Advancing the Agenda One Challenge at a Time
An Interview with Katherine DiMatteo, Organic Trade Association
An internationally recognized leader in building consensus on organic standards and practices, Organic Trade Association (OTA) Executive Director Katherine DiMatteo has successfully rallied support from diverse sectors of industry and government for the promotion of organic foods and products. When a new organic policy-making controversy erupted in April, DiMatteo and the OTA staff didn’t have to rally member support for long—a galvanized industry swiftly began to speak out.
The three guidance documents and a directive issued by the U.S. Department of Agriculture (USDA) National Organic Program (NOP) were viewed by industry as weakening both certain areas of the Organic Foods Production Act of 1990 and the regulatory public comment process itself. The policy changes included a reversal of the 2002 policy that allowed the organic certification of certified organic personal care products, organic pet foods and organic supplements, products in which companies had invested hundreds of millions of dollars to develop. Other pronouncements in the April policy changes by NOP required organic certifiers to certify farms even if the farm uses pesticides with unknown ingredients; allowed organic dairy cows to be treated with antibiotics and their milk to be sold as organic; and allowed artificial preservatives in feed supplements.
Neither the public, including those who make or buy organic products, nor the National Organic Standard Board (NOSB), the Secretary’s advisory body, were consulted about these policy changes. This caused OTA and others within the industry, including NOSB members, to decry that the action taken by NOP had, in effect, been major rule changes, setting dangerous precedent, and showing disregard for the needs of organic farmers, processors and consumers, who would be most affected by the agency’s arbitrary changes in the nation’s organic regulations. Along with efforts by Sen. Patrick Leahy (D-Vt.), the Consumers Union and other organizations, OTA called for these policies to be rescinded and for the true public-private partnership envisioned in the Organic Foods Production Act to be restored. On May 26, U.S. Department of Agriculture Secretary Ann Veneman rescinded the NOP clarifications and directed the agency to work with the NOSB and the organic industry to reach the best solutions to issues that were raised in implementing national organic standards.
In this issue of Organic Processing Magazine, DiMatteo shares her thoughts on the state of the organic industry, the recent controversy, and the trends and challenges ahead for this growing market. For more than 20 years, she has been involved in advocating changes in federal policies and steps by individuals to create a more sustainable world. From 1985 to 1989, she was development director of the Peace Development Fund, and served as the executive director of the Northeast Sustainable Energy Association from 1989 to 1990. Since 1990, she has served as the executive director of the Organic Trade Association (OTA), the business association representing the organic agriculture industry in North America.
OP: In your opinion, what are the most significant developments or initiatives in the organic industry since the USDA began implementing the National Organic Program standards two years ago?
DiMatteo: The most significant development we’ve seen since the implementation of the national organic rule in 2002 has really occurred in terms of the marketplace. Since implementation, we’ve seen a great number of food products use the USDA seal and qualify for certification in the organic and 100% organic labeling categories. We’ve also seen a growing number of companies introduce new products in non-food categories, developing organic products in line with the NOP rules.
I think that the expectation that we all had about implementation of the rule, that it would level the playing field and encourage companies to produce organic products has in fact worked in that way. What is surprising, however, is that even after two years of implementation, in the business community there is still a complete lack of understanding and in some cases, awareness that there is a regulation and what they have to do to meet that regulation to call their product organic. But the stream of commerce, the months that companies were given to change their products lines to meet the criteria, is up. I think that a number of the products that were being sold over the past few years as organic actually weren’t in compliance with the new rule, so now we’re going to start seeing changes in terms of number of organic label products in compliance with the NOP standards. We’re going to begin seeing a truer picture of products that are in complete rule compliance.
OP: Can you discuss the four rule changes made by NOP administrators in April, the ensuing industry reaction, and U.S. Agriculture Secretary Veneman’s decision to reverse those changes in May?
