“Organic” has become a universal term to describe an array of products, practices and procedures perceived as healthy for man, animal and the environment. Worldwide, there are now almost 600 organic producer associations in 70 countries (http://www.nofavt.org/Organic%20faq2.htm). Each has developed its own version of the meaning of organic.
Virtually all definitions tend to share a degree of meaning, yet each definition has its own unique features. It is important to gather some understanding of how various sectors of the food market place tend to interpret the term organic.
Organic on the label generally implies to the consumer that:
- The product was grown with a dedication to agricultural practices that strive for a balance with nature, using methods and materials that are of low impact to the environment.
- The product was created as a result of a commitment to maintain and replenish soil fertility with the belief that the highest quality foods are grown on healthy land.
- The contents have been minimally processed to maintain the integrity of the food without artificial ingredients, preservatives or irradiation.
Organic to the livestock producer generally means farms have been inspected to verify they meet rigorous standards that mandate the use of organic feed; prohibit the use of antibiotics; and give animals access to the outdoors.
Production methods are selected based on criteria that meet all federal, state and local health regulations; work in harmony with the environment; build biological diversity; and foster healthy soil and growing conditions. Organic generally also means market animals were raised without the use of toxic persistent pesticides, antibiotics and parasiticides.
The Natural Question
Adding to the confusion of what is organic is the clamor caused by a new genre of product identification recognized as “eco” or “green” labeling. Products wearing those labels may or may not be certifiably organic. Perhaps the greatest confusion caused by such labeling surrounds the use of the word “natural.”
According to the U.S. Food Safety and Inspection Services (FSIS) the term “natural” may be used when products contain no artificial ingredients and are no more than minimally processed in accordance with the rules of the agency. (http://www.fsis.usda.gov/index.htm)
Natural foods are generally understood to be any packaged food product that does not contain any added artificial (having no counterpart in nature) additives, but it does not necessarily extend to the exclusion of pesticides or other chemicals used in processing. In the early 1980s in response to an explosion of food products claiming to be natural, the Federal Trade Commission recommended standards for food products so labeled. At the time, it was recommended that Congress approve a definition be approved that could be enforced. Congress temporarily tabled the issue, and it never again came up for review. In general though, natural foods meet this definition: A food may be called natural only if it contains no artificial ingredients and had no more processing than it would normally receive in a household kitchen. Minimal processing includes washing or peeling fruits or vegetables; homogenizing milk; freezing, canning, or bottling foods; grinding nuts; baking bread; and aging meats.
(http://www.worldwise.com/sustainable_living/fact_sheets/food.html)
A natural label does not guarantee the product has been organically produced and processed according to the rules of a private certification entity, although it does mean there has been a minimization of synthetic inputs and it may have been produced and processed according to those rules. In some cases, products labeled as natural have possibly originated from growing and processing operations that are phasing into organic production but have yet to achieve a certifiable status.
Domestic Market Trends for Organic Products
The upward consumption trends in the natural foods market are now significant. They are no longer products of choice for just a small group of consumers. In ever increasing numbers, consumers are seeking what they perceive as healthful, safe food, often with the caveat that it is produced in an “environmentally friendly” way. Companies across the spectrum of the food system are working hard to respond quickly and accurately to these preferences. (http://www.hawiaa.org)
Several market studies conducted in recent years have described a sector of the market comprising about 25 percent of the U.S. adult population (between 40-50 million Americans) whose purchasing decisions are increasingly guided by their social and environmental values. Presently measured at somewhere between 3 to 5 percent of the total food market, industry analysts propose that by 2008, organic foods will make up nearly 10 percent of the total retail foods market.(http://www.hawiaa.org )
Public and private research groups register the growth rate of the natural and organic food business somewhere between 14 and 20 percent per year for the last seven to 10 years. This expansion is remarkable when compared to a growth rate for mass market foods of an average of only 3 to 5 percent from 1990 to 1997.(http://www.hawiaa.org )
Virtually all projections tend to agree that U.S. sales will continue upward at a very healthy rate for at least the next several years with some guessing the present rate-ofgrowth to continue until at least 2010.
World Market Trends
Information gathered from various sources generally agrees that the growth rate being experienced in the U.S. is mostly representative of what is happening in other developed nations. The summaries of recent reports from various offices of the Foreign Agricultural Service, USDA, paint a picture of world growth, opportunity and market competition in the organic food sector.
