Aleen Rothschild-Seidel
April 28, 1998
Draft Comments No. 2 of Demeter Association, Inc.
Submitted by Aleen Rothschild-Seidel
Attorney at Law
Berliner Cocoran & Rowe
1101 Seventeenth St. NW
Suite 1100
Washington DC 20036-6456
Tel 202 293 5555
Fax 202 203 9035
e-mail: ARS@CompuServe.com
April 28, 1998
Eileen S. Stommes,
Deputy Administrator
USDA-AMS-TM-NOP
Room 4007-So.
Ag Stop 0275
PO Box 96456
Washington DC 20090-6456
Re: Docket No. TMD-94-00-2
Comments No. 2 of Demeter Association, Inc. for the certification
of biodynamic agriculture (Aurora, NY)
Dear Ms. Stommes:
This is a second set of comments on the National Organic Program Proposed Rules submitted on behalf of the Demeter Association, Inc. These comments should be considered in connection with the first set of comments submitted by Anne Mendenhall, Director of Demeter Association.
The Demeter Association, organized as a nonprofit Massachusetts corporation, certifies approximately 60 farms and processors which meet either biodynamic standards or Demeter standards for organic-in-transition-to-biodynamic. The biodynamic movement began in 1923 in Germany based on a series of lectures given by Rudolf Steiner, who was also the founder of the anthroposophic society. His holistic approach to agriculture was brought to the US in the 1930's, and domestic and imported biodynamic products have been commercially available in the US since that time. The Demeter Association has been certifying farms and processors since 1982; it works closely together with the Bio-Dynamic Farming and Gardening Association, which provides education material on the farming method (and has also submitted comments).
Biodynamic agriculture is considered beyond organic. An ideal biodynamic farm is self-sufficient, uses natural biodynamic preparations to rejuvenate soil and plants, and follows rules based on a spiritual understanding of nature. Demeter certified products have a reputation in the organic community nationally and internationally for being high-quality natural goods produced according to strict standards; the Demeter community is known for being philosophically committed to the natural biodynamic process.
The Demeter Association is outraged that accredited certifiers would not be allowed to apply higher standards than those set out in the proposed regulations; the fact that the regulations set maximum instead of minimum standards threatens to run out of business Demeter certified farmers and processors and others who produce high quality organic products. This could not have been the intention of the legislature in enacting the OFPA. Demeter is further concerned that the USDA has developed a definition of "organic" which does not correspond to the usual and customary definition of the word domestically or internationally, has monopolized the use of this word and has constructed a bureaucracy which could stifle the growth of an innovative, competitive organic business. It is our opinion that the proposed organic regulations should be rewritten for the reasons set out below.
I. Proposed Sec. 205.301(b)(2), which prohibits private certifiers
from adopting higher standards, is unconstitutional; this section, along
with the labeling provisions, constitutes a taking of property without just
compensation, a violation of freedom of speech, and an arbitrary
restriction on businesses which produce high quality organic goods.
re: Subpart E - Accreditation of Certifying Agents, Sec. 205.301(b)(2)
Subpart C - Labels, Sec. 205.100(a)(3) and (4)(iv); Sec. 205.103
Fifth Amendment, Taking of Property
Regulatory Flexibility Act
7 USC Sec. 6505 OFPA
A. Proposed Sec. 205.301(b)(2) and the labeling provisions
would constitute an unconstitutional taking of property interests in
Demeter certification marks and trade names.
Proposed Sec. 205.301(b)(2) provides that a certifying agent cannot
"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."
Demeter Association presently owns several registered certification
marks which it licenses for use to certified farmers and processors.
Demeter grants certified biodynamic farms the right to use a "Demeter
certified Biodynamic" seal, to use the name "biodynamic" to describe the
product, and to use the lower case "demeter" logo along with the trade name
of the product. Farms in transition to biodynamic are authorized to use the
Demeter organic seal, which has not been registered with the US Patent and
Trademark Office, but which is protected under common law. The Demeter
Association certification marks are similar to those used on Demeter
products in other countries.
