• 2014 Farm Bill: Organic Checkoff Program and Organic Crop Insurance
  • February 12, 2014 | Author: Marnie A. Jensen
  • Law Firm: Husch Blackwell LLP - Lincoln Office
  • Finally! On February 7, 2014, the President signed the “Agricultural Act of 2014,” or what most of us simply call the 2014 “Farm Bill.”

    What does the Farm Bill’s passage means for sustainable and organic operations? A lot. But this post focuses on two major “game changers” for organic producers.

    First, the Bill establishes what has been referred to as the “Organic Checkoff Program,” but what is more technically an amendment to the USDA’s Federal Research and Promotion Program. According to the USDA, a “checkoff” program is a system where the industry collects fees from producers and then “use[s] these funds to increase the success of the businesses and farmers within their industry.” “Got Milk?”, “The Other White Meat”, and “Beef, It’s What’s for Dinner” are all examples of advertising campaigns funded through checkoff programs.

    Prior to the Farm’s Bill’s passage, organic products were subject to the conventional checkoff programs already in place. For example, an organic blueberry producer paid the same assessment amount of $18 per ton collected on highbush blueberries produced in and imported into the United States. Importantly, the Farm Bill clarifies that all certified organic operations are exempt from existing checkoff programs, whether the products are 100% organic or 95% organic, or whether it is a split operation.  Thus, it appears that the certified organic blueberry producer no longer has to pay that $18 per ton.

    The 2014 Farm Bill opens the door for an Organic Checkoff Program, but establishing the program will take some work. During debate over the 2014 Farm Bill, not everyone agreed that the checkoff was a good, or feasible, idea. The largest trade group for the organic industry, the Organic Trade Association (the “OTA”) was the driving force in getting the Organic Checkoff Program provision included in the bill, producing position papers and press releases in support of the checkoff program. On the other hand, organic “watchdog” organization, the Cornucopia Institute, continues to be strongly opposed to the checkoff program. Reconciling these opposing viewpoints will likely not be easy.

    Now that the Farm Bill has paved the way, the next step is the submission of a proposal for an Organic Checkoff Program that meets the USDA’s requirements. After submission of the proposal, there will be publication in the Federal Register for comment, possible public meetings, nominations and appointment of a board, production of a recommended assessment rate, budget, and marketing plan, and approval by the USDA of that plan. Only after completion of ALL of these steps will an Organic Checkoff Program be operational. The disagreements between industry stakeholders regarding the Organic Checkoff Program will no doubt continue throughout this process.

    Second, and less controversially, the Farm Bill eliminates the 5% premium “surcharge” on crop insurance for organic crops. In addition, the USDA will continue and expand its work to establish prices for organic commodities for purposes of crop insurance payouts, thanks to additional funding. Prior to the Farm Bill’s passage, the USDA had only established crop insurance payout prices for corn, soybeans, cotton, processing tomatoes, and a several types of stone fruit. Beginning in 2014, eight more crops will be added, and, presumably, many more in the years to come. The USDA seems nearly as happy as organic farmers, blogging about this important development itself.

    These two changes will get a lot of attention over the coming months and years, although there are multitudes of other provisions in the 2014 Farm Bill affecting sustainable and organic agriculture. For example, there are provisions regarding Farmers’ Markets, conservation programs, research and development, increased funding for the NOP, and much more. We’ll have the next five years to discuss all of these changes!