricultural products may be
used in or on ``organic'' and ``made with * * *'' products pursuant to
paragraphs (b) and (c) of section 205.301, respectively. Documentation
of commercial availability of each substance to be used as a nonorganic
ingredient in products labeled ``organic'' must be listed in the
organic handling system plan in accordance with section 205.201.
Handlers are prohibited from using: (1) Ionizing radiation for the
treatment or processing of foods; (2) ingredients produced using
excluded methods; or (3) volatile synthetic solvents in or on a
processed product or any ingredient which is sold, labeled, or
represented as organic. The prohibition on ionizing radiation for the
treatment or processing of foods is discussed under Applicability,
section 205.105. This rule does not prohibit an organic handling
operation from using Food and Drug Administration (FDA)-approved X-rays
for inspecting packaged foods for foreign objects that may be
inadvertently commingled in the packaged product.
The two paragraphs on excluded methods and ionizing radiation in
section 205.270(c) of the proposed rule are replaced with new paragraph
(c)(1) which cross-references those practices under paragraphs (e) and
(f) of section 205.105. New section 205.105 clearly specifies that
ionizing radiation and excluded methods are two practices that handlers
must not use in producing organic agricultural products and
ingredients. The prohibition on the use of volatile synthetic solvents,
also included under paragraph (c) of section 205.270 does not apply to
nonorganic ingredients in ``made with * * *'' products.
The practice standard for facility pest management under section
205.271 requires the producer or handler operating a facility to use
management practices to control and prevent pest infestations.
Prevention practices in paragraph (a) include removing pest habitats,
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 in paragraph (b) include
mechanical or physical controls, such as traps, light, or sound. Lures
and repellents using nonsynthetic substances may be used as pest
controls. Lures and repellents with synthetic substances that are
allowed on the National List also may be used. Prevention and control
practices in paragraphs (a) and (b) may be used concurrently.
If the practices in paragraphs (a) and (b) are not effective,
amended paragraph (c) provides that handlers may then use a
nonsynthetic or synthetic substance consistent with National List. If
the measures and substances provided under paragraphs (a), (b), and (c)
are not
[[Page 80562]]
effective, synthetic substances not on the National List may be used to
control pest infestations. Under new paragraph (d), the handler and the
operation's certifying agent, prior to using such a substance, must
agree on the substance to be used to control the pest, measures to be
taken to prevent contact with organically produced product, and
ingredients that may be in the handling facility.
This rule recognizes that certain local, State, and Federal laws or
regulations may require intervention with prohibited substances before
or at the same time substances allowed in paragraphs (b) and (c) are
used. To the extent that this occurs, this rule permits the handler to
follow such laws and regulations to market a product as organically
handled, provided that the product does not come into contact with the
pest control substance used.
The extent of pest infestation cannot be foreseen when an organic
plan is submitted by the certified operation and approved by the
certifying agent. A handler who uses any nonsynthetic or synthetic
substance to control facility pests must update its organic handling
system plan to address all measures taken or intended to be taken to
prevent contact between the substance and any organically produced
ingredient or finished product.
Section 205.272 provides additional practice standards that must be
followed by an organic handling operation to prevent the commingling of
organic and nonorganic products and to 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 certified organic
operations may receive temporary variances from the production and
handling provisions of this subpart. The Administrator may establish
temporary variances due to: (1) Natural disasters declared by the
Secretary; (2) unavoidable business interruption caused by natural
catastrophes such as drought, wind, fire, flood, excessive moisture,
hail, tornado, or earthquake; or (3) to conduct research on organic
production and handling techniques or inputs. An SOP's governing State
official or a certifying agent may recommend that the Administrator
establish a temporary variance for various reasons including an
unavoidable business interruption. The Administrator will determine how
long a temporary variance will be in effect at the time it is
established, subject to such extension as the Administrator deems
necessary. Temporary variances may not be issued to allow use of any
practice, material, or procedure which is prohibited under section
205.105.
The proposed rule inadvertently omitted the SOP's governing State
official as having authority to recommend a temporary variance to the
Administrator. We have added that authority in paragraph (b) of section
205.290.
Upon notification by the Administrator that a temporary variance
has been established, the certifying agent must inform each production
and handling operation it certifies that may be affected by the
temporary variance. For example, if a drought causes a severe shortage
of organically produced hay, a dairy operation may 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 nonorganic hay used and the timeframe
needed to restore the total feed ration to organic sources. The
certifying agent may require that the next organic plan include
contingency measures to avoid the need to resort to nonorganic feed in
case of a future shortage.
General--Changes Based on Comments
This subpart differs from the proposal in several respects as
follows:
(1) Maintain or Improve Provision for Production Operations Only. A
number of commenters questioned whether the requirement in the proposed
rule that an operation must ``maintain or improve the natural resources
of the operation, including soil and water quality'' applied to
handling as well as production operations. They stated that handling
operations are not integrated into natural systems the way that
production systems are. As a result, these commenters were uncertain
how handlers could fulfill the ``maintain or improve'' requirement.
The ``maintain or improve'' requirement addresses the impact of a
production operation on the natural resource base that sustains it and,
as such, does not apply to handling operations. We have modified the
final rule in section 205.200 by limiting the ``maintain or improve''
requirement to production practices.
(2) Management Practices and Physical Barriers to Prevent
Commingling. Many commenters, including numerous certifying agents,
stated that the proposed provisions for an organic system plan were not
adequate for the task of certifying an operation that produces both
organic and nonorganic products. The commenters requested that the
final rule incorporate the provisions established in the OFPA for
certifying these split operations. These provisions include separate
recordkeeping for the organic and nonorganic operations and the
implementation of protective practices to prevent the commingling of
product and the unintentional contact of organic product with
prohibited substances. We have amended the provisions for an organic
system plan in section 205.201(a)(5) to require greater accountability
regarding the segregation of organic and nonorganic products in a split
operation. The changes we made incorporate language from the OFPA
(``physical facilities, management practices'') to provide clear
criteria for producers, handlers and certifying agents to agree upon an
organic system plan that protects the integrity of organic product.
(3) Commercial Availability. The proposed rule required that a raw
or processed agricultural product sold, labeled, or represented as
organic must contain not less than 95 percent organically produced raw
or processed agricultural product. Additionally, section 205.606 of the
proposed rule allowed any nonorganically produced agricultural product
to be used in the 5 percent nonorganic component of an agricultural
product sold, labeled, or represented as organic. Many commenters
objected to these provisions and recommended that nonorganically
produced agricultural products should only be allowed in an organic
product when the organically produced form was not commercially
available. Commenters stated that allowing nonorganically produced
agricultural products within the 5 percent would significantly weaken
demand for many organically produced commodities, especially herbs and
spices. These commenters stated that herbs and spices often constitute
less than 5 percent of the ingredients in a raw or processed
agricultural product and that handlers producing an organic product
would instinctively seek out the less expensive nonorganic variety.
They also indicated that the 5 percent component is an important market
for many products
[[Page 80563]]
produced from organically produced livestock, such as milk derivatives
and meat by-products, that are not typically marketed directly to
consumers. Commenters stated that the preponderance of current
certification programs use the commercial availability criterion when
determining whether a nonorganically produced agricultural product may
be used within the 5 percent component. Commenters cited the National
Organic Standards Board's (NOSB) recommendation that organic
agricultural products be used in this 5 percent component unless they
are commercially unavailable and requested that the final rule
incorporate the criteria for determining commercial availability that
accompanied that NOSB recommendation.
We agree with commenters that a preference for organically produced
agricultural commodities, when commercially available, can benefit
organic producers, handlers, and consumers in a variety of ways. We
believe that the commercial availability requirement may allow
consumers to have confidence that processed products labeled as
``organic'' contain the highest feasible percentage of organic
ingredients. Some producers may benefit from any market incentive to
supply organically produced minor ingredients that handlers need for
their processed products. We recognize that the provision does impose
an additional requirement on handlers who must ascertain whether the
agricultural ingredients they use are commercially available in organic
form. The NOSB recommended that the final rule contain a commercial
availability provision based upon the guidelines developed by the
American Organic Standards project of the Organic Trade Association.
For these reasons, we have amended the final rule to require that an
agricultural commodity used as an ingredient in a raw or processed
product labeled as organic must be organic when the ingredient is
commercially available in an organic form.
While recognizing the potential benefits of applying the commercial
availability standard to all agricultural ingredients in a processed
product, we are concerned that enforcing this provision could impose an
excessive burden on handlers. Although many commenters stated that some
existing certifying agents apply a commercial availability standard, we
do not have complete information on the criteria used by these
certifying agents, and we are unsure whether a consensus exists on
criteria for commercial availability within the organic community.
Additionally, we are concerned that, unless the standard is clearly
articulated and consistently interpreted and enforced, it will not be
effective. Disagreement among certifying agents regarding when and
under what circumstances an ingredient is commercially available would
undermine our intent to create an equitable and enforceable standard.
AMS is soliciting additional comment and information on a number of
issues concerning the development of standards for the commercial
availability of organically produced agricultural commodities used in
processed products labeled as ``organic.'' On the basis of these
comments and information and additional recommendations that the NOSB
may develop, AMS will develop a commercial availability standard for
use in implementing the final rule. AMS intends to develop the
commercial availability standard and incorporate it within the final
rule prior to the commencement of certification activities by
accredited certifying agents. This approach will provide organic
handlers and certifying agents the standard necessary to incorporate
the consideration of commercial availability of ingredients in an
organic system plan at the time that the USDA organic standard comes
into use. Specifically, AMS requests comments and information
addressing the following questions:
What factors, such as quantity, quality, consistency of supply, and
expense of different sources of an ingredient, should be factored into
the consideration of commercial availability? What relative importance
should each of these factors possess, and are there circumstances under
which the relative importance can change?
What activities and documentation are sufficient to demonstrate
that a handler has taken appropriate and adequate measures to ascertain
whether an ingredient is commercially available?
How can AMS ensure the greatest possible degree of consistency in
the application of the commercial availability standard among multiple
certifying agents?
Could potentially adverse effects of a commercial availability
standard, such as uncertainty over the cost and availability of
essential ingredients, impact or impede the development of markets for
organically processed products?
What economic and administrative burdens are imposed by the
commercial availability standards found in existing organic
certification programs?
How would producers benefit from market incentives to increase use
of organic ingredients that result from a commercial availability
standard?
Would lack of a commercial availability standard provide a
disincentive for handlers of products labeled ``organic'' to seek out
additional organic minor ingredients? What impacts could this have on
producers of minor ingredients?
AMS welcomes any new or unpublished research results or information
that exists concerning a commercial availability standard. AMS
specifically invites comment from establishments which currently
operate using commercial availability or a comparable provision in the
conduct of their business. AMS will receive comment on this issue until
90 days after publication of the final rule.
(4) Conservation of Biodiversity. Many commenters recommended
amending the definition of organic production to include the
requirement that an organic production system must promote or enhance
biological diversity (biodiversity). Commenters stated that the
definitions for organic production developed by the NOSB and the Codex
Commission include this requirement. We agree with these commenters and
have amended the definition of organic production to require that a
producer must conserve biodiversity on his or her operation. The use of
``conserve'' establishes that the producer must initiate practices to
support biodiversity and avoid, to the extent practicable, any
activities that would diminish it. Compliance with the requirement to
conserve biodiversity requires that a producer incorporate practices in
his or her organic system plan that are beneficial to biodiversity on
his or her operation.
General--Changes Requested But Not Made
This subpart retains from the proposed rule regulations on which we
received comments as follows:
Organic Plan Excessively Restrictive. One organic inspector was
concerned that the requirements of the organic system plan were too
prescriptive and would create an excessive paper work burden for
producers and handlers. The commenter stated that the excessive
specificity of certain requirements (composition and source of every
substance used), combined with the ambiguity of others (soil and tissue
testing required but with no mention of the frequency), would confuse
the working relationship between a producer or handler and his or her
certifying agent. The commenter was
[[Page 80564]]
concerned that strict adherence to the specifications in the organic
system plan would compromise the ability of producers and handlers to
run their businesses. While agreeing that flexibility in the
development of the organic system plan was valuable, the commenter
stated that producers and handlers, not the certifying agent, must
retain the primary managerial role for their operation. Other
commenters maintained that the organic system plan requirements were
too ambiguous and would inhibit certifying agents' efforts to review
necessary information. For example, a trade association commented that
the absence of specific recordkeeping requirements for livestock feed
materials, medications, and health care activities would impair
compliance monitoring.
The provisions for an organic system plan were one of the most
significantly revised components of the proposed rule, and, with minor
changes related to split operations, we have retained them in the final
rule. These provisions provide ample discretion for producers,
handlers, and certifying agents to perform their duties while
recognizing that mutual consent is a prerequisite for them to meet
their responsibilities. The organic system plan enables producers and
handlers to propose and certifying agents to approve site and
operation-specific practices that fulfill all applicable program
requirements. Producers and handlers retain the authority to manage
their operations as they deem necessary, but any actions they undertake
that modify their organic system plan must be approved by the
certifying agent. With regard to recordkeeping, certifying agents are
authorized to require the additional information, such as the livestock
records mentioned in the comment, that they deem necessary to evaluate
compliance with the regulations.
One certifying agent stated that the requirement to maintain or
improve the natural resources of the operation was worthy in principle
but unreasonable to achieve. This commenter stated that the long-term
consequences of an organic system plan could not be foreseen and
recommended requiring that producers ``must endeavor'' to maintain or
improve the operation's natural resources. We have not changed this
requirement because the vast majority of commenters supported an
organic system plan that mandated the ``maintain or improve''
principle. A good working relationship between the producer and his or
her certifying agent, including the annual inspection and accompanying
revisions to the organic system plan, can rectify the unforeseen and
unfavorable conditions that arise.
Crop Production--Changes Based on Comments
This subpart differs from the proposal in several respects as
follows:
(1) Crop nutrient management. The fundamental requirement of the
soil fertility and crop nutrient management practice standard, that
tillage, cultivation, and nutrient management practices maintain or
improve the physical, chemical, and biological condition of the soil
and minimize erosion, remains unaltered. The proposed rule required
that a producer budget crop nutrients by properly utilizing manure or
other animal and plant materials, mined substances of low or high
solubility, and allowed synthetic amendments. Many commenters disagreed
with using the term, ``budget,'' which they considered too limiting to
characterize nutrient management in organic systems. These commenters
recommended that the practice standard instead emphasize the diverse
practices used in organic systems to cycle nutrients over extended
periods of time.
We agree with these commenters and have amended the final rule to
require that producers manage crop nutrients and soil fertility through
the use of crop rotations and cover crops in addition to plant and
animal materials. Additionally, we clarified that producers may manage
crop nutrients and soil fertility by applying mined substances if they
are used in compliance with the conditions established in the National
List. Finally, we removed the word, ``waste,'' from our description of
animal and plant materials in the proposed rule to emphasize the
importance of these resources in organic soil fertility management.
(2) Compost Practice Standard. The proposed rule required that a
composted material used on an organic operation must be produced at a
facility in compliance with the Natural Resource Conservation Service
(NRCS) practice standard. While many commenters agreed with the need
for greater oversight of the feedstocks and procedures used to produce
compost, most stated that the NRCS practice standard would not be
suitable for this purpose. Commenters stated that the requirements in
the NRCS practice standard were not designed for organic operations and
would prohibit many established, effective composting systems currently
used by organic producers. For example, adoption of the NRCS practice
standard would prevent producers from using nonfarm wastes as compost
feedstocks. Materials such as food processing by-products and leaves
from curbside collection programs have long been used with beneficial
results.
Commenters also stated that the minimum acceptable requirements for
the design, construction, and operation of a composting facility
contained in the practice standard were appropriate for a voluntary
cost share program but were excessive as a compliance requirement for
organic certification. Commenters questioned whether producers could
justify the investment of time and resources needed to comply with the
multiple design and operation criteria specified in the NRCS practice
standard.
We agree with commenters who stated that, given the diversity of
composting systems covered by a national organic standard, requiring
full compliance with the NRCS practice standard would be overly
prescriptive. We maintain, however, that implementation of the OFPA
requires a rigorous, quantitative standard for the production of
compost. The OFPA contains significant restrictions on applying raw
manure that are reflected in the soil fertility and crop nutrient
management practice standard. These restrictions pertain to raw manure
and do not apply once fresh animal materials are transformed into a
composted material. An organic producer using a composted material
containing manure must comply with the nutrient cycling and soil and
water conservation provisions in his or her organic system plan but is
not constrained by the restrictions that apply to raw manure.
Therefore, producers intending to apply soil amendments will require
clear and verifiable criteria to differentiate raw manure from
composted material. We developed the requirements in the final rule for
producing an allowed composted material by integrating standards used
by the Environmental Protection Agency (EPA) and USDA's Natural
Resources Conservation Service (NRCS). The requirements for the carbon-
to-nitrogen (C:N) ratio for composting materials are the same as that
found in the NRCS practice standard for a composting facility. The time
and temperature requirements for in-vessel, static aerated pile, and
windrow composting systems are consistent with that EPA regulates under
40 CFR Part 503 for the production of Class A sewage sludge.
Additionally, AMS reviewed these compost production requirements with
USDA's Agricultural Research Service (ARS).
[[Page 80565]]
The conditions in the final rule for producing an allowed composted
material begin with the selection of appropriate feedstocks. The
producer's first responsibility is to identify the source of the
feedstocks used in the composting system. This requirement ensures that
only allowed plant and animal materials are included in the composting
process, that they are not contaminated with prohibited materials, and
that they are incorporated in quantities suitable to the design of the
composting system. Certifying agents will exercise considerable
discretion for evaluating the appropriateness of potential feedstock
materials and may require testing for prohibited substances before
allowing their use. For example, a certifying agent could require a
producer to monitor off-farm inputs such as leaves collected through a
municipal curbside program or organic wastes from a food processing
facility. Monitoring may be necessary to protect against contamination
from residues of prohibited substances, such as motor oil or heavy
metals, or gross inert materials such as glass shards that can enter
the organic waste stream.
The final rule further requires that the producer adhere to
quantitative criteria when combining and managing the plant and animal
materials that are being composted. When combining feedstocks to
initiate the process, producers must establish a C:N ratio of between
25:1 and 40:1. This range allows for very diverse combinations of
feedstock materials while ensuring that, when properly managed, the
composting process will yield high quality material. While some
commenters maintained that specifying any C:N ratio in the final rule
would be too restrictive, it would be far more problematic not to
establish a range. The 25:1 to 40:1 range ensures that producers will
establish appropriate conditions under which the additional
requirements in this practice standard, most notably the time and
temperature criteria, can be achieved with minimal producer oversight.
Composting operations using a C:N ratio lower than 25:1 require
increasingly intensive management as the ratio drops due to the risk of
putrefaction. Operations in excess of the 40:1 range may achieve the
minimum temperature but are likely to drop off quickly and result in a
finished material that is inadequately mature and deficient in
nitrogen. The producer is not required to perform a physical analysis
of each feedstock component if he or she can demonstrate that an
estimated value is reliable. For example, estimates of the carbon and
nitrogen content in specific manures and plant materials are generally
recognized. Other feedstocks of consistent quality may be tested once
and assumed to approximate that value.
The producer must develop in his or her organic system plan the
management strategies and monitoring techniques to be used in his or
her composting system. To produce an allowed composted material, the
producer must use an in-vessel, static aerated pile, or windrow
composting system. Producers using an in-vessel or static aerated pile
system must document that the composting process achieved a temperature
between 131 deg.F and 170 deg.F and maintained that level for a minimum
of 3 days. Producers using a windrow composting system must document
that the composting process achieved a temperature between 131 deg.F
and 170 deg.F and maintained that level for a minimum of 15 days.
Compost produced using a windrow system must be turned five times
during the process. These time and temperature requirements are
designed to minimize the risk from human pathogens contained in the
feedstocks, degrade plant pathogens and weed seeds, and ensure that the
plant nutrients are sufficiently stabilized for land application.
The final rule does not contain provisions for the use of materials
commonly referred to as ``compost teas.'' A compost tea is produced by
combining composted plant and animal materials with water and a
concentrated nutrient source such as molasses. The moisture and
nutrient source contribute to a bloom in the microbial population in
the compost, which is then applied in liquid form as a crop pest or
disease control agent. The microbial composition of compost teas are
difficult to ascertain and control and we are concerned that applying
compost teas could impose a risk to human health. Regulation of compost
teas was not addressed in the proposed rule. The National Organic
Program (NOP) will request additional input from the NOSB and the
agricultural research community before deciding whether these materials
should be prohibited in organic production or whether restrictions on
their use are appropriate.
In addition to managing crop nutrients with raw manure and
composted plant and animal materials, a producer may use uncomposted
plant materials. These are materials derived exclusively from plant
sources that a producer manages in a manner that makes them suitable
for application in a cropping system. For example, plant materials that
are degraded and stabilized through a vermicomposting process may be
used as a soil fertility and crop nutrient amendment.
(3) Mined Substances of High Solubility. The proposed rule treated
mined substances of high solubility as a single category of soil
amendment and allowed their use where warranted by soil and crop tissue
testing. Many commenters objected to the general allowance for this
category of substances and were particularly disappointed that the NOSB
annotations on two such materials, sodium (Chilean) nitrate and
potassium chloride, were not included. Commenters cited the potential
detrimental effects of these highly soluble and saline substances on
soil quality and stated that several international organic
certification programs severely prescribe or prohibit their use. One
certifying agent recommended that natural substances of high solubility
and salinity be handled comparably to similar synthetic materials such
as liquid fish products and humic acids that appear on the National
List, complete with their original NOSB annotations.
At its June 2000 meeting, the NOSB recommended that the NOP delete
general references to mined substances of high solubility from the
final rule, and incorporate the NOSB's specific annotations for
materials of this nature. We have adopted this recommendation by
retaining a place for mined substances of high solubility in the soil
fertility and crop nutrient management practice standard but
restricting their use to the conditions established for the material as
specified on the National List of prohibited natural substances. Under
this approach, mined substances of high solubility are prohibited
unless used in accordance with the annotation recommended by the NOSB
and added by the Secretary to the National List. We deleted the
provision from the proposed rule that use of the substance be
``justified by soil or crop tissue analysis.'' The final rule contains
two materials--sodium nitrate and potassium chloride--that may be used
in organic crop production with the annotations developed by the NOSB.
While ``mined substances of high solubility'' is not a discrete,
recognized category such as crop nutrients, the proposed rule mentioned
sodium nitrate, potassium chloride, potassium nitrate (niter),
langbeinite (sulfate of potash magnesia), and potassium sulfate in this
context. Based on the recommendation of the NOSB, the final rule would
prohibit use of these materials, unless the NOSB developed
recommendations on conditions for their use and the Secretary added
them
[[Page 80566]]
to the National List. The NOP would welcome further guidance from the
NOSB on these materials.
(4) Burning crop residues. The proposed rule prohibited burning as
a means of crop disposal, except for burning prunings from perennial
crops to suppress the spread of disease. Many commenters supported the
principle behind the prohibition but maintained that the proposed
language was too restrictive and would preclude certain beneficial
agronomic practices. Several producers stated that the proposed rule
would prevent them from collecting and burning residues from diseased
annual crops, which they felt was an effective and beneficial practice.
Other producers cited their use of prescriptive burning as a management
practice for certain native or wild crops. As evidenced by the
allowance for burning to suppress disease with perennial crops, the
proposed rule was not designed to preclude the selective use of fire in
organic production. We agree with the commenters that a more flexible
allowance for the practice is warranted, and we have amended the
provision to allow burning of annual and perennial crop residues for
the suppression of disease and to stimulate seed germination. Producers
must establish their need and procedures for burning in their organic
system plan, and the practice cannot be used solely to remove crop
debris from fields.
(5) Requirement for Organic Seed in Sprout Production. The proposed
rule allowed nonorganically produced seeds for all purposes, including
sprout production, when the certifying agent concurred with the
producer that organically produced seeds were not commercially
available. While commenters predominately supported this approach with
seed used for planting, they were virtually unanimous in stating that
it is never appropriate to allow nonorganically produced and handled
seeds in organic sprout production. Commenters cited the NOSB's June
1994 recommendation that seed used for the production of edible sprouts
shall be organically produced and stated that existing certification
standards do not provide an exemption based on commercial availability.
We agree with these commenters and have modified the final rule to
require that organic seed must be used for the production of edible
sprouts.
(6) Mitigating the Effects of a Biological, Botanical, or Synthetic
Substance. The proposed rule required that producers who used a
biological or botanical substance or an allowed synthetic substance to
control crop pests, weeds, or disease evaluate and mitigate the effects
of repetitive use of the same or similar substances. While agreeing
that pest resistance and shifts in pest populations were important
considerations, commenters stated that managing these issues was beyond
the ability of individual operations. Commenters recommended that the
NOP develop principles and practices for managing pest resistance and
shifts in pest types that would apply to all production operations. We
agree with these comments and have deleted the requirement to evaluate
and mitigate the effects of using the same or similar crop pest, weed,
or disease control substances. The final rule requires that producers
document the use of such substances in their organic systems plans,
subject to the approval of their certifying agent.
(7) Prohibition on Use of Treated Lumber. The proposed rule did not
specifically address the use of lumber that had been treated with a
prohibited substance, such as arsenic, in organic production. Citing
the explicit prohibition on these substances in existing organic
standards, many commenters felt that treated lumber should be excluded
in the final rule. Commenters also cited the NOSB's recommendation to
prohibit the use of lumber treated with a prohibited substance for new
construction and replacement purposes effective upon publication of the
final rule. We have included a modified version of the NOSB's
recommendation within the crop pest, weed, and disease management
practice standard. This provision prohibits the use of lumber treated
with arsenate or other prohibited materials for new installations or
replacement purposes in contact with an organic production site. We
included this modification to clarify that the prohibition applies to
lumber used in direct contact with organically produced and handled
crops and livestock and does not include uses, such as lumber for fence
posts or building materials, that are isolated from production. The
prohibition applies to lumber used in crop production, such as the
frames of a planting bed, and for raising livestock, such as the boards
used to build a farrowing house.
(8) Greater Rigor in the Wild Harvest Production Organic System
Plan. A number of commenters stated that the wild-crop harvesting
practice standard was insufficiently descriptive and that the proposed
rule failed to apply the same oversight to wild harvest operations as
it did to those producing crops and livestock. Some commenters
maintained that the proposed rule did not require a wild harvest
producer to operate under an approved organic system plan. These
commenters proposed specific items, including maps of the production
area that should be required in a wild harvest operation's organic
system plan. One commenter recommended that the definition for ``wild
crop'' be modified to allow the harvest of plants from aquatic
environments.
We amended the practice standard for wild-crop harvesting to
express the compliance requirements more clearly. Wild-crop producers
must comply with the same organic system plan requirements and
conditions, as applicable to their operation, as their counterparts who
produce crops and livestock. Wild harvest operations are production
systems, and they must satisfy the general requirement that all
practices included in their organic system plan must maintain or
improve the natural resources of the operation, including soil and
water quality. We modified the practice standard to emphasize that wild
harvest production is linked to a designated site and expect that a
certifying agent would incorporate mapping and boundary conditions into
the organic system plan requirements. Finally, we changed the
definition of ``wild crop'' to specify that harvest takes place from a
``site'' instead of ``from land,'' thereby allowing for aquatic plant
certification.
Crop Production--Changes Requested But Not Made
This subpart retains from the proposed rule regulations on which we
received comments as follows:
(1) Application of Raw Manure. The soil fertility and crop nutrient
management practice standard in the proposed rule permitted the
application of raw manure to crops not intended for human consumption
and established restrictions for applying it to crops used for human
food. For human food crops, the proposed rule required a 120-day
interval between application and harvest of crops whose edible portion
had direct contact with the soil or soil particles, and a 90-day
interval for crops that did not. These provisions reflected the
recommendations developed by the NOSB at its June 1999 meeting. The
practice standard also required that raw manure must be applied in a
manner that did not contribute to the contamination of crops, soil, or
water by plant nutrients, pathogenic organisms, heavy metals, or
residues of prohibited substances.
The majority of commenters supported the provisions for applying
raw manure. Some commenters stated
[[Page 80567]]
that the provisions effectively balanced the benefits of applying raw
manure to the soil with the environmental and human health risks
associated with its use. These commenters stated that the lengthy
intervals between application and harvest would not impose an
unreasonable or unfeasible burden on organic producers. The NOSB
strongly supported the provisions in the proposed rule, emphasizing
that raw manure contributed significant benefits to soil nutrient,
structure, and biological activity that other soil fertility practices
and materials do not provide. Other commenters stated that the
provisions were consistent with the requirements in existing organic
standards and added that the restrictions were justifiable because they
reflected responsible management practices.
For differing reasons, a number of commenters disagreed with the
proposed provisions. Some commenters cited the human health risks
associated with pathogenic organisms found in raw manure and stated
that the proposed intervals between application and harvest were not
adequately protective. These commenters recommended that the NOP
conduct more extensive risk assessment procedures before determining
what, if any, intervals between application and harvest would
adequately protect human health. Some of these commenters identified
the risk assessment methodology and pathogen treatment procedures
governing the production and use of sewage sludge as the most suitable
precedent for guiding the additional work required in this area.
Conversely, a number of commenters stated that the provisions in the
proposed rule were excessive because they exceeded the minimum 60-day
interval between application and harvest established in the OFPA. Many
of these commenters recommended eliminating the distinction between
crops that come into contact with soil or soil particles and those that
don't and applying a uniform 60-day interval between harvest and
application for any crop to which raw manure had been applied. Some
commenters stated that the 120-day interval severely limited the
flexibility of producers who operated in regions such as the Northeast
where the growing season lasted only slightly longer. Other commenters
maintained that the practice standard did not address specific
practices, such as applying raw manure to frozen fields, that they
maintained should be expressly prohibited.
The responsibility to use raw manure in a manner that is protective
of human health applies to all producers, whether organic or not, who
apply such materials. We acknowledge the commenters who noted that the
OFPA cites food safety concerns relative to manure use and, therefore,
that food safety considerations should be reflected in the practice
standard for applying raw manure in the final rule. Some of the
commenters favored more extensive risk assessment procedures or
lengthening the interval between application and harvest. We have not,
however, changed the provisions for applying raw manure.
Although public health officials and others have identified the use
of raw manure as a potential food safety concern, at the present time,
there is no science-based, agreed-upon standard for regulating the use
of raw manure in crop production. The standard in this rule is not a
public health standard. The determination of food safety demands a
complex risk assessment methodology, involving extensive research, peer
review, and field testing for validation of results. The only
comparable undertaking in Federal rulemaking has been EPA's development
of treatment and application standards for sewage sludge, an
undertaking that required years of dedicated effort. The NOP does not
have a comparable capacity with which to undertake a comprehensive risk
assessment of the safety of applying raw manure to human food crops. To
delegate the authority to determine what constitutes safe application
of raw manure to certifying agents would be even more problematic. A
certifying agent cannot be responsible for establishing a Federal food
safety standard. Therefore, the standard in this rule is a reflection
of AMS' view and of the public comments that this standard is
reasonable and consistent with current organic industry practices and
NOSB recommendations for organic food crop production. Should
additional research or Federal regulation regarding food safety
requirements for applying raw manure emerge, AMS will ensure that
organic production practice standards are revised to reflect the most
up-to-date food safety standard.
Neither the identification of food safety as a consideration in the
OFPA nor the inclusion of this practice standard in the final rule
should be construed to suggest that organically produced agricultural
products are any safer than nonorganically produced ones. USDA has
consistently stated that certification is a process claim, not a
product claim, and, as such, cannot be used to differentiate organic
from nonorganic commodities with regard to food safety. National
organic standards for manure use cannot be used to establish a food
safety standard for certified commodities in the absence of as uniform
Federal regulation to ensure the safety of all human food crops to
which raw manure has been applied. The OFPA was designed to certify a
process for informational marketing purposes.
Neither have we changed the practice standard in response to
comments that the requirement in the final rule should not exceed the
60-day interval contained in the OFPA. The OFPA clearly establishes
that the interval must be no less than 60 days and does not preclude a
longer standard. The NOSB has strongly supported the proposed 90-and
120-day intervals, and the vast majority of commenters indicated that
these provisions would be feasible for virtually all organic cropping
systems. The requirement in the practice standard that raw manure must
be applied in a manner that does not contribute to the contamination of
crops, soil, or water by plant nutrients, pathogenic organisms, heavy
metals, or residues of prohibited substances provides certifying agents
the discretion to prohibit specific practices that would not be in
compliance. With this discretion, a certifying agent could prohibit
practices, such as applying manure to frozen ground or too close to
water resources, that many commenters stated were not appropriate for
organic production.
(2) No Prohibition on Manure from Nonorganic Operations. The
proposed rule identified animal and plant waste materials as important
components in soil fertility and crop nutrient management without
providing criteria for distinguishing allowed and prohibited sources. A
large number of commenters objected to this provision and stated that
manure from nonorganic sources may contain residues from prohibited
substances, including animal medications. These commenters maintained
that some of these residues, such as antibiotics, may remain active for
extended intervals, and others, such as heavy metals, could accumulate
on the organic operation. Commenters stated that if either or both
conditions prevailed, the integrity of the organic operation would be
jeopardized. Many producers and certifying agents emphasized that the
proposed rule conflicted with the Codex guidelines that prohibit the
use of manure from factory farms. These commenters were concerned that
failure to restrict the use of manure from nonorganic operations would
put their products at a competitive disadvantage, particularly in
European markets. When raising this issue, most commenters requested
that the final rule either prohibit the use of
[[Page 80568]]
manure from factory farms or state that certifying agents could
regulate the practice by requiring residue testing and restrictions on
application.
We have not changed the provisions for using manure from nonorganic
operations in the final rule. In many discussions on the subject
throughout the years, the NOSB has never recommended that manure from
nonorganic farms be prohibited. Existing organic certification
standards routinely permit the use of manure from nonorganic operations
with appropriate oversight, and the final rule incorporates a similar
approach. Under the final rule, a certifying agent can require residue
testing when there is reasonable concern that manure, either raw or as
a component of compost, contains sufficient quantities of prohibited
materials to violate the organic integrity of the operation. Providing
certifying agents the discretion to require screening for prohibited
materials will minimize the risk of introducing contaminants while
maintaining the ecologically important practice of recycling organic
material from nonorganic operations. Additionally, the final rule
requires that producers apply manure and compost in a manner that
maintains or improves the soil and water quality of their operation.
This provision provides an additional safeguard that certifying agents
may use to ensure that the application of any form of manure protects
the natural resources of the operation.
(3) Rotating a Field in and out of Organic Production. Some
commenters stated that a producer should not be allowed to rotate
fields on their operation in and out of organic production. These
commenters were concerned that producers could apply prohibited
substances that persisted for many years, such as soil fumigants, and
begin harvesting organically produced crops after 3 years. They stated
that, without a prohibition on the rotation of fields in this manner,
organic producers could effectively use a prohibited substance on their
operation.
We have not amended the final rule to prohibit the rotation of a
field on an operation in and out of organic production. The statutory
prohibition on the application of a prohibited substance is 3 years,
and this requirement is contained in section 205.202(b). This
prohibition restricts the application of a prohibited substance, not
its residual activity. If AMS receives evidence that the rotation of
fields in this manner threatens to compromise organic production, the
NOP and NOSB will collaborate on developing standards to remedy it.
(4) Use of Seed Treatments on the National List. The seed and
planting stock practice standard in the proposed rule generated a very
diverse array of responses that, while largely favorable, highlighted a
potentially disruptive impact on organic producers. The practice
standard favored organic seed and planting stock over nonorganically
produced but untreated varieties and nonorganically produced, untreated
seed and planting stock over nonorganically produced seeds and planting
stock treated with an allowed synthetic substance. Producers could use
the less preferable seed or planting stock variety if they demonstrated
to their certifying agent that an equivalent variety in the preferred
form was not commercially available. Most commenters endorsed the
principle of requiring organic seed and planting stock and agreed that
the proposed provisions were a workable approach to enforcement. They
stated that the provisions created an incentive for seed and planting
stock providers to develop supplies for organic markets, yet enabled
producers who made a good faith effort but failed to locate seed or
planting stock in the preferred form the ability to continue producing
organically. Most commenters indicated that this approach would support
the existing market for organic seed and planting stock while fostering
its continued development.
A number of commenters, however, stated that the seed and planting
stock practice standard was unreasonable and unworkable and would
adversely affect organic producers. These effects would include
significantly reduced planting options due to the nonavailability of
seed in any allowed form and higher seed costs, which represent a
significant percentage of the total production cost for some
commodities. These commenters maintained that the three categories of
seed and planting stock allowed in the order of preference could not
reliably provide producers with many commercial varieties currently
being planted. They pointed out that there were no synthetic seed
treatments on the National List in the proposed rule, thereby
eliminating the use of treated seed in organic production. Commenters
stated that producers often rely upon seed and planting stock varieties
that are uniquely well adapted for their growing conditions or
marketing requirements and that these particular varieties would very
often not be available in untreated form. These commenters concluded
that the proposed practice standard would compel many producers to
abandon many tried and true varieties of seed and planting stock and
perhaps phase out organic production entirely. One commenter maintained
that the proposed rule's stated intention of using the practice
standard to stimulate production of organic seed and planting stock was
not within the purpose of the OFPA.
We have not changed the seed and planting stock practice standard
in response to these commenters because the prohibition on using
synthetic materials not on the National List is a requirement of the
OFPA. The final rule cannot allow producers to use synthetic seed
treatments that have not been reviewed, favorably recommended by the
NOSB, and added to the National List by the Secretary. The practice
standard creates incentives for producers to seek out seed and planting
stock inputs that are the most compatible with organic production, yet
includes allowances when preferred forms are not commercially
available. While no seed treatments are included on the National List
in the final rule, individuals may petition the NOSB for review of such
substances. Additionally, the practice standard creates an incentive
for seed and planting stock producers and suppliers to develop natural
treatments suitable for organic systems that would not need to appear
on the National List. The objectives of spurring production of
organically grown seed and promoting research in natural seed
treatments are compatible with the OFPA's purpose of facilitating
commerce in organically produced and processed food. We designed the
practice standard to pursue these objectives while preventing the
disruption that an ironclad requirement for organically produced seed
and planting stock may have caused.
(5) Practice Standard for Maple Syrup. Many commenters stated that
the proposed rule lacked production and handling standards for
operations that produce maple syrup. Commenters stated that maple syrup
production is a significant enterprise for many organic producers and
that the absence of a practice standard in the final rule would
adversely affect existing markets for organic products. Many commenters
recommended that the final rule incorporate the maple syrup practice
standard from an existing certification program or the American Organic
Standards.
We have not included a practice standard for the production and
handling of maple syrup because the final rule contains sufficient
provisions for the certification of these types of operations. After
reviewing existing
[[Page 80569]]
practice standards for maple syrup, we determined that the standards in
the final rule for crop production, handling operations, and allowed
and prohibited materials on the National List provided comparable
guidance.
Crop Production--Clarifications
Clarification is given on the following issues raised by
commenters:
(1) Applicability of Crop Rotation Requirement to all Operations.
One State program commented that the crop rotation practice standard in
the proposed rule was unreasonable for producers who operated in
regions where limited rainfall and irrigation resources or unique soil
conditions made cover cropping impractical. This commenter stated that
certain dryland cropping systems, such as aloe vera production,
function as ``semi-perennial'' systems that do not include rotations,
yet fulfill the objectives of the crop rotation practice standard. A
certifying agent expressed a similar concern by suggesting that the
crop rotation practice standard be changed by adding ``may include, but
is not limited to'' prior to the list of allowed management practices.
This commenter felt that the ``may include'' clause afforded individual
growers greater discretion by acknowledging that not every allowed
management practice would be applicable to all operations.
We have retained the language from the proposed rule because it
already provides the flexibility to develop site-specific crop rotation
practices requested by these commenters. The regulation as originally
written includes the `` but not limited to'' clause that allows
producers to include alternative management practices in their organic
system plan. Additionally, the regulation states that the producer must
implement a crop rotation that provides the required functions ``that
are applicable to the operation.'' This further establishes that the
crop rotation component of an organic system plan must be considered
within the context of site-specific environmental conditions including
climate, hydrology, soil conditions, and the crops being produced. The
final rule requires implementation of a crop rotation, but the producer
and certifying agent will determine the specific crops and the
frequency and sequencing of their use in that rotation. Crop rotations
must fulfill the requirements of this practice standard--to maintain or
improve soil organic matter content, provide for pest management,
manage deficient or excess plant nutrients, and control erosion--and
are not obligated to use any specific management practice. We
structured this and other practice standards, as well as the
requirements of the organic system plan, to enable producers and
certifying agents to develop organic system plans adapted to natural
variation in environmental conditions and production systems.
(2) Excluding Annual Seedlings from Planting Stock. The proposed
rule allowed a producer to use nonorganically produced seeds and
planting stock if organically produced equivalent varieties were not
commercially available. Several commenters, including the NOSB, were
concerned that the definition of planting stock as ``any plant or plant
tissue, including rhizomes, shoots, leaf or stem cuttings, roots, or
tubers, used in plant production or propagation'' was sufficiently
broad to be applied to annual seedlings. While many commenters,
including the NOSB, supported the commercial availability exemption in
the case of seeds and planting stock, they objected to extending it to
annual seedlings. The proposed rule did not intend to include annual
seedling within the definition of planting stock and included a
separate definition of ``annual seedling'' as ``a plant grown from seed
that will complete its life cycle or produce a harvestable crop yield
within the same crop your or season in which it is planted.'' The
proposed rule addressed annual seedlings as a distinct category within
the seed and planting stock practice standard. There was no allowance
for using nonorganically produced annual seedlings based on commercial
availability, and such seedlings can only be used when a temporary
variance has been issued due to a catastrophic business interruption.
The growth of markets for organically produced annual seedlings, unlike
those for seeds and planting stock, obviates the need for the
commercial availability provision. We have retained this approach in
the final rule.
Livestock Production--Changes Based on Comments
This subpart differs from the proposal in several respects as
follows:
(1) Whole Herd Conversion. The proposed rule required that
livestock receive 1 year of continuous organic management prior to the
milk or milk products they produce being labeled as organic. Based on
the feed provisions in that proposal, producers would be required to
provide a 100-percent organic feed ration (exclusive of National List
substances allowed as feed supplements and additives) for that entire
year. Many producers, consumers, State certification programs, and
certifying agents commented that the full year organic feed requirement
created an insurmountable barrier for small and medium-size dairy
operations wishing to convert to organic production. They maintained
that the added expense of a full year, 100-percent organic feed
requirement was economically prohibitive. These commenters stated that
``new entry'' or ``whole herd'' conversion provisions in existing
certification standards have been instrumental in enabling established
nonorganic dairies to make the transition to organic production.
Commenters stated that these provisions typically allow producers to
provide livestock 80-percent organic or self-raised feed for the first
9 months of a herd's transition, before requiring 100-percent organic
feed for the final 3 months. Some commenters stated that many current
organic dairies had capitalized on this whole herd conversion provision
and that the consistent growth in demand for organic milk and milk
products reflected consumer acceptance of the principle.
At its June 2000 meeting, the NOSB reiterated its prior endorsement
of the conversion principle for operations that jointly convert dairy
herds and the land on which they are raised. The NOSB recommended
allowing a producer managing an entire, distinct herd to provide 80-
percent organic or self-raised feed during the first 9 months of the
final year of conversion, and 100-percent organic feed for the final 3
months. The recommendation further required that dairy animals brought
onto an organic dairy must be organically raised form the last third of
gestation, except that feed produced on land managed under an organic
system plan could be fed to young stock up to 12 months prior to milk
production.
While the preponderance of comments supported the whole herd
conversion provision, a significant number of individuals, certifying
agents, and State certification programs opposed it. Some commenters
felt that requiring less than 1 full year of 100-percent organic feed
would not satisfy consumer expectations for an organically managed
dairy. Other commenters stated that the whole herd conversion merely
favored one segment of organic producers over another. They maintained
that the full year, 100-percent organic feed requirement would
stimulate markets for organically produced hay and grain, thereby
rewarding good row crop rotation. One certifying agent was concerned
that the conversion provision would create a permanent exemption and
that split
[[Page 80570]]
operation dairies could use it repeatedly to bring nonorganic animals
into the organic operation.
The final rule contains a provision for whole herd conversion that
closely resembles those found in the NOSB recommendation and the
existing certification standards. The final rule requires that an
entire, distinct dairy herd must be under organic management for 1 year
prior to the production of organic milk. During the first 9 months of
that year, the producer must provide a feed ration containing a minimum
of 80-percent organic feed or feed that is raised from land included in
the organic system plan and managed in compliance with organic crop
requirements. The balance of the feed ration may be nonorganically
produced, but it must not include prohibited substances including
antibiotics or hormones. The producer must provide the herd 100-percent
organic feed for the final 3 months before the production of organic
milk. The producer must comply with the provisions in the livestock
health and living conditions practice standard during the entire year
of conversion. After the dairy operation has been certified, animals
brought on to the operation must be organically raised from the last
third of gestation. We did not incorporate the NOSB's recommendation to
provide young stock with nonorganic feed up to 12 months prior to the
production of certified milk. By creating an ongoing allowance for
using nonorganic feed on a certified operation, this provision would
have undermined the principle that a whole herd conversion is a
distinct, one-time event.
We anticipate that the provisions added to the final rule will
address the concerns of commenters who objected to the conversion
principle. Consumers have embraced milk and milk products from dairies
certified under private whole herd conversion provisions essentially
identical to that in the final rule. While the conversion provision may
temporarily reduce demand for organic feed materials, it encourages
producers to develop their own supplies of organic feed. The conversion
provision also rewards producers for raising their own replacement
animals while still allowing for the introduction of animals from off
the farm that were organically raised from the last third of gestation.
This should protect existing markets for organically raised heifers
while not discriminating against closed herd operations. Finally, the
conversion provision cannot be used routinely to bring nonorganically
raised animals into an organic operation. It is a one-time opportunity
for producers working with a certifying agent to implement a conversion
strategy for an established, discrete dairy herd in conjunction with
the land resources that sustain it.
(2) Organic Management for Livestock from the Last Third of
Gestation. The proposed rule required that organically managed breeder
and dairy stock sold, labeled, or represented as organic slaughter
stock must be under continuous organic management from birth. Many
commenters stated that this requirement was an inappropriate relaxation
of most existing organic standards, which require organic management
for all slaughter stock from the last third of gestation. These
commenters cited the NOSB's 1994 recommendation that all slaughter
stock must be the progeny of breeder stock under organic management
from the last third of gestation or longer. Commenters also recommended
extending the organic management provision to cover the last third of
gestation to make it consistent with the requirements in section
205.236(a)(4) for the organically raised offspring of breeder stock. We
agree with the argument presented by commenters and have changed the
final rule to require that breeder or dairy stock be organically raised
from the last third of gestation to be sold as organic slaughter stock.
(3) Conversion Period for Nonedible Livestock Products. The
proposed rule required that livestock must be under continuous organic
management for a period not less than 1 year before the nonedible
products produced from them could be sold as organic. Several
commenters questioned the basis for creating different origin of
livestock requirements based on whether the operation intended to
produce edible or nonedible products. These commenters stated that the
OFPA does not sanction such a distinction, nor is it contained in
existing certification standards. They questioned why the proposed rule
created such a provision in the absence of a favorable NOSB
recommendation. We agree that the creation of a separate origin of
livestock requirement for animals intended to provide nonedible
products could be confusing. We have changed this provision in the
final rule to require that nonedible products be produced from
livestock that have been organically managed from the last third of
gestation.
(4) Provisions for Feed Supplements and Feed Additives. The
proposed rule provided that nonagricultural products and synthetic
substances included on the National List could be used as feed
additives and supplements. Many commenters stated that allowing
nonagricultural products and synthetic substances as feed supplements
contradicted the definition for ``feed supplement'' found in the
proposed rule. That definition stipulated that a feed supplement must,
itself, be a feed material, and the definition for ``feed'' in the
proposed rule precluded using nonagricultural products and synthetic
substances. These commenters requested that either the definition of
``feed supplement'' be changed to make it consistent with the allowance
for nonagricultural products and synthetic substances or else that the
term be dropped from the final rule. The Food and Drug Administration
(FDA) recommended modifying the definitions for ``feed additive'' and
``feed supplement'' and further specifying the components required in a
feed ration under the livestock health care practice standard.
We amended the definition in the final rule to state that a feed
supplement is ``a combination of feed nutrients added to livestock feed
to improve the nutritional balance or performance of the total
ration.'' We retained the second component of the proposed definition,
which described how a feed supplement could be offered to livestock. We
amended the definition of ``feed additive'' to ``a substance added to
feed in micro quantities to fulfill a specific nutritional need; i.e.,
essential nutrients in the form of amino acids, vitamins, and
minerals.'' The definitions for ``feed supplement'' and ``feed
additive'' in the proposed rule were originally recommended by the
NOSB. While our intent in the proposed rule was to codify as fully as
possible the recommendations of the NOSB, we agree with commenters that
the proposed definitions were incompatible with the overall provisions
for livestock feed. The definitions in the final rule are consistent
with the NOSB's objective to create clear distinctions between feed,
feed supplements, and feed additives while clarifying the role for each
within an organic livestock ration. We also incorporated FDA's
recommendation to include protein and/or amino acids, fatty acids,
energy sources, and fiber for ruminants as required elements of a feed
ration in the livestock health care practice standard. These additions
make the livestock health care practice standard more consistent with
the National Research Council's Committee on Animal Nutrition's
Nutrient Requirement series, which we cited in the proposed rule as the
basis for feed requirements.
Many commenters addressed provisions in the proposed rule to allow
or prohibit specific materials and categories of materials used in
livestock
[[Page 80571]]
feed. Among these, some commenters questioned whether enzymes were
defined as a feed additive and, therefore, allowed. One certifying
agent requested guidance on the status of supplementing livestock feed
with amino acids. At its October 1999 meeting, the NOSB discussed the
Technical Advisory Panel (TAP) reviews on the use of enzymes and amino
acids in livestock feed. The NOSB determined that natural sources of
enzymes exist and that their use should be allowed in organic
production. Their discussion of natural sources of enzymes concluded
that enzymes derived from edible, nontoxic plants and nonpathogenic
bacteria or fungi that had not been genetically engineered should be
allowed as a nonorganic feed additive. The NOSB did not take a position
on amino acids during this meeting but indicated that it would revisit
the subject in the near future. Based on these recommendations, the
final rule allows the use of natural enzymes but not amino acids as
nonorganic feed additives. The NOSB's recommendation that natural
sources of enzymes existed and were compatible with organic livestock
production supports allowing them without adding them to the National
List. Some commenters discussed the animal welfare and environmental
benefits associated with providing amino acids in livestock feed and
supported allowing them. However, without a recommendation from the
NOSB that amino acids are natural or should be added to the National
List as a synthetic, the final rule does not allow their use.
Commenters questioned whether nonsynthetic but nonagricultural
substances, such as ground oyster shells and diatomaceous earth, would
be allowed in agricultural feed. In 1994, the NOSB recommended that
natural feed additives can be from any source, provided that the
additive is not classified as a prohibited natural on the National
List. We agree with this recommendation and have amended the final rule
to allow such materials as feed additives and supplements. The only
additional constraint on these materials is that every feed, feed
additive, and feed supplement be used in compliance with the Federal
Food, Drug, and Cosmetic Act, as stated in section 205.237(b)(6).
The NOSB recommended that ruminants maintained under temporary
confinement must have access to dry, unchopped hay. Although this
position was an NOSB recommendation and not part of the proposed rule,
several commenters responded to it. Most of these commenters stated
that the language was too restrictive and could preclude the use of
many suitable forage products. One dairy producer stated that the
requirement would not be practical for operations that mix hay with
other feed components. We agree that the NOSB's proposed language is
too prescriptive and have not included it in the final rule.
(5) Provisions for Confinement. The proposed rule established the
health, nutritional, and behavioral needs of the particular species and
breed of animal as the primary considerations for determining livestock
living conditions. The proposed rule also identified essential
components of the practice standard, including access to shade,
shelter, exercise areas, fresh air, and direct sunlight, while stating
that species-specific guidelines would be developed in conjunction with
future NOSB recommendations and public comment. Finally, the proposed
rule outlined the conditions pertaining to animal welfare and
environmental protection under which producers could temporarily
confine livestock.
While supportive of the underlying principles of this practice
standard, the vast majority of commenters stated that the actual
provisions suffered from a lack of clarity and specificity. Many
commenters were concerned that the proposed rule did not adequately
ensure access to the outdoors for all animals. While supportive of the
access to pasture requirement for ruminant production, commenters
stated that the final rule needed a clear definition of pasture to make
the provision meaningful. Conversely, some commenters supported the
less prescriptive approach adopted in the proposed rule. The NOSB added
considerably to its earlier recommendations on livestock living
conditions during its June 2000 meeting.
Many commenters stated that the criteria identified as required
elements in the provisions for livestock living conditions did not
specifically include access to the outdoors. One commenter stated that
the requirement that animals receive direct sunlight could be
interpreted to simply require windows in livestock confinement
facilities. Commenters were virtually unanimous that, except for the
limited exceptions for temporary confinement, all animals of all
species must be afforded access to the outdoors. Commenters also
maintained that the outdoor area must accommodate natural livestock
behavior, such as dust wallows for poultry and, in the case of
ruminants, provide substantial nutrition. Many commenters specifically
opposed dry lots as an allowable outdoor environment. The NOSB
recommended that the final rule state that all livestock shall have
access to the outdoors. As a result of these comments, we have revised
the final rule to establish that access to the outdoors is a required
element for all organically raised livestock.
We further amended the final rule to include a definition of
``pasture.'' The definition of ``pasture'' we included emphasizes that
livestock producers must manage their land to provide nutritional
benefit to grazing animals while maintaining or improving the soil,
water, and vegetative resources of the operation. The producer must
establish and maintain forage species-appropriate for the nutritional
requirements of the species using the pasture.
Numerous commenters requested clarification on species-specific
living conditions, such as the use of cages for poultry and confinement
systems for veal production. The use of continuous confinement systems
including cages for poultry and veal production is incompatible with
the requirement that organically raised livestock receive access to the
outdoors and the ability to engage in physical activity appropriate to
their needs. There will be times when producers must temporarily
confine livestock under their care, but these instances must be
supported by the exemptions to the outdoor access requirement included
in the final rule. Other commenters requested additional guidance on
whether confinement for the purpose of finishing slaughter stock would
be allowed, and, if so, how long that confinement could last.
Commenters who supported an allowance for finishing most often
recommended that, in the case of cattle, confinement should not exceed
90 days. The final rule does not include a specific length of time that
cattle or other species may be confined prior to slaughter. We will
seek additional input from the NOSB and public comment before
developing such standards.
Several commenters questioned whether a Federal, State, or local
regulation that required confinement would supersede the requirement
for outdoor access. These commenters were aware of county ordinances
that prohibited free ranging livestock production to protect water
quality. Organic operations must comply with all Federal, State, and
local regulations. At the same time, to sell, label, or represent an
agricultural commodity as ``100 percent organic,'' ``organic,'' or
``made with * * *'' the producer or handler must comply with all the
applicable requirements set forth in this
[[Page 80572]]
regulation. Federal, State, or local regulations that prohibit a
required practice or require a prohibited one will essentially preclude
organic certification of the affected commodity within that
jurisdiction.
(6) Prohibition on Parasiticides During Lactation. The proposed
rule provided that breeder stock could receive synthetic parasiticides
included on the National List, provided that the treatment occurred
prior to the last third of gestation for progeny that were to be
organically managed. Many commenters supported this principle but were
concerned that the wording would allow producers to administer
parasiticides to lactating breeder stock while the offspring were still
nursing. These commenters felt that such an allowance violated the
intent of the provision because offspring could be exposed to systemic
parasiticides or their residues through their mother's milk. The NOSB
recommended a prohibition on using allowed synthetic parasiticides
during lactation for progeny that are organically managed. We agree
with these commenters and have modified the final rule to prohibit the
treatment of organically managed breeder stock with allowed synthetic
parasiticides during the last third of gestation or lactation.
Livestock Production--Changes Requested But Not Made
This subpart retains from the proposed rule regulations on which we
received comments as follows:
(1) Prohibition on Factory Farms. Many commenters requested that
the final rule prohibit the certification of ``factory farms.'' These
commenters stated that factory farms are dependent upon practices and
materials that are inconsistent with or expressly prohibited in the
OFPA. The final rule does not contain such a prohibition because
commenters did not provide a clear, enforceable definition of ``factory
farm'' for use in the final rule. All organic operations, regardless of
their size or other characteristics, must develop and adhere to an
approved organic system plan that complies with these regulations in
order to be certified.
(2) Nonorganic Feed Protocol. The proposed rule required that,
except for nonagricultural products and synthetic substances included
on the National List, a producer must provide livestock with a total
feed ration composed of agricultural feed products, including pasture
and forage, that is organically produced and, if applicable, handled.
It also included provisions for temporary variances that, under very
limited circumstances and with the approval of the certifying agent and
the Administrator, would provide an exemption from specific production
and handling standards. The preamble of the proposed rule described an
emergency resulting in the unavailability of organic agricultural feed
products as an example of a situation in which a temporary variance
could be issued. Many commenters recommended that the final rule
require a producer who received a temporary variance for a feed
emergency to follow the order of preference for noncertified organic
feed developed by the NOSB. This order of preference requires a
producer to procure agricultural feed products from sources that are as
close to complying with the standards for organic certification as
possible. Commenters stated that adherence to the order of preference
would most closely conform with the expectation of consumers that
organically raised livestock received organic feed and would create an
incentive for livestock feed producers to pursue certification.
We have not included the NOSB's feed emergency order of preference
in the final rule because it would be too prescriptive and difficult to
enforce during an emergency. Receiving a temporary variance
categorically exempts a producer from the provision for which it was
issued, although that producer may not substitute any practice,
material, or procedure that is otherwise prohibited, although that
producer may not substitute any practice, material, or procedure that
is otherwise prohibited under section 205.105. Additionally, certified
organic feed is far more available in terms of quantity and
affordability than when the NOSB developed its order of preference in
1994. We anticipate that producers whose original supply of organic
agricultural feed products is interrupted will be able to fill the
shortfall through the marketplace.
(3) Prohibition on Physical Alterations. The proposed rule required
that producers perform physical alterations as needed to promote animal
welfare and in a manner that minimizes pain and stress. This provision
was one component of the health care practice standard that required
producers to establish and maintain preventive livestock health care
practices. We stated in the preamble that there was insufficient
consensus from previous public comment to designate specific physical
alterations as allowed or prohibited and envisioned working with
producers, certifying agents, and consumers to achieve that goal. We
requested comment on techniques to measure animal stress that could be
used to evaluate whether specific physical alterations were consistent
with the conditions established in the proposed rule.
We received significant numbers of comments both opposing and
supporting the provision in the proposed rule for performing physical
alterations. Many commenters opposed any allowance for physical
alterations and argued that such practices are cruel and debilitating
to animals. These commenters maintained that modifications in breed
selection, stocking densities, and the configuration of living
conditions could achieve results similar to physical alterations
without harming the animal. They stated that by adapting their
production systems to promote the physical and psychological welfare of
animals, producers could obviate the need for physical alterations. In
particular, commenters cited physical alterations to the beaks and feet
of poultry as unnecessary due to the availability of alternative
production systems. Many commenters expressed concern that the
allowance for physical alterations would facilitate the certification
of large confinement operations. Commenters also stated that performing
physical alterations was inconsistent with Codex guidelines and
objected to the allowance before full public deliberation on the
subject through the NOSB process.
A large number of commenters stated that, if reasonable guidelines
could be established, the allowance for physical alterations would be a
beneficial, and even necessary, condition for organic livestock
production. These commenters maintained that producers engage in
physical alterations for the overall welfare of the flock or herd and
that the pain and stress of performing them must be weighed against the
pain and stress of not doing so. For example, these commenters cited
the traumatic effect of cannibalism on poultry flocks that had not
undergone beak trimming or the injuries caused by animals whose horns
had not been removed. Many of these commenters stated that producers
could reduce but not eliminate the need for physical alterations
through alternative production practices such as breed selection and
stocking densities. The NOSB supported the provision as written in the
proposed rule, stating that it met the animal welfare requirements
while allowing practices necessary for good animal husbandry. We have
retained the proposed provision for physical alterations without taking
any further position on whether specific practices are allowed or
prohibited. We did not receive substantial new
[[Page 80573]]
guidance on techniques to measure stress in animals due to physical
alterations and have made no revisions in that regard. The final rule
establishes that, when appropriately performed and within the context
of an overall management system, specific physical alterations are
allowed. It also mandates that, as an element of a preventative health
care program, physical alterations must benefit the ultimate physical
and psychological welfare of the affected animal.
