Order Code RL31595
CRS Report for Congress
Received through the CRS Web
Organic Agriculture in the U.S.:
Program and Policy Issues
Updated November 3, 2005
Jean M. Rawson
Specialist in Agricultural Policy
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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Organic Agriculture in the U.S.:
Program and Policy Issues
Summary
Congress passed the Organic Foods Production Act (OFPA) in 1990 as part of
a larger law governing U.S. Department of Agriculture (USDA) programs from 1990
through 1996 (P.L. 101-624, the Food, Agriculture, Conservation, and Trade Act of
1990). The act authorized the creation of a National Organic Program within USDA
to establish standards for producers and processors of organic foods, and permit such
operations to label their products with a “USDA Organic” seal after being officially
certified by USDA-accredited agents. The purpose of the program, which was
implemented in October 2002, is to give consumers confidence in the legitimacy of
products sold as organic, permit legal action against those who use the term
fraudulently, increase the supply and variety of available organic products, and
facilitate international trade in organic products.

Due to the newness of the National Organic Program, it is difficult to gauge its
overall impact on the organic industry. However, a recent USDA report states that
the number of people seeking USDA accreditation to become certification agents
increased by more than 130% between 2002 and 2005, suggesting significant growth
in the number of farm and processing operations going into organic production.
USDA estimates that sales of organic foods rose from $6 billion in 2000 to $10.4
billion in 2003. The annual rate of market growth since 1990 has remained steady
at about 20%.
Policy issues affecting the National Organic Program since implementation
largely reflect the differences in interpretation among stakeholders of the language
and intent of OFPA and the actual operation of the program under the final rule. The
most recent issues concern, first, USDA’s efforts to write a new regulation governing
livestock access to pasture, and second, a lawsuit brought by a plaintiff who argued
that USDA’s administration of the NOP has been too lenient concerning the use of
certain synthetic ingredients in foods bearing the “USDA Organic” label, and too
lenient concerning the process for converting a dairy herd from conventional to
organic production. The final judgment in the case, which was issued in June 2005,
requires the Department to develop new rules based on the original statutory
language. The revised rules would become effective two years after the date of the
judgement, up until which time products made under the old rules would be allowed
into commerce.
Subsequently, however, conferees on the FY2006 USDA appropriations bill
attached a provision that amends the OFPA in such a way as to largely maintain the
NOP regulations as they were before the court decision. This action is likely to
worsen the rift between those who welcomed the court ruling because they felt it
would force USDA to write stricter regulations that would more closely reflect the
statute, and those (a sizeable consortium of major food companies) who predicted
that new rules written to satisfy the court decision might severely limit current and
future lines of organic products and economically harm all sectors of the industry.
This report will be revised as events warrant.

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Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Organic Sector Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Organic Foods Production Act of 1990 . . . . . . . . . . . . . . . . . . . . . . . . . 3
Congressional Action on Related Legislation . . . . . . . . . . . . . . . . . . . . . . . . 4
Cost-Sharing Start-Up Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Value-Added Producer Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Exemption from Check-Off Programs . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Livestock Feed Regulations Changed, Then Reversed . . . . . . . . . . . . . 6
USDA Regulatory Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Interpretive Issue Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Peer Review of Accreditation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Controversy over “Access to Pasture” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Court Ruling Controversy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

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Organic Agriculture in the U.S.:
Program and Policy Issues
Background
Organic farming, as defined in the final rule establishing the USDA National
Organic Program (NOP), is “a production system that is managed in accordance with
the [Organic Foods Production] Act and regulations ... to respond to site-specific
conditions by integrating cultural, biological, and mechanical practices that foster
cycling of resources, promote ecological balance, and conserve biodiversity.”1 This
definition indicates that organic agriculture is both an approach to food production
based on biological methods that avoid the use of synthetic crop or livestock
production inputs (spelled out in detail in the December 2000 rule), and a broadly
defined philosophical approach to farming that puts value on resource efficiency and
ecological harmony.
Interest in organic farming migrated from Europe to the United States in the
early 1900s. Beginning in the 1950s, as the U.S. public became more concerned
about the potential adverse environmental and public health effects of agricultural
chemicals and so-called “factory farming” methods, private research organizations
began to conduct scientific investigations into non-chemical and non-intensive
farming techniques, and a small but slowly increasing number of farmers began to
adopt organic production practices. Except for a brief period from about 1978 to
1981, USDA did not conduct any activities in support of organic agriculture until
OFPA required the Department to begin rulemaking to establish the National Organic
Program in 1990.
Organic Sector Statistics2
In 2001 (the most recent year for which data are available), there were 2.3
million acres of cropland and pasture under organic management in 48 states, with
half of that amount having been added between 1997 and 2001. Nationwide there
were about 7,000 certified organic operations in 2001, according to USDA. Fresh
produce is the largest sector of the organic industry, with California, Washington, and
Colorado having the greatest number of acres devoted to organic fruit and vegetable
production. Colorado, Texas, and Montana have the most acreage of organic pasture
for livestock. In the Northeast, Southeast, and Upper Midwest, small-scale growers
1 7CFR205.2.
2 USDA, Economic Research Service. Recent Growth Patterns in the U.S. Organic Foods
Market. Report No. AIB777. September 2002. Available online at
[http://www.ers.usda.gov/publications/aib777/].

