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Key changes
The 2002 Farm Act contains several
first-time research and technical assistance provisions to
assist organic crop and livestock producers with production
and marketing. The Act authorizes $15 million in new funding
for advanced organic production systems research and $5
million for a national cost-share program to help defray the
costs of certification incurred by organic crop and livestock
producers. For the first time, organic producers who produce
and market only organic products will be allowed an exemption
from paying conventional marketing assessments.
Summary of provisions
Several provisions directly
affect the U.S. organic sector:
- The Organic Agriculture Research and Extension
Initiative authorizes $3 million per year in new mandatory
appropriations in fiscal years (FY) 2003-07. Funds will be
used to administer competitive research grants, largely
through USDA's Cooperative State Research, Education, and
Extension Service. Research is to focus on determining
desirable traits for organic commodities; identifying
marketing and policy constraints on the expansion of organic
agriculture; and conducting advanced research on organic
farms, including production, marketing, and socioeconomic
research.
- Other research and extension provisions for organic
agriculture that are authorized, but not mandated, include
data development on organic agricultural production and
marketing; facilitated access to organic research conducted
outside the United States for research and extension
professionals, farmers, and others; and a mandated report on
the need for additional funding for research and promotion
of organic agricultural products.
- A National Organic Certification Cost-Share Program is
established to assist producers and handlers of agricultural
products in obtaining certification under the National
Organic Program established under the Organic Foods
Production Act of 1990. The program provides $5 million in
FY 2002 to remain available until expended. The maximum
Federal cost share is 75 percent annually, with payments up
to $500 per producer or handler.
- Certified organic producers who produce and market only
organic products and do not produce any conventional or
nonorganic products are exempt from paying an assessment
under any commodity promotion law. Organic growers had
concerns about paying assessments that did little or nothing
to market organic products. Methods for improving the
treatment of certified organic agricultural products under
Federal marketing orders will be evaluated as part of the
research and extension provisions authorized under the Farm
Act.
Several other provisions in the 2002 Farm Act indirectly
affect organic crop and livestock producers. Processes used to
produce agricultural commodities (including organically
produced products) are now included in the definition of
products that qualify for value-added market development
grants. Several of the conservation assistance programs may
interest organic farmers, and one—Agricultural Management
Assistance—now specifically mentions organic farming among the
practices that qualify for assistance to mitigate risk through
market diversification and resource conservation practices.
Economic implications
Organic farming has been
one of the fastest growing segments of U.S. agriculture in
recent years, but it is building on a small base and faces
numerous production and marketing obstacles to more widespread
adoption. The Organic Agriculture Research and Extension
Initiative is designed to fund projects that address these
obstacles. The organic production and marketing data
initiatives can make price discovery less costly and improve
market efficiency, and may assist farmers, processors, food
manufacturers, and others in making sound economic investment
decisions in the food and agriculture sector.
The organic farm structure differs substantially from the
U.S. agriculture industry as a whole, with fruits, vegetables,
and other high-value specialty crops making up a much larger
proportion of this sector. The Conservation Security Program,
which provides payments to producers for adopting or
maintaining a wide range of management, vegetative, and
land-based structural practices to address resource concerns,
may interest organic farmers who commonly adopt these types of
practices as part of their organic farming systems. Unlike
most other Federal conservation programs, producers who grow
specialty crops will be eligible to participate. The technical
assistance features of the Conservation Security Program may
be useful for organic farmers and those interested in
transitioning to organic farming systems.
USDA promulgated final rules implementing the Organic Foods
Production Act in December 2000. These rules require that all
except the smallest producers and handlers be certified by a
State or private agency accredited under the uniform standards
developed by USDA. State and private certifier fees for
inspections, pesticide residue testing, and other
certification services represent an added expense for organic
producers. In 2001, USDA established a certification
cost-share program to help pay certifier fees in 15
States—Connecticut, Delaware, Maine, Maryland, Massachusetts,
Nevada, New Hampshire, New Jersey, New York, Pennsylvania,
Rhode Island, Utah, Vermont, West Virginia, and Wyoming. The
2002 Farm Act's National Organic Certification Cost-Share
Program provides funds that will complement this program,
making organic growers in all States eligible for
certification cost-share assistance. The maximum Federal cost
share is 75 percent annually, with payments up to $500 per
producer or handler. This would cover a substantial part of
the certification costs of many organic farmers with small
operations, who typically pay a smaller fee based on the
sliding-scale fee structure that many certifiers have in
place.
Federal research and policy initiatives often play a key
role in the adoption of new farming systems in the United
States. The research activities and technical assistance
authorized by the 2002 Farm Act could encourage growth in the
organic farm sector.
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