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Organic Trade Association (OTA) Proposal to Implement an Organic Research and Promotion Program: Organic Check-Off

By Ed Maltby, NODPA Executive Director

Added July 16, 2012

Farmer and consumer groups say:

YES on a technical regulatory fix that allows organic farmers to withdraw their check-off dollars from supporting conventional agriculture AND

NO on regulation to support the path to establish an Organic Research and Promotion Program

OTA's proposed changes to Section 501 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C.7 7401) as it relates to exemption of organic products from assessment from agricultural check-off programs continues to evolve as they take their message to the organic community and Congress. OTA continues to say the discussion is on a proposed order (not on any other models) and the legislation is to allow organic to be a commodity under the Federal Research and Promotion Order (FRPO). Farmer and consumer groups that oppose OTA's legislative agenda on a FRPO say that a series of one-sided webinars and a few meetings at Trade Shows and the NOSB do not constitute a community discussion; that there are many better and more representative organizational and governance models under which funds can be pooled for organic research and promotion. Legislative language is very premature without even a definition of what is meant by 'Organic' as a commodity under an FRPO and who will be assessed and therefore vote on any proposed order.

There is complete agreement within the organic community that legislative language that will allow all organic products to be exempt from the non-organic check-off programs should be supported and moved through Congress. This technical fix will stop organic dollars from being used to promote non-organic products and will allow that money to be used by producers and processors to promote and support organic production.

This is all that is needed to stop organic farmers
from being unfairly taxed by conventional check-off programs.

There is disagreement between DC lobbyists and experts as to whether the technical regulatory fix would pass as a standalone amendment. The Podesta Group, hired by OTA, who has very limited experience on agricultural issues, says that it would not. But many other industry professionals differ in their opinion and say a stand-alone amendment would be more easily accepted. Unfortunately farmers do not have deep pockets to hire lobbyists to give their professional opinion.

OTA's regulatory language and proposal for An Organic Research and Promotion Program is "Not Ready For Prime Time."

Farmer and consumer groups do not support extending authority or steps that would ultimately lead to a Federal, USDA mandated, 'Organic Research and Promotion Program' with a governing committee appointed by the Agriculture Secretary. They believe that OTA's proposed program is following the same path of the conventional advertising, research and promotion orders with their many short-comings and pitfalls. They believe that the strategies, tactics and attitude adopted by OTA in its process of consulting the organic community about an Organic Check-off Program has been top-down and confirms that OTA will lead the community down a predetermined path where governance of the program and control of disbursement of funds will be invested in the processors and manufacturers, rather than the producers.

Here is what is needed to unite the organic community behind the goals of more dollars for research and promotion of organic and restore the trust that is so essential for future discussions:

  1. OTA should agree that the compromise language they have in the Senate Farm Bill asking for an independent feasibility study on an ORPP is enough regulatory language on establishing an ORPP at this time. Any future language can always be attached as an amendment to any bill in Congress. OTA should instruct the Podesta Group to stop lobbying to have their language to establish organic as a commodity under an ORPP included in the House Farm Bill, the House Appropriations Committee or any other House or Senate bills.
  2. OTA should work with other groups to use the 2012 Farm Bill to promote the technical fix that will allow all organic products to be exempt from a conventional check-off.
  3. We need an industry wide discussion that includes all stakeholders in a process similar to that used to develop the Organic Action Plan. This would examine the benefits or need to pool any check-off funds, the different models that can be used to organize and govern the decisions on assessments and disbursement of funds, (some have suggested a more regional response similar to the Sustainable Agriculture Research and Education model - SARE), that would not duplicate the mistakes of the Federal programs. Until we have details on who will be assessed, what will be assessed, how the assessment will be collected, who will govern the program and how it will be managed, it is impossible to make a decision on any Organic Check Off program and whether it will be beneficial to pool all funds, have regional pools, have commodity pools, regional governance or buy into the Federal program.