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of organic fruits, vegetables, herbs, and flowers are a significant component of
individual states’ agriculture industries.3
Since 1990, sales of organic products have been growing 20% per year on
average. Estimated growth rates from 2005 through 2010 range from 9% to 16%
annually. The estimated value of sales of organic foods was $6 billion in 2000 and
$10.4 billion in 2003. In 2003, 47% of organic foods were sold through conventional
retailers, 44% through natural food stores, and 9% through farmers’ markets,
restaurants, exports, and other marketing channels.4 Despite sustained market
growth, organic food sales constitute about 1.8% of the total U.S. retail sales of food.
Various sources of export data estimated U.S. exports of organic foods at between
$125 million and $300 million in the 2000-2002 period.5 The biggest export market
is Canada; other major markets are Japan, the European Union, and other countries
in Asia.
The high growth rate in sales of organic products can be attributed in part to the
higher prices that organic producers and processors receive for their products,
according to USDA economists. They speculate that part of the price premium may
be due to higher production costs and to higher demand relative to supply. For the
2000-2004 period, the annual average farmgate price premiums for fresh organic
broccoli and carrots fluctuated from 75% to 133% above the prices of conventionally
grown broccoli and carrots, according to ERS. Price premiums for the two
vegetables at the wholesale level never went below 125% in the same period.6 The
ERS study goes on to say that:
Laws of supply and demand, however, make it unlikely that price premiums
contributing to higher profits and market growth can coexist over the long run:
as long as higher profits exist, new suppliers will enter the market, and once
market supply increases faster than demand, price premiums and the
commensurate level of higher profits are likely to decline.... Many organic
industry participants and observers believe that the price premiums ... need to
decrease if organic foods are to penetrate much beyond the 2- to 3-percent level
into the mainstream.7
The consumer studies that ERS reviewed did not permit any clear estimate of
future demand for organic products. The studies showed that price, size, packaging,
appearance, and concerns about health and nutrition, taste, food safety, and the
3 For a detailed graphic representation of the distribution of organic crop and pasture acreage
and number of operations per state, see [http://www.ers.usda.gov/Amberwaves/Feb03/
pdf/indicators.pdf].
4 USDA. Economic Research Service. Price premiums hold on as U.S. organic produce
market expands. Report VGS-308-01. May 2005. Available online at
[http://www.ers.usda.gov].
5 Ibid.
6 Ibid.
7 Ibid.

