65850 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

DEPARTMENT OF AGRICULTURE

Agricultural Marketing Service

7 CFR Part 205

[Docket Number: TMD–94–00–2]

RIN: 0581–AA40

National Organic Program

AGENCY: Agricultural Marketing Service,

USDA.

ACTION: Proposed rule.

SUMMARY: The Agricultural Marketing

Service (AMS) is seeking comments on

a proposal to establish a National

Organic Program (NOP or program). The

program is proposed under the Organic

Foods Production Act of 1990 (OFPA or

Act), as amended, which requires the

establishment of national standards

governing the marketing of certain

agricultural products as organically

produced to facilitate commerce in fresh

and processed food that is organically

produced and to assure consumers that

such products meet consistent

standards. This program would

establish national standards for the

organic production and handling of

agricultural products, which would

include a National List of synthetic

substances approved for use in the

production and handling of organically

produced products. It also would

establish an accreditation program for

State officials and private persons who

want to be accredited to certify farm,

wild crop harvesting, and handling

operations that comply with the

program’s requirements, and a

certification program for farm, wild crop

harvesting, and handling operations that

want to be certified as meeting the

program’s requirements. The program

additionally would include labeling

requirements for organic products and

products containing organic ingredients,

and enforcement provisions. Further,

the proposed rule provides for the

approval of State organic programs and

the importation into the United States of

organic agricultural products from

foreign programs determined to have

equivalent requirements.

DATES: Comments must be submitted on

or before March 16, 1998.

ADDRESSES: Interested persons are

invited to submit written comments on

this proposal to: Eileen S. Stommes,

Deputy Administrator, USDA–AMS–

TM–NOP, Room 4007–So., Ag Stop

0275, P.O. Box 96456, Washington, DC

20090–6456. Comments also may be

sent by fax to (202) 690–4632.

Additionally, comments may be sent via

the Internet through the National

Organic Program’s homepage at: http://

www.ams.usda.gov/nop. See the

SUPPLEMENTARY INFORMATION section for

further details on submitting comments.

FOR FURTHER INFORMATION CONTACT:

Michael I. Hankin, Senior Agricultural

Marketing Specialist, USDA–AMS–TM–

NOP, Room 2510-So., P.O. Box 96456,

Washington, DC 20090–6456;

Telephone: (202) 720–3252; Fax: (202)

690–3924.

SUPPLEMENTARY INFORMATION:

Submission of Comments

Written comments submitted by

regular mail and faxed comments

should be identified with the docket

number found in brackets in the

heading of this document. Multiple page

comments submitted by regular mail

should not be stapled or clipped to

facilitate the timely scanning and

posting of these comments to the NOP

homepage. Persons submitting written

or faxed comments are requested to

identify the topic and section number,

if applicable, to which the comment

refers: for example, for a comment

regarding feed for organic livestock,

reference Livestock and section 205.13.

Topics should be selected from the

following list: General, Proposed

Effective Date, Regulatory Impact

Assessment, Regulatory Flexibility

Analysis, Paperwork Reduction Act,

Definitions, Applicability (section

205.3), Crops, Livestock, Handling,

National List, Labeling, Certification,

Accreditation, State Programs, Fees,

Compliance, Appeals, and Equivalency.

It is our intention to have all

comments, whether mailed, faxed, or

submitted via the Internet, available for

viewing on the NOP homepage at http:/

/www.ams.usda.gov/nop in a timely

manner. Comments submitted in

response to this proposal will be

available for viewing at the USDA–

AMS, Transportation and Marketing,

Room 2945-South Building, 14th and

Independence Ave., S.W., Washington,

D.C., from 9:00 a.m. to 1:00 p.m., and

from 2:00 p.m. to 4:30 p.m., Monday

through Friday (except official Federal

holidays). Persons wanting to visit the

USDA South Building to view

comments received in response to this

proposal are requested to make an

appointment in advance by calling

Martha Bearer at (202) 720–8037.

Purpose and Background of the

National Organic Program

Members of organic industries across

the U.S. have experienced numerous

problems marketing their organically

produced and handled agricultural

products. Inconsistent and conflicting

organic production standards may have

been an obstacle to the effective

marketing of organic products. There are

currently 33 private and 11 State

organic certification agencies (certifiers),

each with their own standards and

identifying marks. Some existing private

certifying agencies are concerned that

States might impose registration or

licensing fees which would limit or

prevent the private certifiers from

conducting certification activities in

those States. Labeling problems have

confronted manufacturers of multiingredient organic food products

containing ingredients certified by

different certifiers because reciprocity

agreements have to be negotiated

between certifiers. Consumer confusion

may exist because of the variety of seals,

labels, and logos used by certifiers and

State programs. Also, there is no

industry wide agreement on an accepted

list of substances that should be

permitted or prohibited for use in

organic production and handling.

Finally, a lack of national organic

standards may inhibit organic farmers

and handlers from taking full advantage

of international organic markets and

may reduce consumer choices in the

variety of organic products available in

the marketplace.

To address these problems, the

organic industry trade association

attempted to establish a national

voluntary organic certification program.

However, the industry could not

develop a consensus on the standards

that should be adopted. Thereafter,

Congress was petitioned by the organic

industry trade association to establish a

mandatory national organic program.

Congress, in 1990, enacted the Organic

Foods Production Act of 1990, as

amended (7 U.S.C. 6501 et seq.). The

purposes of the OFPA, set forth in

section 2102 (7 U.S.C. 6501) are to: (1)

establish national standards governing

the marketing of certain agricultural

products as organically produced

products; (2) assure consumers that

organically produced products meet a

consistent standard; and (3) facilitate

commerce in fresh and processed food

that is organically produced.

The National Organic Standards Board

Pursuant to section 2119 of the OFPA

(7 U.S.C. 6518), the Secretary of

Agriculture, hereafter referred to as the

Secretary, established a National

Organic Standards Board (NOSB or

Board). The NOSB has assisted the

Secretary in developing a National List

of substances to be used in organic

production and handling and has

advised the Secretary on other aspects
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65851

of implementing the National Organic

Program.

The Act establishes what the

composition of the Board should be. In

accordance with the Act, the Secretary

appointed 14 members in January 1992

that included 4 organic farmers, 2

organic handlers, 1 owner or operator of

a retail establishment with significant

trade in organic products, 3 experts in

environmental protection and resource

conservation, 3 representatives of public

interest or consumer interest groups,

and 1 expert in the field of either

toxicology, ecology, or biochemistry.

The 15th member, an accredited

certifier, would be appointed after

certifying agents are accredited by the

Secretary. The Act also provides that

members of the NOSB be appointed for

5 year terms and that the original

members be appointed to staggered

terms of 3, 4 and 5 years to provide

continuity of membership on the Board.

The NOSB has held 12 full Board

meetings and 5 joint committee

meetings since the appointment of its

members in 1992. To make

recommendations regarding specific

issues, the Board formed 6 working

committees: Crops Standards; Livestock

(and Livestock products) Standards;

Processing, Packaging and Labeling

Standards; Materials; Accreditation; and

International Committees. Each

committee reviewed the provisions of

the OFPA and standards previously

established by other organic

organizations to determine for which

subject areas position papers would be

developed. Based on the position papers

developed, public input given by

persons at NOSB meetings, and an

extensive review and comment process

used to develop draft recommendations,

the Board provided recommendations to

the Secretary about various matters. The

recommendations included ones

regarding production and handling

standards, labeling, accreditation,

product residue testing, and emergency

spray programs.

The Board has provided

recommendations regarding which

synthetic substances should be

permitted to be used in organic

production and handling and which

non-synthetic substances should be

prohibited for use, in order to

recommend to the Secretary whether

they should be placed on the National

List as synthetic substances approved

for use or non-synthetic substances not

approved for use. The Board has

reviewed approximately 170 substances,

including botanical pesticides as

required in section 2119(k)(4) of the

OFPA (7 U.S.C. 6518(k)(4)), for possible

placement on the National List, and the

Board used technical advisory panels to

provide scientific evaluation of the

materials considered in its review of the

substances.

The NOSB’s initial recommendations

were presented to the Secretary on

August 1, 1994. The NOSB has

continued to make recommendations

and has submitted 30 addenda to its

initial recommendations. A copy of the

NOSB recommendations may be viewed

on the NOP home page at: http://

www.ams.usda.gov/nop, or obtained by

writing to: Maria Strother, Agricultural

Marketing Specialist, USDA–AMS–TM–

NOP, Room 2510-So., P.O. Box 96456,

Washington, DC 20090–6456.

All of the NOSB recommendations

were considered by AMS in developing

the proposed regulation for the National

Organic Program. The discussions and

public input involved in generating the

recommendations have been invaluable

in assisting AMS to become aware of the

complexity of various issues and to

arrive at solutions that represent the

interests of farmers, handlers and

consumers. We have written a proposed

regulation that incorporates to the

greatest extent possible the organic

principles and specifics contained in

the NOSB recommendations. Many of

the recommendations were restructured,

reordered, or combined to be compatible

with the format of the proposed rule. In

the few instances where a section of our

proposed rule does not reflect the NOSB

recommendation, we explain the

variation in the preamble for the

specific section.

The NOSB recommendations and

discussions on the following topics

were especially helpful to AMS in

developing the proposed rule:

accreditation; labeling; importation;

organic farm and handling plans; split

operations; planting stock policies;

emergency pest or disease treatments;

livestock feed and health care;

commercial availability; drift of

synthetic substances; small farmer

exemption; phase-in of NOP

implementation; fiber processing; and

the National List substance review

process.

Public Input

In addition to the NOSB

recommendations, AMS has received

considerable input from interested

persons regarding establishment of the

National Organic Program and this

proposed rule.

Section 2110(g) of the OFPA (7 U.S.C.

6509(g)) requires the Secretary to hold

public hearings to obtain information to

guide the implementation of standards

for livestock products. Four such

hearings were held during 1994: January

27–28 in Washington, DC; February 10

in Rosemont, Illinois; February 24 in

Denver, Colorado; and March 22 in

Sacramento, California. Oral and written

testimony was received from more than

70 persons, including livestock

producers, veterinarians, certifying

agents, processors and members of the

NOSB. Comments covered livestock

production and product marketing,

antibiotic use, livestock living

conditions, feed availability, provisions

for conversion to organic production,

and label requirements. These

comments have been beneficial in

developing this proposed rule.

Prior to publication of this proposed

rule, public comment also was received

at public events attended by NOP staff

members. Public comment was received

at the 12 full Board and 5 joint

committee meetings. NOP staff made

presentations and received comments at

local and regional organic conferences

and workshops and at national and

international organic and natural food

shows. Comments also were received at:

a national organic certifiers meeting

held on July 21, 1995, to discuss

accreditation issues; a meeting of State

officials held on February 26, 1996, to

discuss the role of States in the NOP;

training sessions for organic inspectors;

and numerous speaking engagements of

the AMS Administrator, the NOP

program manager, and the NOP staff

where the public had an opportunity to

participate in question and answer

sessions.

Proposed Effective Date of the

Regulation

We have received inquiries about

when the various provisions of a final

rule will be effective.

The final rule would establish a

procedure and a time frame for

designating private persons and State

officials as accredited certifying agents

under the program. One option would

be to require organizations desiring to

be included on the initial list of

certifying agents accredited under the

National Organic Program to submit

their applications within approximately

two months after publication of the final

regulation. Applications submitted later

than two months after publication of the

final rule would not be considered for

inclusion on the initial list of certifying

agents, but would be reviewed as soon

as possible after publication of the

initial list of accredited certifying

agents. Subsequent lists of accredited

certifying agents would be published as

they are developed.

If we adopted this option, we would

publish an initial list of accredited

certifiers in the Federal Register after
65852 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

reviewing the applications received

during the first two months after

publication of the final regulation. We

will publish subsequent lists of

accredited certifying agents as new

applicants become accredited. We

would expect publication of the initial

list to occur within six months after

publication of the final rule. Only after

publication of that list would the

provisions of the regulation applicable

to certification become effective. Thus,

the provisions in the proposal that

address the application process for, and

decisions to be made about, the

certification of farms, wild crop

harvesting operations, and handling

operations, would become effective only

after certifiers have become accredited.

Certifiers would begin certifying

individual operations under the NOP

six months after publication of the final

rule.

In order for accredited certifying

agents to begin certifying operations

under the NOP six months after

publication of the final rule, we believe

we would need, as we previously

indicated, to have accreditation

applications submitted within two

months after publication of the final

regulation. We believe that the initiation

of certification activities by accredited

certifying agents six months after

publication of the final rule would

permit the implementation of the

national standards for organic products

within a reasonable time frame after

publication of the final rule.

We request comments from all

interested parties, particularly small

businesses that want to obtain

accreditation as certifying agents, as to

whether a two month time frame after

publication of the final rule for

submission of applications for

accreditation is a sufficient time period,

or whether an extended time period,

such as three or four months after

publication of the final rule, should be

permitted for those who want to be

listed on the initial list of accredited

certifiers. Any such extension, of

course, would lengthen the

implementation schedule.

In this implementation option, we

would expect to allow a 12-month

period of time after publication of the

initial list of certifying agents for

operations to become certified under the

relevant provision of the final

regulation. Thus, all provisions of the

NOP would be implemented 18 months

after publication of the final rule. On

that date, which will be stated in the

final rule, all organic operations

required to be certified will have to be

certified in order to sell or label their

products as organic. Operations that are

certified prior to 18 months after

publication of the final regulation

would be permitted to use the USDA

organic seal upon certification by a

USDA accredited certification

organization.

We would like comments, particularly

from small farm or handling operations,

as to whether the 12-month period of

time we anticipate allowing for farm,

wild crop harvesting, and handling

operations to become certified is a

reasonable period of time for such

operations to become certified. We are

particularly interested in learning

whether there are any economic or other

factors that would create difficulties in

obtaining certification within the 12-

month time period we expect to provide

for obtaining certification.

Several people have raised questions

about what the impact of the rule would

be when it is effective. Some farmers

whose operations are currently certified

as organic under private or State

standards have asked what the status of

their certified farming operations would

be if a substance allowed for use under

their current private or State

certification is not on the National List,

and, therefore, not allowed under the

National Organic Program.

The OFPA requires that a product

sold or labeled as an organically

produced agricultural product must,

except as otherwise provided in the Act

and excluding livestock, be produced on

land to which no prohibited substances,

including synthetic chemicals, have

been applied during the three years

immediately preceding harvest of the

agricultural product. We have

incorporated this prohibition in our

proposal. Thus, a farm would not be

able to become certified under the

National Organic Program until three

years after the time any prohibited

substance was last applied. Therefore, at

the time the final rule becomes effective,

such farming operations previously

certified under private or State programs

would not be able to sell or represent

their products as organically produced

if they could not satisfy the three year

period established for nonuse of a

prohibited substance.

Petitions, however, to amend the

National List may be submitted

immediately after publication of the

final rule by using the petition process

proposed in section 205.28 of subpart B.

It may be possible, therefore, for a

person who submits a petition

immediately after publication of the

final rule to the NOSB for review of a

new synthetic substance to be included

on the National List, to have this

substance approved for use by the

Secretary prior to the effective date of

the program. If this were to occur, then

prior use of the substance would not

prevent the products from being sold or

represented as organically produced.

Processors also have asked what

impact the program’s requirements

would have on their existing product

and label inventories. With regard to

existing product and label inventories,

we believe that our intended 18-month

delayed effective date for the complete

rule would provide ample time for

handlers to use up existing product and

label inventories required under their

existing organic certification program

before the rule becomes effective.

States also have asked what effect the

rule would have on their current organic

regulations. With regard to current State

organic regulations, we also believe that

the anticipated 18-month delayed

effective date should provide State

officials with ample time to make the

necessary changes to their State

regulations and submit their State

proposed organic program to the

Secretary for approval.

Because it is the intent of AMS to

provide a final rule which facilitates

trade and which is the least disruptive

as possible for the production, handling

and marketing of organic products, we

request comment on our intended

schedule of effective dates for the

provisions of the rule. We also request

comments on any problems that organic

farmers and handlers, States, and others

may encounter when adjusting their

operations to meet the requirements of

the National Organic Program, including

the OFPA requirement of a 3-year

period prior to the harvest of organic

products from land to which a

prohibited substance is applied. A timetable for implementation of the program

would be published in the final rule.

Prior Documents in This Proceeding

The following notices related to the

National Organic Standards Board and

the development of this proposed

regulation have been published in the

Federal Register. Four notices of

nominations for membership on the

National Organic Standards Board were

published between April 1991 and July

1996 (56 FR 15323, 59 FR 43807, 60 FR

40153, 61 FR 33897). Two notices of

extension of time for submitting

nominations were published on

September 22, 1995, and September 23,

1996 (60 FR 49246, 61 FR 49725).

Twelve notices of meetings of the

National Organic Standard Board were

published between March 1992 and

August 1996 (57 FR 7094, 57 FR 27017,

57 FR 36974, 58 FR 85, 58 FR 105, 58

FR 171, 59 FR 58, 59 FR 26186, 59 FR

49385, 60 FR 51980, 60 FR 15532, 61 FR
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65853

43520). One notice of public hearings on

organic livestock and livestock products

was published on December 30, 1993

(58 FR 69315). One notice specifying a

procedure to submit names of

substances for inclusion on the National

List was published on March 27, 1995

(60 FR 15744).

Executive Order 12988

This proposal has been reviewed

under Executive Order 12988, Civil

Justice Reform. This rule is not intended

to have retroactive effect.

States and local jurisdictions are

preempted under section 2115 of the

OFPA (7 U.S.C. 6514) from creating

programs of accreditation for private

persons or State officials who want to

become certifying agents of organic

farms or handling operations. A

governing State official would have to

apply to the USDA to be accredited as

a certifying agent, as described in

section 2115(b) of the OFPA (7 U.S.C.

6514(b)). States also are preempted

under sections 2104 through 2108 of the

OFPA (7 U.S.C. 6503 through 6507)

from creating certification programs to

certify organic farms or handling

operations unless the State programs

have been submitted to, and approved

by, the Secretary as meeting the

requirements of the OFPA.

Pursuant to section 2108(b)(2) of the

OFPA (7 U.S.C. 6507(b)(2)), a State

organic certification program may

contain additional requirements for the

production and handling of organically

produced agricultural products that are

produced in the State, and for the

certification of organic farm and

handling operations located within the

State, under certain circumstances.

Such additional requirements must: (a)

further the purposes of the OFPA; (b)

not be inconsistent with the OFPA; (c)

not be discriminatory towards

agricultural commodities organically

produced in other States; and (d) not be

effective until approved by the

Secretary.

Pursuant to section 2120(f) of the

OFPA (7 U.S.C. 6519(f)), this proposal

would not alter the authority of the

Secretary under the Federal Meat

Inspection Act (21 U.S.C. 601 et seq.),

the Poultry Products Inspections Act (21

U.S.C. 451 et seq.) or the Egg Products

Inspection Act (21 U.S.C. 1031 et seq.),

concerning meat, poultry, and egg

products, nor any of the authorities of

the Secretary of Health and Human

Services under the Federal Food, Drug

and Cosmetic Act (21 U.S.C. 301 et

seq.), nor the authority of the

Administrator of the Environmental

Protection Agency (EPA) under the

Federal Insecticide, Fungicide and

Rodenticide Act (7 U.S.C. 136 et seq.).

Section 2121 of the OFPA (7 U.S.C.

6520) provides for the Secretary to

establish an expedited administrative

appeals procedure under which persons

may appeal an action of the Secretary,

the applicable governing State official,

or a certifying agent under this title that

adversely affects such person or is

inconsistent with the organic

certification program established under

this title. The Act also provides that the

U.S. District Court for the district in

which a person is located has

jurisdiction to review the Secretary’s

decision.

Executive Order 12866

This proposed rule has been

determined to be economically

significant for the purposes of Executive

Order 12866 and, therefore, has been

reviewed by the Office of Management

and Budget (OMB). When proposing a

regulation which has been determined

to be economically significant, agencies

are required to: assess the costs and

benefits of available regulatory

alternatives; base regulatory decisions

on the best reasonably obtainable

technical, economic, and other

information; avoid duplicative

regulations; and tailor regulations to

impose the least burden on society

consistent with obtaining regulatory

objectives. Therefore, to assist in

fulfilling the objectives of Executive

Order 12866, and the Unfunded

Mandates Reform Act of 1995, the

USDA has prepared a Regulatory Impact

Assessment (RIA) which is attached as

an appendix to this proposed rule and

from which the following summaries of

the costs and benefits of the proposed

National Organic Program have been

taken.

Ideally, the net benefits of the

proposed rule would be estimated by

employing a quantitative analysis using

information about the cost structure of

the industry, the demand for organic

food, and projected shifts in supply and

demand resulting from the various

factors discussed in the assessment.

However, although researchers have

conducted numerous small-scale studies

to determine consumer willingness to

pay for organic products and to identify

reasons why conventional food buyers

do not choose organic food products,

the available data are insufficient to

support a quantitative assessment of this

type. At this time, USDA invites public

input to provide additional data that

may aid in the development of a

quantitative assessment. This data

should be submitted in response to the

questions included in the Conclusion

section of the RIA. These questions are

intended to solicit information needed

to develop baseline data about the

potential program participants, the costs

of organic production, revenues from

organic sales, and the impact of the

program on market growth.

Summary of the Costs of the Proposed

Rule

The proposed rule would impose

direct costs in the form of fees charged

to certifiers for USDA accreditation and

to farmers, wild crop harvesters and

handlers for support of the National

Organic Program. The proposed rule

also would impose administrative costs,

such as submission of information,

recordkeeping, and access to records

that may constitute an additional

burden. The actual amount of the

additional administrative costs that

would be imposed by the final rule is

expected to be different for those

entities who currently are active in the

organic industry, as compared to those

new entities who would begin their

activities only after the national

program is implemented. Certifiers,

farmers, wild crop harvesters and

handlers who currently are active in the

organic industry already perform most

of these administrative functions;

therefore, the additional costs to them

would depend upon the extent to which

their current practices are different from

the requirements of the final regulation.

Farmers, wild crop harvesters and

handlers would be required to produce

and handle products in accordance with

the standards set forth in the rule and

provide certifiers with the required

information necessary to verify

certification requirements. Farmers,

wild crop harvesters, and handlers

would be charged a fee by the certifying

agent for these certification services. We

were not able to estimate the exact cost

of certification fees that would be

charged by certifying agents after

implementation of the national program

because these fees currently vary widely

among existing certifiers: some existing

private certifying agents are non-profit;

some States who currently conduct

certification activities subsidize these

activities from other revenue sources;

some existing certifying agents include

the cost of inspection and, in some

cases, laboratory testing, in their

certification fee; and some existing

larger certifying agents may charge

lower fees because they are able to

spread their fixed costs over a larger

number of clients.

Farmers, wild crop harvesters, and

handlers may experience certain costs to

comply with the final regulations. For

example, there may be costs associated
65854 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

with the proposed requirement that

organic products not come in contact

with prohibited substances, or with the

proposed requirement that pest control

substances be used only if pest

prevention measures are ineffective.

However, since the proposed rule is a

synthesis of existing State and private

organic certification programs and the

NOSB recommendations, we believe

that farmers, wild crop harvesters and

handlers who currently participate in

existing State or private organic

certification programs would experience

little or no increased compliance costs

as a result of implementation of the

National Organic Program. Additionally,

farmers and handlers who would be

exempted or excluded under the rule,

but who choose to become certified in

order to receive the benefits of

certification, would be subject to the

additional cost of certification and

recordkeeping. USDA requests data on

the costs of organic production and the

revenues from organic farming, and on

a comparison of these costs and

revenues to conventional systems.

The following are the upper-bound

estimates of the cost of initial

certification under the National Organic

Program:

Estimated Cost to Farmers and

Wild Crop Harvesters for Initial Certification

Certification fee * ......... $413

USDA fee ...................... 50

Total fees ............... 463

Paperwork reporting

burden ....................... 1 381

Paperwork recordkeeping burden ......... 34

Total reporting and

recordkeeping .... 415

ESTIMATED COST TO

FARMERS AND

WILD CROP HARVESTERS FOR INITIAL CERTIFICATION .................... $878

Estimated Cost to Handlers for

Initial Certification

Certification fee * ......... $943

USDA fee ...................... 500

Total fees ............... 1,443

Paperwork reporting

burden ....................... 2 433

Paperwork recordkeeping burden ......... 34

Total reporting and

recordkeeping .... 467

ESTIMATED TOTAL

COST TO HANDLERS FOR INITIAL

CERTIFICATION ...... $1,910

*The estimated certification fee is based

on the average of fees charged by a representative group of certifying agents: private

non-profit, private for-profit and a State

agency. Most certifying agents in our representative group include the cost of inspection and, if applicable, required laboratory

testing in the certification fee. 1For new organic producers.

2For new organic handlers.

USDA requests data on certification

fees currently paid by existing organic

farmers, wild crop harvesters, and

handlers in order to better assess the

impact of the proposed program.

After implementation, all organic

certification agencies, whether private

or State, would be accredited by USDA

and would pay fees for the following

services provided by USDA: application

review, annual report review, site

evaluation visits, and administrative

duties. A certifier who currently is

accredited by a private accreditation

organization might pay USDA lower site

evaluation visit fees than a certifier who

is not currently accredited, because of

measures that are implemented by the

certifier to receive its private

accreditation. Additionally, as required

by the OFPA, a private certifying agent

would have to furnish reasonable

security for the purpose of protecting

the rights of farms and handling

operations certified by the agent. The

amount and type of security would be

established through future rulemaking.

States that currently perform organic

certification activities under their own

regulations, or that have laws pertaining

to the certification of organically

produced and handled products, or that

plan to have an organic program in the

future, may incur some additional costs.

For example, States with existing

organic programs or regulations may be

required to supplement or revise them

in order to meet the criteria of the

OFPA, including the provisions set forth

in section 2107 of the OFPA (7 U.S.C.

6506). A State without an existing

organic program that initiates a new

State organic program would be

expected to incur greater costs to

establish its program.

The following are the upper-bound

estimates for the cost of initial

accreditation under the National

Organic Program:

Estimated Cost to Certifying

Agents for Initial Accreditation

Accreditation application fee ...................... $640

Site evaluation fee * ..... 3,500

USDA Administrative

fee .............................. 2,000

Total fees ............... 6,140

Paperwork reporting

burden ....................... 1 23,931

Paperwork recordkeeping burden ......... 60

Total reporting and

recordkeeping .... 23,991

ESTIMATED TOTAL

COST FOR INITIAL

ACCREDITATION .... $30,131

*Each certifying agent would have a siteevaluation to confirm accreditation, and

thereafter a subsequent renewal evaluation

at least every 5 years following confirmation

of accreditation. In some cases, a pre-confirmation site visit may be necessary. We anticipate that the frequency of site evaluations

would be based on the performance of the

certifying agent and would be higher during

the initial years of the program. 1For new organic certifiers.

The USDA requests data on the fees

currently paid by existing organic

certifying agents for accreditation in

order to better assess the impact of the

proposed program.

The requirement in the proposed rule

for qualified certification personnel to

be used to evaluate certification

applications and contribute to

certification decisions may result in an

increase in labor and training costs for

some existing certifiers. The amount of

additional costs to these certifiers would

depend on the level of expertise among

current certification personnel, the

extent to which certifiers currently rely

on volunteers, and the costs of training

these persons. Our proposed inspector

training requirements conform to

current established practice in the

industry and are not expected to impose

an additional burden on existing

certifiers who utilize inspectors.

We also have identified nonquantifiable costs that may result. Some

certifiers consider the loss of

independence in setting certification

standards under a national program as

imposing a cost. Other certifiers

consider the establishment of uniform

national standards and an accreditation

program as a benefit in that the risk of

potentially costly disputes over

acceptance of other certifier’s standards

(reciprocity) is eliminated. We

anticipate that the net impact would be

positive because the reciprocity dispute

problems would be eliminated.

Another non-quantifiable cost could

result from the proposed requirements

that certifiers provide access to all their

records to the Secretary and the

applicable governing State official, and

provide access to laboratory analyses

and certification documents, other than
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65855

confidential business information, to the

general public. Although not

quantifiable, these requirements may

represent a change in the way some

existing certifiers currently maintain

these records.

Summary of Benefits of the Proposed

Rule

In the absence of a nationally

recognized definition of organic,

consumers may be mislead by labels on

products claiming to be organic, or

claiming to contain organic ingredients,

when in fact some of the products or

ingredients may not have been

organically produced. Because many

consumers are willing to pay price

premiums for organic food, producers

have an economic incentive to label

their products organic. But consumers

generally are unable to distinguish

organic products from conventionally

produced products by sight inspection;

hence, consumers rely on verification

methods such as certification by private

entities or verification by retailers. The

USDA requests data to determine the

extent to which mislabeling of nonorganically produced products as

organic occurs and the market impacts

of mislabeling in terms of quantities of

organic goods sold and the prices for

organic goods.

Individual ingredients in multiingredient processed products may be

certified under different standards of

organic production, thus making it

difficult for a consumer to determine the

production standards under which each

of the ingredients was produced. The

proposed standards for organic

production, enforced through

accreditation of certifiers, would assure

consumers that the organic ingredients

were produced under one national

standard. Furthermore, USDA

regulation of labeling claims for organic

food would allow the USDA and other

federal agencies whose jurisdiction

includes ensuring the veracity of

labeling claims to prosecute those who

mislabel products sold as organic.

Establishing a national definition for

organic would be expected to increase

the supply and variety of organic

products, especially meat and poultry,

available to consumers. The Food and

Drug Administration (FDA) and the

Bureau of Alcohol, Tobacco and

Firearms (ATF) currently allow use of

the word organic on most food and

alcohol labels, but USDA has withheld

approval for the use of organic labels on

meat and poultry pending the outcome

of this rule making. Without the

regulation, however, FDA may decide to

disallow use of the term organic on

labels and USDA may continue their

current restrictions on the use of organic

on meat and poultry labels. The

increased variety of organic products,

especially meat and poultry, that might

be marketed after implementation of the

final rule may increase the variety of

available organic products so as to

parallel the variety of non-organic

products. The USDA requests data and

analyses which would support

projections of the demand for organic

meat and poultry.

By providing for the accreditation of

certifiers, the proposed rule would

establish the requirements and

enforcement mechanism to protect

producers and handlers from

inconsistent certification services, lack

of reciprocity between certifiers, and

competition from fraudulent products,

which can increase costs or reduce

revenue for organic farmers and

handlers. In the absence of the National

Organic Program, the certifier of a final

product may not be required to

recognize the certification of an

intermediate organic product used in

the final product. Thus, both farmers

and primary food processors face a risk

of being unable to sell an organic

product identified as certified when

more than one certifier is involved.

Monitoring by USDA of certification

inspections and certifier personnel

training and qualifications would help

to ensure the quality of the certification,

the use of consistent criteria for

certification, and the use of certification

personnel who are knowledgeable and

free from conflicts of interest.

National organic standards and the

assurance provided by the USDA

accreditation of certifiers would benefit

farmers and handlers by opening access

to international markets. The trade

restrictions that currently exist would

be resolved if foreign countries who

import organic products recognize the

National Organic Program as equivalent.

Farmers and handlers in the United

States may expect larger growth in

exports of organic products to follow

implementation of the final rule.

The contributions of national organic

standards to increased domestic

demand and to expanded international

markets for organic products may

provide opportunities for current

organic producers to expand the scale of

their operations. Increased organic

production also may provide incentives

for input industries to develop new

technologies which could lower

producers’ costs of organic production.

Input costs also may decline as a result

of economies of scale being achieved in

input industries producing for the

organic market. Expanded markets

could encourage additional farmers and

handlers to enter the marketplace,

resulting in a potential decline of

certifiers’ average costs of operation as

fixed costs are spread over a growing

number of clients. The USDA requests

information to determine whether the

organic industry and consumers of

organic goods have benefitted from

industry growth resulting in economies

of scale and production and marketing

efficiencies, and whether industry

participants anticipate such benefits

from this rule.

There are three ways in which

certifiers’ administrative costs could be

reduced as a result of the regulation.

First, certifiers’ costs of maintaining

access to organic markets for their

clients should be reduced because costs

associated with determining

equivalency between certifiers would be

reduced or eliminated. Accreditation

and uniform national standards would

alleviate the need to negotiate

individual reciprocity agreements with

other certifiers. Furthermore, USDA

oversight of certifiers would simplify

the process of certifying multiple

ingredient products, thus reducing

certification costs. The responsibility for

meeting production and certification

requirements of each ingredient would

rest with the certified producers and

accredited certifying agents of the

individual ingredients. National

standards also would eliminate costly

equivalency disputes between States

which may affect interstate commerce.

Second, certifiers would no longer

have to pay private organizations for the

accreditation required to gain access to

some international markets. This would

be of particular benefit to the smaller

certifiers who may have been unable to

enter these markets because of the high

cost of international accreditation. A

portion of the administrative fees paid

by each certifying agent would support

USDA activities to negotiate

equivalency of organic standards in

world markets so that producer clients

of all USDA accredited certifiers could

have access to these markets.

Third, in the long run, uniform

standards of production, certification

and accreditation should reduce the cost

of training certification staff. Industrywide training costs may increase

initially, but should decline as the pool

of trained certifiers and certification

personnel increases and the

corresponding cost of training new

certification personnel decreases,

especially in those instances where

personnel transfer from one certifier to

another. Standardized materials, such as

compliance guides and training

manuals, also should contribute to a

reduction in the cost of training
65856 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

certification staff. In addition, USDA

accreditation of certifiers would present

opportunities for sharing information

about standards, practices and the

general requirements of the program

through the National Organic Program

staff.

Unfunded Mandates Reform Act

The Unfunded Mandates Reform Act

(Pub. L. 104–4) requires (in Section 202)

that agencies prepare a qualitative and

quantitative assessment of the

anticipated costs and benefits before

proposing any rule that may result in

annual expenditures by State, local, and

tribal governments, in the aggregate, or

by the private sector, of $100,000,000

(adjusted annually for inflation) in any

one year. As discussed in the preceding

section entitled ‘‘Executive Order

12866’’, USDA has prepared a

Regulatory Impact Assessment (RIA) to

assess the costs and benefits of this

proposed rule. As explained in the RIA,

which is attached as an appendix to this

proposed rule, USDA was unable to

provide a quantitative assessment of the

costs and benefits of the proposed rule,

except for the cost of fees and

recordkeeping that would result from

the proposed rule, because of

insufficient data available to support a

quantitative assessment. The cost of fees

resulting from this proposed rule is

estimated to be $1,000,000 during the

first year of program implementation,

and the cost of recordkeeping is

estimated not to exceed $4,700,000

during any one of the first three years

of program implementation. The RIA

does, however, provide a qualitative

assessment of the proposed rule’s costs

and benefits.

The USDA has posed a list of

questions in the RIA to assist in the

development of a quantitative

assessment for the final RIA that will be

published as part of the final rule for the

National Organic Program. We will

utilize public input received in response

to these questions and to other

provisions of this proposed rule, as well

as other resources available to USDA

before publication of the final rule, to

develop a quantitative assessment of the

costs and benefits of the final rule.

Although USDA has not determined

whether this proposed rule would result

in annual expenditures by State, local,

and tribal governments, in the aggregate,

or by the private sector, of $100,000,000,

USDA has sought to meet the objectives

of the Unfunded Mandates Reform Act.

In addition to its qualitative cost/benefit

assessment, USDA has identified in the

RIA three regulatory alternatives to the

proposed rule. We also discuss in the

preamble sections entitled ‘‘Paperwork

Reduction Act of 1995’’ and ‘‘The

Regulatory Flexibility Act and the

Effects on Small Businesses’’, the

analysis we have employed in reaching

a determination that this proposed rule

is the least costly and least burdensome

to the regulated parties, in that we have

designed the proposed rule to be as

consistent as possible with existing

industry practices, while satisfying the

specific requirements of the OFPA.

Additionally, we have had numerous

occasions to communicate with State

governments during the development of

the proposed rule. Representatives of

various State governments participated

in several public meetings of the NOSB

and they have provided valuable input

to the NOSB for its recommendations on

standards and the National List. USDA

also hosted a meeting on February 26,

1996, to discuss with many State

officials the status of the proposed rule

and to listen to concerns about such

topics as fees, enforcement, certifier

logo use, and the range of additional

requirements that States may include in

their State programs. On numerous

other occasions, AMS staff has had

discussions with a wide array of State

officials on subjects related to this

proposed rule or the establishment of, or

amendment to, State organic

certification programs. USDA will

continue to provide effective

opportunities for the broadest possible

input by States and all interested parties

throughout the rulemaking process.

The Regulatory Flexibility Act and the

Effects on Small Businesses

Pursuant to the requirements set forth

in the Regulatory Flexibility Act (RFA)

(5 U.S.C. 601 et seq.), the Agricultural

Marketing Service (AMS) has

considered the economic impact of the

proposed rule on small entities. The

AMS’ analysis, as required by the RFA,

considers the impact of this proposed

regulation on small entities and

evaluates alternatives that would

accomplish the objectives of the rule

without unduly burdening small entities

or erecting barriers that would restrict

their ability to compete in the organic

market. The following Initial Regulatory

Flexibility Analysis was written with

guidance from the Small Business

Administration (SBA).

The size of the organic industry has

risen dramatically in recent years from

a low of $78 million in 1980, to $1

billion in 1990, to a total retail sales

level of $3.5 billion in 1996. Certified

organic cropland production has

expanded from 473,000 acres to 667,000

acres in the period 1992 to 1994, and is

expected to reach 2 million acres by the

year 2000. Despite this rapid growth, it

should be noted that the organic

industry represents a very small

percentage of total agricultural

production and sales, and that organic

certifiers, farmers and handlers tend to

own smaller operations rather than

larger ones.

Currently, organic certification is

voluntary and self-imposed. According

to the most complete data available to

the AMS, there are 33 private and 11

State certifying agencies certifying

approximately 4,000 farmers and 600

handlers in the United States. Over half

of the private and State agencies certify

both farm and handling operations,

while the others certify only farms. Over

three-fourths of State and private

agencies each certify fewer than 150

farms and 20 handlers. Based on a

review conducted by AMS of 16

certifiers, who provided information on

the organic sales of products produced

on certified farms, most of the farms

certified have less than $25,000 in gross

sales.

A national organic program would

benefit farmers by opening access to

international markets. U.S. exports of

organic products totaled $203 million in

1994 or about 9 percent of the organic

output. Export markets may become

more substantial and offer price

premiums for organic products with

increased world-wide consumption of

organically produced food. For example,

the organic market share in the

European Union (EU) has been

projected to reach 2.5 percent of total

food consumption expenditures by

1998. Austria expects its organic market

share to equal one third of all food sales

by the year 2000. In 1994, France and

Germany combined had total retail sales

of organic foods equal to that of the

United States in the same year

(approximately $2 billion). Japan’s retail

sales for that year were estimated to be

$688 million. Other EU countries report

growth rates equal to or greater than the

current growth rate in the United States

of about 20 percent per year.

The reason for regulatory action is

fully explained in the Regulatory Impact

Assessment which is attached as an

appendix to this proposed regulation. In

short, the organic market may be

precluded from reaching its full

potential until there is a definition of

the term organic, which would be

achieved by implementation of this

proposed regulation that provides

regulations for production, handling,

labeling, certification and accreditation

of U.S. certifiers. Domestic and

international trade in organic products

may also be hampered by the need to

negotiate reciprocity agreements

because of the differing standards of
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65857

production and handling that currently

exist; meat and poultry, including

processed products containing meat and

poultry as ingredients, cannot be labeled

organic; and few enforcement

mechanisms exist to protect consumers

against fraudulent organic labeling.

The statutory authority for this

proposed rule is the OFPA, which in

section 2104(a) (7 U.S.C. 6503(a))

requires the Secretary of Agriculture to

develop a national organic program. In

general, the Secretary must establish an

organic certification program for farmers

and handlers of agricultural products

that have been produced using organic

methods as provided for in the OFPA.

In addition, section 2115 of the OFPA

(7 U.S.C. 6514) requires the Secretary to

establish and implement a program to

accredit a governing State official and

any private person who meets the

requirements of the OFPA and the

regulations in part 205 as a certifying

agent for the purpose of certifying a

farm or handling operation as being in

compliance with the standards set forth

in this proposed regulation.

The purpose of the RFA is to fit

regulatory actions to the scale of

business subject to the actions in order

that small businesses would not be

unduly or disproportionately burdened.

To accomplish this purpose, it first is

necessary to define a small business.

According to the Standard Industrial

Codes (SIC) (13 CFR Part 121) which are

developed by an inter-agency group,

published by the Office and

Management and Budget (OMB), and

used by the SBA to identify small

businesses, nearly all of the entities

affected by this proposed regulation

would be considered small businesses.

According to the SIC, a small business

in the agricultural services sector, such

as certifiers, includes firms with

revenues of less than $3.5 million (SIC

Division A Major Group 07). In crop

production, the SIC definition of a small

business includes all farms with annual

gross sales under $500,000 (SIC 0111–

0191). (Most of the farms currently

certified have less than $25,000 in gross

sales of organic production. However,

many farms combine organic and

conventional production on the same

operation, some with total sales that

may exceed $500,000). In handling

operations, according to the SIC, a small

business is defined as having fewer than

500 employees (SIC Division D Major

Group 20). (The workforce data needed

to determine whether any organic

handling operations exceed 500

employees is not available, but

anecdotal information leads us to

believe that no organic handling

operations employ more than 499

persons).

We consulted with the SBA Office of

Advocacy regarding the use of size

standards different from those in 13 CFR

121. For the purpose of identifying

those entities who would be most

affected by this proposed regulation,

alternative definitions were established

for the purpose of this analysis. The

alternative definition of a small certifier

which we established for this analysis is

one with total revenue from certification

of less than $25,000. The alternative

definition of a small farm which we

established is one with a maximum of

$5,000 in gross sales of agricultural

products, as is set forth in section

2106(d) of the OFPA (7 U.S.C. 6505(d)).

Additionally, for this analysis, we

established the alternative definition of

a small handling operations to be one

whose sales are $50,000 or less.

Development of regulations for the

National Organic Program began with

the premise that the industry should be

burdened as little as possible by the

OFPA regulation. To accomplish the

goal of regulation with minimal burden,

we initially determined that most of the

information needed for organic farmers

and handlers to become certified, and

for certifiers to become accredited,

already exists for those entities

currently operating. The challenge was

to create a regulation which complied

with the OFPA mandates and which

embodied the customary and usual

business practices already being carried

out by the industry. No new forms have

been proposed and few additional

documents would be required in this

proposed regulation. Certifiers may

need to create some of the documents

proposed for the application process;

farmers may have to keep records for

longer periods of time; and handlers

may need to refine recordkeeping to

ensure a clear audit trail. However, they

would be allowed the flexibility to use

the easiest and least expensive means

available to provide information, as long

as the required information is adequate

to ensure compliance with the

regulations.

Small and large farmers, handlers,

and certifiers would be affected by

additional fees resulting from

implementation of the National Organic

Program. Certifiers may be burdened

with the accreditation requirements for

business related activities, such as the

requirement for a financial audit.

However, because no particular form is

required, current business records may

be sufficient to provide the necessary

information. The requirements to keep

personnel records, explain

administrative procedures, and evaluate

personnel may be burdensome to small

certification businesses. Yet, we have

received the comment from at least one

small business that requirements such

as these can increase efficiency and

make a small business more cost

effective.

Section 2112(d) of the OFPA (7 U.S.C.

6511(d)) requires farmers and handlers

to maintain records for five years, and

section 2116 (c)(1) of the OFPA (7

U.S.C. 6515(c)(1)) requires certifiers to

maintain records for ten years. Our

research of the industry indicates that

farmers and handlers already maintain

records for five years and certifiers do

not discard historical documents. This

regulation, therefore, should not

significantly increase the record

retention burden beyond current

industry practice. However, under the

requirements of the Paperwork

Reduction Act of 1995 (PRA) (44 U.S.C.

3506 and 3507), a burden is created

when a law or regulation requires the

storage of information. The burden to

the industry is calculated on the time

required to file a document. Under the

PRA we are required to estimate and

account for this burden.

No other burdens are expected to fall

upon the organic industry as a result of

overlapping Federal rules. This

proposed regulation would not

duplicate, overlap or conflict with any

existing Federal rules. In preparing this

proposed regulation, AMS consulted

other Federal agencies such as the FDA,

EPA, ATF, and the USDA’s Food Safety

and Inspection Service (FSIS) to ensure

that this proposed regulation would

complement existing regulations.

Whether using the SIC definitions for

small businesses or the alternative

definitions created for this analysis, our

proposed regulation would have a

significant impact on a substantial

number of small businesses. However,

we have considered several options

with the intention of mitigating negative

economic impacts. The following

options were considered by AMS prior

to and during the development of the

proposed regulation.

Regulatory Options

Option 1: The Organic Market in the

Absence of Regulation

We have explored the alternative of

no government regulation of the organic

industry. However, current problems in

the organic industry would continue to

affect small entities as well as large

ones. In fact, it is likely that the effect

of no regulation would negatively

impact small businesses to a greater

degree than larger ones. For example,

without regulation, smaller certifiers
65858 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

entering the industry with growth

expectations based on implementation

of the OFPA through Federal regulation

would be negatively affected to a greater

degree than larger certifiers who can

spread fixed costs over a larger number

of clients. Larger businesses do not

depend as heavily on industry growth to

maintain their business operations.

Organic farmers who have integrated

livestock into their agricultural

operation are negatively impacted in

two ways without regulation of the

organic industry. First, they do not

receive the price premium for organic

meat and poultry because at the present

time FSIS does not allow for the use of

the term organic on meat and poultry

labels. This would impact small farmers

to a greater extent because they have

fewer animals from which to profit from

a price premium. Second, to feed their

livestock, farmers either must pay a

higher price for organically produced

livestock feed or raise the feed on their

own land which otherwise could be

used to produce organic cash crops.

Smaller farmers are disproportionately

impacted because the ratio of the

number of livestock per acre of land is

limited by the number of acres they

must use for organic crop production in

order to be a profitable business. Larger

farmers face the same decision of

whether to purchase organic feed or

raise their own, but they have more

acres over which to spread the cost of

either choice.

Without Federal regulation, small

certifiers and farmers wishing to export

agricultural products are negatively

impacted to a greater degree than larger

organizations by a lack of resources and

influence over foreign market systems.

Also, completing the paperwork

required for exporting products is

disproportionately costly to small

entities because of their limited

resources. The burden of completing

this paperwork can be eased if the

certifier has attained private, third-party

accreditation. We are aware that

certifiers currently may pay in excess of

$15,000 for accreditation by a private

organization. Smaller certifiers cannot

afford these fees, and therefore,

potential clients wishing to export

organic products choose to be certified

by the larger, privately-accredited

organizations.

Finally, we are required by the OFPA

to regulate the industry through the

National Organic Program. In fact, we

have received requests from many small

businesses, certifiers, farmers, and

handlers, to move forward with

implementation of a national program as

quickly as possible. Therefore, we

believe that regulating the organic

industry would be the most appropriate

action to help small businesses.

Option 2: Exemption of Small Certifiers

From Accreditation

We considered the option to exempt

small certifiers from accreditation

requirements, just as small farmers and

handlers are exempt from certification.

However, the OFPA does not provide

for such an exemption and this,

therefore, would require a legislative

amendment. Additionally, we do not

believe that exempting small certifiers

would be in the best interest of the

industry or the small certifiers.

The exemption of small farmers

carries with it limitations which may

discourage some small farmers from

claiming exemption, preferring instead

to become certified. In this proposed

regulation, small farmers who are not

certified and who use the term organic

to identify their products must comply

with the USDA standards, yet they may

not display the USDA seal or a

certifying agent’s logo on the labels or

the labeling of their products.

Furthermore, organic agricultural

products produced on small farms that

claim exemption from certification

requirements cannot be labeled as

organic ingredients in products

processed by a certified operation. As a

result, consumers and processors may

not wish to pay a price premium for

organic products from a non-certified

operation.

The exemption of small certifiers from

accreditation would carry with it

limitations resulting from the absence of

Federal oversight. Interstate and

international trade would be hampered

because it would likely be limited to

products certified by accredited

certifiers. Distinguishing exempt

certifiers from accredited ones might

require that product labels of accredited

certifiers’ clients include the USDA logo

and lead to consumer confusion over

labels in the marketplace.

Protecting consumers from fraudulent

certification claims on labels would be

difficult at the Federal level since AMS

and other enforcement agencies, such as

the FDA, ATF, and FSIS, would have to

distinguish accredited certifiers from

those who are exempt. Costly spot

checks or site visits would be required

by AMS to verify that products sold or

labeled as organic are produced under

systems that are consistent with the

national program. To accomplish this, a

mechanism would have to be

established to charge exempt certifiers

for spot checks or site visits and these

charges might be more costly than

becoming accredited.

One of the purposes of the OFPA is

to assure consumers that organically

produced products meet a consistent

standard. Without the assurance

provided by Federal oversight of

certifiers through USDA accreditation,

there is no way to ensure that one

national standard of production and

handling for organic agricultural

products would be employed. The result

could be the continuation of costly

reciprocity agreements among small,

exempt certifiers and large, USDA

accredited certifiers. This could prove to

be more costly to small entities than

accreditation. For all of these reasons,

we have determined that option 2 is not

a viable alternative.

Option 3: The Proposed Regulation

The regulation we propose is a

synthesis of existing organic standards

and certification programs. We have

done extensive outreach which is

explained in the SUPPLEMENTARY

INFORMATION section entitled ‘‘Public

Input’’. After gathering the necessary

information, we developed this

proposed regulation to ensure industry

integrity and help the organic industry

grow. In this section, we will discuss

how this proposed Federal regulation of

the organic industry would: eliminate

costly administrative tasks now

necessary under current industry

practice and thus mitigate the financial

burden of USDA accreditation; level the

playing field, enabling small entities to

better compete in the industry; and

benefit all farmers and handlers through

industry growth. Finally, this proposed

regulation includes three factors that

would decrease its overall burden by

providing flexibility in compliance and

fees.

Certification organizations currently

develop and interpret their own

standards of production and handling.

The consensus of our outreach to the

industry is that one national standard

with interpretation, decision making,

and enforcement authority at the

Federal level would eliminate the need

for certifiers to develop and amend

standards. Federal regulation also

would provide a consistent process for

certifying operations that produce and

handle products bearing an organic

label. Smaller certifiers would benefit to

a greater degree than larger certifiers

because the resources saved from

creating and interpreting their own

standards could be directed toward

improving their business operations and

offsetting any additional burden

imposed by accreditation.

One national standard would

eliminate the need to negotiate costly

reciprocity agreements and thus save
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65859

certifiers’ resources used to negotiate

the agreements, while also expanding

markets for organic farmers and

handlers certified by smaller

organizations which currently do not

have, or have a limited number of, such

agreements. Eliminating the need for

accreditation by private organizations

prior to export would relieve certifiers

of current financial and paperwork

burdens while leveling the playing field

for large and small organic entities

wishing to export organic agricultural

products.

An expanded market caused by the

introduction of organic meat and

poultry, added consumer confidence

backed by consistent standards of

production and handling, and

additional export volumes of organic

agricultural products would benefit all

of the organic industry.

Another benefit of this proposed

regulation to smaller certifiers would be

an extended network of information

exchange. Presently, information

dissemination occurs on a one-to-one

basis and through participation in

industry groups, meetings, workshops

and international trade fairs.

Participation in these activities, which

often are dominated by issues of the

larger certifiers, is costly and frequently

prohibitive to smaller entities. This

proposed regulation would facilitate

providing certifiers with information

about the program, including standards,

practices and general requirements.

Small certifiers would have access to

the same information at the same time

as large certifiers, which could be

passed on to their clients, typically

small farmers and handlers.

In our previously discussed

implementation option, we consider

allowing a 6-month period of time after

publication of the final rule for

certifying agents to gain initial

accreditation, followed by a 12-month

period of time for farm, wild crop

harvesting, and handling operations to

become certified under the relevant

provision of the final regulation. Thus,

we intend that the provisions of the

NOP would be implemented

approximately 18 months after

publication of the final rule. On that

date, which will be stated in the final

rule, all organic operations required to

be certified in order to sell or label their

products as organic would have to be

certified. Operations that are certified

prior to 18-months after publication of

the final regulation would be permitted

to use the USDA organic seal upon

certification by a USDA accredited

certification organization.

We would like comments, particularly

from small farm or handling operations,

as to whether the 12-month period of

time we anticipate allowing for farm

and handling operations to become

certified is a reasonable period of time

for such operations to become certified.

We are particularly interested in

learning whether there are any

economic or other factors that would

create difficulties in obtaining

certification within the 12-month time

period we expect to provide for

obtaining certification.

Small certifiers have expressed

concern that they may not have the

expertise necessary to become

accredited by USDA or to carry out the

responsibilities associated with

accreditation. However, we believe that

this proposed regulation is consistent

with, and builds upon, current industry

practice. It was designed to allow

existing certifiers, farmers and handlers

to continue to operate within the

organic industry.

In developing our proposal, we

considered requiring that accreditation

be renewed annually by large certifiers

and bi-annually by small certifiers.

However, annual or bi-annual

preparation of accreditation application

materials and the review of applications

would be burdensome to accredited

certifiers and the NOP staff,

respectively. Therefore, in this

regulation we have proposed that rather

than extending the length of

accreditation for small certifiers, we

would require that all certifiers submit

annually only information about their

operation that had changed from the

previous year. This requirement would

eliminate the burden of certifiers

annually refiling all of the information

submitted in the initial accreditation.

Renewal of accreditation would occur

every fifth year.

Finally, this proposed regulation has

three elements of flexibility that are

advantageous to small entities:

performance based production and

handling standards and certifier

requirements; production and handling

standards that contain a range of

allowable practices; and certifier siteevaluation fees that would reflect actual

costs incurred in connection with the

site-evaluation.

The standards in this proposed

regulation are performance standards

based on the results of a management

system, rather than prescriptive or

design standards that prescribe specific

technology or a precise procedure for

compliance. Performance standards

allow for flexibility in compliance,

which is especially important to organic

farmers, handlers and certifiers with

limited resources. Performance

standards promote innovation and the

development of new technologies which

would help the industry as a whole be

more efficient. Finally, they provide a

less costly means of compliance than

design standards. Small entities, in

particular, benefit because compliance

with performance standards allows for

the adaptation of existing systems

without costly capital investment.

The proposed rule allows for

flexibility by providing a range of

farming and handling practices that can

be used when necessary to maintain the

organic integrity of the operation. The

use of a practice or substance that is

allowable only when necessary must be

described in the organic plan, as set

forth in section 205.205 of subpart D of

this proposed regulation, as a record for

consideration by the certifier during a

certification review. The benefit in

providing a range of practices is that a

farmer or handler would not lose their

investment in an organic operation

because of certain conditions, such as

adverse weather or commercial

unavailability. This is especially

important to small farmers and handlers

who depend on the organic price

premium to a greater extent than larger

firms.

Section 2107(a)(10) of the OFPA (7

U.S.C. 6506(a)(10)) authorizes the

collection of reasonable fees from

farmers, handlers, and certifying agents

who participate in the national organic

program. When developing this

proposed rule, two alternative fee

models were considered. The fee for

direct services model proposed in

sections 205.421 through 205.424 of this

proposed regulation combines a fixed

fee for all farmers, handlers and

certifiers with a variable fee for certain

direct services provided by AMS in the

accreditation of certifiers. The second

model considered, but not used in this

proposal, was the fee per certification

model which would have based

accreditation fees on the numbers of

farmers and handlers certified.

The fee for direct services model

proposes to distribute program costs for

services to certified farmers and

handlers through fixed fees of $50 and

$500, respectively. The difference

between farmer and handler fees is

designed to account for the greater

overhead and staff time devoted to

handler and processed product issues as

compared to farmer and raw product

issues. A more extensive explanation of

farmer and handler fees is provided in

the SUPPLEMENTARY INFORMATION section

entitled ‘‘Fees’’. Additionally in this

model, certifiers would be required to

pay a fee of $640 when applying for

accreditation and submitting annual

reports to cover staff time needed to
65860 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

process the application or review the

report, and an annual administrative fee

of $2,000 for program costs that cannot

be allocated to a specific certifier. The

balance of accreditation costs would be

billed to certifiers on a time rate for

direct services. A certifier would have to

collect sufficient funds from the farmers

and handlers it certifies to cover these

program fees. Due to the fixed

components of the fees in this model,

large farmers and handlers, as well as

large certifiers, would have the ability to

spread their costs over a larger base and,

consequently, lower their fixed costs per

unit.

Under the fee for direct services

model, labor hours, travel, and per diem

costs for the site inspections required

for accreditation would be included in

the variable fee for direct services. AMS

estimates the average cost to conduct an

accreditation site visit to be $3,500 per

visit. The travel cost component of this

figure would vary based on the

certifier’s distance from Washington,

D.C., because site visits would be

conducted by the National Organic

Program staff working away from

program headquarters. An alternative

method of distributing travel costs

would be to estimate an average annual

cost per trip, given the expected number

of trips and the geographic distribution

of certifiers, and charge that amount for

all site visits regardless of location.

The advantage of the fee for direct

services model is that it incorporates a

measure of size in the fee structure, i.e.,

the time spent on each accreditation by

National Organic Program staff. The

variable portion of the fee would

distribute program costs among

certifiers according to the resources

actually consumed in providing the

accreditation service. The disadvantage

of this model is that it introduces a

source of variation in fees for which the

derivation is not wholly transparent or

predictable. With several National

Organic Program staff conducting

accreditation evaluations, a complaint

about the efficiency of an individual

accreditation would be difficult to

resolve on the basis of objective

measures.

Under the fee per certification model

that we did not use in this proposal, in

which certifiers would pay a fee to the

USDA for each certification performed,

the smallest one half of certifiers, who

certify about 10 percent of organic

operations, would pay about 10 percent

of the estimated costs associated with

accreditation. The largest 10 percent of

certifiers, who certify about 45 percent

of organic operations, would pay about

45 percent of accreditation costs. The

remaining 40 percent of certifiers in the

middle would pay 45 percent of the

costs. The fee per certification would be

fixed, regardless of the size of the

operation being certified. This feature

has the potential to create a barrier to

market access for the smaller operations.

Certifiers who charge farmers and

handlers for certification based on size

and scope of the operation would

maximize their profits by certifying only

the larger farmers and handlers from

whom they would realize a higher

return. If certifiers were to discriminate

in this manner in favor of larger

operations, smaller farmers and

handlers would find the certification

services available to them to be

relatively limited and possibly more

expensive than under the fee for direct

services model that includes a variable

fee for site visits. A fixed fee per

certification also would not take into

account, in the distribution of costs, the

large difference in size between

processors and primary producers.

Processors are generally much larger

than primary producers in terms of both

total output and total revenue.

Even with the flexibility proposed in

the regulation and the expanded market

opportunities brought about by

implementation of the National Organic

Program, some small organic certifiers,

farmers and handlers may choose not to

continue because of the proposed fees.

We invite comments concerning the

expected benefits and costs to small

entities as presented in this analysis.

Paperwork Reduction Act of 1995

This proposed rule contains

recordkeeping and submission

requirements that are subject to public

comment and to review by the Office of

Management and Budget under the

Paperwork Reduction Act of 1995 (44

U.S.C. 3506 and 3507). Therefore, in

accordance with 5 CFR Part 1320, we

are providing a description of the

reporting and recordkeeping

requirements and an estimate of the

annual burden on the organic industry.

The proposed requirements would not

become effective prior to OMB approval.

Title: National Organic Program.

OMB Number: New collection.

Expiration Date of Approval: Three

years from date of approval.

Type of Request: New.

Abstract: The information collection

requirements in this proposed

regulation are essential to carry out the

mandate of the Organic Foods

Production Act of 1990 (OFPA or Act).

The OFPA requires the Secretary of

Agriculture to establish and implement

a program to accredit a governing State

official, or any private person, who

meets the requirements of the Act and

the proposed regulations, as a certifying

agent for the purpose of certifying a

farm, wild crop harvesting, or handling

operation as being in compliance with

the standards set forth in the Act and

this proposed regulation. After

implementation of the National Organic

Program, any agricultural product

labeled as organic or made with certain

organic ingredients would have to

originate from an operation that is

certified by an accredited USDA

certifier.

The OFPA requires certified farms,

wild crop harvesting operations and

handling operations to maintain records

for 5 years and certifying agents to

maintain records for 10 years. The

OFPA exempts from certification farm

operations with gross agricultural sales

of less than $5,000, and the proposed

regulation also exempts handling

operations with gross agricultural sales

of less than $5,000. We propose that

each exempt operation would be

required to maintain records for one

year that verify that such sales are less

than $5,000. We also propose that

operations that handle only multiingredient agricultural products that

only represent the organic nature of

ingredients in the ingredients statement

would not have to be certified. These

operations would be required to

maintain records for one year that verify

the source of organic products received

and the operations to whom final

organic products are sold. The OFPA

also exempts from certification any

retail operation, or portion of a retail

operation, that only handles organically

produced agricultural products, but

does not process them. The exemptions

and exclusions from certification

requirements proposed in this

regulation are discussed in the

supplementary information provided for

section 205.202 of subpart D.

Other information collection

requirements proposed in this

regulation include: petitioning the

NOSB to review a substance for

inclusion on the National List;

developing labels; preparing inspector

and peer review panel reports;

documenting methods to prevent

commingling of organic with nonorganic products; notifying the proper

authority in the case of non-compliance

with the regulations or the possible

violation of food safety laws; and

submitting State organic certification

programs to the Secretary for approval.

The USDA conducted extensive

research while developing this proposed

regulation so as to minimize disruption

to the customary and usual business

practices of certifiers, farms, wild crop

harvesting operations and handling
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65861

operations. The research included

consultation with administrators of

existing certification agencies; a review

of certifiers’ publications, recordkeeping

forms, and business characteristics;

discussions at meetings with State and

private certifiers about their concerns

regarding accreditation;

communications with the organic

industry trade association; and a review

of the National Organic Standards Board

recommendations that were presented

to the Secretary after extensive public

input. This research helped us

determine that certifiers conduct their

certification of farms, wild crop

harvesting operations and handling

operations in a similar manner and have

similar recordkeeping systems and

business operating practices. We also

determined that most of the information

we would require to conduct

accreditation could be collected from

certifiers’ existing materials without

creating new forms, and that the

information currently used by certifiers

to certify farmers, wild crop harvesters

and handlers could be adapted to

comply with this proposed regulation.

We are required under the PRA to

report the amount of time necessary for

participants to comply with the

proposed regulation as if there were no

previously existing documents. The

PRA requires that our total reporting

(creation and submission of documents)

burden cover the greatest amount of

reporting burden that might occur for

any single creation or submission of a

document during any one of the first

three years following program

implementation, i.e: 1999, 2000, and

2001. Therefore, our total estimated

reporting burden reflects the greatest

possible burden for each reporting

activity that might occur during this

three year period. We also are required

by the PRA to measure the

recordkeeping burden. The

recordkeeping burden is the amount of

time needed to store and maintain

records. For the purpose of measuring

the recordkeeping burden for our

proposed rule, we use the burden for the

year 2001, the reporting year for which

we estimated that the largest number of

records might be stored and maintained.

The USDA estimated the number of

program participants who would be

required to either create, submit, or

store documents as a result of the

proposed rule. To determine the number

of organic farmers and handlers, we

conducted an analysis of existing

certified organic farmers and handlers

in the United States for 1994, (Dunn,

Julie Anton. 1995. ‘‘Organic Food and

Fiber: An Analysis of 1994 Certified

Production in the United States.’’ U.S.

Department of Agriculture, Agriculture)

and examined an analysis of data

collected for the California Department

of Food and Agriculture Organic

Program concerning registered organic

farms and handling operations in that

state (Klonsky, Karen, and Laura Tourte.

September 1995. ‘‘Statistical Review of

California’s Organic Agriculture, 1992–

93’’. Cooperative Extension, Department

of Agricultural Economics, University of

California, Davis). Our analysis

indicated that an estimated 4,000 farms

and 600 handling operations were

certified by 33 private and 11 State

certifiers. The data collected in the

USDA analysis indicated that the

number of certified organic farmers

increased at an average rate of 12

percent in the period from 1991 to 1994,

and the number of certified organic

handlers increased at an average rate of

11 percent over the same 3 years. Based

on this rate of growth, we estimate that

7,049 farmers and 1,011 handlers will

seek certification in the year 1999 and

that these numbers would increase to

8,843 farmers and 1,245 handlers in the

year 2001. We also estimate, based on

our inquiries to existing certifiers, that

in the year 1999: 50 percent of certified

organic farms will include livestock, 25

percent of certified organic farms and 75

percent of certified organic handling

operations will be split operations, and

150 wild crop harvesting operations will

seek certification.

Data from the California Department

of Food and Agriculture study indicated

that 50 percent of registered organic

farmers in California had incomes below

$10,000 in 1994. For the purposes of

this burden analysis, we estimated for

the year 2001 that 25 percent of all

organic farmers and handlers would

have an income of less than $5,000 from

the sale of agricultural products and,

therefore, would be exempt from

certification. Based on our estimated

rate of growth for organic farmers and

handlers, we anticipate that there would

be a total of 11,788 non-certified and

certified organic farms and a total of

1,660 non-certified and certified organic

handling operations in the year 2001. Of

these farms and handling operations, we

estimated that 25 percent (2,947 farms

and 415 handling operations) could be

exempt from certification. As proposed

in this regulation, each exempt

operation would be required to maintain

records to verify that its gross sales of

agricultural products is below $5,000.

We request data and public input that

would assist us to better determine the

percentage of certified organic farms

with livestock and the percentage of

certified operations that may be split

operations, the percentage of organic

farms and handling operations that may

be exempt from certification because

they have sales less than $5,000, and the

number of wild crop harvesters.

Our inquires to several existing

certifiers indicated that of the total

number of operations seeking

certification, approximately 5 percent of

farms and handling operations are

denied certification; most of the farms

and handling operations denied

certification received certification after

they reapply. Additionally,

approximately 25 percent of certified

operations were identified by certifiers

during an annual review as having some

deficiency; most of these operations

retained their certification status.

Other than farmers and handlers, we

have made burden estimates for other

entities who will create, submit or

maintain records as a result of the

proposed National Organic Program. For

instance, we expect to receive 5

petitions annually for substances to be

reviewed by the NOSB for inclusion on

the National List. We estimated a low

number of petitions because prior to

proposing the National List the NOSB

researched and determined which

substances are currently in use in the

organic industry, and because the NOSB

itself will be identifying new substances

for inclusion on the National List.

We also estimated the time spent to

develop product labels for products

sold, labeled, or represented as organic

or made with certain organic

ingredients, or which use the term

organic to modify an ingredient in the

ingredients statement. The time spent

deciding about use of the USDA seal, a

State emblem, or the seal of a private

certifier also is included in this burden.

Our research indicated that operations

using product labels containing the term

organic handle an average of 19.5

product labels. Additional research

indicated that there are currently about

16,000 products with the term organic

used on the product label and that the

number has been increasing by 250

products annually, based on marketing

data from 1994, 1995 and 1996. We

estimate, therefore, that by the year

2001, 17,000 products will be marketed

with the label term organic.

Regarding operations that handle

products that only represent the organic

nature of ingredients in an ingredients

statement, or that handle prepackaged

organic products and do not remove

them from the packaging (such as a

warehouse or terminal market), the

proposed rule contains certain

recordkeeping requirements in addition

to the requirement to document the

procedures to prevent the commingling
65862 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

of organic with non-organic products

and the exposure of organic products to

prohibited substances. These

recordkeeping requirements are that

documentation is to be maintained for 1

year to verify the source and quantity of

organic products received and to verify

the destination and quantity of products

shipped from the operation. At this

time, we do not have information as to

the number of such operations, nor can

we identify a means of collecting this

information. We request public input to

assist us in determining the number of

such operations.

We estimated that the number of

certifying agents would remain constant

during the years 1999, 2000, and 2001

because our research indicates that the

total number has remained unchanged

since 1994. Although we predicted in

the Regulatory Flexibility Analysis that

some of the smallest entities may cease

operation as a result of the NOP, we

know of new certifying agents that have

begun certifying operations, and others

who intend to begin so after

implementation of the NOP. We also

know of existing certifiers who have

ceased their operations. We further

estimated that the number of organic

inspectors would increase by the year

2001. We based this estimate on

information obtained from a private

organic inspector organization which

indicated that each inspector performed

approximately 35 inspections in 1996.

Using this average of 35 inspections per

inspector, we estimate that 293

inspectors would be required in the year

2001 to inspect the estimated 10,238

operations to be certified.

The proposed regulation has certain

requirements for laboratory testing of

products that are produced on certified

organic farms or wild crop harvesting

operations and handled through

certified handling operations. These

tests would be required to be conducted

of certified operations not less

frequently than every five years;

therefore, approximately 20 percent of

the total number of certified operations

would have products tested each year.

Based on our estimate that 10,238

operations would be certified in the year

2001, we estimate that 2,048 operations

would have products tested in that year.

Other residue testing may be conducted

randomly of products at any point of

production or distribution. Pre-harvest

tissue testing is proposed to be

conducted of crops grown on soil

suspected of harboring a contaminant.

We estimate that certifiers would be

required to collect a combined total of

32 samples as part of this random and

pre-harvest testing, and would report

violations of food safety laws to the

appropriate health agencies in 10

instances. We also propose that

producers, handlers, and wild crop

harvesters report to their certifier any

instance of an application of a

prohibited substance. We estimate that

25 such instances would be reported to

a certifier.

We estimate that approximately 30

foreign programs would submit their

programs to USDA in the year 1999 for

review in order to seek equivalency

with the NOP. These programs are

important to handlers of multiingredient organic products, especially

for the spices and flavoring agents that

cannot be produced in the U.S. We also

estimate that 15 approved foreign

programs would be reviewed again by

the Secretary for continued equivalency

in the year 2001 and that 5 approved

programs would submit substantive

program amendments to the Secretary

also in the year 2001.

ESTIMATED ANNUAL REPORTING BURDEN

Burden element Respondents Number of

responses

Average

hours per

response

Total hours Total cost

Monitor for measurable degradation of soil and

water.

Farmers/handlers, harvesters.2,560 4.00 10,238.00 $102,380

Petition to add to the National List ............................. Interested parties ............. 5 10.00 50.00 500

Development of a label .............................................. Farmers/handlers, harvesters.17,056 2.00 34,113.00 682,260

Application for certification ......................................... Farmers/handlers, harvesters.8,210 1.00 8,210.00 82,100

Farm organic plan (crops) 1 ........................................ Farmers ........................... 7,049 14.75 103,972.75 1,039,730

Farms with livestock 2 .......................................... Farmers ........................... 3,525 3.00 10,575.00 105,750

Split farms 2 ......................................................... Farmers ........................... 1,762 2.50 4,405.00 44,050

Wild crop organic plan ................................................ Harvesters ....................... 150 9.50 1,425.00 14,250

Handler organic plan .................................................. Handlers .......................... 1,011 13.00 13,143.00 131,430

Handler split operation 2 ...................................... Handlers .......................... 759 5.00 3,795.00 37,950

Statement of compliance to USDA regulations .......... Farmers/handlers, harvesters.8,210 0.50 4,105.00 41,050

Inspector report .......................................................... Inspectors ........................ 10,240 4.00 40,960.00 409,640

Determination of certification status 3 ......................... Certifying agents, farmers/handlers, harvesters.8,254 1.24 10,209.10 102,090

Annual continuation of certification ............................ Farmers/handlers, harvesters.10,238 3.78 38,648.70 386,490

Notification to certified operation of non-compliance Certifying agents ............. 2,561 2.23 5,711.44 114,220

Certifying agent notification of Administrator 4 ........... Certifying agents ............. 12,769 0.85 10,848.20 216,960

Accreditation requirements (other than recordkeeping) 5.Certifying agents ............. 8,272 03.06 25,344.00 506,880

Accreditation application ............................................. Certifying agents ............. 44 1.67 73.50 1,480

Evidence of ability to certify ....................................... Certifying agents ............. 44 23.28 1,024.50 20,500

Statements of agreement ........................................... Certifying agents ............. 44 0.69 30.25 600

Peer review panel 6 .................................................... Panel members, certifying

agents.

72 11.00 792.00 15,840

Annual continuation of accreditation .......................... Certifying agents ............. 44 10.36 456.00 9,120

Transfer of records to Secretary ................................ Certifying agents ............. 2 40.00 80.00 1,600

Suspended certifying agent submits new application Certifying agents ............. 1 16.00 16.00 320

State program application .......................................... State officials ................... 11 42.73 470.00 9,400

Periodic sampling for compliance .............................. Certifying agents ............. 2,048 3.00 6,144.00 122,880
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65863

ESTIMATED ANNUAL REPORTING BURDEN—Continued

Burden element Respondents Number of

responses

Average

hours per

response

Total hours Total cost

Additional sampling and residue testing .................... Certifying agents ............. 22 3.00 66.00 1,320

Report residue and pre-harvest test results ............... Certifying agents ............. 20 0.50 10.00 200

Report application of prohibited substances .............. Certifying agents, farmers/handlers, harvesters.25 0.15 3.75 80

Equivalency of foreign programs ................................ Foreign program officials 30 128.33 3,850.00 77,000

Total ..................................................................... .......................................... .................... .................... 338,771.00 4,278,034

1We do not have information to estimate the number of livestock operations that do not produce crops; therefore, it is not possible to estimate

the burden hours for such an operation. 2Estimated hours for farms with livestock and split operations are in addition to the hours needed to complete a farm plan for crops or a handler plan. 3 Respondents in the determination of certification status include 44 certifying agents who determine to grant or deny certification to 8,210 applicants. The time elements include the exchange of information necessary for a certifying agent to decide whether to grant or deny certification,

issuance of a certificate, and notification of the Administrator when certification is denied and when applicants do not reapply. 4 Notification of certification status includes notification of the Administrator by the certifier of both the operations that have been certified and

those operations not in compliance. We estimate that about 25 percent of all operations will not be in compliance, and would be granted a continuation of certification with restrictions. 5The burden elements accounted for in this entry are not mentioned in other sections of the proposed rule. These include the time necessary

to provide information to persons seeking certification and to establish a State or certifying agent logo, seal or identification. 6We estimate that 72 persons (50 peer review pool members and 22 certifying agents) would participate in the peer review panel process.

ESTIMATED ANNUAL REPORTING BURDEN

Burden element Respondents Number of

responses

Average

hours per

response

Total hours Total cost

Exempt and excluded operations ............................... Farmers/handlers, harvesters.3,362 1.00 3,362.0 $33,620

Production records ..................................................... Farmers/handlers, harvesters.10,238 3.41 34,905.5 349,055

Certification records .................................................... Certifying agent ............... 44 3.00 132.0 2,640

Total ..................................................................... .......................................... .................... .................... 38,399.5 385,315

Annual Reporting and Recordkeeping

Burden:

Estimated number of respondents:

13,967.

Total annual hours: 377,171.

Total Cost: $ 4,663,349.

It is important to note that the burden

being reported is an estimate of the

amount of time that would be required

of program participants. It is not a

measurement of the burden that would

be required of existing certifying agents

and currently certified farmers,

harvesters and handlers in addition to

the reporting and recordkeeping

activities that they currently perform. In

writing the proposed regulation, we

carefully reviewed existing industry

practice and made every effort to

incorporate the documents and

practices currently being used within

the industry as a means of minimizing

reporting and recordkeeping costs when

the program begins full operation.

The USDA encourages farmers,

handlers and certifiers to use any

electronic means available to them to

create, submit and store records,

including: keeping data base records of

crops or livestock produced on

operations that are certified; lists of farm

and handling operations and their

location; creating certification or

training documents; maintaining

business accounting records; and

sending documents by fax or over the

Internet. Research of the industry

indicates that most certifiers use

electronic data creation and storage, fax

machines, and the Internet. Some farm

and handling operations use computers

and word processors for their

recordkeeping. Based on this

information, we estimated that 25

percent of the collection of information

would be performed by automated,

electronic, mechanical, or other

technological means. We request

comments to help assess the number of

organizations using computers, word

processors, and other electronic

equipment to create and store

documents, as well as the extent to

which the Internet is used to exchange

information.

Additionally, comments are invited

on: (1) whether the proposed collection

of information is necessary for the

proper performance of the functions of

the USDA, including whether the

information would have practical

utility; (2) the accuracy of the USDA’s

estimate of the burden of the proposed

collection of information, including the

validity of the methodology and

assumptions used; (3) ways to enhance

the quality, utility, and clarity of the

information to be collected; and (4)

ways to minimize the burden of the

collection of information on those who

are to respond, including the use of

appropriate automated, electronic,

mechanical, or other technological

collection techniques or other forms of

information technology. Comments

should be sent to: Office of Management

and Budget, New Executive Office

Building, 725 17th Street, N.W., Room

725, Washington, DC 20503, Attention:

Lisa Grove, Desk Officer. Comments also

should be sent to: Don Hulcher,

Clearance Officer, USDA–OICO, Room

404W, Jamie Whitten Building, Ag Stop

7602, P.O. Box 96456, Washington, DC

20090–6456. Additionally, comments

may be sent by fax to (202) 690–4632 or

submitted via the Internet through the

National Organic Program’s homepage

at: http://www.ams.usda.gov/nop.
65864 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

Comments are best assured of having

full effect if they are received within 30

days after publication of the proposed

rule in the Federal Register.

National Organic Program Overview

Pursuant to the OFPA, this rule

proposes regulations for the production,

handling and marketing of organically

produced agricultural products and for

the management of the National Organic

Program. The major components of the

national organic program are

summarized below. A reference to the

placement of the regulatory text of the

summarized topic is entered at the end

of each program component’s summary.

Definitions: Various terms used in the

proposal are defined to ensure that

regulatory requirements that must be

met are clear. Subpart A.

Production and handling

requirements: The OFPA requires that

national standards be established for the

organic production and handling of

agricultural products. Agricultural

products are any agricultural

commodity, whether raw or processed,

including any commodity or product

derived from livestock that is marketed

in the United States for human or

livestock consumption. To establish

consistent national standards for organic

production and handling of agricultural

products, this proposed rule provides

for the implementation of a system of

organic farming and handling that is

consistent with the provisions of the

OFPA. The standards proposed would

apply to the production of crops and

livestock and the harvesting of wild

crops, and to fresh or processed

agricultural products that are, or that are

intended to be, sold, labeled, or

represented as organically produced or

as containing organic ingredients.

The proposed regulation provides for

flexibility in the application of the

proposed national organic standards

and takes into account specific

conditions that may occur at different

production and handling sites. Under

the proposal, each organic farmer and

handler would be required to develop

an organic plan for their operations. The

plan would be evaluated and approved

by an accredited certifying agent if it

were determined to meet the

requirements of the OFPA and the

regulations promulgated under the

OFPA. The performance of each farmer

and handler in meeting the approved

practices in their organic plans would

be monitored by their certifiers. Subpart

B.

National List: This proposal includes

a National List of allowed synthetic

substances that can be used, and

provides for the development of a list of

non-synthetic substances that cannot be

used, in the production and handling of

organically produced agricultural

products. The NOSB provided

recommendations to the Secretary with

regard to synthetic substances it

believed should be permitted to be used

and the non-synthetic substances it

believed should be prohibited for use.

The Act establishes the criteria that

must be considered before a synthetic

substance can be placed on the National

List of substances approved for use, and

criteria that must be considered before

a non-synthetic substance can be placed

on the National List of substances

prohibited for use. A procedure for

petitioning the Secretary and the NOSB

to have changes made to the National

List of substances approved or

prohibited for use is incorporated in the

proposed regulations. Subpart B.

Labeling: This rule proposes

regulations for the label, labeling, and

market information for organically

produced agricultural products. The

proposal applies to agricultural

products that contain various

percentages of organic ingredients. The

proposal also provides for the use of the

USDA organic seal, States’ organic seals,

and a certifying agent’s name, seal or

logo, under certain conditions. Subpart

C.

Certification: The proposed rule

provides the requirements and

procedures for farms, wild crop

harvesting operations, and handling

operations applying for organic

certification under the NOP. The

proposed rule would permit Indian

tribes that as an entity operate a farm,

a wild crop harvesting operation, and/

or a handling operation, as well as

individual tribal members who carry out

such operations, to apply for organic

certification for these operations. The

application process for certification and

the requirements that must be met to

obtain certification, including the

submission of an organic plan, are in the

proposed regulations. The proposed

regulations provide, in accordance with

the Act, that the determination of

whether a farm, wild crop harvesting, or

handling operation should be certified

as an organic farm, wild crop

harvesting, or handling operation,

would be made by certifying agents

accredited by the Secretary. If a

certifying agent initially determines that

certification should not be granted, the

proposed rule allows the applicant for

certification to reapply under certain

conditions. Additionally, the proposed

rule provides for the denial of an

application for certification and the

termination of certification. It also

provides for notice of these actions to

the applicant or certified operation and

an opportunity for the applicant or

certified operation to respond to the

notice prior to the denial or termination

action. Subpart D.

Accreditation: This proposed rule

establishes an accreditation program for

persons who want to be accredited as a

certifying agent. Persons who could

become accredited if they meet the

OFPA’s requirements for accreditation

would include Indian tribes or

individual tribal members. Accredited

certifying agents would be authorized to

certify operations that meet the

requirements of the OFPA and the

regulations in part 205 as certified

farms, certified wild crop harvesting

operations, and certified handling

operations. State governing officials and

private persons may apply for and be

accredited by the Secretary as certifying

agents. Qualifications needed to obtain

and to maintain accreditation are

specified in the proposed rule.

Procedures for denying, terminating,

and suspending accreditation also are

proposed. Subpart E.

State organic programs: This proposal

permits States to establish or continue

to operate their own organic programs,

provided that the program reflects the

requirements of the OFPA and its

implementing regulations, and is

approved by the Secretary.

