Washington Insider - Friday

Organic Guarantee Criticized

Here’s a quick monitor of Washington farm and trade policy issues from DTN’s well-placed observer.

USDA Confirms China Shift on Requirements for Imports of US Soybeans

China will allow shipments of U.S. soybeans containing up to 1% foreign material to have expedited access while those with more than 1% foreign material may be held for additional testing, according to statements from USDA's Animal and Plant Health Inspection Service (APHIS).

The change takes effect January 1. APHIS is indicating those shipments with more than 1% foreign material may be subject to additional inspection, cleaning or treatment at destination. Reports have signaled the issue has been raised by China since September to U.S. inspection officials on excessive contamination in U.S. shipments, primarily weed seeds.

EU Seeking 1.4 Billion Euros in Russia Sanctions at WTO over Pork

Trade sanctions totaling 1.39 billion euros ($1.65 billion) are being sought by the European Union (EU) against Russia over their failure to abide by a WTO ruling on hogs and pork. Russia banned imports of pork and hogs from the EU, citing African Swine Fever (ASF) as the reason.

The WTO ruled against Russia's ban earlier this year and the EU maintains they have not lived up to the WTO ruling. The EU request for sanctions will be made at a January 3 meeting of the WTO's dispute settlement body (DSB). The level of sanctions the EU is seeking is based on the level of total relevant exports in 2013, increasing by 15% annually.

Washington Insider: Organic Guarantee Criticized

The Washington Post this week is looking at the growing “tumult” in Congress over whether the “USDA Organic” label really guarantees that a product is grown as advertise. Congress is weighing legislation that would roughly double the budget for the USDA’s oversight of the organic industry, the Post says.

The bill, introduced by Rep. John J. Faso, R-N.Y., has 33 House cosponsors, and its backers hope that its bipartisan support will enable its passage next year.

USDA's National Organic Program is supposed to protect consumers from food that is advertised as organic but that does not meet organic standards and the Post has published several stories casting doubt on the authenticity of the products from some of the largest "organic" producers of milk, eggs and imported grains.

"There's a growing concern about the capacity of the Agriculture Department to accurately monitor products that are labelled organic but may not actually be," Faso said, citing the shipments of bogus organic soybeans from the Ukraine through Turkey to the United States, which was reported in The Post in May.

"Because you can get a premium price, there are inevitably going to be people who will try to trick the [organic] system," Faso said. "Under the terms of this bill, we will gradually increase the funding that's available to the department and the regulators, so that we can better track and monitor these products."

The legislation roughly doubles the budget for the USDA's organic program to $24 million over the next five years. It also, among other things, calls for the modernization of the USDA system that tracks imports of purportedly "organic" foods, allows organic inspectors to share investigative information across a supply chain, and requires officials to file an annual report to Congress detailing its organic investigations.

The responsibility for regulating the industry lies with USDA's National Organic Program, which defines what farming methods count as organic and issues certificates to farmers and handlers that comply with those rules. The organic label enables them to charge as much twice the price of a conventional product.

For years, an organic watchdog group, the Cornucopia Institute, raised questions about the rigor of organic enforcement. This year, however, amid reports of failures in several significant components of the industry, the program has faced a remarkable level of skepticism. In September, the chief of the program, Miles McEvoy, announced that he would be retiring. But several other events promised that the turmoil would continue.

The questions about the program largely revolve around the belief that products unfit to be called “organic” are nevertheless winning the right to bear the “USDA Organic” label.

Several farm groups are, out of frustration, creating alternatives to the “USDA Organic” label. Most prominently, the Rodale Institute, a key early supporter of the “USDA Organic” label, and Patagonia, the apparel maker, are promoting a new “regenerative organic” standard that they say will fill in gaps in the current USDA organic rules. In announcing the program, Rose Marcario, president of Patagonia, wrote that the “boom for organics has coincided with a boom for imposters.”

The Organic Trade Association, which represents 9,000 organic businesses in the U.S. and has long been an ally of the USDA’s National Organic Program, sued the USDA in an attempt to force it to establish more humane rules for livestock on “organic” farms. As a Post story illustrated earlier this year, those rules are much less stringent than many consumers think: a henhouse can be deemed “USDA Organic” even if it holds 180,000 birds that are not allowed outside and are kept at a density of three hens per square foot of floor space. In a follow up decision, the USDA ruled that the animals in “organic” products need not be treated any more humanely than those in conventional farming.

It is interesting to note that the Post seems to suggest that the proposed new legislation likely would not “silence current criticism.” It says this is because the program is considered “marketing” and not conducted by “the usual USDA inspectors.” It also says it spots a conflict of interest embedded in the organic inspection program. To win the "USDA Organic" label, farms hire their own inspection companies, or “certifiers,” to conduct the performance audits.

In fact, certification programs are basically more limited than some supporters would like. In fact, while most “seals of quality” are based on tests of the product using objective criteria the organic certificate is based mainly on the production process—it certifies that “the food or other agricultural product has been produced through approved methods.”

The organic standards themselves describe the specific requirements of a production process and that must be verified by a USDA-accredited agent before products can be labeled “USDA organic,” according to USDA.

So, there are many issues surrounding the organic certification program and what it means and these are not generally well understood—although the program’s link to premium prices certainly creates an incentive to fight over such definitions. And, the Post is likely right that better program funding may not increase consumer confidence very much, Washington Insider believes.

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