These certification marks show that the certified products were
produced according to Demeter standards, which are based on international
Demeter guidelines. These standards were filed with the certification mark
applications, as required under trademark law, and are part of the
certification marks.
The certification marks identify the goods and carry with it the
good will and good reputation of Demeter. The lower case "demeter" logo
becomes part of the trade name of the product. If XYZ Yogurt, for example,
is certified biodynamic by Demeter, the labeling on the principle display
panel would change to "demeter XYZ Biodynamic Yogurt." The label could also
indicate that the yogurt was organic, since biodynamic products also meet
the standards of all private certifiers in the US. This situation would not
be allowed to continue under the Proposed Rules.
If Demeter Association were to become a certifying agent under the
proposed regulations, it's certified farmers and processors apparently
would not be allowed to use the Demeter logo and seal to indicate
conformance to Biodynamic or transition-to-biodynamic standards. Demeter
Association and their certified businesses would therefore lose their
rights to use the certification marks (and accompanying good will and trade
name) to identify their products. Consumers would not be able to ascertain
that the products meet Demeter standards. Biodynamic farmers and processors
would thus not be able to survive on the US market.
Trademarks are Protected Property Rights
Courts have held that trademarks, trade names and other intangible
property are protected by the taking clause of the Fifth Amendment. In
Maltina Corporation v. Cawy Bottling Corporation, 462 F.2d 1021, 1027 (5th
Cir. 1972), cert den , 409 US 1060, 93 S.Ct. 555, 34 L.Ed.2d 512 (1972),
the Supreme Court held that depriving a company of the use of its trademark
without compensation "would violate bedrock principles ..., embodied in the
Fifth Amendment to the Constitution." (See also, obiter dictum in Friedman
v. Rogers, 440 U.S. 1, 12 (1979), regarding trade name protection under the
taking clause; see also, McCarthy on Trademarks and Unfair Competition, 3rd
Ed., 2.06 "Trademarks Are Property Rights," and 2.08[4] "The Property
Aspects of Good Will and Its Trademark Symbol.")
In Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1004 - 1005, 104
S.Ct. 2862, 81 L.Ed.2d 815 (1984), regarding trade secrets and other
intangible property falling within Fifth Amendment protection, the Supreme
Court stated:
It has never been the rule that only governmental acquisition or
destruction of the property of an individual constitutes a taking, for
'courts have held that the deprivation of the former owner rather than the
accretion of a right or interest to the sovereign constitutes the
taking....' United States v. General Motors Corp., 323 U.S., at 378
[1945]....The inquiry into whether a taking has occurred is essentially an
'ad hoc, factual' inquiry. Kaiser Aetna, 444 U.S., at 175. The Court,
however, has identified several factors that should be taken into account
when determining whether a governmental action has gone beyond 'regulation'
and effects a 'taking.' Among those factors are: 'the character of the
governmental action, its economic impact, and its interference with
reasonable investment-backed expectations.' PruneYard Shopping Center v.
Robins, 447 U.S., at 83."
The Proposed Rules restrictions of the use of a certifier's
trademarks and trade names goes too far, beyond "regulation" to "taking."
USDA Actions Do Not Comply with Executive Order 12630
We further point out that Ronald Reagan's Executive Order No.
12630, Governmental Actions and Interference with Constitutionally
Protected Property Rights, provides as follows with regard to the taking of
property:
Sec. 3. General Principles. In formulating or implementing policies that
have takings implications, each Executive department and agency shall be
guided by the following general principles:
...(c) Government officials whose actions are taken specifically for
purposes of protecting public health and safety are ordinarily given
broader latitude by courts before their actions are considered to be
takings. However, the mere assertion of a public health and safety purpose
is insufficient to avoid a taking. Actions to which this Order applies
asserted to be for the protection of public health and safety, therefore,
should be undertaken only in response to real and substantial threats to
public health and safety, be designed to advance significantly the health
and safety purpose, and be no greater than is necessary to achieve the
health and safety purpose.