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environment all play varying roles in consumer decisions to buy organic food.
Surveys on race, ethnicity, and income levels showed significant diversity.8
The Organic Foods Production Act of 1990
Congress passed the Organic Foods Production Act (OFPA) of 1990 (Title 21
of P.L. 101-624, the Food, Agriculture, Conservation, and Trade Act of 1990; the
1990 farm bill) with widespread support from organic industry groups, the National
Association of State Departments of Agriculture, and other farm and consumer
groups. The organic industry petitioned Congress to draft the act in the late 1980s,
after it had been frustrated in its attempts to come to an internal consensus on
production and certification standards. The industry maintained that federal
standards would reduce consumer confusion over the many different state and private
standards then in use, and would promote confidence in the integrity of organic
products over the long term. Manufacturers of multi-ingredient organic food
products stated that uniform standards would facilitate labeling. Others held that
regulations would help the organic industry expand product lines and increase
marketing opportunities. Industry analysts asserted that a consistent U.S. organic
standard would facilitate access to a potentially lucrative international organic
market.
The Organic Foods Production Act of 1990 authorized a National Organic
Program to be administered by USDA’s Agricultural Marketing Service (AMS). The
act established a 15-member National Organic Standards Board (NOSB) to “assist
in the development of standards for substances to be used in organic production”
(referred to as the “National List”) and to “provide recommendations to the Secretary
regarding implementation.”
Under the program, producers, processors and handlers who wish to market their
products as organic are required to follow production practices as spelled out in detail
in regulations (7 CFR 205). USDA accredits private and state certification agents,
who visit producers, processors, and handlers to certify that their operations abide by
the standards; they conduct annual reviews to verify continued compliance. It is
illegal for anyone to use the word “organic” on a product if it does not meet the
standards set in the law and regulations.9 The presence of the “USDA Organic” seal
on a product means it is 95% or more organic. Labels on products having 70% to
95% organic content can say “made with organic (specified ingredients or food
groups),” but cannot carry the seal. Foreign organic producers and handlers wishing
to export products to the United States may be certified by a USDA-accredited
certification agent in their own country, if there is one; or USDA may accept
8 Ibid.
9 Farms and handling operations that sell less than $5,000 a year in organic agricultural
products are exempt from certification; however, these producers and handlers must abide
by the national standards for organic products and may label their products as organic.

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certification by agents accredited by a foreign government; or, USDA may negotiate
an equivalency agreement with another nation’s organic program.10
The regulations under the OFPA are intended to set uniform minimum standards
for organic production. States may adopt additional requirements after review and
approval by USDA. Furthermore, private organic organizations are permitted to affix
their own labels in addition to the USDA label, indicating that the product meets their
standards as well as the national ones. The private label may indicate only that the
organization’s standards are in addition to (but not superior to) the national standards.
AMS reviews certification agents for re-accreditation every five years. AMS
enforces the regulations by revoking or suspending a producer’s certification or an
agent’s accreditation if a satisfactory solution to a program violation cannot be found.
The NOP final rule became effective on February 21, 2001; the program itself
became fully operational on October 21, 2002. In the first step toward
implementation, USDA accredited private and state certification agents, who in turn
began to certify organic producers and handlers according to the standards found in
7 CFR 205. After October 21, 2002, all products sold as organic had to be in
compliance with the regulations and carry the “USDA Organic” seal.
Congressional Action on Related Legislation
Cost-Sharing Start-Up Costs. Although the OFPA requires the cost of the
National Organic Program to be fully supported by user fees collected for USDA
accreditation and certification services, Congress has appropriated funds on several
occasions to help the program in its initial stages. The FY2001 USDA appropriations
act (P.L. 106-387) contained $639,000 to cover accreditation costs. In FY2002,
under the Agricultural Management Assistance Program authorized by the Federal
Crop Insurance Act (P.L. 106-224), Congress made $1 million available to state
agriculture departments in 15 designated states to help defray the costs of
certification for small-scale producers and processors.
The 2002 farm bill (P.L. 107-171, the Farm Security and Rural Investment Act),
which was enacted in May 2002, also provided additional funds to support program
start-up. Title X of the farm act gave USDA authority to continue to defray the costs
of producers and handlers seeking organic certification through FY2007, and
authorized a one-time, mandatory transfer of $5 million from the Commodity Credit
Corporation (CCC) to establish a national organic certification cost-share program
under the NOP. Federal funds may not cover more than 75% ($500 maximum) of
a producer’s or handler’s costs for becoming certified. The transfer occurred in
10 A July 2005 audit by the USDA Office of Inspector General (OIG) states that USDA had
41 accredited certification agents in foreign countries. The report also found that as of
August 2004, AMS had negotiated only one equivalency agreement with a foreign country
(Japan). The OIG recommends implementation of internal operating procedures “to assure
that the NOP is achieving its intended objectives to ensure that organic products meet
consistent, uniform standards.” The audit report is available online by going to
[http://www.usda.gov/oig/audits.htm] and following the links from “View Audit Reports and
News Releases,” to the listing by “Agency Subject of Report.” It is under the Agricultural
Marketing Service, July 2005.