In order for a State program to be

approved as meeting the general

requirements set forth in section 2107 of

the OFPA (7 U.S.C. 6506), the program

must have regulatory provisions that

meet the following requirements: (1)

provide that an agricultural product to

be sold or labeled as organically

produced must be produced only on

certified organic farms and handled

only through certified organic handling

operations in accordance with the

OFPA’s requirements and be produced

and handled in accordance with such

program; (2) require that producers and

handlers desiring to participate under

such program establish an organic plan

as provided for in section 2114 of the

OFPA (7 U.S.C. 6513); (3) provide for

procedures that allow producers and

handlers to appeal an adverse

administrative determination under this

Act; (4) require each certified organic

farm, certified organic wild crop

operation, and each certified organic

handling operation to certify to the

governing State official, on an annual

basis, that such farmer or handler has

not produced or handled any

agricultural product sold or labeled as

organically produced except in

accordance with this title; (5) provide

for annual on-site inspection by the

certifying agent of each farm, wild crop
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65865

harvesting, and handling operation that

has been certified under the OFPA

requirements; (6) require periodic

residue testing by certifying agents of

agricultural products that have been

produced on certified organic farms and

handled through certified organic

handling operations to determine

whether such products contain any

pesticide or other nonorganic residue or

natural toxicants and to require

certifying agents, to the extent that such

agents are aware of a violation of

applicable laws relating to food safety,

to report such violation to the

appropriate health agencies; (7) provide

for appropriate and adequate

enforcement procedures; (8) protect

against conflicts-of-interest; (9) provide

for public access to certification

documents and laboratory analyses that

pertain to certification; (10) provide for

the collection of reasonable fees from

producers, certifying agents and

handlers who participate in the

program; and (11) require such other

terms and conditions as may be

determined by the Secretary to be

necessary.

Once a State program is approved,

farm, wild crop harvesting, and

handling operations in that State that

wish to sell, label, or represent their

product as organically produced would

have to be approved as a certified

operation under the State program. The

determination as to whether or not a

farm, wild crop harvesting, or handling

operation meets a State’s certification

requirements would be made by an

agent accredited by the USDA under the

National Organic Program. The

accredited agent who would make this

determination either can be a private

person who has been accredited by the

USDA or a governing State official who

has been accredited by the USDA.

In order to be certified under the State

program, an operation would have to

meet the State certification

requirements. These certification

requirements, as discussed previously,

must reflect the requirements in the

National Organic Program. Thus,

certified operations in States that have

their own program would be producing

products that are represented as

organically produced in accordance

with the requirements of the National

Organic Program that have been

included in the State program, in

accordance with section 2107 or the

OFPA (7 U.S.C. 6506). Therefore, the

provisions set forth in our proposal in

part 205 would be applicable to

operations that are located in States that

have their own programs since these

provisions would be included in

programs that are approved by the

Secretary.

States, however, could have

requirements that are in addition to

those of the NOP if they are approved

by the Secretary and meet the statutory

criteria for approval. This means that if

a State has applied for, and received,

approval from the Secretary for

requirements in its program that are in

addition to those in the NOP, farm, wild

crop harvesting, and handling

operations that operate in that State

would have to comply with these

additional requirements that have been

approved. However, a State would not

be allowed to require farm, wild crop

harvesting, and handling operations in

other States to comply with any

additional requirements that the

Secretary has approved for use by that

State.

Fees: The proposed rule establishes a

system of fees to be paid by farmers,

wild crop harvesters, handlers, and

certifying agents based on the services

provided to them by the USDA. The fees

collected from applicants for

accreditation and from accredited

certifying agents would be for reviewing

applications and annual reports,

performing administrative services for

the benefit of all accredited certifying

agents, and for conducting site

evaluations to evaluate the certifying

agent’s performance. The fees collected

from farmers, wild crop harvesters, and

handlers would be assessed as a fixed

fee for each category. Farmers, wild crop

harvesters, and handlers operating

under a State organic program would

pay fees directly to USDA. Subpart F.

Compliance review and other testing:

This proposal establishes a system for

sampling and testing organically

produced and handled products. It

provides for pre-harvest tissue testing

and residue testing to aid in

enforcement of the regulations. Subpart

F.

Appeals: The OFPA provides for the

Secretary to establish an expedited

administrative appeals procedure under

which persons may appeal an action of

the Secretary or a certifying agent under

this title that adversely affects such

person or is inconsistent with the

organic certification program

established under this title. This

proposal provides a procedure for the

appeal of these actions. Subpart F.

Equivalency of imported organic

products: This proposal, in accordance

with the OFPA, permits organic

products produced and handled in

foreign countries to be imported into the

United States, and represented as

organically produced, under certain

conditions. These products would have

to be produced and handled under an

organic certification program that

provide safeguards and guidelines that

are at least equivalent to the

requirements of the OFPA and the

National Organic Program. Under this

proposal, the Secretary would review

and approve, if equivalent, the foreign

organic programs. Subpart F.

Subpart A—Definitions

A number of the definitions provided

in this proposed rule are terms defined

in the Act, and for these definitions we

have used the language provided in the

Act. Some definitions are discussed in

other parts of the supplementary

information and other definitions

provided are self-explanatory. However,

for certain definitions, we have

discussed below our reasons for

establishing these definitions to help

ensure that appropriate and consistent

procedures are followed in complying

with other requirements proposed here.

Active ingredient is a term found in

section 2118(c)(1)(B)(i) of the OFPA (7

U.S.C. 6517(c)(1)(B)(i)). This section

describes categories of substances that

may include active synthetic ingredients

that may be considered to be included

on the National List. Although the Act

does not specifically define the term

active ingredient, EPA does define this

term in section 2(a) of the Federal

Insecticide, Fungicide, and Rodenticide

Act (FIFRA) (7 U.S.C. 136(a)), as

amended. The EPA defines the term

active ingredient to be pesticides,

herbicides, and other substances

covered by the FIFRA. We have

included the EPA definition of active

ingredient as one of our definitions for

this term, i.e., the definition that covers

active ingredients in pesticide

formulations.

The EPA definition, however, does

not cover the full scope of all active

synthetic substances that the Act would

authorize for inclusion on the National

List. Therefore, our other proposed

definition for active ingredients, ‘‘active

ingredients in any input other than

pesticide formulations’’, covers these

other substances. One type of substance

that is included in this definition of

active ingredient is a substance used in

any aspect of organic production or

handling that becomes chemically

functional within an agroecosystem. A

chemically functional substance is one

that would be absorbed by plants or that

would affect soil chemistry when used

as permitted under this proposal, such

as a micronutrient or a cation balancing

agent. Substances or materials that do

not fit this description, such as plastic

mulches, sticky barriers or row covers,

thereby would not be considered as
65866 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

active ingredients under this definition.

Our proposed definition also covers

substances required to be listed as

ingredients or additives on food labels,

but it does not include incidental

additives and processing aids that are

not required to be listed on food labels.

The agroecosystem is a term that

encompasses all the elements of a

system of organic farming and handling,

and as such is the primary focus of the

proposed organic crop and livestock

production standards. Section

2119(m)(5) of the OFPA (7 U.S.C.

6518(m)(5)) specifically indicates that

the effects of a substance on the

agroecosystem is a criterion that must be

evaluated before a synthetic substance

can be included on the National List of

substances allowed for use.

Biodegradable refers to a specific

quality of a material or substance that is

used on or applied to the soil that makes

the material or substance susceptible to

biological decomposition. Most

biodegradable materials are organic

matter obtained from plant or animal

sources. A material such as plastic that

is not biodegradable will resist

decomposition and persist in the soil,

and may enter into unknown chemical

interactions with soil and water. While

chemical degradation of nonbiodegradable materials into simpler

compounds eventually occurs, this

process happens very slowly compared

to biological decomposition. The use of

non-biodegradable materials as

production inputs is considered to be

incompatible with a system of organic

farming or handling because they may

leave residues of synthetic substances in

the soil.

Chapter is defined here with reference

to our proposal for the accreditation of

certifying agents in subpart E. We are

aware of two existing certifying agents

that each operate as a single certification

body through a system of chapters. We

believe that this is an acceptable

practice. Such chapters would,

however, be expected to comply with

the Act and the regulations in this part.

Commercially available is a term that

was the subject of extensive deliberation

by the NOSB, and our proposed

definition reflects their

recommendation. We believe that this

definition is essential in order for

producers and handlers to make

appropriate decisions about whether it

is necessary to use certain materials,

such as the use of non-organically

produced planting stock or livestock

feed. It also is necessary to help

certifying agents evaluate whether the

use of such materials is justified or

should be discontinued.

Contaminant is a term used in section

2112(b) of the OFPA (7 U.S.C. 6511(b))

with reference to substances that persist

in the environment, that may be

suspected to be present in soil, and

which may necessitate a preharvest

tissue test of crops grown on that soil to

determine the level of the contaminant

in an organically produced crop.

Cytotoxic mode of action is used in

sections 205.9(f) and 205.21(a) of

subpart B to describe the activity of a

type of synthetic substance that is

prohibited for use in organic

production. Substances of this type

chemically interact with plant and

animal cells and interfere with normal

cell functions. Our definition describes

synthetic substances that are cytotoxic

and that, therefore, would be prohibited

for use.

Degradation is defined to allow

organic producers, handlers and

certifying agents to accurately identify

when the use of a practice or substance

that is otherwise permitted under this

proposal should be ended or modified.

This would occur when it results in

measurable degradation of soil or water

quality. For example, if nitrate levels in

an adjacent well are found to increase

over two or more crop years following

application of a highly soluble mined

source of nitrogen to soil, as set forth in

proposed section 205.7 (c)(2) of subpart

B, then the practice would have to be

terminated or modified to prevent

further adverse effects on water nitrate

levels.

Detectable residue level (DRL) is

proposed for the purposes of this part as

being a residue of a pesticide or other

prohibited substance that is five percent

or greater than the established EPA

tolerance level for the product that was

tested, provided that if there is no

tolerance level established but an action

level has been established, the DRL will

be the action level established by the

FDA for the product tested. EPA

tolerance levels, expressed in terms of

parts of a pesticide residue per million

parts of the food (ppm), refer to the

amount of a pesticide residue that may

be present in or on a raw agricultural

commodity, processed food or

processed feed. These tolerance levels

are listed in 40 CFR Part 180 (raw

agricultural commodities), Part 185

(processed foods) and Part 186

(processed feed). The FDA action levels

are used to regulate the occurrence of

very low levels of pesticide residues

that result from the persistence of a

pesticide in the environment and for

which there is no tolerance level

established by EPA. The action levels

for certain pesticides found as residues

in agricultural commodities, processed

foods or processed feeds are listed in the

FDA publication entitled ‘‘Action Levels

for Poisonous or Deleterious Substances

in Human Food and Animal Feed.’’

Certain pesticide residues may not be

detectable by available residue testing

techniques at a level as low as five

percent of the EPA tolerance level; in

these cases, we would consider the

detectable residue level to be the lowest

level measurable by available

techniques.

The purpose of defining the DRL at

the proposed levels is to establish a

practical level for determining when to

conduct an investigation, as required in

section 2112(c)(2)(B) of the OFPA (7

U.S.C. 6511(c)(2)(B)), to determine when

a residue is the result of an intentional

application or when it is justified by

site-specific unavoidable residual

environment contamination due to the

persistence of the detected substance.

The proposed DRL should help

eliminate unnecessary investigations

and test procedures and is within the

range of tolerance levels developed by

existing State and private organic

programs. As discussed with reference

to unavoidable residual environmental

contamination, the Secretary would

establish on a case by case basis the

residue levels which would indicate

that a prohibited substance had been

intentionally applied.

Fertilizers are addressed in section

2109(b)(1) of the OFPA (7 U.S.C.

6508(b)(1)), which prohibits the use in

organic production of fertilizers that

contain synthetic ingredients or any

commercially blended fertilizers that

contain prohibited substances under the

Act or a State program. Although the

Act does not define the term fertilizers,

we have proposed a definition in order

to clarify the kinds of synthetic soil

amendment substances that may be

considered for inclusion on the National

List. Our proposed definition of

fertilizers is consistent with those used

by various State agencies that regulate

the labeling of fertilizers, and refers to

materials that supply the major plant

nutrients nitrogen, phosphorus and

potassium. Synthetic mineral

substances, such as micronutrients and

cation balancing agents, which do not

supply quantities of the three major

plant nutrients, would not be

considered fertilizers under this

definition and could, therefore, be

considered for inclusion on the National

List because they are not prohibited

under section 2109(b)(1) of the OFPA (7

U.S.C. 6508(b)(1)).

Incidental additive is defined so that

handlers clearly know that the

substances included in this category

may be used in handling organic
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65867

products, even though the incidental

additive itself may not be included on

the National List.

Inert ingredient refers to any

substance or group of structurally

similar substances if designated by the

EPA, other than an active ingredient

that is intentionally included in a

pesticide or formulated product. Inert

ingredients used in pesticides are

specifically regulated by EPA and have

been classified by EPA with respect to

their relative toxicity. This EPA

classification of inert ingredients is

referred to in Section 2118(c)(1)(B)(ii) of

the OFPA (7 U.S.C. 6517(c)(1)(B)(ii))

and has been used in this proposal to

indicate the types of inert ingredients

that may be used in any pesticide

product allowed for use on a certified

farm or handling operation.

However, the EPA definition does not

cover the full scope of inert ingredients

that may be used in formulated products

allowed for use in organic farming. Our

proposed definition of this term also

includes inert ingredients intentionally

included in any product used in organic

crop production, such as fertilizers or

foliar sprays.

Non-agricultural ingredient is a term

we use in various sections of this

proposal to delineate the type and

category of substances allowed for use

as ingredients in or on organically

produced agricultural products if the

substance is included on the National

List in section 205.26 of subpart B. As

discussed in the supplementary

information section in reference to the

National List, we have used this term in

order to accurately describe those

substances that would satisfy the

provisions of section 2118(c)(1) of the

OFPA (7 U.S.C. 6517(c)(1)) related to

handling.

Non-synthetic is a term used

throughout our proposal to describe

those substances that are not synthetic.

As discussed in the supplementary

information for the National List, we

determined that this term is more

appropriate than the word natural,

which is not defined in the Act and

which has other regulatory and

marketing meanings.

Packaging is defined here as any

material used to wrap, cover, or contain

an agricultural product, and also

includes wax applied directly to an

edible surface of an agricultural

product. This definition is proposed in

response to the public input that

expressed concerns that waxes that

contain synthetic fungicides or

preservatives may be used on organic

products, such as fresh produce or

cheese. We believe that this definition is

needed to implement the prohibition

against the use of packaging materials

containing such prohibited substances,

as set forth in section 2111(a)(5) of the

OFPA (7 U.S.C. 6510(a)(5)), to any

material that contacts an edible surface

of an organic product.

Production aid is any substance,

material, device or structure, but not an

organism, that is used to produce an

agricultural product. A production aid

may or may not be synthetic, and may

or may not function as an active

ingredient. Examples of production aids

are provided in section 2118(c)(1)(B)(i)

of the OFPA (7 U.S.C. 6517(c)(1)(B)(i))

and include netting, tree wraps and

seals, insect traps, sticky barriers, row

covers, and equipment cleansers. Any

production aid that is determined to be

active and synthetic must appear on the

National List in either sections 205.22 or

205.24 of subpart B before it may be

used in organic farming.

Putrefaction is defined in order to

clarify the reasons why plant and

animal materials that are prone to

putrefaction are less preferable for use

in proper manuring practice than those

materials that are not prone to

putrefaction, as proposed in section

205.7 of subpart B.

Soil quality is a term that serves as a

central performance standard for the use

of any method or substance in an

organic farming system, in that such use

may not result in measurable

degradation of soil or water quality, as

proposed in section 205.3(b)(1). In order

to determine whether a given operation

is in compliance with the regulations,

farmers and certifiers must have a clear

understanding of what soil quality is

and how it may be measured. Our

proposed definition of this term

encompasses physical, chemical and

biological soil quality indicators that

could readily be measured or observed

at a given location. Examples of soil

quality indicators commonly measured

in organic farming systems include

erosion, aggregation, compaction,

drainage, organic content, nutrient

content, pH, cation balances, presence

of contaminants, leaf tissue analysis,

presence of indicator weed species,

presence of pathogens, earthworm

populations, and legume nodulation.

Subtherapeutic is a term used in

section 2110(d)(1)(A) of the OFPA (7

U.S.C. 6509(d)(1)(A)) to refer to a dosage

level of antibiotics that is prohibited for

administration to organically managed

livestock. Our proposed definition of

this term indicates one of the

circumstances in which use of an

antibiotic is prohibited.

System of organic farming and

handling is a term used throughout our

proposal to refer to the general set of

principles and objectives of the Act.

This term also serves as the foundation

of the organic production and handling

provisions proposed here, and is

discussed more fully in the

supplementary information that

introduces Subpart B.

Unavoidable residual environmental

contamination (UREC) is a term used in

section 2112(c)(2)(B) of the OFPA (7

U.S.C. 6511(c)(2)(B)) which we define as

the residue level of a prohibited

substance that could be expected to

exist in the soil at, or in a product

originating from, a specific production

site to which the prohibited substance

had not been applied for a minimum of

three years. If a residue test of an

organically produced product

originating from a specific certified site

reveals a detectable residue level of a

prohibited substance, then the UREC

level for the specific certified site would

be determined by the Secretary in

consultation with the applicable

governing State official, and the

appropriate environmental regulatory

agency. A product found to contain a

detectable residue level exceeding the

UREC level for the specific site may not

be sold or labeled as organic.

Subpart B—Organic Crop and Livestock

Production and Handling Requirements

Introduction

USDA’s proposed requirements for

organic farming and handling,

encompassed in subpart B, sections

205.3, 205.5 through 205.9, and 205.11

through 205.28, set forth the

requirements for organic crop

production, wild crop harvesting,

organic livestock production, organic

handling, and for products and

substances allowed and prohibited in

organic farming and handling. These

requirements are proposed to

implement the purposes of the Act as

set forth in section 2102 of the OFPA (7

U.S.C. 6501) to establish national

standards governing the marketing of

organically produced agricultural

products; to assure consumers that

organically produced products meet a

consistent standard; and to facilitate

interstate commerce in fresh and

processed food that is organically

produced. Section 2106 of the OFPA (7

U.S.C. 6505) requires that any

agricultural product that is sold or

labeled as organically produced be

produced and handled in accordance

with the standards established under

the Act. Section 2118 of the OFPA (7

U.S.C. 6517) requires that a National

List of substances approved and

prohibited for use in organic farming
65868 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

and handling established by the

Secretary be included in the standards.

Active synthetic substances must appear

on the National List as approved

substances in order to be used in

organic production, and a non-synthetic

(natural) substance may not be used if

it appears on the National List of

substances prohibited for use.

We would like to point out that the

word substance is used in a variety of

ways in this docket. When the word

substance refers to a material that meets

the OFPA’s definition of a synthetic

substance, it is described as a ‘‘synthetic

substance’’. When the word substance

refers to a non-synthetic material (i.e.,

natural material), which is one that does

not come within the OFPA’s definition

of a synthetic substance, it is described

as a ‘‘non-synthetic substance.’’ When

the word substance refers to a material

prohibited for use in the organic

program, whether it be synthetic or nonsynthetic (i.e., natural), it is described as

a ‘‘prohibited substance.’’ An example

of such a prohibited material is a

synthetic substance that does not appear

on the National List of synthetic

substances permitted for use in organic

farming and handling. When the word

substance is used without any

modifiers, it is used to describe all

materials (substances), regardless of

whether such substances are synthetic

or non-synthetic, or prohibited or

allowed for use in organic farming and

handling.

We have crafted this subpart to be

consistent with the requirements of the

Act, including its principles for organic

farming and handling systems.

Although the Act does not specifically

define what a system of organic farming

and handling is, it does refer in sections

2103(4) and (5) of the OFPA (7 U.S.C.

6502(4) and (5)) to a system of organic

farming and a system of organic

handling, respectively, as described in

the Act. In order to establish consistent

national standards for organic

production and handling, we have

determined that it is necessary to define

what a system of organic farming and

handling is, and to describe those

practices that are consistent with such

a system. Another purpose of this

definition will be to provide an explicit

point of reference for the organic

industry to make determinations as to

whether various practices and

substances are consistent with organic

farming and handling. We further

expect the proposed definition of a

system of organic farming and handling

to serve as a reference point for program

matters it is determined need further

development.

We have defined a system of organic

farming and handling to be: a system

that is designed and managed to

produce agricultural products by the use

of methods and substances that

maintain the integrity of organic

agricultural products until they reach

the consumer. This is accomplished by

using, where possible, cultural,

biological and mechanical methods, as

opposed to using substances, to fulfill

any specific function within the system

so as to: maintain long-term soil

fertility; increase soil biological activity;

ensure effective pest management;

recycle wastes to return nutrients to the

land; provide attentive care for farm

animals; and handle the agricultural

products without the use of extraneous

synthetic additives or processing in

accordance with the Act and the

regulations in this part.

Our proposed definition has been

derived from the underlying premises of

what constitutes organic farming and

handling systems, as reflected in various

provisions of the Act. This definition

also is consistent with the definitions

and principles established by the

existing public and private organic

programs that we have reviewed and the

definitions and principles of organic

agriculture and production systems

adopted by the National Organic

Standards Board. The principles

reflected in our definition of a system of

organic farming and handling are

incorporated in the regulations we are

proposing.

The concept of maintaining the

integrity of organic agricultural products

is established by one of the purposes of

the Act, stated in section 2102(2) of the

OFPA (7 U.S.C. 6501(2)), to assure

consumers that organically produced

products meet a consistent standard.

The Act generally delineates methods

and substances that may or may not be

used in organic farming and handling in

furtherance of this purpose.

Additionally, in section 2104 of the

OFPA (7 U.S.C. 6503) it specifically

provides for an organic certification

program for producers and handlers of

organic agricultural products. Such a

program helps to ensure the integrity of

organic products.

There is a preference for the use of

cultural, biological and mechanical

methods wherever possible, as opposed

to using substances, in organic farming

and handling. Examples of methods that

do not involve the use of any substances

are the planting of green manure crops

instead of applying fertilizer substances,

and the use of crop rotations and

disease resistant plant varieties instead

of applying disease-suppressing

substances. Section 2105(1) of the OFPA

(7 U.S.C. 6504(1)) provides that an

organically produced agricultural

product must be produced and handled

without the use of synthetic chemicals,

except as otherwise provided for in the

Act. Further, the Act provides in section

2118 (7 U.S.C. 6517) a detailed scheme

and criteria for determining whether a

particular active synthetic substance

may be exempted from the general

prohibition on the use of synthetic

chemicals, and further provides in that

section for the prohibition of the use of

certain substances that are not synthetic.

Also, the Act specifically directs in

section 2119(m)(6) of the OFPA (7

U.S.C. 6518(m)(6)) that the NOSB

consider the use of practices or other

available materials as alternatives to a

synthetic substance being included on

the National List. Furthermore, the use

of certain substances in organic crop

and livestock production and organic

handling is specifically prohibited in

several provisions of the Act, such as

portions of sections 2109, 2110, and

2111 of the OFPA (7 U.S.C. 6508, 6509

and 6510). Therefore, we are proposing

in our definition of a system of organic

farming and handling that, where

possible, cultural, biological and

mechanical methods, as opposed to

using substances, are preferred. These

provisions support the concept that both

non-synthetic substances and methods

that do not involve the use of any

substances, such as cultural, biological,

and mechanical methods, are preferred

alternatives to the use of synthetic

chemicals.

The tenets of maintaining long-term

soil fertility and increasing soil

biological activity are established in

section 2114(b)(1) of the OFPA (7 U.S.C.

6513(b)(1)), which requires that an

organic plan contain provisions

designed to foster soil fertility, primarily

through the management of the organic

content of the soil. The Act further

addresses soil biological activity in

section 2119(m)(5) of the OFPA (7

U.S.C. 6518(m)(5)) when it requires that

the physiological effects of a synthetic

substance on soil organisms be taken

into consideration before the substance

is allowed for use in organic production.

The need for effective pest

management methods in an organic

farming system is established in section

2109(c) of the OFPA (7 U.S.C. 6508(c))

which prohibits the use of certain

substances and materials for the control

of pests, weeds, and diseases. This

section, considered together with the

Act’s prohibition of the use of most

synthetic chemicals in organic

production systems, necessitates that

crop pest management methods be

implemented that avoid the need to use
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65869

synthetic substances and materials. In

addition, the inclusion of crop rotation

practices in an organic plan, as set forth

in section 2114(b)(1) of the OFPA (7

U.S.C. 6513(b)(1)), is critical to

implementing effective pest

management strategies and soil fertility

management in an organic farming

system.

Recycling wastes to return nutrients

to the land is a principle expressed in

the language of section 2114(b)(1) of the

OFPA (7 U.S.C. 6513(b)(1)) which

requires the fostering of soil fertility and

which provides for proper manuring to

be used to manage soil organic content,

and in section 2114(b)(2) of the OFPA

(7 U.S.C. 6513(b)(2)) which delineates

more specific requirements for the

application of manure to crops.

Although the use of livestock manure is

one means of complying with this

requirement, our proposed definition of

proper manuring also includes the use

of other plant or animal wastes to

improve soil organic content and

provide crop nutrients.

Attentive care for farm animals is

implicit in the provisions of sections

2110(c) and (d) of the OFPA (7 U.S.C.

6509(c) and (d)), which specify what

may or may not be fed to organically

managed livestock, prohibit certain

health care practices, and require the

NOSB to recommend additional

standards for the care of organic

livestock. The alternative to using the

methods and practices prohibited under

this section of the Act is expressed by

the concept of attentive care which is

essential when relying on management

methods, rather than substances such as

medications, to maintain livestock

health.

This proposed rule also incorporates

the principle that organic agricultural

products are to be handled without the

use of extraneous synthetic additives

and processing. Examples of extraneous

additives are synthetic preservatives,

coloring agents and flavors. These are

not allowed because the Act, in section

6510(a)(1), prohibits the addition of any

synthetic ingredient during the

processing or postharvest handling of an

agricultural product. Extraneous

processing generally involves the use of

additional substances during and after

the processing. Extraneous processing

would entail, for example,

unnecessarily subjecting a product to

temperatures that degrade its inherent

antioxidant content, thereby requiring

supplementation with an antioxidant to

maintain the product’s stability.

Our proposed program encompasses

all agricultural products, as defined in

section 2103 of the OFPA (7 U.S.C.

6502), and all aspects of their

production and handling, ranging from

soil fertility management to the

packaging and labeling of the final

product. Our requirements address the

systems used to produce an agricultural

product rather than the physical

qualities of the product itself. No

distinctions should be made between

organically and non-organically

produced products in terms of quality,

appearance, or safety.

We believe that an effective regulatory

scheme, which has to be applicable to

diverse types of operations and

geographic regions must be as flexible as

possible and take into account sitespecific conditions. We accordingly

have developed this proposal to

provide, within the parameters of the

Act, provisions that take into account

site specific conditions without

impairing the organic integrity of the

product produced. In creating this

proposal, we examined various

examples of, and ideas for, such

provisions, including standards

developed by existing organic programs,

guidelines of international organic

interest groups and standards setting

organizations, recommendations of the

NOSB, and suggestions provided in

public input received in the course of

NOSB meetings and as response to

NOSB draft documents.

Existing organic certification

programs, both State and private, have

grappled with the need to provide

flexibility in their allowed standards

and procedures. One method that

existing organic programs have used is

to distinguish in their standards

between practices that they consider to

be acceptable for use without

restrictions, those that they consider to

be acceptable for use only in certain

conditions (i.e., restricted practices),

and those that they do not consider to

be acceptable for use under any

circumstance. An example of restricted

use is illustrated by the case of botanical

pesticides, which most organic

practitioners consider to be a last resort

for pest control, and which are

considered acceptable for use only

under certain circumstances. Many

existing organic certification programs

have thus included such substances

within the area of restricted practices

that must be closely evaluated and

justified by site-specific needs.

We have approached this need for

flexibility by incorporating two types of

regulatory provisions into our proposed

standards. The first type of regulatory

provision establishes, where

appropriate, an order of preference for

selecting practices or materials. For

example, we propose in section 205.7(b)

of subpart B an order of preferred

selection of five types of materials that

would be acceptable for use in proper

manuring. We also propose in section

205.9 of subpart B an order of preferred

selection for the use of practices and

substances to prevent and control crop

pests, weeds, and diseases. We would

like to solicit public comment as to

whether or not the establishment of

orders of preference would impose an

unnecessary burden on organic

producers.

The second type of regulatory

provision we propose would permit the

use of certain practices or substances

only if necessary. The producer or

handler would base their determination

of the need to use a particular method

or substance on site specific

circumstances. The basis for a producer

or handler determining that a certain

practice or substance is necessary would

be described in the organic plan, or

update to the organic plan, and would

be reviewed and evaluated by the

certifying agent. An example of a

practice that we are proposing be used

only if necessary is the use of nonorganically produced feedstuffs as a

portion of an animal’s feed ration, as

proposed in section 205.13(a) of subpart

B.

A number of the regulations are

written as performance standards.

Performance standards are generally

written in terms of the results expected,

rather than the specific actions that

must be taken to achieve the desired

result. An example of a performance

standard is the requirement proposed in

section 205.3(b) of subpart B that the

use or application of any practice or

substance must not result in measurable

degradation of soil or water quality.

This proposed provision requires that

practices used in an organic operation

be implemented in a manner that

maintains soil and water quality, but

does not specify the practices that have

to be used.

Subpart B—Regulatory Overview

Subpart B of part 205 consists of

USDA’s proposed organic production

and handling requirements, and a

proposed list of (1) synthetic substances

allowed and non-synthetic (natural)

substances prohibited for use in organic

crop and livestock production and (2)

non-agricultural substances and nonorganically produced agricultural

products allowed in or on processed

organic products. The proposed

requirements for organic production and

handling, and the provisions for the

proposed National List and use of

substances, have been integrated as a

unified whole consistent with our
65870 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

proposed definition of a system of

organic farming and handling.

Section 205.3 (applicability) of

subpart B delineates proposed general

requirements and conditions for organic

production and handling. Section 205.3

of subpart B includes the general

requirement that the use of any method

or substance not result in measurable

degradation of soil or water quality.

This section is followed by the sections

that set forth the requirements for

organic crop production (sections 205.5

through 205.9), wild crop harvesting

(section 205.11), organic livestock

management (sections 205.12 through

205.15), and organic handling (sections

205.16 through 205.19). Following the

sections on production and handling,

sections 205.20 through 205.28 contain

the proposed National List. The

proposed National List regulations

consist of sections that describe the

active synthetic substances that are

allowed for use in organic crop and

livestock production, the non-synthetic

(natural) substances that are prohibited

for use in organic crop or livestock

production, and the non-agricultural

and non-organically produced

ingredients allowed in or on processed

organic products. (The OFPA does not

require non-synthetic (natural)

substances allowed for use in organic

crop and livestock production, or nonorganically produced products

prohibited for use in or on processed

organic products, to be included in the

National List). Sections 205.20 and

205.21 summarize all of the categories

and types of substances allowed and

prohibited for use in organic farming

and handling, as provided under the Act

and the proposed regulations in Subpart

B.

Applicability—Section 205.3

In paragraph (a) of this section, we

propose to establish the requirement

that any agricultural product that is

sold, labeled or represented as organic

be produced in compliance with the

relevant proposed crop, wild crop,

livestock and handling requirements,

including those of the National List.

Crops and livestock would have to be

produced or harvested on a certified

organic farming operation and handled

by a certified organic handling

operation under a system of organic

farming and handling.

We propose in paragraph (b) of this

section that any use or application of a

method or substance under these

proposed requirements must be used in

accordance with all applicable

requirements of part 205 and must not

result in measurable degradation of soil

or water quality. This provision is

proposed to clarify that all methods and

substances used in a certified operation

shall be consistent with a system of

organic farming and handling, the

purposes of the Act, and any other

requirements in the regulations in part

205. This provision also is consistent

with the recognition in the Act of the

relation between organic practices and

soil and water quality.

In most instances we are not

proposing to require that any specific

indicators of soil or water quality be

monitored for compliance with this

provision. Rather, we expect that

appropriate and reliable indicators of

soil or water quality would be chosen

according to site-specific

considerations, such as the nature of the

crops or livestock being produced, the

location and scale of the operation, and

the kinds of practices being used. By not

requiring monitoring of specific

indicators, except in certain cases, we

thus intend to leave the decision as to

whether to monitor the effects of a

method or substance, as well as the

choice of indicators to be monitored, to

the producer or handler in consultation

with the certifying agent. We would

expect any such monitoring activities to

be described in the applicable organic

plan, and therefore subject to approval

by the certifying agent, who might

require changes.

For example, if a certifying agent had

some concerns about the impact on soil

quality of any practice, such as the

planting of a sloping field prone to

erosion with corn or sorghum, the

certifying agent might require the

producer to monitor erosion in that field

to ensure that soil quality was not being

degraded. This could occur following a

review of an organic plan or any

required annual inspection of a certified

operation. This provision also would

address the requirement set forth in

section 2114(b)(1) of the OFPA (7 U.S.C.

6513(b)(1)) that soil fertility be

addressed in an organic farm plan for

crop production. Additionally, a

certifier who was concerned about the

compliance of a cattle feeding operation

with the manure management

requirements proposed in section

205.15(c) might require that the

producer monitor nitrate levels in a

nearby well to show that cattle holding

areas were not discharging manureladen runoff into groundwater. A wild

crop harvester similarly might be

required by a certifier to estimate the

population of the harvested plant

species that remain in a given area after

each harvest, to ensure that the

harvesting was being done in

compliance with section 2114(f) of the

OFPA (7 U.S.C. 6513(f)), which requires

that harvesting does not deplete the

plant species being harvested (as

proposed in section 205.11(b)).

Other indicators of soil or water

quality that might be appropriate to

monitor, depending on the situation,

would include: residues in soil or water

of substances prohibited for use in

organic farming; soil biological activity

as indicated by earthworm populations;

soil organic matter and nutrient content;

or soil compaction. It should be noted

that much of this monitoring activity is

widely practiced in the course of

managing a farm or handling operation,

and in many cases would coincide with

measurements, assessments or

observations already being undertaken

routinely by a producer.

Although not required by statute, the

NOSB recommended that irrigation and

water management be addressed within

an organic farm plan. At this time,

however, we are not proposing

regulations specifically for the quality of

irrigation water.

Section 205.3(b)(2) further would

require that, if the same function within

an organic farming or handling

operation may be fulfilled by either a

commercially available non-synthetic

substance or an allowed synthetic

substance equally suitable for the

intended use, then the producer or

handler must choose the non-synthetic

substance in preference to the synthetic

substance if there is no discernable

difference between the two in terms of

impacts on soil or water quality. We

recognize that such choices may seldom

have to be made in any operation.

However, we are proposing this

provision to further reinforce the

preference for the use of non-synthetic

substances, as opposed to synthetic

substances, that is implicit in the Act,

as previously discussed. Any allowed

synthetic substance will have been

evaluated by the NOSB according to

section 2119(m)(6) of the OFPA (7

U.S.C. 6518(m)(6)), regarding alternative

practices and available materials, and

our proposed requirement makes clear

the choice producers and handlers must

make in a situation where an equally

suitable non-synthetic alternative is

available.

Organic Crop Production Requirements

Land Requirements—Section 205.5

This proposed section addresses

overall land management practices that

we have determined are needed to

ensure that the area on which organic

crops are produced meets the

requirements of the Act and the

proposed regulations in subpart B. We

have proposed in paragraph (a) of this
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section, in accordance with section 2105

of the OFPA (7 U.S.C. 6504), that land

not have had any prohibited substances

applied to it for at least three years prior

to harvest of an organically produced

crop.

We are proposing further that any

land on which organic crops are

produced have clearly defined and

identifiable boundaries, as provided

under section 2107(b)(1)(A) of the OFPA

(7 U.S.C. 6506(b)(1)(A)). We believe that

this requirement should apply to all

land on which crops are grown under

organic management for two reasons.

First, organically managed fields must

be clearly identifiable so that an

inspector may verify that the observed

conditions on a farm operation are

consistent with the information

provided by the producer in the

application for certification. Secondly,

organically managed fields need to be

clearly identifiable to anyone who may

be using prohibited substances on

adjoining lands in order to help prevent

unintentional application of prohibited

substances to organically managed

areas.

Paragraph (b) of this section would

apply to any organically managed land

area that adjoins land that is not

organically managed, and would require

that a producer implement, or propose

a plan to implement, some means to

prevent the possibility of unintended

application of prohibited substances to

land and contact of a prohibited

substance with the land from which

organically produced crops are to be

harvested. This could be done through

establishment of physical barriers,

diversion of runoff, buffer zones, or

other means, in accordance with section

2107(b)(1)(A) of the OFPA (7 U.S.C.

6506(b)(1)(A)). Existing State and

private organic standards have

customarily required producers to

establish and maintain adequate buffer

zones between adjoining organic and

non-organic field units and usually

specify the minimum size of a buffer

area. The information we have reviewed

indicates that such specific minimum

size requirements should not be

included in our proposal because they

would not be applicable to every

situation and could impose unnecessary

burdens on some organic producers.

Crop Rotation—Section 205.6

Crop rotations, or other means of

ensuring soil fertility and effective pest

management, are the cornerstone of

successful organic crop production.

They are essential considerations in

establishing and maintaining an organic

farm system because they help to

prevent pest, weed and disease

problems; disrupt crop pest, weed, and

disease cycles; provide habitat for

beneficial organisms; stimulate positive

biological and chemical interactions in

the agroecosystem; and maintain soil

and water quality in a manner that

diminishes the need for the use of

synthetic substances.

Section 2114(b)(1) of the OFPA (7

U.S.C. 6513 (b)(1)) requires a crop

production farm (organic) plan to foster

soil fertility through practices that

include crop rotation. Although the Act

includes a provision for crop rotations

as a means of improving soil fertility,

crop rotations also serve additional

critical functions in an organic farming

system. Primary among these functions

are: the prevention of weed, pest and

disease problems by the planting of

species that do not support the pest

organisms or that provide food or

habitat for beneficial insects; the

stimulation of populations of beneficial

soil organisms, such as mycorrhizal

fungi and predacious nematodes; and

the occurrence of alellopathic effects

that suppress weed growth.

Such functions similarly may be

accomplished by techniques other than

crop rotation. Additionally, crop

rotation practiced in the production of

annual crops, such as corn or soybeans,

may not be feasible in the production of

perennial crops, such as tree fruits or

hay. Therefore, we are providing for

alternative practices to crop rotations

that also serve the purposes of ensuring

soil fertility and effective pest

management.

Examples of alternative practices

which a producer might use include the

following: one method would be to

establish or preserve non-agricultural

areas such as hedgerows, wetlands,

native prairies and woodland, adjacent

to or adjoining a farm or field, to serve,

for example, as habitat for beneficial

organisms. A second related method

would be to plant species that serve this

same function adjacent to or between

rows of crops. A third related method

would be the use on pasture areas of

rotational or intensive grazing methods

in which animals are moved frequently

to fresh pasture in order to optimize

nutritional content of the forage and

extend the pasture season. Other

methods commonly used in managing

perennial plantings, which cannot be

rotated from field to field, include

interplanting, alley cropping, strip

cropping and introduction of livestock

into perennial systems.

As proposed in section 205.2, a crop

rotation is defined as the practice of

alternating the annual crops grown on a

specific field in a planned pattern or

sequence in successive crop years, so

that crops of the same species or family

are not grown repeatedly without

interruption on the same field during

two or more crop years. This rotation

might include the use of sod, legumes

or other nitrogen-fixing plants, or green

manures in alternation with cultivated

crops. These crops are universally

recognized in the applicable literature

as highly desirable methods of

improving soil organic matter content

and long-term fertility, as well as

conferring other benefits associated with

crop rotation.

However, a producer could repeatedly

plant the same species or family in a

given field over more than two crop

years, provided that practices which

ensure soil fertility and effective pest

management, and which do not result in

measurable degradation of soil or water

quality, as proposed in section

205.3(b)(1), are used. For example, use

of living mulches, such as clover

interplanted between rows of carrots,

could accomplish the same result as a

more frequent rotation of carrots with

other crops. Other examples of practices

that might be used in place of the

rotation of annual crops are the

application of large amounts of leaf

mulch or compost to beds in which the

same crop family is grown several

seasons in succession by a small-scale

vegetable producer, and a grain

operation in which early annual weeds

may serve as a green manure crop that

replenishes soil fertility and provides

the other beneficial effects of crop

rotations despite the continual

commercial production of a single

species in a field.

Soil Fertility and Crop Nutrient

Management—Section 205.7

Section 2114(b) of the OFPA (7 U.S.C.

6513(b)) requires that an organic plan

provide for the management of soil

organic content through proper tillage,

crop rotation and manuring, thereby

acknowledging the importance of soil

fertility for organic crop production. A

fundamental tenet of organic

management systems is that the primary

objective of soil management is to

nourish soil organisms which will in

turn ensure soil fertility and properly

balanced crop nutrition. We have

incorporated this concept in drafting

this proposal.

We consider the term proper

manuring as used in section 2114(b) of

the OFPA (7 U.S.C. 6513(b)) to mean

any use or application of plant or

animal materials, including green

manure crops, to improve soil fertility,

especially its organic content. The use

of compost and other recycled organic

wastes, whether or not they contain
65872 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

livestock manure, are therefore

considered to be part of proper

manuring. Any practice, however, that

could contribute significantly to water

contamination by nitrates and bacteria,

including human pathogens, or

otherwise result in measurable

degradation of soil or water quality,

would accordingly not be considered

proper manuring.

Section 2109(b) of the OFPA (7 U.S.C.

6508(b)) specifically addresses

prohibitions on the use of certain

materials as fertilizers and soil

amendments; these provisions also are

addressed in this section of the

proposal. The practices we propose for

fertility and nutrient management are

also relevant to and essential for the

prevention of pest, weed and disease

problems that might otherwise have to

be controlled through the use of

synthetic substances.

Section 205.7(a) would require that

any tillage or cultivation implements

and practices be selected and used by an

organic producer in a manner that does

not result in measurable degradation of

soil quality. Soil physical qualities

include soil structure, aggregation,

aeration, drainage and erodibility, all of

which are indicators of soil fertility.

While we have not proposed to prohibit

any specific tillage or cultivation

implement or practice, our proposal

would require producers to select tools

and practices that do not harm soil

quality. For example, excessive use of

rototillers has been shown to damage

soil structure and lead to accelerated

loss of organic content, while improper

moldboard plowing may induce soil

compaction. We would expect an

organic producer to manage such tools

or practices so that no measurable

degradation of soil quality resulted.

Proper Manuring—Section 205.7(b)

In section 205.7(b) we propose the

types of plant and animal wastes that

may be used in an organic system.

These materials would represent the

methods, in conjunction with crop

rotations and green manure crops, that

can be used to build soil organic matter

and provide essential crop nutrients in

accordance with section 2114(b) of the

OFPA (7 U.S.C. 6513(b)). The practices

proposed are stated in an order of

preference for choosing among available

alternatives because we believe that

these preferences most accurately reflect

the concept of proper manuring. As

proposed here, the preferred choices in

this order of preference are for the

practices that are least likely to result in

measurable degradation of soil or water

quality. For example, the application of

compost, as provided in paragraph (b)(1)

of this section, is least likely to

contribute to contamination of water by

nitrates and bacteria, including human

pathogens, whereas uncomposted

materials having a high soluble nutrient

content, as provided in paragraph (b)(3)

of this section, are more likely to

adversely affect water quality. Because

section 2114(b)(2)(C) of the OFPA (7

U.S.C. 6513(b)(2)(C)) requires manuring

practices to not significantly contribute

to water contamination by nitrates or

bacteria, this section also would require

that any application of plant or animal

waste materials does not do so.

The first choice of materials, as stated

in paragraph (b)(1) of this section,

would be certain composted materials;

these include materials such as

livestock manure, food processing

wastes, crop residues, spoiled hay and

similar materials. The use of composted

plant and animal matter recycles

nutrients and builds soil organic content

with minimal concern for measurable

degradation of soil or water quality, and

is fully compatible with our proposed

definition of a system of organic farming

and handling. This practice does not

include composts made with certain

materials that may pose greater concerns

for soil or water quality, which are

addressed in paragraphs (b)(4) and (b)(5)

of this section.

Paragraph (b)(2) of this section

includes plant or animal materials that

are neither susceptible to anaerobic

decomposition (which presents

potential odor and pathogen problems)

nor high in soluble nutrients (that may

pollute water) and which therefore are

suitable for application to soil without

first being composted. These materials

are the second best choice because

applying them directly to soil permits

them to decompose and contribute to

soil organic content and fertility,

thereby functioning in a manner similar

to composted materials. This choice also

is consistent with the proposed

definition of a system of organic farming

and handling because it furthers the use

of methods in preference to substances.

Paragraph (b)(2) of this section would

cover materials such as seaweed,

sawdust, peat, earthworm castings,

leaves, rice hulls and similar dry, stable

substances. Well-aged and fully

decomposed animal manure that has not

been subjected to a composting process

might also be used under proposed

paragraph (b)(2) of this section.

We propose in section 205.7(b)(3) to

allow the use of agricultural waste

materials that are known to be

susceptible to anaerobic decomposition

or that are high in soluble nutrients.

These materials are the third choice

because they require care in use and

application in order to avoid causing

measurable degradation of soil or water

quality. However, we believe that their

use should still be permitted because

they are a potentially valuable source of

soil organic content and crop nutrients.

Examples of such materials include food

processing wastes, such as fruit peelings

or culls, slaughterhouse by-products,

fish wastes, whey, and highly

nitrogenous plant concentrates like

alfalfa or soybean meal. This category

also would include the use of raw

animal manure.

Section 2114(b) of the OFPA (7 U.S.C.

6513(b)) permits the application of raw

manure to any green manure crop, any

perennial crop, and any crop not for

human consumption. This section of the

OFPA also restricts the use of raw

manure, in that raw manure may only

be applied to a crop intended for human

consumption if the crop is harvested

after a reasonable period of time

determined by the certifying agent to

ensure the safety of the crop, but in no

event may the period be less than 60

days after the application of raw

manure. Furthermore, section 2114

(b)(2)(C) of the OFPA (7 U.S.C. 6513

(b)(2)(C)) prohibits raw manure from

being applied to any crop in a way that

significantly contributes to water

contamination by nitrates or bacteria.

Over recent months and years, there

has been an increase in the incidence of

food borne illness caused by certain

human pathogens found in animal

manure. In consideration of this

increased incidence of illness, this

proposed regulation does not address in

detail the use of raw animal manure in

crops intended for human consumption

because of the need to develop more

and better scientific data regarding the

safety of the crop after application of

raw manure. Although we acknowledge

that the use of animal manure, whether

applied directly to the field or

composted, is common in organic

agriculture, there is inadequate data to

make the determinations necessary

regarding the safety of the crop after

application of raw manure. Similarly,

data are needed to make the

determinations necessary to ensure that

livestock exposure to pathogens does

not occur in cases where raw manure is

used.

We are soliciting public comment and

scientific and technical data in regard to

the minimum time which must pass

before a crop raised for human

consumption on land to which raw

manure has been applied may be

harvested. Such technical information

might include differentiating the type of

crops to which differently treated

manure can be applied with safety and,
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65873

in addition, suitable time and

temperature standards for composting

animal manures. The Act specifies that

when raw manure has been applied to

land used to raise a crop intended for

human consumption, at least 60 days

must pass between application and

harvesting to ensure the safety of the

crop. If and when regulations regarding

the safety of any food grown on land to

which raw manure has been applied are

promulgated by FDA, EPA and/or

USDA, these regulations would be

applicable to the use of raw manure in

organic agriculture.

We also would like to obtain public

comment and scientific and technical

data as to whether there are any

situations where composted manure

would have essentially the same

characteristics as raw manure, thus

necessitating special measures to ensure

the safety of the food. We would like to

receive data as to whether under any

circumstances, and if so which

circumstances, the application of

composted material to crops, or the

method of preparation of composted

material which is intended to be applied

to crops, would create any human

health or food safety concerns.

On October 2, 1997, President Clinton

announced a plan to further ensure the

safety of the nation’s food supply. The

plan, entitled ‘‘Initiative to Ensure the

Safety of Imported and Domestic Fruits

and Vegetables,’’ is geared towards

increasing assurances that fruits and

vegetables, whether produced

domestically or imported, are safe. As

part of this initiative, the President

directed the Secretary of Health and

Human Services, in partnership with

the Secretary of Agriculture, and in

close cooperation with the agricultural

community, to issue guidance on good

agricultural practices (GAP’s) and good

manufacturing practices (GMP’s) for

fruits and vegetables.

In response to this directive, FDA and

USDA are developing guidance to

minimize microbial food safety hazards

for fresh fruits and vegetables. The

guidance is intended to assist growers

and handlers in continuing to improve

the safety of domestic and imported

produce. The agencies have identified

several potential vehicles or

mechanisms for pathogenic

contamination of fruits and vegetables,

including but not limited to: (1) Water;

(2) the application of manure and

municipal wastewater; (3) worker and

field sanitation and hygiene; and (4)

transportation and handling. The

agencies will be publishing draft general

guidance for public comment shortly.

Proposed paragraph (b)(4) of this

section addresses the use of plant and

animal waste materials containing a

non-active residue of a substance. We

define a non-active residue in section

205.2 as: any synthetic substance that

does not appear on the National List of

synthetic substances allowed for use,

any non-synthetic substance that does

appear on the National List of nonsynthetic substances prohibited for use,

or any non-synthetic (natural) poison

(such as arsenic or lead salts) that has

long-term effects and persists in the

environment, and which occurs in a

very small quantity as a non-active

substance in a production input or

water. This provision would apply to

plant or animal waste materials

resulting from industrial food or fiber

processing, municipal solid waste

streams, and similar sources in which

the materials have been treated or mixed

with other substances. These kinds of

materials include non-organically

produced cotton gin trash, cocoa hulls,

and confinement livestock manure from

animals that are known to have been

treated with synthetic substances.

Municipal yard wastes, including

leaves, grass trimmings and prunings,

also might fall into this category.

As discussed in the supplementary

information to the National List, plant

or animal materials that only have been

treated or mixed with synthetic

substances, but not chemically altered

by such treatment, are not considered

synthetic under the definition provided

by section 2103(21) of the OFPA (7

U.S.C. 6502(21)), and are therefore not

prohibited under the Act. Additionally,

any non-active residues of substances

found on such materials would have

minimal or no impact on the organic

agroecosystem and therefore the

residues are not consistent with the

definition of an active substance or

ingredient when found in a compost

feedstock. Furthermore, the residues

themselves are not used to produce an

organic crop since they occur as

unintended additives that are not

intentionally applied and do not

perform nor interfere with any function

in the agroecosystem.

Such materials would therefore be

permitted for use as compost feedstock

in organic crop production, but we are

proposing that their use be restricted by

the requirements that they be

composted prior to application to soil,

and that levels of any non-active

residues detected in the raw plant or

animal waste materials not increase in

soil. Although certain synthetic

substances resist decomposition or may

persist if composting is incomplete,

most residues present in these materials

will decompose sufficiently when

subjected to proper composting

processes so as to be of negligible

concern. A producer using these

composted waste materials would be

expected to use them in such a way that

any persistent residues did not increase

in the soil or accumulate to a level that

caused measurable degradation to soil

or water quality.

In paragraph (b)(5) of this section, we

propose to permit the use of plant and

animal waste materials that have been

chemically altered (by the industrial

process), and which are therefore

considered active synthetic substances

under section 2103(21) of the OFPA (7

U.S.C. 6502(21)), and can only be used

if they appear on the National List of

active synthetic substances allowed for

use in organic farming. Unlike nonsynthetic materials that may contain

synthetic substances as non-active

residues as permitted under paragraph

(b)(4) of this section, this provision

refers to materials derived from a

process that chemically changes the

material. Such materials might include

leather meal, newspaper and kiln dust.

Although this type of material would

not have to be composted prior to

application, a farmer using such

substances in a system of organic

farming would be expected to use them

in such a way so that measurable

degradation of soil or water quality did

not occur.

Providing Mineral Nutrients—Section

205.7(c)

In section 205.7(c), we propose that

certain mineral substances could be

used as a means of fostering soil fertility

by providing major nutrients or

micronutrients. While use of proper

rotations and recycled plant and animal

wastes can often provide all the mineral

nutrients required by crops,

supplemental sources of these nutrients

sometimes are needed. We have divided

paragraph (c) into two subsections,

which represent two broad types of

mineral substances that may be used.

The first two types consist of nonsynthetic substances of low solubility

and salinity, including mined

substances such as lime, greensand and

rock phosphate, and substances

extracted from a plant or animal

substance, such as liquid seaweed

extracts, or from a mined mineral. Such

substances historically have been

accepted in organic production, and

because they are not synthetic

chemicals their use is consistent with

the Act and with a system of organic

farming and handling. It should be

noted that, as we discuss in the

supplemental information to the

National List, we do not consider the

extraction method to be consequential
65874 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

when used to obtain substances from

non-synthetic sources that are used in

crop production. The extraction method

alone would not cause the substance to

be considered synthetic nor would we

expect the resultant substances to have

detrimental effects on biological and

chemical interactions in the

agroecosystem or cause any measurable

degradation of soil or water quality. Fish

emulsion products which contain

synthetic stabilizers also would not be

considered to be synthetic under this

proposal because the stabilizers are not

active synthetic ingredients, as

discussed in the supplementary

information to the National List.

The use of ash derived from the

burning of a plant or animal material,

such as wood or sunflower hulls, is also

included in this category of nonsynthetic mineral nutrient sources,

except for certain instances. The use of

ash would be prohibited if the ash is

obtained from a practice prohibited

under paragraphs (d)(2) or (3) of this

section or if the ash appears on the

National List of prohibited nonsynthetic substances or if the material

burned to create the ash had been

treated or combined with a prohibited

substance. It should be noted that a

product of the combustion of an

inorganic or mineral substance, such as

sulfur or calcium carbonate, would be

considered a synthetic substance under

this proposal.

The second category of substances

that could be used as sources of crop

nutrients comprises any highly soluble

or synthetic substance, which we

propose may be added to soil to correct

a known nutrient deficiency provided

that its use does not result in

measurable degradation of soil or water

quality. These substances have

historically been permitted by most

organic certification programs we have

reviewed, but with restrictions placed

on their use. We would like to receive

comment as to whether or not further

restrictions on the use of any of these

substances would be appropriate. Such

restrictions might, for example, include

designating this type of substance as

representing a lower order of preference

than substances included in paragraph

(c)(1) of this section, or might include

permitting their use only if necessary.

The three types of substances that

would be covered by this second

category include synthetic

micronutrient substances, non-synthetic

minerals that are highly soluble and

have a high salt index, and cation

balancing agents. Synthetic

micronutrient minerals, such as soluble

boron and chelated trace minerals (e.g.

zinc, manganese, iron, and copper), may

often be the most effective and practical

choice for correcting soil deficiencies of

these essential nutrients, and when

properly used can be considered a

beneficial practice in an organic soil

management system. Their proposed

use is restricted because, in addition to

being synthetic substances, misuse or

overuse of these substances can cause

measurable degradation of soil or water

quality. Synthetic micronutrients,

which are minerals that we propose to

consider as active ingredients in an

organic system, are proposed in section

205.22(f) for inclusion on the National

List as allowed synthetic crop

production substances. However, the

NOSB has recommended, and we agree,

that it is not acceptable to use any of

these substances in a way that takes

advantage of their herbicidal nature

which could result in measurable

degradation of soil quality.

Other substances in this category

include highly soluble and saline nonsynthetic mined minerals, such as

sodium (Chilean) nitrate or potassium

nitrate (niter), which may be applied as

a source of nitrogen, as well as

potassium chloride (muriate of potash),

langbeinite (sulfate of potash magnesia),

and potassium sulfate, which are

sometimes used to balance the soil

cation nutrient content. Such substances

are usually available as non-synthetic

mined minerals, but are proposed to be

restricted to cases of known nutrient

deficiency because of their potential to

degrade soil quality by contributing to

soil salinization when excessively

applied. While the Act makes no

mention of these specific materials,

section 2109(b)(2) of the OFPA (7 U.S.C.

6508(b)(2)) indicates that certain

mineral nutrients and nitrogen should

not be permitted if they are inconsistent

with the applicable organic certification

program. Soil amendment substances,

such as langbeinite and potassium

sulfate, used to balance cation nutrients

are more widely considered to be

acceptable adjuncts to an organic

fertility management system, but are

included in this category due to their

high solubility and salinity, which

could cause measurable degradation of

soil quality if overused. As previously

stated, a producer could use these

substances only to correct a known

nutrient deficiency.

As proposed and discussed in section

205.22(c) for allowed synthetic crop

substances, certain cation balancing

agents, such as potassium sulfate, may

be available on the market either as nonsynthetic mined minerals or as synthetic

by-products of an industrial process. In

cases where the origin of such a

substance cannot be determined from

readily available information, such as a

label or labeling accompanying the

product, the mineral is presumed to be

synthetic and must appear on the

National List as an allowed synthetic

crop production substance before it may

be used. This presumption would

prevent the inadvertent application of a

prohibited substance when the producer

cannot readily determine the origin of a

cation balancing agent.

Finally, we propose in paragraph (d)

of this section to prohibit: the use of any

fertilizers or commercially blended

fertilizers that contain an active

synthetic ingredient not allowed for use

in crop production as provided for in

section 205.22, or that contains an

active prohibited substance; the use of

ash obtained from the disposal of

manure by burning; and burning as a

means of disposal of manure or of crop

residues produced on the farm. The first

prohibition is proposed in accordance

with section 2109(b)(1) of the OFPA (7

U.S.C. 6508(b)(1)) which requires that

such a prohibition be established. The

second and third prohibitions are

proposed in agreement with the

recommendations received from the

NOSB. Burning these materials is not an

appropriate method to use to recycle

organic wastes and would not be

considered as a proper method in a

manuring program because burning

removes the carbon from these wastes

and thereby destroys the value of the

materials for restoring soil organic

content. Burning as a disposal method

of these materials would therefore not

be consistent with section 2114(b)(1) of

the OFPA (7 U.S.C. 6513(b)(1)).

Selection and Use of Seeds, Seedlings

and Planting Stock—Section 205.8

Section 2109(a) of the OFPA (7 U.S.C.

6508(a)) prohibits an organic producer

from applying materials to or engaging

in practices on seeds or seedlings that

are inconsistent with the program

established under the Act. Therefore, we

are proposing that all seeds and planting

stock, including annual seedlings and

transplants, be organically produced.

However, we recognize that at the

present time this is impractical for many

farms because organically produced

seeds and planting stock are not widely

commercially available; thus, we are

proposing to permit exceptions to this

requirement. It is our expectation that

our requiring organic producers to use

organic seed and planting stock except

in limited circumstances will stimulate

increased organic production of these

essential farm inputs.

This proposal would permit the use of

non-organically produced seeds and

planting stock in producing an organic
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65875

crop only when an equivalent

organically produced variety is not

commercially available. Planting stock

includes, as we define it, any plant

material used for plant reproduction,

except seeds, and includes such

materials as seedlings, cuttings, tubers,

roots, slips, rhizomes, crowns, and

plantlets derived through tissue culture

techniques. Our proposal also would

require that untreated planting stock be

selected in preference to treated

planting stock whenever there is a

choice. With the exception of annual

seedlings, most organic farm operations

are not equipped to produce planting

stock on the farm. In addition, certain

planting stock, such as berry plants and

tubers, are required by some State

regulations to be treated with pesticides

to prevent the introduction of plant

diseases and other pests.

Although we have received some

input in favor of prohibiting all uses of

non-organically produced annual

seedlings, we believe that the inclusion

of such annual seedlings under this

proposed rule is justified. The flexibility

of allowing the use of non-organically

produced annual seedlings would

permit a farmer who lost a crop due to

unanticipated or emergency

circumstances shortly after

transplanting to replant with a similar

non-organically produced variety that

was either treated or untreated. It

should be noted that any annual

seedlings that are produced and

replanted on the same certified organic

farm are considered transplants and

could not be treated with prohibited

substances, as proposed in section

205.8(c).

We are proposing that treated seeds

could only be used if untreated seeds of

the same variety are commercially

unavailable or it is infeasible to obtain

untreated seeds due to unanticipated or

emergency circumstances. As discussed

in the supplementary information for

the National List, we are not proposing

any seed treatment substance to be

included on the National List because

we are not proposing to allow a

producer to use any seed treatment on

a certified organic farm. Treated seeds

under our proposal are not an active

synthetic ingredient in the organic

farming system and therefore are not

required to appear on the National List.

A producer could not use the treated

seed in order to take advantage of the

functional application of the seed

treatment (this would be using the seed

treatment as an active ingredient) or to

use up treated seed remaining from the

previous year if the appropriate

untreated seed had since become

available.

Because a full range of untreated nonorganically produced crop seeds is

widely available, the circumstances

under which this exception would be

justified are limited. These

circumstances might include situations

in which untreated seeds are not

obtainable due, for example, to the fact

that untreated seeds must sometimes be

ordered well in advance of expected

delivery or the fact that it may not be

possible to order very small amounts of

untreated seed of a new seed variety

that a producer wishes to use on a trial

basis. Emergency or unanticipated

circumstances would include loss of a

crop to flood or frost and untreated

seeds were no longer available for

replanting.

In section 205.8(b) we propose the

requirements for how non-organically

produced planting stock used as

planting stock to produce a perennial

crop could be sold, labeled or

represented as organic. We propose this

provision, as authorized by section

2107(a)(11) of the OFPA (7 U.S.C.

6506(a)(11)), in order to provide the

means by which a nursery operation

that operates in accordance with the Act

and our proposed regulations in part

205 could purchase planting stock from

a non-organic operation and later resell

this stock as organically produced. This

proposal would permit perennial

planting stock to be represented as

organic after it had been maintained

under organic management on a

certified organic farm for a period of at

least one crop year. For example, a

certified organic nursery operation

could purchase non-organic dwarf apple

rootstock and graft it with locally

adapted varieties, then sell the resultant

planting stock as organically produced

after raising it organically for at least

one year. We have proposed the one

year period because we do not consider

nursery stock that is held on a certified

operation for less than a year before it

is resold to have been organically

produced. This provision is intended to

stimulate a wider availability of key

organic production inputs and thus

make the ability to comply with the

requirement that organic sources of

planting stock be used, as set forth in

proposed section 205.8(a), more feasible

for organic producers.

In section 205.8(c), we propose to

prohibit the use of transplants treated

with a prohibited substance, as

provided for in section 2109(c)(3) of the

OFPA (7 U.S.C. 6508(c)(3)). It should be

noted that we have defined a transplant

as an annual seedling produced on an

organic farm and transplanted to a field

on the same farm operation to raise an

organically produced crop. This

definition also is consistent with section

2109(a) of the OFPA (7 U.S.C. 6508(a))

which prohibits farm producers from

applying substances to seeds or

seedlings that are contrary to or

inconsistent with the proposed program.

We do not propose to prohibit the use

of seedlings or other planting stock that

may have been treated with synthetic

substances before reaching the organic

farm since the treatment itself is not

applied on, or intended to be used on,

the organic farm.

While the OFPA mandates that the

Secretary develop organic standards, it

is silent on the issue of genetically

engineered organisms (GEOs) and their

products. However, the accompanying

Senate report language states that

‘‘* * * as time goes on, various

scientific breakthroughs, including

biotechnology techniques, will require

scrutiny for their application to organic

production. The committee is concerned

that production materials keep pace

with our evolving knowledge of

production systems.’’

In the time since the OFPA was

passed, GEOs and their products have

assumed a more significant role in

agricultural production. The policy of

the United States Government is that

GEOs and their products should be

regulated based on risk, not on how they

are produced. The NOSB has

recommended to the Secretary as a

policy matter that GEOs should not be

allowed in organic farming and

handling.

Public comment is invited with

respect to the use of GEOs or their

products in a system of organic farming

and handling. The USDA specifically

invites comments on whether the use of

GEOs or their products in organic

farming and handling should be

permitted, prohibited, or allowed on a

case-by-case basis. Comments should

detail the basis for the commenter’s

recommendations, including the

agricultural, technical, or scientific

factors involved. Comments should also

identify the criteria that should be

applied to case-by-case determinations.

Prevention and Control of Crop Pests,

Weeds, and Diseases—Section 205.9

Section 2109(c) of the OFPA (7 U.S.C.

6508(c)) sets forth practices, such as the

use of natural poisons that persist in the

environment, or plastic mulches, that

are prohibited or restricted in the

control of pests, weeds and diseases in

organic crops. Section 2118(c)(1)(B)(i) of

the OFPA (7 U.S.C. 6517(c)(1)(B)(i)) lists

the following categories of active

synthetic substances (used for pest,

weed, and disease control) that may be

considered for exemption if they are
65876 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

included on the National List: copper

and sulfur compounds; toxins derived

from bacteria; pheromones, soaps,

horticultural oils, vitamins and

minerals, and production aids including

netting, tree wraps and seals, insect

traps, and sticky barriers.

This section is designed to implement

these two provisions of the Act and is

consistent with the NOSB

recommendations and public comments

received by the NOSB, as well as being

consistent with the proposed definition

of a system of organic farming and

handling. The structure of this section

reflects an order of preference, in which

the first choice is the use of

management methods to prevent the

occurrence of weeds, pests, and

diseases, and the second choice is the

use of methods and certain substances

to control occurrences that may

develop. This section is consistent with

the definition of a system of organic

farming and handling and with the

NOSB recommendations because it

requires that methods be chosen in

preference to substances and that toxic

substances, whether allowed synthetic

substances or non-synthetic substances,

be permitted only as a last resort.

In section 205.9(a), we propose to

require that preventive measures be

used by an organic producer for the

prevention of pest, weed and disease

problems in crops, including, but not

limited to: crop rotations or other

practices provided for by section 205.6;

replenishment and maintenance of soil

fertility, as proposed in section 205.7;

appropriate sanitation measures, such as

composting plant debris to remove

disease vectors, weed seeds and pest

habitat; cultural practices such as

irrigation or timing of plantings to

enhance crop health and avoid peak

pest hatchings; and selection of species

and varieties for traits such as disease

resistance and suitability to local

climate conditions.

When prevention is inadequate,

sections 205.9(b) through (d) of our

proposal would provide for a range of

practices that could be used to control

pest, weed, and disease problems. These

methods are consistent with the section

2105(1) of the OFPA (7 U.S.C. 6504(1))

requirement that organic production not

include the use of synthetic chemicals

unless otherwise provided for in the

Act. Although a preventive management

approach, as exemplified in proposed

section 205.9(a), would be preferable,

we recognize that once pests or weeds

are present they must be controlled in

order to avoid economic or otherwise

significant damage to crops. Pest control

practices, as proposed in section

205.9(b), are: augmentation or

introduction of predators or parasites,

such as trichogramma wasps and

ladybugs; mechanical or physical

controls, such as pest barriers or traps;

and use of non-synthetic and non-toxic

controls, such as repellants or lures. All

of these methods are fully consistent

with a system of organic farming, as

defined in section 205.2, and do not

entail the use of any active synthetic

substance.

Practices proposed in section 205.9(c)

that could be used for weed control

when preventive measures are not

effective are: mulching with fully

biodegradable materials, which include

plant-derived matter such as straw,

bark, leaves and paper, but do not

include plastics that disintegrate but do

not biodegrade; livestock grazing to

reduce weed competition; any

mechanical or physical controls, such as

weeding and cultivation techniques;

and, in accordance with section

2109(c)(2) of the OFPA (7 U.S.C.

6508(c)(2)), plastic or other synthetic

mulches provided that they are removed

from the field at the end of the growing

or harvest season. It should be noted

that the use of cultivation to control

weeds under this proposal also would

have to be consistent with the

provisions proposed in section 205.7(a)

for protecting soil quality.

In paragraph (d) of this section, we

propose that practices that are intended

to prevent the spread of diseases, such

as steam sterilization to eliminate

disease organisms from greenhouse

growing media, could be used if disease

preventive measures are not effective.

Plant diseases, once they occur, are

difficult to control with existing organic

technologies, although some success has

been demonstrated with the use of

compost preparations that actively

suppress plant pathogens, a practice

that would be included in this

provision.

In paragraph (e) of this section, we are

proposing to permit the use of certain

methods and substances to control

pests, weeds, and diseases in an organic

farming system if the practices proposed

in paragraphs (a) through (d) are not

effective, provided that their use does

not result in measurable degradation of

soil or water quality. Although the use

of the proposed substances is often

necessary, the use of these substances

may pose concerns for soil or water

quality when overused. Therefore, a

producer who used any substance

proposed for use in paragraph (e) of this

section would have to describe in the

organic plan how use of the substance

was not resulting in measurable

degradation of soil or water quality.

Botanical pesticides are specifically

addressed in section 2119(k)(4) of the

OFPA (7 U.S.C. 6518(k)(4)) as requiring

a special review to determine whether

any of them should be placed on the

National List of prohibited natural

substances. This review was undertaken

by the NOSB at its meeting in Rohnert

Park, California, in October, 1994.

Considerable public input also has been

received concerning the use of botanical

pesticides in organic production. Some

public input expressed concern as to

whether organic farmers should be

permitted to use any pesticide sprays,

even if they are non-synthetic. Many

organic practitioners who acknowledged

the need to use botanical pesticides

stated that they used them only after

more ecologically compatible

alternatives proved to be unsuccessful.

Our review of existing organic programs

and public input also indicated that

non-synthetic substances used as

biological controls may pose concerns

for soil and water quality if used

indiscriminately. Concerns also have

been expressed that the use of these

substances may impact biological and

chemical interactions in the

agroecosystem, including the possibility

of inducing accelerated resistance in

pest populations.

While many producers may not need

to use botanical pesticides, prohibiting

these materials entirely would severely

restrict the availability of a wide range

of organically produced crops. After

concluding its technical review process,

the NOSB recommended that neem,

pyrethrums, rotenone, ryania, and

sabadilla be allowed for use in organic

agriculture. We agree with the NOSB

recommendations on the basis of the

aforementioned public input, and

therefore provide in section 205.9(e) for

the use of botanical pesticides under

certain circumstances, provided that the

botanical substance is not included as a

prohibited non-synthetic (natural)

substance on the National List.

Our proposal also would allow the

use of any synthetic weed, pest, or

disease control substance that is

included on the National List as a crop

production substance, such as dormant

oils, vitamin-D based rodenticides,

pheromones, and copper or sulfur

fungicides. In addition, non-synthetic,

biologically based materials, such as

bacterial toxins, that are used to kill

pests, weeds or plant diseases also

would be included under this paragraph

of our proposal.

This paragraph of section 205.9 also

would permit the use of allowed

synthetic substances for the purpose of

cotton defoliation. We have determined

that this provision should be proposed
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after reviewing testimony from organic

cotton producers and scientific evidence

that the substances in question, which

are mineral compounds having a high

salt index and solubility (and usually

synthetically derived) are ordinarily not

used in amounts that could cause

concern for adverse impacts on soil

fertility.

Prohibited Pest, Weed and Disease

Control Practices—Section 205.9(f)

In section 205.9(f), we propose to

prohibit the use of a synthetic carbonbased compound that kills insects,

weeds, diseases or other pests through

a cytotoxic mode of action. We have

defined the phrase cytotoxic mode of

action to mean having a toxic effect by

means of interference with normal cell

functions. We believe this proposal is

appropriate because section 2118

(c)(1)(B)(i) of the OFPA (7 U.S.C.

6517(c)(1)(B)(i)) does not delineate this

category of substances as a category of

active synthetic substances that could

be considered for inclusion on the

National List of permitted synthetic

substances. In addition, these

substances are prohibited under all

existing State, private and international

organic programs that we reviewed, and

public input received from organic

producers and other members of the

public has raised frequent concerns that

such substances potentially might be

allowed for use in organic production.

We therefore have determined that the

use of any substance in this category

would be inconsistent with a system of

organic farming, as defined under

proposed section 205.2, and with the

organic certification program

established under the Act.

Wild Crop Harvesting—Section 205.11

Wild crops are generally not produced

and managed on a farming operation,

but rather are harvested from public or

private lands; therefore, most of the

farming and management practices and

materials described in this proposal,

such as soil management practices or

weed, pest and disease control, would

not be applicable. However, because

wild crops are addressed in section

2114(f) of the OFPA (7 U.S.C. 6513(f))

and because they are used extensively

as ingredients in many organic

products, we are proposing in this

section provisions for the harvesting of

organic wild crops. We note here that if

management practices such as

cultivation or fertilization are

undertaken prior to the harvest of a wild

crop, the wild crop would be considered

as a managed agricultural product and

would be subject instead to the relevant

requirements proposed for organic crop

production. This idea is reflected in our

proposed definition of a wild crop as

being harvested from an area of land

that is not maintained under cultivation

or other agricultural management. It

should be noted that this section would

apply only to crops harvested from the

wild, and that game animals harvested

from the wild are not addressed in this

proposal.

As required under section 2105(2) of

the OFPA (7 U.S.C. 6504(2)) and section

2114(f)(2) of the OFPA (7 U.S.C.

6513(f)(2)), we propose in section

205.11(a) that the land from which wild

crops are harvested for sale as organic

must have had no prohibited substances

applied to it for the three years

immediately preceding the harvest of

the wild crop and any time thereafter.

Our proposal requires that wild crop

harvesting be done in a manner that

would not be destructive to the

environment and which would sustain

the growth and production of the wild

crop, as required under section

2114(f)(3) of the OFPA (7 U.S.C.

6513(f)(3)).

Organic Livestock Production

Requirements

Section 2110 of the OFPA (7 U.S.C.

6509) sets forth certain requirements

and prohibitions for organic animal

production. It requires the Secretary to

hold public hearings to guide the

implementation of standards for

livestock products. It also states that the

NOSB shall recommend additional

standards for livestock health care to

ensure that such livestock is organically

produced. Accordingly, the Secretary

held public hearings in Washington, DC,

on January 27–28, 1994; Rosemont, IL,

on February 10, 1994; Denver, CO, on

February 24, 1994; and Sacramento, CA,

on March 22, 1994 on this matter.

Additionally, the NOSB provided

recommendations to the Secretary on

August 1, 1994 and subsequently, as

required in the Act. We have developed

the provisions proposed in sections

205.12 through 205.15 in accordance

with section 2110 of the OFPA (7 U.S.C.

6509), the input received at the public

hearings, and the NOSB

recommendations.

Origin of Livestock—Section 205.12

Livestock as defined in section

2103(11) of the OFPA (7 U.S.C.

6502(11)) are cattle, sheep, goats, swine,

poultry, equine animals used for food or

in the production of food, fish used for

food, wild or domesticated game, or

other nonplant life. Organically raised

livestock should be the offspring of

organically raised parents and live

under organic management beginning

with their first day of life. We propose

in paragraph (a) of this section that

livestock raised on a certified organic

farm for the production of meat, milk,

eggs, or other products to be sold,

labeled, or represented as organically

produced be under organic management

from birth or hatching, or be the

offspring of parents that have been

under organic management, except in

certain cases. These exceptions are

based on the provisions of section 2110

of the OFPA (7 U.S.C. 6509) that

provides that breeder stock, poultry

from which meat or eggs are derived,

and dairy animals from which milk and

milk products are derived, can be

purchased from non-organic sources

and subsequently raised as organic

livestock.

Paragraphs (a)(1) through (3) of this

section are proposed in accordance with

section 2110 of the OFPA (7 U.S.C.

6509). Paragraph (a)(1) of this section

would permit the purchase of livestock

from any source for use as breeder stock

of organic livestock, except that a

gestating mammal would have to be

brought onto a certified facility prior to

the last third of pregnancy. Paragraph

(a)(2) of this section would permit dairy

animals from which milk or milk

products will be sold, represented, or

labeled as organically produced to be

brought onto a certified facility

beginning no later than 12-months prior

to the production of milk or milk

products that are to be sold,

represented, or labeled as organic.

Paragraph (a)(3) of this section would

permit the purchase of poultry from any

source for use as organic slaughter stock

(meat) or for organic egg production

provided that the poultry are brought

onto a certified facility no later than the

second day of life.

We have proposed other provisions

that cover what the practices are for

bringing other types of livestock, such

as bees, fish, and mammalian livestock

designated as organic slaughter stock,

into an organic operation to produce

such products as fiber, honey, meat and

caviar. These provisions are based on

public input received at the USDA

livestock hearings, NOSB meetings and

public response to NOSB draft

recommendations.

In section 205.12(a)(4) we propose

that livestock may be designated for the

production of non-edible organic

products, such as hides, feathers, fur

and fiber, if the animal is raised in

compliance with one of the other

provisions proposed in paragraph (a) of

this section, as appropriate to the

species. Additionally, we propose that

livestock not raised under organic

management from birth or hatching,
65878 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

such as male breeder stock purchased

from non-organic sources and

subsequently raised as organic livestock

for the production of certain non-edible

products, shall have been maintained

under organic management no less than

90 days prior to harvest of the organic

product. For example, wool from a buck

sheep designated as organic breeder

stock in accordance with paragraph

(a)(1) of this section could be sold or

represented as organically produced

only after the buck had been maintained

under organic management for at least

90 days prior to the time of shearing.

This time period is proposed in order to

ensure that non-edible products, such as

wool or hides, from breeder animals

brought under organic management

could not be represented as organically

produced until the producer had

included the livestock in the overall

farm management system.

In section 205.12(a)(5) we are

proposing how livestock types such as

fish, crustaceans, mammalian livestock

designated as organic slaughter stock,

and other species not addressed in the

previous four provisions, could be

introduced onto an organic operation for

the production of edible organic

products.

We specifically propose in paragraph

(a)(5)(i) that bees may be brought onto

a certified facility at any stage of life.

We propose this because we determined

that the production of honey depends

on the nature of the forage available to

the bees at the time of honey flow.

Additionally, because of the ephemeral

life cycle of individual bees, previous

locations of the hive would be

inconsequential to the honey harvested

at the certified organic facility.

We propose in paragraph (a)(5)(ii) of

this section that, if necessary,

mammalian livestock from any source

could be used as organic slaughter stock

for the production of meat if it is

brought onto a certified facility no later

than the 15th day of life. This proposed

provision would allow producers a

reasonable length of time to integrate

animals from non-organic sources into

their organic operation, while still

ensuring that the animal is brought onto

the certified facility early enough in life

to develop primarily and substantially

under organic care. Allowing a mammal

up to 15 days to be introduced onto the

certified facility would provide

adequate time for the young stock to

receive its mother’s first milk, gain

strength and be transported over any

distance to the organic farm.

As noted, a producer could use nonorganic sources of mammalian livestock

to be designated as organic slaughter

stock only if the use of non-organic

livestock is necessary. The

determination of necessity would be

based on site-specific conditions that

would be described by a producer in an

organic plan, or updates to an organic

plan, and reviewed by the certifying

agent. Examples of site specific

conditions that may serve as a basis for

supporting the determination to

purchase livestock from non-organic

sources are: commercial unavailability

of livestock from organic sources, and

unanticipated or emergency

circumstances that prevent the purchase

of commercially available organic

livestock.

We are requesting public comment as

to the conditions under which nonorganic mammalian livestock may be

used as organic slaughter stock. For

example, we would like public

comment as to whether specific

conditions, such as commercial

unavailability of organic livestock or an

emergency situation, should be a

prerequisite for allowing mammalian

livestock of non-organic origin to be

designated as organic slaughter stock

and, if so, what these conditions should

be. We also request comment as to

whether we should provide for the use

of mammalian livestock of non-organic

origin in the production of organic meat.

We propose in paragraph (a)(5)(iii)

that all livestock types other than those

described in paragraphs (a)(1) through

(5)(ii) may be brought onto a certified

facility no later than the earliest

commercially available stage of life.

Other livestock types represent a wide

range of life spans and levels of

commercial availability, and there is no

basis for proposing specific time limits

for their introduction into an organic

facility. Sufficient time is required to

raise the young of any such species from

its earliest commercially available stage

to reach marketable size; this time

period will ensure that the stock is

raised primarily under organic

management.

Prohibited Practices for Origin of

Livestock—Section 205.12(b)

In section 205.12(b)(1), we propose

that producers be prohibited from

moving animals in and out of organic

care for the purpose of circumventing

the proposed requirements. This

provision addresses our concerns that

the leeway provided by proposed

paragraph (a)(1) of this section for the

purchase of non-organic breeder stock

might be misused by a producer who

might, for example, repeatedly bring a

pregnant mammal onto a certified farm

just prior to the last third of pregnancy,

remove the mammal from organic care

after the offspring is born, and then

reintroduce her to organic management

again just before the last third of the

next pregnancy. Paragraph (b)(2) of this

section is consistent with section

2110(c)(3) of the OFPA (7 U.S.C. 6509

(c)(3)), which prohibits the use of

hormones to stimulate the growth or

production of organically produced

livestock. In paragraph (b)(2) of this

section we propose that the use of

hormones for any breeding purposes be

prohibited.

Livestock Feed—Section 205.13

Organically produced feed is one of

the foundations of organic livestock

management. Section 2110(c)(1) of the

OFPA (7 U.S.C. 6509(c)(1)) requires

producers of organic livestock to

provide organically produced feed that

meets the requirements of the Act to

their livestock. Therefore, we propose in

paragraph (a) of this section that the

total feed ration for organically raised

livestock be organically produced. This

requirement would include all pasture

or rangeland on which the livestock are

grazed. Forage from rangeland would be

considered a wild crop and, thus, would

be considered to be organically

produced if it complied with the

proposed wild crop harvesting

requirements proposed in section

205.11. Purchased feed supplements,

such as soybean protein concentrates,

would have to be produced in

compliance with the Act and the

regulations in subpart B to be

considered organically produced.

During the livestock hearings

conducted by USDA, producers

expressed concerns that unless an

allowance was provided for non-organic

animal feed, the organic status of

livestock could be jeopardized by

unavoidable circumstances that would

cause or prevent livestock from

consuming non-organic feed. Some of

the circumstances cited by the

producers were poor growing

conditions, severe weather, commercial

unavailability and fence jumping. We

believe that these concerns are valid

and, therefore, propose in paragraph

(a)(1)(i) through (iv) of this section to

permit, if necessary, that livestock

under organic management be allowed

to receive other than a total feed ration

that is organically produced. We believe

that our additional proposed provisions

are consistent with a system of organic

farming and handling and that they will

not result in a compromise of the

integrity of organic products.

We propose in paragraph (a)(1)(i) of

this section that an animal be allowed

to receive up to twenty percent nonorganic feed as part of its total feed

ration in a given year. Paragraph
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(a)(1)(ii) of this section proposes that in

emergency situations which affect the

commercial availability of organic feed,

such as weather related disasters, the

Administrator could authorize the use

of non-organic feed greater than the

twenty percent non-organic feed

allowed in paragraph (a)(1)(i) of this

section.

