Organics in the News

Harvey v. Veneman’s spectre of unintended consequences roils organic waters
Successful legal challenge to parts of the USDA Organic Rule could have a big impact on producers and the marketplace.

By Dan Sullivan

	"The beauty of this Act is that not only do people get food that they want, but they get to support a land production system that supports their values… No one disagrees that we need to eliminate these barriers for small farmers; the question is how best to do that." -Jay Feldman

A U.S. Magistrate Judge recommended summary judgment for Veneman with regard to all of Harvey’s complaints but one, and a Maine District Court took the agriculture secretary’s side on all of them (except for one that was thrown out because it was ruled Harvey had no standing to pursue it). Not to be dissuaded easily, Harvey appealed seven of the counts and—following an amici (friend of the court) petition by Beyond Pesticides, The Center for Food Safety, and Rural Advancement Foundation-USA—an appeals court in Boston found in his favor on two counts and sent a third back to the Maine court for review. (A second amici brief was also filed by other supporting nonprofits as well as individuals Anne Mendenhall, John Clark and Merrill Clark.)

Harvey charged that:

• The Organic Rule’s blanket exemption of non-organic products “not commercially available in organic form” from review was out of step with the OFPA. (The appeals court left it for the District Court to decide if these ingredients—such as corn starch, carob bean gum, and kelp—should be reviewed on a case-by-case basis.)
• The Rule’s provision allowing the use of synthetic substances in processing of items labeled “organic” went against the spirit and letter of OFPA. The appeals court agreed. (Under the Rule, multi-ingredient items bearing the “organic” label may contain up to 5 percent non-organic ingredients; this was not challenged.)
• The Rule’s provision allowing up to 20-percent conventional feed in the first nine months of a dairy herd’s one-year conversion to organic contradicted OFPA. The appeals court also agreed on this.

The District Court must now decide how to carry out these decrees.

“The court’s decision can be quite prescriptive, or they can be general orders to USDA telling them to fix the regulations without telling them how to fix them,” said Jim Riddle, chair of the National Organic Standards Board (NOSB), which serves in an advisory capacity to the NOP (National Organic Program). “Time will tell.”

Harvey had also asked the appeals court for clarification as to whether the “no synthetics” ruling applies to the “made with organic” label category, that is, products containing between 70 and 95 percent organic ingredients (Harvey and the amici contended that it should not). As this story was being put to bed, the appeals court added a footnote to its decision, saying the ruling did not apply to the “made with organic” category.

To add to the confusion and uncertainty still swirling around Harvey v. Veneman, industry insiders reported that the USDA indicated, following a public meeting with the NOSB, that its own interpretation of the Harvey ruling with regard to NOP jurisdiction on synthetics might cause it to abandon the 70 to 95 percent “made with organic” category. Whether that interpretation is a real possibility—or if the appeals court’s recent clarification would have any bearing on that interpretation—remains to be seen.

Reaching out to USDA

On March 3, U.S. Rep. Ron Kind (D-WI), co-chair of the U.S. House Organic Caucus, sent a letter to recently seated Secretary of Agriculture Mike Johanns recounting the success of organic agriculture over the past decade and outlining the issues and challenges at hand:

"“These are strange standards, but we’ve worked with them to get where we are at with family farmers. To me, it’s about coming to a happy medium between what really works and the highest standards possible." -George Siemon

“The big challenge before us now is the recently decided case of Harvey v. Veneman and its probable effect on OFPA,” the letter states. “The three counts that concern us are the alleged exemption for non-organic products not commercially available, the use of synthetic substances in processing, and the conversion of dairy herds to organic production. These holdings could significantly impair, especially the smaller family farms, from continuing their organic operation or make it financially impossible to transition into organic production.

“Based on the Harvey v. Veneman lawsuit, the USDA will have to rewrite the regulation to implement the court’s decision,” the letter to the agriculture secretary stated.

The USDA had until March 14 to challenge the appeal court’s decision. It made no move to do so.

On March 17, the coalition of nonprofit groups supporting Harvey drafted a statement, now being referred to as the “Anaheim letter,” reiterating their motives for involvement and calling for consensus to sort out the quagmire.

