The National Organic Program: An Opportunity for Industry

Sales of organic foods reached approximately $5.6 million in the United States last year, up from $4.7 million in 1999, signaling consumers’ willingness to buy organic. Organic sales in the European Union, the largest market for organic food outside the U.S, reached approximately $14 billion last year, achieving a yearly growth of nearly 25% over the past ten years. The Natural Marketing Institute reported that 43% of the general U.S. population consumed organic foods in 2000. Changes in agricultural practices, consumer health perceptions and lifestyle, and marketing strategies in the market have prompted multinational corporations and small business operators to invest in the “organic” industry.

The Organic Foods Protection Act (OFPA) of 1990 mandated the establishment of an organic certification program for farmers and handlers of agricultural products produced using organic methods prescribed by OFPA. April 2001 marked a decade of effort by the U.S. Dept. of Agriculture and input from the Organic Materials Review Institute and the Organic Trade Association to implement the National Organic Program. In February 2002, USDA will announce accredited certifiers, who must meet all of the requirements of the Act, including but not limited to accreditation fees, administrative and personnel requirements, document retention, and conflict-of-interest restrictions.

Implementation of this program may provide benefits to consumers, producers, handlers, and certifiers. Consumers who seek certified organic foods will be protected from false and misleading organic food labels, and possibly be exposed to a broader variety of organic foods. Major food manufacturers are working with organic farmers, domestic transitional growers, and international food importers to meet the growing organic food market for raw materials and finished products.

For producers and handlers, certification means uniformity of standards, consistency among certifiers, and reduced fraudulent products. Accreditation should reduce the risk of restricted domestic and international markets, thus increasing access to these markets and potentially improving the importation of organic foods to the U.S.

Imposed personnel training and administrative costs require further consideration. The certifier training and certification process involve multiple steps: application, inspection, ingredient management documentation, appropriate product storage and labeling, and acceptable sanitation practices:
• A food company requesting certification must contact a certifying agency and submit a “reasonable” application fee. The new legislation provides first-year estimated certification costs for the major certifying agencies, such as Oregon Tilth, California Certified Organic Farmers, and Farm Verified Organic.

• Application materials must be reviewed, and a trained inspector must perform an on-site inspection. All product formulations and ingredient documentation must be reviewed to ensure that each new product meets USDA labeling requirements.

• Storage of organic ingredients and finished products must also be documented to ensure that there is minimal risk of environmental contamination.

• Water analysis reports, when applicable, must be maintained, regardless of water sourcing.

• Packaging and labeling information must be provided in accordance with the national regulations.

• Cleaning and sanitizing protocols must be articulated in the form of standard operational procedures to ensure that line cleaning and sanitizing occur prior to organic product processing.

• Pest management protocols must include all measures taken to prevent contamination of organic ingredients and finished products.

• Detailed audit tracking is required for all organic ingredients and their quantities for each certified organic product. Annual on-site inspections will be conducted for each certified operation.

The National Organic Program provides a list of all allowed and prohibited substances for organic crop production, organic livestock production, and organic processed food products. One challenge, however, is enforcement of these ingredient standards as the regulatory agencies face continued lack of resources and changes in priorities.

The new law clearly articulates labeling requirements for organic products. Certified organic product that is 100% organic can be labeled as “100% organic,” with optional USDA and certifying agent’s seals. A product that is 95% organic can be labeled “organic,” with optional USDA and certifying agent’s seals. A product with 70–95% organic ingredients can be labeled “made with organic ingredients,” with an optional certifying agent’s seal. A product with less than 70% organic ingredients is prohibited from making any reference to the organic content of the product and using the USDA and certifying agent’s seals.

This new legislation is an opportunity for the food industry to reconnect with a growing number of American and international consumers demanding certified organic foods.

by JOE MONTECALVO
Professor of Food Science & Nutrition
California Polytechnic State University