As noted, a producer could use nonorganic sources of feed if the use of nonorganic feed is necessary. As previously

described in regard to the use of nonorganic sources of mammalian livestock

to be designated as organic slaughter

stock, determination of necessity would

be based on site-specific conditions that

would be described by a producer in an

organic plan, or updates to an organic

plan, and reviewed by the certifying

agent.

We are requesting public comment as

to conditions under which non-organic

feed may be used. For example, we

would like public comment as to

whether specific conditions, such as

commercial unavailability of organic

feed, regional environmental factors, or

an unanticipated situation, should be a

prerequisite for allowing non-organic

feed and, if so, what these conditions

should be. We also request comment as

to whether we should provide for the

use of feed of non-organic origin in the

production of organic livestock on

certified organic farms.

In paragraph (a)(1)(iii) of this section,

we propose an exemption that would

allow an entire, distinct dairy herd, that

is converted to organic management for

the first time, to be fed non-organic feed

up to 90 days prior to the production of

milk or milk products labeled, sold, or

represented as organic. In testimony

received at the USDA public hearings,

milk producers expressed concern that

purchasing organic feed for twelve

months prior to selling the milk as

organic could hinder or prevent a

producer from deciding to make the

transition from non-organic to organic

production. They further explained that

the twelve-month period for feeding

organic feed grown on the farm could

not be initiated until after the farm was

certified as organic, which might be

three years after the producer first

decided to make the transition to

organic production so as to comply with

section 2105(2) of the OFPA (7 U.S.C.

6504(2)) regarding prohibited

substances applied to the land.

Our proposal would permit use of this

exception only one time for any given

discrete dairy herd. This exception

applies only to feed; producers still

would have to comply with all other

organic livestock management

requirements for the 12-month period

prior to selling the milk or milk

products from these animals as organic,

as required in section 2110(e)(2) of the

OFPA (7 U.S.C. 6509(e)(2)).

We propose in section 205.13(a)(1)(iv)

that bees from which organic honey and

other products are harvested be

provided with access to enough

organically managed forage to provide

them with a predominant portion of

their needs. The NOSB received many

comments about organic honey

production and considered several

suggestions without making a

recommendation to the Secretary. One

suggestion considered by the NOSB was

that the producers monitor their honey

bees to ensure that only organic forage

was accessed by the bees; honey

producers maintain that it is infeasible

to monitor and control all bee forage

areas. Another suggestion considered

was to require the hive to be surrounded

by organic forage areas for the total

radius of the distance for which bees are

known to fly. However, this radius may

vary and is impractical in most regions

because the estimated two mile radius

that bees are known to cover would

entail more than 12.5 square miles of

continuous organic forage area

surrounding each hive.

In creating the proposed provision for

bee forage areas, we considered the

applicability of the proposed provision

in paragraph (a)(1)(i) of this section for

twenty percent non-organic feed.

However, we decided that it would not

be possible for a producer or certifier to

ascertain the exact forage percentages

for bees. We expect that producers of

organic honey would meet our proposed

requirement that bee forage areas be

predominantly organic by actively

managing on-farm plantings, including

crops, buffer zones, biological islands,

roadsides or other available areas during

honey flows. A producer also could

satisfy this provision by moving hives to

other organically managed areas to take

advantage of organic off-farm acreage.

The NOSB received public comments

regarding the addition of vitamin and

mineral supplements to an organic feed

ration to prevent deficiency diseases. In

their deliberations, the NOSB

recognized that producers cannot easily

determine whether an animal’s

nutritional requirements are being

satisfied solely by the organically grown

feed provided to them, especially in the

case of grazing animals.

The NOSB subsequently

recommended that organic feed be

allowed to be supplemented with

vitamins and minerals, as needed, to

ensure an animal’s health. Deficiency

diseases, such as milk fever, may not be

recognized until an animal becomes

debilitated; moreover, allowing any

animal to become weakened because of

vitamin and mineral deficiencies may

lead to more serious health problems.

Accordingly, we propose in paragraph

(a)(2) of this section that the use of nonagricultural products as vitamin and

mineral supplements to satisfy the

health requirements of livestock be

permitted, provided that any synthetic

supplement used in organic livestock

production is included as an allowed

synthetic on the National list in section

205.24. In accordance with section

2118(c)(1) of the OFPA (7 U.S.C.

6517(c)(1)), trace minerals and dietary

supplements are included in proposed

section 205.24 as synthetic substances

permitted for use in organic livestock

production.

We propose in section 205.13(a)(3)

that producers be allowed to use

synthetic amino acid additives as

necessary for the purpose of fulfilling

the nutritional requirements of the

livestock, if the synthetic amino acid

used is included as an allowed synthetic

on the National list in section 205.24.

During the USDA public hearings and

NOSB meetings, organic livestock

producers stated that it is sometimes

necessary to add amino acid (protein)

additives to feed rations to ensure

optimal health and growth. They

explained that producers cannot

control, even by diversifying the feed

ration, the quantity and type of protein

available in organic feedstuffs. For

example, the lysine content of many

feedstuffs is known to be inadequate.

Tests to analyze the essential amino

acid content in feed are inexpensive,

and the National Research Council’s

Committee on Animal Nutrition

publishes nutrient requirements for

domestic animals, including

requirements for essential amino acids,

where applicable. These levels could be

used as guidelines for producers and

certifying agents to ensure that the

amino acids were not used at levels high

enough to artificially stimulate growth

or production in the animal, which is

proposed to be prohibited under section

205.13(b)(2). An analysis of feed

showing that it required use of amino

acid supplementation would constitute

a site-specific condition that could be

used to demonstrate that its use was

necessary to fulfill the nutritional

requirement of the livestock.

Prohibited Livestock Feeding

Practices—Section 205.13(b)

Sections 2110(c)(2) and (3) of the

OFPA (7 U.S.C. 6509(c)(2) and (3))

prohibit the use of plastic pellets for

roughage; manure refeeding; feed

formulas containing urea; and the use of
65880 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

growth promoters and hormones,

including antibiotics and synthetic trace

elements to stimulate growth or

production. We therefore propose in

paragraphs (b)(1) through (3) of this

section that these materials and

practices be prohibited. It should be

noted that this proposal differs from the

language given in the Act for the

purpose of clarifying the intent of this

prohibition. This clarification is

necessary because synthetic trace

elements and other feed supplements,

which are stated in the Act as

prohibited when used to stimulate

livestock growth or production, are

proposed to be permitted, as allowed by

the Act, in section 205.13(a) when used

only to provide essential nutritional

elements to supplement livestock feed.

In accordance with section 2118(c)(1) of

the OFPA (7 U.S.C. 6517(c)(1)), trace

minerals and nutritional supplements

are proposed to be included as synthetic

substances permitted for use in organic

livestock production in section 205.24

of the proposed National List.

Livestock Health Care—Section 205.14

In developing our proposed organic

livestock health care requirements, we

considered information from a number

of sources. This research was necessary

because the Act does not provide

affirmative requirements for the health

care of livestock in an organic operation.

The primary sources of information we

used were the NOSB recommendations,

provided in accordance with section

2110(d)(2) of the OFPA (7 U.S.C.

6509(d)(2)), and public input received

during the USDA organic livestock

hearings held in accordance with

section 2110(g) of the OFPA (7 U.S.C.

6509(g)). We also reviewed comments

from the public provided during input

sessions at NOSB meetings and in

response to NOSB draft

recommendations. And, finally, we

reviewed the livestock production

standards of the existing State and

private certification organizations in an

effort to learn as much as possible about

the practices currently being used.

As a result of the research we did, we

determined that health care in organic

livestock production should be based on

the prevention of diseases and should

include the provisions of adequate feed,

living conditions and attentive care so

as to ensure a healthful living

environment and prevent the

occurrence of disease and injury.

We propose in paragraph (a) that the

practice for maintaining livestock health

would be a preventive management

system. Preventive management

includes providing diverse feedstuffs

while minimizing conditions favorable

to disease, illness, injury and parasites.

Techniques such as providing isolation

facilities for sick animals, rotating

pastures, and introducing species that

disrupt parasite reproduction would be

appropriate for a certified operation.

Sanitation practices, such as the use of

antiseptics to cleanse wounds, and the

removal of manure, spilled fodder, and

soiled bedding material, would be

suitable practices to prevent the

occurrence and spread of infectious

organisms.

We further propose to permit the use

of veterinary biologics, such as vaccines

and inoculants, as well as vitamins and

minerals, to effectively prevent disease

or injury. In fact, Federal and State

regulations may require the use of

vaccines and inoculants, and organic

livestock producers would be expected

to comply with any applicable

regulations regarding mandatory

vaccinations. Additionally, the practice

of breeding animals for adaptability to

site-specific conditions, including

resistance to local diseases and

parasites, also would play an important

role in a system of organic farming.

The OFPA does not contain

affirmative requirements for

administering animal drugs in the event

of illness or injury; section 2110(d)(1) of

the OFPA (7 U.S.C. 6509(d)(1)) prohibits

administering medications, other than

vaccinations, in the absences of illness.

This suggests that the use of

medications in organic livestock

production may be permitted. In

determining the appropriate use of

medications in organic livestock

production, we reviewed the NOSB

recommendations, public input received

at NOSB meetings, livestock hearings

testimony, and existing State and

private standards. The result of this

research indicated that there is little

agreement about the kinds of

medications that are appropriate in

organic livestock production and how

they should be used. There was

agreement, however, that even with the

best preventive management, animals

sometimes become ill, injured or

infested with parasites and that

producers should be provided with a

means of administering medications to

sick or injured animals. We have used

the term animal drug to include three of

the terms used in the Act: ‘‘medication,

antibiotic and parasiticide’’, since

animal drug is the term commonly used

by the Center for Veterinary Medicine of

the FDA in referring to these substances.

In section 205.14(b) we propose that,

in a situation where the preventive

measures provided for in paragraph (a)

were not effective in maintaining

livestock health, animal drugs, except as

prohibited in paragraph (d) of this

section, may be administered to organic

livestock and that they may be used at

any life stage; restrictions are provided

only for mammals and other stock

intended for slaughter stock.

Our research indicated that it is

appropriate in organic livestock health

care to administer parasiticides either

internally or externally to any animal at

any life-stage, provided that the

producer complies with the prohibition

against routine use of a synthetic

internal parasiticide, set forth in section

2110(d)(1)(B) of the OFPA (7 U.S.C.

6509(d)(1)(B)). Routine use is defined in

section 205.2 as administering a

parasiticide to an animal without cause.

While some public comment favored

prohibiting the use of internal

parasiticides and the NOSB

recommended a restricted use of

parasiticides, many producers stated

that parasites can threaten animal health

at any life-stage and that the use of

parasiticides is essential in certain

regions of the country. Even under

highly controlled situations, some

parasites endemic to certain regions can

be carried by wild birds, water, or feed.

Concerns for the overall health of an

animal would indicate that parasiticides

be used as soon as possible after

determining the presence of parasites at

a level that would affect the health of

the infected livestock.

Our review of information concerning

organic livestock health care revealed a

good deal of difference in the use of

antibiotics. We found that most of the

concern about this drug use in animals

was with the subtherapeutic use of

antibiotics, which is prohibited by the

Act. The NOSB recommended

prohibiting the use of antibiotics in the

production of organic slaughter stock

and restricting the use of antibiotics for

other livestock. Public comment

suggested that the health of organic

livestock might benefit from receiving

antibiotics. We would like to solicit

public comment on the use of animal

drugs in the production of organic

livestock, including organic slaughter

stock.

Based on the above reasons and after

careful consideration of the information

available, we propose to restrict the use

of animal drugs in animals intended as

organic slaughter stock. We propose in

sections 205.14(b)(1) and (2) that animal

drugs, other than those administered

topically and parasiticides, could be

administered to mammals intended as

slaughter stock only during the first 21

days of life, and to all other slaughter

stock only during the first 7 days after

arrival at the certified facility. Animal

drugs administered topically and
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65881

parasiticides could be administered at

any time of life.

We propose to permit this limited

allowance for the use of animal drugs in

slaughter stock due to the concerns

about the vulnerability of newly born or

hatched livestock brought onto a

certified operation from a non-organic

source. Newborn animals are

particularly vulnerable to diseases, such

as diarrhea and pneumonia, during the

time immediately following transport,

as a result of the stress of adapting to a

new environment. Allowing the use of

animal drugs would be an appropriate

safety net for young organic livestock

during their first week of organic

management. Since mammals may be as

old as 15 days of age when brought onto

an organic operation, as proposed in

section 205.12(a)(5)(ii) dealing with the

sourcing of animals, mammals could

receive animal drugs up to the 21st day

of life, or 7 days after the last possible

date after arrival at the certified facility.

This is consistent with the 7-day time

period in which animal drugs may be

administered to non-mammals after

their arrivals onto an organic facility.

We believe that restricting the use of

animal drugs in organic slaughter stock

production is consistent with a system

of organic farming and handling which

uses prevention methods, rather than

substances, to optimize health.

Proposed section 205.14(c) restricts

the sale of products from organic

livestock to which an animal drug has

been administered. We propose in this

paragraph that the products from treated

livestock could be obtained and

thereafter sold, labeled, or represented

as organic only after the producer has

determined that the animal had fully

recovered from the conditions being

treated, but in no case sooner than the

applicable withdrawal period stated on

the label or labeling of the animal drug

or as required by the veterinarian. This

proposal was developed after a lengthy

and extensive review of significant

amounts of public input. Also, the

NOSB submitted to the Secretary a

subsequent addenda to their

recommendations on the use of

antibiotics and parasiticides in livestock

used to produce milk and eggs, which

stated:

Just as soil health must be restored after the

use of restricted materials, animals whose

health has been threatened by illness or

infection must be allowed adequate time to

recuperate after administration of an

antibiotic or parasiticide. The restoration of

health is effected through adequate recovery

management. Products from both restored

soil and restored animals may then be

labeled as organically produced.

In determining when animal health

has been restored, a producer might

observe the somatic cell counts in milk,

the resumption of normal weight gain in

a young animal, or an increase of egg

production in a laying flock. Under this

proposal, an organic producer might

reasonably decide to withhold a product

from the organic market beyond the

withdrawal period specified on the label

based on observations of the animal’s

health.

Some of the input received by the

NOSB and the USDA requested

extending FDA withdrawal period after

internally administering animal drugs,

particularly antibiotics or parasiticides,

to organic livestock. The extended

withdrawal periods suggested by the

public input ranged from twice the FDA

withdrawal time to a minimum of 90

days. However, our proposal does not

make such a requirement because an

extended withholding time does not

further the goals of a system of organic

farming and handling. We wish to point

out that under our proposal, animals

used for breeding or as a source of other

products could later be sold as organic

slaughter stock only if the animal

complied with all of the other

requirements for organic slaughter

stock.

Prohibited Livestock Health Care

Practices—Section 205.14(d)

Section 2110(d) of the OFPA (7 U.S.C.

6509(d)) prohibits producers from using

subtherapeutic doses of antibiotics,

synthetic internal parasiticides on a

routine basis, or medications, other than

vaccinations, in the absence of illness.

Accordingly, we propose in paragraph

(d) of this section to prohibit

administering any medication, other

than vaccinations, in the absence of

illness; the routine use of synthetic

internal parasiticides; and the

subtherapeutic use of antibiotics.

Livestock Living Conditions and Manure

Management—Section 205.15

Living conditions play a significant

role in livestock health and production.

At the USDA hearings and NOSB

meetings, extensive testimony was

received addressing the issue of

livestock living conditions. As provided

for under section 2110(d)(2) of the

OFPA (7 U.S.C. 6509(d)(2)), the NOSB

developed specific recommendations for

additional standards for livestock living

conditions, including manure

management. This proposal is

consistent with the NOSB

recommendations.

In section 205.15(a), we propose to

require that the following living

conditions be provided, as appropriate

to the species, to promote livestock

health: protection from the elements;

space for movement; clean and dry

living conditions; and appropriate

access to the outdoors, food and clean

water. These conditions would provide

a healthful environment to raise

organically produced livestock and

reduce or eliminate the need to

administer animal drugs.

We propose in section 205.15(b) that,

if necessary, animals could be

maintained under conditions that

restrict the available space for

movement or access to outdoors,

provided that other living conditions are

adequate to maintain the animals’

health without the use of animal drugs,

except as provided in 205.14(b). In

developing this proposal, we considered

public input regarding the effects of

climate, geographical location and

physical surroundings on the ability of

animals to have access to the outdoors.

The premise that organic management is

soil based and that animals should be

allowed, as appropriate, access to the

soil was considered in balance with

animal health issues, such as prevention

of exposure to harmful organisms

carried by wild animals and the need to

keep animals indoors during extended

periods of inclement weather. The

flexibility provided by the provisions of

205.15(b) would allow operations

without facilities for outdoor access to

be certified for organic livestock

production and also would permit

animals to be confined during critical

periods such as farrowing.

As noted, the producer could

maintain animals under conditions that

restrict the available space for

movement or access to outside only if

the practice is appropriate and

necessary. As previously discussed in

regards to the use of non-organic

sources of livestock feed and

mammalian livestock designated as

organic slaughter stock, the

determination of necessity would be

based on site-specific conditions that

would be described by the producer in

an organic plan, or updates to an

organic plan, and reviewed and

evaluated by the certifying agent.

We are requesting public comment as

to the conditions under which animals

may be maintained so as to restrict the

available space for movement or access

to outdoors. Examples of site-specific

conditions which might serve as a basis

for maintaining animals under

conditions that restrict the available

space for movement or access to

outdoors are: emergency or

unanticipated circumstances and sitespecific soil, climate, animal health, or

other environmental factors. We also
65882 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

request comment as to whether we

should allow practices that restrict the

available space for movement or access

to outdoors.

Manure Management—Section

205.15(c)

In section 205.15(c), we propose that

in any area where livestock are housed,

pastured or penned, manure would have

to be managed in a way that does not

cause measurable degradation of soil

quality; does not significantly contribute

to contamination of water by nitrates

and bacteria, including human

pathogens; optimizes nutrient recycling;

and does not include burning or any

practice inconsistent with section

205.14(a) of this subpart which

addresses prevention of livestock health

problems. These provisions are

consistent with sections 2114(b)(1) and

(2) of the OFPA (7 U.S.C. 6513(b)(1) and

(2)) that address proper manuring and

methods for applying livestock manure

to soil. The proper management of

manure requires that it be used in a way

that optimizes nutrient recycling to be

consistent with a system of organic

farming. As discussed in the

supplementary information for

proposed section 205.7(d)(3), the

disposal of manure by burning cannot

be considered proper manuring.

Organic Handling Requirements

Product Composition—Section 205.16

This section of our proposal addresses

the requirements and prohibitions for

ingredients used in products that would

be permitted to use the word organic in

some manner on a label or labeling of

an agricultural product. These

provisions are in accordance with:

section 2106(a)(1)(A) of the OFPA (7

U.S.C. 6505(a)(1)(A)) which requires

that any product that is sold, labeled, or

represented as organic must be

produced and handled in accordance

with the Act; section 2111(a)(4) of the

OFPA (7 U.S.C. 6510(a)(4)) which

provides for an organic product to

contain up to 5 percent by total weight

of the finished product, exclusive of

water and salt, of non-organically

produced ingredients that are on the

National List; and sections 2106(c)(1)

and (2) of the OFPA (7 U.S.C. 6505(c)(1)

and (2)) which permit certain

exemptions for agricultural products

that contain more than 5 percent nonorganically produced ingredients.

In paragraph (a)(1) of this section, we

propose that an agricultural product,

including a raw agricultural product,

sold, labeled, or represented as organic,

contain only organically produced

agricultural ingredients, exclusive of

water or salt, except in one

circumstance. This exception is based

on section 2111(a)(4) of the OFPA (7

U.S.C. 6510(a)(4)) which allows an

organically produced agricultural

product to contain up to 5 percent nonorganically produced ingredients that

are on the National List. Accordingly,

we propose in paragraphs (a)(1)(i) and

(ii) of this section that a product sold,

labeled, or represented as organic could

contain non-organically produced

agricultural products and nonagricultural ingredients that are

included on the National List, up to 5

percent of the total weight of the

finished product, exclusive of water or

salt. As proposed and discussed in the

supplementary information to the

National List section 205.27 for nonorganic agricultural products, all nonorganically produced agricultural

products are proposed to be included on

the National List, and therefore would

be permitted for use in an organic

product in accordance with section

2111(a)(4) of the OFPA (7 U.S.C.

6510(a)(4)).

We propose in paragraph (a)(2) of this

section the order of preference by which

all ingredients used in an organic

product would have to be selected. We

have determined that the provisions of

paragraph (a)(2) of this section are

needed to ensure the integrity of

products sold, labeled, or represented as

organic and to ensure that organic

products are handled in accordance

with a system of organic farming and

handling, as defined in proposed

section 205.2 of subpart A. Accordingly,

we propose in paragraph (a)(2)(i) that a

handler would have to select

commercially available organically

produced agricultural products as

ingredients in preference to non-organic

agricultural products and nonagricultural ingredients. For example, in

a bread that contains 97 percent

organically produced flour and also

sesame seeds, a handler would have to

use organically produced sesame seeds

whenever they were commercially

available.

We propose in paragraph (a)(2)(ii) that

a handler would have to choose a

commercially available non-organically

produced agricultural product as an

ingredient in preference to a nonagricultural ingredient. For example, a

thickener such as corn starch or

arrowroot, if commercially available,

would need to be selected as an

ingredient in a salad dressing in

preference to a non-agricultural

ingredient, such as disodium phosphate.

Paragraphs (i) and (ii) of this section

together would direct a handler toward

the use of an organically produced

agricultural product whenever possible

for a given function in the product. The

provisions of these two paragraphs are

consistent with the NOSB

recommendation that organic

ingredients be used in a multiingredient product to the extent

possible.

We propose in paragraph (a)(2)(iii) of

this section that a non-organically

produced agricultural product or nonagricultural ingredient that is extracted

without the use of a synthetic volatile

solvent, or which does not contain

propylene glycol as a carrier, if

commercially available, must be used as

an ingredient in preference to a nonorganically produced agricultural

product or non-agricultural ingredient

that is extracted with a synthetic

volatile solvent or which contains

propylene glycol as a carrier.

Although the NOSB recommended

that substances extracted with a

synthetic volatile solvent (such as

hexane) or that contain propylene glycol

as a carrier be prohibited for use in

organic products, we believe our

proposal to allow their use only when

alternative substances or products are

not commercially available does not

affect the integrity of organically

produced products.

Section 2106(c)(1) of the OFPA (7

U.S.C. 6505(c)(1)) authorizes products

that contain at least 50 percent (but less

than 95 percent) organically produced

ingredients to use the word organic on

the principal display panel of the

product to describe those ingredients

that are organically produced.

Accordingly, the Secretary, in

consultation with the NOSB and the

Secretary of Health and Human

Services, is proposing in subpart C of

this part to allow the statement made

with certain organic ingredients to

appear on the principal display panel of

this type of product.

We propose in paragraph (b) the

composition requirements for a product

labeled as made with certain organic

ingredients. These proposed

requirements are that the total weight of

the finished product that is not

comprised of organic agricultural

products, excluding water and salt, shall

consist of some combination of nonorganically produced agricultural

products and non-agricultural

ingredients included on the National

List. This is consistent with the

proposed composition requirement for

non-organic ingredients in products

labeled as organic and is consistent with

the composition requirements of section

2111(a)(4) of the OFPA (7 U.S.C.

6510(a)(4)).
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Proposed paragraph (b)(3) of this

section would require that products

sold, labeled, or represented as made

with certain organic ingredients have

been produced in compliance with

sections 205.16 through 205.19 of this

proposal, with the exception of sections

205.16 (a) and (c) of this subpart.

Section 205.16(a) applies to agricultural

products, including raw agricultural

products, that are labeled as organic.

Section 205.16(c) applies to multiingredient agricultural products that

only represent the organic nature of

such ingredients in the ingredients

statement and which themselves are not

sold, labeled or represented as organic

or made with certain organic

ingredients. The provisions of proposed

paragraph (b)(3) are necessary to assure

consumers that products in which the

predominant portion of ingredients are

represented as organically produced

have been produced and handled in

accordance with a consistent standard,

as provided under section 2102(2) of the

OFPA (7 U.S.C. 6501(2)).

We note that processed agricultural

products sold, labeled, or represented as

made with certain organic ingredients

are exempted by section 2106(c)(1) of

the OFPA (7 U.S.C. 6505(c)(1)) from

complying with the provisions of the

Act, except as required by the Secretary

in consultation with the NOSB and the

Secretary of HHS. Therefore, handlers of

this type of product can be exempted

from complying with certain provisions

of this proposal, provided that the

exemptions do not affect the integrity of

the organic ingredients in the product.

Accordingly, as proposed and discussed

in the supplementary information for

section 205.201(b) of subpart D

regarding an exemption for handlers of

this type of product from the

requirement set forth in section

205.3(b)(2) of subpart B that a

commercially available non-synthetic

substance be selected in preference to

an allowed synthetic substance, we note

that a handling operation that produces

products sold, labeled, or represented as

made with certain organic ingredients

also would not be subject to the

provisions in section 205.16(a) and (c)

with respect to the handling of this type

of product. For example, a manufacturer

of a product sold, labeled, or

represented as made with certain

organic ingredients could use a nonorganic agricultural ingredient instead

of a commercially available organic

agricultural ingredient, as is required in

proposed section 205.16(a)(2) for the

manufacturer of a product to be sold,

labeled or represented as organic.

However, the handling operation would

be required to be certified and to

demonstrate in the organic plan

compliance with the applicable

handling requirements in subpart B. We

believe that these provisions will help

assure the integrity of the organic

ingredients in this type of product

without imposing undue requirements

on the handlers who produce them.

Paragraph (c) of this section is

proposed in accordance with section

2106(c)(2) of the OFPA (7 U.S.C.

6505(c)(2)) and would exempt a multiingredient product that only represents

the organic nature of such ingredients in

the ingredients statement, and which

itself is not sold, labeled or represented

as organic or made with certain organic

ingredients, from complying with the

requirements proposed in this subpart.

It is not critical for either the purposes

of the Act or the integrity of the organic

ingredients if a finished product that

cannot be sold, labeled, or represented

as organic or as made with certain

organic ingredients on its principal

display panel is not subject to the

provisions of this subpart. We note,

however, that although a finished

product that contains less than 50

percent organically produced

ingredients, or any other multiingredient product that represents the

organic nature of ingredients in the

ingredients statement and which is not

labeled as organic or made with certain

organic ingredients, need not be

handled by a certified organic handling

operation, the ingredients represented

as organic in such a product must have

been produced and handled in

accordance with all the applicable

provisions of the Act and the

regulations of this part. In addition,

while handling operations which

handle only this type of product would

not be required to become certified

under the provisions proposed in

section 205.202 of subpart D, this

proposal would still require such

operations to maintain records to show

that any organic ingredients listed on

product labels were obtained from

operations that were certified in

compliance with the Act and the

regulations of this part.

Paragraph (d) of this section would

prohibit the use of organic and nonorganic forms of the same agricultural

ingredient if the ingredient is listed as

organic in the ingredients statement. We

believe that such a provision is needed

in order to avoid any possibility of

confusion concerning the source and

percentage of the organic ingredients in

the product.

Paragraph (e) of this section would

prohibit, in accordance with sections

2111(a)(3) and (7) of the OFPA (7 U.S.C.

6510(a)(3) and (7)), the addition of

sulfites, nitrates, or nitrites to an organic

food product, or the addition to the food

of water that does not meet the Safe

Drinking Water Act requirements (42

U.S.C. 300f et seq.).

Processing Practices—Section 205.17

In paragraph (a) of this section we

propose that biological methods, such as

fermentation, or mechanical methods,

such as grinding, pressing, heating or

drying, be used to process an

agricultural product intended to be sold,

labeled, or represented as organic or

made with certain organic ingredients

for the purpose of retarding spoilage or

otherwise preparing an agricultural

product for market. However, an

incidental additive, except for the

prohibition on the use of volatile

synthetic solvents proposed in section

205.17(b)(3), may be used, if necessary,

to process an agricultural product

intended to be sold, labeled, or

represented as organic or made with

certain organic ingredients. An

incidental additive used in the

processing of agricultural products is

defined in proposed section 205.2 as an

additive present in an agricultural

product at an insignificant level and

that does not have any technical or

functional effect in the product, and is

therefore not considered an active

ingredient. As discussed in the

supplementary information for section

205.26 of subpart B, incidental additives

may be used in organic handling

without inclusion on the National List.

Section 205.17(a) is consistent with the

principles stated in our proposed

definition of a system of organic farming

and handling (section 205.2) and as

further discussed in the introduction to

the supplementary information for

subpart B.

The NOSB recommended that

handlers document that a food could

not be processed without the use of a

synthetic incidental additive and that

the handler demonstrate progress to

replace the synthetic incidental additive

over time. The NOSB language is

consistent with our proposal to permit

the use of such substances only if

necessary. By including several

synthetic incidental additives in its

National List recommendations, the

NOSB also recognized that a wide range

of currently available organic products

could not be manufactured feasibly

without the use of incidental additives,

such as defoaming agents, adjuvants,

clarifiers, filtering agents and equipment

cleansers.

As noted, a producer could use an

incidental additive if the use of the

additive is necessary. As previously
65884 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

described in the supplementary

information for sections 205.12, 205.13,

and 205.15 of subpart B regarding

livestock production, determination of

necessity would be based on sitespecific conditions that would be

described by a producer in an organic

plan, or updates to an organic plan, and

reviewed by the certifying agent.

We are requesting public comment as

to the conditions under which

incidental additives may be used. For

example, we would like public

comment as to whether specific

conditions, such as the inefficacy or

unavailability of mechanical or

biological methods, should be a

prerequisite for using an incidental

additive and, if so, what these

conditions should be. We also request

comment as to whether handlers who

handle only products sold, labeled, or

represented as made with certain

organic ingredients should be exempted

from the restriction of using incidental

additives only if necessary.

Paragraph (b) of this section proposes

several practices that would be

prohibited for the processing and

preparation of any raw agricultural

product, and on a finished agricultural

product, sold, labeled, or represented as

organic or as made with certain organic

ingredients.

Paragraphs (b)(1) and (b)(2) of this

section are proposed in accordance with

sections 2111(a)(5) and (6) of the OFPA

(7 U.S.C. 6510(a)(5) and (6)) and would

prohibit the use of storage containers or

bins, including packages and packaging

materials that contain synthetic

fungicides, preservatives or fumigants,

and also would prohibit the use or reuse

of any bag or container that previously

had been in contact with any substance

that could compromise the organic

integrity of its contents. Our proposed

definition of packaging set forth in

section 205.2 encompasses waxes used

in contact with an edible surface of an

agricultural product.

Proposed paragraph (b)(3) of this

section would prohibit the use of a

volatile synthetic solvent. Volatile

synthetic solvents, such as hexane or

isopropyl alcohol, are used in

processing and extraction. This

proposed prohibition is made under the

authority of section 2107(a)(11) of the

OFPA (7 U.S.C. 6506(a)(11)) which

authorizes this program to require such

terms and conditions as are determined

necessary. The prohibition of the use of

a volatile synthetic solvent is in

agreement with the NOSB

recommendation that the use of a

volatile synthetic solvent is not

essential, and therefore should not be

permitted in the handling of an

organically produced product or a

product sold, labeled, or represented as

organic or made with certain organic

ingredients.

As previously discussed in regard to

the use of raw manure in organic crop

production (section 205.7 of subpart B),

there has been an increase in the

incidence of food borne illness caused

by certain pathogens. The application of

ionizing radiation as a sanitation or

preservation treatment currently is

permitted by FDA for a wide range of

agricultural products. Additionally, a

request to permit the use of ionizing

radiation on red meat products was

recently approved by FDA. The NOSB

has recommended to the Secretary that

the practice of ionizing radiation should

not be allowed in organic handling, and

its use is prohibited by most existing

organic certification programs which we

have reviewed.

Public comment is invited with

respect to the compatibility of the use of

ionizing radiation with a system of

organic farming and handling. The

USDA also invites comments on

whether there are effective alternatives

to ionizing radiation, such as sanitary

practices, heat pasteurization and

incidental additives, that are compatible

with a system of organic farming and

handling, and, if so, how they are

compatible. Additionally, we are

soliciting comment as to whether the

use of ionizing radiation is considered

an essential standard industry practice,

or good manufacturing practice, in the

processing of any agricultural product:

for example, in the sanitary handling of

herbs and spices.

Prevention and Control of Facility

Pests—Section 205.18

We are proposing provisions to

safeguard the integrity of organic

products that are handled in facilities in

which pest control substances may be

used. The NOSB recommendations and

our review of most existing organic

programs indicate that this area needs to

be addressed. We have accordingly

determined, as authorized by section

2107(a)(11) of the OFPA (7 U.S.C.

6506(a)(11)), which authorizes this

program to require such terms and

conditions as are determined necessary,

that the proposed requirements for

facility pest management in an organic

handling operation are necessary and

appropriate for an organic certification

program.

As is true with crop production and

livestock health care, prevention of pest

occurrences should be the first strategy

used by an organic handler. This is also

consistent with the goal of maintaining

the integrity of organic products by

avoiding the need to use pest control

substances in handling facilities, as

reflected in our definition of a system of

organic farming and handling. We

propose in paragraph (a) of this section

that the best practice for control and

prevention of facility pests would be a

preventive management system. This

system would include measures to

remove pest habitat and to prevent pests

from gaining entrance to the handling

facility, as well as managing

environmental factors inside the facility

such as temperature, light, air

circulation and humidity to discourage

proliferation of pest populations.

If prevention measures are not

effective and pests do appear in organic

handling facilities, we propose in

paragraph (b) of this section for facility

pest control to permit the use of pest

control techniques, which include:

mechanical controls such as traps or

barriers; augmentation and introduction

of predators and parasites for the pest

species; and non-toxic, non-synthetic

substances such as lures and repellants.

Pest prevention and control is further

discussed in the supplementary

information provided in section 205.9

for crop pests, weeds and diseases.

However, if pest prevention or control

measures provided in paragraph (a) and

(b) of this section are not effective, we

propose in paragraph (c) of this section

to permit the use of any substance to

control pests, provided the substance is

approved for its intended use by the

appropriate regulatory authority and the

substance is applied in a manner that

prevents such substance from contacting

any ingredient or finished product

intended to be sold, labeled, or

represented as organic or made with

certain organic ingredients. We have

proposed paragraph (c) in recognition of

the fact that handling facilities are

subject to federal, state, and local

regulations concerning food safety. The

use of the practices in paragraph (c) of

this section would entail maintaining

adequate safeguards to protect organic

products and ingredients from being

contacted by any pest control substance.

As noted, proposed paragraph (c)

would allow the use of any substance to

control pests, provided such substances

were used only when methods to

prevent or control pests were not

effective. Additionally, any substance

used must be applied in a manner that

prevents such substance from contacting

any ingredient or finished product

intended to be sold, labeled, or

represented as organic or made with

certain organic ingredients. Because

eradication of a pest infestation may

necessitate the use of substances, we are

proposing to allow the use of any
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substance approved for use by the

appropriate Federal, State or local

regulatory agency to assure that organic

handling operations have sufficient

practices available to deal effectively

with severe pest infestations. Structural

pest control is unique in that substances

used for this purpose are not considered

to be used in the production and

handling of organic crops, and are not

applied to land used in the production

of organic crops.

Many existing certification programs

restrict synthetic substances used to

control pests in certified handling

facilities to substances reviewed and

allowed for use by the certification

agency. We request comment as to

whether only those substances included

on the National List of active synthetic

substances allowed for use in organic

crop production, as set forth in section

205.22, should be permitted to be used

to control pests in certified handling

facilities. Additionally, if the use of

synthetic substances in structural pest

control should not be restricted solely to

those synthetic substances included on

the National List of active synthetic

substances, we request comment as to

whether handlers should be required to

use synthetic substances included on

the National List of active synthetic

substances (or a non-synthetic biological

or botanical substance) before the use of

synthetic substances not included on

the National List.

Prevention of Commingling and Contact

With Prohibited Substances—Section

205.19

There are two primary threats to

organic integrity: the possibility of

commingling organic products with

similar products that were not

organically produced, and the

possibility of the organic product

coming into contact with a prohibited

substance. Since there is no apparent

physical difference between an

organically produced product and a

non-organic product, commingling is a

serious concern and an organic handling

operation must make every effort to

provide adequate measures to ensure

that commingling does not occur, in

addition to adopting measures to protect

organic products from contacting

prohibited substances.

Sections 2107(b)(1)(C) and 2111(b) of

the OFPA (7 U.S.C. 6506(b)(1)(C) and

6510(b)) specifically provide for the

prevention of commingling of organic

and non-organic products, especially

meat, in any operation that handles both

types of products, and the

implementation of practices that protect

organic products from contact with

prohibited substances. Therefore, we

propose in this section that a certified

handling operation, and a handling

operation that is exempt or excluded

from certification in accordance with

section 205.202(a)(3) or section

205.202(b) of subpart D, shall be

required to establish appropriate

safeguards during handling, storage and

transportation to both prevent the

commingling of organic and non-organic

products and to assure that organic

products are protected from contact

with prohibited substances.

These safeguards could take many

forms depending on the nature of the

products and the certified handling

operation, and should encompass each

step of the manufacturing or handling

process, including storage and

transportation. A certified handling

operation that receives certification

under our proposal might consist of

disparate locations and facilities,

including some that handle both nonorganic and organic products. The

public input we have received indicates

that many certified handling operations

use subcontractors to perform certain

processing functions, such as

dehydrating or freezing, rather than

performing the function within the

facilities maintained by the certified

operation. Our primary concern in these

instances is that adequate safeguards are

maintained by the certified operation

and the subcontractor to ensure that

commingling and contact of organic

products with prohibited substances did

not occur. A certified handling

operation that subcontracted with

different facilities for cold storage, for

example, would have to make sure that

its products were clearly segregated

from non-organic products and that an

inspector examined all such

subcontracted facilities as a part of the

site visit to the certified operation. A

certified handling operation also would

have to take appropriate measures to

ensure that organic products or

ingredients were transported under

conditions that protected their integrity.

We note that the best method to prevent

commingling or contact with prohibited

substances would be to eliminate the

possibility of such occurrences, such as

when a certified operation handles only

organic products and uses no prohibited

pest control substances.

Subpart B—National List

Purpose and Basis of the Proposed

National List

The National standards for organic

production, provided for in section 2105

of the OFPA (7 U.S.C. 6504), include the

requirement that an organically

produced agricultural product shall

have been produced without the use of

synthetic chemicals, except as otherwise

provided for in the Act. The exemptions

to which section 2105 refers are

specifically delineated in section 2118

of the OFPA (7 U.S.C. 6517), which

provides for the establishment of a

National List of substances that may be

allowed for use in an organic farming or

handling operation that are otherwise

prohibited for use under the Act. This

section also provides for the

establishment of a National List of nonsynthetic substances, that are otherwise

allowed under the Act, that may not be

used in organic farming or handling.

Section 2118(a) of the OFPA (7 U.S.C.

6517(a)) provides that the Secretary

shall establish the National List of

approved and prohibited substances,

and section 2118(d)(1) of the OFPA (7

U.S.C. 6517(d)(1)) provides that the

National List shall be based upon a

proposed national list developed by the

NOSB. In accordance with section 2119

of the OFPA (7 U.S.C. 6518), the NOSB

conducted the prescribed review

process, and solicited public comment

at meetings, before recommending an

initial proposed national list to the

Secretary. The NOSB recommendations

were based on at least one technical

advisory panel review of each substance

in question, as required in section

2119(k)(3) of the OFPA (7 U.S.C.

6518(k)(3)). The NOSB also reviewed

available information from the

Environmental Protection Agency, the

National Institute of Environmental

Health Studies, and other appropriate

sources, as required in section 2119(l)(1)

of the OFPA (7 U.S.C. 6518(l)(1)), to

assist it in evaluating each substance

under consideration in accordance with

the criteria delineated in section

2119(m) of the OFPA (7 U.S.C.

6518(m)). The criteria that were

considered for each substance are: the

potential of the substance for

detrimental chemical interactions with

other materials used in organic farming

systems; the toxicity and mode of action

of the substance and of its breakdown

products or any contaminants, and their

persistence in the environment; the

probability of environmental

contamination during manufacture, use,

misuse or disposal of the substance; its

effects on human health; the effects of

the substance on biological and

chemical interactions in the

agroecosystem; the alternatives to using

the substance; and the compatibility of

the substance with a system of

sustainable agriculture. The NOSB

recommendations, along with the

results of the required evaluation and

technical advisory panel review for each
65886 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

substance, were considered by the

Secretary in accordance with the

requirements of section 2118(d) of the

OFPA (7 U.S.C. 6517(d)).

Basis for Inclusion of Substances and

Ingredients on the National List

Basis for Inclusion of Specific Synthetic

Substances on the National List of

Synthetic Substances Allowed for Use in

Organic Farming and Handling

Section 2118(c)(1) of the OFPA (7

U.S.C. 6517(c)(1)) provides three sets of

criteria upon which determinations to

allow the use of substances that are

otherwise prohibited by the Act must be

based. The first set of criteria, in section

2118(c)(1)(A) of the OFPA (7 U.S.C.

6517(c)(1)(A)), requires that the

Secretary, in consultation with the

Secretary of the Department of Health

and Human Services and the

Administrator of EPA, determine that:

use of the substance would not be

harmful to human health or the

environment; the substance is necessary

to the production or handling of an

agricultural product because of the

unavailability of wholly natural

substitute products; and the use of the

substance is consistent with organic

farming and handling.

The second set of criteria in section

2118(c)(1)(B) of the OFPA (7 U.S.C.

6517(c)(1)(B)) describes the types of

substances that may be considered for

use if they are included on the National

List. The first type of substance is one

that is used in production and contains

an active synthetic ingredient that falls

into one of the following categories:

copper and sulfur compounds; toxins

derived from bacteria; pheromones;

soaps; horticultural oils; fish emulsions;

treated seed; vitamins and minerals;

livestock parasiticides and medicines;

and production aids, including netting,

tree wraps and seals, insect traps, sticky

barriers, row covers, and equipment

cleansers. The Secretary has accordingly

reviewed each substance proposed in

sections 205.22 and 205.24 for inclusion

on the National List to determine that it

is an active synthetic ingredient or

includes an active synthetic ingredient.

The second type is a substance that is

used (in a formulation) in production

and (the formulation) contains synthetic

inert ingredients that the Administrator

of the EPA has not classified as inerts

of toxicological concern; and the third

type of substance is one that is used in

handling and is non-synthetic but is not

organically produced.

The third criterion in section

2118(c)(1)(C) of the OFPA (7 U.S.C.

6517(c)(1)(C)) is that each specific

exemption be developed according to

the procedure described in section

2118(d) of the OFPA (7 U.S.C. 6517(d))

for establishing and amending the

National List. This procedure includes

basing the proposed National List on the

recommendations received from the

NOSB, and publishing such proposed

National List in the Federal Register for

public comment before establishing the

National List. The same procedure must

be used in developing any amendments

to the National List.

After receiving the NOSB’s

recommendations, the Secretary

determined, in consultation with the

Secretary of HHS and the Administrator

of the EPA that the use of each

substance or ingredient being

considered for inclusion on the

proposed National List of synthetic

substances allowed for use in organic

farming would meet the first set of

criteria. We then examined the second

set of criteria to make determinations

concerning substances being considered

for inclusion on the National List of

allowed synthetic substances. For each

substance considered, it was first

necessary to determine whether the

substance is synthetic according to the

definition provided by the Act. The Act

defines a synthetic substance to be ‘‘a

substance that is formulated or

manufactured by a chemical process or

by a process that chemically changes a

substance extracted from naturally

occurring plant, animal, or mineral

sources, except that such term shall not

apply to substances created by naturally

occurring biological processes.’’

The language in section

2118(c)(1)(B)(i) of the OFPA (7 U.S.C.

6517)(c)(1)(B)(i)), which provides one

set of criteria for placing a substance on

the National List, makes it clear that

only synthetic substances that contain

active ingredients need to be on the

National List in order to be permitted

for use in organic production. This

provision only encompasses active

synthetic ingredients that are used in

production and that come within certain

categories. We have accordingly

proposed a definition of an active

ingredient or substance (in any input

other than pesticide formulations) to

include any substance that, when used

in a system of organic farming or

handling, becomes a chemically

functional part of that system, or is

otherwise of significant consequence to

the production, handling and integrity

of an organically produced product.

This definition excludes substances that

are present in insignificant amounts in

the agroecosystem, such as equipment

cleansers; do not chemically interact

with the system, such as plastic

mulches or row covers; or are otherwise

inconsequential to the performance of

any function within the system.

It should be noted that a formulated

product that contains a substance that is

an active synthetic ingredient and

which also contains a synthetic inert

ingredient may only be used if the

active synthetic ingredient is included

in one of the proposed allowed

synthetic categories. Section

2118(c)(1)(B)(ii) of the OFPA (7 U.S.C.

6517(c)(1)(B)(ii)) does not require that

inert ingredients be included as a

separate category of the National List in

order to be permitted for use in organic

production. Rather, the Act requires

only that the inert ingredients not be

classified by the Administrator of the

EPA as inerts of toxicological concern in

order for the substance to be permitted

for use. Our proposal for evaluating

formulations that contain synthetic inert

ingredients is included and discussed in

proposed sections 205.20 through

205.21 and the corresponding

supplementary information.

The discussions held by the NOSB as

they evaluated substances under

consideration, and their

recommendations for their proposed

National List, served as the primary

basis for our determinations as to

whether or not a particular substance is

active and synthetic, and if so, whether

to include it as an allowed synthetic

substance on the proposed National

List. A discussion of those substances

that we have determined to be synthetic,

but not active, and which therefore are

not required to be included on the

National List in order to be used in

organic farming and handling, is

included in the supplementary

information to section 205.20 of this

proposal, which sets forth all the

categories of substances and ingredients

that can be used in organic production

and handling.

Basis for Including Specific Natural

(Non-synthetic) Substances on the

National List of Non-synthetic

Substances Prohibited for Use in

Organic Farming and Handling

In this proposal the word nonsynthetic is used to address substances

that are described in the Act as either

natural or non-synthetic. No definition

is provided in the OFPA for the word

natural. There is also a great deal of

ambiguity currently surrounding the use

and meaning of the term in regard to

production inputs, nutritional

supplements, cosmetics and other

products. The use of the term nonsynthetic in section 2118 of the OFPA

(7 U.S.C. 6517) provides us with the

basis for using this term in our proposed

rule to describe substances that are not
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65887

synthetic. By using this one term to

describe substances that are not

determined to be synthetic, we hope to

avoid the uncertainty that surrounds the

current use of the term natural in the

marketplace. Therefore, in agreement

with the recommendations provided by

the NOSB, we will use the word nonsynthetic in this and all other provisions

of this proposal to address substances

that are described in the Act either as

natural or non-synthetic substances.

Natural (non-synthetic) substances are

generally allowed under the Act for use

in organic farming and handling and

thus do not have to be included on the

National List in order to be used.

However, the Act does provide for

specific natural (non-synthetic)

substances to be prohibited for use in

organic farming and handling if certain

criteria are met. The Act also provides

that the specified natural (nonsynthetic) substances which are

prohibited for use in organic farming

and handling are to be put on the

National List of prohibited substances.

Section 2118(c)(2) of the OFPA (7

U.S.C. 6517(c)(2)) delineates the criteria

upon which the decision to prohibit the

use of a specific natural substance is to

be based. These criteria require that the

Secretary determine, in consultation

with the Secretary of HHS and the

Administrator of the EPA, that the use

of the substance would be harmful to

human health or the environment, and

that its use would be inconsistent with

organic farming or handling and the

purposes of the Act.

Basis for Inclusion of Non-agricultural

Substances and Non-organically

Produced Agricultural Products on the

National List as Substances Permitted

for Use as Ingredients In or On

Processed Organic Products.

One criterion provided by section

2118(c)(1)(A)(ii) of the OFPA (7 U.S.C.

6517(c)(1)(A)(ii)) for inclusion of a

substance on the National List of

synthetic substances permitted to be

used is that it must be necessary to the

production or handling of the

agricultural product because of the

unavailability of wholly natural

substitute products. Thus, synthetic

substances used in handling an organic

product may be considered for inclusion

on the National List of substances

permitted to be used. Such substances,

however, must be evaluated according

to the same criteria as synthetic

substances permitted to be used in crop

or livestock production, in accordance

with section 2118(c)(1)(A) of the OFPA

(7 U.S.C. 6517(c)(1)(A)). Section

2118(c)(1)(B)(iii) of the OFPA (7 U.S.C.

6517(c)(1)(B)(iii)) permits the

consideration of the inclusion of nonsynthetic non-organically produced

substances on the National List for use

in handling organic processed products

if they meet the same criteria set forth

for synthetic substances in section

2118(c)(1)(A) of the OFPA (7 U.S.C.

6517(c)(1)(A)). Because a substance that

is not an agricultural product is

considered to be non-organically

produced, this OFPA provision requires

that the NOSB and the Secretary

evaluate non-synthetic non-agricultural

substances according to the same

criteria and procedure as an active

synthetic substance used in crop or

livestock production or handling. For

these reasons, we are proposing in

section 205.26 a National List category

of non-agricultural substances allowed

as ingredients in or on organic

processed products, that consists of both

synthetic and non-synthetic substances.

A separate category of non-organically

produced agricultural products allowed

as ingredients in organic processed

products is proposed in section 205.27,

also in accordance with section

2118(c)(1)(B)(iii) of the OFPA (7 U.S.C.

6517(c)(1)(B)(iii)).

Summary of the National List and

Petition Process for Adding New

Substances

Sections 205.20 and 205.21 of subpart

B provide a summary of all the

categories of substances, ingredients and

formulated products that are either

allowed or prohibited for use in organic

farming and handling. These sections

are proposed in order to make clear the

status of any substance that may be

considered for use in a certified

operation. The following are the

categories of substances that we propose

comprise the National List: active

synthetic substances allowed for use in

organic crop production (section

205.22); non-synthetic substances

prohibited for use in organic crop

production (section 205.23); active

synthetic substances allowed for use in

organic livestock production (section

205.24); non-synthetic substances

prohibited for use in organic livestock

production (section 205.25); nonagricultural substances allowed as

ingredients in or on processed products

labeled as organic or as made with

certain organic ingredients (section

205.26); and non-organically produced

agricultural products allowed as

ingredients in or on processed products

labeled as organic or as made with

certain organic ingredients (section

205.27).

The six categories of substances we

propose for the National List delineate

the substances that can and cannot be

used in organic crop production, in

organic livestock production, and in

processed products labeled as organic or

made with certain organic ingredients.

Accordingly, only a substance that

appears in more than one category, such

as synthetic mineral nutrients that are

proposed for use in both crop

production and as livestock feed

supplements, may be used for more than

one purpose.

Proposed section 205.28 delineates

the process by which a person may

petition the NOSB to add new

substances to the National List in any of

the six aforementioned categories,

which entails the submission of

specified information to USDA.

Relationship of the National List to the

Organic Production and Handling

Requirements

Section 2118(a) of the OFPA (7 U.S.C.

6517(a)) requires the Secretary to

establish a National List to be included

in the standards for organic production

and handling established under the Act.

We have accordingly developed the

proposed production and handling

requirements (sections 205.3 through

205.19) and the National List (sections

205.22 through 205.28) as a unified

whole. The practices delineated within

the proposed requirements for organic

production and handling include

appropriate restrictions and conditions

on the use of substances, while the

National List delineates what substances

may or may not be used. These

standards also are intended to be

consistent with our proposed definition

of a system of organic farming and

handling, which, as discussed

previously, was created in order to

provide a concise summary of the

underlying principles implicit in the

Act. Under this proposal, any substance

that is permitted to be used in organic

farming or handling must be used in

compliance with the regulations

delineated in sections 205.5 through

205.19 of subpart B and must also meet

the requirements proposed in section

205.3(b)(1) that its use not result in any

measurable degradation of soil or water

quality. We believe that the provisions

proposed here for the appropriate use

and application of substances is

consistent with the provisions of the Act

that address the National List and with

the definition of a system of organic

farming and handling.

General Rules for Categories of

Substances and Ingredients Permitted

for Use in Organic Farming and

Handling—Section 205.20

Section 205.20 has been proposed to

make it clear that a substance or
65888 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

ingredient on the National List of

substances permitted to be used in

organic farming and handling may have

its use restricted under other proposed

regulatory provisions.

In section 205.20(a) we propose that

all active synthetic substances or nonorganically produced ingredients that

are included on the National List in

sections 205.22, 205.24, 205.26, or

205.27, and therefore permitted to be

used in organic farming and handling,

would have to be used in compliance

with the Act and all the regulations we

are proposing. In paragraph (b) of this

section we propose that any other

substance that may be used in a system

of organic farming and handling also

would have to be used in compliance

with the Act and the regulations. Thus,

any substance or ingredient that is

permitted for use only could be used if

its use complied with any applicable

restrictions on its use that are provided

for in other sections of the proposed

regulations. For example, section

205.7(c)(2)(i) permits the use of

synthetic micronutrients to produce

organic crops provided that the

micronutrients are not applied in a

manner intended to be herbicidal, and

section 205.16(a) permits the use of nonorganically produced ingredients in a

product labeled as organic provided that

the ingredients comprise less than 5

percent of the total weight of the

product, excluding water and salt. Of

course, all substances used in organic

farming or handling also must be used

in accordance with any other applicable

Federal, State, or local regulations.

In section 205.20(b) we propose three

categories of substances that are not

required to be included on the National

List in order to be permitted for use in

the production or handling of organic

products. A substance that does not

appear on the National List would have

to be included in one of these categories

in order to be used in organic farming

or handling, as applicable.

The first category of substances

permitted for use in organic farming or

handling, as proposed in paragraph (b)

of this section, comprises non-synthetic

substances that are not included on the

National List in section 205.23 or

section 205.25 as a non-synthetic

substance prohibited for use. Section

2118(c)(2) of the OFPA (7 U.S.C.

6517(c)(2)) provides for a non-synthetic

substance to be prohibited in organic

farming and handling only when it is

included as a prohibited substance on

the National List. Also, section 2113 of

the OFPA (7 U.S.C. 6512) states that a

production or handling practice is

permitted under the Act unless it is

prohibited or otherwise restricted, or is

determined to be inconsistent with the

certification program established under

the Act.

The following list contains various

substances that we have reviewed in

consultation with the NOSB and

determined to be both non-synthetic

and as not meeting the Act’s criteria that

would prohibit their use. Therefore,

these substances are permitted for use in

organic crop production. This list is not

intended to be inclusive of all nonsynthetic substances allowed for use. It

is, however, based on lists of substances

historically permitted for use in organic

production by existing certification

programs and is included here as a

reference guide.

A List of Natural (Non-Synthetic) Substances

Reviewed for Use in Organic Crop

Production (Non-Inclusive, for Reference

Only)

Animal substances or byproducts:

Blood meal

Bone meal and bones

Feather meal

Fish emulsions

Fish hydrolysate

Fish products (fish meal, fish bones, and

fish powder)

Fish solubles

Guano, bat or bird

Hoof and horn meal

Insect extracts

Manures, animal

Manure tea

Oyster shells and other sea shells

Oyster shell lime

Sea animal wastes

Tankage

Whey, dairy

Worm castings

Beneficial organisms

Algae

Bacteria [including Bacillus thuringiensis

(Bt)]

Fungi

Higher animals

Higher plants

Insects

Microbial soil, compost, plant and seed

inoculants

Mites

Nematodes

Protozoa

Viruses

Fermented or bio-processed substances and

composts (see animal, plant and mineral

categories for compost feed stocks):

Alcohol-from natural sources only (Ethyl)

Biodynamic preparations

Compost

Compost tea

Gibberellic acid

Leaf mold

Mushroom compost

Vinegar

Mined minerals and other mined substances:

Basalt

Borate and boron products

Calcium sulfate (gypsum)

Chilean nitrate (sodium nitrate, nitrate of

soda)

Clays

Colloidal phosphate

Cryolite (sodium fluoaluminate)

Diatomaceous earth

Dolomite

Feldspar

Granite dust

Greensand

Humates, mined sources

Humic acid derivatives

Kieserite

Lignite

Limestone

Marl

Muriate of potash

Niter (potassium nitrate)

Peat moss

Perlite

Phosphate rock, raw

Potassium sulfate

Pumice

Rock dust

Sand

Sulfur

Sulphate of potash magnesia (langbeinite)

Sodium bicarbonate

Vermiculite

Plant substances or byproducts:

Alfalfa pellets, or meal

Aquatic plant extracts

Citrus products

Citrus oil

Cocoa bean hulls

Cotton gin trash

Cottonseed meal

Food processing wastes

Garlic

Grape and other pomaces

Herbal preparations

Hay

Kelp or seaweed, unprocessed, meal,

extracts or other derivatives

Leaves

Molasses

Neem and Neem extracts

Peanut meal

Peanut hulls

Plant extracts

Propolis

Pyrethrums

Rice hulls and other residues

Rotenone

Ryania

Sabadilla

Saw dust, bark, wood chips and other

wood wastes

Soybean meal

Straw

Tobacco, and tobacco by-products

Wood ash

Vegetable waste, cannery waste

We consider a non-synthetic

substance that is an industrial byproduct to be synthetic only if the

substance becomes chemically altered

as a result of a manufacturing process.

This is consistent with section 2103(21)

of the OFPA (7 U.S.C. 6502(21)) which

defines a synthetic substance as one that

is formulated or manufactured by a

chemical process or by a process that

chemically changes the substance.

Examples of industrial by-products that

are synthetic substances are: paper
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65889

manufacturing wastes, kiln dust, and

leather meal. Whey solids and sawdust

are examples of industrial by-products

that are not chemically altered and are

therefore non-synthetic.

We do not consider non-synthetic

substances that have been treated with

a s ynthetic substance, but which have

not been chemically altered by a

manufacturing process, to be synthetic

under the definition given in the Act.

This is because the residues of synthetic

substances that may be present in these

materials do not chemically combine

with or change the chemical

composition of the original substance.

Additionally, the presence of these

residues has no significant effect on

biological and chemical interactions in

the agroecosystem, including

physiological effects on soil organisms,

crops and livestock, nor would the

residues cause measurable degradation

to soil or water quality. The synthetic

residues therefore are not considered to

be active synthetic ingredients or

substances under the definition we have

proposed. Examples of non-synthetic

substances that may have been treated

with a synthetic substance, but not

chemically altered, include municipal

yard wastes and processing wastes from

non-organically produced crops, such as

cotton gin trash or cocoa hulls.

We also do not consider certain

categories of substances that are

delineated in section 2118(c)(1)(B)(i) of

the OFPA (7 U.S.C. 6517(c)(1)(B)(i)),

which provides one set of criteria for

substances which may be included on

the National List of synthetic substances

allowed for use in organic farming and

handling, as synthetic substances

according to the definition of synthetic

given in the Act. We are therefore

proposing to allow the use of the

following substances in organic

production and handling without being

included in the National List of active

synthetic substances allowed for use in

organic farming.

Toxins derived from bacteria are not

synthetic and the use of non-synthetic

toxins as pest control substances in

organic crop production would be

regulated under section 205.9(e)(1). We

note, however, that toxins derived from

genetically engineered microorganisms

are included in this document as a

separate listing on the proposed

National List of active synthetic

substances allowed for use in crop

production, as set forth in section

205.22(d) of subpart B. We have

included toxins derived from

genetically engineered bacteria on the

proposed National List primarily so that

we can receive comment on the proper

classification of these substances, and

on whether they should be allowed,

prohibited, or approved on a case-bycase basis.

Fish emulsions are non-synthetic,

although they may contain synthetic

preservatives or stabilizers. These

preservatives or stabilizers would be

considered as inert ingredients, as

defined in section 205.2, because they

are not active ingredients in the

formulated product. Also, these

preservatives or stabilizers do not

chemically alter the non-synthetic fish

emulsion; therefore, their presence in a

formulated product would not make the

fish emulsion synthetic under the

definition in the Act. However, if the

level of a synthetic stabilizer in the fish

emulsion is higher than necessary to

stabilize the product, the stabilizer

would then be considered as a synthetic

fertilizer and thus prohibited under

section 2109(b)(1) of the OFPA (7 U.S.C.

6508(b)(1)).

Treated seed, i.e., seed treated with

pesticides, itself is not a synthetic

substance because seed is an

agricultural product and the treatment

does not chemically alter or combine

with the seed. When a treated seed is

used as permitted in proposed section

205.8(a), the seed treatment does not

function as an active ingredient for its

intended use, nor do we consider it as

causing measurable degradation of soil

or water quality; therefore, the seed

treatment is incidental or

inconsequential when treated seed is

used in organic production.

The second category, proposed in

paragraph (b)(2) of this section, includes

those substances or devices that are not

active synthetic ingredients or

substances, as defined in section 205.2,

in a system of organic farming and

handling. This category encompasses

certain production aids used in crop

and livestock production, such as

plastics or other synthetic materials

used as mechanical devices, treatments

used for structures, and substances that

otherwise do not enter into chemical

interactions in the agroecosystem under

normal conditions of use. It also

includes certain production aids and

other substances used in handling that

are considered to be incidental

additives, as is consistent with FDA and

FSIS regulations governing ingredients

that must be included on product labels.

The following list of substances or

categories of substances have been

determined by us to fall into this

category because they are aids, devices,

or incidental additives that do not

contain active synthetic ingredients and

do not meet the proposed definition of

active ingredient or substance, and are

therefore permitted for use in organic

production or handling without

inclusion on the National List. Included

in this listing are some categories of

substances delineated in section

2118(c)(1)(B)(i) of the OFPA (7 U.S.C.

6517(c)(1)(B)(i)), which establishes one

set of criteria for substances that may be

included on the National List, as well as

additional substances that were

considered by the NOSB for inclusion

on the National List. This discussion is

not intended to be an all-inclusive

listing of non-active substances that may

be used in organic production or

handling.

Production aids such as netting; tree

wraps and seals; sticky barriers; row

covers; equipment cleaners; flocculants;

pelletizers; adjuvants; and surfactants

and other substances added to water to

change its physical properties do not

contain or function as active ingredients

under our proposed definition of active

ingredient because proper use of these

substances has no consequential effects

on biological and chemical interactions

in the agroecosystem and does not cause

measurable degradation of soil or water

quality. Agricultural plastics, whether

used as insect barriers, mulch, irrigation

pipe, season extenders, or similar

purposes, cannot be said to enter into

chemical interactions in the

agroecosystem. Substances used to

adjust the texture of dry materials (e.g.,

flocculants or pelletizers) or to change

the physical qualities of water (e.g.,

adjuvants or surfactants) are considered

to be inconsequential additives rather

than active ingredients in fertilizer, pest

control, tank mixes, or other types of

product formulations.

Synthetic substances used in insect or

rodent traps are not active synthetic

ingredients because they are not

integrated into an organic production or

handling system and do not interact

chemically with any element of the

agroecosystem. They are, additionally,

prohibited from directly contacting an

organic product or crop and therefore

would not affect the integrity of an

organic product.

We do not consider wood that is

treated with synthetic preservatives and

used in buildings, trellises and fences to

have a significant potential to cause

degradation of soil or water quality

because the wood preservatives do not

chemically interact with, or affect the

integrity of, any aspect of the

agroecosystem when used for structures,

even structures that are used in contact

with the soil. However, in certain

situations, treatments used to preserve

wood have been shown to have effects

on biological and chemical interactions

in the agroecosystem that would cause

the treated wood to be considered an
65890 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

active substance under our proposed

definition. These situations are

conditions that bring the wood into

prolonged contact with soil that has a

very high organic content, as is

commonly found in compost bins and

containers used for greenhouse potting

mixes. We therefore would consider

treated wood to be an active synthetic

substance in any such situation, and

thus prohibited for use in conditions of

prolonged contact with soil that has a

very high organic content. Further, as

discussed in the supplementary

information for section 205.21, if treated

wood were to be used as a bin or

container for an organic product, its use

would be prohibited under section

2111(a)(5) of the OFPA (7 U.S.C.

6510(a)(5)), which prohibits the use for

the handling of organic products of any

storage containers or bins that contain

synthetic fungicides, preservatives or

fumigants.

An incidental additive used in the

processing of agricultural products,

which we define as an additive present

in an agricultural product at an

insignificant level and that does not

have any technical or functional effect

in the product, does not therefore meet

our definition of an active ingredient.

As discussed in the supplementary

information for section 205.26,

incidental additives may be used in

organic handling without inclusion on

the National List, but their use is

regulated in section 205.17(a).

In section 205.20(b)(3), we propose

that formulated products containing

inert ingredients may be used in a

certified organic farming operation if the

formulated product does not contain an

active synthetic ingredient that is

prohibited for use in organic farming,

and any synthetic inert ingredient

contained in the formulation is not

classified by EPA as an inert of

toxicological concern. In order for a

formulated product to be used in

organic crop production, each active

ingredient it contains must be a

substance that is permitted under the

Act and subpart B of part 205.

Additionally, the Act in section

2118(c)(1)(B)(ii) of the OFPA (7 U.S.C.

6517(c)(1)(B)(ii)) specifically prohibits

products containing substances

classified by EPA as inerts of

toxicological concern. We have

determined that this prohibition applies

only to EPA List 1 inerts (Inerts of

Toxicological Concern), as explained in

the supplementary information for

section 205.21(d). Accordingly,

formulations containing synthetic inert

substances included on EPA List 2,

Potentially Toxic Inerts; EPA List 3,

Inerts of Unknown Toxicity; and EPA

List 4, Inerts of Minimal Concern would

be permitted in organic production

under our proposal.

General Rules for Categories of

Substances and Ingredients Prohibited

for Use in Organic Farming and

Handling—Section 205.21

Section 205.21 delineates five general

categories of substances that would be

prohibited for any use in organic

production or handling. The first of

these, proposed in paragraph (a) of this

section, would be an active synthetic

substance that is not included as an

active synthetic substance permitted for

use in either organic crop or livestock

production in sections 205.22 or 205.24

of the National List. This category is

proposed, as stated previously, in

accordance with sections 2105(1) and

2118(c)(1)(B)(i) of the OFPA (7 U.S.C.

6504(1) and 6517(c)(1)(B)(i)) which

prohibit the use of any active synthetic

substance in organic production unless

it is on the National List. Our proposed

category specifically includes any

synthetic carbon based substance that

has a cytotoxic mode of action, as

defined in section 205.2. These

synthetic carbon based substances are

discussed in the supplementary

information for section 205.9(f). They

are not one of the categories of

substances that is identified in section

2118(c)(1)(B)(i) of the OFPA (7 U.S.C.

6517(c)(1)(B)(i)) as a possible category of

synthetic substances that may be put on

the National List, thus allowing their

use. It should be noted that any active

synthetic substance that does not belong

to any of the categories of substances

identified in this section of the Act

could not be included on the National

List and thus could not be permitted for

use in organic farming or handling.

Paragraph (b) of this section would

prohibit the use of a non-agricultural

substance used as an ingredient in or on

a processed product that is labeled as

organic or as made with certain organic

ingredients if the substance is not

included in section 205.26 as an

allowed non-agricultural substance.

This category, as previously discussed,

is proposed in accordance with section

2118(c)(1)(B)(iii) of the OFPA (7 U.S.C.

6517(c)(1)(B)(iii)), which permits the

use of a non-organically produced

ingredient in handling an organic

product only if the substance is

included on the National List.

The third category, proposed in

paragraph (c) of this section, would

include any prohibited non-synthetic

substance included in either sections

205.23 or 205.25. The absence of any

prohibited non-synthetic substances in

this proposal is discussed in the

supplementary information for

proposed section 205.23.

The fourth category of substances

prohibited under this proposal, in

section 205.21(d), is in accordance with

section 2118(c)(1)(B)(ii) of the OFPA (7

U.S.C. 6517(c)(1)(B)(ii)), which prohibits

the use of formulated products that

contain any synthetic inert ingredient

that is classified by the Administrator of

the EPA as an inert of toxicological

concern. Inert ingredients of

toxicological concern are those inert

ingredients included on the EPA List 1

Inerts of Toxicological Concern (54 FR

48314, November 22, 1989). Our

proposed provision would prohibit the

use of any formulation containing an

inert ingredient included on the EPA

List 1, even if that product contained an

active ingredient that was otherwise

allowed in this subpart. Formulated

pesticidal products that contain EPA

List 1 inerts can be identified by organic

producers and handlers because the

EPA requires the phrase ‘‘This product

contains the toxic inert ingredient . . .’’

to appear on the label of such products.

Paragraph (e) of this section would

prohibit the use of any fertilizer or

commercially blended fertilizer that

contains an active synthetic ingredient

not allowed for use in crop production

as provided for in section 205.22, or that

contains an active prohibited substance.

This prohibition is consistent with

section 2109(b)(1) of the OFPA (7 U.S.C.

6508(b)(1)) and would apply in this

proposal only to substances or products

which meet the definition of fertilizer

which we propose in section 205.2.

Under our proposal, the provisions of

paragraph (e) of this section would not

apply to substances used as

micronutrients, foliar nutrients, soil

cation balancing agents, soil

conditioners, or substances with similar

functions which do not meet our

proposed definition of fertilizer as a

single or blended substance applied to

the soil to supply any of the three

primary plant nutrients, nitrogen (N),

phosphorus (P) and potassium (K),

needed for the growth of plants.

Micronutrients and these substances

with similar functions are permitted for

use in organic crop production in most

of the existing organic programs we

have reviewed, and to include them

within the category of synthetic

fertilizers, which are prohibited under

the Act, would unnecessarily restrict the

options available to organic farmers for

providing essential plant nutrients and

maintaining soil fertility.
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65891

The National List of Active Synthetic

Substances Allowed for Use in Organic

Crop Production—Section 205.22

This section of the proposed

regulation lists the active synthetic

substances that have been reviewed for

use in organic crop production and

which the Secretary proposes be

allowed for such use because each

meets the criteria in the Act that permits

their use. These substances have been

reviewed by the NOSB as required by

the Act, and have been determined by

the Secretary to contain or function as

an active ingredient in one of the

categories the Act permits for inclusion

on the National List as a substance

permitted for use.

Any synthetic substance included on

the National List appears only according

to its generic or most commonly used

name. In some cases, we have indicated

other commonly-known terms for

certain substances, such as horticultural

oils. A farmer or handler is expected to

request clarification from the applicable

certifying agent in the case of

uncertainty about the generic name of a

particular brand-name substance, or

about the use of any substance for

which there might be any other

questions.

Section 205.22, the list of active

synthetic substances allowed for use in

organic crop production, is organized

into groups according to the functions

for which the substances may be used.

These groups are: horticultural oils used

as insect pest smothering or suffocating

agents; soaps used as insecticides,

algicides, de-mossers, large animal

repellants, and herbicides; production

aids; toxins derived from genetically

engineered bacteria (that are not

released live into the agroecosystem) for

use as pesticides; copper and sulfur

compounds used as pesticides; minerals

used as micronutrients; and minerals

used as defoliants in fiber production.

Most of the substances included in

this section of the National List are

proposed in accordance with the

recommendations provided by the

NOSB. There are, however, a few cases

in which we have determined it

necessary to amend the NOSB

recommendations concerning a

particular substance in consideration of

the Act, public input, and other

information, including evaluations by

the technical advisory panels. The

following are substances for which the

NOSB recommendations differ from our

proposed list in section 205.22.

The NOSB recommended restricting

the use of herbicidal soaps (proposed in

section 205.22(b)) to non-field

applications. We determined, however,

that the uses of herbicidal soaps allowed

by EPA would not be harmful to human

health or the environment and are

consistent with the other criteria

provided by the Act, and thus do not

need to be restricted to non-field

applications. The available evidence

suggests that these soaps are not

persistent in the agroecosystem and

would not cause measurable

degradation of soil or water quality or

have discernable effects on biological

and chemical interactions in the

agroecosystem.

The NOSB recommended allowing

certain specific antibiotics as pesticides

in crop production, but did not

recommend to allow others for this use,

particularly Avermectin. Based on a

review of the technical information for

these substances, we determined that all

the antibiotics labeled for use as

pesticides by EPA are of equally

minimal consequence in their effects on

biological and chemical interactions in

the agroecosystem and would not cause

measurable degradation of soil or water

quality when properly used according to

label instruction and use restrictions,

and there are no other criteria specified

in the Act that any specific substance in

this category fails to meet.

The synergist piperonyl butoxide

(PBO) (proposed in section 205.22(c)(9))

was not recommended by the NOSB for

inclusion on the National List; the vote

to approve PBO failed by only one vote

to achieve the two-thirds majority

required for approval. PBO is extracted

from a non-synthetic substance, but is

modified synthetically in the process of

extraction and refining; it does not

appear to persist in the environment or

otherwise have significant effects on

biological and chemical interactions in

the agroecosystem or cause measurable

degradation of soil or water quality, and

is consistent with the other criteria

specified in the Act. It also functions in

a manner that significantly reduces the

amounts required of some botanical

pesticides that may be applied. In

consideration of the benefits of reducing

the amount of botanical pesticides used

in an organic farming operation, which

the scientific evidence clearly indicates

is more likely to effect biological and

chemical interactions in the

agroecosystem than the PBO, we have

determined that PBO should appear as

an allowed synthetic substance on the

proposed National List.

The NOSB did not recommend to

include on the proposed National List

killed microbial pesticides (toxins

derived from genetically engineered

bacteria that are not released live into

the agroecosystem), such as the Bacillus

thuringiensis toxin (proposed in section

205.22(d)). However, several technical

experts to the NOSB reviewed these

substances positively, and did not raise

concerns about their effects on

biological and chemical interactions in

the agroecosystem when these

substances are properly used. We have

included toxins derived from

genetically engineered bacteria that are

not released live into the agroecosystem

on the proposed National List.

Our research indicates that the

genetically engineered bacteria from

which the toxins proposed for inclusion

on the National List in section 205.22(d)

are derived are not released live into the

agroecosystem and therefore do not

have the potential to reproduce. Our

research, however, indicates that the

toxins themselves if overused may have

the potential to induce accelerated

resistance of pest populations. In this

regard, we would like to receive public

comment and technical and scientific

data as to the effects of the use of toxins

derived from genetically engineered

bacteria that are not released live into

the agroecosystem on the biological and

chemical interactions in the

agroecosystem.

The NOSB recommended that

minerals used as defoliants in organic

fiber production (proposed in section

205.22(g)) should be restricted

according to their use and source

because of their potential to cause

measurable degradation of soil and

water quality. However, technical

information we reviewed about the use

of these substances indicates that they

are unlikely to result in measurable

degradation of soil and water quality in

the amounts applied for the defoliation

of fiber crops. We have, therefore, listed

calcium chloride, magnesium chloride,

sodium chlorate, and sodium chloride

as allowed synthetic substances used to

defoliate fiber crops. In accordance with

proposed section 205.3(b)(2), a nonsynthetic substance, such as sodium

chloride extracted from brine, would

have to be chosen in preference to any

synthetic defoliant, whenever possible.

However, we determined that all four

substances reviewed should appear on

the National List because they are

relatively indistinguishable with respect

to their potential for measurable

degradation of soil and water quality. In

addition, all these minerals are available

in both synthetic and non-synthetic

forms that are not readily

distinguishable, and thus would have to

appear on the National List in order to

be permitted for use.

The NOSB has reviewed amino acids

(proposed in section 205.22(b)(5)) but

has not yet made a recommendation as

to whether to include them on the
65892 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

National List as allowed synthetic crop

production substances. However, the

NOSB did vote to allow the use of

certain vitamins, which are similar to

amino acids in their use as a crop

production aid and their effects on soil

and water quality. We did not find any

scientific evidence that amino acids,

which are synthetically derived but

chemically identical to substances that

are normally found in soil organic

matter, pose any concern for measurable

degradation of soil and water quality

and they meet all the other criteria

established in the Act. We therefore

have included amino acids on the

proposed National List for use as an

organic crop production aid. The NOSB recommended the

following substances for inclusion on

the National List of allowed synthetic

substances, but we have not included

them on the proposed National List

because we determined that they were

non-synthetic. Therefore, they may be

used in organic farming without being

included on the National List.

Fish products, aquatic plant extracts,

and humic acid and its derivatives are

not included because, as discussed

previously, we determined that they are

non-synthetic. Although the NOSB also

had concerns about synthetic

extractants used to produce these nonsynthetic substances, we determined

that the extraction methods for

substances used in crop production are

inconsequential in their effects on

biological and chemical interactions in

the agroecosystem or to measurable

degradation of soil and water quality.

Additionally, the addition of small

amounts of synthetic stabilizers or

preservatives to these products is of

minimal concern and, as discussed in

the supplementary information for

section 205.20 of this proposal, the

inclusion in a formulated product of

synthetic inert ingredients that are not

of toxicological concern does not cause

the product to be prohibited for use in

organic production. However, we are

aware that synthetic stabilizers

sometimes may be added to such

products at levels higher than necessary

to stabilize the formulation in order to

increase its fertilizer value. In such

cases, the stabilizers would be

considered to be synthetic fertilizers,

which are prohibited for use in organic

production by section 2109(b)(1) of the

OFPA (7 U.S.C. 6508(b)(1)) and

proposed section 205.7(d)(1). A certified

producer or handler is expected to

request clarification from the certifying

agent in the case of uncertainty about

whether a specific product would be

prohibited according to this definition. Elemental sulfur also was

recommended by the NOSB for

inclusion in proposed section 205.21.

However, we consider elemental sulfur

to be non-synthetic regardless of its

source.

Potassium nitrate (niter) was reviewed

by the NOSB as a synthetic substance

and was not recommended for inclusion

as an allowed synthetic substance for

organic crop production. However, we

reviewed information that potassium

nitrate also exists as a natural mineral

deposit that may be mined for

agricultural use. Although we agree

with the NOSB and do not consider

synthetic potassium nitrate to meet the

criteria for inclusion as a synthetic

substance on the National List, niter in

the form of a non-synthetic mined

product would be allowed for use in

organic production under the Act and

the proposed regulations in subpart B of

this part.

The following substances were

recommended by the NOSB for

inclusion as allowed synthetic

substances for organic crop production.

We have not included them on the

National List because we consider them

not to be active substances or

ingredients in the applications for

which they are used and therefore, as

previously discussed, are substances

that may be used in a certified organic

operation without inclusion on the

National List:

Plastic mulches and row covers do

not interact chemically with the

agroecosystem and are specifically

permitted under section 2109(c)(2) of

the OFPA (7 U.S.C. 6508(c)(2)) if they

are removed at the end of each harvest

season.

Disinfectants, such as alcohols,

hydrogen peroxide and chlorine bleach

that are used to clean equipment; sticky

traps and barriers; and ammonium

carbonate used as bait in traps are not

used directly on soil or crops and thus

are not active because they have no

significant consequence to the organic

production system.

Lignin sulfonate, which is used as a

dust suppressant or as a chelating agent,

is not active in either use because, in the

former instance it is not applied to soil

used for crop production and, in the

latter instance, it is not an active

ingredient in a formulated

(micronutrient) product.

Detergents and other emulsifiers used

as surfactants or adjuvants often are

added in very small quantities directly

to tank mixes used for spraying and are

considered to be non-active, just as inert

ingredients within a formulated product

are. Similar considerations apply to

sodium silicate and other substances

used to affect the surface tension of

water, as is sometimes done to improve

the buoyancy of tree fruit during

packing.

The NOSB also recommended that

lumber treated with arsenates not be

included on the National List as an

allowed synthetic substance. However,

as previously discussed, we determined

that a substance used to treat lumber

that is used for such purposes as

buildings, fences and trellises cannot be

considered to be an active ingredient

under our definition of an active

ingredient. However, evidence we have

reviewed indicates that arsenates and

other synthetic lumber preservatives

may become active when in contact

with soil having a very high organic

content, such as soil used in greenhouse

beds or compost bins. Because arsenates

and other synthetic substances used to

preserve lumber are not proposed by us

to be included on the National List as

active synthetic substance, and because

section 2109(c)(1) of the OFPA (7 U.S.C.

6508(c)(1)) specifically prohibits the use

of arsenic or lead salts in organic crop

production, the use of arsenates and

other synthetic lumber preservatives in

any manner that might be considered an

active use would be prohibited under

the Act and this proposal. Furthermore,

section 2111(a)(5) of the OFPA (7 U.S.C.

6510(a)(5)) prohibits the use of storage

containers or bins that contain any

synthetic fungicides or preservatives in

handling organic products and this

would include bins constructed of

arsenate treated lumber.

Finally, the NOSB recommended that

biosolids, or municipal sludge, should

be classified as synthetic and were not

appropriate for use in organic crop

production. The EPA defines biosolids

as the primarily organic residuals,

produced by current wastewater

treatment processes that treat domestic

sewage, that can be beneficially

recycled. Under current EPA

regulations, such recycling can include

land application of biosolids to provide

primary plant nutrients and

micronutrients to crops and vegetation

produced in agriculture and to improve

soil characteristics by providing

necessary moisture and/or organic

matter to enhance soil tilth. Over the

years, EPA, USDA, and FDA have

issued joint policy statements that have

endorsed the beneficial utilization of

biosolids on land for purposes that

include the production of fruits and

vegetables. However, to prevent

potential problems, the guidance

contains steps that must be taken

relative to issues such as the amount of

cadmium and lead that can be applied

to the soil, the amount of PCBs in the

biosolids, and the relative accumulation
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65893

of heavy metals into edible plant parts.

Under these and other restrictions

contained in 40 CFR Part 503, biosolids

can be safely used in conventional

agriculture. However, we are requesting

comments to assess the extent to which

biosolids may be used in organic

production. The USDA specifically

invites comments on whether the use of

biosolids (municipal sludge) should be

permitted or prohibited in organic

production. The USDA also invites

comments on the classification of

biosolids as a synthetic rather than a

non-synthetic substance. Comments

should detail the basis for the

commenter’s recommendation,

including the agricultural, policy,

technical, or scientific factors.

The National List of Non-Synthetic

(Natural) Substances Prohibited for Use

in Organic Crop Production—Section

205.23

The NOSB has recommended that the

rodenticide strychnine, the fertilizer

ingredient manure ash, and the

pesticide sodium fluoaluminate, which

are non-synthetic (natural) substances,

be prohibited for use in organic farming

and handling. As stated previously, in

order for the Secretary to prohibit the

use of a non-synthetic (natural)

substance in an organic farming or

handling operation, it must be

determined that the use of such

substance both would be harmful to

human health and the environment and

inconsistent with organic farming or

handling. Further, the Secretary of HHS

and the Administrator of EPA must be

consulted.