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FY2002 and remains available until fully expended, which is expected to occur in
2006.11
Value-Added Producer Grants. The rural development title of the 2002
farm bill established a competitive grant program to promote research on the
development and marketing of value-added agricultural products, to be funded
through an annual transfer of $40 million from the CCC to USDA through FY2006.
Projects on organically produced commodities are eligible for these grants. Congress
authorized $40 million in mandatory CCC funds to be made available each year
through FY2007, but the actual funding levels so far have been volatile. The
program received $50 million in mandatory funds in FY2003, consisting of $40
million in unspent funds from the first CCC transfer in FY2002 and $10 million of
the $40 million CCC transfer for FY2003. In FY2004 and FY2005, appropriators
prohibited the spending of the mandatory funds and instead appropriated about $15
million annually.
Research. The research title of the 2002 farm bill renewed expiring authority
for a competitive grant program to support research and extension activities on
organic production, processing, and international marketing. The conference report
also added language calling for an emphasis on classical and advanced research on
genetics to improve organic crops; research to identify the marketing and policy
constraints on the organic industry; and expanded on-farm research. The act
authorized $3 million to be transferred annually from the U.S. Treasury to USDA,
beginning in FY2003, to support this research.12 Other provisions in the research
title: (1) require USDA’s Economic Research Service (ERS) to gather and maintain
segregated data on the production and marketing of organic agriculture; and (2)
require ERS and the National Agricultural Library to make it easier for U.S. organic
producers, researchers and extension professionals to obtain the results of organic
research conducted in foreign countries.13
11 The CCC is a wholly owned government financing institution for USDA agencies that
administer mandatory programs, such as the farm commodity price and income support
programs for wheat, cotton, rice, and certain other crops; agricultural export subsidies; and
certain conservation and trade programs. CCC funds are considered mandatory funds that
must be made available for the purposes authorized. In practice, however, appropriators
sometimes prohibit or place restrictions on funding for mandatory programs in the annual
appropriations bill. A July 2005 audit of the NOP by USDA’s Office of Inspector General
(OIG) found that AMS has not been properly documenting its procedures for maintaining
and controlling cost-share programs, which makes it difficult if not impossible to monitor
the use of funds. AMS officials have promised to implement proper procedures by the end
of FY2005.
12 Information on Integrated Organic Program research grants are available on the
Cooperative State Research, Education, and Extension Service website at
[http://www.csrees.usda.gov/fo/funding.cfm].
13 ERS published a paper in August 2005 entitled, “Market-Led Growth vs. Government-
Facilitated Growth: Development of the U.S. and EU Organic Agriculture Sectors.”
Available online at [http://www.ers.usda.gov/Briefing/Organic/]. Congress has not
appropriated funds to date for a National Agricultural Library International Organic
Research Collaboration.

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Concerning the availability of production and marketing data on organic
agriculture, an official of the Organic Trade Association (OTA) states that many gaps
exist, and that the Economic Research Service still is relying extensively on external
data sources for much of its information. As of September 2005, a comprehensive
USDA survey of the entire organic sector has not been conducted. USDA’s
Agricultural Marketing Service has not yet begun to provide market news on the
organic sector, which would permit up-to-date price discovery. Separate export and
import data for organic products are not being collected at the borders. These
deficiencies hamper business planning and expansion, complicate crop insurance
premium-setting and loss payments, among other issues, according to OTA.
Exemption from Check-Off Programs. The 2002 farm bill contained a
provision concerning issues related to the organic industry and USDA commodity
research and promotion programs. These are programs that support generic
advertising to promote an agricultural product (e.g., the milk mustache ads). They
are funded by assessments that producers, processors, other handlers, and frequently
importers, are required to deduct from revenue at the time of sale (thus they usually
are called “check-off” programs). Congress has passed many laws authorizing
national check-off programs for various farm commodities; there currently are 15 in
operation. (For more information on check-off programs, see CRS Report 95-353,
Federal Farm Promotion (“Check-off”) Programs, by Geoffrey S. Becker.)
The Senate version of the 2002 farm bill (S. 1731) would have established a
check-off program for organic commodities, but the provision was not adopted in
conference. The enacted bill instead included language exempting producers and
handlers who have a certified 100% organic operation from having to pay
assessments under any existing commodity check-off programs in which they
currently participate. For example, a producer who grows peaches on an entirely
organic farm that has been certified under the NOP would be eligible to be exempted
from paying an assessment under the marketing order for peaches and nectarines,
when he sells his crop to a wholesaler or other handler. The proposed rule on the
exemption for producers appeared in the Federal Register in April 2004 (69 FR
22690). Final rules for both producers and handlers of organic commodities were
published in January 2005 and became effective in February 2005 (70 FR 2744 and
2763, respectively).
Livestock Feed Regulations Changed, Then Reversed. The
conference report accompanying the Consolidated Appropriations Resolution for
FY2003 (P.L. 108-7/H.J.Res. 2; H.Rept. 108-10; February 21, 2003), contained a
provision that made a controversial change in the National Organic Program. Section
771 of the law effectively deleted the NOP standard that requires livestock and dairy
producers to provide 100% organically produced feed for their animals in order to
qualify for organic certification. It further provided that, if USDA surveys found that
in some geographic areas organic feedstuffs cost more than twice what
conventionally produced feed cost, then livestock and dairy producers in that area
could be certified as organic without having to meet the NOP standard.
Reaction to this provision from several Members of Congress, the organic
industry, and a few large food processors who had already committed resources to
complying with the original rule, was swift and negative. Senator Leahy, who

