Organic Agriculture in the United States: Program and Policy Issues
Organic Agriculture in the United States:
Program and Policy Issues
Updated November 25, 2008
Specialist in Agricultural Policy
Resources, Science, and Industry Division
Organic Agriculture in the United States:
Program and Policy Issues
Congress passed the Organic Foods Production Act (OFPA) in 1990 as part of
a larger law governing U.S. Department of Agriculture (USDA) programs from 1990
through 1996 (P.L. 101-624, the Food, Agriculture, Conservation, and Trade Act of
1990). The act authorized the creation of a National Organic Program (NOP) within
USDA to establish standards for producers and processors of organic foods, and
permit such operations to label their products with a “USDA Organic” seal after
being officially certified by USDA-accredited agents. The purpose of the program,
which was implemented in October 2002, is to give consumers confidence in the
legitimacy of products sold as organic, permit legal action against those who use the
term fraudulently, increase the supply and variety of available organic products, and
facilitate international trade in organic products.
Policy issues affecting the National Organic Program since implementation
largely reflect the differences in interpretation among stakeholders of the language
and intent of OFPA and the actual operation of the program under the final rule. The
NOP was challenged in 2003 by a lawsuit claiming that many of the regulations were
more lenient than the original statute permitted. Although the issues around the
lawsuit were ultimately resolved, partly by court-ordered rulemaking and partly by
an amendment to the OFPA that was attached to the FY2006 appropriations bill, new
issues concerning program operation continue to arise.
One of these relates to USDA’s efforts to write a new regulation governing
access to pasture for organic dairy cows (and other ruminants). Tight supplies of
certain organic commodities, particularly dairy products, and the entry into the
market of major grocery retailers wanting to sell organic foods are adding pressure
to this debate. Critics charge that large organic dairy operations are not abiding by
the intent of OFPA by feeding organic grain to cows in feedlots, and that the
principle of grazing is central to consumers’ concept of organic milk. Supporters of
existing regulations point to the need for flexibility in order to maintain an organic
dairy sector that can meet growing demand. USDA published its proposed rules on
October 24, 2008.
The new omnibus law that will govern USDA programs and policies through
FY2012 contains several provisions affecting organic agriculture and the NOP (H.R.
2419/P.L. 110-246; the Food, Conservation, and Energy Act of 2008). The law
provides $22 million in mandatory funds to continue a cost-share program to help
farmers obtain organic certification; $5 million in mandatory funds and $25 million
in authority for appropriated funds over five years to support the collection and
analysis of organic production and marketing data; and $78 million in mandatory
funds over four years to support the organic agriculture research and extension
This report will be revised as events warrant.
Organic Sector Statistics........................................1
The Organic Foods Production Act of 1990.........................3
USDA Regulatory Activity......................................5
Access to Pasture Controversy................................5
Organic Farmed Fish Controversy.............................7
Major Organic Provisions in the 2002 Farm Bill .....................7
Cost-Sharing Start-Up Costs.................................7
Organic Agriculture in the 2008 Farm Bill..........................9
Organic Conversion Cost-Sharing.............................9
Data Collection and Analysis.................................9
Support for NOP Administration.............................10
List of Figures
Figure 1. Certified Organic Acreage and Operations, 2005.................2
Organic Agriculture in the United States:
Program and Policy Issues1
Organic farming, as defined in the final rule establishing the U.S Department
of Agriculture (USDA) National Organic Program (NOP), is “a production system
that is managed in accordance with the [Organic Foods Production] Act and
regulations ... to respond to site-specific conditions by integrating cultural, biological,
and mechanical practices that foster cycling of resources, promote ecological balance,
and conserve biodiversity.”2 This definition indicates that organic agriculture is both
an approach to food production based on biological methods that avoid the use of
synthetic crop or livestock production inputs (spelled out in detail in the December
2000 rule), and a broadly defined philosophical approach to farming that puts value
on resource efficiency and ecological harmony.