The Secretary of HHS and the

Administrator of EPA, respectively,

have the authority to regulate crop

production substances according to

human health and safety and

environmental protection. These two

agencies have the responsibility to

review and establish appropriate

restrictions on the use of any substance

as a pest control, food, feed or drug, and

the applicable agency must determine

that allowed use of the substance poses

no threat to human health and the

environment before permitting a

substance to be used in agricultural

production or handling. In consulting

with these agencies, they concluded that

their review of these substances showed

that, when used according to the

requirements established by these

agencies, the substances do not meet the

criteria in the Act for inclusion on the

National List of prohibited nonsynthetic (natural) substances. In

concurrence with this conclusion, we

have determined that there can be no

non-synthetic substance that meets both

of the OFPA criteria for being

designated as a prohibited non-synthetic

substance, and we did not accept the

NOSB’s recommendation for the

prohibition of strychnine, manure ash,

and sodium fluoaluminate. We only

include sections 205.23 and 205.25 in

our proposal so that appropriate

substances may be included on the

National List in the future should this

be determined to be necessary.

The National List of Active Synthetic

Substances Allowed for Use in Organic

Livestock Production—Section 205.24

The substances proposed for

inclusion in this section of the National

List are listed as the following six

categories: trace minerals; nutrients and

dietary supplements; feed additives

(provided they are also included in

section 205.26); animal drugs and other

animal health care substances; vaccines

and biologics; and pest control

substances (provided they also are

included in section 205.22).

This section would permit any active

synthetic substance permitted by FDA,

EPA and USDA in the specified

categories to be allowed for use in

organic livestock production when used

in accordance with the restrictions

specified by the approving agency and

the restrictions specified in this section.

We have proposed these active synthetic

substances to be permitted for use after

reviewing the NOSB recommendations

for livestock substances to be included

on the National List, and their

recommendations for the use of

vitamins, minerals, inoculants,

vaccines, antibiotics and parasiticides in

livestock production. Our proposed list

is consistent with sections 2110 and

2118 of the OFPA (7 U.S.C. 6509 and

6517), which delineate feeding and

health care practices to be used in

organic livestock production and the

categories of synthetic substances

related to livestock production that may

be included in the National List.

Section 2110(d) of the OFPA (7 U.S.C.

6509(d)) prohibits certain uses of

veterinary medications, specifically

subtherapeutic doses of antibiotics and

routine administration of synthetic

internal parasiticides, in organic

livestock production. The use of other

veterinary medications, except vaccines,

is prohibited only in the absence of

illness. This indicates that therapeutic

doses of antibiotics, non-routine use of

synthetic internal parasiticides, any use

of vaccines, and administration of any

veterinary medication to treat an illness

are all permitted under the Act, without

the need to include these substances on

the National List of synthetic substances

permitted to be used. However, because

livestock parasiticides and medicines

are also included among the categories

of active synthetic substances in section

2118(c)(1)(B)(i) of the OFPA (7 U.S.C.

6517(c)(1)(B)(i)) that would need to be

included on the National List in order

to be permitted to be used, we have

included animal drugs (veterinary

medications) in this section of the

proposed National List in order to

clarify that their use is permitted.

All of the categories proposed for

inclusion in this section of the National

List, other than animal drugs and other

animal health care substances and

vaccines and biologics, have been

explicitly reviewed by the NOSB itself

and proposed for inclusion as either

crop production substances in section

205.22 or as ingredients allowed in

processed products in section 205.26.

We are including the categories of

animal drugs and animal health care

substances and vaccines and biologics

in the National List because these

substances have already been evaluated

by the applicable regulatory agency that

approves them for general use by

criteria similar to those in section

2119(m) of the OFPA (7 U.S.C. 6518(m))

that are to be used by the NOSB in

evaluating a substance.

A representative of the FDA’s Center

of Veterinary Medicine (CVM)

addressed the NOSB in Rohnert Park,

California, in October 1994, to explain

in detail the review process conducted

by CVM in reviewing veterinary drugs

and establishing withdrawal times. The

NOSB voted at its meeting in Austin,

Texas, on October 31, 1995, to accept

the FDA evaluations of antibiotics,

parasiticides, vitamins and minerals and

the USDA evaluations of inoculants and

vaccines as equivalent to the substance

review process established for the NOSB

in sections 2119(k), (l) and (m) of the

OFPA (7 U.S.C. 6518 (k), (l) and (m)).

However, in doing so, the NOSB did

indicate that it would: defer the initial

technical advisory panel review of

synthetic vitamins and minerals for a

period of two years unless a specific

vitamin or mineral is identified in the

interim as being in conflict with organic

principles and therefore requires an

immediate review; defer the initial

review of vaccines and inoculants for a

period of two years, except in the case

of a substance that may be in conflict

with organic principles and therefore

requires an immediate review; and

establish a priority ranking of antibiotics

and parasiticides to be used by

producers when administering animal

drugs. To date, the NOSB has not yet

established a priority ranking for

preferred use of the antibiotics and

parasiticides approved by FDA.
65894 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

The National List of Non-Synthetic

Substances Prohibited for Use in

Organic Livestock Production—Section

205.25

As previously discussed with

reference to proposed section 205.23, no

substances are proposed in this section

because we have determined that no

non-synthetic substances meet the

criteria provided in section 2118(c)(2) of

the OFPA (7 U.S.C. 6517(c)(2)) for

prohibiting their use.

The National List of Non-agricultural

Substances Allowed as Ingredients in or

on Processed Products Labeled as

Organic or Made With Certain Organic

Ingredients—Section 205.26

We propose in § 205.26 the National

List category of non-agricultural

substances allowed as ingredients in or

on processed products labeled as

organic or made with certain organic

ingredients. As discussed previously,

this section of the National List is

proposed to satisfy the provision in

section 2118(c)(1)(B)(iii) of the OFPA (7

U.S.C. 6517(c)(1)(B)(iii)) that a nonorganically produced substance used in

handling be evaluated as if it were

synthetic, and therefore the use of such

a substance is prohibited unless it

appears on the National List.

The inclusion of both synthetic and

non-synthetic non-agricultural

substances in this category is necessary

because, as was indicated in the NOSB’s

deliberations, it is often very difficult to

decisively classify many nonagricultural ingredients as synthetic or

non-synthetic. For example, citric acid

is a naturally occurring substance that

may be obtained from citrus fruits.

However, after reviewing and discussing

the process by which virtually all

commercially available citric acid is

formulated, the NOSB was almost

evenly divided in its vote as to whether

or not this process rendered the

substance synthetic under the definition

provided in section 2103 of the OFPA

(7 U.S.C. 6502).

We have not, however, proposed to

include in this section of the National

List any substance (ingredient) that does

not meet our definition of an active

ingredient. Substances that are not

active ingredients are considered to be

incidental additives, and such

substances are not consistent with the

FDA and FSIS requirements for

substances that must be listed on a

product label. As previously discussed,

because incidental additives are not

active ingredients, they are not

otherwise prohibited by the Act and

may thus be used in handling organic

products without having to be included

on the National List. We are accordingly

including only substances that do meet

the definition of an active ingredient,

and that therefore are required by the

FDA and FSIS to be listed on a product

label, in the National List of nonagricultural substances allowed as

ingredients in or on processed organic

products.

Proposed § 205.26 contains an

alphabetical listing of the generic name

of the non-agricultural substances

which meet the Act’s criteria for

inclusion on the National List as

substances permitted to be used. These

substances have been reviewed by the

NOSB and included in

recommendations made by them to the

Secretary regarding substances to be

included on the proposed National List.

In most cases, substances are listed

individually, such as ammonium

bicarbonate or lactic acid, but in many

cases categories of substances, such as

cultures (dairy, non-synthetic) or

nutrient supplements, are listed. When

a category is listed, the use of any

substance that belongs to that category

is allowed.

This section diverges from certain

recommendations provided by the

NOSB. As discussed with respect to

allowed synthetic substances used in

crop production, proposed in § 205.22,

certain substances that the NOSB

recommended be included on the

National List of substances allowed for

use as ingredients in or on processed

organic products are not active, and are

thus not included in this section. These

substances, which may be used without

inclusion on the National List, are

diatomaceous earth, clays including

kaolin and bentonite, nitrogen, oxygen,

ozone, chlorine bleach, perlite, sodium

hydroxide, ethylene, hydrogen

peroxide, and potassium hydroxide.

Kelp was reviewed and recommended

by the NOSB as a permitted nonagricultural substance in processed

products. We have not included kelp as

a non-agricultural substance permitted

for use because kelp and other seaweeds

are plants harvested from the wild, and

so are considered agricultural products

as opposed to non-agricultural products

when used as ingredients in processed

organic products. Kelp also might be

considered a nutrient supplement when

used as a source of iodine in food meant

for human consumption and as a source

of iodine and trace minerals in livestock

feed.

The NOSB recommended the plant

derived waxes carnauba wax and wood

rosin for inclusion on the proposed

National List. (Wood rosin also is

referred to as lac-resin, shellac-based

wax, or resin). We have included

carnauba wax and wood rosin in this

proposed section and additionally

propose to include candelilla wax and

beeswax as allowed non-agricultural

substances. Candelilla wax is a plant

derived wax that is commonly used, as

is beeswax, in coatings for fresh

produce. We consider both waxes to be

necessary to the handling of agricultural

products and as meeting the other

requirements of section 2118(a) of the

OFPA (7 U.S.C. 6517(a)) that must be

met before such substances may be

permitted to be used. In accordance

with section 2111(a)(5) of the OFPA (7

U.S.C. 6510(a)(5)), which prohibits the

use of any packaging materials that

contain synthetic fungicides or

preservatives, any wax used as a coating

on fresh produce could not contain

synthetic preservatives or fungicides.

The NOSB recommended the

inclusion of unmodified cornstarch as a

permitted substance and postponed a

decision on other unmodified starches.

Unmodified starches are agricultural

ingredients because they are

manufactured from agricultural

products through methods that do not

meet the Act’s definition of synthetic.

Their use would therefore be permitted

as non-organic agricultural ingredients

in proposed § 205.27.

The NOSB reviewed whey protein

and did not recommend it for inclusion

on the National List of allowed non

agricultural ingredients. We consider

whey protein to be necessary to the

handling of certain agricultural products

because of the unavailability of wholly

natural products, which use is then

provided for in section 2118(c)(1)(A)(ii)

of the OFPA (7 U.S.C. 6517(c)(1)(A)(ii)).

This substance also meets the other

criteria in the Act for inclusion on the

National List, and we accordingly

propose that it be included as an

allowed non-agricultural ingredient as

part of our category whey and its

fractions.

The NOSB also recommended not to

include magnesium carbonate,

potassium phosphate, magnesium

stearate, and potassium iodide on their

proposed National List of nonagricultural ingredients allowed in

agricultural products labeled as organic.

However, the NOSB recommended that

these four substances be permitted in

products labeled as made with certain

organic ingredients. Because our

proposed National List is applicable to

both types of labeled products, we

propose to include magnesium

carbonate, potassium phosphate,

magnesium stearate and potassium

iodide in this section and allow their

use in products labeled organic and

made with certain organic ingredients.
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65895

(Potassium iodide is not listed

separately because it is included within

the nutrient supplement category).

Chymosin is an enzyme that occurs

naturally in animals and currently is

being produced through genetically

engineered microorganism in quantities

suitable for cheese production. The

NOSB recommended that chymosin not

be included on the proposed National

List of non-agricultural substances

because it is derived from a genetically

engineered microorganism. We have

included chymosin on the proposed

National List so as to solicit public

comment.

The NOSB recommended that

enzymes derived from bacteria which

were not genetically engineered are

appropriate for use as non agricultural

ingredients in agricultural products

labeled as organic or made with certain

organic ingredients. Although the NOSB

has not completed its review of sources

of non-synthetic enzymes, such as plant,

animal, and micro-organisms other than

bacteria, we have included the category

of enzymes, non-synthetic in this

section of the proposed National List for

the purpose of receiving comment

during the period that the NOSB

completes its review and develops its

recommendation. When they have

completed their review, appropriate

notice will be provided. We would

consider animal-derived rennet to be

included in the category of nonsynthetic enzymes.

The NOSB classified calcium sulfate

as synthetic and did not recommend it

for inclusion on the proposed National

List of non-agricultural substances

permitted to be used. However, we are

aware of at least one source of mined

gypsum (non-synthetic) that is refined

to food grade calcium sulfate. Also, we

received comments from some

manufacturers of tofu who stated their

preference for calcium sulfate over other

coagulants. Non-synthetic calcium

sulfate could serve in some cases as a

wholly natural alternative to the use of

synthetic tofu coagulants, and otherwise

meets the Act’s criteria for inclusion on

the National List of non-agricultural

substances permitted to be used. We

have therefore included calcium sulfate

in this section of the proposed National

List.

Some substances included in this

proposed section 205.26 as nonagricultural substances are

manufactured from feed stocks that are

agricultural products, such as corn.

Some persons may thus consider these

substances to be agricultural products,

and therefore not appropriate for

inclusion in this section of the National

List. We have included these substances

because they are not easily recognizable

as agricultural products, or because

there is some likelihood that the

processing methods used to purify these

substances would render them synthetic

as defined under the Act. The inclusion

of these substances in this section is

based on our definition of a nonagricultural ingredient (proposed in

section 205.2) as a substance that is

extracted, isolated from, or is a fraction

of an agricultural product, so that the

identity of the agricultural product is

unrecognizable in the extract, isolate or

fraction. Examples of these proposed

substances include: ascorbic acid,

beeswax, citric acid, candelilla wax,

carnauba wax, carrageenan, nonsynthetic colors, lactic acid, lecithin,

mono and diglycerides, pectin,

potassium acid tartrate, tartaric acid and

whey and its fractions. Since many of

these substances originate from

agricultural products, it is possible that

these substances could be available in

the future as organic agricultural

products.

Non-organically Produced Agricultural

Products Allowed as Ingredients In or

On Processed Products Labeled as

Organic or Made With Organic

Ingredients—Section 205.27

Non-organically produced agricultural

ingredients are permitted for use in

processed organic products under

section 2111(a)(4) of the OFPA (7 U.S.C.

6510(a)(4)), provided that they comprise

less than five percent by weight of the

finished product, exclusive of water and

salt, and are included on the National

List. Section 2118(c)(1)(B)(iii) of the

OFPA (7 U.S.C. 6517(c)(1)(B)(iii))

requires non-organically produced

substances to be evaluated according to

the same criteria used for active

synthetic ingredients in order to be

permitted for use as ingredients in

organic products. In its review of nonorganically produced agricultural

products, the NOSB concluded that all

agricultural products, considered as a

category, meet the criteria for including

substances on the National List, as set

forth in sections 2118(c)(1)(A) and

2119(m) of the OFPA (7 U.S.C.

6517(c)(1)(A) and 6518(m)). In

concurrence with the NOSB, we are

proposing in this section that all nonorganically produced agricultural

products be allowed as ingredients in

organic processed products. Under this

proposal, any agricultural product could

be used if such use complied with the

provisions proposed in section 205.16.

Amending the National List—Section

205.28

Section 2119(n) of the OFPA (7 U.S.C.

6518(n)) requires the establishment of a

petition procedure by which interested

parties may request the NOSB to

evaluate substances for inclusion on the

National List. We accordingly have

proposed in section 205.28 a process by

which an interested party may petition

the NOSB to review a substance and

make a recommendation as to whether

the substance should be included in the

National List as an allowed active

synthetic substance, a prohibited nonsynthetic substance, or a nonagricultural substance allowed to be

used as an ingredient in or on processed

organic products.

This section also proposes the

information that, to the extent it is

available to the petitioner, should be

included in the petition to assist the

NOSB review of the substance and the

Secretary’s determination as to its

inclusion on the National List. The

information requested by proposed

paragraph (d) of this section would

provide information relevant to the

issues that are to be examined when

considering placing a substance on the

National List. This would include

information that would enable the

Secretary to determine whether a

substance functions as, or contains, an

active synthetic ingredient, and whether

it falls into one of the categories of

active synthetic substances that may be

included on the National List of

approved substances. This would also

include information needed to evaluate

the health, environmental, and

agroecosystem effects of the substance.

This proposed section also would

require regulatory information, such as

registration of the substance in question

with EPA or FDA. Other required

information would include a

description of the manufacturing

process of the substance, product

characteristics, safety information

relating to the substance, and

bibliographies of scientific literature

relating to the substance that may be

available to the petitioner to be

submitted. The petitioner would be

requested to submit information that

describes alternative substances or

alternative cultural methods that could

be utilized in place of the substance,

and that summarizes the effects on the

environment, human health, and farm

ecosystem that might support the use of

the substance. This information is

needed to help determine whether a

substance is an active synthetic

ingredient in one of the categories that

the Act, in section 2118(c)(1)(B)(i) of the
65896 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

OFPA (7 U.S.C. 6517(c)(1)(B)(i)),

permits to be used if it is on the

National List and whether allowance of

a synthetic substance is justified by the

lack of a suitable non-synthetic or

cultural alternative, as required under

section 2118(c)(1)(A)(ii) of the OFPA (7

U.S.C. 6517(c)(1)(A)(ii)). Other

information required to be submitted is

needed to determine whether a nonsynthetic substance will be prohibited

for use under the criteria specified in

section 2118(c)(2) of the OFPA (7 U.S.C.

6517(c)(2)).

Section 2118(d) of the OFPA (7 U.S.C.

6517(d)) includes provision for the

procedure by which amendments may

be made to the National List. Following

receipt of a petition, as proposed in this

section, the Secretary would determine

whether the substance is within one of

the categories of the National List. If the

substance is within one of the defined

categories, it would be reviewed by the

NOSB in accordance with the criteria

provided in the Act.

After the NOSB submits its

recommendations concerning a

petitioned substance to the Secretary,

the Secretary would then determine

whether the substance satisfies the

criteria listed in section 2118(c) of the

OFPA (7 U.S.C. 6517(c)) regarding the

inclusion of substances on the National

List as an allowed or prohibited

substance. If the Secretary determines

that the substance does meet these

criteria, the addition of the substance to

the National List would then be

proposed as an amendment to the

National List according to the procedure

established in section 2118(d) of the

OFPA (7 U.S.C. 6517 (d)), which

includes publication in the Federal

Register of a proposed amendment to

the National List and an opportunity for

public comment.

As provided for in section 2118(e) of

the OFPA (7 U.S.C. 6517(e)), the NOSB

also would review any substance on the

National List within five years of the

substance being allowed or prohibited

for use, and would provide the

Secretary with recommendations as to

whether the substance should remain on

the National List. The Secretary would

decide whether to renew each

allowance or prohibition in order for an

allowed or prohibited substance to

remain on the National List. The

Secretary’s decisions concerning this

then would be published in the Federal

Register.

Subpart C—Labels, Labeling, and

Market Information

Sections 2106(a)(1)(A) and (B) of the

OFPA (7 U.S.C. 6505(a)(1)(A) and (B))

state that persons may sell or label

agricultural products as organically

produced only in accordance with the

Act, and that persons may affix a label

to and provide other market information

concerning organically produced

agricultural products only when the

products are produced and handled in

accordance with the Act.

In accordance with the Act, we are

proposing in subpart C of this part

provisions regarding labels, labeling,

and marketing information for

agricultural products that are

organically produced and for any

agricultural products that contain

organically produced ingredients.

Additionally, provisions also are

included for the use of the USDA seal

on labels, labeling, and other market

information as authorized by section

2106(a)(2) of the OFPA (7 U.S.C.

6505(a)(2)), and this subpart also

addresses the use of products that

originate from operations that sell no

more than $5,000 annually in value of

agricultural products. These operations

are exempt from certain provisions of

the Act.

Agricultural Products in Packages Sold,

Labeled, or Represented as Organic—

Section 205.100

In accordance with section 2106 of

the OFPA (7 U.S.C. 6505) which

provides for selling and labeling a

product as organically produced, we

propose in section 205.100 of this

subpart our labeling provisions for

agricultural products in packages

described in section 205.16(a) that are

sold, labeled, or represented as organic.

These are finished products that contain

at least 95 percent organically produced

ingredients, by weight, excluding water

and salt, hereafter referred to as

‘‘products that contain at least 95

percent organic ingredients’’. The

percentage of the product that is not

organic must be made of some

combination of non-agricultural

ingredients and/or non-organically

produced agricultural products

included on the National List. Packages

are defined in our proposal as a

container or wrapping that bears a label

and which encloses an agricultural

product, except for agricultural products

in bulk containers, shipping containers,

or shipping cartons.

In paragraph (a) of this section, we

propose the terms that may be used on

agricultural products described in

section 205.16(a) that are sold, labeled,

or represented as organic, (i.e., products

that contain at least 95 percent organic

ingredients). We propose to allow the

term organic to be used on the principal

display panel to modify the name of the

product and in the ingredients

statement to modify the name of each

ingredient organically produced and

handled in accordance with the Act and

the regulations in this part. We have

defined the principal display panel to

be that part of a label that is most likely

to be displayed, presented, shown or

examined under customary conditions

of display for retail sale. The ingredients

statement is defined as the listing of the

ingredients contained in a product

listed by their common or usual names

in the descending order of

predominance. The ingredients

statement is usually located on the

information panel of products other

than meat and poultry products and is

often located on the principal display

panel of meat and poultry products, but

may be placed on other package panels

because of package restrictions.

We are proposing to allow the term

organic to appear on the principal

display panel to ensure a clear,

consistent and conspicuous

identification of organically produced

agricultural products for consumers.

Examples of the use of this term are

organic grapes, organic beef, organic

peppermint tea, organic vegetable soup,

organic whole wheat bread, and organic

ice cream. We are proposing to allow

the term organic to be used in the

ingredients statement to modify the

name of each organically produced

ingredient in order to provide

consumers with a means of knowing

which ingredients have been organically

produced. Many consumers would

consider information about the specific

organic ingredients contained in a

product to be essential information to

have as a part of their purchasing

decision.

Section 2106(a)(2) of the OFPA (7

U.S.C. 6505(a)(2)) provides for products

that meet USDA standards for organic

production to incorporate the USDA

seal on such agricultural products.

Additionally, section 2108 of the OFPA

(7 U.S.C. 6507) provides for a State to

establish a State organic program that

meets the requirements of the national

organic program. If a State does so, and

its program is approved by USDA, we

believe it is appropriate to allow the

State to have a seal representing its

program, and to allow agricultural

products produced under such a State

program to bear a State seal.

Accordingly, we propose in paragraph

(a)(3) of this section that a USDA seal,

and a State seal that represents a State

organic program approved by the

Secretary, as provided for in section

205.402 of subpart F, may be used on

the principal display panel of packages

of agricultural products labeled as

organic. These seals would reflect that
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65897

the product was produced and handled

in accordance with the Act and the

regulations in this part, and if

applicable, the requirements of a State

organic program approved by the

Secretary.

We think that the terms and marks

used on the principal display panel,

which is the most visible panel, should

be those terms and marks which simply

and clearly present information about

the organic nature of the agricultural

product and its compliance with the

national organic program requirements

and, if applicable, the requirements of

an approved State organic program. This

is consistent with the purposes stated in

sections 2102(2) and (3) of the OFPA (7

U.S.C. 6501(2) and (3)) to assure

consumers that organically produced

products meet a consistent standard and

to facilitate commerce.

We propose in paragraph (a)(4) of this

section the terms and marks which may

appear on the information panel of

products in packages that are sold,

labeled, or represented as organic (i.e.,

products that contain at least 95 percent

organic ingredients). We have defined

the information panel to be that part of

the label immediately contiguous and to

the right of the principal display panel

as observed by an individual facing the

principal display panel, unless an

allowance has to be made for another

section of the label to be designated as

the information panel because of size or

other limitations. Many meat and

poultry products do not have an

information panel.

Most of the terms and marks proposed

to be permitted to be used on the

information panel of products that

contain at least 95 percent organic

ingredients are the same terms and

marks previously proposed to be

allowed to be used on the principal

display panel: the term organic, the

USDA seal, and a State seal representing

a State organic program approved by the

Secretary. Additionally, we propose to

permit on the information panel the use

of a certifying agent’s name, seal, logo

or other identification which represents

that the farm, wild crop harvesting, or

handling operation that produced or

handled the finished product is a

certified operation. We are proposing

here to allow only the identification of

the certifying agent that certified the

operation that produced or handled the

finished product. We believe that

allowance of the use of multiple

identification of certifying agents who

certify any operation involved in the

production or handling of the product

would be unwieldy and confusing to the

consumer. We invite comments on this

issue.

The NOSB received some public

comment which requested that

identification of a certifying agent on

product labels be prohibited. Other

public comments, however, indicated

that the identification of a certifying

agent should be required on product

labels to inform consumers of the

specific organization that performed the

certification of the operation.

Additionally, some public comments

requested that the identification of a

certifying agent be optional, so that each

individual producer and handler could

decide whether to include this

identification on their label.

After evaluating the public comments,

we agree that the decision as to whether

to include the certifying agent’s

identification on a label should be

optional. We believe that inclusion of

the identification of the certifying agent

who certified the operation that made

the finished product is not essential.

Therefore, we have included this

identification of a certifying agent in our

proposal as optional information that

may be included on the information

panel of a label of products that contain

at least 95 percent organic ingredients.

We propose to allow the placement of

the identification of the certifying agent

on the information panel, but not on the

principal display panel, because we

want the principal display panel to

include only those terms or marks that

would be important to everyone, i.e.,

those terms or marks that present

information about the organic nature of

the agricultural product, its compliance

with the national organic program

requirements and, if applicable, the

requirements of an approved State

organic program; we do not feel that the

identification of a certifying agent is this

type of information. We propose to

allow the placement of the

identification of the certifying agent on

the information panel, rather than

restricting its use to other less

prominent panels, because we agree

with the public input we received that

stated that this information would be

important to some consumers in their

purchasing decisions.

In paragraph (a)(5) of this section, we

propose that the terms or marks that

may appear on the information panel for

products sold, labeled, or represented as

organic (i.e., products that contain at

least 95 percent organic ingredients)

also may be used on any package panels

of the product, excluding the principal

display panel. Additionally, we are

proposing that these same terms and

marks may be used on the product’s

labeling and on market information

about the product. We have defined

labeling to be written, printed or graphic

material accompanying a product at any

time or displayed about the product at

the retail store. Market information has

been defined to be any written, printed,

audio-visual or graphic information,

including advertising, pamphlets, flyers,

catalogues, posters, and signs, that are

used to assist in the sale or promotion

of a product. This provision is

consistent with section 2106(a)(1)(B) of

the OFPA (7 U.S.C. 6505(a)(1)(B)),

which provides for labels and market

information to be provided for and

affixed on agricultural products that are

produced and handled in accordance

with the Act and the regulations in this

part.

Agricultural Products in Packages Sold,

Labeled, or Represented as Made With

Certain Organic Ingredients—Section

205.101

Section 2106(c)(1) of the OFPA (7

U.S.C. 6505(c)(1)) authorizes the

Secretary, in consultation with the

NOSB and the Secretary of Health and

Human Services, to allow the use of the

word organic on the principal display

panel of an agricultural product that

contains at least 50 percent organically

produced ingredients by weight,

excluding water and salt, only for the

purpose of describing the organically

produced ingredients. Our proposed

section 205.16(b) makes it clear that this

type of product is one containing at

least 50 percent, but less than 95

percent, organically produced

ingredients. The Secretary has consulted

with the Secretary of Health and Human

Services and reviewed the NOSB

recommendations for this matter. We

are proposing to allow the word organic

to appear on the principal display panel

of products described in section

205.16(b) as discussed below, hereafter

referred to as ‘‘products that contain

between 50 and 95 percent organic

ingredients’’.

We propose, in paragraph (a) of this

section, the terms that must be used on

agricultural products sold in packages,

described in section 205.16(b), that are

sold, labeled, or represented as made

with certain organic ingredients, (i.e.,

products that contain between 50 and

95 percent organic ingredients). We

propose in paragraph (a)(1) of this

section that the statement made with

certain organic ingredients must be used

on the principal display panel of a

product described in section 205.16(b).

We believe that allowing the word

organic to appear on the principal

display panel of these products only

when used within the statement made

with certain organic ingredients would

enable consumers to easily distinguish

this type of product from a product that
65898 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

contains at least 95 percent organic

ingredients, on which the term organic

must appear on the principal display

panel to modify the name of the

product.

We request comments from industry,

consumers, consumer interest groups,

and all other interested persons on our

proposed use of the statement made

with certain organic ingredients on the

principal display panel of products that

contain between 50 and 95 percent

organic ingredients. We are soliciting

information as to whether there are

alternative label proposals, and if so, a

description of them, that would

accomplish our purpose of clearly

distinguishing on the principal display

panel between products that contain at

least 95 percent organic ingredients and

those that contain between 50 and 95

percent organic ingredients.

We also propose in paragraph (a)(2) of

this section to require that the term

organic be used in the ingredients

statement to modify organically

produced ingredients. We are proposing

this in order to provide consumers with

a means of knowing which ingredients

have been organically produced.

We propose in paragraph (b) of this

section the terms and marks that may,

but that are not required to, be used on

agricultural products described in

section 205.16(b) that are sold, labeled,

or represented as made with certain

organic ingredients (i.e., products that

contain between 50 and 95 percent

organic ingredients). In paragraph (b)(1)

of this section, we propose to allow the

statement made with certain organic

ingredients to appear on the information

panel. We believe this would further

assist consumers in readily identifying

products that contain between 50 and

95 percent organic ingredients, and

additionally may be useful in certain

retail display situations where the view

of the principal display panel may be

obscured from the consumer. We also

propose in paragraph (b)(1) of this

section to allow the identification on the

information panel of the certifying agent

who certified the farm, wild crop

harvesting, or handling operation that

produced or handled the finished

product. Our reasons for allowing the

optional inclusion of the certifying

agent’s identification on the information

panel and the prohibition of its

placement on the principal display

panel for these type of products, are the

same ones we previously discussed with

regard to products that contain at least

95 percent organic ingredients.

In paragraph (b)(2) of this section, we

propose that any of the terms and marks

proposed to be allowed to be used on

the information panel may also be used

on labeling, market information and any

package panel, excluding the principal

display panel, of products labeled as

made with certain organic ingredients.

The allowed terms or marks would be

the statement made with certain organic

ingredients and the certifying agent’s

identification. This provision is

consistent with section 2106(a)(1)(B) of

the OFPA (7 U.S.C. 6505(a)(1)(B)),

which provides for labels and market

information to be provided for and

affixed on agricultural products that are

produced and handled in accordance

with the Act and the regulations in this

part.

Multi-ingredient Agricultural Products

That Only Represent the Organic Nature

of Such Ingredients in the Ingredients

Statement—Section 205.102

Section 2106(c)(2) of the OFPA (7

U.S.C. 6505(c)(2)) authorizes the

Secretary, in consultation with the

NOSB and the Secretary of Health and

Human Services, to allow products that

contain less than 50 percent organically

produced ingredients by weight of the

finished product, excluding water and

salt, to include the word organic on the

ingredient listing panel to describe

those ingredients that are organically

produced. The Secretary has consulted

with the Secretary of Health of Human

Services and reviewed the NOSB

recommendations on this matter. We

propose the following provisions for the

use of the word organic in the

ingredients statement of multiingredient agricultural products that

only represent the organic nature of

such ingredients in the ingredients

statement.

We propose in section 205.102 that

the term organic may be used in the

ingredients statement of this type of

product to modify the name of an

ingredient organically produced and

handled in accordance with the Act and

the regulations in this part. We also

propose in section 205.102 that

agricultural products that are composed

of more than one ingredient may

represent in an ingredients statement

that the ingredients are organic without

the finished product having to be

produced and handled in a certified

operation, if certain conditions are met.

One of the conditions that must be met

is that the producer or handler of the

finished product would have to

maintain certain records that are

required for non-certified operations.

The second condition that must be met

is that the only representation made

about the organic nature of the product

is a statement in the ingredients

statement that identifies organic

ingredients.

We also propose in paragraph (b) of

this section that the term organic may be

used on labeling, marketing information

and package panels of labels other than

the principal display panel and

information panel, to describe the

organic ingredients in products

discussed above. We are permitting the

identification of organic ingredients

under these conditions for a variety of

organic products in order to allow the

organic industry flexibility in the

production and marketing of organic

products.

Use of Terms or Statements That

Directly or Indirectly Imply That a

Product is Organically Produced and

Handled—Section 205.103

Section 2106(a)(1)(B) of the OFPA (7

U.S.C. 505(a)(1)(B)) provides that a

person may affix or provide a label or

other market information about an

agricultural product, including an

ingredient, that directly or indirectly

implies that the product is organically

produced and handled only when the

product has been produced and handled

using organic methods in accordance

with the Act. Accordingly, we propose

in this section that labels, labeling or

market information that directly or

indirectly imply organic production and

handling practices may be provided for

or affixed only on agricultural products

produced and handled in accordance

with the Act and the regulations in this

part.

Our proposed regulations would

authorize the use on a label, labeling, or

market information of the term organic

and other terms and phrases that

directly or indirectly imply that the

product was organically produced and

handled. Therefore, under our proposal,

any terms or phrases that directly or

indirectly imply that a product has been

organically produced or handled would

be prohibited from being used on the

label, labeling, or market information of

products that are not produced in

accordance with the Act and the

regulations in this part.

We considered putting in our

proposed requirement a specific list of

the terms and phrases that we believe

would directly or indirectly imply that

a product was organically produced and

handled. We have not done this because

we are uncertain as to what terms and

phrases should appropriately be placed

on such a list. We request comment

from the public as to what terms or

phrases, other than organic or made

with certain organic ingredients, they

believe could directly or indirectly

imply that a product was organically

produced and handled and the rationale

for the allowance of their use. Examples
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of terms or phrases which we consider

may imply directly or indirectly that a

product is organically produced and

handled and about which we

specifically request comment include:

‘‘produced without synthetic

pesticides’’; ‘‘produced without

synthetic fertilizers’’; ‘‘raised without

synthetic chemicals’’; ‘‘pesticide-free

farm’’; ‘‘no drugs or growth hormones

used’’; ‘‘raised without antibiotics’’;

‘‘raised without hormones’’; ‘‘no growth

stimulants administered’’; ‘‘ecologically

produced’’; ‘‘sustainably harvested’’;

and ‘‘humanely raised’’.

Informational Statements Prohibited—

Section 205.104

We are proposing in this section to

prohibit certain informational

statements from being included on the

principal display panel and ingredients

statement of any products containing

organically produced ingredients

because we believe such statements

might mislead consumers. Because

these are the areas that consumers

generally examine to obtain information

about the nature of the product they are

purchasing, we believe that these areas

should therefore contain only terms or

phrases that are familiar to consumers

and are readily understood by them.

In paragraph (a) of this section, we

propose to prohibit the phrase one

hundred percent, stated in letters,

numbers or symbols, when used as part

of any phrase or sentence that includes

the term organic, on the principal

display panel and in the ingredients

statement of a product that is sold,

labeled, or represented as organic.

Examples of phrases that would be

prohibited by this paragraph are: our

ingredients are one hundred percent

organic; 100% organic whole wheat;

and we only use 100 percent organic

methods.

In paragraph (b) of this section, we

propose to prohibit the placement of a

statement of the percentage of organic

ingredients on the principal display

panel and in the ingredients statement

of any product containing organic

ingredients. Our proposal would not

prohibit a statement of the percentage of

organic ingredients from being used on

labeling materials, market information

and any panel other than the principal

display panel.

The NOSB received comments from

manufacturers both in favor and in

opposition to allowing the inclusion of

a statement of the percentage of organic

ingredients on product labels. The

NOSB recommended to the Secretary

that a percentage statement be allowed

on the principal display panel only for

products containing one hundred

percent organic ingredients. For all

other products, the NOSB recommended

that a percentage statement be restricted

to the information panel.

We agree with the NOSB that a

percentage statement should be

permitted, and accordingly propose to

allow a statement of the percentage of

organic ingredients on a product label

for the benefit of consumers who believe

that this information is important to

them as part of their purchasing

decisions. However, we propose to

prohibit its placement on the principal

display panel and in the ingredients

statement. We propose this prohibition

on the placement of the percentage

statement because we do not consider a

percentage statement to be essential

program information. Its use on the

principal display panel and ingredients

statement would be inconsistent with

our proposed labeling scheme, as

previously explained, which provides

for placing only essential program

information on the principal display

panel and ingredients statement. We

request comment on our proposal to

allow a statement of the percentage of

organic ingredients on a product

package and on our proposal to prohibit

its use on the principal display panel

and in the ingredients statement.

In paragraph (c) of this section, we

propose to prohibit the use of the phrase

organic when available, or a term of

similar meaning or intent, on the

principal display panel and in the

ingredients statement of products

containing organic ingredients.

Agricultural Products in a Form Other

Than Packages That are Sold, Labeled,

or Represented as Organic or Made With

Certain Organic Ingredients—Section

205.105

We propose in paragraphs (a) and (b)

of this section the terms and marks that

may be used on products in a form other

than packages that are sold or

represented as organic or made with

certain organic ingredients, in order to

prevent the possibility of mixing organic

and nonorganic products. Products in a

form other than packages are those

products that either are not enclosed in

a container or wrapping or are products

labeled as bulk food items in containers.

Products in other than package form

include such products as bulk food

items, unpackaged fruits and vegetables

for sale in a retail store, raw agricultural

products such as grains, and products in

shipping containers for further

processing.

We propose in paragraph (a)(1) of this

section that agricultural products that

contain at least 95 percent organic

ingredients that are sold or represented

as organic may use the term organic on

a retail display label (or labeling) or

display container to modify the name of

the product. We propose in paragraph

(a)(2) of this section that the term

organic may be used in the ingredients

statement to modify the name of an

ingredient organically produced and

handled in accordance with the Act and

the regulations in this part. The

proposals made in paragraphs (a)(1) and

(a)(2) of this section would be

applicable to organic products in other

than package form at the time of retail

sale and, thereby, would provide for

organic products sold in retail stores in

bulk or other non-package form to be

identified by the same terms as we

propose to be used on organic products

in package form.

We propose in paragraph (a)(3) of this

section that shipping containers for

organic products in other than package

form may bear a clearly recognizable

organic identification mark(s) or term(s)

in plain view on the shipping container.

The mark(s) or term(s) are proposed to

be chosen from the following: the term

organic used to modify the name of the

product; the USDA seal; a seal

representing an approved State organic

program; and the certifying agent’s

name, seal, logo, or other identification

representing certification of the

operation that produced or handled the

product. We believe that this provision

would assist those handlers who handle

both organically produced and nonorganically produced products to

readily identify and separate the

products and prevent their

commingling, as required in proposed

section 205.19.

We propose in paragraph (b) of this

section the labeling requirements for

agricultural products in other than

package form that are sold or

represented as made with certain

organic ingredients. We believe that

agricultural products in a form other

than packages that are sold or

represented as made with certain

organic ingredients need to meet

specific labeling requirements that are

similar to the requirements proposed for

agricultural products in other than

package form that are sold, labeled, or

represented as organic. These labeling

requirements are needed to ensure that

these products can be readily identified

and to assist handlers in preventing the

possibility of commingling products

sold, labeled, or represented as made

with certain organic ingredients with

non-organically produced products.

Accordingly, we propose in paragraph

(b)(1) of this section that agricultural

products that are sold or represented as

made with certain organic ingredients
65900 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

that are described in section 205.16(b)

shall use the statement made with

certain organic ingredients on a retail

display label (or labeling) or display

container to modify the name of the

product. We propose in paragraph (b)(2)

of this section that the term organic be

used in the ingredients statement to

modify the name of an ingredient

organically produced and handled in

accordance with the Act and the

regulations in this part. Finally, we

propose in paragraph (b)(3) of this

section that agricultural products in a

form other than packages would use the

statement made with certain organic

ingredients located in plain view on the

shipping container, which may be

accompanied by the certifying agent’s

name, seal, logo, or other identification.

The rationale for the provisions

proposed in paragraph (b) of this section

are discussed in the supplementary

information for paragraph (a) of this

section regarding organic products in a

form other than packages.

Agricultural Products Produced on an

Exempt Farm or Handling Operation—

Section 205.106

Section 2106(d) of the OFPA (7 U.S.C.

6505(d)) provides an exemption from

the compliance requirements of section

2106(a)(1) of the OFPA (7 U.S.C.

6505(a)(1)), which does not permit a

person to sell or label an agricultural

product as organically produced unless

it has been produced and handled in

accordance with the Act. This

exemption applies to a person who sells

no more that $5,000 annually in value

of agricultural products, unless such

person voluntarily chooses to be

certified. In § 205.202(a)(1) of subpart D,

we propose that a farm, handling

operation, or wild crop harvesting

operation that produces, handles or

harvests agricultural products, but

which annually sells no more than

$5,000 in value of agricultural products,

would be exempt from the certification

requirements of the Act and the

regulations set forth in subpart D of this

part. Consistent with section 2107(a)(11)

of the OFPA (7 U.S.C. 6506(a)(11)),

however, which allows the Secretary to

require such other terms and conditions

determined to be necessary, we propose

in paragraphs (a) and (b) of this section

certain labeling requirements for

agricultural products that are produced

on these exempt operations that have

not been certified. We propose these

labeling prohibitions in order to help

ensure that consumers are not misled

when they purchase agricultural

products from them, and in order to

assure that products and ingredients

sold, labeled, or represented as meeting

the requirements of the OFPA in fact

have been produced and handled in

accordance with the Act.

In paragraph (a) of this section, we

propose to prohibit the displaying of the

USDA seal or any certifying agent’s

name, seal, logo, or other identification

of certification referring to the

requirements of the Act and the

regulations of this part. The purpose of

this provision would be to ensure that

only agricultural products that meet the

proposed requirements for organic

production and certification in part 205

could have a label or other market

information that incorporated the USDA

seal or certification identification, either

of which would indicate compliance

with the Act and the regulations in this

part. Additionally, the provision

proposed in paragraph (a) of this section

would assist consumers in

distinguishing between an organic

product from an exempt operation and

an organic product from an operation

certified to national or State program

requirements.

In paragraph (b) of this section, we

propose that an agricultural product that

is produced or processed on an exempt

farm or handling operation that

annually sells no more than $5,000 in

value of agricultural products and

which has not been certified could not

be identified as an organic ingredient in

a product produced or processed on a

farm or handling operation that

annually sells more than $5,000 in value

of agricultural products. We propose

this prohibition for the purpose of

prohibiting organic agricultural

products that originate from exempt

uncertified operations from being

commingled with organic agricultural

products that originate from operations

that are certified to national or State

program requirements. This provision as

proposed would help promote clarity

for consumers in identifying when an

agricultural product was produced and

handled in accordance with the Act and

the regulations in this part.

The USDA Seal—Section 205.107

Section 2106(a)(2) of the OFPA (7

U.S.C. 6505(a)(2)) allows labels affixed

to, or market information provided for,

domestic agricultural products that meet

the USDA standards for organic

production to incorporate the USDA

seal. In accordance with this section of

the OFPA, we propose in paragraph (a)

of this section that the USDA seal could

be used only on those agricultural

products (raw or processed) labeled as

organic (i.e., products that contain at

least 95 percent organic ingredients), as

described in § 205.16(a), that are

produced in the U.S. and are produced

and handled on a certified operation.

This provision as proposed would

permit a product produced in the U.S.

which contained imported organic

ingredients obtained from a program

determined by the Secretary to be

equivalent to the national program to

display the USDA seal.

In paragraphs (b) and (c) of this

section, we propose the form and design

of the USDA seal. We propose to require

the reproduction of the mark in a dark

color on a light background, or in a light

color on a dark background, or in a

standard four color label. We propose

that the USDA seal consist of an interior

globe with continents displayed and a

diagonal line across the globe

(continents) with the word organic on

the diagonal. The globe with continents

would be surrounded by concentric

circles with arrows containing the

words meets USDA requirements. A

triangle would enclose the globe and the

concentric circles.

The use of the globe with continents

is intended to represent the principles

of organic production upon which the

national organic program is founded.

These principles are oriented toward the

nurturing of a healthy agroecosystem as

part of the biosphere, represented by the

globe. The concentric circles with

arrows represent the basic practice of

recycling nutrients and materials which

is essential to a system of organic

farming. The triangle represents the

stability of a healthy agroecosystem

based upon the stewardship of soil,

water and air as its components.

We believe that this seal, which may

be used at the option of the producer or

handler in accordance with the

provisions of subpart C of this part,

would allow consumers to readily

identify that the organic product met the

requirements of the National Organic

Program as proposed in the regulations

of this part. We request comment on the

design of the USDA seal and its use as

proposed in this subpart as to whether

the proposed design will readily

identify an organic product as one that

meets the requirements of the National

Organic Program.

In particular, we would like to receive

examples of alternative designs for the

USDA seal that would be effective in

allowing consumers to readily identify

that an organic product meets the

requirements of the organic program.

We would appreciate it if any

alternative designs submitted are

accompanied by an explanation about

how the alternative design suggested

would more effectively make organic

products readily identifiable as being

produced under the National Organic

Program than the proposed design for
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65901

the USDA seal. In addition, we would

like comments from all interested

persons as to whether the proposed

design for the USDA seal would create

any burdens for its use.

We have provided a chart of what is

required to be reflected on the labels

and labeling of various types of organic

products, as well as what is required to

be reflected on certain types of market

information provided about organic

products. The chart also indicates where

required information is to be placed on

labels, on labeling, and on certain types

of market information. Additionally, the

chart indicates what type of information

may, but is not required, to be placed on

labels, on labeling, and on certain types

of market information for various types

of organic products. Further, the chart

indicates what type of information may

not be placed on the labels, labeling,

and market information of various types

of organic products, and where it is

prohibited from being placed.

SUBPART C—LABELS, LABELING, AND MARKET INFORMATION

Required Discretionary Prohibited

Agricultural products in packages sold, labeled or represented as organic

Principal display panel:

• None ........................................... • The term organic to modify the

name of the product.

• Certifying agent’s name, seal, logo, or other identification.

• USDA seal .................................. • One hundred percent stated in letters, numbers, or symbols, used

with any phrase or sentence that includes the term organic.

• State seal ................................... • Statement of the percentage of organically produced ingredients

contained in a product.

• Phrase: organic when available (or term of similar meaning or intent).

Ingredients Statement:

• None ........................................... • The term organic to modify the

name of an ingredient organically produced and handled.

• One hundred percent stated in letters, numbers, or symbols, used

with any phrase or sentence that includes the term organic.

• Statement of the percentage of organically produced ingredients

contained in a product.

• Phrase: organic when available (or term of similar meaning or intent).

Information panel:

• None ........................................... • Organic with product name ........ • None.

• USDA seal.

• State seal.

• Certifying agent’s name, seal,

logo, or other identification.

Agricultural products in packages sold, labeled, or represented as made with certain organic ingredients

Principal display panel:

• Statement: made with certain organic ingredients.• None ........................................... • One hundred percent stated in letters, numbers, or symbols, used

with any phrase or sentence that includes the term organic.

• Statement of the percentage of organically produced ingredients

contained in a product.

• Phrase: organic when available (or term of similar meaning or intent).

• USDA seal.

• State seal.

• Certifying agent’s name, seal, logo, or other identification

ingredients statement:

• The term organic to modify the

name of an ingredient organically produced and handled..

• None ........................................... • One hundred percent stated in letters, numbers, or symbols, used

with any phrase or sentence that includes the term organic.

• Statement of the percentage of organically produced ingredients

contained in a product.

• Phrase: organic when available (or term of similar meaning or intent).

Information panel:

• None ........................................... • Statement: made with certain organic ingredients.• USDA seal.

• Certifying agent’s name, seal,

logo, or other identification.

• State seal.

Multi-ingredient agricultural products that are not produced by certified operations and that only represent the organic nature of such

ingredients in the ingredient statement and which are not sold, labeled, or represented as organic or made with certain organic

ingredients

Principal display panel:

• None ........................................... • None ........................................... • The term organic to modify the name of the product.

• Statement: made with certain organic ingredients.

• USDA seal.

• State seal.
65902 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

SUBPART C—LABELS, LABELING, AND MARKET INFORMATION—Continued

Required Discretionary Prohibited

• Certifying agent’s name, seal, logo, or other identification.

• One hundred percent stated in letters, numbers, or symbols, used

with any phrase or sentence that includes the term organic.

• Statement of the percentage of organically produced ingredients

contained in a product.

• Phrase: organic when available (or term of similar meaning or intent).

Ingredients statement:

• None ........................................... • Organic to modify the name of

an ingredient that is organically

produced and handled.

• One hundred percent stated in letters, numbers, or symbols, used

with any phrase or sentence that includes the term organic.

• Statement of the percentage of organically produced ingredients

contained in a product.

• Phrase: organic when available (or term of similar meaning or intent).

Information panel:

• None ........................................... • None ........................................... • The term organic to modify the name of the product.

• Statement: made with certain organic ingredients.

• USDA seal.

• State seal.

• Certifying agent’s name, seal, logo, or other identification.

Agricultural products in other than package form that are sold, labeled or represented as organic or made with certain organic

ingredients.

Retail display label or display

container:

For organic products: • For organic products:

• None ........................................... • The term organic to modify the

name of the product.

• None.

• USDA seal.

• State seal.

• Certifying agent’s name, seal,

logo, or other identification..

For made with certain organic ingredients products:For made with certain organic ingredients products:

• Statement: made with certain organic ingredients.• Certifying agent’s name, seal,

logo, or other identification.

None

Ingredients statement:

For organic products: For organic products:

• None. .......................................... • The term organic to modify the

name of an ingredient organically produced and handled..

• None.

For made with certain organic ingredients products:For made with certain organic ingredients products:

• The term organic to modify the

name of an ingredient organically produced and handled.

• None ........................................... • None.

Shipping container:

For organic products: For organic products, one or more

of the following:

• None ........................................... • The term organic to modify the

name of the product; or

• None.

• USDA seal; or.

• State seal; or.

• Certifying agent’s name, seal,

logo, or other identification..

For made with certain organic ingredients products:For made with certain organic ingredients products:

• Statement: made with certain organic ingredients.• Certifying agent’s name, seal,

logo, or other identification.

• None.

Subpart D—Certification

Section 2104(a) of the OFPA (7 U.S.C.

6503(a)) requires that the Secretary

establish an organic certification

program for producers and handlers of

agricultural products that have been

produced using organic methods, and

that this program be implemented

through certifying agents. Section

2107(a) of the OFPA (7 U.S.C. 6506(a))

requires that all agricultural products

sold or labeled as organically produced

be produced on a farm and handled

through a handling operation that has

been certified, and delineates a number

of other provisions that must be

included in a certification program

established under the Act. The Act,
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65903

however, provides for certain

exemptions from certification. In this

subpart we propose the certification

provisions of the National Organic

Program, which includes the

requirements that must be met by farm,

wild crop harvesting, and handling

operations that want to be certified, and

the procedures that must be followed by

certifying agents in evaluating and

making determinations concerning

operations seeking certification. Subpart

E of this part delineates our proposed

accreditation program for organic

certifying agents, as required by section

2115(a) of the OFPA (7 U.S.C. 6514(a)),

including the requirement that a

certifying agent must conduct

certification activities in accordance

with the procedures proposed in

subpart D of this part to maintain its

accredited status.

The certification process is needed to

ensure that products labeled as organic

and made with certain organic

ingredients are produced and handled

in accordance with the requirements

proposed in subpart B of this part.

Numerous private organizations and

States already have developed

experience and expertise in organic

certification procedures. In developing

this proposal, we have consulted with

and examined the programs developed

by existing private and State certifying

agencies, considered the NOSB’s

recommendations, and considered

comments received from the public. We

also have reviewed the guidelines for

the certification or registration of quality

systems and for the assessment or

accreditation of certifying bodies, as

promulgated by the International

Organization for Standardization. Other

information we have reviewed includes

guidelines for inspection, certification

and accreditation established by other

countries, international organic interest

groups, and standards setting

organizations, such as the International

Federation of Organic Agricultural

Movements.

This proposal is consistent with the

provisions of the Act and incorporates,

to the extent possible, the current

practices of the organic certification

community. We have designed the

proposed regulations to minimize the

burdens placed on organic producers

and handlers, ensure that decisions

made by certifying agents are well

founded and fair, and provide sufficient

guidance and oversight to protect the

integrity of the organic label. We also

have developed this proposal to utilize

the expertise that exists in the organic

community, which encompasses a broad

range of producers, handlers and

geographic locales, and to allow for

differences in size, scope and

organizational style represented by

existing and anticipated private and

State certification programs.

Synopsis of Proposed Certification

Program

The provisions of sections 205.201

through 205.206, and sections 205.216

through 205.217(a), address the

certification of farm, wild crop

harvesting and handling operations that

produce agricultural products,

including livestock, that are, or are

intended to be, sold, labeled or

represented as organic or as made with

certain organic ingredients. These

proposed sections delineate the types of

operations that must be certified; the

types of operations that would be

exempt or excluded from the

certification requirement; the general

requirements that must be met to obtain

and maintain certification; and the

information that must be submitted

when applying for certification,

including the provisions of an organic

plan. Certification applicants would

have to submit a statement agreeing to

comply with the proposed production

and handling requirements and would

have to allow access to their facilities

and records by a certifying agent,

representatives of the Secretary, and the

applicable governing State official in the

case of operations located in a State that

operates an approved State program. An

operation whose request for certification

was approved would have to operate in

compliance with the requirements

proposed in Subpart B, maintain records

of its operations to show that it was

complying with those requirements, and

submit updated information annually.

Sections 205.207 through 205.215,

and sections 205.217(b) through

205.220, propose the procedures that a

certifying agent must follow in

determining the certification status of a

certification applicant or a certified

operation, including the procedure for

conducting on-site inspections; the basis

for approving an application for

certification; the procedure for notifying

an operation of, along with an

opportunity to correct, non-compliance

with the Act and the regulations; and

the procedure for recommending that

the certification of an operation or a

portion of an operation be denied or

terminated by the Administrator, after

providing notice and an opportunity to

be heard. The final section of this

subpart proposes the notifications that a

certifying agent would have to provide

to the Administrator concerning

operations that it certified.

It should be noted that, in a State that

establishes an approved State program,

as provided for and discussed in

sections 205.401 through 205.403 of

subpart F, the certifying agent also

would have to provide these

notifications to the applicable governing

State official. Additionally, the

certifying agent would be required to

verify that an applicant for certification

in a State that establishes an approved

state program was complying with any

additional requirements provided under

the State program. Proceedings to deny

or terminate certification, and an

opportunity to appeal such actions,

would be initiated and conducted in

accordance with the approved State

program regulations.

What Has to be Certified—Section

205.201

Section 2106(a)(1) of the OFPA (7

U.S.C. 6505(a)(1)) requires that

agricultural products that are sold or

labeled as organically produced,

including products for which other

market information is provided that

directly or indirectly implies that the

products have been produced and

handled using organic methods, must

comply with the requirements of the

Act. Therefore, we propose that, except

as discussed below in proposed section

205.202, any farming, wild crop

harvesting, or handling operation, or

portion of any of these operations, that

intends to sell, label or represent an

agricultural product as organic, or as

made with certain organic ingredients,

would have to comply with all the

applicable production and handling

requirements set forth in subpart B of

this part and be certified in accordance

with the regulations of this subpart.

We further propose in section

205.201(a) that any operation that

provides handling services to fewer than

3 certified entities that produce or

handle agricultural products that are, or

that are intended to be, sold, labeled or

represented as organic or made with

certain organic ingredients, would not

be required to be separately certified

apart from the operations for which it

provides such services. This provision

is proposed because, as is sometimes the

case in existing certification programs

we have examined, a certified operation

may comprise facilities owned by

different entities that it contracts with to

provide handling services, such as

washing and packing fresh produce,

freezing multi-ingredient products, or

warehousing. In such cases, the

facilities that provide these services

would be included in the certification

obtained by the contracting operation,

and therefore considered certified with

respect to the handling of any products

to be sold, labeled or represented as
65904 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

organic or made with certain organic

ingredients. Such a facility would, for

the purposes of this proposal, also be

considered to be a distinct portion of the

operation for which it provides the

handling services. However, as

proposed in this section, if such a

facility were to provide handling

services under contract to three or more

certified handling operations, it would

then have to obtain a separate

certification. For example, a facility that

provided washing and packing services

to one or two organic produce growers

could be included in the growers’

certifications as a portion of each of

their operations, but if it were to then

provide packing services for a third

organic produce grower it would have to

obtain its own separate certification.

Comment is invited concerning the

potential impact of this proposed

requirement on handling operations that

currently contract for handling services

or that currently provide such services.

Section 2106(c) of the OFPA (7 U.S.C.

6505(c)) exempts products that contain

at least 50 percent (but less than 95

percent) organic ingredients from

complying with the requirements of the

Act, but allows the Secretary, in

consultation with the NOSB and the

Secretary of HHS, to permit such

products to be labeled on the principal

display panel as containing certain

organically produced ingredients. In

section 205.101 of subpart C, we

propose that such products could be

labeled as made with certain organic

ingredients on the principal display

panel. In section 205.201(b) we propose

that a handling operation, or portion of

a handling operation, that handles only

agricultural products that are, or that are

intended to be, sold, labeled or

represented as made with certain

organic ingredients would have to be

certified but would be exempt from

complying with the requirement

proposed in section 205.3(b)(2) of

Subpart B, which requires that a

commercially available non-synthetic

substance be selected in preference to

an allowed synthetic substance.

Products labeled as made with certain

organic ingredients would not, in

accordance with section 2106(c) of the

OFPA (7 U.S.C. 6505(c)), have to be

handled by a certified organic handling

operation. However, the organically

produced ingredients contained in such

products would not be exempt from the

Act’s certification requirement.

Therefore, because the preponderance of

the ingredients in such a product would

be organically produced, we believe that

the level of oversight provided by the

certification process is needed in order

to safeguard the integrity of the

organically produced ingredients and to

assure consumers that these ingredients

comply with consistent national

standards. Because this type of product

would be able to use the word organic

on its principal display panel within the

statement made with certain organic

ingredients, we believe that consumers

will generally expect that such products

are in compliance with the Act and the

regulations in this part. However,

because the product itself is not

represented as an organic product, we

are proposing that such products need

not comply with the requirement to

select non-synthetic substances in

preference to allowed synthetic

substances. Such products would still

have to comply with all other applicable

provisions, including selecting only

non-agricultural ingredients that are

included on the National List.

Exemptions and Exclusions—Section

205.202

In accordance with section 2106(d) of

the OFPA (7 U.S.C. 6505(d)), paragraph

(a)(1) of this section would exempt

producers and handlers that produce,

handle or harvest agricultural products

who sell no more than $5,000 annually

in value of agricultural products from

complying with the certification

requirements set forth in this subpart.

However, we propose in subpart C to

prohibit the products produced on these

exempt operations from being

represented as originating from a

certified operation, displaying the

USDA seal, or being identified as an

organic ingredient in a product

processed or produced on an operation

that sells more than $5,000 in value of

agricultural products. These

prohibitions are necessary to ensure that

the organically produced ingredients

contained in products that originate

from certified operations are accurately

represented. These prohibitions would

not apply to an otherwise exempt

operation that voluntarily chose to

become certified under the Act and the

regulations.

As indicated above, the exemption

from certification proposed in the

regulations for producers and handlers

who sell no more than $5,000 annually

of agricultural products is what is

provided for in section 2106(d) of the

OFPA (7 U.S.C. 6505(d)). During the

course of public input given at NOSB

meetings, various commenters suggested

that the exemption from certification

should include producers and handlers

who annually sell no more than $10,000

of agricultural products, as opposed to

$5,000. In order to provide for such an

exemption in our regulations, we would

need to have the OFPA amended. We

would appreciate comments as to

whether the current statutory limitation

of $5,000 for exemption from

certification should be raised to

$10,000, or to another amount, and why

such an increased monetary limitation

for exemption from certification is

appropriate. In addition, we would like

data as to the number of operations that

may be exempt under the current $5,000

limitation for exemption, and the

number of operations that may be

exempt under any new monetary

amount suggested.

In paragraph (a)(2) of this section, we

propose to exempt retail operations, or

portions of such operations, that handle

organically produced agricultural

products but do not process them. This

is consistent with the definition of

handling operation as set forth in

section 2103(10) of the OFPA (7 U.S.C.

6502(10)). An exclusion for certain retail

operations that do process organic

agricultural products is proposed in

paragraph (b)(3) of this section.

Section 2106(c) of the OFPA (7 U.S.C.

6505(c)) states that the provisions of

section 2106(a) (7 U.S.C. 6505(a))

regarding compliance with the

requirements of the Act do not apply to

two types of processed agricultural

products that contain less than 95

percent organic ingredients. This

section of the Act exempts products that

contain less than 50 percent organically

produced ingredients from compliance

with the regulations proposed in this

part, and we have accordingly proposed,

in paragraph (a)(3) of this section, to

exempt any handling operation, or

portion of a handling operation, that

handles only agricultural products that

contain less than 50 percent organic

ingredients from all the requirements

proposed in this part except the

applicable labeling provisions proposed

in subpart C and the provisions

proposed in section 205.19 of subpart B

for the prevention of commingling and

contact of organic products by

prohibited substances with regard to

any organically produced ingredients

used in this type of product. We believe

that these requirements are necessary

for a handler of this type of product in

order to safeguard the integrity of the

organic ingredients used in any such

product, and to ensure that any use of

the word organic in the ingredient

listing is in accordance with our

proposed labeling provisions.

In section 205.202(b), we propose that

certain types of operations or portions of

operations be excluded from

compliance with the certification

requirements in subpart D. After careful

consideration of the NOSB

recommendations, public input, and
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65905

information received from

representatives of various types of

handling and retail operations, we

believe that it would be burdensome to

require certification of the types of

handling operations addressed in this

section and, furthermore, that such a

requirement is unnecessary because it

would not contribute to assuring the

integrity of an organically produced

product. Accordingly, we propose that

three types of handling operations, or

portions of operations, not be required

to be certified.

In section 205.202(b)(1) we propose

that a handling operation, or portion of

a handling operation, would be

excluded from compliance with the

proposed regulations in this part, except

for the requirements for the prevention

of commingling and contact by an

organic product with prohibited

substances in section 205.19 of subpart

B, if it handles only products labeled as

organic or as made with certain organic

ingredients that meet two criteria. These

two criteria are that the products are

packaged or otherwise enclosed in a

container prior to being received by the

operation, and that the products remain

in the same package or container and

are not processed while in the control

of the operation. This exclusion would

avoid creating an unnecessary barrier

for handlers who distribute non-organic

products and who want to include a

selection of organic products in their

offerings. However, in order to protect

the integrity of the organically produced

products, we do not propose to exempt

this type of handling operation from the

requirements set forth in section 205.19

of subpart B regarding the prevention of

commingling and contact with

prohibited substances with respect to

any organically produced products.

In section 205.202(b)(2) we propose to

exclude restaurants and other foodservice type establishments that process

ready-to-eat organic agricultural

products but which do not enclose the

food in a container labeled or

represented to the consumer as organic

or made with certain organic

ingredients. As further explained below

in paragraph (b)(3) of this section, we

are not proposing to require certification

of operations that process food as part

of their normal retail operations if they

do not repackage the food in containers

that are labeled or represented by the

operation as organic or as made with

certain organic ingredients. We consider

the act of preparing ready-to-eat food by

restaurants to be part of their normal

retail operations.

We propose in section 205.202(b)(3)

to exclude a retail operation, or portion

of a retail operation, that processes

products labeled as organic or as made

with certain organic ingredients in the

course of its normal retail operations,

but does not repackage products under

its own organic label. A retail operation,

or portion of a retail operation, excluded

under this proposal in paragraph (b)(3)

of this section would have to satisfy two

requirements. First, the operation would

have to process only products that were

previously labeled as organic or made

with certain organic ingredients before

being acquired by the retailer. Second,

the products would have to be

processed by the operation in the course

of its normal retail business solely for

the purpose of presenting or offering the

product to a consumer. These

requirements mean that the product

offered to the consumer by the retail

operation could not be one that was

created by the retailer by combining two

or more ingredients into a single

product that is then labeled or

represented by the retail operation as

organic or as made with certain organic

ingredients, and it could not be a

product that is repackaged by the

operation and newly labeled or

represented as organic or made with

certain organic ingredients. We do not

consider either creating a new product

from two or more ingredients, or

repackaging and relabeling a product, to

be normal retail business practices for

retail operations solely for the purpose

of presenting or offering a product to a

consumer. It should be noted that a

weight label is not included within our

proposed definition of label as set forth

in section 205.2 of subpart A; therefore,

we would not consider a retail operation

applying a weight label to a product

repackaged from a bulk container or

sliced from a larger quantity to be a

repackaging activity that would require

certification because applying weight

labels is an activity that we consider to

be within normal retail business

practices for retail operations.

Examples of retailer processing

activities that would be excluded and

which therefore would not require that

the retail operation be certified are

washing and sorting fresh produce for

display in bulk; cutting cheese from a

bulk wheel and placing weight labels on

the cheese packages; repackaging two

pound bags of organic brown rice from

a 50 pound sack and placing weight

labels on the two pound bags; and

allowing consumers to package their

own bags of organic grain from a bulk

container. Examples of retailer

processing activities that would not be

excluded and which therefore would

require that the retail operation be

certified are baking organic bread;

preparing an organic pasta salad for sale

at the deli counter; repackaging a series

of products such as grains or pastas

under the retailer’s own label that

identifies the products as organic; and

preparing a private label pizza labeled

as made with certain organic ingredients

for customers to purchase from a

refrigerated display case for baking at

home. We invite further comment

concerning the exclusions proposed in

this section.

In section 205.202(c) we propose that

farm or handling operations that are

either exempt from certification under

section 205.202(a), or excluded from

certification under section 205.202(b),

would still be required to maintain

certain records and to make those

records available to authorized

representatives of the Secretary and the

applicable governing State official.

Small operations that are exempt

pursuant to paragraph (a)(1) of this

section would have to keep records for

no less than one calendar year to

substantiate that the operation did not

sell more than $5,000 in agricultural

products in the previous calendar year,

and therefore met the requirements for

exemption of small operations provided

by section 2106(d) of the OFPA (7

U.S.C. 6505(d)).

Handlers of products that contain less

than 50 percent organic ingredients who

are exempt under section 205.202(a)(3),

or handlers who are excluded under

section 205.202(b)(1), would have to

maintain records for no less than one

year from the date of receiving a product

labeled as organic or made with certain

organic ingredients, that are adequate to

verify the source and quantity of the

product and that the product or

ingredient was handled in accordance

with section 205.19 to prevent

commingling and contact with

prohibited substances. Records also

would have to be maintained for no less

than one year from the date of shipping

a product that contains organic

ingredients so as to verify the

destination and quantity of the product

shipped. The recordkeeping

requirements proposed in paragraph

(c)(2) of this section are necessary to

assist in enforcement of the national

organic program and to verify that the

operation is adequately safeguarding the

integrity of organically produced

products and organically produced

ingredients.

We would like comments on the

various exemptions from certification

we have proposed, as well as on any

other exemptions from certification that

should be proposed, keeping in mind

that legislative changes may have to be
65906 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

sought to provide additional exemptions

from certification.

General Requirements for

Certification—Section 205.203

This section of our proposal

delineates the six general requirements

with which an organic farm, wild crop

harvesting, or handling operation must

comply in order to receive and maintain

certification. These proposed provisions

summarize the requirements provided

in the Act and various sections of the

regulations proposed in this part, so that

a person seeking organic certification

can determine all the requirements

which must be met by the operation to

be certified.

The first requirement, proposed in

paragraph (a) of this section, is to

comply with the applicable organic

production and handling requirements

of the Act and the regulations in this

part. Paragraph (b) of this section would

require that the operation establish and

implement an organic plan that is

submitted to an accredited certifying

agent, as required by section 2107(a)(2)

of the OFPA (7 U.S.C. 6506(a)(2)), and

updated annually. The provisions that

must be in the organic plan are

proposed in section 205.205. The third

requirement, proposed in paragraph (c)

of this section in accordance with

section 2107(a)(5) of the OFPA (7 U.S.C.

6506(a)(5)) is that an annual on-site

inspection by the certifying agent must

be permitted. In paragraph (d) of this

section we propose that a certified

operation must maintain all records

applicable to the organic operation for a

period of not less than five years from

the date of creation of the record, and

allow the Secretary, the applicable

governing State official if the operation

is in a State where there is an approved

State program, and the certifying agent,

access to such records, as proposed in

section 205.216. This provision is

proposed because we believe it is

necessary in order to determine the

operation’s compliance with the Act

and the regulations in this part for the

purpose of providing adequate

enforcement procedures, as required in

section 2107(a)(7) of the OFPA (7 U.S.C.

6506(a)(7)). Section 205.203(e) of this

proposal requires that a certified

operation submit the required fees to the

certifying agent, as proposed in section

205.422 of subpart F in accordance with

section 2107(a)(10) of the OFPA (7

U.S.C. 6506(a)(10)).

In section 205.203(f) we propose that

a certified operation must immediately

notify the certifying agent about any

application of a prohibited substance to

any field, farm unit, site, facility,

livestock, or product that is part of the

certified operation, and about any other

change in a certified operation, or any

portion of the operation, that may affect

its compliance with the Act and the

regulations in this part. This provision

is necessary in order to ensure that an

operation that is approved for

certification would notify the certifying

agent in the event that anything occurs

that would change the operation’s

compliance with the requirements

proposed in subpart B. This provision

therefore would require notification of

the certifying agent if an operation was

subject to a Federal or State emergency

pest or disease treatment program as

described in proposed section 205.432

of subpart F and provided for in section

2107(b)(2) of the OFPA (7 U.S.C.

6506(b)(2)).

Applying for Certification—Section

205.204

As proposed in this section, a

certification applicant would have to

submit an organic plan, as proposed in

section 205.205, and a statement

agreeing to comply with the Act and the

regulations, as proposed in section

205.206, to an accredited certifying

agent. An applicant also would need to

submit basic contact information, such

as phone and fax numbers, for the

operation for which certification is

sought. In paragraph (c) of this section,

we further propose that the applicant

submit the name or names of any

organic certifying agent to which any

application for certification previously

has been made, including the year or

years of the application and the

outcome of each application. It should

be noted that, if the certification

applicant previously had applied to a

different certifying agent who issued a

notification of non-compliance as

proposed in section 205.215(a), the

applicant also would have to submit

documentation that shows that the

defects in compliance identified in that

notice had been corrected, in

accordance with proposed section

205.215(b). Knowledge of previous

certifications or applications for

certification is needed in order to

determine if information about

implementation of an organic plan or

other updated information, as proposed

in section 205.217(a), should be

provided. It also would enable a

certifying agent to verify whether any

new applicant for certification was

previously issued a notification of noncompliance by another certifying agent.

Organic Plan—Section 205.205

Section 2114 of the OFPA (7 U.S.C.

6513) requires a producer or handler

who wants certification to submit an

organic plan to the certifying agent, and

provides for certain provisions that

should be in the plan to foster the

production and handling of agricultural

products in accordance with the Act.

Section 2103(13) of the OFPA (7 U.S.C.

6502(13)) defines an organic plan as a

plan of management of an organic

farming or handling operation that has

been agreed to by the producer or

handler and the certifying agent and

that includes written plans concerning

all aspects of agricultural production or

handling, including crop rotation and

other practices required under the Act

and the regulations in this part. The

specific organic crop production and

wild crop harvesting practices required

by sections 2114(b) and (f) of the OFPA

(7 U.S.C. 6513(b) and (f)) are addressed

in this proposal in section 205.6 (crop

rotation), section 205.7 (soil fertility and

crop nutrient management), and section

205.11 (wild crop harvesting). The

required provisions of the organic plan

proposed here are consistent with the

OFPA definition, and would enable a

certifying agent to determine whether

the applicant’s management methods

meet the requirements of the Act and

the regulations of this part. We also

believe that the establishment of an

organic plan, as proposed here, would

be a means by which organic producers

and handlers could evaluate their

operations and develop strategies to

help them maintain compliance with

the relevant organic production or

handling requirements.

Section 205.205 of this proposal

would require a certification applicant

to submit an organic plan to the

certifying agent. In a State with an

approved State program, as proposed

and discussed in section 205.402 of

subpart F, the applicant also would

have to submit the organic plan to the

applicable governing State official. The

organic plan would have to identify, as

applicable to the operation for which

certification is requested, a description

of the practices and activities previously

implemented, and intended to be

implemented and maintained, to

establish a system of organic farming

and handling that complies with the

applicable crop, livestock, wild crop

harvesting, and handling requirements

proposed in Subpart B. Details of any

multi-year planning necessary in order

to comply with all applicable

requirements would have to be included

in the organic plan. For example, a

rotation plan or a description of other

methods for ensuring adequate pest

management, such as introduction of

diverse species into areas planted with

perennial crops, would have to be
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65907

provided for each field or farm parcel,

as provided for in section 205.6 of

subpart B. The organic plan also would

have to describe practices implemented

and intended to be implemented to

comply with proposed section 205.3(b)

of subpart B, which proposes that any

practices used not result in measurable

degradation of soil and water quality

and that non-synthetic substances be

chosen in preference to synthetic

substances, to the extent possible. For

example, a farmer might describe

practices implemented to ensure that

soil quality is not measurably degraded

by tillage practices or that

contamination of water by nitrates does

not occur when manure is applied. The

organic plan also would have to

describe activities to evaluate the effects

of practices for which more specific

restrictions are proposed. For example,

a farmer who is using a composted

waste material that contains a nonactive residue of a substance, as

proposed in section 205.7(b)(4), would

include information in the organic plan

to demonstrate that the level of nonactive residues that may be present in

the composted waste material was not

increasing in the soil to which it is

applied.

The information delineated in

sections 205.205(b) through 205.205(e)

would have to be submitted as it was

applicable to the operation for which

certification is sought. These proposed

paragraphs would require sufficient

information about the farm, wild crop

harvesting or handling operation for

which certification is sought to evaluate

whether an applicant is complying with

or is able to comply with the Act and

our proposed organic production and

handling requirements in sections 205.3

through 205.28 of subpart B. It also is

needed to aid the certifying agent in

determining which areas of the

operation should be observed in the

course of the on-site inspection.

Section 205.205(b) proposes the

information that would have to be

submitted with respect to a farm

operation. This information includes a

description of the farm’s crops,

livestock, and on-farm processing

activities, total acreage, and a map or

maps showing all fields or farm parcels

for which certification is requested. The

map(s) are required to show field and

farm parcel boundaries, sizes, locations,

and any significant identifying features.

They must also show any adjoining

land, that is not part of the operation to

be certified, to which a prohibited

substance may be applied, and the

location of any facility used for

livestock housing, storage, or postharvest handling. Information also

would be required that provides a

history of the crops grown and

fertilizers or other production inputs

applied to each field or farm to be

certified for the three year period

immediately preceding the date of the

request for certification. The

information would have to include the

crops intended to be planted or

managed on each field in the coming

crop year, and a list of agricultural

products to be sold as organic or as

made with certain organic ingredients.

A farm operation also would have to

submit information about the intended

use of certain categories of production

inputs. First, information would have to

be submitted that listed all substances

intended to be used as production

inputs in the crop year. This list would

have to indicate each substance

intended to be applied to land or crops,

its source, the anticipated quantity of it

to be used, and where it would be

applied. We also propose to request a

list of all the seeds or planting stock

intended to be purchased that would

indicate for each of these its source (e.g.

nursery or seed company), the

approximate quantity to be used, and

whether it was organically produced,

treated, or untreated.

We propose that a livestock producer

submit a list of all animals or livestock

management units (such as flocks of

poultry or colonies of bees) to be

maintained on the operation and to be

purchased in the following year for use

as organic livestock or for the

production of organic livestock

products. The list also would have to

indicate the source of the livestock (e.g.,

born on the farm, or name of the

hatchery), estimated number of each

type of livestock to be used and

purchased in the certification year, the

intended use of the livestock (such as

slaughter stock, milk, wool, or

breeding), and whether the livestock

were purchased from a certified

operation. Other information required to

be submitted would indicate the

livestock feed and feed supplements

intended to be purchased in the

certification year, and their source (e.g.,

local feed mill, or neighboring farm) and

estimated quantity. Additionally,

information as to what portion, if any,

of the purchased feed was not

organically produced would need to be

provided. The livestock operation also

would have to submit the name of the

veterinarian from whom the producer

obtains animal drugs or prescriptions

for animal drugs, and a list of any

animal drug expected to be used in the

certification year, including its source,

estimated amount to be used, and the

types of livestock to which it might be

administered. Finally, a farm operation

would have to describe the post-harvest

handling or processing methods and

facilities to be used. Examples of postharvest handling facilities would

include fresh produce washing and

packing facilities, grain cleaners, milk

bottling, herb drying, and slaughtering

facilities, whether the facilities are part

of the farm operation to be certified or

located elsewhere.

It should be noted that, in cases where

the regulation provides for the use of a

particular substance or production input

only when other applicable proposed

methods or production inputs are not

effective or are not commercially

available, such as botanical pesticides

(section 205.9), treated seeds (section

205.8), or non-organically produced

livestock feed (section 205.13), a

description of the reasons for using a

restricted substance or production input

would have to be included in the

organic plan. For example, a farmer

might describe why botanical

pesticides, rather than measures that did

not involve the use of a substance, were

used to control particular pests on

particular crops. Similarly, a livestock

producer would describe the reasons for

feeding non-organic feed, such as an

unanticipated expansion of a dairy herd.

Annual updates to the plan also would

describe the conditions that necessitated

any allowed emergency or

unanticipated use of a particular

production input. For example, if

treated seed were used to replant a corn

crop lost to flooding, the farmer would

provide this information as part of the

next annual update to the organic plan.

Paragraph (c) of this section would

require that an applicant requesting

certification of a split operation (a farm

or facility using both organic and nonorganic practices in different field units

or aspects of the operation) submit

certain additional information. This

information would include: anticipated

quantities and locations of any crop,

livestock or livestock product intended

to be grown or raised both organically

and non-organically in the coming crop

year; each prohibited substance that was

applied on the farm in the three years

prior to the request for certification;

each prohibited substance or practice

that may be used in the certification

year on a non-organic portion of the

farm; and a description of the measures

that will be used to prevent

commingling of organic and non-organic

products, and contact of organic field

units or products with prohibited

substances. This information is needed

to determine whether there is any

potential for organically managed

portions of the operation to come into
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contact with synthetic pesticides or

other substances that are prohibited for

use in organic farming and handling

under the Act.

In paragraph (d) of this section we

propose that a certification applicant be

required to submit the following

information regarding a wild crop

harvesting operation: a map showing

each area from which wild crops will be

harvested in the certification year; the

ownership of the area and evidence of

permission to harvest in this area; a

history of this area that demonstrates

that no prohibited substance has been

applied within three years prior to the

initial harvest of a wild crop to be sold

or represented as organic; each species

of plant to be harvested, as well as its

botanical name, the part of the plant to

be taken (such as leaves, roots, flowers,

fruits, or the whole plant), and the

quantities of the plant expected to be

harvested in the coming crop year; the

dates of the harvest season; other

information that the certifying agent

might need to assess the impacts of the

harvest operation on the environment

and sustained growth and production of

the wild crop; each type of wild product

expected to be sold or represented as

organic or made with certain organic

ingredients, and the quantity of each

type of product to be sold or represented

(such as dried flowers in bulk, fresh

roots and potpourri mixes); and a list of

all post-harvest handling or processing

methods and facilities to be used by the

applicant.

As proposed in paragraph (e) of this

section for handling operations, a

handling operation applying for

certification must submit: a brief,

general description of the type of

handling operation and the processing,

manufacturing or other handling

procedures it will use (such as grain

cleaning and milling, meat or produce

packing, dairy processing, or frozen

food manufacturing); a description of

the structural pest management methods

used and intended to be used in each

facility; and a list of each product

intended to be handled and sold or

represented in the certification year as

organic or made with certain organic

ingredients. A handling operation that

produces both organic and non-organic

products also would have to provide a

list of each non-organically produced

product or type of product to be sold in

the certification year, and a description

of the measures to be used to prevent

the commingling of organic and nonorganic products and ingredients, and

the contact of organic products, and

packaging and storage areas used for

organic products, with prohibited

substances. Finally, the handling

operation would have to submit a list of

each ingredient, incidental additive, and

type of packaging material to be used for

organic products in the certification

year, and specify for each, as applicable,

whether it is an organic agricultural

product, a non-organic agricultural

product, or a non-agricultural

ingredient; the estimated quantity to be

used; its source or manufacturer (e.g.,

name of the farm(s), flavor company, or

packaging manufacturer from which it is

purchased); and the country of origin for

each imported organic agricultural

product to be used. The source of any

water to be used as an ingredient in an

organic product would have to be

identified in order to determine that the

water meets the Safe Drinking Water Act

(42 U.S.C. 300(f) et seq.) requirements.

This determination needs to be made

because section 2111(a)(7) of the OFPA

(7 U.S.C. 6510(a)(7)) prohibits handling

operations from using water that does

not meet all the Safe Drinking Water Act

requirements.

We would like to point out that we

believe that the information we are

requiring be submitted to certifying

agents when an application for

certification is made could result in

many positive benefits for the organic

program. We believe that the submitted

information will significantly decrease

the amount of time it will take to

conduct inspections of operations

seeking certification. If this occurs, then

the costs incurred by operations

applying for certification will be

reduced.

We also believe that the information

submitted at the time an application for

certification is made will also lessen the

burdens that could be incurred by

certifying agents in making their own

certification decisions, and in

responding to requests for information

from other certifying agents. This could

occur because certifying agents will not

have to continually re-contact

certification applicants or certified

operations when carrying out their

responsibilities.

Additionally, we believe that

information that is immediately

available will help ensure that timely

decisions are made. For example, the

marketing of multi-ingredient products

that may require multiple certifications

should be able to occur in a timely and

efficient manner because accredited

certifying agents will be able to readily

exchange the information needed to

assure that these multiple certifications

occur. Additionally, the easy

accessibility to information that

documents what is to occur in a

certified operation will provide both

certifying agents and the Administrator

with the ability to help ensure that

violations of the organic program that

occur can promptly be substantiated,

thus helping to ensure the integrity of

representations made about the organic

nature of a product.

