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Overall Description of Deadline: The Organic Foods Production Act calls for the Secretary to appoint the National Organic Standards Board 180 days after enactment and convene it within 60 days thereafter.

Statement of Need: The purpose of these regulations is to implement the Organic Foods Production Act (OFPA). The Act requires the establishment of consistent national standards for products labeled as organic; mandatory independent, third-party certification of such products; U.S. Department of Agriculture (USDA) oversight of the independent certifiers and their inspectors; and assurance that imported organic food products are produced and processed under practices equivalent to USDA standards. Establishment of the National Organic Program is necessary to eliminate the confusion that exists among consumers because of the variety of standards under which organic foods are currently produced and the irregular and sometimes unsubstantiated labeling claims.

Summary of the Legal Basis: This regulatory action is authorized by title XXI of the Food, Agriculture, Conservation, and Trade Act of 1990 (Public Law 101-624).

Alternatives: The Board developed recommendations through an open discussion process with the interested parties. The Board formed six subcommittees to draft recommendations for the following subject areas: Crop standards; livestock standards; processing, packaging, and labeling standards; materials; accreditation of certifying agents; and international (import) requirements. The Board has held 20 meetings during which they have accepted public comments. In addition, the Agency held four public hearings on livestock to develop additional input to the development of livestock standards. In reviewing the Organic Foods Production Act, the Board identified about 25 specific topics requiring recommendation development such as an organic plan, pesticide drift, livestock health, and materials review. Draft documents were prepared in the specific subject areas and circulated for comment from the organic industry. These documents were then further revised with full board-member input and submitted a final time for public comment. Upon receipt of comments, revisions were made, and the document was approved as a recommendation to the Secretary. Approximately 25 of these recommendations were approved at a Board meeting in June 1994 and forwarded to the Secretary (after minor editing in the approval process) in August 1994. In all of the documents, the Board committees considered alternatives and altered positions based on reasoned public comments received. The Board continues to provide recommendations for modification or additions to program recommendations as the program is implemented and operating. The allowed synthetic substances and prohibited natural substances on the national list are subject to review by the Board and the Secretary every 5 years in order for the national list to be valid according to section 2118(e) of the OFPA. The Secretary uses the recommendations as the basis for developing proposed rules for implementing the program. The Secretary may not accept recommendations that are deemed to be inconsistent with Department policy or lack a defensible position. In December 1997, the NOP published a proposed regulation that drew more than 275,000 mostly negative comments from the public. This intense public concern prompted the Secretary to call for the rule to be rewritten. The process included a review of comments, further discussion with the NOSP regarding their recommendations, and publishing for comment three options papers--two dealing with organic livestock practices and one addressing authority of certifying agents. NOP published a second proposed rule March 12, 2000, that received 40,774 comments, most of which are favorable. NOP published a final rule on December 21, 2000.

Anticipated Costs and Benefits: Implementation of the National Organic Program will benefit certifying agents, producers, handlers, and consumers. Key benefits include improved protection of buyers from misleading claims and more information on organic food, reduced administrative costs, and improved access to international organic markets. The proposed rule would impose direct costs on applicants for accreditation. Certifying agents will be charged fees and related charges when applying for and for annual reviews of accreditation. Estimated direct costs for accreditation are $1,560 to $2,100 during the first 18 months following publication of the final rule. Following the initial 18 months when hourly charges for accreditation service will be charged, the cost for initial accreditation will be $6,120 to $9,700. The cost for the annual review of accreditation is estimated at $190 to $760 depending on the complexity of the certifying agent's business. Certifying agents are expected to pass the costs of accreditation and other costs onto their producer and handler clients. USDA will not impose any direct fees on producers and handlers. However, all industry participants--certifying agents, producers, and handlers--will have costs of compliance, including paperwork and recordkeeping costs. USDA National Organic Program, States operating State programs, and certifying agents will all bear enforcement costs. The amount of enforcement costs is unknown.

Risks: The program does not address food safety issues. Any reduction in risks to public health, safety, or the environment are indirect benefits of the management practices and substances used by organic producers. Organic producers seek to reduce or eliminate practices and materials that may harm soil life, deplete nonrenewable resources, pose a hazard to water and air quality, or threaten farmworkers health. The Act requires the establishment of a "national list" of approved synthetic and prohibited natural materials as an integral part of the program. Synthetic materials approved for the national list must have been determined by the USDA, FDA, and EPA to be not harmful to human health or the environment.