In the evaluation of the benefits and disadvantages of the existing check-off programs, the following questions need to be answered:

  • Simple basic questions that are so integral to discussions of any proposed program: Who will be assessed? How will they be assessed and on what basis? Will the assessment be at many levels of the supply chain? How will representation on the governing committee be determined? Will a program be based in states and regions, feeding limited dollars back to a national program or vice-versa?
  • Are the advantages of pooling check-off funds within the federal program outweighed by the restrictive guidelines, heavy bureaucracy, lack of accountability, cost of administration, a history of using check-off funds inappropriately, and poor representation of farmer priorities in the granting of research dollars? The investigation by the Office of the Inspector General of the Research and Promotion Check-Off Programs highlighted the failing of the existing programs and confirmed farmers' distrust of those programs.
  • Who gets the benefits from commodity promotions? The success of the Federal Research and Promotion Programs have often been judged by consumer recognition of advertising slogans rather than its impact on sales of product and effect on farm families across the country through relevant research and promotion programs.
  • Does the existing check off programs keep family farm producers in business? There have been declining farm numbers and an increasing concentration in agriculture while these commodity research and promotion programs have been in effect. 'Got Milk?' - 'The Incredible Edible Egg' – "Beef, It's What's for Dinner' and 'Pork, The Other White Meat', to name a few, may be nice sounding promotional terms but producers legitimately ask what is in it for them. Below are some examples of changes under the existing 18 Federal Research and Promotion Programs:
    • Between 1992 and 2004, U.S. farms with hogs declined from over 240,000 to fewer than 70,000. Currently 20 pork entities produce 50 percent of all the hogs in the U.S. Very few independent hog producers remain in business and the market is dominated by the integrated meatpackers. The pork checkoff fund will generate $72 million in 2012. (Source: USDA)
      The wheat checkoff was designed to increase wheat exports. Current wheat exports are in fact below the 10-year average, with the wheat check off having been in place since 1980. (2011/2012 crop year exports are projected to be 27.9 million metric tonnes vs. the 10 year average of 28.3 million metric tonnes.) (Source: Wheat Growers Association)
    • "Beef, it's what's for dinner," campaign. This advertising effort is funded by a $1.00 per head checkoff assessed every time a live animal changes hands. This checkoff program has been in effect since 1989 and millions of dollars have been "checked off" and millions spent on very creative advertising. What has happened to beef per capita consumption during the time of the campaign?
    • Beef per capita consumption has declined from 88 pounds per person to less than 60 pounds today (USDA, ERS beef per capita consumption, boneless equivalent weight basis).
      Since the start of the 'Got Milk' campaign in October 1993, the consumption of fluid milk has dropped year by year (per capita US consumption of fluid milk in 1993 was 24.37 gallons, in 2010 it was 20.69 gallons), as have the number of dairy farms (1993 there were 124,945 dairy farms but only 51,481 in 2011). (Source USDA AMS)
    • The "Incredible Edible Egg" campaign was started in 1977. Since then, consumption of eggs has declined. In 1987, there were around 2,500 operations with flocks of 75,000 hens or more. In 2012, there are 179 egg producing companies with flocks of 75,000 hens or more.

In the face of OTA's continued lobbying of the House of Representatives to include their own legislative language, the Organic Farmers' Agency for Relationship Marketing (OFARM Inc.) and the Federation Of Organic Dairy Farmers (FOOD Farmers) submitted a letter to the leadership of the House on Monday, July 9 2012, that explains the position of organic farmers, producers, ranchers, growers and consumer groups. This letter can be downloaded from WEB LINK HERE.

Some of the other organizations that support this position and signed on to the letter are: Beyond Pesticides (DC), Buckwheat Growers Association of Minnesota (MN), Cornucopia Institute (WI), Food and Water Watch (DC), Elizabeth Henderson, Farmer, (NY), Hoosier Organic Marketing Education (IN), Kansas Organic Producers Association (KS), Midwest Organic Farmers Cooperative (IL), Montana Organic Producers Cooperative (MT), National Farmers Organization (NFOrganics), NOFA Interstate Council (New England and New York), Northeast Organic Farming Association of New York, Inc. (NOFA-NY), Organic Consumers Association (DC and MN), Wisconsin Organic Marketing Alliance (WI)

For more information contact: