National Organic Program – An Overview

 

Background

The practice of producing organically grown agricultural products has existed for several decades in the United States and has evolved from a small-scale and localized system into a highly organized and global production and marketing system. These changes motivated the organic industry to establish standards for organic production and marketing.

Initially, private organizations and some states developed third-party certification systems. Under these systems, inspectors employed by either private organizations or state governments would certify farm and food operations as organic under certain requirements. However, each organization and state that ran an organic certification system had different organic standards. While the third-party certification system was a positive development for the organic industry, many third parties refused to recognize products that were certified by other certifying organizations because of differing standards. Therefore, organic producers found it hard to get their products into the marketplace, especially across state lines. The inability to adequately prevent instances of fraud was another major obstacle.

Congress responded to these problems by enacting the Organic Foods Production Act (OFPA), 7 U.S.C. §§ 6501et seq. The OFPA was enacted to create “(1) . . . national standards governing the marketing of [organically produced] agricultural products;(2) to assure consumers that organically produced products meet a consistent standard; and (3) to facilitate interstate commerce in fresh and processed [organically produced] food.” 7 U.S.C. § 6501. On December 21, 2000, the Agricultural Marketing Service (AMS), an agency within the United States Department of Agriculture (USDA), published a final rule which established the regulations implementing the OFPA. See 7 C.F.R. § 205. The combination of the OFPA and the organic regulations make up the National Organic Program (NOP). Since October 21, 2002, producers and handlers that sell, label, or represent agricultural products as organic must comply with the NOP.

Federal Regulatory Authority

In the National Organic Program, administrative agencies such as USDA/FDA/EPA have been given authority by Congress to create regulations implementing the requirements of the federal law.  In 2024, the Supreme Court of the United States issued two rulings that are expected to have a major impact on how judges decide cases challenging those regulations and that agency authority.

Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244 (2024) overruled the long-standing doctrine of deference established in Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984). Chevron deference was a two-step process that clarified how and when federal courts should defer to an agency regulation interpreting a statute.  Chevron only applied in situations where a court had determined that the statutory language the agency was interpreting was ambiguous.  If it was ambiguous, the court would consider whether the agency’s interpretation of the statutory language was “reasonable”.  If it was reasonable, the court was required to defer to the agency’s interpretation. If it was not, the court would overrule the interpretation.

Loper Bright formally overturned Chevron. In a 6-3 decision, the Supreme Court held that “courts may not defer to an agency interpretation of the law simply because a statute is ambiguous[.]” Following the ruling, courts are instead required to exercise independent judgment in determining whether an administrative agency has acted within its statutory authority.  Courts may still seek guidance from the agencies involved, but courts will no longer be required to defer to an agency’s interpretation of a statute.

In Corner Post, Inc. v. Bd. of Governors of the Fed. Rsrv. Sys., 144 S. Ct. 2440 (2024), the Supreme Court extended the period of time during which a party may file a lawsuit challenging federal agency actions. According to 28 U.S.C.S. § 2401(a), the six-year statute of limitations began to run when an administrative agency’s action was “final.”  In Corner Post, the Supreme Court ruled that an action becomes “final” when a plaintiff suffers an injury, rather than when a “final regulation” is released. This ruling expands the potential for plaintiffs to challenge federal agency rules and regulations that have been final for over six years.

While the full effect of these two rulings remains to be seen, it is highly likely that the agricultural industry will be impacted by the Supreme Court’s decisions. Importantly, the rulings fundamentally change how courts will resolve lawsuits challenging agency regulations for misinterpreting the agency’s statutory authority. Impacts are most likely to be felt in areas of the law, such as National Organic Program, dominated by statutes with relatively ambiguous language where Congress has relied on agency regulations to fill in specifics.

National Organic Program

Key Definitions

Both the OFPA and the regulations define certain terms. Although the OFPA and the regulations define many terms, it is important to understand the meaning of a select few as they are used in this body of law.

The OFPA defines a “producer” as any person engaged in the business of growing or producing food, feed, and other agricultural-based consumer products. See 7 U.S.C. § 6502(19). This differs from “handlers” which both the OFPA and the regulations define as any person that handles agricultural products, except for final retailers that do not process agricultural products. See id. §6502(9); see 7 C.F.R. § 205.2. However, the term handler does not include those who transport or deliver organic crops from a producer to a handler, in other words, the middlemen are not considered handlers as long as they are not handling organic products and qualify for an exception. See id. at § 205.2.

The NOP includes in the definition of “handle” the sale, process, or package of agricultural products, including trading, importing, exporting, combining, and treating, to cover any activity that might affect the organic product. Id., see also 88 F.R. §§ 3548, 3620. Keep in mind the audit trail of any agricultural product labeled as organic under the NOP, as well as the supply chain traceability include transfer of ownership and transportation. See id. § 205.2. Similarly, the supply chain traceability requires the “ability to identify and track the movement, sale, custody, handling, and organic status of an agricultural product along a supply chain.” See 88 F.R. §§ 3548, 3553.

The OFPA and its regulations define an “agricultural product” as any agricultural commodity in raw or processed form. See 7 U.S.C. § 6502(1); see 7 C.F.R. § 205.2. The term “agricultural product” also includes any product derived from livestock that is marketed for either human or livestock consumption. See id.

A labeling is “written, printed, or graphic material accompanying an agricultural product at any time or written, printed, or graphic material about the agricultural product displayed at retail stores about the product. Id.

Finally, the OFPA and its regulations define “processing” as “cooking, baking, curing, heating, drying, mixing, grinding, churning, separating, extracting, slaughtering, cutting, fermenting, distilling, eviscerating, preserving, dehydrating, freezing, chilling, or otherwise manufacturing and includes the packaging, canning, jarring, or otherwise enclosing food in a container.” See 7 U.S.C. § 6502(18); see also 7 C.F.R. § 205.2.

Applicability

Although the NOP requirements apply to most organic operations, the regulations allow for a few exemptions. An exemption is granted to those who would ordinarily fall under the regulation, but the regulation explicitly offers leave from liability.

Although exempted organic operations are not required to comply with NOP certification requirements, they must still comply with other applicable NOP requirements. Exempted operations must still adhere to certain conditions including applicable organic production and handling requirements, see 7 C.F.R. § 205.200 et seq.; using the correct organic labeling, see id. § 205.300 et seq.; and keeping accurate records. Id. § 205.101(i).

Eight types of organic operations are exempt from the NOP certification requirements. These exempt operations include those that: (1) have a gross annual income from organic product sales totaling $5,000 or less; (2) are retail food establishments that handle but do not process organic products; (3) are retail food establishments that process, at the point of final sale, products certified as “100 percent organic,” “organic,” or “made with organic specified ingredients or food groups; (4) are handling operations that only handle products containing 70 percent organic ingredients or that only identify organic ingredients in the ingredients list of packaged products; (5) do not handle but receive, store, and/or prepare for shipment organic products that are enclosed in sealed, tamper-evident packages prior to being received and remains in the same package; (6) do not handle but buy, sell, receive, store, and/or prepare for shipment organic products already labeled for retail sale that are enclosed in a sealed, tamper-evident package and remains in the same package; (7) do not handle but is a Customs broker only conducting customs business; or (8) do not handle but only arrange for the shipping, storing, transport, or movement of organic products. 7 C.F.R. § 205.101.

Organic Production and Handling Standards

Non-exempt organic producers and handlers must comply with the NOP organic production and handling standards found in Subpart C of the regulations. The production and handling standards set forth requirements for organic system plans, crop production, livestock production, and organic handling.

An “organic system plan” is an organic production or handling operation plan that the producer or handler and the certifying agent agreed upon and includes a written plan concerning all aspects of agricultural production or handling. 7 C.F.R. § 205.2. Some of the more notable requirements of an organic system plan include a description of the practices and procedures and the monitoring practices and procedures that will be performed and maintained along with how often they are performed, a description of the recordkeeping system implemented, and a description of the management practices established to prevent commingling of organic and nonorganic products. For a complete list of requirements, please refer to 7 C.F.R. § 205.201. Producers also have the option to substitute a plan prepared for another Federal, State, or local government regulatory program for the organic system plan so long as the plan meets all the requirements of 7 C.F.R. § 205.201.

The organic production and handling requirements that govern crop production include land management; soil fertility and crop nutrient management practices; seeds and planting stock use; crop rotation; crop pest, weed, and disease management; and the harvesting of “wild crops.” 7 C.F.R. §§ 205.202 – 207. Although the NOP sets soil fertility standards, crops grown without soil can still be certified organic. See Ctr. for Food Safety v. Vilsack, No. 21-15883 (9^th Cir. Sep. 22, 2022).

The requirements that govern livestock production include livestock origins, livestock feed, livestock health care practices, livestock living conditions, and pasture practice standards. 7 C.F.R. §§ 205.236–40. On  November 2023, USDA’s AMS amended the organic livestock and poultry production requirements. See 88 FR 75394. The rule adds new provisions for livestock handling and transport for slaughter and avian living conditions along with expanding and clarifying the existing requirements for livestock care and production practices and mammalian living conditions and welfare. Id. The amendment focus is “on animal welfare, especially outdoor access requirements.” Id. The affected entities include: (1) individuals or business entities that are considering organic certification for a new or existing livestock farm or slaughter facility; (2) existing livestock farms and slaughter facilities that are currently certified organic under the USDA organic regulations; and (3) certifying agents accredited by the USDA to certify organic livestock operations and organic livestock handling operations. Id.

There are also handler specific standards outlines in Subpart C.  The organic handling standards set forth requirements for managing pests and for preventing the commingling and contact of organic products with prohibited substances. 7 C.F.R. §§ 205.270-272. The last section of Subpart C describes the requirements for imports into the United States. 7 C.F.R. § 205.273. All organic products entering the United States are required to have NOP Import certificates. Id.  The organic importer must have a control system to document this verification. Id.

Labels, Labeling, and Market Information

Subpart D of the organic regulations sets forth standards, requirements, and restrictions that govern the labeling and use of marketing information for organically produced products. 7 C.F.R. §§ 205.300 et esq. This section of the regulations aims to prevent abuses in the marketing of organic products and to assure consumers that organic products and ingredients are labeled in a consistent, reliable, and predictable manner.

In particular, this subpart explains the difference between the labeling terms “100% Organic”, “Organic”, and “made with organic ingredients”. Only products that are solely derived from organically produced ingredients can bear the label “100% organic”. 7 C.F.R. § 205.301(a)., The product may carry an “Organic” label when 95% of the product contains organically produced raw or processed agricultural products. 7 C.F.R. § 205.301(b). The product may be labeled, sold, or represented as  “made with organic (specified ingredients or food group(s))”when 70% or more of a product’s ingredients are organically produced and handled, . 7 C.F.R. § 205.301(d). While products with less than 70% of organically produced ingredients may only identify the organic ingredients or contents in their label and must not display the USDA seal or any other certifying identification. 7 C.F.R. §§ 205.301(d), 305.

Subpart D also explains how to: calculate the percentage of organic composition in a product; label livestock feed; label nonretail containers used for shipping and storing organic products; label organic products that are sold, labeled, or represented as “100 percent organic,” “organic,” and “made with organic (specified ingredients or food group(s)) at the point of retail sale but are not sold in a packaged container; label products produced on exempted and excluded operations; and use the USDA organic seal on products. 7 C.F.R. §§ 205.302, 306-311.

Certification

Subpart E of the organic regulations governs the certification process. “Certification” is when a certifying agent determines that an operation has complied with all applicable NOP requirements. 7 C.F.R. § 250.2. A “certifying agent” is “[a]ny entity accredited by the Secretary for the purpose of certifying a production or handling operation as a certified [organic] production or handling operation.” Id. Certification is documented by a certificate of organic operation. Id. The organic regulations set forth general requirements for applying for certification, how certifying agents should review applications, how certifying agents should conduct on-site inspections, and how certifying agents should grant and deny certifications. 7 C.F.R. § 205.400-406. The certification authority ensures that “prohibited substances have not been and are not being applied to the operation.” 27 C.F.R. §205.403(c).

National List and National Organic Standards Board

The OFPA established the National Organic Standards Board (NOSB). 7 U.S.C. § 6518. The NOSB is a Federal Advisory Board comprised of fifteen public volunteers from across the organic community. Id. § 6518(b). The NOSB reviews and makes recommendations on various issues involving the production, handling, and processing of organic products. Most notably, the NOSB assists with developing and amending the “National List of Allowed and Prohibited Substances” set forth by the NOP.

The National List sets forth the “approved and prohibited substances that shall be included in the standards for organic production and handling.” See 7 USCS § 6517. The National List identifies synesthetic substances that organic producers may use and natural substances that organic producers may not use. Id. § 6517. The National List is based upon recommendations submitted to the Secretary of Agriculture by the NOSB. Id. § 6517(d)(1). Any person may petition the NOSB to consider whether a substance should be listed as allowed or prohibited on the National List. See 7 C.F.R. § 205.607(a).

State Organic Programs

Any state may create a state organic program (SOP) for production and handling operations within that state. The SOP is subject to certain conditions set by the NOP. Before implementing an SOP, the state must submit a plan for approval of the Secretary of Agriculture. 7 U.S.C. § 6507.  After the SOP is approved, the state must submit the program for revision no less than once every 5-year period. Id.

The SOP must comply with all NOP requirements, although it may contain additional requirements that are more restrictive than NOP requirements “because of environmental conditions or the necessity of specific production or handling practices particular to the State or region of the United States.” 7 U.S.C. § 6507(a)-(b)(1). Any additional or more restrictive requirements in the SOP must be consistent with the OFPA and further the purposes of the OFPA. Thus, the SOP must be consistent with NOP and must not be “discriminatory towards agricultural commodities organically produced in other States.” Id.  § 6507(b)(2)(A)-(C).