HD12 - The Study of the Feasibility and Appropriateness of Becoming a Certifying Agent Under the Federal Organic Foods Production Act

Executive Summary:
Over the past decade, organic agriculture has been a small, but one of the fastest growing sectors in U.S. agriculture. In the U.S., 1.3 million acres were certified in 1997, with an average annual growth rate between 20 and 30 percent in the 1990's. Organic production in Virginia has roughly mimicked national trends. Currently there are 9,327 certified organic acres in Virginia, which represents less than one percent of total agricultural land in the state, and approximately one percent of total food sales.

Nationally, retail sales for organic products have grown for the past 10 years with a compounded annual growth rate of 22.74 percent. Current national sales of organic products are projected at $9.3 billion (two percent of total food sales), with projections for sales to reach $20 billion by 2005.

In 1990, Congress and the Virginia General Assembly passed organic food production acts. It took a decade and over 300,000 public comments for USDA to issue a final rule on December 20, 2000. Both acts establish a means by which producers can have then food production systems certified as being in concert with the established procedures for organic production, meaning food products produced without the aid of chemical or synthetic products or procedures.

In Virginia, the implementation of the Virginia Organic Food Act (§ 3 1-385 5) first took the form of the Virginia Association for Biological Farming (VABF), providing inspection and certification processing as an agent for the Virginia Department of Agriculture and Consumer Services (VDACS). By 1996, VABF no longer wished to provide this service and VDACS took over the full implementation of the organic certification program. VDACS undertook this responsibility even though the agency had no specific funding appropriation for this purpose.

Since the inception of the Virginia Organic Food Act, the philosophy behind the Virginia organic certification program was to maintain a state certification program until the federal program came into being. No one predicted it would take ten years to get to this point.

With the National Organic Program (NOP) to become fully operational on October 21, 2002, the Commonwealth of Virginia must evaluate the role it will take for organic certification under the NOP The basic choices are to:

1. Seek full accreditation from USDA to implement the NOP in Virginia as a State Organic Program, with full responsibility for implementation and enforcement of the NOP

2. Become one of many organic certifying agents in Virginia

3. Withdraw offering organic certification, current organic producers could seek certification from private organizations

4. Construct a cost-share program with producers for organic certification.

There currently are 120 enterprises certified by the Commonwealth of Virginia under the Virginia Organic Food Act. It is estimated another 20-25 Virginia organic enterprises are certified through private organizations.

In 2001, the Virginia Department of Agriculture and Consumer Services (VDACS) conducted a survey of the current roster of producers certified under the Virginia program. The producers in the Virginia program are mostly small-scale growers producing for local, direct market sales (roadside stand, farmers markets and subscription farming), or new-to-market organic farmers transitioning from other conventional farming enterprises, e.g., southwest Virginia tobacco producers The main points revealed by the survey are:

1. Virginia's organic producers consider the current state organic certification plan to be cost effective for them.

2. A majority of participants directly market their products to consumers.

3. A majority of producers surveyed indicated they fall under the USDA threshold of $5,000 in sales. Producers below $5,000 in sales are not required to have organic certification under the NOP.

4 Eighty-five percent of producers surveyed indicated they would not pay a higher fee to be certified, and would likely forgo organic certification if the fee increases.

Five options for certification were explored. Given the relatively limited scope of organic production in Virginia, it is not practical for Virginia to establish a State Organic Program under the NOP. We recommend that the Commonwealth end its current certification program and instead facilitate the organic certification assistance through private organizations. Virginia should also provide cost-share support, marketing assistance and certification advice and training to producers seeking certification. Under this plan, the small-scale direct marketing producer will likely drop out of an official certification program, as they will fall under the USDA sales threshold. The larger, commercial-scale organic producer will not require state assistance. Hence, state assistance would be focused on the new-to-market organic producer who is likely transitioning out of another conventional agricultural enterprise, e.g., tobacco, and would benefit from the certification training and cost sharing.