“The amici’s involvement in the case was designed to hold the USDA’s exercise of regulatory power within the parameters established by the Organic Foods Production Act and to ensure that the amici’s constituent communities could be involved in shaping the outcome of the lawsuit,” the memo states. “The amici recognizes that the decision in the case could have significant impacts on the organic marketplace. As a result, in the brief the amici urged the court of appeals to make sure that any ruling from the court not cause undue disruption and hardship on the organic marketplace.”

No one will know for sure if that cautionary plea was successful until the District court issues its summary judgment, which should contain timelines for implementation.

“Both Harvey and the USDA seek phase-ins that minimize disruptions to the organic marketplace and give affected parties adequate time—such as 18 months—to make changes in product labels and/or composition to come into compliance with new requirements,” said Riddle, who sent his own letter to the new agriculture secretary urging support for remedies that put the least strain on organic farmers and the marketplace.

Much speculation

Harvey v. Veneman timeline • October 23, 2002: Organic blueberry farmer and National Organic Program (NOP) organic inspector Arthur Harvey files suit against then U.S. Secretary of Agriculture Ann Veneman two days after the National Organic Program is fully implemented, charging that the USDA overstepped its boundaries in drafting the standards guiding the program—specifically, that nine provisions of the new rule are out of sync with the Organic Food Production Act (OFPA) of 1990 and dilute its organic standards. • January 8, 2004: A U.S. District Court in Maine follows a magistrate’s recommendation to grant summary judgment to the agriculture secretary with regard to seven of the complaints, and to dismiss one of them because Harvey lacks standing to bring the claim. The District Court goes against a recommendation to side with Harvey on the ninth. (Supported by a coalition of nonprofit groups—including the Organic Consumer’s Association, Public Citizen, Sierra Club, Northeast Organic Farming Association (Massachusetts chapter), Greenpeace USA, and Waterkeeper Alliance—Harvey appeals seven counts of the original nine.) • June 14, 2004: Three nonprofit groups—Beyond Pesticides, The Center for Food Safety, and Rural Advancement Foundation, USA—claiming to represent environmental, consumer, and farmer perspectives file as amici (friend of the court) brief supporting Harvey’s appeal. (The other supporting groups—along with individuals Anne Mendenhall, John Clark and Merrill Clark—file a second statement as amici.) • January 26, 2005: The U.S. Court of Appeals for the First Circuit reverses the District Court’s ruling with regard to two complaints. The implications of this ruling to the NOP are that: • Synthetic substances used in processing—such as ascorbic acid and potassium hydroxide—will no longer be allowed in multi-ingredient products labeled as “organic.” • Dairy herds transitioning to organic production may no longer be fed only 80 percent organic feed for the first nine months of their one-year transition but must be fed 100-percent organic feed for a full year prior to milk or milk products from that herd being sold as organic. The appeals court leaves it up to the District Court to decide a third matter: •Non-organic products—such as cornstarch, carob bean gums, and kelp—not commercially available as organic must be reviewed individually in order to be included in the 5 percent of ingredients not required to be organic in multi-ingredient products labeled “organic”. (The substances would need to be petitioned, then reviewed by the NOSB and placed on the National List at 205.606 by USDA to be considered for use. Certifiers would still need to review the operator’s attempts to source organic. Substances not on the list could no longer be considered for approval by certifiers.) Under NOP guidelines, there had been a blanket exemption for these products. (The appeals remanded this item back to the District court in Maine to make the final call.) • March 3, 2005: U.S. Rep. Ron Kind, co-chair of the U.S. House Organic Caucus, sends a letter to newly appointed U.S. Secretary of Agriculture Mike Johanns outlining the perceived threat to the organic marketplace and urging him to take action. • March 14: The deadline passes for the USDA to challenge the Court of Appeals. Harvey files a motion with the Circuit Court asking for clarification on the scope of the “no synthetics” ruling to determine if the ruling applies only to the “organic” labeling category—as he and his supporters contend it should—or if the ruling extends to the “made with organic ingredients” category, post harvest handling, and the processing of livestock feeds. • March 17, 2005: A coalition of organizations that had supported the Harvey suit circulates a memo, the “Anaheim letter,” stating that their involvement in the case was to make sure the USDA did not overstep its authority and to give the coalition standing in shaping the outcome of the suit. The memo goes on to explain that the coalition is working with all parties to craft a response to the ruling “that will both maintain the integrity of the organic standards and allow the organic sector to grow.” • March 31, 2005: US Court of Appeals for the First Circuit makes its ruling clear by adding a footnote that the ban on synthetics applies only to the “organic” or “100-percent organic” labels and not the “made with organic” category. • What’s next? The case goes back before the District Court, which operates under no mandated deadline.