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championed OFPA and its inclusion in the Food, Agriculture, Conservation, and
Trade Act of 1990, circulated a “Dear Colleague” letter on February 12, 2003, urging
Senators to remove Section 771 from H.J.Res 2, but without success. On February
26, 2003, Senator Leahy introduced S. 457, the Organic Restoration Act of 2003, and
on February 27, Representative Farr introduced H.R. 955, a bill to repeal Section
771. The conference report accompanying emergency wartime supplemental
appropriations for FY2003, which the President enacted on April 16, 2003, contained
the language from H.R. 955 repealing the earlier action taken in P.L. 108-7 (Section
2104 of H.Rept. 108-76; P.L. 108-11).
USDA released the report on organic feed availability in June 2003. It states
that “ample acreage is available to provide more than enough feed grains to meet the
needs of organic livestock and broiler producers ... [and] with limited exceptions,
prices for organic poultry rations are not more than twice the prices of convention
poultry feed rations.”14
USDA Regulatory Activity
Interpretive Issue Statements. In April 2004, the National Organic
Program headquarters in USDA released “issue statements,” i.e., guidelines for
interpretation of program regulations in four areas. These were livestock feed,
livestock health, inert ingredients in approved organic pesticides, and the inclusion
of non-food items like lotions and cosmetics within the scope of the NOP. AMS
issued the statements administratively (rather than through the Federal Register).
Many program participants were immediately critical of the Department for not
giving the issue statements to the National Organic Standards Board for advance
review, since the critics viewed them as revisions of the regulations, not simply as
clarifications. USDA rescinded the issue statements in May 2004, and asked the
Board to provide feedback on them, which it did in October 2004.
Subsequently, on August 23, 2005, the Department issued a memorandum
reversing its original position on the “scope of program” issue.15 The memorandum
states that, if all standards for organic agricultural ingredients are met, then the
organic seal can be used on personal care products, supplements, and pet foods. This
reversal was prompted by a lawsuit that was brought against USDA after it released
the issue statement in April 2004 saying that nonfood organic products could not
carry the “USDA Organic” seal.
The sequence of events is at issue here, more so than the issue statements
themselves. The NOP is a new program covering a sector of U.S. agriculture that
wants to be perceived as decidedly different from conventional agriculture, which has
been covered by USDA marketing and regulatory programs for almost a century.
Unlike other marketing programs, the NOP regulations are much more prescriptive
14 USDA, Agricultural Marketing Service. Organic Feed for Poultry & Livestock:
Availability and Prices. Available online at
[http://www.ams.usda.gov/nop/prodhandlers/feedstudyjune2003.pdf].
15 Available online at [http://www.ams.usda.gov/nop/TodaysNews.html]; see August 24,
2005.

