"Everybody's wrong everybody's right Someone must be wrong when someone else is right.” Sham 69, That’s Life (1978)
In a decision handed down January 26th by the U.S. Court of Appeals (1st Circuit), three provisions of the National Organic Program (NOP) final rule were judged “inconsistent with the Organic Foods Production Act of 1990 (OFPA).” This ruling caught most of the industry by surprise and has the potential to change the organics industry as we know it today.
The ruling followed an original complaint filed by Arthur Harvey, an organic blueberry farmer and NOP organic inspector, on October 23, 2002, just two days after the final rule had become fully implemented.
In the nine counts of his original suit, Harvey challenged the validity of the final rule that the U.S. Department of Agriculture (USDA) wrote in order to implement OFPA. He asserted that various provisions of the NOP rule were “arbitrary, capricious and contrary” to law. U.S. Magistrate Judge Margaret Kravchuk eventually dismissed all counts on January 8th, 2004.
Harvey and his team—which included the Organic Consumers Association (OCA) and Public Citizen—appealed seven counts from his original nine to the First Circuit. On January 26, 2005, Harvey “won” on the following three counts:
- Count 1: The NOP final rule (the Rule) improperly provides for a blanket exemption of non-organic products (e.g., cornstarch, carob bean gum, kelp) “not commercially available in organic form” from review for inclusion in the National List.
- Count 3: the Rule’s provisions permitting 38 (was 36) so-called synthetic substances (e.g. vitamin C, baking soda, lecithin) in processing contravenes OFPA.
- Count 7: the Rule’s provisions allowing dairy animals being converted to organic production to be fed 80 percent organic feed for the first nine months of the year prior to the sale of their products as organic contravenes OFPA, “which requires dairy animals to be fed 100 percent organic feed for 12 full months prior to [their sale] as organic.”
The First Circuit remanded the first count back to the District Court, in Boston, to decide whether the blanket exemption clause should stand, and it reversed counts three (synthetic substances in organic processing) and seven (dairy herd conversion feeding requirements) in favor of Harvey.
Reaction to the ruling
Given what represents a virtual elimination of “synthetic” ingredients from organic food production, and a—by all accounts—disincentive for conventional dairy farmers to convert to organic methods, I asked Katherine DiMatteo, the executive director of the Greenfield, Mass.-based Organic Trade Association (OTA) what she thought of the ruling:
“OFPA wasn’t created to codify an embodiment of ideal purity in food production that would appeal only to a rarified, niche market,” DiMatteo explained. “It also wasn’t cavalierly decided what [synthetics] would be allowed.”
“What I feel very strongly about was that this was agreed to by all—there was consensus. We all moved forward together in good faith to ensure that the regulations were acceptable, keeping in mind that refinements could follow through ongoing meetings and public comment.”
George Siemon, CEO of Organic Valley in LaFarge, Wisc., said that, “Although the law was not perfect, it was darn good.”
“We worked very hard, and built this industry inch by inch. Now this ruling comes along, which I feel has dealt a real blow to the stability of organics.”
Ronnie Cummins, executive director of the Little Marais, Minn.-based Organic Consumers Association (OCA), had a different take: “America’s 30 million organics consumers want very strict standards—products that are produced with integrity. OFPA very clearly stated certain standards—USDA arbitrarily changed things.”
Cummins is concerned, however, about the danger for stricter standards - without more assistance to organic farmers, especially dairy farmers—to have a negative impact on the category.
Up until now, the regulations provided that, for the first nine months of the year, dairy herds being converted to organic must be fed a minimum of 80 percent organic feed, and 100% organic feed for the final two months—essentially a “one-time exception for conversion of a whole dairy herd from conventional to organic production” (USDA brief).
“If we permanently lose the dairy herd conversion provision, it will take 400 percent more feed and cost farmers 400 percent more,” cautions Siemon. “It will also probably force farmers to pre-commit to conversion possibly a year earlier, which could really discourage family farms from converting.”
“We can’t tighten up standards without providing real subsidies to promote organics and to help farmers,” agreed Cummins. “Today there’s no incentive and no help for organic farmers, especially dairy farmers,” Cummins added. “We need a solid program to encourage conversion to organic.”
The USDA now needs to determine its next steps, in consultation with the U.S. Department of Justice (DOJ) and the Solicitor General of the U.S. The USDA has until March 14th to file a re-hearing petition (typically a 15-page brief). USDA has two ways to do this. It can go back to the same panel of three judges, or it can seek an en banc hearing with all judges on the Circuit, with the latter approach (en banc) being what the government is considering at the moment, according to one DOJ attorney with whom I spoke.
If USDA does not file a petition, the First Circuit has to issue a mandate seven days after March 14th for the USDA to comply with the ruling. The mandate can be stayed for up to 90 days, however, if a writ of certiorari is filed so that the matter can be considered by the Supreme Court, an unlikely route.
When I asked Harvey if he had any regrets as to how everything has turned out, he said: “I don’t disagree with the ruling but I got more than I asked for—I asked for half a loaf and I got three loaves instead.”
“Of course it’s all embarrassing, and the timing is difficult for the industry, but I didn’t create the illegalities in the rule. The purpose of my lawsuit had nothing to do with hurting dairy farmers but everything to do with synthetics in processed food.”
When asked if he has reached out to industry on this, Harvey said, “We’re talking about this thick and fast and trying to come up with a friendly compromise.”
In the meantime, notes DiMatteo, “Since the bar is now set so unfairly high, those larger companies which were entering the category will now have a disincentive to go for certified [organic] and an incentive to actually go for ‘Made With Organic Ingredients,’ a much lower standard that only requires 70 percent organic ingredients but which may be indistinguishable from ‘Certified Organic’ in the eyes of most consumers. I ask you: ‘Who has won’?”
Siemon had this to say: “We’re reaching out to see if we can build a consensus among trade and consumer groups, and I think we’re honestly not that far off. I’m extending my hand forward, and I’m really hoping that we can work through our differences over the next 18 to 20 months and find a solution that strengthens the category and inspires consumer confidence.”
“If the purpose was to show the USDA that they can’t step outside of the law, great--now where do we go?,” asked Siemon. “The community has now been divided at a very dangerous time politically, not the best time to be opening up and tinkering with the [organics] law.”
So, “Who won?” and “What now?” are really the key questions currently, questions to which no one has a definitive answer yet, least of all the USDA, which issued “no comment” at press time.
Few would dispute, though, that expeditiously finding common ground would be in the very best interests of all concerned, and that if Congress were to reallocate farm subsidies to help organics and farmers—not part of this suit—that this could be the silver lining within this cloud that’s now drifting overhead.