In its winter newsletter, the Independent Organic Inspectors Association (IOIA) ruminated on possible prescriptive remedies. “…The organic industry may very well have to re-open OFPA and bring some order by writing more coherent authorizing legislation,” the newsletter stated. “…The danger in opening the law to ‘fix it’ is that it opens the door to all interests, not just the ‘loyal’ organic people.

“But the bottom line remains: OFPA must be changed to become consistent with the rule or the rules must be changed.”

“It’s a real concern,” said George Siemon, CEO of Organic Valley Family of Farms. “We have a law that was written in ’89-’90, and we have things that aren’t perfect about it. We thought we could fix it through rulemaking, but we found out that’s not how you fix faulty laws; you have to go back through Congress.”

Siemon indicated that, through the vehicle of a rider, there’s momentum within the greater organic community to do just that—fix the OFPA so that it is consistent with the Organic Rule as adopted in 2002 (a move that would require Congressional review).

“In the organic trade there is a sense of unity that we are going to fix what we had and not ask for more,” Siemon said.

“There are always dangers; it kind of depends on you where you are at with all of these issues. We consider the harm [done by the Harvey v. Veneman decision] to be bad. I’m very much supportive of going forward.”

Another camp within the organic community hopes to avoid that strategy.

“The preference is not to open the statute, because it’s difficult to control the legislative process in general,” said Jay Feldman, executive director of Beyond Pesticides. “The consensus is that it might be a free-for-all around special interests who are not, in the end, protective of farmers and consumers.

“When I first came to Washington, Congressman Kika de la Garza [chairman of the House Agriculture Committee from 1981 to 1994] told me, “writing legislation is the art of the possible,” which meant that every piece of legislation has compromises. OFPA certainly had compromises built into it. Our hope is that we will protect the integrity of organic and not leave critical questions about consumer health and safety up to Congress to debate and compromise. That means all parties need to agree in advance of pursuing any type of statutory change.”

Steady growth at risk?

Harvey v. Veneman has had many industry insiders speculating on the potential short- and long-term economic repercussions to an industry that’s enjoyed close to 20 percent growth each year over the past decade. While the case has caused some rifts among key players in the organic community, most everyone agrees that a united front moving forward is critical.

“The truth is that these people who play a watchdog role are important,” Seimon said of Harvey and his supporters. “The people who supported this suit thought that if they were to lose the suit, it would send the wrong message to USDA.

“In this case, in 1990 we felt that synthetics were not needed. Now we realize, after this many years of experience, that synthetics are pretty necessary for a lot of different processes,” Siemon said.

The current list of 38 synthetic substances allowable in the production of processed organic foods under the 2002 Organic Rule include calcium citrate, hydrogen peroxide, and magnesium chloride (derived from sea water). It also includes ozone, ethylene and silicon dioxide.

Siemon does not dispute that the list should be routinely scrutinized. He also said that allowing some synthetics—for production and processing—in the 95/5 “organic” label category is imperative to the integrity of the organic label. Otherwise, he said, producers are bound to abandon that label and move to the less stringent 70/30 “made with organic” category. “If you’ve got 95-5, you’re going to encourage more organic food…Within that 5 percent we have to constantly improve and ask: ‘What are we doing and what can we do better?’ These are not meant to be permanent exceptions.”

One criticism that’s been leveled by those outside the Harvey camp has been that the Organic Rule was adopted following more than 12 years of painstaking meetings and public rulemaking that included compromises from all parties.

Those who support Harvey counter that OFPA is clear on synthetics, or as the recent IOIA newsletter put it, “There was a problem with synthetics from day one: the law forbade it (sic), but a constituency insisted on it (sic).”