Interest in organic farming migrated from Europe to the United States in the
early 1900s. Beginning in the 1950s, as the U.S. public became more concerned
about the potential adverse environmental and public health effects of agricultural
chemicals and so-called “factory farming” methods, private research organizations
began to conduct scientific investigations into non-chemical and non-intensive
farming techniques, and a small but slowly increasing number of farmers began to
adopt organic production practices. Except for a brief period from about 1978 to
1981, USDA did not conduct any activities in support of organic agriculture until
OFPA required the Department to begin rulemaking to establish the National Organic
Program in 1990.
Organic Sector Statistics
The annual rate of market growth for organic foods and other products has
remained around the 20% rate it achieved beginning in 1990, although analysts
generally expect it to moderate over the next decade.3 The Organic Trade
Association’s (OTA’s) 2007 Manufacturer Survey determined that sales of organic
food products were $16.7 million in 2006, or 2.8% of total U.S. retail food sales.4
About 38% of organic foods are sold through conventional retailers, 44% through
1 This report is an updated and revised version of a report originally written by former CRS
specialist Jean M. Rawson.
2 7 CFR 205.2.
3 USDA, Economic Research Service (ERS), Recent Growth Patterns in the U.S. Organic
Foods Market, AIB777, September 2002, at [http://www.ers.usda.gov/publications/aib777/].
4 Organic Trade Association 2007 Manufacturer Survey. Available online at
[http://www.ota.com/ organic/mt/business.html ].
natural food stores, and 16% through farmers’ markets, mass merchandisers and club
stores, restaurants, exports, and other marketing channels. Various sources of export
data estimated U.S. exports of organic foods at between $125 million and $300
million in the 2000-2002 period.5 The biggest export market is Canada; other major
markets are Japan, the European Union, and other countries in Asia. The OTA 2007
Manufacturer Survey reported that $938 million in nonfood organic product sales
occurred in 2006. The fastest-growing categories were organic supplements,
personal care products, flowers, pet foods, and fibers.6
According to USDA’s Economic Research Service (ERS), 2005 was the first
year that all 50 states reported having some certified organic farmland. Nationwide,
the number of acres of certified organic cropland and pasture/rangeland was 4 million
in 2005. ERS estimated that in 2004 the number of certified operations that process
and distribute organic products was just over 3,000.7
Figure 1. Certified Organic Acreage and Operations, 2005
Source: USDA, Economic Research Service.
Fresh produce is the largest sector of the organic industry, with California
having the greatest number of acres devoted to organic fruit and vegetable production
(see Figure 1). Other states leading in certified organic crop acreage are Washington,
Oregon, North Dakota, Minnesota, Wisconsin, Montana, and Iowa. California,
5 USDA, ERS, “Price premiums hold on as U.S. organic produce market expands,” VGS-
6 The OTA 2007 manufacturer survey is available online at [http://www.ota.com/index.html]
under “Organic Facts/Market Trends.”
7 USDA/ERS, Organic Production Data Sets. Available online at [http://www.ers.usda.gov/
Texas, Alaska, and Montana have the most acreage of organic pasture for livestock.
In the Northeast, Southeast, and Upper Midwest, small-scale growers of organic
fruits, vegetables, herbs, and flowers are a significant component of individual states’
The high growth rate in sales of organic products can be attributed in part to the
higher prices that organic producers and processors receive for their products,
according to ERS. Agency economists speculate that part of the price premium may
be due to higher production costs and to higher demand relative to supply. For the
2000-2004 period (the most recent data available), the annual average farmgate price
premiums for fresh organic broccoli and carrots fluctuated from 75% to 133% above
the prices of conventionally grown broccoli and carrots, according to ERS. Price
premiums for the two vegetables at the wholesale level never went below 125% in
the same period. The ERS study goes on to say that:
Laws of supply and demand, however, make it unlikely that price premiums
contributing to higher profits and market growth can coexist over the long run:
as long as higher profits exist, new suppliers will enter the market, and once
market supply increases faster than demand, price premiums and the
commensurate level of higher profits are likely to decline.... Many organic
industry participants and observers believe that the price premiums ... need to
decrease if organic foods are to penetrate much beyond the 2- to 3-percent level9
into the mainstream.