United Kingdom
The market for organic food is increasing by more than 21 percent a year in the UK alone, and in countries such as Denmark and Austria, sales of organic food are likely to overtake sales of conventional food within 10-15 years. (http://www.fas.usda.gov/scriptsg/gain_display_report.exe?Rep_ID=15000064)
Netherlands
The market for organic foods stands poised for growth as consumers are increasingly drawn to the environmental and health allure of organic foods. Supermarkets are taking a serious look at expanding their organic food sections, including two major supermarket chains in the Netherlands, Albert Heijn and Konmar. The Dutch government actively supports the organic food industry, aiming to advance market share from less than 1 percent of total food consumption to as much as 6-10 percent. In February 1997, the Dutch Government implemented a roughly $33-million action plan to stimulate production, distribution and sales of organics.(http://www.fas.usda.gov/info/agexporter/1997/dutch.html)
Austria
As there are probably opportunities for Austrian organic products on the EU market, agricultural representatives are interested in the expansion of organic agriculture. About two-thirds of organic production is sold on the domestic market and the rest is exported. Imports include mainly fruits, vegetables and feed. Of U.S. products, best opportunities are for tree nuts and dried fruits. (http://www.fas.usda.gov/scriptsw/AttacheRep/gain_display_report.asp?Rep_ID=25546221.0)
Belgium-Luxembourg
Organic farming in Belgium is poised for growth with the potential for a ten-fold increase in the number of producers. (http://www.fas.usda.gov/scriptsw/AttacheRep/gain_display_report.asp?Rep_ID=25495561.0)
France
Organic food is still a niche market in France in terms of value, representing 0.5 percent of total French retail food sales. However, it constitutes a growing market both for sales and the image it transmits to consumers. As a result of the French government action plan to stimulate organic agricultural production and distribution in France, sales of organic products are expected to reach FF 15 billion ($2.5 billion) by the year 2003. (http://www.fas.usda.gov/scriptsw/AttacheRep/gain_display_report.asp?Rep_ID=25545926.0)
Germany
Germany is one of the world’s largest producers and consumers of organic food products. Significant opportunities exist for U.S. organic food and beverage exporters who are prepared to invest the resources necessary to properly market their product in Germany.
(http://www.fas.usda.gov/scriptsg/gain_display_report.exeRep_ID=10006016)
China
The interest in “Green Food” is rising quickly. It is apparent that while the people are attaching importance to the construction of a more ecological environment, they are also attaching more importance to the evolution of healthy and nutritious food. (http://www.fas.usda.gov/scriptsg/gain_display_report.exe?Rep_ID=10005512)
Hong Kong
Organic food sales have grown slowly since the early 1990s as local Chinese have become increasingly health conscious. Organic foods are marketed as health foods here, and therefore carry the positive health food image. Best prospects for increased sales are baby food, rice cakes, grains, fruit juice and breakfast cereal.
(http://www.fas.usda.gov/scriptsw/AttacheRep/gain_display_report.asp?Rep_ID=25606931.0)
Japan
Total sales, including foods marketed as “no chemical” and “reduced chemical,” are forecast to jump 15 percent in 1999 to almost $3 billion. Fresh fruits and vegetables account for more than three-fourths of the total. (http://www.fas.usda.gov/scriptsw/AttacheRep/gain_display_report.asp?Rep_ID=25535985)
Republic of Korea
The market for organic products is relatively small, but has grown rapidly over the past 10 years. Current import regulations are ambiguous, but favor processed organic ingredients. A majority of consumers surveyed indicated plans to purchase more organic foods, while a third indicated a willingness to pay 50 percent more for organic products. (http://www.fas.usda.gov/scriptsw/AttacheRep/gain_display_report.asp?Rep_ID=25606800.0)
Mexico
In 1985, there were virtually no health food stores in Mexico; now an estimated 500 exist, more than 90 percent of which are located in Mexico City and Monterrey. The health food industry is now a $300 million per year business at retail. Retail chains are becoming more important: Chains represent about 100 stores, or 20 percent of the total. They handle mainly imported products and sell over 80 percent of Mexico’s health food imports. The major chains are Super Soya, Nutrisa, GNC, Nutrisoya and Golden Harvest. U.S. products play a major role in the Mexican health food market. (http://www.fas.usda.gov/scriptsg/gain_display_report.exe?Rep_ID=10002682)
Argentina
Organic production is estimated at $20 million, of which 85 percent is exported and only 15 percent destined for domestic consumption. However, with the largest per capita GDP in Latin America and the increasing interest of supermarkets in organic products, good possibilities are opened for a larger demand of both domestic and imported organic products.(http://www.fas.usda.gov/scriptsw/AttacheRep/gain_display_report.asp?rep_ID=25606944.0)
Brazil
Organic farming is growing at an estimated annual rate of 20 percent, although from a very small base. Although largely limited to crops, organic animal production is growing as well. Brazil is also exporting some organic products, such as soybeans and sugar. Imports are insignificant, and undocumented, but market opportunities exist. A final rule to regulate organic farming is due soon.