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regarding production and manufacturing practices, and NOP officials understandably
might still be learning how to deal with these new factors in a regulatory setting.
Thus it might be expected that NOP officials could on occasion take administrative
action without thinking it necessary to consult the National Organic Standards Board,
or might differ with the Board on the form and substance of a proposed regulation.
Situations of this sort were largely responsible for the Department’s taking 11 years
to publish an NOP final rule after OFPA enactment in 1990. Similarly, the National
Organic Standards Board and industry stakeholders might perceive program officials’
failure to consult the Board on how certain regulations should be interpreted as
dismissive of their input.
An audit report on the NOP released in July 2005 by USDA’s Office of
Inspector General (OIG) directly addresses these concerns.16 The report found that
“AMS has not established protocols for working with the National Organic Standards
Board or resolving conflicts with them,” and recommends that the NOP “establish
procedures for receiving, reviewing, and implementing recommendations from the
Board.” The report states that “AMS also needs to improve management controls for
administering the NOP,” and recommends that AMS “resolve and implement internal
operating procedures for such things as the resolution of complaints to govern
program operations.” The OIG made 10 recommendations in all. AMS officials
agreed with them and promised to implement solutions by the end of FY2005, or
publish draft procedures for public comment by the end of December 2005.
Peer Review of Accreditation. Section 2117of OFPA (7 CFR 205.509)
requires that a three-person panel periodically review NOP’s accreditation
procedures, site evaluation reports, and decisions, in order to determine their
adherence to the regulations. This part of OFPA has not been implemented to date
because the statutory language is vague concerning some basic issues; e.g., how to
find a sufficient number of experts in organic accreditation who themselves are not
USDA-accredited certification agents.
In lieu of the three-person panels, USDA contracted in 2003 with the American
National Standards Institute (ANSI), a private, non-profit organization that
administers the U.S. voluntary standardization and conformity assessment system
(part of a world-wide system commonly referred to as ISO 9000; ISO stands for
International Standards Organization).17 ANSI conducted a peer evaluation of the
NOP accreditation system and delivered its report in December 2004.18 It found a
number of discrepancies between NOP’s accreditation policies and procedures and
those outlined in ISO 9000. Furthermore, ANSI reported that it had difficulty
assessing the discrepancies because USDA has not fully documented the quality
system it uses to assess applicants for accreditation.
16 USDA, Office of Inspector General. Audit Report: Agricultural Marketing Service’s
National Organic Program. The audit report is available online by going to
[http://www.usda.gov/oig/audits.htm] and following the links from “View Audit Reports and
News Releases,” to the listing by “Agency Subject of Report.” It is under the Agricultural
Marketing Service, July 2005.
17 Notice was published in the Federal Register on August 13, 2003 (68 FR 48334).
18 Available online at [http://www.ams.usda.gov/nop/CertifyingAgents/ANSIReport.pdf].

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The question of how to implement the original statutory language remains to be
addressed by NOP officials and the National Organic Standards Board.
Controversy over “Access to Pasture”
In January 2005 a newspaper article about a Colorado organic dairy operation
raised a major controversy within the industry and among some public interest
groups.19 The article focused on a 5,300-cow organic farm where the animals were
fed almost exclusively on grain and allowed outdoors mostly for exercise.
The NOP regulation at the core of the dispute is 7 CFR 205.239(a)(1-2): “The
producer of an organic livestock operation must establish and maintain livestock
living conditions which accommodate the health and natural behavior of animals,
including (1)Access to the outdoors, shade, shelter, exercise areas, fresh air, and
direct sunlight suitable to the species, its stage of production, the climate, and the
environment; (2) Access to pasture for ruminants[.]”
The news article cites organic dairy producers who argue that the regulation
means that organic cattle must get some of their nutrition, as well as fresh air and
sunshine, from grazing on pasture. The Colorado operator maintains that his animals
have outdoor access, but that in an arid state like Colorado, providing sufficient
pasturage for all his cows to graze would be an insurmountable requirement.
At a February 2005 meeting of the National Organic Standards Board, members
discussed and recommended new language for 7 CFR 205.239, which it forwarded
to National Organic Program officials for approval.20 The emphasis in the revised
language was on allowing cows at the appropriate “stage of life” to graze pasture
“during the pasture’s normal growing season.” At the August 2005 Board meeting,
the NOP staff rejected the recommendation saying it lacked a “clear and concise
regulatory objective,” and asked the Board to rework it.21 It could be a year before
a proposed rule reflecting a revised NOSB recommendation could be published for
comment in the Federal Register, a delay that some speakers at the Board meeting
argued was unacceptable. A guidance document that the Board posted on its website
for comment in March 2005 is serving unofficially as an interim interpretation of the
current “access to pasture” requirement until a proposed revised standard can be
published.22
19 “Organic Milk Debate; Dairies dispute ‘organic’ values; Ex-hippie farmers contest
practices of big producers,” Chicago Tribune, January 10, 2005. See
[http://www.organicconsumers.org/organic/milk011105.cfm].
20 Minutes of February 28-March 3, 2005, NOSB meeting available online at
[http://www.ams.usda.gov/nosb/meetings/meetings.html].
21 Minutes of August 15-17, 2005, NOSB meeting available online at
[http://www.ams.usda.gov/nosb/meetings/meetings.html].
22 “NOSB Livestock Committee Recommendations for Guidance; Pasture Requirements for
the National Organic Program,” National Organic Standards Board, March 2, 2005.
Available online at [http://www.ams.usda.gov/nosb/meetings/meetings.html].