The consumer studies that ERS reviewed did not permit any clear estimate of
future demand for organic products. The studies showed that price, size, packaging,
appearance, and concerns about health and nutrition, taste, food safety, and the
environment all play varying roles in consumer decisions to buy organic food.
Surveys on race, ethnicity, and income levels showed significant diversity.
The Organic Foods Production Act of 1990
Congress passed the Organic Foods Production Act (OFPA) of 1990 (Title 21
of P.L. 101-624, the Food, Agriculture, Conservation, and Trade Act of 1990; the
1990 farm bill) with widespread support from organic industry groups, the National
Association of State Departments of Agriculture, and other farm and consumer
groups. The organic industry petitioned Congress to draft the act in the late 1980s,
after it had been frustrated in its attempts to come to an internal consensus on
production and certification standards. The industry maintained that federal
standards would reduce consumer confusion over the many different state and private
standards then in use, and would promote confidence in the integrity of organic
products over the long term. Manufacturers of multi-ingredient organic food
products stated that uniform standards would facilitate labeling. Others held that
8 For a detailed graphic representation of the distribution of organic crop and pasture acreage
and number of operations per state, see [http://www.ers.usda.gov/Amberwaves/Feb03/
9 USDA, ERS, “Price premiums hold on as U.S. organic produce market expands,”
VGS-308-01, May 2005, at [http://www.ers.usda.gov].
regulations would help the organic industry expand product lines and increase
marketing opportunities. Industry analysts asserted that a consistent U.S. organic
standard would facilitate access to a potentially lucrative international organic
The Organic Foods Production Act of 1990 authorized a National Organic
Program to be administered by USDA’s Agricultural Marketing Service (AMS). The
act established a 15-member National Organic Standards Board (NOSB) to “assist
in the development of standards for substances to be used in organic production”
(referred to as the “National List”) and to “provide recommendations to the Secretary
Under the program, producers, processors and handlers who wish to market their
products as organic are required to follow production practices as spelled out in detail
in regulations (7 CFR 205). USDA accredits private and state certification agents,
who visit producers, processors, and handlers to certify that their operations abide by
the standards; they conduct annual reviews to verify continued compliance. It is
illegal for anyone to use the word “organic” on a product if it does not meet the
standards set in the law and regulations.10 The presence of the “USDA Organic” seal
on a product means it is 95% or more organic. Labels on products having 70% to
95% organic content can say “made with organic (specified ingredients or food
groups),” but cannot carry the seal. Foreign organic producers and handlers wishing
to export products to the United States may be certified by a USDA-accredited
certification agent in their own country, if there is one; or USDA may accept
certification by agents accredited by a foreign government; or, USDA may negotiate
an equivalency agreement with another nation’s organic program.11
The regulations under the OFPA are intended to set uniform minimum standards
for organic production. States may adopt additional requirements after review and
approval by USDA. Furthermore, private organic organizations are permitted to affix
their own labels in addition to the USDA label, indicating that the product meets their
standards as well as the national ones. The private label may indicate only that the
organization’s standards are in addition to (but not superior to) the national standards.
AMS reviews certification agents for re-accreditation every five years. AMS has the
authority to revoke or suspend a producer’s certification or an agent’s accreditation
if a satisfactory solution to a program violation cannot be found.
10 Farms and handling operations that sell less than $5,000 a year in organic agricultural
products are exempt from certification; however, these producers and handlers must abide
by the national standards for organic products and may label their products as organic.
