Natural Foods Merchandiser

Politicking Muddles NOP

It sounds like the makings of a movie plot: A small group of legislators change the regulatory landscape of the organics industry—for at least the near term, and possibly for the foreseeable future—behind closed doors, under the cover of darkness.

But it's truth, not a tale.

One night in February, a House delegation to the appropriations committee inserted wording into the 3,000-page, $397.4 billion 2003 federal budget that effectively gutted the U.S. Department of Agriculture's National Organic Standard for certified livestock operations.

The last-minute language prohibits funding of enforcement of the part of the rule that requires organic meat and dairy producers to feed their animals 100 percent organic grain, unless the secretary of agriculture confirms organic feed is commercially available at no more than double the cost of conventional feed.

In a budget loaded with pork-barrel treats, this particular prize was won by Rep. Nathan Deal, R-Ga., for one of his corporate constituents, Fieldale Farms. Fieldale employees contributed $4,000 to Deal's last congressional campaign, according to the Center for Responsive Politics.

Fieldale Farms Corp., a Baldwin, Ga.-based poultry producer, has for years sought to modify the organic feed requirement for its chickens, claiming it was unable to source enough organic grain to feed its birds. Last spring, Fieldale Farms heavily lobbied USDA's National Organic Program to relax the 100 percent organic feed requirement for livestock, says Joe Mendelson, legal director at the Center for Food Safety. The NOP said no.

In the years prior to the NOP's October 2002 implementation, Fieldale also tried to market its chickens with an organic label—even though it admitted it was feeding its birds no more than 10 percent organic feed. Thwarted, the company eventually began marketing its Springer Mountain Farms and Readington Farmers Chicken brands with an "antibiotic-free" label.

Sens. Patrick Leahy, D-Vt., and Olympia Snow, R-Maine, and Rep. Sam Farr, D-Calif., have introduced legislation in their respective chambers to strike the new language from the federal budget bill. The Organic Trade Association also has urged its members to pressure Congress to strike the language.

Agriculture Secretary Ann Veneman sided with organic advocates saying the language "could weaken the national organic program."

Though she did not endorse the bill seeking to overturn the provision included in the budget bill, she did say it was "important to maintain a strong organic program that ensures the integrity of the organic label placed on consumer products.

"The best way to do that is by maintaining the organic standards as we implemented them in October 2002."

Although Leahy's bill may garner enough votes to overturn the offending language, organic industry members are sober about what it might mean if the organic rule remains compromised.

"I've begun to try and think about what the likelihood of this is in a Republican-controlled Congress," says Jerry McGeorge, cooperative coordinator at Organic Valley, one of the nation's largest organic dairy and meat producers. "Unfortunately, what I can say is that the supporters of organic agriculture in Congress, almost to a person, are Democrats. But I also don't see the organics industry taking this lying down. We'll work to activate the grass-roots network that we know is out there."

Repeat Performance
Few legislators or government officials dismiss the power of that network. In 1997, nearly a quarter of a million consumers let their displeasure be known about the USDA's ultimately unsuccessful attempt to allow genetically modified organisms to be used in organic agriculture practices.

Regardless of whether attempts to overturn Rep. Deal's language in section 771 of the Omnibus Appropriations Act prevail, industry retailers are adamant in their opposition to the change in the livestock feed standard and say they will stock only products from producers that abide by the original rules.

Supernatural chain Wild Oats Markets Inc. will boycott Fieldale and any other livestock company that markets its products as organic but does not use 100 percent organic feed. "We have a sausage producer that buys from Fieldale. It's a natural product, not an organic product, but we are going to tell them we won't buy their sausage if they use Fieldale products," Sonja Tuitele, director of corporate communications at Boulder, Colo.-based Wild Oats, said in February.

Wild Oats also is using signs in its meat and deli departments to inform consumers of its actions.

Whole Foods Market, the nation's largest supernatural chain, told the Los Angeles Times it also will not stock meat and poultry sporting the organic label unless the livestock was fed with 100 percent organic feed.

Both Wild Oats and Whole Foods have mounted a Web-based campaign urging their customers to lobby their legislators to help repeal section 771 of the Omnibus Appropriations Act.

