Formal Recommendation 

 From: National Organic Standards Board (NOSB)

 To: the National Organic Program (NOP)

Date: 

Subject: 

Chair: 

The NOSB hereby recommends to the NOP the following: 

Rulemaking Action:

Guidance Statement:

Other:

Statement of Recommendation:;DŽƚŝŽŶηϭͿ

 

Rationale Supporting Recommendation (including consistency with OFPA and NOP):

 

Committee Vote:

 

Moved: 

Seconded: 

Yes: No: Abstain: Absent: Recuse: 

 

 

 Page 1 revised 04/13 ma
National Organic Standards Board

Compliance, Accreditation, and Certification Sub-Committee

Request for NOP Clarification and Guidance on Retail Compliance and Certification

*Reviewed February 25, 2014 - Minor revisions.

1. Introduction

While the National Organic Standards and various National Organic Program (NOP) guidance 

resources are clear on the compliance expectations for growers, handlers, and livestock 

operators, the NOP’s expectations are less clear for retail operators. Retail stores function not 

only as handlers of organic products, but also as purchasers, verifiers, and marketers of specific 

products and organic agriculture in general. In many cases, retail operations are exempt from 

the requirement for certification for handlers (7 CFR 205.101(a)(2)) and excluded from the 

certification requirement (§205.101(b)(2)). However, exclusion and exemption are not 

completely clear regarding the extent to which a retailer may handle and process products while 

still qualifying for the exemption and/or exclusion. Numerous retailers have become voluntarily 

certified as handlers, yet there are many areas where handling organic system plans (OSP) and 

operational expectations do not apply directly to retail operations, and the retail sector would 

benefit from clearer NOP guidance on its expectations for compliance for certified and noncertified retail operations. Finally, retailers who sell both organic and non-organic products, 

market their certification to consumers, often using the USDA seal. Retailers (along with other 

producers) need clear guidance on the use of the USDA Organic Seal and the “organic” claim in 

general, in the marketing of split operations.

The CAC Subcommittee (CACS) prepared a discussion document on this topic for the 

scheduled 2013 NOSB meeting in Louisville. While that meeting was not held, we received 

sufficient written comments from organic stakeholders to move forward with a proposal. The 

discussion document sought to engage all impacted stakeholders and ask for their input as to 

what specific issues need more clarity to help with understanding and compliance. We also 

sought detailed information about any existing inconsistencies that could use more clarity to

enable a more consistent process of review and accreditation by the various accredited 

certifying agents (ACAs), NOP, and ultimately the retailers themselves. 

Based on public comment received for the fall 2013 meeting, the subcommittee has prepared a 

proposal which asks the National Organic Program to provide enhanced education and 

outreach targeting the retail sector. The intent is to attempt to accomplish this through education 

and outreach, in a way that can provide better clarification to assist the retailers and certifiers 

with a more clear and concise understanding of what is required of an organic retailer by the 

regulation. 

2. Background

In 2009, the NOSB approved a CACS Guidance Recommendation entitled “Clarification of 

Marketing for Voluntary Retail Certification.” This recommendation presented general 

background on the exemptions allowed for retailers, and described a need for clearer guidance 

around the use of the USDA seal and the “organic” claim in the marketing of organic retail 

stores. The recommendation acknowledged that the phrase “Certified Organic Retailer” may be 

challenging to a consumer, and identified a need for clearer guidance around the use of this 

term. 
The 2009 recommendation then identifies a number of specific certification areas where the 

NOP should provide clearer guidance in order to facilitate consistency and clarity among retail 

operators:

• Guidance on the use of the USDA seal in marketing certified retail operations.

• Clear and consistent guidelines for deli and bakery operations, identifying precisely 

under what conditions certification is required.

• Additional guidance on the ACAs’ role in managing voluntary retail certification 

programs. 

• Clarity on retailers’ role in improving the marketing of voluntary retailer organic 

certification. 

A number of the 2009 NOSB’s recommendations remain unaddressed by the NOP. Given that 

the issues described in the earlier recommendation remain critical, we have updated that 

recommendation to include a number of additional concerns and requests. 

The CAC subcommittee prepared a discussion document for the scheduled fall 2013 NOSB 

meeting, which was cancelled. However, the written public comment received for that 

discussion document was used in the development of the current proposal. 

3. Relevant Areas of the Rule

§ 205.100 What has to be certified.

(a) Except for operations exempt or excluded in § 205.101, each production or handling 

operation or specified portion of a production or handling operation that produces or 

handles crops, livestock, livestock products, or other agricultural products that are 

intended to be sold, labeled, or represented as “100 percent organic,” “organic,” or 

“made with organic (specified ingredients or food group(s))” must be certified according 

to the provisions of subpart E of this part and must meet all other applicable 

requirements of this part.

