An effort by the Organic Trade Association to establish a national checkoff program for the research and promotion of organic commodities is moving forward, with a referendum expected on the issue within about a year.  

Laura Batcha, chief executive officer and executive director of the OTA, gave a presentation during last month’s United Fresh Produce Association convention in Chicago and also discussed the issue following that event with The Produce News.Laura Batcha

OTA submitted a proposal to the U.S. Department of Agriculture in early May. Under the normal procedural rules, USDA has announced that it will entertain alternative proposals until July 20. Batcha said soon thereafter the proposal or proposals should be made available for public comment.

She expects that period to conclude by the fall and then USDA will potentially incorporate the comments into a final proposal and hold a referendum within six months or so.

“We certainly expect that there would be a referendum in 2016, and then it would take time after that to get the program up and running,” she said.

As a lobbying group, OTA will not be involved in the administration of an organic checkoff program but the association has been intimately involved in its development. Batcha said it has been a three-year effort with many different ideas vetted and many different organic constituencies consulted.  

The checkoff program is utilized for many different agricultural commodities. It is similar to an agricultural marketing order, though a marketing order is basically geographic in nature, such as the one dealing with Florida avocados. Checkoff programs are national, such as the ones managed by the Hass Avocado Board and the National Mango Board.  

Sam Jones, a public affairs officer for USDA’s Agricultural Marketing Service, said the organic effort is unique as it is not commodity specific.  

“All other checkoff programs deal with an individual commodity,” he said. “That is not true with this proposal.”

Batcha told the United Fresh audience that the organic industry had to get special legislation to give USDA the authority to establish this type of checkoff program. This program will include all organic products (fruits, vegetables, nuts, meat, dairy, etc.) and the research and promotion effort will focus on defining and explaining the value proposition of the organic seal.

All holders of a mandatory organic certification under the National Organic Program will participate financially. The funding mechanism has been worked out so that each member of the supply chain would only pay on the net value added that they provided to the product.

So while a producer would pay a percentage based on the raw sales of the product, a processor would pay its assessment based on the differential between the cost of the product and their sales price.

The percentage in the initial proposal is one-tenth of 1 percent of net organic sales of products that are 100 percent organic. A smaller percentage would be assessed for products “made with organic” ingredients.

Batcha estimated that after administrative costs are deducted, the program would have a research and promotion budget in the neighborhood of $30 million.

One Los Angeles organic produce distributor, Heath & Lejeune Inc., estimated that its assessment would be about $3,000 annually. Company CEO Rick Lejeune, who is well versed on the proposal, said the assessment amount is not daunting but he is a bit skeptical of the idea. As a general rule, he said organic producers are suspicious of government involvement in their affairs. Many backed the National Organics Program as something they saw as necessary but this might not rise to that same level of need.

“We haven’t made up our minds yet as to how we would vote,” he said.

Batcha said she welcomes the skepticism, and in fact during the United Fresh presentation several audience members from the organic community articulated their fears.  

Batcha knows there is a lack of information out there but she said polling has shown that once they understand the proposal, proponents outnumber opponents two to one. She is confident that by the time a referendum is held the idea will have sufficient support.

Batcha told the United Fresh audience that it simply needs a majority of those voting to be in favor for it to pass. She estimated that there are 18,000 NOP certificate holders in the United States

She said there is also a lack of information among consumers as to what organic is and what it means. Though growth has been rapid, OTA does not believe it can be sustained without addressing such challenges as supply shortages, viable pest management options and market confusion.

With regard to consumer attitudes, the Batcha said that while 84 percent of consumers have bought organic products and 45 percent buy them once a month, there is a disconnect between what the organic seal means and what consumers think it means. Most consumers, she said, do not know what the regulations are or the value proposition that organics offer.

She was clear that no organic promotion program would include negative comments about conventional products. She said the regulations are clear: “You can compare but you can’t disparage.”

One potential issue that seems to be rooted in the regulations is the makeup of the board managing the program. The proposal calls for a 17-member board with eight handlers, eight producers and one non-voting at large public member. By law, the representatives will be elected regionally and represent various supply-chain classifications rather than commodity categories such as produce, meat or dairy.