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Petition Asks USDA To Establish Organic Promo, Research Checkoff
Proposed Assessment Rate Of One-Tenth Of 1% Of Net Organic Sales Could Generate Over $35 Million In Income
In what supporters are calling a “groundbreaking” move for the organic sector, the Organic Trade Association (OTA), in collaboration with the GRO Organic (Generic Research and Promotion Order for Organic), this week formally petitioned the US Department of Agriculture (USDA) to begin steps to establish an organic industry promotion and research checkoff program.
As proposed, the organic checkoff would be a full supply chain checkoff program, promoting the organic brand and organic production practices.
The GRO Organic Program proposes an assessment rate of one-tenth of 1 percent of net organic sales (defined as total gross sales of organic products minus the cost of certified organic ingredients, feed, and inputs used in the production of organic products).
Organic handlers would pay one-tenth of 1 percent of net organic sales, while organic producers would have the option of paying one-tenth of 1 percent of either net organic sales or producer net profit.
The assessment would apply to all assessed organic producers, organic handlers, and importers of organic products. Small farms, with gross organic revenue of less than $250,000 annually, would be covered but not assessed, and would have the option of not paying in, or paying a voluntary assessment of the same one-tenth of 1 percent of net organic sales.
In order to administer the program, all mandatory organic certificate holders throughout the supply chain, including producers, handlers, brand manufacturers, co-packers and importers, with gross organic revenue in excess of $250,000 per year, would be subject to a mandatory organic checkoff assessment.
The GRO Organic Board could expect to generate over $35 million in income from US organic operations at the optimum assessment rate, according to a summary of the generic research and promotion order for organic.
The GRO Organic Program has set a cap of 15 percent on administrative expenses. This cap would also apply to any organization, such as a research university, that receives funding from the GRO Organic Program.
It is estimated that the funds remaining after program administration costs are paid would be almost $30 million.
An industry-governed board, appointed by the US secretary of agriculture with input from the organic sector, would direct an organic checkoff program. This board would be responsible for allocating funds and approving organic research, promotion plans and programs.
The composition of the board would reflect the diversity of sectors paying into the checkoff, in addition to having balanced regional participation and strong producer representation. As proposed, the board would be composed of 50 percent producers, 50 percent handlers, processors and importers, and one non-voting at-large, totaling 17... Send me more information