(b) Any production or handling operation or specified portion of a production or handling 

operation that has been already certified by a certifying agent on the date that the 

certifying agent receives its accreditation under this part shall be deemed to be certified 

under the Act until the operation's next anniversary date of certification. Such recognition 

shall only be available to those operations certified by a certifying agent that receives its 

accreditation within 18 months from February 20, 2001.

(c) Any operation that:

(1) Knowingly sells or labels a product as organic, except in accordance with the 

Act, shall be subject to a civil penalty of not more than 3.91(b)(1)(xxxvii) of this 

title per violation.

(2) Makes a false statement under the Act to the Secretary, a governing State 

official, or an accredited certifying agent shall be subject to the provisions of 

section 1001 of title 18, United States Code.
§ 205.101 Exemptions and exclusions from certification.

(a) Exemptions. 

(1) A production or handling operation that sells agricultural products as “organic” but 

whose gross agricultural income from organic sales totals $5,000 or less annually is 

exempt from certification under subpart E of this part and from submitting an organic 

system plan for acceptance or approval under § 205.201 but must comply with the 

applicable organic production and handling requirements of subpart C of this part and 

the labeling requirements of § 205.310. The products from such operations shall not be 

used as ingredients identified as organic in processed products produced by another 

handling operation.

(2) A handling operation that is a retail food establishment or portion of a retail food 

establishment that 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 only handles agricultural 

products that contain less than 70 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 contact of organic products with prohibited 

substances set forth in § 205.272 with respect to any organically produced 

ingredients used in an agricultural product;

(ii) The labeling provisions of §§ 205.305 and 205.310; and

(iii) The recordkeeping provisions in paragraph (c) of this section.

(4) A handling operation or portion of a handling operation that only identifies organic 

ingredients on the information panel is exempt from the requirements in this part, except:

(i) The provisions for prevention of contact of organic products with prohibited 

substances set forth in § 205.272 with respect to any organically produced 

ingredients used in an agricultural product;

(ii) The labeling provisions of §§ 205.305 and 205.310; and

(iii) The recordkeeping provisions in paragraph (c) of this section.

(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 § 205.272 with respect to any 

organically produced products, if such operation or portion of the operation only sells 

organic agricultural products labeled as “100 percent organic,” “organic,” or “made with 

organic (specified ingredients or food group(s))” 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 handling operation that is a retail food establishment or portion of a retail food 

establishment that processes, on the premises of the retail food establishment, raw and 

ready-to-eat food from agricultural products that were previously labeled as “100 percent 

organic,” “organic,” or “made with organic (specified ingredients or food group(s))” is 

excluded from the requirements in this part, except:

(i) The requirements for the prevention of contact with prohibited substances as 

set forth in § 205.272; and

(ii) The labeling provisions of § 205.310.

(c) Records to be maintained by exempt operations. (1) Any handling operation exempt 

from certification pursuant to paragraph (a)(3) or (a)(4) of this section must maintain 

records sufficient to:

(i) Prove that ingredients identified as organic were organically produced and 

handled; and

(ii) Verify quantities produced from such ingredients.

(2) Records must be maintained for no less than 3 years beyond their creation and the 

operations must allow representatives of the Secretary and the applicable State organic 

programs' governing State official access to these records for inspection and copying 

during normal business hours to determine compliance with the applicable regulations 

set forth in this part.

§ 205.270 Organic handling requirements.

(a) Mechanical or biological methods, including but not limited to cooking, baking, curing, 

heating, drying, mixing, grinding, churning, separating, distilling, extracting, slaughtering, 

cutting, fermenting, eviscerating, preserving, dehydrating, freezing, chilling, or otherwise 

manufacturing, and the packaging, canning, jarring, or otherwise enclosing food in a 

container may be used to process an organically produced agricultural product for the 

purpose of retarding spoilage or otherwise preparing the agricultural product for market.

(b) Nonagricultural substances allowed under § 205.605 and nonorganically produced 

agricultural products allowed under § 205.606 may be used:

(1) In or on a processed agricultural product intended to be sold, labeled, or 

represented as “organic,” pursuant to § 205.301(b), if not commercially available 

in organic form.
(2) In or on a processed agricultural product intended to be sold, labeled, or 

represented as “made with organic (specified ingredients or food group(s)),” 

pursuant to § 205.301(c).

(c) The handler of an organic handling operation must not use in or on agricultural 

products intended to be sold, labeled, or represented as “100 percent organic,” 

“organic,” or “made with organic (specified ingredients or food group(s)),” or in or on any 

ingredients labeled as organic:

(1) Practices prohibited under paragraphs (e) and (f) of § 205.105.