Recurring Themes
All farm operations are unique no matter what practices are being used. However, there are several points that seem to be mentioned repeatedly when discussing the transition period with groups of producers who have integrated the organic philosophy into their operations.
- Production methods changed dramatically.
- Making the change was not easy.
- They had to learn by trial and error.
- They had to discover new sources for information.
- They had to learn to think organically.
- There was greater integration of the farm and livestock system.
- There was renewed emphasis on grazing room for all livestock
- There was an initial dip in output, frequently followed by return to near normal levels of production plus advantage of reduced inputs.
- There was additional emphasis on record keeping for certification maintenance.
- More time was needed for marketing and procurement of acceptable inputs and supplies. Nearly as much time was spent on marketing as on production.
Pork, Beef and Poultry Products
Marketing, promotion and cultivation of consumer attitudes are all needed to escalate demand for organic meat products. However, prior to January 2000, labeling was most frequently cited as the primary obstacle in developing a scaled-up market for organic meats, as they could not be legally labeled purely as organic – even if certified privately. Organic meats presently have no legal status with the USDA. As a result, producers were mainly left to conditionally label their meat products and market them directly into a fragmented market place made up fractionally of direct-purchase consumers, local markets, some natural foods retailers, Web sites, restaurants and farmers markets.
Congress passed the Organic Foods Production Act (OFPA) of 1990 to:
- establish national standards governing the marketing of certain agricultural products as organically produced products;
- assure consumers that organically produced products meet a consistent standard; and
- facilitate commerce in organically produced fresh and processed food.
However, USDA’s Agricultural Marketing Service (AMS) is still developing regulations for the use of the term organic on the labeling of food products. A proposed rule discussing this important issue was published on December 16, 1997, in the Federal Register (62 FR 65850), which resulted in about 280,000 public comments. AMS is planning to reissue a proposed rule that will address issues raised and seek further comment. Furthermore, the National Organic Standards Board (NOSB), formed as a result of the OFPA, continues to advise AMS on promulgating OFPA regulations.
Meat Labeling Issue
Use of the term “organic” by itself is not permissible on meat and poultry products, but they may be labeled “certified organic by (name of the certifying entity)” if processors seek prior approval from USDA’s Food Safety and Inspection Service (FSIS) and the claim meets certain basic criteria. Specifically, to use the claim in labeling, processors will need to show that products have been certified as organic by an authority or entity that certifies products as “organically” produced. That entity must have standards that define “organically produced” and a system for ensuring that products it certifies meet those standards.
FSIS will permit the claim “certified organic by (a certifying entity)” along with the use of animal production claims and the term “natural.” FSIS has permitted the application of “animal production claims,” i.e., truthful statements about how the animals from which meat and poultry products are derived or raised, on the labeling of meat and poultry products. For many years, animal production claims have served as an alternative to the use of the term “organic” on the labeling of meat and poultry products in the absence of a uniformly accepted definition. Thus, producers may wish to continue the use of animal production claims on meat and poultry labeling. Examples of animal production claims are “No Hormone Implants Used in Raising,” “Raised without Added Hormones,” “No Antibiotics Used in Raising,” “Corn Fed,” “Fed an All Vegetable Diet,” “Raised in an Open Pasture,” and “Free Range.” The system FSIS has in place for evaluating the necessary supporting documentation to ensure the accuracy of animal production claims, such as producer affidavits and raising protocols, will continue to be used whenever these types of claims are made.
The term “natural” may be used when products contain no artificial ingredients and are no more than minimally processed in accordance with FSIS Policy Memo 055. This term may be used in combination with the claim “certified organic by (a certifying entity)” when the conditions of the policy are met.
