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REVIEW OF ECONOMIC IMPACTS OF 

ORGANIC PRODUCTION, PROCESSING, 

AND MARKETING OF ORGANIC 

AGRICULTURAL PRODUCTS

HEARING

BEFORE THE

SUBCOMMITTEE ON HORTICULTURE AND ORGANIC 

AGRICULTURE

OF THE

COMMITTEE ON AGRICULTURE 

HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

APRIL 18, 2007

Serial No. 110–11

(

Printed for the use of the Committee on Agriculture 

www.agriculture.house.gov 

COMMITTEE ON AGRICULTURE 

COLLIN C. PETERSON, Minnesota, Chairman 

TIM HOLDEN, Pennsylvania 

Vice Chairman 

MIKE MCINTYRE, North Carolina 

BOB ETHERIDGE, North Carolina 

LEONARD L. BOSWELL, Iowa 

JOE BACA, California 

DENNIS A. CARDOZA, California 

DAVID SCOTT, Georgia 

JIM MARSHALL, Georgia 

STEPHANIE HERSETH SANDLIN, South 

Dakota 

HENRY CUELLAR, Texas 

JIM COSTA, California 

JOHN T. SALAZAR, Colorado 

BRAD ELLSWORTH, Indiana 

NANCY E. BOYDA, Kansas 

ZACHARY T. SPACE, Ohio 

TIMOTHY J. WALZ, Minnesota 

KIRSTEN E. GILLIBRAND, New York 

STEVE KAGEN, Wisconsin 

EARL POMEROY, North Dakota 

LINCOLN DAVIS, Tennessee 

JOHN BARROW, Georgia 

NICK LAMPSON, Texas 

JOE DONNELLY, Indiana 

TIM MAHONEY, Florida 

BOB GOODLATTE, Virginia 

Ranking Minority Member 

TERRY EVERETT, Alabama 

FRANK D. LUCAS, Oklahoma 

JERRY MORAN, Kansas 

ROBIN HAYES, North Carolina 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

JO BONNER, Alabama 

MIKE ROGERS, Alabama 

STEVE KING, Iowa 

MARILYN N. MUSGRAVE, Colorado 

RANDY NEUGEBAUER, Texas 

CHARLES W. BOUSTANY, JR., Louisiana 

JOHN R. ‘‘RANDY’’ KUHL, JR., New York 

VIRGINIA FOXX, North Carolina 

K. MICHAEL CONAWAY, Texas 

JEFF FORTENBERRY, Nebraska 

JEAN SCHMIDT, Ohio 

ADRIAN SMITH, Nebraska 

KEVIN MCCARTHY, California 

TIM WALBERG, Michigan 

PROFESSIONAL STAFF

ROBERT L. LAREW, Chief of Staff 

ANDREW W. BAKER, Chief Counsel 

WILLIAM E. O’CONNER, JR., Minority Staff Director

SUBCOMMITTEE ON HORTICULTURE AND ORGANIC AGRICULTURE

DENNIS A. CARDOZA, California, Chairman 

BOB ETHERIDGE, North Carolina 

LINCOLN DAVIS, Tennessee 

TIM MAHONEY, Florida 

JOHN BARROW, Georgia 

KIRSTEN E. GILLIBRAND, New York 

RANDY NEUGEBAUER, Texas 

Ranking Minority Member 

JOHN R. ‘‘RANDY’’ KUHL, JR., New York 

VIRGINIA FOXX, North Carolina 

KEVIN MCCARTHY, California 

K. MICHAEL CONAWAY, Texas 

KEITH JONES, Subcommittee Staff Director

(II) 

(III)

C O N T E N T S 

Page 

Cardoza, Hon. Dennis A., a Representative in Congress from the State of 

California, opening statement ............................................................................. 1

Prepared statement .......................................................................................... 47

Neugebauer, Hon. Randy, a Representative in Congress from the State of 

Texas, opening statement .................................................................................... 3

Prepared statement .......................................................................................... 49

Peterson, Hon. Collin C., a Representative in Congress from the State of 

Minnesota, prepared statement .......................................................................... 50

Goodlatte, Hon. Bob, a Representative in Congress from the Commonwealth 

of Virginia, prepared statement .......................................................................... 52

WITNESSES

Wilcox, Ms. Caren, Executive Director and CEO, Organic Trade Association, 

Greenfield, Massachusetts ................................................................................... 4

Prepared statement .......................................................................................... 81

Marqusee, Mr. Robert B., Director, Department of Rural Economic Development, Woodburry County, Sioux City, Iowa ...................................................... 5

Prepared statement .......................................................................................... 113

James, Ms. Bea, Category Leadership Program Manager, National Cooperative Grocers Association, St. Paul, Minnesota ................................................... 7

Prepared statement .......................................................................................... 120

Lipson, Mr. Mark, Policy Program Director, Organic Farming Research Foundation, Santa Cruz, California ............................................................................ 9

Prepared statement .......................................................................................... 126

Vieira, Mr. Manuel, Owner, A.V. Thomas Produce, Livingston, California ....... 20

Prepared statement .......................................................................................... 133

Martens, Ms. Mary-Howell R., Lakeview Organic Grains, Penn Yan, New 

York ....................................................................................................................... 21

Prepared statement .......................................................................................... 137

Lively, Mr. Scott, President and CEO, Dakota Beef, LLC, Howard, South 

Dakota ................................................................................................................... 23

Prepared statement .......................................................................................... 141

Pike, Mr. Robert, Vice President/General Manager, Braswell Foods/Glenwood 

Foods, Nashville, North Carolina ....................................................................... 24

Prepared statement .......................................................................................... 149

Marquardt, Ms. Sandra, President, On the Mark Public Relations, Silver 

Spring, Maryland, on behalf of Ms. La Rhea Pepper, President, Organic 

Essentials, Inc., O’Donnell, Texas ...................................................................... 36

Prepared statement .......................................................................................... 152

Clarkson, Mr. Lynn, President, Clarkson Grain Company, Inc., Cerro Gordo, 

Illinois ................................................................................................................... 37

Prepared statement .......................................................................................... 161

Ghilarducci, Mr. Rich, President and CEO, Humboldt Creamery, Fortuna, 

California .............................................................................................................. 39

Prepared statement .......................................................................................... 166

Dawes, Ms. Nicole Bernard, President and COO, Late July Snacks, Hyannis, 

Massachusetts ...................................................................................................... 40

Prepared statement .......................................................................................... 170

SUBMITTED MATERIAL

Behar, Mr. Harriet and Mr. Aaron Brin, Sweet Earth Farm, Gays Mills, 

Wisconsin .............................................................................................................. 54

Page

IV

Birmingham, Ms. Dierdre, Owner-operator, Somerset Orchard and Farm, 

Mineral Point, Wisconsin .................................................................................... 56

Brushaber, Mr. James R., Organic Producer, Beaverton, Michigan ................... 58

Butterfield, Ms. Brenda A., Butterfield Organic Growers, Pittsfield, New 

Hampshire ............................................................................................................ 59

Conner, Dr. David S., Ph.D., Researcher, East Lansing, Michigan .................... 61

Diffley, Ms. Atina, Gardens of Eagan Organic Farm, Farmington, Minneosta .. 62

Hildebrand, Mr. Stanley J., Organic Producer, Rutledge, Missouri .................... 66

Kelly, Mr. Dan, Blue Heron Orchard, Canton, Missouri ...................................... 67

Lipson, Mr. Mark, Policy Program Director, Organic Farming Research Foundation, Santa Cruz, California ............................................................................ 68

Lubbert, Mr. and Mrs. Walter and Joyce, Organic Farmers, Mendon, Illinois .. 70

Martinell, Ms. Bonnie, CEO, On Thyme Gourmet Inc., Co-owner, Boja Farm, 

Bridger, Montana ................................................................................................. 71

Miller, Mr. Tim P., Millberg Farm Certified Organic, Kyle, Texas ..................... 73

Rogers, Mr. David L., Farm Policy Advisor, Northeast Organic Farming Association of Vermont ................................................................................................ 74

Wilcox, Ms. Caren, Executive Director and CEO, Organic Trade Association, 

Greenfield, Massachusetts ................................................................................... 79

(1)

HEARING TO REVIEW ECONOMIC IMPACTS OF 

ORGANIC PRODUCTION, PROCESSING, AND 

MARKETING OF ORGANIC AGRICULTURAL 

PRODUCTS 

WEDNESDAY, APRIL 18, 2007

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON AGRICULTURE, 

SUBCOMMITTEE ON HORTICULTURE AND ORGANIC

AGRICULTURE

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:00 a.m., in Room 

1300 of the Longworth House Office Building, Hon. Dennis A. 

Cardoza [Chairman of the Subcommittee] presiding. 

Members present: Representatives Cardoza, Etheridge, Davis, 

Gillibrand, Peterson (ex officio), Neugebauer, Kuhl, and McCarthy. 

Staff present: Tyler Jameson, Keith Jones, Scott Kuschmider, 

Merrick Munday, John Riley, Sharon Rusnak, April Slayton, 

Debbie Smith, John Goldberg, Alise Kowalski, Pam Miller, and 

Jamie Weyer. 

STATEMENT OF HON. DENNIS A. CARDOZA, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. CARDOZA. Good morning. This hearing of the Subcommittee 

on Horticulture and Organic Agriculture, to review economic impacts of organic production, processing and marketing of organic 

agricultural products, will come to order. 

I want to thank you all for being here today, attending our hearing and taking time from your busy schedules to testify about the 

economic impacts of organics on agriculture. I want to acknowledge 

the absence of one witness from Mr. Conaway’s district today. Mrs. 

La Rhea Pepper is unable to be here with us due to the passing 

of her husband, after a lengthy illness. The members of the Subcommittee extend our sympathy to Ms. Pepper and her family. In 

her absence, her oral testimony today will be read into the record 

by Mrs. Sandra Marquardt. 

Ladies and gentlemen, this is a historic hearing. Today marks 

the first hearing on organic agriculture ever to be held in the 

House Agriculture Committee. I am proud to be chairing this Subcommittee as we engage, for the first, time organic producers, processors, and manufacturers, in a substantial discussion of the challenges and opportunities facing the industry. But I must also commend Chairman Peterson for his leadership in acknowledging the 

important role that organic agriculture has to play in ensuring a 

2

prosperous U.S. farm sector by creating a Subcommittee to specifically monitor this industry as we write the 2007 Farm Bill. In 2005, the U.S. organic market grew 17 percent to reach $14.6 

billion in retail sales. Organic food’s share of the total retail food 

sales has reached 2.5 percent. Certain non-food sectors show even 

more remarkable growth. Organic fiber sales have grown over 44 

percent in the past year; organic flour sales, over 50 percent; and 

today, organic products are rapidly becoming mainstream staples 

in high-end restaurants, sports venues, university cafeterias, club 

stores and other mass-market retailers. This broad acceptance and 

perception of quality is a far cry from where organic was just 20 

years ago. It was once the domain of ugly broccoli, dried up apples 

and wormy tomatoes. Today, the industry offers to the American 

consumer high-quality produce, innovative salad mixes, full lines of 

convenience foods and dairy items. The product diversity represented here today by producers and processors witness a testimony in and of itself. Organic has arrived in the hearts and minds 

of the American consumer. 

Today, all the members at their daises are provided with cookies 

from the Late July organic company, and they were provided today 

by a witness on one our panels, Nicole Bernard Dawes, the President of Late July, who will be testifying later. 

There are, however, significant challenges to maintaining the 

growth and reputation of the U.S. organic sector. The first and perhaps foremost challenge is ensuring the continued integrity of the 

USDA organic seal. Consumers look to the USDA’s green and 

brown seal as their assurance of the highest quality in organic 

products. In order to maintain its well-deserved consumer confidence, the National Organic Program must be adequately staffed 

so that it can provide the industry with timely responses to its 

questions and calls for new standards to exercise the appropriate 

oversight of accredited certifying agents, and to engage in the proper enforcement of regulatory violations. 

Furthermore, the rapid growth and demand for organic products 

in the United States has not gone unnoticed by other countries. 

Producers abroad are vying to meet the demand for organic products created by the U.S. consumer. I am extremely concerned that 

foreign imports, especially from those rising from agricultural giants like China, claim to be organic when they are failing to meet 

some basic standards for organic agriculture. The rapid increase in 

these so-called organic imports is further straining NOP’s limited 

resources. As I am sure we will hear time and time again from the 

panel today, the integrity of the organic label is the most important, if not the only symbol, for consumer confidence. Any cracks 

in that system from products at home or abroad can cause significant damage to the industry and must be rectified immediately. 

Finally, we in Congress must work to ensure that organic agriculture is better integrated into USDA as a whole. Technical assistance for organic producers, through USDA extension programs, is 

often sporadic and its availability is uneven among extension 

agents. Organic farmers can be penalized simply for being organic 

farmers when assessing crop insurance. And finally, we must ensure the sector receives the research it badly needs to continue its 

remarkable growth. 

3

I look forward to hearing from the panels today and especially 

from one of my hometown constituents and dear friend, Mr. 

Manuel Vieira, from Livingston, California. With that, I now I yield 

to the Ranking Member, Mr. Neugebauer, the time for him to make 

his opening statement. 

STATEMENT OF HON. RANDY NEUGEBAUER, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. NEUGEBAUER. Well, thank you, Chairman Cardoza. And of 

course, this is my first time to be in these new facilities here and 

I might add that we have traded up. 

Mr. CARDOZA. We have moved up in the world. 

Mr. NEUGEBAUER. Thank you for calling today’s hearing on organic agriculture. I didn’t realize that this was the first time a 

Committee had heard that, and so it is an honor to be a part of 

this very historic day, as we talk about the expanding organic industry. 

The National Organic Program is a successful voluntary marketing program, through standards that all producers and processors follow certification enforcement processes. Consumers know 

that when they purchase goods with the USDA organic seal, they 

are purchasing food that has been grown or raised in a certain 

manner. I emphasize that the NOP is a marketing program and it 

is voluntary, because I believe that these two features of the program have contributed to its success. For organic producers and 

processors, the demand for their products has been growing by 

nearly 20 percent a year. Entrepreneurs have realized this demand 

and have invested in supplying this growing market and they are 

receiving a price premium for their products. I understand that 

those in organic agriculture have a number of priorities for the 

2007 Farm Bill, and I am interested in learning more from the industry on these proposals, given our limited resources and also 

given the fact that the marketplace has been good to the organic 

producers. 

There is an appropriate USDA role when it comes to maintaining 

the standards and certification behind the USDA organic label. 

USDA has the responsibility to ensure that the label means what 

it says. There is also an appropriate role for research and extension, and organic producers also benefit from the research and conversation programs that are available to all farmers. However, I 

am cautious about increasing the role of USDA in the organic marketplace and in producers’ decisions on whether or not to engage 

in organic agriculture. 

I look forward to hearing more about your ideas for the 2007 

Farm Bill and learning from the organic producers and processors 

here today about the growth and changes in the market for organic 

products. Thank you, Mr. Chairman. 

Mr. CARDOZA. Thank you, Mr. Neugebauer. The chair would request other members to submit their opening statements for the 

record so that witnesses may begin their testimony and we ensure 

that there is ample time for your questions. We want to start with 

panel one and we would like to welcome you all to the table. We 

will start with Mrs. Caren Wilcox, Executive Director and CEO of 

the Organic Trade Association, from Greenfield, Massachusetts. 

4

Welcome. Mr. Robert Marqusee, Director of the Department of 

Rural Economic Development, Woodbury County, Sioux City, Iowa. 

Thank you for being here, sir. Ms. Bea James, Category Leadership 

Program Manager, National Cooperative Grocers Association, St. 

Paul, Minnesota; and Mr. Mark Lipson, Policy Program Director of 

the Organic Farming Research Foundation, from Santa Cruz, California. Ms. Wilcox, please begin when you are ready. Each panelist 

will have five minutes. You are welcome to summarize your written 

testimony so that we can get to your questions as soon as possible. 

STATEMENT OF CAREN WILCOX, EXECUTIVE DIRECTOR AND 

CEO, ORGANIC TRADE ASSOCIATION 

Ms. WILCOX. Thank you, Mr. Chairman, good morning, and 

Ranking Member Neugebauer and members of the Subcommittee. 

