Organic farmers to get a break on ag fees

Farm Forum

WASHINGTON — An organic farming seed planted in the latest farm bill sprouted on Dec. 16, broadening exemptions from conventional crop promotion fees.

From almonds to watermelons, the proposed new fee exemptions cover myriad organic crops across different U.S. regions. The exemptions also reflect the escalating federal cultivation of an organic agriculture sector that now posts an estimated $35 billion in annual sales.

“Federal investment in organic has come a long way in the past decade from where it used to be, but it still falls short,” Brise Tencer, executive director of the Santa Cruz, Calif.-based Organic Farming Research Foundation, said in an interview on Dec. 16.

The farm bill signed by President Barack Obama last February included several modest goodies for organic growers. It boosted organic agriculture research funding to $100 million over five years. It provided money for organic market data research and funded a cost-share program to help organic producers obtain certification.

Any investment is particularly significant for California, which accounts for 19 percent of all organic farms and 36 percent of all organic crop sales, according to research by Karen Klonsky, a cooperative extension specialist at the University of California, Davis. Still, other states could benefit as well.

At North Carolina State University, for example, researchers are using $1.4 million in new federal funds to study organic treatment of mastitis in dairy cows. At the University of Missouri, some $900,000 in federal funds will help researchers study organic weed control.

Other farm bill provisions are still in the pipeline.

As part of the 900-plus-page farm bill package, for instance, lawmakers expanded an existing exemption for organic producers from certain industry fees. The fees are paid to support 23 marketing orders and 22 research and promotion programs. Marketing orders are a form of industry self-regulation, covering various crops, including almonds, grapes and walnuts. Through the marketing order, growers pay fees that support research and advertising.

The separate research and promotion programs, covering the likes of beef, dairy and blueberries, similarly assess fees that help promote crops and conduct research.

“The organic world is benefiting from the production research,” Dexter Long, vice president and general manager of Hilltop Ranch Inc., a larger handler of organic almonds based in California’s Merced County, said on Dec. 16.

Long noted that some organic producers are “already not paying” industry fees. This current exemption, though, is limited.

A prior farm bill exempted organic producers from the promotion fees only if 100 percent of their production was certified organic. The latest bill expands that. Now, producers will be exempt for their organically produced portion of their crop even if another portion is nonorganic.

“Organic producers should not have to pay into conventional marketing orders,” Tencer said.

Writing the law was half the battle.

To implement the organic provisions, the Agriculture Department must issue formal rules following a public comment period. A 26-page document published on Dec. 16 in the Federal Register starts the comment period, which expires Jan. 15.

Under the proposed new rules, in brief, a producer would only pay a promotion assessment on the percentage of their crops that’s certified as organic.

The Agriculture Department estimates that as many as 20 percent of the entities handling agricultural products under marketing orders may handle some quantity of organic products. These firms could potentially take advantage of the new fee exemptions.

The reduced fees, in turn, will shrink some budgets.

Among marketing orders, the Agriculture Department notes, the Modesto, Calif.-based Almond Board of California expects a reduction of $298,000, and the Fresno, Calif.-based California Raisin Administrative Committee expects a reduction of $180,000 as a result of the expanded eligibility for organic assessment exemptions.

“Should this rule be implemented, these boards and committees would have to adjust programs and reduce budgeted expenses accordingly,” the Agriculture Department noted.

Similarly, the research and promotion programs serving the beef, mushroom, potato and soybean industries, among others, are expected to experience some falloff in assessments as more organic producers take advantage of the broader exemptions.