However, an alternative scheme for

having the necessary records available

for certification decisions might be a

scheme in which information needed

for certification decisions would be

required to be created by an applicant

and made available for review and

copying at an applicant’s sites of

operation, but would not be required to

be submitted to certifying agents at the

time an application for certification is

made. In this scheme, these records

would be reviewed by inspectors acting

on behalf of certifying agents when an

inspection is carried out as part of the

process of determining whether an

applicant should be certified. If records

are needed at any other time, they could

either be submitted to the certifying

agent or made available for review at a

farm or handling operation.

We would like comments from the

public in regard to our proposed

scheme, and the possible alternative to

it discussed above. In particular, we

would like information regarding the

following:

(1) Whether the suggested alternative

scheme which would require the

creation and availability, but not the

submission, of needed records would

provide certifying agents with the

records they need to make certification

decisions in a timely and efficient

manner;

(2) Whether the suggested alternative

scheme would be less, or alternatively,

more burdensome economically, or in

any other manner, than the proposed

scheme for submission of records for

anyone participating in the organic

certification program, including

certifying agents, inspectors, farming

operations, and handling operations,

and if so, how and why it would be less

or more burdensome; and

(3) Whether any records we are

proposing to be submitted as part of the

certification application, which in our

alternative scheme would be maintained

at the sites of operation, are not needed

to make appropriate certification

decisions or to ensure the integrity of

the organic program. For example, we

would like comments as to whether

certifying agents need to know the

anticipated quantities of non-organic

agricultural products intended to be

grown or harvested in order to make

certification decisions for split

operations. We also would like

comments in this area regarding our

requirement that split operations submit
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65909

information that indicates the expected

quantity and location of each substance

prohibited for use under the OFPA that

may be used on a non-certified portion

of the split operation.

Statement of Compliance—Section

205.206

We propose in this section, in

accordance with section 2107(a)(4) of

the OFPA (7 U.S.C. 6506(a)(4)), that an

applicant for certification also submit a

statement agreeing to comply with the

Act and the regulations in this part,

including the requirements for receiving

and maintaining certification proposed

in section 205.203, to the Secretary and

the certifying agent. This statement of

compliance would be submitted along

with the certification application, and

annually thereafter.

Preliminary Evaluation of an

Application for Certification—Section

205.207

Section 205.207 would require a

certifying agent to make a preliminary

evaluation to determine whether the

applicant may be in compliance with

the applicable production and handling

requirements before conducting an

inspection. This preliminary evaluation,

which would be based on an

examination of the application materials

received, would avoid the necessity of

conducting an inspection of an

applicant who clearly could not be in

compliance with the applicable organic

requirements, thus preventing

unnecessary burdens on both the

certifying agent and the applicant.

This section also would require that

the certifying agent verify that an

applicant who had previously applied

to another certifying agent and received

a notification of non-compliance, as

proposed in section 205.215(a), had

submitted documentation to support the

correction of any deficiencies identified

in the notification of non-compliance.

This provision would assist a certifying

agent to identify corrections made in

response to deficiencies in compliance

that previously had been noted by

another certifier. Once the preliminary

evaluation was completed and the

information indicated that the operation

may be in compliance with the Act and

the regulations, the certifying agent

would then arrange to conduct an onsite inspection of the operation.

Arranging for Inspections—Section

205.208

Section 2107(a)(5) of the OFPA (7

U.S.C. 6506(a)(5)) requires that an

annual on-site inspection be performed

by the certifying agent of each farm and

handling operation that has applied for

certification or that is certified. In

section 205.208(a), we propose that a

certifying agent arrange to conduct an

initial on-site inspection of each farm,

facility, and site that is included in an

operation for which certification is

requested, for the purpose of

determining whether to approve the

request for certification. Another on-site

inspection would be conducted each

year thereafter, to determine if the

certification should be continued.

Paragraph (b) of this section would

require that such initial inspection be

conducted within a reasonable time

following a favorable preliminary

evaluation of an application for

certification, as proposed in section

205.207. While the Act does not specify

that on-site inspections be performed

prior to granting certification,

performing at least one inspection prior

to certification is the customary and

required procedure for all existing

certification programs of which we are

aware, and we believe that it should be

required in our proposal in order to

verify that the information provided in

an application for certification

accurately reflects the practices used by

the operation requesting certification.

We have not specified a time period

within which an inspection must be

conducted because this will vary

depending on when an application is

submitted and the type of operation to

be inspected.

In paragraph (c) of this section, we

propose that an inspection be scheduled

at a time when the inspector can

observe land, facilities, and activities

that demonstrate the operation’s

compliance with, or capacity to comply

with, the organic production and

handling requirements proposed in

subpart B. Inspections also would have

to be arranged so that the applicant or

an authorized representative of the

applicant who is knowledgeable about

the operation will be present during the

inspection. This requirement is

necessary so that information pertinent

to whether an applicant is complying or

can comply with the Act and the

regulations, can be obtained or clarified

through discussion with personnel

knowledgeable about the operation

being certified.

Verification of Information—Section

205.210

Section 2105(3) of the OFPA (7 U.S.C.

6504(3)) requires that an agricultural

product to be sold or labeled as an

organically produced agricultural

product must be produced and handled

in compliance with an organic plan

agreed to by the producer and handler

of the product and the certifying agent.

In section 205.210 we propose the

means by which a certifying agent,

through the use of an inspector, would

verify that the information provided in

the application for certification and in

the organic plan, as proposed in

sections 205.204 and 205.205, or in any

annual update to this information, as

provided in section 205.217, accurately

represents that the applicant is

complying or has the ability to comply

with the Act and the regulations. When

an inspection is conducted to evaluate

continuation of certification, its

purposes also would include

verification that the provisions of the

organic plan are being implemented.

The inspector should be able to

determine from his or her observations

whether the facilities and equipment

used by an applicant for certification

would enable the operation to be in full

compliance with all the applicable

requirements. For example, the

inspector might verify that a produce

operation that was preparing to plant

annual vegetable seedlings had already

obtained or produced seedlings that

comply with section 205.8. If nonorganically produced seedlings were

being used, the inspector also would

examine the operation’s records that

demonstrate that comparable

organically produced seedlings were not

commercially available.

In order to verify that the information

submitted to the certifying agent is

accurate and that practices used by the

applicant are in compliance with the

applicable provisions of the Act and the

regulations, an inspection might include

an examination of the applicant’s fields,

buildings, storage areas, production

inputs, equipment, and other facilities,

including any off-site facilities used by

the operation for organic production or

handling. In addition, all supplies and

inventories of products that are, or that

are intended to be, sold, labeled or

represented as organic or as made with

certain organic ingredients might be

examined to observe whether they are

stored and handled in a manner that

creates any possibility of their being

commingled with non-organic products.

Labels, labeling, and other market

information might also be examined to

determine if such material was in

compliance with the requirements of

Subpart C. The inspector also might

observe boundaries, buffer zones, and

other critical control points where

prohibited substances could contact

organic crops, livestock, or other

agricultural products, equipment or

production areas used in organic

production or handling, and places

where commingling with nonorganic

products might occur, especially in split
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operations. Observations of the overall

general health and condition of the soil,

livestock, crops and other biological

elements, such as hedgerows and

waterways, as appropriate, also might be

made. Additionally, the inspector might

examine the operation’s records and

recordkeeping system, as needed to

determine the applicant’s compliance,

or ability to comply with, the

recordkeeping requirements proposed in

section 205.216. Additionally, the

inspector might need to collect samples

of materials or substances for laboratory

analysis that may serve as evidence of

compliance, as proposed in sections

205.430 and 205.431 of subpart F, when

instructed to do so by the certifying

agent, or when the inspector observed a

situation, such as herbicide damage to

plants, which could indicate that any

crop, field, livestock, product or facility

within the operation has come into

contact with a prohibited substance.

Post-inspection Conference—Section

205.211

In section 205.211 we propose to

require that the inspector conduct a

post-inspection conference with the

certification applicant or an authorized

representative of the inspected

operation. During this conference, the

inspector would discuss specific

observations made concerning the

applicant’s compliance, or ability to

comply, with the Act and the

regulations, such as the adequacy of

buffer areas observed to prevent contact

with organically managed fields by

prohibited substances, or the adequacy

of the segregation of organic products

from non-organic products in storage

areas. We have proposed this

requirement because such discussions

are routinely included in procedures

currently used by most existing

certification programs, and we believe

that permitting an applicant to clarify

any information that is to be reported by

the inspector to the certifying agent

would help ensure the accuracy of the

information. For example, if a crop

being grown in a particular field is

different from the crop indicated in the

applicant information, the applicant

could explain why the alternative crop

had been substituted. This discussion

also would assist the applicant in

preparing future revisions to the organic

plan and in making other changes to the

operation, such as implementing

practices that reduce the need to use

pest control substances or animal drugs.

Reporting to the Certifying Agent—

Section 205.212

In section 205.212, we propose that

the certifying agent would require that

the inspector prepare and submit to the

certifying agent, within thirty days of

completing an inspection, a written

report that describes the inspector’s

observations and assessments of the

inspected operation’s compliance, or

ability to comply, with the Act and the

regulations. The inspection report is a

key document that will be used by the

certifying agent to verify an applicant’s

compliance, or ability to comply, with

the regulations of the National Organic

Program.

In accordance with section 2105(3) of

the OFPA (7 U.S.C. 6504(3)) which

requires that organic products be

produced and handled in compliance

with an organic plan agreed to by both

the producer or handler and the

certifying agent, we believe that

sufficiently detailed information must

be contained in an inspection report in

order for the certifying agent to

determine whether to approve the

organic plan or require that it be

revised, and also to determine whether

a certified operation is complying with

the organic plan as previously

approved. Therefore, it is critical that

the report include a complete, detailed

description of the observations and

assessments made by the inspector

pursuant to section 205.210.

Additional Inspections—Section

205.213

In paragraph (a) of this section, we

propose that, in addition to the annual

on-site inspection required in section

205.208(a), a certifying agent could

conduct an inspection of any farm,

facility, or site used by a certified

operation or an applicant for

certification when necessary to

determine compliance with the Act and

the regulations in this part. In paragraph

(b) of this section, we propose that the

Secretary also may require that

additional inspections be performed for

the purpose of determining compliance

with the Act and the regulations in this

part. In a State in which there was an

approved State program, the governing

State official also would be able to

require additional inspections. A

certifying agent thus could decide to

conduct additional inspections of

certification applicants or certified

operations as necessary to obtain

information that was needed by the

certifying agent to determine or verify

the certification of the operation.

We believe that the requirements and

procedures proposed in sections

205.208 through 205.213 to be followed

by a certifying agent in conducting an

inspection of an applicant for organic

certification or a certified operation

represent a key provision of our

proposed certification program. The

inspection process is critical for

maintaining the integrity of the national

organic certification program and must

be undertaken in a reliable, thorough

and consistent manner. Clear, consistent

criteria for performing inspections are

essential because of the diversity of

private and State certifying agents who

will be conducting inspections and

evaluating inspection reports under this

program.

Approval of Certification—Section

205.214

In this section we propose the basis

for a certifying agent to approve an

application for certification, and the

procedure to be used by the certifying

agent in notifying the applicant of the

approval. Paragraph (a) of this section

would require that the certifying agent

review the information submitted by the

applicant, including the organic plan,

and the report submitted by the

inspector, and request that the

certification applicant submit any

additional information and

documentation that may be needed to

determine if the certification applicant

is complying, or is able to comply, with

the Act and the regulations. For

example, this might include information

about changes in crops actually planted

in certain fields, additional livestock

added to the operation, or new sources

for ingredients in a processed product,

that occurred since the inspection took

place.

Based on a review of all the

information submitted by the

certification applicant and the

inspector, including any additional

information the applicant has provided

pursuant to paragraph (a) of this section,

paragraph (b) of this section would

require the certifying agent to approve

an application for certification after

determining that the applicant’s

operation satisfies four criteria. First,

the certifying agent would need to

determine that the practices and

substances used, or intended to be used,

by the operation are consistent with a

system of organic farming and handling,

as defined in section 205.2, and comply

with the applicable production and

handling requirements in this proposal.

The second criterion that must be met

is that the applicant satisfies the general

requirements for certification, as

proposed in section 205.203. Third, the

certifying agent would have to

determine that the applicant’s organic

plan satisfies the applicable

requirements of the Act and the

production and handling regulations in

subpart B, including the provisions for

the use of substances proposed in the
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65911

National List. The fourth criterion that

must be met is that the applicant’s

records and recordkeeping system

satisfy the applicable requirements

proposed in section 205.216.

After the certifying agent determines

that an application for certification

should be approved, paragraph (c) of

this section would require that the

certifying agent send the applicant a

written notification, and to state in the

notice any restrictions or requirements

that are being imposed as a condition of

certification. For example, if the

inspector noted that information about

persons who had applied substances to

certain farm parcels was missing from

the applicant’s records, the notice

would require that such information be

submitted by a certain time.

Along with the notification of

approval, the certifying agent would

provide a certificate which the

operation could use as proof of

certification. In paragraph (d) of this

section, we propose that the certificate

include the name of the certified

operation, the effective date of the

certification, and the category(ies) and

type(s) of products and crop year, if

applicable, covered by the certification.

Denial of Certification—Section 205.215

In this section we propose the

procedure to be followed if the

certifying agent has reason to believe,

based on a review of the information

specified in section 205.214(a), that an

applicant for certification is not able to

comply, or is not in compliance, with

the requirements of the Act and the

regulations in this part. When this

occurs, the certifying agent would be

required to provide a written

notification of non-compliance to the

applicant, as proposed in section

205.218(a). This notification would be

sent by certified mail to the certification

applicant, and would contain a

description of each deficiency in the

applicant’s ability to comply with the

Act and the regulations in this part that

the certifying agent has reason to believe

has occurred, the evidence on which the

notification is based, and the date by

which the operation must correct each

deficiency in compliance identified in

the notification.

Following the correction of

deficiencies identified in the

notification of non-compliance, section

205.215(b) would permit the applicant

to submit a new application for

certification to any accredited certifying

agent. A new application would include

documentation of actions taken by the

applicant to correct the deficiencies in

compliance identified in the notification

of non-compliance sent pursuant to

paragraph (a) of this section. If a new

application is submitted to a different

certifying agent, the certification

applicant would be required to

simultaneously inform the certifying

agent who issued the notification of

non-compliance that a new application

has been submitted and the name of the

certifying agent to whom it was

submitted. It should be noted that an

applicant for certification must provide

information to a certifying agent about

previous applications for certification

and their outcome, as proposed in

section 205.204(d) (applicant

information). A certifying agent thus

would be able to determine whether a

new applicant previously had received

a notification of non-compliance from a

different accredited certifying agent and

would be required to include with the

application for certification

documentation that deficiencies in

compliance identified in the previous

notification had been corrected.

Finally, in paragraph (c) of this

section, we propose that if a

certification applicant who receives a

notification of non-compliance does not

correct the deficiencies or does not

notify the certifying agent that it has

submitted a new application within the

time specified in the notice of noncompliance, the certifying agent would

submit to the Administrator a notice of

its recommendation to deny

certification to the applicant. The

Administrator then could institute

proceedings to deny certification

pursuant to the Rules of Practice, 7 CFR

1.130, et seq. The Rules of Practice

provide for the formal filing of a

complaint by the Secretary, an

opportunity for the certification

applicant to answer the complaint, a

procedure for holding a hearing, and a

procedure for further appealing an

adverse decision following any hearing

that is held. A final determination to

deny certification would not be made

until the applicant had received notice

and an opportunity to be heard.

Recordkeeping—Section 205.216

Section 2112(d) of the OFPA (7 U.S.C.

6511(d)) requires that producers who

operate a certified organic farm or

handling operation maintain certain

records for five years concerning the

production or handling of agricultural

products that are sold or labeled as

organically produced. We accordingly

propose in section 205.216 that a

certified operation maintain records

concerning the production, harvesting,

and handling of agricultural products

that are, or that are intended to be, sold,

labeled or represented as organic or

made with certain organic ingredients

sufficient to demonstrate compliance

with the Act and the regulations, for a

period of five years. These records

would have to be made available to

authorized representatives of the

Secretary, the applicable governing

State official in a State with an

approved State program, as proposed

and discussed in section 205.402 of

subpart F, and the certifying agent, for

the purpose of verifying the operation’s

compliance with the Act and the

regulations in this part and the

provisions of the applicable State

program. Records maintained in

accordance with this provision could

include written, electronic, or graphic

documentation, such as maps or plant

diagrams, that serve to support and

substantiate any information provided

to the certifying agent concerning the

operation’s production and handling

methods.

In paragraph (b) of this section we

propose that certain specific records

would have to be maintained by a

certified operation. Other records, in

addition to those indicated, also may be

maintained as considered appropriate

by the operation to support information

provided to the certifying agent. In

paragraphs (b)(1) and (b)(2) of this

section it is proposed, in accordance

with sections 2105(2) and 2112(d) of the

OFPA (7 U.S.C. 6504(2) and 6511(d)),

that the operation would have to

maintain a list of all substances applied

to fields or land that are part of the

certified operation for a period of no

less than three years preceding the

intended or actual time of harvest of an

organic crop from such fields or land,

along with the name and address of any

person who applies or has applied any

substance to any part of the farm, the

name of the substance, and the date(s),

location(s), rate(s) and method(s) of

application. Section 2110(f)(2) of the

OFPA (7 U.S.C. 6509(f)(2)) requires that

certain records be kept with respect to

livestock maintained under organic

management. Accordingly, we propose

in section 205.216(b)(3) that, for each

animal (or livestock management unit,

such as a poultry flock or bee colony)

that is, or whose products are, intended

to be sold or represented as organic in

accordance with the livestock

production requirements proposed in

sections 205.12 through 205.15 of

subpart B, the producer would have to

keep records of: the source of the animal

or livestock management unit and the

date it entered the certified operation;

the amounts and sources of all animal

drugs administered to it; all feeds and

feed supplements fed to it; and the

location of the field, farm unit, or
65912 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

facility where it is maintained, as

applicable. These records all are

necessary in order to maintain a

detailed, verifiable audit trail so that

each animal (or livestock unit) can be

traced back to the farm, as required by

section 2110(f)(1) of the OFPA (7 U.S.C.

6509(f)(1)).

A fourth category of records we

propose would have to be maintained

includes any information submitted to a

certifying agent as part of an application

for certification or as part of

continuation of certification, as

proposed in sections 204.204 and

205.217.

We are also proposing that the records

would have to be adequate to establish

an audit trail. An audit trail is defined

as the ability to follow, through

documentation, the transfer of

ownership and the transportation of any

agricultural product labeled as organic

or made with certain organic

ingredients. This information would

include, as applicable, the source,

production and handling methods,

transfer of ownership, and

transportation of any agricultural

product labeled as organic or made with

certain organic ingredients that is

received by or shipped from the

certified operation. Although section

2110(f)(1) of the OFPA (7 U.S.C.

6509(f)(1)) imposes a verifiable audit

trail requirement only on livestock

operations, our proposal to establish a

verifiable audit trail for all organically

produced products is needed in order to

adequately enforce the provisions of the

Act. It also is consistent with the

recordkeeping requirements of most

existing certification programs we have

reviewed, and consistent with the

recommendations provided by the

NOSB.

Paragraph (c) of this section reiterates

that any operation that is exempt or

excluded from certification under

section 205.202 (a) or (b) must maintain

records in accordance with proposed

section 205.202(c).

Continuation of Certification—Section

205.217

Section 2107(a)(4) of the OFPA (7

U.S.C. 6506(a)(4)) requires that a

certified operation certify on an annual

basis that it is producing agricultural

products that are sold, labeled, or

represented as organic in compliance

with the Act and the regulations.

Additionally, section 2107(a)(5) of the

OFPA (7 U.S.C. 6506(a)(5)) requires an

annual on-site inspection of each

certified operation. The annual

submission of updated information

proposed in paragraph (a) of this section

would provide a certifying agent with

information about changes that may

have been made in an operation during

the preceding year which is needed by

the certifying agent to properly prepare

for the annual inspection. Although

nearly all the existing certification

programs we reviewed require an

annual renewal of certification, we are

proposing in section 205.217 that a

certified operation needs to submit only

updated information to the certifying

agent on an annual basis. As proposed

here, an approved certification status

would continue in effect until the

operation voluntarily ceased to be

certified or was terminated, as proposed

in section 205.219.

As proposed in paragraph (a) of this

section, a certified operation would

submit to the certifying agent any

additions or changes to each item of

information contained in the previous

year’s application and any amendments

to the organic plan, including a

description of activities undertaken in

the previous year, and intended to be

undertaken in the coming year, to

implement the provisions of the organic

plan, as proposed in sections 205.204

and 205.205. For example, if a farm had

expanded its acreage in organic

production or the number of livestock

included in its operation had decreased,

this information would have to be

included in the update. The certifying

agent would have the previous

application information on file, or

would be able to obtain it from the

certifying agent who had previously

certified the operation, so that the

applicable information specified in

section 205.204 and 205.205 would be

available when preparing for the on-site

inspection.

The application materials also would

have to include a statement that the

certified operation will remain in

compliance with the Act and the

regulations in this part, as well as any

other information that may be requested

by the certifying agent. In section

205.217 (b) and (c) we propose that after

receiving the updated information as

specified in paragraph (a) of this

section, the certifying agent would

arrange to conduct an on-site inspection

of the certified operation pursuant to

sections 205.208 through 205.211. After

conducting an on-site inspection of the

certified operation pursuant to section

205.212, if a certifying agent has reason

to believe that a certified operation is

not complying with the requirements of

the Act and the regulations, the

certifying agent would provide a written

notification of non-compliance to the

operation, as proposed in section

205.218(a).

Notification of Non-compliance With

Certification Requirements—Section

205.218

Section 2107(a)(7) of the OFPA (7

U.S.C. 6506(a)(7)) requires that a

certification program established under

the Act provide for appropriate and

adequate enforcement measures. In

section 205.218 we propose the

procedure by which a certifying agent

would identify any problems that may

occur in the compliance with, or

possible violations of, the Act or the

regulations in this part by a certified

operation, or a certification applicant,

and then provide an opportunity for the

operation to correct any defects in its

compliance.

In paragraph (a) of this section we

propose that a certifying agent would

send a written notification of noncompliance by certified mail sent to the

place of business of the certification

applicant or the certified operation. The

notification would have to contain the

following information: a description of

each deficiency in compliance and each

possible violation of the Act and the

regulations that the certifying agent has

reason to believe has occurred; the

evidence on which the notification is

based; and the date by which the

operation must correct each deficiency

in compliance and each possible

violation delineated in the notification,

and submit documentation to the

certifying agent to support such

corrections.

In paragraph (b) of this section we

propose the procedure to be followed

after a certifying agent sends a

notification of non-compliance to an

operation it has certified. If the

documentation to support corrections

received by the certifying agent from an

operation it has certified is not adequate

to demonstrate that each deficiency in

compliance and each possible violation

has been corrected, we propose that the

certifying agent would conduct an

additional inspection, if one is

necessary, to determine whether the

operation is complying with, or has

violated, the Act or the regulations.

After conducting an additional

inspection, if one is necessary, or

without conducting an additional

inspection, if one is not necessary, the

certifying agent would review the status

of the certified operation to determine

whether the operation or any portion of

the operation has ceased to comply

with, or has violated, the Act and the

regulations.

Paragraph (b)(3) of this section

proposes the procedure to be followed

after the certifying agent has reviewed

the certified operation’s status, pursuant
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65913

to paragraph (b)(2) of this section.

Following a review of a certified

operations’s status, if a certifying agent

determines that the operation is in

compliance with the Act and the

regulations, the certifying agent would

be required to notify the certified

operation in writing of its determination

of compliance. If the outcome of the

review gives the certifying agent reason

to believe that the certified operation or

any portion of the operation is not in

compliance with the Act and the

regulations, the certifying agent would

submit to the Administrator a notice of

its recommendation to terminate the

certification of the certified operation or

any portion of the certified operation

that the certifying agent believes to have

ceased to comply with the Act and the

regulations. It should be noted that a

recommendation could be made to

terminate the certification of only a

portion of an operation: for example,

when a prohibited substance is applied

to only one field that is part of a

certified farm operation, but all other

fields remain in compliance with the

Act and the regulations.

Termination of Certification—Section

205.219

In section 205.219 we propose the

procedure to be followed to terminate

the certification of an operation or a

portion of an operation that a certifying

agent believes has ceased to comply

with the Act and the regulations. In

paragraph (a) of this section we propose

that a certifying agent would send the

certified operation a notification of noncompliance and follow the other

procedures proposed in section 205.218

if the certifying agent has reason to

believe that a certified operation or a

person responsibly connected with a

farm, wild crop harvesting, or handling

operation it has certified has: violated

the purposes of the national organic

certification program; made a false

statement; or attempted to have a label

indicating that an agricultural product is

organically produced affixed to such

product when such product was not

organically produced in accordance

with the Act and the regulations.

In section 205.219(b) we propose that

if a certifying agent has reason to believe

that a certified operation or a person

responsibly connected with an

operation certified by the certifying

agent has wilfully violated the Act and

the regulations, the certifying agent

would not send a notification of noncompliance pursuant to section 205.218.

Instead, the certifying agent would

submit to the Administrator a notice of

its recommendation to terminate the

certification of the certified operation or

any portion of the certified operation

that the certifying agent believes to have

ceased to comply with the Act and the

regulations. The names of any persons

the certifying agent believes to have

willfully violated the Act and the

regulations would have to be listed in

the recommendation to terminate

certification submitted to the

Administrator.

In section 205.219(c) we propose that

the Administrator could institute the

proceedings to terminate certification

(pursuant to the Rules of Practice 7 CFR

1.130, et seq.) following the

Administrator’s receipt from a certifying

agent of a notification of a

recommendation to terminate the

certification of an operation or any

portion of an operation. The Rules of

Practice provide for the formal filing of

a complaint by the Secretary, an

opportunity for the person(s) named in

the complaint to answer the complaint,

a procedure for holding a hearing, and

a procedure for further appealing an

adverse decision following any hearing

that is held. A final determination to

terminate the certification would not be

made, therefore, until the person(s)

believed to have violated the Act and

the regulations had received notice and

an opportunity to be heard. A

notification of a certifying agent’s

recommendation to terminate

certification could be submitted either

in accordance with paragraph (b) of this

section, or in accordance with section

205.218(b)(3)(ii) following a review of

the status of a certified operation.

Section 2120(c) of the OFPA (7 U.S.C.

6519(c)) requires that, after notice and

an opportunity to be heard, a person

who is determined to have violated the

Act and the regulations; made a false

statement; or attempted to have a label

indicating that an agricultural product is

organically produced affixed to such

product that such person knows, or

should have reason to know, was not

organically produced, shall not be

eligible to receive certification for five

years from the occurrence of such

violation. Section 205.219(d)(1) is

proposed in accordance with the Act’s

requirement, with the period of

ineligibility to begin when a

determination is made subsequent to the

proceedings to terminate certification as

proposed in paragraph (c) of this

section. This section of the Act also

permits the Secretary to waive or reduce

the period of ineligibility if it is in the

best interests of the certification

program established under the Act, and

we accordingly propose in paragraph

(d)(2) of this section that the Secretary

may waive ineligibility for certification

if it is in the best interests of the

certification program established under

subpart D.

Notification of Certification Status—

Section 205.220

In section 205.220 we propose that a

certifying agent would be required to

submit to the Administrator a copy of

any notification of non-compliance, sent

pursuant to section 205.218,

simultaneously with its issuance to the

certification applicant or the certified

operation, and also to submit to the

Administrator on a quarterly calendar

basis the name of each operation whose

application for certification has been

approved. This information is needed in

order for the Administrator to maintain

current information concerning the

status of certified farm, wild crop

harvesting and handling operations, and

therefore provide adequate enforcement

measures. Information about any

operation that has received a

notification of non-compliance,

pursuant to section 205.218(a), is

needed in order to ensure that

information about possible violations of

the Act and the regulations is provided

to the Administrator in a timely manner.

This provision also would enable a

certifying agent to determine whether a

new certification applicant had

previously received a notification of

non-compliance from a different

certifying agent, and was therefore

required to document that any defects in

compliance had been corrected.

SUBPART D—WHAT HAS TO BE CERTIFIED

Entity Needs to be

certified

Records required for organic ingredients

and organic products

ORGANIC OPERATION SELLING or HANDLING NO MORE THAN $5,000 annually in agricultural products § 205.202(a)(1).NO .................... *SALES RECORDS § 205.202(c)(1).

*Sales records for all agricultural products.
65914 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

SUBPART D—WHAT HAS TO BE CERTIFIED—Continued

Entity Needs to be

certified

Records required for organic ingredients

and organic products

ORGANIC OPERATION SELLING or HANDLING MORE THAN $5,000 in agricultural products or a HANDLING OPERATION (i.e., co-packer, etc.) that provides

handling services to THREE (3) OR MORE operations that produce or handle

agricultural products sold, labeled, or represented as organic or as made with

certain organic ingredients § 205.201(a).

YES .................. ALL RECORDS § 205.216.

HANDLER of made with certain organic ingredients product §§ 205.201(a) and (b) YES .................. ALL RECORDS § 205.216.

HANDLER of products that contain less than 50% organic ingredients

§ 205.202(a)(3).

NO .................... SOURCE/QUANTITY RECEIVED—

§ 205.202(c)(3)(i).

COMMINGLING/CONTACT—

§ 205.202(c)(3)(i).

DESTINATION/QUANTITY SHIPPED—

§ 205.202(c)(3)(ii)).

HANDLER (distributor, warehouser, etc.) of packaged or otherwise enclosed products that remain in the same packages § 205.202(b)(1).NO .................... SOURCE/QUANTITY RECEIVED—

§ 205.202(c)(3)(i).

COMMINGLING/CONTACT—

§ 205.202(c)(3)(i).

DESTINATION/QUANTITY SHIPPED—

§ 205.202(c)(3)(ii)).

RETAIL OPERATION that does not process organic products § 205.202(a)(2) ....... NO ....................

RETAIL OPERATION that processes in the course of normal retail activity solely

for the purpose of offering the product to the consumer § 205.202(b)(3).

NO ....................

RETAIL OPERATION that processes other than in the course of normal retail activity, i.e., combines into a single product products previously labeled organic

and represents for sale under a new label § 205.201(a).

YES .................. ALL RECORDS—§ 205.216.

RESTAURANTS and FOOD SERVICE ESTABLISHMENTS that process ready-toeat food but do not package and label the food § 205.202(b)(2).NO ....................

Subpart E—Accreditation of Certifying

Agents

Section 2115(a) of the OFPA (7 U.S.C.

6514(a)) requires that the Secretary

establish and implement a program to

accredit a governing State official, and

any private person, who meets the

requirements of the Act, as a certifying

agent for the purpose of certifying a

farm or handling operation as a certified

organic farm or certified organic

handling operation. Section 2104 of the

OFPA (7 U.S.C. 6503) provides for the

establishment of an organic certification

program, which we have proposed in

subpart D of this proposal, and section

2104(d) of the OFPA (7 U.S.C. 6503(d))

requires that the Secretary implement

the certification program through

certifying agents. We accordingly have

proposed the provisions contained in

this subpart to establish a program to

accredit certifying agents to implement

the certification program that is

proposed in subpart D. We have

developed this subpart following an

extensive review of information about,

and consultation with representatives

of, existing organic certification

programs and existing accreditation

programs. We also have reviewed

recommendations provided by the

NOSB and public input submitted to the

NOSB and the USDA.

This subpart delineates the procedure

which a governing State official or a

private person must follow in order to

apply for and maintain accreditation as

a certifying agent. A governing State

official is defined by the Act as the chief

executive official of a State or, in the

case of a State that provides for the

Statewide election of an official to be

responsible solely for the administration

of agricultural operations of the State,

such official, who administers an

organic certification program under the

Act. A person is defined as an

individual, group of individuals,

corporation, association, organization,

cooperative, or other entity. Over 33

private certification organizations

currently exist, including some that are

organized for profit and others that are

non-profit membership organizations.

Some of these organizations cover a

broad geographic scope and certify a

wide range of operations producing

diverse agricultural products. Others are

small and cover limited geographical

areas or types of operations. This

proposal has been developed to provide

enough flexibility to allow for diversity

of organizational types, while ensuring

that the requirements of the Act are met.

We anticipate that new private

certifying agents will be organized when

certification becomes mandatory for the

marketing of agricultural products that

are represented as organically produced.

Eleven States currently certify organic

producers in accordance with State

laws, and additional States have

expressed interest in establishing

organic certification programs in their

States.

Additionally, a governing State

official may establish an approved State

program, as proposed and discussed in

section 205.402 of subpart F, in

accordance with section 2108 of the

OFPA (7 U.S.C. 6507). A State could

elect to operate the certification

component of an approved State

program by utilizing accredited

certifying agents who are private

persons; the State would not need to

apply for and receive accreditation as a

certifying agent as a condition of its

State program being approved by the

Secretary. Conversely, a governing State

official could apply for and receive

accreditation as a State certifying agent

without having to establish an approved

State program.

Synopsis of Proposed Accreditation

Program

This subpart delineates the

requirements that must be met for a

private person or a governing State

official to receive and maintain

accreditation as a certifying agent. These

requirements include those that are

provided under sections 2115 and 2116

of the OFPA (7 U.S.C. 6514 and 6515)

which include having sufficient

expertise in organic farming and

handling techniques. They also include

other requirements that we believe are

necessary in order to perform the

certification functions we have
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65915

proposed in subpart D, such as having

an annual internal review conducted of

the accredited certifying agent’s

operations.

Subpart E also provides a procedure

for applying for accreditation, including

the information that an applicant must

submit. The application material

includes basic information about the

applicant’s operation, information that

provides evidence of its expertise in

organic farming and handling

techniques, evidence of the applicant’s

ability to implement the organic

certification program required under the

Act, and an agreement to comply with

the Act and the regulations, as well as

certain other terms and conditions. A

private person would have to agree to

certain additional terms, including

agreeing to hold the Secretary harmless

for any failure on its part, and to furnish

reasonable security to protect the rights

of participants in the certification

program in the event the applicant

ceases its operations.

This subpart then delineates the

procedures by which the Administrator

either would approve or deny an

application for accreditation. The

procedure for denial of accreditation

would not be initiated until the

applicant had been notified of defects in

its ability to comply with the

requirements and given an opportunity

to correct them. This proposal would

require an initial on-site evaluation of

an accredited certifying agent’s

operations within a reasonable time

after approving an application for

accreditation, and a subsequent review

by a peer review panel, as provided

under section 2117 of the OFPA (7

U.S.C. 6516). The Administrator then

would review the site evaluation report

and the recommendations provided by

each peer reviewer to determine

whether to confirm or deny

confirmation of the agent’s accredited

status. Following confirmation of

accreditation, this proposal would

require a certifying agent to submit fees

and reports annually, and to request

renewal of accreditation every 5 years.

Each USDA review of a certifier’s

request for renewal of accreditation

would include an on-site evaluation of

a certifying agent’s operations and a

subsequent review by a peer review

panel. This proposal also would permit

the Administrator to conduct site

evaluations whenever needed, including

prior to approving accreditation, in

order to verify the accuracy of

information submitted and ensure

compliance with the Act and the

regulations.

This proposal further provides for

certain enforcement actions to be taken

if a certifying agent is not complying

with or has violated the Act or the

regulations in this part. A notification

would be sent to a certifying agent if the

Administrator has reason to believe that

the certifying agent is not complying

with the Act and the regulations. The

basis for initiating the procedure for

suspending or terminating an

accreditation, which would be initiated

after the certifying agent had an

opportunity to correct deficiencies in

compliance, is then proposed. A private

person or a governing State official

whose accreditation was suspended

could reapply for accreditation after

taking corrective actions to bring its

activities into compliance with the Act

and the regulations. A private person

whose accreditation was terminated

would be ineligible to receive

accreditation for no less than three

years, as provided by section 2120(e)(2)

of the OFPA (7 U.S.C. 6519(e)(2)).

Distinctions Between Certifying Agents

The OFPA provides that a governing

State official and any private person can

become an accredited certifying agent if

it successfully can demonstrate that it

meets the requirements for accreditation

established by the Secretary. All organic

certifying agents, whether new or

existing, or a private person or a

governing State official, generally will

have to meet the same qualifications,

demonstrate the same capabilities, and

undergo the same accreditation process.

There are, however, certain

requirements stated in the OFPA that

pertain only to private certifying agents.

Section 2116(e) of the OFPA (7 U.S.C.

6515(e)) requires only private certifying

agents to furnish reasonable security, in

an amount determined by the Secretary,

to protect the rights of participants in

the organic certification program. This

section of the Act also requires only a

private certifying agent to agree to hold

the Secretary harmless for any failure on

its part to carry out the Act’s provisions.

Another difference between private

and State certifying agents concerns the

termination of accreditation. Section

2120(e) of the OFPA (7 U.S.C. 6519(e))

provides for the loss of accreditation

only for a private certifying agent who

violates the provisions of the Act and

the regulations or who negligently

certifies an operation, and also requires

that the private certifying agent be

ineligible for accreditation for a period

of at least three years. Section 2116(j)(1)

of the OFPA (7 U.S.C. 6515(j)(1))

provides for the suspension of

accreditation for any certifying agent

who is not properly adhering to the

provisions of the OFPA and does not

require a minimum period of

ineligibility. These provisions of the Act

are reflected in our proposed section

205.316 (termination of accreditation).

Areas of Accreditation—Section

205.300

As provided by section 2115(a) of the

OFPA (7 U.S.C. 6514(a)), this section

proposes that the Secretary shall

accredit a qualified accreditation

applicant in the areas of crops,

livestock, wild crops, or handling, or

any combination thereof, to certify a

farm, wild crop harvesting operation, or

handling operation as a certified organic

farm, a certified organic wild crop

harvesting operation, or a certified

organic handling operation. This

proposal would allow certifying agents

who may have limited areas of expertise

to become accredited to conduct

certifications only of those types of

operations for which they have

expertise. Thus, certifying agents would

not be required to have expertise in

areas for which they are not requesting

accreditation, in order to obtain

accreditation in the areas for which they

request it. For example, a certifying

agent that only wanted to be accredited

to certify mushroom farming operations

would not have to have expertise in the

raising of organic livestock in order to

become accredited to certify mushroom

operations. Additionally, a number of

the existing non-profit certification

programs we have reviewed certify only

farms, since their personnel are not

knowledgeable enough about

manufacturing and processing

procedures to certify those types of

operations. Under this proposal, these

organizations would not have to acquire

the capability to certify other types of

operations in order to be accredited to

certify only farms.

General Requirements for

Accreditation—Section 205.301

Sections 2115 and 2116 of the OFPA

(7 U.S.C. 6514 and 6515) delineate

certain requirements that accredited

certifying agents must meet in carrying

out the organic certification program

mandated by the Act. This section of

our proposal delineates those general

requirements that are provided in these

sections of the Act, as well as certain

additional requirements that we have

determined to be necessary to ensure

the integrity of the program. These

additional requirements are authorized

by section 2107(a)(11) of the OFPA (7

U.S.C. 6506(a)(11)) which permits a

program established under the Act to

require other necessary terms and

conditions, as determined by the

Secretary.
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All of the requirements proposed in

paragraph (a) of this section would

apply equally to both State and private

certifying agents. The first two require

that an accredited certifying agent have

sufficient expertise in organic farming

and handling techniques, and

demonstrate the ability to fully comply

with the requirements for accreditation

to implement the certification program

under the Act and the regulations, as

provided respectively in sections

2115(b)(2) and 2116(a) of the OFPA (7

U.S.C. 6514(b)(2) and 6515(a)).

The third requirement we propose in

section 205.301(a) is that a certifying

agent carry out the provisions of the Act

and the regulations in this part, which

would include sections 205.207 through

205.214 of subpart D that describe

certifying agent responsibilities and

section 205.430 of subpart F, concerning

compliance testing. The fourth

requirement proposed in paragraph (a)

of this section is consistent with section

2116(b) of the OFPA (7 U.S.C. 6515(b)),

which requires a certifying agent to use

a sufficient number of inspectors to

implement the applicable organic

certification program. Our proposal also

would include in this requirement

personnel other than inspectors, such as

those who review applicants for

certification. After reviewing

information from existing certification

programs, we have concluded that

sufficient qualified personnel in

addition to inspectors are essential for a

certifying agent to have the expertise

necessary to implement the certification

program as proposed in subpart D of

this part. Paragraph (a)(4) of this section

additionally would require that the

personnel be adequately trained to

implement the organic certification

program established under the Act and

the regulations.

In section 205.301(a)(5) we propose

that a certifying agent be required to

conduct an annual performance review

for each inspector used and to

implement measures to correct any

possible defects in compliance with the

Act and the regulations identified in

each such review. The quality and

consistency of the performance of

inspections is critical to the integrity of

the certification program we have

developed and proposed in subpart D.

In order to ensure that all inspections

are conducted in a manner that

adequately scrutinizes certified

operations, we believe that a certifying

agent must annually evaluate the

performance of each inspector it uses

during the year. Paragraph (a)(6) of this

section similarly would require that an

annual internal evaluation review be

conducted of the certifying agent’s own

certification activities, and that

measures to correct any possible defects

in compliance with the Act and the

regulations be implemented, as

identified in each such review. We

propose this requirement in order to

safeguard further the integrity of the

certification process, and also to provide

an additional means of evaluating the

adequacy of a certifying agent’s

performance and compliance with the

Act and the regulations. Such a

procedure is consistent with accepted

quality management methods and

would assist the certifying agent in

helping to ensure that its operations

continue to comply with the

requirements of the Act and the

regulations. The requirements proposed

in paragraphs (a)(5) and (a)(6) of this

section would help ensure that a

certifying agent possesses the requisite

expertise to conduct certification

activities, as required by section

2115(b)(2) of the OFPA (7 U.S.C.

6514(b)(2)), and maintains the

administrative capability to fully

implement the proposed program, as

required by section 2116(a) of the OFPA

(7 U.S.C. 6515(a)).

In section 205.301(a)(7) we propose

the requirement that a certifying agent

provide sufficient information to

persons seeking certification to enable

an applicant for certification to comply

with the applicable requirements of the

Act and the regulations. This would

require that a certifying agent provide

applicable information, such as

information about the National Organic

Program’s requirements for: the

production and handling of agricultural

products; wild crop harvesting;

certification; labeling; inspection;

appeals of adverse actions; fees and

expenses; approved State program

requirements; and any other information

that is needed for a person to be able to

apply for certification and comply with

all the relevant requirements.

Section 2116(c) of the OFPA (7 U.S.C.

6515(c)) requires that a certifying agent

maintain records of its activities under

the Act for not less than 10 years, and

that it allow only representatives of the

Secretary and the governing State

official access to these records.

Paragraph (a)(8) of this section reflects

those requirements. Section 2116(g) of

the OFPA (7 U.S.C. 6515(g)) requires

that a certifying agent maintain strict

confidentiality with respect to its clients

under the applicable organic

certification program and not disclose

any business related information of its

clients to third parties, with the

exception of the Secretary or the

applicable governing State official.

Paragraph (a)(9) of this section reflects

this provision, and also allows for

certain exceptions, as proposed and

discussed in section 205.304(b)(5) of

this subpart.

The requirements provided in section

2116(h) of the OFPA (7 U.S.C. 6515(h))

address the prevention of conflicts of

interest by certifying agents, and

paragraph (a)(10) of this section is

proposed to be consistent with those

provisions. We have found it necessary

in some cases to add certain

clarifications to the language contained

in the Act in order to establish

requirements that are both feasible for

the diverse range of certifying agents

and adequate to prevent conflicts of

interest. The first provision proposed in

paragraph (a)(10) of this section is that

a certifying agent could not certify an

operation in which the agent, or a

responsibly connected party of the

agent, has held a commercial interest,

including the provision of consultancy

services, within 12 months prior to the

application for certification. This

provision also would require that a

certifying agent not certify an operation

through the use of any employee that

has or has held a commercial interest in

the operation, including the provision of

consultancy services, within the 12

month period prior to the application

for certification. This proposal therefore

would permit a certifying agent to

certify the operation of an employee

provided that the employee was not

used in certifying that operation. This

clarification is consistent with the intent

of the Act, and would permit the use by

certifying agents of peer reviewers, as is

the practice in many of the current

organic certification programs we have

examined. While the Act does not

mention responsibly connected parties,

which we have defined as any person

who is a partner, officer, director,

holder, manager, or owner of 10 per

centum or more of the voting stock of

an applicant or a recipient of

certification or accreditation, we believe

that any such person should be limited

in the same way as the agent itself.

Section 2116(h)(1) of the OFPA (7

U.S.C. 6515(h)(1)) also does not specify

a time limit for previous commercial

relationships in its conflict of interest

provisions; however, we are proposing

here that the prohibition of commercial

relationships extend only to the

previous 12 months. We believe that

extending this period indefinitely into

the past would prevent certifying agents

from hiring qualified personnel who at

some time had a financial interest in an

operation certified by the agent. An

indefinite extension would have the

effect of severely curtailing most
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certifying agents’ ability to comply with

the Act’s requirement of employing

people with sufficient expertise to

implement the applicable certification

program. We believe that 12 months is

a sufficient period to ensure that any

previous commercial interest would not

create a conflict of interest situation,

since this time period is consistent with

similar provisions governing conflict of

interest for government employees.

The second provision proposed in

paragraph (a)(10) of this section would

similarly prohibit a certifying agent

from assigning an inspector to perform

an inspection of an operation in which

the inspector has or has held a

commercial relationship within the 12

months prior to conducting the

inspection. We propose this because of

the fact that many existing organic

certification programs use inspectors

who are neither employees nor

responsibly connected parties, but who

instead are independent contractors

who work for multiple certifying agents.

As proposed here, such inspectors

would be appropriately prevented from

performing inspections in which they

had any conflict of interest.

In accordance with section 2116(h)(2)

of the OFPA (7 U.S.C. 6515(h)(2)), the

third provision proposed in paragraph

(a)(10) of this section would prohibit a

certifying agent and any employee,

inspector, or other personnel involved

in certification activities to accept

payment, gifts, or favors of any kind,

other than prescribed fees, from any

business inspected. We would not

consider a volunteer who performs

services for a not-for-profit certifying

agent as providing favors to any

particular individual in that agency and,

therefore, would not consider the

certifying agent as being in a conflict of

interest situation by accepting such

services from volunteers. The final

provision of paragraph (a)(10) of this

section, proposed in accordance with

section 2116(h)(3) of the OFPA (7 U.S.C.

6515(h)(3)), would prohibit a certifying

agent from providing advice concerning

organic practices or techniques to any

certification applicant for a fee other

than as part of the fees established for

its accredited certification program.

Section 205.301(a)(11) would require

that a certifying agent accept the

certification decisions made by another

USDA accredited certifying agent as

equivalent to its own. We believe this

provision is necessary so as to prevent

certifying agents from requiring

handlers to purchase only organic

products originating from operations

certified by the particular certifying

agent, under the premise that products

originating from operations certified by

other certifying agents are not

equivalent. Such a situation would

conflict with the purposes of the Act to

establish national standards for

organically produced products and to

facilitate interstate commerce for

organically produced agricultural

products.

Section 205.301(12) would require a

certifying agent to refrain from making

false or misleading claims about its

accreditation status, the USDA

accreditation program, or the nature or

qualities of products labeled as

organically produced. For example, a

certifying agent could describe its

procedure for certifying organic

production methods, but it could not

claim that its certification procedure

offers a guarantee of product quality. We

believe that this provision is needed to

prevent the dissemination of inaccurate

or misleading information to consumers

about organically produced products,

which is consistent with the purpose of

the Act to assure consumers that

organically produced products meet a

consistent standard.

Section 205.301(a)(13) would require

that a certifying agent charge only such

fees to applicants for certification and

operations it certifies that the Secretary

determines are reasonable. This

provision is consistent with section

2107(a)(10) of the OFPA (7 U.S.C.

6506(a)(10)), which requires the

certification program established under

the Act to provide for the collection of

reasonable fees from producers and

handlers who participate in such

program. AMS will review the fees

charged by the certifying agents when

they apply for accreditation and when

they submit annual reports to ensure

that the fees are reasonable and that

small businesses are not unduly

burdened. Section 205.301(a)(14) would

require a certifying agent to pay and

submit fees to AMS in accordance with

sections 205.421 and 205.422(b) of

subpart F, in which we propose that

certifying agents would be required to

pay certain fees to become accredited

and to maintain accreditation, and also

would be required to collect National

Organic Program fees from farmers and

handlers to be submitted to AMS.

In section 205.301(a)(15) we propose

that a certifying agent would have to

comply with and implement such other

terms and conditions deemed necessary

by the Secretary. This provision is made

in accordance with section 2116(d) of

the OFPA (7 U.S.C. 6515(d)).

Paragraph (b) of this section would

permit a certifying agent to establish a

seal, logo or other identifying mark that

could be used by farm, wild crop

harvesting, and handling operations that

it certifies for the purpose of denoting

affiliation with that certifying agent.

This provision, authorized by section

2107(a)(11) of the OFPA (7 U.S.C.

6506(a)(11)), is proposed in

consideration of public input provided

by many organic producers and

handlers expressing their desire to

identify their operations with a

particular certification program. Some

existing certification programs also

stated that they have made a

considerable investment in developing

consumer recognition for their names or

logos. Although we also received

comments stating that the use of

certifying agent seals or logos should be

prohibited, we have determined that a

prohibition of seals and logos is not

necessary. We believe that the use of

certifying agent identification to

indicate affiliation with a certifying

agent would provide information of

value to some consumers and would not

be in conflict with the purpose stated in

section 2102(2) of the OFPA (7 U.S.C.

6501(2)) of assuring consumers that

organically produced products meet a

consistent national standard.

This proposal would require that the

use of any such seal or logo not be

required as a condition for receiving

certification, and, thereby, its use would

be optional on the part of the farmer or

handler. In order to ensure that any use

of a certifying agent’s logo does not

conflict with the purposes of the Act,

proposed section 205.301(b)(2) also

specifies that the agent could not

require, as a condition for use of its

identification mark, compliance with

any farming or handling requirements in

addition to those provided for in the Act

and the regulations in this part. Some

public input has been received

suggesting that certifying agents be

allowed to use their logo or seal to

recognize ‘‘additional achievements’’ on

the part of farmers and handlers that

exceed the requirements proposed in

the national organic standards. This

position was not recommended by the

NOSB, which instead adopted a

recommendation as a policy matter that

was consistent with the provisions of

this section of our proposal. Our

proposal would not prohibit a certifying

agent from verifying that a producer or

handler it certifies is meeting

contractual specifications that include

requirements in addition to those of the

Act and the regulations. It would

prohibit the use of the certifying agent’s

logo or seal on a label, labeling material

or other market information to represent

compliance with farming or handling

requirements in addition to those
65918 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

provided under the Act and the

regulations in this part.

In accordance with section 2116(e) of

the OFPA (7 U.S.C. 6515(e)), section

205.301(c) proposes three additional

requirements for a certifying agent who

is a private person. These requirements

are that a private certifying agent must:

hold the Secretary harmless for any

failure on the part of the certifying agent

to carry out the provisions of the Act

and the regulations; furnish reasonable

security, in an amount and according to

terms as may be prescribed by

regulation by the Secretary, for the

purpose of protecting the rights of farms

and handling operations certified by

certifying agents under the Act and the

regulations in this part; and transfer to

the Secretary and make available to the

applicable governing State official all

records or copies of records concerning

the person’s certification activities in

the event that the certifying agent

dissolves or loses its accreditation. The

amount and the type of reasonable

security that must be furnished by a

private certifying agent for the purpose

of protecting the rights of operations

certified by the agent will be the subject

of future rule making by the

Department.

Applying for Accreditation—Section

205.302

As provided under section 2115(b)(1)

of the OFPA (7 U.S.C. 6514(b)(1)), this

section instructs a private person or a

governing State official who wishes to

become accredited under this proposal

to submit applicable documents and

information, as delineated in proposed

sections 205.303 through 205.305, and

the fees required in section 205.421(a) of

subpart F to the Program Manager of the

National Organic Program. The

Administrator then would determine

whether the applicant demonstrates

sufficient expertise and ability to fully

implement the organic certification

program proposed in subpart D of this

part.

Information to be Submitted by an

Accreditation Applicant—Section

205.303

In order to evaluate an applicant for

accreditation, it is necessary to identify

who the applicant is, how it may be

contacted, who is responsible for

conducting its operations, if it is a

private person, and the extent of the

certification activities it intends to

conduct under the Act and the

regulations. Accordingly, in this section

we propose that a person seeking

accreditation as a certifying agent

provide certain descriptive information

about its organization and intended

certification activities. This includes the

name of the applicant, location of its

offices, and its contact numbers

(telephone, fax number, and Internet

address). A private person also would

have to identify the individual

responsible for its day-to-day

operations, as required by section

2116(i) of the OFPA (7 U.S.C. 6515(i)),

and its taxpayer identification number.

Paragraph (b) of this section requires the

applicant to submit a list of any

organization units, such as chapters or

subsidiary offices, including the names

of contact persons, office addresses and

other contact information. This

information is needed in order to

determine whether multiple sites are

used to conduct certification activities

and, if so, to evaluate whether these

activities are conducted in compliance

with the Act and the regulations.

In paragraph (c) of this section, we

propose that the accreditation applicant

specify the intended scope of its

certification activities, and estimate the

numbers of producers or handlers in

each type of operation, such as crops,

wild crops, livestock, or handling, that

it expects to certify each year. This

information is needed so that the

Administrator may determine the types

of certifications a certifying agent is

qualified to conduct. This proposed

provision would require an applicant

that was limited in scope, such as one

that intends to certify producers of only

one commodity, to demonstrate only

that it had sufficient capability and

expertise to conduct the types and

numbers of certifications that fell within

its requested scope of accreditation.

Paragraph (d) of this section requests

an accreditation applicant to indicate

the type of entity it is (i.e., for profit

private, non-profit private, or State), and

to provide documentation pertaining to

its legal status and organizational

structure. An applicant who is a

governing State official would have to

submit a copy of the official’s statutory

or regulatory authority to conduct

certification activities in that State, and

a private person would have to submit

information about its status and

organizational purpose, such as articles

of incorporation, by-laws, ownership or

membership provisions, and the date of

establishment. This type of

documentation is generally maintained

on file by an organization, and would be

required to assist the Administrator in

verifying that the purposes of the

organization are consistent with its

intended activities under the Act and

the regulations in this part.

Paragraph (e) of this section would

require an applicant to submit a list of

all the States where it currently

conducts and intends to conduct

certification activities. This information

would be required so that the

Administrator could determine whether

a certifying agent who conducts or

intends to conduct certifications in

more than one State is knowledgeable of

any additional requirements of an

approved State program, if applicable,

as provided under section 2108(b) of the

OFPA (7 U.S.C. 6507(b)).

Evidence of Expertise and Ability to be

Submitted by an Accreditation

Applicant—Section 205.304

Sections 2115(b)(2) and 2116(a) of the

OFPA (7 U.S.C. 6514(b)(2) and 6515(a))

require that a private person or a

governing State official seeking

accreditation as a certifying agent have

sufficient expertise in organic farming

and handling techniques and be able to

fully implement the applicable organic

certification program established under

the Act. This section accordingly

requests that an applicant for

accreditation submit information and

documents that demonstrate such

expertise and ability. Paragraph (a) of

this section requests information

concerning personnel used by the

applicant to conduct certification

activities. The first item requested in

this proposed paragraph is a description

of the applicant’s policies and

procedures for training, supervising,

and evaluating personnel. This

information is needed for the

Administrator to determine whether the

applicant is providing sufficient

oversight over personnel involved in

certification activities to ensure

compliance with the Act and the

regulations in this part. The second item

requested in this paragraph is the names

and functions of all personnel intended

to be used in the certification operation,

including all parties responsibly

connected to the applicant,

administrative staff, certification

inspectors, and members of certification

review and internal evaluation

committees. This information may

include the job title or position of each

person and a description of the organic

certification functions they will

perform. This information would enable

the Administrator to determine that the

applicant has sufficient personnel to

perform the certification activities for

which it seeks accreditation, and

whether it has a sufficient number of

inspectors to implement the

certification program, as required under

section 2116(b) of the OFPA (7 U.S.C.

6515(b)).

The third item in proposed paragraph

(a) of this section requests the

submission of more descriptive
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information about the qualifications,

such as past experience, training, and

education in organic farming and

handling, of each of the applicant’s

inspectors and persons designated to

review or evaluate certification

applicants. This proposal would

provide the Administrator with the

information needed to evaluate the

qualifications of inspectors and review

personnel when determining whether

the applicant possesses the requisite

expertise in organic farming and

handling techniques.

Although inspector qualifications

would receive careful scrutiny by the

Secretary, we have not proposed the

specific types of training and experience

a certification inspector must possess.

We have determined through

consultation with experienced organic

inspectors that such provisions would

not be feasible because of the variability

of expertise needed for the types of

operations to be inspected. Furthermore,

current organic inspectors differ widely

in terms of their background, training

and experience, as well as in their

relationship to existing certification

programs. For example, current organic

inspectors may be seasonal employees

of a private certifying agent, full-time

State employees who conduct

inspections for several State regulatory

agencies, or independent contractors

used by several certifying agents, and

the expertise required in each case

would differ significantly. We also are

aware of at least one existing association

that accredits independent professional

organic inspectors according to criteria

consistent with the requirements of our

proposed certification program; we

would consider an inspector’s receipt of

such accreditation when we evaluate

the inspector’s qualifications.

The final item in paragraph (a) of this

section would request a description of

any training measures the accreditation

applicant has provided or intends to

provide to its personnel in organic

farming and handling and in the skills

needed to ensure compliance with the

Act and the regulations in this part. This

information would enable us to

determine whether the applicant would

take measures to ensure that its

personnel maintain adequate levels of

expertise and are able to fully

implement the certification program.

Paragraph (b) of proposed section

205.304 delineates the information that

we propose an applicant for

accreditation must submit concerning

its administrative policies and

procedures. We have determined that

this information is needed to evaluate

whether the applicant is able to fully

implement the proposed certification

program and to meet the general

responsibilities and requirements

proposed in section 205.301. The first

item in this paragraph would request a

description of the procedure to be used

by the applicant to evaluate certification

applicants and issue certificates. This

information might, for example, include

copies of any forms to be used to record

inspection visit results and other

information about certification

applicants. This information would be

used by the Administrator to determine

that an accreditation applicant has

adequate procedures in place to

properly evaluate the eligibility of a

farmer or handler to receive certification

for their operations.

The second item in this paragraph

requests information about the

applicant’s procedures for reviewing

whether operations that it will certify

are in compliance with the Act and the

regulations in this part and for reporting

violations to the Secretary and the

applicable governing State official.

Sections 2112(a) through (c) of the

OFPA (7 U.S.C. 6511(a) through (c))

require certain testing to be done to

assist in enforcement of the Act. We

have addressed and discussed these

provisions in sections 205.430 through

205.432 of subpart F. The information

requested in paragraph (b)(2) of this

section would help the Administrator

determine whether an applicant would

be able to comply with these

requirements. This information also

would assist in determining whether the

applicant would be able to comply with

the requirement in section 2120(d) of

the OFPA (7 U.S.C. 6519(d)) that a

certifying agent immediately report any

violations of the Act to the Secretary or

the governing State official, if

applicable.

The third and fourth items proposed

in paragraph 205.304(b) request a

description of procedures the applicant

would use to comply with the

recordkeeping and confidentiality

provisions proposed in sections

205.301(a)(8) and (9), in accordance

with sections 2116(c) and (g) of the

OFPA (7 U.S.C. 6515(c) and (g)). This

information would be used to evaluate

an applicant’s ability to maintain

records of its activities under the Act for

10 years, maintain strict confidentiality

of its records with respect to its clients’

business information, and allow

representatives of the Secretary and the

governing State official access to these

records, as required under the Act.

Section 2107(a)(9) of the OFPA (7

U.S.C. 6506(a)(9)) requires that a

certification program provide for public

access to certification documents and

laboratory analyses that pertain to

certification. The fifth item proposed in

section 205.304(b) accordingly requests

that an accreditation applicant submit a

description of its procedures for making

certain information available to the

public upon request. This information

includes a list of all the operations it has

certified, effective dates of certification,

organic products produced by each

certified operation, and the results of

laboratory analyses for residues of

pesticides and other prohibited

substances. This information would

have to be made available for

certifications conducted up to ten years

prior to receipt of the request. As

proposed here, the policies and

procedures described also would

provide for public access to other nonconfidential business information as

permitted by the producer or handler

and approved by the Secretary. This

provision would permit a certifying

agent to disclose to the public other

non-confidential information about its

clients’ production practices if

permitted to do so by the client and

approved by the Secretary.

Paragraph (c) of proposed section

205.304 requests a description of the

applicant’s policies and procedures for

the collection and disbursement of

funds, and documents that identify

anticipated sources of income,

including all fees to be collected from

producers and handlers in accordance

with the requirements proposed in

section 205.301(a)(15) of this subpart

and section 205.422(a) of subpart F.

This information is needed to determine

whether the applicant is charging

reasonable fees to its clients, and

whether it has sufficient income to

submit the required fees proposed in

section 205.421. This information also

would help the Administrator

determine that certification decisions

were not influenced by the concern for

their financial impact on the certifying

agent and to review an applicant’s

anticipated revenue sources for other

potential conflicts of interest, such as

fees charged on the basis of the sale of

organic products by certified operations.

Paragraph (d) of section 205.304

requests information about policies and

procedures to be implemented by the

applicant to prevent conflicts of interest.

Conflict of interest requirements are

proposed in section 205.301(a)(10) in

accordance with section 2116(h) of the

OFPA (7 U.S.C. 6515(h)). This proposal

would request information concerning

any food and agriculture-related

business interests of the applicant’s

personnel, as well as the business

interests of immediate family members,

so that the Administrator may
65920 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

determine whether conflicts of interest

may exist.

Some accreditation applicants

currently may be conducting organic

certification activities under State laws

or private programs. Paragraph (e) of

this section accordingly provides for the

optional submission of information

about certification activities currently

conducted by these applicants. This

information could include a list of all

farms and handling operations currently

certified by the applicant, and copies of

inspection reports and certification

documents for representative farms or

handling operations certified by the

applicant during the previous year. An

accreditation applicant who previously

has undergone a process of accreditation

or evaluation of its organic certification

activities, such as might be performed

by a private accreditation body, also

could submit any information

concerning such a process conducted

within the previous year. We believe

that documentation of a previously

conducted independent evaluation of

the applicant’s expertise and

organizational capability would be

helpful in determining whether the

certifying agent is qualified and

prepared to comply with the Act and

the regulations. Although we would not

expect an applicant for accreditation to

have been complying with the

requirements of the Act and the

regulations in this part prior to

becoming accredited, these documents

would be valuable as an indication of

the applicant’s prior experience in

evaluating organic farming and handling

operations and of its ability to

implement the proposed certification

program. Finally, because we recognize

that an applicant may possess other

information that is relevant to the

Secretary’s decision whether to approve

an accreditation, we propose in

paragraph (f) of this section that an

applicant for accreditation could submit

any other information the applicant

believes may support the Secretary’s

evaluation of its request for

accreditation.

As previously discussed, an applicant

for accreditation may be a newly formed

organization that intends to begin

conducting certifications after it is

accredited, or it may be a certification

organization that currently exists. Based

on a review of currently existing

certification programs, we believe that

all the information requested in sections

205.303 and 205.304 should be readily

available to any person or governing

State official who is eligible for

accreditation under the Act and the

regulations in this part and is applicable

to both existing and newly formed

organizations preparing to perform

certification activities under the

National Organic Program or an

approved State program. We also

believe that all of the information we are

proposing to require in sections 205.303

and 205.304 is essential to enable the

Administrator to make a determination

concerning approval of an application

for accreditation.

Statement of Agreement To Be

Submitted by an Accreditation

Applicant—Section 205.305

In this section we propose that an

applicant for accreditation would have

to submit a statement of agreement

along with the information and

documents delineated in sections

205.303 and 205.304. Paragraph (a) of

this section delineates seven provisions

to which a private person or governing

State official seeking accreditation must

agree. Two provisions of this agreement

would be to carry out the provisions of

the Act and the regulations in this part

and to implement and carry out any

other terms and conditions that the

Secretary determines appropriate, both

of which are required by section 2116(d)

of the OFPA (7 U.S.C. 6515(d)). It

should be noted that this agreement

would encompass all the general

requirements proposed under section

205.301, including the provision

repeated here that a certifying agent

accept a certification decision made by

another USDA accredited certifying

agent as equivalent to its own.

The remaining four provisions to

which an accreditation applicant would

have to agree would state the

requirements proposed in sections

205.301(a)(5), (a)(6), (a)(12), and (a)(13).

These provisions are that the applicant

agrees to: refrain from making false or

misleading claims about its

accreditation status, the USDA

accreditation program for certifying

agents, or the nature or qualities of

products labeled as organically

produced; conduct an annual

performance review for each inspector

to be used and implement measures to

correct any possible defects in

compliance with the Act and the

regulations in this part identified in

each review conducted; have an annual

internal evaluation review conducted of

its certification activities and implement

measures to correct any possible defects

in compliance with the Act and the

regulations in this part identified in

each review conducted; and pay and

submit fees to AMS in accordance with

sections 205.421 and 205.422(b) of

subpart F of this part.

Paragraph (b) of this section provides

for certain agreements that would apply

only to certifying agents who are private

persons, as provided for in section

2116(e) of the OFPA (7 U.S.C. 6515(e)),

and as proposed in section 205.301(c) as

general requirements for accreditation.

These provisions are that a private

certifying agent must agree to hold the

Secretary harmless for any failure on the

part of the certifying agent to carry out

the provisions of the Act, and also must

furnish reasonable security for the

purpose of protecting the rights of

participants in the applicable organic

certification program. We also have

proposed, in accordance with section

2116(c)(3) of the OFPA (7 U.S.C.

6515(c)(3)), that a private certifying

agent agree to transfer to the Secretary

and make available to the applicable

governing State official all records or

copies of records concerning the

person’s certification activities in the

event that the certifying agent dissolves

or loses its accreditation.

Approval of Accreditation—Section

205.306

In this section we propose that if the

Administrator determines that an

applicant has submitted all of the

information and the statement of

agreement proposed in sections 205.303

through 205.305, has paid the required

fee as proposed in section 205.421(c) of

Subpart F, and meets or is capable of

meeting the general requirements for

accreditation as proposed in section

205.301, the Administrator would notify

the applicant in writing that its request

for accreditation has been approved. We

also provide for the Administrator to

consider information obtained from a

site evaluation visit, as proposed in

section 205.309, in making this

determination. The written notice of

approval of accreditation would state

the area(s) for which accreditation was

given and the effective date of the

accreditation. A private person also

would be notified of the amount and

type of security determined by the

Administrator that would be needed to

protect the rights of farming and

handling operations certified by such

certifying agent, in accordance with

section 2116(e)(2) of the OFPA (7 U.S.C.

6515(e)(2)).

We have received public input

expressing concerns about granting

accreditation to applicants prior to

conducting a site evaluation and a peer

review process. However, we believe

that the procedure proposed here is

appropriate for several reasons. First, we

believe that the document review

process proposed here is sufficiently

rigorous to permit a well-founded

assessment of the applicant’s

capabilities and qualifications. In cases
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65921

where the application documentation

reveals possible concerns about the

applicant’s expertise and ability to

implement the proposed certification

program, our proposed section 205.309

would authorize us to conduct a

preliminary site evaluation visit. Our

proposal would allow all eligible

certifying agents, both existing and

newly formed, to receive accreditation

in a timely manner and would avoid

conferring an advantage on those

certifying agents for whom we complete

the initial site evaluation and peer

review process before those of

competing certifying agents. We further

believe that conducting a site evaluation

of a newly established certifying agent

before it had begun any certification

activities might not contribute

information that would be useful for our

evaluation. Previously existing

certifying agents also would need time

to make adjustments in their operations

to comply with the National Organic

Program regulations.

Finally, section 2107(a)(1)(A) of the

OFPA (7 U.S.C. 6506(a)(1)(A)) requires

that any product sold as organic be

produced and handled by a certified

operation; this provision of the Act

cannot be implemented until certifying

agents have been accredited by AMS.

We have received considerable public

input that the OFPA should be

implemented as quickly as possible. A

proposal that would require full site

evaluations and peer reviews to be

conducted prior to granting

accreditation would further delay

implementation of the Act.

Denial of Accreditation—Section

205.307

In section 205.307 we propose the

procedure for denying an application for

accreditation. Paragraph (a) provides

that, if there was reason to believe,

based on a review of the information

specified in sections 205.303 through

205.305, that an applicant for

accreditation is not able to comply, or

is not in compliance, with the

requirements of the Act and the

regulations in Part 205, including the

general requirements proposed in

section 205.301, the Administrator

would provide a written notification of

non-compliance to the applicant, as

proposed in section 205.315(a). The

notification would be sent by certified

mail to the accreditation applicant, and

would state any deficiencies in the

ability of the applicant to comply with

the Act and the regulations that the

Administrator believes exist, the

evidence on which the notification is

based, and a date by which the

deficiencies must be corrected.

In section 205.307(b) we propose that,

following the correction of deficiencies

identified in the notification issued in

accordance with paragraph (a) of this

section, the applicant could submit a

new application for accreditation to the

Administrator. The new application

would have to include documentation

of actions taken by the applicant to

correct the deficiencies delineated in

the notification of non-compliance.

If an accreditation applicant who

receives a notification pursuant to

paragraph (a) of this section does not

correct the deficiencies identified

within the time specified in the notice

of non-compliance, paragraph (c) of this

section would require that the

Administrator institute proceedings to

deny accreditation.

Maintaining Accreditation—Section

205.308

This section proposes that, in order to

maintain its accreditation, a certifying

agent must continue to satisfy the

general requirements of section 205.301

of this subpart throughout the duration

of its accredited status, and must pay

the required fees in accordance with the

provisions proposed in sections 205.421

and 205.422(b) of subpart F.

Site Evaluations—Section 205.309

This section of our proposal would

require AMS to conduct a site

evaluation of each certifying agent’s

operation initially, and at least once

every 5 years thereafter, to examine its

operations in order to evaluate the

agent’s compliance with the Act and the

regulations. A site evaluation to

determine compliance may include an

examination of the certifying agent’s

facilities, records, procedures and

activities conducted under the Act and

the regulations set forth in Part 205.

Although the Act does not specifically

require that site evaluations be

conducted, we concur with the

recommendations made by the NOSB

that such a process is necessary for the

Secretary to maintain adequate

oversight of the activities of accredited

certifying agents under the Act and the

regulations in this part. This procedure

is integral to other accreditation

programs that we reviewed, and is

analogous to the annual on-site

inspection that is required of all

operations that are certified under the

Act, as provided for in section

2107(a)(5) of the OFPA (7 U.S.C.

6506(a)(5)).

This proposal provides that the

Administrator would arrange and

conduct the site evaluations to verify

compliance with the Act and the

regulations in this part. In order to

verify the certifying agents’s

compliance, the Administrator might

conduct visits to selected farm, wild

crop harvesting, and handling

operations that have been certified by

the agent. We anticipate that the

operations to be visited might be chosen

in consultation with the agent and as

might be determined necessary by the

Administrator to verify the agent’s

compliance with the regulations. A site

evaluation report would be prepared

which described the observations made

about the certifying agent’s compliance

with the Act and the regulations in this

part, including its performance of

certification activities.

We have received some public input

suggesting that we use peer reviewers,

as provided for in section 2117 of the

OFPA (7 U.S.C. 6516), in the site

evaluation process. We have not

provided for peer reviewers to

participate in site evaluations. We

believe that the use of peer reviewers to

conduct site evaluations is unnecessary

and could pose an excessive burden on

the certifying agents, because the use of

persons other than a single AMS

evaluator would increase the costs of

conducting site evaluations, due to

additional travel and per diem

expenses, and could delay site

evaluations due to the need to

accommodate the peer reviewers’

scheduling constraints. Furthermore,

AMS personnel will be sufficiently

qualified and prepared to perform the

site evaluations.

Paragraph (a) of this section also

provides for a site evaluation of a newly

accredited certifying agent to be

conducted within a reasonable time

after the date on which the certifying

agent’s notice of approval of

accreditation is issued, provided that

the agent has conducted sufficient

certification activities under the Act and

the regulations upon which the

Administrator may base an evaluation.

We expect to confer closely with newly

established certifying agents prior to

scheduling an initial site evaluation to

determine that they have performed

enough certifications on which to base

the evaluation.

We proposed in paragraph (b) of this

section that a site evaluation of an

accreditation applicant or a certifying

agent’s operation and performance may

be conducted by the Administrator at

any time to determine compliance

under the Act and the regulations in this

part. For instance, site evaluations of the

operations of a certifying agent

requesting renewal of accreditation

would be conducted under this proposal

as part of the renewal process, which we

propose in section 205.314(b) to occur
65922 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

every five years. However, as proposed

in section 205.309(b), site evaluations

could be conducted whenever the

Administrator determined that one was

necessary to evaluate whether the

certifying agent’s operations and

performance are in compliance with the

Act and the regulations. Thus, although

accreditation would have to be renewed

every five years, a site evaluation could

occur more often than every five years.

We believe that the frequency of site

evaluations needed to properly oversee

the activities of certifying agents would

likely be higher than once every five

years in the initial few years after

implementation, but that a five year

period may be a reasonable interval of

time for conducting site evaluations of

established accredited certifying agents.

This proposal would give us the

flexibility to conduct site evaluations

based on an assessment of the previous

performance of the certifying agent and

the need to oversee the agent’s

certification activities. Comments as to

the impacts of this proposed provision

on certifying agent operations are

invited.

Additionally, this section would give

the Administrator the authority to

conduct an additional site evaluation

prior to the approval of accreditation, as

needed to verify whether an

accreditation applicant can comply with

the general requirements of section

205.301. We also believe it is essential

to be able to conduct a site evaluation

at any time that circumstances warrant

a site visit to ensure the integrity of the

organic certification program. For

example, a site visit may be necessary

if we receive a significant number of

substantiated complaints from clients or

the public about the performance of a

certifying agent.

Peer Review Panel—Section 205.311

Section 2117 of the OFPA (7 U.S.C.

6516) provides for the establishment of

a peer review panel to assist the

Secretary in evaluating applicants for

accreditation. This section of our

proposal accordingly delineates the

function, composition, duties, and the

meeting and reporting procedures for

the peer review panel. In section

205.311(a) we are proposing that a peer

review panel be required to review the

accreditation status of a certifying agent

after AMS has conducted a site

evaluation for confirmation or renewal

of accreditation, as proposed in sections

205.309(a) and 205.314(b) of subpart E,

respectively. This section would require

the Administrator to consider the

reports received from each individual

member of a peer review panel when

making a determination whether to

confirm the accreditation of a certifying

agent, pursuant to section 205.312, or

when making a determination whether

to renew the accreditation of a certifying

agent, pursuant to section 205.314(b).

We are also proposing that the

Administrator could choose to convene

a peer review panel at any time for the

purpose of evaluating a certifying

agent’s activities under the Act and the

regulations. This provision would

provide flexibility for the Administrator

to seek recommendations from peer

reviewers at other times when it may be

necessary to evaluate a certifying agent’s

compliance with the Act and the

regulations.

In paragraph (b) of this section we

propose that the Administrator establish

a pool of peer review panel members to

perform a review of any certifying agent

for which an initial or renewal site

evaluation has been conducted,

pursuant to proposed section 205.309.

We anticipate that a notice calling for

candidates for the peer review panel

pool would be published in the Federal

Register shortly after publication of the

final rule. Candidates would be

requested to submit a letter to the

Program Manager of the National

Organic Program requesting

appointment to the peer review panel

pool, stating in the letter their name and

address, qualifications, and a disclosure

of any association with any person who

is or who may become an accredited

certifying agent, which may constitute a

conflict of interest, such as being a

responsibly connected party of a

certified operation. Candidates accepted

for this pool would be notified by the

Administrator and could continue to

serve until otherwise notified. As the

need arose for additional members of

the pool, the Administrator would

publish an announcement to that effect

in the Federal Register.

Section 2117(b) of the OFPA (7 U.S.C.

6516(b)) provides for the peer review

panel to consist of no less than three

persons who have expertise in organic

farming and handling methods, and for

at least two of the panelists to be other

than USDA or approved State program

personnel. This proposal is consistent

with these requirements. Section

205.311(b) of this proposal calls for the

Administrator to convene a three to five

member panel from the pool of peer

reviewers. Each panel would include

one member from AMS as a permanent

member, who would be responsible for

presiding over any proceedings to

ensure that they are conducted in

accordance with AMS policy. Under the

scheme proposed here, personnel from

an approved State program could be

included as an additional panel member

on a panel that consisted of at least four

members. Our proposal would keep the

panel to a minimum size so as to

minimize costs, but would permit

sufficient numbers of persons with

organic production and certification

expertise to participate in the

accreditation process.

In paragraph (b)(2) of this section we

propose that each convened peer review

panel include no less than one member

who possesses sufficient expertise, as

determined by the Administrator, in the

areas of accreditation delineated in the

notice of approval of accreditation, as

proposed in section 205.306(a), for each

certifying agent whose operations and

performance are to be reviewed. This

approach would allow for the selection

of panelists whose expertise matches

the characteristics of the particular

certifying agents under review. For

example, a panelist with a background

in organic processing and

manufacturing practices, but who was

unfamiliar with organic mushroom

production, would not be used to

review a certifying agent whose scope of

certification included only mushroom

producers.

We propose in paragraph (b)(3) of this

section to prohibit the selection of a

peer reviewer who was associated with

a certifying agent being reviewed in a

manner that would constitute a known

or perceived conflict of interest, as

determined by the Administrator. We

believe that to ensure the integrity of

our proposed program we must take

measures to ensure that any

recommendations provided by peer

reviewers are not influenced by the

possibility of a financial interest in the

outcome of the Administrator’s

determination.

Some public input we received

suggested that we include

representatives of consumer,

environmental and other public interest

groups as members of the peer review

panel as a means of having broader

public involvement in the oversight of

certifying agents. The Act requires that

persons who possess the necessary

technical expertise in organic

production and handling practices

evaluate the performance of certifying

agents. Persons representing consumer,

environmental, or other similar groups

who possess the necessary expertise

could be eligible to participate in the

peer review panel if they file a letter

with the Administrator, and are

determined to meet the criteria

established to become a peer review

panel member.

We propose in section 205.311(c) that

each peer review panel member would

individually review the site evaluation
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report prepared by the Administrator

and any other information that may be

provided by the Administrator relevant

to confirming or renewing the

accreditation status of a certifying agent.

Each peer review panel member would

provide an individual report to the

Administrator regarding the certifying

agent’s ability to conduct and perform

certification activities under the

regulations. We also propose in this

section that each peer reviewer would

have to agree to treat the information

received for review as confidential, and

could not release, copy, quote, or

otherwise use material from the

information received, other than in the

report required to be submitted. This

provision is needed in order to protect

the confidentiality of business

information received by USDA

concerning the operations of certifying

agents, as well as any information about

operations certified by those agents.

In section 205.311(d) we propose that

the Administrator could decide to

convene a meeting or conference call of

a peer review panel, if necessary, for

evaluating the accreditation status of a

certifying agent, or if it is requested by

at least one peer review panel member.

This section also would permit the

Administrator to include in this meeting

or conference call the certifying agent

being evaluated, or a representative of

the agent, for the purpose of providing

additional information. This provision

is proposed so that members of the peer

review panel may have the opportunity

to request clarification of any aspect of

the agent’s activities described in the

site evaluation report. However, any

meeting or conference call would have

to be conducted in a manner that will

ensure that the actions of panel

members are carried out on an

individual basis with any opinions and

recommendations by a member being

individually made.

Section 205.311(d) would

additionally permit copies of peer

review panel reports to be provided to

the certifying agent, who could then

submit a written response for

consideration by the Administrator.

This provision would permit a

certifying agent to submit clarifications

or additional information bearing on its

activities under the Act and the

regulations, whether or not a meeting or

conference call of the peer review panel

was conducted.

In the final paragraph of this section

we propose that each peer review

panelist would individually provide a

written report to the Administrator. This

report would contain the panelist’s

recommendations concerning

confirmation or renewal of accreditation

for each certifying agent reviewed, and

a description of the basis for each

recommendation. These

recommendations might, for example,

include conditions that the reviewer

believes should be included in the

notice of confirmation of accreditation,

as proposed in section 205.312, or the

notice of renewal of accreditation, as

proposed in section 205.314(c).

We are soliciting comments on our

proposed accreditation provisions,

including whether alternative

provisions should be promulgated. In

particular, we would like comments on

whether the peer review process for

accreditation should occur when the

initial application for accreditation is

made, as opposed to when accreditation

is confirmed after a site visit.

Confirmation of Accreditation—Section

205.312

In this section we propose that the

Administrator would make a

determination whether or not to confirm

the accreditation of a certifying agent.

This determination would occur

following review of a site evaluation

report and the reports from the peer

reviewers. If the Administrator

determined that the certifying agent was

in compliance with the Act and the

regulations, including the general

requirements proposed in section

205.301, the Administrator would issue

the agent a written notice of

confirmation of accreditation status.

Confirmation notices, therefore, would

not be issued to any certifying agent

who was not complying with the Act

and the regulations, which would

include payment to AMS of all fees

owed by the certifying agent and the

furnishing of reasonable security by a

private certifying agent. The

confirmation notice would include any

terms or conditions that must be

addressed by the certifying agent before

the certifying agent submits a request for

renewal of its accreditation. After

confirmation, a certifying agent’s

accreditation would be effective until

such time that the certifying agent fails

to renew accreditation in accordance

with section 205.314, or the

accreditation was suspended or

terminated pursuant to section 205.316,

or the certifying agent voluntarily

ceased its certification operations.

Denial of Confirmation—Section

205.313

In section 205.313 we propose the

procedure to be followed to deny

confirmation of accreditation to a

certifying agent. Paragraph (a) of this

section provides that, if the

Administrator has reason to believe,

based on a review of the information

specified in sections 205.303 through

205.305, and the results of a site

evaluation and reports submitted by the

peer review panel, pursuant to sections

205.309 and 205.311(e), respectively,

that the certifying agent is not

complying with the requirements of the

Act and the regulations in this part,

including the general requirements for

accreditation proposed in section

205.301, the Administrator would

provide a written notification of noncompliance to the applicant in

accordance with section 205.315(a) of

this subpart.