I am Caren Wilcox, Executive Director of the Organic Trade Association, OTA for short, the 1600 member business association representing all aspects of the organic chain, including farming, processing, distribution and retailing of food, organic textiles and personal care products. Thank you for this historic hearing. We do 

agree with you that it is historic. It has been my great opportunity 

to lead the Organic Trade Association for the last year, following 

a long career in the private and public sectors, almost exclusively 

involved with food and agriculture. 

You will hear today from several OTA members, who will talk 

about their individual experiences of going organic and how they 

have literally built their businesses often from the ground up. Perhaps the most important thing you will hear from many of them 

is the impact that organic agriculture has had, not only on their 

own wellbeing, but also on the economic growth of their communities. 

Certified organic production and processing starts with a positive 

system of farming that maintains and replenishes soil fertility 

without the use of toxic and persistent pesticides and fertilizers. It 

includes a system of production from farm to fork, so that we may 

maintain the organic integrity that begins on the farm. Organic 

foods must be produced without the use of antibiotics, synthetic 

hormones, sewage sludge, irradiation, genetic engineering and 

other excluded practices; and cloning animals or using their products is considered inconsistent with organic practice. For products 

that use at least 95 percent organic ingredients, the USDA organic 

seal may be used on a voluntary basis. You will see it on the Late 

July products, and we included it in our testimony. 

OTA studies the marketplace because USDA does not have the 

authority to do so comprehensively. And as the Chairman said, 

food and beverage sales were about $14.6 billion in 2005 and occupied about 2.5 percent of the retail marketplace. The fastest growing organic product categories include meat, dairy and condiments. 

Fruits and vegetables, many from California, Mr. Chairman, represent the largest dollar value category in the organic sector. Pet 

food was growing as a category even before the latest tragic recalls 

and it is growing even faster now. 

Now, I do want to talk about farmland, which is not growing as 

fast in terms of certification. ERS tells us that .5 percent acreage 

of cropland and .5 percent of pastureland are certified organic 

5

acres. The national standards were implemented in 2002, so we 

hope that additional acreage is now reaching certified organic status after its 3-year conversion. But it is clear, U.S. farmers are not 

keeping up with consumer demand for organic products in the 

United States, and the government does not collect import data on 

organic goods, but imports must be substantial. We want to enhance the ability of U.S. farmers to provide as much organic food, 

fiber and other organic products as possible for our country. To 

that end, we have four objectives in the farm bill: providing technical and conversion assistance and cost-share certification for 

farmers; we also need to overcome hurdles of data collection, including organic prices, markets, crops, farms, processors and crop 

loss experience. It is almost entirely absent now from the USDA’s 

lexicon and this data is critical for organic growth, not only for its 

own sake, but because we need it for our crop insurance and banking needs. USDA is known across the world for research and you 

will hear a little bit more about that later, but we only get a tiny 

share. And finally, we need to be sure that USDA, in general, and 

the National Organic Program, specifically, have the resources to 

keep up with the dramatic growth that organic certification programs demand. Consumers need to have confidence in the label 

and USDA’s attention to NOP will ensure that fact. We need your 

help with this. 

Organic offers rural America’s farmers, and its shoppers alike, a 

choice of wonderful products, while contributing to the protection 

of our land, air and water. Frankly, what we need is parity of resources to build sound infrastructure as we compete in the marketplace with conventional food and products of biotechnology. We look 

forward to working with the members of the Subcommittee and the 

Full Committee to achieve great results. That you for this opportunity. 

[The prepared statement of Ms. Wilcox appears at the conclusion 

of the hearing:] 

Mr. CARDOZA. Thank you, Ms. Wilcox. Next for the panel we 

have Mr. Robert Marqusee, Director of the Department of Rural 

Economic Development. Sir, welcome to our panel and please proceed with your testimony. 

STATEMENT OF ROBERT B. MARQUSEE, DIRECTOR, 

DEPARTMENT OF RURAL ECONOMIC DEVELOPMENT 

Mr. MARQUSEE. Thank you very much. My name is Robert 

Marqusee and I am the Director of Rural Economic Development 

for Woodbury County, Iowa, which is the Sioux City area. I want 

to thank the Chairman and the Ranking Member and the entire 

Committee for this awesome responsibility to communicate to this 

group and to the government the devastating effects of subsidized 

industrial farming and what those effects are on the rural landscape, and what we in Woodbury County have done by way of local 

policies promoting organic agriculture to counteract those impacts. 

When I began my position in March of 2005 as Rural Economic 

Development Director, our rural communities were long in decline. 

The average loss of population in our rural non-bedroom communities was about 25 percent and the folks who remained in those 

communities were aging. This is typical of rural communities 

6

throughout the State of Iowa, where the average age of the farmer 

is 55 to 60 years old, most of the land is cash-rented, 25 percent 

of the land is owned by individuals aged 75-plus, and farms are 

getting larger and larger, a 78 percent increase in farms exceeding 

1,000 acres, pushing out the small to midsized farm operations. As 

the Des Moines Register concluded in a special 2-part report, the 

continued industrialization of farming will promote fewer owners of 

land, faster decline in rural populations, less income and a strain 

on the environment. 

I quickly discovered that the reason for this sad state of affairs 

was twofold. Federal farm subsidies, in the advent of chemical 

farming, encouraged large corporate farms that produce less diversified crops with less labor, higher input and environmental costs, 

all of which shattered the previous local agricultural economies. A 

lot of money was flowing out of the county. The results of that policy have been the consolidation of farms and the elimination of 

next-generation farmer. In addition, I found that 10 percent of the 

farmers receive approximately 80 percent of the subsidies. Despite 

millions of subsidy dollars being paid to farmers, there was a net 

loss growing the directed corn and soybean. In other words, I found 

our rural communities in crisis and I expect at least half of our 

rural communities to disappear within the next 10 years. There is 

no debate as to the cause of this decline. 

So Woodbury County enacted two policies, trying to reverse the 

fortunes of the rural communities. We needed to recreate the economic dependencies of producers, local markets, distribution and 

storage. Our only option was to counter the negative economic 

forces that was creating the problem. We passed the first policy in 

the Nation that provides a hundred percent real-property tax rebate to any farmer who converted from conventional to organic 

farming practices. Then we passed a mandatory local food purchase 

policy requiring the county to purchase locally-grown organic food 

for its jail, juvenile detention center, and work release program. We 

now have a local organic food restaurant, a market store, farmers 

market, a local foods broker and soon-to-be-announced regional 

foods brand. A neighboring county has enacted the Woodbury 

organics conversion policy and two others have indicated that they 

will adopt a similar policy this year. 

A major problem has been in supply and this is really the crux 

of the matter. While the demand is high, our aging farmers are 

trapped in the subsidy treadmill. There are few young farmers left 

in these communities and most economic development activities 

focus on erecting ethanol plants. It should be noted that the rush 

to ethanol as a prime economic development tool does nothing but 

put industrial farming on steroids. The monetary incentives associated with high corn prices is to eliminate crop rotations, level scenic hills in search of more producing land, increases land prices, 

has higher input costs, most of the benefits going to the landowner 

and not the cash-rent farmer. As for the supply of organic products, 

it is hard to compete with a system of Federal and market supports 

so totally dedicated to industrial agriculture. The demand is there. 

Organic food is the only growing segment of the food industry, yet 

Federal policy does not promote, on equal footing, the organic food 

industry. Therefore the trade imbalance will continue to grow while 

7

consumers demand the better organic choice. This situation simply 

does not make sense. 

We in Woodbury County are doing everything we can to reverse 

the trends in our rural communities. However, without a significant modification of Federal farm policy, the picture of rural America will be bleaker and beyond repair in the very near future. I 

have submitted written testimony which contains a coherent detail 

of what I have said today and I request that it be accepted for the 

record. Thank you very much. 

[The prepared statement of Mr. Marqusee appears at the conclusion of the hearing:] 

Mr. CARDOZA. Thank you, sir. Your testimony will be included in 

the record. 

Mr. MARQUSEE. Thank you. 

Mr. CARDOZA. Next, we have Bea James from St. Paul, Minnesota. Welcome. Thank you very much for being here and please 

proceed with your testimony. 

STATEMENT OF BEA JAMES, CATEGORY LEADERSHIP PROGRAM MANAGER, NATIONAL COOPERATIVE GROCERS ASSOCIATION 

Ms. JAMES. Mr. Chairman and members of the Subcommittee, 

good morning. My name is Bea James and I want to thank you for 

giving me the opportunity to speak to you today. My testimony will 

provide a brief overview of the delicate integral working relationship between local organic farmers and retail cooperatives, as well 

as the thriving economic results produced by this relationship. 

I have worked in the natural organic food industry for more than 

20 years and have a variety of combined experience, including distribution, production and purchasing in mass market as well as coop store formats. I currently manage the Category Leadership Program for the National Cooperative Grocers Association, NCGA. I 

also hold the retailer seat on the USDA National Organic Standards Board, although my comments today do not represent those 

of the NOSB. I am a member of the Minnesota Department of Agriculture Organic Advisory Task Force. Although I am not an economist, I would encourage you to read Bill McKibben’s book Deep 

Economy. His book offers compelling economic facts about the current need to pursue prosperity in a more local direction, with communities producing more of their own food. 

My point today is simple, so I will make it right off. The local 

organic farmer, as an individual and as a member of a larger community, has a positive impact on the thriving success of our communities, our economy and the integrity of organic agriculture. I 

am here before you today on behalf of the NCGA, a business services cooperation for natural food co-ops located throughout the 

United States, which include more than 130 independent co-op 

storefronts where you will find beautiful broccoli and not rotten tomatoes, fresh and beautiful, in 32 States, with combined annual 

sales of nearly $800 million. 

Organic agriculture is undoubtedly a bright spot in agriculture 

today. Despite the difficulties in making the shift to organic farming, the rewards are great for those farmers who truly make the 

commitment to do so. But the rewards for organic farmers are deVerDate 0ct 09 2002 10:46 Mar 26, 2008 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 F:\DOCS\110-11\41379.TXT HAG2 PsN: JAMIE
8

pendent on consumer acceptance and access to their product. And 

here is where the role of the NCGA starts. NCGA is working to 

provide markets for small, local sustainable and organic farmers. 

This partnership not only ensures consumers have a broad array 

of organic products available in their stores, but also makes sure 

that the infrastructure of this symbiotic relationship is contributing 

to a thriving community of economic growth and development. 

In a general survey conducted by the NCGA, we learned that 

many of our co-ops are sourcing over 15 percent of their products 

from local producers. As a group, in the Minneapolis/St. Paul area, 

12 co-ops alone have estimated that almost 19 percent of their retail sales come from local purchases. The NCGA works with thousands of local farmers and producers across North America and we 

are proud that our co-op members have a first-name working relationship with them and their families. I would like to share with 

you 1 of 3 economic success stories that I have submitted in my 

written testimony to illustrate the symbiotic relationship between 

farm and community. 

In New Prague, Minnesota, the Minar’s third-generation farm is 

thriving, but this would not have happened without the co-op partnership. The Minar family farm goes as far back as 1926 and 7 

years ago the Minars decided to commit to sustainable agriculture 

and began selling their milk in glass jars to only 6 co-ops in the 

Twin Cities area. In 2004, they became USDA certified organic and 

today their Cedar Summit Farm products can be found in more 

than 90 retail outlets throughout the Midwest. As Dan Minar put 

it, ‘‘we would not be where we are today if it was not for the coops. Our sales started with them and our success is because of 

them.’’ There are two other examples that I have submitted and I 

encourage you to please read them. There are hundreds of other examples that I could refer to. I hope that you value how these examples illustrate what is clearly a win-win-win situation for the farmer, the co-ops and the consumer. 

Organic consumers have a strong philosophical desire to support 

local agriculture and value the quality and freshness they receive 

in doing so. Organic consumers also appreciate the smaller ecological footprint the distribution of local organic food makes, enjoy 

knowing organic farmers and value the connection their purchases 

given towards the food they are eating. The small, local organic 

farm adds to the integrity and value of the organic label by creating these hands-on experiences in their communities. If we are 

to maintain the hope and promise that organic agriculture has become, it is critical that we meet the consumer demand with ample 

supply and continued standards based in organic integrity. Simply 

put, we need more organic farms and continued government funding for expanding the organic sector in agriculture. The circle of life 

illustrated in my examples depends on it. 

Attached to my written testimony is a summary of the NCGA 

and the National Organic Coalition 2007 Farm Bill priorities, on a 

wide range of issues and programs and I urge your strong consideration of these proposals. Mr. Chairman and members of the Subcommittee, I thank you and I encourage you to recognize that local 

organic farms are vital to the success of the communities we all 

live in. 

9

In conclusion, my point today still remains, the local organic 

farmer, as an individual and as a member of a larger community, 

has a positive impact on the thriving success of our communities, 

our economy and the integrity of organic agriculture. Thank you. 

[The prepared statement of Ms. James appears at the conclusion 

of the hearing:] 

Mr. CARDOZA. Thank you very much. Next up on our panel is 

Mark Lipson from Santa Cruz, California. Mark has testified at 

one of my listening sessions in California previously and we welcome you to Washington, sir. Please proceed. 

STATEMENT OF MARK LIPSON, POLICY PROGRAM DIRECTOR, 

ORGANIC FARMING RESEARCH FOUNDATION 

Mr. LIPSON. Thank you very much, Mr. Chairman, and thank 

you, Mr. Ranking Member. My name is Mark Lipson and I represent the Organic Farming Research Foundation, which was 

founded in 1990 by organic farmers to promote the improvement 

and widespread adoption of organic farming practices. 

The Nation’s 10,000 certified organic farmers are the leading 

innovators of ecologically-based agriculture. Their entrepreneurship 

is the foundation of the economic success that organic foods and 

fiber are enjoying in the marketplace. These organic farmers are in 

every State and region of the country. They grow every type of crop 

and livestock that is produced in the United States. On behalf of 

these producers, I thank the leaderships of the Full Committee and 

the Subcommittee for this historic opportunity. We respectfully 

look forward to building the information record with you and doing 

our part to craft Federal policy that contributes to the wellbeing of 

all of the food and farming system in the United States. 

Organic agriculture makes strong and unique contributions to all 

of the strategic goals for agriculture, productivity, conservation, 

rural development, health and safety and trade. Because of these 

multiple benefits, support for improving and expanding organic agriculture is one of the best investments that you can make with the 

limited resources available to you. The highest payoff target in this 

investment strategy is organic research and education. Organic agriculture is based on natural processes of soil fertility and ecological management of pests and diseases. Most agricultural technology is directed at simplifying the farm landscape. Organic systems require complexity and diversification. Successful organic 

management is information-intensive. There is no simple recipe but 

knowledge is always the key ingredient. 

Lack of research and education in organic agriculture is inhibiting growth of this sector. There is an accelerating decline of the 

U.S. share in the rapidly growing domestic markets. Notably, this 

lack of research and education applies both to new and novice 

farmers making the transition, as well as veteran growers facing 

technical limits to their expansion. The lack of statistical data and 

current market information is hurting organic producers and inhibiting growth in several ways. Capital and credit be difficult to obtain because there isn’t reliable data to back up business plans and 

budgets. Organic producers are currently charged a 5-percent surcharge on crop insurance premiums. 

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It is also notable that the regulatory program for the organic 

label is affected by the lack of research support. The National Organic Program within USDA/AMS is trying to solve some complex 

regulatory questions that were not fully anticipated in the 1990 

law. All of these issues need but severely lack scientific data to inform the policy formulation. In producing, in marketing and in 

maintaining the integrity of the label, information is a limiting factor to growth and success. 

Now, deliberate Federal investment in organic agriculture research and extension did not begin until 2001 and it remains miniscule. USDA’s total spending for research, education and economics is about $2 billion a year. Less than one percent of that now 

is specifically directed at the needs of organic production. With 

these very small resources, there is excellent work being done in 

each of the USDA’s research agencies, and in my written testimony, I have summarized some of this and I will be happy to talk 

about that more. Overall, these programs have succeeded at creating a good set of prototypes scattered around different parts of 

the country, good models, but we have only begun to address the 

backlog of basic and applied organic systems research. 