11 A July 2005 audit by the USDA Office of Inspector General (OIG) states that USDA had
41 accredited certification agents in foreign countries. The report also found that as of
August 2004, AMS had negotiated only one equivalency agreement with a foreign country
(Japan). The OIG recommends implementation of internal operating procedures “to assure
that the NOP is achieving its intended objectives to ensure that organic products meet
consistent, uniform standards.” The audit report is at [http://www.usda.gov/oig/audits.htm];
follow links from “View Audit Reports and News Releases” to the listing by “Agency
Subject of Report.” It is under the Agricultural Marketing Service, July 2005.
The NOP final rule became effective on February 21, 2001; the program itself
became fully operational on October 21, 2002. In the first step toward
implementation, USDA accredited private and state certification agents, who in turn
began to certify organic producers and handlers according to the standards found in
7 CFR 205. After October 21, 2002, all products sold as organic had to be in
compliance with the regulations and carry the “USDA Organic” seal.
USDA Regulatory Activity
Access to Pasture Controversy. In January 2005 a newspaper article
about a Colorado organic dairy operation shed light on a major controversy within12
the organic industry and certain consumer groups. The article focused on a 5,300-
cow organic farm where the animals were fed almost exclusively on grain and
allowed outdoors into a feedlot for air and exercise.
The NOP regulation at the core of the dispute is 7 CFR 205.239(a)(1-2): “The
producer of an organic livestock operation must establish and maintain livestock
living conditions which accommodate the health and natural behavior of animals,
including (1) Access to the outdoors, shade, shelter, exercise areas, fresh air, and
direct sunlight suitable to the species, its stage of production, the climate, and the
environment; (2) Access to pasture for ruminants[.]”
The news article cited organic dairy producers who argued that the regulation
means that organic cattle must get some of their nutrition, as well as fresh air and
exercise, from grazing on pasture. The Colorado operator maintained that his
animals have outdoor access, but that in an arid state like Colorado, providing
sufficient pasturage for all his cows to graze would be an insurmountable
This issue illustrates an underlying tension within the organic industry. The
existence of regulatory standards for organic production and processing has allowed
more conventional food companies to create organic product lines and enter the
market. Some of the older (and generally smaller) companies in the industry hold
that organic farming practices are an integral part of the meaning of the term
“organic,” particularly with respect to standards for the treatment and feeding of
livestock. These stakeholders maintain that if the pasturage in certain parts of the
nation can support only small dairy or beef cattle herds, or none at all, then such
farms should be small or nonexistent in those areas. Others, notably some of the
newer entrants into the organic market, are concerned lest the regulations become so
prescriptive that they deprive producers and processors of the opportunity to benefit
from the expanding market for organic products. The recent entry into the organic
market of some large supermarket chains is putting pressure on the industry to meet
demand, particularly for organic dairy products.
12 “Organic Milk Debate; Dairies dispute ‘organic’ values; Ex-hippie farmers contest
practices of big producers,” Chicago Tribune, January 10, 2005, at [http://www.
At a February 2005 meeting of the National Organic Standards Board, members
discussed and recommended new language for 7 CFR 205.239, which they forwarded
to National Organic Program officials for approval.13 The emphasis in the revised
language was on allowing cows at the appropriate “stage of life” to graze pasture
“during the pasture’s normal growing season.” At the August 2005 board meeting,
NOP staff rejected the recommendation, saying it lacked a “clear and concise
regulatory objective,” and asked the board to rework it.14
On April 13, 2006, AMS published an advanced notice of proposed rulemaking
asking stakeholders to respond to a number of questions concerning access to pasture,
including questions concerning whether consumers consider pasturing to be essential
to organic milk production, and whether there is science-based information on
ruminant animal nutrition and minimum pasture requirements, among other things.15
The proposed rule has not yet been published. Critics of the NOP are expressing
their concern that as more time passes without a final rule, additional large feedlot
dairy operations are being certified organic in possible violation of the OFPA.16
On October 24, 2008, USDA published its proposed rule to amend the NOP
livestock standards to clarify the role pasture plays in the production of organic
ruminants.17 Among the proposed changes are:
!definition of “growing season” and the requirement that all animals
over the age of six months must be on pasture throughout the
!requirement that animals receive 30% of their dry matter intake
(DMI) from pasture.