(4) Withdrawal for Synthetic Parasiticides in Lactating Livestock.
The proposed rule required a 90-day withdrawal period before milk and
milk products produced from livestock treated with an allowed synthetic
parasiticide could be labeled as organic. Referencing the statement in
the preamble to the proposed rule that the 90-day withdrawal period was
attributable to ``consumer expectations of organically raised
animals,'' a dairy producer commented that the provision ignored animal
welfare and farm economic sustainability considerations. The commenter
considered the 90-day withdrawal period capricious and problematic
since, for bovine dairy operations, it would compel producers to either
shorten an animal's natural drying off period, or lose 30 days of
organic milk production. The commenter stated that the optimal extended
withdrawal period for this situation would be 60 days since this is the
approximate duration of a dairy cow's natural dry period. Under this
approach, livestock requiring treatment could receive an allowed
synthetic parasiticide at the time of drying off, thus allowing the
withdrawal period to coincide with the natural 60-day period when the
livestock were not lactating. Livestock could complete the withdrawal
period prior to the birth of their offspring in approximately 60 days,
at which time the mother's milk could again be sold as organic. The
commenter maintained that the 60-day period would satisfy consumer
expectation for an extended withdrawal period after treatment with an
allowed synthetic parasiticide without imposing an unnecessary
constraint on the producer.
We have retained the 90-day withdrawal period in the final rule.
The provisions in the final rule for treating livestock with an allowed
synthetic parasiticide reflect the 90-day withdrawal period recommended
by the NOSB at its October 1999 meeting. The NOSB has the authority to
reconsider this issue and propose an alternative annotation for the
Secretary's consideration.
(5) Delineation of Space Requirements for Animal Confinement. The
proposed rule did not establish space requirements for livestock living
conditions but stated that a producer must accommodate the health and
natural behavior of animals under his or her care. Some commenters
stated their preference for space requirements because they are more
uniform and enforceable. These commenters stated that some existing
certification standards include space requirements in standards for
livestock living conditions and that Codex guidelines support this
approach. While not disagreeing that space requirements could be an
effective certification tool for organic livestock production systems,
we have not incorporated any such provisions in the final rule. We
anticipate that additional NOSB recommendations and public comment will
be necessary for the development of space requirements. At its June
2000 meeting, the NOSB agreed that it would be premature to include
space requirements in the final rule.
(6) Access to pasture versus pasture-based. Commenters stated that
the proposed rule's requirement that ruminants receive ``access to
pasture'' did not sufficiently characterize the relationship that
should exist between ruminants and the land they graze. Many of these
commenters recommended that the final rule require that ruminant
production be ``pasture-based.'' Many commenters stated that the final
rule needed a more explicit description of the relationship between
livestock and grazing land. The NOSB shared this perspective and
recommended that the final rule require that ruminant production
systems be ``pasture-based.'' In contrast, an organic dairy producer
maintained that a uniform, prescriptive definition of pasture would not
be appropriate in a final rule. This commenter stated that the
diversity of growing seasons, environmental variables, and forage and
grass species could not be captured in a single definition and that
certifying agents should define pasture on a case-by-case basis. This
commenter also disagreed with the ``pasture-based'' requirement,
stating that pasture should be only one of several components of
balanced livestock nutrition. Singling out pasture as the foundation
for ruminant management would distort this balance and deprive other
producers of the revenue and rotation benefits they generate by growing
livestock feed.
We retained the ``access to pasture'' requirement because the term,
``pasture-based,'' has not been sufficiently defined to use for
implementing the final rule. The final rule does include a definition
for pasture, and retention of the ``access to pasture'' provision
provides producers and certifying agents with a verifiable and
enforceable standard. The NOP will work with the NOSB to develop
additional guidance for managing ruminant production operations.
(7) Stage of Production. The proposed rule contained provisions for
temporary confinement, during which time livestock would not receive
access to the outdoors. Many commenters were concerned that the stage-
of-production justification for temporary confinement could be used to
deny animals access to the outdoors during naturally occurring life
stages, including lactation. Commenters overwhelmingly opposed such an
allowance and stated that the stage of production exemption should be
narrowly applied. One commenter stated that a dairy operation, for
example, might have seven or eight distinct age groups of animals, with
each group requiring distinct living conditions. Under these
circumstances, the commenter maintained that a producer should be
allowed to temporarily house one of these age groups indoors to
maximize use of the whole farm and the available pasture. At its June
2000 meeting, the NOSB stated that the allowance for temporary
confinement should be restricted to short-term events such as birthing
of newborn or finish feeding for slaughter stock and should
specifically exclude lactating dairy animals.
We have not changed the provision in the final rule for the stage-
of-production allowance in response to these comments. The NOSB has
supported the principle of a stage-of-production allowance but has not
provided sufficient guidance for determining, on a species-specific
basis, what conditions would warrant such an allowance. Without a
clearer foundation for evaluating practices, we have not identified any
specific examples of practices that would or would not warrant a stage-
of-production allowance. We will continue to explore with the NOSB
specific conditions under which certain species could be temporarily
confined to enhance their well-being.
In the final rule, temporary confinement refers to the period
during which livestock are denied access to the outdoors. The length of
temporary confinement will vary according to the conditions on which it
is based, such as the duration of inclement weather. The conditions for
implementing temporary confinement for livestock do not minimize the
producer's ability to
[[Page 80574]]
restrain livestock in the performance of necessary production
practices. For example, it is allowable for a producer to restrain
livestock during the actual milking process or under similar
circumstances, such as the administration of medication, when the
safety and welfare of the livestock and producer are involved.
Handling--Changes Based on Comments
The following changes are made based on comments received.
(1) Commercial Availability. A large number of commenters,
including organic handlers and certifying agents, stated that
``commercial availability'' must be included as a requirement for the 5
percent of nonorganic ingredients that are used in products labeled
``organic.''
We agree and have added a commercial availability requirement as
part of a handler's organic system plan under section 205.201 of this
subpart. Up to 5 percent (less water and salt) of a product labeled
``organic,'' may be nonorganic agricultural ingredients. However,
handlers must document that organic forms of the nonorganic ingredients
are not commercially available before using the nonorganic ingredients.
(2) Prohibited Practices. Commenters were unclear about the extent
of the prohibition on use of excluded methods and ionizing radiation.
To make that prohibition clear, we have moved the handling prohibitions
in proposed rule sections 205.270 (c) to 205.105, Applicability,
subpart B. Paragraphs (c)(1) and (c)(2) which listed excluded methods
and ionizing radiation in the proposed rule are combined into paragraph
(c)(1) that cross-references new section 205.105.
(3) Use of Predator Pests and Parasites. Paragraph (b)(1) of
section 205.271 proposed that predator pests and parasites may be used
to control pests in handling facilities. Under FDA's Good Manufacturing
Practice, 21 CFR part section 110.35(c), it states that ``No pests
shall be allowed in any area of a food plant.'' Some commenters
believed use of predator pests in handling facilities is prohibited by
the FDA regulation. Other commenters stated that predator pests could
be used in certain handling facilities under the FDA regulation. One
commenter claimed that the FDA regulation in 21 CFR part 110.19 allows
exemptions for certain establishments that only harvest, store, or
distribute raw agricultural product. Another commenter suggested that
use of predator pests should be allowed when FDA does not prohibit
their use.
We do not intend to be inconsistent with the FDA requirement and,
thus, have removed proposed paragraph (b)(1) of section 205.271. Use of
predator pests in various organic handling and storage areas is subject
to FDA's Good Manufacturing Practice. Paragraphs (b)(2) and (b)(3) are
redesignated.
(4) Use of Synthetic Pheromone Lures. Proposed paragraph (b)(3)
provided for use of nonsynthetic lures and repellant. A few handlers
and certifying agents commented that nearly all pheromone lures use
synthetic substances. Because pheromone lures do not come into contact
with products in a handling facility, commenters argued that such lures
should be allowed, provided that the synthetic substance used is on the
National List.
We agree and have added ``synthetic substances'' to redesignated
paragraph (b)(2) for use in lures and repellents. The synthetic
substances used must be consistent with the National List.
(5) Restrict Initial Use of Synthetics to National List Substances.
Paragraph (c) in the proposed rule provided for use of any synthetic
substance to prevent or control pests. Several handlers and certifying
agents stated that use of nonsynthetic and synthetic substances should
initially be limited first to substances which are allowed on the
National List. This would mean that substances not allowed for use on
the National List could not be used initially to control or prevent
pest infestations.
We agree with these comments. Use of allowed substance before use
of other substances is a fundamental principle of organic agriculture.
Therefore, if preferred practices under paragraphs (a) and (b) are not
successful in preventing or controlling pest infestations, handlers may
then use, under amended paragraph (c), only nonsynthetic or synthetic
substances which are allowed for use on the National List.
We have removed the proviso that applications of a pest control
substance must be consistent with the product's label instructions.
This requirement is readily understood and does not need to be
explicitly stated in the regulations.
Because paragraph (c) now provides for use only of allowed National
List substances, a new paragraph (d) is added to allow for use of other
synthetic substances, including synthetic substances not on the
National List, to prevent or control pest infestations. These
substances may be used only if the practices in paragraphs (a), (b),
and (c) are ineffective. Before the substance is used, the handler and
the operation's certifying agent must agree on the synthetic substance
to be used and the measures to be taken to prevent contact of the
substance with organic products and ingredients in the facility. We
expect that this communication can be accomplished with telephone calls
or by electronic means.
This regulation does not preempt Federal, State, or local health
and sanitation requirements. We recognize that inspectors who monitor
compliance with those regulations may require immediate intervention
and use of synthetic substances, not on the National List, before or at
the same time as the methods specified in paragraphs (b) and (c).
Therefore, to make this clear, we have added a new paragraph (f). To
ensure that the use of the substances does not destroy a product's
organic integrity, we are requiring that the handler take appropriate
measures to prevent contact of the product with the pest control
substance used.
(6) Preventing Contact with Prohibited Substances. Commenters
recommended that, if prohibited substances are applied by fogging or
fumigation, the organic product and packaging material must be required
to be completely removed from the facility and reentry of the product
or packaging be delayed for a period three times longer than that
specified on the pesticide label. Commenters believed removal and
reentry should be mandatory, regardless of the organic product or
container.
We understand the commenters' concerns. However, their
recommendations are not appropriate for all pest infestations. We
believe that measures needed to be taken to prevent contact with a
synthetic substance must be determined on a case-by-case basis by the
handler and certifying agent. As stated earlier, new paragraph (d) of
section 205.271 requires a handler and certifying agent to agree on
control and prevention measures prior to application of a synthetic
substance. We believe that such an agreement will help safeguard a
product's organic integrity. Use of a synthetic substance in fogging or
fumigation should be based on, among other things, location of the pest
relative to the organic products in the facility; the extent of the
pest infestation; the substance and application method to be used; the
state of the organically produced product or ingredient (raw,
unpackaged bulk, canned, or otherwise sealed); and health and
sanitation requirements of local, State, and Federal authorities.
Paragraph (e) is changed to clarify that an operation's organic
handling plan must be updated to document all measures taken to prevent
contact between synthetic pest control
[[Page 80575]]
substances and organically produced products and ingredients.
(7) Repetitive Use of Pest Control Measures. One commenter
suggested a change in the paragraph (e) requirement that handlers'
organic plans must include ``an evaluation of the effects of repetitive
use'' of pest prevention and control materials. The commenter believed
that the requirement was excessive and beyond what should be expected
of handlers. The commenter indicated that handlers' organic plans
should address the ``techniques that will be used to minimize'' the
negative effects of repetitive use of pest control materials.
We agree that ``an evaluation of the effects of repetitive use'' is
more than what is reasonable to expect of handlers in their organic
plans. We do not agree, however, that an organic plan should be
required to address the ``techniques'' used to minimize the effects of
repetitive use of pest control materials. However, we believe that
handlers should update their organic handling plans to account for the
use of pest control or prevention substances, particularly if the
substances are prohibited substances. The update should include a
description of the application methods used and the measures taken to
prevent contact between the substance used and the organic product. We
have added these requirements in redesignated paragraph (e). Proposed
paragraph (e) of section 205.271 is removed.
Handling--Changes Requested But Not Made
(1) Exceptions to Handling Processes. A commenter stated that many
herbal products are extracted from organically produced herbs but that
the extraction of those products ``can employ significantly different
methods than those used in the manufacture of more traditional foods.''
To be labeled as ``organic'' ingredients, substances such as herbs,
spices, flavorings, colorings, and other similar substances, must be
derived from a certified organic source and be extracted without the
use of prohibited substances.
(2) Allowed Synthetics Used in Packaging Materials and Storage
Containers. A State department of agriculture commented that section
205.272(b)(1) prohibits use of synthetic fungicides, preservatives, or
fumigants in packaging materials and storage containers or bins. The
comment stated that it is inconsistent to permit use of allowed
substances as ingredients in processed products but prohibit their use
as a preservative or fumigant in the packaging materials and storage
containers and bins. The commenter suggested that paragraph (b)(1) be
amended to permit use of National List-allowed substances in section
205.605, particularly carbon dioxide and ozone, in packaging materials
and storage containers or bins.
We understand the commenter's concern. However, section 6510(a)(5)
of the Act specifically prohibits use of any packaging materials,
storage containers, or bins that contain synthetic fungicides,
preservatives, or fumigants.
(3) Additional Measures to Prevent Product Contamination. A few
commenters suggested changing paragraph (e) of section 205.271 to
require that handlers' organic handling plans specify measures that
would be taken to prevent contact between a pest control substance and
``packaging materials.'' This would be in addition to measures
preventing contamination of ``any ingredient or finished product'' in
the handling facility.
We understand the commenters' objective. However, for the reasons
stated earlier in regard to commenters' request that mandatory removal
of product during pest control treatment be required, we believe that
such a requirement should not be mandatory for all packaging materials.
Measures to prevent contamination of packaging material should be left
to the handler and certifying agent to specify in the handling plan.
Handling--Clarifications
Clarification is given on the following issues raised by
commenters.
(1) Use of Nonorganic Ingredients in Processed Products. We have
corrected paragraph (c) of section 205.270 to clarify what must not be
used in or on organically produced ingredients and nonorganically
produced ingredients used in processed organic products. The
prohibition on use of ionizing radiation, excluded methods, and
volatile synthetic solvents applies to all organically produced
ingredients. The 5 percent of nonorganic ingredients in products
labeled ``organic,'' also are subject to the three prohibited
practices. The nonorganic ingredients in products labeled ``made with
organic ingredients'' must not be produced using ionizing radiation or
excluded methods but may be produced using volatile synthetic solvents.
The nonorganic ingredients in products containing less than 70 percent
organically produced ingredients may be produced and processed using
ionizing radiation, excluded methods, and synthetic solvents.
(2) Water Quality Used in Processing. A handler questioned whether
public drinking water containing approved levels of chlorine, pursuant
to the Safe Drinking Water Act, is acceptable for use in processing
products labeled ``100 percent organic.'' Water meeting the Safe
Drinking Water Act may be used in processing any organically produced
products.
Temporary Variances--Changes Based on Comments
Additional Causes for Issuing Temporary Variance. A few State
department of agriculture commenters suggested that ``drought'' should
be added to the regulatory text as a natural disaster warranting a
temporary variance from regulations.
We agree and have added drought to the regulatory text in paragraph
(a)(2) of section 205.290. We have also added ``hail'' as a natural
disaster warranting a temporary variance. Both drought and hail were
mentioned in the preamble of the proposed rule but were unintentionally
left out of the regulatory text.
Temporary Variances--Changes Requested But Not Made
Allowance of Temporary Variances. A few commenters suggested that
SOP's governing State officials should be able to authorize temporary
variances due to local natural disasters which may occur in a State. We
do not agree that with these comments. For consistency of application,
we believe that only the Administrator should have the authority to
grant a temporary variance. Citing local conditions, an SOP's governing
State official and certifying agents may recommend a temporary variance
to the Administrator. We are committed to providing quick responses to
such recommendations.
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
(pdp), information panel, ingredient statement, and on other package
panels. Labeling requirements also are established for organically
produced livestock feed, for containers used in shipping and storing
organic
[[Page 80576]]
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 established. Finally, this subpart provides for a USDA seal and
regulations for display of the USDA seal and the seals, logos, or other
identifying marks of certifying agents.
The intent of these sections is to ensure that organically produced
agricultural products and ingredients 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
other Federal labeling regulations. The Food and Drug Administration
(FDA) regulates the placement of information on food product packages
in 21 CFR parts 1 and 101. USDA's Food Safety and Inspection Service's
(FSIS) Federal Meat Inspection Act, Poultry Products Inspection Act,
and Egg Products Inspection Act have implementing regulations in 9 CFR
part 317 which must be followed in the labeling of meat, poultry, and
egg products. The Federal Trade Commission (FTC) regulations under the
Fair Packaging and Labeling Act (FLPA) in 16 CFR part 500 and the
Alcohol Tobacco and Firearms (ATF) regulations under the Federal
Alcohol Administration Act (FAA) in 27 CFR parts 4, 5, and 7, also must
be followed, as applicable to the nature of the product. The labeling
requirements specified in this subpart must be implemented in a manner
so that they do not conflict with the labeling requirements of these
and other Federal labeling requirements.
While this regulation does not require labeling of an organic
product as organic, we assume that producers and handlers choose to
label their organic products and display the USDA seal to the extent
allowed in these regulations. They do this to improve the marketability
of their organic product.
Under the National Organic Program (NOP), the assembly, packaging,
and labeling of multiingredient organic products 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. Based on
comments received, several important labeling changes from the proposed
rule are made in this final rule. (1) The term, ``organic,'' cannot be
used in an agricultural product name if it modifies an ingredient that
is not organically produced (e.g., ``organic chocolate ice cream'' when
the chocolate flavoring is not organically produced). (2) The 5 percent
or less of nonorganic ingredients in products labeled ``organic'' must
be determined not ``commercially available'' in organic form. (3)
Display of a product's organic percentage is changed from required to
optional for ``organic'' and ``made with * * *'' products. (4) The
minimum organic content for ``made with * * *'' products is increased
from 50 percent to 70 percent. (5) In addition to listing individual
ingredients, the ``made with * * *'' label may identify a food group on
the label (``made with organic fruit''). (6) A new section is added to
provide labeling of livestock feed that is organically produced. (7)
Finally, a revised design for the USDA seal is established. In addition
to these changes, we have made a few changes in the regulatory text for
clarity and consistency purposes. These do not change the intent of the
regulation.
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 produce and label
organic ingredients and/or assemble multiingredient products composed
of 70 percent or more organic ingredients must be certified as an
organic handling operation. Handlers of products of less than 70
percent organic ingredients do not have to be certified unless the
handler actually produces one or more of the organic ingredients used
in the 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 an organic product
package are subject to recordkeeping requirements which show proof that
the product purchased prior to relabeling was, indeed, organically
produced and handled. Distributors which receive and transport labeled
product to market are not subject to certification or any labeling
requirements of this regulation.
Many commenters appealed for ``transition'' or ``conversion''
labeling. This issue is discussed under Applicability in subpart B.
Transition labeling is not provided for in the Act or the proposed rule
and is not provided for in this regulation.
Description of Regulations
General Requirements
The general labeling principle employed in this regulation is that
labeling or identification of the organic nature of a product increases
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 establish the three percentage categories for organic
content and basic labeling requirements in those categories.
Section 205.300 specifies the general use of the term, ``organic,''
on product labels and market information. Paragraph (a) establishes
that the term, ``organic,'' may be used only on labels and in market
information as a modifier 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
or in market information for any purpose other than to modify or
identify the product or ingredient in the product that is organically
produced and handled. Food products and ingredients that are not
organically produced and handled cannot be modified, described, or
identified with the term, ``organic,'' on any package panel or in
market information in any way that implies the product is organically
produced.
Section 6519(b) of the Act provides the Secretary with the
authority to review use of the term, ``organic,'' in agricultural
product names and the names of companies that produce agricultural
products. While we believe that the term, ``organic,'' in a brand name
context does not inherently imply an organic production or handling
claim and, thus, does not inherently constitute a false or misleading
statement, we intend to monitor the use of the term in the context of
the entire label. We will consult with the FTC and FDA regarding
product and company names that may misrepresent the nature of the
product and take action on a case-by-case basis.
Categories of Organic Content
Section 205.301 establishes the organic content requirements for
different labeling provisions specified under this program. The type of
labeling and market information that can be used and its placement on
different panels of consumer packages and in market information is
based on the percentage of organic ingredients in the product. The
percentage must reflect the actual weight or fluid volume (excluding
water
[[Page 80577]]
and salt) of the organic ingredients in the product. Four categories of
organic content are established: 100 percent organic; 95 percent or
more organic; 70 to 95 percent organic; and less than 70 percent
organic.
100 Percent Organic
For labeling and market information purposes, this regulation
allows a ``100 percent organic'' label on: (1) agricultural products
that are composed of a single ingredient such as raw, organically
produced fruits and vegetables and (2) products composed of two or more
organically produced ingredients, provided that the individual
ingredients are, themselves, wholly organic and produced without any
nonorganic ingredients or additives. Only processing aids which are,
themselves, organically produced, may be used in the production of
products labeled ``100 percent organic.'' With the exception of the
description phrase ``100 percent'' on the pdp, the labeling
requirements for ``100 percent organic'' products are the same as
requirements for 95 percent organic products specified in section
205.303.
Organic
Products labeled or represented as ``organic'' must 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. Up to 5 percent of the ingredients may be nonagricultural
substances (consistent with the National List) and, if not commercially
available in organic form pursuant to section 205.201, nonorganic
agricultural products and ingredients in minor amounts (hereinafter
referred to as minor ingredients) (spices, flavors, colorings, oils,
vitamins, minerals, accessory nutrients, incidental food additives).
The nonorganic ingredients must not be produced using excluded methods,
sewage sludge, or ionizing radiation.
Made with 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 and salt) between 70 and 95 percent
organic agricultural ingredients. The organic ingredients must be
produced in accordance with subpart C and subpart G. Such products may
be labeled or represented as ``made with organic (specified ingredients
or food group(s)).'' By ``specified,'' we mean the name of the
agricultural product(s) or food group(s) forming the organic
ingredient(s). Up to three organically produced ingredients or food
groups may be named in the phrase.
If one or more food groups are specified in the phrase, all
ingredients in the product which belong to the food group(s) identified
on the label must be organically produced. For the purposes of this
labeling, the following food groups may be identified as organically
produced on a food package label: beans, fish, fruits, grains, herbs,
meats, nuts, oils, poultry, seeds, spices, sweeteners, and vegetables.
In addition, processed milk products (butter, cheese, yogurt, milk,
sour creams, etc.) also may be identified as a ``milk products'' food
group. For instance, a vegetable soup made with 85 percent organically
produced and handled potatoes, tomatoes, peppers, celery, and onions
may be labeled ``soup made with organic potatoes, tomatoes, and
peppers'' or, alternatively, ``soup made with organic vegetables.'' In
the latter example, the soup may not contain nonorganic vegetables. For
the purposes of this labeling provision, tomatoes are classified,
accordingly to food use, as a vegetable.
To qualify for this organic labeling, the nonorganic agricultural
ingredients must be produced and handled without use of the first three
prohibited practices specified in paragraph (f) of section 205.301, but
may be produced or handled using practices prohibited in paragraphs
(f)(4) through (f)(7).
Because of the length of the labeling phrase ``made with organic
(specified ingredients or food group(s)),'' such products are referred
to in this preamble as ``made with * * * '' products. The labeling
requirements for ``made with * * *'' products are specified in section
205.304.
Product With Less Than 70 Percent Organic Ingredients
The final labeling category covers multiingredient products with
less than 70 percent organic ingredients (by weight or fluid volume,
excluding water and salt). The organic ingredients must be produced in
accordance with subparts C and G. The remaining nonorganic ingredients
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 section 205.305.
Products that fail to meet the requirements for one labeling
category may be eligible for a lower labeling category. For example, if
a product contains wholly organic ingredients but the product
formulation requires a processing aid or less than 5 percent of a minor
ingredient that does not exist in organic form, the product cannot be
labeled ``100 percent organic'' and must be labeled as ``organic.'' If
a multiingredient product is 95 percent or more organic but contains a
prohibited substance in the remaining 5 percent, the product cannot be
labeled as ``organic,'' because of the presence of the prohibited
substance, but may be labeled as a ``made with * * *'' product.
Further, a handler who produces a ``100 percent organic'' or
``organic'' product but chooses not to be certified under this program
may only display the organic percentage on the information panel and
label the ingredients as ``organic'' on the ingredient statement. The
handler must comply with recordkeeping requirements in subpart E.
Livestock Feed
All agricultural ingredients used in raw and processed livestock
feed that is labeled as ``100 percent organic'' and ``organic'' must be
organically produced and handled in accordance with the requirements of
these regulations. The difference between the two labels is that feed
labeled as ``100 percent organic'' must be composed only of organically
produced agricultural ingredients and may not contain nonorganic feed
additives or supplements. The agricultural portion of livestock feed
labeled as ``organic'' must contain only organically produced raw and
processed agricultural ingredients and may contain feed additives and
supplements in conformance with the requirements of section 205.237.
Additionally, labeling of livestock feed containers must follow State
livestock feed labeling laws.
Prohibited Practices
The labeling of whole products or ingredients as organic is
prohibited if those products or ingredients are produced using any of
the following production or handling practices: (1) Ingredients or
processing aids produced using excluded methods; (2) ingredients that
have been produced using applications of sewage sludge; (3) ingredients
that have been processed with ionizing radiation; (4) synthetic
substances not 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 (except
the use of sulfites in the
[[Page 80578]]
production of wine); (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.
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, shows how use of the seven prohibited
practices affects the labeling of organically produced products and
ingredients used in those products.
Table 1.--Prohibited Production and Handling Practices for Labeling Categories
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Use nonorganic
Use ionizing Use substances not on Contain added ingredients and Use both organic
Organic and use label Use excluded methods Use sewage sludge radiation National List sulfites, nitrates, label ``when and nonorganic forms
nitrites available'' of same ingredient
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
``100 percent organic'': Single/ NO................... NO................... NO................... NO................... NO................... NO.................. NO
multiingredients completely
organic.
``Organic'':
Organic ingredients (95% or NO................... NO................... NO................... NO................... NO................... NO.................. NO
more).
Nonorganic ingredients (5% or NO................... NO................... NO................... NO................... NO................... NO.................. NO
less).
``Made with organic
ingredients'':
Organic ingredients (70-95%). NO................... NO................... NO................... NO................... NO--except wine...... NO.................. NO
Nonorganic ingredients (30% NO................... NO................... NO................... OK................... OK................... NA*................. NA*
or less).
Less-than 70% organic
ingredients:
Organic ingredients (30% or NO................... NO................... NO................... NO................... NO--except wine...... NO.................. NO
less).
Nonorganic ingredients (70% OK................... OK................... OK................... OK................... OK................... NA*................. NA*
or more).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
* Not applicable, provided that the nonorganic ingredient is not labeled as ``organic'' on the ingredient statement and is not counted in the calculation of the product's organic percentage.
Calculating the Percentage of Organic Ingredients
Section 205.302 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 calculation is made by the handler at the time the
finished product is assembled.
The organic percentage of liquid products and liquid ingredients is
determined based on the fluid volume of the product and ingredients
(excluding water and salt). When a product is identified on the pdp or
the information panel as being reconstituted with water from a
concentrate, the organic content is calculated on the basis of a
single-strength concentration.
For products that contain organically produced dry and liquid
ingredients, the percentage of total organic ingredients is based on
the 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 such 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.
At the discretion of the handler, the total percentage of all
organic ingredients in a food product may be displayed on any package
panel of the product with the phrase, ``contains X percent organic
ingredients,'' or a similar phrase. If the total percentage is a
fraction, it must be rounded down to the nearest whole number. The
percentage of each organic ingredient is not required to be displayed
in the ingredient statement.
A certified operation that produces organic product may contract
with another operation to repackage and/or relabel the product in
consumer packages. In such cases, the repacker or relabeler may use
information provided by the certified operation to determine the
percentage of organic ingredients and properly label the organic
product package consistent with the requirements of this subpart.
Labeling ``100 Percent Organic'' and ``Organic'' Products
Section 205.303 includes optional, required, and prohibited
practices for labeling agricultural products that are ``100 percent
organic'' or ``organic.'' Products that are composed of wholly organic
ingredients may be identified with the label statement, ``100 percent
organic,'' on any package panel. Products composed of between 95 and
100 percent organic ingredients may be identified with the label
statement ``organic'' on any package panel, and the handler must
identify each organic ingredient in the ingredient statement.
The handler may display the following information on the pdp, 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;
and (2) for products labeled ``organic,'' the percentage of organic
ingredients in the product. The size of the percentage statement must
not exceed one-half the size of the largest type size on the panel
[[Page 80579]]
on which the statement is displayed. It also must appear in its
entirety in the same type size, style, and color without highlighting;
(3) the USDA seal; and (4) 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 finished product 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.
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.
If a product is labeled as ``100 percent organic'' the ingredients
may be identified with the term, ``organic,'' but will 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, each organically
produced ingredient listed in the ingredient statement must be
identified with the term, ``organic,'' or an asterisk or other mark to
indicate that the ingredient is organically produced. Water and salt
cannot be identified as ``organic'' in the ingredient statement.
The handler of these products also must display on the information
panel the name of the certifying agent which certified the handling
operation that produced the finished product. The handler may include
the business address, Internet 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 or food
group(s))''
With regard to agricultural products ``made with * * *''--those
products containing between 70 and 95 percent organic ingredients--this
rule establishes, in section 205.304, the following optional, required,
and prohibited labeling practices.
Under optional practices, the ``made with * * *'' statement is used
to identify the organically produced ingredients in the product. The
statement may be placed on the pdp and other panels of the package. The
same statement can also be used in market information representing the
product. However, the following restrictions are placed on the
statement: (1) The statement may list up to three ingredients or food
group commodities that are in the product; (2) the individually
specified ingredients and all ingredients in a labeled food group must
be organically produced and must be identified as ``organic'' in the
ingredient statement on the package's information panel; (3) 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 pdp;
and (4) the statement and optional display of the product's organic
percentage must appear in their entirety in the same type size, style,
and color without highlighting.
The following food groups can be specified in the ``made with''
labeling statement: fish, fruits, grains, herbs, meats, nuts, oils,
poultry, seeds, spices, sweeteners, and vegetables. In addition,
organically produced and processed butter, cheeses, yogurt, milk, sour
cream, etc., may be identified as a ``milk products'' food group. For
the purposes of this labeling, tomatoes are considered as vegetables,
based on their use in a product. As noted immediately above, all of a
product's ingredients that are in the specified food group(s) must be
organically produced.
Display of the ``made with * * *'' statement on other panels must
be similarly consistent with the size of print used on those panels.
These restrictions are in accordance with FDA labeling requirements and
similar to the recommendations of the National Organic Standards Board
(NOSB). This provision helps assure that the ``made with * * *''
statement is not displayed in such a manner as to misrepresent the
actual organic composition of the product.
The USDA seal may not be displayed on the pdp of products labeled
``made with organic ingredients.'' However, at the handler's option and
consistent with any contract agreement between the organic producer or
handler and the certifying agent, the certifying agent's seal or logo
may be displayed on the pdp and other package panels.
Packages of ``made with * * *'' products may display on the pdp,
information panel, or any package panel, the total percentage of
organic ingredients in the product. Any organically produced
ingredient, including any ingredient that is a member of a food group
listed on the ``made with * * *'' statement, must be identified in the
ingredient statement with the term, ``organic.'' Alternatively, an
asterisk or other mark may be placed beside each organically produced
ingredient in the ingredients statement with an explanation that the
mark indicates the ingredient is organically produced.
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. The handler may include the
business address, Internet address, or telephone number of the
certifying agent which certified the handler of the finished product.
If the percentage of organic ingredients in the product is
displayed, the handler who affixes the label to the product package is
responsible for determining the percentage. The handler may use
information provided by the certified operation in determining the
percentage. As part of the certifying agent's annual certification of
the handler, the certifier must verify the calculation and labeling of
packages.
Labeling Products With Less Than 70 Percent Organic Ingredients
Section 205.305 covers the final labeling category of packaged
multiingredient agricultural products containing less than 70 percent
organic ingredients.
Handlers of ``less than 70 percent'' multiingredient products, who
choose to declare the organic nature of their product, may do so only
in the ingredient statement by identifying the organically produced
ingredients with the term, ``organic,'' or with an asterisk or other
mark. If the handler identifies the ingredients that are organically
produced, the handler also may declare the percentage of organic
content in the product. The percentage may only be placed on the
information panel so that it can be viewed in relation to the
ingredient statement.
Processed products composed of less than 70 percent organic content
cannot display the USDA seal or any certifying agent's organic
certification seal or logo anywhere on the product package or in market
information.
Handlers of such products are subject to this regulation in the
following ways. Those handlers who only purchase organic and nonorganic
ingredients and
[[Page 80580]]
assemble a finished product of less than 70 percent organic content do
not have to be certified as organic handlers. However, they are
responsible for appropriate handling and storage of the organic
ingredients (section 205.101(a)(3)) and for maintaining records
verifying the organic certification of the ingredients used in the
product (section 205.101(c)). To the extent that the packaging process
includes affixing the label to finished product package, those handlers
are responsible for meeting the labeling requirements of this subpart.
The nonorganic ingredients may be produced, handled, and assembled
without regard to the requirements of this part.
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'' (optional). product, identify organic''
or processed product). (optional). Certifying agent each ingredient (optional).
USDA seal and name (required); as ``organic'' USDA seal and
certifying agent business/Internet (optional). certifying agent
seal(s) address, tele. seal(s)
(optional). No. (optional). (optional).
``Organic'' (95% or more organic ``Organic'' (plus ``X% organic'' Identify organic ``X% organic''
ingredients). product name) (optional). ingredients as (optional).
(optional). Certifying agent ``organic'' USDA seal and
``X% organic'' name (required); (required if certifying agent
(optional) USDA business/Internet other organic seal(s)
seal and address, tele. labeling is (optional).
certifying agent No. (optional). shown).
seal(s)
(optional).
``Made with Organic ``made with ``X% organic Identify organic ``made with
Ingredients'' (70 to 95% organic ingredients'' ingredients as organic
organic ingredients). (ingredients or (optional). ``organic'' (ingredients or
food group(s))'' Certifying agent (required if food group(s))''
(optional). name (required); other organic (optional) ``X%
``X% organic'' business/Internet labeling is organic''
(optional). address, tele. shown). (optional).
Certifying agent No. (optional). Certifying agent
seal of final Prohibited: USDA seal of final
product handler seal. product handler
(optional). (optional).
Prohibited: USDA Prohibited: USDA
seal. seal.
Less-than 70% organic Prohibited: Any ``X% organic'' Identify organic Prohibited: USDA
ingredients. reference to (optional). ingredients as seal & certifying
organic content Prohibited: USDA ``organic'' agent seal.
of product. seal & certifying (optional)
Prohibited: USDA agent seal. (required if %
seal & certifying organic is
agent seal. displayed).
----------------------------------------------------------------------------------------------------------------
Misrepresentation in Labeling of Organic Products. The labeling
requirements of this final rule 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.
If terms or phrases are 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.
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 may misrepresent
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 labeled.
Moreover, ``pure,'' ``healthy,'' and other similar terms are
regulated by FDA and FSIS. These terms may be used only in accordance
with the labeling requirements of FDA and FSIS. The prohibition on use
of these terms to modify ``organic'' does not otherwise preclude their
use in other labeling statements as long as such statements are in
accordance with other applicable regulations. Representations made in
market information for organic products are also subject to the
requirements and restrictions of other Federal statutes and applicable
regulations, including the Federal Trade Commission Act, 15 U.S.C. 45
et seq.
Labeling Organically Produced Livestock Feed Products
New section 205.306 is added to provide for labeling of the two
categories of livestock feed that are organically produced under this
regulation. Feed labeled ``100 percent organic'' may contain only
organically produced agricultural product. Such feed must not contain
feed additives, supplements, or synthetic substances. Feed labeled
``organic'' must contain only organically produced agricultural
products and may contain feed additives and supplements in accordance
with section 205.237, Livestock Feed, and section 205.603 of the
National List. This rule does not limit the percentage of such
additives and supplements in organic feed products, which may be
required under various State laws.
Livestock feed labeled ``100 percent organic'' and ``organic'' may,
at the handler's option, display the USDA seal and the seal or logo of
the certifying agent. The organic ingredients listed on the ingredient
statement may be identified with the word, ``organic,'' or other
reference mark. The name of the certifying agent must be displayed on
the information panel. The business address, Internet address, and
other contact information for the certifying agent may be displayed.
These are the only labeling options to indicate that livestock feed
that is organically produced.
[[Page 80581]]
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 (EU) organic
standards. Such factual statements regarding the organic nature of the
product are 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 are 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 in
accordance with the requirements of the NOP may be shipped to
international markets without marking the shipping containers ``for
export only.''
Organically produced products imported into the United States must
be labeled in accordance with the requirements of this subpart.
Labeling and market representation of the product cannot imply that the
product is also certified to other organic standards or requirements
that differ from this national program.
Labeling Nonretail Containers
Section 205.307 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 *
* *'' Labeling nonretail containers as containing organically produced
product should provide 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 labeling provisions are not intended for shipping or
storage containers that also are used in displays at the point of
retail sale. Retail containers must meet labeling provisions specified
in section 205.307.
Containers used only for shipping and storage of any organic
product labeled as containing 70 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 available to handlers if they 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 product. Much of this information may
overlap information that the handler normally affixes to shipping and
storage containers or information that is required under other Federal
labeling regulations. There are no restrictions on size or display of
the term, ``organic,'' or the certifying agent seal unless required by
other Federal or State statutes.
Labeling Products at the Point of Retail Sale
Section 205.308 applies to organically produced ``100 percent
organic'' and ``organic'' products that are not packaged prior to sale
and are presented in a manner which allows the consumer to select the
quantity of the product purchased.
The terms, ``100 percent organic'' and ``organic,'' as applicable,
may be used to modify the name of the product in retail displays,
labeling, and market information. The ingredient statement of a product
labeled ``organic'' displayed at retail sale must identify the organic
ingredients. If the product is prepared in a certified facility, 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.
Section 205.309 addresses ``made with * * *'' products that are not
packaged prior to sale and are presented in a manner which allows the
consumer to select the quantity of the product purchased. These
products include, but are not limited to, multiingredient products
containing between 70 and 95 percent organic ingredients. The ``made
with * * *'' label may be used to modify the name of the product in
retail displays, labeling, and market information. Up to three organic
ingredients or food groups may be identified in the statement. If such
statement is declared in market information at the point of retail
sale, the ingredient statement and market information must identify the
organic ingredients. Retail display and market information of bulk
products cannot display the USDA seal but may, if the product is
prepared in a certified facility, display the seal or logo of the
certifying agent which certified the finished product. The certifying
agent's seal or logo may be displayed at the option of the retail food
establishment.
Products containing less than 70 percent organic ingredients may
not be identified as organic or containing organic ingredients at
retail sale. The USDA seal and any certifying agent seal or logo may
not be displayed for such products.
Labeling Products Produced in Exempt or Excluded Operations
Section 205.310 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. These operations are discussed
more thoroughly in subpart B, Applicability.
Any such operation that is exempt or excluded from certification or
which chooses not to be certified may not label its organically
produced products in a way which indicates that the operation has been
certified as organic. Exempt producers may market whole, raw organic
product directly to consumers, for example, at a farmers market or
roadside stand as ``organic apples'' or ``organic tomatoes.'' Exempt
producers may market their products to retail food establishments for
resale to consumers. However, no terms may be used which indicate that
such products are ``certified'' as organic. Finally, exempt organic
producers cannot sell their product to a handler for use as an
ingredient or for processing into an ingredient that is labeled as
organic on the information panel.
These provisions are truth in labeling provisions because display
of a certification seal indicates that the product has been certified.
We believe this requirement helps differentiate between certified and
uncertified products and helps maintain the integrity of certified
products while providing organic labeling opportunities for exempt and
excluded operations.
USDA Organic Seal
This final rule establishes a USDA seal that can be placed on
consumer packages, displayed at retail food
[[Page 80582]]
establishments, and used in market information to show that certified
organic products have been produced and handled in accordance with
these regulations. The USDA seal can only be used to identify raw and
processed products that are certified as organically produced. It
cannot be used for products labeled as ``made with organic
ingredients'' (70 to 95 percent organic ingredients) or on products
with less than 70 percent organic ingredients.
The USDA seal is composed of an outer circle around two interior
half circles with an overlay of the words ``USDA Organic.'' When used,
the USDA seal must be the same form and design as shown in figure 1 of
section 205.311 of this regulation. The USDA seal must be printed
legibly and conspicuously. On consumer packages, retail displays, and
labeling and market information, the USDA seal should be printed on a
white background in earth tones with a brown outer circle and separate
interior half circles of white (upper) and green (lower). The term,
``USDA,'' must appear in green on the white half circle. The term,
``organic,'' must appear in white on the green half circle. The handler
may print the USDA seal in black and white, using black in the place of
green and brown. Size permitting, the green (or black) lower half
circle may have four light lines running from left to right and
disappearing at the right horizon, to resemble a cultivated field. The
choice between these two color schemes is left to the discretion of the
producer, handler, or retail food establishment.
Labeling--Changes Based on Comments
The following changes are made based on comments received.
(1) Use of ``Organic'' in Product Names. The NOSB, State organic
program (SOP) managers, certifying agents, and a large number of
individual commenters strongly recommended that USDA prohibit use of
the term, ``organic,'' to modify an ingredient in a product name if the
ingredient, itself, is not produced organically. The examples offered
were ``organic chocolate ice cream'' and ``organic cherry sweets'' in
which the ice cream and candy are at least 95 percent organic but the
chocolate and cherry flavoring is not organically produced.
We agree with commenters that such product names can be misleading
and would be a violation of section 205.300(a). In the examples, the
word, ``organic,'' precedes the words, ``chocolate'' and ``cherry,''
and clearly implies that those ingredients are organically produced.
The chocolate and cherry flavorings must be organically produced to be
used in this way. If the product is at least 95 percent organically
produced but the flavoring is nonorganic, the word sequence must be
reversed or the word, ``flavored,'' must be added to the name; e.g.,
``chocolate organic ice cream'' or ``chocolate flavored organic ice
cream.'' A sentence has been added to section 205.300(a) to specify
that the term, ``organic,'' may not be used in a product name to
identify an ingredient that is not organically produced.
A similar comment was received asking how a single product with two
separately wrapped components can be labeled if one of the components
is organically produced and the other is not. The commenter's example
was a carrot and dip snack pack in which the carrots are organically
produced and the dip is a conventional product. Another example is
ready-to-eat tossed green salad in which the salad greens are
organically produced but the separately pouched salad dressing is a
nonorganic component of the product.
Such products also must be labeled in accordance with section
205.300(a). It would be misleading to label the snack pack ``organic
carrots and dip'' or ``organic green salad and ranch dressing,'' if the
dip and ranch dressing are not produced with organic ingredients. The
salad may be labeled ``organic green salad with ranch dressing.''
Section 6519(b) of the Act provides the Secretary with the
authority to take action against misuse of the term, ``organic.'' USDA
will monitor use of the term, ``organic,'' in product names and will
restrict use of the term in names that are determined to be
deliberately misleading to consumers. Such determinations must be made
on a case-by-cases basis.
(2) Labeling Livestock Feed. In the definition of ``agricultural
product,'' the Act includes product marketed for ``livestock
consumption.'' This means that NOP regulations have applicability to
livestock feed production. The Association of American Feed Control
Officials (AAFCO) and a few States departments of agriculture commented
that the proposed provisions conflict with widely followed standards
for livestock feed labeling. AAFCO's ``Model Bill and Regulation''
standards are incorporated in many State feed laws. The commenters
claimed that the requirement to identify organic ingredients in the
ingredient statement conflicts with feed regulations which prohibit
reference to an ingredient's ``quality or grade.'' They also claimed
that the percentage of organic content requirement is a quantitative
claim that must be verified by independent sources (e.g., sources other
than the certifying agent). The commenters suggested that a provision
be added to address labeling of commercial livestock feed.
We have added new paragraph (e) of section 205.301 which provides
for two kinds of feed that can be labeled as ``organic.'' The first is
feed that contains only organically produced agricultural ingredients
and contains no added nutrients or supplements. The second organic feed
category also must contain only organically produced agricultural
ingredients but may contain feed additives and supplements that are
needed to meet the nutritional and health needs of the livestock for
which the feed is intended. Feed labeled as ``organic'' must conform
with the requirements of section 205.237, Livestock feed. That section
provides that feed additives and supplements produced in conformity
with section 205.603 of the National List may be used. The NOP requires
that livestock under organic management must only be fed organically
produced agricultural ingredients.
We also have added new section 205.306 to address commenters'
labeling concerns. The new section provides for optional display of a
feed's organic percentage and optional identification of the feed
ingredients that are organically produced. The labeling requirements
are not intended to supersede the general feed labeling requirements
established in the FFDCA and those found under various State laws.
Handling processes, feed formulations and recordkeeping must be
sufficient to meet the requirements of applicable State regulations.
We believe the provisions in new paragraph (e) of section 205.301
on feed content and new section 205.306 on labeling will allow
livestock feed producers to produce and label organic livestock feed
that is in accordance with these regulations and State requirements.
(3) Organic Processing Aids. Several industry leaders and SOP
managers questioned whether the proposed rule intended to exclude the
use of certified organic processing aids in the creation of ``100
percent organic'' products. Commenters pointed out that a handler
should be able to use organically produced processing aids to create
products that are labeled as ``100 percent organic.'' The processing
aid can be a by-product of an organic agricultural product; e.g., a
filter made of rice hulls from organically produced rice. AMS concurs.
Accordingly, a change is made in paragraph (f)(4) of section 205.301 to
provide for use of
[[Page 80583]]
organically produced processing aids in products labeled ``100 percent
organic.''
To help clarify this and correct an incomplete reference in the
proposed rule preamble, we have changed the column heading of the
fourth prohibited practice in the preamble table 1.
(4) Content of ``100 Percent Organic Products.'' Certifying agents
and several industry commenters called attention to the regulatory text
of section 205.301(a) describing 100 percent organic products. They
argued that the proposed rule would allow products with one or more 95
percent-plus ``organic'' ingredients to be combined as components and
have the resulting product be labeled as ``100 percent organic.''
We did not intend to allow any ingredient that is less than 100
percent organic to be used in a product labeled ``100 percent
organic.'' To leave no doubt as to the nature of any product labeled
``100 percent organic,'' we have changed the wording of paragraph (a)
of section 205.301 to clarify that a multiingredient ``100 percent
organic'' product must be comprised entirely of 100 percent organic
ingredients.
(5) Labeling of Organic Percentage. We received many comments
requesting clearer display of a product's percentage of organic
content. Most suggested that any product containing less than 100
percent organic ingredients should be required to display the organic
percentage on the pdp. They argued that display of the organic
percentage on the front of the package would enable consumers to more
easily determine organic content, compare competing products, and make
better purchase decisions. The NOSB did not recommend display of
organic percentage on the pdp for all products containing organic
ingredients.
We also received several comments from handlers concerned that the
required display of a product's organic percentage can be a burden on
handlers. They stated that, to save packaging and printing costs,
handlers order bulk quantities of printed packages, labels, and other
printed marketing materials. When printed in advance of a growing
season and harvest, the handler may not be able to assemble a product
that is exactly consistent with the preprinted labeling information,
particularly the percentage of organic content. One commenter
representing a commodity association opposed the required percentage
labeling because the association believes consumers will not understand
any organic claim if a percentage of less than 100 percent is
displayed.
We believe that display of the percentage of organic content is
important product information that can be very helpful to consumers in
their purchase decisions. We also believe that the opportunity to
display the percentage content of organically produced ingredients can
be a positive factor in encouraging handlers to use more organic
ingredients in their multiingredient products. At the same time, we
understand the financial commitment involved in preprinting bulk
quantities of packages and labels well in advance of harvests, which
determine availability of needed ingredients.
This final rule implements changes in sections 205.303 and 205.304
for products labeled ``organic'' and ``made with organic ingredients.''
The requirement to display the percentage of organic content on the
information panel is removed. That requirement is replaced with
optional labeling of the product's organic percentage on the pdp or any
other package panels. This will allow those handlers to display the
percentage of their product's organically produced contents on the pdp
where it will be most immediately visible to consumers. Handlers who
cannot, with certainty, display their product's organic percentage or
who choose not to display the percentage, are not required to do so.
This revised labeling provision also removes the requirement in
section 205.305 that products with less than 70 percent organic content
display the product's organic percentage on the information panel.
Under this final rule, that percentage labeling is optional but is
still restricted to the information panel. The percentage of a less
than 70 percent organic product may not be displayed on the pdp and may
not be displayed if the organic ingredients are not identified in the
ingredient statement.
(6) Designation of Organically Produced Ingredients. A certifying
agent suggested that identification of organic ingredients in
ingredient statements should be allowed to be made with an asterisk or
similar mark, with the asterisk defined on the information panel. The
commenter stated that the repetitive use of the word, ``organic,'' may
cause space problems on some small packages and that use of a mark is a
common industry practice. We agree with the comment and have changed
sections 205.303(b)(1), 205.304(b)(1), and 205.305(a)(i) of the
regulatory text accordingly. Thus, organic ingredients may be
identified in the ingredient statement with either the term,
``organic,'' or an asterisk or other mark, provided that the asterisk
or other mark is defined on the information panel adjacent to the
ingredient statement.
(7) Minimum Organic Percentage for Labeling. In the proposed rule's
preamble, we asked for public comment on whether the 50 percent minimum
organic content for pdp labeling should be increased. The 50 percent
minimum content was established in section 6505(c) of the Act. However,
the Act also provides the Secretary with the authority to require such
other terms and conditions as are necessary to implement the program.
Thus, the minimum organic content level for pdp labeling could be
changed if the change would further the purposes of the Act.
Comments to the first (1997) proposal and to the revised proposed
rule suggested that the minimum organic content for labeling purposes
should be increased. All comments received, including comments from
certifying agents, a leading organic association, the EU and other
international commenters recommended that the minimum organic content
to qualify for pdp labeling should be raised to 70 percent, which is
the EU's minimum. All comments stated that the increase is necessary to
make the NOP standards consistent with international organic standards.
Commenters also pointed to advances in organic production and
processing technologies and to increases in the availability of
organically produced products and processed ingredients. These factors
should make it easier for handlers to assemble food products with
higher organic content.
We concur with the comments. We view this as a tightening of
labeling requirements in that pdp labeling now requires a higher
percentage of organic ingredients and makes the U.S. standard
consistent with international norms.
In the proposed rule's preamble, we also asked for specific public
comment on whether a minimum percentage of total product content should
be required for any single organic ingredient that is included in the
pdp statement ``made with organic (specified ingredients).'' No
commenters responded to this question. Therefore, no required minimum
percentage for a single organic ingredient in ``made with * * *''
products is established.
(8) ``Made With Organic (Specified Food Groups).'' Several industry
organizations suggested that, as an alternative to listing up to three
organic ingredients in the ``made with * * *'' label, the rule should
also allow for identification of food ``groups'' or ``classes'' of food
in the ``made with'' label. Commenters suggested, for instance, that a
soup (with 70 percent or
[[Page 80584]]
more organic ingredients, less water and salt) containing organically
produced potatoes, carrots, and onions may be labeled as ``soup made
with organic potatoes, carrots, and onions'' or, alternatively, ``soup
made with organic vegetables.''
We agree that this label option offers handlers of such
multiingredient products with more flexibility in their labeling. All
ingredients in the identified food group must be organically produced
and must be identified in the ingredient statement as ``organic.'' In
the above example, if soup also contains conventionally produced
cauliflower, only ``soup made with organic potatoes, carrots, and
onions'' can be displayed.
We also believe that some parameters must be established as to what
are considered as food groups or classes of food. For the purposes of
this regulation, products from the following food groups may be labeled
as ``organic'' in a ``made with * * *'' label: beans, fruits, grains,
herbs, meats, nuts, oils, poultry, seeds, spices, and vegetables. In
addition, organically produced and processed butter, cheeses, yogurt,
milk, sour cream, etc. may be combined in a product and identified as
``organic milk products.'' Organically produced and processed sugar
cane, sugar beets, corn syrup, maple syrup, etc. may be used in a
product and identified as ``organic sweeteners.''
Finally, to be consistent with the ``made with * * *'' labeling for
individual ingredients, up to three food groups can be identified in
the ``made with * * *'' statement. Section 205.304 is changed
accordingly.
(9) Labeling Products from Exempt and Excluded Operations. A change
is made in redesignated section 205.310 which provides for labeling of
organic products produced by exempt and excluded operations. SOP
managers and an organic handler pointed out that the preamble suggested
restrictions on labeling that would prevent exempt and excluded
operations from identifying their products as ``organic.'' After review
of the proposed rule, we have revised redesignated section 205.310 to
more clearly specify labeling opportunities for exempt operations. The
regulatory text more clearly states that such operations may not label
or represent their organic products as being ``certified'' as organic
and that such exempt and excluded operations must comply with
applicable production and handling provisions of subpart C. Labeling
must be consistent with the four labeling categories based on the
product's organic content.
A State organic advisory board recommended that proposed section
205.309 be revised to apply to exempt and excluded operations which
choose to be certified under this program. We do not believe it is
necessary to provide separate regulatory text for exempt and excluded
operations that are certified. An exempt operation is not precluded
from organic certification, if qualified.
(10) Redesigned USDA Seal. Leading industry members, certifying
agents, SOP managers, and many individual commenters opposed the
proposed wording and design of the USDA seal. Comments generally stated
the following points: (1) The proposed Seal wording indicates that USDA
is the certifying agent rather than accredited certifiers; (2)
international Organization for Standardization (ISO) Guide 61 prohibits
government bodies from acting or appearing as certifying agents; and
(3) The shield or badge design indicates a certification of product
``quality'' and assurance of safety which is inconsistent with the
NOP's claim to be a certification of ``process'' only. Commenters
suggested several alternative seal statements, including: ``Certified
Organic--USDA Accredited,'' ``Certified Organic--USDA Approved,''
``USDA Certified Organic Production,'' ``Meets USDA Organic Production
Requirements.''
Based on comments received, we are implementing a revised USDA seal
which is shown in the regulatory text under section 301.311. It is a
circular design with the words, ``USDA Organic.'' The color scheme is a
white background, brown outer circle, white and green inner
semicircles, and green and white words. A black and white color scheme
also may be used if preferred by the handler.
Some commenters suggested changing the shape of the USDA seal to a
circle or triangle which, they state, is more in keeping with
recognized recycling and sustainability logos. We did not choose a
triangle design because processors have commented that triangle designs
may cause tears in shrink wrap coverings at the points of the triangle.
Labeling--Changes Requested But Not Made
(1) ``Organic'' in Company Names. Many commenters stated that the
term, ``organic,'' must not be used as part of a company name if the
company does not market organically produced foods. They are concerned
that the term in a company name would incorrectly imply that the
product, itself, is organically produced.
While we understand commenter concerns, we do not know the extent
of the problem. We do not believe those concerns require such a
prohibition in the regulations at this time. These regulations may not
be the best mechanism to address the issue. Section 6519(b) of the Act
provides the Secretary with the authority to take action against misuse
of the term, ``organic.'' USDA will monitor use of the term,
``organic,'' in company names and will work with the FTC to take action
against such misuse of the term. These determinations must be made on a
case-by-case basis. The proposed rule did not specifically address this
issue. We have added a sentence to paragraph (a) of section 205.300 to
this effect.
(2) The ``100 Percent Organic'' Label. A large number of commenters
opposed the ``100 percent organic'' label for different reasons. A few
claimed that the label is not authorized under the Act. Several
commenters suggested that consumers will not understand the difference
between multiingredient products labeled ``100 percent organic'' and
``organic.'' Others raised the concern that the ``100 percent organic''
phrase to modify raw, fresh fruits and vegetables in produce sections
and farmers markets may be confusing to consumers.
Regarding the first comment, the term is not specifically provided
for in the Act. However, the Secretary has the authority under section
6506(a)(11) to require other terms and conditions as may be necessary
to develop a national organic program. When a product is wholly
organic, pursuant to the production and handling requirements of the
NOP, we believe the handler should have the option to differentiate it
from products which, by necessity, are less than 100 percent organic.
We believe the label meets the purposes of the Act.
Regarding consumer confusion, we believe consumers will understand
the difference between the two kinds of organic products and will make
their organic purchases accordingly.
Regarding the labeling of raw, fresh product as ``100 percent
organic,'' organically produced products can be labeled to a lower
labeling category. Raw, fresh fruits and vegetables which qualify for a
``100 percent organic'' label may be labeled simply as ``organic,'' if
the producer or retail operator believes that label is best for
marketing purposes.
(3) Explain Why Product Is Not 100 Percent Organic. A large number
of commenters also suggested any ``product that is less than 100
percent organic should carry that information on the main display panel
* * *'' By ``that information,'' we assume the commenters are referring
to the reasons
[[Page 80585]]
why a product cannot be certified as ``100 percent organic.''
AMS believes such a labeling requirement is impractical. Products
may fail to qualify for a ``100 percent organic'' label for very
technical, or little understood, reasons. Contemporary food processing
often uses ingredients, processing technologies, and product
formulations that are complicated, technical, and probably not of
interest to the general organic consumer. Such information is not
required on nonorganically produced products for the simple reason that
it is not considered useful to consumers. Explanations of the different
processing technologies used in food products would be cumbersome and
would interfere with other product labeling.
We believe the optional display of the organic percentage and
required identification of organic ingredients on the information panel
provides sufficient information for consumers to make purchase
decisions. Other descriptive information regarding processing
substances and procedures may, of course, be provided at the handler's
option and placed in accordance with other Federal labeling
requirements.
(4) Check the Appropriate Organic Category. One commenter suggested
that packages of organically produced product display a small box
listing the four organic label categories and a check mark beside the
category which fits the product.
We understand the simplicity and comparative nature of such a
standardized organic label that allows easy comparison of similar
products. However, we believe that the optional display of the
product's organic percentage and required identification of organic
ingredients will be more helpful to consumers and makes the grid box
redundant.
(5) Nonorganic Ingredients in Organic Products. A large number of
comments were received on the composition and use of nonorganic
ingredients in products labeled ``made with * * *'' and on conventional
products with less than 50 (now 70) percent organic ingredients.
Several industry commenters suggested that nonorganic ingredients in
``made with * * *'' products must be ``natural'' (nonsynthetic
agricultural substances) and not be artificially produced. Commenters
argued that all ingredients in ``made with * * *'' and less than 70
percent products should be produced in accordance with the prohibited
practices under sections 205.105 and 205.301(f). A significant number
of commenters opposed identification of organic ingredients in what
they called ``natural food'' products.
First, we do not agree that the nonorganic ingredients in ``made
with * * *'' products must be restricted to only ``natural'' products.
Such restrictions on the composition of nonorganic ingredients would
significantly reduce handlers' options in producing those products and,
thus, reduce consumers' options in purchasing products with organic
ingredients.
Regarding prohibited practices, this rule implements the strong
industry and consumer demand that the prohibited practices found under
section 205.105 (excluded methods, irradiation, and sewage sludge) not
be used in nonorganic ingredients in ``made with * * *'' products.
However, we do not believe that restrictions on use of the other
prohibited practices, found in section 205.301(f), would further the
purposes of the Act. Application of all prohibited practices on the
nonorganic ingredients in the ``made with * * *'' and less-than 70
percent organic products would essentially require that those products
be organically produced. The Act allows for products that are not
wholly organic. We believe the ``made with * * *'' label and the
labeling restrictions on the less-than 70 percent organic products
clearly states to consumers that only some of the ingredients in those
products are organically produced.
If accepted, these comments would unnecessarily restrict a
handler's ability to truthfully represent and market a conventionally
produced agricultural product with some organic ingredients. A handler
should not be prohibited from making a truthful claim about some
ingredients in a less than 70 percent organic product.