OFRF has provided recommendations for policy targets and program objectives in the 2007 Farm Bill that are attached to our testimony. There are a variety of ways to meet these targets. We look 

forward to discussing these as the Committee proceeds to work on 

specific legislative proposals. 

America wants organic foods and fiber. America wants organic 

family farms in the landscape. Beginning farmers want to participate in the organic market. Our country needs a diversity of approaches to the very serious challenges we face in dietary health, 

energy and environmental conversation and rural economic development. Relatively modest investments in scaling up organic agriculture can help provide solutions in all of these areas and provide 

a tremendous return to our land, our health and our economy. 

Thank you very much for the opportunity to testify today, and I do 

ask that I may revise and extend these comments in the written 

record with additional data. 

[The prepared statement of Mr. Lipson appears at the conclusion 

of the hearing:] 

Mr. CARDOZA. Thank you very much. You will be able to add to 

your testimony as we go forward. I just want to make a personal 

note that my wife is a family doctor. For several years now, she has 

moved the family into a more organic mode. In fact, we get a box 

of fresh fruits and vegetables delivered to our house every week, 

all organic, and it has helped my children, who shun fruits and 

vegetables of all kinds, to now appreciate it more, as we require 

them to finish the box before they can go on to other things. 

We will now move on to questions and the chair would like to 

remind members that they will be recognized for questions in order 

of seniority, for members who were here at the start of the hearing. 

After that, members will be recognized in order of arrival, and I appreciate the members understanding. I would like to start. Well, at 

least let me acknowledge Chairman Peterson’s arrival. 

Mr. PETERSON. Well, Mr. Chairman, thank you for that and I 

want to thank you and the Ranking Member for your leadership. 

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And we are, you know, going to put some focus on this issue in this 

Committee and I think there are lots of opportunities here for folks 

in agriculture, especially young people, and so we appreciate your 

leadership and we appreciate you holding this hearing. 

Mr. CARDOZA. Thank you, Mr. Peterson. I want to recognize that 

you have been an outstanding Chairman on how you have conducted the Committee so far this year and we look forward to big 

things in the farm bill, accomplishments that will largely be at 

your direction. One of them is this historic hearing today, where 

you have set up this Subcommittee and led us on a new path and 

we thank you for that. 

I will kick off the questions, then I will turn it over to my colleague, Mr. Neugebauer, to ask a set of his own questions. I would 

like to start with Ms. Wilcox, in my first question. In your written 

testimony, ma’am, you highlight the difficulties with crop insurance 

for the organic industry. Could you expand on this issue? 

Ms. WILCOX. Yes, Mr. Chairman. As my colleague Mark Lipson 

said and as we say in our written testimony, farmers have a very 

difficult time with crop insurance. Initially, they weren’t permitted 

to get Federally covered crop insurance at all. And then there was 

a ‘‘remedy’’ for that, where they are now permitted to pay an extra 

five percent and be compensated at the conventional rate if they 

have a loss. So they have inputs that are more comprehensive than 

a conventional farmer would have and yet, if they have a loss, they 

do not get that compensation. There are also some problems in 

them being covered by the NAS Census, which impedes some of 

their disaster assistance, also. But just on the crop insurance issue, 

that is why we are very, very concentrated on trying to get good 

data. We are told that one of the reasons is that, of course, we need 

to have actuarial data in order to write an insurance product. And 

having worked at the Department, I do understand that the Department does have some criteria for that. I think we have a good 

chance, if we can get the data, to have a good analysis done in the 

Department, a quick one, that will permit crop insurance to be 

issued on a much more equitable basis, with parity toward the conventional and biotech community, which doesn’t pay five percent 

and gets compensated for their loss. 

Mr. CARDOZA. Thank you. As a follow up, again, in your written 

testimony you state that the 3-year transition period is essential to 

create a working organic farm, yet you acknowledge the difficulties 

new entrants face during the transition period. Is this a technical 

assistance issue? Is it a financial assistance issue? What are the 

challenges that you are facing? 

Ms. WILCOX. Well, the farmers report to us and I think that 

Mark would probably want to comment on this, too. They report to 

us that the conversion process can be quite daunting. First of all, 

as you acknowledged, it is very difficult for them to find advisors, 

in terms of going to organic. The extension system is very uneven 

in that process. We have a couple of States where extension is very 

pro organic and they have a lot of good information. But we also 

have areas where extension has actually issued information that is 

contrary to organic. And so we have to find mentors for or farmers 

have to find mentors for themselves. They also do have financial 

challenges because of the banking system. Without actuarial data, 

12

again, the bankers tend to say to that people that they may not be 

able to finance them as carefully. We actually have board members 

of OTA who are helping with the financing of their supplying farmers as they go through conversion. So there are a host of needs. A 

farmer has to look at the whole process before he goes and gets a 

certifier. He has got to have a business plan. He has got to have 

a credit plan. He has got to understand the marketplace, in terms 

of the products where he can really know that he will have a market. And all of that takes some technical assistance and advisory 

work. 

Mr. CARDOZA. Thank you. Mr. Lipson, I want to follow up on 

your point in your testimony. You note that the National Organic 

Program, and I assume, the National Organic Standards Board, are 

wrestling with regulatory questions. More research could assist in 

forming these regulatory responses. Can you expand on that point? 

Mr. LIPSON. Yes, sir. One example is the effort right now to develop regulations for pasture requirements for organic dairy animals. There is a great deal of difficulty that the program is having 

in figuring out how to define, in an enforceable way, what is adequate nutrition from pasture in order to write a regulation that 

meets the spirit and letter of the 1990 law. In order to do that, 

they are relying primarily on anecdotal information from the producers, who have a very sophisticated idea of how those requirements can be met. But in order for the regulatory program to put 

that into a legalistic framework, they are straining to find scientific 

data that backs them up and gives them a strong legal foundation 

for making those changes. Now there is good work in the research 

pipeline, now being done that could help with that, but it is coming 

very late in the process. There are other issues such as production 

of organic seed in order to meet a full enforcement of the organic 

seed requirement, a whole number of areas where there just isn’t 

yet good scientific information that an agency typically would rely 

on in writing these regulations. 

Mr. CARDOZA. Thank you. Thank you very much. I will now call 

on my colleague, the Ranking Member of the Committee, Mr. 

Neugebauer, for five minutes of questioning. 

Mr. NEUGEBAUER. Well, thank you, Mr. Chairman. I guess first 

to Ms. Wilcox. There has been a great deal of discussion about 

technical assistance to producers during this transition period. 

While many organizations have advocated that the USDA should 

provide this technical assistance, I was wondering why this 

shouldn’t come from the trade associations. Would they be better 

able to provide that? Could you kind of share that with me? 

Ms. WILCOX. Well, we do think that the technical assistance 

should be multi-faceted and diverse, and OTA is actually preparing 

some opportunities that will help, we hope, with technical transition. But since we have a very large land grant system with extension and we have many NGOs out in the countryside that are familiar with the steps that need to be considered prior to going into 

transition, into conversion, we do believe that there is a role for 

USDA to play, either in direct technical assistance through extension, but also through contracting with various NGOs, who are not 

terribly prosperous in terms of trying to expand their operations 

but who have the knowledge that can be given to, for instance, 

13

young farmers who really want to explore conversion but don’t 

know about rotation of crops that they might want to pursue, some 

of the manure management that they may want to do, that they 

do have to do in terms of organic farming, some of the technical 

things that need to be done and we do believe that there is a role. 

As you well know, USDA gives a lot of technical advice about a lot 

of things and we think organics should have a little bit of a share. 

Mr. NEUGEBAUER. This is really a question for the panel and 

maybe you could just kind of go down there. But obviously, one of 

the things that is important is the certification process and the enforcement process, if you are going to have a certification process 

and the enforcement. What is the general consensus right now of 

how that process is working, both from the certification side and 

the enforcement side? And Mr. Lipson, we will start down on your 

side and we will move to your right. 

Mr. LIPSON. The Certification and Accreditation Program run by 

USDA is the standard for the world. There is no question about 

that. And the integrity that has been built is absolutely critical to 

the consumer demand, but the system is strained. It is being 

strained by the growth right now and the very understaffed condition of that program is a complete bottleneck for the rulemaking 

that everybody needs to have out in the open, in order to maintain 

that consumer confidence. 

Mr. NEUGEBAUER. So is it the rules or is it just the ability to get 

certain products certified? 

Mr. LIPSON. Well, it is both. There are parts of the standards 

that are incompletely implemented. The pasture and grazing requirements for dairy animals is probably the biggest one on the 

table right now. But there are other areas of the standards, aquaculture, honeybees, mushrooms, where there isn’t even a standard, 

even a draft rule, yet in place. And so there are years worth of 

work stacked up that the National Organic Program simply does 

not have the staff to address in a timely way. 

Mr. NEUGEBAUER. Okay. Ms. James? 

Ms. JAMES. Currently the situation with the certification, from 

my point of view, is there is, number one, a demand in the industry 

for more organic products. There is a lack of those products being 

grown and produced, and the weight of having those items available relies on there being ample support in the certification part 

of the industry. And as new regulations become developed for these 

areas that need to have certification processes, such as pasture and 

aquaculture, the weight of that comes down on to the certification 

process. There is no other audit trail or process currently in place 

in order to make sure that organic products are truly organic. The 

certifier is the one who has the weight of a lot of that. And I know 

also that there is a shortage of certifiers to work for the certification agencies as well. 

Mr. NEUGEBAUER. Mr. Marqusee? 

Mr. MARQUSEE. The certification process for what we need in the 

county, actually, it is very helpful for the county, because the county doesn’t have to do the enforcement. We just rely on the NOP and 

the certification. But what we did at Woodbury County was, from 

a local policy perspective and local foods policy perspective, is to 

allow transitional products to be sold within our local food systems 

14

from the local food purchase plan and various other things that we 

have gotten. So we are trying to ease the transition costs for the 

3-year period traditionally for crops by accepting those in the system initially for sale, but they have to be on the track for certification at the end of year 3. Under our organics conversion policy, 

if at the end of three years they are not certified, they have to hand 

back the taxes that they have been rebated. But I have nothing 

specific in terms of the actual certification process. 

Mr. NEUGEBAUER. Thank you. 

Ms. WILCOX. The certifiers, of course, are private or state entities 

and they operate as agents of USDA and USDA has a responsibility to accredit them and they have a process for that. But what 

we have to look at is that the NOP itself, the National Organic Program office has only about six people and that is all FTEs. That 

is not just professionals. And they don’t have a full-time rule writer, for instance, so we have this backlog of rules. But the same people who have to be looking at the rules, also have to be looking at 

the accreditation process for the certifiers and they also need to be 

making sure that produce that is being produced offshore is done 

by accredited certifiers and that there is oversight there, and that 

any problems that emerge in the certification process, because we 

are all learning new things and there are new products that are 

asked to be certified, then any of those can be resolved and that 

all of the certifiers can be informed of any policy changes. So it is 

a very complex area and it is one that we are increasingly alarmed 

about because our industry is growing so fast and NOP is not able 

to keep up right now. 

Mr. NEUGEBAUER. Thank you very much. 

Mr. CARDOZA. Thank you, Mr. Neugebauer. Ladies and gentlemen, rank has its privileges and I will now recognize the Chairman 

of the Committee, Mr. Peterson, for questions. 

Mr. PETERSON. Well, thank you, Mr. Chairman. I want to delve 

into this transition period a little more. You know, we have been 

having some conferences and meetings back in my district and it 

comes up about this transition period. You know, the industry is, 

as you say, growing faster than any other sector, so I am kind of 

trying to get a hand on just what the Chairman was talking about 

earlier. But these 3 years, what do you do with that land during 

those 3 years, does it just sit there or they are growing these crops 

during that period of time but they are just not certified, is that 

what the situation is? 

Mr. MARQUSEE. Well, I would say that, typically, they will do a 

cover crop and try to get their land prepared for the crops later. 

They can grow crops during that period, but their yields will be significantly lower. 

Mr. PETERSON. Right. And so this cover crop, if they are just 

doing that, that is not saleable, there is no income off of it. You 

have got, apparently, a program in your county to help this? 

Mr. MARQUSEE. That is correct. 

Mr. PETERSON. Yes. But there isn’t any Federal help for this, 

right? 

Mr. MARQUSEE. No, there isn’t and the problem that we have 

had is struggling is because of the age of the farmer. 

Mr. PETERSON. Yes. 

15

Mr. MARQUSEE. It is pretty hard. We are trying to attract younger people back to our county. 

Mr. PETERSON. Right. So what if we, for example, took the CSP 

program and we said that one of the things that we would do with 

that would be to have some kind of help to transition, would that 

be something you think would make sense? 

Mr. MARQUSEE. I do, yes. 

Mr. PETERSON. Would this cause a problem in making it too easy 

and we end up getting too many people in organic and collapse——

Mr. MARQUSEE. I guarantee you that won’t——

Mr. PETERSON. That is not going to happen? 

Mr. MARQUSEE. No. 

Mr. PETERSON. We have got a bigger market out there, then. In 

that regard, the other thing that came up is as we were planning 

this conference that we had, and we have an organic dairy that 

was set up in my district and the guy at the meeting says he has 

a lot more market than hes got producers. Even though he is paying 25 bucks a hundred, he can’t get enough people to transition. 

Another guy that is an organic beef herder, grass-fed beef, can’t 

buy enough cattle to fill his market. I think to some extent it seems 

to me that in a dairy, a lot of these producers are 55, 60 years old. 

They are not going to convert unless they have a young son or 

daughter who wants to come back. So I am just trying to get my 

hands around what would be the best policy to try to move this 

along and you think technical assistance is a big part of this, as 

opposed to taking away these barriers or I guess it is a combination 

of both? 

Mr. MARQUSEE. I think technical assistance is very important 

and I would mirror what has been said by Ms. Wilcox. We have 

created a network of existing organic farmers as mentors, but of 

course, that is a very difficult program because they are busy working on their farms, so they don’t want to travel all over the place, 

but we have created that kind of resource for those who convert. 

I would like to indicate that we have had younger people moving 

into our county as a result of this policy. What the county could 

really use is local money to facilitate, identify and create markets, 

for instance, and that is precisely what we were doing. My job at 

the county level has been to find markets for those producers. So 

we have demand. You know, it is tremendous demand. The problem is that I just don’t have supply and it is really hard for me to 

convince a 60-year-old farmer to start doing organics. 

Mr. PETERSON. Yes. The other thing that I read about, and it was 

somewhat the focus of what we were looking at in my district, is 

local foods. Now how does local foods fit in with organic? Is there 

some kind of a differentiation here? 

Mr. MARQUSEE. It is the same coin and then they are both complimentary. 

Mr. PETERSON. But what I am getting is, is there some kind of 

effort going on to label things local as opposed to organic, you 

know? 

Ms. JAMES. Actually, in the State of Minnesota, the Minnesota 

Department of Agriculture is currently looking at a way to label 

things as grown in Minnesota. One of the distinguishing differences 

between a locally-produced product and one that isn’t, is the ecoVerDate 0ct 09 2002 10:46 Mar 26, 2008 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 F:\DOCS\110-11\41379.TXT HAG2 PsN: JAMIE
16

logical footprint that happens between the community, that it really is a very sustainable system when you have a local organic farm 

selling to an outlet, a farmers market or a small cooperative and 

then those consumers coming, and I know I mentioned that in my 

testimony, but I think it is really important to recognize that symbiotic relationship with the consumer experiencing that really adds 

to the value and integrity of the organic seal, because they have 

a firsthand experience with being able to meet that farmer and understand exactly how they benefit from purchasing those products. 

Mr. PETERSON. Anybody else? 

Mr. LIPSON. Mr. Chairman, the baseline for a robust, diversified, 

local food economy is going to have to be organic. The local environmental impacts, the interaction between the community and the 

farm, if we are going to keep building this movement for local food, 

having that production based on local inputs for fertility and a 

healthy environment, doing the pest management, that is just 

going to be the baseline of those kinds of systems. 

Mr. PETERSON. Thank you. Thank you very much, Mr. Chairman. 

Mr. CARDOZA. Thank you, Mr. Chairman. I would now like to recognize Mr. Robert Etheridge for five minutes of questioning. Thank 

you. 