!definition of “temporary confinement” and clarification of periods
of temporary confinement.
!standards for pasture practice that addresses the management of
pasture as a crop.18
The proposed rule is intended to close a loophole that has allowed some larger dairy
operations to sell their milk as organic and at a price premium, even though their
13 NOSB meeting minutes, February 28 through March 3, 2005, at [http://www.
ams.usda.gov/nosb/meetings /meetings .html ].
14 NOSB meeting minutes, August 15 through 17, 2005 at [http://www.ams.usda.gov/
15 71 Federal Register 19131.
16 Center for Food Safety, National Organic Coalition, Pasture Fact Sheet.
17 USDA, AMS, National Organic Program (NOP), Access to Pasture (Livestock); Proposed
Rule, 7 CFR Part 205, Oct. 24, 2008, 73 Federal Register 63548, at [http://www.ams.
usda.gov/AMSv1.0/getfile?dDocName= ST ELPRDC5073426&acct=n%20oprulemaking].
18 USDA, AMS, USDA Publishes Proposed Rule to Clarify Pasture Provisions of Organic
Regulations, Press Release AMS 200-08, October 22, 2008, at [http://www.ams.usda.gov/
AMSv1.0/ams.printData.do?temp l a t e = p r i n t P a ge&navID=&page =printPage &dDocId=ST
ELPRDC5073342&dID=102368&w f = f a l s e &d o c T itle=USDA+Publishes+Proposed+Rul
e+to+Clarify+Pasture+Provi sions+of+Or ganic+Regulations].
cows rarely graze on fresh grass. The comment period for USDA’s proposed rule
closes in December 2008.
Organic Farmed Fish Controversy. For the past few years the NOSB has
been in the process of developing an independent set of organic standards for
aquaculture to allow for certain farmed fish to be labeled “organic.” In November
2008, the NOSB, working with the Aquaculture Working Group (AWG), approved
recommendations on labeling criteria for farmed fish.19 These recommendations are
expected to serve as the basis for an upcoming USDA proposed rulemaking.
Consumer advocates criticize the NOSB recommendations, claiming these
criteria would allow for sub-par organic fish to be sold at a premium, thus
undermining organic standards and consumer confidence in the organic marketplace.
Environmental groups also criticize the NOSB recommendations for not specifying
that farm fish be produced in closed, controlled production systems. These groups
criticize the NOSB recommendations for (1) allowing farmed fish to receive feed that
is not 100% organic; (2) allowing farmed fish to be fed fishmeal derived from wild
fish, which critics say has the potential to carry certain water-borne contaminants;
and (3) allowing for the use of open net cages at fish farms, which critics say are
associated with environmental problems and discharges into U.S. waterways and may20
also harm wild fish supplies. These groups — which include the Consumers Union,
the Organic Consumers Association, the Center for Food Safety, and Food and Water
Watch, among others — want only fish that eat 100% organic feed and are produced
in closed production systems to be eligible to be certified as organic. Aquaculture21
producers generally support the NOSB recommendations.
Major Organic Provisions in the 2002 Farm Bill
Cost-Sharing Start-Up Costs. Although the OFPA requires the cost of the
National Organic Program to be fully supported by user fees collected for USDA
accreditation and certification services, Congress has appropriated funds on several
occasions to help the program in its initial stages. The FY2001 USDA appropriations
act (P.L. 106-387) contained $639,000 to cover accreditation costs. In FY2002,
under the Agricultural Management Assistance Program authorized by the Federal
Crop Insurance Act (P.L. 106-224), Congress made $1 million available to state
agriculture departments in 15 designated states to help defray the costs of
certification for small-scale producers and processors.