(6) Alternative ``Made With * * *'' Labels. A few SOP managers
commented that the phrase, ``made with * * *,'' is confusing. They
stated that many processed foods contain at least 50 percent organic
ingredients but do not make an organic claim on the pdp. They believe
the label would be less confusing if it stated a minimum organic
percentage rather than identifying the organic ingredients. They
suggest the labeling category be changed to ``contains at least 50
percent organic ingredients (or, as revised in this rule, ``contains at
least 70 percent organic ingredients'').
We disagree. Identification of up to three organically produced
ingredients or food groups on the pdp gives consumers useful, specific
information about the product's organic ingredients. This label,
combined with the optional display of the percentage content on the pdp
and required identification of organic ingredients, should provide
enough information for consumers to make good decisions.
A few commenters contended that the statement ``made with organic
(specified ingredients)'' is unclear and ``open ended'' and that
consumers may assume the entire product is organically produced. The
``made with * * *'' labeling claim refers only to the organic
ingredients and not to the whole product. We do not believe that
consumers will be confused by the label.
(7) Use of Other Terms as Synonymous for ``Organic''. A few
commenters representing international organic standards suggested that
use of the terms, ``biologic'' and ``ecologic,'' which are synonymous
with ``organic'' in other countries, should be allowed under the NOP.
Commenters claimed these terms are approved by Codex and their
inclusion in this regulation would facilitate international trade and
equivalency agreements.
These terms were addressed in the proposed rule and are not
accepted. Under the NOP, these terms may be used as eco-labels on a
product package but may not be used in place of the term, ``organic.''
Although such terms may be considered synonymous with ``organic'' in
other countries, they are not widely used or understood in this
country. We believe their use as synonymous for ``organic'' would only
lend to consumer confusion. Regarding the Codex labeling standard, we
point out that Codex also provides that terms commonly used in a
country may be used in place of ``biologic'' and ``ecologic.'' Thus,
the use of ``organic'' in the United States is consistent with Codex
standards.
With regard to the commenters' claim that the alternate labels
would facilitate international trade, this regulation allows
alternative labeling of products which are being shipped to
international markets. Thus, a certified organic operation in the
United States may produce a product to meet contracted organic
requirements of a foreign buyer, label the product as ``biologic'' or
``ecologic'' on the pdp consistent with the market preferences of the
receiving country, and ship the product to the foreign buyer.
Other terms were suggested by commenters as alternatives to the
term, ``organic,'' including ``grown by age-old, natural methods,''
``grown without chemical input,'' and ``residue Free.'' These phrases
may be consumer friendly but clearly do not convey the
[[Page 80586]]
extensive and complex nature of contemporary organic agriculture. These
phrases may be used as additional, eco-labels, provided they are
truthful labeling statements. They are not permitted as replacements
for the term, ``organic.''
(8) Reconstituted Organic Concentrates. A certifying agent objected
to paragraph (a)(2) of section 205.302, which allows labeling of an
organically produced concentrate ingredient which is reconstituted with
water during assembly of the processed product. The commenter claimed
that this provision gives consumers the message that reconstituted
juice is equivalent to fresh juice when, the commenter claims, it is
not the same.
AMS disagrees. This labeling is consistent with current industry
practices. The Act does not prohibit such labeling of concentrates. We
believe it is in the interest of the program to allow labeling of
organically produced concentrates, provided that the process to produce
the concentrate and the reconstitution process is consistent with
organic principles and the National List.
(9) Calculating Reconstituted Versus Dehydrated Weight. Several
comments were received regarding specific problems encountered in the
calculation of the percentage of organic content as provided under
section 295.302. A handler claimed the reconstituted weight of an
organically produced spice should be counted in the percentage
calculation rather than the dehydrated weight of the spice used in the
formulation. A similar comment was received from a food cooperative
suggesting that, if an organically produced concentrate (in powdered
form) is added to the same organically produced ingredient in its
organic liquid form (not from concentrate), then the product's organic
percentage should be calculated based on the concentrate's single-
strength reconstituted weight plus the weight of the natural organic
liquid.
AMS disagrees with these comments. This regulation provides for an
ingredient's weight to be calculated, excluding added water and salt.
If an organically produced spice is added to a product in its natural
form, the weight of the spice is calculated. If the spice ingredient is
in dehydrated, powdered form when added in the product formulation, the
dehydrated weight of the spice must be the basis for its percentage of
content calculation. If an organically produced dehydrated spice is
reconstituted with water prior to product assembly, the spice must
still be calculated at its dehydrated weight because percentage
calculations are based on the ingredient weight, excluding water and
salt. It would be misleading to calculate the weight of the concentrate
ingredient in its reconstituted form.
Likewise, if a powdered ingredient is added to the same organically
produced ingredient in its natural, liquid form, the weight of the
powdered ingredient must be used. Using the reconstituted weight of the
powdered ingredient would increase the percentage of the ingredient
above the actual weight of the ingredient in the product. We believe
that if the comment were accepted, the handler would be able to use
less natural organic liquid than the organic percentage and ingredient
statement indicates.
(10) Calculate Organic Percentage in Tenths of a Percent. A trade
organization suggested that the organic percentage be rounded to tenths
of one percent to accommodate products that may contain a minor
ingredient or additive that comprises less than 1 percent of the
product. The example provided was Vitamin D in milk. The comment
suggested that it is misleading to consumers to suggest that 1 percent
of a milk product is nonorganic when the Vitamin D additive may be
comprise only a few tenths of one percent of the product.
AMS disagrees. Rounding down the percentage to a whole number is
sufficient for consumer information and does not misrepresent the
product's organic content. A handler may add a qualifying statement
regarding the minor ingredient's weight in relation to the whole
product weight.
(11) Verifying Calculations. A State department of agriculture
comment suggested that the paragraph (c) of section 205.302 be revised
slightly to provide that percentage calculations must be verified ``to
the satisfaction'' of the certifying agent. The commenter believes that
the suggested language allows the handler the flexibility to determine
the number calculations that need to be checked in order to verify that
the organic percentage calculation is correct.
We do not believe the suggested change is necessary. We assume that
any use of a certifying agent's seal on a product means that the
certifying agent has checked and approves of the method of calculating
the product's organic percentage. If the calculations are not to the
certifying agent's satisfaction, the agent would not certify the
handling process.
While we appreciate the point made by the commenter, we do not
believe the suggested change means what the commenter intends.
Paragraph (c) of section 205.302 does not specify the number and
methods of calculations that need to be carried out by a certifying
agent because that will depend on the handling process being certified
and the ingredients in the product. We leave that to the discretion of
the certifying agent. Also, the basis for a product's organic
percentage calculation should be clarified in the organic plan. It is
assumed that the certifying agent will either be satisfied that the
methodology for calculating organic percentage is correct or the
methodology will be changed.
(12) Labeling Nonretail Shipping Containers. A few State
departments of agriculture commented that shipping and storage
containers with organic products should be required to be labeled as
containing organic product. Other commenters recommended that shipping
containers be required to display the name of the grower and the
certifying agent. They cite these requirements as current industry
practice.
This regulation does not require organic labeling on shipping and
storage containers because those containers are not used in the
marketplace. The only information required by the NOP is the production
lot number of the product, if a lot number exists for the particular
product. Product content and shipper information may be displayed, as
required by other Federal or State regulations or at the discretion of
the handler. Proper identification of the organic nature of a product
with special instructions for shipment or storage could prevent
exposure to prohibited substances that would lead to subsequent loss of
the shipment as an organic product.
(13) Disclaimers on Organic Products. Several commenters complained
that consumers are misled by the organic labeling and the NOP. They
claimed that when science-based technologies (genetic engineering,
irradiation, chlorination, etc.) are not used on products, the food is
less safe than conventionally produced foods. Some of the commenters
suggested that a disclaimer regarding food safety and nutritional value
be required on packages with organic labeling.
AMS disagrees. The USDA seal indicates only that the product has
been certified to a certain production and/or handling ``process'' or
``system.'' The seal does not convey a message of food safety or more
nutritional value. The NOP prohibitions on use of excluded methods,
ionizing radiation, sewage sludge, and some substances and materials
are not intended to imply that
[[Page 80587]]
conventionally produced products made by those methods or containing
those prohibited substances are less safe or nutritious than
organically produced products. We do not believe that organic food
packages or labeling should carry disclaimers of what the USDA seal or
a certifying agent's seal does not represent. Other Federal and State
seals and marketing claims are placed on consumer products, including
food products, without disclaimers regarding those seals and claims. A
disclaimer displayed in relation to USDA seal or a certifying agent's
seal would confuse consumers. Finally, disclaimer statements also would
present space problems on small product packages.
Labeling--Clarifications
Clarification is given on the following issues raised by
commenters:
(1) Certification Is to an Organic Process, Not Organic Product.
Several commenters suggested that the final rule more clearly state
that the NOP provides for certification of an organic process or system
of agriculture and not certification of products, themselves, as
``organic.'' They stated that the phrase ``* * * contain or be created
using * * *'' in paragraphs (a), (b), and (c) of section 205.301
implies certification of the product's content and not to the
processed-based, organic system of agriculture.
We agree and have revised the wording in those paragraphs to
clarify that such products must be organically produced in accordance
with organic production and handling requirement of this regulation.
(2) Phasing Out Use of Old Labels and Packages. Citing FDA
regulations, the NOSB, certifying agents, and some State agencies
suggested a minimum 18-month period for handlers to use up their
current supplies of packages and labels before complying with the new
labeling requirements.
This rule provides for an interim period of 18 months between
publication of the final rule and the implementation date of the
program. Publication of this final rule serves notice to certified
producers and handlers that they should begin planning for phasing out
use of labels that are not in accordance with these requirements.
The implementation process is discussed in Applicability, subpart
B. An organic operation will automatically be certified under this
program when its certifying agent is accredited by AMS. At that time,
the operation may begin following these labeling requirements but may
not display the new USDA seal until the implementation date. AMS
assumes that certifying agents and their client certified operations
will maintain frequent contact as to the status of the agent's
application for accreditation so that the certified operation may
schedule the phasing out of old labels and purchase of new labels and
packages. AMS expects to accredit all currently operating certifying
agents by the implementation date of this regulation. Stick-on labels
to comply with the new requirements are acceptable.
Newly established organic operations certified for the first time
must immediately begin using labels in accordance with this program.
(3) Labeling of Products With Minor Ingredients. Several commenters
questioned how the minor ingredients (spices, flavors, colorings,
preservatives, oils, vitamins, minerals, accessory nutrients,
processing aids, and incidental food additives) needed for formulation
or processing of many multiingredient products will be treated under
the ``100 percent organic'' and ``organic'' labeling categories.
Because minor ingredients may not exist or are difficult to obtain in
organic form, their use in a product can affect the labeling of the
product, even though the percentage of the ingredient is extremely
small compared to the rest of the product's ingredients.
Minor ingredients and processing aids must be treated as any other
ingredient or substance which is used as an ingredient in or in the
processing of an organically produced product. To be added as an
ingredient or used in the processing of a product labeled ``100 percent
organic,'' a minor ingredient must be extracted from a certified
organic source without the use of chemicals or solvents. To be added as
an ingredient or used in the processing of a product labeled
``organic,'' a minor ingredient must be from an organic agricultural
source, if commercially available. If not commercially available, the
ingredient must be an agricultural product or a substance consistent
with the National List.
(4) Reusing Containers. A commenter complained that small producers
should not be subjected to costly packaging and labeling requirements
when their products are sold directly to the public at farmers markets
and roadside stands. The commenter requested that small producers be
able to reuse retail boxes and labels. The commenter did not specify
which labeling provisions presented burdensome costs on small entities.
We agree that costs for exempt operations, indeed all organic
operations, should be kept to a minimum. NOP does not prohibit reuse of
containers provided their labeling does not misrepresent product and
does not allow organic product to come into contact with prohibited
substances from the container's previous contents.
(5) Clarifying Prohibited Labeling Practices. Commenters identified
a few inconsistencies between the preamble and regulatory text
regarding the seven prohibited production and processing practices now
specified in section 205.301(f). We have made the following changes to
clarify the intent of the regulation.
A commenter correctly pointed out that the regulatory text of
paragraph (f) incorrectly refers only to ingredients that cannot be
produced using the seven prohibited production and handling practices
listed in the paragraph. That text is not consistent with the preamble,
which correctly states that whole products, as well as ingredients,
labeled as ``organic'' cannot be produced or processed using the seven
prohibited practices. The term, ``whole products,'' is added to the
introductory sentence of new section 205.301(f).
A few commenters pointed out that all seven practices are
prohibited in the production of nonorganic ingredients used in products
labeled as ``organic.'' The second sentence of proposed paragraph (b)
of section 205.301 (products labeled ``organic'') incorrectly listed
only the first three prohibited practices. A phrase is added to the
introductory sentence of new paragraph (f) to specify that the 5
percent or less of nonorganic ingredients in products labeled as
``organic'' may not be produced or handled using any of the seven
prohibited practices.
Finally, with the addition of the commercial availability
requirement in section 205.201, a conforming change is needed in
section 205.301(f)(6) regarding use of nonorganic ingredients when
organically produced ingredients are available.
(6) Consistency with State Labeling Requirements. One State organic
association commented that the State's law requires identification of
the certifying agent if the term, ``certified organic,'' appears on the
label. The comment was not clear about where on the package the
certifier must be identified; e.g., with the ``certified organic'' term
on the pdp or anywhere on the package. The commenter did not
specifically suggest changing the labeling provisions to include the
certifying agent on the pdp.
This regulation allows a handler the option of displaying the
certifying agent's seal or logo on the pdp for products with 70 percent
or more
[[Page 80588]]
organically produced ingredients. This regulation also requires
identification of the certifying agent on the information panel of all
products containing 70 percent or more organically produced
ingredients. The identification must include an address or contact
information and be placed adjacent to identification of the
manufacturer, required by FDA. We believe these provisions are
sufficient to meet the State's labeling requirements. The NOP will be
available to consult with States regarding alternative labeling
required to be used in the State.
(7) Clarifying Labeling of Products in Other Than Packaged Form. We
have modified sections 205.308 and 205.309 to clarify that products in
other than packaged form at the point of retail sale that are prepared
by an exempt or excluded operation may be labeled as ``100 percent
organic,'' ``organic,'' or ``made with * * *'' as appropriate.
Consistent with the general restrictions on the labeling of products
from such operations, which are found in section 205.310, such products
may not display the USDA seal or any certifying agent's seal or other
identifying mark or otherwise be represented as a certified organic
product.
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. This certification process will be
carried out by accredited certifying agents.
Description of Regulations
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
production and handling areas, structures, and offices.
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 or food
group(s))'' 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 organic
program's (SOP) 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 an
application for certification to an accredited certifying agent. The
application 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. A certifying agent must accept all
production and handling applications that fall within its area(s) of
accreditation and certify all qualified applicants to the extent of its
administrative capacity to do so. In other words, a certifying agent
may decline to accept an application for certification when the
certifying agent is not accredited for the area to be certified or when
the certifying agent lacks the resources to perform the certification.
However, the certifying agent 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 noncompliances
identified in a previously received notification of noncompliance or
denial of certification. We anticipate that at a future date the
certifying agent 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, which shall be
conducted within a reasonable time, 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 initial
inspection may be delayed for up to 6 months to comply with the
requirement that the inspection be conducted when the land, facilities,
and activities that demonstrate compliance or capacity to comply can be
observed.
The certifying agent will conduct an initial on-site inspection of
each production unit, facility, and site that produces or handles
organic products and that is included in the applicant's
[[Page 80589]]
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 an authorized representative of
the operation 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 42d 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 operation who is knowledgeable about 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. At the time of the inspection, the inspector shall provide the
operation's authorized representative with a receipt for any samples
taken by the inspector. There shall be no charge to the inspector for
the samples taken.
The certifying agent shall, within a reasonable time, provide the
inspected operation with a copy of the on-site inspection report, as
approved by the certifying agent, for any on-site inspection performed
and provide the operation with a copy of the test results for any
samples taken by an inspector.
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 grant
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 grant certification and issue a ``certificate of organic
operation.'' The certification may include requirements for the
correction of minor noncompliances within a specified time period 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 SOP'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. The notification of noncompliance will describe each
noncompliance, the facts on which the notification is based, and the
date by which rebuttal or correction of each noncompliance must be
made. Applicants who receive a notification of noncompliance may
correct the noncompliances 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 noncompliances and
supporting documentation. Applicants may also submit, by the date
specified, written information to the issuing 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
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, when available, 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 noncompliances noted in the notification of noncompliance.
When a certifying agent receives such an application, the certifying
agent will treat the application as a new
[[Page 80590]]
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 and pay the certification fees 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. The
certified operation must also provide an update on the correction of
minor noncompliances previously identified by the certifying agent as
requiring correction for continued certification.
Following receipt of the certified operation's updated information,
the certifying agent will, within a reasonable time, arrange and
conduct an on-site inspection of the certified operation. When it is
impossible for the certifying agent to conduct the annual on-site
inspection following receipt of the certified operation's annual update
of information, the certifying agent may allow continuation of
certification and issue an updated certificate of organic operation on
the basis of the information submitted and the most recent on-site
inspection conducted during the previous 12 months. However, the annual
on-site inspection must be conducted within the first 6 months
following the certified operation's scheduled date of annual update. 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 section 205.662.
In addition to annual inspections, a certifying agent may conduct
additional on-site inspections of certified operations that produce or
handle organic products to determine compliance with the Act and
regulations. The Administrator or SOP'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 USDA during its evaluation of a certifying agent for reaccreditation
and at other times in response to complaints. Certified production and
handling operations can file complaints with USDA 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 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 USDA. 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 the proposal in several respects as
follows:
(1) Access to Production and Handling Operation. We have amended
section 205.400(c) by changing ``noncertified areas and structures'' to
``noncertified production and handling
[[Page 80591]]
areas, structures, and offices.'' A commenter requested that section
205.400(c) be amended to allow for access to farm-related structures
only. The commenter believes that the requirements of section
205.400(c) could be interpreted as giving inspectors access to
residential property. We agree with the commenter that residential
privacy should be maintained. However, if a certified operation
conducts business from or stores records at a residential property, the
certified operation will be considered to be maintaining an office at
the residential property. The records in such office shall be made
accessible for review and copying. Accordingly, we have amended section
205.400(c) to further clarify which areas and structures are to be made
accessible during an on-site inspection.
(2) Application for Certification. We have amended the first
paragraph of section 205.401 by replacing the word, ``request,'' each
time it occurred with the word, ``application.'' A commenter
recommended that we amend the first paragraph of section 205.401 by
replacing the word, ``request,'' with ``application.'' We have accepted
the commenter's recommendation because the amendment makes the language
in the first paragraph consistent with the title and the requirements
of the section.
(3) Verification of Correction of Noncompliances. To make section
205.402(a)(3) consistent with section 205.401(c) we have amended the
language in section 205.402(a)(3) to require that the certifying agent
verify that an applicant who previously applied to another certifying
agent and received a notification of denial of certification has
submitted documentation to support the correction of any noncompliances
identified in the notification of denial of certification. A commenter
recommended that section 205.402(a)(3) be amended by inserting ``or
denial of certification'' after the phrase, ``notification of
noncompliance.'' We have accepted the commenter's recommended amendment
because it is consistent with the requirements of section 205.401(c).
Section 205.401(c) requires an applicant for certification to include
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. The applicant is also required to
include, when available, a copy of any notification of noncompliance or
denial of certification issued to the applicant for certification. The
words, ``when available,'' have been added to this requirement in this
final rule to satisfy concerns regarding the status of applicants who
cannot find or no longer have a copy of any notification of
noncompliance or denial of certification previously received. We see no
down side to relaxing this requirement since the applicant must still
comply with each of the other provisions in section 205.401(c),
including the requirement that the applicant include a description of
the actions taken to correct the noncompliances noted in any
notification of noncompliance or denial of certification, including
evidence of such correction. Further, the certifying agent will be
using USDA's database of certification actions during its review of an
application for certification.
(4) Timely Communication to the Applicant. We have amended section
205.402(b), by requiring at paragraph (b)(1) that the certifying agent,
within a reasonable time, review the application materials received and
communicate its findings to the applicant. A commenter requested that
we amend section 205.402(b) which required a certifying agent to
communicate to the applicant its findings on the review of application
materials submitted by the applicant. Specifically, the commenter
requested that section 205.402(b) be amended by adding to the end
thereof, ``in a timely manner so as to prevent the avoidable tillage of
native habitat that had been identified in the application as lands for
organic production.''
We concur that certification decisions should be timely. There are
many reasons (e.g., financial and contractual) for why certification
must be timely. It would be impractical, however, to attempt to address
all of the reasons for timely certification in these regulations. We
have, therefore, amended section 205.402(b) as noted above. This
amendment is consistent with the requirement in section 205.402(a) that
the certifying agent, upon acceptance of an application for
certification, review the application for completeness, determine by a
review of the application materials whether the applicant appears to
comply or may be able to comply with the requirements for
certification, and schedule an on-site inspection. The ``upon
acceptance'' requirement necessitates that the certifying agent review
the application for certification and provide feedback to the applicant
in a timely manner.
(5) On-site Inspections. We have amended section 205.403(a)(1) by
specifying that the initial and annual on-site inspections of each
production unit, facility, and site in an operation applies to those
units, facilities, and sites that produce or handle organic products. A
commenter recommended that section 205.403(a)(1) be amended to specify
that on-site inspections of each production unit, facility, and site
will include just those that produce or handle organic products. The
commenter stated that this change was necessary because some retail
corporations choose to certify all store locations regardless of
whether the location sells organic products. The commenter went on to
say that, if a location does not stock any organic products, the
certifying agent should have the discretion to modify the inspection
requirement.
We have excluded all retail food establishments from certification.
The exclusion is found in section 205.101(b)(2). Accordingly, the
commenter's recommendation is not applicable to retail food
establishments. We have, however, made the recommended amendment to
section 205.403(a)(1) because of its potential applicability to other
operations which may apply for certification.
(6) Scheduling Initial On-site Inspection. We have amended section
205.403(b) to provide that the initial inspection may be delayed for up
to 6 months to comply with the requirement that the inspection be
conducted when the land, facilities, and activities that demonstrate
compliance or capacity to comply with the organic production and
handling requirements can be observed. We received a comment stating
that if an application is received in January for a crop that will be
planted in May, it would be necessary to delay the inspection until
late May or June to observe the crop in the field. The commenter went
on to say that the alternative would be to conduct the initial
inspection before the crop is planted, in order to meet the ``within a
reasonable time'' requirement, and then conduct a reinspection during
the growing season. The commenter recommended amending section
205.403(b) to allow the certifying agent to delay the initial on-site
inspection until the land, facilities, and activities that demonstrate
compliance or capacity to comply can be observed.
We have accepted the recommendation because there may be situations
where a later on-site inspection will prove mutually beneficial to the
certifying agent and the operation to be inspected. However, certifying
agents are reminded that the operation may be certified following a
demonstration that the operation is able to comply with the organic
production and handling requirements found in subpart C of these
regulations. Accordingly, certifying agents should
[[Page 80592]]
not unnecessarily delay the certification of an organic production or
handling operation by insisting that the inspection only be performed
when the operation can demonstrate its actual compliance with the
organic production and handling requirements. Applicants who believe
that the certifying agent is abusing its authority to delay the on-site
inspection may file a complaint with the Administrator.
We have also amended the second sentence in section 205.403(b) by
inserting the word, ``all,'' and removing both references to
``applicant'' to clarify that the provision applies to all on-site
inspections.
(7) Exit Interview. We have amended section 205.403(d) by requiring
that the inspector conduct an exit interview with ``an authorized
representative of the operation who is knowledgeable about the
inspected operation'' rather than ``an authorized representative of the
inspected operation'' as required in the proposed rule. This amendment
is consistent with the requirement in section 205.403(b) that an on-
site inspection be conducted when an authorized representative of the
operation who is knowledgeable about the operation is present.
A commenter requested that we define ``authorized representative.''
Another commenter recommended changing the term, ``authorized
representative,'' to ``responsible executive.'' Our amendment of
section 205.403(d) responds to both of these comments by clarifying the
qualifications of an authorized representative.
A third commenter stated that an exit interview is not a practical
requirement and that an initial interview is often preferred. The
commenter stressed that verification that the inspector has correctly
understood what is presented is ongoing. This commenter also expressed
the belief that there may be times when it may not be appropriate for
the inspector to address issues of concern and that such issues may be
best left to the certifying agent. The commenter recommended that the
requirement for an exit interview be deleted or presented as an option.
Another commenter suggested that issues of concern are often identified
and discussed with the operation's representative during the course of
the inspection. This commenter believes that it is unnecessarily
confrontational to require an exit interview during which these issues
of concern are repeated. This commenter recommended replacing the
required exit interview with a communications provision that would
require the inspector to discuss the need for any additional
information as well as any issues of concern. The recommended provision
would also authorize the certifying agent to provide the applicant with
a summary of the inspector's areas of concern.
While we agree that the language in section 205.403(d) needed
clarification, we do not agree that the exit interview is impractical
or unnecessarily confrontational. The exit interview is intended to
give the inspector an opportunity to confirm the accuracy and
completeness of inspection observations and information gathered during
the on-site inspection, to request any additional information necessary
to establish eligibility for certification, and to raise and discuss
any known issues of concern. Issues of concern that may involve
compliance issues will be handled as authorized by the certifying
agent. The exit interview is also intended to give the inspected
operation's authorized representative general information concerning
the inspector's observations. Such exit interviews are required under
ISO Guide 10011-1. Accordingly, requiring exit interviews is consistent
with ISO standards and our expectation, as stated earlier in this
preamble, that certifying agents benchmark their on-site inspection
procedures to ISO Guide 10011-1.
(8) On-site Inspection Documentation. We have amended section
205.402(b) by adding the requirements that the certifying agent: (1)
provide the applicant with a copy of the on-site inspection report, as
approved by the certifying agent, for any on-site inspection performed
and (2) provide the applicant with a copy of the test results for any
samples taken by an inspector. We have also amended section 205.403 by
adding a new paragraph (e) that requires the inspector, at the time of
the inspection, to provide the operation's authorized representative
with a receipt for any samples taken by the inspector. This new
paragraph also addresses the requirement that the certifying agent
provide the operation inspected with a copy of the inspection report
and any test results. Having the certifying agent issue the on-site
inspection report to the operation inspected is consistent with ISO
Guide 65, section 11(b).
Several commenters recommended that section 205.403 be amended to
require that the inspector issue a copy of the on-site inspection
report to the operation at the exit interview. They also recommended
that the inspector be required to provide the operation with a receipt
for samples collected for testing. The commenters, further, recommended
that the certifying agent be required to provide the operation with a
written report on the results of the testing performed on the samples
taken. A commenter also recommended that the operation be paid for any
samples taken. One of the commenters recommended that section 205.403
be amended by adding protocol for an exit interview.
We concur that the applicant for certification and certified
operations should be provided with a copy of the on-site inspection
report, a receipt for samples taken, and a copy of the test results for
samples taken. Accordingly, we have amended sections 205.402(b) and
205.403 as noted above.
The protocol for an exit interview will be set forth in the
certifying agent's procedures to be used to evaluate certification
applicants, make certification decisions, and issue certification
certificates. The NOP is available to respond to questions and to
assist certifying agents in the development of these procedures which
are required under section 205.504(b)(1). Accordingly, AMS is not
amending the section to include a protocol for exit interviews. AMS is
also not including a requirement that the certifying agent pay the
applicant for samples taken, since such charges would just be charged
back to the applicant as a cost for processing the applicant's
application for certification.
(9) Granting Certification. We have amended the last sentence of
section 205.404(a) by removing the word, ``restrictions,'' and
replacing it with ``requirements for the correction of minor
noncompliances within a specified time period.'' A commenter suggested
that the last sentence of section 205.404(a) be amended to read: ``The
approval may include restrictions or requirements as a condition of
continued certification, which includes a time line for fulfilling the
requirement.'' Another commenter requested that we define
``restrictions.'' This commenter also recommended amending section
205.404(a) to clarify the meaning of ``restrictions'' and to require
corrective action by the operator within a specific time period. We
agree with the commenters that the last sentence of section 205.404(a)
was in need of further clarification. We also agree that it is
appropriate for the regulations to require that the requirements for
correction include a specified time period within which the corrections
must be made. Accordingly, we amended section 205.404(a) as noted
above. The certifying agent will make the determination of whether a
violation
[[Page 80593]]
of the Act and regulations is minor. Minor noncompliances are those
infractions that, by themselves, do not preclude the certification or
continued certification of an otherwise qualified organic producer or
handler. The certifying agent would be free to modify the time period
for correction should it believe it to be appropriate.
We have also made editorial changes to section 205.404(a)
consistent with suggestions we received on section 205.506. In the
title to section 205.404 we have replaced ``Approval of'' with
``Granting.'' In section 205.404(a) we have replaced ``approve'' with
``grant'' and ``approval'' with ``certification.'' This change makes
the language in section 205.404 consistent with ISO Guide 65, section
4.6, which addresses the granting of certification.
(10) Payment of Fees. We have amended the introductory statement
within section 205.406(a) by adding the requirement that, to continue
certification, a certified operation annually pay the certifying
agent's certification fees. A commenter recommended amending section
205.404(c) by adding a sentence providing that a certified operation's
failure to pay the certifying agent's certification fees may be a cause
for suspension or revocation of certification. We agree that the issue
of payment of fees should be addressed but not in section 205.404(c),
which deals with the duration of a certified operation's certification.
We believe the issue of payment of certification fees is more
appropriately addressed in section 205.406, which deals with
continuation of certification. Accordingly, we have amended section
205.406(a) to require payment of the certifying agent's fees as a
condition of continued certification. This addition would allow a
certifying agent to initiate suspension or revocation proceedings
against any operation that fails to pay the required fees. The
certifying agent is not required to initiate suspension or revocation
proceedings for failure to pay the fees. In fact, the certifying agent
is encouraged to use one or more of the legal debt collection
alternatives available to it.
(11) Denial of Certification. We have amended section 205.405 to
include noncompliance and resolution provisions originally included by
cross-reference to section 205.662(a). We have made this amendment in
response to a comment that these regulations do not provide an
opportunity for a hearing upon denial of certification. We disagree
with the commenter's assessment but have amended section 205.405(a) to
eliminate confusion that may result from the cross-reference to section
205.662(a). We have determined that section 205.662(a) may cause
confusion for certification applicants because the section does not
specifically address applicants.
As amended, section 205.405(a) required a written notification of
noncompliance that describes each noncompliance, the facts on which the
noncompliance is based, and the date by which the applicant must rebut
or correct each noncompliance and submit supporting documentation of
each such correction when correction is possible. Section 205.405(b)
lists the options available to the applicant, including the options of
correcting the noncompliance or submitting written information to rebut
the noncompliance. Successful correction or rebuttal will result in an
approval of certification. When the corrective action or rebuttal is
not sufficient for the applicant to qualify for certification, the
certifying agent will issue a written notice of denial of
certification. This notice will state the reason(s) for denial and the
applicant's right to request mediation in accordance with section
205.663 or to file an appeal in accordance with section 205.681.
(12) Rebuttal of a Noncompliance. We have amended section
205.405(b)(3) to clarify that rebuttal of a noncompliance shall be
submitted to the certifying agent that issued the notification of
noncompliance. We made this amendment in response to a commenter's
question about who has authority to evaluate a written rebuttal.
(13) Correction of Minor Noncompliances. We have amended section
205.406(a) by adding a new paragraph (3) which requires the certified
operation to include with its annual reporting an update on the
correction of minor noncompliances previously identified by the
certifying agent as requiring correction for continued certification. A
commenter recommended adding at 205.406(a) a requirement that the
certified operation address any restrictions that have been applied to
its certification under 205.404(a). We agree with the commenter that
the annual reporting by the certified operation should include an
update addressing the certified operation's compliance with the
certifying agent's requirements for the correction of minor
noncompliances. Accordingly, we amended section 205.406(a) as noted
above and redesignated paragraph (3) as paragraph (4). The certifying
agent will make the determination of whether a violation of the Act and
regulations is minor. Minor noncompliances are those infractions that,
by themselves, do not preclude the certification or continued
certification of an otherwise qualified organic producer or handler.
(14) Scheduling Annual On-site Inspections. We have amended section
205.406(b) to provide that, when it is impossible for the certifying
agent to conduct the annual on-site inspection following receipt of the
certified operation's annual update of information, the certifying
agent may allow continuation of certification and issue an updated
certificate of organic operation on the basis of the information
submitted and the most recent on-site inspection conducted during the
previous 12 months. The annual on-site inspection, required by section
205.403, must, however, be conducted within the first 6 months
following the certified operation's scheduled date of annual update.
A commenter expressed the belief that the requirement for an on-
site inspection after receipt of the certified operation's annual
update of information would have required that all annual on-site
inspections be performed at the same time of the year. The commenter
went on to express the belief that, to avoid inspecting certified
operations twice a year, certifying agents would have to schedule the
annual update to occur during the growing season in order to comply
with the requirement for timing inspections when normal production
activities can be observed. The commenter stated that certifying agents
should be given more flexibility for scheduling inspections and
conducting their certification programs according to management
procedures best suited to their agency. The commenter recommended
amending section 205.406(b) by adding to the end thereof: ``or base the
decision regarding eligibility for renewal on an on-site inspection
conducted during the previous 12 months.''
We agree with the commenter that certifying agents should be given
more flexibility for scheduling on-site inspections so as to best meet
the management needs of the certifying agent. Accordingly, we have
amended section 205.406(b) to allow continuation of certification and
issuance of an updated certificate of organic operation on the basis of
the information submitted and the most recent on-site inspection
conducted during the previous 12 months. This option will be available
to the certifying agent when renewal is scheduled for a time when it is
impossible to conduct the annual on-site inspection following receipt
of the annual update and at a time when land, facilities, and
activities that demonstrate the operation's compliance or capability
[[Page 80594]]
to comply can be observed. This change does not affect the requirement
in section 205.403(a)(1) that the certifying agent conduct an annual
on-site inspection of each certified operation. Further, the annual on-
site inspection must be conducted within the first 6 months following
the certified operation's scheduled date of annual update.
Certification--Changes Requested But Not Made
This subpart retains from the proposed rule regulations on which we
received comments as follows:
(1) Number of On-site Inspections. A commenter recommended that
section 205.403(a)(1) be amended by adding a requirement that
production operations be under active organic management for the last
year of the 3-year land conversion period and that two on-site
inspections be performed prior to organic certification.
Section 205.403(a)(1) provides that the certifying agent must
conduct an initial on-site inspection of each production unit,
facility, and site that produces or handles organic products and that
is included in an operation for which certification is requested. The
requirement does not preclude a certifying agent from conducting
additional on-site inspections, if necessary, to establish the
applicant's eligibility for certification. The Act requires a 3-year
period immediately preceding harvest, during which the production
operation must be free from the application of prohibited substances.
The Act does not, however, require that land be under active organic
management during this period, and we do not believe such a requirement
in these regulations is necessary. Such a requirement, for example,
would necessitate some process for verifying that an operation is under
active organic management, which would, in effect, require a
certification-type decision a year before certification is granted and
the operation can begin to label products as certified organic.
Accordingly, we disagree with the commenter's recommendation that an
operation be under active organic management for the last year of the
3-year land conversion and that two on-site inspections be required.
(2) Unannounced Inspections. A commenter recommended that section
205.403(a)(2)(iii) be amended to require additional unannounced
inspections either by defining the circumstances under which the
inspections should be undertaken or by setting a minimum percentage of
unannounced inspections. The commenter claimed that 5 percent is a
common percentage adopted by certifying agents around the world.
Section 205.403 requires an initial on-site inspection, annual on-
site inspection, and additional on-site inspections to determine
compliance with the Act and regulations, to verify that information
provided reflects actual practices, and to verify, through testing if
necessary, that prohibited substances are not used by the operation.
Because of the widely disparate nature of certified operations, we
believe the certifying agent is in the best position to determine the
need for additional on-site inspections. Accordingly, we have rejected
the commenter's request that the regulations require additional
unannounced visits either by defining the circumstances under which
these should be undertaken or by setting a minimum percentage.
(3) Timeliness of Certifying Agent Review Information. A commenter
requested that section 205.404(a) be amended to specify a timeframe of
60 days rather than ``Within a reasonable time'' as the time by which
the certifying agent must review the on-site inspection report, the
results of any analyses for substances, and any additional information
requested from or supplied by the applicant.
Section 205.404(a) requires the certifying agent, within a
reasonable time after completion of the initial on-site inspection, to
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. Section 205.504(b)(1) requires the
certifying agent to submit a copy of the procedures to be used to
evaluate certification applicants, make certification decisions, and
issue certification certificates. Such procedures and the certifying
agent's performance in making timely certification decisions will be
subject to review during accreditation and reaccreditation of 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. Accordingly, timely
service will be in the best interest of certifying agents since such
complaints could have an impact on their reaccreditation or continued
accreditation. Further, our original position is consistent with those
commenters requesting flexibility in determining what constitutes
reasonable time. Accordingly, we have not amended section 205.404(a) as
requested.
(4) Categories of Organic Operation. We received a variety of
comments regarding the requirement that the certifying agent issue a
certificate of organic operation which specifies the categories of
organic operation, including crops, wild crops, livestock, or processed
products produced by the certified operation. One commenter recommended
that section 205.404(b)(3) be amended, with regard to processing, to
only require a processing category to be specified on the certificate,
such as food processing or feed processing. The commenter stated that
it should not be necessary to list every product on the certificate.
Specifically, the commenter recommended amending section 205.404(b)(3)
by inserting the words, ``general categories of,'' immediately in front
of the word, ``processed.'' Another commenter recommended amending
section 205.404(b)(3) to require the identity of specific crops and the
specific processing operations certified. Still another commenter
requested that section 205.404(b) be amended by adding a new paragraph
requiring that the certificate include the number of livestock of each
species produced on the certified operation. This same commenter also
recommended the addition of a new paragraph requiring that the
certificate identify the specific location of each certified organic
field and handling operation. We also received support for section
205.404(b)(3) as written. This commenter does not support the addition
of information regarding the number of livestock or the location of
fields.
We disagree with the suggestion that the certificate list every
crop, wild crop, livestock, or processed product produced by the
certified operation. We believe that listing categories of organic
operation is sufficient. This does not, however, prevent the certifying
agent, in cooperation with the certified operation, from listing
specific crops, livestock, or processed products on the certificate.
Such information could always be listed on the certificate when
requested by the certified operation. We also disagree with the
commenter who requested that certifying agents display the number of
livestock of each species produced by the certified operation and the
specific location of each certified organic field and handling
operation. We do not believe it is necessary to list the quantity of
product to be produced or handled at a certified operation, nor do we
believe it is necessary to list the location of a certified operation's
fields or facilities. Such information may,
[[Page 80595]]
however, be listed on the certificate upon the written request of the
certified operation. By requiring the name, address, and telephone
number of the certifying agent, 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.
(5) Annual Renewal of Certification. Numerous commenters requested
that section 205.404(b)(2) be amended to provide for the placement of
an expiration date on the certificate of organic operation. The
commenters want yearly expiration of certification and yearly
expiration of the certificate of organic operation. Commenters also
requested that section 205.404(c) be amended to provide that once
certified, a production or handling operation's organic certification
continues in effect until the expiration date on the certificate, until
surrendered by the organic operation, or until suspended or revoked by
the certifying agent, the SOP's governing State official, or the
Administrator. Some commenters recommended the addition of a new
paragraph 205.406(e) that would provide for automatic suspension of a
certification if the certified operation did not provide the
information required in paragraph 205.406(a) by the expiration date to
be placed on the certificate of organic operation.
We disagree with the commenters who have requested annual renewal
of certification and that the certified operation's certification and
its certificate of organic operation expire annually. 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. More
importantly, unlike accreditation, where the Act provides for
expiration and renewal, the Act does not provide for an expiration or
renewal of certification. Therefore, it is also our position that once
granted certification the production or handling operation retains that
certification until voluntarily surrendered or removed, following due
process, for violation of the Act or these regulations.
(6) Denial of Certification. A commenter recommended that section
205.405(e) be amended to place a time restriction on reapplication for
certification after denial of certification. The commenter suggested a
3-year period. We disagree with this recommendation because the reasons
for denial include a wide range of noncompliances. The ability to
correct noncompliances will vary as will the time needed to correct the
noncompliances.
(7) Production and Handling Operation Certification Following
Suspension or Revocation of Certifying Agent Accreditation. A few
commenters requested amendment of section 205.406 through the addition
of a new paragraph (f). Specifically, the commenters requested
provisions that would provide for USDA notification of certified
operations regarding the suspension or revocation of their certifying
agent's accreditation. Some of these commenters requested that the
provisions also allow the affected certified operation to use current
market labels for a maximum period of 12 months, provided the certified
operation made application for certification with another USDA-
accredited certifying agent within 3 months of being notified of their
certifying agent's suspension or revocation of accreditation. Another
commenter requested that the new paragraph provide that the affected
certified operation will continue to operate as if certified by the
USDA and will be allowed to use current market labels for a maximum
period of 12 months. The commenter stated that this amendment would
provide the certified operation with the time needed to obtain
recertification by an accredited certifying agent and to prepare new
labels.
We disagree with the recommendations. USDA does not perform organic
certification activities under any circumstance, including upon
surrender, suspension, or revocation of an accredited certifying
agent's accreditation. Operations certified by a certifying agent that
surrenders or loses its USDA accreditation will be notified by USDA and
given an opportunity to immediately begin seeking certification by the
USDA-accredited certifying agent of their choice. Certified operations
shall not affix the seal or other representation of a certifying agent
to any product that they produce after the certifying agent has
surrendered or had its accreditation revoked. The certified operation
may use the USDA organic seal. In the case of suspension of the
certifying agent, the reasons for the suspension and the terms of the
suspension will determine whether the certifying agent's certified
operations will have to seek recertification or stop affixing the
certifying agent's seal or other representation to their products. USDA
will announce the suspension or revocation of a certifying agent's
accreditation, and the announcement will address the status of
operations certified by the certifying agent.
Certification--Clarifications
Clarification is given on the following issues raised by commenters
as follows:
(1) Recordkeeping. A commenter stated that most computerized
recordkeeping systems used at retail and wholesale are set up to save
the data for a maximum of 2 years; adding 3 additional years to that
requirement would be extremely costly as systems modifications and
additional hardware and support would be required to meet the mandate.
The commenter suggested that since food product is generally sold and
consumed within a matter of months (if not weeks), shortening this
requirement to 2 years should meet the goal for tracking of any product
through the distribution system. This commenter was referring to the
requirement in section 205.400(d) that records be maintained for not
less than 5 years beyond their creation.
Section 205.103 requires that a certified operation maintain
records; that the records 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 as 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 the regulations in this part; and that the
certified operation must make such records available for inspection and
copying during normal business hours by authorized representatives of
the Secretary, the applicable SOP's governing State official, and the
certifying agent. The requirements do not state in what form (i.e.,
paper, electronic, film) that the records must be maintained.
Therefore, in answer to the commenter's concern, database records more
than 2 years old could be stored in any form, including on an
electronic storage device, which would permit retrieval upon request.
(2) Application Fees. A commenter recommended that section 205.401
be
[[Page 80596]]
amended by adding a new paragraph (e) which would require an applicant
for certification to include, along with the other required application
information, the application fees required by the certifying agent.
The requested language is unnecessary because section 205.400(e)
requires submission of the applicable fees charged by the certifying
agent as a general requirement for certification.
(3) Applicant Identification. In reference to section 205.401(c) a
commenter stated that an applicant that is a corporation could easily
change the name of the corporation in order to avoid having to report
applications submitted and denied under the previous name. The
commenter went on to state that there must be a database available to
certifying agents that includes names and location addresses of
operations that have received a notification of noncompliance, denial
of certification, or a suspension or revocation of certification.
Section 205.401(b) requires the applicant to include in its
application 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.
As we stated in the preamble to the proposed rule, we anticipate
using the data collected under section 205.501(a)(15) to establish and
maintain two 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 suspension or revocation of
certification. Certifying agents would use the second Internet database
during their review of an application for certification.
(4) Withdrawal of Application. Several commenters expressed the
belief that allowing an applicant to voluntarily withdraw its
application will be used as a tool to avoid denial of certification.
They expressed concern that voluntary withdrawal before denial of
certification will allow the applicant to make application with a
different certifying agent with a clean record. These commenters were
responding to the provision in section 205.402(e) which allows an
applicant for certification to withdraw its application at any time.
We continue to believe that operations should not be unnecessarily
stigmatized because they applied for certification before the operation
was ready to meet all requirements for certification. While some
operations may use voluntary withdrawal as a means to avoid the
issuance of a notification of noncompliance or a notice of denial of
certification, this should not adversely affect the National Organic
Program (NOP) because all certifying agents are responsible for using
qualified personnel in the certification process and for ensuring an
applicant's eligibility for certification. Further, all applicants for
certification are required under section 205.401(c) to include in their
application 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.
(5) On-site Inspections. Section 205.403(a)(2)(ii) provides that
the Administrator or SOP'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. In commenting on this provision, a commenter asked, ``Who is
running this program: State or Federal officials?''
This is a national organic program administered by the Agricultural
Marketing Service of the United States Department of Agriculture.
States may administer their own organic program. However, all SOP's are
subject to USDA approval. The National Organic Standards and a State's
organic standards under a USDA-approved SOP are the National Organic
Standards for that State. The State, under USDA's approval of the SOP,
has enforcement responsibilities for the Federal and State components
of the organic program within the State.
(6) Verification of Information. A commenter stated that section
205.403(c) is insufficiently comprehensive. The commenter stated that
organic inspection is assessment of a process evaluated against
comprehensive standards and, as such, it requires specific rules to
provide confidence in the quality of the inspection. The commenter
recommended amending section 205.403(c) by including requirements on
minimum verification methods.
Section 205.403(c) identifies what must be verified during the on-
site inspection. The details on how the verification will be
accomplished will be set forth in the certifying agent's procedures to
be used to evaluate certification applicants, make certification
decisions, and issue certification certificates and the certifying
agent's procedures for reviewing and investigating certified operation
compliance with the Act and regulations. The NOP is available to
respond to questions and to assist certifying agents in complying with
the on-site inspection requirements, including those for the
verification of information.
(7) Notifying Customers of Change in Certification Status. A
commenter stated that the regulations do not indicate when a certified
organic producer must stop using the organic seal or whether they must
notify customers of their denial of certification. The commenter
recommended amending section 205.405 to include a provision for
notifying customers of a certified operation's change in certification
status.
Any producer or handler who plans to sell, label, or represent its
product as ``100 percent organic,'' ``organic,'' or ``made with * * *''
must be certified unless exempted under the small operation exemption
under section 205.101(a)(1) or not regulated under the NOP (i.e., a
producer of dog food). Only certified operations may represent
themselves as certified. Operations denied certification may not
represent their products as ``100 percent organic,'' ``organic,'' or
``made with * * *'' Operations that have had their certification
suspended or revoked will be subject to the terms and conditions of
their suspension or revocation relative to the labeling of product
produced prior to the suspension or revocation. No product produced by
an operation after suspension or revocation of certification may be
sold, labeled, or represented as ``100 percent organic,'' ``organic,''
or ``made with * * *''
Buyers of organic product can request to see the producer's or
handler's certificate of organic operation. Operations that have lost
their organic status will be unable to obtain an updated certificate.
Buyers with questions regarding an operation's organic status may also
contact the certifying agent identified on a certificate of organic
operation. Further, as previously noted, we anticipate using the data
collected under section 205.501(a)(15) to establish and maintain an
Internet database accessible to the general public that will include
the
[[Page 80597]]
names and other appropriate data on certified organic production and
handling operations.
(8) Continuation of Certification. A few commenters recommended
amending section 205.406 to include a safety net for producers who are
certified by a certifying agent that does not become accredited by
USDA. They stated that the rule must clearly state that a certified
organic producer will have the full 18-month implementation period
starting from the effective date of the final rule to get recertified
if their certifying agent is not accredited. One of the commenters
stated that because the NOP anticipates that the accreditation process
will require 12 months, producers will, in effect, have 6 months to be
certified by a new certifying agent should the producer's certifying
agent not be accredited.
Certification under the NOP will become mandatory 18 months after
the effective date of the final rule. Applications for accreditation
will be processed on a first-come, first-served basis. Accreditations
will be announced approximately 12 months after the effective date of
the final rule for those qualified certifying agents who apply within
the first 6 months following the effective date and for any other
applicants that AMS determines eligible. Certifying agents will begin
the process of certifying organic production and handling operations to
the national standards upon receipt of their USDA accreditation. 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. This
phase-in period will only be available to those certified operations
certified by a certifying agent that receives its accreditation within
18 months from the effective date 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. Operations certified by a certifying agent, which fails to
apply for or fails to meet the requirements for USDA accreditation
under the NOP, must seek and receive certification by a USDA-accredited
certifying agent before they can sell, label, or represent their
products as organic, effective 18 months after the effective date of
the final rule.
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 U.S. organically
produced agricultural commodities. The accreditation requirements in
these regulations will, upon announcement of the first group of
accredited certifying agents, replace the voluntary fee-for-service
organic assessment 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 was used as a benchmark in developing the
accreditation program described in this final 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 42d 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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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
to standards that do not make an organic claim. An accredited
certifying agent may not, however, engage in any business operations or
activities which would involve the agent in a violation of or in a
conflict of interest under the NOP.
Description of Regulations
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.
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. Certifying agents planning to certify
production or handling operations within a State with an approved State
organic program (SOP) must demonstrate their ability to comply with the
requirements of the SOP.
The administrative information submitted by the applicant must
include copies of its procedures for certifying operations, for
ensuring compliance of its certified operations with the Act and
regulations, for complying with recordkeeping requirements, and for
making information available to the
[[Page 80598]]
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 will 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 must
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 all persons who review applications for
certification perform on-site inspections, review certification
documents, evaluate qualifications for certification, make
recommendations concerning certification, or make certification
decisions and that all parties responsibly connected to the certifying
agent 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 giving advice or providing
consultancy services to certification applicants or certified
operations for overcoming identified barriers to certification. This
requirement does not apply to voluntary education programs available to
the general public and sponsored by the certifying agent.
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.
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 certifying agent
accredited or accepted by USDA pursuant to section 205.500 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 evaluation of all persons who review applications
for certification, perform on-site inspections, review certification
documents, evaluate qualifications for certification, make
recommendations concerning certification, or make certification
decisions and implement measures to correct any deficiencies in
certification services; and (2) have an annual program review conducted
of their certification activities by their staff, an outside auditor,
or a consultant who has expertise to conduct such reviews and implement
measures to correct any noncompliances with the Act and the regulations
in this part that are identified in the 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. This
requirement for the transfer of records does not apply to a merger,
sale, or other transfer of ownership of a certifying agent. A private
entity certifying agent must also agree to make such records available
to any applicable SOP's governing State official.
Granting 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 the granting of accreditation in writing. The notice of
accreditation will state the area(s) for which accreditation is given,
the effective date of the accreditation, any terms or conditions for
the correction of minor noncompliances, 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 with a notification of
noncompliance which will describe each noncompliance, the facts on
which the notification is based, and the date by which the applicant
must rebut or correct each noncompliance and submit supporting
documentation of each such correction when correction is possible. If
the applicant is successful in its rebuttal or provides acceptable
evidence demonstrating correction of the noncompliances, the NOP
Program Manager will send the applicant a written notification of
noncompliance resolution and proceed with further processing of the
application. If the applicant fails to correct the noncompliances,
fails to report the corrections by the date specified in the
notification of noncompliance, fails to file a rebuttal by the date
specified in the notification of noncompliance, or is unsuccessful in
its rebuttal, the Program
[[Page 80599]]
Manager will issue a written notification of accreditation denial to
the applicant. An applicant who has received written notification of
accreditation denial may apply for accreditation again at any time or
file an appeal of the denial of accreditation with the Administrator by
the date specified in the notification of accreditation denial.
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.
However, certifying agents certifying production or handling operations
within a State with more restrictive requirements, approved by the
Administrator, shall require compliance with such requirements as a
condition of use of their identifying mark by such operations.
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 Program Manager finds, following the site
evaluation, that an accredited certifying agent is not in compliance
with the Act or regulations, the Program Manager will issue the
certifying agent a written notification of noncompliance. If the
certifying agent fails to correct the noncompliances, report the
corrections by the date specified in the notification of noncompliance,
or file a rebuttal 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 at any time, unless otherwise stated in the
notification of suspension, submit a request to the Secretary for
reinstatement of its accreditation. 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
regulations. A 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 shall establish a peer review panel pursuant to
the Federal Advisory Committee Act (FACA) (5 U.S.C. App. 2 et seq.).
The peer review panel shall be composed of not fewer than three members
who shall annually evaluate the NOP's adherence to the accreditation
procedures in subpart F of these regulations and ISO/IEC Guide 61,\3\
General requirements for assessment and accreditation of certification/
registration bodies, and the NOP's accreditation decisions. This will
be accomplished through the review of: (1) accreditation procedures,
(2) document review and site evaluation reports, and (3) accreditation
decision documents or documentation. The peer review panel shall report
its finding, in writing, to the NOP Program Manager.
---------------------------------------------------------------------------
\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 42d Street, New York, NY 10036; Website:
www.ansi.org; E-mail: [email protected]; Telephone: 212-642-4900;
Facsimile: 212-398-0023.
---------------------------------------------------------------------------
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
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 performance evaluations and annual
program review and a description of adjustments to the certifying
agent's operation and procedures implemented or to be implemented in
response to the performance evaluations and program review; and (5) the
required AMS fees.
Certifying agents will keep the Administrator informed of their
certification activities by providing the Administrator with a copy of:
(1) 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) a list, on
January 2 of each year, including the name, address, and telephone
number of each operation granted certification during the preceding
year.
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 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.
[[Page 80600]]
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 SOP'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, products
produced, 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, notices 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
memorandums 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 evaluations and supporting documents; conflict of
interest disclosure reports and supporting documents; annual program
review working papers, memorandums, letters, and reports; fee
schedules; annual 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 SOP'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 SOP's governing State official all records or copies
of records concerning its certification activities. This requirement
for the transfer of records does not apply to a merger, sale, or other
transfer of ownership of a certifying agent.
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 persons who review applications for
certification, perform on-site inspections, review certification
documents, evaluate qualifications for certification, make
recommendations concerning certification, or make certification
decisions and all parties responsibly connected to the certifying
agent. Coverage of the conflict of interest provisions extends to
immediate family members of persons required to complete an annual
conflict of interest disclosure report. 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 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, such persons 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 giving advice or providing
consultancy services to certification applicants or certified
operations for overcoming identified barriers to certification. To
further ensure against conflict of interest, the certifying agent must
ensure that the decision to certify an operation is made by a person
different from the person who conducted the on-site inspection.
The certifying agent must reconsider a certified operation's
application for certification when the certifying agent determines,
within 12 months of certifying the operation, that a person
participating in the certification process and covered under section
205.501(c)(11)(ii) has or had a conflict of interest involving the
applicant. If necessary, the certifying agent must perform a new on-
site inspection. All costs associated with a reconsideration of an
application, including onsite inspection costs, shall be borne by the
certifying agent. When it is determined that, at the time of
certification, a conflict of interest existed between the applicant and
a person covered under section 205.501(c)(11)(i), the certifying agent
must refer the certified operation to a different accredited certifying
agent for recertification. The certifying agent must also reimburse the
operation for the cost of the recertification.
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. Accredited certifying agents must accept all production and
handling
[[Page 80601]]
applications that fall within their areas of accreditation and certify
all qualified applicants, to the extent of their administrative
capacity to do so, without regard to size or membership in any
association or group.
Renewal of Accreditation
To avoid a lapse in accreditation, certifying agents must apply for
renewal of accreditation at least 6 months prior to the fifth
anniversary of issuance of the notification of accreditation and each
subsequent renewal of accreditation. The Administrator will send the
certifying agent a notice of pending expiration of accreditation
approximately 1 year prior to the scheduled date of expiration. 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
and the results of a site evaluation, 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.
Amending Accreditation
An accredited certifying agent may request amendment to its
accreditation at any time. The application for amendment must be sent
to the Administrator and must contain information applicable to the
requested change in accreditation, a complete and accurate update of
the certifying agent's application information and evidence of
expertise and ability, and the applicable fees.
Accreditation--Changes Based on Comments
This subpart differs from the proposal in several respects as
follows:
(1) Advice and Consultancy Services. We have amended section
205.501(a)(11)(iv) to clarify that certifying agents are to prevent
conflicts of interest by not giving advice or providing consultancy
services to applicants for certification and certified operations for
overcoming identified barriers to certification. This amendment has
been made in response to a commenter who stated that the provisions of
section 205.501(a)(11)(iv), as proposed, seemed to preclude the
providing of advice and educational workshops and training programs. It
was not our intent to prevent certifying agents from sponsoring in-
house publications, conferences, workshops, informational meetings, and
field days for which participation is voluntary and open to the general
public. The provisions as originally proposed and as amended are
intended to prohibit certifying agents from telling applicants and
certified operations how to overcome barriers to certification
identified by the certifying agent. It would be a conflict of interest
for a certifying agent to tell an operation how to comply inasmuch as
the certifying agents impartiality and objectivity will be lost should
the advice or consultancy prove ineffective in resolving the
noncompliance. The provisions of section 205.501(a)(11)(iv) are
consistent with ISO Guide 61.
To further clarify this issue, we have also amended section
205.501(a)(16) by adding ``for certification activities'' after the
word, ``charges.''
(2) Conflicts of Interest--Persons Covered. We have amended section
205.501(a)(11)(v) to limit the completion of annual conflict of
interest disclosure reports to all persons who review applications for
certification, perform on-site inspections, review certification
documents, evaluate qualifications for certification, make
recommendations concerning certification, or make certification
decisions and all parties responsibly connected to the certifying
agent. A commenter recommended amending section 205.501(a)(11)(v) to
have it apply to all persons with direct oversight of or participation
in the certification program rather than all persons identified in
section 205.504(a)(2). Section 205.504(a)(2) includes 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. We have decided that completion of
annual conflict of interest disclosure reports by persons not involved
in the certification process or responsibly connected to the certifying
agent is unnecessary. As amended, section 205.501(a)(11)(v) includes
all persons with the opportunity to influence the outcome of a decision
on whether to certify a specific production or handling operation.
Completed conflict of interest disclosure reports will be used by
certifying agents to identify persons with interests in applicants for
certification and certified operations that may affect the impartiality
of such persons.
(3) Reporting Certifications Granted. We have amended section
205.501(a)(15)(ii) (formerly section 205.501(a)(14)(ii)) by replacing
``a quarterly calendar basis'' with ``January 2 of each year.'' A
commenter stated that the requirement that certifying agents report
certifications that they have granted on a quarterly basis to the
Administrator is burdensome. The commenter requested that section
205.501(a)(14)(ii) be amended to require a midyear or end-year
reporting. Section 205.501(a)(15)(ii) now requires the certifying agent
to submit a list, on January 2 of each year, including the name,
address, and telephone number of each operation granted certification
during the preceding year. Certifying agents can fulfill this
requirement by providing an up-to-date copy of the list of producers
and handlers required to be made available to the public by section
205.504(b)(5)(ii).
(4) Notification of Inspector. We have added a new section
205.501(a)(18) requiring the certifying agent to provide the inspector,
prior to each on-site inspection, with previous on-site inspection
reports and to notify the inspector of the certifying agent's decision
relative to granting or denying certification to the applicant site
inspected by the inspector. Such notification must identify any
requirements for the correction of minor noncompliances. We have made
this addition because we agree with the commenter that such information
should be provided to the inspector and because the requirements are
consistent with ISO Guide 61.
(5) Acceptance of Applications. We have added a new section
205.501(a)(19) requiring the certifying agent to accept all production
or handling applications
[[Page 80602]]
for certification that fall within the certifying agent's areas of
accreditation and to certify all qualified applicants, to the extent of
their administrative capacity to do so, without regard to size or
membership in any association or group. We have made this addition
because we agree with the many commenters who requested that certifying
agents be required to certify all qualified applicants. We recognize,
however, that there may be times when the certifying agent's workload
or the size of its client base might make it necessary for the
certifying agent to decline acceptance of an application for
certification within its area of accreditation. This is why we have
included the proviso, ``to the extent of their administrative capacity
to do so.'' We have included ``without regard to size or membership in
any association or group'' to address commenter concerns about
discrimination in the providing of certification services. This
addition is consistent with ISO Guide 61.