(2) A volatile synthetic solvent or other synthetic processing aid not allowed 

under § 205.605: Except, that, nonorganic ingredients in products labeled “made 

with organic (specified ingredients or food group(s))” are not subject to this 

requirement.

§ 205.310 Agricultural products produced on an exempt or excluded operation.

(a) An agricultural product organically produced or handled on an exempt or excluded 

operation must not:

(1) Display the USDA seal or any certifying agent's seal or other identifying mark 

which represents the exempt or excluded operation as a certified organic 

operation, or

(2) Be represented as a certified organic product or certified organic ingredient to 

any buyer.

(b) An agricultural product organically produced or handled on an exempt or excluded 

operation may be identified as an organic product or organic ingredient in a 

multiingredient product produced by the exempt or excluded operation. Such product or 

ingredient must not be identified or represented as “organic” in a product processed by 

others.

(c) Such product is subject to requirements specified in paragraph (a) of § 205.300, and 

paragraphs (f)(1) through (f)(7) of § 205.301.

§ 205.311 USDA Seal. 

(a) The USDA seal described in paragraphs (b) and (c) of this section may be used only 

for raw or processed agricultural products described in paragraphs (a), (b), (e)(1), and 

(e)(2) of § 205.301.

(b) The USDA seal must replicate the form and design of the example in figure 1 and 

must be printed legibly and conspicuously:
(1) On a white background with a brown outer circle and with the term, “USDA,” 

in green overlaying a white upper semicircle and with the term, “organic,” in white 

overlaying the green lower half circle; or

(2) On a white or transparent background with black outer circle and black 

“USDA” on a white or transparent upper half of the circle with a contrasting white 

or transparent “organic” on the black lower half circle.

(3) The green or black lower half circle may have four light lines running from left 

to right and disappearing at the point on the right horizon to resemble a cultivated 

field.

§ 205.400 General requirements for certification.

A person seeking to receive or maintain organic certification under the regulations in this 

part must:

(a) Comply with the Act and applicable organic production and handling regulations of 

this part;

(b) Establish, implement, and update annually an organic production or handling system 

plan that is submitted to an accredited certifying agent as provided for in § 205.200;

(c) Permit on-site inspections with complete access to the production or handling 

operation, including noncertified production and handling areas, structures, and offices 

by the certifying agent as provided for in § 205.403;

(d) Maintain all records applicable to the organic operation for not less than 5 years 

beyond their creation and allow authorized representatives of the Secretary, the 

applicable State organic program's governing State official, and the certifying agent 

access to such records during normal business hours for review and copying to 

determine compliance with the Act and the regulations in this part, as provided for in 

§ 205.104;

(e) Submit the applicable fees charged by the certifying agent; and

(f) Immediately notify the certifying agent concerning any:
(1) Application, including drift, of a prohibited substance to any field, production 

unit, site, facility, livestock, or product that is part of an operation; and

(2) 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.

4. Recommendations

The CACS requests that the NOP provide clear general education and guidance on organic 

compliance to the retail sector, and clarify several specific sections of the Rule as it applies to 

retail operations. 

Education and Outreach

Our discussions and comments received highlighted the need for increased education 

and training for retailers, especially non-certified retailers. While certified retailers receive 

oversight and certification from Accredited Certifying Agents, non-certified retailers 

(including farmers markets and online retailers) do not have the benefit of direct certifier 

outreach. We believe that the NOP can play a more active role in educating retailers 

about the regulatory requirements that govern their operations. Since the implementation 

of the Rule, a number of retailers have become voluntarily certified. As a number of 

commenters noted, such certification can benefit consumers through third-party 

verification of organic sourcing, handling and merchandising activities. NOP educational 

materials for retailers should highlight the opportunity and potential benefits of voluntary 

retail certification. Enhanced education and support services for retailers will ensure 

consistent compliance with the National Organic Standards, increasing consumer 

understanding of and trust in the USDA organic label. 

Clarification of the Rule as it Applies to Retail Operations

Written comments described a number of sections of the regulations which are unclear 

as to how and when they apply to retail stores. We ask the National Organic Program to 

issue concise guidance, in conjunction with the education and training described above, 

which clarifies the application of the Rule’s regulatory requirements to retail operations. 

