USDA Drops Organic Checkoff Marketing Program

For Presence Marketing Newsletter, June 2018
By Steven Hoffman

Citing “uncertain industry support for and outstanding substantive issues with the proposed program,” USDA in May 2018 terminated a proposed organic checkoff national marketing program. The measure, backed by the Organic Trade Association (OTA), would have assessed producers to pay for the program, raising at least $30 million per year.

The organic checkoff program, called by OTA “GRO Organic (Generic Research Promotion Order for Organics), would have been under the supervision of USDA, as are research and promotion orders for other commodity crops and marketing programs such as “Got Milk.” 

Organic producers and handlers with sales over $250,000 would have had to pay one-tenth of one percent of their net organic sales into the marketing fund, according to the proposal. Importers also would have paid into the system, and smaller producers could opt in to take part. However, growers and handlers with gross revenue of less than $250,000 would have been exempt from contributing funds to the marketing program.

The announcement came as a surprise to the OTA, the organization that originally petitioned three years ago for the program. “It came as a complete surprise – the last we’d understood was, based on the precedent from previous checkoffs, we thought we’d cleared the threshold, OTA Executive Director and CEO Laura Batcha told FeedNavigator. “We were very, very surprised – it was incredibly unexpected,” she said.

“It is not lost on folks that the same week they terminated the organic program – they launched a proposal for GMO labeling that has a smiley face on it,” Batcha added. “At face value that does not appear like a level playing field – and USDA should be in the business of promoting choices for farmers, not in the business of picking winners and losers,” she said.

However, not all organic industry advocates supported the organic checkoff program. There have been questions regarding the effectiveness of other product checkoff programs and their benefit to small producers, along with questions about the way funding is managed, noted Mark Kastel, co-director of consumer advocacy group Cornucopia Institute.

“The proposed Organic Research and Promotion Program would have required all certified organic operations, even those exempt from the checkoff itself, to submit annual gross sales reports. All entities whose organic gross sales exceed $250,000 would have been mandated to pay 0.001% of their annual organic net sales,” said the Organic Farmers Association (OFA), based in Kutztown, PA. Jennifer Taylor, Vice President of OFA and a certified organic farmer in central Georgia added, “Organic farmers already fulfill a heavy load of annual paperwork for their organic certification. Additional federally mandated paperwork would have been overly burdensome, especially for the 75 percent of certified organic farmers estimated to be exempt from the checkoff,” she said.

OFA says it does agree with OTA and other organic industry stakeholder groups that organic research and promotion are necessary and needed by the whole community, and looks forward to finding creative solutions that serve all constituents in growing the market for organic foods.

Steven Hoffman is Managing Director of Compass Natural, providing brand marketing, PR, social media, and strategic business development services to natural, organic and sustainable products businesses. Contact steve@compassnaturalmarketing.com.