To GRO or Not to GRO
Largely unnoticed by the organic produce industry, one of the largest---and most important---efforts ever to raise funds for organic research and promotion is becoming more visible. OPN is taking a look at the USDA marketing order impacting organic fresh fruit and vegetable producers, handlers and retailers.
Today is Part I of an overview of the GRO Organic Program.
What Is GRO Organic?
The Organic Trade Association, in collaboration with the GRO Organic Core Committee, has formally petitioned the U.S. Department of Agriculture (USDA) for a research and promotion check-off program for organic products, including fresh produce, dairy, meat, grain and processed organic foods (wines, for example). Under the GRO order, growers, handlers and importers of organic products will be assessed a fee and pool these resources to conduct research and promotion activities.
If Approved, What Organic Products Will Be Assessed?
All certified organic products will be assessed including a range of agricultural commodities, such as fruits, vegetables, dairy, meat, poultry, breads, grains, snack foods, condiments, beverages and packaged-and-prepared foods. Non-food items (textiles, personal-care products, pet food, flowers, etc.) will also be assessed.
How Much Will a Company Be Assessed?
A company will be assessed one-tenth of one percent of net sale of organic product:
- for growers, organic feed, seed and planting stock: total gross sales minus cost
- for processors: the cost of certified organic ingredients
What is an Example of How Much One-tenth of One Percent Is?
If a company’s sales equal $100,000 in net organic products, you’ll be assessed $100. If sales equal $1,000,000 in net organic products, the assessment will be $1,000.
Who Pays the Assessment?
The assessment is mandatory unless the company meets one of the exemptions.
Who is Exempt from the Assessment?
- producers with gross organic sales of $250,000 or less for the prior marketing year
- handlers with gross organic sales of $250,000 or less for the prior marketing year
- importers with $250,000 or less in transaction value of imported organic products for the prior marketing year
- Organic products exported from the U.S.
What if a Company is Currently Assessed by Another Marketing Order?
A company can claim an exemption for its organic product from paying assessments to existing Research & Promotion (R&P) marketing orders. If the GRO Organic assessment is passed through referendum, the exemption will go away and no longer apply.
If a company that grows or handles organic product has an existing R&P order, the company will be able to choose whether to pay the assessment for the current commodity R&P marketing order or to the GRO Organic marketing order.
A Company is assessed by its State Commodity Promotional Program — How is that Handled?
The company will still owe the state/regional assessment. The GRO Organic Proposal includes a provision to offset part of what you pay to a state promotion assessment. Section 1255.54 states that the Board, with approval of the Secretary, can credit an organic producer or handler up to 25 percent of the amount to GRO Organic to “offset collection and compliance costs relating to such assessments and for fees paid to Qualified State Commodity Boards required by State law.”
The offset will only be for monies that go to research and promotional programs; not for dues or quality specifications.
What’s an Example of a Company Being Assessed by its State Commodity Promotional Program and How it is Impacted by the GRO Program?
For example, an organic potato grower in Idaho was required to pay the Idaho state program $30 each year. If GRO Organic is passed, the Idaho grower is assessed $100 by the new program. In this scenario, the grower can offset 25 percent ($25 of the $100 to GRO Organic) so the grower pays $75 to GRO Organic and $30 to the state program.
The grower can offset 25 percent of what he pays the state to GRO Organic, but not 100 percent.
What Can Stakeholders Do?
Your voice counts as to whether GRO Organic moves forward. The deadline for comments to USDA has just been extended from March 20 until April 19! As of mid-February, USDA had received 1,656 comments on their website about the assessment. Ninety-seven percent of these comments are from consumers. Only three percent are from growers and only one is from a retailer. Your comments---pro or con-- are important.
YOUR VOICE COUNTS! Visit www.regulations.gov to provide your comments directly to USDA about the proposed GRO Organic Assessment.
Look for Part II next week.
Mark Carroll, VP of Merchandising for Produce and Floral, The Fresh Market, Discusses His New Job and All Things Organic Produce
OPN Connect: Mark, you have moved from California to North Carolina with your new position at The Fresh Market. How do you see the landscape of organic fresh produce today?
Mark Carroll: From a retailer’s perspective, the growth of organic, fresh produce at the retail store has been driven by retailers of all sizes, but the most significant growth has come from larger retail chains. The sheer volume of a larger retailer has increased the demand of organics and I see this continuing to grow as the demand over the last few years has far exceeded the supply of fresh organics.Read More
The Organic Produce Network (OPN) and California Certified Organic Farmers (CCOF) are teaming up to host the first-ever Organic Grower Summit (OGS) in Monterey, California on December 13 -14, 2017
The OGS will bring together the entire organic production chain as well as service and supply partners at one informative event. Organic growers, producers and handlers from fresh produce, dairy, meat and grain sectors will have the opportunity to network and learn with suppliers, service providers, packaging and technology companies, equipment manufacturers and other companies critical to their success.
“CCOF growers look forward to this rare opportunity to network with each other and with other organic sector leaders and innovators,” says CCOF CEO Cathy Calfo, “Growers are key to meeting the demand for organic products and grower-driven events like this summit are important to their success.”
Following an opening night networking reception on December 13, informative and educational sessions on core issues related to organic production start a full day of thought-provoking and inspiring presentations the next day. Keynote talks by industry leaders and a trade show floor with exhibitors from packaging, technology and related service providers crucial to organic production success will round out the day.
“There is a tremendous appetite for information and education as it relates to organic food production and we are thrilled to be partnering with the nation’s leading organic certification organization to bring together the various facets of the organic production community under one roof to exchange ideas and information that will make our industry stronger, “said Matt Seeley, cofounder of OPN.Read More
OPN Connect is pleased to introduce our first contributor, Melody Meyer, vice president of corporate social responsibility, policy and industry relations for United Natural Foods Inc. (UNFI). Melody has been in the organic food industry since 1976 and is a founding member of the Alliance of Organic Food Funders and an active member of Sustainable Agriculture and Food Systems Funders.
Follow her Blog at www.organicmattersblog.com.
Peeling Back the Label: Organic, Natural and Local
by Melody Meyer
Walking down a typical food aisle can be a daunting experience—a cacophony of seductive labels resounding from every shelf—these missives entice you to make purchases based on a feeling. Buying that product will make you feel healthier, sexier or perhaps a sense of pride that you are somehow protecting humankind and the environment. Food labels are powerful instruments that determine our purchasing habits unwittingly as we fill our baskets with hopes and emotions. With so many labels vying for our attention, it’s high time we peeled back the truth to see what’s really behind some of our most popular food labels.Read More
Do you know what the top drivers in 2016 are? How does your product rank?Read More
Organic Produce Summit Announces Retail Roundtable as Keynote Presentation
Registration is limited and attendees are encouraged to sign up as soon as possible as OPS anticipates another sold-out event.
Are "Natural Foods" Undermining Organic?
According to the Hartman Report, greater access to private label organic products and the growth of the natural market have provided consumers with options that could dilute the “purity” and the price organic foods have enjoyed in the growth phase. Hartman Group’s research since the 1990s has helped growers and retailers alike stay ahead of trends. The new syndicated research report for 2016 explores key distinctions between organic and natural and continues to document the changing landscape of the organic and natural marketplace and culture.
Produce is Being Lasered in Sweden
Yes, you read it right. Swedish chain ICA is using low-energy carbon dioxide laser to brand produce – essentially removing the pigment from the skin to mark the produce with its name, country of origin and code. The technology doesn’t pierce the skin and does not harm the product, while helping reduce waste from stickers and packaging.Read More