The Generic Research and Promotion Order for Organic or “GRO Organic,” is different than other check-offs—it will benefit the entire organic industry, not just a single commodity. It will address two major challenges facing the organic industry: consumer confusion about what it means to be organic and the need for more organic production in this country.
An Organic Check-Off program would enable a large, strong, and coordinated promotion plan in the form of TV and media ads, in-store promotions, and other high-profile promotional activities to educate consumers about what it means to be organic. It would also fund on-farm and regional research programs to encourage farmers to transition to organic, ultimately increasing the number of organic.
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The proposal calls for organic certificate holders with yearly organic sales in excess of $250,000 to be subject to a mandatory organic check-off assessment, and organic certificate holders with organic sales less than $250,000 to have the choice of whether to voluntarily be assessed. The check-off fee would apply to the entire supply chain. Organic handlers would pay one-tenth of one percent of Net Organic Sales. The assessment would be based on total gross sales minus the cost of certified organic goods. Organic producers would also have the option of paying one-tenth of one percent of Producer Net Profit—income received from organic products less the associated production expenses (such as labor, feed, and fuel) excluding fixed non-cash costs. For example, there would be a $100 assessment at $100,000 Net Organic Sales/Producer Net Profit and a $1,000 assessment at $1,000,000 Net Organic Sales/Producer Net Profit.
An industry-governed board, appointed by the U.S. Secretary of Agriculture with input from the organic sector, would direct an Organic Check-Off program. This board would be responsible for allocating funds and approving organic research, promotion plans and programs. The composition of the board would reflect the diversity of sectors paying into the check-off, in addition to having balanced regional participation and strong producer representation. Producers would hold at least 50 percent of the seats on the board and directly choose their regional representatives. Producers will directly select their regional representatives through a simple nomination and balloting process.
ORGANIC CHECK-OFF FAQs
An organic check-off would be unlike any other check-off program in American agriculture. Nothing like it has ever been tried, so the idea has understandably raised some questions. OTA has talked to lots of organic stakeholders over the past three years, and has found there’s a core group of concerns that keep coming up. We’ve also found that most of these concerns are based on perceptions of older check-offs, and we’ve addressed these issues. Here’s how:
Solution: The composition of the check-off board has been designed with the key objective to give producers a strong voice. Organic producers will hold least half of the voting seats on the check-off board. Those producers will represent different regions, and will be directly elected by producers in their region. Producers are the backbone of the organic industry, and their needs and interests will not be overlooked or diminished.
Solution: The check-off has been crafted so that producers and handlers with revenue under $250,000 could choose to be assessed. If they chose to participate and pay into the program, they’d have full voting rights.
Solution: The assessment rate is broad and shallow; everybody pays a little into the program and everyone benefits. The assessment rate would be 1/10 of 1 percent of Net Organic Sales (or of Producer Net Profit), so for an operation with net organic sales of say $90,000, the voluntary annual assessment would be $90.
Solution: An absolutely paramount objective of the GRO Organic program is to increase research for organic in order to help organic farmers deal with everyday problems, accelerate the adoption of organic practices and boost organic production. At least 50 to 75 percent of the check-off funds have been earmarked specifically for research or for activities that work hand-in-hand with research, such as technical assistance and widespread information dissemination of research findings. Also, because organic producers have identified local and regional research as a critical need, a board sub-committee of regional producer seat holders would be established to recommend to the full board just how those research funds should be spent.
Solution: A number of common-sense prohibitions are written into the check-off: First, a tight maximum cap of 15 percent of assessments has been established for administrative expenses; second, no check-off dollars could be used for lobbying; third, no check-off dollars could be used to promote individual brands.
Solution: A referendum is required every seven years to decide whether or not to continue the program. The organic check-off has been crafted to be accountable and transparent. If organic stakeholders are not satisfied with the program, they can vote to end it.