Demeter Association cannot identify "real and substantial threats
to public health" which necessitate the taking of property interests in
certification marks. Demeter also is of the opinion that the USDA has not
followed Sec. 4(d) of the Executive Order and established "to the extent
possible that the restrictions imposed on the private property are not
disproportionate to the extent to which the use contributes to the overall
risk" [to public health and safety].
Redrafting Sec. 205.301(b)(2)
Proposed Sec. 205.301(b)(2) should be rewritten to allow a private
certifier to require as a condition of use of its identifying mark
compliance with standards in addition to those provided for in the
regulations. This would allow one certifying agent to certify as to both
Demeter and USDA standards, so that the words "organic," "Demeter" and
"biodynamic" could all appear on the label of a product.
This changed wording of the section would be consistent with the
Organic Food Production Act. The requirement of "consistent standards"
under the OFPA, 7 USC 6501, should refer to minimum, not maximum standards.
Redrafting Sec. 205.100(a)(3) and (4)(iv)
The marks of Demeter and other private certifiers should be allowed
on the principal display panel so they can be seen by a consumer. If a
private mark is only allowed on the information panel, as provided in
proposed regulation Sec. 205.100(a)(3) and (4)(iv), this would be the
equivalent of prohibiting use of the mark in most cases; the information
panel is usually required to be on the side of a package and cannot be seen
by a consumer looking at the package on a grocery store shelf.
Sec. 205.103 and Taking of Property
Sec. 205.103, prohibiting "eco-labeling" unless a product has been
certified by an accredited certifier, should be deleted.
"Biodynamic" is not equivalent to organic. There could be no
reciprocity between a Demeter biodynamic certification and another private
certifier, because Demeter has requirements in addition to regular organic
standards. Even the Demeter certified organic-in-transition-to-Biodynamic
standards require standards in addition to most organic standards. However,
if Demeter certification marks were considered to imply "directly or
indirectly" that a product is organic under the proposed regulation, then
Demeter Association and its certified farms and processors would be
deprived of the use of their certification marks, their identity and
goodwill without just compensation.
Demeter certified farms and processors should have the choice of
using the Demeter certification marks with or without USDA certification.
Biodynamic agriculture is different from organic, so it should not require
USDA certification. However, for biodynamic farms and businesses who wish
the USDA certification in addition to Demeter certification, Demeter
Association should be able to offer this certification to them.
Regulatory Flexibility Act and the Effects on Small Businesses
In considering the economic impact of the proposed rule on small
businesses, the USDA needs to consider the costs of depriving the Demeter
certified farmers and processors of the certification mark, identity and
goodwill, and to consider alternatives to this undue burden and the barrier
to competing in the organic market. These costs, including litigation costs
to challenge the final regulations for the reasons set out in these
comments, should also be taken into account in the Regulatory Impact
Assessment.
re: Subpart E - Accreditation of Certifying Agents, Sec. 205.301(b)(2)
Subpart C - Labels, Sec. 205.100(a)(3) and (4)(iv); Sec. 205.103
First Amendment, Freedom of Speech
B. The maximum standards in Sec. 205.301(b)(2), the eco-labeling
provisions in Sec. 205.103 and the restrictions on the principal display
panel in Sec. 205.100(a) violate constitutional rights to freedom of
speech.
Sec. 205.301(b)(2) prohibits a certifier from using higher
standards than those set out in the Rules. Even if a product meets Demeter
Biodynamic or organic standards, an accredited certifier is not allowed to
verify this to the consumer. This "gag rule" misleads consumers, keeps
information from consumers and violates the rights of Demeter Association
and its certified farmers and processors to freedom of speech (either
commercial or noncommercial).
In Rubin v. Coors Brewing Co., 514 US 476, 115 S.Ct. 1585 (1995),
the Supreme Court held that a law and regulations prohibiting beer labels
from displaying alcohol content was inconsistent with the protections
granted to commercial speech by the First Amendment.
