National Organic Program

Note: EPA no longer updates this information, but it may be useful as a reference or resource.

[Federal Register: December 16, 1997 (Volume 62, Number 241)]
[Proposed Rules]
[Page 65849-65898]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16de97-28]
[[Page 65850]]

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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 205
[Docket Number: TMD-94-00-2]
RIN: 0581-AA40

AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.

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SUMMARY: The Agricultural Marketing Service (AMS) is seeking comments
on a proposal to establish a National Organic Program (NOP or program).
The program is proposed under the Organic Foods Production Act of 1990
(OFPA or Act), as amended, which requires the establishment of national
standards governing the marketing of certain agricultural products as
organically produced to facilitate commerce in fresh and processed food
that is organically produced and to assure consumers that such products
meet consistent standards. This program would establish national
standards for the organic production and handling of agricultural
products, which would include a National List of synthetic substances
approved for use in the production and handling of organically produced
products. It also would establish an accreditation program for State
officials and private persons who want to be accredited to certify
farm, wild crop harvesting, and handling operations that comply with
the program's requirements, and a certification program for farm, wild
crop harvesting, and handling operations that want to be certified as
meeting the program's requirements. The program additionally would
include labeling requirements for organic products and products
containing organic ingredients, and enforcement provisions. Further,
the proposed rule provides for the approval of State organic programs
and the importation into the United States of organic agricultural
products from foreign programs determined to have equivalent requirements.

DATES: Comments must be submitted on or before March 16, 1998.

ADDRESSES: Interested persons are invited to submit written comments on
this proposal to: Eileen S. Stommes, Deputy Administrator, USDA-AMS-TM-
NOP, Room 4007-So., Ag Stop 0275, P.O. Box 96456, Washington, DC 20090-
6456. Comments also may be sent by fax to (202) 690-4632. Additionally,
comments may be sent via the Internet through the National Organic
Program's homepage at: http://www.ams.usda.gov/nop. See the
SUPPLEMENTARY INFORMATION section for further details on submitting
comments.

FOR FURTHER INFORMATION CONTACT: Michael I. Hankin, Senior Agricultural
Marketing Specialist, USDA-AMS-TM-NOP, Room 2510-So., P.O. Box 96456,
Washington, DC 20090-6456; Telephone: (202) 720-3252; Fax: (202) 690-3924.

SUPPLEMENTARY INFORMATION:

Submission of Comments

Written comments submitted by regular mail and faxed comments
should be identified with the docket number found in brackets in the
heading of this document. Multiple page comments submitted by regular
mail should not be stapled or clipped to facilitate the timely scanning
and posting of these comments to the NOP homepage. Persons submitting
written or faxed comments are requested to identify the topic and
section number, if applicable, to which the comment refers: for
example, for a comment regarding feed for organic livestock, reference
Livestock and section 205.13. Topics should be selected from the
following list: General, Proposed Effective Date, Regulatory Impact
Assessment, Regulatory Flexibility Analysis, Paperwork Reduction Act,
Definitions, Applicability (section 205.3), Crops, Livestock, Handling,
National List, Labeling, Certification, Accreditation, State Programs,
Fees, Compliance, Appeals, and Equivalency.
It is our intention to have all comments, whether mailed, faxed, or
submitted via the Internet, available for viewing on the NOP homepage
at http://www.ams.usda.gov/nop in a timely manner. Comments submitted
in response to this proposal will be available for viewing at the USDA-
AMS, Transportation and Marketing, Room 2945-South Building, 14th and
Independence Ave., S.W., Washington, D.C., from 9:00 a.m. to 1:00 p.m.,
and from 2:00 p.m. to 4:30 p.m., Monday through Friday (except official
Federal holidays). Persons wanting to visit the USDA South Building to
view comments received in response to this proposal are requested to
make an appointment in advance by calling Martha Bearer at (202) 720-8037.

Purpose and Background of the National Organic Program

Members of organic industries across the U.S. have experienced
numerous problems marketing their organically produced and handled
agricultural products. Inconsistent and conflicting organic production
standards may have been an obstacle to the effective marketing of
organic products. There are currently 33 private and 11 State organic
certification agencies (certifiers), each with their own standards and
identifying marks. Some existing private certifying agencies are
concerned that States might impose registration or licensing fees which
would limit or prevent the private certifiers from conducting
certification activities in those States. Labeling problems have
confronted manufacturers of multi-ingredient organic food products
containing ingredients certified by different certifiers because
reciprocity agreements have to be negotiated between certifiers.
Consumer confusion may exist because of the variety of seals, labels,
and logos used by certifiers and State programs. Also, there is no
industry wide agreement on an accepted list of substances that should
be permitted or prohibited for use in organic production and handling.
Finally, a lack of national organic standards may inhibit organic
farmers and handlers from taking full advantage of international
organic markets and may reduce consumer choices in the variety of
organic products available in the marketplace.
To address these problems, the organic industry trade association
attempted to establish a national voluntary organic certification
program. However, the industry could not develop a consensus on the
standards that should be adopted. Thereafter, Congress was petitioned
by the organic industry trade association to establish a mandatory
national organic program. Congress, in 1990, enacted the Organic Foods
Production Act of 1990, as amended (7 U.S.C. 6501 et seq.). The
purposes of the OFPA, set forth in section 2102 (7 U.S.C. 6501) are to:
(1) establish national standards governing the marketing of certain
agricultural products as organically produced products; (2) assure
consumers that organically produced products meet a consistent
standard; and (3) facilitate commerce in fresh and processed food that
is organically produced.