Mr. ETHERIDGE. Thank you, Mr. Chairman, and thank you for 

holding this hearing. Let me thank each of you for coming today. 

Ms. Wilcox, let me ask you a question, because you pointed out, in 

your written as well as in your oral testimony before the Committee, and almost all of you have touched on this, that this industry is the fastest growing segment of agriculture today, and one of 

the main recommendations for the farm bill is that technical assistance be made available for producers to convert to organic production. My question would be, how do you see this technical assistance working within the framework of current organic production? 

And I guess, why do you think it should be one of the highest priorities in the 2007 Farm Bill? 

Ms. WILCOX. Well, Mr. Etheridge, obviously, we would like to increase the amount of organic production in the United States. We 

know the consumers are demanding a very high amount of organic 

in the marketplace and we want a lot more acreage to be here in 

the United States. I am not opposed to imports. About half of our 

food is imported now, but it would be much better for our environment and for our consumers if it was grown here. So then we have 

to look at what are the impediments to going to certification, and 

when we tried to look at that, we found that the actual facing 

about whether you will decide to try to go organic is a daunting 

kind of a task. People are asking themselves the question, what do 

I do in the three years, like the Chairman asked. What do I do 

about working without the pesticides that I have always worked 

with? How do I learn about managing pests, there is a perfectly 

good way to learn that, but it is a whole new way of farming than 

they may have been taught in ag school and certainly that they 

may have been taught by their neighbors or their parents. And so 

we do believe that there are certain things that need to be done, 

including looking at rotation requirements, soil preparation, the 

manure and the handling of animals, which is done in a much different way in organic. There are just a myriad of things that need 

17

to be done or looked at before you decide to go ahead and convert 

your farm, because that is a big decision. And then there is a need 

for technical assistance and mentoring while you are doing that because, as my colleague here said, there can be a diminution of production during the three years. It is not as dramatic in some cases 

as has been portrayed by conventional agriculture, but there can 

be a diminution, because you are learning also about rotation and 

about growing several crops instead of one row crop, and you are 

learning about a lot of new things. 

Mr. ETHERIDGE. How does the United States stack up internationally in terms of development of organic markets? Any data 

on that you are aware of? 

Ms. WILCOX. The Department reported. They did a very good 

study, it is a couple of years old now, between the EU and the 

United States, and the EU, just in the 15, you know, original countries in the EU had about 5 times the amount of acreage converted 

in 2003, so I have no idea now what that number may be. And of 

course, we do know, although anecdotally, that other countries are 

responding to the organic demand in great numbers and there is 

a lot of conversion going on. 

Mr. ETHERIDGE. Good. Thank you. Ms. James, you raised the 

concern of synthetic or non-organic products being used as substitutes in organic products because of lack of organic ingredients. 

Can you be a bit more specific on the issue, and can these organic 

ingredients be produced in the United States? 

Ms. JAMES. Currently the National Organic Program Regulation 

205.606, 605, 604, you will find a list—National list of allowed synthetic and nonsynthetic agricultural and nonagricultural products. 

At a current NOSB meeting that was held, there was a significant 

amount of agricultural products that were being petitioned—nonorganic agricultural products that were being petitioned to be listed 

on the National List. And in my opinion, I believe that if our organic farming situation in the United States was thriving and we 

had more government support for growing these agricultural products, we would not have to be listing things that should be able to 

be grown organically and be in organic products. Does that answer 

your question? 

Mr. ETHERIDGE. Partially. I may come back to that later. Thank 

you, Mr. Chairman. I will yield back. I see my time has expired. 

Mr. CARDOZA. Thank you, Mr. Etheridge. I would now like to call 

on Mr. Kuhl for five minutes of questions. 

Mr. KUHL. Thank you, Mr. Chairman, and I thank all of the 

panel members for coming and testifying. A question for you, Ms. 

Wilcox, first. In my years of dealing with organic agriculture at the 

State level, I have noticed that the general population has a very 

difficult time really kind of differentiating the difference between 

organic and regular produce. I have noted that there has been 

some advertising in recent cases, particularly as it relates to dairy 

products, where there have been some organic producers advertising as being pesticide-free and/or antibiotic-free, and I am curious as to—I think that sends the wrong message, certainly, because, as you know, the Federal regulations require all products to 

be essentially pesticide-free and antibiotic-free, and I think that 

does a disservice to organic farming. I am curious as to what the 

18

Organic Trade Association is doing to try to control what I would 

call non-misleading advertising practices within the organic industry? 

Ms. WILCOX. Well, as you know, probably controlling members is 

just about as hard as controlling constituents, Mr. Kuhl, but we 

certainly do put out what we regard as factual and important marketing messaging that is truthful and complete. We try to make 

that available to our members so that they understand that sometimes misstatements are made, but we are not in a position to police their advertising. I don’t review their advertising. When I was 

at Hershey Foods, I reviewed all of the advertising so I knew what 

was there. But we don’t do that, so we have to rely on our members 

to comply with the law, which is an important thing in this country. We do have truth-in-advertising laws. In the area of antibiotics, I think it is important to realize that, in fact, while the 

phrase you described may raise a question for you, animals that 

are raised in the United States on an organic ranch or farm are 

not treated with antibiotics. And if, for humane reasons, they became so ill that they had to be treated with an antibiotic, they 

would be removed from the organic herd and placed into a conventional herd. So the organic dairy or organic farmer is absolutely not 

using antibiotics or synthetic hormones in their animals and that 

is in contrast many times to conventional. 

Mr. KUHL. Yes. Is there some sort of advertising promotion that 

you send out to your members to suggest that they follow? 

Ms. WILCOX. No. 

Mr. KUHL. Okay. 

Ms. WILCOX. No, at our annual meetings, we hold seminars for 

people to learn about marketing techniques and of course, we emphasize truth in advertising at those. 

Mr. KUHL. Okay. And a question for the panel. I am disappointed 

that the Chairman had to leave, but as you all know, because I was 

looking for a commitment from him that there wouldn’t be any 

kind of shrinking baseline for the farm bill overall, and that there 

would be increased kind of assets available, particularly as it relates to this Subcommittee. But I think most of us understand that 

there probably is going to be less money available and therefore we 

are going to have to prioritize requests from the ag community for 

specific kinds of things, and I am curious. If you had to pick 2 

areas, each one of you, just 2 areas that this Subcommittee should 

kind of prioritize for the furtherance of organic agriculture, what 

would they be? We will start with Mr. Lipson. 

Mr. LIPSON. Very clear, the research and extension are the limiting factors to growth. It has all of these secondary impacts that 

I have tried to outline. I think that is going to be the biggest payoff 

for investing resources. 

Mr. KUHL. Okay. Ms. James? 

Ms. JAMES. Organic conversion assistance and organic certification cost-share assistance. 

Mr. KUHL. Okay. 

Mr. MARQUSEE. I would say crop insurance is probably the biggest, and market development. 

Mr. KUHL. Okay. And Ms. Wilcox? 

19

Ms. WILCOX. Well, we need conversion, absolutely, and we also 

need data because it leads to all the other things that can help 

with conversion. 

Mr. KUHL. Okay, thank you all. 

Mr. CARDOZA. Thank you. Mr. McCarthy. 

Mr. MCCARTHY. Thank you, Mr. Chairman. I appreciate you 

holding this hearing. In my district out in the California, I have 

seen organics grow, especially in the carrots and continuing in expanding. I was just listening to the last question about organic conversion, so my first question is, how much of organic product is exported right now? Is there any? 

Ms. WILCOX. Yes, there is. I don’t think that I have that number 

with me and I would be glad to provide it for you. OTA actually 

participates in the Market Access Program, the MAP export program, and there is a substantial but not a huge amount of product 

that is exported mostly to very high income, you won’t be surprised, areas that would like to buy our processed organic product, 

and then there is some other production that is——

Mr. MCCARTHY. Because the reason I ask, I heard organic conversion the most and if we were to do something in the farm bill, 

many of those that grow organic now get a premium price. I am 

wondering if there is a program, if you are thinking of one on the 

conversion, if it should be a sliding scale in, should it be by different product, so not everybody switches within a certain market 

and the price comes down. Those that got in before conversion are 

somehow penalized because government helped another. Has anyone put any thought to, when say conversion, a program for conversion? 

Mr. LIPSON. Mr. McCarthy, the strategy that we need is one that 

takes regionally resources in terms of research and extension and 

market development, looks at the specific opportunities that match 

markets to production capacities and puts together that puzzle in 

terms a diversified approach to conversion in an area. In California, there is obviously huge trade opportunities in the Pacific 

Rim. You know, we do have a long way to go towards fulfilling the 

domestic growth in demand, but there are very important opportunities in international trade as well and those can be matched up 

with production capacities, but it is going to be different in every 

region of the country, so what we need is a strategy like they are 

doing in Woodbury County. It takes all the pieces in terms of market development and technical information, local demand as well as 

export opportunities, to try to craft a strategy that way. 

Mr. MCCARTHY. And so I understand the whole matrix you do, 

but would you pick all products and converge over by region and 

you would say which ones by market size? 

Mr. LIPSON. Well, I think there is definitely, with more market 

analysis, we would have better information about how much room 

there is to grow in different areas. I mean——

Mr. MCCARTHY. So prior to do any conversion, the number one 

would be the data and the market analysis? 

Mr. LIPSON. We need business plans, for sure, and you have got 

to have good data in order to be able to build those. 

Ms. WILCOX. The OTA does do market surveys because USDA is 

not authorized at this time to do a comprehensive market survey, 

20

and one of the questions we ask is if you could get more how many 

of you could market more product if you could get more certified 

ingredients? And over 50 percent of our respondents say that they 

would have a shortfall. And I think it is important for you to realize that, of course, you come from the strongest organic State, California. We have only achieved having reports of organic in all 50 

States in the last year and we have, you know, as I said in my testimony, .5 percent of cropland and .5 percent of pastureland has 

been certified. While consumer demand this year, we believe, will 

be 3 percent or more, it will actually be 3 percent in the retail 

store. So consumer demand is going up like this and organic production is, frankly, in the United States, not going up like that. 

Mr. MCCARTHY. Thank you, Mr. Chairman. No further questions. 

Mr. CARDOZA. Okay. Mr. Etheridge, did you have a follow-up that 

you wanted——

Mr. ETHERIDGE. No. 

Mr. CARDOZA. Okay. I think the members will have some followup questions and they will contact you individually to get those answers. Thank you very much for your testimony. 

Mr. LIPSON. Thank you very much. 

Mr. CARDOZA. Thank you. We would now like to invite to the dais 

the second panel. We would like to invite up today Mr. Manuel 

Vieira, Owner of A.V. Thomas Produce, from Livingston, California; 

Ms. Mary-Howell Martens from Lakeview Organic Grains in Penn 

Yan, New York; Mr. Scott Lively, President and CEO of Dakota 

Beef, from Howard, South Dakota; and Mr. Robert Pike, Vice President and General Manager of Braswell Foods and Glenwood Foods 

in Nashville, North Carolina. Welcome to all. Mr. Vieira, a special 

welcome to you, all the way from California. You have been a dear 

and old friend and you have done a fantastic job in growing your 

organic business, and please feel free to proceed with your testimony. 

STATEMENT OF MANUEL VIEIRA, OWNER, A.V. THOMAS 

PRODUCE 

Mr. VIEIRA. Thank you, Mr. Chairman. My name is Manuel 

Vieira. I am from Livingston, California, in Merced County, where 

I own my company, A.V. Thomas Produce. We grow, pack and ship 

organic yams and sweet potatoes. We started with 10 acres of organic sweet potatoes in 1988. Now we grow over 1500. We ship our 

organic product all over the United States, Canada and Europe. 

A.V. Thomas Produce has been in business since 1960. 

I would like to start by first expressing my thanks to Chairman 

Cardoza and Ranking Member Neugebauer and the rest of the Subcommittee for your commitment and dedication to agriculture as a 

whole and especially to organic farming. I would also like to express thanks to our organic Subcommittee for holding this hearing 

so that all may have a better understanding on how truly important organic farming is for the future and the wellbeing of all. 

Organic integrity, responsibilities and requirements are tested 

and inspected by our dual-certifiers, COFA, California Organic 

Farmers Association, and OCIA, Organic Crop Improvement Association. Each year our operation goes through a rigorous and intensive inspection at our farm and our processing and packing entiVerDate 0ct 09 2002 10:46 Mar 26, 2008 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 F:\DOCS\110-11\41379.TXT HAG2 PsN: JAMIE
21

ties. Each field has a complete file of all the previous three years 

of activities. Each of our farms has a list of requirements to be met. 

These requirements are all enforced to the year. The rules and regulations of organic farming are set by certification and verification 

programs that we apply through our certification bodies. We are 

currently accredited through the USDA National Organic Program, 

NOP, certification program. We are also accredited by the European Union verification program, which allows us to export our 

sweet potatoes and yams to Europe. 

The NOP was mandated by the Organic Food Production Act of 

1990. This provided a uniform organic standard. The NOP accredited certifying agencies, such as COFA and OCIA, it confirms that 

the certifiers understand and is using the national standard and 

also confirms that the certifier can conduct business of certification 

properly. 

Mr. Cardoza, I would like to conclude once again by thanking you 

and the members of the Subcommittee for the opportunity to share 

a little about our organic commitment. Thank you all. 

[The prepared statement of Mr. Vieira appears at the conclusion 

of the hearing:] 

Mr. CARDOZA. Thank you, Mr. Vieira. Next up we have Ms. 

Mary-Howell Martens from Penn Yan, New York. Welcome. 

STATEMENT OF MARY-HOWELL R. MARTENS, LAKEVIEW 

ORGANIC GRAINS 

Ms. MARTENS. Thank you very much, Mr. Chairman, thank you 

to Mr. Kuhl, he is my district representative, and to Mr. Etheridge, 

because I am a horticulture major from North Carolina State, so 

I have connections to several things. 

I am going to go ahead and start with part of my testimony and 

it is a quote. ‘‘I wish you didn’t have to do that.’’ I was saying that 

to my husband as I was standing by the kitchen door, several 

months pregnant with my second child, watching my husband go 

out to battle the weeds, all dressed up in his white zoot suit, his 

Tyvek suit, heavy green gloves. He was out to fight the enemy. Me 

too, but what choice do we have? It was 1991, the first year after 

we had split up the farm partnership with Klaas’ two brothers. It 

is not easy farming over 600 acres, just the two of us. Farm prices 

are never good, weather is always risky, but at least we had one 

advantage over most of our neighbors. Weed control was rarely a 

problem because Klaas was very good at planting herbicide combinations and fertilizers. In my job in the grape breeding program 

at the New York State Agricultural Experiment Station, I was responsible for planting the grape spray program for the breeding 

vineyards, and so Klaas and I had many romantic moments during 

our early marriage discussing the relative merits of this chemical 

and that chemical. 

How do two people so apparently committed to the agribusiness 

ideal of American agriculture end up operating a large organic 

farm not very many years later? We truly believe that we were like 

many conventional farmers, using chemical fertilizers and pesticides simply because we thought there was no other way, but very 

concerned what it was doing to us, our family, our land, our environment and our community. We are now farming over 1400 acres 

22

of certified organic crops, corn, soybeans, small grains, red kidney 

beans, cabbage, hay, and for every crop, there is a good, profitable 

organic market. 

All three of our children are active on the farm. In addition to 

working on our farm, our son Peter, who is 18, has rented 250 

acres of his own land is farming that organically and is earning 

good profit to buy farm equipment and pay for his college education. Our 15-year-old daughter Elizabeth, who is here today, has 

purchased heifers with her USDA/FSA youth loan and is 

transitioning them to organic and is learning a lot from those cows 

every day, things that she could learn no other way. Eleven-yearold Daniel works on the farm and helps on the farm in every way 

he can. All three children are proud to be involved in our farm and 

proud to be organic farmers. 