The Court, 514 US, at 481 - 2 , referred to Virginia State Bd. of
Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748 (1976)
and stated: " There we noted that the free flow of commercial information
is 'indispensable to the proper allocation of resources in a free
enterprise system' because it informs the numerous private decisions that
drive the system. Id., at 765. Indeed, we observed that a 'particular
consumer's interest in the free flow of commercial information . . . may be
as keen, if not keener by far, than his interest in the day's most urgent
political debate.' Id., at 763."
In determining whether a regulation of commercial speech survives
First Amendment scrutiny, the Supreme Court in the Rubin v. Coors case
applied the test set out in Central Hudson Gas & Electric Corp. v. Public
Serv. Comm'n of N. Y., 447 U.S. 557, 562 (1980) (quoting Ohralik v. Ohio
State Bar Assn., 436 U.S. 447, 455-456 (1978)): "'For commercial speech to
come within [the First Amendment], it at least must concern lawful activity
and not be misleading. Next, we ask whether the asserted governmental
interest is substantial. If both inquiries yield positive answers, we must
determine whether the regulation directly advances the governmental
interest asserted, and whether it is not more extensive than is necessary
to serve that interest.' 447 U.S., at 566." 514 U.S., at 483.
Demeter seals and logos concern lawful activity and are not
misleading. We do not believe that the government can prove substantial
government interest in prohibiting their use, can show that the regulations
directly advances the governmental interest asserted or can substantiate
that the proposed regulations are not more extensive than is necessary to
serve that interest.
The Rubin v. Coors Court also spoke of the irrationality of the
beer labeling law and noted that the general trend in federal regulation of
consumer products favors greater disclosure of information rather than
less; as an example it mentioned the Nutrition Labeling and Education Act
of 1990, Pub. L. 101-535, 104 Stat. 2353, as amended (requiring labels of
food products sold in the United States to display nutritional
information).
The concurring opinion of Justice Stevens, 514 U.S., at 497, found
the labeling law a violation of First Amendment freedom of speech, without
applying the commercial speech test. He spoke strongly about the danger of
withholding information from the citizenry:
Whatever standard is applied, I find no merit whatsoever in the
Government's assertion that an interest in restraining competition among
brewers to satisfy consumer demand for stronger beverages justifies a
statutory abridgment of truthful speech. Any "interest" in restricting the
flow of accurate information because of the perceived danger of that
knowledge is anathema to the First Amendment; more speech and a
better-informed citizenry are among the central goals of the Free Speech
Clause. Accordingly, the Constitution is most skeptical of supposed state
interests that seek to keep people in the dark for what the government
believes to be their own good. See Virginia Pharmacy, 425 U.S., at 769-770;
Bates, 433 U.S., at 374-375. One of the vagaries of the "commercial speech"
doctrine in its current form is that the Court sometimes takes such
paternalistic motives seriously. .... In my opinion, the Government's
asserted interest, that consumers should be misled or uninformed for their
own protection, does not suffice to justify restrictions on protected
speech in any context, whether under 'exacting scrutiny' or some other
standard.... Congress may not seek to accomplish [its] purpose through a
policy of consumer ignorance, at the expense of the free-speech rights of
the sellers and purchasers. See Virginia Pharmacy, 425 U.S., at 756-757."
re: Sec. 205.301(b)(2)
A regulation preventing a company from placing a certification mark
on a label to show that a product meets high standards is a violation of
the First Amendment right to freedom of speech.
re: Sec. 205.100(a)(3) and (4)(iv)
Regulations requiring private certification marks to be on the
informational panel only is an unconstitutional restriction of free speech.
As noted earlier, the informational panel is usually on the side of the
package, and when consumers look at products on a grocery store shelf, they
usually will not be able to see the informational panel. Customers who seek
to purchase products conforming to Demeter standards would be unable to
find them.
re: Sec. 205.103
Disallowing so-called eco-labeling except on certified organic
products is, as indicated by Justice Stephens, another paternal regulation
which attempts to protect consumers by keeping them in the dark. It is a
violation of the First Amendment right to free speech. The Demeter
certification marks and logos should be allowed on the principal display
panel of packages even if the farmers and producers have not been certified
pursuant to USDA organic standards.
re: Sec. 205.301(b)(2), Sec. 205.103, Sec. 205.100
Forced Omission on Label Violates Consumer Rights
A corollary to the right to free speech is the consumer's right to
know, instead of being kept ignorant; a right to truth in labeling and free
choice in the marketplace instead of paternalistic restrictions.