DiMatteo: Very broadly different issues were covered in the four different documents issued by the NOP office, and each had different levels of impact in terms of the changes that they would represent. The first was a scope document that removed the possibility that non-food products would be allowed to comply with the existing USDA rules for food. This was a reversal of a 2002 document that NOP staff had issued, which said that if companies could comply with the existing rules they would be allowed to be certified to the NOP standard and use any of the labeling if they complied as a non-food product with the food rule. So, that particular statement really had large impact on the companies that had invested time, had released products, that got certified and were in the process of complying with the food rules for things like personal care products and dietary supplements. And in each one of those, the levels of difficulty in achieving compliance is different. In general, it was a sudden, unexpected and radical change to the 2002 policy with regard to non-food products, with no discussion prior to the release of the scope document that these changes were even being considered.
The sections of the scope document dealing with pet food and aquaculture were also cut loose in the sense that even though the NOP said, “Yes, they do come under the OFPA and come under the agency’s authority, since we don’t have any rules, you can do whatever you want until we do have rules.” This, of course, meant that under those categories, especially pet foods, companies that had done the research and development, spent the money, received certification and printed their packaging suddenly were going to be competing with products labeled organic that have no organic content in them. And, of course, with regard to aquaculture there are many difficulties, including the fact that it is not a land-based system and the farm fish versus wild fish controversy as to whether the latter can be considered organic. But by opening the door wide and stating that until there are any rules you can do whatever you want, the NOP scope document rendered the term “organic” meaningless for this category and all categories. By opening the door to broad use of the word organic without any oversight or regulation meant that it could impact dramatically consumer confidence in the use of the term organic on food products that USDA considered qualified for the NOP. Ultimately, that particular guidance statement was a whole hornet’s nest of problems and issues of varying degrees.
Another guidance focused on the use of antibiotics, and in our view, was a corrupted interpretation of an issue that needs to be dealt with in the rule. This has to do with unclear wording in the part of the NOP rule regarding conversion of conventional dairy operations to organic dairy operations in terms of the use of antibiotics for livestock. There have been many discussions between NOP staff, the NOSB and industry through public comment on this issue, as well as suggestions made about how to correct the rule itself because the rule has to be corrected in order for this issue to be clarified. The issued guidance statement really took into consideration none of the comments made on this very complex issue about how to transition a whole herd of cows from conventional status to organic without having to buy all new calves that have been raised organically. To just say that the producer can use antibiotics and then transition for 12 months without putting any limits on that, whether it’s a one-time use or a herd conversion, would really open the door to farms that could afford to continue to feed organic feed to animals for 12 months after giving them antibiotics and would allow them to take cows in and out of organic production. This was never the intent of the law, or at least it wasn’t the intent of the organic community in its approach to organic. Again, there is a rule change that is needed, but a directive of the kind that was issued was a far cry from what anyone in the industry would have supported.
The fish meal is another issue that had been discussed among the NOP staff and the NOSB, but the issue was not whether fish meal should or shouldn’t be used because the rule actually says that it can be used as a supplement. The issue that was being discussed in the industry and the NOSB was whether there be a limit in the percent of feed in which fish meal would be able to be used as a supplement. In other words, what is the definition of a supplement and which animals should be allowed to get fish meal. The other issue was, what about the synthetic preservatives that are commonly used in fish meal products? Those preservatives have not been reviewed for the National List. So these were all the issues we were grappling with, and then to get a directive that ignored these issues and stated that producers could use fish meal because it is “natural” was another simplistic proclamation for a complex issue that was already in stages of discussion.
The directive that was issued a week after the guidance documents pertained to the use of inerts in pesticides for organic crop production. This was a surprise because there was an assumption in the law, in the rule and in practice that inerts needed to be identified in products that were used in organic production. That way the producer would know if inerts are categorized under List 2 or 3, which are allowed in conventional but for organic they are questionable and need to be identified, followed by a determination about the level of toxicity and other factors, to know whether those inerts are allowed for use. The directive essentially stated that if you try but you can’t find out whether the inert is allowed, you can go ahead and use it and it will be noted in your farm plan and certification. And further, you’re not going to lose or be denied your certification because of it, even if at some point in time you figure out that it isn’t allowed. The producer can stop using it at that point and it won’t change the products sold as organic or the certification status of the farm.