(6) Ability to Comply with SOP. We have added a new section
205.501(a)(20) requiring the certifying agent to demonstrate its
ability to comply with an SOP, to certify organic production or
handling operations within the State. This change, as pointed out by a
State commenter, is necessary to clarify that a certifying agent must
be able to comply with an SOP to certify production or handling
operations within that State.
(7) Performance Evaluation. We have amended section 205.501(a)(6)
by replacing ``appraisal'' with ``evaluation'' and expanding the
coverage from inspectors to persons who review applications for
certification, perform on-site inspections, review certification
documents, evaluate qualifications for certification, make
recommendations concerning certification, or make certification
decisions. Corresponding amendments have also been made to section
205.510(a)(4). Further, we have amended section 205.501(a)(6) to
clarify that the deficiencies to be corrected are deficiencies in
certification services. We changed ``appraisal'' to ``evaluation'' at
the request of a State commenter who pointed out that State inspectors
generally perform other duties in addition to the inspection of organic
production or handling operations. We concur that this change will help
differentiate between the State's employee performance appraisal for
all duties as a State employee and the evaluation of certification
services provided under the NOP. Expanding the coverage from inspectors
to all persons involved in the certification process makes the
regulation consistent with ISO Guide 61. Sections 205.505(a)(3) and
205.510(a)(4) have been amended to make their language consistent with
the changes to section 205.501(a)(6).
(8) Annual Program Evaluation. We have amended section
205.501(a)(7) by replacing ``evaluation'' with ``review'' and by
replacing ``evaluations'' with ``reviews.'' A commenter suggested
amending section 205.501(a)(7) by replacing the requirement of an
annual program evaluation with an annual review of program activities.
We agree that ``review'' is a more appropriate term than ``evaluate''
since to review is to examine, report, and correct while evaluate is
more in the nature of assessing value. We have not, however, accepted
that portion of the commenter's suggestion which would have removed the
reference to the review being conducted by the certifying agent's
staff, an outside auditor, or a consultant who has the expertise to
conduct such reviews. We have not accepted this suggestion because the
comment would have limited the review to being conducted by the
certifying agent with no requirement that the certifying agent be
qualified to conduct the review. Another commenter wanted to change the
requirement to an annual assessment of the quality of the inspection
system. We have not accepted this suggestion because it can be
interpreted as narrowing the scope of the review from the full
certification program to just the inspection component of the
certification program. This commenter would also have limited the
review to being conducted by the certifying agent with no requirement
that the certifying agent be qualified to conduct the review. We
believe that narrowing the scope of the review would be inconsistent
with ISO Guide 65. It is also inconsistent with our intent that the
entire certification program be reviewed annually. We also received a
comment stating that it is a violation of ISO Guide 65 to have staff
perform an internal review. We disagree with this commenter. ISO Guide
65 provides that the certification body shall conduct periodic internal
audits covering all procedures in a planned and systematic manner.
Sections 205.505(a)(4) and 205.510(a)(4) have been amended to make
their language consistent with the changes to section 205.501(a)(7).
(9) Certification Decision. We have added a new section
205.501(a)(11)(vi) that requires the certifying agent to ensure that
the decision to certify an operation is made by a person different from
the person who carried out the on-site inspection. Commenters requested
that this provision be added to the requirement that certifying agents
prevent conflicts of interest. We concur with the request because it
clearly separates the act of inspecting an organic operation from the
act of granting certification. This addition is also consistent with
ISO Guide 65, section 4.2(f), which requires that the certification
body ensure that each decision on certification is taken by a person
different from those who carried out the evaluation.
(10) Determination of Conflict of Interest. We have added a new
section 205.501(a)(12) addressing situations where a conflict of
interest present at the time of certification is identified after
certification. Several commenters requested the addition of a provision
that, if a conflict of interest is identified within 12 months of
certification, the certifying agent must reconsider the application and
may reinspect the operation if necessary. We agree with the commenters
that the issue of conflicts of interest present at the time of
certification but identified after certification need to be addressed
in the regulations. Accordingly, we have provided that an entity
accredited as a certifying agent must reconsider a certified
operation's application for certification and, if necessary, perform a
new on-site inspection when it is determined, within 12 months of
certifying the operation, that any person participating in the
certification process and covered under section 205.501(a)(11)(ii) has
or had a conflict of interest involving the applicant. Because the
certifying agent is responsible for preventing conflicts of interest,
all costs associated with a reconsideration of application, including
onsite inspection costs, must be borne by the certifying agent.
Further, a certifying agent must refer a certified operation to a
different accredited certifying agent for recertification when it is
determined that any person covered under section 205.501(a)(11)(i) at
the time of certification of the applicant had a conflict of interest
involving the applicant. Because the certifying agent is responsible
for preventing conflicts of interest, the certifying agent must
reimburse the operation for the cost of the recertification. Sections
205.501(a)(12) through 205.501(a)(17) have been redesignated as
sections 205.501(a)(13) through 205.501(a)(18), respectively.
(11) Financial Security. We published an advanced notice of
proposed rulemaking and request for comments regarding financial
security in the
[[Page 80603]]
August 9, 2000, issue of the Federal Register. We issued a news release
announcing the Federal Register publication on August 9, 2000. Numerous
commenters expressed concern about reasonable security relative to its
amount and impact on small certifying agents. A few commenters
requested a definition for reasonable security. Others stated that the
formula for determining the amount of security should be published in
the Federal Register. The March 13, 2000, NOP proposed rule stated that
the amount and terms of reasonable financial security would be the
subject of additional rulemaking. The August 9, 2000, advanced notice
of proposed rulemaking solicited comments on all aspects of reasonable
security and protection of the rights of program participants. We
requested comments from any interested parties, including producers and
handlers of organic agricultural products, certifying agents, importers
and exporters, the international community, and any other person or
group. Six questions were provided to facilitate public comment on the
advanced notice of proposed rulemaking. Comments addressing other
relevant issues were also invited. The questions posed in the advanced
notice of proposed rulemaking were:
(a) From what risks or events might a customer of a private
certifying agent require reasonable security?
(b) What are the financial instrument(s) that could provide the
reasonable security to protect customers from these events?
(c) What dollar amounts of security would give reasonable
protection to a customer of a private certifying agent?
(d) What are the financial costs to private certifiers, especially
small certifiers, of providing reasonable security?
(e) Do the risks or events provided in response to question #1
necessarily require financial compensation?
(f) Are there situations in which reasonable security is not
needed?
Following analysis of the comments received, we will publish a
proposed rule on reasonable security in the Federal Register. The
public will again be invited to submit comments. The proposed rule will
include the proposed regulation, an explanation of the decision-making
process, an analysis of the costs and benefits, the effects on small
businesses, and an estimate of the paperwork burden imposed by the
regulation.
(12) Use of Identifying Mark. We have amended section 205.501(b)(2)
to clarify that all certifying agents (private and State) certifying
production or handling operations within a State with more restrictive
requirements, approved by the Secretary, shall require compliance with
such requirements as a condition of use of their identifying mark by
such operations. Numerous commenters stated that they wanted USDA to
permit higher production standards by private certifying agents. See
also item 17 under Accreditation--Changes Requested But Not Made. This
amendment is intended to further clarify our position that no
certifying agent (State or private) may establish or require compliance
with its own organic standards. It is an SOP, not a State certifying
agent, that receives approval from the Secretary for more restrictive
requirements. See also item 7 under Accreditation--Clarifications.
(13) Transfer of Records. To address the issues of a merger, sale,
or other transfer of ownership, we have added the following to the end
of section 205.501(c)(3); ``Provided, That, such transfer shall not
apply to a merger, sale, or other transfer of ownership of a certifying
agent.'' Commenters suggested amending section 205.501(c)(3) to provide
for the transfer of records accumulated from the time of accreditation
to the Administrator or his or her designee, another accredited
certifying agent, or an SOP's governing State official in a State where
such official exists. It was also stated that this section needs to
take into account a certifying agent's decision to merge or transfer
accounts to another certifying agent in the case of loss of
accreditation. Under the NOP, should a certifying agent dissolve or
lose its accreditation, its certified operations will be free to seek
certification with the accredited certifying agent of their choice.
Accordingly, it would be inappropriate to automatically transfer an
operation's records to another certifying agent as requested by the
commenters. However, in analyzing the comments, we realized that a
provision was needed for a merger, sale, or other transfer of ownership
of a certifying agent; thus, the amendment to section 205.501(c)(3).
Section 205.505(b)(3) has been amended to make its language consistent
with the changes to section 205.501(c)(3).
(14) Fees for Information. We have amended section 205.504(b)(5) by
inserting ``including any fees to be assessed'' after the word,
``used.'' This change is made in response to the question of whether
fees may be charged for making information available to the public. It
is our intent that certifying agents may charge reasonable fees for
document search time, duplication, and, when applicable, review costs.
We anticipate that review costs will most likely be incurred when the
information requested is located within documents which may contain
confidential business information.
(15) Information Available to the Public. We have amended section
205.504(b)(5)(ii) by adding products produced to the information to be
released to the public. This addition responds in an alternate way to
commenters who wanted the information included on certificates of
organic operation. That request was denied; see item 4, Changes
Requested But Not Made, under subpart E, Certification. This addition
is consistent with ISO Guide 61.
(16) Equivalency of Certification Decisions and Statement of
Agreement. We have amended sections 205.501(a)(12) (redesignated as
205.501(a)(13)) and 205.505(a)(1) by deleting the words, ``USDA
accredited'' and ``as equivalent to its own,'' and adding to the end
thereof: ``accredited or accepted by USDA pursuant to section
205.500.'' We have made this amendment to clarify that the provision
applies to certification decisions by domestic certifying agents as
well as foreign certifying agents accredited or accepted by USDA
pursuant to section 205.500.
There were many comments in support of section 205.501(a)(12) as
written. However some did not agree that certifying agents should have
to recognize another agent's decision as equivalent to their own. These
commenters want to maintain the right and ability not to use their seal
on a product that does not meet their standards. The most strongly
voiced comment stated: ``delete section 205.501(a)(12) and section
205.505(a)(1). The requirements constitute a ``taking'' in violation of
the Fifth Amendment and are unnecessary to accomplish the goal of
establishing a consistent standard and facilitating trade.''
We do not concur with the commenters who want to change sections
205.501(a)(12) and 205.505(a)(1). We also do not agree with the comment
that sections 205.501(a)(12) and 205.505(a)(1) constitute a taking in
violation of the Fifth Amendment and are unnecessary to accomplish the
goal of establishing a consistent standard and facilitating trade. We
believe that, to accomplish the goal of establishing a consistent
standard and to facilitate trade, it is vital that an accredited
certifying agent accept the certification decisions made by another
certifying agent accredited or accepted by USDA pursuant to section
205.500. All domestic organic production and handling operations,
unless exempted or excluded under
[[Page 80604]]
section 205.101, must be certified to these national standards and,
when applicable, any State standards approved by the Secretary. All
domestic certified operations must be certified by a certifying agent
accredited by the Administrator. No USDA-accredited certifying agent,
domestic or foreign, may establish or require compliance with its own
organic standards. Certifying agents are not required to have an
identifying mark for use under the NOP. However, if a certifying agent
is going to use an identifying mark under the NOP, the use of such mark
must be voluntary and available to all of the certifying agent's
clients certified under the NOP. Accordingly, we have not changed the
requirement that a certifying agent accept the certification decisions
made by another USDA-accredited certifying agent. We have, however, as
noted above, amended both sections to require that USDA-accredited
certifying agents accept the certification decisions made by another
certifying agent accredited or accepted by USDA pursuant to section
205.500.
(17) Granting Accreditation. We have made editorial changes to
section 205.506 consistent with the suggestion that we replace
``approval of accreditation'' with ``granting of accreditation.'' In
the title to section 205.506, we have replaced ``Approval of'' with
``Granting.'' In section 205.506(a), we have replaced ``approved'' with
``granted,'' and in section 205.506(b), we have replaced ``approval''
with ``the granting.'' We have made these change because, under the
NOP, we grant accreditation rather than approve accreditation.
(18) Correction of Minor Noncompliances. We have added a new
section 205.506(b)(3) providing that the notification granting
accreditation will state any terms and conditions for the correction of
minor noncompliances. Commenters requested the addition of language to
section 205.506(b) which would clarify that the Administrator may
accredit with required corrective actions for minor noncompliances. In
the proposed rule, we addressed accreditation subject to the correction
of minor noncompliances at section 205.510(a)(3). We agree with
commenters that, for the purposes of clarity, this issue should also be
addressed in section 205.506 on the granting of accreditation.
Accordingly, we have added new section 205.506(b)(3) as noted above. We
have also retained the provisions of section 205.510(a)(3), which
requires certifying agents to annually report on actions taken to
satisfy any terms and conditions addressed in the most recent
notification of accreditation or notice of renewal of accreditation.
Section 205.506(b)(3) has been redesignated as section 205.506(b)(4).
(19) Denial of Accreditation. We have amended section 205.507 to
include noncompliance and resolution provisions originally included by
cross-reference to section 205.665(a). This cross-reference created
confusion for commenters, regarding section 205.665's applicability to
applicants for accreditation because the section does not specifically
address applicants. Rather than specifically identifying applicants
within section 205.665, we believe the issue is best clarified by
addressing noncompliance and resolution within section 205.507. As
amended, section 205.507 now states in paragraph (a) that the written
notification of noncompliance must describe each noncompliance, the
facts on which the notification is based, and the date by which the
applicant must rebut or correct each noncompliance and submit
supporting documentation of each such correction when correction is
possible. This rewrite of paragraph (a) also enabled us to eliminate
paragraph (b) since its provisions are addressed in amended paragraph
(a). The section also provides, at new paragraph (b), that when each
noncompliance has been resolved, the Program Manager will send the
applicant a written notification of noncompliance resolution and
proceed with further processing of the application. We have also
clarified the applicant's appeal rights by adding ``or appeal the
denial of accreditation in accordance with section 205.681 by the date
specified in the notification of accreditation denial'' to the end of
paragraph (c).
(20) Reinstatement of Accreditation. We have amended section
205.507(d) by removing the requirement that a certifying agent that has
had its accreditation suspended reapply for accreditation in accordance
with section 205.502. In its place, we provide that the certifying
agent may request reinstatement of its accreditation. Such request may
be submitted at any time unless otherwise stated in the notification of
suspension. Amended section 205.507(d) also provides that the
certifying agent's 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. We have made this change because unlike
revocation, suspension does not terminate a certifying agent's
accreditation. Accordingly, requiring a new application for
accreditation is unnecessary and burdensome on the certifying agent.
This change is consistent with changes to sections 205.662(f) and
205.665(g)(1), which were made based on comments received on section
205.662(f).
(21) Ineligible for accreditation. We have amended section
205.507(d) by deleting ``private entity'' from the third sentence. The
amended sentence provides that ``A 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.'' Several
commenters recommended deletion of ``private entity'' so that private
certifying agents would be regulated on an equivalent basis with State
certifying agents. It is our intent to regulate private and State
certifying agents on an equivalent basis. Accordingly, we made the
recommended change.
(22) Peer Review. We have amended section 205.509. As amended, the
section requires that the Administrator establish a peer review panel
pursuant to FACA (5 U.S.C. App. 2 et seq.). The peer review panel will
be composed of not less than 3 members who will annually evaluate the
NOP's adherence to the accreditation procedures in subpart F of these
regulations and ISO/IEC Guide 61, General requirements for assessment
and accreditation of certification/registration bodies, and the NOP's
accreditation decisions. This will be accomplished through the review
of accreditation procedures, document review and site evaluation
reports, and accreditation decision documents and documentation. The
peer review panel will report its finding, in writing, to the NOP's
Program Manager. We developed this approach to peer review as a means
of addressing the suggestions of the commenters and the need for
administration of an effective and timely accreditation program.
Many commenters wanted the opening language in the first sentence
of section 205.509 changed from ``The Administrator may'' to the ``The
Administrator shall'' establish a peer review panel to assist in
evaluating applicants for accreditation, amendment to an accreditation,
and renewal of accreditation as certifying agents. One of the most
frequent comments, including a comment by the NOSB, was that peer
reviewers should be compensated for their time and expenses. Many
commenters believe also that the peer review process should be
collaborative. Some commenters who wanted this change recognized that a
collaborative process where confidential information was shared could
run into problems
[[Page 80605]]
because FACA (P.L. 92-463, 5 U.S.C. App.) meetings are open to the
public. They advised creating a FACA panel but restricting public
access during discussion of confidential business information based on
5 U.S.C. Section 522b(c)(4) of the Government in the Sunshine Act.
As requested, amended section 205.509 requires the formation of a
peer review panel. Also as requested, peer reviewers, who will serve as
a FACA committee, will be reimbursed for their travel and per diem
expenses. The reviewers will also work collaboratively. We have not,
however, provided for collaborative review of each applicant for
accreditation by the peer review panel because of the administrative
burden that an outside collaborative review process would place on the
NOP. Currently, there are 36 private and 13 State certifying agencies.
It is, therefore, likely that USDA will receive approximately 50
applications for accreditation the first year of the program. Given the
need to make accreditation decisions in a timely, organized fashion, it
would be infeasible to convene a panel of peers for each applicant for
accreditation prior to rendering a decision on accreditation. However,
as noted above, we have provided that a peer review panel will annually
evaluate the NOP's adherence to the accreditation procedures in subpart
F of these regulations and ISO/IEC Guide 61, General requirements for
assessment and accreditation of certification/registration bodies, and
validate the NOP's accreditation decisions.
We have also amended current section 205.510(c)(3) by removing the
reference to reports submitted by a peer review panel to make that
section consistent with the rewrite of section 205.509.
(23) Expiration of accreditation. We have added a new section
205.510(c)(1) which provides that the Administrator shall send the
accredited certifying agent a notice of pending expiration of
accreditation approximately 1 year prior to the scheduled date of
expiration. A commenter suggested USDA notification of certifying
agents at least 1 year prior to the scheduled expiration of
accreditation. We have made the suggested change because we believe
notification about 1 year prior to expiration will facilitate the
timely receipt of applications for renewal. We have redesignated
sections 205.510(c)(1) and 205.510(c)(2) as 205.510(c)(2) and
205.510(c)(3), respectively.
(24) Amendments to Accreditation. We have added a new section
205.510(f) to provide that an amendment to an accreditation may be
requested at any time. The application for amendment must be sent to
the Administrator and must contain information applicable to the
requested change in accreditation. The application for amendment must
also contain a complete and accurate update of the information
submitted in accordance with section 205.503, Applicant information;
and section 205.504, Evidence of expertise and ability. The applicant
must also submit the applicable fees required in section 205.640. We
have added this new section because we agree with the commenter who
expressed concern that the regulations were not clear regarding
amendments to accreditation. This addition is consistent with section
205.510(a)(2) which allows certifying agents to request amendment of
their accreditation as part of their annual report to the
Administrator.
Accreditation--Changes Requested But Not Made
This subpart retains from the proposed rule, regulations on which
we received comments as follows:
(1) Accreditation by USDA. A commenter stated that ISO/IEC Guide 61
specifies, but the proposed rule did not specify, the requirements for
USDA to assess and accredit certifying agents. The commenter questioned
USDA's acceptance internationally as a competent accreditation body. A
few commenters requested that USDA provide certifying agents with
assurance of international trade acceptance of the USDA's accreditation
program prior to implementation of the final rule. We do not believe
that it is necessary to include in these regulations detailed
procedures by which USDA will operate its accreditation program. USDA
has developed its accreditation and certification programs with the
intent that they meet or exceed international guidelines. Every country
will make its own decision regarding acceptance of this accreditation
program. Accordingly, while we do not anticipate problems with
acceptance of our accreditation program, we cannot provide assurance
against problems as requested by the commenters.
(2) Equivalency at the European Community (EC) Level. A commenter
requested confirmation that an equivalency agreement would be
negotiated at the EC level since the EC legislation provides for the
basic rules while accreditation of certifying agents is a task for each
member state. Another commenter pointed out that because Switzerland
has the same regulations as the EC, equivalency would have to be done
in close coordination with the EC. The commenter went on to say that
according to Swiss and European practice, not only the organic product,
but also the bodies involved will be mutually accepted. This commenter
also stated that, due to Swiss import provisions, brokers must be
subject to a certain control. Equivalency will be negotiated between
the United States and the foreign government authority seeking the
equivalency agreement.
(3) Period of Accreditation. It was suggested that accreditation
should be for a 4-year period with full reevaluation occurring once
every 4 years and annual surveillance visits in the intervening years.
We do not concur with changing the period of accreditation from 5 years
to 4 years as suggested. The 5-year period that we have provided that
accreditation is consistent with the Act, which provides that
accreditation shall be for a period of not to exceed 5 years. The
commenter claims that the international norm is for full reevaluations
to take place once every 4 years with annual surveillance visits in the
intervening years. ISO Guide 61, section 3.5.1, provides that the
accreditation body shall have an established documented program,
consistent with the accreditation granted, for carrying out periodic
surveillance and reassessment at sufficiently close intervals to verify
that its accredited body continues to comply with the accreditation
requirements. We believe that accreditation for 5 years is a reasonable
period of time. Further, we believe that a 5-year period of
accreditation is consistent with ISO Guide 61 inasmuch as we require an
annual evaluation of the certification program; annual review of
persons associated with the certification process, including
inspectors; annual reporting with a complete and accurate update of
information required for accreditation; and one or more site
evaluations during the period of accreditation in addition to the
initial site evaluation for the period of accreditation. Accordingly,
we have not made the recommended change.
(4) Accreditation by Private-Sector Accreditation Bodies. Numerous
commenters wanted language added to section 205.500(c) that would allow
private sector accreditation bodies to accredit foreign certifying
agents. For example, several commenters suggested adding a provision
reading as follows: ``The foreign certifying agent is accredited by a
private accreditation body recognized by the USDA as defined by an
equivalency agreement negotiated between the USDA and the accreditation
body.'' Commenters also wanted us to amend section 205.502(a)
[[Page 80606]]
to recognize accreditation by private accreditation programs.
USDA is the accrediting body for all accreditations under the NOP.
USDA will not recognize nongovernmental accrediting bodies. USDA will
recognize foreign certifying agents accredited by a foreign government
authority when USDA determines that the foreign government's standards
meet the requirements of the NOP or when an equivalency agreement has
been negotiated between the United States and a foreign government.
(5) Requirements for Accreditation. Some commenters requested more
specificity in the requirements for accreditation. For example, one
recommended that section 205.501(a)(1) should include the requirement
that inspectors demonstrate completion of a specified training program
or internship or ongoing education and/or licensing. Another commenter
wanted baseline criteria for denying an application due to expertise.
Still others wanted a definition for (1) ``experience and training
pertaining to organic/sustainable agricultural methods and their
implementation on farm or in processing facilities,'' (2) ``trained
certifying agent personnel,'' and (3) ``reasonable time.'' Finally, one
wanted recordkeeping and evaluative parameters. AMS does not believe
that it is necessary to present the requirements for accreditation to
the extent of detail requested by the commenters. The intent is to
provide flexibility to the certifying agents such that they can tailor
their policies and procedures to the nature and scope of their
operation. The NOP is available to respond to questions and to assist
certifying agents in complying with the requirements for accreditation.
(6) Volunteer Board Members. Some commenters suggested amending
section 205.501(a)(5) to include a reference to committees and to
expand ``sufficient expertise'' to ``sufficient balance of interests
and expertise.'' The commenters proposed the amendment to create a
firewall between those persons involved in decision making and the
volunteer board members. However, the purpose of section 205.501(a)(5)
is to ensure that the persons used by the certifying agent to assume
inspection, analysis, and decision-making responsibilities have
sufficient expertise in organic production or handling techniques to
successfully perform the duties assigned. Therefore, we have not made
the suggested changes. Conflict of interest guidelines are found at
section 205.501(a)(11).
(7) Confidentiality. A commenter stated that Texas law prevents the
Texas Department of Agriculture from guaranteeing confidentiality to
its clients. Accordingly, the commenter requested that section
205.501(a)(10) be amended by adding to the end thereof: ``or as
required by State statutes.'' We have not made the suggested change
because the Act requires that the certifying agent maintain strict
confidentiality with respect to its clients under the NOP and not
disclose any business-related information concerning such client
obtained while implementing the Act. To be accredited under the NOP,
certifying agents must fully comply with the requirements of the Act
and these regulations. Further, no SOP will be approved which does not
comply with the NOP.
(8) Certifying Agent Fees. Several commenters requested that the
regulations prohibit royalty formulas (i.e., fees from every certified
sale) for certifying agent fees. It is not our intent to regulate how a
certifying agent sets its fees beyond their being reasonable and
nondiscriminatory.
(9) Conflicts of Interest. We received numerous comments stating
that section 205.501(a)(11)(i) was too restrictive and unnecessary due
to the provisions of section 205.501(a)(11)(ii) to prevent conflicts of
interest. Some argued that these conflict of interest provisions are
beyond ISO requirements and place an undue burden on membership based
certifying agents and the entities they serve. They requested a
conflict of interest policy enabling membership-based certification
organizations to continue operating. A commenter suggested that section
205.501(a)(11) be amended to require that a certifying agent's board
members sign an affidavit listing potential conflicts of interest,
identify issues where an organization decision might help them
personally, and exclude themselves from decision-making that would
assist them personally. This commenter proposed the amendment for the
purpose of creating a firewall between those persons involved in
certification decision-making and the volunteer board members.
We do not believe that the conflict of interest provisions are too
restrictive. These provisions are very similar to conflict of interest
provisions under other USDA programs involving public-private
partnerships (e.g., grain inspection). The certifying agent and its
responsibly connected parties, including volunteer board members, hold
positions of influence over the certifying agent's employees and
persons with whom the certifying agent contracts for such services as
inspection, sampling, and residue testing. Therefore, we continue to
believe that avoiding such conflicts of interest is necessary to
maintain the integrity of the organic certification process.
(10) Conflicts of Interest and Prohibition on Certification. A
commenter requested that we include an ``or'' between sections
205.501(a)(11)(i) and 205.501(a)(11)(ii). We have not made the
recommended change because both sections must be complied with; they
are not mutually exclusive. Section 205.501(a)(11)(i) prohibits the
certification of an applicant when the certifying agent or a
responsibly connected party of such certifying agent has or has held a
commercial interest in the applicant for certification, including an
immediate family interest or the provision of consulting services,
within the 12-month period prior to the application for certification.
When the certifying agent and its responsibly connected persons are
free of any conflict of interest involving the applicant for
certification, the applicant may be certified if qualified. However,
section 205.501(a)(11)(ii) requires the certifying agent to exclude any
person (employees and contractors who do not meet the definition of
responsibly connected), 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.
(11) Gifts and Contributions. Commenters recommended that section
205.501(a)(11)(iii) be amended to allow not-for-profit organizations to
accept gifts and contributions from certified operations for those
programs not directly related to the certifying agent's organic
certification activities. They also wanted it clarified that not-for-
profit organizations can accept voluntary labor from certified
operations for those programs not directly related to the certifying
agent's organic certification activities. We have not made the
requested changes. First, the acceptance of gifts and contributions
would constitute a conflict of interest and would be contrary to ISO
Guide 61. Certifying agents must have the financial stability and
resources to perform their certification duties without relying on
gifts and contributions from those they serve.
[[Page 80607]]
Second, we have not added the requested provision on voluntary labor
because section 205.501(a)(11)(iii) already addresses the acceptance of
voluntary labor by not-for-profit organizations from certified
operations.
(12) Conflicts of Interest--Determination Period. Commenters wanted
to increase the conflict determination period from 12 months to 24
months. Some also wanted the period to extend for 2 years after, with
the exception of those who have left the employ of the certifying agent
or are no longer under contract with the certifying agent.
We disagree with the recommendations calling for a longer
precertification conflict of interest 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, section 205.501(a)(11)(v) 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 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
not made the recommended change.
The change recommended by the commenters who requested that the
conflict of interest determination period extend for 2 years after
certification is unnecessary. 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 final rule.
(13) False and Misleading Claims. A commenter asked who will
determine what is a misleading claim about the nature or qualities of
products labeled as organically produced. This same commenter
recommended amending section 205.501(a)(13) by removing the prohibition
against making false or misleading claims about the nature or qualities
of products labeled as organically produced.
We disagree with this recommendation. 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. Accordingly, USDA
will determine what is a misleading claim. 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 change suggested by the commenter
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, we have not made the recommended change to what is now
section 205.501(a)(14).
(14) Certifying Agent Compliance With Terms and Conditions Deemed
Necessary. A commenter recommended that we remove section
205.501(a)(17). This section requires that certifying agents comply
with and implement other terms and conditions deemed necessary by the
Secretary. This requirement is consistent with section 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, we have not accepted the commenter's recommendation. This
requirement is located at current section 205.501(a)(21).
(15) Limitations on the Use of Certifying Agent's Marks. Numerous
commenters stated that they wanted USDA to permit higher production
standards by private certifying agents. A common argument for allowing
higher standards was that practitioners must be allowed to ``raise the
bar'' through superior ecological on-farm practices or pursuit of other
social and ecological goals. Some commenters recommended that the
language in section 205.501(b)(2) be replaced with provisions that
would allow certifying agents to issue licensing agreements with
contract specifications that clearly establish conditions for use of
the certifying agent's identifying mark.
We believe the positions advocated by the commenters are
inconsistent with section 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. We believe that,
to accomplish the goal of establishing a consistent standard and to
facilitate trade, it is vital that an accredited certifying agent
accept the certification decisions made by another certifying agent
accredited or accepted by USDA pursuant to section 205.500. All organic
production and handling operations, unless exempted or excluded under
section 205.101 or not regulated under the NOP (i.e., a producer of dog
food), must be certified to these national standards and, when
applicable, any State standards approved by the Secretary. All
certified operations must be certified by a certifying agent accredited
by the Administrator. No accredited certifying agent may establish or
require compliance with its
[[Page 80608]]
own organic standards. Accredited certifying agents may establish other
standards outside of the NOP. They may not, however, refer to them as
organic standards nor require that applicants for certification under
the NOP or operations certified under the NOP comply with such
standards as a requirement for certification under the NOP. Use of the
certifying agent's identifying mark must be voluntary and available to
all of its clients certified under the NOP. However, a certifying agent
may withdraw a certified operation's authority to use its identifying
mark during a compliance process. The certifying agent, however,
accepts full liability for any such action.
The national standards implemented by this final rule can be
amended as needed to establish more restrictive national standards.
Anyone may request that a provision of these regulations be amended by
submitting a request to the NOP Program Manager or the Chairperson of
the NOSB. Requests for amendments submitted to the NOP Program Manager
will be forwarded to the NOSB for its consideration. The NOSB will
consider the requested amendments and make its recommendations to the
Administrator. When appropriate, the NOP will conduct rulemaking on the
recommended amendment. Such rulemaking will include an opportunity for
public comment.
(16) Evidence of Expertise and Ability. A commenter stated that
section 205.504, which addresses the documentation necessary to
establish evidence of expertise and abilities, requires too much
paperwork. We believe the amount of paperwork is appropriate for the
task at hand, verifying a certifying agent's expertise in and
eligibility for accreditation to certify organic production and
handling operations to the NOP. We further believe that the level of
paperwork is necessary to meet international guidelines for determining
whether an applicant is qualified for accreditation as a certifying
agent.
(17) Procedures for Making Information Available to the Public.
Comments on section 205.504(b)(5) were mixed. Some commenters felt that
the proposal fell short of the OFPA requirement to ``Provide for public
access to certification documents and lab analysis.'' Others thought
that too much confidential information would be released.
The Act requires public access, at section 2107(a)(9), to
certification documents and laboratory analyses pertaining to
certification. Accordingly, we disagree with those commenters who
requested that such documents not be released to the public. We also
disagree with the commenters who contend that the requirement for
public disclosure falls short of what is required by the Act. Section
205.504(b)(5) meets the requirements of the Act by requiring the
release of those documents cited in section 2107(a)(9) of the Act. The
section also authorizes the release of other business information as
authorized in writing by the producer or handler.
(18) Accreditation Prior to Site Evaluation. Numerous commenters
recommended that we require site visits prior to accreditation. Some
commenters cited ISO Guide 61, section 2.3.1, in their arguments for
site visits prior to accreditation. ISO Guide 61, section 2.3.1.,
provides that the decision on whether to accredit a body shall be made
on the basis of the information gathered during the accreditation
process and any other relevant information. Section 3.3.2 of ISO Guide
61 provides that the accreditation body shall witness fully the on-site
activities of one or more assessments or audits conducted by an
applicant body before an initial accreditation is granted.
We do not concur with the commenters. These regulations provide for
assessment of the applicant's qualifications and capabilities through a
rigorous review of the application and supporting documentation.
Following this review, an initial site evaluation shall be conducted
before or within a reasonable period of time after issuance of the
applicant's ``notification of accreditation.'' 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 will be conducted. We have
further provided that a site evaluation shall be conducted after
application for renewal of accreditation but prior to renewal of
accreditation.
Our purpose in allowing for initial accreditation prior to a site
evaluation is to facilitate implementation of the NOP and to provide a
means for newly established certifying agents to obtain a client base
to demonstrate that they can meet the requirements of the NOP
regulations. We believe this is consistent with the intent of ISO Guide
61, section 2.3.1. and fits within its ``and any other relevant
information'' provision. Accordingly, we restate our position that
accreditation approval without a site evaluation is appropriate,
necessary in the case of established certifying agents that may need to
make adjustments in their operations to comply with the NOP
regulations, and necessary in the case of newly established certifying
agents who will have to obtain a client base to demonstrate beyond the
paperwork that they can meet the requirements of the NOP regulations.
(19) Ineligibility After Revocation of Accreditation. Section
205.507(d) provides that a 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. A commenter
stated that the 3-year period of ineligibility is overly long and
effectively puts the certifying agent out of business. The commenter
suggested that a 6- to 12-month period might be reasonable. We have not
accepted the suggested 6- to 12-month ineligibility period because the
Act requires a period of ineligibility of not less than 3 years
following revocation of accreditation.
(20) Qualifications of the Site Evaluator. A commenter recommended
amending section 205.508(a) to indicate the required qualifications of
the site evaluator. We have not accepted the recommendation. We do not
believe that it is necessary to specify the required qualifications of
site evaluators in these regulations. All USDA employees who will
perform site evaluations under the NOP are quality systems auditors
trained in accordance with internationally recognized protocols.
(21) Complaint Process. A commenter recommended that section
205.510 include a complaint process for complaints by certified
operations regarding the performance of a certifying agent or
inspector. The commenter also recommended that section 205.510 include
a complaint process for the public should they feel that a certifying
agent is not in compliance.
We do not believe that it is necessary to include a complaint
process in the regulations. All interested parties are free to file a
complaint with an accredited certifying agent, SOP's governing State
official, or the Administrator at any time. We will provide guidance to
accredited certifying agents and SOP's governing State officials
regarding the type of information to gather when receiving a complaint.
SOP's governing State officials will include in their request for
approval of their SOP information on their collection of complaint
information. Certifying agents will include details regarding the
collection of complaint information and the investigation of complaints
involving certified operations in their procedures for reviewing and
investigating certified operation compliance (section
[[Page 80609]]
205.504(b)(2)). This will include maintaining records of complaints and
remedial actions relative to certification as well as documentation of
followup actions. Further, certifying agents will include details
regarding the collection of complaint information and the investigation
of complaints involving inspectors and other personnel employed by or
contracted by the certifying agents in their policies and procedures
for training, evaluating, and supervising personnel (section
205.504(a)(1)).
(22) Recordkeeping by Certifying Agents. A commenter stated that
the 10-year recordkeeping requirement of section 205.510(b)(2) for
records created by the certifying agent regarding applicants for
certification and certified operations is excessive. The commenter
recommended a 5-year retention period. We have not accepted the
recommended 5-year records retention period for records created by the
certifying agent regarding applicants for certification and certified
operations because the Act requires the retention of such records for
10 years.
(23) Reaccreditation. A commenter recommended that section
205.510(c)(1) be amended to require reaccreditation every 3 years. We
have provided that accreditation will be for a period of 5 years. This
is consistent with the Act which provides that accreditation shall be
for a period of not to exceed 5 years. The commenter believes that a 5-
year period is not consistent with ISO Guide 61, section 3.5.1, which
provides that the accreditation body shall have an established
documented program, consistent with the accreditation granted, for
carrying out periodic surveillance and reassessment at sufficiently
close intervals to verify that its accredited body continues to comply
with the accreditation requirements. We believe that accreditation for
5 years is a reasonable period of time. Further, we believe that a 5-
year period of accreditation is consistent with ISO Guide 61 inasmuch
as we require an annual evaluation of the certification program; annual
review of persons associated with the certification process, including
inspectors; annual reporting with a complete and accurate update of
information required for accreditation; and one or more site
evaluations during the period of accreditation in addition to the
initial site evaluation for the period of accreditation. Accordingly,
we have not made the recommended change. This requirement is located at
current section 205.510(c)(2).
(24) Notice of Renewal of Accreditation. A commenter recommended
that section 205.510(d) be amended to include a timeframe within which
the Administrator must notify an applicant of its renewal of
accreditation. We believe that a mandated timeframe for notifying the
applicant of renewal of accreditation is inappropriate. We plan to
process all applications for renewal of accreditation in the order in
which they are received, to confirm the receipt of each application,
and to establish a dialog with the applicant upon confirmation of
receipt of an application for renewal of accreditation. The length of
the renewal process will depend in large part on the nature of the
operation seeking renewal of accreditation. To minimize the chances
that an accreditation will expire during the renewal process, we have:
(1) provided that the Administrator shall send the accredited
certifying agent a notice of pending expiration of accreditation
approximately 1 year before the date of expiration of the certifying
agent's accreditation, (2) required that an application for renewal of
accreditation must be received at least 6 months prior to expiration of
the certifying agent's accreditation, and (3) provided that the
accreditation of a certifying agent who makes timely application for
renewal of accreditation will not expire during the renewal process.
Accordingly, we have not made the recommended amendment.
Accreditation--Clarifications
Clarification is given on the following issues raised by commenters
as follows:
(1) Accreditation of Foreign Certifying Agents. A commenter
suggested that section 205.500 be amended to provide that if there is a
government system operating in a foreign country then the government is
the appropriate pathway for that country to apply for accreditation.
USDA will accept an application for accreditation to perform
certification activities under the NOP from any private entity or
governmental entity certifying agent and accredit such applicant upon
proof of qualification for accreditation. USDA will provide for USDA
accreditation of certifying agents and acceptance of a foreign
government's accreditation of certifying agent within the same country.
This maximizes opportunity for certifying agents without the potential
for confusion and overlap in documentation. Further, we believe these
requirements facilitate world trade.
(2) State Approval of Product From Foreign Countries. A commenter
stated that any product making claims of organic agricultural
ingredients to be sold in California shall fall under the jurisdiction
of the California Organic Program for enforcement, inspection, and
certification direction. The commenter further stated that, should any
foreign certifying agents be accepted, they too shall be subject to the
sovereign rights of the State of California to protect and enforce the
laws of the State of California and to protect agricultural claims in
this State.
Any organic program administered by a State will have to be
approved by the Secretary. Approval of an SOP will be contingent upon
the State's agreeing to accept the certification decisions made by
certifying agents accredited or accepted by USDA pursuant to section
205.500.
(3) Equivalency. A commenter stated that USDA should declare in
section 205.500 that there are no alternative methods of production
that meet the Congressional purpose ``to assure consumers that
organically produced products meet a consistent standard.'' The
commenter went on to state that, if USDA proceeds with equivalency then
the regulations should be amended to provide for: (1) No importing
until final determination, (2) no final determination until Federal
Register publication and public comment, (3) audit of foreign agency
and production sites, and (4) revocation of accreditation for
violations. The commenter also recommended that foreign certifying
agents be reviewed with the same frequency as State certifying agents.
We disagree that there are no alternative methods of production
that assure consumers that organically produced products meet a
consistent standard. Accordingly, we will negotiate equivalency
agreements with foreign governments. A final equivalency agreement will
be required before affected product may be imported into the United
States and sold, labeled, or represented as organic. Equivalency
agreements will be announced to the public through a notice in the
Federal Register and a news release. Site evaluations are a
possibility. Foreign certifying agents that receive USDA accreditation,
rather than recognition through their government, will have to fully
comply with the NOP and will be treated the same as domestic accredited
certifying agents.
(4) Evaluation of Equivalency. Commenters asked how equivalency
would be evaluated and recommended basing equivalency, not on a check
of formalities, but on the finding of substantive equivalence and
equivalent effectiveness of certifying systems.
The negotiation of an equivalency agreement will involve meetings
between representatives of the foreign
[[Page 80610]]
government seeking equivalency and representatives of USDA's
Agricultural Marketing Service and Foreign Agricultural Service.
Support will be provided by the Office of the U.S. Trade
Representative. The process will also include the review of documents
and possibly one or more site evaluations. Equivalency agreements will
be announced to the public through a notice in the Federal Register and
a news release.
(5) Treatment of Certifying Agents Operating in More Than One
Country. A few commenters requested that we amend section 205.500(c) by
adding a provision to clarify the issue of how the international
activities of foreign or domestic certifying agents will be treated
when they operate in more than one country.
We believe that the requested provision is unnecessary. Certifying
agents, domestic and foreign, accredited under the NOP will be expected
to comply fully with the requirements of the NOP regardless of where
they operate. The only exception would be when they operate in a
country in which the Secretary has negotiated an equivalency agreement.
(6) Accreditation of Foreign Certifying Agents. A commenter
requested that we amend section 205.500(c) to exempt foreign applicants
from having to be accredited certifying agents in USDA's program if the
exporting country's national organic program meets international
standards; e.g, Codex guidelines.
We have provided for USDA accreditation of qualified foreign
certifying agents upon application. We have also provided that USDA
will accept a foreign certifying agent's accreditation to certify
organic production or handling operations if it 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. We have further provided that USDA
will accept a foreign certifying agent's accreditation to certify
organic production or handling operations if the foreign government
authority that accredited the foreign certifying agent acted under an
equivalency agreement negotiated between the United States and the
foreign government. These recognitions of foreign government programs,
however, do not extend to international standards such as Codex
guidelines. In either case, we are recognizing the ability of a foreign
government's program to meet U.S. standards, not some other
international standard.
(7) States with an Organic Statute. A commenter stated that a State
with an organic statute or regulations that does not certify organic
producers or organic handlers should not have to be accredited.
The NOP requires the Secretary's approval of SOP's whether or not
the State has a State certifying agent. A State may have an SOP but not
have a State certifying agent. In this case the SOP must be approved by
the Secretary. A State may have a State certifying agent but no SOP. In
this case, the State certifying agent must apply for and receive
accreditation to certify organic production or handling operations.
Finally, a State may have an SOP and a State certifying agent. In this
case, the SOP must be approved by the Secretary, and the State
certifying agent must apply for and receive accreditation to certify
organic production or handling operations.
(8) Nondiscriminatory Services. A commenter wanted the addition of
a provision in section 205.501(a) requiring certifying agents to
provide nondiscriminatory services. We have not included the suggested
addition in this final rule because the provision already exists in
section 205.501(d).
(9) Release of Information. A few commenters requested that we
amend section 205.501(a)(10) to include a general exclusion allowing
the release of any information with the client's permission. We have
not included the suggested addition in this final rule because section
205.504(b)(5)(iv) already addresses the allowed release of other
business information as permitted in writing by the producer or
handler.
(10) Use of the Term, ``Certified Organic.'' In commenting on
section 205.501(b)(1), a commenter stated that if the term, ``certified
organic,'' is included on a label, it must state by whom, according to
Maine State law. We do not believe that the requirements of section
205.501(b)(1) would preclude a certified operation from complying with
a State law requiring identification of the certifying agent on a
product sold, labeled, or represented as ``certified organic.''
Further, these regulations do not require a certified operation to use
the word, ``certified,'' on its label.
(11) Holding the Secretary Harmless. In commenting on the
requirements of section 205.501(c)(1), a commenter stated that
certifying agents are responsible for representing USDA but seem to
have no recourse. Another commenter asked, what happens if a certifying
agent is found in violation of the Act but the violation was due to
information or direction that came from USDA?
Under the NOP, accredited certifying agents are required to comply
with and carry out the requirements of the Act and these regulations.
If they fail to do so, they are responsible for their actions or
failures to act. This would not be true if the action or failure to act
was at the direction of the Secretary.
(12) Self-evaluation of Ability to Comply. A commenter requested
that section 205.504 be amended to provide clarity on the baseline
requirements that would allow a certifying agent to conduct a self-
evaluation to determine its ability to comply. The commenter stated
that there should be some type of baseline acceptance of expertise and
ability. The commenter wants details regarding the ``training'' or
``experience'' requirements necessary to qualify for accreditation.
This commenter also stated that criteria for inspector and reviewer
training should be added and enlarged.
We do not believe that it is necessary to present the requirements
for accreditation to the extent of detail requested by the commenter.
The intent is to provide flexibility to the certifying agents such that
they can tailor their policies and procedures to the nature and scope
of their operation. The NOP is available to respond to questions and to
assist certifying agents in complying with the requirements for
accreditation.
(13) Evidence of Expertise and Ability. Commenters stated that
important elements of ISO Guide 65 are missing from section 205.504.
They cite the maintenance of a complaints register and a register of
precedents and provisions for subcontracting and a documents control
policy or a document register.
Certifying agents grant certification, deny certification, and take
enforcement action against a certified operation's certification.
Certifying agents are required to maintain records applicable to all
such actions and to report such actions to the Administrator.
Certifying agents may contract with qualified individuals for the
performance of services such as inspection, sampling, and residue
testing. Certifying agents are required to submit personnel information
(employed and contracted) and administrative policies and procedures to
the Administrator. All such documents must be updated annually. The
regulations also require the maintenance of records according to
specified retention periods. All of these factors will be considered in
granting or denying accreditation. We believe these requirements meet
or exceed the ISO Guide 65 guidelines.
(14) Personnel Evidence of Expertise. A commenter inquired about
the
[[Page 80611]]
frequency at which the personnel information, required by section
205.504(a) and used to establish evidence of expertise and ability, is
to be updated. Section 205.510 requires that the certifying agent
annually submit a complete and accurate update of the information
required in section 205.504.
(15) Responsibly Connected. A commenter stated that the term,
``responsibly connected,'' as used in section 205.504(a)(2) is a broad
sweep. The commenter believes the term would include everyone they do
business with.
Section 205.504(a)(2) requires the certifying agent to provide the
name and position description of all personnel to be used in the
certification operation. The section assists the certifying agent in
meeting the requirement by identifying categories of persons covered by
the requirement including persons responsibly connected to the
certifying agent. Responsibly connected does not include everyone that
the certifying agent does business with. Responsibly connected is
defined in the Definitions subpart of this final rule as ``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.'' This definition has not changed.
(16) Independent Third-Party Inspectors. A commenter recommended
amending section 205.504(a)(3)(I) to provide for the use of independent
third-party inspectors. We believe that this recommended amendment is
unnecessary since nothing in these regulations precludes a certifying
agent from contracting with independent third parties for inspection
services.
(17) Response to Accreditation Applicant. A commenter requested
that section 205.506(a)(3) be amended to provide a timeframe within
which the Administrator has to respond to the accreditation
application. While section 205.506(a)(3) identifies the information to
be reviewed by the Administrator prior to the granting of
accreditation, we assume the commenter is seeking a specific time limit
by which the Administrator will acknowledge receipt of an application
for accreditation. In the alternative, the commenter may have been
seeking a specific time limit by which the Administrator must grant or
deny accreditation. We believe that a regulation-mandated timeframe for
notifying the applicant of receipt of an application or for granting or
denying accreditation is unnecessary. We plan to process all
applications in the order in which they are received, to confirm the
receipt of each application upon receipt, and to establish a dialog
with the applicant upon confirmation of receipt of an application for
accreditation. We will work with each applicant to complete the
accreditation process as expeditiously as possible. A firm timeframe,
however, cannot be set for granting or denying accreditation due to the
anticipated uniqueness of each applicant and its application for
accreditation.
(18) Duration of Accreditation and Certification. A commenter
asked, ``How can certification be essentially in perpetuity and
accreditation have a time restraint?'' The commenter's question does
not indicate a preference for certification or accreditation longevity.
The commenter correctly points out that certification and
accreditation, both of which must be updated annually, are granted for
different time periods. The Act limits the period of accreditation to 5
years but does not establish a limit to the period of certification. We
believe the requirement that the certified operation submit an annual
update of its organic plan negates the need for a certification
expiration date.
(19) Denial of Accreditation. In commenting on section 205.507, a
commenter stated that the regulations need to address what happens to a
certifying agent's clients when the certifying agent fails to qualify
for accreditation on its first attempt.
Section 205.507(c) provides that an applicant who has received
written notification of accreditation denial may apply for
accreditation again at any time in accordance with section 205.502.
Upon implementation of the certification requirements of the NOP,
production and handling operations planning to sell, label, or
represent their products as organic must be certified by a USDA-
accredited certifying agent before selling, labeling, or representing
their products as organic. If a producer's or handler's choice of
certifying agents does not receive USDA accreditation, the producer or
handler must seek and receive certification under the NOP from a USDA-
accredited certifying agent before selling, labeling, or representing
their products as organic. Producers and handlers not so certified may
not sell, label, or represent their products as organic. Any producer
or handler who violates this requirement will be subject to prosecution
under section 2120 of the Act.
(20) Loss of Accreditation After Initial Site Visit. Commenting on
section 205.508(b), a commenter stated the belief that accreditation
before a site visit may cause problems if the certifying agent does not
meet the requirements and, subsequently, loses its accreditation. We
believe the problems will be no greater than will occur at any other
time when it becomes necessary to revoke a certifying agent's
accreditation, including when it becomes necessary to initiate
proceedings to suspend or revoke the certification of one or more of
the certifying agent's certified operations. However, just because
revocation of a certifying agent's accreditation may be justified, it
may not be necessary to suspend or revoke the certification of one or
more of its clients. An operation certified by a certifying agent that
has lost its accreditation must make application with a new certifying
agent if it is going to continue to sell, label, or represent its
products as organic.
(21) Prohibition on Certification After Expiration of
Accreditation. A commenter stated that, ``USDA should allow certifying
agents to apply the same provisions to expiration of certification of a
certified operation.'' The provision referenced by the commenter is the
section 205.510(c)(1) (current section 205.510(c)(2)) requirement that
certifying agents with an expired accreditation must not perform
certification activities under the Act and these regulations. We have
not accepted the commenter's request that the same prohibition be
applied to production and handling operations with an expired
certification because certification does not expire.
(22) Expiration of Accreditation. Many commenters requested that we
amend section 205.510(c)(1) to require annual reports and
``minivisits.'' The commenters cited ISO Guide 61, section 3.5.1. We do
not believe that annual ``minivisits'' are necessary to meet the
requirements of ISO Guide 61 or to assure compliance with the NOP. One
or more site evaluations will be conducted during the period of
accreditation. The certifying agent's annual report will be used as a
determining factor in whether to conduct a site evaluation. A request
for amendment to a certifying agent's area of accreditation will also
result in a site evaluation. This requirement is located at current
section 205.510(c)(2).
(23) Update and Review of Inspector Lists. In commenting on section
205.510(c)(1) (current section 205.510(c)(2)) several commenters stated
that updating and review of inspector lists must occur more frequently
than every 5 years. They cited ISO Guide 61, section 3.5.1.
Section 205.510(a)(1) requires that the certifying agent annually
update the information required in section 205.504. This includes the
inspector information required by paragraphs 205.504(a)(2) and
205.504(a)(3)(i).
[[Page 80612]]
Subpart G--Administrative
The National List of Allowed and Prohibited Substances
Description of Regulations
General Requirements
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 or food group(s)).'' 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
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.
Substances appearing on the National List are designated using the
following classifications:
1. Synthetic substances allowed for use in organic crop production
2. Nonsynthetic substances prohibited for use in organic crop
production
3. Synthetic substances allowed for use in organic livestock
production
4. Nonsynthetic substances prohibited for use in organic livestock
production
5. Nonagricultural (nonorganic) substances allowed as ingredients
in or on processed products labeled as ``organic'' or ``made with
organic (specified ingredients or food group(s))
6. Nonorganically produced agricultural products allowed as
ingredients in or on processed products labeled as organic'' or ``made
with organic (specified ingredients or food group(s))
This subpart also outlines procedures through which an individual
may petition the Secretary to evaluate substances for developing
proposed National List amendments and deletions.
The NOSB is responsible for making the recommendation of whether a
substance is suitable for use in organic production and handling. The
OFPA allows the NOSB to develop substance recommendations and
annotations and forward to the Secretary a Proposed National List and
any subsequent proposed amendments. We have made every effort to ensure
the National List in this final rule corresponds to the recommendations
on allowed and prohibited substances made by the NOSB. In developing
their recommendations, the NOSB evaluates synthetic substances for the
National List utilizing the criteria stipulated by the Act.
Additionally, criteria for evaluating synthetic processing ingredients
have been implemented by the NOSB. 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. The NOSB adopted these criteria as internal
guidelines for evaluating processing aids and adjuvants. The adopted
criteria do not supersede the criteria contained in the OFPA or replace
the Food and Drug Administration's (FDA) regulations related to food
additives and generally recognized as safe (GRAS) substances. The NOSB
has also provided recommendations for the use of synthetic inert
ingredients in formulated pesticide products used as production inputs
in organic crop or livestock operations. The Environmental Protection
Agency (EPA) regulates and maintains the EPA Lists of Inert ingredients
used for pesticide. In this final rule, EPA Inerts List 1 and 2 are
prohibited, EPA List 3 is also prohibited unless specifically
recommended as allowed by the NOSB, and EPA List 4 Inerts are allowed
unless specifically prohibited.
In this final rule, only EPA List 4 Inerts are allowed as
ingredients in formulated pesticide products used in organic crop and
livestock production. The allowance for EPA List 4 Inerts only applies
to pesticide formulations. Synthetic ingredients in any formulated
products used as organic production inputs, including pesticides,
fertilizers, animal drugs, and feeds, must be included on the National
List. As sanctioned by OFPA, synthetic substances can be used in
organic production and handling as long as they appear on the National
List. 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 one of the
NOSB's primary activities 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
that are essential to organic production and handling. 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.
We expect the maintenance of the National List to be a dynamic
process. We anticipate that decisions on substance petitions for the
inclusion on or deletion from the National List will be made on an
annual basis. Any person seeking a change in the National List should
request a copy of the petition procedures that were published in the
Federal Register (65 Fed Reg 43259--43261) on July 13, 2000, from the
NOP. The National List petition process contact information is: Program
Manager, National Organic Program, USDA/AMS/TMP/NOP, Room 2945-S, Ag
Stop 0268, P.O. Box 96456, Washington, DC 20090-6456 or visit the NOP
website: www.ams.usda.gov/nop. Substances petitioned for inclusion on
the National List will be reviewed by the NOSB, which will forward a
recommendation to the Secretary. Any amendments to the National List
will require rulemaking and must be published for comment in the
Federal Register.
Nothing in this subpart alters the authority of other Federal
agencies to regulate substances appearing on the National List. FDA
issues regulations for the safe use of substances in food production
and processing. USDA's Food Safety and Inspection Service (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 GRAS
substances take precedence over the approved and prohibited uses
specified in this final rule. In other words, 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. FDA and FSIS
regulations can be amended from time to time under their rulemaking
procedures, and conditions of safe use of food additives and GRAS
substances can be revised by the amendment. 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
[[Page 80613]]
production of livestock in an organic operation must comply with the
Federal Food, Drug, and Cosmetic Act (FFDCA). 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,
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.
Under the Federal Insecticide, Fungicide, and Rodenticide Act
(FIFRA), EPA regulates the use of all pesticide products, including
those that may be approved for use in the NOP. In registering a
pesticide under FIFRA, EPA approves the uses of each pesticide product.
It is a violation of FIFRA to use a registered product in a manner
inconsistent with its labeling. The fact that a substance is on the
National List does not authorize use or a pesticide product for that
use if the pesticide product label does not include that use. If the
National List and the pesticide labeling conflict, the pesticide
labeling takes precedence and may prohibit a practice allowed on the
National List.
National List--Changes Based On Comments
This subpart differs from the proposal in several respects as
follows:
(1) Comprehensive Prohibition on Excluded Methods. Many commenters
supported a comprehensive prohibition on the use of excluded methods in
organic production and handling. These commenters stated that the
proposed language on excluded methods could have allowed some uses
since the general prohibition described in section 205.301 of the
proposed rule could be interpreted as applying only to multiingredient
products. In order to provide a comprehensive prohibition on the use of
excluded methods, we incorporated a new provision within section
205.105. A more comprehensive discussion of this issue is found in
subpart B, Applicability.
(2) Substance Evaluation Criteria for the National List. Commenters
stated that the final rule should include in the regulation text the
evaluation criteria utilized by the NOSB for the development of
substance recommendations. We agree, and we have inserted the substance
evaluation criteria developed by the NOSB for processing ingredients
and cited the criteria within the Act (7 U.S.C. 6518(m)) for crops and
livestock production as new provisions for section 205.600, which is
now entitled ``Evaluation criteria for allowed and prohibited
substances, methods, and ingredients.''
(3) Substances Approved for Inclusion on the National List.
Commenters stated that the National List did not contain all of the
substances recommended by the NOSB for inclusion on the National List
of Allowed and Prohibited Substances. We agree and have added the
following substances consistent with the most recent NOSB
recommendations:
Crop Production
Lime sulfur as a plant disease control substance
Elemental sulfur as a plant or soil amendment
Copper as a plant or soil micronutrient
Streptomycin sulfate as plant disease control substances with the
annotation `` for fire blight control in apples and pears only''
Terramycin (oxytetracycline calcium complex) as a plant disease control
substance with the annotation ``for fire blight control only''
Magnesium sulfate as a plant or soil amendment with the annotation
``allowed with a documented soil deficiency''
Ethylene as a plant growth regulator, with the annotation ``for
regulation of pineapple flowering''
We have added sodium nitrate and potassium chloride to the National
List as nonsynthetic substances prohibited for use in crop production
unless used in accordance with the substance annotations. Sodium
nitrate is prohibited unless use is restricted to no more than 20
percent of the crop's total nitrogen requirement. Potassium chloride is
prohibited unless derived from a mined source and applied in a manner
that minimizes chloride accumulation in the soil. These additions are
discussed further in item 3 under Changes Based on Comments, subpart C.
Livestock Production
Oxytocin with the annotation ``for use in postparturition therapeutic
applications''
EPA List 4 inert ingredients as synthetic inert ingredients for use
with nonsynthetic substances or synthetic substances allowed in organic
livestock production.
Several commenters recommended that the final rule should specify
which nonsynthetic substances are prohibited for use in livestock
production. These commenters stated that the proposed rule prohibited
six such substances for use in crop production and maintained that an
analogous list for livestock operations would be beneficial. Of the six
nonsynthetic substances in the proposed rule prohibited for use in crop
production, four were based on NOSB recommendations (strychnine,
tobacco dust, sodium fluoaluminate (mined), and ash from burning
manure) and two were based on statutory provisions in the OFPA (arsenic
and lead salts). After reviewing these substances and the NOSB
recommendations, we determined that the prohibition for one,
strychnine, also applies to livestock production. Individuals may
petition the NOSB to have additional nonsynthetic substances prohibited
for use in organic crop and livestock production.
Organic Handling (Processing)
Tribasic calcium phosphate
Nonsynthetic colors
Flavors, with the annotation ``nonsynthetic sources only and must not
be produced using synthetic solvents and carrier systems or any
artificial preservatives''
Nonsynthetic waxes, carnauba wax, wood resin
Cornstarch (native), gums, kelp, lecithin and pectin were moved from
section 205.605 to section 205.606
(4) Substance Removed from the National List. Commenters stated
that certain substances on the National List in the proposed rule had
not been recommended by the NOSB. We agree with the comment that the
NOSB did not recommend that magnesium should be allowed as a plant or
soil micronutrient and have removed it from the National List.
(5) Changes in Substance Annotations on the National List.