Although Demeter products are a small part of the organic market,
certain consumers prefer to purchase these goods because of their
consistent high quality or because the consumers approve of Demeter's
spiritual approach to agriculture or identify with anthroposophic
principals. Demeter products are currently available nationwide and can
usually be found in small organic food stores as well as large chains such
as Freshfields, Whole Foods and Bread and Circus. Consumers could be denied
access to these products under the Proposed Rules.
re: Sec. 205.301(b)(2)
C. Setting maximum standards for organic foods is an arbitrary
restriction on the free market economy, contrary to the intention of the
legislature.
The Proposed Rules impose, in effect, a low maximum standard for
organic food. Accredited certifiers would not be allowed to verify to
consumers through the use of their logo that a product met standards in
addition to those in the regulations. The rule thus not only restricts
certifiers from requiring higher standards, it also sets a ceiling for
organic standards, limited to what the certifiers can verify.
The proposed section imposes a penalty on companies which adhere to
higher and often more expensive standards. These companies would no longer
be competitive since they could not verify these additional standards or
use their a certifiers' seals or logos to identify the quality of products.
It was the intention of the legislature in enacting the OFPA to
promote the organic food industry and protect consumers, not to restrict
competition, eliminate high quality products and stifle innovation with
regard to new or additional standards.
The USDA arbitrarily interpreted the term "consistent standards" in
the OFPA to mean maximum, instead of minimum, organic standards. There is
nothing in the Act or the legislative history of the Act to indicate that
this was desired, and it is contrary to the basic objective of the law
regulating the American free market economy, which is the promotion and
encouragement of competition. As stated by Judge Jerome Frank, "...[t]here
is a basic public policy, deep-rooted in our economy and respected by the
courts, resting on the assumption that social welfare is best advanced by
free competition." Eastern Wine Corp. v. Winslow-Warren Ltd., 137 F.2d 955
(2d Cir. 1943), cert. denied, 320 U.S. 758, 88 L.Ed. 452, 64 S.Ct. 65.
Although the USDA speaks of the benefits of uniform (maximum)
standards under the regulations, it has in fact not produced a unitary
standard. The regulations not only present a wide range of options in the
standards, they also permit each state government to write different
regulations.
The proposed regulation prohibiting certifiers from requiring
additional standards is arbitrary, in violation of due process of law,
irrational and not intended by the legislature.
re: Regulatory Impact Assessment, Regulatory Flexibility Analysis
General
II. The USDA needs to reconsider the options of no governmental
regulation of organic food production or minimal involvement by adopting
private voluntary standards.
At a time when the executive and legislative branches of government
have clearly expressed their preference for a reduction in government, for
encouragement of private enterprise and for adoption of standards drawn up
by private standard setting organizations, the USDA has instead drafted
plans for an expensive, burdensome bureaucracy.
Self-Regulation of Industry
The situation in the organic community has changed since the OFPA
was enacted. Private organic certifiers have made much progress in bringing
their standards in line with each other, and the USDA is no longer needed
to set up organic standards and regulate the organic business. It is clear
from the overwhelming public disapproval of the proposed regulations that
government cannot properly perform this function.
Self-regulation of the organic food industry is needed to preserve
the integrity of organic agriculture and to protect it from a costly,
stifling bureaucracy.