In paragraph (b) of this section we

propose that if a certifying agent who

receives a notification pursuant to

paragraph (a) of this section corrects the

deficiencies identified within the time

specified in the notice of noncompliance, and submits

documentation supporting actions taken

by the certifying agent to correct the

deficiencies, as proposed in section

205.315(a)(3), the Administrator would

issue a notice of confirmation of

accreditation to the certifying agent,

pursuant to section 205.312(a).

Paragraph (c) of this section would

permit the Administrator to institute

proceedings to deny confirmation of

accreditation if the certifying agent does

not correct the deficiencies identified in

the notice of non-compliance.

Continued Accreditation—Section

205.314

We propose in paragraph (a) that an

accredited certifying agent shall submit

certain information annually to the

Administrator on or before the

anniversary date of the issuance of the

notice of confirmation of accreditation.

This information would be reviewed by

the Administrator to determine whether

the certifying agent was maintaining its

accreditation status in accordance with

proposed section 205.308 of subpart E

and to assess the need to conduct a site

evaluation visit. We believe that an

annual process of reviewing information

submitted by certifying agents is

necessary so that the Administrator can

be informed of any changes in the

procedures and personnel used by

certifying agents, who also must

annually review the certification of

producers and handlers, in accordance

with section 2107(a)(4) of the OFPA (7

U.S.C. 6506(a)(4)).

We propose that the accredited

certifying agent annually submit four

kinds of information in addition to the

proposed fees required in section

205.421(a) of subpart F. First, the agent

would have to update the general

information and evidence of expertise
65924 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

and ability submitted in the previous

year, pursuant to sections 205.303 and

205.304 of subpart E. Second, if an agent

is requesting any changes in its areas of

accreditation, as delineated in section

205.300, the additional information

needed to support the request for a

change in the certifying agent’s scope of

certification activities would be

submitted. Third, we propose that the

certifying agent submit a report that

describes the measures the agent has

implemented in the previous year, and

any measures it plans to implement in

the coming year, to address the

conditions delineated by the

Administrator in the most recent notice

of confirmation of accreditation or

renewal of accreditation. The certifying

agent also would be required to describe

the corrective actions implemented and

intended to be implemented by the

certifying agent in response to the most

recent inspector performance reviews

and the required internal evaluation

review of the agent’s operations.

Section 2115(c) of the OFPA (7 U.S.C.

6514(c)) provides for accreditation to be

granted for a period not to exceed five

years. Section 205.314(b) would

accordingly require that an accredited

certifying agent request renewal of

accreditation on or before the fifth

anniversary of the issuance of the notice

of confirmation of accreditation, and of

each subsequent renewal of

accreditation. The Administrator would

then review the information contained

in the annual reports submitted in

accordance with paragraph (a) of this

section, along with the results of the site

evaluation(s) performed in accordance

with section 205.309 and peer review

panel reports submitted in accordance

with section 205.311(e), in order to

determine whether the certifying agent

was still in compliance with the Act and

the regulations.

Because section 2115(c) of the OFPA

(7 U.S.C. 6514(c)) stipulates that

accreditation may be granted for a

period of time ‘‘not to exceed’’ 5 years,

we considered proposing a period of

time less than 5 years before a certifying

agent would be required to renew its

accreditation. Our intent in considering

a lesser period of time for renewal of

accreditation would be to establish an

adequate level of oversight activity to

ensure that the certifying agent is in

compliance with the Act and the

regulations. However, we believe that an

adequate level of oversight necessary to

ensure compliance with the Act and the

regulations would be provided by the

requirement proposed in section

205.314(a) that certifying agents submit

annual updates to the Administrator.

Additionally, as proposed in sections

205.309(b) and 205.311(a)(2) of this

subpart, the Administrator could decide

to conduct an additional site evaluation

and peer review of a certifying agent’s

activities at any time. We also believe

that a requirement that accreditation be

formally renewed more frequently than

every five years might pose an undue

burden on certifying agents. Comment

concerning the length of time for which

accreditation should be granted is

invited.

We propose in section 205.314(c) that

the Administrator would issue a notice

of renewal of accreditation after having

made the determination that the

certifying agent continues to comply

with the Act and the regulations in this

part. The notice of renewal, as in the

case of the notice of confirmation of

accreditation, would specify any terms

and conditions that would have to be

addressed by the certifying agent, and

the time within which the terms and

conditions must be satisfied. In

paragraph (d) of this section, we

propose that if the Administrator

determines that there is reason to

believe that the certifying agent is not in

compliance with the Act and the

regulations, the Administrator would

issue a notification of non-compliance

to the certifying agent, as proposed in

section 205.315.

Notification of Non-Compliance With

Accreditation Requirements—Section

205.315

In section 205.315 we propose the

procedure for the Administrator to

notify an accredited certifying agent, or

an applicant for accreditation, of

deficiencies in its compliance, or ability

to comply, with the Act and the

regulations, including the general

requirements proposed in section

205.301, and provide an opportunity to

correct any deficiencies identified. In

paragraph (a) of this section we propose

that a written notification of noncompliance would be sent by certified

mail to the place of business of the

accreditation applicant or the certifying

agent, as applicable. The notification

would contain the following

information: a description of each

deficiency in compliance and each

violation of the Act and the regulations

in this part that the Administrator has

reason to believe has occurred; the

evidence on which the notification is

based; and the date by which the

accreditation applicant or the certifying

agent, as applicable, must correct each

deficiency and each violation delineated

in the notification, and submit

documentation to the Administrator to

support such corrections.

In paragraph (b) of this section we

propose the procedure to be followed if

an accredited certifying agent does not

provide documentation to the

Administrator, pursuant to paragraph

(a)(3) of this section, that is adequate to

demonstrate that each deficiency in

compliance and each violation has been

corrected by the date indicated in the

written notification. This paragraph

would permit the Administrator to

conduct an additional site evaluation, as

provided for in section 205.309, to

determine whether the certifying agent

is complying with, or has violated, the

Act or the regulations, including the

general requirements proposed in

section 205.301.

In section 205.315(c)(1) we propose

that the Administrator would notify the

certifying agent in writing of a

determination that the agent was

complying with the Act and the

regulations, if, following receipt of a

notification of non-compliance as

proposed in paragraph (a) of this

section, the certifying agent submitted

the requisite documentation of

corrective actions taken, and if,

following any additional site evaluation

conducted pursuant to paragraph (b) of

this section, the Administrator

determined that the certifying agent was

fully complying with the Act and the

regulations. This paragraph further

provides in paragraph (c)(2) of this

section that, if the Administrator has

reason to believe that the certifying

agent is not in compliance with the Act

and the regulations in this part, the

Administrator may institute a

proceeding to suspend or terminate the

certifying agent’s accreditation.

Termination of Accreditation—Section

205.316

Section 2116(j)(1) of the OFPA (7

U.S.C. 6515(j)(1)) provides for the

suspension of a certifying agent’s

accreditation if the Secretary determines

that the certifying agent is not properly

adhering to the provisions of the Act

and the regulations. This provision of

the OFPA would permit the Secretary to

suspend the accreditation of either a

governing State official or a private

certifying agent. Section 2120(e) of the

OFPA (7 U.S.C. 6519(e)) provides for the

loss of accreditation by a private

certifying agent if the certifying agent

violates the provisions of the Act and

the regulations, or if the agent falsely or

negligently certifies any farming or

handling operation that does not meet

the requirements for a certified

operation under the certification

program established by the Act. In

section 205.316 we accordingly propose

that the accreditation of any certifying
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65925

agent could be suspended, but that only

a private certifying agent could have its

accreditation terminated.

In section 205.316(a) we propose that

if the Administrator has reason to

believe that an accredited certifying

agent or a person responsibly connected

with an accredited certifying agent has

ceased to comply with or has violated

the Act or the regulations, including the

general requirements proposed in

section 205.301, then the Administrator

would initiate the process proposed in

section 205.315 by issuing a notification

of non-compliance. However, as

proposed in paragraph (b) of this

section, if the Administrator has reason

to believe that an accredited certifying

agent or a person responsibly connected

with an accredited certifying agent has

wilfully violated the Act and the

regulations in this part, including the

general requirements proposed in

section 205.301, the Administrator may

institute a proceeding to suspend or

terminate the accreditation of the

certifying agent pursuant to the Rules of

Practice 7 CFR 1.130, et seq. The Rules

of Practice provide for the formal filing

of a complaint by the Secretary, an

opportunity for the certifying agent to

answer the complaint, a procedure for

holding a hearing, and a procedure for

further appealing an adverse decision

following any hearing that is held. A

final determination to suspend the

accreditation would not be made,

therefore, until the certifying agent had

received notice and an opportunity to be

heard.

In section 205.316(c) we propose that

a private person or a governing State

official whose accreditation as a

certifying agent is suspended or

terminated would have to cease any

certification activity in each area of

accreditation and in each State for

which its accreditation is suspended, or

in the case of a private person whose

accreditation is terminated, cease all

certification activities conducted under

the Act and the regulations. The person

or governing State official whose

accreditation was either suspended or

terminated would have to transfer to the

Secretary, and make available to the

applicable governing State official, all

records concerning its certification

activities that were suspended or

terminated. This would enable the

Secretary to promptly determine

whether farms or handling operations

certified by such certifying agent may

retain their organic certification. This

provision is consistent with section

2116(j)(2) of the OFPA (7 U.S.C.

6515(j)(2)), which requires the Secretary

to promptly determine whether farms or

handling operations certified by a

certifying agent who has lost

accreditation may retain their organic

certification.

As proposed, a certifying agent who

was determined to be in compliance

with all the requirements for certifying

certain types of operations, such as

farms, but no longer had the requisite

expertise to certify other types of

operations, such as handling operations,

could have its accreditation suspended

only in the area of handling operations.

Additionally, if a certifying agent was

determined not to be complying with

the additional requirements of an

approved State program, but was

otherwise complying with the Act and

the regulations, this proposal would

permit its accreditation to be suspended

only in that state.

The Act provides for the Secretary or

a governing State official to suspend the

accreditation of a private certifying

agent. However, we have not included

a provision for the governing State

official to suspend accreditation in this

proposal because the Act only provides

for the Secretary, not the governing

State official, to grant (or reinstate)

accreditation. Therefore, we believe that

the authority to remove an accredited

status must remain with the Secretary.

In the event that a private certifying

agent was to cease complying with, or

to violate, the provisions of an approved

State program, we would expect the

applicable governing State official to

present this information to the Secretary

for appropriate action.

In section 205.316(d) we propose that

a private person or a governing State

official whose accreditation as a

certifying agent is suspended by the

Secretary under this section could at

any time submit a new request for

accreditation, pursuant to section

205.302. The new request for

accreditation would have to be

accompanied by documentation that

demonstrates that appropriate corrective

actions to comply with and remain in

compliance with the Act and the

regulations, including the general

requirements proposed in section

205.301, have been taken. This might,

for example, entail payment of

outstanding accreditation fees or

evidence that sufficient funds have been

provided for the required reasonable

security to protect the rights of certified

farms and handling operations.

In accordance with section 2120(e)(2)

of the OFPA (7 U.S.C. 6519(e)(2)), we

propose in section 205.316(e) that a

private person whose accreditation as a

certifying agent is terminated would be

ineligible to be accredited as a certifying

agent under the Act and the regulations

for a period of not less than three years

following the date of such

determination.

Subpart F—Additional Regulatory

Functions

State Programs

Section 2104(a) of the OFPA (7 U.S.C.

6503(a)) requires the Secretary to

establish an organic certification

program for producers and handlers of

agricultural products. Section 2104(b) of

the OFPA (7 U.S.C. 6503(b)) requires

that the Secretary permit each State to

implement a State organic certification

program for producers and handlers of

organic products that have been

produced using organic practices as

provided for in the OFPA. Section

2108(b) of the OFPA (7 U.S.C. 6507(b))

provides for State programs under

certain circumstances to contain more

restrictive requirements, than in the

program established by the Secretary,

for the production or handling of

agricultural products sold or labeled as

organically produced in such State and

for the certification of farms and

handling operations. Section 2103(20) of

the OFPA (7 U.S.C. 6502(20)) defines a

State organic certification program as

one that meets the general requirements

for an organic program set forth in

section 2107 of the OFPA (7 U.S.C.

6506), is approved by the Secretary, and

is designed to ensure that a product that

is sold or labeled as organically

produced is produced and handled

using organic methods. Under a State

program, an accredited State official

and/or private certifying agent would

perform certification activities for

producers and handlers according to the

procedures and requirements

established in subpart D; such agents are

discussed in subpart E (Accreditation)

of this proposal. As discussed in subpart

E, it is not necessary for a State to have

a State program to be accredited as a

certifying agent, and vice versa.

In order for a State program to be

approved as meeting the general

requirements set forth in section 2107 of

the OFPA (7 U.S.C. 6506), the program

must have regulatory provisions that

meet the following requirements: (1)

provide that an agricultural product to

be sold or labeled as organically

produced must be produced only on

certified organic farms and handled

only through certified organic handling

operations in accordance with the

requirements of the Act; and be

produced and handled in accordance

with such program; (2) require that

producers and handlers desiring to

participate under such program

establish an organic plan as provided for

in section 2114 of the OFPA (7 U.S.C.
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6513); (3) provide for procedures that

allow producers and handlers to appeal

an adverse administrative determination

under the Act; (4) require each certified

organic farm, certified organic wild crop

harvesting operation, and each certified

organic handling operation to certify to

the governing State official, on an

annual basis, that such farmer or

handler has not produced or handled

any agricultural product sold or labeled

as organically produced except in

accordance with this title; (5) provide

for annual on-site inspection by the

certifying agent of each farm, wild crop

harvesting, and handling operation that

has been certified under this title; (6)

require periodic residue testing by

certifying agents of agricultural products

that have been produced on certified

organic farm and handled through

certified organic handling operations to

determine whether such products

contain any pesticide or other

nonorganic residue or natural toxicants

and to require certifying agents, to the

extent that such agents are aware of a

violation of applicable laws relating to

food safety, to report such violation to

the appropriate health agencies; (7)

provide for appropriate and adequate

enforcement procedures; (8) protect

against conflict-of-interest as specified

under section 2116(h) of the OFPA (7

U.S.C. 6515(h)); (9) provide for public

access to certification documents and

laboratory analyses that pertain to

certification; (10) provide for the

collection of reasonable fees from

producers, certifying agents and

handlers who participate in the

program; and (11) require such other

terms and conditions as may be

determined by the Secretary to be

necessary.

Once a State program is approved,

farm, wild crop harvesting, and

handling operations in that State that

wish to sell, label, or represent their

product as organically produced would

have to be approved as a certified

operation under the State program. The

determination as to whether or not a

farm, wild crop harvesting, or handling

operation meets a State’s certification

requirements would be made by a

certifying agent accredited by the USDA

under the National Organic Program.

The accredited certifying agent who

would make this determination either

would be a private person who has been

accredited by the USDA, or a governing

State official who has been accredited

by the USDA.

In order to be certified under the State

program, an operation would have to

meet all of the State certification

requirements. However, these

certification requirements, as discussed

previously, must reflect the

requirements of the National Organic

Program. Certified operations in States

that have their own program would be

producing products that are represented

as organically produced in accordance

with the requirements of the National

Organic Program, which will have been

included in the State program in

accordance with section 2107 of the

OFPA (7 U.S.C. 6506). Therefore, the

provisions set forth in our proposal in

part 205 would be applicable to

operations that are located in States that

have their own programs since these

provisions would be included in

programs that are approved by the

Secretary. It is important that all

interested persons provide comments on

the provisions of our proposed rule

since these are the provisions that

would be required to be included in a

State program in accordance with

section 2108 of the OFPA ( 7 U.S.C.

6507). If an operation is located in a

State that does not have an approved

State program, that operation would

carry out its operations only under the

requirements of the National Organic

Program.

States may have requirements that are

in addition to those of the National

Organic Program if they are approved by

the Secretary and meet the statutory

criteria for approval. This means that if

a State has received approval from the

Secretary for requirements in its

program that are in addition to those of

the National Organic Program, all

certified farm, wild crop harvesting, and

handling operations that operate in that

State would have to comply with these

additional requirements that have been

approved. However, one State would

not be allowed to require farm, wild

crop harvesting, and handling

operations in another State to comply

with any additional requirements that

have been approved by the Secretary for

the former State.

Requirements of State Programs—

Section 205.401

As required in section 2104(b) of the

OFPA (7 U.S.C. 6503(b)), we propose in

section 205.401(a) to permit a State to

establish a State program for producers

and handlers of agricultural products

within the State that have been

produced and handled using organic

methods as provided by the OFPA and

its implementing regulations.

The accreditation of a governing State

official to conduct certification activities

of farms and handling operations is

specifically authorized in section

2115(a) of the OFPA (7 U.S.C. 6514(a))

and is set forth in subpart E of our

proposal. As reflected in our proposal,

the approval by the Secretary of a State

organic program would be a separate

decision from the determination of

whether a governing State official who

applies to be a certifying agent should

be accredited. Although the Act

provides for the accreditation of a

governing State official as a certifying

agent, it does not require that the

certification of producers and handlers

operating in a State that has an

approved program be performed solely

by the State certifying agent. Rather, the

required certification of producers and

handlers operating under an approved

State program can be conducted by

either the State certifying agent or a

private certifying agent. Producers and

handlers of organic products operating

in a State that chooses to implement a

State program, but which does not

obtain accreditation for a governing

State official, would be certified by

private certifying agents.

In accordance with section 2108(a) of

the OFPA (7 U.S.C. 6507(a)), we would

require in section 205.401(b) that a State

program meet the requirements of the

regulations in part 205 and the Act,

including the general requirements for

an organic program listed in section

2107(a) of the OFPA (7 U.S.C. 6506 (a)).

These requirements would require: that

an agricultural product that is to be sold

or labeled as organically produced be

produced and handled only on certified

operations in accordance with the Act

and the regulations in part 205; that

participating producers and handlers

establish an organic plan; that an annual

on-site inspection by the certifying

agent of each certified farm and

handling operation be done; that

reasonable fees be collected from

producers, certifying agents and

handlers who participate in such

program; that public access to

certification documents and laboratory

analyses that pertain to certification be

established; that procedures that allow

producers and handlers to appeal an

adverse administrative determination be

established; that appropriate and

adequate enforcement procedures and

conflict-of-interest provisions be

established; and that periodic residue

testing by certifying agents of

agricultural products that have been

produced on certified organic farms and

handled through certified organic

handling operations be done.

As provided for in section 2108(b)(1)

of the OFPA (7 U.S.C. 6507(b)(1)), we

propose in section 205.401(c) that a

State program that meets the

requirements of regulations in part 205

and the Act also could contain more

restrictive requirements governing the

certification of organic farming and
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65927

handling operations and the production

and handling of organic agricultural

products than those in USDA’s National

Organic Program. However, in

accordance with section 2108(b)(2) of

the OFPA (7 U.S.C. 6507(b)(2)), we

propose that any additional

requirements must further the purposes

of the Act and the regulations in part

205; not be inconsistent with the Act

and the regulations in part 205; not be

discriminatory towards agricultural

commodities organically produced in

other States in accordance with the Act

and the regulations in part 205; and not

become effective until approved by the

Secretary.

One concern expressed by private

certification organizations in response

to the NOSB draft recommendations

was that a State that had its own

program also might implement its own

accreditation program for certifying

agents, and require that a certifying

agent be accredited by the State, as well

as by the USDA. In this regard, section

2115(a) of the OFPA (7 U.S.C. 6514(a))

requires that both a governing State

official and a private person be

accredited solely by the Secretary and,

thus, provides for the Secretary alone to

establish and implement an

accreditation program for existing and

new certifying agents. Accordingly, a

State cannot implement an accreditation

program for certifying agents.

Another concern expressed by private

certification organizations was that a

State might attempt to prevent them

from certifying farm and handling

operations in that State by charging a

high, unreasonable fee to them for

registering with the State as a certifying

agent or for purchasing a business

operating license. As part of the

approval process for a State organic

certification program, we would review

any fees established by States with

respect to the requirements in section

2107(a)(10) of the OFPA (7 U.S.C.

6506(a)(10)) for the collection of

reasonable fees from certifying agents

and in section 2108(b)(2)(A) of the

OFPA (7 U.S.C. 6507(b)(2)(A)) that

additional State program requirements

further the purposes of the Act. In order

for the State program to be approved,

the fees established would have to be

determined to be reasonable.

We know that some current

requirements in existing State organic

programs vary from our proposed

regulations. We also expect State

program proposals to include

requirements we have not considered.

Therefore, in section 205.401(c) of the

proposed regulation we do not include

a list of additional requirements which

might be determined to be in

compliance with the Act’s criteria for

approval of additional requirements.

Rather, each State program’s proposal

would be reviewed to ensure that it

complies with the provisions of section

205.401(c) (1) through (4) which are the

Act’s criteria for approval of additional

requirements.

Approval of State Programs and

Program Amendments—Section 205.402

In section 205.402(a), we propose that

a governing State official must submit to

the Secretary any proposed State

program, or proposed substantive

amendments to a State program, and

must obtain the Secretary’s approval

prior to implementation of the program

and any amendments to it. In section

205.402(b), we propose that the

Secretary would notify the governing

State official within six months after

receipt of the program or any proposed

change to the program as to whether the

program or substantive amendment is

approved or disapproved. This is

consistent with the provisions of section

2108(c) of the OFPA (7 U.S.C. 6507(c)).

After receipt of the notice disapproving

a State program, the governing State

official may reapply at any time.

Review of Approved Programs—Section

205.403

In section 205.403, we propose that

the Secretary would review a State

program not less than once every five

years from the date of initial approval of

the State program. This is consistent

with section 2108(c)(1) of the OFPA (7

U.S.C. 6507(c)(1)), which requires this

be done. The State program would be

notified within six months after

initiation of the review, whether the

program is approved or disapproved,

and if disapproved, the reasons for the

disapproval.

Fees

Section 2107(a)(10) of the OFPA (7

U.S.C. 6506(a)(10)) authorizes the

collection of reasonable fees from

farmers, handlers, and certifying agents

who participate in the national organic

certification program. In sections

205.421 through 205.424 we propose the

fees we intend to charge to reflect the

cost of the services provided by the

USDA. The statute provides that the fees

collected be deposited into the general

fund of the U.S. Treasury. Accordingly,

the agency must obtain appropriated

funds to operate this program.

In our efforts to assemble the

economic and demographic information

needed to develop the details for

assessing and collecting reasonable fees,

we consulted extensively with both

State and private certifying agencies. We

received assistance from the USDA

Economic Research Service, as well as

from other programs within AMS, in

identifying various options for the

assessment of fees in this program.

Additionally, we determined the

number of certifying agents and their

chapters that are currently operating in

the United States and conducted an

analysis to determine the number of

organic farms and handling operations

that were operated in the United States

for 1994 (Dunn, Julie Anton. 1995.

‘‘Organic Food and Fiber: An Analysis

of 1994 Certified Production in the

United States.’’ U.S. Department of

Agriculture, Agricultural). We also

examined an analysis of data collected

by the California Department of Food

and Agriculture concerning registered

organic farms and handling operations

in that state (California Department of

Health Services. 1995. ‘‘Report on the

Registration of California Organic

Processed Food Firms.’’ Sacramento:

State of California Marketing Service).

Based on these analyses, we estimate

that 44 certifying agents may apply for

accreditation and that 30 chapters or

subsidiary offices would be included in

their applications. We further estimate

that 4,000 farmers and 600 handlers

would be eligible for certification.

We estimate that it will cost

approximately $1,000,000 in the first

full year of operation to operate our

program when it is implemented. These

costs include approximately $644,000

for the salaries and benefits of 12 staff

members, which would be comprised of

a program manager, 8 marketing

specialists, and 3 support staff

personnel, and approximately $356,000

for general administrative overhead and

operating costs, such as printing,

training, travel, NOSB meetings,

equipment, supplies, rent, heat, and

communications. A description of the

services that would be provided to

program participants by the NOP staff is

presented in the applicable

supplementary information sections on

fees that follow.

Based on 1994 workload data, we

estimate that $500,000 of this

$1,000,000 will be collected from farms,

handling operations, and wild crop

harvesting operations, $389,000 from

applicants for accreditation and

accredited certifying agents, and

$112,000 from private foreign

certification programs, for a total of $1

million. Note, actual billing may be

somewhat greater due to inflation since

1994. We have included a chart at the

end of the fee discussion that illustrates

the fees that will be charged. The fees

in this rule are based upon estimates of

the cost to AMS of providing each of the
65928 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

services described, and may be adjusted

in future years based upon program

experience and projected or actual

changes in the cost of operations (e.g.

inflation).

We again would like to point out that,

in addition to the fees that certified

operations would be required to submit

to USDA, farm, wild crop harvesting,

and handling operations that want to be

certified under the Act, and those that

have been so certified, also would need

to pay certifying agents, whether State

or private, for the certification services

provided by them. These certification

services would include review of an

initial application for certification,

annual review of updated information,

review of an organic plan and updates

to the organic plan, and conducting

annual inspections both before and after

certification is granted. As part of the

accreditation process for certifying

agents that we propose in subpart E,

USDA would require certifying agents to

submit for approval the fees they intend

to charge to operations for which they

are going to conduct certification

activities. If the intended fees submitted

are deemed reasonable, as required in

section 2107(a)(10) of the OFPA (7

U.S.C. 6506(a)(10), USDA will approve

the fees schedule submitted.

The AMS, as set forth in section

205.423 of this proposal, also would be

charging fees to foreign organic

certification programs, other than those

operated by a foreign country itself.

These fees would cover the costs AMS

will incur in determining whether these

programs have requirements equivalent

to those of the AMS program. These fees

are authorized under the Independent

Offices Appropriations Act (31 U.S.C.

9701 et seq.).

Fees for Accreditation Applicants and

Accredited Certifying Agents—Section

205.421

Section 2107(a)(10) of the OFPA (7

U.S.C. 6506(a)(10)) provides for the

collection of reasonable fees from

certifying agents who participate in the

program. This section discusses the fees

proposed to be paid by applicants who

are initially applying for accreditation

and fees to be paid by accredited

certifying agents.

In section 205.421(a)(1) we propose

that each applicant for accreditation,

and each accredited certifying agent

submitting an annual report, would be

required to submit to the Administrator

a non-refundable fee of $640. This fee

would cover the AMS cost to review

and evaluate the material required to be

submitted to become accredited or to

continue accreditation. We believe it is

appropriate to establish a fee structure

to recover the cost of this service.

We estimate that it will take an

average of 16 hours to review each

application for accreditation, or each

annual report, for certifying agencies

that do not have chapters or subsidiary

offices. Our estimation is based upon

knowledge gained from examining

current accreditation programs as well

as our general experience and

knowledge gained from other AMS

programs that involve the submission

and review of applications. We estimate

that the hourly cost for AMS personnel

to handle and review the applications

and annual reports will be $40 per hour.

This is the average hourly cost for AMS

to conduct a program of this nature.

Based on an hourly fee of $40 per hour

and an estimated time of 16 hours for

handling and review, we estimate the

cost to evaluate accreditation

applications and annual reports to be

$640 per applicant or accredited

certifying agent, as applicable.

Therefore, we are proposing that each

applicant of this type (i.e., single, nonmulti-unit organization) seeking

accreditation or submitting an annual

report pay a $640 non-refundable fee at

the time of submission of application for

accreditation or an annual report.

Assessing a uniform fee for

accreditation application and

submission of an annual report is based

on our knowledge gained from other

AMS programs and current

accreditation programs being operated.

We are not proposing a fee for this

activity based on the size and

complexity of the certifying agent

because we believe that differences in

the size and complexity of the certifiers

would result in an insignificant

difference in the amount of time needed

to review applications and annual

reports.

We further propose in section

205.421(a)(2) that an additional

application or annual report review fee

of $160 be charged for each chapter or

subsidiary office of an accreditation

entity. This additional fee of $160 is the

cost we estimate AMS will incur for the

additional 4 hours we estimate will be

necessary to review the additional

information required to be submitted for

each part of a multi-unit organization.

We estimate the hourly cost will be $40,

the same average hourly cost we

propose for reviewing application

information and annual reports

submitted by applicants and accredited

certifying agents. Based on our estimate

that 44 certifying agents with 30

chapters or subsidiary offices may apply

for accreditation, we estimate that we

may collect $32,960 annually from fees

associated with reviewing accreditation

applications and annual reports.

In paragraph (b) of section 205.421,

we are proposing the fees that certifiers

would be assessed for a site evaluation

visit conducted by AMS. The fees that

would be assessed for a site evaluation

visit would be any travel and per diem

expenses incurred as a result of the

conduct of site evaluations, as well as

the hourly costs to conduct the site

evaluation. Site evaluations are

proposed in section 205.309(a) of

subpart E to be performed by AMS

within a reasonable time after issuance

of a notice of approval of accreditation

to verify compliance of the certifying

agent with the Act and the regulations.

In section 205.309(b), we propose that a

site evaluation also may be conducted at

any time to determine an applicant’s or

certifying agent’s compliance with, or

quality of performance under, the Act

and the regulations. Additionally, we

propose in section 205.314(b) that a site

evaluation would occur every 5 years as

part of the process of renewal of

accreditation for an accredited certifying

agent.

We estimate that the hourly cost of

performing site evaluations will be $40,

calculated to the nearest fifteen minute

period, for each AMS evaluator

conducting the site evaluation visit,

including travel time to and from the

evaluator’s duty station. This is the

average cost for AMS to conduct

evaluations of this nature. We anticipate

that the time necessary for AMS to

conduct a site evaluation, and therefore

the total cost to be assessed a certifying

agent for a site evaluation, will vary

between certifying agents due to

differences in their size, complexity,

and other similar factors. The fee we

propose in paragraph (b) of this section

would be a direct assessment on

applicants and accredited certifying

agents for the hourly costs and travel

and per diem expenses associated with

conducting our site evaluations. As

proposed, an applicant or accredited

certifying agent would be required to

pay these fees within 30 days following

the date the bill is issued. As proposed

in section 205.424 of this subpart, the

fees submitted as payment for the costs

of the site evaluation would be required

to be submitted by certified check or

money order made payable to AMS and

sent to the address specified on the bill.

AMS estimates that an average site

evaluation would require 5 days and

would cost a certifying agent $3,500.

The $3,500 expense would result from

the hourly costs for staff time necessary

to prepare for and conduct the site

evaluation, and the related travel and

per diem expenses, such as air fare, car
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rental, lodging, meals, and incidental

expenses. We estimate that of the $3,500

cost, approximately $1,100 would result

from related travel and per diem

expenses and approximately $2,400

would result from the time (hourly

costs) necessary to prepare for and

conduct the site evaluation. We

anticipate that of this $2,400 hourly

cost, $1,600 would result from the time

spent by one AMS evaluator being on

site for 5 days (40 hours) at $40 per

hour, and $800 would result from the 20

hours we estimate will be needed to

prepare for the evaluation, write an

evaluation report, and communicate the

results of the evaluation process to the

certifying agent. As previously noted,

the actual cost for each site evaluation

will vary based on the length of the

evaluation, due to such factors as the

certifying agent’s location, size and

complexity.

Based on our estimate that 44

certifying agents with 30 subsidiary

offices or chapters may be accredited,

we expect to receive $259,000 annually

from fees associated with site

evaluations. We note that under our

scheme for site evaluations proposed in

section 205.309 of subpart E, a site

evaluation visit may not be performed

each year for every certifying agent and

every subsidiary office or chapter.

However, also under our scheme, a site

evaluation may be performed more than

once each year for a certifying agent or

its subsidiary office or chapter, when

determined necessary by the

Administrator to determine the

certifier’s compliance or evaluate its

performance. For the purpose of

estimating fees to be collected annually

from certifying agents, we assumed that

for the intital year that site visits are

performed, a site visit would be

performed for each certifying agent and

each subsidiary office or chapter.

Thereafter, a site visit of a certifying

agent, subsidiary office, or chapter may

be performed more or less often than

annually. The previously discussed

number of 12 NOP staff members

estimated to be needed to conduct

program activities would be adjusted

accordingly with an increase or decrease

in workload.

A different model which we

considered for the site evaluation fee,

but which we are not proposing, was

based on categorizing certifiers

according to their size and assessing

them a fee for a site evaluation based

solely on this factor. In such a scenario,

for example, a certifying agent who

certified less than 50 clients might be

assessed a fee equivalent to 3 days of

work while a certifying agent that

certified more than 500 clients would be

assessed a fee equivalent to 30 days of

work. We decided not to propose this

model after determining that site

evaluation costs would depend on

factors other than the size of the

certifying agent’s operation, such as the

complexity of the certification activities

conducted by the certifier, the location

of the certifier’s facilities, and the

certifier’s organizational structure.

In paragraph (c) of this section, we

propose that an administrative fee of

$2,000 be paid by a certifying agent

upon the initial granting of

accreditation, upon the granting of

confirmation of accreditation, and upon

the submission of each subsequent

annual report. Under the regulatory

scheme we are proposing, a person who

wants to be an accredited certifying

agent first would have to apply for and

be granted accreditation, then would

have to have this accreditation

confirmed, and then would have to

submit annual reports to provide

current information.

Our $2,000 fee is based upon the

yearly cost we estimate we would incur

for providing various administrative

services to accredited agents which

would cover the administrative costs

discussed below. Since we expect that

confirmation of accreditation would

occur approximately 12 months after the

granting of initial accreditation, and that

submission of an annual report would

occur subsequently one year later, we

propose to assess a $2,000 fee for each

of these yearly periods so that the fees

charged will reflect the cost of the

services provided. We also are

proposing that, upon the granting of

initial accreditation, upon the granting

of confirmation of accreditation, and

upon the submission of an annual

report, a certifying agent would pay an

additional fee of $300 for each chapter

or subsidiary of the agent’s organization.

Our fees here are based on knowledge

gained from the review of currently

existing accreditation programs such as

the International Organization for

Standardization program and the

International Federation of Organic

Agricultural Movements program.

Our administrative fees would cover

costs for the operation of our

accreditation program that are not

covered by paragraphs (a) and (b) of

section 205.421. The $2,000 fee would

cover day-to-day program activities and

operational and overhead costs for

single-site accreditation entities.

Examples of operational and overhead

costs are utilities, rent, supplies,

printing, equipment purchases, and

communication. Program activities

include: develop and provide guidance

on the NOP production, handling and

certification requirements; compile,

copy, and mail site evaluation reports;

conduct peer review panel meetings or

conference calls; and enforce the

program. The $300 fee for each

additional chapter or subsidiary would

cover the additional time for program

activities, and additional overhead and

operating expenses, we believe can be

attributed to, and which are necessary

for, our providing the previously

identified services to chapters and

subsidiary offices. Based on our

estimate that 44 certifying agents with

30 subsidiary offices or chapters may be

accredited, we expect to receive $97,000

annually from administrative fees.

Payment of the non-refundable fees

would be required 30 days from the date

of issuance of a notification of approval

of accreditation and notification of

confirmation of accreditation, and with

the submission of each annual report.

An alternative model for the

administrative fee that we considered

would be to base the administrative fee

on the types of certifications performed

by certifiers. For example, certifying

agents who certify farmers and handlers

trading in international markets, or who

certify processors producing multiingredient products, would pay a higher

administrative fee. The underlying

assumption is that certifying agents who

provide more complex services to

farmers and handlers utilize more

program resources and derive greater

benefit from the National Organic

Program than other certifiers. In

evaluating this alternative, we

considered that the AMS costs to

administer this model would be

considerably higher than the costs

associated with the uniform

administrative fee model we are

proposing.

Fees for Certified Operations—Section

205.422

In order for AMS to carry out the

OFPA, and in turn fulfill the mission of

AMS, certain program activities must be

undertaken. We used the time required

to accomplish these program activities

as the basis for determining the amount

of fees charged to each certified farm or

handling operation. Program activities

that would have to be carried out

include: financial and staff support for

the NOSB; compliance and

enforcement; provision to the public of

information about the program;

attendance at meetings, conferences and

trade fairs conducted both inside and

outside the United States to convey

information about the program; and

other general and administrative

functions. To accomplish these

activities, we would need to pay various
65930 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

fixed costs, including costs for overhead

(utilities, rent and communications),

equipment costs for computers and

copying machines, and staff expenses,

which would include salaries, benefits

and travel costs.

In this section, we propose the fees to

be collected from certified farmers, wild

crop harvesters, and handlers. The total

cost for the program activities which we

estimate that AMS will provide for farm,

wild crop harvesting, and handling

operations certified under the National

Organic Program is $500,000, one half of

the annual projected program cost of

$1,000,000. We estimate that

approximately 40 percent of the

$500,000, or $200,000, would be needed

to carry out program activities

concerned with the issues of certified

farms and wild crop harvesting

operations, and that approximately 60

percent of the $500,000, or $300,000,

would be needed to carry out activities

concerned with the issues of certified

handling operations.

The fee we propose is based upon

dividing our estimated cost for program

activities for farmers and harvesters, and

handlers, respectively, among the

estimated 4,000 farmers and 600

handlers we believe will participate in

our program. Accordingly, we propose

that each farmer and wild crop harvester

would pay $50 annually, or $200,000

divided by 4,000 farmers. We propose

that each handler would pay $500

annually, or $300,000 divided by 600

handlers. We used this manner to

determine the fee that will be charged

each farmer, each wild crop harvester,

and each handler because almost all of

the activities that would be carried out

for each group, i.e., for the certified

farmers and wild crop harvesters, and

for the certifier handlers, will be equally

applicable to each farmer and harvester,

and each handler. It would not be

practical to apply any of the possible

small portion of activities that remain to

individual farmers, wild crop

harvesters, and handlers separate and

apart from the overall costs to each

group. We request any additional

information that would improve the

estimates of farmer, wild crop

harvesting, and handler participation, so

that a more accurate estimate of these

fees can be developed.

In our consideration of farmer,

harvester, and handler fees, we

determined that the allocation of a

higher percentage of costs to handlers’

issues (60 percent), as opposed to

farmer/harvester issues (40 percent),

would be appropriate. We anticipate

that handling issues, especially such

issues as enforcement; record keeping

and auditing; labeling, including use of

the USDA seal and State seals on

different product lines; equivalency of

imported organically produced

ingredients; and maintenance of the

National List of non-agricultural

ingredients, will require greater program

staff time and operating expenses than

farming and harvesting issues.

In developing our proposed fee

structure, we considered proposing a fee

structure that did not include a fee

collected directly from producers and

handlers, but that instead assessed fees

on certifying agents to cover the total

$1,000,000 cost of the National Organic

Program. We considered this alternative

because we recognize that any fee

charged to a certifying agent ultimately

will be incorporated into the fee that the

certifying agent charges the producer

and handler for certification services.

However, we did not propose this

alternative because we consider our

proposal that would directly assess

producers, handlers and certifying

agents for services we provide to them

to better represent an appropriate and

practical method of providing

transparency and distributing overall

program costs among the universe of

potential participants and beneficiaries.

We also considered developing a

sliding scale of fees to be charged to

producers and handlers, based on the

size and complexity of their operations.

For example, a farmer or handler who

sells $5,000 annually of agricultural

products would be charged

proportionately less than a farmer or

handler whose sales exceed $5,000.

However, we are proposing fees that are

related directly to the costs of services

provided by AMS, rather than to such

factors as a participant’s sales volume or

income from the sale of organically

produced products, because we estimate

that a scheme for charging fees based on

factors such as sales volume or income

is a more complex scheme and would

require additional recordkeeping burden

and administrative costs for producers

and certifiers.

As discussed previously, we have

made a distinction between services

provided to farmers/harvesters as a

group and handlers as a group.

However, we have not made a

distinction within each group for

assessing fees to farms and harvesting

operations, and handling operations,

based on their size, complexity, or other

similar factor. Because we are

concerned about the impact of our

proposed uniform fee structure on

smaller farms and smaller handling

operations, we are requesting public

comment on the impact of our proposed

structure on smaller operations.

Additionally, we are request public

comment on alternative methods for

calculating fees, including, but not

limited to (1) the actual cost of

providing services to each individual or

operation, and (2) the size of the

operation or value of the product(s) for

which service is being provided.

Fees for Import Programs—Section

205.423

We are proposing in section

205.423(a) that foreign organic

certification programs, other than those

operated by a foreign country itself, pay

a fee of $40 per hour plus any travel and

per diem costs that might be incurred to

establish the equivalency of the

program. This is the average hourly cost

for AMS to conduct a program of this

nature. Before equivalency is final and

effective for foreign certification

programs for which payment for

determination of equivalency is

required, payment must be made to

AMS.

In section 205.423(c) we are

proposing that the fees must be

submitted by certified funds made

payable to AMS and paid within 30

days following the date of notification of

AMS of its intent to approve the

program subject to receipt of the fees.

Fees should be submitted according to

the instructions provided by AMS. As

indicated in the proposal, no program

would be approved until all required

fees are paid.

Payment of Fees and Other Charges—

Section 205.424

In section 205.424(a) we propose that

all fees be submitted in the form of a

certified check or money order made

payable to AMS and sent to the address

identified in the bill issued for these

fees. We also propose, in accordance

with section 3717 of the Debt Collection

Act of 1982 as amended (31 U.S.C.

3717), that all fees required to be

submitted would incur interest,

penalties, and other costs in the case of

late payment of the fees due. In

addition, failure to submit payment, or

a late payment, of a bill owed to AMS

may result in the loss of, or failure to

obtain, certification, accreditation, or

equivalency status.

Fees for application for accreditation

or for the review of an annual report

must be included with the application

or with the annual report. Without

payment of the fee, AMS will not act on

the application. Fees for site evaluations

and administrative fees that are not paid

or that are received late may cause AMS

to refrain from issuing, confirming, or

continuing accreditation. Certification

of farm, wild crop harvesting and

handling operations is dependent upon
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65931

the payment of the fees. Import

programs, other than those operated by

a foreign country itself, would not be

acknowledged as being equivalent until

payment is made to cover the AMS cost

for the establishment of equivalency.

ESTIMATED NATIONAL ORGANIC PROGRAM FEES

[Based on 1994 data]

Description Certification agents

(est. 44)

Subsidiary offices

or chapters (est.

30)

Handlers (est. 600) Farmers (est.

4,000)

Private foreign certification programs (est.

16)

Application or Annual Report Fee ........... $640/Annually ........ $160/Annually ........ $0 ........................... $0 ........................... $0

Administrative Fee ................................... 2,000/Annually ....... 300/Annually .......... 500/Annually .......... 50/Annually ............ 0

Site Evaluations ...................................... 3,500* .................... 3,500* .................... 0 ............................. 0 ............................. 0

Equivalency Review ................................ 0 ............................. 0 ............................. 0 ............................. 0 ............................. 7,000

Total Estimated Fees** .................... 270,160 .................. 118,800 .................. 300,000 .................. 200,000 .................. 112,000

* The $3,500 estimated cost is based on a 5 day site evaluation computed at $40 per hour plus travel and per diem costs. The actual cost will

vary based on the length of the evaluation. Initial site evaluations would be performed approximately 12 months after initial granting of accreditation, after which site evaluations will be conducted at least once every 5 years and as necessary to determine compliance. The $40 per hour

rate, which is used in many of the National Organic Program fees, is based upon the average hourly cost for AMS to conduct a program of the

nature.

** The estimated numbers of farmers, handlers and certifiers are based on data collected in 1994; therefore, the total estimated fees may not

represent the number of farmers, handlers and certifiers who might participate in the National Organic Program after implementation. We also

estimated the number of equivalency reviews conducted for private foreign certification programs to be approximately 16 per year. An equivalency review may cost more than accreditation of a certification agent because it would include an analysis of the following: production standards, criteria for allowing certain substances to be used, certification requirements, enforcement measures and accreditation process, and may

include a site visit to the foreign program headquarters. We request information that would improve the estimates of farmer, handler, certifier and

private foreign program participation so a more accurate estimate of these fees can be developed.

Compliance Review and Other Testing

Sections 205.430 through 205.433

contain our proposed provisions for

compliance review, preharvest tissue

testing, application of a prohibited

substance due to emergency pest or

disease treatment, and the reporting of

the application of a prohibited

substance. Section 2107(a)(6) of the

OFPA (7 U.S.C. 6506(a)(6)) requires the

establishment of a program under which

certifying agents would conduct

periodic residue testing of agricultural

products from certified farms and

handling operations and report any

violations of food safety laws which

they are aware of to the appropriate

health agencies. Section 2112 of the

OFPA (7 U.S.C. 6511)) requirements in

regard to preharvest tissue testing and

testing of products sold or labeled as

organically produced also are addressed

in the proposal. Additionally, the

proposal addresses the provisions of

section 2107(b)(2) of the OFPA (7 U.S.C.

6506(b)(2)) regarding the application of

prohibited substances on certified

organic farms that occur as the result of

a Federal or State emergency pest or

disease treatment program.

Compliance Review—Section 205.430

This proposed section would

implement the residue testing

requirements of sections 2107(a)(6) of

the OFPA (7 U.S.C. 6506(a)(6)) and

2112(a) and (b) of the OFPA (7 U.S.C.

6511(a) and (b)). Section 2107(a)(6) of

the OFPA (7 U.S.C. 6506(a)(6)) requires

a certifying agent to undertake periodic

residue testing of products from

certified farms and handling operations

to determine if such products contain a

detectable residue level of a pesticide or

other prohibited substance and to report

violations of food safety laws, if found,

to the appropriate health agencies.

Section 2112(a) of the OFPA (7 U.S.C.

6511(a)) requires the Secretary, the

applicable governing State official or the

certifying agent to utilize a system of

residue testing to test products sold or

labeled as organically produced to assist

in enforcement of this title. Section

2112(c) of the OFPA (7 U.S.C. 6511(c))

further requires the Secretary,

applicable governing State official and

the certifying agent to conduct an

investigation of a certified farm or

handling operation when the residue

test of a product from the certified farm

or operation shows a detectable residue

level of a pesticide or other prohibited

substance, to determine if the organic

certification program has been violated,

and may require the producer or

handler of such product to prove that

any prohibited substance was not

applied to such product.

In paragraph (a) of this section we

propose that a certifying agent would

arrange with inspectors to conduct

periodic sampling for the purpose of

testing organically produced

agricultural products from farm, wild

crop harvesting, and handling

operations certified by that agent to

enforce the Act and the regulations set

forth in this part. Certifying agents

would instruct inspectors when to

sample organically produced products

on certified farm, wild crop harvesting,

and handling operations. We do not

propose that this sampling would be

performed at each annual inspection.

We believe that the frequency of

sampling should be adequate to monitor

compliance with the section 2105(2) of

the OFPA (7 U.S.C. 6504(2)) provision

that prohibits the sale or labeling of

agricultural products as organic that are

produced on land to which any

prohibited substances, including

synthetic chemicals, have been applied

during the 3 years immediately

preceding the harvest of the agricultural

products, but yet not so frequent as to

be unnecessary or burdensome to the

certified operations. We have proposed

testing not less frequently than every 5

years. However, we specifically request

comment on whether this period of time

is appropriate. As required by the Act,

we also propose to require certifying

agents, to the extent that such agents are

aware of a violation of applicable laws

relating to food safety, to report such

violation to the appropriate health

agencies (Federal, State, and local).

In paragraph (b) of this section, which

addresses the compliance provisions of

section 2112(a) of the OFPA (7 U.S.C.

6511(a)), we propose that the Secretary

or governing State official would

arrange for sampling and residue testing

of organically produced products at any

point of production or distribution, and

may require the certifying agent to

conduct sampling and residue testing of

organically produced products

originating from operations certified by

that agent. These product samples could

be taken from any point in the
65932 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

distribution chain, from the farm to the

retail store. We believe that taking

samples from any point in the

distribution chain would assist in

maintaining the integrity of organically

produced agricultural products after

they leave the certified operation and

would provide consumers with added

assurance that no pesticide or other

prohibited substance was used in

producing or handling the products.

The results from all sampling and

testing would be used to determine if an

agricultural product contains any

detectable residue level of a pesticide or

other prohibited substance. We define

the detectable residue level in proposed

section 205.2 of subpart A as being the

level that is 5 percent or greater of the

established EPA tolerance level for the

product that was tested, provided that if

there is no tolerance level established,

but an action level has been established,

the detectable residue level will be the

action level established by FDA for the

product tested. The EPA tolerance

levels, expressed in terms of parts of a

pesticide residue per million parts of

the food (ppm), refer to the amount of

a pesticide residue that may legally be

present in or on a raw agricultural

commodity, as set forth in section 408(a)

of the Federal Food, Drug and Cosmetic

Act (FFDCA) (21 U.S.C. 346(a)), or

present in processed food or feed under

the terms of the food additive regulation

as set forth in section 409 of the FFDCA

(21 U.S.C. 348). Tolerance levels for raw

agricultural commodities are published

in 40 CFR Part 180; for processed foods,

in 40 CFR Part 185; and for processed

feed, in 40 CFR Part 186. The FDA

action levels, which are based on

recommendations received from the

EPA, also are expressed in terms of parts

of a pesticide residue per million parts

of the food and are used to regulate the

occurrence of very low levels of

pesticide residues that result from

pesticides that are persistent in the

environment and for which EPA does

not establish a tolerance level. The FDA

action levels are published in FDA’s

Compliance Policy Guide (CPG),

Chapter 5 (Foods), subchapter 575,

section 575.100. We have based our

compliance testing proposals on the

EPA tolerances and the FDA action

levels because they represent the best

data available on what are appropriate

and safe residue levels.

In our proposal, we have determined

that the detectable residue level for a

prohibited substance would be at 5

percent of the EPA tolerance for the

product tested, or at the actual FDA

action level for the product tested, as

applicable, so as to establish a practical

benchmark for determining when to

conduct an investigation pursuant to

section 2112(c)(1) of the OFPA (7 U.S.C.

6511(c)(1)). A practical benchmark must

be low enough to provide adequate

protection against the use of pesticides

or other prohibited substances and yet

high enough not to burden a producer

or handler, and the national or

applicable State program, with an

investigation unless a reasonable

question of non-compliance exists. Our

proposed levels of 5 percent of the EPA

tolerance, or at the actual FDA action

level, as indicators of a detectable

residue level are based upon the

historical use of 5 or 10 percent of the

EPA tolerance, or the actual FDA action

level, by States and other certifying

agents in the organic industry.

The NOSB recommended that the

USDA enter into an arrangement with

the Department of Health and Human

Services to conduct sampling and

testing of raw organic agricultural

products as a part of the FDA’s

regulatory monitoring program of all

agricultural products for pesticide

residues. The NOSB suggested a similar

arrangement with States that conduct

their own pesticide residue monitoring

programs. After implementation, we

will consider these possibilities and

similar arrangements with other existing

pesticide residue testing programs to

fulfill the proposed sampling provision

set forth in paragraph (b) of this section.

In paragraph (c) in this section, we

propose to require each product sample

collected by an inspector representing

the Secretary, a certifying agent, or

applicable governing State official, as

part of the compliance review, to be

submitted to a laboratory facility

accredited to test the commodity

sampled. (Laboratory accreditation is

not a part of the USDA accreditation

program and is currently administered

through private and independent third

parties.) Each product sampled would

be collected in accordance with

instructions provided in subchapter 400

of the FDA Investigations Operations

Manual (IOM). We have chosen the IOM

because it serves as the FDA’s primary

guide to field investigators and

inspectors on investigational policies

and procedures, and thus provides for

consistency in periodic and random

sample collection. The analytical

methods used to test each product

sample to determine if an agricultural

product contains a detectable residue

level of a pesticide or other prohibited

substance would be selected as

appropriate from the FDA’s Pesticide

Analytical Manual (PAM) Volumes I

and II, the Official Methods of Analysis

of the Association of Official Analytical

Chemists, or the Food Safety Inspection

Service (FSIS) Residue Chemical

Guidebook. We have adopted the

analytical methods contained or

referenced in these publications because

they serve as the standard analytical

methods used by the FDA, FSIS, and

other laboratories to examine food and

animal feed for pesticide residues for

regulatory purposes. The results of such

tests would be reported to the certifying

agent or governing State official, as

applicable, and to the Secretary.

Our proposed paragraph (c)(3) of this

section would require that the Secretary,

the governing State official, or the

certifying agent, as applicable, inform

the appropriate regulatory agency in the

event a residue test level exceeded

either the EPA tolerance level or the

FDA action level, as applicable, for that

substance. This proposal is consistent

with section 2107(a)(6) of the OFPA (7

U.S.C. 6506(a)(6)), which requires

reporting of violations related to food

safety to the appropriate health

agencies.

Paragraphs (d)(1) and (2) of this

section propose the actions that would

be undertaken by the Secretary after the

receipt of a residue test result that

indicated a detectable residue level of a

prohibited substance. Our proposed

paragraph (d)(1) of this section would

require the Secretary, applicable

governing State official, or certifying

agent to conduct an investigation to

determine the cause of a detectable

residue level of a prohibited substance

in the sample, as provided for under

section 2112(c)(1) of the OFPA (7 U.S.C.

6511(c)(1)). The investigation may

include a visit to the certified operation

to determine whether the detectable

residue level exceeds the unavoidable

residual environmental contamination

level for the prohibited substance at the

specific certified operation.

Proposed paragraph (d)(2) of this

section would implement the provision

of section 2112(c)(2) of the OFPA (7

U.S.C. 6511(c)(2)) which prohibits

organically produced agricultural

products from being sold or labeled as

organically produced if the investigation

into the cause of a detectable residue

level in a sample determines that the

residue was the result of an intentional

application of a prohibited substance or

was at a level greater than the

unavoidable residual environmental

contamination level for the prohibited

substance. The NOSB recommended

that the unavoidable residual

environmental contamination level be at

the actual FDA action level, or not to

exceed 5 percent of the EPA tolerance,

as applicable. We propose instead that

the unavoidable residual environmental

contamination be established for each
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65933

specific site only after a product

produced on that site is found to

contain a detectable residue level of 5

percent of the EPA tolerance, or at the

actual FDA action level, as applicable.

We believe that unavoidable residual

levels of contaminants in the

environment vary so greatly by region,

State, and site so as to render

impractical the use of a uniform level.

The certification eligibility of certified

operations also would be better

evaluated by our proposal to establish a

site-specific unavoidable residual level

during the investigation, rather than

applying a pre-determined level.

Proposed paragraph (d)(2) of this section

would authorize the Administrator to

institute proceedings to terminate the

certification of an operation, or portion

of an operation, after an investigation

determined that the residue resulted

from an intentional application of a

prohibited substance or that the residue

level exceeded the unavoidable residual

environmental contamination level. The

termination procedure is more fully

described in section 205.219 of subpart

D.

Preharvest Tissue Testing—Section

205.431

Section 2112(b) of the OFPA (7 U.S.C.

6511(b)) authorizes the Secretary, the

governing State official, or the certifying

agent to conduct preharvest tissue

testing of any crop grown on soil

suspected of harboring contaminants.

We accordingly propose in paragraph (a)

of this section that such a test may be

conducted when the soil is suspected by

the Secretary, the governing State

official or the certifying agent of

containing contaminants. We have

defined contaminant in section 205.2 of

subpart A to be a residue of a prohibited

substance that persists in the

environment. This pre-harvest tissue

test would be conducted to determine

whether the crop to be harvested

contained levels of any contaminant

greater than either the actual FDA action

level, or EPA tolerance, as applicable,

for that contaminant.

We also believe a pre-harvest tissue

test could assist producers of

organically grown crops raised on soil to

which certain highly persistent

prohibited substances were applied

more than three years prior to the

harvest of an organic crop to be

knowledgeable of the residue levels

contained in their crops. For example,

any soil could potentially harbor

sufficient amounts of prohibited

substances, such as chlorinated

hydrocarbons, that are known to causes

certain types of crops, such as squash or

cucumbers, to absorb enough of these

contaminants to exceed established FDA

action levels or EPA tolerances.

In paragraph (b) of this section, we

propose that preharvest tissue samples

be collected by an inspector

representing the certifying agent or

applicable governing State official and

submitted in accordance with

subchapter 400 of the FDA

Investigations Operations Manual

(IOM). The analytical methods used for

determining if preharvest tissue samples

contain a detectable residue of a

pesticide or prohibited substance are

identified among the methods contained

or referenced in the FDA’s Pesticide

Analytical Manual Volume I and II or

the Official Methods of Analysis of the

Association of Official Analytical

Chemists. This parallels the procedure

for compliance testing and sampling as

proposed in section 205.430(c).

Paragraph (c) of this section would

require the certifying agent or the

governing State official to report the

results of each preharvest tissue test to

the Secretary and to the appropriate

health agencies if a pre-harvest tissue

test result indicated that the residue

level of a contaminant exceeds the EPA

tolerance or the FDA action level, as

applicable, for that contaminant.

The NOSB submitted

recommendations addressing instances

of drift of prohibited substances upon

organically produced crops. The NOSB

defined drift as the physical movement

of prohibited pesticides or fertilizers

from the intended target site onto a

certified organic field or farm, or portion

thereof, caused by a person who is not

the certified organic producer or a

person working under the direction of

the certified organic producer. They

recommended that agricultural products

exposed to drift should not be sold or

labeled as organically produced or fed

to livestock on certified operations and

that pre-harvest tissue tests be required

to verify which crops were not drifted

upon.

We have not provided in our proposal

for instances of drift, or for the use of

pre-harvest testing to verify portions of

fields that receive drift. Although drift

may be commonplace, especially in

those agricultural regions where

pesticide use on non-organic lands is

routine and heavy, exposure to drift

does not constitute use of a prohibited

substance and does not affect the

integrity of organically produced crops

because the amount of prohibited

substance to which the crops are

exposed is negligible. We believe our

provisions proposed in sections 205.430

and 205.431 for the testing of

organically produced agricultural

products, both before and subsequent to

harvest, to determine residue levels and,

if necessary, to conduct an investigation

as to the cause of a detectable residue

level, are adequate to protect the

integrity of agricultural products sold or

labeled as organically produced.

Emergency Pest or Disease Treatment—

Section 205.432

This proposed section would address

situations where certified organic farms

are subject to Federal or State

emergency pest or disease programs. It

would, pursuant to the discretionary

requirements of 2107(b)(2) of the OFPA

(7 U.S.C. 6506(b)(2)), provide that a farm

subject to such treatment program

would not have its certification status

affected, so long as certain prohibitions

in the proposed regulations are

complied with.

The NOSB recommended, and we

agree, that land that is subject to an

emergency treatment program with a

prohibited substance should not be

required to be withheld from production

of organically produced products for a

period of three years. Therefore, we are

proposing that a certified farm that is

otherwise in compliance with the

regulations would not have its

certification status affected as a result of

a Federal or State emergency pest or

disease treatment program, provided

that the conditions stated in paragraphs

(a) and (b) of this section, as applicable,

are satisfied.

Paragraph (a) of this section would

prohibit the sale or labeling of any crop

harvested from a treated farm as

organically produced if the harvested

crop, or plant part to be harvested, had

come in contact with a prohibited

substance applied as part of the

emergency program. Field observations

by the producer, combined with the

reporting requirements of proposed

section 205.433 and the testing and

sampling provisions of sections 205.430

and 205.431 would be used to

determine which crops had come in

contact with the prohibited substance

and to monitor that they were not being

sold or labeled as organically produced.

We propose in paragraph (b) of this

section that any livestock that were

treated with a prohibited substance as

part of a Federal or State emergency pest

or disease treatment program, or

product derived from such livestock,

could not be sold as organically

produced. However, exceptions to the

prohibition on the sale of treated

livestock and their products as

organically produced are proposed in

paragraphs (b)(1) and (b)(2) of this

section. In accordance with section

2110(e)(2) of the OFPA (7 U.S.C.

6509(e)(2)), we propose in paragraph
65934 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

(b)(1) of this section that milk and milk

products from a treated dairy animal

could be sold as organically produced

beginning no less than twelve months

following the last treatment with the

prohibited substance. Additionally, in

accordance with section 2110(b) of the

OFPA (7 U.S.C. 6509(b), we propose in

(b)(2) of this section that offspring from

breeder stock that was not in the last

third of its gestation at the time of the

last application of a prohibited

substance could be considered as

organic at the time of birth.

Reporting the Application of a

Prohibited Substance—Section 205.433

Section 205.433 provides a general

requirement that producers or handlers

immediately notify the certifying agent

of any instance of an application of a

prohibited substance on their certified

operations. This requirement would

ensure that the certifying agent was

made aware of any incident of this type,

that occurs on an operation certified by

them, which might affect the integrity

and status of an agricultural product

sold as organically produced by the

operation or the status of the operation

from which an agricultural product is

harvested. Failure to notify the

certifying agent may result in

termination of certification, as provided

for in section 205.219 of subpart D.

Appeals

General—Section 205.452

Section 2121(a) of the OFPA (7 U.S.C.

6520(a)) requires the Secretary to

establish an administrative appeals

procedure under which persons may

appeal an action of the Secretary or a

certifying agent that adversely affects

such person or that is inconsistent with

the applicable organic certification

program. We accordingly propose in

this section that any person subject to

the OFPA who believes that he or she

is adversely affected by a decision of a

member of the National Organic

Program staff or by a certifying official

may appeal such decision to the

Administrator of the Agricultural

Marketing Service.

Equivalency of Imported Organic

Products

Section 2106(b) of the OFPA (7 U.S.C.

6505(b)) provides that agricultural

products imported into the United

States may be sold or labeled as

organically produced only if the

Secretary determines that the products

have been produced and handled under

an organic certification program that

provides safeguards and guidelines that

are at least equivalent to the

requirements of the Act. We are

proposing provisions concerning

equivalency and the process for

establishing equivalency in accordance

with this requirement.

Eligibility of Agricultural Products for

Importation Into the United States—

Section 205.480

Section 205.480 requires that

imported agricultural products, or

ingredients in products, that are to be

sold or labeled as organic must have

been produced and handled under an

organic certification program that the

Secretary has determined has safeguards

and guidelines equivalent to those in

the Act and our proposed regulations.

Determination of the Equivalency of

Foreign Programs—Section 205.481

To provide for the importation of

organic agricultural products, we

propose in section 205.481 that an

evaluation of a foreign organic

certification program would include a

review of its: standards for production

and handling of agricultural products;

lists of substances allowed and

prohibited for use and the criteria used

to establish the lists; inspection and

certification requirements for farm and

handling operations and oversight of

certification provisions; enforcement

provisions; the accreditation process

and requirements for an accredited

status; and any additional information

deemed necessary by the Secretary to

use to determine equivalency. Examples

of other information that may be

required to be submitted are a list of

products certified by the program and

copies of inspection reports used in

determining certification status.

It is necessary to evaluate these

elements in order to satisfy the

provisions of the OFPA that foreign

programs provide safeguards and

guidelines at least equivalent to the

requirements of the OFPA and its

implementing regulations. These

equivalent safeguards and guidelines

should include: standards for organic

farming and handling, including

substances allowed and prohibited for

use in the production and handling of

organic products; provisions for

certification of farming and handling

operations; and oversight of persons and

organizations who will be responsible

for the certification of farm and

handling operations. In addition, there

should be equivalent measures provided

for enforcement of any program

requirements.

One example of an element that may

be examined in determining

equivalency is whether the program’s

standards for farm and handling

operations incorporate, as does the Act

and our proposed regulations, the

principle of prevention, i.e., prevention

of disease in animals, pest infestation in

crops, and commingling of non-organic

products with organic products in a

food handling operation.

We note that farms and handling

operations certified by agents operating

under a foreign organic certification

program that is determined to be

equivalent with the USDA National

Organic Program would be able to

import products into the United States

without the certified farm or handling

operation itself having to apply for

approval for importation from the

USDA.

We recognize that not all organic

products produced in foreign countries

are produced in countries that would

have established their own equivalent

foreign organic certification programs.

We intend that the determination of

equivalency of any other type of foreign

organic certification program, such as

one conducted by a certifying agent that

operates in a country that has not been

determined to have an equivalent

program, also be based on an evaluation

and determination of the components

set forth in section 205.481. We also are

aware that the accreditation of some

foreign organic certification programs

may be conducted by an agency other

than an agency of the government.

Process for Establishing Equivalency of

Foreign Programs—Section 205.482.

In this section, we propose the

process by which a foreign organic

certification program may apply for a

determination of the equivalency of its

program with the National Organic

Program, and in turn, the procedure for

notification of a determination of

equivalency or nonequivalency. In

paragraph (a) of this section, a foreign

organic certification program that wants

to establish the equivalency of its

organic program with the National

Organic Program would submit to the

Secretary a complete and accurate

description of its program, including

any of the laws and applicable

requirements upon which the program

is based and any other information

requested by the Secretary.

In paragraph (b) of this section, we

propose that the Secretary would make

a determination of equivalency or

nonequivalency and notify the foreign

organic certification program of the

decision. If the Secretary determines

that a foreign organic certification

program is equivalent to the USDA

National Organic Program, we propose

that the Secretary provide the foreign

organic certification program written
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65935

notification of the date upon which

organically produced agricultural

products produced and handled under

the program may be imported into the

United States and labeled or sold as

organic. If a foreign organic certification

program has been determined by the

Secretary not to be equivalent, we

propose that the Secretary provide the

foreign organic certification program

written notification and state the basis

for such determination. After receipt of

such notice, the foreign organic

certification program may reapply at

any time.

We propose in paragraph (c) of this

section that, if at any time the Secretary

determines that a foreign program is not

equivalent, the Secretary may withdraw

the equivalency status. Termination of

the equivalency status will be effective

upon receipt by the foreign organic

program of the notice.

Maintenance of Eligibility for

Importation—Section 205.483

In order to determine if a foreign

organic certification program continues

to be eligible to import agricultural

products into the United States that are

to be sold or labeled as organic, we

propose in section 205.483 that reviews

of the foreign organic certification

program be conducted periodically to

reevaluate whether the program

continues to be equivalent. The

Secretary will review, as a part of the

reevaluation, documents and other

information related to the conduct of the

foreign organic certification program,

including any amendments made to the

program requirements since its last

evaluation. Continuance of the

eligibility for importation of products

produced and handled under a program

would depend on the results of these

reviews and the timely submissions of

all documents and other information

needed for the review.

List of Subjects in 7 CFR Part 205

Administrative practice and

procedure, Agriculture, Animals,

Archives and records, Foods, Imports,

Labeling, Organically produced

products, Plants, Reporting and

recordkeeping requirements, Seals and

insignia, Soil conservation.

For the reasons set forth in the

preamble, it is proposed that Title 7,

Chapter I of the Code of Federal

Regulations be amended as follows:

1. Parts 205 through 209, which are

currently reserved in subchapter K

(Federal Seed Act), are removed.

2. A new subchapter M consisting of

parts 205 through 209 is added to read

as follows:

SUBCHAPTER M—ORGANIC FOODS

PRODUCTION ACT PROVISIONS

PART 205—NATIONAL ORGANIC

PROGRAM

Subpart A—Definitions

Sec.

205.1 Meaning of words.

205.2 Terms defined.

Subpart B—Organic Crop and Livestock

Production and Handling Requirements

205.3 Applicability.

205.4 [Reserved]

Organic Crop Production Requirements

205.5 Land requirements.

205.6 Crop rotation.

205.7 Soil fertility and crop nutrient

management.

205.8 Selection and use of seeds, seedlings

and planting stock.

205.9 Prevention and control of crop pests,

weeds, and diseases.

205.10 [Reserved]

205.11 Wild crop harvesting.

Organic Livestock Production Requirements

205.12 Origin of livestock.

205.13 Livestock feed.

205.14 Livestock health care.

205.15 Livestock living conditions and

manure management.

Organic Handling Requirements

205.16 Product composition.

205.17 Processing practices.

205.18 Prevention and control of facility

pests.

205.19 Prevention of commingling and

contact with prohibited substances.

The Use of Active Synthetic Substances,

Non-synthetic Substances, Non-Agricultural

(Non-organic) Substances and Nonorganically Produced Ingredients in Organic

Farming and Handling Operations,

Including the National List of Allowed and

Prohibited Substances

205.20 General rules for categories of

substances and ingredients permitted for

use in organic farming and handling.

205.21 General rules for categories of

substances and ingredients prohibited

for use in organic farming and handling.

The National List of Allowed and Prohibited

Substances

205.22 Active synthetic substances allowed

for use in organic crop production.

205.23 Non-synthetic substances prohibited

for use in organic crop production.

205.24 Active synthetic substances allowed

for use in organic livestock production.

205.25 Non-synthetic substances prohibited

for use in organic livestock production.

205.26 Non-agricultural (non-organic)

substances allowed as ingredients in or

on processed products labeled as organic

or made with certain organic ingredients.

205.27 Non-organically produced

agricultural products allowed as

ingredients in or on processed products

labeled as organic or made with certain

organic ingredients.

205.28 Amending the National List.

205.29—205.99 [Reserved]

Subpart C—Labels, Labeling, and Market

Information

205.100 Agricultural products in packages

sold, labeled or represented as organic.

205.101 Agricultural products in packages

sold, labeled or represented as made

with certain organic ingredients.

205.102 Multi-ingredient agricultural

products that only represent the organic

nature of such ingredients in the

ingredients statement.

205.103 Use of terms or statements that

directly or indirectly imply that a

product is organically produced and

handled.

205.104 Informational statements

prohibited.

205.105 Agricultural products in a form

other than packages that are sold, labeled

or represented as organic or made with

certain organic ingredients.

205.106 Agricultural products produced on

an exempt farm or handling operation.

205.107 The USDA seal.

205.108—205.200 [Reserved]

Subpart D—Certification

205.201 What has to be certified.

205.202 Exemptions and exclusions from

certification.

205.203 General requirements for

certification.

205.204 Applying for certification.

205.205 Organic plan.

205.206 Statement of compliance.

205.207 Preliminary evaluation of an

application for certification.

205.208 Arranging for inspections.

205.209 [Reserved]

205.210 Verification of information.

205.211 Post-inspection conference.

205.212 Reporting to the certifying agent.

205.213 Additional inspections.

205.214 Approval of certification.

205.215 Denial of certification.

205.216 Recordkeeping.

205.217 Continuation of certification.

205.218 Notification of non-compliance

with certification requirements.

205.219 Termination of certification.

205.220 Notification of certification status.

205.221—205.299 [Reserved]

Subpart E—Accreditation of Certifying

Agents

205.300 Areas of accreditation.

205.301 General requirements for

accreditation.

205.302 Applying for accreditation.

205.303 Information to be submitted by an

accreditation applicant.

205.304 Evidence of expertise and ability to

be submitted by an accreditation

applicant.

205.305 Statement of agreement to be

submitted by an accreditation applicant.

205.306 Approval of accreditation.

205.307 Denial of accreditation.

205.308 Maintaining accreditation.

205.309 Site evaluations.

205.310 [Reserved]

205.311 Peer review panel.

205.312 Confirmation of accreditation.

205.313 Denial of confirmation.
65936 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

205.314 Continued accreditation.

205.315 Notification of non-compliance

with accreditation requirements.

205.316 Termination of accreditation.

205.317—205.400 [Reserved]

Subpart F—Additional Regulatory

Functions

State Programs

205.401 Requirements of State programs.

205.402 Approval of State programs and

program amendments.

205.403 Review of approved programs.

205.404–205.420 [Reserved]

Fees

205.421 Fees for accreditation applicants

and accredited certifying agents.

205.422 Fees for certified operations.

205.423 Fees for import programs.

205.424 Payment of fees and other charges.

205.425–205.429 [Reserved]

Compliance Review and Other Testing

205.430 Compliance review.

205.431 Preharvest tissue testing.

205.432 Emergency pest or disease

treatment.

205.433 Reporting the application of a

prohibited substance.

205.434–205.451 [Reserved]

Appeals

205.452 General.

205.453–205.479 [Reserved]

Equivalency of Imported Organic Products

205.480 Equivalency of agricultural

products for importation into the United

States.

205.481 Determination of the equivalency

of foreign programs.

205.482 Process for establishing

equivalency of foreign programs.

205.483 Maintenance of eligibility for

importation.

205.484–205.999 [Reserved]

Authority: 7 U.S.C. 6501–6522.

PART 205—NATIONAL ORGANIC

PROGRAM

Subpart A—Definitions

§ 205.1 Meaning of words.

For the purpose of the regulations in

this subpart, words in the singular form

shall be deemed to impart the plural

and vice versa, as the case may demand.

§ 205.2 Terms defined.

Accreditation. A determination made

by the Secretary that authorizes a

governing State official or private

person to conduct certification activities

as a certifying agent under this part.

Act. The Organic Foods Production

Act of 1990, as amended (7 U.S.C. 6501

et seq.).

Active ingredient in any input other

than pesticide formulations. Any

substance, that when used in a system

of organic farming or handling, becomes

a chemically functional part of that

system; is a labeled ingredient or food

additive; or is a substance that is

otherwise of significant consequence to

the production, handling and integrity

of an organically produced agricultural

product.

Active ingredient in pesticide

formulations. Any substance (or group

of structurally similar substances) as

specified by the EPA in 40 CFR 152.3(b),

that will prevent, destroy, repel or

mitigate any pest, or that functions as a

plant regulator, desiccant, or defoliant,

within the meaning of section 2(a) of the

Federal Insecticide, Fungicide, and

Rodenticide Act, as amended (7 U.S.C.

136(a)).

Administrator. The Administrator for

the Agricultural Marketing Service

(AMS), United States Departure of

Agriculture, or the representative to

whom authority has been delegated to

act in the stead of the Administrator.

Agricultural product. Any agricultural

commodity or product, whether raw or

processed, including any commodity or

product derived from livestock that is

marketed in the United States for

human or livestock consumption.

Agroecosystem. A system consisting

of the functions, interactions, and

balances of biological, hydrological,

geological, and other environmental

elements that are found within a given

farm operation.

Allowed synthetic. A substance that is

included on the National List of

synthetic substances allowed for use in

organic farming.

Animal drug. Any drug as defined in

Section 201 of the Federal Food, Drug

and Cosmetic Act, as amended (21

U.S.C. 321) that is intended for use in

livestock, including any drug intended

for use in livestock feed, but not

including such livestock feed.

Annual seedling. A plant grown from

seed that will complete its life cycle or

produce a harvestable yield within the

same crop year or season in which it

was planted.

Area of operations. The types of

operations: crops, livestock, wild crop

harvesting, handling, or any

combination thereof, that a certifying

agent may be accredited to certify under

this part.

Audit trail. Documentation that is

sufficient to determine the source,

transfer of ownership and transportation

of any agricultural product labeled as

organic or made with certain organic

ingredients, or of any agricultural

product identified as organic in an

ingredients statement.

Biodegradable. Subject to biological

decomposition into simpler biochemical

or chemical components.

Biologics. All viruses, serums, toxins,

and analogous products of natural or

synthetic origin, such as diagnostics,

antitoxins, vaccines, live

microorganisms, killed microorganisms

and the antigenic or immunizing

components of microorganisms

intended for use in the diagnosis,

treatment or prevention of diseases of

animals.

Botanical pesticides. Natural (nonsynthetic) pesticides derived from

plants.

Breeding. Selection of plants or

animals to reproduce desired

characteristics in succeeding

generations.

Buffer area. An area located between

a certified farm or portion of a farm, and

an adjacent land area that is not

maintained under organic management.

A buffer area must be sufficient in size

or other features (e.g., windbreaks or a

diversion ditch) to prevent the

possibility of unintended contact by

prohibited substances applied to

adjacent land areas with an area that is

part of a certified operation.

Cation balancing agent. A mineral

substance applied to the soil to adjust

the ratio among positively charged

(cation) nutrients on soil colloids. The

major cation nutrients are calcium (Ca),

magnesium (Mg), and potassium (K),

and the cation micronutrients include

iron (Fe), zinc (Zn), copper (Cu) and

manganese (Mn).

Certification or certified. A

determination made by a certifying

agent that a farm, wild crop harvesting,

or handling operation is in compliance

with the Act and the regulations in this

part, which is documented by a

certificate that identifies the entity

certified, the effective date of

certification, and the types of

agricultural products for which

certification is granted.

Certification activities. Activities

conducted by a certifying agent in

regard to certification applicants or

certified farms, handling operations and

wild crop harvesting operations.

Certification applicant. A producer or

handler of agricultural products who

applies to a certifying agent for

certification.

Certified facility. A processing,

manufacturing, livestock housing or

other site or structure maintained or

operated to grow, raise or handle

organically produced agricultural

products that is part of a certified

organic farm, a certified organic wild

crop harvesting operation, or a certified

organic handling operation.

Certified organic farm. A farm, or

portion of a farm, or site, where

agricultural products or livestock are
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65937

produced, that is certified by the

certifying agent under the Act as

utilizing a system of organic farming as

described by the Act and regulations in

this part.

Certified organic handling operation.

An operation, or portion of a handling

operation, that is certified by a

certifying agent as utilizing a system of

organic handling as described under the

Act and the regulations in this part.

Certified organic wild crop harvesting

operation. An operation, or portion of

an operation, that is certified by a

certifying agent as harvesting wild crops

in compliance with the Act and the

regulations in this part.

Certifying agent. The chief executive

officer of a State or, in the case of a State

that provides for the Statewide election

of an official to be responsible solely for

the administration of the agricultural

operations of the State, such official,

and any person (including private

entities) who is accredited by the

Secretary as a certifying agent for the

purpose of certifying a farm, wild crop

harvesting operation, or handling

operation as a certified organic farm,

wild crop harvesting, or handling

operation.

Certifying agent’s operation. All sites,

facilities, personnel and records used by

a certifying agent to conduct

certification activities under the Act and

the regulations in this part.

Chapter. A subsidiary organizational

unit of a certifying agent that conducts

certification activities in a manner

consistent with relevant policies and

procedures developed by the certifying

agent in accordance with the Act and

the regulations of this part.

Commercially available. The ability to

obtain a production input in an

appropriate form, quality, and quantity

to be feasibly and economically used to

fulfill an essential function in a system

of organic farming and handling.

Commingling. Physical contact

between unpackaged organically

produced and non-organically produced

agricultural products during production,

transportation, storage or handling,

other than during the manufacture of a

multi-ingredient product containing

both types of ingredients.

Compost. A process that creates

conditions that facilitate the controlled

decomposition of organic matter into a

more stable and easily handled soil

amendment or fertilizer, usually by

piling, aerating and moistening; or the

product of such a process.

Confirmation of accreditation. A

determination made by the Secretary

following the receipt of an AMS site

evaluation report and peer review panel

reports that a certifying agent is

operating in compliance with the Act

and regulations in this part.

Contaminant. A residue of a

prohibited substance that persists in the

environment.

Control. Any method that reduces or

limits damage by, or populations of,

pests, weeds or diseases to levels that do

not significantly reduce productivity.

Critical control point. Any point, step

or procedure in a certified production or

handling operation where loss of control

may result in a loss of an organic

product’s integrity, such as the

commingling of organic products with

non-organic products or contact of

organic products with prohibited

substances.

Crop. A plant or part of a plant

intended to be marketed as an

agricultural product or fed to livestock.

Crop residues. The plant parts

remaining in a field after the harvest of

a crop, which include stalks, stems,

leaves, roots and weeds.

Crop rotation. The practice of

alternating the annual crops grown on a

specific field in a planned pattern or

sequence in successive crop years, so

that crops of the same species or family

are not grown repeatedly without

interruption on the same field during

two or more crop years.

Crop year. That normal growing

season for a crop as determined by the

Secretary.

Cultivation. Digging up or cutting the

soil to prepare a seed bed, control

weeds, aerate the soil or work organic

matter, crop residues or fertilizers into

the soil.

Cultural. Methods used to enhance

crop and livestock health and prevent

weed, pest or disease problems without

the use of substances; examples include

the selection of appropriate varieties

and planting sites; selection of

appropriate breeds of livestock;

providing livestock facilities designed to

meet requirements of species or type of

livestock; proper timing and density of

plantings; irrigation; and extending a

growing season by manipulating the

microclimate with green houses, cold

frames, or wind breaks.

Cytotoxic mode of action. Having a

toxic effect by means of interference

with normal cell functions.

Degradation. Measurable evidence of

damage or adverse effects over the

course of two or more crop years, as

determined by monitoring one or more

indicators of soil or water quality.

Detectable residue level. The level of

a pesticide or other prohibited

substance that is 5 percent or greater of

the established EPA tolerance level, as

set forth in 40 CFR Parts 180, 185, and

186, for the product that was tested,

provided that if there is no tolerance

level established, but an action level has

been established, the detectable residue

level will be the action level established

by FDA for the product tested.

Disease vectors. Plants or animals that

harbor and carry disease organisms

which may attack crops or livestock.

Emergency pest or disease treatment

program. A mandatory program

authorized by a State, federal or local

agency for the purpose of controlling or

eradicating a pest or disease.

Employee. Any person who will be

involved in certification decisions.

Extract. The action of producing a

substance by a process of dissolving the

soluble fractions of a plant, animal or

mineral in water or another solvent; or

the product thereof.

Farm. An agricultural operation

maintained for the purpose of producing

agricultural products.

Fertilizer. A single or blended

substance applied to the soil to supply

any of the three primary plant nutrients,

nitrogen (N), phosphorus (P) and

potassium (K), needed for the growth of

plants.

Field. An area of land identified as a

discrete unit within a farm operation.

Foliar nutrient. Any liquid substance

applied directly to the foliage of a

growing plant for the purpose of

delivering essential nutrient(s) in an

immediately available form.

Formulated product. A commercial

product composed of more than one

substance.

Fungicide. Any substance that kills

fungi or molds.

Generic name. The general or

scientific name of a substance that is not

a trade name.

Genetic engineering. Genetic

modification of organisms by

recombinant DNA techniques.

Governing State official. The chief

executive official of a State or, in the

case of a State that provides for the

Statewide election of an official to be

responsible solely for the administration

of the agricultural operations of the

State, such official, who administers an

organic certification program under the

Act.

Handle. To sell, process, or package

agricultural products.

Handler. Any person engaged in the

business of handling agricultural

products, except such term shall not

include final retailers of agricultural

products that do not process agricultural

products.

Handling operation. Any operation or

portion of an operation (except final

retailers of agricultural products that do

not process agricultural products) that

receives or otherwise acquires
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agricultural products and processes,

packages, or stores such products.

Incidental additive. An additive

present in agricultural products at an

insignificant level that does not have

any technical or functional effect in the

product and is therefore not an active

ingredient.

Inert ingredient in any input other

than pesticide formulations. Any

substance other than an active

ingredient intentionally included in any

product used in organic crop

production.

Inert ingredient in pesticide

formulations. Any substance (or group

of structurally similar substances if

designated by the EPA) other than an

active ingredient which is intentionally

included in a pesticide product (40 CFR

152.3(m)).