In the mid 1990s, Klaas and I began grinding organic feed from 

our own grains, for several nearby dairy farmers. In 2001, our business had grown enough to justify purchasing the local feed mill and 

with the help of a USDA Rural Development grant, we converted 

it to a fully-organic feed mill that is now known as the Lakeview 

Organic Grain. This operation is now employing 7 full-time employees and 2 full-time truck drivers, and now serves over 300 organic 

animal farmers in New York and Pennsylvania. We also supply organic crop seeds and other organic inputs and a whole lot of information. I spend probably most of every day on the phone talking 

to people. We talk about resources. Well, a lot of people come to 

us and we help them with weed control, soil fertility management, 

animal management. We are now grinding more feed at our feed 

mill than Agway ever did when they ran it previous to us, and we 

are even grateful for some competition entering the business, because the pie is big enough for all of us. 

We have learned that, while many outside the organic community may define us by what we don’t do, we don’t do pesticides, we 

don’t do antibiotics, all that we were talking about earlier, we 

would rather define ourselves by what we do do, crop rotation, soil 

fertility, soil health management, managing our farm for health, 

soil health, plant health, animal health, so that intervention isn’t 

needed, that we don’t need to rely on outside inputs. 

Where do we go from here? At this time in New York alone, 

there are over 600 certified organic farms, 125 in our district alone, 

more than 250 organic dairy farms and over 100,000 certified organic acres. The National Organic Program needs help. They do a 

fine job and we fully support them, but they are woefully understaffed and underfunded. We need help. We need to get them more 

money so that they can have at least—well, all organic funding 

should be at least the same percentage that organic agriculture has 

in the United States. We need more help for NRCS personnel so 

that they can do a better job of improving our farmland, informational services, like ATTRA and SARE, need more funding so that 

they can distribute useful information to researchers, to farmers, to 

extension agents. We need more help for transition farmers so that 

we have more supplies. We would buy more grain from New York 

if we had it, but there isn’t enough. 

In conclusion, I want to thank all of you for forming this Subcommittee and for listening to us today. Agriculture in the United 

23

States is diverse, but organic is no longer a minor niche just for 

the counterculture or the extremely affluent. It is creating a lot of 

opportunities for many people, hope for many people, and that 

needs your help. 

[The prepared statement of Ms. Martens appears at the conclusion of the hearing:] 

Mr. CARDOZA. Thank you. Next, we have Mr. Scott Lively from 

South Dakota. Welcome, sir, and please proceed with your testimony. 

STATEMENT OF SCOTT LIVELY, PRESIDENT AND CEO, DAKOTA 

BEEF, LLC 

Mr. LIVELY. Thank you very much, Mr. Chairman and members 

of the Subcommittee. I want to thank you for holding this hearing. 

I have been very impressed so far with the level of questions. I 

kind of thought this would be huge educationally, from our point, 

and you guys are clearly well educated and asking great questions 

and I appreciate that. It shows how serious you are taking this. I 

know what a huge task you have with the farm bill and I appreciate this being such a serious section of it. 

As you stated, my name is Scott Lively. I am the CEO and 

Chairman and the founder of Dakota Beef, LLC. I have been active 

member of the organic food industry for seven years. Exactly seven 

years ago this summer, I founded Dakota Beef, along with my wife, 

purely because she had her second child and took off on an organic 

zealot tangent and decided that our kids were going to consume 

nothing but organic dairy, fruits and vegetables forever and we 

went pretty much cold turkey overnight. I knew nothing about the 

industry nor did I really care much about it. I was a meat-eating, 

potato-eating guy from Chicago. Nevertheless we went out and 

bought 30 head of cattle in Seward, Illinois, we processed them locally, all at one time, and sold them door to door in Chicago restaurants out of the back of her Volvo, mostly white tablecloth and 

gourmet restaurants. Seven years later, we are clearly the largest 

organic certified beef company in the Nation. We are in all 48 

States, with the exception of North and South Dakota. I don’t understand why, being called Dakota Beef. And we ship hundreds of 

thousands of pounds of beef per month. 

This market is clearly a consumer-driven market. It is affecting 

the economy in many ways. The small town in South Dakota where 

we are headquartered had roughly 1200 working adults, 65 of 

which now work for our beef plant, and we employ another 15 employees across the United States in 5 different States, in sales, 

marketing, research and development and whatnot. 

Going back to this being a consumer-driven industry, I think a 

lot of people would like to pretend this industry didn’t exist and 

that is more concentrated on that crunchy granola, whole food 

shopper. It clearly is not. As you guys have stated yourselves, this 

industry is growing at a dramatic rate. Seventy percent of the consumers in America report that they purchase organic products at 

least occasionally. This industry has grown consistently at 20 percent a year for the last 10 years. In my opinion, it is rapidly approaching a $40 billion industry over the next couple of years. 

24

In my opinion, this symbol that the USDA/NOP has put out is 

clearly arguably the strongest process claim ever made in USDA 

history. It is a claim that has never, ever been made of how a product is processed, from the way it is raised, if a livestock or farm, 

the way it is handled, the way it is shipped to the facility that it 

is processed in, and what I would encourage you to look at is why 

consumers are purchasing this. What is causing this growth? What 

is causing the 20 percent a year? It is a perceived notion, in my 

opinion, that these consumers believe that when it has this symbol, 

which has become a brand in itself, that they perceive it is better 

for the environment, that it is better for their health, and that they 

perceive that it supports small, local farmers. 

As you work on the 2007 Farm Bill, I encourage you to look at 

the following: continue to improve USDA oversight for the NOP. I 

think that a stricter standard is not necessarily the answer right 

now, and I certainly wouldn’t encourage lightening the standard, 

but enforcing the current standard, enforcing the rules in the national list is clearly what needs to happen. Elevate the compliance 

and the assessment inspections, particularly around, but not limited to, imported organic agricultural products. I think that the 

paper trail on imported beef, particularly for my industry, is pretty 

thin and I think that when we are going out to these foreign countries and bringing in certified organic grass-fed beef or whatever it 

is, there just needs to be a little more oversight on that. We particularly focus on grain-fed choice-graded beef in the United States 

and there is nothing wrong with the imports, but it has got to be 

regulated and we have got to make sure that the consumer believes 

in this brand, that they believe in that symbol. The only way this 

is going to be done is stronger resources and funding to the USDA’s 

NOP. I think last year the funding was about $2.1 million and I 

am speaking from memory and a guess, and that is to basically 

oversee an industry that is approaching $40 billion. Consumer confidence in this sector is a direct result of organic product integrity, 

which in turn is dependent on NOP oversight and enforcement. 

I look forward to your questions and I really appreciate the time 

to address you. 

[The prepared statement of Mr. Lively appears at the conclusion 

of the hearing:] 

Mr. CARDOZA. Thank you. Next up we have Mr. Robert Pike from 

Nashville, North Carolina. Welcome, sir. 

STATEMENT OF ROBERT PIKE, VICE PRESIDENT/GENERAL 

MANAGER, BRASWELL FOODS/GLENWOOD FOODS 

Mr. PIKE. Thank you. Well, good morning, Mr. Chairman and 

Ranking Member and especially my congressman, Mr. Etheridge, 

that we have so enjoyed having him even to our facilities in Nash 

County. 

Braswell Foods is a family-owned company that produces, processes and distributes eggs and feed in the Mid-Atlantic region. We 

are owned by Scott Braswell, who is the third-generation owner. 

The company’s heritage can be dated back to 1834 to a small 

water-powered corn milling operation in Nash County, North Carolina. From that small beginning, the Braswell family has grown the 

company to one of the largest egg and feed producers in the MidVerDate 0ct 09 2002 10:46 Mar 26, 2008 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 F:\DOCS\110-11\41379.TXT HAG2 PsN: JAMIE
25

Atlantic region. Our current operations consist of 5 operating companies with over 150 employees, and contracts with 23 familyowned organic farming operations. 

In 1996, Braswell acquired Glenwood Foods in Jetersville, Virginia. Glenwood Farms was an established egg producer and marketer to the Virginia region. Just prior to our acquisition, the previous owners had seen the need to start producing and marketing 

organic eggs. They were true pioneers, because this was before it 

was cool to be organic and long before the USDA certification requirements that prevented fraudulent marketing of organic products. 

Beginning with a flock of 15,000 birds, our flock size now is approaching 400,000. These birds produce about 10 million dozen 

eggs per year under the brands of Eggland’s Best and other branded labels that can be found in most of the retail natural food stores 

from Maine to Florida. We also export product to Canada and Bermuda. Braswell is a fully-integrated organic egg producer. We have 

our own feed milling, pullet growing, liquid egg product and distribution operations. All of our operations have been certified by 

QAI, Quality Assurance International, from day one. The Braswell 

family of companies enjoy a reputation, being one of the country’s 

premier organic egg and feed providers with sales over $20 million 

per year. 

Our feed-milling operation not only supplies feed to our own 

birds, but to other organic livestock operations. We purchase organic corn from 7,000 acres and soybeans from 6,000 acres of certified land. Most of the grain that we buy is from the Midwest, but 

we have also established buying programs to encourage grain farmers in our local area to convert to organic production by paying premiums for the grain during the transition period of 3 years, in exchange for the following 3 year’s crops. We traditionally pay from 

50 to 100 percent premiums for these crops over the regular commodity crops, with today’s pricing of organic corn being anywhere 

from $10 to $12 a bushel and bean meal over $600 a ton. 

It is a concern that the 2006 crop will not be enough to supply 

the demand until the new crop is available. One of our main suppliers of organic grains has told us that, because of the increased 

demand from organic livestock, there will be a major shortage in 

a large part of 2007 and into 2008. Producers will have to look for 

offshore supplies, such as China and Europe, to fill the gap. This 

shortage will limit our industry’s growth. 

Organic production has also had a great influence on our conventional operations. We have implemented many of the third-party 

certification principles in our food safety, animal welfare and environmental programs. Braswell is the first and only ISO 14001 certified egg company, which shows the continual commitment to 

produce the best products while striving to improve our environment. 

As part of our rapidly growing organic community, we have seen 

many changes and challenges as we strive to serve the customers’ 

demand for organic products. One key event that has helped committed organic producers, such as Braswell, was the implementation of the USDA certified organic program. For the most part, this 

program has leveled the playing field for fair competition and has 

26

provided assurance to the consumer that organic products are what 

they say they are. This program has been government at its best, 

but it still needs Congress’ support as demand for more certification of both domestic and foreign supplies increase. For example, 

China is making organic soybean meal available to us in North 

Carolina at 25 percent less value versus Midwest meal. As the U.S. 

demand increases and the U.S. farmer does not put more acres in 

to organic, supplies of organic products will be needed and more 

grain supplies will be needed to fill the gap from offshore. These 

suppliers will need to be held to the same high standards that our 

domestic suppliers are and USDA will need more resources to ensure the process. 

Another area of concern and challenge is somewhat of a paradox, 

is the use of organic fertilizers, livestock waste, on our croplands 

while some of our environmentalist friends have targeted this practice as not good for the environment. Some even said that organic 

materials should be classified as ‘‘hazardous waste.’’ As treated as 

other waste, it would fall under the Superfund law. If our laws prevent the use of this natural product, which has been used to grow 

crops since the beginning of time, the organic food industry would 

collapse. 

The Braswell family would hope that if you have not tried some 

of our eggs, that you will in the future, and invite you to see our 

operations in North Carolina and Virginia and again, thank you for 

the privilege of being here today. 

[The prepared statement of Mr. Pike appears at the conclusion 

of the hearing:] 

Mr. CARDOZA. Thank you very much to our entire panel. I have 

to say that you are quite impressive, all of you, in both the scope 

and commitment of your endeavors. I am very impressed. I want 

to start the questioning with Mr. Vieira. 

Sir, you are truly one of the American success stories in farming 

in organics. I think you arrived here in the United States in 1968 

and have grown your business. I toured it recently. It is fantastic 

and so impressive, the commitment and the innovation that you 

have brought to the industry. My dad and grandfather used to be 

sweet potato growers, as you know, and they were pioneers in their 

time, but nothing compared to what you have done in your industry. 

I was very interested in your testimony. You talk about the conversion process going to organics. I would like you to elaborate a 

little bit about that. And also what is entailed for your particular 

industry in converting to organics? Then I also would like you—you 

mentioned in your testimony that you also are certified for the EU 

to export to them and I would like to know what differences there 

currently exists between EU certification and USDA certification? 

Mr. VIEIRA. Thank you, Mr. Chairman. First of all, it was not 

easy when, in 1988, our company decided to start planting organic 

yams and sweet potatoes. And as I said, we started in a very small 

scale, only 10 acres it and was a process of learning and getting 

beat once in a while. But every year, we had the commitment and 

we decided to keep going and we increased from one year to the 

other. And in 19 years we went from 10 acres to over 1500. One 

of the most difficult things is land. We have to have three years 

27

of doing almost nothing. You can plant rye or you can leave it just 

open. We have to have a strong commitment for organic, as we did. 

Like I said, the three years we have without anything or we rent 

most of our ground, so we have to have affidavits from neighbors, 

from the county, from anyone if this pasture, as you know, in our 

area is lot of land has been in just pasture that nothing has been 

doing for a long time around Livingston, Atwater, Stevenson and 

when we find the ground we would work it is like vision ground. 

And like I said, finding the proper ground, going into the process 

according to the laws, rules, regulations, is one of the most difficult 

things we have. 

As far as the requirements to go to Europe, it is more or less the 

same as here. We have two independent entities that give a certification and when we present to them our history, what we have 

been doing for almost 20 years, we present every single document 

that they ask us, it has been no problem to ship to Europe. Because 

we have been having enough market in this country and Canada 

to ship our sweet potatoes, we are not so crazy to ship to Europe 

if we have the market here. But we ship a few to a few good clients. 

Mr. CARDOZA. Thank you. Ms. Martens, one thing that you mentioned at some length was the fact that you used to spray herbicides and now you are not. I will tell you that I am an avid family 

gardener in my home and I am so interested to figure out how you 

can control those darn weeds without using herbicides. Could you 

elaborate a little bit on your technique? This is really not for the 

Committee’s purposes, but for my personal purposes. 

Ms. MARTENS. I would be happy to. Looking at weed control is 

probably our major challenge on a crop farm. We don’t have the insects and diseases that would be in a vegetable farm, but weed control is a challenge, but it is not an impossible one. In fact, once you 

get your system, it is not that difficult. We separate it into two distinct categories; the cultural weed control, where by rotating your 

crops, enhancing soil health, soil fertility management, you really, 

truly limit and control the amount of weeds and the species of 

weeds that are present so that you can then go in with mechanical 

tools that are appropriate and do not require a great deal of labor 

or petroleum that are timed correctly for effective weed control. 

On our row crops, if we can get in with what is called a coil tine 

harrow, which are thin wire tines that shake the ground, aerate it 

and allow for weed seedlings to desiccate, to dry out. If we can get 

in twice, once right around emergence and once right after emergence and then go in twice with a field cultivator or an in-row, between-row cultivator, four passes will do weed control sufficient to 

make our fields look as if they had been sprayed with herbicide. 

It isn’t that difficult, it isn’t rocket science. It is more timing and 

having the right tools and having your soil in good shape and having your crop rotations in good shape. 

Mr. CARDOZA. Yes, I have a follow-up question. Do you have that 

rotten nut grass in your area? Because that is a blight in my area. 

Ms. MARTENS. We do have nut sage, we did. One of the things 

we found that a lot of the rhizome weeds, like nut sage and crabgrass, that we expected to be problems when we went organic 

stopped being problems, mainly because of the microbial activity in 

28

the soil. When you change your soil conditions, you change your 

weed populations and the things that you think are going to be a 

problem aren’t necessarily. 

Mr. CARDOZA. That is interesting. Thank you. I would like to talk 

to you more about that. 

Ms. MARTENS. All right. 

Mr. CARDOZA. I am going to ask a little indulgence. There is one 

question I would like to ask the entire panel. Can you comment on 

the effects of imports on your business and the sufficiency of oversight by USDA? I am concerned, frankly, that in some other countries we are simply not getting the oversight that protects the consumer. You all have built up such a high standard and high bar 

in our country. We do have high oversight here. And I am just 

afraid that the further you get from Washington or U.S. borders 

and as you get to other countries, we are simply seeing a lack of 

oversight in those areas. 

For example, in some countries, application of water that is polluted from the rivers in that country are a huge concern to me 

where you wouldn’t allow a pesticide but yet there might be pesticides or other chemicals in the water that is being applied to organic farms. Can you all speak to that? Do you have any knowledge of that? And what is the effect of imports on your industry 

and whether you believe that oversight is high enough, a high 

enough bar? I will start with Mr. Pike. 