Commenters stated that certain annotations in the proposed rule did not
capture the precise recommendations of the NOSB. We agree and have
amended the annotations within the National List as follows:
The annotation for hydrated lime as a plant disease control
substance now states, ``must be used in a manner that minimizes
accumulation of copper in the soil.''
The annotation for horticultural oils as an insecticide substance
and as a plant disease control substance now
[[Page 80614]]
states, ``Narrow range oils as dormant, suffocating, and summer oils.''
The annotation for hydrated lime in livestock production now
states, ``not permitted for soil application or to cauterize physical
alterations or deodorize animal wastes.''
The annotation for the allowed synthetic parasiticide Ivermectin
has been modified to state that the substance may not be used during
the lactation period of breeding stock.
The annotation for trace minerals and vitamins allowed as feed
additives has been modified and now states, ``used for enrichment or
fortification when FDA approved.''
The annotation for magnesium sulfate in organic handling now
states, ``nonsynthetic sources only.''
The annotation for EPA List 4 Inerts allowed in crop and livestock
production has been modified to state, `` * * * for use with
nonsynthetic substances or synthetic substances listed in this section
* * *''
(6) Sulfur Dioxide for Organic Wines. Many commenters recommended
that this final rule should allow for the use of sulfur dioxide in wine
labeled ``made with organic grapes.'' They argued that sulfur dioxide
is necessary in organic wine production and that prohibiting its use
would have a negative impact on organic grape production and wineries
that produce wine labeled ``made with organic grapes.'' The prohibition
on the use of sulfur dioxide in the proposed rule was based upon the
requirement in the Act that prohibited the addition of sulfites to
organically produced foods. However, a change in the Act now allows the
use of sulfites in wine labeled as ``made with organic grapes.''
Therefore, we have added sulfur dioxide to the National List with the
annotation, ``for use only in wine labeled ``made with organic
grapes,'' Provided, That, total sulfite concentration does not exceed
100 ppm.'' The label for the wine must indicate the presence of
sulfites. This addition to the National List is also in agreement with
the NOSB recommendation for allowing the use of sulfur dioxide in
producing wine to be labeled as ``made with organic grapes.''
National List--Changes Requested But Not Made
This subpart retains from the proposed rule regulations on which we
received comments as follows:
(1) Restructuring the National List. Commenters requested a
restructuring of the National List to improve its clarity and ease of
use. Some of the commenters asked for minor changes involving the
wording of section titles. Other commenters were opposed to the
categories used in the National List because the categories are not in
compliance with the Act. In its June 2000 meeting, the NOSB asked the
NOP to review a proposal from a research institute proposing that
processing materials for the National List be categorized according to
industry standards. This proposal recommended including new sections
for substances used in ``made with * * *'' and substances used in the
5-percent nonorganic portion of ``organic'' multiingredient products.
We agree that the present structure of the National List may not have
optimum clarity and ease of use. However, extensive restructuring of
the National List without additional NOSB consideration and public
discussion would be a significant variation from the policy that
established the National List for this final rule. The NOP will work
with the NOSB and the public to refine the National list consistent
with industry norms and public expectations.
(2) Use of EPA List 4 Inerts. The proposed rule allowed EPA List 4
Inerts to be used as synthetic inert ingredients with allowed synthetic
active ingredients in crop production. Some commenters stated that
certain substances among the EPA List 4 inerts should not be allowed in
organic production. Some commenters went further and recommended that
the allowance for synthetic inert ingredients should be limited to the
subset of materials that the EPA designates as List 4A. We do not agree
with these commenters and have retained the allowance for all inerts
included on EPA List 4. List 4 inerts are classified by EPA as those of
``minimal concern'and, after continuing consultation with EPA, we
believe there is no justification for a further restriction to List 4A.
If commenters believe that a particular List 4 inert should not be
allowed in formulated products used in organic production, they can
petition the NOSB to have that substance prohibited.
(3) Removing Vaccines from the National List. Some commenters
asserted that vaccines should not be included on the National List
because the NOSB had never favorably recommended their use in livestock
production. However, the OFPA authorizes the use of vaccines, and in
1995, the NOSB recommended allowing their use. The NOSB stated that use
of vaccines may be necessary to ensure the health of the animal and to
remain in compliance with Federal, State, or regional regulations. We
agree with the NOSB's recommendation and have retained vaccines as an
allowed substance in livestock medication.
(4) Adding Amino Acids to the National List. Some commenters
recommended that amino acids should be added to the National List as
allowed synthetic substances for livestock production. We have not
added amino acids to the National List because the NOSB has not
recommended that they should be allowed. This subject is discussed
further in item 4, Livestock--Changes Based on Comments, subpart C.
(5) Creating a Category for Prohibited Nonsynthetic Seed
Treatments. A commenter stated that the National List of nonsynthetic
substances prohibited for use in crop production should include
provisions for seed treated with a nonsynthetic substance. This
commenter stated that the final rule should acknowledge that a
nonsynthetic seed treatment could be prohibited on the National List.
We do not believe it is necessary to include a separate category for
seed treatments under the prohibited nonsynthetic section of the
National List. An individual may petition the NOSB to have a particular
nonsynthetic seed treatments placed on the prohibited list without
creating a new category for seed treatments.
(6) Creating a Category for Treated Seed and Toxins Derived from
Bacteria. Commenters stated that the National List of synthetic
substances allowed in crop production should include categories for
treated seed and toxins derived from bacteria. These commenters stated
that these categories are sanctioned by the OFPA, and failure to
consider them would place a significant burden on organic producers. We
believe it is unnecessary to include these categories on the National
List. Specific substances from these categories could be incorporated
in existing categories that reflect their function, such as plant
disease control or insecticide. An individual may submit petitions to
the NOSB to have specific substances from these categories considered
for inclusion on the National List.
(7) Remove Categories for Feed Supplements. A commenter stated that
it was inappropriate for the National List of synthetic substances
allowed in livestock production to contain categories for feed
supplements and feed additives because they are not authorized in the
OFPA. We disagree with this commenter because the identification of
categories on the National List does not mean that all substances
within that category are allowed. The categories help to clarify which
types of materials may be included on the National List. The substances
included under the categories of feed supplements and feed
[[Page 80615]]
additives were recommended by the NOSB and added to the National List
with the Secretary's approval.
(8) Neurotoxic Substances on the National List. Many commenters
requested that the NOP remove particular substances from section
205.605 of the National List. They stated these substances were sources
of neurotoxic compounds that negatively effect human health. The
substances cited were yeast (autolysate and brewers), carrageenan, and
enzymes. Moreover, these commenters argued against including on the
National List some amino acids or their derivatives which the
commenters claim have neurotoxic side effects. These commenters
requested that amino acids should be prohibited from the National List
due to the possibility that neurotoxic substances could be utilized for
either organic agricultural production or handling.
We do not agree with the requests of the commenters and we have not
made the requested changes. There are no amino acids currently on the
National List; therefore, synthetic sources of amino acids are
prohibited. Unless recommended for use by the NOSB, synthetic amino
acids will not be included on the National List. The NOP has
established a petition process for substances to be evaluated for
inclusion on or removal from the National List of Allowed and
Prohibited Substances in organic production and handling. Anyone
seeking to have a particular substance removed from the National List
may file a substance petition to amend the National List.
(9) EPA List 4 Inerts for Organic Processing. A few commenters
recommended that substances in EPA List 4 inerts that are allowed for
use in crop production also be allowed for use as processing materials.
We do not agree, and we have not included EPA List 4 Inerts on the
National List for organic handling. Inerts listed on EPA List 4 have
been evaluated and approved for use in pesticide formulations, not for
use as processing materials. Inerts that are included on EPA List 4
would have to be further evaluated to determine whether such materials
meet the criteria for inclusion on the National List.
(10) Modifying Annotations of Organic Processing Substances. One
commenter requested that the Department modify the annotation for
phosphoric acid to include its use as a processing aid. We have not
made the suggested change. Any change in the annotation of a substance
can only occur through an NOSB recommendation. Individuals or groups
can use the petition process to submit substance petitions to the NOSB
for the evaluation to be included on or removed from the National List.
(11) Nutritional Supplementation of Organic Foods. Some commenters
asserted that 21 CFR 104.20 is not an adequate stand-alone reference
for nutritional supplementation of organic foods. As a result, these
commenters recommended that the final rule include as additional cites
21 CFR 101.9(c)(8) for FDA-regulated foods and 9 CFR 317.30(c),
318.409(c)(8) for foods regulated by FSIS to support 21 CFR 104.20. We
did not implement the suggested changes of the commenters. Section
205.605(b)(20) in the proposed rule allowed the use of synthetic
nutrient vitamins and minerals to be used in accordance with 21 CFR
104.20, Nutritional Quality Guidelines For Foods, as ingredients in
processed products to be sold as ``organic'' or ``made with * * *.''
The commenters recommended cites, 21 CFR 101.9(c)(8) for FDA-regulated
foods and 9 CFR 317.30(c); section 318.409(c)(8) did not provide
provisions for nutritional supplementation of foods. Instead, these
suggested cites were particularly aimed toward: (1) The declaration of
nutrition information on the label and in labeling of a food; (2)
labeling, marking devices, and containers; (3) entry into official
establishments; and (4) reinspection and preparation of products. The
NOP, in consultation with FDA, considers 21 CFR 104.20 to be the most
appropriate reference regarding nutritional supplementation for organic
foods.
(12) National List Petition Process as Part of the Final Rule.
Commenters have requested that the National List Petition Process,
approved by the NOSB at its June 2000 meeting (and published in the
Federal Register on July 13, 2000), be included in the final rule. We
do not agree with the commenters, and we have retained the National
List Petition Process regulation language from the proposed rule. We
have separated the specific petition process from the regulation to
provide for maximum flexibility to change and clarify the petition
process to accommodate new considerations developed during the NOP
implementation. If this process were part of this final rule, updates
to the petition process would require notice and comment rulemaking.
Any changes in the National List that may be a result of the petition
process, however, would require notice and comment rulemaking.
(13) Nonapproved Substance Amendments to the National List.
Commenters also requested to have many substances that are not on the
National List and that have not been recommended by the NOSB for use in
organic production and handling be added to the National List. We do
not agree. Amendments to the National List must be petitioned for NOSB
consideration, must have an NOSB recommendation, and must be published
for public comment in the Federal Register.
National List--Clarifications
Clarification is given on the following issues raised by commenters
as follows:
(1) Inerts Use in Botanical or Microbial Pesticides. Commenters
expressed concern that the prohibition on the use of EPA List 3 inerts
would prevent organic producers from using certain botanical or
microbial formulated products that are currently allowed under some
certification programs. These commenters requested that the NOP and the
NOSB expedite the evaluation of List 3 inerts used in nonsynthetic
formulated products to prevent the loss of certain formulated products.
The prohibition of List 3 inerts was based on the recommendation of the
NOSB to add only those substances from List 4 to the National List. The
NOSB also recommended that individual inert substances included on List
3 could be petitioned for addition to the National List. The NOP has
requested that the NOSB identify for expedited review those List 3
inerts that are most important in formulated products used in organic
production. Individuals may petition to have these inerts considered
for inclusion on the National List. Additionally, the NOP will work
with the EPA and the registrants of formulated products to expedite
review of List 3 inerts currently included in formulated products used
in organic production. Unless List 3 inerts are moved to List 4 or
individually added to the National List, they are prohibited for use in
organic production.
(2) Prohibiting Ash, Grit, and Screenings Derived from Sewage
Sludge. Many commenters recommended that the ash, grit, and screenings
derived from the production of sewage sludge should be added to the
National List as nonsynthetic materials prohibited for use in crop
production. While the use of sewage sludge, including ash, grit, and
screenings, is prohibited in organic production, we did not add them to
the National List as prohibited nonsynthetic substances. This subject
is discussed further under subpart A, Definitions--Changes Requested
But Not Made.
(3) Allowed Uses for Pheromones. Some commenters were concerned
that
[[Page 80616]]
the annotation for using pheromones as ``insect attractants'' was too
limiting and would not include uses such as mating disruption,
trapping, and monitoring. The annotation for pheromones does not
preclude any use for a pheromone that is otherwise allowed by Federal,
State, or local regulation.
(4) Nonagricultural Products as Livestock Feed Ingredients. Some
commenters questioned whether nonsynthetic, nonagricultural substances
such as fishmeal and crushed oyster shell needed to be added to the
National List to be used in livestock feed. Nonsynthetic substances do
not have to appear on the National List and may be used in organic
livestock feed, provided that they are used in compliance with the
FFDCA. This subject is discussed further under item 4, Livestock--
Changes Based on Comments, subpart C.
(5) Chlorine Disinfectant Limit Annotation for Organic Production
and Handling. Some commenters requested clarification on the annotation
for using chlorine materials as an allowed synthetic substance in crop
and handling operations. The annotation in the proposed rule, which has
been retained in the final rule, stated that ``residual chlorine levels
in the water shall not exceed the maximum residual disinfectant limit
under the Safe Water Drinking Act.'' With this annotation, the residual
chlorine levels at the point where the waste water stream leaves the
production or handling operation must meet limits under the Safe
Drinking Water Act.
(6) Tobacco Use in Organic Production. One commenter questioned
whether forms of tobacco other than tobacco dust, such as water
extracts or smoke, were prohibited nonsynthetic substances. The
technical advisory panel (TAP) review on which the NOSB based its
recommendation to prohibit tobacco dust identified nicotine sulfate as
the active ingredient. Therefore, any substance containing nicotine
sulfate as an active ingredient is prohibited in crop production.
(7) Nonsynthetic Agricultural Processing Aids on the National List.
A commenter requested clarification from the NOP on whether processing
aids (e.g., defoaming agents), which are nonsynthetic and nonorganic
agricultural substances (e.g., soybean oil), must appear on the
National List when used in processing. In the regulation, a
nonsynthetic and nonorganic agricultural product, such as soybean oil,
used as a processing aid does not have to appear on the National List.
Such products are included in the provision in section 205.606 that
nonorganically produced agricultural products may be used in accordance
with any applicable restrictions when the substance is not commercially
available in organic form.
(8) Transparency of the National List Petition Process. Some
commenters stated the petition process for amending the National List
appears to have limited public access and should be more transparent.
These commenters advocate that any amendments to the National List
should be subject to notice and comment. They also requested clarity on
how petitions are prioritized and reviewed and the timeframes for
review. Additionally, these commenters asked the NOP to expedite the
review of materials for the National List. On July 13, 2000, AMS
published in the Federal Register (Vol. 65, 43259-43261) guidelines for
submitting petitions for the evaluations of substances for the addition
to or removal from the National List. In this notice, the NOP stated
that most petition information is available for public inspection with
the exception of information considered to be ``confidential business
information.'' The notice also specified that any changes to the
National List must be published in the Federal Register for public
comment. The published petition notice has also provided an indication
to the industry about the urgency of the need for substance review and
that the industry should provide pertinent information to the NOSB to
expedite the review of materials not on the National List.
State Organic Programs
The Act provides that each State may implement an organic program
for agricultural products that have been produced and handled within
the State, using organic methods that meet the requirements of the Act
and these regulations. The Act further provides that a State organic
program (SOP) may contain more restrictive requirements for organic
products produced and handled within the State than are contained in
the National Organic Program (NOP). All SOP's and subsequent amendments
thereto must be approved by the Secretary.
A State may have an SOP but not have a State certifying agent. A
State may have a State certifying agent but no SOP. Finally, a State
may have an SOP and a State certifying agent. In all cases, the SOP's
must be approved by the Secretary. In all cases, the State certifying
agent must apply for and receive accreditation to certify organic
production or handling operations pursuant to subpart F.
In States with an approved SOP, the SOP's governing State official
is responsible for administering a compliance program for enforcement
of the NOP and any more restrictive requirements contained in the SOP.
The SOP governing State officials may review and investigate complaints
of noncompliance involving organic production or handling operations
operating within their State and, when appropriate, initiate suspension
or revocation of certification. The SOP governing State officials may
also review and investigate complaints of noncompliance involving
accredited certifying agents operating within their State. They must
report the findings of any review and investigation of a certifying
agent to the NOP Program Manager along with any recommendations for
appropriate action. States that do not have an SOP will not be
responsible for compliance under the NOP, except that an accredited
State certifying agent operating within such State will have compliance
responsibilities under the NOP as a condition of its accreditation.
The sections covering SOP's, beginning with section 205.620,
establish: (1) The requirements for an SOP and amending such a program
and (2) the process for approval of an SOP and amendments to the SOP's.
Review and approval of an SOP will occur not less than once during each
5-year period. Review related to compliance matters may occur at any
time.
Description of Regulations
State Organic Program Requirements
A State may establish an SOP for production and handling operations
within the State that produces and handles organic agricultural
products. The SOP and supporting documentation must demonstrate that
the SOP meets the requirements for organic programs specified in the
Act.
An SOP may contain more restrictive requirements governing the
production and handling of organic products within the State. Such
requirements must be based on environmental conditions or specific
production or handling practices particular to the State or region of
the United States, which necessitates the more restrictive requirement.
More restrictive requirements must be justified and shown to be
consistent with and to further the purposes of the Act and the
regulations in this part. Requirements necessitated by an environmental
condition that is limited to a specific geographic area of the State
should only be required of organic production and
[[Page 80617]]
handling operations operating within the applicable geographic area. If
approved by the Secretary, the more restrictive requirements will
become the NOP regulations for organic producers and handlers in the
State or applicable geographical area of the State. All USDA-accredited
certifying agents planning to operate within a State with an SOP will
be required to demonstrate their ability to comply with the SOP's more
restrictive requirements.
No provision of an SOP shall discriminate against organic
agricultural products produced by production or handling operations
certified by certifying agents accredited or accepted by USDA pursuant
to section 205.500. Specifically, an SOP may not discriminate against
agricultural commodities organically produced in other States in
accordance with the Act and the regulations in this part. Further, an
SOP may not discriminate against agricultural commodities organically
produced by production or handling operations certified by foreign
certifying agents operating under: (1) Standards determined by USDA to
meet the requirements of this part or (2) an equivalency agreement
negotiated between the United States and a foreign government.
To receive approval of its SOP, a State must assume enforcement
obligations in the State for the requirements of this part and any more
restrictive requirements included in the SOP and approved by the
Secretary. Specifically, the State must ensure compliance with the Act,
the regulations in this part, and the provisions of the SOP by
certified production and handling operations operating within the
State. The SOP must include compliance and appeals procedures
equivalent to those provided for under the NOP.
An SOP and any amendments thereto must be approved by the Secretary
prior to implementation by the State.
State Organic Program Approval Process
An SOP and subsequent amendments thereto must be submitted to the
Secretary by the SOP's governing State official for approval prior to
implementation. A request for approval of an SOP must contain
supporting materials that include statutory authorities, program
descriptions, documentation of environmental or ecological conditions
or specific production and handling 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. A request for amendment of an approved SOP must contain
supporting materials that include an explanation and documentation of
the environmental or ecological conditions or specific production
practices particular to the State or region, which necessitate 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 in this part.
Each request for approval of an SOP or amendment to an SOP and its
supporting materials and documentation will be reviewed for compliance
with the Act and these regulations. Within 6 months of receiving the
request for approval, the Secretary will notify the SOP's governing
State official of approval or disapproval. A disapproval will include
the reasons for disapproval. A State receiving a notice of disapproval
of its SOP or amendment to its SOP may submit a revised SOP or
amendment to its SOP at any time.
Review of State Organic Programs
SOP's will be reviewed at least once every 5 years by the Secretary
as required by section 6507(c)(1) of the Act. The Secretary will notify
the SOP's governing State official of approval or disapproval of the
program within 6 months after initiation of the review.
State Organic Programs--Changes Based on Comments
This portion of subpart G differs from the proposal in several
respects as follows:
(1) Publication of SOP's and Consideration of Public Comments. Some
commenters assert that the USDA should not publish SOP provisions for
public comment in the Federal Register. These commenters argued that it
is not appropriate for the NOP to have nonresidents commenting on a
particular State program as nearly all States have a mechanism to
ensure full public participation in their regulation promulgation. They
believe the comment process set forth in the proposed rule is a
redundant and unacceptable intrusion on State sovereignty.
We will not publish for public comment the provisions of SOP's
under review by the Secretary in the Federal Register. We have removed
the provision from this final rule, described in section 205.621(b),
requiring the Secretary to publish in the Federal Register for public
comment a summary of the SOP and a summary of any amendment to such a
program. Alternatively, we will announce which SOP's are being reviewed
through the NOP website. The NOP will issue public information notices
that will announce each approved SOP and any approved amendments to an
existing State program. The notices will identify the 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 website.
(2) NOP Oversight of SOP's. Several commenters stated that, in the
proposed rule, the provisions did not provide a comprehensive
description of organic programs operated by States that would be under
NOP authority. Some commenters implied that the proposed rule would
only include States with organic certification programs, while other
commenters inquired whether the sections 205.620 to 205.622 included
other SOP activities beyond certification.
To address the commenters' concerns, we have modified the section
heading by adding the term, ``organic,'' and removing the term,
``certification,'' from the description and definition of SOP's. We
have taken this action to clarify that, while certification is one
component of the requirements, it does not define the extent of
evaluation of State programs that will be conducted by the NOP. SOP's
can choose not to conduct certification activities under their existing
organic program. State programs whose provisions fall within the scope
of the eleven general provisions described in the Act (7 U.S.C. 6506)
will require Departmental review.
States may conduct other kinds of organic programs that will not
need review and approval by the NOP. Examples of these other programs
may include: organic promotion and research projects, marketing;
transition assistance or cost share programs, registration of State
organic production and handling operations, registration of certifying
agents operating within the State, or a consumer referral program. The
NOP will not regulate such State activities. 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 would be beyond the scope of
this national program and will not be subject to the Secretary's
review.
State Organic Programs--Changes Requested But Not Made
(1) Limitations on SOP More Restrictive Requirements. Commenters
expressed concern that limiting a State's
[[Page 80618]]
ability to craft a regulation designated as a more restrictive
requirement to environmental conditions or specific production and
handling practices would hinder the ongoing development of SOP's. They
were concerned that any State legislation modifying the SOP would need
to be preapproved by the Secretary.
We have retained the provision limiting the scope of more
restrictive requirements States can include in their organic program as
described in section 205.620(c). We believe the language contained in
the provision is broad enough to facilitate the development of SOP's
without hindering development or State program implementation and
enforcement. Section 6507(b)(1) of the Act provides that States may
establish more restrictive organic certification requirements;
paragraph (b)(2) establishes parameters for those requirements. More
restrictive SOP requirements must: further the purposes of the Act, be
consistent with the Act, not discriminate against other State's
agricultural commodities, and be approved by the Secretary before
becoming effective. We expect that a State's more restrictive
requirements are likely to cover specific organic production or
handling practices to address a State's specific environmental
conditions. The Secretary will approve State's requests for more
restrictive State requirements that are consistent with the purposes of
the Act. However, we believe requests from States for more restrictive
requirements will be rare. Although SOP's can impose additional
requirements, we believe States will be reluctant to put their program
participants at a competitive disadvantage when compared to producers
and handlers in other States absent compelling environmental conditions
or a compelling need for special production and handling practices.
While preapproval of State legislation modifying an existing SOP is not
required, the NOP envisions a close consultation with States with
existing programs to ensure consistency with the final rule.
(2) SOP Enforcement Obligations. Some commenters expressed concern
about States having adequate resources available to implement
enforcement activities that they are obligated to conduct under the
NOP. A few of these commenters argue that the enforcement obligation
will result in their State programs being discontinued. A few
commenters cited a lack of federal funding to support State enforcement
obligations and suggested the NOP provide funding for enforcement
activities.
The proposed rule indicated that States with organic programs must
assume enforcement obligations for this regulation within their State.
We have retained this enforcement obligation in section 205.620(d).
Many States currently have organic programs with the kind of
comprehensive enforcement and compliance mechanisms necessary for
implementing any State regulatory program. Assuming those enforcement
activities are consistent with the NOP, this final rule adds no
additional regulatory burden to the SOP's. The costs associated with
the enforcement activities of an approved SOP should be similar to the
enforcement costs associated with the existing State program.
Additional clarification of SOP enforcement obligations is in the
Accreditation, Appeals, and Compliance preamble discussions.
(3) SOP Evaluation Notification Period. A few commenters indicated
that the SOP review and decision notification period described in
section 205.621(b) of the proposed rule could hinder a State's ability
to develop or implement an SOP. These commenters cited potential cases
in which particular States have requirements for regulatory
promulgation that must occur within 6 months under a State legislative
session that is held once every 2 years. These commenters suggested the
NOP should reduce the notification time to 1 to 3 months.
We disagree with the commenters. In the proposed rule in section
205.621(b), the Secretary is required to notify the SOP's governing
State official within 6 months of receipt of submission of documents
and information regarding the approval of the SOP. We have retained
this time period. We will review SOP applications as quickly as
possible and will endeavor to make decisions in less than 6 months
whenever possible. However, some SOP's may be very complex and require
more review time. The NOP envisions working closely with the States and
State officials to ensure a smooth transition to the requirements of
this final rule.
State Organic Programs--Clarifications
(1) Discrimination Against Organic Products. Several commenters
requested the addition of a provision prohibiting an SOP from
discriminating against agricultural commodities organically produced in
other States. Discrimination by a State against organically produced
agricultural products produced in another State is prevented in two
ways. First, any organic program administered by a State must meet the
requirements for organic programs specified in the Act and be approved
by the Secretary. Finally, a USDA-accredited certifying agent must
accept the certification decisions made by another USDA-accredited
certifying agent as its own.
(2) Potential Duplication Between the Accreditation and SOP Review
Process. Some commenters asked about possible duplication between the
process for reviewing SOP's and the process of accreditation review.
These commenters have asked the NOP to eliminate any duplication that
may exist between the two review processes. The NOP will be conducting
a review process for SOP's and a separate review process for
accrediting State and private certifying agents. The two reviews are
different. The SOP review is the evaluation of SOP compliance with the
Act and the NOP regulations. If approved, the SOP becomes the NOP
standards for the particular State with which all certifying agents
operating in that State must comply. Approved SOP's must be in
compliance with the Act and the NOP regulations. They cannot have
weaker standards than the NOP. States can have more restrictive
requirements than the NOP if approved by the Secretary.
The accreditation review is an evaluation of the ability of
certifying agents to carry out their responsibilities under the NOP.
This review is a measure of the competency of certifying agents to
evaluate compliance to national organic standards. Certifying agents
will not be unilaterally establishing regulations or standards related
to the certification of organic products. They will only provide an
assessment of compliance.
Thus, SOP reviews and accreditation reviews are separate
evaluations of different procedures. We acknowledge some of the
information for the two evaluations may be similar; e.g., compliance
procedures. The reviews do not duplicate the same requirements.
However, the NOP envisions working with States to ensure documentation
is not duplicated.
(3) Scope of Enforcement by States. A number of State commenters
have requested clarification on the proposed rule provision specifying
that approved SOP's must assume enforcement obligations in their State
for the requirements of the NOP and any additional requirements
approved by the Secretary. These commenters have indicated that they
remain uncertain as to what is expected by the term, ``enforcement
obligation.''
Approved SOP's will have to administer and provide enforcement of
the requirements of the Act and the
[[Page 80619]]
regulations of the NOP. The administrative procedures used by the State
in administering the approved SOP should have the same force and effect
as the procedures use by AMS in administering this program. This final
rule specifies that the requirements for environmental conditions or
for special production and handling practices are necessary for
establishing more restrictive requirements. These factors establish our
position that a State must agree to incurring increased enforcement
responsibilities and obligations to be approved as an SOP under the
NOP. For instance, a State with an approved organic 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.
Once approved by the Secretary, the State governing official of the SOP
must administer the SOP in a manner that is consistent and equitable
for the certified parties involved in compliance actions.
(4) SOP's That Do not Certify and NOP Oversight. A few commenters
requested that the NOP develop new provisions to include State programs
that have organic regulations but do not conduct certification
activities. These commenters argue that any SOP that has a regulatory
impact on organic producers, regardless of whether or not the program
includes certification, be approved by the Secretary.
This regulation, in section 205.620(b), provides for NOP oversight
of SOP's that do not conduct certification activities.
(5) State's Use of Private Certifying Agents. Some commenters have
requested that the NOP provide clarification of the proposed rule
sections 205.620 through 205.622 on how these sections will affect
States that delegate certification activities to private certifying
agents. These commenters asked how the NOP intends to oversee this type
of State activity.
The NOP intends to give considerable latitude to States in choosing
the most appropriate system or procedures to structure their programs.
This may include a State establishing its own certifying agent or
relying on private certifying agents. However, States will not be
accrediting certifying agents operating in their State. Accreditation
of all certifying agents operating in the United States is the
responsibility of USDA. Establishment of a single national
accreditation program is an essential part of the NOP. As stated
elsewhere in this final rule, any accreditation responsibilities of a
State's current organic program will cease with implementation of this
program. Pursuant to the Compliance provisions of this subpart, the
governing State official charged with compliance oversight under the
SOP 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, as provided by
section 205.501(a)(20), and determine whether they are able to certify
to the approved, more restrictive requirements. Our accreditation
responsibilities include oversight of both State and private certifying
agents, including any foreign certifying agents that may operate in a
State.
Subpart G--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 U.S.
Department of Agriculture (USDA) 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.
Description of Regulation
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 a place and back to the
headquarters or from 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 USDA, travel tolls, or,
when 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. 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
[[Page 80620]]
the evaluator(s) receives per diem reimbursement. The per diem rate
will be administratively determined by USDA. 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 USDA. 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, Room 2945-South
Building, P.O. 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 that must be applied to the
applicant's fees-for-service account. A certifying agent may set the
nonrefundable portion of certification fees; however, the nonrefundable
portion of certification fees must be explained in the fee schedule
submitted to the Administrator. The fee schedule must explain what fee
amounts are nonrefundable and at what stage during the certification
process the respective fees become nonrefundable. 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 subpart differs from the proposal in the following respects:
Nonrefundable Portion of Certification Fees. Commenters were not
satisfied with the provision in section 205.642 that stated, ``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 fee for service account.'' Some
commenters believed we were requiring the certifying agents to bill
fees for inspection services separately. One State agency expressed a
concern that we were placing a limit on the initial fee the certifying
agent could collect. As a result, the State agency commented that by
not being allowed to collect the full certification fee at the time of
application, the certifying agent, in effect, would be extending credit
to the applicant. Commenters reported that some State agencies are
prevented by statute from extending credit and are required to collect
all fees at the time of application. Several commenters stated that the
amount of $250.00 was too low and would not cover the costs the
certifying agents could incur during the certification process. One
organization noted that we should consider prorating the amount of the
fee to be refunded when an applicant for certification withdraws before
the completion of the certification process. The organization
recommended that the amount of the prorated fee should be based on how
far along in the certification process the applicant had progressed
before withdrawal. Another commenter believed it was inappropriate for
USDA to set any fees for private certification programs and that the
fees should be market driven.
It was not our intent to limit the initial amount that certifying
agents could collect from the applicant for certification. Our intent
was to limit the portion of the fee that would be nonrefundable in
order to reduce the potential liability for the small producer/handler
who may need to withdraw prematurely from the certification process.
However, we acknowledge that this provision could be misinterpreted. We
also realize that certifying agents may incur initial costs during the
preliminary stage of the certification process that may be more or less
than the $250.00 application rate proposed. As a result, we have
removed the provision that stated certifying agents could collect a
nonrefundable fee of not more than $250.00 at the time of application
from applicants for certification.
Certifying agents may set the nonrefundable portion of their
certification fees. However, the nonrefundable portion of their
certification fees must be explained in the fee schedule submitted to
the Administrator. The fee schedule must explain what fee amounts are
nonrefundable and at what stage during the certification process the
respective fees become nonrefundable. Certifying agents will also
provide all persons inquiring about the application process with a copy
of its fee schedule.
Fees--Changes Requested But Not Made
This subpart retains from the proposed rule regulations on which we
received comments as follows:
(1) Farm Subsidy/Transition Program. Many commenters asked that
USDA subsidize or develop a cost-share program for small farmers/
producers who are certified or who are in transition to organic
farming. Some commenters wanted these costs to be fully subsidized; a
few commenters suggested that USDA pay for any extra site visit costs;
and many others wanted USDA to pay premium prices to farmers for their
products during the period of transition to organic production. In
addition, many commenters argued that USDA should fully fund
certification costs. Finally, many commenters suggested that the USDA
should provide additional financial support to the organic industry
because the industry is relatively young and composed of a large number
of small, low-resource businesses.
We have considered the commenters requests but have not made the
suggested changes. The NOP under AMS is primarily a user-fee-based
Federal program. Section 2107(a)(10) of the Organic Food Production Act
of 1990 (OFPA) requires that the NOP provide for the collection of
reasonable fees from producers, certifying agents, and handlers who
participate in activities to certify, produce, or handle agricultural
products as organically produced. Therefore, under the
[[Page 80621]]
statutory authority of OFPA, it is outside of the scope of the NOP to
provide for the subsidization of producers, handlers, and certifying
agents as desired by some commenters. We have, however, established
provisions in this part that we believe will minimize the economic
impact of the NOP on producers, handlers, and certifying agents.
(2) Small Farmer Exemption Versus Lower Certification Fees. Many
commenters suggested that certification fees be lowered or based on a
sliding scale rather than instituting an exemption from certification
for small farmers and handlers.
We have not accepted the commenters' suggestion. We cannot remove
the small farmer exemption because section 2106(d) of the Act requires
that small farmers be provided an exemption from organic certification
if they sell no more than $5,000 annually in value of agricultural
products. Also, certification fees cannot be lowered by USDA because
NOP under AMS is primarily a user-fee-based Federal agency. It is not
our goal or objective to make a profit on our accreditation activities.
However, our fees associated with the accreditation process are
targeted toward recovering costs incurred during the accreditation
process. Commenters expressed a concern that the accreditation fees
charged by USDA would have an impact on the certification fees
prescribed by certifying agents to operations seeking organic
certification. We understand the commenters' concern that accreditation
fees charged to certifying agents will most likely be calculated into
the fees that certifiers charge their clients. However, we believe that
our provision to waive the hourly service charges for accreditation
during the first 18 months of implementation of the NOP should help
reduce accreditation costs of the certifying agent and should,
therefore, result lower certification fee charged by certifying agents.
As provided by the Act and the regulations in this part, fees charged
by certifying agents must be reasonable. Also, certifying agents must
submit their fee schedule to the Administrator and may only charge
those fees and charges filed with the Administrator. In addition,
certifiers are required to provide their approved fee schedules to
applicants for certification. Therefore, applicants for certification
will be able to base their selection of a certifying agent on price if
they choose. Moreover, there are no provisions in the regulations that
preclude certifying agents from pricing their services on a sliding
scale, as long as their fees are consistent and nondiscriminatory and
are approved during the accreditation process.
(3) Accreditation Fees. Many industry commenters suggested that we
reevaluate our accreditation fee structure. They believe the hourly
accreditation rate proposed is unacceptable. Commenters were concerned
that high accreditation costs would lead to high certification costs,
which would have a greater impact on small operations. Some industry
commenters also noted that we should be required to provide a fee
schedule such as the certifiers are required to do. They stated that
unless USDA provided a fee schedule that included travel costs, they
would not be able to accurately budget for these costs. A few
commenters wanted USDA to forgo charging travel costs or not charge
travel time at the full rate. Several commenters also stated that the
hourly rate stated in the proposal is much higher than what the people
who actually perform the accreditations will earn. However, a large
majority of the commenters favored the 18-month period in which AMS
will not charge the hourly accreditation rate to applicants.
As stated in the proposal, the hourly rate will be the same as that
of AMS' Quality Systems Certification Program. Due to the fact that
AMS' Quality Systems Certification Program publishes one rate that is
readily available to the public, it is our belief that it is
unnecessary for the NOP to set up a separate fee schedule. The NOP will
notify accredited certifying agents and applicants for accreditation of
any proposed rate changes and final actions on such rates by AMS. We
will also periodically report the status of fees to the National
Organic Standards Board.
Those applicants and certifying agents who need accreditation cost
estimates, including travel, for budgetary or other reasons may notify
the NOP. The NOP staff will provide the applicant with a cost estimate,
based on information provided by the applicant. As stated in an earlier
response ((2)--Changes Requested But Not Made), the objective of the
fee that is charged to accredit certifying agents is not to gain a
profit for accreditation activities but to recover costs incurred
during the accreditation process. As such, these costs include but are
not limited to salaries, benefits, clerical help, equipment, supplies,
etc.
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 NOP Program Manager, State organic
programs' (SOP) governing State officials, and State and private
certifying agents. These provisions also address the rights of
certified production and handling operations and accredited certifying
agents operating under the NOP. The granting and denial of
certification and accreditation are addressed under subparts E and F.
Description of Regulations
The Secretary is required under the Act to review the operations of
SOP's, 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 compliance proceedings and
provide oversight of compliance proceedings on behalf of the Secretary
and the Administrator. The Program Manager will initiate proceedings to
suspend or revoke a certified operation's certification if a certifying
agent or SOP's governing State official fails to take appropriate
enforcement action. The Program Manager may also initiate proceedings
to suspend or revoke a certified operation's certification if the
operation is found to have been erroneously certified by a certifying
agent whose accreditation has been suspended or revoked. We anticipate,
however, that most investigations, reviews, and analyses of
certification noncompliance and initiation of suspension or revocation
will be conducted by the certified operation's certifying agent. With
regard to certifying agents, the Program Manager will, when
appropriate, initiate proceedings to suspend or revoke the
accreditation of a certifying agent for noncompliance with the Act and
these regulations.
In States with an approved SOP, the SOP's governing State official
is responsible for administering a compliance program for enforcement
of the NOP/SOP. SOP's governing State officials may review and
investigate complaints of noncompliance involving organic production or
handling operations operating within their State and, when appropriate,
initiate suspension or revocation of certification. SOP's governing
State officials may also review and investigate complaints of
noncompliance involving accredited certifying agents operating within
their State. They must report the findings of any review and
investigation of a certifying agent to the Program Manager along with
any recommendations for appropriate action.
The compliance provisions of the NOP are consistent with the
[[Page 80622]]
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. A compliance action regarding certification
carried out under an approved SOP'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 certification and accreditation is laid out in subparts E and
F, respectively.
Each notification of noncompliance, rejection of mediation,
noncompliance resolution, proposed suspension or revocation, and
suspension or revocation issued under these regulations must be sent to
the recipient's place of business via a delivery service which provides
return receipts. Certified operations and certifying agents must
respond to all compliance notifications via a delivery service which
provides return receipts.
Noncompliance Procedure for Certified Operations
The Act provides for the enforcement of certification requirements.
Statutory oversight of production and handling operations by certifying
agents includes review of organic plans, on-site inspections, residue
and tissue testing, authority to conduct investigations and initiate
suspension or revocation actions, and responsibility to report
violations.
Notification of Noncompliance
A written notification of noncompliance will be sent to the
certified operation when an inspection, review, or investigation
reveals any noncompliance with the Act or these regulations. 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. The 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 and submit supporting
documentation of the correction. A certified operation may continue to
sell its product as organic upon receiving a notification of
noncompliance and throughout the compliance proceeding and any appeal
procedure which might follow the compliance proceeding unless otherwise
notified by a State or Federal government agency.
If a certified operation believes the notification of noncompliance
is incorrect or not well-founded, the certified operation may submit a
rebuttal to the certifying agent or SOP's governing State official, as
applicable, providing supporting data to refute the facts stated in the
notification. The opportunity for rebuttal is provided to allow
certifying agents and certified operations to informally resolve
noncompliance issues. The rebuttal process 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
noncompliances and submit proof of such corrections. When the certified
operation demonstrates that each noncompliance has been corrected or
otherwise resolved, the certifying agent or SOP's governing State
official, as applicable, will send the certified operation a written
notification of noncompliance resolution.
Proposed Suspension or Revocation of Certification
If the noncompliance is not resolved or is not in the process of
being resolved by the date specified in the notification of
noncompliance, the certifying agent or SOP's governing State official
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 or revocation period or whether the suspension
or revocation applies to the entire operation or to a portion or
portions of the operation.
If a certifying agent or SOP's governing State official 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 the proposed suspension or revocation.
If a certifying agent or SOP's governing State official has reason
to believe that a certified operation has willfully violated the Act or
regulations, a notification of proposed suspension or revocation will
be sent to the certified operation. The proposed suspension or
revocation will be for the entire operation or a portion of the
operation. This notification, because it involves a willful violation,
will be sent without first issuing a notification of noncompliance.
Mediation
A production or handling 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 dispute
more quickly than the next step, which is filing an appeal. When
mediation is requested, it must be requested in writing to the
applicable certifying agent. The certifying agent will have the option
of accepting or rejecting the request for mediation. If the certifying
agent rejects the request for mediation, the certifying agent must
provide written notification to the applicant for certification or
certified operation. The written notification must advise the applicant
for certification or certified operation of the right to request an
appeal in accordance with section 205.681. Any such appeal must be
requested within 30 days of the date of the written notification of
rejection of the request for mediation. If mediation is accepted by the
certifying agent, such mediation must be conducted by a qualified
mediator mutually agreed upon by the parties to the mediation. If an
SOP is in effect, the mediation procedures established in the SOP, as
approved by the Secretary, must be followed. 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
production or handling operation will have 30 days from termination of
mediation to appeal the denial of certification or proposed suspension
or revocation in accordance with the appeal procedures in section
205.681.
Any agreement reached during or as a result of the mediation
process must be in compliance with the Act and these regulations. The
Secretary reserves the right to review any mediated agreement for
conformity to the Act and these regulations and to reject any agreement
[[Page 80623]]
or provision not in conformance with the Act or these regulations
Suspension or Revocation
The certifying agent or SOP's governing State official 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 or SOP's governing State official
must not send a notification of suspension or revocation to a certified
operation that has requested mediation or filed an appeal while final
resolution of either is pending.
The decision to suspend or revoke certification will be based on
the seriousness of the noncompliance. 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 otherwise violating the purposes of the Act.
In addition to suspension or revocation, a certified operation that
knowingly sells or labels a product as organic, except in accordance
with the Act, will be subject to a civil penalty of not more than
$10,000 per violation. Further, a certified operation that makes a
false statement under the Act to the Secretary, an SOP's governing
State official, or a certifying agent will be subject to the provisions
of section 1001 of title 18, United States Code.
A certified operation whose certification has been suspended under
this section may at any time, unless otherwise stated in the
notification of suspension, submit a request to the Secretary for
reinstatement of its certification. 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 NOP.
A certified operation or a person responsibly connected with an
operation that has had its certification revoked will be ineligible to
receive certification for an operation in which such operation or
person has an interest for 5 years following the date of revocation.
Accordingly, an operation will be ineligible for organic certification
if one of its responsibly connected parties, was a responsibly
connected party of an operation that had its certification revoked. The
Secretary may, when in the best interest of the certification program,
reduce or eliminate the period of ineligibility.
Noncompliance Procedure for Certifying Agents
The Program Manager, on behalf of the Secretary, may initiate a
compliance action against an accredited certifying agent who violates
the Act or these regulations. Compliance proceedings may be initiated
as a result of annual reviews for continuation of accreditation, site
evaluations, or investigations initiated in response to complaints of
noncompliant activities. Compliance proceedings also may be initiated
on recommendation of an SOP's 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 or correct each
noncompliance described and submit supporting documentation of each
correction.
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, the
Program Manager will issue a notification of proposed suspension or
revocation of accreditation. The notification will state whether the
suspension or revocation will be for the certifying agent's entire
accreditation, that portion of the accreditation applicable to a
particular field office, or a specific area of accreditation. For
instance, if a certifying agent with field offices in different
geographic areas is cited for a compliance violation at one field
office, the Program Manager could determine that only that portion of
the accreditation applicable to the noncompliant field office 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 will issue a notification of proposed suspension or revocation
of accreditation. The proposed suspension or revocation may be for the
certifying agent's entire accreditation, that portion of the
accreditation applicable to a particular field office, or a specified
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 section 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 SOP's 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, unless otherwise stated in the notification
of suspension, submit a request to the Secretary for reinstatement of
its 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.
[[Page 80624]]
State Organic Programs' Compliance Procedures
An SOP's governing State official may initiate noncompliance
proceedings against 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 SOP's governing State official must promptly notify the Program
Manager of commencement of noncompliance proceedings initiated against
certified operations and forward to the Program Manager a copy of each
notice issued. A noncompliance proceeding, brought by an SOP's
governing State official against a certified operation may be appealed
in accordance with the appeal procedures of the SOP. There will 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.
An SOP'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 SOP's governing
State official must send a written report of noncompliance to the
Program Manager. The SOP's governing State official's report must
provide a description of each noncompliance and the facts upon which
the noncompliance is based.
Compliance--Changes Based On Comments
This portion of subpart G differs from the proposal in several
respects as follows:
(1) Written Notifications. We have added a new paragraph (d) to
section 205.660. The preamble to the proposed rule stated that all
written notifications sent by certifying agents and SOP's governing
State officials, as well as rebuttals, requests for mediation, and
notices of correction of noncompliances sent by certified operations,
will be sent to the addressee's place of business by a delivery service
which provides dated return receipts. The assurance of completed
communications and timely compliance procedures was given as the reason
for delivery by a service which provides dated return receipts. The
addition of paragraph (d) at section 205.660 is one of the actions that
we have taken in response to requests from commenters that we further
clarify the compliance process. Paragraph (d) requires that each
notification of noncompliance, rejection of mediation, noncompliance
resolution, proposed suspension or revocation, and suspension or
revocation issued in accordance with sections 205.662, 205.663, and
205.665 and each response to such notification must be sent to the
recipient's place of business via a delivery service which provides
return receipts. This action will facilitate the effective
administration of the compliance process by assuring a verifiable time
line on the issuance and receipt of compliance documents and the
response given to each such document.
(2) Determination of Willful. The preamble statement that ``only
the Program Manager or governing State official may make the final
determination that a violation is willful'' was incorrect and
inconsistent with the regulatory language in section 205.662(d).
Section 205.662(d) provides that, ``if a certifying agent or State
organic 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 organic 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.'' Accordingly, as recommended by a commenter, the
incorrect statement has been deleted from the preamble to this final
rule.
(3) Proposed Suspension or Revocation. We have amended sections
205.662(c) and 205.665(c) by removing the redundant phrase ``or is not
adequate to demonstrate that each noncompliance has been corrected''
from the first sentence of each section.
(4) Suspension or Revocation. We have amended section 205.662(e)(2)
by adding ``while final resolution of either is pending'' to the end
thereof. The language of section 205.662(e)(2) now reads: ``A
certifying agent or State organic program's governing State official
must not send a notification of suspension or revocation to a certified
operation that has requested mediation pursuant to section 205.663 or
filed an appeal pursuant to section 205.681 while final resolution of
either is pending.'' We have made this change because we agree with
those commenters who expressed the belief that section 205.662(e)(2)
needed to be amended to clarify the duration of the stay on the
issuance of a notification of suspension or revocation when mediation
is requested or an appeal is filed. Several commenters stated that
section 205.662(e)(2) needed to be amended to clarify that requesting
mediation or filing an appeal does not indefinitely stop the suspension
or revocation process.
(5) Eligibility After Suspension or Revocation of Certification. We
have amended section 205.662(f) such that it now parallels section
205.665(g) which addresses suspension and revocation of certifying
agents. We have also changed the title of section 205.662(f) from
``Ineligibility'' to ``Eligibility'' to parallel section 205.665(g). A
few commenters referred to the provisions in section 205.665(g), which
addresses eligibility after suspension or revocation of accreditation,
and requested clarification of the difference between suspension and
revocation of certification. Upon reviewing section 205.662(f), we
decided that amendment was needed to clarify the difference between
suspension and revocation of certification relative to eligibility for
certification. Accordingly, we added a new paragraph (1) which provides
that a certified operation whose certification has been suspended under
this section may at any time, unless otherwise stated in the
notification of suspension, submit a request to the Secretary for
reinstatement of its certification. The paragraph also provides that
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. We
also amended what is now paragraph (2) of section 205.662(f) to clarify
that the period of ineligibility following revocation of certification
is 5 years unless reduced or eliminated by the Secretary.
Further, we have amended section 205.665(g)(1) to clarify that a
certifying agent that has had its accreditation suspended may request
reinstatement of its accreditation rather than submit a new request for
accreditation. The amendment also clarifies that the reinstatement may
be requested at any time unless otherwise stated in the notification of
suspension. This amendment makes section 205.665(g)(1) similar to new
paragraph (1) of section 205.662(f). This amendment is also consistent
with commenter desires that the noncompliance procedures for certified
operations and accredited certifying agents be similar.
(6) Penalties for Violations of the Act. We have amended section
205.662 by adding a new paragraph (g) which incorporates therein the
provisions of
[[Page 80625]]
paragraphs (a) and (b) of section 2120, 7 U.S.C. 6519, Violations of
Title, of the Act. Specifically, paragraph (g) provides that, in
addition to suspension or revocation, any certified operation that
knowingly sells or labels a product as organic, except in accordance
with the Act, shall be subject to a civil penalty of not more than
$10,000 per violation. This paragraph also provides that any certified
operation that makes a false statement under the Act to the Secretary,
an SOP's governing State official, or a certifying agent shall be
subject to the provisions of section 1001 of title 18, United States
Code. Commenters requested regulatory language citing section 2120, 7
USC 6519, Violations of Title, of the Act. Commenters also requested a
clearer description of enforcement. Specifically, they want provisions
describing how USDA will deal with operations that make false claims or
do not meet the NOP requirements. Further, numerous commenters
expressed concern that there are no penalties in the regulations other
than suspension and revocation. The European Community stated that it
did not find, in the proposal, requirements for penalties to be applied
by certifying agents when irregularities or infringements are found.
The European Community went on to say that the European Union requires
such penalties.
The Act provides for suspension and revocation of certification and
the civil and criminal penalties addressed in 7 U.S.C. 6519. Certified
operations are also required through the compliance program set forth
in these regulations, to correct all noncompliances with the Act or
regulations as a condition of retaining their certification.
Furthermore, to get a suspended certification reinstated, an operation
must submit a request to the Secretary. 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. An operation or a person
responsibly connected with an operation whose certification has been
revoked will be ineligible to receive certification for a period of not
more than 5 years.
We believe adding paragraph (g) will help clarify that there are
penalties which may be imposed on certified operations that violate the
Act and these regulations in addition to suspension or revocation.
The provisions of the Act and these regulations apply to all
persons who sell, label, or represent their agricultural product as
organic. Accordingly, persons who falsely sell, label, or represent
their product as organic, are subject to the provisions of paragraphs
(a) and (b) of section 2120, 7 USC 6519, of the Act. To clarify this,
we have added a new paragraph (c) to section 205.100 of the
Applicability subpart.
Certifying agents, SOP's governing State officials, and USDA will
receive complaints alleging violations of the Act or these regulations.
Certifying agents will review all complaints that they receive to
determine if the complaint involves one of their clients. If the
complaint involves a client of the certifying agent, the agent will
handle the complaint in accordance with its procedures for reviewing
and investigating certified operation compliance. If the complaint
involves a person who is not a client of the certifying agent, the
certifying agent will refer the complaint to the SOP's governing State
official, when applicable, or, in the absence of an applicable SOP's
governing State official, the Administrator. SOP's governing State
officials will review all complaints that they receive in accordance
with their procedures for reviewing and investigating alleged
violations of the NOP and SOP. The SOP's governing State official's
review of the complaint could result in referral of the complaint to a
certifying agent when the complaint involves a client of the certifying
agent, dismissal, or investigation by the SOP's governing State
official. SOP's governing State officials will, as appropriate,
investigate allegations of violations of the Act by noncertified
operations operating within their State. USDA will review all
complaints that it receives in accordance with its procedures for
reviewing and investigating alleged violations of the NOP. USDA will
refer complaints alleging violations of the NOP/SOP to the applicable
SOP's governing State official, who may, in turn, refer the complaint
to the applicable certifying agent. In States without an approved SOP,
USDA will refer complaints to the applicable certifying agent. USDA
will, as appropriate, investigate allegations of violations of the Act
by noncertified operations operating in States where there is no
approved SOP.
(7) Mediation. We have amended section 205.663 by providing that a
dispute with respect to proposed suspension or revocation of
certification may, rather than shall, be mediated. We have also
provided that mediation must be requested in writing to the applicable
certifying agent. The certifying agent will have the option of
accepting or rejecting the request for mediation. If the certifying
agent rejects the request for mediation, the certifying agent must
provide written notification to the applicant for certification or
certified operation. The written notification must advise the applicant
for certification or certified operation of the right to request an
appeal within 30 days of the date of the written notification of
rejection of the request for mediation. If mediation is accepted by the
certifying agent, such mediation must be conducted by a qualified
mediator mutually agreed upon by the parties to the mediation.
Several commenters wanted section 205.663 amended to provide that
disputes ``may,'' rather than ``shall,'' be mediated. The commenters
advocated allowing the certifying agent to determine when mediation is
a productive option. Several State commenters wanted to amend the
second sentence to read as follows: ``If a State organic program is in
effect, the mediation procedures established in the State organic
program, as approved by the Secretary, will be followed for cases
involving the State organic program and its applicants or certified
parties.'' Another commenter wanted to retain the requirement that
disputes ``shall'' be mediated but wanted disputes mediated in
accordance with 7 CFR part 11 and section 205.681 of these regulations.
We concur that certifying agents should be authorized to reject a
request for mediation, especially when they believe that the
noncompliance issue is not conducive to mediation. Accordingly, we
amended section 205.663 as noted above. We disagree, however, with the
State commenters who want to amend the second sentence. We believe that
the recommended change would exclude the clients of private-sector
certifying agents operating within the State. USDA approval of an SOP
will require that all certified operations operating within the State
have the same opportunities for mediation, regardless of whether they
are certified by a private or State certifying agent. If an approved
SOP provides for mediation, such mediation must be available to all
certified operations operating within the State. We also disagree with
the commenter who requested that disputes be mediated in accordance
with 7 CFR part 11 and section 205.681 of these regulations. First, we
believe that States with an approved SOP must be allowed to establish
their own mediation program and procedures. Second, the Act and its
implementing regulations are subject to the APA for adjudication. The
provisions of the APA generally applicable to agency adjudication are
not applicable to proceedings under 7
[[Page 80626]]
CFR part 11, National Appeals Division Rules of Procedure. Even if 7
CFR part 11 were applicable, it does not address mediation procedures.
Mediation is merely addressed in 7 CFR Part 11 as an available dispute
resolution method along with its impact on the filing of an appeal.
(8) Noncompliance Procedure for Certifying Agents. We have amended
section 205.665(a)(3) to clarify that, like certified operations,
certifying agents must submit supporting documentation of each
correction of a noncompliance identified in a notification of
noncompliance. This amendment to section 205.665(a)(3) was made in
response to commenter concerns that the noncompliance procedures for
certified operations and certifying agents be similar. It had been our
intent that certifying agents would have to document their correction
of noncompliances and that the noncompliance procedures for certified
operations and certifying agents would be similar.
Compliance--Changes Requested But Not Made
This subpart retains from the proposed rule, regulations on which
we received comments as follows:
(1) Funding for Enforcement. Several commenters stated that USDA
should provide funding to the States for the cost of performing
enforcement activities. Others asked who should fund investigations and
enforcement actions if certifying agents (State and private) are
enforcing compliance with a Federal law. Numerous commenters requested
information on how enforcement will be funded. The National Organic
Standards Board (NOSB) recommended that the NOP examine existing models
for capturing enforcement fees such as the State of California's
registration program for all growers, handlers, and processors who use
the word, ``organic,'' in marketing their products.
We disagree with the commenters who stated that USDA should fund
enforcement activities (State and private). Costs for compliance under
the NOP will be borne by USDA, States with approved SOP's, and
accredited certifying agents. Each of the entities will bear the cost
of their own enforcement activities under the NOP. AMS anticipates that
States will consider the cost of enforcing their SOP's prior to seeking
USDA approval of such programs. We also anticipate that certifying
agents will factor the cost of compliance into their certification fee
schedules.
We agree that there may be alternatives, such as the State of
California's registration program, available to raise funds for
enforcing the NOP. We will help identify existing models and potential
options that may be available in the future at the Federal, State, or
certifying agent level. In the interim, we believe that SOP's should
explore funding options at their level and that certifying agents
should factor the cost of enforcement into their certification fees
structure.
(2) Stop Sale. A number of commenters requested that the
regulations include the ability to stop sales or recall misbranded or
fraudulently produced products. The Act does not authorize the NOP to
stop sales or recall misbranded or fraudulently produced product.
Accordingly, USDA cannot authorize stop sales or the recall of product.
We also believe that the certified operation's right to due process
precludes a stop sale or recall prior to full adjudication of the
alleged noncompliance. However, the Food and Drug Administration (FDA)
and the USDA's Food Safety Inspection Service (FSIS) have stop sale
authority that may be used in certain organic noncompliance cases.
Further, States may, at their discretion, be able to provide for stop
sale or recall of misbranded or fraudulently produced products produced
within their State. While the Act does not provide for stop sale or
recall, it does provide at 7 U.S.C. 6519 that any person who: (1)
knowingly sells or labels a product as organic, except in accordance
with the Act, shall be subject to a civil penalty of not more than
$10,000 and (2) makes a false statement under the Act to the Secretary,
an SOP's governing State official, or a certifying agent shall be
subject to the provisions of section 1001 of title 18, United States
Code.
(3) Notification of Proposed Suspension or Revocation. A commenter
recommended replacing ``notification of proposed suspension or
revocation'' in section 205.662(d) with ``notification of suspension or
revocation.'' Certification cannot be suspended or revoked without due
process. Accordingly, the issuance of a written notification of
proposed suspension or revocation is necessary to provide the certified
operation with information regarding the alleged noncompliance(s) and
its right to answer the allegations. For this reason we have not
accepted the commenter's recommendation.
(4) Mediation for Certifying Agents. Several commenters recommended
amending section 205.665(c)(4) to provide for mediation between a
certifying agent and the Program Manager when a proposed suspension or
revocation is disputed by the certifying agent. We have not accepted
the recommendation. USDA uses 7 CFR part 1, Rules of Practice Governing
Formal Adjudicatory Proceedings Instituted by the Secretary Under
Various Statutes, for adjudicatory proceedings involving the denial,
suspension, and revocation of accreditation.
(5) Revocation of Accreditation. A commenter stated that revocation
of accreditation for 3 years is excessive. The commenter stated that a
period of 6 to 12 months might be reasonable. We have not amended
section 205.665(g)(2) because the Act requires that the period of
revocation for certifying agents, who violate the Act and these
regulations, be for not less than 3 years. Suspension is available to
the Secretary to address less egregious noncompliances. A certifying
agent whose accreditation is suspended may at any time, unless
otherwise stated in the notification of suspension, submit a request to
the Secretary for reinstatement of its accreditation. 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 these regulations.
(6) Appeals Under SOP's. Several commenters recommended amending
205.668(b) by adding at the end thereof: ``unless the State program's
appeals procedures include judicial review through the State District
Court.'' Another commenter wanted 205.668(b) amended by removing ``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,'' and inserting in its place ``at
7 CFR part 11 and 205.681 of this chapter.'' We have not accepted the
recommendations because the Act at 7 U.S.C. 6520 provides that a final
decision of the Secretary may be appealed to the United States District
Court for the district in which the person is located. We consider an
approved SOP to be the NOP for that State. As such, we consider the
SOP's governing State official of such approved SOP to be the
equivalent of a representative of the Secretary for the purposes of the
appeals procedures under the NOP. Accordingly, the final decision of
the SOP's governing State official of an approved SOP is considered the
final decision of the Secretary and, as such, is appealable to
[[Page 80627]]
the United States District Court for the district in which the person
is located, not a State's District Court.
We also disagree with the commenter who wanted all appeals to be
made to the National Appeals Division under the provisions at 7 CFR
part 11 and section 205.681 of these regulations. First, we believe
that States with an approved SOP must be allowed to establish their own
appeal procedures. Such procedures would have to comply with the Act,
be equivalent to the procedures of USDA, and be approved by the
Secretary. Second, as noted elsewhere in this preamble, the Act and its
implementing regulations are subject to the APA for adjudication. The
provisions of the APA generally applicable to agency adjudication are
not applicable to proceedings under 7 CFR part 11.