Many in the organic community have already taken steps since the
Proposed Rules were published to begin harmonizing standards and developing
an independent accreditation system for organic production. Jim Riddle,
head of the Independent Organic Inspectors Association, gave a speech at an
Earth Day Rally on April 21, 1998 at the Minnesota State Capital announcing
the formation of an Independent Accreditation Steering Committee (IASC) "to
develop proposals for self-regulatory structures for harmonization and
accreditation." He explained that this organization is "a collaborative
effort of private and State certifiers, inspectors, organic farmers,
handlers, retailers and consumers....The standards we develop will be based
on existing high standards, on NOSB recommendations, Organic Trade
Association (OTA) Guidelines, and IFOAM Basic Standards. They will
reference the Organic Material Review Institute's (OMRI's) Genetic Material
List. Accreditation proposals will be based on IFOAM accreditation
criteria, NOSB recommendations, International Standards Organization (ISO)
requirements and OTA Guidelines."
It is the position of the Demeter Association that the USDA should
allow complete self-regulation of the organic industry. However, if the
USDA remains involved in the regulation of organic production, it should do
so on a minimal basis and adopt the standards which will be drafted by the
new private organic standards setting organization. The government has
extensive experience working with such private organizations, for example
ANSI (American National Standards Institute), and adopting their standards
into regulations.
It is government policy, as expressed in legislative acts,
executive orders and agency circulars, to work to reduce or eliminate
government regulations and rely on industry standards. President Clinton,
in Executive Order No. 12866, Regulatory Planning and Review, September 30,
1993, stated: "The American people deserve a regulatory system that works
for them, not against them: ... regulatory policies that recognize that the
private sector and private markets are the best engine for economic
growth...." He further ordered:
Section 1. Statement of Regulatory Philosophy and Principles.
(a) The Regulatory Philosophy. Federal agencies should promulgate only such
regulations as are required by law, are necessary to interpret the law, or
are made necessary by compelling public need.... In deciding whether and
how to regulate, agencies should assess all costs and benefits of available
regulatory alternatives, including the alternative of not regulating.
The Office of Management and Budget stated in Circular No, A-119
that the policy to be followed by all Executive Departments is to "rely on
voluntary standards [drawn up by private organizations], both domestic and
international, whenever feasible..." in its regulatory activities. The
Circular further emphasizes that "(v)oluntary standards that will serve
agencies' purposes and are consistent with applicable laws and regulations
should be adopted and used by Federal agencies in the interests of greater
economy and efficiency, unless they are specifically prohibited by law from
doing so."
re: Regulatory Flexibility Analysis, Regulatory Impact Assessment
Under the Regulatory Flexibility Act and Executive Order 12866, the
USDA is required to analyze seriously the options of no governmental
regulation or adoption of voluntary private standards. The situation has
changed since the USDA first reviewed these issues.
Excessive Costs
The USDA has not taken into account the extra costs which will be
imposed on farmers and processors under the Proposed Rules, and which would
not be necessary if the USDA allowed the organic community to
self-regulate, either completely or to a large degree. The USDA estimated
cost to producers and handlers for initial certification does not take into
account the additional fees which the private certifier will have to
charge. Also, the USDA has not estimated the cost to producers of its vague
proposed testing requirement. The private certifiers will not only have to
charge the producers for the costs of the initial accreditation and other
USDA fees, it also must cover the costs of additional paperwork, the costs
of posting security, any liability insurance costs, as well as basic costs
such as overhead.
re: Subpart E - Accreditation of Certifying Agents
III. The Proposed Rules on Accreditation of Certifying Agents are
contrary to USA customary practice and ISO guidelines, since the Rules do
not allow for independent certifying agencies and an adequate checks and
balances system.
It is usual in the USA and internationally to set up third-party
certification systems with the certifying organization independent from the
impartial third party which grants it accreditation. Within the certifying
organization, there is traditionally another checks and balances system in
that the person(s) making a decision as to certification is not the same as
the person who carried out the evaluation.
The Proposed Regulations have blurred the traditional separation
between the certifiers and their accreditors or oversight entities, by
placing the certifying agencies in the role of tightly controlled federal
agents, similar to unsalaried employees or subcontractors, instead of
independent bodies.