Mr. PIKE. Well, at this time, as I said in my testimony, we are 

being offered organic soybean meal out of China and after just recently adopting a little girl from China and seeing the vastness of 

that country, I can’t imagine some of the certification efforts that 

has to go on there. But it is being offered. The certifiers are assuring us that the product is certified properly. There is a concern 

there, but more importantly it is limiting the growth of our own industry and our own farming community to be able to convert to 

organics. As in eggs, eggs are a fairly perishable item. There is not 

any pressure at this point in time. 

Mr. CARDOZA. Thank you. 

Mr. LIVELY. It is a great question and I am so glad you brought 

it up. I would say that the single biggest competitive issue facing 

the organic beef producer is foreign beef both economically and for 

the oversight and paper trail you are discussing. In the supply 

chain of livestock, you have got many layers. It is not just that a 

guy raises an animal, sells an animal, it gets processed. There is 

genetics. There is a cow-calfer that breeds and then your next step 

is to lay a background or spend some time with the animal until 

the animal is up to an age where it can be fed or finished on high 

protein grains to get that lush flavor we all like. 

Each one of those steps in the organic agriculture for livestock 

has to be certified organic and watched. The field that the animal 

grazes in has got to be certified organic with soil samples, with the 

three year wait and whatnot, as well as any added feeds; corn, soy, 

flax, barley, wheat, whatever else is put in that animal’s diet. I 

can’t imagine that it is being managed or the oversight is—in my 

opinion, there is clearly not the same standard being held to the 

U.S. beef as there is to foreign beef and it is purely an opinion 

there. 

29

But I can’t imagine that an entire supply chain is being tracked 

along with the processing. Once it turns from a livestock product 

to a food product that is actually being handled, that process is 

being tracked and then it is put on some big cargo freighter and 

trucked over with here with diesels and call it sustainable meat. 

So my issue is that you are correct. I think the oversight on foreign 

beef could be a lot tighter, but my only information is anecdotal 

and opinion right now. 

Mr. CARDOZA. Something that I think this Committee is going to 

have to really look at even more is exactly what you just talked 

about and something else that was talked about, and I don’t want 

to divert from the question, I want to get back to the panelists, but 

I am very concerned that the organic label, as someone said previously, is also sort of a moniker for sustainable. 

Mr. LIVELY. Yes. 

Mr. CARDOZA. And I am not sure that all countries have the 

same view on this as we do and that we are employing sustainable 

practices. 

Mr. LIVELY. If I could make one more point on that and I will 

pass in a second here, is that when we process an animal at Dakota Beef in Howard and that animal becomes a carcass and is now 

become a food product and the USDA gives the thumbs up that 

this is a sanitary, clean—and by the way, the USDA does a great 

job keeping, you know, food safe, clean and moving, but they are 

not overly educated on the organic standard. We spent our first 

year of production teaching our USDA inspector how to monitor us 

for organic rules and now he is great. He has done his own research. 

But we spray that carcass with organic citric acid or hot water, 

things that are allowed. What foreign countries might use on a beef 

carcass, who knows what the allowed substances would be? How 

would you even track it? How would you know what the source of 

that product is? And that is, indeed, where all pathogens are removed and it is given the thumbs up; this is clean, move it into 

the cooler and start processing it. 

Mr. CARDOZA. You have instructed us to instruct our staff to 

start looking at this right away. Thank you. 

Ms. MARTENS. Just briefly. At our feed mill, we have a commitment to buy first, New York grown grain for feeding New York 

dairy cows. Because for two reasons. One is that we know the 

farmers growing them and so therefore we know what practices 

they are using and their integrity. But we also want the income, 

the wealth to stay in New York as best we can. This is community 

development, because the money that is generated in New York 

benefits not just agricultural businesses, but bounces around the 

community in many different ways. 

If we cannot get what we need from New York, and we can’t. 

New York doesn’t grow anywhere near enough grain for our needs. 

Then we will go Midwest or western Canada, Ontario and then, as 

a last ditch source, we will go outside the country. We will be 

bringing in some sunflower meal in from South America later this 

year because there isn’t enough. I feel that the integrity issue is 

a big one, but community development and keeping the benefits of 

organic farming here in the United States to benefit both the supVerDate 0ct 09 2002 10:46 Mar 26, 2008 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 F:\DOCS\110-11\41379.TXT HAG2 PsN: JAMIE
30

pliers and the users is very, very important. And so if we can put 

emphasis on that, we will not only solve the integrity and the 

traceability, but we will also help American farmers. 

Mr. CARDOZA. Thank you. Mr. Vieira. 

Mr. VIEIRA. Mr. Chairman, I think your question was a great 

one. The other day I saw, in our district, the city of Merced, California, a can of yams from China, which makes me very nervous. 

They were conventional, non-organic, but even conventional, I hope 

that those countries that grow any type of produce, it doesn’t matter if it is organic or conventional, that they follow the same rules, 

strict rules and regulations as this country. Thank you, sir. 

Mr. CARDOZA. Thank you. I will now turn it over to my Ranking 

Member, Mr. Neugebauer, for his question period. 

Mr. NEUGEBAUER. Thank you, Mr. Chairman, and thank you for 

that last question. That was a very good question, very interesting 

response from our folks. This transition period that we have been 

talking about, I want to kind of explore that a little bit more. Is 

the three years, is that kind of a set-in-stone number and if it is, 

can you explain to me kind of what is going on there? 

Ms. MARTENS. The rule says that there has to be 36 months between last prohibited material and harvest, so that is, in effect, 

three years. We have taken many acres through transition and we 

have never grown nothing for three years. And I think it is a really 

important point to say that you don’t do nothing, you don’t leave 

that land idle, you don’t get no income off of it. You just have to 

use organic practices for those 36 months and you cannot sell the 

crop as organic. But you can grow conventional hay, you can grow 

conventional soybeans, which work very well under organic management; just can’t use GMO varieties. 

Many people that we work with have hay land, CRP land, other 

idle land coming out that can be organic immediately because nothing has been applied on them for the previous three years. They 

don’t need to go through a three-year deliberate transition if nothing has been applied. So yes, it is three years, but there are many 

ways to do it where you don’t lose income during that time nor do 

you lose a crop. 

Mr. NEUGEBAUER. So would it be a fair assessment to say that 

the transition period, because it is three years, is not an impediment, necessarily, for if I am conventional farming, to move to organic farming, Mr. Lively? 

Mr. LIVELY. I don’t think it is an impediment, no. I think that 

there are a few factors and I am going to speak from the corn industry because I know cattle and corn is about the only two crops 

that I focus on. Typically, when someone is doing what is called the 

transition crop, during those three years they might experience a 

slight loss in yield because they are not using the chemical fertilizers and whatnot they are used to using. But it is a great training ground for them and a period for them to learn how to do organic agriculture. 

I have never, and I have probably worked with certifications on 

over 60,000 acres of certified organic corn in South Dakota in the 

last year. I have never seen a producer lose money on a transition. 

I have seen him have less yield and have down years but never 

lose money and I have always seen the banks being willing to lend 

31

against it. The struggle is getting the bank to understand the process once it is organic and hey, this is a much higher margin, more 

expensive crop with higher input cost. 

But as Ms. Martens has mentioned, the idea of CRP land is becoming a phenomenal route for people wanting to get into the organic industry quicker. A lot of these are ranchers and farmers 

have huge tracts, quarters and quarters of CRP land and they are 

getting, you know, a nice annual fee for keeping it as CRP land. 

Maybe there is quite a bit of CRP land out there, I am not sure. 

I know how much there is in South and North Dakota. This land, 

if it has been treated according to CRP standards, would certify organically almost instantaneously. 

Now granted, a lot of CRP land was put in that is not farmable, 

which defeats the whole purpose, in my opinion, but that land 

would certify overnight, quickly, and what we are really talking 

about is an affidavit and the producer is willing to sign his affidavit saying hey, listen, it has been three years. I have been solid. 

I have done a good job. Here is my backup and management proof. 

There are a lot of guys that could go organic much quicker than 

they think. 

Another market for that transition corn would be the all-natural 

cattle industry. There is a significant difference between all-natural 

and 100 percent organic and we need to be very clear on that. The 

standards are clearly different. A lot of these all-natural producers 

would like to buy transition corn because they are basically buying 

what is organic corn for commodity prices during that time. So 

there are options for them and no, it is not sitting stagnant. 

Mr. NEUGEBAUER. And you mentioned another important piece of 

that is the capital. Is there recognition in the capital markets, the 

lending markets, that this is, you know, a better opportunity economically for some of our producers and is the lending, farm lending industry, as a whole, fairly responsive to that? 

Mr. LIVELY. I would say that has been slow in coming, but it is 

coming. There is a lot of private equity capital coming into the 

space. A lot of these hedge funds that are sitting on tons of cash 

and have nothing to do with it are getting into the space. A few 

progressive banks, such as the Bank of Oklahoma and Rabobank, 

are putting some time around this and seeing the value for what 

it is. But as a whole, I would say the bank industry has not jumped 

on board yet. They are still very much tied to the commodity industry. 

Mr. NEUGEBAUER. Anybody else want to respond to that? 

Ms. MARTENS. We have an organic farmers group that gets together during the winter for day-long meetings and pretty often, 

we have conventional farmers who are thinking about going organic bring their banker or their loan officer to the meetings so 

they can learn about organic farming and see what real organic 

farmers look like. And they usually go away feeling pretty comfortable with the whole situation because we don’t look weird and 

we don’t act weird. We act pretty responsible. And so it is an educational process, but bankers are generally fairly open to seeing 

successful farms because they see so many farms that are not successful, conventional ones. 

Mr. NEUGEBAUER. Mr. Vieira. 

32

Mr. VIEIRA. Another type of crop, sweet potatoes, in our area is 

like a nematode and worms. And because there is no chemical to 

use for organic, we have to have at least one, sometimes two years 

of what we call dry farming or oats or winter rye. No irrigation. 

In our area, usually, from April to October, we have no rain that 

we like. We don’t want rain at the time, so because there is no 

needing that at the time, during that period of time, so the nematodes and the white worms go away. So there are reasons why we 

don’t farm during those three years. One is the requirement, by the 

rules, and the other one is to benefit us because we could farm 

something, but if we do farm, we have to irrigate and we are going 

to keep those pests alive, which we don’t want to. Thank you. 

Mr. NEUGEBAUER. Thank you very much. 

Mr. CARDOZA. Thank you, Mr. Neugebauer. Mr. Etheridge. 

Mr. ETHERIDGE. Thank you, Mr. Chairman, and thank you for 

this hearing. Let me thank all of the panelists and especially my 

friend, Mr. Pike, from Nashville, North Carolina. And I have had 

a chance to tour their operation and I would tell you that, and this 

was several years ago, they do an outstanding job, they really do. 

Mr. Pike, let me ask you a question. You mentioned your concern 

that you had about the U.S. organic market becoming reliant on organic feedstock from abroad and each one of you discussed it a little bit, specifically China and given what has happened in recent 

days with feedstock for pets and even today they pull more product 

off the shelves. 

My question is, and you had indicated that feedstock is about 25 

percent less than domestic feedstock. In your opinion, does this call 

into question the quality standard for these products? You alluded 

to it. I am going to give you a chance to talk about it a little bit 

more. And finally, how can we be sure that these foreign grains are 

actually organic? And after you answer, I may give someone else 

a chance to comment because I have one more question for you. 

Mr. PIKE. As Ms. Martens mentioned, we also prioritize our purchases in terms of local areas, branching out and of course, it 

would be the importation of product. Even at significant reduction 

in cost, we put that down on an as-needed basis. From the standpoint of quality, we test all of our ingredients for various and sundry protein, all the normal things and from what we have indicated, the quality has been at standard. 

It has not been above and it has not been below, but it has been 

at standard and so from that standpoint in our formulations, we 

do make any adjustments for that. But in terms of guaranteeing 

that it was organic, we rely strictly on the certification agencies, 

which are approved by our certification agency as a reliable source 

of the whole process, that any organic soybean farmer in our case, 

would go through. 

One of the things that I mentioned in my testimony, too, is the 

transition issue. That would also be a question of how they transition in these foreign markets and these are some of the things I 

would be interested in understanding. 

Mr. ETHERIDGE. Let me have one follow-up with you and then I 

will ask some others to comment. What percentage of Braswell 

products are currently organic and in your opinion, are we still exVerDate 0ct 09 2002 10:46 Mar 26, 2008 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 F:\DOCS\110-11\41379.TXT HAG2 PsN: JAMIE
33

pecting to see this demand continue to grow as we have seen it 

over the last number of years? 

Mr. PIKE. Yes. Currently our total organic production is roughly 

30 percent of our total flock. In our feed milling operations, this 

represents close to 35 percent. We continue to see the growth. We 

supply feed to some broiler operations, as well as other egg operations. Our egg demand for branded egg products, as well as some 

of the house brands that you see in major grocery stores has continued to grow. 

It has been phenomenal. It just continues to blow our socks off 

every year when we do our market projections and budgets. Our 

limiting factor today is our supply of organic grains to keep our 

animals fed. One day without organic feed and our birds are no 

longer organic and the investment that we have in our birds, which 

is double of conventional, goes away overnight. 

Mr. ETHERIDGE. You indicated poultry operations and other operations in the area that are organic, other than egg operations? 

Mr. PIKE. Yes, there are some broiler operations over near Siler 

City that are growing. They are looking to double their production 

this year, as well, because of the demand for the product. 

Mr. ETHERIDGE. Just so everyone will know, the poultry operation in North Carolina is substantial. Ms. Martens, you mentioned 

in your testimony the difficulty organic producers face in obtaining 

bank loans and other sources of financing. Can you just share with 

us briefly the help you may have received from USDA’s rural development in obtaining your additional loan in getting your feed mill 

up and running? 

Ms. MARTENS. Well, we were very fortunate to get a rural development loan. It is a good program that stimulates rural development in that it requires that farmers or other managers work together in groups and develop ideas that will help the community, 

itself, into a business plan. We did get that. It was not a substantial amount of financing for the mill. Fortunately, we bought the 

mill at a time when the market was expanding, so we haven’t 

needed a whole lot of financial assistance because we have had 

such a vastly expanding market simultaneously. 

There is money available. The bankers we work with are very interested in the whole organic process and the opportunities and 

they have been very good to us, very good to work with and we will 

help other farmers get into contact with the same bankers. So I 

have not seen that to be a major impediment for most people if 

they can document that they are good farm managers. Because one 

thing I want to emphasize is it really takes a superior farmer to 

be an organic farmer. 

It takes somebody who is willing to not just find organically approved substituted materials, but to really change their management style, become a lot more skilled at observation and decision 

making and timing. And so for a banker to be willing to extend 

credit, they have to see that the person does have those skills and 

has a good track record and a good possibility of being a skilled organic farmer. 

Mr. ETHERIDGE. Thank you. You are attentive to detail. Let me 

thank each of you and I yield back. 

Mr. CARDOZA. Thank you, Mr. Etheridge. Mr. Kuhl. 

34

Mr. KUHL. Yes, Mr. Chairman. Just a quick question to the 

panel. We spent a lot of time on this transition period. Obviously, 

that is very important and seems like to expand the markets, we 

have got to do more there, from a Committee standpoint. What was 

the most difficult part of the transition for each one of you in your 

business? And keep in mind that I am interested in that aspect 

that we can be helpful with from a Committee standpoint. 

Ms. MARTENS. I think the biggest impediment for transition is 

thinking that you can do it. It is a mental thing more than any 

kind of operational thing. Believing that it is possible and then 

finding other people that you can talk to and learn the tools and 

the techniques and have somebody there for support to say okay, 

yes, you do have a few weeds. That is not going to kill you, you 

are still going to get a good crop. So as far as you are concerned, 

we need strong organizational support for programs like SARE, 

like ATTRA. They are information, but they also fund programs 

that will help farmers to help other farmers. 

We need a sense that there are other people in the area that are 

going to be helping them. So I think mentoring programs make a 

lot of sense if farmers can take time out of their busy schedule to 

do that. What I see is that just throwing money at organics isn’t 

necessarily the solution. It has to be focused in ways where farmers 

who are wanting information can get that information and can put 

it to use. So when there are problems or mistakes or insecurities, 

there is someone there to talk to. 