It is very difficult for farmers to figure out what inerts are in the products they use for their crop production because companies are not obligated to tell the buyer what those inerts are, which limits the base of knowledge. Perhaps this hardship or difficulty point of view was the motivation for the NOP directive, and although compelling, no one ever said that maintaining organic standards of production was going to be easy. There are two sources of information that exist to assist organic farmers with this very information. The first is the Organic Materials Institute Review (OMRI) brand names list, which does review the inerts under confidentiality agreements and posts the names of brand-name materials that meet the requirements of the OFPA and the NOP rule. The other is the U.S. Environmental Protection Agency (EPA)’s voluntary registration list for brand-name materials that they review for compliance with the NOP. Farmers can go to one of these two sources and look to see if the product they want to use is listed or they can tell their suppliers to get on one of these two lists.
We were very surprised with the rapid decision made by Secretary Veneman to rescind the NOP guidelines and directive on May 26. When OTA realized that NOP administrators were determined that they had authority and the legal responsibility to issue these clarifications to the rule and were unlikely to change their position, we decided to send the Secretary a letter from the trade association. The letter pointed out our industry’s dissatisfaction with how the process occurred and the negative impact that these policy and rule changes would have on the industry. Our expectation was that we would have to write to Secretary Veneman several times and insist on a meeting with her. At the same time, we were working with Senator Leahy’s staff and staff in the House of Representatives to circulate “Dear Colleague” letters that senators and representatives could sign, urging the Secretary to review the situation and take some action. That letter had not yet been sent to the Secretary and the press coverage had just begun to bubble up when she announced her decision at the end of a press conference that was focused on a completely different subject.
It was excellent that the NOP changes were rescinded because it ensures that businesses won’t move too quickly to incorporate unnecessary changes in their processes or marketing plans, and prevents the erosion of consumer confidence in the organic label.
The NOP administrative staff met with NOSB Policy Development Committee members, industry representatives and others on June 9. Several commitments were made by NOP at the meeting, including accepting comments from the public on the four retracted statements. Also, USDA has agreed to review and respond by the end of July to a proposal from NOSB about procedures for improved collaboration. OTA will monitor the progress of these commitments and keep the industry informed.
OP: What are the near-term challenges facing the organic industry, and why?
DiMatteo: I think that supply and demand will remain a challenge for organic processors in the near term. We also appear to be entering a phase in which the population size of consumers who most frequently buy organic and most frequently try new products is maxing out. As a result, we need to bring in the next level of consumers, those who are buying infrequently, and move them into the frequent buyer category where they will try new product introductions or buy products with organic ingredients that are outside of their usual category purchases. This will take more education, marketing and advertising to get more information that supports the health benefits to the consumer.
Information about the health benefits of organic is not easy to come by, however. The Organic Center for Education and Promotion was established two years ago to gather this information but it is careful, deliberative, long-term work. So there is a challenge in messaging that is going to bring the mid-level organic consumer to a higher level, and even more difficult will be attracting those who are not buying organic today into purchasing organic products. At the same time, we have to keep market growth at such a level as to support farmers who are converting their operations to organic. We want more conversion to organic agriculture for the important environmental and public health reasons, and we have to make sure the growth is strong enough for those to keep their farms in organic, as well as attract others to convert acreage to organic production.
In addition, we are beginning to reach a stage in the industry where all the others issues surrounding agricultural policy and economics are going to affect us. The organic industry has been somewhat segregated with farm price premiums and premiums paid at retail, a relatively good supply-and-demand balance and support for domestic organic production. Examples of these emerging challenges include domestic organic production competing with international organic production; domestic brand products competing with international brand products in the marketplace; price pressures flowing throughout the industry (i.e., farmers suffering the most for their percent of the economic growth); and trade related issues that may have nothing to do with differences in organic standards between countries but rather having to do with controversies between governments or bans on certain products, regardless of whether they are organic or conventional. Similarly, another issue is the application of genetic engineering (GE) in agriculture. We need to be aware of where GE is headed in terms of expansion, contraction, liability and labeling.
As we mature as an industry, our challenges will grow beyond those of keeping the integrity of the organic standards.