Compliance--Clarifications
Clarification is given on the following issues raised by
commenters:
(1) Complaints, Investigations, Stop Sales, and Penalties. Many
commenters wanted USDA to spell out the responsibilities and
authorities of States, State and private certifying agents, Federal
agencies, and citizens to make complaints, investigate violations, halt
the sale of products, and impose penalties. Anyone may file a
complaint, with USDA, an SOP's governing State official, or certifying
agent, alleging violation of the Act or these regulations. Certifying
agents, SOP's governing State officials, and USDA will receive, review,
and investigate complaints alleging violations of the Act or these
regulations as described in item 6 above under Changes Based on
Comments. Citizens have no authority under the NOP to investigate
complaints alleging violation of the Act or these regulations.
As noted elsewhere in this preamble, the Act does not authorize
USDA to stop the sale of product. Accordingly, USDA cannot authorize
stop sales by accredited certifying agents. We also believe that the
certified operation's right to due process precludes a stop sale prior
to full adjudication of the alleged noncompliance. However, FDA and
FSIS have stop sale authority that may be used in the event of food
safety concerns. Further, States may, at their discretion, be able to
provide for stop sale of product produced within their State. Citizens
have no authority under the NOP to stop the sale of a product.
The Act and these regulations provide for suspension or revocation
of certification by certifying agents, SOP's governing State officials,
and the Secretary. Only USDA may suspend or revoke a certifying agent's
accreditation. All proposals to suspend or revoke a certification or
accreditation are subject to appeal as provided in section 205.681. The
Act provides at 7 U.S.C. 6519 that any person who: (1) knowingly sells
or labels a product as organic, except in accordance with the Act,
shall be subject to a civil penalty of not more than $10,000; and (2)
makes a false statement under the Act to the Secretary, an SOP's
governing State official, or a certifying agent shall be subject to the
provisions of section 1001 of title 18, United States Code. Only USDA
may bring an action under 7 U.S.C. 6519.
(2) Certifying Agent's Identifying Mark. The NOSB reaffirmed its
recommendation which would allow private certifying agents to prevent
the use of their service mark (seal) upon written notification that:
(1) certification by the private certifying agent has been terminated,
and (2) the certifying agent has 30 days to appeal the certifying
agent's decision to the Secretary of Agriculture. We will neither
prohibit nor approve a certifying agent's actions to withdraw a
certified operation's authority to use the certifying agent's
identifying mark for alleged violations of the Act or regulations. We
stand fast in our position that all certified operations are to be
given due process prior to the suspension or revocation of their
certification. The reader is also reminded that the certifying agent
cannot terminate, suspend, or revoke a certification if the certified
operation files an appeal with an SOP's governing State official, when
applicable, or the Administrator as provided for in the notification of
proposed suspension or revocation. The certifying agent accepts full
liability for any action brought as a result of the withdrawal of a
certified operation's authority to use the certifying agent's
identifying mark.
(3) Loss of Certification. A commenter posed several questions
regarding the loss of certification. The commenter's questions and our
responses are as follows.
How will consumers and affected regulatory agencies know if a
grower or handler loses its certification? We will provide public
notification of suspensions and revocations of certified operations
through means such as the NOP website.
What will the effect of a lost certification be? Suspension or
revocation of a producer's or handler's certification will require that
the producer or handler immediately cease its sale, labeling, and
representation of agricultural products as organically produced or
handled as provided in the suspension or revocation order. A production
or handling operation or a person responsibly connected with an
operation whose certification has been suspended may at any time,
unless otherwise stated in the notification of suspension, submit a new
request for certification in accordance with section 205.401. 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. An
operation or a person responsibly connected with an operation whose
certification has been revoked will be ineligible to receive
certification for a period of not more than 5 years following the date
of such revocation, as determined by the Secretary. Any producer or
handler who sells, labels, or represents its product as organic
contrary to the provisions of the suspension or revocation order would
be subject to prosecution under 7 U.S.C. 6519 of the Act.
Will the certifying agent give a future effective date for loss of
certification, or could the loss of certification be immediate or even
retroactive? Suspension or revocation will become effective as
specified in the suspension or revocation order once it becomes final
and effective. The operation, upon suspension or revocation, will be
prohibited from selling, labeling, and representing its product as
organic per the provisions of the suspension or revocation order.
If organic products already on the market were grown or handled by
someone whose certification is revoked or suspended, would USDA require
that the products be recalled and relabeled? USDA will not, unless the
noncompliance involves a food safety issue under FSIS, require the
recall or relabeling of product in the channels of commerce prior to
the issuance of a suspension or revocation order. First, at the time
the product was produced, it may have been produced in compliance with
the Act and these regulations. Second, USDA does not have the
authority, under the Act, to issue a stop sale order for product sold,
labeled, or represented as organic and placed in the channels of
commerce prior to suspension or revocation of a certified operation's
certification. The Act, however, provides at 7 U.S.C. 6519(a) for the
prosecution of any person who knowingly sells or labels a product as
organic, except in accordance with the Act. Such persons shall be
subject to a civil penalty of not more than $10,000 per violation.
(4) Investigations. A commenter suggested that we amend section
[[Page 80628]]
205.661(a) to require that all complaints must be investigated in
accordance with the certifying agent's complaints policy. The commenter
also stated that the Administrator should know which complaints were
not investigated. We disagree that all complaints must be investigated
since, upon review of the alleged noncompliance, some complaints may
lack grounds for investigation. For example, a concerned citizen could
allege that an organic producer was seen applying a pesticide to a
specific field. Upon review of the allegation, the certifying agent
could determine that the producer in question was a split operation and
that the field in question was part of the conventional side of the
production operation. Accordingly, there would be no need for an
investigation. However, the certifying agent will be expected to: (1)
take each allegation seriously, (2) review each complaint received, (3)
make a determination as to whether there may be a basis for conducting
an investigation, (4) investigate all allegations when it is believed
that there may be a basis for conducting the investigation, and (5)
maintain a detailed log of all complaints received and their
disposition. The actions taken by the certifying agent must be in
conformance with the certifying agent's procedures for reviewing and
investigating certified operation compliance.
(5) Deadline for the Correction of a Noncompliance. Several
commenters requested that 205.662(a)(3) be amended by adding: ``The
deadline for correction of the noncompliance may be extended at the
discretion of the certifier if substantial progress has been made to
correct the noncompliance.'' We believe that the requested amendment is
unnecessary. Section 205.662(a)(3) requires that the notification of
noncompliance include a date by which the certified operation must
rebut or correct each noncompliance and submit supporting documentation
of each correction when correction is possible. There is no prohibition
preventing the certifying agent from extending the deadline specified
when the certifying agent believes that the certified operation has
made a good faith effort at correcting each noncompliance.
(6) Compliance with SOP. Several States requested that section
205.665 be amended to clarify how States may handle a private
certifying agent found to be in noncompliance with SOP's approved by
the Secretary. A majority of these commenters also asked if NOP intends
to suspend or revoke the accreditation of certifying agents on a State-
by-State basis. Section 205.668(c) authorizes an SOP's governing State
official to 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 SOP's governing State official shall send a written
report of noncompliance to the NOP Program Manager. The report shall
provide a description of each noncompliance and the facts upon which
the noncompliance is based. The NOP Program Manager will then employ
the noncompliance procedures for certifying agents as found in section
205.665. This may include additional investigative work by AMS. Only
USDA may suspend or revoke a certifying agent's accreditation.
SOP's must meet the general requirements for organic programs
specified in the Act and be at least equivalent to these regulations.
Accordingly, noncompliances worthy of suspension or revocation would in
all probability be worthy of national suspension or revocation of
accreditation for one or more areas of accreditation. Therefore, USDA
does not anticipate suspending or revoking accreditations, or areas of
accreditation, on a State-by-State basis. It is possible, however, that
the Secretary may decide to only suspend or revoke a certifying agent's
accreditation or an area of accreditation to certify producers or
handlers within a given State. Such a decision would in all probability
be tied to a State's more restrictive requirements.
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.
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 organic programs' (SOP)
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.
Description of Regulations
General Requirements
Under the residue testing requirements of the NOP, all agricultural
products sold, labeled, or represented as organically produced must be
available for inspection by the Administrator, SOP's governing State
official, or certifying agent. Organic farms and handling operations
must be made available for inspection under subpart E, Certification.
In addition, products from the aforementioned organic operations may be
required by the SOP's governing State official or certifying agent to
undergo preharvest or postharvest testing when there is reason to
believe that agricultural inputs used in organic agriculture production
or agricultural products to be sold or labeled as organically produced
have come into contact with prohibited substances or have been produced
using excluded methods. The cost of such testing will be borne by the
applicable certifying agent 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 final rule 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
or a product produced using excluded methods found in or on samples
during analysis will serve as a warning indicator to the certifying
agent.
The Administrator, SOP's governing State official, or certifying
agent may require preharvest or postharvest testing of any agricultural
input used in organic agricultural production or any agricultural
product to be sold or labeled as ``100 percent organic,'' ``organic,''
or ``made with organic (specified ingredients or food group(s)).'' It
is based on the Administrator's, SOP's governing State official's, or
certifying agent's belief that an agricultural product or agricultural
input has come into contact with one or more prohibited substances or
has been produced using excluded methods. Certifying agents do not have
to conduct residue tests if they do not have reason to believe that
there is a need for testing.
[[Page 80629]]
Certifying agents must ensure, however, that certified organic
operations are operating in accordance with the Act and the regulations
set forth in this part.
The ``reason to believe'' could be triggered by various situations,
for example: (1) The applicable authority receiving a 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) the product
from a certified organic operation being 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, SOP's
governing State official, or certifying agent or will conduct sampling.
According to subpart F, Accreditation, private or State entities
accredited as certifying agents under the NOP must ensure that its
responsibly connected persons, employees, and contractors with
inspection, analysis, and decision-making responsibilities have
sufficient expertise to successfully perform the duties assigned.
Therefore, all inspectors employed by certifying agents to conduct
sampling must have sufficient expertise in methods of chain-of-custody
sampling. Moreover, testing for chemical residues must be performed in
an accredited laboratory. When conducting chemical analyses, the
laboratory must incorporate the analytical methods described in the
most current edition of the Official Methods of Analysis of the AOAC
International or other current applicable validated methodology for
determining the presence of contaminants in agricultural products.
Results of all analyses and tests performed under section 205.670 must
be promptly provided to the Administrator, except, that, where an SOP
exists, all test results and analyses should be provided to the SOP's
governing State official by the applicable certifying party that
requested testing. Residue test results and analyses must also be,
according to section 205.403(e)(2), provided to the owner of the
certified organic operation whose product was tested. All other
parities desiring to obtain such information must request it from the
applicable certifying agent.
OFPA requires certifying agents, to the extent of their awareness,
to report violations of applicable laws relating to food safety to
appropriate health agencies such as EPA and FDA. When residue testing
indicates that an agricultural product contains pesticide residues or
environmental contaminants that exceed either the EPA tolerance level
or FDA action level, as applicable, the certifying agent must promptly
report data revealing such information to the Federal agency whose
regulatory tolerance or action level has been exceeded.
Residue Testing and Monitoring Tools
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 5 percent of the Environmental Protection Agency (EPA)
tolerance for the specific residue detected on the agricultural product
intended to be sold as organically produced. This compliance measure, 5
percent of EPA tolerance for the detected prohibited residue, will
serve as a standard for the Administrator, SOP's governing State
officials, and certifying agents to assist in monitoring for illegal
use violations.
In addition, we intend to establish levels of unavoidable residual
environmental contamination (UREC) for crop-and site-specific
agricultural commodities to be sold, labeled, or represented as ``100
percent organic,'' ``organic,'' or ``made with . . .'' These levels
will represent limits at which USDA may take compliance action to
suspend the use of a contaminated area for organic agricultural
production. Currently, USDA is seeking scientifically sound principles
and measures by which it can establish UREC levels to most effectively
address issues of unavoidable residual environmental contamination with
respect to this rule. However, in the interim, UREC will be defined as
the Food and Drug Administration's (FDA) action levels for poisonous or
deleterious substances in human food or animal feed. UREC levels will
be initially set for persistent prohibited substances (aldrin,
dieldrin, chlordane, DDE, etc.) in the environment. 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.
Analyses and test results will 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 or Products Derived from Excluded
Methods
In the case of residue testing and the detection of prohibited
substances in or on agricultural products to be sold, labeled, or
represented as ``100 percent organic,'' ``organic,'' or ``made with . .
.'' products with detectable residues of prohibited substances that
exceed 5 percent of the EPA tolerance for the specific residue or UREC
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 sections 205.662 and 205.663 of subpart G, Compliance.
The ``5 percent of EPA tolerance'' standard is considered a level
above which an agricultural product cannot be sold as organic,
regardless of how the product may have come into contact with a
potential prohibited substance. This standard has been established to:
(1) satisfy consumer expectations that organic agricultural products
will contain minimal chemical residues and (2) respond to the organic
industry's request to implement a standard comparable to current
industry practices. However, the ``5 percent of EPA tolerance''
standard cannot be used to automatically qualify agricultural products
as organically produced, even if the level of chemical residues
detected on an agricultural product is below 5 percent of the EPA
tolerance for the respective prohibited substance. This final rule is a
comprehensive set of standards and regulations that determines whether
a product can or cannot be considered to carry the specified organic
labeling terms in subpart D, Labeling. Therefore, in addition to this
section of subpart G, Administrative, all other requirements of this
part must be met by certified organic operations to have an
agricultural product considered ``organically produced.''
When residue testing detects the presence of any prohibited
substance, whether above or below 5 percent of the EPA tolerance for
the specific pesticide or UREC, the SOP's governing State official or
certifying agent may conduct an investigation of the certified organic
[[Page 80630]]
operation to determine the cause of the prohibited substance or product
in or on the agricultural product to be sold or labeled as organically
produced. The same shall occur if testing detects a product produced
using excluded methods. If the investigation reveals that the presence
of the prohibited substance or product produced using excluded methods
in or on an agricultural product intended to be sold as organically
produced is the result of an intentional application of a prohibited
substance or use of excluded methods, the certified organic operation
shall be subject to suspension or revocation of its organic
certification. In addition, any person who knowingly sells, labels, or
represents an agricultural product as organically produced in violation
of the Act or these regulations shall be subject to a civil penalty of
not more than $10,000 per violation.
Emergency Pest 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 or disease
treatment program and the organic handling or production operation
otherwise meets the requirements of this final rule, the certification
status of the operation shall not be affected as a result of the
application of the prohibited substance, except 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 or
disease treatment program cannot be sold, labeled, or represented as
``100 percent organic,'' ``organic,'' or ``made with . . .'' 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 . . .''
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 proposal in several
respects as follows:
(1) Reporting Requirements. Commenters were not satisfied with the
language in section 205.670(d)(1) that required results of all analyses
and tests performed under section 205.670 to be provided to the
Administrator promptly upon receipt. They asked that the paragraph be
amended to include that: (1) Results of all analyses and tests
performed under section 205.670 be provided by the Administrator to the
appropriate SOP's governing State official; and (2) test results be
made immediately available to the owner of the material sampled. They
stated that since State organic certification programs are responsible
for enforcement within their State, results of residue tests conducted
by certifying agents must be provided to the SOP's governing State
official for routine monitoring and for investigating possible
violations of the Act.
We agree with the commenters and have responded to their concerns
accordingly. To ensure that SOP's receive results of all tests and
analyses conducted under the inspection and testing requirements of
subpart G, section 205.670(d) has been amended to include that the
results of all analyses and residue tests must be provided to the
Administrator promptly upon receipt; Except: That where an SOP exists,
all test results and analyses should be provided to the SOP's governing
State official.
In regard to the commenters' request that certified organic
operations be provided with a copy of test results from samples taken
by an inspector, an additional paragraph, section 205.403(e)(2), has
been added to subpart E, Certification, that assures that such
information is provided to the owners of certified organic operations
by the certifying agents.
(2) Integrity Of Organic Samples. We have modified language in
section 205.670(c) to clarify our intent regarding the maintenance of
sample integrity. The proposed rule stated that ``sample integrity must
be maintained in transit, and residue testing must be performed in an
accredited laboratory.'' During the final rulemaking process, we did
not believe that our intent was clear on this subject. Our intent is to
ensure that sample integrity is maintained throughout the entire chain
of custody during the residue testing process. Proposed language only
suggests that sample integrity be maintained in transit. Therefore, we
have changed the second sentence in section 205.670(c) to state that
``sample integrity must be maintained throughout the chain of custody,
and residue testing must be performed in an accredited laboratory.''
(3) Reporting Residue and Other Food Safety Violations to
Appropriate Health Agencies. In the proposed rule, section 205.671(b)
under Exclusion from Organic Sale states, ``If test results indicate a
specific agricultural product contains pesticide residues or
environmental contaminants that exceed the FDA's or the EPA's
regulatory tolerances, the data must be reported promptly to the
appropriate public health agencies.'' During the final rulemaking
process, a group of commenters suggested that we move section
205.671(b) into section 205.670 as paragraph (e). They recommended that
we move section 205.671(b) because it does not specifically address the
sale of organically produced products, as indicated by the section
heading. They recommended that section 205.671(b) be placed under
section 205.670 as paragraph (e) because it dealt with the reporting of
residues that exceed Federal regulatory tolerances. The commenters
further stated that, while section 205.671(b) creates a duty to report,
it is not specific as to who must report.
We have accepted the suggestions of the commenters and have
responded accordingly. We have removed section 205.671(b) and relocated
it under section 205.670 as paragraph (e). We have also modified the
regulatory text of paragraph (e) to include language that instructs
certifying agents to report, when residue testing indicates that an
agricultural product contains pesticide residues or environmental
contaminants that exceed either the EPA tolerance level or FDA action
level, as applicable, data reveling such information to the Federal
agency whose regulatory tolerance or action level has been exceeded.
(4) Exclusion from Organic Sale. We have reviewed section
205.671(a), removed the requirement to implement the Pesticide Data
Program (pdp) estimated national mean as a compliance tool in
monitoring for the presence of unacceptable levels of prohibited
substances in agricultural products intended to be sold as organic, and
added the ``5 percent of EPA tolerance'' standard.
Commenters voiced the opinion that the estimated national mean
would be a difficult standard in organic agricultural production for
several reasons. Some stated that the estimated national mean was a new
concept that would confuse
[[Page 80631]]
producers and handlers because they would not know the exact definition
of ``estimated national mean'' and how it would be determined. Others
stated that the PDP was too limited in scope to employ an estimated
national mean for all commodity/pesticide combinations. Commenters
reasoned that PDP data were limited in terms of the agricultural
commodities that are sampled and tested.
Another group of commenters stated that PDP data would be unfair to
use in the NOP's residue testing plan. They argued PDP data should not
be used to set maximum residue levels for organic agricultural products
because PDP samples its products as close to the point of consumption
as possible. As a result, commenters believe that PDP data may not be
totally reflective of residue levels of agricultural products at the
farmgate level. Since most residue testing in organic agricultural
production takes place at the farmgate, these commenters argued that it
would be an inappropriate standard for organic agricultural production.
As a result, a large number of commenters suggested that we
reconsider using the estimated national mean as a standard for the
maximum allowable residues on organically produced products. Instead,
commenters recommended that the NOP incorporate the National Organic
Standards Board's (NOSB) recommendation and current industry practice
of using 5 percent of the EPA tolerance as a maximum level of pesticide
residue on organic agricultural products. Commenters argued that using
5 percent of the EPA tolerance provides a sense of confidence to the
consumers of organic agricultural products.
In many respects, we agree with the commenters. We have revisited
using PDP data to establish an estimated national mean for commodity/
pesticide combinations and for setting a maximum level of pesticide
residue that could exclude agricultural products from being sold,
labeled, or represented as organic. As a result, we have concluded that
such an approach may be somewhat underdeveloped to incorporate into the
NOP. We have reached this conclusion based on many of the same
arguments presented by commenters (i.e., limited scope of agricultural
products tested under PDP, product sampling based upon market
availability, testing near the point of consumption, etc.). Also, we
estimated that there would be a considerable time lag between the
implementation of the NOP and defining a comprehensive list of
estimated national means for all commodity/pesticide combinations.
Thus, we have decided not to use the estimated national mean as a tool
for monitoring organic agricultural products for the presence of
prohibited substances and as a standard to exclude agricultural
products from being sold, labeled, or represented as organically
produced.
Instead, we have decided to follow the recommendation of the
commenters by replacing the estimated national mean for specific
commodity/pesticide pairs with 5 percent of the EPA tolerance for the
specific pesticide. Therefore, when residue testing detects prohibited
substances at levels that are greater than 5 percent of the EPA
tolerance for the specific pesticide detected on the particular product
samples, the agricultural product must not be sold or labeled as
organically produced.
We fully understand that the EPA tolerance is defined as the
maximum legal level of a pesticide residue in or on a raw or processed
agricultural commodity. We also acknowledge that the EPA tolerance is a
health-based standard. We are not trying to employ the 5 percent
standard in a manner similar to that of EPA. As mentioned in our
proposal, the national organic standards, including provisions
governing prohibited substances, are based on the method of production,
not the content of the product. The primary purpose of the residue
testing approach described in this final rule, then, is to provide an
additional tool for SOP's governing State officials and certifying
agents to use in monitoring and ensuring compliance with the NOP.
(5) Unavoidable Residual Environmental Contamination. We have
defined, as an interim measure, UREC as the FDA action levels for
poisonous or deleterious substances in human food or animal feed.
Section 205.671 proposed the use of UREC to serve as a residue
testing tool for compliance. Commenters believed UREC levels, as
prescribed in section 205.671 of the proposed rule, would be
problematic as a standard because they were undefined. Commenters
argued that it would be impractical and very expensive to establish
UREC levels for every organic crop and region in the United States.
They suggested that UREC levels be managed as a practice standard or
program manual issue. They also expressed the concern that inconsistent
application of UREC levels could create difficulties for certifying
agents and certified operations.
We agree that UREC levels should be defined. We are seeking
scientifically sound principles and measures by which we can establish
UREC levels to most effectively address issues of unavoidable residual
contamination with respect to this rule. However, in the interim, the
ability to implement an undefined standard would be difficult for
certifying agents. Therefore, we have included language in the preamble
that temporarily defines UREC as the FDA action levels for poisonous or
deleterious substances in human food or animal feed. When residue
testing detects the presence of a prohibited substance on an
agricultural product greater than such levels mentioned, the
agricultural product cannot be sold as organic. We have decided to use
FDA action levels for UREC because they encompass many of the toxic,
persistent chemicals and heavy metals that are present in the
environment and may be found on food and animal feed. As mentioned
earlier, the FDA action levels are being employed in this part as
temporary measures for compliance. We will continue to seek
scientifically sound principles and measures by which to establish UREC
levels that more appropriately satisfy the purposes of this part.
Residue Testing--Changes Requested But Not Made
This subpart retains from the proposed rule regulations on which we
received comments as follows:
(1) Residue Testing Responsibility. Commenters petitioned that we
remove the requirement in section 205.670(b) that states residue tests
must be conducted by the applicable SOP's governing State official or
the certifying agent at the official's or certifying agent's own
expense. The commenters expressed the opinion that we were practicing
``micromanagement.'' They also said that there was no need for the
proposal to be so detailed with respect to who pays for residue
testing. Based on the commenters' responses, residue analyses are
reportedly paid by producers, buyers, brokers, certifiers, and
government residue testing programs.
We have not adopted the suggestion of the commenters. In the
proposal, we stated that conducting residue tests was considered a cost
of doing business for certifying agents. Our position has not changed.
Certifying agents can factor residue testing costs into certification
fees. It is not our intention to ``micromanage'' the way that
certifying agents conduct business. Section 2107(a)(6) of the Act
requires that certifying agents conduct residue testing of agricultural
products that have been produced on certified organic farms and handled
through certified organic handling operations. OFPA also
[[Page 80632]]
requires, under section 2112(a) through (c), that certifying agents
enforce its provisions by implementing a system of residue testing to
test products sold or labeled as organically produced. In addition,
subpart E, Certification, authorizes certifying agents to conduct on-
site inspections, which may include residue testing, of certified
organic operations to verify that the operation is complying with the
provisions in the Act and the regulations in this part. Certifying
agents are responsible for monitoring organic operations for the
presence of prohibited substances; we view residue testing as a cost of
doing business. Therefore, we believe that certifying agents should
factor monitoring costs associated with implementing the provisions in
the Act and Rule into their certification fees.
(2) Reporting to Federal Regulatory Agencies. Commenters disagree
with section 205.671(b) of the proposed rule which states that if test
results indicate a specific agricultural product contains pesticide
residues or environmental contaminants that exceed the FDA action level
or EPA tolerance, the data must be reported promptly to appropriate
public health agencies. Commenters believe that since results of all
analyses and tests must be provided to the Administrator, USDA should
be responsible for communicating such test results to other Federal
agencies such as FDA or EPA if regulatory tolerances or action levels
are exceeded. They also suggested that section 205.671(b) be removed
from the national regulations. Commenters expressed the view that such
a requirement is not related to organic certification.
We do not agree with the commenters. It is not our intent to create
additional responsibility for the certifying agent. Section 205.671(b),
redesignated as section 205.670(e), is a statutory requirement. Section
2107(a)(6) of the Organic Food Production Act of 1990 requires
certifying agents, to the extent of their awareness, to report
violations of applicable laws relating to food safety to appropriate
health agencies such as EPA and FDA. Therefore, due to section 2107 of
the Act, section 205.670(e) has been included in the national
regulations.
(3) ``Threshold'' for Genetic Contamination. Many commenters
suggested that we establish a ``threshold'' for the unintended or
adventitious presence of products of excluded methods in organic
products. Some commenters argued that a threshold is necessary because,
without the mandatory labeling of biotechnology-derived products,
organic operations and certifying agents could not be assured that
products of excluded methods were not being used. Others argued that,
without an established threshold, the regulations would constitute a
``zero tolerance'' for products of excluded methods, which would be
impossible to achieve.
We do not believe there is sufficient consensus upon which to
establish such a standard at this time. Much of the basic, baseline
information about the prevalence of genetically engineered products in
the conventional agricultural marketplace that would be necessary to
set such a threshold--e.g., the effects of pollen drift where it may be
a factor, the extent of mixing at various points throughout the
marketing chain, the adventitious presence of genetically engineered
seed in nonengineered seed lots--is still largely unknown. Our
understanding of how the use of biotechnology in conventional
agricultural production might affect organic crop production is even
less well developed.
Also, as was pointed out in some comments, the testing methodology
for the presence of products of excluded methods has not yet been fully
validated. Testing methods for some biotechnology traits in some
commodities are becoming commercially available. Without recognized
methods of testing for and quantifying of all traits in a wide range of
food products, however, it would be very difficult to establish a
reliable numerical tolerance.
There are publicly and privately funded research projects underway
that may provide useful baseline information. Efforts of Federal
agencies to clarify the marketing and labeling of biotechnology- and
nonbiotechnology-derived crops may also help address these concerns.
FDA, for example, is developing guidance for food producers who
voluntarily chose to label biotechnology- and nonbiotechnology-derived
foods. USDA is also preparing a Federal Register Notice to seek public
comment on the appropriate role, if any, that it can play in
facilitating the marketing of agricultural products through the
development of ``quality assurance'' type programs that help to
preserve the identity of agricultural commodities. USDA, in cooperation
with the technology providers, is also working to validate testing
procedures and laboratories for some commodities.
All of these efforts may help to provide information on this issue.
Practices for preserving product identity, including segregating
genetically engineered and nongenetically engineered products, are
evolving in some conventional markets. As we discussed in the preamble
to the proposed rule, we anticipate that these evolving industry best
practices and standards will become the standards for implementing the
provisions in this regulation relating to the use of excluded methods.
As was also discussed in the proposed rule, these regulations do not
establish a ``zero tolerance'' standard. As with other substances not
approve for use in organic production systems, 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. 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.
(4) Certification Status After Emergency Pest or Disease Treatment.
We have not modified language in section 205.672 that would affect the
certification status of a certified organic operation if the operation
had been subjected to a Federal or State emergency pest or disease
treatment program.
Section 205.672 states that when a prohibited substance is applied
to a certified operation due to a Federal or State emergency pest 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 substance: Provided, That, the certified operation adheres
to certain requirements prescribed by the NOP. One group of commenters
informed us that they did not support maintaining the organic status of
an operation that has been directly treated with prohibited substances,
regardless of the reason for treatment. They believe that Federal and
State emergency pest or disease treatment programs should provide
alternatives for organic operations whenever feasible. If no
alternative measure is feasible, the organic operation should choose
between voluntary surrender of their organic status on targeted parts
of the operation or destruction of the crop to eliminate pest habitat.
The commenters also suggested that compensation should be provided to
organic producers whose crops must be destroyed to eliminate habitat.
They feel that allowing the application of prohibited materials to
certified organic land without affecting the certification status
violates the trust consumers place in organic certification.
[[Page 80633]]
We disagree with the position of the commenters. Historically,
residues from emergency pest or disease treatment programs have been
treated as drift cases by certifiers. In these cases, the specific crop
may not be sold as organic, but the organic status of future crop years
are not affected. We intend to handle such cases in a similar manner.
We understand that commenters would like us to remove the certification
of an organic operation that has been treated with a prohibited
substance, but organic certification is a production claim, not a
content claim. We, along with the commenters, are concerned with
consumers trusting organic certification. At the same time, we are
concerned with the welfare of certified organic operations. We have
tried to include language in section 205.672 that would address both
issues. We believe that, if a certified organic grower has been a good
steward of his/her land and has managed the production of his/her
product(s) in accordance with all regulations in the Act and other
requirements in this part, the certification status of the operation
should not be affected. The application of a prohibited substance as
part of a Federal or State emergency pest or disease treatment program
is outside the control of the certified operation. We also believe that
maintaining consumer trust is important. Thus, section 205.672 states
that any harvested crop or plant part to be harvested that has been
treated with a prohibited substance as part of a Federal or State
emergency pest or disease treatment program cannot be sold as
organically produced. Therefore, the certified organic operation can
retain its certification status, and the consumer can be assured that a
product from a certified organic operation that has been in contact
with a prohibited substance as the result of a Federal or State pest or
disease treatment program will not enter the organic marketplace.
Accordingly, we have not made the change to section 205.672 as proposed
by the commenters.
(5) Emergency Pest or Disease Treatment Programs. Commenters
suggested that the Department add a new paragraph to section 205.672
that states ``the certifying agent must monitor production operations
that have been subjected to a Federal or State emergency pest or
disease treatment program, and may require testing of following crops,
or an extended transition period for affected production sites, if
residue test results indicate the presence of a prohibited substance.''
Commenters said the language in the proposed rule did not clearly
establish that a transition period could be needed after contamination
of a certified organic operation by a government-mandated spray
program. They felt that there may be a need for a case-by-case
determination by the certifying agent as to when it would be best for a
certified organic operation to begin selling its products as
organically produced after it has been subject to a government mandated
spray program.
We understand that commenters would like USDA to mandate certifying
agents to monitor operations that have been subject to Federal or State
emergency pest or disease treatment programs; however, we do not see a
need to prescribe such a provision. Based on the responsibilities of
being a USDA-accredited certifier, it is our belief that certifying
agents would monitor a certified organic operation that has been
subjected to a Federal or State emergency pest or disease treatment
program to make sure that product being produced for organic sale is
actually being produced in accordance with the Act and the regulations
in this part. Certifying agents have been granted the authority to
conduct additional on-site inspections of certified organic operations
to determine compliance with the Act and national standards under
subpart E, section 205.403. Commenters requested that we include
language that would allow certifying agents to recommend an extended
transition period for affected production sites if residue tests
indicate the presence of a prohibited substance. Again, we understand
the commenters' concern, but we are not aware of comprehensive soil
residue data that could guide certifying agents in determining
appropriate withdrawal intervals for operations that have been
subjected to emergency pest or disease treatment programs.
Residue Testing--Clarifications
Clarification is given on the following issues raised by commenters
as follows:
(1) Sampling and Testing. Commenters stated that the purpose of
residue testing under the Act is to assure that organically produced
agricultural products that are sold as organic do not contain pesticide
residues or residues of other prohibited substances that exceed levels
as specified by the NOP. Based on language in section 205.670(b) of the
proposed rule, commenters expressed the opinion that the Agricultural
Marketing Service (AMS) was, not only requiring residue testing of
organic agricultural products, but also of ``any'' agricultural input
used or agricultural product intended to be sold as ``100 percent
organic,'' ``organic,'' or ``made with * * *'' when there is reason to
believe that the agricultural input or product has come into contact
with a prohibited substance. Commenters believe that organic certifying
agents may be required to test many nonorganic agricultural inputs
(such as seeds, compost, straw, sawdust, and plastic) and nonorganic
agricultural products and ingredients used in products labeled as
``made with * * *''. They also argued that such testing would be
unnecessary, burdensome, and expensive because such materials are more
likely to have come into contact with a prohibited substance.
Therefore, commenters suggested that we amend section 205.670(b) by
deleting ``agricultural inputs'' and replacing ``agricultural product''
with ``organically produced agricultural product.'' They also
recommended that we replace the second occurrence of ``product'' with
``organic product.'' Thus section 205.670(b) would suggest that only
organic agricultural products could be required to be tested by the
certifying agent.
We understand the concerns of the commenters but believe that the
commenters have misinterpreted the intent of section 205.670(b). It is
not our intent to mandate residue testing of all inputs and ingredients
used in the production of organic agricultural products. Neither is it
our intent for certifying agents to abuse residue testing
responsibility by conducting residue tests of certified organic
operations without reason to believe that the agricultural input or
product intended to be sold as organic has come into contact with
prohibited substances. Our intent is to make it clear that certifying
agents have the authority to test any agricultural input used or
agricultural product intended to be sold as organically produced when
there is reason to believe that the agricultural input or product has
come into contact with a prohibited substance. Section 205.670(b)
allows for testing of inputs and agricultural products, but it does not
require that all inputs of a product intended to be sold as organically
produced must be tested. However, certifying agents must be able to
ensure that certified organic operations are operating in accordance
with the Act and the regulations set forth in this part. To assure that
certifying agents have established fair and effective procedures for
enforcing residue testing requirements, section 205.504(b)(6) provides
that they must submit to USDA a copy of the procedures to be used for
[[Page 80634]]
sampling and residue testing pursuant to section 205.670.
(2) Chain Of Custody Training. A commenter suggested that section
205.670(c) address chain of custody training for inspectors that will
be performing preharvest or postharvest tissue test sample collection
on behalf of the Administrator, SOP's governing State official, or
certifying agent. The commenter proposed that all inspectors should be
trained to handle chain of custody samples in order to maintain the
integrity of the samples.
We agree that inspectors should be appropriately trained to handle
chain-of-custody samples in order to maintain the integrity of the
samples taken from a certified organic operation. However, we do not
believe that the language in section 205.670(c) must be modified to
address such an issue. As a USDA-accredited body, a private or State
entity operating as a certifying agent must 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. The certifying agent must also submit a
description of the training that has been provided or intends to be
provided to personnel to ensure that they comply with and implement the
requirements of the Act and the regulations in this part. In addition,
certifying agents must submit a copy of the procedure to be used for
sampling and residue testing for approval by the Administrator. Through
the accreditation process, therefore, we will be able to assess the
expertise of the individuals employed by the certifying agent and
provide guidance in areas where additional training is needed to comply
with the requirements of the Act and the regulations in this part.
(3) Exclusion from Organic Sale. Commenters expressed that section
205.671(a) could be easily misinterpreted. They said that section
205.671(a) did not make clear that residue testing may not be used to
qualify crops to be sold as organic if a direct application of
prohibited materials occurred. Commenters suggested that section
205.671(a) include: ``Any crop or product to which prohibited materials
have been directly applied shall not be sold, labeled, or represented
as organically produced.''
We do not believe this additional language is necessary. Residue
testing cannot be used to qualify any agricultural crop or product to
which a prohibited material has been purposefully/directly applied. The
presence of any prohibited substance on an agricultural product to be
sold as organic warrants an investigation as to why the detected
prohibited substance is present on the agricultural product. It does
not matter if the product has come into contact with a prohibited
substance through means of drift or intentional application. If the
outcome of the investigation reveals that the presence of the detected
prohibited substance is the result of an intentional application, the
certified operation will be subject to suspension or revocation of its
organic certification and/or a civil penalty of not more than $10,000
if he/she knowingly sells the product as organic. The use of prohibited
substances is not allowed in the Act or this final rule. Residue
testing is not a means of qualifying a crop or product as organic if a
prohibited substance has been intentionally/directly applied. It is a
tool for monitoring compliance with the regulations set forth in the
Act and in this part.
(4) Emergency Pest or Disease Treatment Programs. Commenters
requested that we make a clear distinction between crops or
agricultural products that have had prohibited substances directly
applied to them and those that have come into contact with prohibited
substances through chemical drift. They have proposed that we amend
section 205.672(a) to address this issue. Section 205.672(a) of the
proposal states that any harvested crop or plant part to be harvested
that has had contact with a prohibited substance applied as the result
of a Federal or State emergency pest or disease treatment program
cannot be sold as organically produced. Commenters did not find this
language acceptable because it did not distinguish between the two
types of ways that products can come into contact with prohibited
substances (drift and direct/intentional application) and how each
situation would be addressed with respect to the national organic
standards. Commenters believed that section 205.672(a) was fairly
ambiguous and open for misinterpretation. Commenters requested that we
amend language in section 205.672(a) to include that ``Any harvested
crop or plant part to be harvested that has contact with a prohibited
substance directly applied to the crop as the result of a Federal or
State emergency pest or disease treatment program cannot be sold,
labeled, or represented as organically produced.''
We do not accept the commenters' request and believe that the
commenters have misinterpreted section 205.672 of the proposed rule.
Section 205.672 specifically addresses certified organic operations
that have had prohibited substances applied to them due to a Federal or
State pest or disease treatment program. Section 205.672 does not
include those organic operations that may have been drifted upon by
prohibited substances that have been applied to a neighboring farm as a
result of a Federal or State emergency pest or disease treatment
program. Any potential drift from a mandatory pest and disease
treatment program will be treated in the same manner as drift from any
other source.
Adverse Action Appeal Process
This portion of subpart G sets forth the procedures for appealing
adverse actions under the National Organic Program (NOP). These
procedures will be used by: (1) Producers and handlers appealing denial
of certification and proposed suspension or revocation of certification
decisions; and (2) certifying agents appealing denial of accreditation
and proposed suspension or revocation of accreditation decisions. The
Act and the Administrative Procedure Act (APA) (5 U.S.C. 553-559)
provides affected persons with the right to appeal any adverse actions
taken against their application for certification or accreditation or
their certification or accreditation.
The Administrator will handle certification appeals from operations
in States that do not have an approved State organic program (SOP). The
Administrator will also handle appeals of accreditation decisions of
the NOP Program Manager. The Administrator will issue decisions to
sustain or deny appeals. If an appeal is denied, the Administrator will
initiate a formal adjudicatory proceeding to deny, suspend, or revoke
certification or accreditation. Such proceedings will be conducted
pursuant to USDA's Rules of Practice Governing Formal Adjudicatory
Proceedings Instituted by the Secretary Under Various Statutes, 7 CFR
1.130 through 1.151. Under these rules of practice, if the
Administrative Law Judge denies the appeal, the appellant may appeal
the Administrative Law Judge's decision to the Judicial Officer. If the
Judicial Officer denies the appeal, the appellant may appeal the
Judicial Officer's decision to the United States District Court for the
district in which the appellant is located.
In States with approved SOP's, the SOP will oversee certification
compliance proceedings and handle appeals from certified operations in
the State. An SOP's appeal procedures and rules of procedure must be
approved by the Secretary and must be equivalent to
[[Page 80635]]
those of the NOP and USDA. The final decision on an appeal under the
SOP may be appealed by the appellant to United States District Court
for the district in which the appellant is located.
Description of Regulations
These appeal procedures provide that: (1) Persons, subject to the
Act, who believe they are adversely affected by a noncompliance
decision of the NOP's Program Manager may appeal such decision to the
Administrator; (2) persons, subject to the Act, who believe they are
adversely affected by a noncompliance decision of an SOP may appeal
such decision to the SOP's governing State official who will initiate
handling of the appeal in accordance with the appeal procedures
approved by the Secretary; and (3) persons, subject to the Act, who
believe they are adversely affected by a noncompliance decision of a
certifying agent may appeal such decision to the Administrator unless
the person is subject to an approved SOP, in which case the appeal must
be made to the SOP.
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. All appeals
filed under these procedures will be reviewed, heard, and decided by
persons not involved with the decision being appealed.
Certification Appeals
Applicants for certification may appeal a certifying agent's notice
of denial of certification. Certified operations may appeal a
notification of proposed suspension or revocation of their
certification issued by their certifying agent. Such appeals will be
made to the Administrator unless the person is subject to an approved
SOP, in which case the appeal must be made to the SOP.
If the Administrator or SOP sustains an appeal, the applicant or
certified operation will be granted certification or continued
certification, as applicable to the operation's status. 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 notice of
denial of certification or notification of proposed suspension or
revocation of certification.
If the Administrator or SOP denies an appeal, a formal
administrative proceeding will be initiated to deny, suspend, or revoke
the certification. Such proceeding will be conducted in accordance with
USDA's Uniform Rules of Practice or the SOP's rules of procedure.
Accreditation Appeals
Applicants for accreditation may appeal the Program Manager's
notification of accreditation denial. Accredited certifying agents may
appeal a notification of proposed suspension or revocation of their
accreditation issued by the Program Manager. Such appeals will be made
to the Administrator. If the Administrator sustains an appeal, the
applicant or certifying agent will be granted accreditation or
continued accreditation, as applicable to the operation's status. If
the Administrator denies an appeal, a formal administrative proceeding
will be initiated to deny, suspend, or revoke the accreditation. Such
proceeding will be conducted in accordance with USDA's Uniform Rules of
Practice.
Filing Period
An appeal of a noncompliance decision must be filed within the time
period provided in the letter of notification or within 30 days from
the date of receipt of the notification, whichever occurs later. The
appeal will be considered ``filed'' on the date received by the
Administrator or, when applicable, the SOP. Unless appealed in a timely
manner, a notification to deny, suspend, or revoke a certification or
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.
Where and What to File
Appeals to the Administrator must be filed in writing and sent to:
Administrator, USDA-AMS, Room 3071-S, P.O. Box 96456, Washington, DC
20090-6456. Appeals to the SOP must be filed in writing to the address
and person identified in the letter of notification. All appeals 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 or made in accordance with applicable program regulations,
policies, or procedures.
Appeals--Changes Based On Comments
This portion of subpart G differs from the proposal in several
respects as follows:
(1) To Whom an Appeal Is Made. We have amended section 205.680 to
clarify to whom an appeal is made when the noncompliance decision is
made by the NOP's Program Manager, an SOP, or a certifying agent.
Several commenters requested that we amend section 205.680 to make it
consistent with the provision providing that appeals to the
Administrator are not allowed in the case of an SOP decision, because
such appeals have to be made to the SOP's governing State official.
We agree that section 205.680 did not convey sufficient explanation
of to whom an appeal is made. Accordingly, we have amended the language
in section 205.680 to clarify through paragraphs (a), (b), and (c)
that: (1) Persons, subject to the Act, who believe they are adversely
affected by a noncompliance decision of the NOP's Program Manager may
appeal such decision to the Administrator; (2) persons, subject to the
Act, who believe they are adversely affected by a noncompliance
decision of an SOP may appeal such decision to the SOP's governing
State official who will initiate handling of the appeal pursuant to
appeal procedures approved by the Secretary; and (3) persons, subject
to the Act, who believe they are adversely affected by a noncompliance
decision of a certifying agent may appeal such decision to the
Administrator unless the person is subject to an approved SOP, in which
case the appeal must be made to the SOP.
(2) Written Communications. We have added a new paragraph (d) to
section 205.680, which provides that 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. We have taken this action to further clarify the appeals
process. This addition to section 205.680 implements the same
requirements for appeal documents as our addition of new paragraph (d)
to section 205.660 stipulates for compliance documents.
(3) Who Shall Handle Appeals. We have added a new paragraph (e) to
section 205.680, which provides that all appeals must be reviewed,
heard, and decided by persons not involved with the decision being
appealed. This provision was added to section 205.680 to allay the
fears of commenters that the person making the decision would be the
person deciding the appeal. A couple of commenters recommended that an
appeal be heard by persons other than those who made the decision being
appealed. Specifically, they want the appeal conducted by independent
hearing officers who are not responsible for implementation or
administration of the NOP. They also want the final decision-making
authority in the administrative review process placed in the hands of
the Secretary.
[[Page 80636]]
Under the NOP, once the compliance procedures are completed at the
certifying agent level, the certified operation may appeal the decision
of the certifying agent to the Administrator or to the SOP when the
certified operation is located within a State with an approved SOP. The
Administrator or the SOP will review the case and render an opinion on
the appeal. When the appeal is sustained, the certified operation and
certifying agent are notified and the case ends. However, if the appeal
is denied the certified operation and certifying agent are notified and
the certified operation is given an opportunity to appeal the decision
of the Administrator or SOP.
Appeals of decisions made by the Administrator will be heard by an
Administrative Law Judge. If the Administrative Law Judge rules against
the certified operation, the Administrative Law Judge's decision may be
appealed by the certified operation to the Judicial Officer. The
Judicial Officer is the USDA official delegated authority by the
Secretary as the final deciding officer in adjudication proceedings. If
the Judicial Officer rules against the certified operation, the
Judicial Officer's decision may be appealed by the certified operation
to the United States District Court for the district in which the
certified operation is located. For additional information see USDA's
Uniform Rules of Practice found at 7 CFR part 1, subpart H.
Appeals of decisions made by an SOP will follow procedures
comparable to those just described for an appeal of a decision made by
the Administrator. As with a final decision of USDA, a final decision
of the State that goes against the certified operation may be appealed
to the United States District Court for the district in which the
certified operation is located.
(4) Filing Period. We have amended the first sentence of section
205.681(c) by replacing ``at least'' with ``within'' and by adding the
words, ``whichever occurs later,'' to the end thereof. This amendment
has been made to clarify our intent that persons affected by a
noncompliance proceeding decision receive not less than 30 days in
which to file their appeal of the decision.
(5) Where To File an Appeal. We have amended section 205.681(d) to
clarify where appeals are to be filed. First, we have amended what is
now paragraph (1) by removing the requirement that the appellant send a
copy of the appeal to the certifying agent. This action shifts the
responsibility of notifying the certifying agent of the appeal from the
appellant to USDA or, when applicable, the SOP. Second, we have added
language at paragraph (2) which clarifies that appeals to the SOP must
be filed in writing to the address and person identified in the letter
of notification. Finally, we have amended what is now paragraph (3) of
section 205.681 by replacing ``position'' with ``reasons for
believing'' to clarify the intended scope and purpose of the
appellant's appeal statement. Clarification of section 205.681(d) was
prompted by a commenter who stated that it is discriminatory to require
clients of private certifying agents to appeal to USDA in Washington,
when State program clients can appeal locally.
There are various levels of appeal within the NOP. Clients of
certifying agents (State and private) are provided with an opportunity
to rebut the noncompliance findings of the certifying agent. Once the
certified operation has exhausted its options at the certifying agent
level, the certified operation may appeal the decision of the
certifying agent to the Administrator or to the SOP when the certified
operation is located within a State with an approved SOP.
The Administrator will review the case and render an opinion on the
appeal. This level of appeal will not require the certified operation's
representative to travel to the Administrator. An appeal of a decision
made by the Administrator will be heard by an Administrative Law Judge
as near as possible to the certified operation's representative's place
of business or residence. An appeal of a decision made by the
Administrative Law Judge will be heard by the Judicial Officer. Again
the certified operation's representative will not be required to travel
outside of the representative's place of business or residence. If the
certified operation appeals the decision of the Judicial Officer, the
appeal would be heard by the United States District Court for the
district in which the certified operation is located.
Appeals of decisions made by an SOP will follow procedures
comparable to those just described for an appeal of a decision made by
the Administrator. As with a final decision of USDA, a final decision
of the State that goes against the certified operation may be appealed
to the United States District Court for the district in which the
certified operation is located.
(6) Appeal Reports. We will submit an annual report on appeals to
the National Organic Standards Board (NOSB), which will include
nonconfidential compliance information. A commenter requested that we
report quarterly to the NOSB on appeals (number, outcome, kinds, and
problems). We agree that it would be appropriate for the NOP to submit
an appeals report to the NOSB. We will compile appeal data such as the
number, outcome, kinds, and problems encountered. We will maintain this
information under the compliance program to be developed within the
NOP. We do not believe that it is necessary to put this type of detail
or activity into the regulations. Further, we do not believe, at this
time, that reporting more frequently than annually will be needed. The
NOP, however, will work closely with the NOSB to provide it with the
information it may need to recommend program amendments designed to
address compliance and appeal issues.
(7) Availability of Appeal Information. We will develop and
distribute appeal information. A commenter requested that section
205.680 be amended to require the distribution of an appeal information
brochure to any applicant for accreditation or certification. We agree
that the development and distribution of such information is a good
idea. We do not believe, however, that it is necessary or appropriate
to put this type of detail or activity into the regulations. We plan to
provide program information, including appeals and related issues, on
the NOP website.
Appeals--Changes Requested But Not Made
This portion of subpart G retains from the proposed rule,
regulations on which we received comments as follows:
(1) National Appeals Division. Several commenters recommend
amending sections 205.680 and 205.681 to provide for appeals to the
National Appeals Division under the provisions at 7 CFR part 11. We
disagree with the request that the NOP use the National Appeals
Division Rules of Procedure. The Act and its implementing regulations
are subject to the APA for rulemaking and adjudication. The provisions
of the APA generally applicable to agency adjudication are not
applicable to proceedings under 7 CFR part 11, National Appeals
Division Rules of Procedure. USDA uses 7 CFR part 1, Rules of Practice
Governing Formal Adjudicatory Proceedings Instituted by the Secretary
Under Various Statutes, for adjudicatory proceedings involving the
denial, suspension, and revocation of certification and accreditation.
Appeals--Clarifications
Clarification is given on the following issues raised by
commenters:
(1) Appeals. A commenter stated that appeals of certification
decisions should always be taken first to the certifying
[[Page 80637]]
agent to provide an opportunity to rectify any possible error. Another
commenter requested an appeals process that includes private certifying
agents.
Section 205.662(a) requires a written notification of noncompliance
with opportunity to rebut or correct. When the noncompliance has been
resolved due to rebuttal or correction, a written notification of
noncompliance resolution is issued in accordance with section
205.662(b). When rebuttal is unsuccessful or correction of the
noncompliance is not completed within the prescribed time period, a
written notification of proposed suspension or revocation will be
issued in accordance with section 205.662(c). This notification will
advise the certified operation of its right to request mediation or
file an appeal with the Administrator or, when applicable, an SOP. We
believe this process of providing a notification of noncompliance with
opportunity to rebut or correct, followed by a notification of proposed
suspension or revocation, provides ample opportunity for the certified
operation to work with its certifying agent to resolve issues of
noncompliance.
(2) Timely Notification. A few commenters requested that we amend
section 205.680 to include mandatory procedures for timely written
notice of an adverse decision, the reasons for the decision, the
person's appeal rights, and the procedures for filing an appeal. We
recognize that all compliance activities need to be carried out as
quickly and expeditiously as possible within the confines of due
process. We believe that the commenters' concerns are addressed through
various sections of these regulations. Section 205.402(a) requires
review of an application upon acceptance of the application. Section
205.405, on denial of certification, requires a notification of
noncompliance, followed, as applicable, by a notice of denial of
certification. In accordance with section 205.405(d), the notice of
denial of certification will state the reasons for denial and the
applicant's right to request mediation or appeal the decision. Section
205.507 on denial of accreditation requires a notification of
noncompliance, followed, as applicable, by a denial of accreditation.
The notification of accreditation denial will state the reasons for
denial and the applicant's right to appeal the decision. Compliance
sections 205.662 for certified operations and 205.665 for certifying
agents require a notification of noncompliance with an opportunity to
correct or rebut the noncompliance(s). Sections 205.662 and 205.665,
when applicable, require the issuance of a notification of proposed
suspension or revocation. Such notice must describe the noncompliance
and the entity's right to an appeal. Section 205.681 provides the
procedures for filling an appeal.
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, Imports, Labeling, Organically produced products,
Plants, Reporting and recordkeeping requirements, Seals and insignia,
Soil conservation.
For the reasons set forth in the preamble, Title 7, Chapter I of
the Code of Federal Regulations is amended as follows:
PARTS 205-209 [REMOVED]
1. Parts 205 through 209, which are currently reserved in
subchapter K (Federal Seed Act), are removed.
2. A new subchapter M consisting of parts 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 [Reserved]
205.105 Allowed and prohibited substances, methods, and
ingredients in organic production and handling.
205.106-205.199 [Reserved]
Subpart C--Organic Production and Handling Requirements
205.200 General.
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.
205.273-205.289 [Reserved]
205.290 Temporary variances.
205.291-205.299 [Reserved]
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 or food group(s)).''
205.305 Multiingredient packaged products with less that 70
percent organically produced ingredients.
205.306 Labeling of livestock feed.
205.307 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 or food group(s)).''
205.308 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.''
205.309 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 or food group(s)).''
205.310 Agricultural products produced on an exempt or excluded
operation.
205.311 USDA Seal.
205.312-205.399 [Reserved]
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 Granting 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.
[[Page 80638]]
205.506 Granting accreditation.
205.507 Denial of accreditation.
205.508 Site evaluations.
205.509 Peer review panel.
205.510 Annual report, recordkeeping, and renewal of
accreditation.
205.511-205.599 [Reserved]
Subpart G--Administrative
The National List of Allowed and Prohibited Substances
205.600 Evaluation criteria for allowed and prohibited substances,
methods, and ingredients.
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.
205.605 Nonagricultural (nonorganic) substances allowed as
ingredients in or on processed products labeled as ``organic,'' or
``made with organic (specified ingredients or food group(s)).''
205.606 Nonorganically produced agricultural products allowed as
ingredients in or on processed products labeled as ``organic'' or
``made with organic (specified ingredients or food group(s)).''
205.607 Amending the National List.
205.608-205.619 [ Reserved]
State Organic Programs
205.620 Requirements of State organic programs.
205.621 Submission and determination of proposed State organic
programs and amendments to approved State organic programs.
205.622 Review of approved State organic programs.
205.623-205.639 [Reserved]
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 Investigation of certified operations.
205.662 Noncompliance procedure for certified operations.
205.663 Mediation.
205.664 [Reserved]
205.665 Noncompliance procedure for certifying agents.
205.666-205.667 [Reserved]
205.668 Noncompliance procedures under State Organic 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
Sec. 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.
Sec. 205.2 Terms defined.
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, 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.
Agricultural Marketing Service (AMS). The Agricultural Marketing
Service of the United States Department of Agriculture.
Allowed synthetic. A substance that is included on the National
List of synthetic substances allowed for use in organic production or
handling.
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 or 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 70 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.
[[Page 80639]]
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 food
group(s)),'' or, in the case of agricultural products containing less
than 70 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, processing, transportation, storage or handling, other than
during the manufacture of a multiingredient product containing both
types of ingredients.
Compost. The product of a managed process through which
microorganisms break down plant and animal materials into more
available forms suitable for application to the soil. Compost must be
produced through a process that combines plant and animal materials
with an initial C:N ratio of between 25:1 and 40:1. Producers using an
in-vessel or static aerated pile system must maintain the composting
materials at a temperature between 131 deg. F and 170 deg. F for 3
days. Producers using a windrow system must maintain the composting
materials at a temperature between 131 deg. F and 170 deg. F for 15
days, during which time, the materials must be turned a minimum of five
times.
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 rotation.
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 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.
Excluded methods. 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 include
cell fusion, microencapsulation and macroencapsulation, and recombinant
DNA technology (including gene deletion, gene doubling, introducing a
foreign gene, and changing the positions of genes when achieved by
recombinant DNA technology). Such methods do 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 added to feed in micro quantities to
fulfill a specific nutritional need; i.e., essential nutrients in the
form of amino acids, vitamins, and minerals.
Feed supplement. A combination of feed nutrients added to livestock
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. Vegetative material in a fresh, dried, or ensiled state
(pasture, hay, or silage), which is fed to livestock.
Governmental entity. Any domestic government, tribal government, or
foreign governmental subdivision providing certification services.
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.
[[Page 80640]]
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 (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.
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.
Inspector. Any person retained or used by a certifying agent to
conduct inspections of certification applicants or certified production
or handling operations.
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.
Manure. Feces, urine, other excrement, and bedding produced by
livestock that has not been composted.
Market information. Any written, printed, audiovisual, or graphic
information, including advertising, pamphlets, flyers, catalogues,
posters, and signs, distributed, broadcast, or made available outside
of retail outlets that are used to assist in the sale or promotion of a
product.
Mulch. Any nonsynthetic material, such as wood chips, leaves, or
straw, or any synthetic material included on the National List for such
use, such as newspaper or plastic that serves to suppress weed growth,
moderate soil temperature, or conserve soil moisture.
Narrow range oils. Petroleum derivatives, predominately of
paraffinic and napthenic fractions with 50 percent boiling point (10 mm
Hg) between 415 deg. F and 440 deg. F.
National List. A list of allowed and prohibited substances as
provided for in the Act.
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
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.
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.
Nontoxic. Not known to cause any adverse physiological effects in
animals, plants, humans, or the environment.
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 production. A production system that is managed in
accordance with the Act and regulations in this part to respond to
site-specific conditions by integrating cultural, biological, and
mechanical practices that foster cycling of resources, promote
ecological balance, and conserve biodiversity.
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.
Pasture. Land used for livestock grazing that is managed to provide
feed value and maintain or improve soil, water, and vegetative
resources.
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, partnership, corporation, association,
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
[[Page 80641]]
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 other than annual
seedlings but 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
includes 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, slaughtering, cutting,
fermenting, distilling, eviscerating, preserving, dehydrating,
freezing, chilling, or otherwise manufacturing and includes the
packaging, canning, jarring, or otherwise enclosing food in a
container.
Processing aid. (1) Substance that is added to a food during the
processing of such food but is removed in some manner from the food
before it is packaged in its finished form;
(2) a substance that is added to a food during processing, is
converted into constituents normally present in the food, and does not
significantly increase the amount of the constituents naturally found
in the food; and
(3) a substance that is added to a food for its technical or
functional effect in the processing but is present in the finished food
at insignificant levels and does not have any technical or functional
effect in that food.
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 the use of which 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.
Split operation. An operation that produces or handles both organic
and nonorganic agricultural products.
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 organic program (SOP). 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 organic 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.
Tolerance. The maximum legal level of a pesticide chemical residue
in or on a raw or processed agricultural commodity or processed food.
Transplant. A seedling which has been removed from its original
place of production, transported, and replanted.
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 a site 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 or food
group(s))'' must be certified according to the provisions of subpart E
of this part and
[[Page 80642]]
must meet all other applicable requirements of this part.
(b) Any production or handling operation or specified portion of a
production or handling operation that has been already certified by a
certifying agent on the date that the certifying agent receives its
accreditation under this part shall be deemed to be certified under the
Act until the operation's next 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
February 20, 2001.
(c) Any operation that:
(1) Knowingly sells or labels a product as organic, except in
accordance with the Act, shall be subject to a civil penalty of not
more than $10,000 per violation.
(2) Makes a false statement under the Act to the Secretary, a
governing State official, or an accredited certifying agent shall be
subject to the provisions of section 1001 of title 18, United States
Code.
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. 205.310. The products from such operations shall not be used as
ingredients identified as organic in processed products produced by
another handling operation.
(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
only handles agricultural products that contain less than 70 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 Secs. 205.305 and 205.310; and
(iii) The recordkeeping provisions in paragraph (c) of this
section.
(4) A handling operation or portion of a handling operation that
only identifies organic ingredients on 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 Secs. 205.305 and 205.310; 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 or food group(s))'' 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, on the premises
of the retail food establishment, raw and ready-to-eat food from
agricultural products that were previously labeled as ``100 percent
organic,'' ``organic,'' or ``made with organic (specified ingredients
or food group(s))'' 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. 205.310.
(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 quantities 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 organic programs' 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 or food group(s))'' 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; and
(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.
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 or food group(s)).''
(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 [Reserved]
Sec. 205.105 Allowed and prohibited substances, methods, and
ingredients in organic production and handling.