Mr. KUHL. Thank you. 

Mr. LIVELY. I would say that, you know, the obstacles are there 

and the issues are there, but after seven years, it has just kind of 

become a cost of doing business. You deal with it. From my personal experience on the cattle side, we have one of the largest organic ranches in the Nation in eastern Oregon, about 155,000 

acres; 90,000 of which is BLM land. This ranch covers two different 

counties and two different BLM districts. One district has been unbelievably cooperative about working with us in co-managing the 

land, not spraying, allowing us to do the weed control. 

The other district has been somewhat impossible to deal with 

and telling us that they have absolutely no willingness at all and 

they are going to spray where they want to spray and it is their 

land, although we are stuck in a 99 year lease with them and we 

are trying to graze organic cattle there. So I would say that the 

challenges would be getting more cooperation from the other agencies, such as the BLM and I really do believe there is a huge opportunity in the CRP program. I think it is a very untapped resource 

where there is, I wouldn’t use the word cheap, but available lowcost organic land. 

Mr. KUHL. Mr. Pike. 

Mr. PIKE. You know, one of the things that the Committee needs 

to understand is that organics is not only herbicide and pesticide 

issues. It also pertains to environmental as well as animal care 

guidelines and one of the things that took our company in making 

the transition from our normal cage laying operations was going to 

a free roaming mode of production. For our people, it was more of 

a mindset, accepting these whole new ways of doing things. In 

terms of our transition and our livestock, the three years doesn’t 

35

really apply, but it is a definite change in how we manage our 

birds. But, again, working back with the corn farmers and helping 

them and educating them is part of our process, as well. 

Mr. VIEIRA. Sir, in the sweet potato and the yam industry, one 

of the most difficult things has been convincing the sweet potato 

costs of California or everybody involved in investing more money 

in developing new types of sweet potatoes like pox resistant or 

nematode resistant or white worm resistant. That has been one of 

the most difficult things. In our industry, we would like to have the 

help for research and new varieties and new types of sweet potatoes that can resist all the types of pests that we have in our soil 

in our area. Thank you, sir. 

Mr. KUHL. Thank you. All right, Mr. Chairman, I yield back. 

Mr. CARDOZA. Thank you. Clearly, this is a panel of innovators 

and pioneers. You have all mentioned research at one point or another and that is something that this Committee has consistently 

heard from panelists across the spectrum, conventional and organic 

farmers. We are going to be doing a hearing on a bill about specialty crops that most of the members of this panel are co-signers 

on and it will be done in Mr. Holden’s Subcommittee, but it will 

include all these concerns for research. 

And the commitment of this Committee has been as we go forward and write the farm bill, that we are certainly going to be very 

sensitive to making sure that whatever we write in every section 

of the bill also applies to organic producers, so you will, for the first 

time, be included in all aspects of the bill. Thank you so much for 

your testimony. You have done a great job today. I would like to 

call up the third panel at this time. 

Today we have, as I said previously, Ms. Sandra Marquardt, 

President of On the Mark Public Relations, Silver Spring, Maryland on behalf of Ms. La Rhea Pepper, President of the Organic Essentials, Inc. of O’Donnell, Texas. We have Mr. Lynn Clarkson, 

President of the Clarkson Grain Company from Cerro Gordo, Illinois. We have Mr. Rich Ghilarducci, President and CEO of the 

Humboldt Creamery in Fortuna, California and we have Ms. Nicole 

Bernard Dawes, President and COO of Late July snacks from 

Hyannis, Massachusetts. I want to thank you again for the snacks. 

I have been munching them all morning and it is probably going 

to effectively be my lunch today, so thank you for the sustenance 

here. 

I also want to mention that, as you can note, a number of the 

panel and Committee members have had to transition to other 

meetings. That in no way should discourage your comments because they will all review and get transcripts of this hearing and 

I will make sure to pass on your comments to them. You comments 

are very important to this Committee. Unfortunately, members in 

the Congress have to multi-task and when you get near the lunch 

hour, we have several meetings that sort of trigger that second 

round of meetings they have to attend to, so I apologize for the lack 

of members, but they will, in fact, review your testimony. And 

would you please start, Ms. Marquardt? 

36

STATEMENT OF SANDRA MARQUARDT, PRESIDENT, ON THE 

MARK PUBLIC RELATIONS, ON BEHALF OF MS. LA RHEA 

PEPPER, PRESIDENT, ORGANIC ESSENTIALS, INC. 

Ms. MARQUARDT. Good morning, Mr. Chairman. It has been a 

wonderful, wonderful hearing. Thank you very much for hosting it. 

My name is Sandra Marquardt and I thank you for allowing me 

to testify on behalf of La Rhea Pepper, who wishes she could be 

here but cannot. I will be talking about the burgeoning organic 

fiber sector and by that, I am referring to organic cotton, such as 

this, the organic wool, organic silk and really, any natural fiber 

that is grown in an organic manner. I will do my best to represent 

La Rhea Pepper, but she will be coming here to Washington, D.C. 

this summer and maybe you two can chat directly. 

Mr. CARDOZA. Absolutely. 

Ms. MARQUARDT. Thank you. So La Rhea Pepper is the CEO of 

Organic Essentials in O’Donnell, Texas. Organic Essentials manufactures organic cotton personal care products, such as cotton balls 

and swabs and cotton rounds and until recently, feminine hygiene 

products. She is also an organic cotton grower farming 1100 acres 

of organic cotton near Lubbock, Texas. Given La Rhea and her husband Terry’s concern about the extensive use of pesticides on the 

approximately 3.5 million acres of cotton around them, the Peppers 

became certified organic farmers in 1991 and were certified by the 

Texas Department of Agriculture. 

In 1993 they and a handful of other family farmers created the 

Texas Organic Cotton Marketing Cooperative, which is also called 

TOCMC. And TOCMC has since expanded to 30 family farmers 

growing 8,000 acres of organic cotton and this has enabled the high 

plains of Texas to become the number one organic production area 

in the United States and one of the top 4 production areas for organic cotton in the world. TOCMC created Organic Essentials in 

1996 to market value added products using a short, staple length 

fiber that otherwise falls outside of the spinning qualifications for 

yarn, et cetera, and which was otherwise sold at low prices on the 

conventional market. These products are now available everywhere 

from Whole Foods to places like CVS and even Wal-Mart. 

In the late 1990s, La Rhea joined the Organic Trade Association’s board of directors where she spearheaded the effort to create 

cutting edge standards for the processing, such as dyeing and 

printing, finishing of organic fiber products. This would enable a 

product to be considered organic from field to finished product. In 

2002 La Rhea helped co-found a non-profit organization called the 

Organic Exchange, which is based in California, in Oakland, and 

it facilitates expansion of the global organic fiber industry. 

Now, expansion is really what we have seen. Globally, sales of 

organic cotton products increased an average of 35 percent annually to $583 million in 2005 and these sales are anticipated to skyrocket to $2.5 billion by the end of next year, reflecting an average 

income or an average annual growth rate of 116 percent, which is 

unprecedented in the conventional sector, that is for sure. 

Companies using organic fiber today include such well known 

brands as Nike, Patagonia, Nordstrom, again, Wal-Mart, as well as 

more than 1200 small and medium size brands, retailers and wellknown designers such as Paul McCartney’s daughter, Stella. The 

37

irony is that as we have heard before, for a number of other crops, 

organic crops, there isn’t enough organic cotton to go around for the 

number of brands that want to use it. Another irony, the United 

States used to be tied with Turkey as the largest organic cotton 

production area in the world, but the growth today is happening 

in Turkey, India and China; everywhere else but the United States. 

Now why is this incredible growth opportunity bypassing the 

United States? Well, U.S. farmers face barriers such as a five percent higher insurance premium for the same coverage. Again, we 

talked about that earlier. And new organic cotton growers face having their crops decertified is sprayed by conventional insecticides as 

part of the Boll Weevil Eradication Program. Lastly, while we 

thank Cotton Incorporated for it annual financial survey support of 

OTA’s organic cotton acreage survey, we asked that it provide the 

same kind of support for technical research, education and promotion of organic cotton. 

Mr. Chairman, I thank you again for your interest in organic 

production and we look forward to working with you in any way 

possible to help grow the organic fiber market. Thank you again. 

[The prepared statement of Ms. Pepper appears at the conclusion 

of the hearing:] 

Mr. CARDOZA. Thank you. Mr. Clarkson. 

STATEMENT OF LYNN CLARKSON, PRESIDENT, CLARKSON 

GRAIN COMPANY, INC. 

Mr. CLARKSON. Mr. Chairman, I would like to introduce myself 

as Lynn Clarkson, President of Clarkson Grain Company in Illinois. I would like to thank you and your Committee for your delightful interest in organic and I would like to encourage that. 

My company works with farmers throughout the United States, 

mostly in grains and oils, oil seeds, which means we are operative 

between the Alleghenies and the Rockies and from the Gulf of Mexico to the Canadian border. We work with corns, white, yellow and 

blue; soybeans and wheat, but primarily corns and wheat. Those 

are the farmers who are at the foundation level of the growth in 

meats and dairy products. Those are also the farmers who almost 

all have products that have to go through a conversion process. 

They are not selling directly to consumers. They are selling inputs 

to other parts of the industry. 

Almost every panelist here has underlined the major challenge 

as a supply challenge. Our industry has done a phenomenal job in 

finding demand. To satisfy demand, we have to have supply and 

we are not doing so well here. I would like to give my version of 

Economics 101 for organic agriculture. When I left my office yesterday, we were paying approximately $3.50 a bushel for conventional 

corn delivered to central Illinois. 

At the same time, we were paying over $7 a bushel for organic 

corn at the farm, almost anywhere in the Midwest. We were paying 

approximately $7.50 for conventional soybean delivered into central 

Illinois and probably a minimum $14 a bushel for any organic soybean. The soybean doesn’t even have to have a lot of self-respect 

to garner the $14. We will take almost any quality at that level 

and we are lucky to get it. 

38

Now, prices don’t mean a lot without a consideration of yield. 

And many pundits have suggested that the organic farmer can’t 

raise yields competitive with his conventional neighbor. Approximately 158 replicated studies by Iowa State University would indicate that on the average, organic farmers should expect between 90 

and 95 percent of the yield of his conventional neighbor. 

What are his costs? His costs are no higher than his conventional 

neighbor. So what does that mean for the net effect on his finances? They are significantly better. They are so much better that 

the best organic farmers in their pursuit of land are offering premiums to land owners of $20 to $50 an acre to allow them to rent 

land and convert it to organic. 

So if what I said is true, why are we having difficulty in finding 

farmers willing to convert? Why are we having difficulty in finding 

additional land? There is a host of reasons varying from simple to 

complex and many of those reasons go to stepping into the unknown. Others have asked for help through extension to remove 

some of the risks of going into the unknown. There is a new level 

of selling not to the neighborhood elevator. We frequently have to 

sell to companies located hundreds of miles away. 

Also in the organic world there are not a lot of elevators dedicated so your buyers will expect you to hold your crop on the farm 

until the buyer needs it. That is an inconvenience factor. There are 

several inconvenience factors. And then we step up to today’s reality where we have ethanol changing the face of rural America. 

We are now paying more for conventional corn than we were for 

organic corn a year and a half ago. We have essentially doubled the 

price of conventional corn. 

With the conventional farmers now making or looking at the potential of profits down the road, the highest in their lives, we are 

finding extreme difficulty in convincing anyone to do anything that 

is inconvenient. Even though the net return to the farm might be 

between 50 and 100 percent higher, there are inconvenience factors 

here. So one of the unintended consequences of the U.S. ethanol 

policy is a restriction on what we can do in the organic world. 

There are infrastructure issues, too, and I would like to leave you 

with one thought about blue corn. I hope that you have enjoyed a 

blue corn chip at someplace in your diet. And you and I both know 

it is corn, but there is one large organization that doesn’t claim it 

is corn. That is the USDA. A blue corn farmer technically cannot 

seal his crop because it is not considered to be corn. Now why isn’t 

it corn? Because USDA relies on GIPSA, the grain inspection, 

stockyards and packers administration, to define corn. If they don’t 

define it, it is not corn. To add insult to injury, under current grading rules of the USDA, blue corn is 100 percent damaged because 

the blue color suggests mold. 

So there are some things that could be done fairly cheaply here 

to adjust the bureaucracy to some of the nuances of our world. 

Thank you very much, Mr. Chairman. 

[The prepared statement of Mr. Clarkson appears at the conclusion of the hearing:] 

Mr. CARDOZA. Thank you. Go ahead, sir. 

39

STATEMENT OF RICH GHILARDUCCI, PRESIDENT AND CEO, 

HUMBOLDT CREAMERY 

Mr. GHILARDUCCI. Good morning, Chairman Cardoza and members of the Subcommittee. My name is Rich Ghilarducci and I am 

President/CEO of Humboldt Creamery Association, a dairy cooperative owned by over 50 dairy families located along the north coast 

of California. With the milk that our dairy families produce, our 

processing facilities, which are member owned, manufacture both 

organic and conventional ice cream, fluid milk and powdered milk 

products. Today we employ over 250 people and our products are 

sold in all 50 States and international markets. 

Humboldt Creamery Association’s organic program started in 

2001 with three dairy families representing less than 5 percent of 

our milk supply. Today, organic milk production represents 60 percent of our milk supply from 30 dairy families. I would like to 

thank the Subcommittee for the opportunity to testify in this 

groundbreaking hearing about organic agriculture, which is an important topic for our members, our region and consumers throughout the United States. 

Humboldt Creamery Association was founded in 1929. We are 

the oldest dairy cooperative in the State of California. Most, if not 

all, of our 50 member/owner families are direct descendants of the 

152 founding members of the cooperative. In the last few years, 

some members of the Humboldt Creamery Association were forced 

to leave the dairy business because it was no longer financially feasible to maintain their family dairies. 

It is especially disappointing to know that this decision was often 

made when the dairy was to be transitioned from one generation 

to the next. Not only for Humboldt Creamery Association, but 

throughout the United States, succession is one of the leading factors in the declining number of family farms. However, during the 

same period of time, something very positive happened within our 

cooperative. Over 25 of our family farms transitioned from conventional dairy operations to organic dairy operations. In 2006 alone, 

15 of our member-owned dairies converted to certified organic. 

A cornerstone of organic dairy management is pasture grazing, 

which our members do throughout most of the year except for during the most inclement weather. Another is a natural preventative 

approach to livestock healthcare, as opposed to the use of antibiotics and other synthetic treatments. These techniques of pasture 

and livestock management have been the method of dairying in our 

region for generations. So for many of the cooperative families, organic certification is a validation of a dairy in practice. It has been 

their daily routine for many years. 

We request that this Subcommittee recognize the enormous opportunity that organic agriculture offers family farmers throughout 

the United States to once again fill a role that has been vanishing, 

that of the entrepreneurial family farm which contributes to the 

United States economy. In order to do this, infrastructure must be 

supported by the United States Congress to ensure the industry’s 

growth. 

Humboldt Creamery Association believes there are two key topics 

that need to be supported by this Subcommittee; increased funding 

for the USDA National Organic Program and financial support for 

40

technical assistance in transition from conventional to organic. The 

USDA Organic seal is recognized by consumers to mean strict production and environmental standards, are behind every product labeled organic. It is up to the USDA to ensure the credibility of the 

organic label. Funding and staffing at the USDA National Organic 

Program must keep pace with the growing marketplace. 

Making the transition from conventional to organic dairying can 

be cumbersome to a dairy farmer. It requires specific knowledge of 

growing organic crops to feed their dairy animals, as well as specialized livestock management techniques. In order to ease this 

transition and help farmers with the change, Humboldt Creamery 

urges the Subcommittee to support authorization for educational 

programs and technical training in organic production. 

The SARE, the ATTRA programs have been successful in this 

area in the past. EQUIP has also been successful. More ambitious 

organic transition programs, at least in dairy, should be carefully 

scrutinized by this Committee to ensure that they will not disrupt 

the orderly development of the organic milk supply and allow economics to dictate supply. For Humboldt Creamery Association, the 

growing organic dairy market has provided an exciting, viable opportunity for future generations. 