In the Anaheim letter, Harvey supporters stated a willingness “to consider the limited allowance of some synthetic substances for use in or on the non-organic portions of products labeled as organically produced.”

“I think what we’re trying to say here is that we are certainly open to discussion on common products commonly found in the kitchen,” Feldman said. “The downside, of course, is opening up the federal statute. We believe there needs to be more discussion on acceptable materials that do not approach the specifics or process now embodied by the 38. Our other really big problem with this is the process of getting things off the list. We need to shift the burden of proof away from the consumer and farmer community and onto those seeking to utilize the materials in their products.”

Rather than having the NOP publish an annual list of acceptable synthetic products and ask if there are objections, Feldman suggested having “anyone who wants to continue using a product…go through the process again and go through criteria for retaining its use in the future.”

“If there is to be a list, it needs to be narrowed based on criteria. There is also the issue of sunsetting the list. The amici are, for the most part, open to discussion of what an allowable synthetic would look like based on potential health effects…and that discussion needs to go on way before there’s any discussion of changing the statute.”

Looking out for the family farmer

Another point of contention in Harvey v. Veneman is the 80-20 herd conversion clause, something Siemon—whose cooperatively owned company includes hundreds of dairy farmers—says has been a tremendous help to small farmers. “Bigger farms buy young animals and feed them 100-percent organic for 12 months,” he said. Small family farmers following organic practices over a three-year conversion period have relied on the economic break that not having to provide 100-percent organic feed in the first nine months of the final year of conversion provides, he said. “It’s the standard in Europe,” Siemon said. “And it’s been working out real well for family farmers…80-20 is important to encourage transition.”

“The question we have to grapple with is whether this is the right place to address the transition issue,” Feldman said. “This is principally a labeling issue…Of all the areas in statute, this may be the area that may require statutory change, if there’s agreement that there needs to be a conversion provision that is more lenient than the current language.

“…The issue I think this has elevated is the question of converting farms to organic operations in a financially feasible way. All the imici want to help do that. The beauty of this Act is that not only do people get food that they want, but they get to support a land production system that supports their values… No one disagrees that we need to eliminate these barriers for small farmers; the question is how best to do that.”

For many of the amici, Feldman said, it all boils down to good government. “We can’t allow the NOP to carry out the standards and not embody the Act…That’s been a real problem…

“I think the last thing the farmer and consumer coalition represented by the amici wants to do is move to Congress with disagreement in the organic community. The goal here is to maintain the kind of unified group that we’ve historically seen in organic production and processing amongst all concerned, from consumer to farmer. If the community cannot go to Congress with a unified position, our organization would not support any change in the statute at this time.”

Siemon said the debate around Harvey v. Vemenan presents the organic community with another opportunity to improve the national organic standards. “It’s a fresh review now. Consumers are wanting the highest standards now. Keeping organic commercially available, constantly improving, and keeping what we have is the best way to improve integrity.

“…My biggest fear is that the NOSB will lose its power; it’s such an important meeting ground between the government and the passion that the organic people have.”

The bottom line, said Siemon, is that the standards must continue to strengthen the standing of the American family farmer and to provide alternatives to consumers.

“These are strange standards, but we’ve worked with them to get where we are at with family farmers,” said Siemon, himself an organic farmer, who, with a handful of his Wisconsin neighbors, founded Organic Valley in 1988. “To me, it’s about coming to a happy medium between what really works and the highest standards possible.”

Feldman’s own ‘fear factors’ included producers looking for shortcuts to get into the marketplace and unwittingly undermining organic integrity or, worse yet, people on the sidelines fomenting the debate about the integrity of the label and short-circuiting its rise in the marketplace.

“The question is whether those seeking to be part of the organic industry believe in the underlying core values and principals of organic stewardship versus seeing it simply an economic opportunity to reap financial rewards in the marketplace,” he said.

“During the drafting of OFPA, the people at the table shared these core values: organic stewardship, protection of the workers, healthy food, and a clean environment.

“…Those who helped grow the organic community over the past 25 years have to expect that the range of motives for those who want to get in will vary, and therefore be vigilant about protecting the idea and integrity of what “organic” means.”