To be sold or labeled as ``100 percent organic,'' ``organic,'' or
``made with
[[Page 80643]]
organic (specified ingredients or food group(s)),'' the product must be
produced and handled without the use of:
(a) Synthetic substances and ingredients, except as provided in
Sec. 205.601 or Sec. 205.603;
(b) Nonsynthetic substances prohibited in Sec. 205.602 or
Sec. 205.604;
(c) Nonagricultural substances used in or on processed products,
except as otherwise provided in Sec. 205.605;
(d) Nonorganic agricultural substances used in or on processed
products, except as otherwise provided in Sec. 205.606;
(e) Excluded methods, except for vaccines: Provided, That, the
vaccines are approved in accordance with Sec. 205.600(a);
(f) Ionizing radiation, as described in Food and Drug
Administration regulation, 21 CFR 179.26; and
(g) Sewage sludge.
Secs. 205.106-205.199 [Reserved]
Subpart C--Organic Production and Handling Requirements
Sec. 205.200 General.
The producer or handler of a production or handling operation
intending to sell, label, or represent agricultural products as ``100
percent organic,'' ``organic,'' or ``made with organic (specified
ingredients or food group(s))'' must comply with the applicable
provisions of this subpart. Production 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, intending to sell,
label, or represent agricultural products as ``100 percent organic,''
``organic,'' or ``made with organic (specified ingredients or food
group(s))'' 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 for 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, location(s) where it will be
used, and documentation of commercial availability, as applicable;
(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 the management practices and physical barriers
established to prevent commingling of organic and nonorganic products
on a split operation 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 ``organic,'' 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. 205.105,
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 manage crop nutrients and soil fertility
through rotations, cover crops, and the application of plant and animal
materials.
(c) The producer must manage plant and animal 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 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) Composted plant and animal materials produced though a process
that:
(i) Established an initial C:N ratio of between 25:1 and 40:1; and
(ii) Maintained a temperature of between 131 deg. F and 170 deg. F
for 3 days using an in-vessel or static aerated pile system; or
(iii) Maintained a temperature of between 131 deg. F and 170 deg. F
for 15 days using a windrow composting system, during which period, the
materials must be turned a minimum of five times.
(3) Uncomposted plant materials.
(d) A producer may manage crop nutrients and soil fertility 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 by applying:
(1) A crop nutrient or soil amendment included on the National List
of synthetic substances allowed for use in organic crop production;
(2) A mined substance of low solubility;
(3) A mined substance of high solubility: Provided, That, the
substance is used in compliance with the conditions established on the
National List of nonsynthetic materials prohibited for crop production;
(4) 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
(5) A plant or animal material that has been chemically altered by
a manufacturing process: Provided, That, the material is included on
the National
[[Page 80644]]
List of synthetic substances allowed for use in organic crop production
established in Sec. 205.601.
(e) The producer must not use:
(1) Any fertilizer or composted plant and animal material that
contains a synthetic substance not included on the National List of
synthetic substances allowed for use in organic crop 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, burning may be used to suppress the spread of
disease or to stimulate seed germination.
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: Except, That,
organically produced seed must be used for the production of edible
sprouts;
(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) [Reserved]
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 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 crop production may be applied to prevent, suppress, or
control pests, weeds, or diseases: Provided, That, the conditions for
using the substance are documented in the organic system plan.
(f) The producer must not use lumber treated with arsenate or other
prohibited materials for new installations or replacement purposes in
contact with soil or livestock.
Sec. 205.207 Wild-crop harvesting practice standard.
(a) A wild crop that is intended to be sold, labeled, or
represented as organic must be harvested from a designated area that
has had no prohibited substance, as set forth in Sec. 205.105, 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 products that are to be sold, labeled, or represented
as organic must be from livestock under continuous organic management
from the last third of gestation 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: Except, That, when an
entire, distinct herd is converted to organic production, the producer
may:
(i) For the first 9 months of the year, provide a minimum of 80-
percent feed that is either organic or raised from land included in the
organic system plan and managed in compliance with organic crop
requirements; and
(ii) Provide feed in compliance with Sec. 205.237 for the final 3
months.
(iii) Once an entire, distinct herd has been converted to organic
production, all dairy animals shall be under organic management from
the last third of gestation.
(3) 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 livestock, the breeder stock must be brought
onto the facility no later than the last third of gestation.
(b) The following are prohibited:
(1) Livestock or edible livestock products that are removed from an
[[Page 80645]]
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 the last third of gestation may not be sold,
labeled, or represented as organic slaughter stock.
(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 are organically produced and, if
applicable, organically handled: Except, That, nonsynthetic substances
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 a feed ration sufficient to meet nutritional
requirements, including vitamins, minerals, protein and/or amino acids,
fatty acids, energy sources, and fiber (ruminants);
(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
but not during lactation 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 for growth promotion;
(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 the outdoors, shade, shelter, exercise areas, fresh
air, and direct sunlight suitable to the species, its stage of
production, the climate, and the environment;
(2) Access to pasture for ruminants;
(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, curing, heating, drying, mixing, grinding, churning,
separating, distilling, 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 organically
produced agricultural product 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:
(1) In or on a processed agricultural product intended to be sold,
labeled, or represented as ``organic,'' pursuant to Sec. 205.301(b), if
not commercially available in organic form.
(2) In or on a processed agricultural product intended to be sold,
labeled, or represented as ``made with organic (specified ingredients
or food group(s)),'' pursuant to Sec. 205.301(c).
(c) The handler of an organic handling operation must not use in or
on agricultural products intended to be sold, labeled, or represented
as ``100 percent organic,'' ``organic,'' or ``made
[[Page 80646]]
with organic (specified ingredients or food group(s)),'' or in or on
any ingredients labeled as organic:
(1) Practices prohibited under paragraphs (e) and (f) of
Sec. 205.105.
(2) A volatile synthetic solvent or other synthetic processing aid
not allowed under Sec. 205.605: Except, That, nonorganic ingredients in
products labeled ``made with organic (specified ingredients or food
group(s))'' are not subject to this requirement.
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; and
(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) Mechanical or physical controls including but not limited to
traps, light, or sound; or
(2) Lures and repellents using nonsynthetic or synthetic substances
consistent with the National List.
(c) If the practices provided for in paragraphs (a) and (b) of this
section are not effective to prevent or control pests, a nonsynthetic
or synthetic substance consistent with the National List may be
applied.
(d) If the practices provided for in paragraphs (a), (b), and (c)
of this section are not effective to prevent or control facility pests,
a synthetic substance not on the National List may be applied:
Provided, That, the handler and certifying agent agree on the
substance, method of application, and measures to be taken to prevent
contact of the organically produced products or ingredients with the
substance used.
(e) The handler of an organic handling operation who applies a
nonsynthetic or synthetic substance to prevent or control pests must
update the operation's organic handling plan to reflect the use of such
substances and methods of application. The updated organic plan must
include a list of all measures taken to prevent contact of the
organically produced products or ingredients with the substance used.
(f) Notwithstanding the practices provided for in paragraphs (a),
(b), (c), and (d) of this section, a handler may otherwise use
substances to prevent or control pests as required by Federal, State,
or local laws and regulations: Provided, That, measures are taken to
prevent contact of the organically produced products or ingredients
with the substance used.
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 are prohibited for use in the handling of any
organically produced agricultural product or ingredient labeled in
accordance with subpart D of this part:
(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 has been in
contact with any substance in such a manner as to compromise the
organic integrity of any organically produced product or ingredient
placed in those containers, unless such reusable bag or container has
been thoroughly cleaned and poses no risk of contact of the organically
produced product or ingredient with the substance used.
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 drought, wind, flood, excessive moisture,
hail, 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 State organic program's governing State official or
certifying agent may recommend in writing to the Administrator that a
temporary variance from a standard set forth in subpart C of this part
for organic production or handling operations be established: Provided,
That, such variance is based on one or more of 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
and 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 to which the temporary variance
applies.
(e) Temporary variances will not be granted for any practice,
material, or procedure prohibited under Sec. 205.105.
Secs. 205.291-205.299 [Reserved]
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. The term, ``organic,'' may not be used in a
product name to modify a nonorganic ingredient in the product.
(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. 205.307(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.
(d) Livestock feeds produced in accordance with the requirements of
this part must be labeled in accordance with the requirements of
Sec. 205.306.
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) 100 percent organically produced
ingredients. If labeled as organically produced, 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 products. Any remaining product ingredients must
be organically produced, unless not commercially
[[Page 80647]]
available in organic form, or must be nonagricultural substances or
nonorganically produced agricultural products produced consistent with
the National List in subpart G of this part. If labeled as organically
produced, such product must be labeled pursuant to Sec. 205.303.
(c) Products sold, labeled, or represented as ``made with organic
(specified ingredients or food group(s)).'' Multiingredient
agricultural product sold, labeled, or represented as ``made with
organic (specified ingredients or food group(s))'' must contain (by
weight or fluid volume, excluding water and salt) at least 70 percent
organically produced ingredients which are produced and handled
pursuant to requirements in subpart C of this part. No ingredients may
be produced using prohibited practices specified in paragraphs (f)(1),
(2), and (3) of Sec. 205.301. Nonorganic ingredients may be produced
without regard to paragraphs (f)(4), (5), (6), and (7) of Sec. 205.301.
If labeled as containing organically produced ingredients or food
groups, such product must be labeled pursuant to Sec. 205.304.
(d) Products with less than 70 percent organically produced
ingredients. The organic ingredients in multiingredient agricultural
product containing less than 70 percent organically produced
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 70 percent organically produced
ingredients may represent the organic nature of the product only as
provided in Sec. 205.305.
(e) Livestock feed. (1) A raw or processed livestock feed 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.
(2) A raw or processed livestock feed product sold, labeled, or
represented as ``organic'' must be produced in conformance with
Sec. 205.237.
(f) All products labeled as ``100 percent organic'' or ``organic''
and all ingredients identified as ``organic'' in the ingredient
statement of any product must not:
(1) Be produced using excluded methods, pursuant to Sec. 201.105(e)
of this chapter;
(2) Be produced using sewage sludge, pursuant to Sec. 201.105(f) of
this chapter;
(3) Be processed using ionizing radiation, pursuant to
Sec. 201.105(g) of this chapter;
(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 organically produced processing
aids;
(5) Contain sulfites, nitrates, or nitrites added during the
production or handling process, Except, that, wine containing added
sulfites may be labeled ``made with organic grapes'';
(6) Be produced using nonorganic ingredients when organic
ingredients are 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 food group(s)),'' or that include organic ingredients must be
calculated by:
(1) Dividing the total net weight (excluding water and salt) of
combined organic ingredients at formulation 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 organically produced 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.
(c) The percentage must be determined by the handler who affixes
the label on the consumer package and verified by the certifying agent
of the handler. The handler may use information provided by the
certified operation in determining the percentage.
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:
(1) The term, ``100 percent organic'' or ``organic,'' as
applicable, to modify the name of the product;
(2) For products labeled ``organic,'' the percentage of organic
ingredients in the product; (The size of the percentage statement must
not exceed one-half the size of the largest type size on the panel on
which the statement is displayed and must appear in its entirety in the
same type size, style, and color without highlighting.)
(3) The term, ``organic,'' to identify the organic ingredients in
multiingredient products labeled ``100 percent organic'';
(4) The USDA seal; and/or
(5) 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) For products labeled ``organic,'' identify each organic
ingredient in the ingredient statement with the word, ``organic,'' or
with an asterisk or other reference mark which is defined below the
ingredient statement to indicate the ingredient is organically
produced. Water or salt included as ingredients cannot be identified as
organic.
(2) 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
and may display the business address, Internet address, or telephone
number of the certifying agent in such label.
[[Page 80648]]
Sec. 205.304 Packaged products labeled ``made with organic (specified
ingredients or food group(s)).''
(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:
(i) ``Made with organic (specified ingredients)'': Provided, That,
the statement does not list more than three organically produced
ingredients; or
(ii) ``Made with organic (specified food groups)'': Provided, That,
the statement does not list more than three of the following food
groups: beans, fish, fruits, grains, herbs, meats, nuts, oils, poultry,
seeds, spices, sweeteners, and vegetables or processed milk products;
and, Provided further, That, all ingredients of each listed food group
in the product must be organically produced; and
(iii) Which appears in letters that do not exceed one-half the size
of the largest type size on the panel and which appears in its entirety
in the same type size, style, and color without highlighting.
(2) The percentage of organic ingredients in the product. The size
of the percentage statement must not exceed one-half the size of the
largest type size on the panel on which the statement is displayed and
must appear in its entirety in the same type size, style, and color
without highlighting.
(3) 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) In the ingredient statement, identify each organic ingredient
with the word, ``organic,'' or with an asterisk or other reference mark
which is defined below the ingredient statement to indicate the
ingredient is organically produced. Water or salt included as
ingredients cannot be identified as organic.
(2) 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, Internet 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 Multi-ingredient packaged products with less than 70
percent organically produced ingredients.
(a) An agricultural product with less than 70 percent organically
produced ingredients may only identify the organic content of the
product by:
(1) Identifying each organically produced ingredient in the
ingredient statement with the word, ``organic,'' or with an asterisk or
other reference mark which is defined below the ingredient statement to
indicate the ingredient is organically produced, and
(2) If the organically produced ingredients are identified in the
ingredient statement, displaying the product's percentage of organic
contents on the information panel.
(b) Agricultural products with less than 70 percent organically
produced ingredients must not display:
(1) The USDA seal; and
(2) Any certifying agent seal, logo, or other identifying mark
which represents organic certification of a product or product
ingredients.
Sec. 205.306 Labeling of livestock feed.
(a) Livestock feed products described in Sec. 205.301(e)(1) and
(e)(2) may display on any package panel the following terms:
(1) The statement, ``100 percent organic'' or ``organic,'' as
applicable, to modify the name of the feed 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 raw or processed organic ingredients used in the finished product,
Provided, That, such seals or marks are not displayed more prominently
than the USDA seal;
(4) The word, ``organic,'' or an asterisk or other reference mark
which is defined on the package to identify ingredients that are
organically produced. Water or salt included as ingredients cannot be
identified as organic.
(b) Livestock feed products described in Sec. 205.301(e)(1) and
(e)(2) must:
(1) 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, display the name of
the certifying agent that certified the handler of the finished
product. The business address, Internet address, or telephone number of
the certifying agent may be included in such label.
(2) Comply with other Federal agency or State feed labeling
requirements as applicable.
Sec. 205.307 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 or food group(s)).''
(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;
(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) 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 in
accordance 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 products are clearly
marked ``For Export Only'' and: Provided further, That, proof of such
container marking and export must be maintained by the handler in
accordance with recordkeeping requirements for exempt and excluded
operations under Sec. 205.101.
Sec. 205.308 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 in other than packaged form may use the
term, ``100 percent organic'' or ``organic,'' as applicable, to modify
the name of the product in retail display, labeling, and display
containers: Provided, That, the term, ``organic,'' is used to identify
the organic ingredients listed in the ingredient statement.
(b) If the product is prepared in a certified facility, the retail
display, labeling, and display containers may use:
(1) The USDA seal; and
(2) The seal, logo, or other identifying mark of the certifying
agent that
[[Page 80649]]
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. 205.309 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 or food group(s)).''
(a) Agricultural products in other than packaged form containing
between 70 and 95 percent organically produced ingredients may use the
phrase, ``made with organic (specified ingredients or food group(s)),''
to modify the name of the product in retail display, labeling, and
display containers.
(1) Such statement must not list more than three organic
ingredients or food groups, and
(2) In any such display of the product's ingredient statement, the
organic ingredients are identified as ``organic.''
(b) If prepared in a certified facility, such agricultural products
labeled as ``made with organic (specified ingredients or food
group(s))'' in retail displays, display containers, and market
information may display the certifying agent's seal, logo, or other
identifying mark.
Sec. 205.310 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 the exempt or excluded operation as a
certified organic operation, or
(2) Be represented as a certified organic product or certified
organic ingredient 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 or represented as ``organic'' in a product processed by
others.
(c) Such product is subject to requirements specified in paragraph
(a) of Sec. 205.300, and paragraphs (f)(1) through (f)(7) of
Sec. 205.301.
Sec. 205.311 USDA Seal.
(a) The USDA seal described in paragraphs (b) and (c) of this
section may be used only for raw or processed agricultural products
described in paragraphs (a), (b), (e)(1), and (e)(2) of Sec. 205.301.
(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 background with a brown outer circle and with the
term, ``USDA,'' in green overlaying a white upper semicircle and with
the term, ``organic,'' in white overlaying the green lower half circle;
or
(2) On a white or transparent background with black outer circle
and black ``USDA'' on a white or transparent upper half of the circle
with a contrasting white or transparent ``organic'' on the black lower
half circle.
(3) The green or black lower half circle may have four light lines
running from left to right and disappearing at the point on the right
horizon to resemble a cultivated field.
[GRAPHIC] [TIFF OMITTED] TR21DE00.001
Secs. 205.312-205.399 [Reserved]
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 production and
handling areas, structures, and offices 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 organic
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 an application for
certification to a certifying agent. The application 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; the
outcome of the application(s) submission, including, when available, 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 noncompliances 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
[[Page 80650]]
noncompliance or denial of certification, pursuant to Sec. 205.405, has
submitted documentation to support the correction of any noncompliances
identified in the notification of noncompliance or denial of
certification, as required in Sec. 205.405(e); 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 within a reasonable time:
(1) Review the application materials received and communicate its
findings to the applicant;
(2) Provide the applicant with a copy of the on-site inspection
report, as approved by the certifying agent, for any on-site inspection
performed; and
(3) Provide the applicant with a copy of the test results for any
samples taken by an inspector.
(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 produces or handles organic products and that is included in an
operation for which certification is requested. An on-site inspection
shall be conducted annually thereafter for each certified operation
that produces or handles organic products 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 organic 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 organic program's governing State official.
(b) Scheduling. (1) 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: Except, That, the initial
inspection may be delayed for up to 6 months to comply with the
requirement that the inspection be conducted when the land, facilities,
and activities that demonstrate compliance or capacity to comply can be
observed.
(2) All on-site inspections must be conducted when an authorized
representative of the operation 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 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 operation who is knowledgeable
about 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.
(e) Documents to the inspected operation. (1) At the time of the
inspection, the inspector shall provide the operation's authorized
representative with a receipt for any samples taken by the inspector.
There shall be no charge to the inspector for the samples taken.
(2) A copy of the on-site inspection report and any test results
will be sent to the inspected operation by the certifying agent.
Sec. 205.404 Granting 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
grant certification. The certification may include requirements for the
correction of minor noncompliances within a specified time period 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
organic 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.
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. The notification of noncompliance shall
provide:
[[Page 80651]]
(1) A description of each noncompliance;
(2) The facts upon which the notification of noncompliance is
based; and
(3) The date by which the applicant must rebut or correct each
noncompliance and submit supporting documentation of each such
correction when correction is possible.
(b) Upon receipt of such notification of noncompliance, the
applicant may:
(1) Correct noncompliances and submit a description of the
corrective actions taken with supporting documentation to the
certifying agent;
(2) Correct noncompliances 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 the issuing certifying agent 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 organic program; or
(3) File an appeal of the denial of certification pursuant to
Sec. 205.681 or, if applicable, pursuant to a State organic program.
(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 noncompliances 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
pay the certification fees and 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);
(3) An update on the correction of minor noncompliances previously
identified by the certifying agent as requiring correction for
continued certification; and
(4) 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 within a reasonable
time arrange and conduct an on-site inspection of the certified
operation pursuant to Sec. 205.403: Except, That, when it is impossible
for the certifying agent to conduct the annual on-site inspection
following receipt of the certified operation's annual update of
information, the certifying agent may allow continuation of
certification and issue an updated certificate of organic operation on
the basis of the information submitted and the most recent on-site
inspection conducted during the previous 12 months: Provided, That, the
annual on-site inspection, required pursuant to Sec. 205.403, is
conducted within the first 6 months following the certified operation's
scheduled date of annual update.
(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 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
[[Page 80652]]
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 governmental 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 evaluation of all persons who
review applications for certification, perform on-site inspections,
review certification documents, evaluate qualifications for
certification, make recommendations concerning certification, or make
certification decisions and implement measures to correct any
deficiencies in certification services;
(7) Have an annual program review of its certification activities
conducted by the certifying agent's staff, an outside auditor, or a
consultant who has expertise to conduct such reviews and implement
measures to correct any noncompliances 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 organic 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 organic 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 giving advice or providing consultancy services, to
certification applicants or certified operations, for overcoming
identified barriers to certification;
(v) Requiring all persons who review applications for
certification, perform on-site inspections, review certification
documents, evaluate qualifications for certification, make
recommendations concerning certification, or make certification
decisions and all parties responsibly connected to the certifying agent
to complete an annual conflict of interest disclosure report; and
(vi) Ensuring that the decision to certify an operation is made by
a person different from those who conducted the review of documents and
on-site inspection.
(12)(i) Reconsider a certified operation's application for
certification and, if necessary, perform a new on-site inspection when
it is determined, within 12 months of certifying the operation, that
any person participating in the certification process and covered under
Sec. 205.501(a)(11)(ii) has or had a conflict of interest involving the
applicant. All costs associated with a reconsideration of application,
including onsite inspection costs, shall be borne by the certifying
agent.
(ii) Refer a certified operation to a different accredited
certifying agent for recertification and reimburse the operation for
the cost of the recertification when it is determined that any person
covered under Sec. 205.501(a)(11)(i) at the time of certification of
the applicant had a conflict of interest involving the applicant.
(13) Accept the certification decisions made by another certifying
agent accredited or accepted by USDA pursuant to Sec. 205.500;
(14) 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;
(15) Submit to the Administrator a copy of:
(i) 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) A list, on January 2 of each year, including the name,
address, and telephone number of each operation granted certification
during the preceding year;
(16) Charge applicants for certification and certified production
and handling operations only those fees and charges for certification
activities that it has filed with the Administrator;
(17) Pay and submit fees to AMS in accordance with Sec. 205.640;
(18) Provide the inspector, prior to each on-site inspection, with
previous on-site inspection reports and notify the inspector of its
decision regarding certification of the production or handling
operation site inspected by the inspector and of any requirements for
[[Page 80653]]
the correction of minor noncompliances;
(19) Accept all production or handling applications that fall
within its area(s) of accreditation and certify all qualified
applicants, to the extent of its administrative capacity to do so
without regard to size or membership in any association or group; and
(20) Demonstrate its ability to comply with a State's organic
program to certify organic production or handling operations within the
State.
(21) Comply with, implement, and carry out any other terms and
conditions determined by the Administrator to be necessary.
(b) A private or governmental 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 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, certifying agents certifying production or handling operations
within a State with more restrictive requirements, approved by the
Secretary, shall require compliance with such requirements as a
condition of use of their identifying mark by such operations.
(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 organic 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; Provided, That, such transfer shall not apply to a
merger, sale, or other transfer of ownership of a certifying agent.
(d) No private or governmental 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 governmental 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, P.O. 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 governmental 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 governmental 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 governmental 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
[[Page 80654]]
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, including any fees to be
assessed, 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, products produced, 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
(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 all persons who review applications for certification,
perform on-site inspections, review certification documents, evaluate
qualifications for certification, make recommendations concerning
certification, or make certification decisions and all parties
responsibly connected to the certifying agent, 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 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 governmental 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 certifying
agent accredited or accepted by USDA pursuant to Sec. 205.500;
(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 evaluation of all persons who
review applications for certification, perform on-site inspections,
review certification documents, evaluate qualifications for
certification, make recommendations concerning certification, or make
certification decisions and implement measures to correct any
deficiencies in certification services;
(4) Have an annual internal program review conducted of its
certification activities by certifying agent staff, an outside auditor,
or a consultant who has the expertise to conduct such reviews and
implement measures to correct any noncompliances 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 organic 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; Provided, That such transfer shall not apply to a
merger, sale, or other transfer of ownership of a certifying agent.
Sec. 205.506 Granting accreditation.
(a) Accreditation will be granted 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 the
granting of accreditation in writing, stating:
(1) The area(s) for which accreditation is given;
(2) The effective date of the accreditation;
(3) Any terms and conditions for the correction of minor
noncompliances; and
(4) 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(c), 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 Program Manager 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 Program
[[Page 80655]]
Manager shall provide a written notification of noncompliance to the
applicant. 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 applicant must rebut or correct each
noncompliance and submit supporting documentation of each such
correction when correction is possible.
(b) When each noncompliance has been resolved, the Program Manager
will send the applicant a written notification of noncompliance
resolution and proceed with further processing of the application.
(c) If an applicant fails to correct the noncompliances, fails to
report the corrections by the date specified in the notification of
noncompliance, fails to file a rebuttal of the notification of
noncompliance by the date specified, or is unsuccessful in its
rebuttal, the Program Manager 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, or
appeal the denial of accreditation in accordance with Sec. 205.681 by
the date specified in the notification of accreditation denial.
(d) If the certifying agent was accredited prior to the site
evaluation and the certifying agent fails to correct the
noncompliances, fails to report the corrections by the date specified
in the notification of noncompliance, or fails to file a rebuttal of
the notification of noncompliance by the date specified, the
Administrator will begin proceedings to suspend or revoke the
certifying agent's accreditation. A certifying agent who has had its
accreditation suspended may at any time, unless otherwise stated in the
notification of suspension, submit a request to the Secretary for
reinstatement of its accreditation. 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. A 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.
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 shall establish a peer review panel pursuant to
the Federal Advisory Committee Act (FACA) (5 U.S.C. App. 2 et seq.).
The peer review panel shall be composed of not less than 3 members who
shall annually evaluate the National Organic Program's adherence to the
accreditation procedures in this subpart F and ISO/IEC Guide 61,
General requirements for assessment and accreditation of certification/
registration bodies, and the National Organic Program's accreditation
decisions. This shall be accomplished through the review of
accreditation procedures, document review and site evaluation reports,
and accreditation decision documents or documentation. The peer review
panel shall report its finding, in writing, to the National Organic
Program's Program Manager.
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 performance evaluations and
annual program review and a description of adjustments to the
certifying agent's operation and procedures implemented or to be
implemented in response to the performance evaluations and program
review; 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
(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) The Administrator shall send the
accredited certifying agent a notice of pending expiration of
accreditation approximately 1 year prior to the scheduled date of
expiration.
(2) An accredited certifying agent's application for accreditation
renewal must be received at least 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 the regulations
of this part.
(3) Following receipt of the information submitted by the
certifying agent in accordance with paragraph (a) of this section and
the results of a site evaluation, the Administrator will determine
whether the certifying agent remains in compliance with the Act and
[[Page 80656]]
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.
(f) Amending accreditation. Amendment to scope of an accreditation
may be requested at any time. The application for amendment shall be
sent to the Administrator and shall contain information applicable to
the requested change in accreditation, a complete and accurate update
of the information submitted pursuant to Secs. 205.503 and 205.504, and
the applicable fees required in Sec. 205.640.
Secs. 205.511-205.599 [Reserved]
Subpart G--Administrative
The National List of Allowed and Prohibited Substances
Sec. 205.600 Evaluation criteria for allowed and prohibited
substances, methods, and ingredients.
The following criteria will be utilized in the evaluation of
substances or ingredients for the organic production and handling
sections of the National List:
(a) Synthetic and nonsynthetic substances considered for inclusion
on or deletion from the National List of allowed and prohibited
substances will be evaluated using the criteria specified in the Act (7
U.S.C. 6517 and 6518).
(b) In addition to the criteria set forth in the Act, any synthetic
substance used as a processing aid or adjuvant will be evaluated
against the following criteria:
(1) The substance cannot be produced from a natural source and
there are no organic substitutes;
(2) The substance's manufacture, use, and disposal do not have
adverse effects on the environment and are done in a manner compatible
with organic handling;
(3) The nutritional quality of the food is maintained when the
substance is used, and the substance, itself, or its breakdown products
do not have an adverse effect on human health as defined by applicable
Federal regulations;
(4) The substance's primary use is not as a preservative or to
recreate or improve flavors, colors, textures, or nutritive value lost
during processing, except where the replacement of nutrients is
required by law;
(5) The substance is listed as generally recognized as safe (GRAS)
by Food and Drug Administration (FDA) when used in accordance with
FDA's good manufacturing practices (GMP) and contains no residues of
heavy metals or other contaminants in excess of tolerances set by FDA;
and
(6) The substance is essential for the handling of organically
produced agricultural products.
(c) Nonsynthetics used in organic processing will be evaluated
using the criteria specified in the Act (7 U.S.C. 6517 and 6518).
Sec. 205.601 Synthetic substances allowed for use in organic crop
production.
In accordance with restrictions specified in this section, the
following synthetic substances may be used in organic crop production:
(a) As algicide, disinfectants, and sanitizer, 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 algicide/demisters.
(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 acaricides 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.
(5) Oils, horticultural--narrow range oils as dormant, suffocating,
and summer oils.
(6) Soaps, insecticidal.
(7) 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--None.
(i) As plant disease control.
(1) Coppers, fixed--copper hydroxide, copper oxide, copper
oxychloride, includes products exempted from EPA tolerance, Provided,
That, copper-based materials must be used in a manner that minimizes
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--must be used in a manner that minimizes copper
accumulation in the soil.
(4) Hydrogen peroxide.
(5) Lime sulfur.
(6) Oils, horticultural, narrow range oils as dormant, suffocating,
and summer oils.
(7) Potassium bicarbonate.
(8) Elemental sulfur.
(9) Streptomycin, for fire blight control in apples and pears only.
(10) Tetracycline (oxytetracycline calcium complex), for fire
blight control only.
(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) Elemental sulfur.
(3) Humic acids--naturally occurring deposits, water and alkali
extracts only.
(4) Lignin sulfonate--chelating agent, dust suppressant, floatation
agent.
(5) Magnesium sulfate--allowed with a documented soil deficiency.
(6) 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 testing.
(i) Soluble boron products.
(ii) Sulfates, carbonates, oxides, or silicates of zinc, copper,
iron, manganese, molybdenum, selenium, and cobalt.
(7) Liquid fish products--can be pH adjusted with sulfuric, citric
or
[[Page 80657]]
phosphoric acid. The amount of acid used shall not exceed the minimum
needed to lower the pH to 3.5.
(8) Vitamins, B1, C, and E.
(k) As plant growth regulators--Ethylene--for regulation of
pineapple flowering.
(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 nonsynthetic
substances or synthetic substances listed in this section and used as
an active pesticide ingredient in accordance with any limitations on
the use of such substances.
(1) EPA List 4--Inerts of Minimal Concern.
(n)-(z) [Reserved]
Sec. 205.602 Nonsynthetic substances prohibited for use in organic
crop production.
The following nonsynthetic substances may not be used in organic
crop production:
(a) Ash from manure burning.
(b) Arsenic.
(c) Lead salts.
(d) Sodium fluoaluminate (mined).
(e) Strychnine.
(f) Tobacco dust (nicotine sulfate).
(g) Potassium chloride--unless derived from a mined source and
applied in a manner that minimizes chloride accumulation in the soil.
(h) Sodium nitrate--unless use is restricted to no more than 20% of
the crop's total nitrogen requirement.
(i)-(z) [Reserved]
Sec. 205.603 Synthetic substances allowed for use in organic livestock
production.
In accordance with restrictions specified in this section the
following synthetic substances may be used in organic livestock
production:
(a) As disinfectants, sanitizer, 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) Oxytocin--use in postparturition therapeutic applications.
(12) 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 and must not
be used during the lactation period of breeding stock.
(13) Phosphoric acid--allowed as an equipment cleaner, Provided,
That, no direct contact with organically managed livestock or land
occurs.
(14) Biologics--Vaccines.
(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), not permitted to cauterize
physical alterations or deodorize animal wastes.
(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, used for enrichment or fortification when FDA
approved, including:
(i) Copper sulfate.
(ii) Magnesium sulfate.
(2) Vitamins, used for enrichment or fortification when FDA
approved.
(e) As synthetic inert ingredients as classified by the
Environmental Protection Agency (EPA), for use with nonsynthetic
substances or a synthetic substances listed in this section and used as
an active pesticide ingredient in accordance with any limitations on
the use of such substances.
(f) EPA List 4--Inerts of Minimal Concern.
(g)-(z) [Reserved]
Sec. 205.604 Nonsynthetic substances prohibited for use in organic
livestock production.
The following nonsynthetic substances may not be used in organic
livestock production:
(a) Strychnine.
(b)-(z) [Reserved]
Sec. 205.605 Nonagricultural (nonorganic) substances allowed as
ingredients in or on processed products labeled as ``organic'' or
``made with organic (specified ingredients or food group(s)).''
The following nonagricultural substances may be used as ingredients
in or on processed products labeled as ``organic'' or ``made with
organic (specified ingredients or food group(s))'' only in accordance
with any restrictions specified in this section.
(a) Nonsynthetics allowed:
(1) Acids.
(i) Alginic.
(ii) Citric--produced by microbial fermentation of carbohydrate
substances.
(iii) Lactic.
(2) Bentonite.
(3) Calcium carbonate.
(4) Calcium chloride.
(5) Colors, nonsynthetic sources only.
(6) Dairy cultures.
(7) Diatomaceous earth--food filtering aid only.
(8) Enzymes--must be derived from edible, nontoxic plants,
nonpathogenic fungi, or nonpathogenic bacteria.
(9) Flavors, nonsynthetic sources only and must not be produced
using synthetic solvents and carrier systems or any artificial
preservative.
(10) Kaolin.
(11) Magnesium sulfate, nonsynthetic sources only.
(12) Nitrogen--oil-free grades.
(13) Oxygen--oil-free grades.
(14) Perlite--for use only as a filter aid in food processing.
(15) Potassium chloride.
(16) Potassium iodide.
(17) Sodium bicarbonate.
(18) Sodium carbonate.
(19) Waxes--nonsynthetic.
(i) Carnauba wax.
(ii) Wood resin.
(20) Yeast--nonsynthetic, growth on petrochemical substrate and
sulfite waste liquor is prohibited.
(i) Autolysate.
[[Page 80658]]
(ii) Bakers.
(iii) Brewers.
(iv) Nutritional.
(v) Smoked--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, dibasic, and tribasic).
(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 postharvest 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.
(15) Lecithin--bleached.
(16) Magnesium carbonate--for use only in agricultural products
labeled ``made with organic (specified ingredients or food group(s)),''
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 or food group(s)),''
prohibited in agricultural products labeled ``organic''.
(19) Nutrient vitamins and minerals, in accordance with 21 CFR
104.20, Nutritional Quality Guidelines For Foods.
(20) Ozone.
(21) Pectin (low-methoxy).
(22) Phosphoric acid--cleaning of food-contact surfaces and
equipment only.
(23) Potassium acid tartrate.
(24) Potassium tartrate made from tartaric acid.
(25) Potassium carbonate.
(26) Potassium citrate.
(27) Potassium hydroxide--prohibited for use in lye peeling of
fruits and vegetables.
(28) Potassium iodide--for use only in agricultural products
labeled ``made with organic (specified ingredients or food group(s)),''
prohibited in agricultural products labeled ``organic''.
(29) Potassium phosphate--for use only in agricultural products
labeled ``made with organic (specific ingredients or food group(s)),''
prohibited in agricultural products labeled ``organic''.
(30) Silicon dioxide.
(31) Sodium citrate.
(32) Sodium hydroxide--prohibited for use in lye peeling of fruits
and vegetables.
(33) Sodium phosphates--for use only in dairy foods.
(34) Sulfur dioxide--for use only in wine labeled ``made with
organic grapes,'' Provided, That, total sulfite concentration does not
exceed 100 ppm.
(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 (specified ingredients or food group(s)).''
The following nonorganically produced agricultural products may be
used as ingredients in or on processed products labeled as ``organic''
or ``made with organic (specified ingredients or food group(s))'' only
in accordance with any restrictions specified in this section.
Any nonorganically produced agricultural product may be used in
accordance with the restrictions specified in this section and when the
product is not commercially available in organic form.
(a) Cornstarch (native)
(b) Gums--water extracted only (arabic, guar, locust bean, carob
bean)
(c) Kelp--for use only as a thickener and dietary supplement
(d) Lecithin--unbleached
(e) Pectin (high-methoxy)
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 by the Board for
recommendation to the Secretary for inclusion on or deletion from the
National List in accordance with 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/TMP/NOP, Room 2945, South Building, P.O. Box
96456, Washington, DC 20090-6456.
Secs. 205.608-205.619 [Reserved]
State Organic Programs
Sec. 205.620 Requirements of State organic programs.
(a) A State may establish a State organic program for production
and handling operations within the State which produce and handle
organic agricultural products.
(b) A State organic program must meet the requirements for organic
programs specified in the Act.
(c) A State organic program may contain more restrictive
requirements because of environmental conditions or the necessity of
specific production or handling practices particular to the State or
region of the United States.
(d) A State organic 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 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
programs and amendments to approved State organic programs.
(a) A State organic program's governing State official must submit
to the Secretary a proposed State organic program and any proposed
amendments to such approved program.
(1) Such submission must contain supporting materials that include
statutory authorities, program description, documentation of the
environmental conditions or specific production and handling 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 program must contain supporting materials that include an
explanation and documentation of the environmental conditions or
specific production and handling 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:
Notify the State organic program's governing
[[Page 80659]]
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 organic
program's governing State official may submit a revised State organic
program or amendment of such a program at any time.
Sec. 205.622 Review of approved State organic programs.
The Secretary will review a State organic program not less than
once during each 5-year period following the date of the initial
program approval. The Secretary will notify the State organic program's
governing State official of approval or disapproval of the program
within 6 months after initiation of the review.
Secs. 205.623-205.639 [Reserved]
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, 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 February 20, 2001, 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 U.S. Department of Agriculture 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, when 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 February 20, 2001. 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 U.S.
Department of Agriculture. Per diem charges shall become effective for
all applicants for initial accreditation and accredited certifying
agents on February 20, 2001. 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 U.S. Department of Agriculture. Such costs
shall become effective for all applicants for initial accreditation and
accredited certifying agents on February 20, 2001.
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, P.O.
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
which shall be applied to the applicant's fees-for-service account. The
certifying agent may set the nonrefundable portion of certification
fees; however, the nonrefundable portion of certification fees must be
explained in the fee schedule submitted to the Administrator. The fee
schedule must explain what fee amounts are nonrefundable and at what
stage during the certification process fees become nonrefundable. The
certifying agent shall provide all persons inquiring
[[Page 80660]]
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 Program Manager has reason to believe that a certified
operation has violated or is not in compliance with the Act or
regulations in this part; or
(2) When a certifying agent or a State organic program's governing
State official fails to take appropriate action to enforce the Act or
regulations in this part.
(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 accreditation requirements pursuant to the Act or
this part.
(d) Each notification of noncompliance, rejection of mediation,
noncompliance resolution, proposed suspension or revocation, and
suspension or revocation issued pursuant to Sec. 205.662, Sec. 205.663,
and Sec. 205.665 and each response to such notification must be sent to
the recipient's place of business via a delivery service which provides
dated return receipts.
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 organic 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 organic 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
organic program's governing State official, as applicable, shall 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, the certifying agent or State organic
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) Willful violations. Notwithstanding paragraph (a) of this
section, if a certifying agent or State organic 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 organic 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 organic
program's governing State official shall send the certified operation a
written notification of suspension or revocation.
(2) A certifying agent or State organic 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, while final
resolution of either is pending.
(f) Eligibility. (1) A certified operation whose certification has
been suspended under this section may at any time, unless otherwise
stated in the notification of suspension, submit a request to the
Secretary for reinstatement of its certification. 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 certified operation or a person responsibly connected with an
operation whose certification has been revoked will be ineligible to
receive certification for a period of 5 years following the date of
such revocation, Except, That, the Secretary may, when in the best
interest of the certification program, reduce or eliminate the period
of ineligibility.
(g) Violations of Act. In addition to suspension or revocation, any
certified operation that:
(1) Knowingly sells or labels a product as organic, except in
accordance with the Act, shall be subject to a civil penalty of not
more than $10,000 per violation.
(2) Makes a false statement under the Act to the Secretary, a State
organic program's governing State official, or a certifying agent shall
be subject to the provisions of section 1001 of title 18, United States
Code.
Sec. 205.663 Mediation.
Any dispute with respect to denial of certification or proposed
suspension or revocation of certification under this part may be
mediated at the request of the applicant for certification or certified
operation and with acceptance by the certifying agent. Mediation shall
be requested in writing to the applicable certifying agent. If the
certifying agent rejects the request for mediation, the certifying
agent shall provide written notification to the applicant for
certification or certified operation. The written notification shall
advise the
[[Page 80661]]
applicant for certification or certified operation of the right to
request an appeal, pursuant to Sec. 205.681, within 30 days of the date
of the written notification of rejection of the request for mediation.
If mediation is accepted by the certifying agent, such mediation shall
be conducted by a qualified mediator mutually agreed upon by the
parties to the mediation. If a State organic program is in effect, the
mediation procedures established in the State organic program, as
approved by the Secretary, will be followed. 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
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 the
regulations in this part. The Secretary may review any mediated
agreement for conformity to the Act and the regulations in this part
and may reject any agreement or provision not in conformance with the
Act or the regulations in this part.
Sec. 205.664 [Reserved]
Sec. 205.665 Noncompliance procedure for certifying agents.
(a) Notification. 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.
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 certifying agent must rebut or correct
each noncompliance and submit supporting documentation of each
correction when correction is possible.
(b) Resolution. When the certifying agent demonstrates that each
noncompliance has been resolved, the Program Manager shall send the
certifying agent 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, 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
(4) The right to file an appeal pursuant to Sec. 205.681.
(d) Willful 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 and in each State for which its accreditation is
suspended or revoked.
(2) Transfer to the Secretary and make available to any applicable
State organic program's 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, unless
otherwise stated in the notification of suspension, submit a request to
the Secretary for reinstatement of its accreditation. 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. 205.666-205.667 [Reserved]
Sec. 205.668 Noncompliance procedures under State organic programs.
(a) A State organic program's governing State official must
promptly notify the Secretary of commencement of any noncompliance
proceeding against a certified operation and forward to the Secretary a
copy of each notice issued.
(b) A noncompliance proceeding, brought by a State organic
program's governing State official against a certified operation, shall
be appealable pursuant to the appeal procedures of the State organic
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 organic 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
organic 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
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 or food group(s))'' must be made
accessible by certified organic production or handling operations for
examination by the Administrator, the applicable State organic
program's governing State official, or the certifying agent.
(b) The Administrator, applicable State organic 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 or food
group(s))'' when there is reason to believe that the agricultural input
or product has come
[[Page 80662]]
into contact with a prohibited substance or has been produced using
excluded methods. Such tests must be conducted by the applicable State
organic 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, applicable State organic
program's governing State official, or certifying agent. Sample
integrity must be maintained throughout the chain of custody, and
residue testing must be performed in an accredited laboratory. Chemical
analysis must be made in accordance with the methods described in the
most current edition of the Official Methods of Analysis of the AOAC
International or other current 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 promptly provided to the Administrator; Except, That,
where a State organic program exists, all test results and analyses
shall be provided to the State organic program's governing State
official by the applicable certifying party that requested testing; and
(2) Will be available for public access, unless the testing is part
of an ongoing compliance investigation.
(e) 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 tolerences, the certifying agent must promptly
report such data to the Federal health agency whose regulatory
tolerance or action level has been exceeded.
Sec. 205.671 Exclusion from organic sale.
When residue testing detects prohibited substances at levels that
are greater than 5 percent of the Environmental Protection Agency's
tolerance for the specific residue detected or unavoidable residual
environmental contamination, the agricultural product must not be sold,
labeled, or represented as organically produced. The Administrator, the
applicable State organic 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.
Sec. 205.672 Emergency pest or disease treatment.
When a prohibited substance is applied to a certified operation due
to a Federal or State emergency pest 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 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 or disease treatment program cannot 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 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.
(a) Persons subject to the Act who believe they are adversely
affected by a noncompliance decision of the National Organic Program's
Program Manager may appeal such decision to the Administrator.
(b) Persons subject to the Act who believe that they are adversely
affected by a noncompliance decision of a State organic program may
appeal such decision to the State organic program's governing State
official who will initiate handling of the appeal pursuant to appeal
procedures approved by the Secretary.
(c) Persons subject to the Act who believe that they are adversely
affected by a noncompliance decision of a certifying agent may appeal
such decision to the Administrator, Except, That, when the person is
subject to an approved State organic program, the appeal must be made
to the State organic program.
(d) 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.
(e) All appeals shall be reviewed, heard, and decided by persons
not involved with the decision being appealed.
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 program the appeal must be made
to the State organic program which will carry out the appeal pursuant
to the State organic program's appeal procedures approved by the
Secretary.
(1) If the Administrator or State organic program 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 or State organic program 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 U.S. Department of Agriculture's Uniform Rules of
Practice or the State organic program's rules of procedure.
(b) Accreditation appeals. An applicant for accreditation and an
accredited certifying agent may appeal the 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 U.S.
Department of Agriculture's Uniform Rules of Practice, 7 CFR part 1,
Subpart H.
[[Page 80663]]
(c) Filing period. An appeal of a noncompliance decision must be
filed within the time period provided in the letter of notification or
within 30 days from receipt of the notification, whichever occurs
later. The appeal will be considered ``filed'' on the date received by
the Administrator or by the State organic program. 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) Where and what to file. (1) Appeals to the Administrator must
be filed in writing and addressed to Administrator, USDA-AMS, Room
3071-S, P.O. Box 96456, Washington, DC 20090-6456.
(2) Appeals to the State organic program must be filed in writing
to the address and person identified in the letter of notification.
(3) All appeals must include a copy of the adverse decision and a
statement of the appellant's reasons for believing that the decision
was not proper or 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 in this part by the Office of Management and Budget
pursuant to the Paperwork Reduction Act of 1995, 44 U.S C. Chapter 35,
is OMB number 0581-0181.
Secs. 205.691-205.699 [Reserved]
PARTS 206-209 [Reserved]
Dated: December 13, 2000.
Kathleen A. Merrigan,
Administrator, Agricultural Marketing Service.
Appendixes to Preamble
Appendix A--Regulatory Impact Assessment for Final Rule Implementing
the Organic Foods Production Act of 1990
The following regulatory assessment is provided to fulfill the
requirements of Executive Order 12866. This assessment consists of a
statement of the need for national organic standards, a description
of the baseline for the analysis, a summary of the provisions of the
final U.S. Department of Agriculture (USDA) rule and the alternative
approaches that were examined, and an analysis of the benefits and
costs. Much of the analysis is necessarily descriptive of the
anticipated effects of the final rule. Because basic market data on
the prices and quantities of organic goods and the costs of organic
production are limited, it is not possible to provide quantitative
estimates of all benefits and costs of the final rule. The cost of
fees and recordkeeping in the final USDA rule are quantified, but
the anticipated benefits and other costs are not. Consequently, the
analysis does not estimate the magnitude or the direction (positive
or negative) of net benefits.
Under the final rule, USDA will implement a program of uniform
standards of production and certification, as mandated by the
Organic Foods Production Act of 1990 (OFPA). The primary benefits
from implementation of USDA's National Organic Program (NOP) are
standardizing the definitions and the manner in which organic
product information is presented to consumers, which may reduce the
cost associated with enforcement actions in consumer fraud cases,
and improved access to domestic and international markets from
harmonizing the various State and private organic standards and
elevating reciprocity negotiations to the national level.
The costs of this rule are the direct costs for accreditation
and the costs of complying with the specific standards in the
proposal, including the reporting and recordkeeping requirements.
Certifiers will be charged fees based on the actual costs of the
accreditation work done by USDA staff. Smaller certifiers with less
complex programs are expected to pay somewhat lower fees. Organic
farmers, ranchers, wild-crop harvesters, and handlers will have to
pay fees for organic certification from a State or private certifier
but will not be charged any additional fees by USDA. The direct
accreditation costs to an estimated 59 certifying agents (including
all 49 current U.S. certifiers and an estimated 10 foreign agents)
during the first 18 months following the final rule are estimated to
be approximately $92,000 to $124,000 and are being subsidized with
appropriated funds derived from the taxpayers. In addition, USDA
will use appropriated funds to cover approximately $270,000-$448,000
in hourly charges for site evaluation during this period and for
other costs associated with starting up the NOP. The magnitude of
other compliance costs for adhering to this regulation--including
the costs of becoming familiar with and adopting the national
standards--have not been measured. For organic farmers who adhere to
State regulations or undergo third-party inspection and
certification, the compliance cost may not be large. For those who
don't, the costs may be more substantial. The impact of this
regulation on small certifying agents and other small businesses has
also not been measured but may be significant.
To account for significant rule changes from the proposal and to
reflect more up-to-date information, we revised some estimates of
benefits and costs. We have raised our estimates of current
certification fees and USDA accreditation fees. Also, we now project
higher USDA accreditation fees after the 18-month implementation
period. We revised our estimates of the certification fees charged
by a representative set of public and private certifiers in the U.S.
based on new data, and our new estimates are about 25 percent higher
for small and midsized farmers. Small and midsized farmers are now
estimated to pay $579 and $1,414 for their first-year certification,
respectively. Accreditation costs after the 18-month implementation
period are substantially above those estimated in the proposed rule,
reflecting a slight increase in the government per diem travel
allowance since the proposed rule was published and a change in the
projected number of reviewers needed for site evaluations and
renewals after the 18-month implementation period. In the proposed
rule, USDA had projected that only one reviewer would be needed for
site evaluations and renewals that took place after the 18-month
implementation period but has changed that projection to two
reviewers based on additional experience with the International
Organization for Standardization (ISO Guide 65) program. We estimate
that initial accreditation costs after the 18-month implementation
period will range from $6,120 to $9,700, approximately double our
estimate in the March 2000 proposed rule.
Marginal changes have been made in the final rule, in response
to comments on the March 2000 proposal, which generally clarify or
add flexibility to producer and handler provisions or make them
better reflect current industry standards. One key change was to
raise the threshold for labeling products as ``made with organic
ingredients'' from 50 percent organic content to 70 percent to be
consistent with international industry standards. Although not
quantified, we believe that this will increase the cost of the rule.
Another key change was to reduce the transition period for a dairy
operation to make a whole-herd conversion to organic production in
order to make conversion affordable for a wider range of dairy
farms, including smaller operations. Although not quantified, we
believe that this will decrease the cost of the rule.
The Need for National Standards
Over the last several decades, as market demand has grown from a
handful of consumers bargaining directly with farmers to millions of
consumers acquiring goods from supermarket shelves as well as market
stalls, a patchwork of State and private institutions has evolved to
set standards and verify label claims. Organically produced food
cannot be distinguished visually from conventional food and cannot
necessarily be distinguished by taste; therefore, consumers must
rely on labels and other advertising tools for product information.
Farmers, food handlers, and other businesses that produce and handle
organically grown food have a financial incentive to advertise that
information because consumers have been willing to pay a price
premium for these goods. However, consumers face difficulties in
discerning the organic attributes of a product, and many producers
and handlers have sought third-party certification of organic
claims.
State and private initiatives have resulted in a fairly robust
system of standards and certification, and the difficulties in
consumer verification have been partially overcome by these
initiatives. Private organizations, mostly nonprofits, began
developing certification standards in the early 1970's as
[[Page 80664]]
a way to support organic farming, as well as to strengthen
legitimate product claims. The first organization to offer third-
party certification, California Certified Organic Farmers, was
formed in the early 1970's, and the first State regulations and laws
on organic labeling were also passed in the 1970's. Currently, 13
State and 36 private certification programs are operating in the
United States, and about half the States currently have some form of
regulation. While most States still do not mandate third-party
certification and many organic producers still market goods without
certification, large food processors, grain traders, and retailers
are increasingly requiring certification, and many growers have
turned to certification as a marketing tool.
However, even with increasing pressure for growers to use third-
party certification services and increasing availability of these
services from State and private certifiers, the discrepancies
between the certifiers on organic standards and between the States
on certification requirements have resulted in several impediments
to market development. The patchwork of variable standards has made
producer access to organic markets, international and domestic,
uneven. The recent emergence of the industry-developed standards may
have mitigated some domestic access problems, but two important
impediments remain. They are: multiingredient certification disputes
and barriers to foreign markets.
Difficulty Certifying Multiingredient Products
Although the State and private organic standards that have
developed over the last several decades have many areas of overlap,
particularly for crop production, the differences have caused
disagreements among certifying agents over whose standards apply to
multiingredient organic processed products. These disagreements have
created sourcing problems for food. Disagreements about standards
also create 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
other's standards. Although new organic product offerings have
emerged at a fast pace during the 1990's, this pace could eventually
slow, assuming that the need for costly reciprocity agreements will
continue to persist in the absence of national standards.
Barriers to Foreign Organic Markets
In the absence of a national standard, U.S. producers have taken
on costs of private accreditation or shipment-by-shipment
certification required to gain access to some foreign markets such
as the European Union (EU). However, even with these actions, U.S.
organic products may have had some difficulties entering other
foreign markets due to high information and search costs on the part
of foreign buyers. Some foreign buyers of U.S. organic products may
incur costs to determine the compatibility of standards. Such costs
may have discouraged purchases of U.S. organic products.
Congress passed the OFPA--Title XXI of the Food, Agriculture,
Conservation and Trade Act of 1990, U.S.C. Title 7--largely to
address these marketing problems. The OFPA mandates that the
Secretary of Agriculture develop a national organic program, and
USDA's statutory responsibility is the primary reason why USDA has
carried out this rulemaking process. The OFPA requires the Secretary
to 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. This
legislation requires the Secretary to establish and implement a
program to accredit a State program 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 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.
Baseline
After struggling to build market recognition and supply capacity
for many decades, the organic farming industry became one the
fastest growing segments of U.S. agriculture during the last decade.
Certified organic cropland more than doubled in the United States
between 1992 and 1997, and two organic livestock sectors-eggs and
dairy-grew even faster (Greene, 2000a). USDA's Economic Research
Service estimates that over 1.3 million acres of U.S. farmland were
certified in 1997, and more recent data from some of the certifiers
indicate that this momentum is continuing (Greene, 2000b). Although
national estimates of the amount of uncertified organic acreage are
not available, data from California, the largest U.S. producer of
organic specialty crops, indicates that most of the State's organic
acreage and about half of the growers were certified during the
1997/98 crop year (Klonsky et al., 2000).
Growth in U.S. sales of organic products during the 1990's
mirrors the growth in acreage devoted to producing these goods.
According to industry data, total organic product sales more than
doubled between 1992 and 1996 to $3.5 billion in sales (table 1).
More recent industry data on organic sales through natural product
stores, the largest outlet for organic products, show annual sales
growth continuing in the general range of 20-25 percent annually.
The recent growth in organic production and sales has taken
place in the absence of national organic standards but with industry
expectation that these standards were forthcoming. While the U.S.
organic industry is characterized by an array of certification,
production, processing, and marketing practices, there are
commonalities throughout the industry.
Certification
The number of U.S. certification groups has fluctuated between
40 and 50 during the last decade. Currently, 49 organizations--36
private and 13 State--are advertising that they provide
certification services to farmers, handlers (a category that USDA
defines to include processors), retailers, or other segments of the
food industry. Some certifiers provide services to multiple segments
of the food industry. 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 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, such as California, require only that an
organic producer register and make certification voluntary. Other
States, including Texas, require certification by the State's own
agents, while Minnesota and others accept certification by a private
certifying agent. Approximately half of the States have laws that
regulate organic production and processing. In many States producers
may claim their product is organic but operate without certification
or well-defined standards. Many organic producers in States with no
State programs 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 for the following reasons. 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 accrediting certifying agents as meeting ISO
Guide 65. It is a valuable recognition that the certifying entity
satisfies the business capacity standards of ISO Guide 65. EU
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 Crop and Livestock Production
In 1997, farmers in 49 States used organic production systems
and third-party organic certification services on over a million
acres of farmland and were raising certified organic livestock
production in nearly half the States, according to USDA data
(Greene, 2000a). Two-thirds of the farmland was used for growing
crops, with Idaho, California, North Dakota, Montana, Minnesota,
Wisconsin, Iowa, and Florida as the top producers.
[[Page 80665]]
Colorado and Alaska had the most organic pasture and rangeland.
California overwhelmingly had the most certified organic fruit and
vegetable acreage in 1997, but farmers were growing small plots of
certified organic vegetables for direct marketing to consumers in
over half the States. About 2 percent of the U.S. apple, grape,
lettuce, and carrot crops were certified organic in 1997, while only
one-tenth of 1 percent of the U.S. corn and soybean crops were grown
under certified organic farming systems. USDA has not estimated the
amount of acreage devoted to organic production systems that has not
been certified, although data from California suggest that a large
number of farmers, mostly those with small operations, produce and
market organic goods without third-party certification.
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 system plan with multiple goals, including
sustainability; and recordkeeping to document practices and progress
toward the plan's goals. Specific elements of organic production
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 of synthetic
chemical pesticides or animal growth hormones. And most
certification standards include a 3-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 handlers obtain prior label approval from
FSIS and the claim meets certain basic criteria. Organic labels have
been permitted on eggs and dairy products--which are regulated by
the Food and Drug Administration (FDA)--throughout the 1990's, but
most certifiers have not yet offered certification services for
these products.
We provide a summary of the New Hampshire organic program to
highlight the similarities in the core set of practices. It is
important to note that this discussion is intended to highlight the
conceptual similarities between State and private programs and is
not intended to suggest that these programs are identical to each
other or to the NOP. 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; recordkeeping
regarding fertilization, cropping, and pest management histories;
separate sales records for organic and nonorganic production; and
records of all laboratory analyses. Residue testing may be required
if USDA believes that the products or soil used for producing
certified products may have become contaminated with prohibited
substances.
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 3-year
history of crop production, pest control, and fertilizer use; a crop
rotation and a soil management plan; and a description of
postharvest 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 certifiers have standards
for handling organic products. And some certifiers have standards
for parts of the food marketing system, such as restaurants, which
are not explicitly covered by the OFPA nor encompassed by this final
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. Other States do not
distinguish between food processors and handlers. Under the final
rule, the term, ``handler,'' includes processors but not final
retailers of agricultural products that do not process agricultural
products.
Organic Product Marketing
The two largest marketing outlets for organically produced goods
are natural foods stores and direct markets--which include farmers
markets, roadside stands, and `community supported agriculture'
arrangements--according to industry data. USDA does not have
official national level statistics on organic retail sales, but an
industry trade publication, the Natural Foods Merchandiser (NFM),
reported estimates of total retail sales of organic foods for years
1990-96 and continues to report estimates of natural product stores
sales (table 1). The last NFM estimate of total organic sales
through all marketing outlets was $3.5 billion in 1996 ($3.7 billion
in 1999 dollars), less than one percent of total food expenditures
by families and individuals that year.
Natural foods stores increased in size and presence in the
United States during the 1990's--many are now the size of
conventional supermarkets--and about two-thirds of estimated total
organic sales during the 1990's were through this outlet (table 1).
Natural foods supermarkets, which are similar to conventional in the
breadth of supermarket offerings and amount of total sales,
accounted for close to 1 percent of total supermarket sales by 1997
(Kaufman 1998). Organic product sales through the natural foods
stores outlet, alone, in 1999 were estimated at $4 billion, and
sales through this outlet increased about 20-25 percent annually
through the 1990's.
Direct-to-consumer market sales ranged from $270 to $390 million
during the early 1990's, accounting for between 17 and 22 percent of
total organic sales during this period, according to NFM estimates
(table 1). Conventional food stores (mass markets) accounted for 6-7
percent of total sales during this period, and export sales
accounted for 3-8 percent of the total. A draft report on the U.S.
organic export market, partly funded by USDA, indicates that current
U.S. export sales are under 5 percent of total organic product sales
(Fuchshofen and Fuchshofen 2000).
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. France, for example,
has indicated to USDA that it prefers to negotiate with a single
national organic program, rather than the dozens of different State
and private certifying programs currently operating in the U.S.
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 nonconventional 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 adoption
of procedures that
[[Page 80666]]
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 face additional financial
and administrative costs.
Requirements of the Final Rule
The final rule follows the structure established in the OFPA. By
adopting this alternative, the Department is following the
legislative direction in the OFPA. All products marketed as organic
will have to be produced and handled as provided in the OFPA and
these regulations. Compared to current organic practices, the final
rule sets a somewhat more stringent system of requirements.
