USDA kills the proposed organic checkoff program

The USDA issued a preliminary notice Friday that kills a proposed organic checkoff program that would have raised money to fund research and marketing for organic food products. The Agricultural Marketing Service cited “uncertain industry support for and unresolved issues with the proposed program” as its rationale for the decision. The proposed checkoff program had been controversial in the organic food industry.

The Organic Trade Association, which was the primary architect of the checkoff, said in a statement that USDA’s decision “reflects a pattern of holding back forward progress on organic.” Laura Batcha, the association’s CEO and executive director, said: “If there was ever a need for an organic checkoff, it is now.” She cited USDA’s recent termination of a proposed rule strengthening animal-welfare standards for organic producers as evidence of organic egg and dairy sales “flattening.”

A year after the 2014 farm bill enabled the creation of checkoff programs beyond a single commodity, OTA filed the proposal for a checkoff. It would have applied to certified organic producers and retailers, raising $30-$40 million for marketing, research, and promotion, according to an OTA estimate in 2015.

A proposed rule for the organic checkoff was published in January 2017, and USDA collected comments for three months. AMS said it received over 15,000 comments during that time, which “disclosed divergent views within the organic industry.”

The proposal was controversial from the start, with some small producers taking issue with its threshold of $250,000 in annual gross revenue for paying into and voting in the program. Among the concerns expressed during the public comment period were that the checkoff would have a “disproportionate impact on high value commodities as assessments would be tied to sales value.” Other critics weren’t sure “whether organic promotion is possible without being disparaging to other agricultural commodities.”

Patty Lovera, assistant director of Food & Water Watch, said, “This is how the [comments] process is supposed to work.” She notes that the checkoff program “would have been a very tough thing to run,” complicated by the proposal’s aim to “[apply] one checkoff to every organic product.”

One of the problems that drove OTA to propose the checkoff is a lack of funding for research in the organic sector. In her statement, Batcha noted that “organic research funding is uncertain because it is tied to the unpredictable fate of the Farm Bill.” The 2014 farm bill mandated just $20 million a year for organic research, which advocates hope to boost to $50 million in the coming farm bill.

Lovera agrees that the underfunding of organic research should be addressed. “No one disputes that organic needs more research,” she says. But the tension in the organic community, she notes, “was whether checkoff is the right tool for that job.”

Producers of 22 commodities pay mandatory taxes into their commodity-specific checkoff programs, which fund research and generic marketing campaigns for those commodities. Several checkoff programs are controversial among farmers, who say the programs benefit the largest producers and not smaller, independent, or specialty operations. In Montana, ranchers have succeeded in halting collection of a mandatory beef checkoff assessment, shifting instead to an opt-in system.

There have been several legislative proposals to amend the checkoff program. In 2017, members of Congress introduced both the Opportunities for Fairness in Farming Act, which would require greater transparency from checkoff programs and prohibit anti-competitive behaviors, and the Voluntary Checkoff Program Participation Act, which would prohibit mandatory participation in checkoff programs. Over 80 farm and rural organizations have declared their support for the bills.

And last week, Reps. Earl Blumenauer, an Oregon Democrat, and Dave Brat, a Virginia Republican, introduced an amendment to the farm bill that would prohibit anti-competitive, unfair, or disparaging activities by checkoff programs.