Delivering the week’s top organic food news
5.16.2018
100% Non-GMO

The USDA Killed the Organic Check-Off Program. Here’s the Real Opportunity Now.


“Got Milk?”

“Pork. The Other White Meat”

“Beef. It’s What’s for Dinner”

You may not eat these foods, but you probably are familiar with one or all of these very famous slogans.

These advertising campaigns were all derived from a mandatory promotional program overseen by the USDA, also known as a check-off program, which charge companies in each industry a small yearly amount to fund its budget.

Advocates for an organic check-off program were hoping to create something similar in our industry, but the USDA just rejected this idea.

Originally proposed to the USDA by the Organic Trade Association (OTA) in 2015, the Generic Research Promotion Order for Organics was expected to raise approximately $30 million on an annual basis. Fees would have been paid by a large number of participants in the organic industry, and funds were earmarked for both research and promotion of the sector.

The USDA made the decision to kill the proposed check-off because it said there was a “lack of consensus within the industry in support for the proposed program and divergent views on how to resolve issues in implementing the proposed program.”

Even though operations that generate less than $250,000 in gross organic revenues would have been exempt from mandatory participation in the program, support for the check-off was not unanimous. Organizations such as The Cornucopia Institute, Organic Consumers Association, Organic Farmers’ Agency for Relationship Marketing (OFARM), Organic Seed Growers and Trade Association (OSGATA), and other groups opposed the check-off. Many of the concerns stemmed from farmers having witnessed problems at other commodity check-off programs, such as the misspending of funds, corruption, lack of openness and auditing, and exorbitant salaries for staff.

The OTA disputed the USDA’s notion that there was “uncertain industry support for the proposed program.” It said that it had nearly 1,400 public endorsers, including over 1,230 certified organic operators.

Regardless of where you stand on the check-off program, here are a few things that we do know.

1) It is an absolute travesty that organic, a $50 billion industry, does not have a national branding and advertising campaign. As a result, the industry is paying a steep price.

The Food Marketing Institute’s 2017 U.S. Grocery Shopper Trends report said that shoppers are looking for “natural” and “Non-GMO” claims much more than “organic” ones. This means we are losing out on valuable revenues because consumers are not adequately informed.

2) If the check-off did pass, the exact language used in the national branding campaign would need to be approved by the USDA, and nothing would be allowed that denigrates any other commodity.

It would not have addressed the toxic chemicals or GMOs permitted in conventional agriculture — key reasons why people choose organic.

THE REAL OPPORTUNITY IN FRONT OF US

If the USDA had pushed through the check-off program, there would be additional funding for organic research and some sort of promotional campaign. These are definite positives.

Yet, the level of anger, distrust and divisiveness within the organic community (mainly from opponents of the check-off program) would have grown exponentially.

With a mandatory program no longer an option, this is a golden opportunity for the Organic Trade Association to take a real leadership role and propose a voluntary check-off program.

The board of this voluntary check-off program should include representatives and/or farmers from many of the groups that opposed the mandatory check-off, including The Cornucopia Institute, Organic Consumers Association, OFARM, OSGATA, and others. There should be radical transparency about how every single dollar is being spent and true collaboration among all industry participants, not just OTA members or appointees. No longer confined to the USDA’s rules, a national branding campaign could be comprised of whatever language or approach that the board deems worthy and appropriate.

Fortunately, there is precedence for successful, voluntary check-off programs, such as in the pistachio industry.

For 25 years, the California Pistachio Commission operated a mandatory check-off before its members voted to disband it.

Then, in 2007, a voluntary program was formed, managed by the American Pistachio Growers. It now represents about 65% of the industry (growers) and 40% of the total volume, and collects fees on a cents per pound basis.

Since inception, revenues have grown from $1.5M to almost $12M, due to both industry and member growth.

“We are fortunate that it is working,” said Richard Matoian, Executive Director of the American Pistachio Growers.

“Under a voluntary program, there are people who are supportive, and there are those who are not. Growers can choose to belong to us any day of the week. In many ways, we have to be more caring and responsive to our members because it is voluntary. We’ve provided a good rationale why people belong, and there is strength in numbers. Everyone is behind it because we can’t do things alone.”

With organic under serious attack from the current administration — the killing of the Organic Animal Welfare Standards and the refusal of the USDA to listen to the National Organic Standards Board’s recommendations about ingredients in organic — we are at a critical time when the industry must be working together, not apart.

Pulling off a voluntary program will not be easy, but if done correctly, it holds the potential to enhance collaboration and strengthen trust among all industry players — something that a mandatory program would never have accomplished.

Have a great day!

Max Goldberg, Founder

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This Week's Quick Hits

Quick Hits

* While on The Ellen DeGeneres Show promoting her Once Upon a Farm organic baby food line, co-founder Jennifer Garner did impressions of numerous farm animals. She crushed it!


* In another must-see video clip, Foodstirs co-founder Sarah Michelle Gellar is promoting her single serve mug cakes behind the register at Starbucks.


* K+ Organics has partnered with Savannah James, the wife of basketball legend LeBron James, to promote its kid-friendly sports drinks.


* There is a great profile of Miyoko Schinner, founder of Miyoko’s Kitchen and the leading figure in the organic, plant-based cheese world.


* Amy’s Drive-Thru has just gotten the green light to open a second location in Corte Madera, California


* The Four Seasons Hotel George V in Paris now has its own organic farm.


* Here’s an update on the partnership between Rodale Institute and St. Luke’s Hospital, and its efforts to deliver organic, farm-to-cafeteria food for its patients.


* University of Wisconsin and Organic Valley have created an endowment honoring the co-op’s COO Louise Hemstead.


* Meal kit delivery service Sun Basket has opened up a distribution center……in a cave.


* Swissx Plant Pharmacy and Food Lab in Los Angeles is now selling $59 CBD vegan shakes.


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