In conclusion, I want to thank Chairman Cardoza and the House 

Subcommittee and I am a firm believer in the United States organic industry and the important role that the USDA plays in the 

integrity of the industry. I would be pleased to answer any questions. 

[The prepared statement of Mr. Ghilarducci appears at the conclusion of the hearing:] 

Mr. CARDOZA. Thank you very much, sir. Ms. Dawes. 

STATEMENT OF NICOLE BERNARD DAWES, PRESIDENT AND 

COO, LATE JULY SNACKS 

Ms. BERNARD DAWES. Chairman Cardoza, Ranking Member 

Neugebauer and members of the Subcommittee, I want to thank 

you for inviting me to this historic hearing. 

My name is Nicole Bernard Dawes and I am the President and 

COO of Late July Organic Snacks. Our factory and company headquarters are located on Cape Cod in Massachusetts and on any 

given day, we have three generations at our family business, including my father, who is my business partner and here today, and 

at least one of my young children is regularly at the office with us. 

We employ 30 people and manufacture exclusively USDA Certified 

Organic products. Our products are available in all 50 States, as 

well as internationally, and we are working on expanding our export program. 

Since our founding in 2003, we have grown over 40 percent annually and our current run rate has us at over $7 million in annual 

sales. This is the third national food company started by my family. 

The first was Cape Cod Potato Chips and the second was Chatham 

Village Foods. I am here today to discuss the incredible opportunity 

this new industry represents, the challenges that we face, how organic products benefit our country and specific ways that Congress 

can help us. 

41

I have spent my entire life in the food business; first as a child 

at my mother’s natural food store in the 1970s and later at my parents’ businesses and now at Late July Organic Snacks. I believe 

our nation is at a major turning point with our food supply and 

this Congress has an incredible opportunity to change, for the better, the future of our food supply by becoming advocates for organic 

agriculture. 

Recent events have underscored to people the need to care about 

where their food comes from, what is in it and the impact their 

buying choices have on the food chain. Parents are checking ingredients before they pack their kids’ lunch and this generation of kids 

are learning to ask questions about their food. The National Organic Program created a level playing field, enabling companies 

like Late July to compete equally against much larger companies. 

It established a rigid set of standards that gave our industry credibility in the marketplace. 

Now everybody carrying the USDA seal is in the same boat. We 

are all subject to the same strict standards. I believe that organic 

agriculture is the gold standard for the food business. It offers family farms an economically viable alternative, produces innovation 

and most importantly, provides an opportunity for businesses and 

individuals to put environmental stewardship into action. 

For all these reasons, organic production is a worthwhile endeavor for food entrepreneurs like myself and not coincidentally, it is 

also the fastest growing segment of the food industry. But there are 

challenges. For us, namely, cost. At Late July, our ingredients can 

be up to 10 times the price of one of our conventional competitors 

and supply shortages are at the root of that. We also have to spend 

significantly for research and development. And while we try to 

keep our prices competitive with the conventional brands, we do 

still have to charge more. 

We are also finding that some channels, like school lunch programs, would like to offer more organic products but can’t afford 

the higher costs. We are also facing confusion with all-natural or 

conventional in the marketplace. Higher costs are acceptable to 

shoppers as long as they know and understand what the USDA Organic seal stands for, but we are finding, as we branch out into 

more and more mainstream accounts, the USDA Organic seal and 

its meaning needs a significant amount of explaining. 

Late July and companies like ours are major customers for organic commodities and we need to broaden our customer base in 

order to grow the industry. But we need to do this while maintaining the same strict standards that we have so our industry never 

loses the credibility we have worked so hard to build. Why does all 

this matter? Organic agriculture reduces the amount of persistent 

pesticides in our country’s air and groundwater. Organic farmers 

don’t use petrochemical based fertilizers and have a lower carbon 

footprint per pound. 

So much today is said about reducing our impact on the environment and making better food choices, but as individuals, it is hard 

to know where to start. Organic products are a gateway. That is 

why organic farming is such an important practice to encourage in 

the U.S., something you can do when you are shopping for your 

food and when you are making Congressional policy decisions. 

42

As a child of the 1970s natural food movement, I was teased for 

the contents of my lunchbox. My mother would pack carob coated 

rice cakes and miso soup and it was products like these that created the old stereotype that organic products don’t taste very good. 

The National Organic Program was the real impetus we needed to 

create the kind of organic products I could only dream about as a 

child. And while it has been a groundbreaking initiative, it still 

needs much support. 

I am here to ask for: increased funding for the National Organic 

Program so it can be fully implemented, effectively enforced and 

better understood; the removal of export barriers and oversight on 

imports; assistance in getting organic programs to school lunch programs; support for the Organic Trade Association’s recommendations. Finally and most importantly, I ask you to take a position 

in favor of organic agriculture. 

I reiterate that we are on the verge of a major turning point in 

our food supply and this Congress has a real opportunity to make 

a difference. Thank you so much for this honor. 

[The prepared statement of Ms. Bernard Dawes appears at the 

conclusion of the hearing:] 

Mr. CARDOZA. Thank you very much. I have less questions and 

I have a couple answers in statements that I want to present. First 

of all, Mr. Clarkson, I was fascinated with your story about the 

blue corn not being recognized as corn. I do enjoy blue corn tortillas 

and chips. I think it is emblematic of how we oftentimes have a 

disconnect from the real world to USDA and how come we can’t 

bridge that gap more readily than we do sometimes is frustrating 

to both farmers and to members of Congress. I am going to ask my 

staff to prepare a letter from this Committee to USDA to ask that 

this particular issue be resolved forthwith and hopefully we will 

have some impact. If not, please feel free to contact us soon. 

Mr. Ghilarducci, I hope I haven’t butchered your name too badly. 

I have a history of butchering names. 

Mr. GHILARDUCCI. Been worse. 

Mr. CARDOZA. You mentioned, as Ms. Dawes does and others 

today, that funding for the USDA program for timely answers and 

timely issues is critically important and I think you have really hit 

on something that we are going to have to pursue and hopefully 

the work that we are going to do in this farm bill will have some 

impact on that, but I am going to have a conversation again with 

Ms. DeLauro, who is the Chairwoman of the Ag Appropriations 

Subcommittee here in the House. I know she is incredibly supportive of organics in general. Even though she comes from more 

of an urban setting than a rural setting, she is a fabulous champion for agriculture in so many ways and really works very hard 

to make sure that we do the right thing in this area of the Appropriations Committee. We will be communicating with her either 

through letter or private communication to try and see that we get 

organics fully funded in this farm cycle and so that is another area 

that we will pursue. 

Finally, Ms. Dawes, you mentioned the importance of the organic 

seal as part of your testimony and I will tell you that is something 

of incredible concern to me as we go forward. Making sure that seal 

that you have worked so hard to build maintains its value and only 

43

a few bad actors or a few violations could really destroy something 

that you have worked so hard to build up and the value of that. 

And I think it is going to be one of the top priorities of this Committee to continue to do oversight in this area, whether it be in 

international imports and whether or not they meet the same 

standards or whether or not there are a few bad actors in the industry that could harm or damage the work that you have so diligently put in. 

I just want to make one final observation before I ask my colleague, Ms. Gillibrand, if she would like to ask some questions. I 

have been incredibly impressed with the entrepreneurial spirit, 

with the commitment and frankly, the successful nature that the 

folks who have testified in all three panels today have exhibited. 

I am very impressed with that and I encourage you; you don’t need 

much encouragement from Congress, but you have done it of your 

own spirit and your own hard work. It reminds me of that kind of 

spirit that my grandparents had when they came to this country 

and farmed the land in a natural way. It was just the way they 

knew, was to not use pesticides or things, but they just did it mainly because that was what they could afford and that was what they 

knew from the old country. And I see that same kind of spirit in 

so many of you and it makes me feel good about the future of agriculture. 

Ms. Gillibrand, it is all yours. 

Ms. GILLIBRAND. Thank you, Mr. Chairman. Thank you all for 

coming. I really appreciate your dedication and your commitment 

to organic farming. I come from a district in upstate New York and 

we have a lot of organic farming, a lot of agriculture, a great history in agriculture and I am very worried about the future of agriculture in this country. 

I am very worried about our dairy farms, which are dying because the price of milk is too low and the price of gas is too high 

and the price of feed is too high and they are really having a tough 

time sustaining their business. So I want to focus a bit on some of 

the challenges that you have, to hear a little bit more about them. 

Ms. Dawes, you talked about trade being an impacting effect. 

You said there are problems with the export laws and the import 

laws. Can you elaborate on the effects they have on you and what 

laws you would want changed and how? 

Ms. DAWES. Certainly. I will say, at our two previous businesses, 

Cape Cod Potato Chips and Chatham Village Foods, exports represented a significant portion of our revenue. But at Late July at 

the moment, our primary exports are to Canada and a few spotty 

locations around the world. There are some inconsistencies between 

the NOP rules and in other organic rules in, say, the EU which 

makes it very difficult for us to produce products that meet both 

standards. 

We are working on that now, but we are a small family business 

and to have to spend, you know, significantly to research how to 

do what we do here in another country and also, you know, all the 

other costs that are associated with that, I mean, despite the huge 

opportunity it represents, it is something that, while we would like 

to do it right now, I think we are probably still a few years away 

from really benefiting from it. 

44

On the import side, really, the oversight on the imports is, from 

my perspective, just critically important to maintaining the integrity of our industry. People have to feel that every single organic 

product that they buy is filled with ingredients that maintain our 

strict NOP standards. 

Ms. GILLIBRAND. So it is your sense that in the imports markets 

that our oversight is insufficient, that there is not enough testing 

of other brands that come in or what type of oversight would you 

like to see more of? 

Ms. DAWES. I think that it is just so new and as the market is 

growing so fast, we need to make sure that we maintain that strict 

oversight and that strict oversight is communicated to the public. 

Ms. GILLIBRAND. Okay. And then on the export side, what regulations are too expensive or difficult for you to meet that the European Union requires? 

Ms. DAWES. We are having trouble right now finding a dairy ingredient that we can use in our products to sell in the European 

Union. All of our dairy ingredients are from some of the best dairy 

farms in this country. But there are some differences in the regulations between our production practices and the EU production 

practices that make it impossible for us to market those ingredients in Europe right now. 

Ms. GILLIBRAND. What production practices? 

Ms. DAWES. I think a dairy producer would probably be more 

qualified to talk about that. 

Ms. GILLIBRAND. Is it that dairy is not organic? 

Ms. DAWES. No, no. Absolutely not. The dairy meets all of our 

strict organic; it is more on the processing side. 

Ms. GILLIBRAND. Okay. Okay, that is helpful. Have any of you 

been non-organic and moved towards organic, or have you all started your farms as organic farms? 

Mr. GHILARDUCCI. For our members, dairy members, initially 

they were all conventional dairies and I shouldn’t say all of them. 

Which is kind of a breath of fresh air. Three of our members are 

first generation farmers that actually started in the dairy industry 

and that is something very unique, to see people enter the industry 

and the only way they have been able to do that is through 

organics. But all of our dairies, the others besides those three, have 

converted from conventional to organic. 

Ms. GILLIBRAND. What kind of support or ideas do you have for 

us, as legislators, to facilitate a farmer to move from regular farming to organic farming, because I know that is a very, very costly 

effort, and what kind of legislative changes or supports would you 

see would be valuable to facilitate that if a farmer chooses to become an organic farmer? 

Mr. GHILARDUCCI. For us in the dairy sector, what I see is education is the most important thing, through the ATTRA program 

or the SARE program. And when I say that it is obvious there is 

an initial up-front cost, but if we can work with them to become 

efficient in their new practices of organic dairying long-term, that 

is what is sustainable for their businesses. And I would also caution, as far as direct payments for conversion. I think the marketplace has taken care of that and recent history has shown, in the 

dairy sector, that has worked adequately to convert dairies. 

45

Mr. CLARKSON. Might I offer you a couple comments in response 

to some of your questions? Many of the U.S. feed producers, corn, 

soybean, soybean meal, technically meet all European standards, 

but they don’t file as if they meet them. You can’t use Chilean nitrate for fertilizer under the European rules; under the U.S. rules, 

you can. So we have to get an affidavit from the farmer saying that 

he doesn’t. I don’t know if you have ever tried to chase a farmer 

down to get him to sign a document. It is difficult. 

Ms. GILLIBRAND. I can imagine. 

Mr. CLARKSON. It is extremely difficult. I want to second my colleague’s comments about the service of ATTRA and others in providing information. Much of the difficulty is in helping people step 

into the unknown. It is not a system they are used to and in conventional farming, you can lay off responsibility of third party quite 

easily. You write a big check and that party takes care of the nutrition and the weed and pest control. 

In the organic world, the farmer has to do it himself. There are 

no third parties there today; 10 years from now there may be. But 

there is more individual responsibility. And what I would ask you 

for help in, my company exports to Japan, Taiwan, Korea, western 

Europe, sometimes South America and Canada. The biggest difficulties we deal with in sending an organic product aren’t strictly 

about organics. It is about GMO contamination. 

The Koreans, for instance, have the tightest standard in the 

world, I might say an absurd standard. It is 0. And 0 is a long, long 

way. The testing is done when containers or shipments arrive in 

Korea. I would like to see some negotiation so we can test and decide whether it is acceptable or rejectable before we invest in international freight. So that is a conversation I would like to see moved 

to a conclusion. 

Ms. GILLIBRAND. Thank you. 

Mr. CARDOZA. Thank you. I want to thank everyone for your time 

and for your extremely thoughtful testimony on the state of organic 

agriculture in the United States. This hearing was long overdue, as 

organics have become an increasingly powerful force in agriculture 

and one that truly deserves our full attention and respect. Again, 

I must give credit to Chairman Peterson for not only creating this 

Subcommittee for specific oversight responsibility over organics, 

but for also recognizing the value of including more stakeholders 

in writing the farm bill than in previous years. 

We heard from a number of people in the organic industry today 

from nearly every region of the country, representing nearly all the 

major organic commodities. There are certainly challenges that organic agriculture is facing, including lack of research and adequate 

crop insurance, highland values and countless other challenges. 

However, it seems clear that despite these obstacles, organic agriculture is growing with leaps and bounds, providing high-quality 

products for a demanding consumer. 

But there is more work for this Subcommittee to do, clearly. First 

and foremost, we must maintain the integrity of the organic seal 

we just spoke about. Without this seal, the unparalleled confidence 

it brings, consumers cannot differentiate between the products that 

have met our most stringent standards and those that are only 

claiming to do so. 

46

This is especially important for the imports of organic products. 

I am extremely concerned that small fissures in the confidence of 

organic products from foreign countries can and will have a disastrous effect on the domestic organic industry if we are not careful. 

Furthermore, we must look closely at the transition procedures for 

moving from conventional to organic agriculture and how these 

rules and regulations are working in the real world and out in the 

field. 

Also, there is obviously a need for more research dollars for organic agriculture to identify better farming methods and plant resistant stocks. However, as we move into the 2007 Farm Bill, we 

face a number of these challenges, not the least of which is finding 

ways to pay for new and expanded programs for organics, for specialty crops, for bio-energy and other sectors of agriculture that 

have not been well-represented in previous farm bills. 

I urge you all to be careful in evaluating your asks. So are we 

are going to have to be fiscally responsible and as we move forward, we have to look for ways to maximize every dollar the Federal government expends. I say that in every committee that I 

serve on. I say it in all areas. Frankly, we are far to stretch, with 

our Federal budget, to be able to do all the things that we want 

to do and we are going to have to be very strategic in what we ask 

for. 

This hearing was an important first step in that process and I 

truly thank you all for your obvious commitment to organic agriculture. I look forward to working with you as we continue our 

farm bill discussions and beyond, as we bring organics fully into 

the fold of Federal programs and the Federal agricultural community. I am very pleased that you all were here today. Thank you 

very much. Under the rules of this Committee, the record of today’s 

hearing will remain open for 10 days to receive additional material 

and supplementary written responses from witnesses to any question posed by a member of the panel. This hearing of the Horticulture and Organic Agriculture Subcommittee is hereby adjourned. 

[Whereupon, at 12:45 p.m., the Subcommittee was adjourned.]

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