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Organic industry check-off program proposed in Senate ag committee's farm bill

Organic industry check-off program proposed in Senate ag committee's farm bill
Bill also reauthorizes $20 mil' annually for Farmers Market and Local Food Promotion Program

by Sustainable Food News

April 27, 2012

The U.S. Senate Agriculture Committee Thursday voted 16-5 to approve its version of the 2012 farm bill, requiring the secretary of agriculture to conduct a feasibility study on an organic industry check-off program that would mandate industry fees to fund marketing, promotion and research projects aimed at boosting the value of the sector.

"Organic growers are not only helping to supply healthy products to our schools, families and communities, but these farmers are also making a major contribution to the American economy," said Senator Debbie Stabenow (D-Mich.), the committee's chairwoman.

The five-year farm bill, formally known as Agriculture Reform, Food and Jobs Act of 2012, is being praised for eliminating direct payments and subsidies to mega-farms, and reducing about $23 billion from the deficit by consolidating programs and cracking down on food assistance abuse.

The last farm bill was passed in 2008, and expires at the end of September. The measure now goes to the full Senate for consideration. Meanwhile, the House Agriculture Committee is holding eight hearings over the next several weeks and will draft its own version of the bill. In the past, House members have targeted cuts in organic.

Organic industry check-off in the future?

The Organic Trade Association’s board of directors approved in 2010 plans to develop a national check-off program for the industry so it can better educate consumers on the benefits of eating organic.

The funds collected would underwrite the type of commodity advertising campaigns that have proved successful, such as "The Incredible, Edible Egg," "Pork. The Other White Meat," and "Got Milk?"

Before joining OTA as its executive director in 2008, Christine Bushway worked for the American Egg Board to enhance national promotion of the Incredible Edible Egg consumer awareness campaign.

In a previous interview with Sustainable Food News, Bushway referred to promotion orders as essentially an industry’s “self-help program,” promoting it and what its members produce.

But rather than focus on specific products, OTA wants to use its advertising muscle on educating the consumer “about what organic delivers. We still know we have a confused consumer out there.”

There are 18 existing promotion orders, all of which promote a single commodity. And many members of the OTA already are already paying into industry promotion orders such as dairy, beef, and produce. For example, organic milk producers already pay the dairy promotion board about 15 cents for every 100 pounds of milk produced.

Problem is, OTA’s promotion order would have to cover multiple commodities, and one of the government’s stipulations about participating in a check-off program is no company can pay into more than one promotion order.

The provision in the Senate agriculture committee's version appears to allow all organic producers to opt out of payments to other commodity check-off programs.

If the committee's version of the farm bill survives in the full Senate and negotiations with the House, a blueprint for the proposed check-off program would be designed and the USDA would schedule an industry referendum.

The plan will probably need 60 percent of the industry vote to be approved, Bushway said.

She also sought to allay concerns among smaller producers and handlers of organic foods.

She said some in the organic industry may “get really frightened because they think the government is just going to take their money.”

Mark Kastel, senior farm policy analyst at organic watchdog, the Cornucopia Institute, who refers to OTA as a trade group “controlled by the corporate agribusinesses that have invested in organics,” said check-off programs amount to nothing more than “economic Robin Hood in reverse programs.”

“I don't think the farmers would have any objection, whatsoever, if the manufacturers and major retailers wanted to tax themselves and invest in a fund for promotion,” Kastel told SFN in an earlier email. “And if they set something up that's [volunteer-based], some farmers might very well want to participate. But a USDA-sanctioned promotional fund, that would be mandatory, would likely generate vigorous protest.”

But Bushway said exemption levels will be set for smaller producers, so they do not have to pay into the check-off. She emphasized that industry would be setting the exemption levels.

Bushway said what’s good about it that is a small producer can be exempt but still benefit from overall industry promotion and marketing efforts.

Meanwhile, other provisions in the committee's version of the 2012 farm bill would benefit the organic industry.

"Overall, organic agriculture fared quite well in this drafting process," said Maureen Wilmot, executive director of the Organic Farming Research Foundation. "The Senate took a fiscally responsible step to invest in an organic economic boon provided by organic agriculture."

Other farm bill benefits to organic include:

·   Organic Agriculture Research and Extension Initiative (OREI), the largest research grant program dedicated to organic agriculture, maintains funding at $80 million over five years through 2017.

·   Organic Production and Market Data Initiatives (ODI) program, an interagency collection of critical market data on organic agriculture production, maintains funding status at $5 million total over five years.

·   Organic Certification Cost Share receives increased funding through the Agricultural Management Assistance program at $11.5 million per year through 2017.

·   The National Organic Program (NOP) receives increased funding of $15 million annually and additional $5 million funding for technology upgrades.

·   The Environmental Quality Incentives Program (EQIP), including the Organic Initiative (EQIP-OI), increases from $7.3 billion to $8.1 billion over five years.

Farm bill provisions hurting organics include:

·   Drastic funding cuts for the Beginning Farmer and Rancher Development Program, neglecting the need to support those farmers that ensure organic farming's future.

·   Failure to reform organic crop insurance, leaving organic farmers having to pay an unfair surcharge for crop insurance and not receiving fair price elections.

·   $4 million funding cuts to OREI from $20 million a year to $16 million a year.

·   Conservation Stewardship Program enrollment levels reduced to 10.3 million additional acres each fiscal year from the 2008 Farm Bill levels of 12.8 million acres per year.

·   The Environmental Quality Incentives Program-Organic Initiative (EQIP-OI) ignores unfair payment limit applied only to organic farmers using EQIP.

·   Ignores additional research into public plant breeding via Agriculture and Food Research Initiative (AFRI), the largest grant program that funds agriculture research at USDA.

The committee's version of the bill also reauthorizes $20 million annually for the Farmers Market and Local 
Food Promotion Program.

The program would give priority to projects that:

·   benefit underserved communities
·   develop market opportunities for small and mid-sized farm and ranch operations
·   include a strategic plan to maximize the use of funds to build capacity for local and regional food systems in a community

The committee's bill would also fund a study on local food production, which would direct the USDA to conduct surveys and analysis and publish reports relating to the production, handling, distribution, retail sales, and trend studies (including consumer purchasing patterns) of or on locally or regionally produced agricultural food products.

The committee did not fund the rural development title or key programs targeted at socially disadvantaged producers, nor did it make needed improvements in farm to school programs.

Read the 2012 Farm Bill Committee's Red-Line Summary of Manager's Amendment, which highlights changes between the Manager's Amendment and the Committee Print
 
Story courtesy of Sustainable Food News.  A highly-timely industry newsletter.  For subscription information: http://sustainablefoodnews.com/index.php
  
Mark A. Kastel
The Cornucopia Institute
kastel@cornucopia.org
608-625-2042 Voice
866-861-2214 Fax
 
P.O. Box 126
Cornucopia, Wisconsin 54827
www.cornucopia.org