Under the OFPA, private certifiers are intended to remain
independent, as is evident from the requirements that they must hold the
Secretary harmless for any failure on their part and must provide security
for protection of the participants in the program (7 USC Sec. 6515(e)).
The generally-accepted requirements that a certifying body (such as
private certifying agents under the Proposed Rule) are supposed to meet are
set out by the International Organization for Standardization in its
ISO/IEC Guide 65:1996, General requirements for bodies operating product
certification systems. Pursuant to these guides,
(t)he structure of the certification body shall be such as to foster
confidence in its certifications. In particular, the certification body
shall
a) be impartial;
b) be responsible for decisions relating to its granting, maintaining,
extending, suspending and withdrawing of certification;
c) identify the management (committee, group or person) which shall
have overall responsibility for .... 7) technical basis for granting
certification;
......
f) ensure that each decision on certification is taken by a person(s)
different from those who carried out the evaluation;
....
h) have adequate arrangements to cover liabilities arising from its
operations and/or activities;
i) have the financial stability and resources required for the
operation of a certification system;
....
m) together with its senior executive and staff, be free from any
commercial, financial and other pressures which might influence the results
of the certification process;
....
o) ensure that activities of related bodies do not affect the
confidentiality, objectivity and impartiality of its certifications, and it
shall not
....
2) give advice or provide consultancy services to the applicant as to
methods of dealing with matters which are barriers to the certification
requested,
3) provide any other products or services which could compromise the
confidentiality, objectivity or impartiality of its certification process
and decisions;
....
4.4 Subcontracting
When a certification body decides to subcontract work related to
certification (e.g. testing or inspection) to an external body or person,
.....(t)he certification body shall
a) take full responsibility for such subcontracted work and maintain
its responsibility for granting, maintaining, extending, suspending or
withdrawing certification;...
The USDA does not appear to have consulted ISO Guides in drafting
its Proposed Rules. If it had, the private certifying agents would be
independent bodies, responsible for decisions as to both certification and
decertification (Sec. 205.307); they would be able to certify according to
higher standards; they would be able to set their own fees to insure
impartiality and financial stability; they would have more discretion to
certify a farm according to the conditions of a farm, for example, instead
of detailed fixed rules or unverifiable orders of preference (as discussed
in Demeter Comments 1 (Issue 3)).
Demeter's German attorney ("Rechtsanwalt"), Hanspeter Schmidt, a
specialist in EU organic food law, has told us that organic certifying
agents in the European Union are expected to conform to European Norm
45011, which includes the same principles as ISO Guide 65. In most European
countries, the government primarily grants accreditation to a private
entity, verifying that it is capable of acting as certifier, and thereafter
the government exercises only limited oversight over the activities of the
certifiers.
If, after considering all options, the USDA decides to regulate
organic food production and private certifiers, the accreditation framework
should conform with domestic and international standards set up to foster
confidence in the system. It should adopt specific accreditation rules
drawn up by a private organic standard setting organization, or it should
permit private ISO65 accreditors to do the accrediting.
Private certifiers should be accredited, but not micro-managed or
turned into government functionaries. They should be given a license to act
as independent certifiers, with only minimal governmental supervision.
re: The National List, general
IV. The USDA has exceeded its statutory authority by adding synthetic
substances to the National List which were not proposed by the NOSB, in
violation of the OFPA, and by deviating from the customary domestic and
international definition of "organic."
re: The National List
As the NOSB and others have rightfully protested, the USDA has
ignored the plain language of 7 USC Sec. 6517(d)(2), entitled "No
additions," which provides as follows: "The Secretary may not include
exemptions for the use of specific synthetic substances in the National
List other than those exemptions contained in the Proposed National List or
Proposed Amendments to the National List." The USDA is acting ultra vires,
in clear violation of its statutory authority, by adding many synthetic
substances to the National List which the NOSB did not include in its
Proposed List.