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The issue is sensitive because it involves the question of farm size. USDA
considers the NOP to be a marketing program that is size-neutral. On the other hand,
many in the industry hold that organic farming practices are an integral part of the
meaning of the term “organic,” particularly with respect to standards for the
treatment and feeding of livestock. Some observers argue that if the pasturage in
certain parts of the nation can support only small dairy or beef cattle herds, or none
at all, then such farms should be small or nonexistent in those areas. Others are
concerned lest the regulations become so prescriptive that they deprive producers and
processors of the opportunity to benefit from the expanding market for organic
products.
Court Ruling Controversy
In June 2005, a First Circuit Court sided with an organic farmer who had filed
suit against USDA claiming that several provisions of the final NOP rule were more
lenient than the underlying statutory language allowed.23 Specifically, the court
determined that certain “natural” substances not commercially available in organic
form had to be individually reviewed to determine their status for the National List
of Approved and Prohibited Substances before they could be used in organic-labeled
products. Second, the court determined that synthetic substances that heretofore had
been approved in the regulations and used in commerce could not be used in the
processing or handling of organic-labeled products. And third, it ruled that the
USDA regulation on converting a dairy herd from conventional to organic production
did not in any way reflect the statutory language and was thus invalid. The District
Court in this case set a one-year time frame for USDA to develop new regulations
and allowed another year beyond that (until June 2007) for the industry to come into
compliance.
Stark differences of opinion within the organic industry on the impact of the
court judgement became immediately apparent. Representatives of consumer groups
and some food retailing groups welcomed the decision. They maintained that
consumers consider the organic label to mean the absence of synthetic ingredients
and that the new, stricter regulations would reconfirm consumer confidence in the
OFPA as enacted. These groups have expressed strong opposition to resolving the
court decision issue by amending the OFPA.
Conversely, a large number of organic food manufacturers were apprehensive
that the ultimate outcome of the court decision would be to force the discontinuation
of hundreds of existing, organic-labeled food and beverage products, and/or end
manufacturers’ ability to use the “USDA Organic” seal, which commands premium
prices in the marketplace. These stakeholders supported the efforts of the Organic
Trade Association to have Congress effect a legislative solution to the issues raised
by the court decision.
In late September 2005, during floor debate on its version of the FY2006 USDA
spending bill (H.R. 2744), the Senate adopted an amendment requiring the Secretary
to conduct a survey to determine the impact of the decision and of various
23 Harvey v. Veneman, 396 F.3d 28 (1st Cir. 2005).

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approaches to addressing it, including amending the OFPA to effectively undo the
court’s action.
In late October 2005, conferees on the FY2006 agriculture appropriations bill
adopted a second provision in committee. The overall effect of this provision is to
change the statutory language to make moot the latter two of the three court holdings.
Specifically, the provision amends the OFPA: (1) to allow “natural” but non-organic
products to be used as long as they are subject to the National List evaluation
process; and additionally, to permit USDA to develop an expedited procedure for
approving the addition of such products to the National List for a limited time period;
(2) to remove the original language that generally prohibits the inclusion of synthetic
substances on the National List (although there are other requirements that must be
met); and (3) to provide a statutory basis for a new regulation on converting dairy
herds to organic that is related to on-farm production of organic feed and forage.
Conclusion
It will be necessary for USDA to write new regulations to address these three
areas. Barring further legislative changes, the new rules will be based on revised
statutory language. The history of the NOP, however, indicates the difficulty in
predicting the outcome of the notice and comment process. This area of public
policy may remain contentious, depending upon the ability of the organic
community’s diverse stakeholders to develop a workable consensus among
themselves on interpreting the OFPA. Additional debate on the statute could happen
when Congress begins consideration of the next farm bill, expected in 2007.
Hearings on various parts of a farm bill could begin in 2006.

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