Among many alternatives, two alternatives to the final rule are
discussed in this section: continuation of the status quo and use of
industry-developed standards. Given the statutory responsibility,
USDA is implementing the requirements of the OFPA. However, under
the status quo alternative, there would be no national standard or
national program of accreditation and certification. 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. However, growers and handlers would still not have
level access, under uniform standards, to the domestic market, and
there may be significant enforcement gaps at the State level.
International pressure for additional verification would continue to
build and would be likely to lead to an increased use of public and
private verification and accreditation services, which are provided
on a user-fee basis with full cost recovery. Establishing
reciprocity between certifying agents in the domestic organic market
would continue to be costly and may stifle growth in trade of
organic products, although the magnitude of these costs and their
effects on growth are unknown. Without further analysis that
includes quantification and monetization of benefits and costs, it
is not clear whether the net benefits associated with this
alternative are greater or less than those associated with the final
rule.
Under the other industry-developed standards alternative, USDA
could eliminate the costs associated with establishing reciprocity
in the domestic market and establish equivalency for access to
international markets, but it would be difficult for industry to
develop consensus standards. For example, the industry-developed
standards recently proposed by the Organic Trade Association were
developed with significant industry input but with little public
comment. In contrast, several hundred thousand comments have been
submitted in the course of the USDA rulemaking process. In addition,
the OFPA mandated an advisory role for a 15-member National Organic
Standards Board (NOSB), which has wide representation from the
organic community and includes members who are farmers, handlers,
retailers, environmentalists, consumers, scientists, and certifiers.
The NOSB has assisted in developing the standards promulgated in
this final rule and will play an advisory role for the NOP even
after the final rule is in place. Without further analysis that
includes quantification and monetization of benefits and costs, it
is not clear whether the net benefits associated with this
alternative are greater or less than those associated with the final
rule.
USDA's final rule will be implemented by the NOP staff in the
Agricultural Marketing Service (AMS). Major features of the NOP
include:
Accreditation and Certification
The rule specifies the accreditation and certification process.
Persons providing certification services for 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 client's 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 be mandatory. 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.
USDA will charge applicants for accreditation and accreditation
renewal (required every 5 years) 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. USDA will also
charge accredited certifiers at an hourly rate to review their
annual reports.
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 NOSB, review of existing organic industry practices and
standards, public comments received on the 1997 proposal and
subsequent issue papers, public meetings, and comments received on
the 2000 proposal.
The final 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 nonsynthetic 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 synthetic 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.
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. Small businesses that are certified may
use the USDA seal.
Recordkeeping
The rule requires certifying agents, producers, and handlers to
keep certain records. Certifying agents are required to file
periodic reports with USDA. Producers and handlers are required to
notify and submit reports to their certifying agent. While
recordkeeping is a standard practice in conventional and organic
farming, the final rule adds recordkeeping and reporting
requirements that 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.
The rule permits certifying agent logos and requires the name of the
certifying agent on processed organic foods.
Enforcement
Organic operations that falsely sell or label a product as
organic will be subject to civil penalties of up to $10,000 per
violation. The provisions of the final regulation apply to all
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persons who sell, label, or represent their agricultural product as
organic, including operations that aren't certified, and the civil
penalties of up to $10,000 apply to these operations as well.
Certifying agents, State organic programs' governing State
officials, and USDA will receive complaints alleging violations of
the Act or these regulations. In States where there is no State
organic program, USDA will investigate allegations of violations of
the Act.
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 that might affect the number of producers and
handlers after the program has been implemented.
For the analysis, USDA assumes the following:
1. Forty-nine domestic certifying agents and ten foreign
certifying agents will be affected by the regulation.
2. Approximately 13,650 certified and noncertified organic
producers will be affected by the regulation. With the assumed
growth rate of 14 percent for certified organic producers and
approximately 8 percent for noncertified organic producers, the
number of organic producers will grow to 17,150 in 2002.
3. Approximately 1,600 handlers of organic food will be affected
by the regulation. This number will grow to 2,250 by 2002.
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 will seek and receive USDA accreditation
in the first 3 years of the program.
Organic Producers
While some USDA data on the number of certified organic
producers in the United States exist, no national data have been
collected on the number of producers that produce and market organic
goods without third-party certification. Organic farming was not
distinguished from conventional agriculture in the last Census of
Agriculture in 1997. USDA and Organic Farming Research Foundation
(OFRF) data were used in the Regulatory Impact Analysis (RIA) of the
March 2000 proposed rule to help estimate the number of certified
U.S. growers affected by the regulation. California Department of
Food and Agriculture (CDFA) data were used to help estimate the
number of uncertified U.S. growers affected by the regulation. All
three of these data sources have updated their estimates of the
number of certified and uncertified organic producers since the RIA
of the proposed rule was published earlier this year. However, the
updated numbers do not indicate trends that would fundamentally
alter the assumptions used in the RIA of the proposed rule to
calculate the number of affected growers, and the estimates made for
the March 2000 RIA are retained in this assessment of the final
rule.
USDA datum indicates the average annual growth rate in the
number of U.S. certified organic growers between 1991 and 1994 was
about 14 percent (Dunn 1995b). In April 2000, USDA's Economic
Research Service estimated that 5,021 certified organic growers
operated 1.347 million acres of U.S. farmland in 1997, indicating
that the increase in acreage had outpaced the increase in growers,
and showing only an 8 percent annual growth rate in growers between
1994 and 1997 (Greene, 2000b). However, USDA's study indicated that
the pace of growth in certified acreage had quickened considerably
since 1997, with the amount of certified acreage increasing 38 to
150 percent between 1997 and 1999 by several large certifying
organizations across the U.S. And a nonprofit organic research
foundation, OFRF, estimates that the number of certified organic
producers in the certification organizations that they track--the
ones that will release data to them--grew over 20 percent annually
between 1997 and 1999, from 4,638 to 6,600 (OFRF 2000). Also, one
certifier, Washington State, responded to our request for data on
the growth rate, indicating that the number of certified organic
producers has increased an average of 17 percent per year between
1994 and 1999 in that State and noting that certification became
mandatory by State law in 1993.
In the March 2000 RIA, USDA estimated that the number of
certified U.S. organic producers potentially affected by this
legislation is approximately 9,350 in 2000 and will be approximately
12,150 in 2002, based on a straight line projection of the 14-
percent annual growth rate trend shown by USDA data for 1991-1994.
The period, 2000-2002, was chosen for analysis because it
encompasses both the period of final rulemaking and the 18-month
implementation period. Congress passed the OFPA in 1990, and the 14-
percent growth rate in certified growers during the 1991-1994 period
reflects their expectation that national organic regulations were
forthcoming. Since the recent estimates of industry growth during
the 1990's are uneven and the actual growth rate in the number of
growers who will become certified after this legislation is
implemented is uncertain, the March 2000 estimates are retained in
this assessment of the final rule.
The March 2000 RIA also estimated the number of producers who
are practicing organic agriculture but who are currently uncertified
that would be affected by the rule. In California, where organic
growers are required to register with the State but not to be
certified, a large proportion of growers are uncertified. The most
recent State data, for the 1997/98 crop year, indicate that 1,526
growers registered as organic, but only 41 percent of them obtained
third-party certification (Klonsky et al., 2000). While only a small
percentage of growers in the lowest organic sales category (0-
$10,000), where the largest number of growers were clustered,
obtained certification, three-quarters or more of the growers
earning at least $50,000 obtained certification, and all of the
growers in the highest sales class were certified. USDA did not use
the California ratios of certified to uncertified growers in the
March 2000 RIA to estimate the number of uncertified growers because
the farming structure of California may not be representative of the
Nation. For example, California sells at least three times more
specialty crops than any other State in the United States and has an
unusual registration program that many growers use instead of
certification.
USDA made two assumptions about uncertified production for the
March 2000 estimate. The first assumption was that the rate of
growth in uncertified production 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. This assumption is consistent with California data
that showed an increase in the percent of organic farmers obtaining
certification between 1996/97 and 1997/98 in virtually every sales
class (Klonsky et al. 2000). Second, the emergence of State
certification programs with lower certification fees than private
certification entities may have encouraged more organic producers to
be certified. Based on these assumptions, USDA assumed that the
number of uncertified organic producers is about 4,300 in 2000 and
will be about 5,000 in 2002, making the total number of farms
potentially affected by the rule about 13,650 in 2000 and 17,150 in
2002.
Organic Handlers
Little information exists on the number of organic product
handlers, such as organic soup manufacturers, organic food packaging
operations, organic food wholesalers, and feed millers. 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 and estimate there are
about 1,600 in 2000 and there will be about 2,250 handlers in 2002.
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. These estimates of organic product handlers are
slightly higher that the estimates made in the March 2000 RIA
because they include about 100 feed millers that were not included
in the earlier calculation.
Retail Food Establishments
Retailers of organic food are grocery stores, bakeries and other
establishments that
[[Page 80668]]
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 under the final rule, they are subject to other
processing, handling, and other production related requirements of
the final rule. Some of the grocery stores in the United States,
particularly the natural foods stores, sell processed or prepared
organic foods and will be affected by the these requirements. USDA
does not have an estimate of the number of entities affected.
Foreign Entities
In addition to domestic certifying agents, foreign certifying
agents may also apply for accreditation under the NOP. At this time,
we have no information regarding the number of foreign certifying
agents that may seek USDA accreditation. Foreign applicants will
face the same base costs for accreditation as domestic applicants
but the overall levels of cost are expected to be higher due to the
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 will seek and
obtain accreditation during the first 3 years of the program.
Benefits of the Final Rule
The benefits of implementing national uniform standards of
production and certification include: (1) Providing a common set of
definitions on organic attributes and standardizing the manner in
which the product information is presented, which may reduce the
cost associated with enforcement actions in consumer fraud cases;
(2) reduced administrative costs; and (3) improved access to 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.
The regulatory changes in the final rule are not expected to reduce
the benefits from those described under the March 2000 proposed
rule.
Information
Potential benefits to consumers as a result of the final rule
include providing a common set of definitions on organic attributes
and standardizing the manner in which the product information is
presented. This standardization may reduce the cost associated with
enforcement actions in consumer fraud cases.
Organic products cannot be distinguished from conventionally
produced products by sight inspection, and consumers rely on
verification methods such as certification to ensure that organic
claims are true. Self-policing by certifiers of growers and handlers
that are certified has been difficult because some certifiers have
been under pressure to use weak standards and lax enforcement
procedures in order to keep their producer and processor clients
from taking their business to other certifiers (Scowcroft 1998).
Anecdotal evidence suggests that consumer fraud involving
organic food does occur, and several States successfully pursued
civil and criminal prosecution of these cases during the 1990's. The
Attorney General of Minnesota successfully prosecuted felony charges
in 1997 against the president of Glacial Ridge Foods, a wholesale
supplier of beans and grains, for repackaging conventionally
produced product and selling approximately $700,000 worth labeled as
certified organic (Mergentime 1997). The San Diego City Attorney's
office successfully prosecuted felony charges against Petrou Foods,
Inc., an organic oil and vinegar distributor, for misbranding
conventional product, based on an investigation by the California
Department of Health Services (Scott 1997). Also the California
Department of Food and Agriculture conducted spot checks of 51
uncertified organic growers during the mid-1990's, based on
complaints, and found 32 violations of California's organic
standards (Farmers Market Outlook). However, only about half of the
States have any organic legislation, and few of those States have
laws with enough teeth to permit prosecution of organic fraud. In
States without similar laws, the costs associated with remedies via
the tort system may be high. The NOP established in this final rule
is expected to fill in important State and regional gaps in
enforcement in organic fraud cases.
The USDA organic seal will also provide consumers a quick tool
to verify that goods offered for sale as organic are in fact
organic.
Reduced Administrative Costs
The 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
establishes 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, the
costs associated with establishing reciprocity between certifying
agents will be eliminated, and the market dampening effects that
these costs impose will be eliminated. Industry-wide training costs
may also decrease. USDA's uniform standards of production and
certification should enable organic inspectors to move more easily
from one certifying agent to another than under the current system.
Domestic and International Markets
The final rule is expected to improve access to domestic and
foreign markets for organically produced goods. The current
patchwork of differing State certification requirements and variable
State and private standards has given producers and handlers uneven
access to the domestic organic market and to the price premiums
associated with this market. Livestock producers, in particular, may
have limited their organic production because they lacked access to
a State or private organic livestock certification program or were
uncertain about the standards that would be implemented under the
NOP.
The final rule could also improve access to EU and other foreign
markets for U.S. organic products. For example, the EU may 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. Foreign acceptance of
the U.S. national standard would reduce costs of negotiating and
documenting shipment by shipment. Reducing these transaction costs
may reduce entry costs for U.S. producers to foreign organic
markets. These benefits would not accrue until after negotiations
for an equivalency agreement have been held and completed
successfully, which could be a lengthy process.
An estimated 5 percent of total U.S. sales are from exports.
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 1999). Medium-term growth rate forecasts range from 5-
10 percent for Germany to 30-40 percent for Denmark, and is 20-30
percent in most of the EU countries, according to the International
Trade Centre UNCTAD/WTO. However, most analysts are basing their
projected future growth rates on straight-line extrapolations of
current sales and growth rates without understanding the underlying
market mechanisms and price elasticities (Lohr 1998).
Costs of the Final Rule
The costs of the 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 final
regulations are not. In addition, this is a short-run analysis. The
analysis examines the costs that may be incurred through 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 in the United States. These 49
entities are considered likely applicants during the first 18 months
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
[[Page 80669]]
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 final rule allows USDA to collect fees from certifying
agents for USDA accreditation. The first proposal would have
permitted USDA to collect fees from producers and handlers as well,
but USDA decided that it would be administratively simpler to
collect fees only from certifiers and would enable State programs
that want to keep client costs low to be able to do so.
Applicants for accreditation will be required to submit a
nonrefundable fee of $500 at the time of application, which will be
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 initial review
and 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 duty station
of USDA employees, per diem expenses for USDA employees performing
the site evaluation, an hourly charge (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.
At present, the base per diem for places in the United States is
$85 ($55 for lodging and $30 for meals and incidental expenses). Per
diem rates are higher than $85 in most large cities and urbanized
places, but over half of the current U.S. certifiers are located in
places that have an $85 per diem rate, and that is the rate used to
calculate average certifier expenses in table 3. A review of
domestic travel by USDA staff during fiscal year 1999 indicates
transportation costs ranging from $500 to $600 per person.
Miscellaneous costs are estimated to add another $50 to each site
visit.
The hourly rate that USDA anticipates charging for accreditation
is the rate that USDA currently charges for services under the
Quality Systems Certification Program (QSCP). Our preliminary
estimate that this rate 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
producers, handlers (packers and processors), 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.
Accreditation will include verification of adherence to ISO
Guide 65 and the regulations. Although much of the site evaluation
for accreditation 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 the QSCP and more limited experience
performing audits verifying that certifying agents meet ISO Guide
65, we project that a site evaluation visit for small applicants
with a simple business structure will require 3 days of review, and
for those large applicants with more complex business structure will
require 5 days of review.
USDA will use two reviewers for each site evaluation visit
during the 18-month implementation period, as well as for new
applicants after that period. 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. Two reviewers will also be needed for the
site evaluation visits for the accreditation renewals, which will
take place every 5 years. In the proposed rule, USDA had projected
that only one reviewer would be needed for site evaluations and
renewals that took place after the 18-month implementation period
but has changed that projection based on additional experience with
the ISO Guide 65 program.
During the 18-month implementation period, applicants will be
charged for travel and per diem costs for two persons and for
miscellaneous expenses but will not be charged application fees or
hourly fees. The estimated expenditures for these initial
accreditations is $1,560-$2,100, with $510-$850 for per diem
expenses, $1,000-$1,200 for travel expenses, and $50 for
miscellaneous expenses (table 3). The cost of initial site
evaluation visits 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 remote locations will involve higher
travel costs.
USDA estimates the costs of a site evaluation visit after the
transition period may average $6,120-$9,700, depending on the
characteristics of the applicant, including $4,500-$7,600 for the
hourly site evaluation charges that are not billed to the certifier
during the first 18 months (table 3). USDA has received appropriated
funds to pay for the hourly site evaluation charges only during the
first 18 months of the program.
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 18-month NOP implementation 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 would approach $1 million.
The direct accreditation costs to an estimated 59 certifying
agents (including all 49 current U.S. certifiers and an estimated 10
foreign certifiers) during the first 18 months following the final
rule, are approximately $92,000 to $124,000. This figure is derived
from the per-firm costs in table 3. In addition, USDA will use
appropriated funds to cover approximately $270,000-$448,000 in
hourly charges for site evaluation. USDA will also use appropriated
funds to cover the costs of producing and publishing an
accreditation handbook in several languages, translating USDA
reports to foreign clients, and developing and funding a peer review
panel to evaluate NOP's adherence to its accreditation procedures.
And if more than the estimated 59 certifiers apply for accreditation
during the first 18 months of the program, USDA will use
appropriated funds to cover additional hourly charges for site
evaluation.
Private certifying agents and State programs that do not mirror
the regulation may incur additional costs to change their programs
to adopt the national standards. The discussion on the effect of the
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. For certifying agents who
currently obtain third-party accreditation, the direct costs of USDA
accreditation, which are only incurred every 5 years, may be lower
on an annual basis compared to the direct costs for third-party
certification of $3,000-$5,000 per year indicated by the commenters.
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, per diem, and
miscellaneous expenses.
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
[[Page 80670]]
approximately 165 organic certification inspectors, and by some of
the larger certifying agents (IOIA). 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 accreditation training for certification
agents 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.
The OFPA requires that private certifying agents furnish
reasonable security for the purpose of protecting the rights of
participants in the organic certification program. It is expected
that there will be costs to certifying agents from these
requirements.
Implementation of the final rule will also impose a less
tangible cost on some certifiers. Some private certifiers have
advertised their program and logo as representing higher standards
than other programs. The brand value associated with the logos of
these certifiers will be lost when uniform standards are implemented
as part of the national program. However, certifiers will still be
able to distinguish themselves to clients based on the quality of
their services and other characteristics.
A key change was made in the final rule, based on comments to
the March 2000 proposal, to make the standard used by certifiers to
determine maximum allowable pesticide residues (the level above
which a product could not be called organic) consistent with the
current industry standard and with NOSB recommendations. In the
final rule, the standard will be set at 5 percent of the pesticide
residue tolerances calculated by the Environmental Protection Agency
(EPA). This change could conceptually reduce costs, but the
magnitude of this reduction is uncertain.
Certification Costs
Under the final 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. Under the proposed rule, certifiers
could charge a maximum of $250 at the time of application, but under
the final rule, certifiers are not limited in the amount of
certification fees that they may charge at the time of application.
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 ten
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-year
(renewal) costs for certification are shown. The average cost for
each size class should be interpreted with care because it 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 into 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. The data from
California suggest that a large number of small farmers produce and
market organic goods without third-party certification, but those
data may not be representative of the national trend. Although many
of the smallest farms would qualify for the small farm exemption
from certification, if consumers accept the labeling practices
required by this final rule, small farmers may obtain certification
to stay in the organic market, which may involve some cost.
In response to comments, the March 2000 proposal was changed to
provide that if a conflict of interest is identified within 12
months of certification, the certifying agent must reconsider the
application and may reinspect the operation if necessary.
Additionally, if a conflict of interest is identified, the
certifying agent must refer the operation to a different accredited
certifying agent. These provisions would likely increase costs to
certifiers; however, the magnitude of this increase is unknown.
Production and Handling Costs
Producers and handlers currently active in the organic industry
may bear costs under the national standards. We believe that while
most provisions of the program mirror current industry practices,
there are some differences. 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
were qualitatively discussed in the March 2000 RIA for major
provisions of the rule and are described below. The March 2000
proposal adhered closely to recommendations from the NOSB and
largely reflected current industry standards. Marginal changes have
been made in the final rule in response to comments on the March
2000 proposal. These changes have been made in concert with NOSB
recommendations and, in general, have been made to clarify or add
flexibility to producer and handler provisions or to make them
better reflect current industry standards.
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 followed 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. The
costs associated with adjusting to provisions in the final rule may
be minimal for certified and State-registered growers but may be
more substantial for noncertified organic producers that do not
follow a specific set of guidelines or regulations. Some organic
producers are neither certified nor registered and, therefore, may
not practice the requirements in the final rule. Major provisions of
the final rule--the withdrawal period required for land to be free
of prohibited substances, National List, animal drug use, and
residue tests--are discussed to illustrate costs; other provisions
may also impose additional costs.
A 3-year withdrawal period, during which prohibited materials
cannot be applied to a field to be certified as organic, is
currently required by most private and State organic standards, and
the final rule also specifies a 3-year period. The effect of this
provision on the currently certified organic farming operations may
be minimal, but the effect on farming operations that are neither
certified nor registered may be significant. Farming operations that
have completed a 3-year withdrawal period will not be affected by
this requirement. To stay in the organic industry, those who have
not completed the 3-year period must comply with this 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.
The impact of the National List, which lists allowed synthetic
substances and prohibited nonsynthetic substances that may or may
not be used in organic production and handling operations, will be
determined by how the national standards differ from current
certification standards and from actual practice. Lists of approved
synthetic materials, including soil amendments and pesticides, vary
from one certification program to another, but a detailed analysis
of specific differences in the various existing materials lists
shows them to be overlapping in most cases with each other and with
the National List. The degree of overlap should mitigate the costs
for certified operations, but
[[Page 80671]]
farming operations, particularly those that aren't certified, may
need to make some adjustments to comply with the list. These
adjustments will impose costs on these operations. The magnitude of
the costs resulting from these adjustments is not quantified.
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 under certain conditions, while others prohibit the use of
animal drugs. The standards in the final rule would prohibit the
sale as organic of edible products derived from an animal treated
with antibiotics or other unapproved substances. The 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.
Additional costs may be imposed by several further changes to
the March 2000 proposal. These changes involve the use of treated
lumber, confinement requirements, and the commercial availability of
ingredients in products labeled ``organic.''
The replacement of lumber treated with prohibited substances
that comes into contact with soil, crops, or livestock under organic
management with treated lumber is now specifically prohibited in
organic systems. Since the use of lumber treated with prohibited
substances for the purpose of preventing degradation is not a common
practice in livestock production, this prohibition is not expected
to increase producer costs substantially. The exact magnitude of any
increase is uncertain and mainly dependent upon the number of
producers seeking organic certification that currently use treated
lumber in their operations and are planning to replace that lumber.
The confinement provisions in the March 2000 proposal have been
slightly modified. Access to the outdoors is now an explicitly
required element for all organically raised livestock. We expect
this change to have a minor impact on overall producer costs, since
we assume most producers raising organic livestock already provide
access to the outdoors. Additionally, the term, ``pasture,'' has
been defined to emphasize that livestock producers must manage their
land to provide nutritional benefit to grazing animals while
maintaining or improving soil, water, and vegetative resources of
the operation. To the extent producers desiring to raise organic
livestock do not currently manage pasture in this manner, we expect
livestock production costs to increase.
The organic plan now requires using organically produced minor
agricultural ingredients unless not commercially available. This
applies to the previously allowed 5-percent nonorganic agricultural
and other ingredients in products labeled ``organic.'' Handlers of
organically produced minor ingredients, especially herbs and spices,
are likely to benefit from this market incentive, while producers of
nonorganic minor ingredients will likely be adversely affected.
Producers will also realize a burden associated with providing the
documentation of commercial availability for ingredients in the 5-
percent component. Since the criteria to determine commercial
availability will be developed after additional comments and
information are considered, the magnitude of the cost and benefit
implications from this standard are currently unquantifiable but
will likely be largely dependent upon the stringency of the
developed criteria.
Producers will also have administrative costs for reporting and
recordkeeping, although producers who currently are active in the
organic industry already perform most of these administrative
functions, and additional costs to them would depend upon the extent
to which their current practices are different from the requirements
of the final rule. The annual reporting and recordkeeping burden on
producers is estimated at 24 hours for certified producers and 1
hour of recordkeeping for small producers who choose to operate as
exempt entities and is valued at $23 per hour.
Other provisions of the final rule, such as those on residue
testing, livestock housing and feed, and health care practices, may
vary enough from those followed by some growers that they may impose
costs due to the variability in current housing, feed, and health
care practices, but lacking information, we have not quantified
these costs.
There were also several key changes made in the final rule,
based on comments to the March 2000 proposal, that will add
flexibility to producer standards. A specific type of production
facility was required for composting manure in the proposal, and
this provision has been modified to ensure that manure is adequately
composted while allowing variation in the type of facility that is
used. Also, the transition period of a dairy operation to make a
whole-herd conversion to organic production has been reduced in
order to make conversion affordable for a wider range of dairy
farms, including smaller operations. Finally, the requirement that
slaughter stock sold, labeled, or represented as organic be under
continuous organic management from birth was changed to require
continuous organic management from the last third of gestation. This
change is also expected to provide possible cost savings and added
flexibility for producers.
Handlers
Handlers of organic food are defined and regulated differently
across different certifying agents and States. Due to this
variability, handlers may incur some cost associated with complying
with the requirements of the regulation. Several key changes were
made in the final rule, based on comments to the March 2000
proposal, to make handler standards more consistent with current
industry standards. The proposal prohibited the addition of sulfites
to wine as required by OFPA. The statute has been changed since
March, and the final rule will permit added sulfites in wine labeled
``made with organic grapes,'' consistent with industry standards and
NOSB recommendations.
Also, the March proposal required products labeled ``made with
organic ingredients'' to have ingredients that were at least 50
percent organic, and this threshold has been raised to 70 percent in
the final rule. Some certifiers set their thresholds at 50 percent,
others at 70 percent, while others restrict labeling to individual
ingredients only. The international industry standard outside the
United States is set at 70 percent. The threshold is set at 70
percent in the final rule inresponese to comments received on the
proposal and to be consistent with international standards, which
will help ease export of U.S. organic product into those markets.
Alternatively, to the extent handlers do not currently meet the 70-
percent threshold to label products ``made with organic
ingredients,'' handlers may incur additional costs to reach the
threshold or exit the industry. The magnitude of those effects is
unknown.
In addition to the labeling requirement, a handler's current use
of nonsynthetic and synthetic substances may change in response to
the final rule. The March 2000 proposal provided for the use of any
prohibited substance to prevent or control pests. This provision has
been changed to first limit the use of nonsynthetic and synthetic
substances to substances which are on the National List before
allowing the use of any synthetic substance. To the extent to which
handlers are now required to consider substances on the National
List before using a prohibited substance and these substances on the
National List are priced differently from the substance otherwise
used, handlers may incur a change in production costs. This
requirement may increase costs on handlers, but the magnitude of
this increase is unknown.
In addition, the commercial availability requirement in the
final rule, described in the producer costs section, may also create
a burden on handlers to consistently apply the standard. To the
extent to which sourcing organically produced ingredients in excess
of 95 percent of the finished product is more expensive than
sourcing nonorganically produced ingredients, handlers seeking the
``organic'' label for their products will incur additional costs. As
previously described, the magnitude of the cost implications from
this standard is currently unquantifiable but will likely be largely
dependent upon the stringency of the standard that is developed.
Handlers will also have administrative costs for reporting and
recordkeeping, although handlers who currently are active in the
organic industry already perform most of these administrative
functions, and additional costs to them would depend upon the extent
to which their current practices are different from the requirements
of the final rule. The annual reporting and recordkeeping burden on
handlers is estimated at 63 hours for certified handlers and 1 hour
of recordkeeping for small handlers who choose to operate as exempt
entities and is valued at $23 per hour.
[[Page 80672]]
Retail Food Establishments
Most retailers are not currently subject to either voluntary
practices or mandatory standards of the organic industry. Retailers
that have organic processing operations, such as organic food delis
and bakeries, are not required to be certified in the final rule.
However, retailers will be subject to requirements such as
prevention of contamination of organic products with prohibited
substances, and commingling organic with nonorganic products.
Obtaining certification and complying with these provisions will
incur some cost.
Labeling Costs
Certified handlers will have to comply with requirements
regarding the approved use of labels. In addition, any producers,
handlers, and retailers who are not currently certified but who
package organic products are also subject to the labeling
requirements. The estimated annual cost for handlers to determine
the composition of 20 products to be reported on labels is
$1,647,000. This figure is based on an average of 1 hour per product
per handler 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 $1,647,000. Total label costs for handlers are
$3.3 million. Any changes to existing labels and new labels that
need to conform to the regulation will incur a cost. The costs
associated with these activities are not quantified. Hence, the
lower bound on the labeling cost is approximately $4 million.
State Program Costs
The national program may impose additional costs on States by
requiring changes in their existing programs. The 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 that conduct certification activities 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 organic programs, and on State and private 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 certifying agents will face the same
obligations and types of costs as private certifying agents.
In States operating State organic programs (SOP), State
enforcement costs are costs associated with ensuring that certified
operations fulfill their obligations. These States will bear the
costs of investigating complaints, monitoring use of the State
organic seal and organic labeling, and taking corrective action when
needed. These States will bear costs related to reviewing an
applicant's or certified operation's appeal and for administrative
proceedings. Many of these activities are already a routine part of
the certification program in States that have programs, and USDA
will fill in gaps in enforcement in States that choose not to have
programs.
USDA's enforcement costs are costs associated with ensuring that
certifying agents fulfill their obligations. In States without an
organic program, USDA will bear the 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 or accredited
operation's appeal and for administrative proceedings. USDA expects
to effectively carry out its enforcement responsibilities using
funds that are already allocated for operating the NOP. To the
extent to which we did not estimate the likely noncompliance rate,
the cost associated with enforcement remains unknown.
Reporting and Recordkeeping Costs
The Paperwork Reduction Act of 1995 requires an estimate of the
annual reporting and recordkeeping burden of the NOP. The estimated
annual reporting and recordkeeping burden reported is approximately
$13 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 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 final rule.
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 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 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 certifying agents. Certifying
agencies each have an estimated burden of 1,068 hours valued at
roughly $27,729.
The following list describes several of the most significant
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 client's 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 agent's 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 must be submitted to USDA of all notices that are
issued on certification denial, 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
[[Page 80673]]
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, 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 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 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 organic 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 as the reporting year
for which the largest number of records might be stored and
maintained.
The annual reporting and recordkeeping burden on producers,
handlers, and certifying agents is summarized in table 4. The annual
burden on certified producers is estimated at 24 hours and $552.
Certified handlers have an estimated burden of 63 hours valued at
$1,449. The burden on small producers and handlers who choose to
operate as exempt entities is minimal, 1 hour of recordkeeping
valued at $23. If this cost is applied to the total estimated number
of affected producers, the reporting and recordkeeping cost would be
$5,260,100 in 2000 and $6,835,554 in 2002. By applying this cost
figure to the estimated total number of affected handlers, the
reporting and recordkeeping cost would be $2,143,002 in 2000 and
$3,013,552 in 2002.
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. If the imposition of
the NOP decreases the importation of organic food into the United
States, then this regulatory action may result in some cost.
Small Business Ramifications
USDA's final rule has 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 will 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 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 accreditation program was part of the 1997
proposal. Because in this final rule, 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 benefiting 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
[[Page 80674]]
still subject to other requirements of the 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
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. 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
that prohibit confinement production systems and require 100 percent
organic feed. And State and Federal certification and conservation
cost-share programs and other government programs may help lower the
impact on small producers.
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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.
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``Natural Foods Supermarkets Gaining in Popularity,'' Economic
Research Service, U.S. Department of Agriculture, FoodReview, Volume
21, Issue 3, September-December.
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
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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.
Klonsky, Karen, Laura Tourte, Robin Kozloff, and Benjamin Shouse.
2000. Statistical Review of California Organic Agriculture, 1995-98,
forthcoming.
Lohr, Luanne. 1998. Implications of Organic Certification for Market
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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.
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Organic Sales to $2.8 Billion in 1995. Natural Foods Merchandiser
(June): 36-38.
Misra, Sukant, Chung L. Huang, and Stephen L. Ott. 1991. Georgia
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the USDA National Commission on Small Farms, Miscellaneous
Publication 1545, January.
Natural Foods Merchandiser. 1995. Organic Update: Reciprocity
Controversies Intensify, Exacerbating Certifier/Manufacturer
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Third Biennial National Organic Farmers' Survey. E. Walz, Program
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[[Page 80675]]
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Agribusiness, Vol. 8 No. 2: 131-142. Table 1.
Table 1.--U.S. Organic Product Sales, 1990-99
($ billions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Natural
Export/ Mass Natural foods Total
Year Export Direct direct market foods stores Total sales sales
subtotal stores (1999 $) (1999 $)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1990................................................... .......... .......... .......... .......... .......... .......... 1 1.27
1991................................................... 0.04 0.27 0.31 0.09 0.85 1.04 1.25 1.53
1992................................................... 0.07 0.32 0.39 0.12 1.03 1.22 1.54 1.83
1993................................................... 0.11 0.36 0.47 0.14 1.29 1.49 1.90 2.19
1994................................................... 0.20 0.39 0.60 0.17 1.54 1.73 2.31 2.60
1995................................................... \1\ \1\ 0.71 0.21 1.87 2.04 2.79 3.05
1996................................................... .......... .......... \1\ \1\ \1\ \1\ 3.5 3.72
1997................................................... .......... .......... .......... .......... \2\ .......... ........... ..........
1998................................................... .......... .......... .......... .......... 3.28 3.35 ........... ..........
1999................................................... .......... .......... .......... .......... 4.00 4.00 ........... ..........
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Natural Foods Merchandiser, New Hope Communications.--= Not reported.
\1\ New Hope Communications reported a combined estimate for export and direct sales in 1995 and reported a different set of subcategories in 1996 and
has reported only on sales in natural foods stores since 1996.
\2\ New Hope Communications did not estimate natural product store sales in 1997, but the Hartman Group estimated these sales at $4.9 billion.
Table 2A.--First-Year Certification Costs, From GRAF and LOHR Analysis
(dollars)
----------------------------------------------------------------------------------------------------------------
Certifying agent Small farm Medium farm Large farm Super farm
----------------------------------------------------------------------------------------------------------------
CCOF........................................................ 850 1,750 4,850 51,250
FVO......................................................... 698 1,737 5,214 51,550
FOG......................................................... 810 1,860 4,860 51,210
NOFA-VT..................................................... 335 535 585 585
NC/SCS...................................................... 700 900 1,000 2,000
OGBA........................................................ 1,290 3,300 12,300 33,296
OTCO-In..................................................... 608 1,603 2,517 150,300
OTCO-Out.................................................... 768 1,698 2,852 12,052
OCIA-WI..................................................... 315 1,590 6,090 75,090
OCIA-VA..................................................... 258 320 495 1,745
TDA......................................................... 90 155 200 575
WSDA........................................................ 480 1,555 3,040 12,480
---------------------------------------------------
Average cost............................................ 579 1,414 3,623 33,276
----------------------------------------------------------------------------------------------------------------
Notes:
CCOF--California Certified Organic Farmers
FVO--Farm Verified Organic
FOG--Florida Certified Organic Growers & Consumers
NOFA-VT--Northeast Organic Farming Association--Vermont
NC/SCS--NutriClean/Scientific Certification Systems
OBBA--Organic Growers and Buyers Association
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
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 80676]]
Table 2B.--Subsequent-Year Certification Costs, From GRAF and LOHR Analysis
(dollars)
----------------------------------------------------------------------------------------------------------------
Certifying agent Small farm Medium farm Large farm Super 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
NC/SCS--NutriClean/Scientific Certification Systems
OBBA--Organic Growers and Buyers Association
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
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 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 at $85/day)...... $510 to $850.
Travel (domestic)...................... $1,000 to $1,200.
Hourly charges (not billed during the $0.
first 18 months).
Miscellaneous charges (copying, phone, $50.
and similar costs).
----------------------------
Total.............................. $1,560 to $2,100.
------------------------------------------------------------------------
Estimated costs to certifying agents for initial accreditation after
first 18 months
------------------------------------------------------------------------
Site evaluation costs (two person team):
Per diem (3 to 5 days)................. $510 to $850.
Travel (domestic)...................... $1,000 to $1,200.
Hourly charges (24 to 40 hours at $95/ $4,560 to $7,600.
hour).
Miscellaneous charges (copying, phone, $50.
and similar costs).
----------------------------
Total.............................. $6,120 to $9,700.
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 (renewals)............... $730.
------------------------------------------------------------------------
Estimated costs to handlers for certification \4\
------------------------------------------------------------------------
Certification fee (initial certification).. $2,337.
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 of less than $250,000,
with 82 percent less than $100,000.
[[Page 80677]]
The average current certification cost for most organic producers is
about $1,025 for the first year of certification ($579 for small and
$1,414 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 $1,000 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 and results in estimated fees of $2,337 and
$2,665, respectively.
Table 4.--Estimated Annual Reporting and Recordkeeping Burden
------------------------------------------------------------------------
Annual
Type of respondent hourly per Hourly rate Annual cost
respondent
------------------------------------------------------------------------
Certified producer............ 24 $23 $552
Certified handler............. 63 23 1,449
Exempt producers and handlers. 1 23 23
Certifying agency............. 1,068 27 27,729
------------------------------------------------------------------------
Note: Estimates derived from Paperwork Reduction Act of 1995 analysis.
Appendix B--Unfunded Mandates Reform Act
This rule has been reviewed under the Unfunded Mandates Reform
Act (Pub. L. 104-4). The Act requires that agencies prepare a
qualitative and quantitative assessment of the anticipated costs and
benefits before issuing 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 1 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 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 program (SOP) 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 SOP's 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 the U.S. Department of Agriculture has determined that
this 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 entitled ``Executive Order 12866'' (also attached as an
appendix to this regulation). The RIA consists of a statement of the
need for the 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 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 rule. The cost of fees and recordkeeping required
by 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 rule
is the least costly and least burdensome to the regulated parties is
discussed in the sections entitled ``The Regulatory Flexibility Act
and the Effects on Small Businesses'' and ``Paperwork Reduction Act
of 1995.'' The 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 during which to communicate with
various entities during the development of the rule; States, for
example. Currently, there are 32 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 National
Organic Standards Board, 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 International Organization for
Standardization (ISO) 65 assessment training session for certifiers
in April-May 1999. More detail about contact with States regarding
this rule is in the Federalism section. It is unknown at this time
how many States, if any, might voluntarily establish their own SOP's
pursuant to the OFPA and the regulations.
Appendix C--Final Regulatory Flexibility Analysis
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires
agencies to consider the economic impact of each 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.
1. Need for and objectives of the National Organic Rule.
Currently, organic certification is voluntary and self-imposed.
Members of organic industries across the United States 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 multiingredient
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 industrywide
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.
In 1990, Congress enacted the Organic Foods Production Act of
1990, as amended (7 U.S.C. 6501 et seq.) (OFPA). The OFPA
[[Page 80678]]
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 (NOP) is the result of the OFPA.
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, USDA will implement a regulation for the NOP.
2. Summary of the significant issues raised by public comments
in response to the Initial Regulatory Flexibility Analysis (IRFA), a
summary of agency assessment of such issues, and a statement of any
changes made in the final rule as a result of such comments.
Although we received many individual comments in reference to
the proposed rule's IRFA, they were, for the most part, variations
of several form letters. Most of the concern on the part of
commenters regarded the fees that small certifying agents would be
subject to under the rule.
Comments Accepted
(1) We received numerous comments to the effect that the fees,
recordkeeping, and paperwork requirements for producer and handler
certification must be kept as low as possible while still offering a
quality certification program. We believe that we have made every
effort in this rule to minimize the cost and paperwork burden to
certifiers and certified operations as much as possible. We have
permitted certifiers and certified operations to develop their own
recordkeeping and reporting systems--so long as they conform to the
needs of the program. For the most part, the paperwork and
recordkeeping requirements for certified operations conform to the
requirements that they presently face under existing certification
programs. In order to minimize the cost to the industry of
transitioning to a system where certifying agents are accredited
(assuming that there will be a learning curve as agents familiarize
themselves with the requirements of accreditation), we have waived
the per-hour cost that USDA will charge to conduct an accreditation
review for the first 18 months of the program.
(2) In the proposed rule, we requested comment on the benefits
of an exemption for small certifiers similar to that for small
producers. We received comments in opposition to such an exemption
because commenters wanted to maintain documented verification of
standards that is afforded by certification and accreditation. They
felt that exemptions weakened the organic system in its ability to
assure consumers of products that meet a consistent standard. We
concurred with this comment and have not developed an exemption for
certifiers in the final rule.
Comments Rejected
(3) We received comments suggesting that, in order to lower the
direct cost of accreditation to smaller certifier applicants, we
should eliminate on-site visits during accreditation or extend the
time beyond the initial on-site visit for a subsequent visit.
Although eliminating the on-site visits would certainly lower the
applicant's costs, we have not made the change to reduce or
eliminate on-site visits. We did not see how USDA could make an
informed decision about whether or not to continue to accredit a
certifying agent without complete access to the relevant records
documenting the agent's business practices. This can only be
efficiently done through a site visit.
(4) We received numerous comments that the fees proposed by USDA
will result in certification fees that are excessive for small
farming operations. The commenters suggested that USDA impose fees
on a sliding scale based on a farmer's income so as not to drive
these farmers out of business and deprive consumers of the benefits
of these operations. We received a similar comment to the Fees
section of the proposed rule, and our response is the same. Although
one of our top priorities is assisting the small farmer, AMS is
primarily a user-fee-based Federal agency. We are aware that our
accreditation fees will figure into the fees that certifiers charge
their clients. However, the fee we will charge to accredit an
applicant is based not on earning profits, but on recovery of costs.
In addition, our waiver of the hourly service charges for
accreditation during the first 18 months of the program should help
to keep the cost of accreditation to certifying agents down. We
believe the requirements that fees charged by a certifying agent
must be reasonable and that certifiers must file a fee schedule for
approval by the Administrator will help to keep costs under control.
Since certifiers are required to provide their approved fee
schedules to applicants for certification, the applicants will be
able to base their selection of certifying agent on price if the
applicants so choose. In addition, nothing in the regulations
precludes certifying agents from pricing their services on a sliding
scale so long as their fees are consistent and nondiscriminatory and
are approved during the accreditation process.
(5) Other commenters were concerned that in the rule USDA
neglects to establish ``reasonable fees'' annually for farm/site/
wild crop production and handling operation certification.
Commenters did not believe that a valid Regulatory Flexibility Act
analysis could be made without the annual farm and handling
operation fee projection. We have not established guidelines for
what constitutes a ``reasonable fee'' in the final rule. Accredited
certifying agents will be required to submit a proposed fee schedule
as a part of their application. At that time, we will work with
applicants for accreditation to ensure that their fees are
appropriate. In addition, certifying agents will be required to send
a copy of their fee schedule to anyone who requests one. This will
allow operations that wish to be certified to shop around and will
provide a disincentive for accredited agents to price themselves out
of the market.
3. Description of and an estimate of the number of small
entities to which the rule will apply.
Small business size standards, Standard Industrial Code (SIC)
(13 CFR part 121), are developed by an interagency group, published
by the Office of Management and Budget, and used by the Small
Business Administration (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.
There are three categories of operations that contain small
business entities that would be affected by this rule: Certifying
agents, organic producers, and/or organic handlers. 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.
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 United States. More than 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 NOP 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.
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). 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. All private,
nonprofit certifying agents would be considered small by SBA's
standards. Based on anecdotal information, only a few private, for-
profit, certifying agents might be categorized as large businesses.
In addition, the 13 State certifying agents, although not exceeding
the revenue threshold, would not be considered to be small entities
under the Act as only government jurisdictions with populations
under 50,000 are considered to
[[Page 80679]]
be small entities under section 601(5). Therefore, at least 30
certifying agents would qualify as a small business.
The term, ``producer,'' means a person who engages in the
business of growing or producing food or feed. 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).''
{time} {time} {time} 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), its 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.
Dunn has estimated the number of certified organic producers in
the United States (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.
Data collected by AMS indicate that the number of organic
farmers increased about 12 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 regulation. 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 certified organic producers used in
assessing the impact of the rule is 12,176.
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.
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. We have estimated that there
would be 12,176 producers certified in the first year and of those
97 percent, or 11,811, based on OFRF's survey results, would qualify
as a small business.
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.
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 2,077 certified handlers in 2001. This figure includes 100
livestock feed handlers who would become certified organic. Again,
the rate of growth could be higher or lower.
In handling operations, a small business has fewer than 500
employees (SIC Division D Major Group 20). 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, currently, about 25
(about 2 percent) of the estimated 1,250 organic handlers in 1999
had more than 500 employees. This includes firms that handle or
process both organic and conventional foods. We have estimated that
2,077 handlers would be certified organic in the first year. Based
on this information, 98 percent or 2,035 would qualify as a small
business.
4. An estimate of the projected reporting, recordkeeping, and
other compliance requirements of the rule, including an estimate of
the classes of small entities which will be subject to the
requirement and the type of professional skills necessary for
preparation of the report or record.
The reporting, recordkeeping, and compliance requirements of the
rule will directly affect three sectors of the organic industry that
contain small business entities: accredited certifying agents,
organic producers, and organic handlers. We have examined the
requirements of the rule as it pertains to each of these entities,
however several requirements to complete this Regulatory Flexibility
Analysis (RFA) overlap with the Regulatory Impact Assessment (RIA)
and the Paperwork Reduction Act (PRA) section. 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 rule's
costs to small entities. The RIA provides an analysis of the
benefits and costs of this regulation. 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 final rule.
The PRA section estimates the reporting and recordkeeping
(information collection) requirements that would be required by this
rule 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.
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 30 of the 36
private certifying agents are small businesses.
The recordkeeping and paperwork requirements are outlined in the
Paperwork Reduction Act section. The requirements for small and
large certifying agents are identical. The recordkeeping and
paperwork requirements for accreditation will be a new burden to
most agents as the majority of them have not been accredited in the
past. However, 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 required 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. Because the rule does not require any particular system
or technology, it does not discriminate against small businesses.
The ability of an agent to carry out the paperwork and recordkeeping
sections of the rule will be more dependant on the
[[Page 80680]]
administrative skill and capacity of their particular organization
than their size. We did not receive significant comments about the
paperwork requirements of the proposed rule that would indicate that
they will be onerous for small certifying agents.
Certifying agents will be the front line in monitoring and
ensuring that certified operations stay in compliance with the Act
and the regulations. However, most of the compliance requirements,
with the exception of some reporting requirements, are consistent
with what certifiers are currently expected to do. Like the
paperwork and reporting requirements, the additional costs to an
agent will depend on how different their current practices are from
the final regulation.
The final, and probably most significant, area in which
certifying agents are affected by the rule is in the fees that they
must pay for accreditation. Certifying agents will be assessed for
the actual time and travel expenses necessary for the NOP to perform
accreditation services, including initial accreditations, 5-year
renewals of accreditation, review of annual reports, and changes to
accreditation. Although the fees have not been set yet, we are using
as a starting point the hourly fees that are charged for the
voluntary, fee-for-service program provided by AMS to certification
bodies requesting conformity assessment to the ISO Guide 65,
``General Requirements for Bodies Operating Product Certification
Systems.'' We expect that at the time the NOP's final rule is
implemented, the fees will be approximately $95 per hour with higher
overtime and holiday rates. Certifying agents will also be charged
for travel, per diem, and other related costs associated with
accreditation. To ease the financial burden of accreditation during
the 18 month transition period after the NOP 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 to the site evaluation. Review
of the certifying agent's annual report is anticipated to range from
2 to 8 hours at the ISO Guide 65 hourly rate. Also, if certifying
agents wish to become accredited in additional areas for which they
were not accredited previously, a site evaluation (with associated
fees) will be necessary. Detail about the expected costs of
accreditation can be found in the RIA.
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 followup 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 followup 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.
The complexity of a 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 affect 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.
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.
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 affected by this final rule and may not be able to
continue in business from a financial standpoint.
Costs to Producers and Handlers
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
rule, we have clarified that the exemption applies to producers and
handlers who sell no more than $5,000 annually in value of organic
products (9). In addition, handling operations are exempt if they:
Are a retail food establishment that handles organically produced
agricultural products but does not process them; handles
agricultural products that contain less than 70 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 70 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.
According to the OFRF survey, 27 percent of currently certified
farms that responded to the survey would fall under the producer
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.
We have estimated that there are 4,801 small organic producers
and 173 handlers that will be exempt from certification (this figure
does not include excluded operations). These operations would be
required to comply with the production and handling standards and
labeling requirements set forth under the NOP. They do not have to
meet the paperwork requirements of certification and they must only
keep records that document compliance with the law for 3 years
(rather than 5 for certified operations. We anticipate that this
exemption will be used primarily by small market gardeners and
hobbyists who grow and process produce and other agricultural
products for sale at farmers
[[Page 80681]]
markets and roadside stands to consumers within their communities.
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.
As with accredited certifying agents, the regulation will impose
administrative costs on certified 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 become certified 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
differ 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. The only distinction made in the final rule between large and
small entities for reporting, recordkeeping, and compliance is for
operators who produce less than $5000 per year in organic products
as stated above.
As with the certifying agents, most of the concern this rule
generated for small certified operations revolves around fees. Under
this 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 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.
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'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 the
existing certification programs mention 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 into
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.
This rule 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.
Those currently receiving voluntary certification will likely
see a modest increase as the certifying agent passes on its cost
incurred under the NOP. 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.
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 NOP is
implemented. Other States, such as Minnesota, have cost-share
programs to help offset costs for organic producers.
Conclusion
This rule will primarily affect small businesses. We have,
therefore, attempted to make the paperwork, recordkeeping, and
compliance provisions as flexible as possible without sacrificing
the integrity of the program. We are not requiring specific
technologies or practices and with the 18-month phase-in of the
program we are attempting to give both certifying agents and
certified operators an opportunity to adapt their current practices
to conform with the rule. Because we have attempted to make the rule
conform with existing industry standards, including ISO guide 65 for
certification and ISO guide 61 for accreditation, the changes for
most organizations and operations should be relatively
straightforward.
The fees required for accreditation will be the most significant
change faced by most operations--and this was apparent in the
comments received. While we understand the concerns of the affected
organizations, in order to administer an accreditation program, it
is necessary that we recover our costs. We are hoping that the
elimination of the hourly charges in the first round of
accreditation will help to alleviate some of this burden.
1. Organic Farming Research Foundation. 1999. Final Results of
the Third Biennial National Organic Farmers' Survey. Santa Cruz, CA.
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.
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.
5. 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.
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
NOP 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.
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.
8. Fetter, Robert T. 1999. Economic Impacts of Alternative
Scenarios of Organic Products Regulation. Senior Honors Thesis.
University of Massachusetts, Amherst, MA.
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.
[[Page 80682]]
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.
Appendix D--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 revised 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 Organic Foods Production Act (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 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 toward 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
regulation 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 E--Executive Order 13132, Federalism
This final rule has been reviewed under Executive Order 13132,
Federalism. This 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 final rule, (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.
The Organic Foods Production Act (OFPA) of 1990 (7 U.S.C. 6501
et seq.) 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. There has been a great deal of support for
this law and these regulations from the organic community.
OFPA and these regulations do preempt State statutes and
regulations related to organic agriculture. OFPA 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.
Currently, 32 States have organic statutes on their books and have
implemented them to various degrees. However, 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 allows the States to
determine the degree to which they are involved in the organic
program. States may choose to: (1) Carry out the requirements of the
Act by establishing a State organic program (SOP) and becoming
accredited to certify operations, (2) establish an SOP but utilize
private accredited certifying agents, (3) become accredited to
certify and operate under the National Organic Program (NOP) as
implemented by the Secretary, or (4) not play an active role in the
NOP. 7 U.S.C. 6507 provides that States may establish an SOP
consistent with the national program. SOP's may contain more
restrictive requirements than the NOP established by the Secretary
of Agriculture. To be more restrictive, SOP's must: 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.
Because implementation of OFPA will have a significant effect on
many States' existing State statutes and programs, the U.S.
Department of Agriculture (USDA) has reached out to States and
actively sought their input throughout the entire process of
developing the organic rule. On publication of the first proposal on
December 16, 1997, an announcement and information packet
summarizing the proposal was sent to more than 1,000 interested
parties, including State governors and State department of
agriculture secretaries, commissioners, or directors. Over a period
of 6 years, numerous meetings were held to provide States an
opportunity to provide information and feedback to the rule. In
1994, States were invited to participate in four public hearings
held in Washington, DC; Rosemont, IL; Denver, CO; and Sacramento,
CA, to gather information to guide development of standards for
livestock products. States were also provided the opportunity to
comment specifically on State issues at a National Organic
Certifiers meeting held on July 21, 1995. They were invited to
discuss accreditation issues at a meeting held on February 26, 1996.
Following the publication of the first proposal, State and local
jurisdictions had the opportunity to provide input at four listening
sessions held in February and March 1998 in Austin, TX; Ames, IA;
Seattle, WA; and New Brunswick, NJ. A meeting to discuss the role of
States in the NOP was held in February 1999. A State organic
certifiers meeting to discuss State issues was held at a March 2000
meeting with the National Association of State Organic Programs.
USDA also drew extensively on the expertise of States and the
organic industry by working closely with the National Organic
Standards Board. The Board met 12 times before publication of the
proposed rule on December 16, 1997, and met five times during 1998
and 1999 and two times in 2000. States were invited to attend each
of these meetings, and official State certifier representatives
participated in Board deliberations in meetings held in July 1998,
July 1999, and March 2000.
Public input sessions were held at each meeting to gather
information from all interested persons, including State and local
jurisdictions. NOP 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. 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 (AMS)
Administrator, the NOP Program Manager, and NOP staff.
In addition, during August and September 2000, the Administrator
and NOP staff engaged in extensive efforts to discuss the proposed
rule. While many organizations declined opportunities for these
briefings, AMS staff did meet with the National
[[Page 80683]]
Conference of State Legislatures (NCSL) and, at their request, in
lieu of a meeting, provided information to the National Governor's
Association (NGA). NGA and NCSL representatives stated they were
aware of the development of the final rule but offered no comments
during these consultations beyond those submitted by the individual
States during the proposed rule's comment period. In addition,
between August and October 2000, NOP staff had telephone or e-mail
contact with the State organic program directors or other State
department of agriculture representatives in 25 States to determine
the scope and status of each State's organic program in the context
of the issuance of the final rule. These State representatives
stated that they were eagerly awaiting the publication of the final
rule and had already begun adjusting their programs to conform with
the March 2000 proposed rule in anticipation of the publication of
the final rule. Finally, States have had the opportunity to comment
on two proposed rules. More than 275,000 comments were received on
the first proposal, and 40,000 on the second proposed rule-including
extensive comments from twelve State departments of agriculture, one
State legislator, two members of Congress, and the National
Association of State Organic Programs.
Through this outreach and consultation process, States have both
provided general feedback to the rule and expressed several specific
concerns about how this rule will affect State programs.
Overwhelmingly, States were extremely supportive of the March 2000
proposed rule. With a few exceptions, most notably who should bear
the cost of enforcement of an SOP, States are supportive of the
Federal legislation. We did not receive a single comment from a
State that indicated that there should not be a national organic
program.
The most prevalent issues they raised regarding the March 2000
proposed rule as to how this rule will affect organic programs in
their States, along with USDA's response, are described below. We
received no direct comments from States on the Federalism section in
the proposed rule. Many of these concerns and others are addressed
in more detail in the relevant sections of the rule.
Applicability
Regarding section 205.100(b), five States currently offer a
``transition to organic'' label for producers who are in the process
of becoming certified. Many of these States would like to continue
to offer this label. However, OFPA does not authorize a ``transition
to organic'' label. Although the States (or private certifiers) are
free to come up with a different label for these farmers, they
cannot utilize the term, organic, in any seal or labeling associated
with the conversion period. There is no change in this provision
from the proposed rule.
Accreditation
Regarding section 205.501(a), many States wanted the NOP to add
an additional subsection to the Accreditation section requiring
certifiers to prove that they can carry out a State's more
restrictive standards in order to be accredited to certify in that
State. AMS concurs with this suggestion and has added a new
paragraph 205.502(a)(20) requiring the certifying agent to
demonstrate its ability to comply with a State's additional
requirements.
Regarding section 205.501(b), there was strong support by all of
the States for the provision that States with SOP's are able to have
higher standards than the NOP for operations within their State.
However, there was not consensus among the States on the prohibition
on private certifiers requiring more stringent standards.
Although most supported the prohibition on private certifiers
imposing additional requirements as a condition of certification
because they perceived that it lowered barriers to farmers and
processors in their States, three States were strongly opposed to
this provision. Because having a consistent national standard is one
of the primary purposes of the legislation, there is no change in
this provision from the proposed rule.
State Programs
There was general confusion about what is the difference between
a State organic certification program and an SOP. In addition, some
States wanted the scope of the NOP's oversight for State organic
activities to be limited to certification. A State organic
certification program is equivalent to a private or foreign
certification program. States wishing to certify operations in their
State must apply to the NOP for accreditation.
An SOP, on the other hand, requires the State to submit a plan
to the NOP for approval to, in effect, administer the NOP within
their State. Included in this is the opportunity to include
requirements that differ from the NOP. In creating an SOP, a State
is also agreeing to take on enforcement activities that would
otherwise be the responsibility of the NOP. One exception to a
State's enforcement authority is that States with SOP's do not have
jurisdiction over the accreditation of certifying agents and cannot
revoke accreditation. They can investigate and report accreditation
violations to the NOP. States with only an accredited certification
program are only responsible for the level of enforcement that all
accredited certifying agents, State, private, or foreign, are
required to take on.
Regarding section 205.620(c), several States want broader
language than ``unique environmental conditions'' to be the basis
for a State to have the right to establish more restrictive
requirements under an SOP. AMS does not concur. There is no change
to this language in the final rule. It is the opinion of AMS that
the current language is broad enough to cover the scope of more
restrictive requirements as authorized by OFPA.
Regarding section 205.620(d), many States want it to be optional
for States with SOP's to take on enforcement obligations; several
want funding from USDA for enforcement activities. AMS does not
concur with this change. AMS does not envision that participation
under the NOP will impose additional fiscal costs on States with
existing organic programs, other than the costs of accreditation.
Regarding section 205.621(b), several States commented that
States with SOP's should not be required to publish proposed changes
to their programs in the Federal Register for public comment. AMS
concurs with this comment. This language was an oversight from the
first proposed rule.
Fees
A few States commented that the proposed fees for accreditation
could cost more than some States could afford to pay. They made some
suggestions for reducing accreditation fees, ranging from no fees (a
completely federally funded program) to charging reduced rates for
travel or eliminating hourly charges. AMS has no plans to change the
fee structure. As in the proposed rule, hourly charges for
accreditation will be waived for all applicants in the first 18
months of the program to facilitate the conversion to a national
accreditation system.
[[Page 80684]]
Compliance
Regarding section 205.665, several States wanted to know what
their authority was to revoke the accreditation of private
certifiers in their State who do not meet additional State standards
under an SOP. An SOP's governing State official is authorized to
review and investigate complaints of noncompliance with the Act or
regulations concerning accreditation of certifying agents operating
in their State. If they discover a noncompliance, they shall send a
written report to the NOP program manager. Because accreditation is
a Federal license, States do not have the authority to revoke a
certifying agent's accreditation. There is no change in this section
from the proposed rule
Appeals
Regarding section 205.668(b), several State commenters want
appeals from SOP's to go to State district court rather than Federal
district court. AMS disagrees. The Act provides that a final
decision of the Secretary may be appealed to the U.S. District Court
for the district in which the person is located. AMS considers an
approved SOP to be the NOP for that State. As such, AMS considers
the governing State official of such State program to be the
equivalent of a representative of the Secretary for the purpose of
the appeals procedures under the NOP. Because the final decision of
the governing State official is considered the final decision of the
Secretary, under the Act it is then appealable to the U.S. District
Court, not the State district court.
Regarding section 205.680, State commenters want a process by
which people who feel they were adversely affected by the organic
program in a State with an SOP may appeal to the SOP's governing
State official, rather than the Administrator. AMS has amended the
language in section 205.680 to clarify to whom an appeal is made
under various situations. If persons believe that they were
adversely affected by a decision made by the NOP Program Manager,
they appeal to the Administrator. If they were adversely affected by
a decision made by a certifying agent (State, private, or foreign),
they appeal to the Administrator unless they are in a State with an
SOP, in which case, they appeal to the SOP's governing State
official. If persons believe that they were adversely affected by a
decision made by a representative of an SOP, they appeal such
decision to the SOP's governing State official or such official's
designee.
[FR Doc. 00-32257 Filed 12-20-00; 8:45 am]
BILLING CODE 3410-02-P