In selecting the additional synthetic substances to be added to the
National List, the USDA also ignored 7 USC Sec. 6517(c), Guidelines for
prohibitions or exemptions, which states as follows:
(1) Exemption for prohibited substances
The National List may provide for the use of substances in an organic
farming or handling operation that are otherwise prohibited under this
chapter only if
(A) the Secretary determines, in consultation with the Secretary of Health
and Human Services and the Administrator of the Environmental Protection
Agency, that the use of such substances -
(i) would not be harmful to human health or the environment;
(ii) is necessary to the production or handling of the agricultural product
because of the unavailability of wholly natural substitute products; and
(iii) is consistent with organic farming and handling;...
The USDA apparently used as primary basis for deciding what could
go on the National List only the determination of whether the substance was
"harmful" according to conventional agriculture standards. It merely used
this risk assessment and failed to consider the corollary requirement of
whether the substance is "necessary to the production or handling of the
agricultural product because of the unavailability of wholly natural
substitute products." This is not only a statutory requirement, it is basic
to the customary definition of "organic" as understood by customers,
farmers and others in the organic business.
Demeter and the vast majority of the organic community do not find
"necessary" any of the items which the NOSB has left off of the Proposed
National List, but the USDA wishes to include, such as synthetic inert
substances contained in EPA List 2 and List 3, any genetically engineered
organism, ionizing radiation, biosolids (municipal sewage sludge), etc. For
Demeter's position on individual substances proposed by the USDA, see
Demeter Comments No. 1 (technical comments); Demeter basically supports
most of the recommendations of the NOSB and the OMRI.
The storm of protest comments regarding the National List and other
requirements under the Proposed Rules is clear evidence that the USDA, OMB
and others have not understood what "organic" means to consumers,
legislators and organic farmers and businesses. The USDA has acted
arbitrarily, overstepping its statutory authority, in not defining
"organic" according to its customary usage.
To many sectors of the organic community, USDA lost it's
credibility and moral authority to regulate organic food production by
acting in blatant disregard of the law.
re: Sec. 205.430 Compliance Review
The USDA furthermore acted arbitrarily in writing a vague
requirement that a certifying agent shall arrange for periodic sampling and
residue testing at least every five years. The agency did not give an
indication of the cost of this or what would be tested. It is contrary to
usual organic practice to require that residue testing take place even if
there is no reason to believe that there is a residue problem. This is an
example of the USDA using performance standards instead of establishing
acceptable processes by which organic foods can be grown and handled, which
is the customary way organic agriculture is defined. The OFPA does not
require that testing for organic products be more frequent than is required
for conventional agricultural products. To impose this extra burden on
organic farmers would increase the cost of organic goods as opposed to
non-organic products, and is violative of the equal protection clause.
Testing is also not an accurate indication that no pesticides were used,
since many pesticides are not detectable several days after use.
re: General: international treaties
Regulatory Flexibility Act
The USDA acted in violation of international agreements by
proposing rules which are contrary to internationally accepted standards of
organic and thus create an unacceptable barrier to trade (Agreement on
Technical Barriers to Trade, GATT Uruguay Round). OMB Circular A-119
specifically instructs Executive Departments and Agencies that
"(i)nternational standards should be considered in procurement and
regulatory applications in the interests of promoting trade and
implementing the provisions of the Agreement on Technical Barriers to
Trade..."
Although the USDA publicized the supposed trade benefits which the
Proposed Rules will bring, it has since heard from IFOAM (the international
organic standards setting organization) and others that U.S. products
labeled "organic" under the Proposed Rules would probably not be accepted
as equivalent in the European Union because the U.S. proposed standards are
too low. Demeter certified farmers and processors which export to Europe
and other countries would lose their export business under the Proposed
Rules, even though the Demeter standards meet the higher European
standards. This loss of business could not have been the intent of Congress
in enacting the OFPA.
The USDA needs to include in its analysis under the Regulatory Flexibility Act the costs of barring exports of US organic products.
To summarize, Demeter strongly urges the USDA to reconsider it's Proposed Rules and allow self-regulation of the organic food industry.
Submitted by
Aleen Rothschild-Seidel
Attorney at Law
on behalf of Demeter Association, Inc.
4/28/98