Specialty Food Magazine

The four concepts of the Proposed Rule, as defined by USDA, are: 1 Organic Integrity The unique attributes that make a product organic and define its status as organic. A product that fully complies with the USDA organic regulations has integrity, and its organic qualities have not been compromised. 2 Organic Fraud Intentional deception for illicit economic gain, where nonorganic products are labeled, sold, or represented as organic. This may include substitutions or deliberate mislabeling; falsified records; and/or false statements given in applications or organic system plans, or during inspections, investigations, and audits. 3 Audit Trail Documentation that is sufficient to determine the source, transfer of ownership, and transportation of any agricultural product labeled as "100 percent organic," the organic ingredients of any agricultural product labeled as "organic" or "made with organic (specified ingredients)," or the organic ingredients of any agricultural product containing less than 70 percent organic ingredients identified as organic in an ingredients statement. 4 Supply Chain Traceability The ability to identify and track a product (including its location, history, and organic nature) along its entire supply chain, from source to consumption, and/or "backwards" from consumption to source. A supply chain audit assesses supply chain traceability for specific products, verifying whether records show all movement, transactions, custody, and activities involving the products. The regulation will massively alter how companies must monitor their organic products and add complexity to the organic supply chain. It will also affect organic inspections, certification, and the ways that certifiers do business. How Enforcement Could Affect You Here are some aspects of the proposed regulation that would affect specialty food makers, importers, distributors, brokers, and retailers: • Definition of handling: By expanding the definition of "handle" to include the "trading, facilitating sale or trade, brokering, repackaging, labeling, combining, receiving or loading," the proposed rule requires that operations which never take physical possession of organic products become certified as organic "handling" operations. Distributors and brokers would be required to develop an Organic Production and Handling System Plan (OSP) and participate in an onsite audit, adding expense to the system. • Packaged products: The exemption for those which only handle packaged products would be eliminated. As SFA commented, "This will dramatically increase costs of compliance without delivering a similar benefit in fraud reduction." • Import certificates: All organic products imported to the U.S. must follow a uniform format for the National Organic Program (NOP) Import Certificate and the NOP Operation ID. • Small business exemption: The small business exemption will be maintained at $5,000 of organic production. That is significantly smaller than the exemption for compliance with the Food Safety Modernization Act, which is $1 million for a qualified facility. • Onsite audits: At least 5 percent of all certification inspections by accredited certifying agents must be unannounced. Supply chain audits must be a part of these inspections. Certifying agents will need to verify that the quantity of organic product sold does not exceed the quantity of organic product that is produced or purchased. • Uniform organic certification certificates: There are currently 80 organic certifiers operating with most not using the Organic Integrity Database, resulting in 70 different certificate formats. Certifiers going forward would be required to issue uniform certificates. • Expiration dates for organic certificates: All organic certificates would have an expiration date generated by the Organic Integrity Database. The new regulations will increase the cost of importing, producing, and selling organic products, impacting companies that embrace organic as a better-for-you food. It will be interesting to see how USDA responds to the 1,500+ comments and adjusts the final rule to protect consumers while also encouraging organic production. Ron Tanner is president of Tanner Food Group. The new regulations will increase the cost of importing, producing, and selling organic products, impacting companies that embrace organic as a better-for-you food. FALL 2022 43

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