'Gold Standard' Tarnished? As Organic Sees Record Growth Internal Battles Plague Industry

The numbers don't lie -- U.S. consumer demand for organic food is surging as people look for what they see as healthy offerings for themselves and their families. But meeting the growing consumer demand is not proving easy, and a deepening divide within the industry is now roiling the landscape of the $39 billion industry amid allegations of an erosion in the rigid standards that have drawn consumers to the premium market.

The internal battle is creating what some call "two organic industries," and is sparking litigation and allegations that the well-known label marking foods as organic no longer assures consumers that foods are free from chemicals and other materials, or that organic meat was raised naturally.

One particularly bitter battle now being waged is over the use of carrageenan, a thickening substance that critics say is shown to be dangerous to human health and is not needed in organic production, but which supporters say has long been proven safe and needed. That issue and others are expected to generate fresh ire at an upcoming meeting of the National Organic Standards Board (NOSB) April 25-27 in Washington.

On one side are independently owned veteran organic suppliers and industry supporters who say rigid standards are sliding, thereby cheating consumers who pay premiums for organic. On the other side are government officials and organic operators who say increased production to meet surging demand requires tools that may not look like traditional organic operations, but still meet the letter of the law.

Two lawsuits now pending against the U.S. Department of Agriculture allege improper actions by USDA that provide for weaker organic standards. The NOSB operates under USDA's Agricultural Marketing Service.

"There are problems going on with this program at USDA... and it changes the way organic food is produced so it doesn't really get to the gold standard," said Paige Tomaselli, a lawyer with the Center for Food Safety. "But when a consumer spends $3 or $4 on a carton of eggs they expect they are getting that gold standard."

USDA National Organic Program (NOP) spokesman Sam Jones-Ellard declined to address specific concerns and declined to provide an NOP official for comment. Jones-Ellard did say, however, that the USDA NOP is preparing to publish - for the first time - a list of administrator decisions, settlements, and other actions taken related to organic standards enforcement.

USDA also on April 7 proposed amending the organic livestock and poultry production requirements in part to "maintain confidence in organically labeled products." Organic regulations require housing and living conditions that allow animals to freely exercise their natural behavior, but there have been mounting complaints that some operators taking the organic mantle are not abiding by that standard. The proposal addresses those complaints in part by requiring producers to implement several practices to ensure appropriate space and outdoor access and to provide for the natural behavior of animals, such as dust bathing for chickens and rooting for pigs.

Questions about the integrity of the organic program come as the numbers of violations of organic regulations are on the rise. In fiscal 2015, USDA received 549 complaints and reviewed or investigated 390 of those alleged violations of the USDA organic regulations, a tally far above the prior year's total of 286. USDA issued 36 cease and desist orders and 121 warning notices and also levied $1.9 million in civil penalties to businesses knowingly violating organic rules.

Doubts also come after many of the country's top food companies, including Kellogg Co., General Mills, Hormel Foods Corp. and other corporate giants, have bought stakes in organic operations over the last several years, taking a dominant role in the industry.

"The organic industry is experiencing a corporate takeover and too often those corporations are exerting pressure to lessen organic integrity," said Jim Gerritsen, President of the Organic Seed Growers and Trade Association.

Critics have taken to the courts to air their grievances. In one lawsuit, Center for Food Safety is suing the USDA and the National Organic Program alleging that USDA is weakening the program and degrading the quality of organically labeled food by making a change in 2013 without public input or notice to a rule that governs the use of synthetic "materials." Organic agricultural products are to be produced and handled without the use of synthetic chemicals, except for those reviewed and approved to be on a list of allowed substances.

Under the change, two-thirds of the NOSB must vote to remove a substance from the approved list, a reversal of the prior practice that require a two-thirds vote to keep a substance on the approved list every five years. The change to the so-called "sunset" policy ultimately makes it easier for companies that want to use synthetic chemicals in organic production, the plaintiffs allege. That case is now awaiting a ruling on the government's motion to dismiss.

Additional plaintiffs include PCC Natural Markets, the nation's largest consumer-owned grocery retailer; Northeast Organic Dairy Producers Alliance; Greensward/New Natives, a certified organic farm based in Aptos, Calif; the Organic Seed Growers and Trade Association; and the Organic Consumers Association.

A second lawsuit, also brought by the Center for Food Safety, claims the USDA has weakened a long-standing prohibition on allowing organic producers to use compost materials treated with synthetic pesticides. Organic producers are barred from using any composted plant and animal materials that contain a synthetic substance not included on the national list of approved substances, but under changes introduced by USDA, producers can now use contaminated materials--such as commercial food waste and lawn trimmings treated with synthetic pesticides--as compost for their crops. An insecticide known as bifenthrin and other pesticides are now allowed, the lawsuit alleges.
USDA has challenged the validity of both lawsuits and the accuracy of the claims. Oral arguments in that case are scheduled for May 12th.

STRONG GROWTH
The backdrop for the infighting comes amid strong growth in organic operations. Data released April 4 by the USDA showed record growth in the number of certified organic operations in the United States of 12 percent between 2014 and 2015, and a surge in the value of the retail market for organic products to more than $39 billion, up from $13 billion in 2005. Overall there are more than 21,700 certified U.S. organic operations -- nearly a 300 percent increase since 2002, according to USDA.

"Organic food is one of the fasting growing segments of American agriculture," Agriculture Secretary Tom Vilsack said in a statement.

Worldwide, the USDA organic seal has become a leading global standard, with more than 31,000 certified organic operations in more than 120 countries, according to the USDA. The agency says it has been working to help grow the organic industry and thus is making organic certification more attainable, including streamlining the certification process and aiding operators. The department spent $11.5 million in 2015 to assist organic operators with certification costs, for example. This year, the government is also launching a new insurance policy to aid organic producers and to provide new opportunities for financial assistance to growers to protect against crop losses due to natural disasters.

CARRAGEENAN CONTROVERSY

Infighting over carrageenan, a seaweed-derived thickener used in products like whipping cream, has been ongoing for years, and is one example of the industry divide.

In its comments to the NOSB, the Cornucopia Institute said that regulatory agencies "have been influenced by aggressive lobbying and industry-funded reports about carrageenan" to allow for its extended use, but that independent research has shown that carrageenan can trigger inflammation in intestinal cells and is associated with intestinal "ulcerations" and other health problems.

But many commentators to the NOSB are supportive of the use of carrageenan, saying that it has been proven safe for decades and has been consumed for hundreds of years and reduces the need for synthetic food additives

"The vast majority of existing science supports the safety of carrageenan... even in infant formula," Robert Brackett, director of the Institute for Food Safety and Health within the Illinois Institute of Technology wrote in a public comment to NOSB.

The material is one of many on the agenda for discussion at the NOSB's April meeting. The board received over 2,900 public comments through April 14 on the agenda items.

A public comment webinar on NOSB issues is set for April 19. The fireworks in Washington start April 25. Stay tuned.