19 Preliminary meeting notes and information is posted on USDA AMS’s website. See
NOSB, Livestock Committee, Proposed Organic Aquaculture Standards: Fish Feed and
Related Management Issues, September 28, 2008, at [http://www.ams.usda.gov/AMSv1.0/
ge tfile?dDocName=ST ELPRDC5072721].
20 Consumers Union, “National Organic Standards Board (NOSB) Decision Today on
‘Organic’ Fish Sets Dangerous Precedent to Gut USDA Organic Program,” November 20,
21 See, e.g., comments by Wally Stevens, Executive Director of the Global Aquaculture
Alliance, as reported in the Washington Post (November 20, 2008).
The 2002 farm bill (P.L. 107-171, the Farm Security and Rural Investment Act),
which was enacted in May 2002, also provided additional funds to support program
start-up. Title X of the farm act gave USDA authority to continue to defray the costs
of producers and handlers seeking organic certification through FY2007, and
authorized a one-time, mandatory transfer of $5 million from the Commodity Credit
Corporation (CCC) to establish a national organic certification cost-share program
under the NOP. Federal funds may not cover more than 75% ($500 maximum) of
a producer’s or handler’s costs for becoming certified. The transfer occurred in
FY2002 and remained available until fully expended, which was in fall 2006.22
Research. The research title of the 2002 farm bill renewed expiring authority
for a competitive grant program to support research and extension activities on
organic production, processing, and international marketing. The conference report
also added language calling for an emphasis on classical and advanced research on
genetics to improve organic crops; research to identify the marketing and policy
constraints on the organic industry; and expanded on-farm research. The act
authorized $3 million to be transferred annually from the U.S. Treasury to USDA in
FY2003-FY2007 to support this research.23 Other provisions in the research title
(1) require ERS to gather and maintain segregated data on the production and
marketing of organic agriculture; and (2) require ERS and the National Agricultural
Library to make it easier for U.S. organic producers, researchers, and extension
professionals to obtain the results of organic research conducted in foreign24
Concerning the availability of production and marketing data on organic
agriculture, a look at ERS’s online economic analyses of the sector indicates that the
agency still is relying on external data sources for much of its information. As of
September 2006, a comprehensive USDA survey of the entire organic sector,
authorized in the 2002 farm bill, has not been conducted. USDA’s Agricultural
Marketing Service has not yet begun to provide market news on the organic sector,
which would permit up-to-date price discovery. Separate export and import data for
organic products are not being collected at the borders. These deficiencies hamper
business planning and expansion, and complicate crop insurance premium-setting
and loss payments, among other issues, according to organic sector stakeholders.
22 The CCC is a wholly owned government financing institution for USDA agencies that
administer mandatory programs, such as the farm commodity price and income support
programs for wheat, cotton, rice, and certain other crops; agricultural export subsidies; and
certain conservation and trade programs. CCC funds are considered mandatory funds that
must be made available for the purposes authorized. In practice, however, appropriators
sometimes prohibit or place restrictions on funding for mandatory programs in the annual
23 Information on Integrated Organic Program research grants are available at USDA’s
website at [http://www.csrees.usda.gov/fo/funding.cfm].
24 USDA, ERS, “Market-Led Growth vs. Government-Facilitated Growth: Development of
the U.S. and EU Organic Agriculture Sectors,” August 2005, at
[http://www.ers.usda.gov/Briefing/Organic/]. Congress has not appropriated funds to date
for a National Agricultural Library International Organic Research Collaboration.
Organic Agriculture in the 2008 Farm Bill
Title X of the Food, Conservation, and Energy Act of 2008 (P.L. 110-246, the
2008 farm bill) is the Horticulture and Organic Production title of the farm bill — the
first such title in a farm bill. The provisions related to organic agriculture focus
primarily on reauthorizing some of the key programs from the 2002 farm bill and
providing mandatory funds to carry them out.