Information panel. That part of the

label of a packaged product that is

immediately contiguous and to the right

of the principal display panel as

observed by an individual facing the

principal display panel, unless another

section of the label is designated as the

information panel because of package

size or other package limitations.

Ingredients statement. The listing of

the ingredients contained in a product

listed by their common and usual names

in the descending order of

predominance.

Inspector. Any person retained or

used by a certifying agent who is

qualified to conduct inspections of

certification applicants or certified

farms, handling operations or wild crop

harvesting operations.

Intentionally applied. The deliberate

use of a substance on a certified organic

farm or handling operation.

Label. Any display of written, printed,

or graphic material on the immediate

container of an agricultural product, or

any such material affixed to any

agricultural product or affixed to a bulk

container containing an agricultural

product, except for a display of written,

printed, or graphic material which

contains only information about the

weight of the product.

Labeling. All written, printed, or

graphic material accompanying an

agricultural product at any time, or

written, printed, or graphic material

about the agricultural product displayed

at retail stores for the product.

Livestock. Any cattle, sheep, goats,

swine, poultry, equine animals used for

food or in the production of food, fish

used for food, wild or domesticated

game, or other nonplant life.

Made with certain organic

ingredients. An agricultural product

wherein organic agricultural products

used as ingredients comprise at least 50

percent, but less than 95 percent, of the

total weight of the finished product,

excluding water and salt; additionally,

the percentage of the total weight of the

finished product, excluding water and

salt, that is not comprised of organic

agricultural products is some

combination of non-agricultural

ingredients and/or non-organically

produced agricultural products

included on the National List.

Market information. Any written,

printed, audio-visual or graphic

information, including advertising,

pamphlets, flyers, catalogues, posters

and signs, that are used to assist in the

sale or promotion of a product.

Mating disrupter. A biochemical

substance that serves to prevent pest

insects from reproducing by interfering

with their ability to locate a suitable

mate.

Micronutrient. A soil or crop mineral

nutrient required in very small

quantities.

Mulch. Any material, such as wood

chips, leaves, straw, paper or plastic

that serves to suppress weed growth,

moderate soil temperature or conserve

soil moisture.

National list. A list of allowed and

prohibited substances as provided for in

section 2118 of the OFPA (7 U.S.C.

6517).

National organic program. The

program authorized by the Act for the

purpose of implementing its provisions.

National Organic Standards Board. A

Board established by the Secretary

under 7 U.S.C. 6518 to assist in the

development of standards for substances

to be used in organic production and to

advise the Secretary on any other

aspects of the implementation of the

National Organic Program.

Non-active residues. Any synthetic

substance that does not appear on the

National List of synthetic substances

allowed for use, any non-synthetic

substance that appears on the National

List of non-synthetic substances

prohibited for use, or any non-synthetic

(natural) poison (such as arsenic or lead

salts) that has long-term effects and

persists in the environment, and which

occurs in a very small quantity as a nonactive substance in a production input

or water.

Non-agricultural ingredient. A

substance that is not a product of

agriculture, such as a mineral or a

bacterial culture, that is used as an

ingredient in an agricultural product.

For the purposes of this part, a nonagricultural ingredient also includes any

substance, such as gums, citric acid or

pectin, that is extracted, isolated from,

or is a fraction of an agricultural

product, so that the identity of the

agricultural product is unrecognizable

in the extract, isolate or fraction.

Non-organic agricultural ingredient or

product. An agricultural ingredient or

product that has not been produced or

handled in accordance with the Act and

the regulations in this part.

Non-synthetic (natural). A substance

that is derived from mineral, plant or

animal matter and does not undergo a

synthetic process as defined in section

2103(21) of the OFPA (7 U.S.C.

6502(21)). For the purposes of this part,

non-synthetic is used as a synonym for

natural as the term is used in the Act.

Non-toxic. Not known to cause any

adverse physiological effects in animals,

plants, humans or the environment.

Organic. A term that refers to a raw

agricultural product produced in

accordance with the Act and the

regulations in this part; or, to an

agricultural product wherein organic

agricultural products used as

ingredients comprise between 95

percent and 100 percent of the total

weight of the finished product,

excluding water and salt; additionally,

the percentage of the total weight of the

finished product, excluding water and

salt, that is not comprised of organic

agricultural products is some

combination of non-agricultural

ingredients and/or non-organically

produced agricultural products

included on the National List.

Organic matter. The remains, residues

or waste products of any living

organism.

Organic plan. A plan of management

of an organic farming or handling

operation that has been agreed to by the

producer or handler and the certifying

agent and that includes written plans

concerning all aspects of agricultural

production or handling described in the

Act and the regulations in subpart B of

this part, including crop rotation and

other practices as required under the

Act.

Package. A container or wrapping that

bears a label and which encloses an

agricultural product, except for

agricultural products in bulk containers,

shipping containers, or shipping

cartons.

Packaging. Material used to wrap,

cover, or contain an agricultural

product, including wax applied directly

to an edible surface of an agricultural

product.

Peer review panel. A panel of

individuals who have expertise in

organic farming and handling methods

and certification procedures, and who

are appointed by the Administrator to

assist in evaluating the performance of

a certifying agent.
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Person. An individual, group of

individuals, corporation, association,

organization, cooperative, or other

entity.

Pesticide. Any substance which alone,

in chemical combination, or in any

formulation with one or more

substances, is defined as a pesticide in

section 2(u) of the Federal Insecticide,

Fungicide, and Rodenticide Act (7

U.S.C. 136(u) et seq.).

Petition. A request to amend the

National List that is submitted by any

person in accordance with this part.

Planting stock. Any plant or plant

tissue, including rhizomes, shoots, leaf

or stem cuttings, roots or tubers used in

plant production or propagation.

Preliminary evaluation. A

determination made by a certifying

agent, prior to an initial inspection of

the operation to be certified, as to

whether a person seeking certification of

an operation may be in compliance with

the regulations in this part.

Principal display panel. That part of

a label that is most likely to be

displayed, presented, shown, or

examined under customary conditions

of display for sale.

Processing. Cooking, baking, heating,

drying, mixing, grinding, churning,

separating, extracting, cutting,

fermenting, eviscerating, preserving,

dehydrating, freezing, or otherwise

manufacturing, and includes the

packaging, canning, jarring, or otherwise

enclosing food in a container.

Processing methods. Mechanical,

biological and chemical procedures

used in the preparation of an

agricultural product for market.

Producer. A person who engages in

the business of growing or producing

food or feed.

Production aid. A substance, material,

structure, or device, but not an

organism, which may or may not be an

active ingredient and may or may not be

a synthetic substance, used to

significantly aid a producer or handler

to produce, handle, or maintain the

integrity of, an agricultural product

during, production, handling and

marketing.

Production input. A substance or

agricultural product that is used to

produce or handle an agricultural

product.

Prohibited substance. A substance

whose use in any aspect of organic

production or handling is prohibited or

not provided for in the Act or the

regulations in subpart B of this part.

Proper manuring. Any use or

application of plant or animal materials,

including green manure crops, so as to

improve soil fertility, especially its

organic content, including the use of

compost and other recycled organic

wastes whether or not they contain

livestock manure.

Putrefaction. Partial anaerobic

decomposition of organic matter so that

it releases noxious oxidation products

and gases, attracts vermin, or harbors

pathogens.

Records. Any information in written,

visual, or electronic form that

documents the activities undertaken by

a producer, handler, or certifying agent

to comply with the Act and regulations

in this part. Records include

questionnaires, affidavits, inspection

reports, field or production logs, maps

or facility diagrams, receipts, invoices,

billing statements, bills of lading,

inventory control documents, laboratory

analysis reports, minutes of meetings,

personnel files, correspondence,

photographs and other materials.

Responsibly connected. Any person

who is a partner, officer, director,

holder, manager, or owner of 10 per

centum or more of the voting stock of

an applicant or a recipient of

certification or accreditation.

Routine use of parasiticide.

Administering a parasiticide to an

animal without cause.

Secretary. The Secretary of

Agriculture or a representative to whom

authority has been delegated to act in

the Secretary’s stead.

Site evaluation. An examination of a

certifying agent’s operations and records

at its places of business for the purpose

of determining, reviewing or evaluating

accreditation status under these

regulations.

Slaughter stock. Any animal that is

intended to be slaughtered for human

consumption.

Soil amendment. Substance or

material applied to the soil as a

production input to improve its

physical qualities or biological activity,

complement or increase soil organic

matter content, or complement or adjust

a soil nutrient level.

Soil quality. Observable indicators of

the physical, chemical or biological

condition of soil.

Split operation. An organic farming

operation that also produces crops or

livestock that are not organically

produced in accordance with the Act

and the regulations of this part.

State. Any State, Territory, the

District of Columbia, or the

Commonwealth of Puerto Rico.

State organic certification program. A

program that meets the requirements of

section 2107 of the OFPA (7 U.S.C.

6506), is approved by the Secretary, and

is designed to ensure that an

agricultural product that is sold or

labeled as organically produced under

the Act is produced and handled using

organic methods.

Subtherapeutic. Administration of an

animal drug, at levels that are below the

levels used to treat clinically sick

animals, for the purpose of increasing

weight gain or improving feed

efficiency.

Suspension of accreditation. An

action taken by the Secretary that results

in a certifying agent losing its authority

to carry out certification activities.

Synergist. A substance that is an

active ingredient which enhances the

activity or efficiency of another

substance, thereby reducing the amount

of other active ingredients needed to

achieve the desired function or result.

Synthetic. A substance that is

formulated or manufactured by a

chemical process or by a process that

chemically changes a substance

extracted from naturally occurring

plant, animal, or mineral sources,

except that such term shall not apply to

substances created by naturally

occurring biological processes.

Synthetic volatile solvent. A synthetic

substance used as a solvent, which

evaporates readily, such as hexane or

isopropyl alcohol.

System of organic farming and

handling. A system that is designed to

produce agricultural products by the use

of methods and substances that

maintain the integrity of organic

agricultural products until they reach

the consumer. This is accomplished by

using, where possible, cultural,

biological and mechanical methods, as

opposed to using substances, to fulfill

any specific function within the system

so as to: maintain long-term soil

fertility; increase soil biological activity;

ensure effective pest management;

recycle wastes to return nutrients to the

land; provide attentive care for farm

animals; and handle the agricultural

products without the use of extraneous

synthetic additives or processing in

accordance with the Act and regulations

in this part.

Transplant. An annual seedling

grown on a certified organic farm and

transplanted to a field on the same farm

operation to raise an organically

produced crop.

Treated. A seed, plant propagation

material or other material purchased for

use as a production input in an organic

farming or handling operation that has

been treated or combined with a

synthetic pesticidal substance (that does

not appear on the National List) prior to

having been purchased.

Unavoidable residual environmental

contamination. The residue level of a

prohibited substance, as determined by

the Secretary in consultation with the
65940 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

applicable governing State official and

the appropriate environmental

regulatory agencies, that could be

expected to exist in the soil at, or in a

product originating from, a specific

production site to which the prohibited

substance had not been applied for a

minimum of three years.

Untreated seeds. Seeds that have not

been treated with a prohibited

substance.

USDA Seal. The logo described in

§ 205.107 of subpart C of this part.

Weed. Any plant that directly

competes or interferes with the growth

or harvest of a crop.

Wild crop. Any plant or portion of a

plant that is collected or harvested from

an area of land that is not maintained

under cultivation or other agricultural

management.

Subpart B—Organic Crop and

Livestock Production and Handling

Requirements

§ 205.3 Applicability.

(a) Any agricultural product that is

sold, labeled, or represented as organic

shall be:

(1) Produced in accordance with the

requirements specified in § 205.3 and

§§ 205.5 through 205.9, or §§ 205.12

through 205.15, and all other applicable

requirements of part 205 on a certified

organic farm; or

(2) Harvested, if a wild crop, in

accordance with the requirements

specified in § 205.11 and all other

applicable requirements of part 205; and

(3) Handled in accordance with the

requirements specified in § 205.3 and

§§ 205.16 through 205.19 and all other

applicable requirements of part 205 in a

certified organic handling operation.

(b) A method or substance that is used

in accordance with this subpart shall be

used in accordance with all applicable

requirements of part 205 and shall be

selected and used such that:

(1) Use or application of the practice

or substance does not result in

measurable degradation of soil or water

quality; and

(2) A commercially available nonsynthetic (natural) substance is selected

in preference to an allowed synthetic

substance if the two substances are

equally suitable for the intended

purpose and there is no discernable

difference between the two substances

in terms of their effects on soil or water

quality.

§ 205.4 [Reserved]

Organic Crop Production Requirements

§ 205.5 Land requirements.

(a) Any field or farm parcel from

which organically produced crops are

intended to be harvested shall:

(1) Have had no prohibited

substances, as delineated in the

categories of substances prohibited for

use in organic farming and handling set

forth in § 205.21, applied to it for a

period of three years immediately

preceding harvest of the crop; and

(2) Have clearly defined and

identifiable boundaries.

(b) If organically managed land

adjoins any area that is not under

organic management, a producer shall

implement, or include in the organic

plan a proposal to implement, physical

barriers, diversion of runoff, buffer areas

or other means to prevent the possibility

of unintended application of a

prohibited substance to the land or

contact of a prohibited substance with

the land on which organically produced

crops are grown.

§ 205.6 Crop rotation.

A crop rotation or other means of

ensuring soil fertility and effective pest

management in any field or farm parcel

shall be established.

§ 205.7 Soil fertility and crop nutrient

management.

(a) Tillage and cultivation. Tillage and

cultivation implements and practices

shall be selected and used in a manner

that does not result in measurable

degradation of soil quality.

(b) Proper manuring. Composted or

uncomposted plant or animal materials

used to replenish soil organic matter

content and essential crop nutrients

shall be selected according to the

following order of preference, and used

in a manner that does not significantly

contribute to water contamination by

nitrates and bacteria, including human

pathogens, or result in other measurable

degradation of soil or water quality:

(1) Any composted materials, except

those materials provided for in

paragraphs (b)(4) and (5) of this section;

(2) Any uncomposted materials of

plant or animal origin, including aged,

fully decomposed animal manure, that

are not known to have a high soluble

nutrient content or that are not prone to

putrefaction.

(3) Any materials of plant or animal

origin that are known to have a high

soluble nutrient content or that are

prone to putrefaction.

(4) Plant or animal waste materials

that contain non-active residues of

substances may be applied, Provided,

That the plant or animal material is

composted prior to application, and

Provided, Further That levels of any

non-active residues detected in the raw

plant or animal waste materials do not

increase in the soil.

(5) Chemically altered plant and

animal waste materials may be applied,

Provided, That such material appears on

the National list of active synthetic

substances allowed for use in organic

crop production provided for in

§ 205.22, and Provided, Further That

levels of any non-active synthetic

residues or heavy metals detected in the

plant or animal waste materials do not

increase in the soil.

(c) Providing mineral nutrients. A

substance used as a source of major

nutrients or micronutrients shall be

selected from the following:

(1) A non-synthetic substance of low

solubility may be added to soil,

including:

(i) A non-synthetic mineral having a

low solubility and salt index;

(ii) A substance extracted from a plant

or animal substance or from a mined

mineral; and

(iii) Ash obtained from the burning of

a plant or animal material, except as

prohibited in paragraphs (d) (2) or (3) of

this section, Provided, That the material

burned has not been treated or

combined with a prohibited substance,

or the ash is not included on the

National List of non-synthetic

substances prohibited for use in organic

crop production.

(2) A highly soluble or synthetic

substance may be added to soil to

correct a known nutrient deficiency,

Provided, That its use does not result in

measurable degradation of soil or water

quality. Highly soluble or synthetic

substances include:

(i) A synthetic substance included on

the National List of active synthetic

substances allowed for use in organic

crop production applied as a source of

micronutrients, Provided, That the

substance is not applied in a manner

intended to be herbicidal;

(ii) A non-synthetic mineral that is

highly soluble and has a high salt index;

or

(iii) A cation balancing agent,

Provided, That the specific cation

balancing agent appears on the National

List of active synthetic substances

allowed for use in organic crop

production if it is synthetic or of

unknown origin.

(d) Prohibited. The following methods

or substances are prohibited for use in

soil fertility and crop nutrient

management:

(1) The use of any fertilizer or

commercially blended fertilizer that
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65941

contains an active synthetic substance

not allowed for use in crop production

as provided for in § 205.22, or that

contains an active prohibited substance;

(2) The use of ash obtained from the

disposal of manure by burning; and

(3) The burning of manure or crop

residues produced on the farm as a

means of disposal.

§ 205.8 Selection and use of seeds,

seedlings and planting stock.

(a) Organically produced seeds and

planting stock, including annual

seedlings and transplants, shall be used,

except that non-organically produced

seeds and planting stock may be used to

produce an organic crop when an

equivalent organically produced variety

is not commercially available, and

Provided, That:

(1) Treated seeds are used only when

untreated seeds of the same variety are

not commercially available or

unanticipated or emergency

circumstances make it infeasible to

obtain untreated seeds; and

(2) Untreated planting stock is

selected in preference to treated

planting stock whenever there is a

choice.

(b) Non-organically produced planting

stock to be used as planting stock to

produce a perennial crop may be sold,

labeled or represented as organically

produced only after the planting stock

has been maintained under a system of

organic management on a certified

organic farm for a period of no less than

one crop year.

(c) Prohibited. Transplants that have

been treated with a prohibited substance

are prohibited for use as planting stock.

§ 205.9 Prevention and control of crop

pests, weeds, and diseases.

(a) Pests, weeds, and diseases in crops

shall be prevented by practices

including, but not limited to:

(1) Crop rotation or other means

provided for in § 205.6;

(2) Replenishment and maintenance

of soil fertility in accordance with

§ 205.7;

(3) Sanitation measures to remove

disease vectors, weed seeds and habitat

for pest organisms; and

(4) Cultural practices that enhance

crop health, including selection of plant

species and varieties with regard to

suitability to site-specific conditions

and resistance to prevalent pests, weeds

and diseases.

(b) If pest prevention measures

provided for in paragraph (a) of this

section are not effective, pest problems

shall be controlled through:

(1) Augmentation or introduction of

predators or parasites of the pest

species;

(2) Mechanical or physical controls;

or

(3) Non-synthetic, non-toxic controls

such as lures and repellents.

(c) If weed prevention measures

provided for in paragraph (a) of this

section are not effective, weeds shall be

controlled through:

(1) Mulching with fully biodegradable

materials;

(2) Livestock grazing;

(3) Mechanical, heat or electrical

means; or

(4) Plastic or other synthetic mulches,

Provided, That they are removed from

the field at the end of the growing or

harvest season.

(d) If disease prevention measures

provided for in paragraph (a) of this

section are not effective, plant diseases

shall be controlled through practices

that suppress the spread of disease

organisms, including, but not limited to,

steam sterilization of growing media.

(e) If the practices provided for in

paragraphs (a) through (d) of this section

are not effective to prevent or control

crop pests, weeds and diseases, the

following substances may be used

Provided, That its use does not result in

measurable degradation of soil or water

quality:

(1) Any non-synthetic biological or

botanical substance, or synthetic

substance that is included on the

National List of active synthetic

substances allowed for use in crop

production, may be applied to prevent,

suppress or control pests, weeds or

diseases.

(2) A synthetic substance that is

included on the National List of active

synthetic substances allowed for use in

crop production may be used to

defoliate cotton.

(f) Prohibited. A synthetic carbonbased substance that functions through

a cytotoxic mode of action shall not be

applied for any prevention or control

purpose.

§ 205.10 [Reserved]

§ 205.11 Wild crop harvesting.

(a) Any land from which a wild crop

intended to be sold, labeled or

represented as organic is harvested shall

have had no prohibited substance, as

delineated in the categories of

substances prohibited for use in organic

farming and handling set forth in

§ 205.21, applied to it for a period of

three years immediately preceding the

harvest of the wild crop and at any time

thereafter.

(b) A wild crop shall be harvested in

a manner that assures that such

harvesting or gathering will not be

destructive to the environment and will

sustain the growth and production of

the wild crop.

Organic Livestock Production

Requirements

§ 205.12 Origin of livestock.

(a) Origin of livestock. Livestock on a

certified organic farm that themselves or

their products are to be sold, labeled, or

represented as organically produced

shall have been under organic

management from birth or hatching, or

shall be the offspring of parents who

have been under organic management,

except that:

(1) Breeder stock. Livestock may be

designated as breeder stock for offspring

that are to be raised as organic livestock

upon entry onto a certified facility,

Provided, That, if such livestock is a

gestating mammal, she must be brought

onto the certified facility prior to the

last third of pregnancy;

(2) Dairy livestock. Livestock may be

designated as organic dairy livestock

from which milk or milk products

obtained therefrom can be sold, labeled

or represented as organically produced,

Provided, That she is brought onto a

certified facility beginning no later than

12 months prior to the production of the

milk or milk products that are to be

sold, labeled or represented as organic;

(3) Poultry. Poultry may be designated

as organic poultry from which meat or

eggs obtained therefrom can be sold,

labeled or represented as organically

produced, Provided, That they are

brought onto a certified facility

beginning no later than the second day

of life;

(4) Livestock used for the production

of non-edible livestock products.

Livestock may be designated as

livestock from which skin, fur, feathers,

fibers and all non-edible products

obtained therefrom can be sold, labeled

or represented as organically produced,

Provided, That such livestock are

brought onto a certified facility in

accordance with one of the

subparagraphs of paragraph (a) of this

section and, Provided, Further That any

livestock not raised under organic

management from birth or hatching

shall have been under organic

management no less than 90 days prior

to harvest of the non-edible product

intended to be sold, labeled, or

represented as organic; and

(5) Other livestock. Livestock, other

than those described in paragraphs

(a)(1) through (4) of this section, may be

designated as organic livestock from

which edible products obtained

therefrom, can be sold, labeled, or

represented as organically produced, if

brought onto a certified facility:
65942 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

(i) At any stage of life for bees;

(ii) If necessary, no later than the 15th

day of life for mammalian livestock of

non-organic origin to be designated as

organic slaughter stock for the

production of meat; or

(iii) No later than the earliest

commercially available stage of life for

livestock types other than bees, or

mammalian livestock designated as

slaughter stock.

(b) Prohibited. The following practices

are prohibited:

(1) The switching of livestock or

facilities between organic and nonorganic management methods for the

purpose of circumventing any provision

of this part; and

(2) The use of hormones for breeding

purposes.

§ 205.13 Livestock feed.

(a) Feeding of livestock. (1)

Agricultural products, including pasture

and forage, that are organically

produced and, if applicable, organically

handled in accordance with the Act and

the regulations in subpart B of this part

shall comprise the total feed ration of

livestock under organic management,

Provided, However, That if necessary:

(i) Livestock, other than as provided

for in paragraphs (a)(1)(ii) through (iv)

of this section, may receive a maximum

of 20 percent of the total feed ration in

a given year that is not organically

produced;

(ii) The Administrator may authorize

the use of non-organic feed in addition

to the amount provided for in paragraph

(a)(1)(i) of this section in an emergency

situation determined by the

Administrator to affect the commercial

availability of organic feed;

(iii) An entire distinct herd of dairy

livestock that is converted to organic

management for the first time may be

provided with non-organic feed until 90

days prior to the production of milk or

milk products to be sold, labeled, or

represented as organic; and

(iv) Bees from which organic honey

and other products are harvested shall

have access to forage organically

produced in accordance with the

requirements specified in §§ 205.3

through 205.11 so as to comprise the

predominant portion of their forage

needs.

(2) Non-agricultural products

provided as vitamin or mineral

supplements may be used to satisfy the

health requirements of livestock under

organic management, Provided, That a

synthetic supplement is included on the

list of synthetic substances permitted for

use in livestock production provided for

in § 205.24.

(3) Synthetic amino acid additives

that appear on the list of synthetic

substances permitted for use in

livestock production as set forth in

§ 205.24 may be fed to livestock under

organic management only as necessary

for the purpose of fulfilling the

nutritional requirements of the

livestock.

(b) Prohibited. The following

substances or methods for the feeding of

livestock are prohibited:

(1) The use of hormones or growth

promoters whether implanted, injected,

or administered orally;

(2) The use of the following for the

purpose of stimulating the growth or

production of the livestock:

(i) Antibiotics or other animal drugs;

(ii) Synthetic amino acid additives or

synthetic trace elements fed above

levels needed for adequate nutrition;

and

(3) The feeding of plastic pellets for

roughage, feed formulas containing

urea, or the refeeding of manure.

§ 205.14 Livestock health care.

(a) The health of livestock under

organic management shall be

maintained by the implementation of

preventive measures, including, but not

limited to:

(1) Providing diverse feedstuffs;

(2) Establishing appropriate housing,

pasture conditions and sanitation

practices so as to minimize the

occurrence and spread of diseases and

parasites;

(3) Administering veterinary

biologics, vitamins and minerals; and

(4) Selecting species and types of

livestock with regard to suitability for

site-specific conditions and resistance to

prevalent diseases and parasites.

(b) If the preventive measures

provided for in paragraph (a) of this

section are not effective in maintaining

livestock health, an animal drug may be

administered to any animal at any time

of life, except as prohibited by

paragraph (d) of this section, and

Provided, That:

(1) Animal drugs, other than animal

drugs administered topically or

parasiticides, may be administered to

mammals intended as organic slaughter

stock only within the first 21 days of

life; and

(2) Animal drugs, other than animal

drugs administered topically or

parasiticides, may be administered to

livestock intended as organic slaughter

stock, other than mammals, only within

the first 7 days after arrival onto a

certified facility.

(c) A product from organic livestock

to which an animal drug has been

administered shall be obtained and

thereafter sold, labeled, or represented

as organic only after the producer has

determined that the animal has fully

recovered from the condition(s) being

treated, but in no case shall that time be

less than the withdrawal period

specified on the label or labeling of the

animal drug or as required by the

veterinarian.

(d) Prohibited. The following

livestock health care methods are

prohibited:

(1) Administering any animal drug,

other than vaccinations, in the absence

of illness;

(2) The routine use of synthetic

internal parasiticides; and

(3) The subtherapeutic use of

antibiotics.

§ 205.15 Livestock living conditions and

manure management.

(a) The following living conditions

shall be adequately provided, as

appropriate to the species, to promote

livestock health:

(1) Protection from the elements;

(2) Space for movement;

(3) Clean and dry living conditions;

(4) Access to outside; and

(5) Access to food and clean water.

(b) If necessary, livestock may be

maintained under conditions that

restrict the available space for

movement or their access to the outside,

Provided, That the other living

conditions specified in paragraph (a) of

this section are adequate to maintain

their health without the use of animal

drugs, except as provided in § 205.14(b).

(c) Manure management practices

used to maintain any area in which

livestock are housed, pastured or

penned shall be implemented in a

manner that:

(1) Does not result in measurable

degradation of soil quality;

(2) Does not significantly contribute to

contamination of water by nitrates and

bacteria, including human pathogens;

(3) Optimizes recycling of nutrients;

and

(4) Does not include burning or any

practice inconsistent with the

provisions of § 205.14(a)(2).

Organic Handling Requirements

§ 205.16 Product composition.

(a) For an agricultural product,

including a raw agricultural product,

sold, labeled, or represented as organic:

(1) Organically produced agricultural

products shall comprise 100 percent of

the total weight of the finished product,

excluding water and salt, except that not

more than five percent of the total

weight of the finished product,

excluding water and salt, may consist of

one or more of the following ingredients

that are included on the National List:
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65943

(i) Non-agricultural substances

allowed as ingredients in or on

processed products sold, labeled, or

represented as organic or made with

certain organic ingredients, provided for

in § 205.26; and

(ii) Non-organically produced

agricultural products allowed as

ingredients in or on processed products

sold, labeled, or represented as organic

or made with certain organic

ingredients, provided for in § 205.27.

(2) An ingredient intended to be used

in a processed product sold, labeled, or

represented as organic shall be selected

according to the following order of

preference:

(i) An organically produced

agricultural product, if commercially

available, shall be selected for use as an

ingredient in preference to a nonorganically produced agricultural

product or a non-agricultural ingredient

included on the National List;

(ii) A non-organically produced

agricultural product, if commercially

available, shall be selected for use as an

ingredient in preference to a nonagricultural ingredient allowed on the

National List; and

(iii) A non-organically produced

agricultural product or a nonagricultural ingredient included on the

National List that is extracted without

the use of a synthetic volatile solvent or

which does not contain propylene

glycol as a carrier, if commercially

available, shall be selected in preference

to a product or ingredient that is

extracted with a synthetic volatile

solvent or which contains propylene

glycol as a carrier.

(b) For an agricultural product sold,

labeled, or represented as made with

certain organic ingredients on the

principal display panel:

(1) Organically produced agricultural

products shall comprise at least 50

percent, but less than 95 percent, of the

total weight of the finished product,

excluding water and salt;

(2) The percentage of the total weight

of the finished product, excluding water

and salt, that is not comprised of

organically produced agricultural

products shall consist of one or more of

the following ingredients:

(i) Non-agricultural substances

allowed as ingredients in or on

processed products sold, labeled, or

represented as organic or made with

certain organic ingredients, provided for

in § 205.26; and

(ii) Non-organically produced

agricultural products allowed as

ingredients in or on processed products

sold, labeled, or represented as organic

or made with certain organic

ingredients, provided for in § 205.27;

and

(3) The finished product shall have

been produced in compliance with

§§ 205.16 through 205.19 of this

subpart, except that the provisions set

forth in §§ 205.16 (a) and (c) shall not

apply.

(c) Multi-ingredient agricultural

products that only represent the organic

nature of such ingredients in the

ingredients statement and which

themselves are not sold, labeled or

represented as organic or made with

certain organic ingredients shall not be

subject to the provisions of this subpart,

except for the provisions for prevention

of commingling and contact of organic

products by prohibited substances, as

set forth in § 205.19, with respect to any

organically produced ingredients.

(d) Organic and non-organic forms of

the same agricultural ingredient shall

not be combined in a product sold,

labeled, or represented as organic or

made with certain organic ingredients if

the ingredient is represented as organic

in the ingredient statement.

(e) The addition of the following

substances to any agricultural product

intended to be sold, labeled, or

represented as organic or made with

certain organic ingredients is

prohibited:

(1) Any sulfites, nitrates, or nitrites; or

(2) Water that does not meet the

requirements of the Safe Drinking Water

Act. (42 U.S.C. 300(f) et seq.).

§ 205.17 Processing practices.

(a) Mechanical or biological methods,

including cooking, baking, heating,

drying, mixing, grinding, churning,

separating, extracting, cutting,

fermenting, eviscerating, preserving,

dehydrating, freezing or chilling shall be

used to process an agricultural product

intended to be sold, labeled, or

represented as organic or made with

certain organic ingredients for the

purpose of retarding spoilage or

otherwise preparing the agricultural

product for market; Provided, However,

That if necessary an incidental additive,

except for volatile synthetic solvents

prohibited in paragraph (b)(3) of this

section, may be used to process such

agricultural product.

(b) Prohibited. The following methods

and substances are prohibited for use in

the processing and preparation of a raw

agricultural product, and on a finished

agricultural product, intended to be

sold, labeled, or represented as organic

or made with certain organic

ingredients:

(1) Storing, coating or packaging in a

storage container or bin, including

packages or packaging materials, that

contain a synthetic fungicide,

preservative, or fumigant;

(2) The use or reuse of any bag or

container that had previously been in

contact with any substance in such a

manner as to compromise the organic

integrity of any products; and

(3) The use of a volatile synthetic

solvent.

§ 205.18 Prevention and control of facility

pests.

(a) Pest occurrence in a certified

organic handling facility shall be

prevented by methods including, but

not limited to:

(1) Measures to remove potential

habitat of, or access to handling

facilities by, pest organisms; and

(2) Management of environmental

factors, such as temperature, light,

humidity, atmosphere and air

circulation to prevent pest reproduction.

(b) If pest prevention measures

provided in paragraph (a) of this section

are not effective, facility pest problems

shall be controlled through:

(1) Augmentation or introduction of

predators or parasites for the pest

species;

(2) Mechanical or physical controls

including, but not limited to, traps, light

or sound; or

(3) Non-toxic, non-synthetic controls,

such as lures and repellants.

(c) If pest prevention or control

measures provided for in paragraphs (a)

and (b) of this section are not effective,

any substance may be used to control

pests, Provided, That:

(1) The substance is approved for its

intended use by the appropriate

regulatory authority; and

(2) The substance is applied in a

manner that prevents such substance

from contacting any ingredient or

finished product intended to be sold,

labeled, or represented as organic or

made with certain organic ingredients.

§ 205.19 Prevention of commingling and

contact with prohibited substances.

A certified handling operation, and a

handling operation that is exempt or

excluded from certification in

accordance with § 205.202(a)(3) or

§ 205.202(b) of subpart D, shall

establish, as appropriate, adequate

safeguards during the handling, storage

and transportation of organically

produced products in order to:

(a) Prevent the commingling of

organic and non-organic products; and

(b) Assure that organic products and

certified facilities are protected from

contact with prohibited substances.
65944 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

The Use of Active Synthetic Substances,

Non-Synthetic Substances, NonAgricultural (Non-Organic) Substances

and Non-Organically Produced

Ingredients in Organic Farming and

Handling Operations, Including the

National List of Allowed and Prohibited

Substances

§ 205.20 General rules for categories of

substances and ingredients permitted for

use in organic farming and handling.

(a) Any active synthetic substance or

ingredient on the National List, as set

forth in §§ 205.22, 205.24, 205.26 and

205.27, is permitted for use in a certified

organic farming or handling operation

in accordance with the Act and the

regulations in part 205.

(b) Any other non-prohibited

substance or ingredient may be used in

a certified organic farming or handling

operation if used in accordance with the

Act and all other applicable provisions

of part 205. These substances or

ingredients are:

(1) A non-synthetic substance that is

not included on the National List as a

prohibited non-synthetic substance in

either § 205.23 or § 205.25;

(2) A synthetic substance or device

that does not function as an active

ingredient or substance in a system of

organic farming and handling, or as an

active ingredient in a processed

product; and

(3) A formulated product containing

inert ingredients (substances) that is

used in a certified organic farming

operation, Provided, That the

formulated product does not contain:

(i) Any active ingredient prohibited

under § 205.21; and

(ii) Any synthetic inert ingredient

classified by EPA as an inert of

toxicological concern.

§ 205.21 General rules for categories of

substances and ingredients prohibited for

use in organic farming and handling.

The following synthetic and nonsynthetic substances and ingredients are

prohibited for use in a certified organic

farming or handling operation:

(a) An active synthetic substance that

is not included on the National List as

an allowed synthetic substance in either

§ 205.22 or § 205.24, including any

synthetic carbon-based substance that

functions through a cytotoxic mode of

action;

(b) A non-agricultural substance, used

as an ingredient in or on a processed

product labeled as organic or made with

certain organic ingredients, that is not

included on the National List as a nonagricultural substance in § 205.26;

(c) A non-synthetic substance that is

included on the National List as a

prohibited non-synthetic substance, in

either § 205.23 or § 205.25;

(d) A formulated product that

contains any synthetic inert ingredient

classified by EPA as an inert of

toxicological concern; and

(e) A fertilizer or commercially

blended fertilizer that contains an active

synthetic substance not allowed for use

in crop production as provided for in

§ 205.22, or that contains an active

prohibited substance.

The National List of Allowed and

Prohibited Substances

Crop Production Substances

§ 205.22 Active synthetic substances

allowed for use in organic crop production.

The following may be used in

accordance with any restrictions

specified in this section and §§ 205.3

through 205.10 of subpart B:

(a) Horticultural oils may be used as

insect pest smothering or suffocating

agents. Horticultural oils include:

(1) Dormant oils;

(2) Suffocating oils; and

(3) Summer oils.

(b) Soaps may be used as insecticides,

algicides, de-mossers, large animal

repellants, and herbicides.

(c) Production aids may be used as

follows:

(1) Acetic acid may be used as a

pesticide;

(2) Pheromones may be used as insect

mating disruptors;

(3) Vitamins may be used as growth

promoters and rooting facilitators;

(4) Vitamin D3 may be used as a

rodenticide;

(5) Amino acids may be used as

growth promoters;

(6) Antibiotics may be used as

pesticides;

(7) Magnesium sulfate may be used as

a cation balancing agent;

(8) Newspaper and other recycled

paper products may be used as mulch

and compost feedstocks;

(9) Piperonyl butoxide may be used as

a synergist;

(10) Potassium sulfate may be used as

a cation balancing agent; and

(11) Boric Acid may be used as a

pesticide.

(d) Toxins, derived from genetically

engineered bacteria (or other

microorganisms) that are not released

live into the agroecosystem, may be

used as pesticides.

(e) Copper and sulfur compounds as

follows may be used as pesticides:

(1) Bordeaux mixes;

(2) Copper, including fixed coppers

exempt from tolerance by EPA:

hydroxides, basic sulfates, oxychlorides,

and oxides;

(3) Lime sulfur, including calcium

polysulphide, and

(4) Sulfur dioxide.

(f) Micronutrient minerals as follows

may be used:

(1) Chelated micronutrients;

(2) Soluble boron products; and

(3) Sulfates, carbonates, oxides, or

silicates of zinc, iron, manganese,

molybdenum, selenium, cobalt or

copper.

(g) Minerals as follows may be used

as defoliants in organic fiber

production:

(1) Calcium chloride;

(2) Magnesium chloride;

(3) Sodium chlorate; and

(4) Sodium chloride.

§ 205.23 Non-synthetic substances

prohibited for use in organic crop

production.

None.

Livestock Production Substances

§ 205.24 Active synthetic substances

allowed for use in organic livestock

production.

Any substance in the following

categories may be used in organic

livestock production in accordance with

any restrictions specified in this section

and §§ 205.3, and 205.12 through 205.15

of subpart B:

(a) Trace minerals;

(b) Nutrients and dietary

supplements;

(c) Feed additives, Provided, That

they are also included in § 205.26;

(d) Animal drugs and other animal

health care substances;

(e) Vaccines and biologics; and

(f) Pest control substances, Provided,

That they are also included in § 205.22.

§ 205.25 Non-synthetic substances

prohibited for use in organic livestock

production.

None.

Processed Product Substances

§ 205.26 Non-agricultural (non-organic)

substances allowed as ingredients in or on

processed products labeled as organic or

made with certain organic ingredients.

The following non-agricultural

ingredients may be used only in

accordance with any restrictions

specified in §§ 205.3, and 205.16

through 205.19 of subpart B:

Non-agricultural Substances Allowed as

Ingredients in or on Processed Products

Labeled as Organic or Made With Certain

Organic Ingredients

Agar-agar

Alginates

Alginic Acid

Aluminum-free baking powder

Ammonium bicarbonate
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65945

Ammonium carbonate

Ascorbic acid

Beeswax

Calcium carbonate

Calcium chloride

Calcium citrate

Calcium sulfate

Calcium hydroxide

Calcium phosphates (mono, di and tribasic)

Candelilla wax

Carbon dioxide

Carnauba wax

Carrageenan

Chymosin

Citric acid

Colors, non-synthetic

Cultures, dairy, non-synthetic

Dipotassium phosphate

Enzymes, non-synthetic

Glycerin

Gums

Lactic acid

Lecithin, unbleached or bleached

Magnesium chloride

Magnesium carbonate

Magnesium stearate

Magnesium sulfate

Mono and diglycerides

Natural flavoring agents, non-synthetic

Nutrient supplements

Pectin, low-methoxy and native (highmethoxy)

Potassium acid tartrate

Potassium carbonate

Potassium chloride

Potassium citrate

Potassium phosphate

Silicon dioxide

Sodium bicarbonate

Sodium carbonate

Sodium citrate

Sodium phosphates (mono, di and tribasic)

Sulfur dioxide (not to exceed 100 ppm when

used in wine)

Tartaric acid

Tocopherols

Whey and its fractions

Wood rosin

Xanthan gum

Yeast autolysate, non-synthetic

Yeast, bakers, non-synthetic

Yeast, brewers, non-synthetic

Yeast, nutritional, non-synthetic

Yeast, smoked, non-synthetic

§ 205.27 Non-organically produced

agricultural products allowed as ingredients

in or on processed products labeled as

organic or made with certain organic

ingredients.

Any non-organically produced

agricultural product may be used in

accordance with any restrictions

specified in § 205.16.

§ 205.28 Amending the National List.

(a) Purpose of petition process. Any

person may petition the NOSB for the

purpose of having a substance evaluated

for recommendation to the Secretary for

inclusion on the National List.

(b) A petition may be submitted to:

Program Manager, USDA/AMS/TM/

NOP, Room 2945 South Building, P.O.

Box 96456, Washington, D.C. 20090–

6456.

(c) Categories of substances. A

substance may be added to the National

List only in the following categories:

(1) Active synthetic substances

allowed for use in organic crop or

livestock production;

(2) Non-synthetic substances

prohibited for use in organic crop or

livestock production; or

(3) Non-agricultural substances

allowed for use as ingredients in or on

processed products labeled as organic or

made with certain organic ingredients.

(d) Content of the petition. A person

should include in the petition as much

of the following information as is

available to the person for each specific

substance:

(1) Background information about the

following:

(i) Substance name (generic or

common name);

(ii) Manufacturer’s name, address, and

telephone number, if different from the

petitioner’s;

(iii) Area of intended or current use

(crops, livestock, or handling);

(iv) Current or intended use of the

substance;

(v) Sources from which the substance

is derived;

(vi) Description of the manufacturing

or processing procedures for the

substance; and

(vii) Summary of previous reviews of

the substance by State or private organic

certification programs or other

organizations that review materials.

(2) Regulatory Information (as

applicable) including, but not limited

to:

(i) EPA registration (include the

registration number);

(ii) Food and Drug Administration

registration;

(iii) State regulatory authority

registration (include State registration

number);

(iv) Chemical Abstract Service (CAS)

number or other product number; and

(v) Labels of products that contain the

petitioned substance.

(3) Research, characteristics, and

safety information:

(i) Detailed findings relevant to the

following characteristics of the

substance:

(A) Detrimental chemical interactions

with other materials used in organic

production;

(B) Toxicity and persistence in the

environment;

(C) Environmental contamination

resulting from its use and manufacture;

(D) Effects on human health; and

(E) Effects on soil organisms, crops

and livestock;

(ii) Bibliographies of pertinent

research on the substance;

(iii) Material Safety Data Sheet

(MSDS);

(iv) Information on the substance

obtained from the National Institute of

Environmental Health Studies; and

(v) Information on whether all or part

of any submission is believed to be

confidential commercial information,

and if so, what parts, and the basis for

the belief that it is confidential

commercial information and should not

be released to the public.

(4) Statements of justification for

placement on the National List, as

follows:

(i) If petitioning for approval of an

active synthetic substance or nonagricultural ingredient, state the reasons

why the substance is necessary to the

production or handling of the organic

product;

(ii) If petitioning for prohibition of a

non-synthetic substance, state the

reasons why the use of the nonsynthetic substance should not be

permitted in organic farming or

handling; or

(iii) Describe alternative substances or

alternative cultural methods that could

be utilized in place of the substance,

summarize effects on the environment,

human health, and the agroecosystem,

and describe its compatibility with a

system of sustainable agriculture.

(e) The Secretary or the NOSB may

request additional information from the

petitioner following receipt of the initial

petition if necessary to evaluate the

substance.

§§ 205.29 through 205.99 [Reserved]

Subpart C—Labels, Labeling, and

Market Information

§ 205.100 Agricultural products in

packages sold, labeled, or represented as

organic.

(a) Agricultural products in packages

described in § 205.16(a) of subpart B

that are sold, labeled, or represented as

organic may use the terms as described

below:

(1) The term organic on the principal

display panel to modify the name of the

product;

(2) The term organic in the

ingredients statement to modify the

name of an ingredient organically

produced and handled in accordance

with the Act and the regulations in this

part;

(3) On the principal display panel, the

following terms or marks:

(i) The USDA seal described in

§ 205.107; and

(ii) A seal representing a State organic

program approved by the Secretary, as
65946 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

provided for in § 205.402 of subpart F;

and

(4) On the information panel, the

following terms or marks:

(i) The term organic used to modify

the name of the product;

(ii) The USDA seal described in

§ 205.107;

(iii) A seal representing a State

organic program approved by the

Secretary, as provided for in § 205.402

of subpart F; and

(iv) A certifying agent’s name, seal,

logo, or other identification which

represents that the farm, wild crop

harvesting, or handling operation that

produced or handled the finished

product is a certified operation.

(5) On other panels of the label,

labeling and market information: Any

term or mark identified in paragraph

(a)(4) of this section may be used on

package panels of labels not covered by

paragraph (a)(3) of this section as well

as on any labeling or market

information.

(b) [Reserved]

§ 205.101 Agricultural products in

packages sold, labeled, or represented as

made with certain organic ingredients.

(a) Agricultural products in packages

described in § 205.16(b) of subpart B

that are sold, labeled, or represented as

made with certain organic ingredients

shall use the terms and marks as

described below:

(1) The statement made with certain

organic ingredients on the principal

display panel; and

(2) The term organic in an ingredients

statement to modify the name of an

ingredient organically produced and

handled in accordance with the Act and

the regulations in this part.

(b) Agricultural products in packages

described in § 205.16(b) of subpart B

that are sold, labeled or represented as

made with certain organic ingredients

may use the terms and marks as

described below:

(1) On the information panel, the

following terms or marks:

(i) The statement made with certain

organic ingredients; and

(ii) A certifying agent’s name, seal,

logo, or other identification which

represents that the farm, wild crop

harvesting, or handling operation that

produced or handled the finished

product is a certified operation.

(2) On other panels of the label,

labeling and market information: Any

term or mark identified in paragraph

(b)(1) of this section may be used on

package panels of labels not covered by

paragraphs (a) or (b)(1) of this section,

as well as on labeling or market

information.

§ 205.102 Multi-ingredient agricultural

products that only represent the organic

nature of such ingredients in the

ingredients statement.

Any agricultural product composed of

more than one ingredient, no matter the

percentage organic ingredients it

contains, that only represents in an

ingredients statement the organic nature

of its ingredients, may use the term

organic in the ingredients statement of

a label, labeling, or market information,

to modify the name of an ingredient that

is organically produced and handled in

accordance with the Act and the

regulations in this part, without the

finished product having to comply with

the certification requirements set forth

in subpart D of this part, Provided, That

the record keeping requirements of

§ 205.202(c) of subpart D are satisfied,

and Provided, Further That the product

itself is not sold, labeled, or represented

as organic or made with certain organic

ingredients.

§ 205.103 Use of terms or statements that

directly or indirectly imply that a product is

organically produced and handled.

Any label, labeling or market

information that implies directly or

indirectly that a product, including an

ingredient, is organically produced and

handled may be used only for an

agricultural product, including an

ingredient, that has been produced and

handled in accordance with the Act and

the regulations in this part.

§ 205.104 Informational statements

prohibited.

The use of the following

informational statements on the

principal display panel and the

ingredients statement of products sold,

labeled, or represented as organic or

made with certain organic ingredients,

or products described in § 205.102 that

contain organic ingredients, is

prohibited:

(a) The phrase one hundred percent,

stated in letters, numbers or symbols,

used as part of any phrase or sentence

that includes the term organic;

(b) A statement of the percentage of

organic ingredients contained in a

product; and

(c) The phrase organic when available

or a term of similar meaning or intent.

§ 205.105 Agricultural products in a form

other than packages that are sold, labeled

or represented as organic or made with

certain organic ingredients.

(a) Agricultural products described in

§ 205.16(a) of subpart B, in a form other

than packages, that are sold or

represented as organic at the time of

retail sale may use the terms and marks

as described below:

(1) The term organic on the retail

display label, labeling or display

container to modify the name of the

product;

(2) The term organic in the

ingredients statement to modify the

name of an ingredient organically

produced and handled in accordance

with the Act and the regulations in this

part; and

(3) A clearly recognizable organic

identification mark(s) or term(s),

selected from the following, located in

plain view on the shipping container:

(i) The term organic used to modify

the name of the product;

(ii) The USDA seal as described in

§ 205.107;

(iii) A seal representing a State

organic program approved by the

Secretary as provided for in § 205.402 of

subpart F; or

(iv) The certifying agent’s name, seal,

logo, or other identification which

represents that the farm, wild crop

harvesting, or handling operation that

produced or handled the finished

product is a certified operation.

(b) Agricultural products described in

§ 205.16(b) of subpart B, in a form other

than packages, that are sold, labeled, or

represented as made with certain

organic ingredients shall use the terms

and marks as described below:

(1) The statement made with certain

organic ingredients on the retail display

label, labeling or display container;

(2) The term organic in the

ingredients statement to modify the

name of an ingredient organically

produced and handled in accordance

with the Act and the regulations in this

part; and

(3) The statement made with certain

organic ingredients, which may be

accompanied by the certifying agent’s

name, seal, logo, or other identification,

located in plain view on the shipping

container.

§ 205.106 Agricultural products produced

on an exempt farm or handling operation.

An agricultural product produced or

processed on a farm, wild crop

harvesting, or handling operation that

annually sells no more than $5,000 in

value of agricultural products and

which has not been certified, shall not:

(a) Display the USDA seal, or any

certifying agent’s name, seal, logo, or

other identification which represents

that the farm, wild crop harvesting, or

handling operation that produced or

handled the product is a certified

operation; or

(b) Be identified as an organic

ingredient in a product produced or

processed on a farm or handling

operation that annually sells more than

$5,000 in value of agricultural products.
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65947

§ 205.107 USDA seal.

(a) The USDA seal described in

paragraphs (b) and (c) of this section

shall be used in accordance with the

provisions of this subpart and shall be

used only on agricultural products (raw

or processed) described in § 205.16(a) of

subpart B that are sold, labeled, or

represented as organic and which are

produced and handled on certified

operations.

(b) The USDA seal used on a label,

labeling, or market information of an

agricultural product shall replicate the

form and design of the example in figure

1.

(c) Except as otherwise authorized by

the Secretary, the USDA seal shall be:

(1) Printed on a light background with

the wording and design in a dark color

or on a dark background with the

wording in a light color, Provided, That

such design is legible and conspicuous

on the material upon which it is

printed; or

(2) Printed in a standard four color

label as follows: concentric circles with

arrows and diagonal on a light

background with black letters; interior

globe cyan blue with green continents;

interior triangular sections green;

exterior triangle (border) yellow; and

both interior and exterior of triangular

border edged with black.

§§ 205.108 through 205.200 [Reserved]

Subpart D—Certification

§ 205.201 What has to be certified.

(a) Each farm, wild crop harvesting

operation, or handling operation that

produces or handles crops, livestock,

livestock products, or other agricultural

products that are, or that are intended

to be, sold, labeled or represented as

organic or made with certain organic

ingredients must be certified according

to the provisions of subpart D of this

part, and must meet all other applicable

requirements of this part, Provided,

That any handling operation that

provides handling services to fewer than

three certified entities that produce or

handle agricultural products that are, or

that are intended to be, sold, labeled or

represented as organic or made with

certain organic ingredients, would not

be required to be separately certified

apart from the operations for which it

provides such services, and Provided,

Further That none of the operations set

forth in paragraph (a) of this section

must be certified if exempt or excluded

in § 205.202 of this subpart.

(b) A handling operation, or portion of

a handling operation, that handles only

agricultural products that are, or that are

intended to be, sold, labeled or

represented as made with certain

organic ingredients is exempt from the

requirement to select a commercially

available non-synthetic substance in

preference to an allowed synthetic

substance, as set forth in § 205.3(b)(2) of

subpart B.

§ 205.202 Exemptions and exclusions from

certification.

(a) Exemptions. (1) A farm, wild crop

harvesting, or handling operation that

sells agricultural products as organic or

made with certain organic ingredients,

but which annually sells no more than

$5,000 in value of agricultural products,

is exempt from complying with the

requirements in this part, except for the

applicable recordkeeping provisions

delineated in paragraph (c)(1) of this

section and the applicable labeling

provisions set forth in subpart C of this

part.

(2) A retail operation, or portion of a

retail operation, that only handles

organically produced agricultural

products but does not process them is

exempt from the requirements in this

part.

(3) A handling operation, or portion of

a handling operation, that handles only

agricultural products that contain less

than 50 percent organic ingredients by

total weight of the finished product,

excluding water and salt, is exempt

from the requirements in this part,

except:

(i) The provisions for prevention of

commingling and contact of organic

products by prohibited substances set

forth in § 205.19 of subpart B with

respect to any organically produced

ingredients used in an agricultural

product; and

(ii) The applicable provisions for

labeling set forth in subpart C of this

part.

(b) Exclusions. (1) A handling

operation, or portion of a handling

operation, is excluded from the

requirements of this part, except for the

requirements for the prevention of

commingling and contact with

prohibited substances as set forth in

§ 205.19 of subpart B with respect to any

organically produced products, if such

operation, or portion of the operation,

sells only agricultural products labeled

as organic or made with certain organic

ingredients that:

(i) Are packaged or otherwise

enclosed in a container prior to being

received or acquired by the operation;

and

(ii) Remain in the same package or

container and are not otherwise

processed while in the control of the

handling operation.

(2) A restaurant or other similar foodservice type establishment that

processes ready-to-eat food from organic

agricultural products and which does

not enclose the food in a package or

container labeled or represented to the

consumer as organic or as made with

certain organic ingredients is excluded

from the requirements of this part.

(3) A retail operation, or portion of a

retail operation, that processes only

agricultural products that are previously

labeled as organic or made with certain

organic ingredients before receipt or

acquisition by the retail operation, is

excluded from the requirements in this

part, Provided, That the operation meets

both of the following requirements:

(i) The agricultural product is

processed by the retail operation, or

portion of the retail operation, in the

course of normal retail business practice

solely for the purpose of offering the

product to a consumer; and

(ii) The agricultural product offered to

the consumer:

(A) Has not been created by the retail

operation by combining two or more

ingredients into a single product that is

then labeled or represented by the retail

operation as organic or as made with

certain organic ingredients; and

(B) Has not been repackaged by the

retail operation so as to provide a new

label or labeling for the repackaged

product which represents it as organic

or made with certain organic

ingredients.

(c) Records to be maintained by

exempt or excluded operations. Any

operation that is exempt or excluded

from certification, as specified in

paragraphs (a) or (b) of this section,

shall maintain records as follows and

shall allow representatives of the

Secretary and the applicable governing

State official access to these records to

determine compliance with the

applicable regulations set forth in this

part:

(1) Small farm or handling operations.

An operation that is exempt from

certification pursuant to paragraph (a)(1)

of this section shall maintain records for

no less than one calendar year to

substantiate that the operation did not
65948 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

sell agricultural products in excess of

$5,000 in value during the previous

calendar year;

(2) Handling operations exempt or

excluded from certification. A handling

operation that is exempt from

certification pursuant to (a)(3) of this

section, or excluded from certification

pursuant to (b)(1) of this section, shall

maintain records as follows:

(i) Documentation as sufficient to

verify the source and quantity of organic

products received and that all organic

products and ingredients have been

handled in accordance with § 205.19 to

prevent commingling and contact with

prohibited substances shall be

maintained for no less than one year

from the date of receipt by the operation

of a product, including ingredients,

labeled as organic or made with certain

organic ingredients; and

(ii) Documentation as sufficient to

verify the destination and quantity of a

product shipped from the operation

shall be maintained for no less than one

year from the date of shipping a product

labeled as organic or as made with

certain organic ingredients, or which

contains any organic ingredients.

§ 205.203 General requirements for

certification.

In order to receive and maintain

organic certification under the Act and

the regulations in this part, a farm, wild

crop harvesting or handling operation

shall:

(a) Comply with the applicable

organic production and handling

requirements of the Act and the

regulations in this part;

(b) Establish, implement, and update

annually an organic plan that is

submitted to an accredited certifying

agent as provided for in § 205.205;

(c) Permit an annual on-site

inspection by the certifying agent, as

provided for in § 205.208 through

205.211;

(d) Maintain all records applicable to

the organic operation for a period of not

less than five years from the date of

creation of the record, and allow

authorized representatives of the

Secretary, the applicable governing

State official, and the certifying agent

access to such records to determine

compliance with the Act and the

regulations in this part, as provided for

in § 205.216;

(e) Submit the applicable fees to the

certifying agent, as provided for in

§ 205.422 of subpart F; and

(f) Immediately notify the certifying

agent concerning:

(1) Any application of a prohibited

substance to any field, farm unit, site,

facility, livestock, or product that is part

of a certified operation; and

(2) Any change in a certified

operation or any portion of a certified

operation that may affect its compliance

with the Act and the regulations in this

part

§ 205.204 Applying for certification.

A person seeking certification of a

farm, wild crop harvesting, or handling

operation under this subpart shall

submit a request for certification to the

certifying agent. The request shall

include the following information:

(a) An organic plan, as required in

§ 205.205;

(b) A statement of compliance, as

required in § 205.206;

(c) The applicant’s business name,

address, phone and fax numbers, and, in

addition, the names of personnel

responsible for maintaining compliance

with the Act and the regulations in this

part; and

(d) The name(s) of any organic

certifying agent(s) to which application

has previously been made, the year(s) of

application, and the outcome of the

application(s) submission.

§ 205.205 Organic plan.

A certification applicant shall submit

to the certifying agent an organic plan

that identifies, as applicable to its

operation:

(a) General. Practices previously

implemented, and intended to be

implemented and maintained, to

establish a system of organic farming

and handling that complies with the

applicable crop, livestock, wild crop

harvesting, and handling requirements,

provided in §§ 205.3, 205.5 through

205.9, and 205.11 through 205.28 of

subpart B.

(b) Farm operations. The following

information shall be submitted

concerning a farm operation:

(1) The total acreage of the operation,

the types of crops grown and livestock

raised, and any on-farm processing

activities;

(2) Map(s) of each field and farm

parcel for which certification is

requested, showing, for each parcel: A

list of crops intended to be planted and/

or managed; identification name or

number; size; location; boundaries; any

significant features that may assist the

certifying agent to identify the field or

parcel; identification of any adjoining

land to which a prohibited substance

may be applied; and the location of any

facility used for livestock housing,

storage, or post-harvest handling;

(3) A history of the crops grown and

production inputs used for each field or

farm parcel for which certification is

requested, which covers the three year

period immediately preceding the date

of the request for certification;

(4) A list of each type of agricultural

product produced on the farm that is

intended to be sold, labeled or

represented as organic or made with

certain organic ingredients;

(5) A list of each substance intended

to be used as a production input,

indicating: its source, anticipated

quantity to be used, and location(s)

where it will be used;

(6) A list of any seeds or planting

stock intended to be purchased,

indicating: its source, approximate

quantity to be used and whether it is

treated, untreated, or organically

produced;

(7) A list of all livestock to be

maintained by the operation and to be

purchased in the certification year for

the production of agricultural products

to be sold, labeled or represented as

organic, or as made with certain organic

ingredients, indicating: their source, the

estimated number to be maintained and

purchased, their intended use (e.g.

slaughter stock, egg production), and

whether the livestock originate from a

certified organic livestock operation;

(8) A list of all livestock feed and feed

supplements intended to be purchased,

indicating: its source, estimated amount

to be purchased, and what, if any,

portion of the feed to be purchased will

not be organically produced;

(9) The name of a veterinarian from

whom animal drugs or a prescription for

animal drugs are obtained, if applicable,

and a list of any animal drugs that may

be used, including their sources,

estimated amount of each animal drug

to be used, and the types of livestock

(such as hogs, fish, or chickens) to

which such drugs are to be

administered; and

(10) A list of all post-harvest handling

or processing methods and facilities to

be used by the applicant.

(c) Split operations. The following

information shall be submitted, as

applicable, concerning a farm or wild

crop harvesting operation that produces

both organic and non-organic products:

(1) A list and anticipated quantities of

livestock and any other agricultural

product intended to be grown, raised or

harvested both organically and nonorganically;

(2) A list, indicating expected

quantity and location, of each substance

or practice prohibited for organic

production under the Act and the

regulations in this part that may be used

on a non-certified portion of the farm;

and

(3) A list of the measures used and

that will be used to prevent
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65949

commingling of organic and non-organic

products, and contact of organic field

units, storage areas and packaging to be

used for organic products, and organic

products, including livestock, with

prohibited substances.

(d) Wild crop harvesting operations.

The following information shall be

submitted concerning a wild crop

harvesting operation:

(1) A map(s) of each area from which

wild crops are designated to be

harvested in the certification year;

(2) Information about the ownership

of, and evidence of permission to

harvest from, the area from which wild

crops are designated to be harvested;

(3) A history of each designated area

so as to demonstrate that no prohibited

substance has been applied within three

years prior to the initial harvest of a

wild crop to be sold, labeled or

represented as organically produced;

(4) A list of each species of plant(s) to

be harvested, including: its botanical

name(s); the part of the plant to be

harvested (e.g., roots, flowers, fruits);

the quantity expected to be harvested in

the certification year; dates of the

harvest season; and any available

information on the impact of the

intended harvest on the environment

and on the growth and production of the

wild crop;

(5) A list of each type of wild product

to be sold or represented as an organic

product, indicating the anticipated

quantity of each type; and

(6) A list of all post-harvest handling

or processing methods and facilities to

be used by the applicant.

(e) Handling operations. The

following information shall be

submitted concerning a handling

operation:

(1) A brief, general description of the

type of handling operation and the

processing, manufacturing, or other

handling procedures used and intended

to be used;

(2) A list of the structural pest

management methods used or intended

to be used;

(3) A list, including the quantity, of

each product intended to be handled

and sold or represented as organic, and

as made with certain organic

ingredients;

(4) A list of each non-organically

produced product or type of product, if

any, intended to be handled or sold;

(5) The measures that will be used to

prevent the commingling of organic and

non-organic products and ingredients

and the contact of storage areas and

packaging to be used for organic

products, and organic products, with

prohibited substances; and

(6) A list of each ingredient,

incidental additive, and type of

packaging material intended to be used

as a production input in the handling of

organic products specifying for each

item listed, as applicable:

(i) Whether it is an organic

agricultural product, a non-organic

agricultural product, or a nonagricultural ingredient;

(ii) The estimated quantity to be used;

(iii) The source or manufacturer;

(iv) The country of origin for each

imported organic agricultural product or

ingredient; and

(v) The source of water used as an

ingredient in any organic product,

specifying whether it meets the Safe

Drinking Water Act requirements (42

U.S.C. 300(f) et seq.).

§ 205.206 Statement of compliance.

A person seeking certification of a

farm, wild crop harvesting or handling

operation shall submit to the certifying

agent a statement agreeing to comply

with the Act and the regulations of this

part, including the requirements for

receiving and maintaining certification

delineated in § 205.203 of this subpart.

§ 205.207 Preliminary evaluation of an

application for certification.

A certifying agent shall, with respect

to any applicant for certification:

(a) Make a preliminary evaluation of

the operation’s compliance and ability

to comply with the applicable

requirements of subpart B of this part;

(b) Verify that an applicant who

previously applied to another certifying

agent and received a notification of noncompliance, pursuant to § 205.215(a) of

this subpart, has submitted

documentation to support the correction

of any deficiencies identified in such

notification, as required in § 205.215(b)

of this subpart; and

(c) Arrange to conduct an on-site

inspection of the operation if the

preliminary evaluation reveals that the

farm, wild crop harvesting or handling

operation may be in compliance with

the applicable requirements of subpart B

of this part.

§ 205.208 Arranging for inspections.

(a) A certifying agent shall arrange to

conduct an initial on-site inspection of

each farm, facility, and site that is

included in an operation for which

certification is requested, and an on-site

inspection of each certified operation

annually thereafter, for the purpose of

determining whether to approve the

request for certification or determining

whether the certification of the

operation should continue.

(b) The initial on-site inspection shall

be conducted within a reasonable time

following a favorable preliminary

evaluation of an application for

certification in accordance with

§ 205.207.

(c) The on-site inspection shall be

scheduled at such time that:

(1) Land, facilities, and activities that

demonstrate the operation’s compliance

with or capability to comply with the

applicable provisions of subpart B of

this part may be observed; and

(2) The applicant or an authorized

representative of the applicant who is

knowledgeable about the operation will

be present during the inspection.

§ 205.209 [Reserved].

§ 205.210 Verification of information.

The inspection of an operation shall

be sufficient to verify the operation’s

compliance, or ability to comply, with

the Act and the regulations in this part,

including verification that the

information, including the organic plan,

provided in accordance with §§ 205.204

or 205.217, and § 205.205, accurately

reflects the practices used or to be used

by the applicant for certification or by

the certified operation and, in the case

of an on-site inspection to evaluate

continuation of certification, that the

provisions of the organic plan are being

implemented.

§ 205.211 Post-inspection conference.

The inspector shall conduct a postinspection conference with an

authorized representative of the

inspected operation, and discuss

observations made by the inspector

regarding the compliance, or ability of

the operation to comply, with the Act

and the regulations in this part.

§ 205.212 Reporting to the certifying

agent.

The certifying agent shall require that

the inspector prepare and submit to the

certifying agent, within thirty days of

completing an inspection, a written

report that describes the inspector’s

observations and assessments of the

inspected operation’s compliance, or

ability to comply, with the Act and the

regulations in this part.

§ 205.213 Additional inspections.

(a) In addition to the annual on-site

inspection, required in § 205.208(a), a

certifying agent may conduct an

inspection of any farm, facility, or site

used by a certified operation or an

applicant for certification when

necessary to determine compliance with

the Act and the regulations in this part.

(b) The Secretary may require that

additional inspections be performed for

the purpose of determining compliance
65950 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

with the Act and the regulations in this

part.

§ 205.214 Approval of certification.

(a) Within a reasonable time after

completion of the initial on-site

inspection, a certifying agent shall

review the inspection report, together

with the application materials

submitted pursuant to §§ 205.204

through 205.206 or § 205.217, as

applicable, and shall request the

applicant for certification to submit any

additional information and

documentation needed to determine if

the certification applicant is complying,

or is able to comply, with the Act and

the regulations in this part.

(b) Following the receipt of any

additional information and

documentation submitted in accordance

with paragraph (a) of this section, the

certifying agent shall approve the

application for certification upon a

determination that:

(1) The practices and substances used

or intended to be used by the applicant

for certification are consistent with a

system of organic farming and handling,

as set forth in § 205.2 of subpart A, and

comply with the applicable organic

production and handling requirements,

as set forth in §§ 205.3, 205.5 through

205.9, and §§ 205.11 through 205.28 of

subpart B;

(2) The applicant has satisfied the

general requirements for certification set

forth in § 205.203;

(3) The organic plan satisfies the

applicable requirements of the Act and

the regulations in subpart B of this part;

and

(4) The records and recordkeeping

system maintained by the applicant

satisfy the applicable requirements of

§ 205.216.

(c) Upon determining, pursuant to

paragraph (b) of this section, to approve

an application for certification, a

certifying agent shall provide a written

notification to the certification

applicant’s place of business, indicating

in such notification restrictions or

requirements, if any, imposed as a

condition of certification.

(d) A notice of approval of

certification sent to a certification

applicant pursuant to paragraph (c) of

this section shall include a certificate

that states:

(1) The name of the certified

operation;

(2) The effective date of the

certification; and

(3) The category(ies), type(s) of

products, and crop years, if applicable,

covered by the certification.

§ 205.215 Denial of certification.

(a) If the certifying agent has reason to

believe, based on a review of the

information specified in § 205.214(a),

that an applicant for certification is not

able to comply, or is not in compliance,

with the requirements of the Act and the

regulations in this part, the certifying

agent shall provide a written

notification of non-compliance to the

applicant in accordance with

§ 205.218(a) of this part.

(b) Following the correction of

deficiencies identified in the

notification issued in accordance with

paragraph (a) of this section, the

applicant may submit a new application

for certification to any accredited

certifying agent. If a new application is

submitted to a certifying agent other

than the agent who issued the

notification of non-compliance, the

certification applicant shall

simultaneously inform the certifying

agent who issued the notification of

non-compliance that a new application

has been submitted and shall identify

the new certifying agent to whom it was

submitted. The new application shall

include documentation of actions taken

by the applicant to correct the

deficiencies delineated in the

notification of non-compliance.

(c) If a certification applicant who

receives a notification pursuant to

paragraph (a) of this section does not

correct the deficiencies or does not

notify the certifying agent that it has

submitted a new application, as

provided for in paragraph (b) of this

section, within the time specified in the

notice of non-compliance, the certifying

agent shall submit to the Administrator

a notice of its recommendation to deny

certification to the applicant. Upon

receipt of a notice of a recommendation

to deny certification, the Administrator

may institute proceedings to deny

certification.

§ 205.216 Recordkeeping.

(a) A certified operation shall

maintain records concerning the

production, harvesting, and handling of

agricultural products that are or that are

intended to be, sold, labeled or

represented as organic or made with

certain organic ingredients for a period

of five years sufficient to demonstrate

compliance with the Act and

regulations in the part, and shall make

such records available to authorized

representatives of the Secretary, the

applicable governing State official, and

the certifying agent.

(b) The records that shall be

maintained by the certified operation in

accordance with paragraph (a) of this

section shall include, but are not limited

to:

(1) A list of all substances applied to

fields and land that are part of the

certified operation for a period of no

less than three years preceding the

intended or actual time of harvest of an

organic crop from such fields or land;

(2) The name and address of any

person, including the operator of the

certified operation and employees of the

certified operation, who applies and

who has applied any substance to any

part of the farm and any livestock or

other agricultural product, including the

name of the substance, and the date(s),

location(s), rate(s) and method(s) of

application;

(3) For each animal (or livestock

management unit, such as a poultry

flock or bee colony) that is, or whose

products are, intended to be sold,

labeled or represented as organic

livestock or organic livestock products

in accordance with the livestock

production standards set forth in

§§ 205.12 through 205.15 of subpart B:

(i) The source of the animal or

livestock management unit and the date

it entered the certified operation;

(ii) The amounts and sources of all

animal drugs administered;

(iii) All feeds and feed supplements

fed; and

(iv) The location of the field, farm

unit, or facility where it is maintained,

as applicable.

(4) Any information submitted to the

certifying agent as part of the

application for certification or as part of

continuation of certification in

accordance with § 205.204 or § 205.217

of this subpart, respectively; and

(5) Records sufficient to show the

quantities, source of, production and

handling methods used for, transfer of

ownership of, and transportation of, any

agricultural product, including

livestock, sold, labeled or represented as

organic or as made with certain organic

ingredients, that is received by or

shipped from the certified operation,

sufficient to establish an audit trail.

(c) A farm, wild crop harvesting,

handling, or other operation that is

exempt or excluded from certification

under §§ 205.202(a) or (b) shall maintain

records as provided for in § 205.202(c).

§ 205.217 Continuation of certification.

(a) A certified operation shall

annually submit the following

information, as applicable, to the

certifying agent:

(1) Any additions and changes to the

information about the operation

submitted in the previous year;

(2) Any amendments to the organic

plan, including a description of any
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activities undertaken in the previous

year, and intended to be undertaken in

the coming year, to implement the

provisions of the organic plan;

(3) A statement that the certified

operation will remain in compliance

with the Act and the regulations in this

part; and

(4) Any other information requested

by the certifying agent, in accordance

with § 205.214(a) of this subpart.

(b) Following the receipt of the

information specified in paragraph (a),

the certifying agent shall arrange and

conduct an on-site inspection of the

certified operation, pursuant to

§§ 205.208 through 205.211.

(c) If the certifying agent has reason to

believe, based on the on-site inspection

and a review of the information

specified in § 205.214(a), that a certified

operation is not complying with the

requirements of the Act and the

regulations in this part, the certifying

agent shall provide a written

notification of non-compliance to the

operation in accordance with

§ 205.218(a) of this subpart.

§ 205.218 Notification of non-compliance

with certification requirements.

(a) A written notification of noncompliance shall be sent by certified

mail to the place of business of the

certification applicant or the certified

operation and shall contain the

following information:

(1) A description of each deficiency in

compliance and each possible violation

of the Act and the regulations in this

part that the certifying agent has reason

to believe has occurred;

(2) The evidence on which the

notification is based; and

(3) The date by which the operation

must correct each deficiency in

compliance and each possible violation

delineated in the notification, and

submit documentation to the certifying

agent to support such corrections.

(b) If the documentation received by

the certifying agent from an operation it

has certified, pursuant to paragraph

(a)(3) of this section, is not adequate to

demonstrate that each deficiency in

compliance and each possible violation

has been corrected, the certifying agent

shall:

(1) Conduct an additional inspection

of the certified operation, as provided

for in § 205.213, if the certifying agent

determines that an additional inspection

is necessary to determine whether the

operation is complying with, or has

violated, the Act or the regulations in

this part;

(2) Review the status of the certified

operation to determine whether the

operation or any portion of the

operation has ceased to comply with, or

has violated, the Act or the regulations

in this part; and

(3) Notification of determination or

recommendation. (i) If, following the

review specified in paragraph (b)(2) of

this section, the certifying agent

determines that the operation is in

compliance with the Act and the

regulations in this part, the certifying

agent shall notify the certified operation

in writing of its determination.

(ii) If, following the review specified

in paragraph (b)(2) of this section, the

certifying agent has reason to believe

that the certified operation or any

portion of the operation is not in

compliance with the Act and the

regulations in this part, the certifying

agent shall submit to the Administrator

a notice of its recommendation to

terminate the certification of the

certified operation or any portion of the

certified operation that the certifying

agent believes to have ceased to comply

with the Act and the regulations in this

part.

§ 205.219 Termination of certification.

(a) A certifying agent shall follow the

procedures in accordance with

§ 205.218 of this subpart if the certifying

agent has reason to believe that a

certified operation or a person

responsibly connected with a farm, wild

crop harvesting, or handling operation it

has certified has:

(1) Made a false statement;

(2) Attempted to have a label

indicating that an agricultural product is

organically produced affixed to such

product when such product was

produced or handled in a manner that

is not in accordance with the Act and

the regulations in this part; or

(3) Otherwise violated the purposes of

the certification program established in

Subpart D of this part.

(b) Notwithstanding paragraph (a) of

this section, if a certifying agent has

reason to believe that a certified

operation or a person responsibly

connected with an operation that has

been certified by the certifying agent has

wilfully violated the Act and the

regulations in this part, the certifying

agent shall submit to the Administrator

a notice of its recommendation to

terminate the certification of the

certified operation or any portion of the

certified operation that the certifying

agent believes to have ceased to comply

with the Act and the regulations in this

part. A notice of recommendation to

terminate certification shall list the

names of any persons the certifying

agent believes to have violated the Act

and the regulations in this part.

(c) Upon receipt by the Administrator

of a notification of a recommendation to

terminate the certification of an

operation or any portion of an

operation, submitted pursuant to

paragraph (b) of this section or

§ 205.218(b)(3)(ii) of this subpart, as

applicable, the Administrator may

institute the proceedings to terminate

certification.

(d) Ineligibility and waiver. (1) A

certified farm, wild crop harvesting, or

handling operation, or a person

responsibly connected with such an

operation, that violates the Act and the

regulations in this part, as determined

following the proceedings instituted

pursuant to paragraph (c) of this section,

shall not be eligible to receive

certification for any farm, wild crop

harvesting, or handling operation in

which such operation or person has an

interest for a period of 5 years from the

occurrence of such violation.

(2) Notwithstanding paragraph (d)(1)

of this section, the Secretary may waive

ineligibility for certification if it is in the

best interests of the certification

program established under subpart D of

this part.

§ 205.220 Notification of certification

status.

A certifying agent shall submit to the

Administrator:

(a) A copy of any notification of noncompliance, sent pursuant to § 205.218,

simultaneously with its issuance to the

certification applicant or the certified

operation; and

(b) On a quarterly calendar basis, the

name of each operation whose

application for certification has been

approved.

§§ 205.221 through 205.299 [Reserved]

Subpart E—Accreditation of Certifying

Agents

§ 205.300 Areas of accreditation.

The Secretary shall accredit a

qualified applicant in the areas of crops,

livestock, wild crops, or handling, or

any combination thereof, to certify a

farm, wild crop harvesting operation, or

handling operation as a certified organic

farm, certified organic wild crop

harvesting operation, or certified

organic handling operation.

§ 205.301 General requirements for

accreditation.

(a) A private person or governing

State official accredited as a certifying

agent under this subpart shall:

(1) Have sufficient expertise in

organic farming and handling

techniques to fully comply with and

implement the terms and conditions of
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the organic certification program

established under the Act and the

regulations in this part;

(2) Demonstrate the ability to fully

comply with the requirements for

accreditation set forth in this subpart;

(3) Carry out the provisions of the Act

and the regulations in this part,

including the provisions of §§ 205.207

through 205.214 of subpart D, and

§ 205.430 of subpart F.

(4) Use a sufficient number of

adequately trained personnel, including

inspectors and certification review

personnel, to comply with and

implement the organic certification

program established under the Act and

the regulations in subpart D of this part;

(5) Conduct an annual performance

review for each inspector used by the

certifying agent, and implement

measures to correct any possible defects

in compliance with the Act and the

regulations in this part identified in

each review conducted;

(6) Have an annual internal evaluation

review conducted of its certification

activities, and implement measures to

correct any possible defects in

compliance with the Act and the

regulations in this part identified in

each review conducted;

(7) Provide sufficient information to

persons seeking certification to enable

an applicant for certification to comply

with the applicable requirements of the

Act and the regulations in this part;

(8) Maintain records and permit

access to records as follows:

(i) Maintain all records concerning its

activities under the Act and the

regulations in this part for a period of

not less than 10 years from the date of

creation of the record; and

(ii) Allow representatives of the

Secretary and the applicable governing

State official access to any and all

records concerning the certifying agent’s

activities under the Act and the

regulations in this part;

(9) Maintain strict confidentiality

with respect to its clients under the

applicable organic certification program

and not disclose to third parties (with

the exception of the Secretary or the

applicable governing State official) any

business related information concerning

any client obtained while implementing

the regulations in this part, except as

provided for in § 205.304(b)(5);

(10) Prevent conflict of interest by not:

(i) Certifying an operation if the

certifying agent or a responsibly

connected party of such certifying agent

has or has held a commercial interest in

the operation, including the provision of

consultancy services, within the 12

month period prior to the application

for certification, and by not certifying an

operation through the use of any

employee that has or has held a

commercial interest in the operation,

including the provision of consultancy

services, within the 12 month period

prior to the application for certification;

(ii) Assigning an inspector to perform

an inspection of an operation if the

inspector has or has held a commercial

interest in the operation, including the

provision of consultancy services,

within the 12 months prior to

conducting the inspection;

(iii) Permitting any employee,

inspector, or other personnel to accept

payment, gifts, or favors of any kind,

other than prescribed fees, from any

business inspected; and

(iv) Providing advice concerning

organic practices or techniques to any

certification applicant or certified

organic farm or handling operation for

a fee, other than as part of the fees

established under the applicable

certification program established under

the Act;

(11) Accept the certification decisions

made by another USDA accredited

certifying agent as equivalent to its own;

(12) Refrain from making false or

misleading claims about its

accreditation status, the USDA

accreditation program for certifying

agents, or the nature or qualities of

products labeled as organically

produced;

(13) Charge only such fees to

applicants for certification and

operations it certifies that the Secretary

determines are reasonable;

(14) Pay and submit fees to AMS in

accordance with §§ 205.421 and

205.422(b) of subpart F of this part; and

(15) Comply with and implement

such other terms and conditions

deemed necessary by the Secretary.

(b) A private person or governing

State official accredited as a certifying

agent under this subpart may establish

a seal, logo or other identifying mark to

be used by farms, wild crop harvesting

operations, and handling operations

certified by the certifying agent to

denote affiliation with the certifying

agent, Provided, That the certifying

agent:

(1) Does not require as a condition of

certification by it the display of its

identifying mark on any product sold,

labeled or represented as organically

produced; and

(2) Does not require as a condition of

use of its identifying mark compliance

with any farming or handling

requirements other than those provided

for in the Act and the regulations in this

part.

(c) A private person accredited as a

certifying agent shall:

(1) Hold the Secretary harmless for

any failure on the part of the certifying

agent to carry out the provisions of the

Act and the regulations in this part;

(2) Furnish reasonable security, in an

amount and according to such terms as

the Secretary may by regulation

prescribe, for the purpose of protecting

the rights of farms, wild crop harvesting

operations, and handling operations

certified by such certifying agent under

the Act and the regulations in this part;

and

(3) Transfer to the Secretary, and

make available to any applicable

governing State official, all records or

copies of records concerning the

person’s certification activities in the

event that the certifying agent dissolves

or loses its accreditation.

§ 205.302 Applying for accreditation.

(a) A private person or governing

State official seeking accreditation as a

certifying agent under this subpart shall

submit an application for accreditation

which contains the applicable

information and documents set forth in

§§ 205.303 through 205.305 and the fees

required in § 205.421(a) of subpart F to:

Program Manager, USDA–AMS–TM–

NOP, Room 2945–S, P.O. Box 96456,

Washington, D.C. 20090–6456.

(b) Following the receipt of the

information and documents, the

Administrator will determine according

to the provisions set forth in § 205.306

whether the applicant for accreditation

should be accredited as a certifying

agent.

§ 205.303 Information to be submitted by

an accreditation applicant.

A private person or governing State

official seeking accreditation as a

certifying agent shall submit the

following information:

(a) The name, primary office location,

mailing address, and contact numbers

(telephone, fax, and Internet address) of

the applicant; additionally, for an

applicant who is a private person, the

name of the person designated to

control its day-to-day operations, and its

taxpayer identification number;

(b) The name, office location, mailing

address, and contact numbers

(telephone, fax, and Internet address) for

each of its organizational units, such as

chapters or subsidiary offices, and the

name of a contact person for each unit;

(c) Each area of operation (crops, wild

crops, livestock or handling) for which

accreditation is requested and the

estimated numbers of each type of

operation anticipated to be certified

annually by the applicant;

(d) The type of entity the applicant is

(e.g. State government agricultural
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65953

office, for-profit business, not-for-profit

membership association); and, in

addition, for:

(1) A governing State official, a copy

of the official’s authority to conduct

certification activities under the Act and

the regulations in this part; and

(2) A private person, documentation

of its entity’s status and organizational

purpose, such as articles of

incorporation and by-laws, ownership

or membership provisions, and its date

of establishment; and

(e) A list of each State in which the

applicant currently certifies farms and

handling operations, and, in addition, a

list of each State in which the applicant

intends to certify farms or handling

operations.

§ 205.304 Evidence of expertise and ability

to be submitted by an accreditation

applicant.