Major manufacturers, including Organic Valley and Horizon Organic, have attempted to mobilize their customers to support repealing the budget language.

Mustard Seed Market, an independent organic and natural foods retailer with two stores in Ohio, also says it will not buy Fieldale Farms' products and will not allow anything other than 100 percent organic grain-fed meat to be labeled organic in its stores. "This will not stand," Mustard Seed's Philip Nabors says of the new language. "It will have to be overturned. We will bury them with letters until they overturn it."

Reaction from the rest of the organic industry has been equally strong.

Indeed, Richard Widmer, executive vice president of Cerro Gordo, Ill.-based Clarkson Grain Co., the largest organic feed supplier in the nation, asserts—as do virtually all organics industry members interviewed for this story—that the price of organic feed should have nothing to do with the organic certification process.

"It doesn't matter if the cost doubles or triples, what's critical is if you want to label something organic meat, it has to be fed with organic feed," Widmer says. "If the price is four times as much as conventional and the consumer is willing to pay it, then that's fine.

"The issue is that we have one group of people who want to profit from the organic movement. They have no intention of abiding by the letter or the spirit of the law," he says. "They want to keep their price slightly under the competition, and if they are buying their grain at half the price of organic, look at their excess profit."

Widmer also argues that loosening the organic standards has far-reaching negative financial consequences for the entire industry. Not only will it confuse and ultimately put off consumers, it will reduce demand for organic feed, which will hurt organic farmers.

Market Assurance
Before the implementation of the national standard for organic meat, supply exceeded demand and about 50 percent of the corn raised organically was sold at conventional prices. "Once we got the standard, it increased the demand, and the organic farmer not only had a market for his soybeans, but for his corn, too," Widmer says.

Widmer also points out that the credibility of the original USDA organic label brought such corporate heavyweights as Tyson Foods, the largest poultry producer in the nation, very quietly into the organic fold. "But if a national standard doesn't mean anything, they could pull out. They are too big to play games," he says.

Petaluma Poultry, which processes 200,000 organically fed chickens a week, also backs a strong national standard for livestock labeled USDA Organic and will continue feeding its birds 100 percent organic feed. Petaluma Vice President Randy Duranceau says Fieldale's argument that there is not enough organic feed to go around is bogus. "It's not true. There is plenty of organic grain out there. What they want is the best of both worlds. They will price right under us, but their cost of production will be half," he says.

In a worst-case scenario, if the language stands, the question then becomes how will the Department of Agriculture, when contending with a highly volatile grain market, determine when the price-doubling threshold has been met? "Is it enough," Organic Valley's McGeorge wonders, "to call one organic feed dealer? Or will there be some sort of attempt to do it on a regional basis and establish average pricing?"

Industry consultant and National Organic Standards Board Secretary Jim Riddle, who long has been cautioning industry vigilance against erosion of the national organic standards, worries that the newly inserted language may have even more far-reaching implications. "The wording in this bill says 'not more than twice the cost.' Does that set a precedent—that for any ingredient or seed where there is commercial availability it cannot be twice the price?"

Also, Riddle notes that if feed for meat and poultry that carries the USDA's organic label doesn't have to be 100 percent organic, then it may contain genetically engineered grain and animal by-products, both of which are prohibited by the national standards in different sections.

As a result of the new livestock feed requirement, the organics industry finds itself at a precipice. "We've really got to think through our reaction with a very long-term approach," Riddle says.

Bright Spot Out There
But despite the current crisis, Riddle also says, there is a bright spot for everyone involved in this $11 billion-and-growing industry. Interestingly, it's in the National Organic Program itself—which, because it came from the legislative branch, could not have stopped Fieldale Farms' end run to gut the livestock standard.

The glimmer is that the NOP for the first time has a dedicated compliance staffer. "Anyone who has a complaint or a concern can contact the compliance division for investigation," Riddle says. "At least now there is someone to call."

For a program that is funded at $1 million in the current approximately $73 billion Agriculture Department budget, perhaps that's the best the organics industry can hope for.

Nancy Nachman-Hunt is a Boulder, Colo., freelance writer and editor. She can be reached at [email protected].

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