Certification Cost-Sharing. The 2008 farm bill reauthorizes the National
Organic Certification Cost-share Program and provides a one-time transfer of $22
million in mandatory funds to support it. The amount a producer or handler can
receive is raised from $500 to $750, and the maximum amount of certification costs
that federal assistance is allowed to cover is 75%.25 In addition, Section 2801 of the
conservation title designates $1.5 million in mandatory funds under the Agricultural
Management Assistance Program specifically for providing certification cost-share
assistance to organic producers in Connecticut, Delaware, Hawaii, Maryland,
Massachusetts, Maine, Nevada, New Hampshire, New Jersey, New York,
Pennsylvania, Rhode Island, Utah, Vermont, West Virginia, and Wyoming.
Organic Conversion Cost-Sharing. The 2008 farm bill includes a
provision from the Senate version of H.R. 2419 that makes grants under the
Environmental Quality Incentives Program (EQIP; in Title II — Conservation) to help
farmers convert from conventional to organic production. The House version of H.R.
2419 would have authorized $50 million in appropriations over five years for a
separate program providing technical assistance and cost-sharing grants for organic
Research. P.L. 110-246 extends the authority for the organic research and
extension initiative that was established in the 1990 farm bill. The bill provides a total
of $78 million in mandatory funds for the initiative in FY2009-FY2012, and also
authorizes $25 million annually in appropriations. Both the House and Senate
versions of H.R. 2419 contained provisions expressing the sense of Congress that the
level of funding for organic research conducted by USDA’s intramural science
agency, the Agricultural Research Service (ARS), should be at least commensurate
with the percentage that organic products represent of the U.S. food market — at least
Data Collection and Analysis. The 2008 farm bill contains a provision to
help USDA fulfill a requirement in the 2002 farm bill to collect segregated data on
organic production and marketing and provide timely market information. The bill
provides a one-time transfer of $5 million in mandatory funds for this purpose, and
requires USDA to report to Congress on the progress it is making on organic data
collection six months after passage of the farm bill.
25 To be eligible for reimbursement, an organic production or handling operation must be
located within a qualified state, comply with NOP regulations for organic production or
handling and have received certification or continuation of certification by a
USDA-accredited certifying agent during the period of Oct. 1, 2008, through Sept. 30, 2009.
Crop Insurance. Organic producers have long expressed dissatisfaction with
coverage for their crops under the federal crop insurance program. Organic farmers
generally must pay higher premiums to participate because the private companies that
offer the insurance are not as familiar with the risks of organic production as they are
with those of conventional production. In addition, the insurance companies generally
pay out organic farmers’ claims based on the value of conventionally grown crops, not
on the higher value that organic crops carry.
Section 12023 in the crop insurance and disaster assistance title of the 2008 farm
bill calls for a review of the underwriting, risk and loss experience of organic versus
conventional crops. Based on the review, the Federal Crop Insurance Corporation will
work to reduce or eliminate premium surcharges on policies for organic producers
“unless the review ... documents the existence of significant, consistent, and systemic
variations in loss history between organic and nonorganic crops, with collectively or
on an individual crop basis....” In addition, organic producers will have an option in
their policies to choose if they want to be reimbursed for losses based on the actual
prices they receive.
Support for NOP Administration. Congress has appropriated roughly $2
million annually in recent years to administer the National Organic Program. Critics
argue that this level of funding has led to insufficient attention to oversight and
compliance activities. The 2008 farm bill sets the annual authorization level for the
NOP at $6.5 million for FY2009, rising to $11 million in FY2012. House and Senate
appropriators will determine the actual funding available.
Other Provisions. The conservation, credit, and trade titles of the House and
Senate farm bills also contain various provisions increasing the organic sector’s access
to programs in those areas. (See CRS Report RL34228, Comparison of the 2008
Farm Bill Conference Agreement with the House and Senate Farm Bills, for