We support the summary presented by the Organic Trade Association (OTA), based on 

its consultation with its retail members, in its written public comments: 

• Section 205.101(a) and (b) - The requirements for an “exempt” retail 

establishment vs. the requirements for an “excluded” retail establishment are not 

clear.

o Are exempt retailers required to comply with the commingling and 

contamination prevention standard (§ 205.272) and/or the labeling 

provisions (§ 205.310) of the NOP regulations? The regulation under 

exemptions and exclusions (§ 205.101) only specifies that exempt 

retailers maintain records as detailed under § 205.101(c), while excluded 

operations are subject to § 205.272 and § 205.310.
o Furthermore, are excluded operations required to comply with the record 

requirements of § 205.101(c)? The regulation specifies that records are to 

be maintained by “exempt” operations, but an “excluded” operation is not 

mentioned. In other words, the regulations appear to require the following:

 Exempt retailers are required to maintain records as detailed 

under § 205.101(c).

 Excluded retailers are required to comply with the commingling

and contamination prevention standard and comply with the 

labeling provisions of § 205.310.

o Can an exempt or an excluded retail establishment handle or process 

NOP certified products and then sell the products off-site? For example, 

can the products be handled or processed on-site of the retail 

establishment, but then sold as “organic” at a farmers’ retail sales? The 

regulation is clear that excluded retail establishments must process “on 

the premises of the retail food establishment.” The regulation is not clear 

about “where” the sale of the product must occur.

• Sections 205.308, 205.309 and 205.310 – Labeling requirements:

o Can an exempt non-certified retail establishment “handle” a product and 

then display the USDA seal or represent the product as “certified” 

organic? In other words, can they handle a product (either transfer the 

product from a container to a display case, or, transfer from the product 

from the original container to a store container (i.e., bulk flour bin)) and 

then transfer the information from the original container/label to the store 

display label?

As noted in the discussion document, the exemption in 7 CFR 205.101(a)(2) applies to a 

retailer that “handles but not process” organic agriculture products. However, the 

definition of “handle” in §205.2 includes the term “process,” which is also defined in the 

regulation. While we believe that the intent of the regulation is to exclude retailers who 

handle organic products but do not otherwise transform them, we ask that the NOP 

clarify the precise contours of this exemption, especially as they apply to simple 

repackaging of organic foods. 

We also ask that the NOP clarify the application of the exemption and exclusion to online 

businesses that ship organic products to customers, including the retail portions of 

certified farms and processing facilities that conduct online sales. As noted in the OTA’s 

comments, the regulation clearly requires that processing activities occur on the retail 

premises, but does not specify where the sales of such products must occur. Does the 

online sales activity of a retail business constitute a “retail food establishment,” and if the 

exemption does apply to online retailers, how should such products be labeled?

Finally, the written comments confirm an opportunity for clarification as to the conditions 

under which a retailer may label a product as “certified organic” or use the USDA seal 

when, for example, organic produce is removed from packaging and merchandised, or a 

bulk grain is placed into a bulk bin. The OTA notes:
There appears to be some contradiction between sections 205.308, 205.309 and 

205.310 of the regulations, all of which together address how products at the 

point of retail can be labeled, and how products produced on exempt and 

excluded operations can be labeled.

As we have explained above, § 205.308 could be read to mean that a product 

produced in a certified facility can be displayed in a retail display using the USDA 

seal and identifying mark of the certifying agent. There is some confusion, 

however, about whether “prepared in a certified facility” would apply to the 

retailer that is handling or processing the product, in which case the retailer 

would need to be certified in order to display the USDA seal or make reference to 

certification. Furthermore, § 205.310 states that an agricultural product produced 

or handled in an excluded or exempt operation must not display the USDA seal 

or represent the product as certified organic.

The current and common practice at non-certified exempt retail establishments is 

to handle certified organic products and transfer from a box to a display case or 

from a bag into a bulk bin the same information as provided on the original 

container. For example, a bag of certified organic flour would be transferred to a 

bulk bin and the bulk bin label would display “certified organic flour. “ It may also 

display the USDA seal. We believe this practice is compliant, as supported by 

section § 205.308 of the regulations. However, clarification is needed.

In conclusion, we ask that the NOP develop clear and actionable guidance for retailers on the 

points noted above and in the earlier discussion document. The development of such guidance 

should include the consultation of retailers and ACAs. We believe that focused education and 

outreach to the retail sector will help improve compliance with the regulation, foster consistency 

across certified and non-certified operations, and promote consumer confidence in the USDA 

Organic label. Retailers represent the final interface with consumers in the organic supply chain, 

and it is crucial that organic integrity in merchandising, handling and marketing be vigilantly 

maintained. 

Recommended Motion:

Motion to accept the Request for NOP Clarification and Guidance on Retail Compliance and 

Certification proposal

Subcommittee Vote: 

Motion by: Jean Richardson

Seconded by: John Foster

Discussion: none

Yes: 7 No: 0 Abstain: 0 Absent: 0 Recuse: 0

Approved by Carmela Beck, Subcommittee Chair, to transmit to NOSB February 22, 2014.