“Got Milk” and “Beef It’s What’s for Dinner” are just two of the now iconic advertising slogans which resulted from USDA mandatory checkoff programs. Following the Organic Trade Association’s proposal to the USDA, a mandatory checkoff may be coming to the organic industry (a copy of the OTA’s proposal to the USDA is available here). “The organic industry in America is thriving and maturing, but it is at a critical juncture,” Laura Batcha, CEO and executive director of OTA, said in a statement. The meaning of USDA’s organic seal is not clear to many consumers and organic production is “not keeping pace with the robust demand,” Bacha said. “An organic check-off program would give organic stakeholders the opportunity to collectively invest in research, build domestic supply and communicate the value of the organic brand to advance the entire industry to a new level.”
An organic checkoff could raise an estimated $30 million a year for research and promotion. The basics of the program proposed by OTA include:
- The Check-off Board, with 16 voting members and 17 seats total, would be made up of 50 percent producers and 50 percent handlers.
- Producers will select their regional representatives through direct balloting.
- A referendum is required every seven years to decide whether or not to continue the program. Producers, processors and suppliers who have opted in to the program, will have one vote per organic certificate.
- Every single certificate holder subject to an assessment will have a direct vote – there is no bloc voting.
- Assessments would be made throughout the value chain on producers, handlers and processors, but “double assessments” on organic inputs will not be made. For instance, one-tenth of 1 percent of handlers’ net organic sales (gross revenue minus the cost of certified organic ingredients) will be assessed, while primary producers will be assessed one-tenth of 1 percent of their net profit (gross revenue minus the cost of organic seed, feed and labor costs).
- Organic producers would have the option of paying an assessment based on Net Organic Sales or Producer Net Profit, whichever they prefer. If they also produce a conventional product and are assessed through its check-off, they may choose, per federal law, which program they opt-in to.
- Farmers and handlers with gross organic revenue below $250,000 will choose whether or not to pay into the program.
- At least 25 percent of funds would be earmarked for research and allocated, at least in part, according to what regional producers prioritize. Twenty-five percent of the funding would be discretionary and 25 percent would go toward information services and technical assistance that expand domestic production.
- All of the research, inventions and innovations resulting from organic check-off programming would remain in the public domain.
Not everyone supports an organic checkoff. “I am very skeptical regarding the creation of a USDA-appointed Organic Research and Promotion Board,” says Jim Riddle, a former organic inspector and past chair of the National Organic Standards Board. “I am hesitant to support the creation of any new organic-related bureaucracy by the USDA. It takes a lot of money to support the bureaucracy itself, and the appointment process is easily manipulated by those with money and political influence.” One major concern with an organic checkoff is the vast variety of products encompassed within the certified organic label. All other USDA checkoffs involve a single commodity (e.g., milk, eggs, pork and beef).
The USDA’s Ag Marketing Service recently extended the deadline from June 19 to July 20, 2015, to submit alternative proposals for a national organic checkoff. Following the deadline for submission of proposals, the USDA will review the proposals and make one or more of the proposals available for public comment. The USDA will then incorporate the comments into an official proposal which will be published in the Federal Register followed by another period of public comment. The final step will be a referendum vote on the proposed checkoff by all organic stakeholders. A majority vote is required to approve and implement the plan. A vote is not expected until sometime in 2016.