Selecting a Certification Entity
Once producers have identified which markets they will be selling to, it is best to go to those markets and ask which certification they need. When trying to think organically, always keep in mind that the central theme in the organic process is continuous tracking of product from time and place of origin to final point of purchase. Again, this is the reason many present organic producers and processors maintain certifications with one, two, three or maybe even four different private certification entities – to make sure their product always has the opportunity to move into the best market while still wearing an organic label.
Exemptions
There may be cases where your operation is exempt. Under the Organic Foods Production Act (OFPA), as well as Iowa’s Organic Agricultural Products Act of 1998, farms and handling operations that sell less than $5,000 worth of product per year of total agricultural products are exempted. These exemptions do not release you from the responsibility of being able to verify the claims you might make on your product labels or in your marketing materials.
Even though your operation may be of a size that is exempt from certification requirements, this does not mean that you may not have certain reporting and record keeping responsibilities when presenting or labeling a product as organic.
The Iowa Act states:
47.5(11) Parties exempted from organic certification.
a. Exempted parties.
- A person who receives $5000 or less in annual gross income from the sale of agricultural products shall be exempt from fees and mandatory organic certification.
- Final retailers of agricultural products who do not process agricultural products are exempted from organic certification in the state of Iowa. Handlers who do not process agricultural products are exempt from certification.
b. The exempted producer or handler selling agricultural products as organic shall demonstrate compliance with Iowa Code chapter 190C and this chapter by implementation and documentation of the following measures:
- Submit to the department a signed Exempt Party Declaration form, as provided by the department, attesting to knowledge of and compliance with Iowa Code chapter 190C and this chapter.
- Submit a $10 processing fee with the declaration to the department.
- Maintain records adequate to verify compliance and trace an organic product from production site to sale for consumption. Records must be kept for five years.
Even if your production levels exempt you from state or federal certification requirements, you may find certification is necessary to sell any quantity of organic production to parties that must in turn guarantee an organic certification to their customers. It is a common practice amongst processors to refuse acceptance of delivery of any product claimed to be organic until the seller provides proper documentation from the preferred certification agency.
Resources for Additional Information
- Alternative Farming Systems Information Center (AFSIC) Alternative Farming Systems Information Center (AFSIC), National Agricultural Library, 10301 Baltimore Ave., Rm. 304, Beltsville, MD 20705-2351
Phone: (301) 504-6559
www.nal.usda.gov/afsic.
One of eight information centers at the library, AFSIC specializes in locating, collecting and providing information about sustainable and alternative agricultural systems.
- American Pastured Poultry Producers Association
APPPA, 5207 70th Street, Chippewa Falls, WI 54729
Phone: (715) 723-2293
dkaufman@discover-net.net
American Pastured Poultry Producers Association publishes a quarterly newsletter about production practices, processing equipment, marketing, legal issues and more. A database networks producers and customers. Membership is $20.
- Appropriate Technology Transfer for Rural Areas (ATTRA)
Appropriate Technology Transfer for Rural Areas (ATTRA), PO Box 3657, Fayetteville, AR 72702
Phone: (800) 346-9140
www.attra.org
Provides assistance, publications and resources free of charge to farmers, Extension educators and other ag professionals. Ask for “Adding Value to Farm Products: An Overview,” and “Fresh to Processed: Adding Value for Specialty Markets.”
- North American Farmers’ Direct Marketing Association (NAFDMA)
North American Farmers’ Direct Marketing Association (NAFDMA), 62 White Loaf Road, Southampton, MA 01073
Phone: (413) 529-0386 or (888) 884-9270
www.nafdma.com
- Sustainable Agriculture Network (SAN)
Sustainable Agriculture Network (SAN), Hills Building, Room 10, University of Vermont, Burlington, VT 05405-0082
www.sare.org/san/htdocs/pubs
As SARE’s national outreach arm, SAN disseminates information through electronic and print publications. Call (802) 656-0471 or e-mail nesare@zoo.umv.edu for questions about bulk discounts or rush orders.
- Sustainable Agriculture Research and Education (SARE) program
Sustainable Agriculture Research and Education (SARE) program, U.S. Department of Agriculture, 1400 Independence Ave. SW, Stop 2223, Washington, DC 20250-2223
Phone: (202) 720-5203
www.sare.org
Administered by USDA-CSREES, SARE studies and spreads information about sustainable agriculture via a nationwide grants program.