A private person or governing State

official seeking accreditation as a

certifying agent shall submit the

following documents and information to

demonstrate its expertise in organic

farming and handling techniques, its

ability to fully comply with and

implement the organic certification

program established in §§ 205.201

through 205.220 of subpart D of this

part, and its ability to comply with the

requirements for accreditation set forth

in § 205.301 of this subpart:

(a) Personnel. (1) A description of the

applicant’s policies and procedures for

training, evaluating and supervising

personnel;

(2) The name and functions of all

personnel intended to be used in the

certification operation, including

administrative staff, certification

inspectors, members of any certification

review and internal evaluation

committees, and all parties responsibly

connected to the certification operation;

(3) A description of the qualifications,

including past experience, training, and

education in agriculture, including

organic farming and handling, for:

(i) Each inspector intended to be used

by the applicant; and

(ii) Each person designated or to be

designated by the applicant to review or

evaluate applications for certification;

and

(4) A description of any training that

the applicant has provided or intends to

provide to personnel to ensure that they

can comply with and implement the

requirements of the Act and the

regulations in this part.

(b) Administrative policies and

procedures. (1) A description of the

procedure to be used to evaluate

certification applicants, make

certification decisions and issue

certification certificates;

(2) A description of the procedures to

be used for reviewing compliance of

certified farm, wild crop harvesting, and

handling operations with the Act and

the regulations in this part and the

reporting of violations of the Act and

the regulations in this part to the

Administrator;

(3) A description of the procedures to

be used for complying with the

recordkeeping requirements set forth in

§ 205.301(a)(8);

(4) A description of the procedures to

be used for maintaining the

confidentiality of any business related

information, as set forth in

§ 205.301(a)(9) of this subpart;

(5) A description of the procedures to

be used for making the following

information available to any member of

the public upon request:

(i) A list of producers and handlers

whose operations it has certified, and

the effective dates of the certifications,

during the ten year period preceding the

receipt of the request from the public;

(ii) The organic agricultural products

produced by each certified operation;

(iii) The results of laboratory analyses

for residues of pesticides and other

prohibited substances conducted during

the ten year period preceding the

request from the public; and

(iv) Other non-confidential business

information as permitted by the

producer or handler and approved by

the Secretary.

(c) Financial policies and procedures.

A description of the applicant’s policies

and procedures for the collection and

disbursement of funds, and documents

that identify anticipated sources of

income, including all fees to be

collected from producers and handlers

in accordance with § 205.301(a)(13) of

this subpart and § 205.422(a) of subpart

F.

(d) Conflict of interest. (1) A

description of procedures intended to be

implemented to prevent the occurrence

of conflicts of interest, as delineated in

§ 205.301(a)(10); and

(2) For each person identified in

§ 205.304(a)(2), the identification of any

food and agriculture-related business

interests, including business interests of

immediate family members, that may

cause a conflict of interest.

(e) Current certification activities. An

applicant who currently certifies farms,

wild crop harvesting, or handling

operations may additionally submit:

(1) A list of all farms, wild crop

harvesting, and handling operations

currently certified by the applicant;

(2) Copies of the inspection reports

and certification evaluation documents

for farms, wild crop harvesting, or

handling operations certified by the

applicant during the previous year; and

(3) The results of an accreditation

process, if any, conducted of the

applicant’s operation by an accrediting

body during the previous year for the

purpose of evaluating its certification

activities; and

(f) Other information. Any other

information the applicant believes may

support the Secretary’s evaluation of the

applicant’s expertise and ability.

§ 205.305 Statement of agreement to be

submitted by an accreditation applicant.

(a) A private person or a governing

State official seeking accreditation

under this subpart shall submit a

statement which affirms that, if granted

accreditation as a certifying agent under

this subpart, the applicant will:

(1) Carry out the provisions of the Act

and the regulations in this part;

(2) Accept the certification decisions

made by another USDA accredited

certifying agent as equivalent to its own;

(3) Refrain from making false or

misleading claims about its

accreditation status, the USDA

accreditation program for certifying

agents, or the nature or qualities of

products labeled as organically

produced;

(4) Conduct an annual performance

review for each inspector to be used and

implement measures to correct any

possible defects in compliance with the

Act and the regulations in this part

identified in each review conducted;

(5) Have an annual internal evaluation

review conducted of its certification

activities and implement measures to

correct any possible defects in

compliance with the Act and the

regulations in this part identified in

each review conducted;

(6) Pay and submit fees to AMS in

accordance with §§ 205.421 and

205.422(b) of subpart F of this part; and

(7) Implement and carry out any other

terms and conditions determined by the

Secretary to be necessary.

(b) A private person who seeks

accreditation as a certifying agent under

this subpart shall additionally agree to:

(1) Hold the Secretary harmless for

any failure on the part of the certifying

agent to carry out the provisions of the

Act and the regulations in this part;

(2) Furnish reasonable security, in an

amount and according to such terms as

the Secretary may by regulation

prescribe, for the purpose of protecting

the rights of the farming and handling

operations certified by such certifying

agent under the Act and the regulations

in this part; and

(3) Transfer to the Secretary and make

available to the applicable governing
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State official all records or copies of

records concerning the person’s

certification activities in the event that

the certifying agent dissolves or loses its

accreditation.

§ 205.306 Approval of accreditation.

(a) Accreditation will be approved if:

(1) The accreditation applicant has

submitted the information required by

§§ 205.303 through 205.305 of this

subpart;

(2) The accreditation applicant pays

the required fee in accordance with

§ 205.421(c) of subpart F of this part;

and

(3) The Administrator determines that

the applicant for accreditation meets or

is capable of meeting the general

requirements for accreditation as stated

in § 205.301 of this subpart, as

applicable, as determined by a review of

the information submitted in

accordance with §§ 205.303 through

205.305 and, if necessary, a review of

the information obtained from a site

visit as provided for in § 205.309.

(b) On making a determination to

approve an application for

accreditation, the Administrator shall

notify the applicant of approval of

accreditation in writing, stating:

(1) The area(s) for which accreditation

is given;

(2) The effective date of the

accreditation; and

(3) For a certifying agent who is a

private person, the amount and type of

security that must be established to

protect the rights of farm, wild crop

harvesting, and handling operations

certified by such certifying agent.

§ 205.307 Denial of accreditation.

(a) If the Administrator has reason to

believe, based on a review of the

information specified in §§ 205.303

through 205.305 of this subpart, that an

applicant for accreditation is not able to

comply or is not in compliance with the

requirements of the Act and the

regulations in this part, including

§ 205.301 of this subpart, the

Administrator shall provide a written

notification of non-compliance to the

applicant in accordance with

§ 205.315(a) of this subpart.

(b) Following the correction of

deficiencies identified in the

notification issued in accordance with

paragraph (a) of this section, the

applicant may submit a new application

for accreditation to the Administrator.

The new application shall include

documentation of actions taken by the

applicant to correct the deficiencies

delineated in the notification of noncompliance.

(c) If an accreditation applicant who

receives a notification pursuant to

paragraph (a) of this section does not

correct the deficiencies identified

within the time specified in the notice

of non-compliance, the Administrator

may institute proceedings to deny

accreditation.

§ 205.308 Maintaining accreditation.

To maintain accreditation, an

accredited certifying agent must

continue to satisfy the requirements of

the Act and the regulations in this part

throughout the duration of its

accreditation, and pay and submit fees

in accordance with §§ 205.421 and

205.422(b) of Subpart F of this part.

§ 205.309 Site evaluations.

(a) An initial site evaluation of the

operation of each certifying agent shall

be performed for the purpose of

verifying its compliance with the Act

and the regulations in this part within

a reasonable period of time after the

date on which the agent’s notice of

approval of accreditation is issued, as

set forth in § 205.306 of this subpart,

and after the agent has conducted

sufficient certification activities for the

Administrator to examine its operations

and evaluate its compliance with

§ 205.301 of this subpart.

(b) A site evaluation of an

accreditation applicant or certifying

agent’s operation and performance may

be conducted at any time to determine

whether an accreditation applicant can

comply with the general requirements

set forth in § 205.301 of this subpart or

to evaluate the certifying agent’s

operation and performance under the

Act and the regulations in this part.

§ 205.310 [Reserved].

§ 205.311 Peer review panel.

(a) Peer review panel(s). (1) A peer

review panel shall review the

accreditation status of a certifying agent

after any site evaluation performed

pursuant to §§ 205.309(a) and

205.314(b) of this subpart.

(2) The Administrator may convene a

peer review panel at any time for the

purpose of evaluating a certifying

agent’s activities under the Act and the

regulations in this part.

(3) The Administrator shall consider

the reports received from each

individual member of a peer review

panel when making a determination

whether to confirm the accreditation of

a certifying agent, or when making a

determination whether to renew the

accreditation of a certifying agent.

(b) Composition of peer review panels.

(1) The Administrator shall convene a

peer review panel, which shall consist

of between three and five persons

selected from the established peer

review panel pool, with the following

membership requirements:

(i) One member shall be personnel of

AMS who shall be responsible for

presiding over the convened panel; and

(ii) At least two members shall not be

personnel of AMS or an approved State

program.

(2) Each convened peer review panel

shall include no less than one member

who possesses sufficient expertise, as

determined by the Administrator, in the

areas of accreditation delineated in the

notice of approval of accreditation,

pursuant to § 205.306(a) of this subpart,

for each certifying agent whose

operations and performance are to be

reviewed.

(3) No person participating on a

convened peer review panel shall be, or

shall have been, associated with a

certifying agent being reviewed by the

panel in a manner that would constitute

a known or perceived conflict of

interest, as determined by the

Administrator.

(c) Duties and responsibilities of

panel members. (1) Each person on a

convened peer review panel shall

individually review the site evaluation

report prepared by the Administrator

and any other information that may be

provided by the Administrator relevant

to confirming or renewing the

accreditation status of a certifying agent;

(2) Information about the certifying

agent received as part of the review

process is confidential information, and

peer reviewers shall not release, copy,

quote, or otherwise use material from

the information received, other than in

the report required to be submitted;

(3) Each peer reviewer must agree,

specifically, to treat the information

received for review as confidential; and

(4) Each person on a convened peer

review panel shall provide an

individual written report to the

Administrator regarding a certifying

agent’s ability to conduct and perform

certification activities.

(d) Optional meeting or conference

call procedure for a convened peer

review panel. (1) The Administrator may

convene a peer review panel meeting or

conference call if necessary for

evaluating the accreditation status of a

certifying agent or at the request of at

least one peer review panel member.

The Administrator may include the

certifying agent being evaluated, or a

representative of the agent, for the

purpose of providing additional

information. Any meeting or conference

call shall be conducted in a manner that

will ensure that the actions of panel

members are carried out on an

individual basis with any opinions and
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65955

recommendations by a member being

individually made.

(2) Copies of the peer review panel

reports may be provided to the

certifying agent and written responses

from the certifying agent may be

submitted for consideration by the

Administrator.

(e) Peer review panel reports. Each

person who participates in a peer

review panel shall provide a written

report to the Administrator which shall

contain the person’s recommendations

concerning confirmation or renewal of

the accreditation for each agent

reviewed and the basis for each

recommendation.

§ 205.312 Confirmation of accreditation.

(a) Notice of confirmation. The

Administrator shall issue a written

notice of confirmation of accreditation

to a certifying agent if the Administrator

determines the agent is in compliance

with the requirements of the Act and the

regulations in this part. The notice of

confirmation will set forth any terms

and conditions that must be addressed

by the certifying agent before submitting

a request for renewal of accreditation.

(b) Duration of accreditation. The

accreditation of a certifying agent shall

continue in effect until such time as the

certifying agent fails to renew

accreditation as delineated in § 205.314,

voluntarily ceases its certification

activities, or accreditation is suspended

or terminated pursuant to § 205.316.

§ 205.313 Denial of confirmation.

(a) If the Administrator has reason to

believe, based on a review of the

information specified in §§ 205.303

through 205.305 and the results of a site

evaluation and the reports submitted by

the peer review panel, pursuant to

§§ 205.309 and 205.311(e) of this

subpart, that the certifying agent is not

complying with the requirements of the

Act and the regulations in this part, the

Administrator shall provide a written

notification of non-compliance to the

certifying agent in accordance with

§ 205.315(a) of this subpart.

(b) If a certifying agent who receives

a notification pursuant to paragraph (a)

of this section corrects the deficiencies

identified within the time specified in

the notice of non-compliance, in

accordance with § 205.315(a)(3) of this

subpart, the Administrator shall issue a

notice of confirmation of accreditation

to the certifying agent, pursuant to

§ 205.312(a).

(c) If a certifying agent who receives

a notification pursuant to paragraph (a)

of this section does not correct the

deficiencies identified within the time

specified in the notice of noncompliance, the Administrator may

institute proceedings to deny

confirmation of accreditation.

§ 205.314 Continued accreditation.

(a) Annual report and fees. An

accredited certifying agent shall submit

annually to the Administrator on or

before the anniversary date of the

issuance of the notice of confirmation of

accreditation, pursuant to § 205.312(a)

of this subpart, the following reports

and fees:

(1) A complete and accurate update of

information submitted pursuant to

§§ 205.303 and 205.304;

(2) Information supporting any

changes being requested in the areas of

accreditation delineated in § 205.300;

(3) The measures that were

implemented in the previous year, and

any measures to be implemented in the

coming year, to satisfy any terms and

conditions determined by the

Administrator to be necessary as

specified in the most recent notice of

confirmation of accreditation, in

accordance with § 205.312(a) of this

subpart, or notice of renewal of

accreditation, in accordance with

paragraph (c) of this section;

(4) The results of the most recent

inspector performance reviews and

internal evaluation review, and

adjustments to the certifying agent’s

operation and procedures implemented,

and intended to be implemented, in

response to the reviews; and

(5) The fees required in § 205.421(a) of

subpart F.

(b) Renewal of accreditation. An

accredited certifying agent shall request

renewal of accreditation on or before the

fifth anniversary of issuance of the

notice of confirmation of accreditation

and each subsequent renewal of

accreditation. Following receipt of the

information submitted by the certifying

agent in accordance with paragraph (a)

of this section and the results of a site

evaluation and the reports submitted by

the peer review panel, pursuant to

§§ 205.309 and 205.311(e) of this

subpart, the Administrator shall

determine whether the certifying agent

remains in compliance with the Act and

the regulations of this part.

(c) Notice of renewal of accreditation.

Upon a determination that the certifying

agent continues to comply with the Act

and the regulations of this part, the

Administrator shall issue a notice of

renewal of accreditation. The notice of

renewal shall specify any terms and

conditions that must be addressed by

the certifying agent and the time within

which those terms and conditions must

be satisfied.

(d) Non-compliance. Upon a

determination that there is reason to

believe that the certifying agent is not in

compliance with the Act and the

regulations of this part, the

Administrator shall initiate the

procedure delineated in § 205.315 of

this subpart.

§ 205.315 Notification of non-compliance

with accreditation requirements.

(a) A written notification of noncompliance shall be sent by certified

mail to the place of business of the

accreditation applicant or the certifying

agent, as applicable, and shall contain

the following information:

(1) A description of each deficiency in

compliance and each violation of the

Act and the regulations in this part that

the Administrator has reason to believe

has occurred;

(2) The evidence on which the

notification is based; and

(3) The date by which the

accreditation applicant or the certifying

agent, as applicable, must correct each

deficiency and each violation delineated

in the notification, and submit

documentation to the Administrator to

support such corrections.

(b) If the documentation received by

the Administrator, pursuant to

paragraph (a)(3) of this section, is not

adequate to demonstrate that each

deficiency in compliance and each

violation has been corrected by the date

indicated in the written notification, the

Administrator may conduct a site

evaluation, as provided for in § 205.309,

to determine whether the certifying

agent is complying with, or has violated,

the Act or the regulations in this part.

(c) Notification of determination or

recommendation. (1) If, following the

procedure pursuant to paragraphs (a)

and (b) of this section, the

Administrator determines that the

certifying agent is in compliance with

the Act and the regulations in this part,

the Administrator shall notify the

certifying agent in writing of this

determination.

(2) If, following the procedure

pursuant to paragraphs (a) and (b) of

this section, the Administrator has

reason to believe that the certifying

agent is not in compliance with the Act

and the regulations in this part, the

Administrator may institute a

proceeding to suspend or terminate the

accreditation of the certifying agent.

§ 205.316 Termination of accreditation.

(a) The Administrator shall follow the

procedures prescribed in § 205.315 of

this subpart if the Administrator has

reason to believe that an accredited

certifying agent or a person responsibly
65956 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

connected with an accredited certifying

agent has ceased to comply with or has

violated the Act or the regulations in

this part.

(b) Notwithstanding paragraph (a) of

this section, if the Administrator has

reason to believe that an accredited

certifying agent or a person responsibly

connected with an accredited certifying

agent has wilfully violated the Act and

the regulations in this part, the

Administrator may institute a

proceeding to suspend or terminate the

accreditation of the certifying agent.

(c) A private person or a governing

State official whose accreditation as a

certifying agent is suspended or

terminated shall:

(1) Cease any certification activity in

each area of accreditation and in each

State for which its accreditation is

suspended; or

(2) In the case of a private person

whose accreditation is terminated, cease

all certification activities; and

(3) Transfer to the Secretary and make

available to any applicable governing

State official all records concerning its

certification activities that were

suspended or terminated, so that the

Secretary may promptly determine

whether farms or handling operations

certified by such certifying agent may

retain their organic certification.

(d) A private person or a governing

State official whose accreditation as a

certifying agent is suspended by the

Secretary under this section may at any

time submit a new request for

accreditation, pursuant to § 205.302 of

this subpart. The request shall be

accompanied by documentation that

demonstrates that appropriate corrective

actions have been taken to comply with

and remain in compliance with the Act

and the regulations in this part.

(e) A private person whose

accreditation as a certifying agent is

terminated shall be ineligible to be

accredited as a certifying agent under

the Act and the regulations in this part

for a period of not less than three years

following the date of such

determination.

§§ 205.317 through 205.400 [Reserved].

Subpart F—Additional Regulatory

Functions

State Programs

§ 205.401 Requirements of State

programs.

(a) A State may establish a State

organic certification program for

producers and handlers of agricultural

products that have been produced

within the State using organic methods

as provided for in the Act and the

regulations in part 205.

(b) The State program shall meet the

requirements of the Act and the

regulations in part 205.

(c) A State program may contain more

restrictive requirements governing the

certification of organic farms and

handling operations and the production

and handling of agricultural products

that are to be sold or labeled as

organically produced than are contained

in the National Organic Program

established by the Secretary, Provided,

That such additional requirements:

(1) Further the purposes of the Act

and the regulations in part 205;

(2) Are consistent with the provisions

of the Act and the regulations in part

205;

(3) Do not discriminate towards

agricultural commodities organically

produced in other States in accordance

with the Act and the regulations in part

205; and

(4) Are approved by the Secretary

prior to being implemented.

§ 205.402 Approval of State programs and

program amendments.

(a) A governing State official shall

submit to the Secretary a proposed State

program, and proposed substantive

amendment(s) to a State program, and

shall obtain the Secretary’s approval

prior to implementation of the proposed

program and any proposed substantive

amendments thereto.

(b) The Secretary will notify the

governing State official within six

months after the receipt of the proposed

State program and proposed substantive

amendment to the State program, as to

whether the program or substantive

amendment is approved or disapproved,

and if disapproved, the reasons for the

disapproval. After receipt of a notice of

disapproval, the State may reapply at

any time.

§ 205.403 Review of approved programs.

The Secretary will review a State

organic certification program not less

than once during each five-year period

following the date of the initial approval

of such program. The Secretary will

notify the governing State official within

six months after the initiation of the

review, whether the program is

approved or disapproved, and if

disapproved, the reasons for the

disapproval.

§§ 205.404 through 205.420 [Reserved].

Fees

§ 205.421 Fees for accreditation applicants

and accredited certifying agents.

(a) Application fees. (1) Each

applicant for accreditation and each

accredited certifying agent shall submit

a non-refundable fee of $640

simultaneous with the submission of

each application for accreditation or

annual report, as applicable. Payment

shall be made by certified check or

money order made payable to

Agricultural Marketing Service and sent

with the application or annual report to:

Program Manager, USDA/AMS/TM/

NOP, Room 2945–S, P.O. Box 96456,

Washington, D.C., 20090–6456.

(2) An applicant or an accredited

certifying agent whose organizational

structure consists of chapters or

subsidiary offices also shall include a

non-refundable fee of $160 for each

chapter or subsidiary office,

simultaneous with the submission of

each application for accreditation or

annual report, as applicable.

(b) Site evaluation fees and related

travel and per diem expenses. Each

applicant or accredited certifying agent

for whom a site visit is conducted shall

submit a non-refundable payment for

the following fees and expenses related

to a site evaluation visit conducted,

pursuant to § 205.309 of subpart E,

within 30 days following issuance of a

bill from AMS for the cost of the site

evaluation visit which shall include

payment of:

(1) An hourly fee of $40 per hour,

calculated to the nearest fifteen minute

period, for each AMS evaluator to

conduct the site evaluation visit,

including travel time to and from the

evaluator’s duty station; and

(2) Travel expenses and per diem

allowances for each AMS evaluator.

(c) Administrative fee. Each

accredited certifying agent shall submit

a non-refundable administrative fee of

$2,000, and an additional nonrefundable administrative fee of $300

for each chapter or subsidiary office

belonging to the certifying agent, within

30 days following issuance of a

notification of approval of accreditation

pursuant to § 205.306(b) of subpart E;

within 30 days following the issuance of

a subsequent notification of

confirmation of accreditation, pursuant

to § 205.312(a) of subpart E; or with the

submission of each annual report,

pursuant to § 205.314(a) of subpart E.

§ 205.422 Fees for certified operations.

(a) Each farm or wild crop harvesting

operation shall submit to the certifying

agent a non-refundable fee of $50 and

each handling operation shall submit to

the certifying agent a non-refundable fee

of $500 by money order or certified

check made payable to the Agricultural

Marketing Service within 15 days of the

date of the issuance by a certifying agent
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65957

1 40 CFR parts 180, 185, and 186.

2The FDA action levels are published in the FDA

publication entitled ‘‘Action Levels for Poisonous

or Deleterious Substances in Human Food and

Animal Feed.’’ Single copies of this booklet are

available fron: Industry Activities Section (HHF–

326), CFSN/FDA, 200 C Street S.W., Washington,

DC 20204.

of a notice of approval of certification

pursuant to § 205.214(c) of subpart D.

(b) Each certifying agent shall submit

to AMS, according to the instructions

provided by the Administrator, all fees

collected pursuant to paragraph (a) of

this section within 15 days following

the date of receipt by the certifying

agent.

§ 205.423 Fees for import programs.

(a) Each foreign certification program,

other than those operated by a foreign

country itself, that wants AMS to

determine whether its program is

equivalent to the AMS organic

certification program shall submit, as

authorized by the Independent Offices

Appropriations Act (31 U.S.C. 9701 et

seq.), a non-refundable payment in the

amount stated in the AMS notice of

intent to acknowledge equivalency sent

to them by AMS. The payment required

will be based on an hourly charge of $40

per hour for review time plus any travel

and per diem expenses incurred.

(b) No determination of equivalency

of such a program shall be final and

effective until such payment is made.

(c) The payment required shall be

submitted by certified funds to AMS

within 30 days following issuance of a

bill from AMS according to the

instructions provided with the notice of

intent to acknowledge equivalency sent

by AMS.

§ 205.424 Payment of fees and other

charges.

(a) All fees shall be submitted in the

form of a certified check or money order

made payable to the Agricultural

Marketing Service and sent according to

the billing instructions.

(b) All fees submitted later than the

time indicated in the applicable section

shall be subject to interest, penalties and

administrative costs, as provided in the

Debt Collection Act of 1982 (31 U.S.C

3717), and may result in the loss of or

failure to obtain certification,

accreditation, or equivalency status.

§§ 205.425 through 205.429 [Reserved].

Compliance Review and Other Testing

§ 205.430 Compliance review.

(a) A certifying agent shall arrange for

periodic sampling and residue testing,

not less frequently than every five years,

of agricultural products produced on

certified organic farms or wild crop

harvesting operations and handled

through certified handling operations

certified by that agent to determine if an

agricultural product contains a

detectable residue level of a pesticide or

other prohibited substance. To the

extent that certifying agents are aware of

a violation of applicable laws relating to

food safety, they are required to report

such violation to the appropriate health

agencies (Federal, State, and local).

(b) The Secretary or the applicable

governing State official shall arrange for

sampling and residue testing of

agricultural products sold, labeled, or

represented as organic, at any point of

production or distribution, and may

require the certifying agent to conduct

sampling and residue testing of such

products originating from operations

certified by that agent in order to

determine if such products contain a

detectable residue level of a pesticide or

other prohibited substance.

(c) Sample collection. (1) Each

product sample collected pursuant to

paragraphs (a) and (b) of this section

shall be collected by an inspector

representing the Secretary, certifying

agent, or applicable governing State

official and submitted for analysis to a

laboratory accredited for the product

test, in accordance with Subchapter 400

of the Food and Drug Administration

‘‘Investigations Operations Manual,’’

available from the FDA, Division of

Emergency and Investigation

Operations, 5600 Fishers Lane,

Rockville MD 20857.

(2) The analytical methods used to

test each product sample shall be

selected as appropriate from:

(i) The FDA ‘‘Pesticide Analytical

Manual,’’ Volumes I and II, available

from the FDA, Department of Health,

Education and Welfare, 200 C Street

S.W., Washington, DC 20204;

(ii) The ‘‘FSIS Residue Chemistry

Guidebook’’, available by request from:

FSIS Quality Systems Branch, Room

516–A, Annex Building, 300 12th Street

S.W., Washington, DC 20250–3700, or

(iii) The ‘‘Official Methods of

Analysis’’ of the Association of Official

Analytical Chemists International

(AOACI), available by request from:

AOACI, 481 North Frederick Ave., Suite

500, Gaithersburg, MD 20877.

(3) The results of all sampling and

testing performed pursuant to

paragraphs (a) and (b) of this section for

each product sample shall be reported

to the certifying agent or applicable

governing State official, and to the

Secretary, Provided, That if any test

result indicates that the product sample

contains a residue level of a pesticide or

other prohibited substance that exceeds

the EPA tolerance level 1 or the FDA

action level,2 as applicable, for that

substance, the certifying agent,

governing State official, or the Secretary

also shall inform the appropriate health

agencies of the results of the residue

test.

(d) Residue test investigations. (1) If

the results of the testing and sampling

performed pursuant to paragraphs (a)

and (b) of this section indicate that the

product sample contains a detectable

residue level of a pesticide or other

prohibited substance, the certifying

agent, the applicable governing State

official, or the Secretary shall conduct

an investigation of the certified

operation that produced or harvested

the product represented by the sample

to determine the cause of the detectable

residue level, and may require the

producer or handler of such product to

prove that any prohibited substance was

not applied to such product.

(2) If the certifying agent, applicable

governing State official, or the Secretary,

determines as a result of the

investigation that the detectable residue

level of the pesticide or other prohibited

substance exceeds the unavoidable

residual environmental contamination

level for the detected pesticide or other

prohibited substance, or that the

detected pesticide or other prohibited

substance was the result of an

intentional application, then the

agricultural products represented by the

sample shall not be sold or labeled as

organically produced, and the

Administrator may institute proceedings

to terminate certification of the

operation, or portion of an operation,

from which the agricultural products

represented by the sample originated, as

provided for in § 205.219 of subpart D.

§ 205.431 Preharvest tissue testing.

(a) General. The Secretary, the

applicable governing State official, or

the certifying agent may require a

preharvest tissue test of any crop to be

sold or labeled as organically produced

that is grown on soil suspected by the

Secretary, the applicable governing

State official, or the certifying agent of

harboring a contaminant.

(b) Preharvest tissue test sample

collection. (1) The preharvest tissue test

sample collection conducted pursuant

to paragraph (a) of this section shall be

performed by an inspector representing

the Secretary, certifying agent, or

applicable governing State official and

shall be collected and submitted for

testing in accordance with Subchapter

400 of the ‘‘FDA Investigations
65958 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

Operations Manual’’ to a laboratory

accredited for the product test.

(2) The analytical methods used to

determine whether a preharvest tissue

test sample contains a residue of a

contaminant shall be selected as

appropriate from the FDA ‘‘Pesticide

Analytical Manual,’’ Volumes I and II,

or the ‘‘Official Methods of Analysis’’ of

the Association of Official Analytical

Chemists.

(c) Reporting of preharvest tissue test

results. The results of each preharvest

tissue test shall be reported to the

Secretary and, Provided, That if the test

result indicates that the residue level of

a contaminant in the organically

produced crop exceeds the EPA

tolerance or FDA action level, the

certifying agent or applicable official

also shall report the results to the

appropriate regulatory agency.

§ 205.432 Emergency pest or disease

treatment.

If a pesticide or other prohibited

substance is applied to a certified

organic farm, wild crop harvesting, or

handling operation due to a Federal or

State emergency pest eradication or

disease treatment program, and the

certified operation otherwise meets the

requirements of this part, the

certification status of the operation shall

not be affected as a result of the

application of the pesticide or other

prohibited substance, Provided, That:

(a) Any harvested crop or plant part

to be harvested that has contact with a

prohibited substance applied as the

result of a Federal or State emergency

pest eradication or disease treatment

program is not sold or labeled as

organically produced; and

(b) Any livestock that are treated with

a prohibited substance applied as the

result of a Federal or State emergency

pest or disease treatment program, or

product derived from such treated

livestock, shall not thereafter be labeled

or sold as organically produced, except

that:

(1) Milk or milk products may be

labeled or sold as organically produced

beginning 12 months following the last

date that the dairy animal was treated

with the prohibited substance; and

(2) The offspring of gestating

mammalian breeder stock treated with a

prohibited substance may be considered

organic Provided, That the breeder stock

was not in the last third of gestation on

the last date that the breeder stock was

treated with the prohibited substance.

§ 205.433 Reporting the application of a

prohibited substance.

A producer or handler shall

immediately report any instance of

application of a prohibited substance on

their certified operation to their

certifying agent and shall inform the

agent of the reason for, or the cause of,

the application.

§§ 205.434 through 205.451 [Reserved].

Appeals

§ 205.452 General.

Any person subject to the Act who

believes that he or she is adversely

affected by a decision of a member of

the National Organic Program staff or by

a certifying official may appeal such

decision to the Administrator.

§§ 205.453 through 205.479 [Reserved].

Equivalency of Imported Organic

Products

§ 205.480 Eligibility of agricultural

products for importation into the United

States.

Any agricultural product imported

into the United States that is labeled or

sold as organic or that contains an

ingredient represented as organic shall

have been produced and handled under

an organic certification program that the

Secretary has determined provides

safeguards and guidelines governing the

production and handling of such

products that are at least equivalent to

the requirements of the Act and the

regulations set forth in part 205.

§ 205.481 Determination of the

equivalency of foreign programs.

The determination of the equivalency

to the Act and regulations in part 205 of

a foreign organic certification program

will be based on an evaluation of the

following components of the program’s

provisions for organically produced and

handled agricultural products:

(a) The standards of production and

handling for agricultural products;

(b) The list of substances allowed and

prohibited for use in the production and

handling of agricultural products and

the criteria for establishing the

allowance or prohibition of substances

used in organic production and

handling;

(c) The requirements for, and process

by which, farms and handling

operations are inspected and certified as

operating under a system of organic

farming and handling, including the

requirements for documentation of the

practices and substances used;

(d) The measures identified to provide

adequate enforcement for, and

protection against, violations of the

program requirements;

(e) The requirements for and process

by which agents are evaluated and

accredited by an agency of the

government as being qualified to certify

organic farm, wild crop harvesting, or

handling operations; and

(f) Any other information relevant to

the production and certification of

organically produced products

including the administration of the

foreign organic certification program.

§ 205.482 Process for establishing

equivalency of foreign programs.

(a) A foreign organic certification

program that wants a determination of

the equivalency of its program, as

provided for in § 205.481, shall submit

to the Secretary a complete and accurate

description of its program, including

any of the laws and applicable

requirements upon which the program

is based and any information requested

by the Secretary.

(b) The foreign organic certification

program shall be notified of the

determination as follows:

(1) A foreign organic certification

program that the Secretary determines

to have safeguards and guidelines

equivalent to the Act and regulations in

part 205, the program’s representative

shall be notified in writing of the date

upon which agricultural products

produced and handled under that

program may begin to be imported into

the United States and sold or labeled as

organically produced; and

(2) A foreign organic certification

program that the Secretary determines

does not have guidelines and safeguards

equivalent to the Act and the

regulations in part 205, the program’s

representative shall be notified in

writing of the basis for such

determination. After receipt of the

notice, the program representative may

reapply at any time.

(c) If at any time the Secretary

determines that a foreign program is not

equivalent, the Secretary may withdraw

the equivalency status. Termination of

the equivalency status will be effective

upon receipt of the notice.

§ 205.483 Maintenance of eligibility for

importation.

(a) Maintenance of eligibility for

importation of agricultural products into

the United States that are to be sold or

labeled as organic will depend on the

results of periodic reviews by the

Secretary of the foreign organic

certification program under which the

products are produced and handled,

and the timely submission of documents

and other information necessary to

reevaluate the equivalency status of the

foreign organic certification program, as

requested by the Secretary, including

any amendments made to the foreign
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65959

organic certification program’s

requirements.

(b) For agricultural products imported

into the United States to continue to be

eligible to be sold or labeled as organic,

the program representative of the

program under which they were

produced and handled must notify the

Secretary of any amendments made to

the program requirements prior to their

implementation.

§§ 205.484—205.999 [Reserved]

PARTS 206—209 [RESERVED]

Dated: December 5, 1997.

Michael V. Dunn,

Assistant Secretary, Marketing and

Regulatory Programs.

Note: The following Attachment will not

appear in the Code of Federal Regulations.

Attachment—Regulatory Impact Assessment

for Proposed Rules Implementing the

Organic Foods Production Act of 1990

The Need for the Proposed Action

The Organic Foods Production Act (OFPA)

of 1990, Title XXI of the Food, Agriculture,

Conservation and Trade Act of 1990 (Farm

Bill), U.S.C. Title 7, mandates that the

Secretary of Agriculture develop a national

organic program. The OFPA states that the

Secretary shall establish an organic

certification program for farmers, wild crop

harvesters and handlers of agricultural

products that have been produced using

organic methods as provided for in the

OFPA. In addition, section 6514 of the OFPA

requires the Secretary to establish and

implement a program to accredit a governing

State official or any private person, who

meets the requirements of the Act, as a

certifying agent to certify that farm, wild crop

harvesting or handling operations are in

compliance with the standards set out in the

regulation. As mandated by the OFPA in

section 6501, the regulations are proposed for

the following purposes: (1) to establish

national standards governing the marketing

of certain agricultural products as organically

produced products; (2) to assure consumers

that organically produced products meet a

consistent standard; and (3) to facilitate

interstate commerce in fresh and processed

food that is organically produced. The

purposes of the OFPA are similar to those of

the quality grading programs currently

provided by USDA for many agricultural

products.

The following regulatory assessment is

provided to fulfill the requirements of

Executive Order 12866. This assessment

consists of a statement of the need for the

proposed action, an examination of

alternative approaches, and an analysis of the

benefits and costs. The analysis is necessarily

descriptive of the anticipated impacts of the

proposed rule. In the absence of basic market

data on the prices and quantities of organic

goods and services and the costs of organic

production, it is not possible to provide

quantitative estimates of the benefits and

costs of the proposed rule, except for the cost

of fees and recordkeeping proposed by the

USDA. Consequently, the analysis does not

contain an estimate of net benefits. Rather, it

describes the developments leading up to the

passage of the OFPA, outlines current market

conditions and recent trends, and identifies

the types of benefits and costs suggested by

the changes in market conditions that the

rule is expected to produce.

The OFPA was introduced at the request of

the organic community after it experienced a

number of problems in the marketing of

organic products. Because many consumers

are willing to pay price premiums for organic

food, producers (farmers and wild crop

harvesters) and handlers have an economic

incentive to label their products organic. But

one problem is that organic products cannot

be distinguished from conventionally

produced products by sight inspection;

hence, consumers rely on verification

methods, such as certification by private

entities or verification by retailers. To the

extent that consumers cannot verify organic

product claims and are therefore vulnerable

to fraud from the mislabeling of organic

products, implementation of uniform organic

standards and mandatory certification can be

presumed to be beneficial.

A second problem is the lack of uniformity

in various aspects of standards defining

organic production. As organic production

became established in the 1980’s, certifying

agencies were formed and some States passed

laws establishing standards for organic

production. However, many standards for

production, processing and labeling of

organic products were different to some

degree, causing disagreements between

certifiers over whose standards would apply

to ingredients used in multi-ingredient

organic processed products. Disagreements

about standards also created sourcing

problems for handlers of these multiingredient products, which at times resulted

in losses for producers of organic ingredients.

Producers, handlers and certifiers appear

to pay the costs resulting from the lack of

uniformity in standards, which interferes

with efficient resource allocation. However,

whether these costs are significant is an

empirical question. The data needed to

estimate the effect of disagreements between

certifiers on producer and handler costs

would have to be collected. The costs of

negotiating and maintaining reciprocity

agreements among certifiers would provide

one cost measure. These reciprocity

agreements, which specify the conditions

under which certifiers recognize each others’

standards, would be unnecessary within a

uniform national standards program. The

costs of private accreditation or shipment-byshipment certification, required to gain

access to some foreign markets such as the

European Union (EU), offer another indirect

measure of the burden of the current system

of variable standards. Certifiers would need

to be surveyed to estimate these costs.

The lack of uniformity in various aspects

of organic standards potentially reduces

consumer welfare by creating confusion over

the meaning of organic. However, the

existence of different standards for organic

production may provide consumers with a

choice of products which they may not have

under a program with a uniform standard.

Our review of the literature did not find

results of surveys of consumers’ perceptions

of the characteristics of organic foods.

Consumer surveys focusing specifically on

the meaning of organic and consumer

preferences for organic standards would need

to be conducted to determine more precisely

the nature and extent of consumer confusion

with, and level of confidence in, the status

quo.

A third problem is the constraint on market

growth resulting from the prohibition on

labeling meat and poultry products as

organic. The USDA Food Safety and

Inspection Service (FSIS) has withheld

approval for the use of organic labels on

these products pending the outcome of this

rulemaking. Industry data indicate the

existence of a small market for ‘‘natural’’

meat, measured as sales of meat from natural

foods stores, but no data are available on

what proportion of these sales might be

represented by organic meat. The data also

are lacking with which to estimate the

demand for organic meat and processed

products containing organic meat. Consumer

surveys indicating the degree of interest in

these products would provide a measure of

demand.

Alternatives to the Proposed Rule

Status Quo: The Organic Market in the

Absence of Regulation

Sales of organic food products produced

under a wide variety of protocols have grown

at approximately 20 percent per year since

1990, the year the OFPA was passed (Table

1). Annual sales data are not available prior

to 1990, but sales growth was approximately

10 percent from 1980 to 1989. Although the

growth in the organic industry since 1989 has

occurred without direct involvement of the

Federal government, the establishment of

national standards and accreditation could

have been anticipated by the industry since

1990, when Congress passed the OFPA.

Economic theory suggests the hypothesis that

investments in production, new product

development, and marketing during this

period may have incorporated expectations

for OFPA implementation. It has not been

possible to test this hypothesis or to separate

out the effect of these expectations from other

forces on industry growth.

The EU is the largest market for organic

food outside the United States. Valued at

approximately $1.7 billion in 1990, the

European market has been projected to grow

at a rate of 25 percent per year, reaching

approximately $14 billion by the year 2000

(Tate, p. 72). The EU regulations establishing

the basis for equivalency in organic

production among EU members and for

imports from outside the EU were adopted in

1991 (Council Regulation 2092/91) (Byng, p.

21). These rules are being implemented by

EU Member Countries, many of whom

already have been operating under their own

nationally recognized and mandated

standards of production and inspection. The

EU regulations allow for imports from nonEU countries whose national standards have

been recognized as equivalent to the EU

standards (Commission Regulation 94/92).
65960 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

International access to domestic organic

products may be very influential on

development of the organic industry in the

United States. In the absence of national

standards, U.S. organic producers have been

able to access European markets only by

obtaining specific product permissions

granted to individual importers by organic

regulatory authorities in an EU Member State

(Byng, p. 27–28). This process requires the

importer to satisfy the authorities, through

documentation and possible site inspection,

that the product in question has been

certified to have been produced under

equivalent standards of production and

inspection. It was intended as a temporary

arrangement to accommodate non-EU

countries that had not yet established

government systems regulating organic

production and certification. Growth in the

trade of organic products, particularly

exports, may be affected if equivalency

between the EU and the United States is not

established.

In the absence of a national program, the

use of the term organic may be affected by

the policies and regulations of other

regulatory bodies. For example, FSIS

currently does not approve the use of an

organic label on meat and poultry, and

without national standards they may

continue their current restrictions, thus

limiting growth in the sales of organic meat

and poultry. The Food and Drug

Administration (FDA) has allowed organic

labeling for all other food products with the

expectation that standards will be

forthcoming. In the absence of a national

standard, FDA’s future position on organic

labeling is uncertain. Additionally, in the

absence of a national program, certifying

agents would not be required to recognize

another certifier’s standards as equivalent. A

lack of reciprocity between certifiers also

may stifle the growth in trade of organic

products for reasons previously discussed in

the section of this assessment which

discusses the need for this proposed action.

A Pure Food Model

Some consumers expect organic food to be

pure food: that is, food which is completely

free of synthetic chemicals (Burros, p. C–1).

A pure food standard could be defined either

as one which would not allow any

exceptions to the prohibition on the use of

synthetic substances, including the proposed

use of some substances in emergency

situations, or as one which would require

that food test completely free of chemical

residues. Such a standard could be posed as

an alternative to the proposed rule; however,

it would be more restrictive than the

standard outlined in the OFPA, and would

require an amendment to the OFPA.

Residue free food may be more restrictive

than the standards of production and

handling currently adopted by the organic

industry itself. Standards based on residue

testing have been rejected by the industry

because: (1) residue testing focuses on the

end product rather than the production

process; (2) not all synthetic chemicals used

in production are detectable as residues; and

(3) some residues may appear in a product

that has been produced organically because

of unavoidable contamination in the soil,

drift, or for other reasons which are beyond

the farmer’s control.

Establishing organic standards to meet a

pure food definition could be expected to

increase marginal costs, causing the supply

curve to shift in and prices to increase,

ceteris paribus. Some consumers, such as

chemically sensitive persons or those who

advocate pure food, likely would be willing

to pay for a more restrictive definition for

organic food. Other consumers would find

the higher prices likely to result from a pure

food standard beyond their willingness to

pay for organic products and, therefore, may

choose not to purchase organic products.

The niche market for pure food could be

supplied by organic producers and handlers

within the context of the regulations and

restrictions contained in the final rule.

Individual farmers and handlers would

continue to have the option of putting

additional information about their

production methods on labeling materials of

organic products, or otherwise meeting the

product specifications of a pure food model,

as long as these were not inconsistent with

the national standards. Such additional

information is subject to the same truth in

labeling requirements as applied to all

products. A certifier would be able to supply

verification of additional product claims as a

service to its clients, without requiring that

all of its certified clients meet such product

specifications.

Exemption of Small Certifiers From

Accreditation

As explained below in the section entitled

‘‘Costs of the Proposed Rule’’ and as

demonstrated in Table 5, the smallest

certifiers (those with annual revenues of

$25,000 or less) may not have the resources

to meet all of the requirements of the rule,

such as accreditation fees, administrative and

personnel requirements, and conflict of

interest restrictions, based on their current

structure and revenues. Therefore, exempting

the smallest certifiers from the accreditation

requirement, similar to small producers being

exempt from certification requirements,

could mitigate the adverse impact of the rule

on this group. This option, however, would

require a legislative amendment to the OFPA.

The exemption of the smaller certifiers

from accreditation would carry with it many

of the limitations resulting from the absence

of Federal oversight. International trade

would likely be limited to products certified

by accredited certifiers. Protecting domestic

consumers from inappropriate organic claims

on the labels of products certified by exempt

certifiers would likely lead to greater

confusion over labels in the marketplace.

Federal enforcement agencies such as FDA,

the Bureau of Alcohol, Tobacco and Firearms

(ATF), and FSIS might wish to distinguish

accredited certifiers from those certifiers who

are exempt, perhaps by requiring accredited

certifiers’ clients to include the USDA seal on

their product labels.

One of the purposes of the OFPA described

in the statute is to assure consumers that

organically produced products meet a

consistent standard. Without Federal

oversight of certifiers, it would be difficult to

ensure that one national standard of

production and handling for agricultural

products would be employed. The result

could be the continuation of reciprocity

agreements between small, exempt certifiers

and large accredited ones. This could result

in a cost for small entities, while providing

less benefit to certified producers and

handlers than would be provided them by

accreditation of all certifiers.

Benefits of the Proposed Rule

There are three points to note regarding the

following discussion of benefits. First, while

the costs of the rule may initially fall on

certifiers, the benefits should be more widely

distributed. The expected growth in the

demand for organic products should create

benefits for consumers, producers, handlers

and certifiers. Second, not all benefits that

may arise from the rule are primarily

economic or quantifiable. Potential benefits

which are neither quantifiable, such as

increased protection for consumers

producers and handlers, nor economic, such

as greater communication among program

participants and the NOP staff, are discussed

here along with the economic benefits. Third,

where economic data are available, they are

generally not adequate to quantify economic

benefits.

Consumer Benefits

Two potential benefits may accrue to

consumers as a result of the proposed rule:

protection from false and misleading organic

food labels and a choice of a wider variety

of organic foods.

Without a national standard, consumers

can be mislead by labels on processed

products claiming to contain organic

ingredients, when in fact some of the

ingredients may not be organically produced

or individual ingredients may be certified

under different standards of organic

production. The proposed organic standards

and USDA accreditation of certifiers might

benefit consumers by providing assurance of

the authenticity of organic claims. However,

without additional data, it is not possible to

quantify this benefit.

Establishing a national standard for the

organic label is expected to increase the

supply and variety of organic products,

especially organic meat and poultry,

available to consumers in the market. The

organic label on meat and poultry products,

including processed foods such as soups and

entrees containing meat and poultry, would

likely account for the bulk of new items that

would enter the market following

implementation.

Producer and Handler Benefits

As previously discussed, the proposed rule

addresses the problem of existing certifying

agents using different standards and not

granting reciprocity to other certifying agents.

By accrediting certifiers, the rule would

establish the requirements and enforcement

mechanism that would protect producers and

handlers from inconsistent certification

services, lack of reciprocity between

certifiers, and competition from fraudulent

products, all of which can increase costs or

reduce revenues. In the absence of a system

of accreditation, the certifier of a final
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65961

product is not required to recognize the

certification of an intermediate product.

Thus, both primary farmers and food

handlers face a risk of being unable to sell

certified organic product when more than

one certifier is involved. The monitoring

activities of accreditation should reduce the

risk of restricted market access, and ensure

that certifiers are using consistent criteria for

certification and that certification personnel

are knowledgeable and free from conflicts of

interest.

The lack of a national standard for the

organic label may present a barrier to

marketing organic food products in the

United States and abroad. Current data show

organic sales growing at the rate of about 20

percent per year. It is unclear whether the

growth rate will continue, increase, or

decrease as a result of regulating the organic

industry. In the absence of technical barriers

to increasing production, implementation of

the rule is expected to result in an increase

in the rate of growth for organic exports and

organic meat and poultry.

It is expected that national standards

would create the conditions necessary for

increased access to international markets.

Despite restricted access to the European

market, the United States is the most

important non-EU supplier of organic

products to EU countries (Foreign

Agriculture Service (FAS), 1995). Import

authorizations have been granted for a

number of raw and processed commodities,

including sunflowers, buckwheat, beans,

sugar and apples. Demand is strong

throughout the European Union, and the

organic market share has been projected to

reach 2.5 percent of total food consumption

expenditures by 1998. Austria expects its

organic market share to equal one third of all

food sales by the year 2000 (FAS, Austria).

In 1994, France and Germany combined had

total retail sales of organic foods equal to that

of the United States (approximately $2

billion) (FAS, France and Germany). Japan’s

retail sales for that year were estimated to be

$688 million (SRI International, p. 15). Other

EU countries report growth rates equal to or

greater than the current growth rate in the

United States of about 20 percent per year.

Upon recognition of equivalency by the EU

and the removal of the trade restrictions

expected to follow implementation of the

final rule, larger growth in exports of organic

food products might be anticipated.

Increased access to international markets

also implies that imports of organic products

to the U.S. may increase. Currently, there are

no restrictions on importing organic products

to the U.S. in addition to those regulations

applying to conventional products. Data are

needed on the current trade balance in

organic products to establish a baseline from

which to measure changes in trade following

implementation. The U.S. Customs Agency

does not collect trade data that distinguish

organic from conventional goods.

The impact of national organic standards

on domestic production depends on

increasing demand and on whether

producers and handlers can lower their unit

costs through expansion of their economies

of scale of operations. Increasing demand

may also create an incentive for new

producers to enter the organic market. Input

costs also may decline if economies of scale

are achieved in input industries producing

for the organic market. These conclusions are

necessarily speculative given the lack of

information on costs and production

relationships for organic goods. However,

such expectations are consistent with

economic theory and experiences in other

industries. Gains to organic producers and

handlers may be partially offset by a decrease

in the demand for comparable nonorganically produced agricultural products,

causing conventional producers and handlers

to lose market share.

With the introduction of national standards

to regulate labeling of organic products,

processed organic products would acquire

commercial item descriptions which are

currently used by the food industry to

identify conventional products. Adopting bar

codes and industry accounting practices

which identify organic goods would make

sales information more accessible for

research and marketing purposes.

Certifier Benefits

Certifiers might experience benefits from

the rule through reductions in their

administrative costs, greater exchange of

information, and an increase in demand for

certification resulting from an increased

demand for organic products and from an

expansion of the organic market due to new

products entering the market.

There are several ways in which certifiers’

administrative costs may be reduced as a

result of the rule. First, increased assurance

through accreditation might reduce certifiers’

costs of maintaining access to organic

markets for their clients. Costs associated

with establishing reciprocity between

certifiers could be eliminated. Accreditation

and national standards would remove the

need to negotiate individual reciprocity

agreements with other certifiers, and would

simplify the process of certifying multiple

ingredient products, thus reducing

certification costs. The responsibility for

meeting production and certification

requirements of each ingredient would rest

with the certified producers and accredited

certifiers of the individual ingredients.

Second, certifiers would no longer would

have to pay private organizations for the

accreditation required to gain access to some

international markets. This would be of

particular benefit to the smaller certifiers

who may have been unable to enter these

markets because of the high cost of

international accreditation. A portion of the

administrative fees paid by each certifying

agent would support USDA activities to

negotiate equivalency of organic standards in

world markets so that producer clients of all

USDA accredited certifiers could have access

to these markets.

Third, in the long run, uniform standard of

production, certification and accreditation

should reduce the cost of training

certification staff. Industry-wide training

costs may increase initially, but should

decline as the pool of trained certifiers and

certification personnel increases and the

corresponding cost of training new

certification personnel decreases, especially

in those instances where personnel transfer

from one certifier to another. Standardized

materials, such as compliance guides and

training manuals, also should contribute to a

reduction in the cost of training certification

staff. In addition, USDA accreditation of

certifiers would present opportunities for

sharing information about standards,

practices and the general requirements of the

program through the National Organic

Program staff. This information is most

frequently provided in Small Entity

Compliance Guides and other printed

material.

The contribution of national standards to

increasing domestic demand and opening

international markets to U.S. organic

products provides opportunities for growth

in certification services. Certifiers’ average

costs of operation may decline as fixed costs

are spread over a growing number of

producers.

Costs of the Proposed Rule

Direct Program Costs

The proposed rule would impose direct

costs on certifiers in the form of a fee paid

to the Federal government for USDA

accreditation, which the OFPA requires of all

certifiers of organic food products in the

United States. Certifiers, in turn, generate

revenue by charging producers and handlers

a certification fee. Although the proposed

rule does not regulate the amount of

certification fees, the OFPA does require that

food products labeled organic be certified,

and that the fees which certifiers collect from

producers and handlers for this service be

reasonable.

The OFPA also provides for the collection

of reasonable fees by USDA from producers

and handlers who participate in the national

program. The following analysis of costs thus

considers both fees to be charged to certifiers

and fees to be charged to producers and

handlers to recover other program costs.

Certifiers’ costs of accreditation are

assumed to be passed on to producers and

handlers through an increase in certification

fees. Currently, supply and demand for

certification services determine the fees

charged in most areas. Some States charge

minimal fees for certification and instead

subsidize operating costs from general

revenues. The majority of certifiers structure

their fee schedules on a sliding scale based

on a measure of size, usually represented by

the client’s gross sales of organic products.

Direct national program costs would equal

the cost of the accreditation program plus the

costs of other functions carried out by the

organic program staff (salaries, overhead,

materials review, compliance costs, etc.).

These costs are estimated at approximately

$1 million for the first year that the program

is in full operation (Table 2). In future years,

direct national program costs would depend

upon the number of accreditation applicants,

annual reports received from certifiers, and

the number of producers, handlers and

certifiers who participate in the program.

Data collected by AMS indicate that the

number of organic farmers increased about 12

percent per year and the number of organic

handlers increased at about 11 percent per

year during the period 1990 to 1994. There
65962 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

is no indication that the rate of growth has

continued, or that the implementation of the

organic program would cause an increase in

the number of organic operations; however,

growth in retail sales, the addition of meat

and poultry to organic production, and the

possibility of increased exports suggest that

the number of operations may increase.

At the current (1995) level of retail sales,

the $1 million program costs imply an

additional consumer cost from the regulation

of approximately .04 cents per dollar. If the

known current 44 certifiers were to be

accredited and assume the total program cost

of $1 million, annual average costs per

certifier would be $22,727. Assuming these

costs are passed on to the estimated number

of 4,600 existing certified organic farmers

and handlers, and assuming that these

certified farmers and handlers continue in

business, certification costs for these 4,600

farmers and handlers would increase by an

average of $217 per year as a result of the

organic program. This increase may be

smaller if more than 4,600 farmers and

handlers are certified. Although the current

fees are based on the anticipated certification

of 4,600 farmers and handlers, we considered

for purposes of estimating the reporting and

recordkeeping burdens of the proposed rule

that the actual total number of certified

farmers and handlers who may participate in

the national program during the first three

years of the program may approximate 12,000

total farmers and handlers combined. These

distributions of direct program costs are

shown in Table 3. The actual distribution of

program costs will be a function of the

elasticity of demand for organic goods. The

more inelastic the demand, the greater the

portion of costs paid by consumers. If

demand is elastic, producers and handlers

will share a larger portion of the cost, and

supply will be affected.

Producers and handlers would be required

to produce and handle products in

accordance with the standards set forth in the

rule, and supply the information necessary to

certifiers to verify certification requirements.

These requirements are not expected to

impose additional costs on those currently

certified. Certified farmers and handlers of

organic products are currently complying

with certification requirements which are not

substantially different from those in the

proposed rule. Organic producers and

handlers who currently are not certified, and

new entrants to organic production and

handling, would face higher costs.

The type of government fee structure

largely would determine how program costs

are distributed among certifiers and,

secondarily, among producers and handlers.

The impact of program costs on certifiers also

would depend on the basis for the fees

certifiers charge their customers, and on their

customers’ characteristics.

The provisions for assessing fee for direct

services presented in the proposed rule set

fixed application and administrative fees of

$640 and $2,000, respectively, to be paid by

certifiers, with the bulk of accreditation costs

billed to certifiers on a time rate for direct

services to conduct site visits. The level of

these fixed fees, plus the variable fee for

direct services, sets a lower bound on the size

at which a certifier could operate and be

economically viable. A certifier would have

to collect enough revenue from the clients it

certifies to cover these fees plus operating

costs. Due to the fixed components of the

fees, larger certifiers would have the ability

to spread their costs over a greater number

of farmers/handlers. Additionally, as

required by the OFPA, a private certifying

agent would have to furnish reasonable

security for the purpose of protecting the

rights of farms and handling operations

certified by the certifying agent. The amount

and type of security would be established

through future rulemaking.

Under the fee for direct services

provisions, labor hours, travel and per diem

costs for the site inspection required for

accreditation would be included in the

variable fee for direct services. This practice

is used by other USDA agencies that conduct

inspection programs. The AMS estimates the

average cost to conduct each accreditation

site visit to be $3,500 per visit. The frequency

of site-evaluations for each certifying agent

could be expected to decrease as the operator

becomes more familiar with the program

regulations. Pre-accreditation site valuations

might be necessary to enable the certifier to

become accredited, and an evaluation would

be required for confirmation of accreditation

and thereafter for renewal of accreditation,

which occurs every 5 years.

The travel cost component of this figure

would vary based on the certifier’s distance

from Washington, D.C., because site visits

will be conducted by the organic program

staff headquartered there. An alternative

method of distributing travel costs would be

to estimate an average annual cost per trip,

given the expected number of trips and the

geographic distribution of all certifiers, and

charge that amount for all site visits,

regardless of location.

A measure of size is incorporated into the

fee structure, i.e., the time spent conducting

each accreditation by organic program staff.

The variable portion of the fee would

distribute program costs among certifiers

according to the resources actually consumed

in providing the accreditation service. The

more complex and larger the certifier, the

more time required to conduct an evaluation

and the larger their fee for accreditation.

However, imposing an hourly rate for

accreditation services introduces a subjective

measure in the determination of fees. With

several national program staff conducting

accreditation evaluations, disputes over the

time required to complete a specific

accreditation process would be difficult to

resolve on an objective basis.

If program costs were distributed

uniformly among existing certifiers, the

smallest certifiers, those with annual

revenues of $25,000 or less, may not have the

financial capacity to continue to operate

within the requirements of the regulation,

based on their current revenues. Distributing

program costs based on a measure of size

would permit more small certifiers to stay in

business, provided that they met other

qualifications for accreditation. Generally, a

fee structure proportionate to size would

result in certifiers contributing to the costs of

the program in proportion to the gains they

accrue from it, their revenues being based

largely on the share of total organic output

produced by the operations they certify.

An additional feature of the proposed fees

for direct services is that it attempts to

distribute program costs according to a

simplified measure of size through a variable

fee charged directly to farmers and handlers

who are certified by an accredited certifying

agent. Under the proposed rule, a farmer

would pay USDA an annual fee of $50 and

a handler would pay $500 per year. The

difference between farmer and handler fees is

designed to account for the difference in staff

time AMS estimates will be devoted to

handler and processed food issues relative to

farmer and raw product issues. Half of the

total program cost of $1 million is assumed

to be covered by these fees.

Administrative Requirements and Associated

Costs

The proposed rule also would impose

administrative costs, such as submission of

information, recordkeeeping, and access to

records that may constitute an additional

burden. The actual amount of the additional

administrative costs that would be imposed

by the final rule is expected to be different

for those entities who would begin their

activities only after the national program is

implemented. Certifiers, farmers, wild crop

harvesters and handlers who currently are

active in the organic industry already

perform most of these administrative

functions; therefore, the additional costs to

them would depend upon the extent to

which their current practices are different

from the requirements of the final regulation.

The following list describes several proposed

administrative requirements or optional

submissions and the probable resources

required for compliance:

1. A list of farmers, wild crop harvesters

and handlers currently certified. This

information could be compiled from existing

records. After implementation, certifiers

would be required to submit on a quarterly

basis a list of operations certified during that

quarter.

2. A description of the certification

decision process, compliance review

procedures, a plan for allowing public access

to records, and measures taken to prevent

conflicts of interest. These policies may have

to be created or modified to conform to the

regulation.

3. Documentation of financial capacity and

compliance with other administrative

requirements (e.g., fee structure,

recordkeeping capability, income sources,

and business relationships showing absence

of conflicts of interest). Some of this

information would be compiled from existing

records (e.g., income sources and fee

schedules), and some may be generated from

other sources.

4. Retention of certification documents for

10 years. This activity requires records and

database management capabilities and

resources (storage space, file cabinets,

electronic storage, etc.). In an informal

inquiry, AMS found that most existing

certifiers currently retain records for at least

10 years, and use both electronic and paper

storage. We believe that this requirement
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65963

would not pose an additional burden on

existing certifiers.

The Act also requires producers and

handlers to retain their records for a

minimum of five years. According to the

same informal AMS inquiry, the industry

generally requires records to be kept for three

years. Overall, producer and handler

operation records required by the proposed

regulation are extensions of, or modifications

to, documents already maintained under

normal industry practice, and therefore this

requirement would have minimal impact on

operations currently certified.

5. Public access would have to be provided

to certification records, such as a list of

certified farmers and handlers, their dates of

certification, products produced, and the

results of pesticide residue tests. This

requirement would have minimal impact

given the requirements for retaining records.

6. Certifiers are required to supply program

information to certification applicants. To

comply with this requirement, certifiers may

need to modify existing standards and

practice.

The criteria for qualified personnel

required in the proposed rule may likely

result in an increase in labor costs for some

existing certifiers and, initially, an increase

in training costs. The amount of additional

costs to these certifiers would depend on the

level of expertise among current certification

agency staff, the extent to which certifiers

currently rely on volunteers, and the current

costs of training certification staff.

Our proposed inspector training

requirements conform closely to current

established practice in the industry and are

not expected to impose an additional burden

on most existing certifiers. Training programs

are currently offered by the Independent

Organic Inspectors Association (IOIA), an

organization of approximately 165 organic

certification inspectors, and by some of the

larger certifiers (IOIA, p. 1).

Costs to existing certifiers to provide

additional training to other staff are difficult

to measure in the absence of information on

current staff skill levels or the existence of

formal training other than inspector training.

Some agencies rely on volunteer staff who

may have had no formal training, but the

extent of this practice is unknown. AMS

intends to offer assistance to certifiers,

producers and handlers by providing guide

books and other printed material that would

enable participants to better understand the

regulations. In addition, AMS intends to

continue open and frequent communication

with certifiers and inspectors to provide as

much information as possible to aid them in

fulfilling the requirements of the regulations.

Table 5 estimates the total initial costs for

an applicant to become accredited as a

certifying agent under the NOP, and the

estimated total initial costs for a producer or

handler to become certified. The costs

presented in Table 5 are the upper-bound

estimates for participation in the National

Organic Program for new organic certifiers,

farmers and handlers.

State Program Costs of the Proposed Rule

The proposed rule is based on the OFPA,

a review of State and private certification

programs, National Organic Standards Board

(NOSB) recommendations, EU regulations,

and foreign organic program provisions.

Table 4 compares many general provisions of

the proposed rule to existing State and

private certification programs and the NOSB

recommendations. The proposed rule

encompasses most of the principles of

existing State programs, with specific

requirements modified to be performancebased rather than design-based. For example,

the proposed standards for housing poultry

require that farmers provide adequate light

and space, rather than requiring a particular

method of housing. With a performancebased rule, certifiers are free to exercise their

judgement regarding how farmers meet the

standards. Thus, the proposed rule provides

greater flexibility than is provided by many

existing programs in determining how a

particular standard can be met.

In many cases, the proposed rule provides

standards where many existing State

programs are silent. For example, according

to AMS data, only two of the eleven State

agencies and 16 of the 33 private agencies

certified livestock in 1994. In the same year,

only six of the eleven States and 15 of the

33 private agencies certified processors or

handlers.

There are 27 States with some standards

governing the production or handling of

organic food, and comparing features of State

standards to the provisions of the proposed

rule provides a means of examining the

potential impact of the rule on existing State

programs. There are two situations in which

implementation of a national program may

impose additional costs on States by

requiring changes in their existing programs.

First, where State standards are below

Federal standards or where elements of the

Federal standards are missing from a State

program, these States would be required to

make changes in their programs that they

might otherwise not make. Second, where

State standards exceed the Federal standards

and the differences are not approved by the

USDA, States also would be required to make

changes in their programs. States without

organic standards or whose current standards

either would conform to those of the national

program or would be approved by the

Secretary would not incur additional costs

resulting from required changes. In States

with existing organic standards but no

certification program, such as California, the

national standards would apply to private

certifiers operating within the State and,

therefore, they also are relevant to indicating

the degree of impact a national program

would have on existing State programs. An

analysis of selected aspects of specific

standards follows:

Transition period. The transition period,

which would specify the time period during

which prohibited materials cannot be applied

before a field can be certified as organic, is

included in most State organic standards.

The OFPA specifies a required transition

period of three years before certifying a field.

Existing certifiers and farmers will have had

several years prior to implementation to

conform with this requirement and its impact

is expected to be minimal. In fact, a required

transition period of three years is currently

in effect in 20 out of 23 States.

Animal drug use. Another common feature

of organic standards is the restricted use of

animal drugs for livestock. Where livestock

standards have been adopted by existing

State programs, most prohibit the use of

animal drugs except for the treatment of a

specific disease condition. Use of animal

drugs is generally prohibited within 90 days

prior to slaughter, or the sale of milk or eggs

as organic. The standards in the proposed

rule would impose a more restrictive time

period for drug use in animals for slaughter,

but do not differ from most existing State

standards in prohibiting the use of drugs on

healthy animals.

Materials list. Lists of approved synthetic

materials, including soil amendments and

pesticides, vary from one State program to

another. A detailed analysis of specific

differences in the various existing materials

lists shows them to be overlapping in most

cases, but mutually exclusive in others. The

impact of the national program would not be

determined by how the national standards

differ from current certification standards,

but rather by how the national standards

differ from actual practice. Data on materials

currently used in organic production are not

available to make this comparison.

Non-Quantifiable Costs

Some certifiers have identified the loss of

independence in setting certification

standards within a uniform national standard

program as imposing a cost. Certification to

a national standard has been described as

‘‘forced reciprocity,’’ that is, compelling

certifiers to recognize as equal in value a

product certified by a competitor. A national

accreditation program would preclude a

certifier of an end product from refusing to

accept a different certification of an

ingredient used in the end product. A lack

of reciprocity can, in fact, impose costs on

manufacturers in the form of lost product

(Natural Foods Merchandiser, April 1995).

Other certifiers welcome the enforcement of

uniform national standards and view

mandatory accreditation as a benefit because

it would eliminate the risk of potentially

costly reciprocity disputes. What appears to

be at stake is the determination of market

shares among certifiers: losses to one certifier

would constitute gains to others.

Another possible cost of the rule may

result from the requirement that certifiers

provide access to records. The Secretary and

the applicable governing State official would

have access to all records and certifiers

would have to provide public access to

laboratory analyses and certification

documents other than confidential business

information. While not quantifiable, this

requirement may represent a substantial

change in the way some certifiers currently

operate and interact with producers, other

certifiers, government agencies, and the

public.

Conclusion

Ideally, the net benefits of the proposed

rule would be estimated by employing a

welfare analysis. In a welfare model, the

quantitative assessment of benefits would be

represented by net changes in consumer and

producer surplus, i.e., the difference between
65964 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

the willingness to pay (or firm cost structure

in the case of producers) and the market

price of organic food. These net changes

would be estimated using information about

the cost structure of the industry, the demand

for organic food, and projected shifts in

supply and demand resulting from the

various factors discussed in the assessment.

Although researchers have conducted

numerous small-scale studies to determine

consumers’ willingness to pay for certain

organic products (primarily fresh produce)

and to identify reasons why conventional

food buyers do not choose organic food

products (Hammitt, 1990 and 1993; Jolly;

Misra et al.; Park and Lohr; Weaver et al.),

the available data are insufficient to support

a quantitative assessment of this type.

USDA has identified the entities that may

be affected by the proposed rule and has

analyzed the anticipated impacts of the rule

on them based on our knowledge of the

industry and limited data. However, USDA

lacks data to thoroughly and quantitatively

describe the existing organic industry and

quantitatively analyze the effects of the

proposed rule. To assist in the assessment of

comments on the rule and to better report to

the public the effects of the rule, USDA

welcomes responses in the following areas.

USDA is particularly interested in data and

analyses that are nationally representative.

1. To establish a baseline, USDA requests

data on the number of farmers producing and

marketing organic goods, the number of

handlers of organic goods, and the number of

organic farmers, wild crop harvesters and

handlers who are operating with third party

certification, and the number who operating

without third party certification..

2. To establish a baseline, USDA requests

data on the number of entities certifying

organic farmers and handlers and the number

of organic certifiers who currently are

accredited.

3. To establish a baseline, USDA requests

data to characterize the costs of organic

production and revenues from organic

farming.

4. To assess the impact of the proposed

program, USDA requests data on fees

currently paid by organic producers and

handlers for certification services and on fees

currently paid by organic certifiers for

accreditation.

5. To assess the impacts of the proposed

program and to better project the costs of

operating the National Organic Program

(which will be recovered by fees), USDA

requests information to project the number of

organic producers and handlers who would

apply for certification under the National

Organic Program. USDA also requests

information to project the number of entities

which would seek USDA accreditation as an

organic certifying agent.

6. The regulatory impact assessment for the

proposed rule considers that cost may be

incurred by fraudulent labeling of organic

products. To what extent does mislabeling of

non-organically produced products as

organic occur and what are the market

impacts in terms of quantities of organic

goods sold and the prices for organic goods?

7. This rule would permit the marketing of

meat and poultry products as organic, which

is not currently permitted. USDA requests

data and analyses which would support

projections of the demand for organic meat

and poultry.

8. The regulatory impact assessment for

this rule reports that sales of organic goods

have been growing at an annual rate of 20

percent. Are there data to support a different

rate?

9. We estimate that the organic industry

may grow after program implementation due

to the introduction of organic meat and

poultry and increased exports of organic

agricultural products. Are there data to

estimate the impact that this rule is likely to

have on overall industry growth?

10. The organic industry and consumers of

organic goods may benefit if industry growth

results in economies of scale, and production

and marketing efficiencies. What has been

the industry experience in this area and do

industry participants anticipate such benefits

from this rule?

References

lll. 1995. Organic Update: Reciprocity

Controversies Intensify, Exacerbating

Certifier/Manufacturer Tensions. Natural

Foods Merchandiser (April): (no page

numbers).

Burros, Marian. 1996. A New Goal Beyond

Organic: ‘‘Clean Food.’’ The New York

Times (February 7).

Byng, John. 1994. UK and European

Community (EC) Legislation. In,

Handbook of Organic Food Processing

and Production. Simon Wright (ed.). pp.

17–30. Glasgow: Blackie Academic and

Professional.

California Department of Health Services.

1995. Report on the Registration of

California Organic Processed Food

Firms. Sacramento: State of California.

Dunn, Julie Anton. 1995. Organic Food and

Fiber: An Analysis of 1994 Certified

Production in the United States. U.S.

Department of Agriculture, Agricultural

Marketing Service.

Emerich, Monica. 1996. Industry Growth:

22.6%. Natural Foods Merchandiser

(June):1–39.

Hammitt, James K. 1990. Risk Perceptions

and Food Choice: An Exploratory

Analysis of Organic-Versus

Conventional-Produce Buyers. Risk

Analysis, Vol.10, No.3: 367–374.

Hammitt, James K. 1993. Consumer

Willingness to Pay to Avoid Pesticide

Residues. Statistica Sinica, 3.

Independent Organic Inspectors Association.

1996. IOIA 1996 Membership Directory.

Winona, MN.

Jolly, Desmond A., Howard G. Schutz,

Katherine V. Diaz-Knauf and Jagjeet

Johal. 1989. Organic Foods: Consumer

Attitudes and Use. Food Technology

(November): 60-66.

Jolly, Desmond A. 1991. Differences Between

Buyers and Nonbuyers of Organic

Produce and Willingness to Pay Organic

Price Premiums. Journal of Agribusiness

(Spring): 97–111.

Klonsky, Karen, and Laura Tourte. 1995.

Statistical Review of California’s Organic

Agriculture, 1992–93. Report prepared

for the California Department of Food

and Agriculture Organic Program.

Cooperative Extension, Department of

Agricultural Economics, University of

California, Davis.

Mergentime, Ken. 1994. The USA

Perspective. In, Handbook of Organic

Food Processing and Production. Simon

Wright (ed.). pp. 160–183. Glasgow:

Blackie Academic and Professional.

Mergentime, Ken and Monica Emerich. 1995.

Organic Sales Jump Over $2 Billion Mark

in 1994. Natural Foods Merchandiser

(June): 74–76.

Mergentime, Ken and Monica Emerich. 1996.

Widening Market Carries Organic Sales

to $2.8 Billion in 1995. Natural Foods

Merchandiser (June): 36–38.

Misra, Sukant, Chung L. Huang and Stephen

L. Ott. 1991. Georgia Consumers’

Preference for Organically Grown Fresh

Produce. Journal of Agribusiness (Fall):

53–65.

Park, Timothy A. and Luanne Lohr. 1996.

Supply and Demand Factors for Organic

Produce. American Journal of

Agricultural Economics, Vol.78 (August):

647–655.

SRI International. 1992. The Japanese Market

for Health Foods and Beverages.

Prepared for the U.S. Agricultural Trade

Office, Tokyo, Japan.

Tate, William. 1991. Organic Produce in

Europe. The Economist Intelligence Unit

Special Report No. 2128. London:

Business International Limited.

Underhill, S. E. and E. E. Figueroa. 1993.

Consumer Preferences for NonConventionally Grown Produce. Paper

presented at the Valuing Food Safety and

Nutrition Conference, organized by the

NE–165 Regional Research Project.

Alexandria, VA, June 2–4.

USDA Foreign Agricultural Service. 1995.

Agricultural Situation: Agricultural

Highlights—Winter 1995. Report from

Austria. Code 24, Sequence No. 007.

USDA Foreign Agricultural Service. 1995.

Agricultural Situation: Organic Food.

Report from Germany. Code 24,

Sequence No. 011.

USDA Foreign Agricultural Service. 1996.

Agricultural Situation: Organic Food

Market Potential and Regulations. Report

from France. Code 24, Sequence No. 002.

Weaver, Robert D., David J. Evans and A. E.

Luloff. 1992. Pesticide Use in Tomato

Production: Consumer Concerns and

Willingness-to-Pay. Agribusiness, Vol.8

No.2: 131–142.

TABLE 1.—ORGANIC SALES, 1980–

1995

Year Sales (in $

millions)

1980 .......................................... 178

1989 .......................................... 631

1990 .......................................... 1,000

1991 .......................................... 1,250

1992 .......................................... 1,540
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65965

TABLE 1.—ORGANIC SALES, 1980–

1995—Continued

Year Sales (in $

millions)

1993 .......................................... 1,890

1994 .......................................... 2,310

1995 .......................................... 2,800

Source: Emerich, p. 23.

TABLE 2.—BREAKDOWN OF PROJECTED NATIONAL ORGANIC PROGRAM COSTS

[Total Program Costs]

Salaries and Benefits ................ $644,000

TABLE 2.—BREAKDOWN OF PROJECTED NATIONAL ORGANIC PROGRAM COSTS—Continued

[Total Program Costs]

Operating Costs * ...................... 180,617

Agency Overhead ** .................. 100,403

Division Overhead ** ................. 74,980

Total ................................... 1,000,000

Total Staffing ..................... 12

* Operating costs include travel, printing,

training, equipment, supplies, rent and other

services. **Agency and Division overhead includes

administrative support, contract and other fees

for services, rent, heat, communications, and

major equipment purchases.

Source: AMS.

TABLE 3.—DISTRIBUTION OF DIRECT

ANNUAL PROGRAM COSTS FOR OFPA

[In dollars]

Direct program costs ................ $1,000,000

Costs per dollar sales ($2.8 billion) ........................................ 0.00036

(.036¢)

Costs per certifier (44 certifiers) 22,727

Costs per farmer/handler (4,600

farmers/handlers) .................. 217

Source: AMS data; Emerich, p. 23.

TABLE 4.—COMPARISON OF THE PROPOSED NATIONAL ORGANIC PROGRAM REGULATIONS WITH THE NOSB

RECOMMENDATIONS AND REPRESENTATIVE STATE AND PRIVATE PROGRAMS

USDA provision in the proposed rule NOSB recommendation State programs Private programs

PRODUCTION AND HANDLING:

Standards based on identified organic principles .......................................... Recommended

principles which

USDA used in

the proposed

rule.

Similar principles .. Similar principles.

Management includes long-range planning, such as an organic plan .......... Similar ................... Similar ................... Similar.

Preventive measures and mechanical or biological methods, as opposed to

substances, used to control pests, weeds, and disease in crops and livestock.

Similar ................... Similar; few States

have livestock

standards.

Similar; few programs have livestock standards.

Organic planting stock, livestock, and ingredients used in preference to

non-organic.

Similar ................... Similar ................... Similar.

Livestock may be fed non-organic feed under certain circumstances ........... Similar ................... Similar ................... Similar.

Prevention of prohibited substances contacting organic products ................. Similar ................... Similar ................... Similar.

Allowed use of specific synthetic substances ................................................ Proposed National

List reflects almost all of the

NOSB recommendations.

Similar; lists vary

among States.

Similar; lists vary

among programs.

Criteria for list of allowed synthetic substances ............................................. Similar ................... General criteria are

similar.

General criteria are

similar.

Mechanical or biological methods, as opposed to substances, used in handling operations.Similar ................... Similar; few States

have handling

standards.

Similar; few programs have handling standards.

Allowed use of non-organic agricultural ingredients in processed organic

food.

Similar ................... Similar ................... Similar.

Allowed use of specific non-agricultural ingredients in processed organic

food.

Proposed National

List reflects almost all of the

NOSB recommendations.

Similar, but few

States have handling standards;

lists differ.

Similar, but few

programs have

handling standards; lists differ.

CERTIFICATION:

Products labeled organic must originate from certified operations ................ Similar ................... Few States do

their own certification but generally producers

and handlers are

certified.

Private programs

generally certify.

Certification performed by a third-party in a prescribed manner ................... Similar ................... Similar for States

that require certification.

Similar.

Annual certification with verification by inspection of site and records .......... Similar ................... Similar for States

that require certification.

Similar.

All certifications granted by accredited certifiers are to be considered

equivalent.

Similar ................... Equivalency granted on a case-bycase basis.Equivalency granted on a case-bycase basis.

ACCREDITATION:
65966 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules

TABLE 4.—COMPARISON OF THE PROPOSED NATIONAL ORGANIC PROGRAM REGULATIONS WITH THE NOSB

RECOMMENDATIONS AND REPRESENTATIVE STATE AND PRIVATE PROGRAMS—Continued

USDA provision in the proposed rule NOSB recommendation State programs Private programs

All certifiers must be accredited by USDA ..................................................... Similar ................... Very few States

accredit or register certifiers.

Very few programs

are accredited

by private organizations.

Certifiers evaluate and train inspectors and certification personnel .............. Similar ................... Similar; differs

among States.

Similar; differs

among programs.

Recordkeeping requirements, public access requirements, and safeguard

requirements for confidential information.

Similar ................... Similar ................... Similar.

Measures enforced to prevent conflict of interest by certifier ........................ Similar ................... Similar, as part of

State’s general

requirements.

Similar, but may

not be monitored.

Certifier performance reviewed by peers ....................................................... Similar ................... Similar in any

State accrediting

certifiers.

Similar for the purpose of establishing reciprocity.

OTHER ELEMENTS:

Site-specific unavoidable residual environmental contamination level used

to determine organic status.

Predetermined unavoidable residual environmental contamination level

should be used

to determine organic status.

Similar, but some

States also use

a predetermined

specified residue

level to determine organic

status.

Similar, but some

programs also

use a predetermined specified

residue level to

determine organic status.

Enforcement by Federal government ............................................................. Similar ................... Intra-State enforcement of existing

State regulations.

Enforcement of individual program

policies.

Access to international markets ..................................................................... Not applicable ....... Individually acquired agreements.Individually acquired agreements.

Evaluation of foreign programs to determine equivalency ............................. Similar ................... Not applicable ....... Not applicable.

Source: AMS.

TABLE 5.—ESTIMATED UPPER-BOUND COSTS OF ACCREDITATION AND CERTIFICATION

ESTIMATED COST TO CERTIFIERS FOR INITIAL ACCREDITATION

Accreditation application fee .................................................................................................................... $640

Site evaluation fee* .................................................................................................................................. 3,500

USDA Administrative fee .......................................................................................................................... 2,000

Total fees ........................................................................................................................................... 6,140

Paperwork reporting burden ..................................................................................................................... 23,931 (for new organic certifiers)

Paperwork recordkeeping burden ............................................................................................................ 60

Total reporting and recordkeeping .................................................................................................... 23,991

ESTIMATED TOTAL COST FOR INITIAL ACCREDITATION ................................................................ 30,131

ESTIMATED COST TO PRODUCERS FOR INITIAL CERTIFICATION

Certification fee** ...................................................................................................................................... $413

USDA fee .................................................................................................................................................. 50

Total fees ........................................................................................................................................... 463

Paperwork reporting burden ..................................................................................................................... 381 (for new organic producers)

Paperwork recordkeeping burden ............................................................................................................ 34

Total reporting and recordkeeping .................................................................................................... 415

ESTIMATED TOTAL COST TO PRODUCERS FOR INITIAL CERTIFICATION .................................... 878

ESTIMATED COST TO HANDLERS FOR INITIAL CERTIFICATION

Certification fee ** ..................................................................................................................................... 943

USDA fee .................................................................................................................................................. 500

Total fees ........................................................................................................................................... 1,443

Paperwork reporting burden ..................................................................................................................... 433 (for new organic handlers)

Paperwork recordkeeping burden ............................................................................................................ 34

Total reporting and recordkeeping .................................................................................................... 467
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Proposed Rules 65967

TABLE 5.—ESTIMATED UPPER-BOUND COSTS OF ACCREDITATION AND CERTIFICATION—Continued

ESTIMATED TOTAL COST TO HANDLERS FOR INITIAL CERTIFICATION ....................................... 1,910

*Each certifying agent would have a site-evaluation to confirm accreditation, and thereafter a subsequent renewal evaluation at least every 5

years following confirmation of accreditation. In some cases, a pre-confirmation site visit may be necessary. We anticipate that the frequency of

site evaluation would be based on the performance of the certifying agent and would be higher during the initial years of the program.

**The estimated certification fee is based on the average of fees charged by a representative group of certifying agents: private non-profit, private for-profit and a State agency. Most certifying agents in our representative group include the cost of inspection and, if applicable, required

laboratory testing in the certification fee.

Source: AMS.

[FR Doc. 97–32322 Filed 12–15–97; 8:45 am]

BILLING CODE 3410–02–P