The National Organic Standards Board

Pursuant to section 2119 of the OFPA (7 U.S.C. 6518), the Secretary
of Agriculture, hereafter referred to as the Secretary, established a
National Organic Standards Board (NOSB or Board). The NOSB has assisted
the Secretary in developing a National List of substances to be used in
organic production and handling and has advised the Secretary on other
aspects

[[Page 65851]]

of implementing the National Organic Program.
The Act establishes what the composition of the Board should be. In
accordance with the Act, the Secretary appointed 14 members in January
1992 that included 4 organic farmers, 2 organic handlers, 1 owner or
operator of a retail establishment with significant trade in organic
products, 3 experts in environmental protection and resource
conservation, 3 representatives of public interest or consumer interest
groups, and 1 expert in the field of either toxicology, ecology, or
biochemistry. The 15th member, an accredited certifier, would be
appointed after certifying agents are accredited by the Secretary. The
Act also provides that members of the NOSB be appointed for 5 year
terms and that the original members be appointed to staggered terms of
3, 4 and 5 years to provide continuity of membership on the Board.
The NOSB has held 12 full Board meetings and 5 joint committee
meetings since the appointment of its members in 1992. To make
recommendations regarding specific issues, the Board formed 6 working
committees: Crops Standards; Livestock (and Livestock products)
Standards; Processing, Packaging and Labeling Standards; Materials;
Accreditation; and International Committees. Each committee reviewed
the provisions of the OFPA and standards previously established by
other organic organizations to determine for which subject areas
position papers would be developed. Based on the position papers
developed, public input given by persons at NOSB meetings, and an
extensive review and comment process used to develop draft
recommendations, the Board provided recommendations to the Secretary
about various matters. The recommendations included ones regarding
production and handling standards, labeling, accreditation, product
residue testing, and emergency spray programs.
The Board has provided recommendations regarding which synthetic
substances should be permitted to be used in organic production and
handling and which non-synthetic substances should be prohibited for
use, in order to recommend to the Secretary whether they should be
placed on the National List as synthetic substances approved for use or
non-synthetic substances not approved for use. The Board has reviewed
approximately 170 substances, including botanical pesticides as
required in section 2119(k)(4) of the OFPA (7 U.S.C. 6518(k)(4)), for
possible placement on the National List, and the Board used technical
advisory panels to provide scientific evaluation of the materials
considered in its review of the substances.
The NOSB's initial recommendations were presented to the Secretary
on August 1, 1994. The NOSB has continued to make recommendations and
has submitted 30 addenda to its initial recommendations. A copy of the
NOSB recommendations may be viewed on the NOP home page at: http://
www.ams.usda.gov/nop, or obtained by writing to: Maria Strother,
Agricultural Marketing Specialist, USDA-AMS-TM-NOP, Room 2510-So., P.O.
Box 96456, Washington, DC 20090-6456.
All of the NOSB recommendations were considered by AMS in
developing the proposed regulation for the National Organic Program.
The discussions and public input involved in generating the
recommendations have been invaluable in assisting AMS to become aware
of the complexity of various issues and to arrive at solutions that
represent the interests of farmers, handlers and consumers. We have
written a proposed regulation that incorporates to the greatest extent
possible the organic principles and specifics contained in the NOSB
recommendations. Many of the recommendations were restructured,
reordered, or combined to be compatible with the format of the proposed
rule. In the few instances where a section of our proposed rule does
not reflect the NOSB recommendation, we explain the variation in the
preamble for the specific section.
The NOSB recommendations and discussions on the following topics
were especially helpful to AMS in developing the proposed rule:
accreditation; labeling; importation; organic farm and handling plans;
split operations; planting stock policies; emergency pest or disease
treatments; livestock feed and health care; commercial availability;
drift of synthetic substances; small farmer exemption; phase-in of NOP
implementation; fiber processing; and the National List substance
review process.

Public Input

In addition to the NOSB recommendations, AMS has received
considerable input from interested persons regarding establishment of
the National Organic Program and this proposed rule.
Section 2110(g) of the OFPA (7 U.S.C. 6509(g)) requires the
Secretary to hold public hearings to obtain information to guide the
implementation of standards for livestock products. Four such hearings
were held during 1994: January 27-28 in Washington, DC; February 10 in
Rosemont, Illinois; February 24 in Denver, Colorado; and March 22 in
Sacramento, California. Oral and written testimony was received from
more than 70 persons, including livestock producers, veterinarians,
certifying agents, processors and members of the NOSB. Comments covered
livestock production and product marketing, antibiotic use, livestock
living conditions, feed availability, provisions for conversion to
organic production, and label requirements. These comments have been
beneficial in developing this proposed rule.
Prior to publication of this proposed rule, public comment also was
received at public events attended by NOP staff members. Public comment
was received at the 12 full Board and 5 joint committee meetings. NOP
staff made presentations and received comments at local and regional
organic conferences and workshops and at national and international
organic and natural food shows. Comments also were received at: a
national organic certifiers meeting held on July 21, 1995, to discuss
accreditation issues; a meeting of State officials held on February 26,
1996, to discuss the role of States in the NOP; training sessions for
organic inspectors; and numerous speaking engagements of the AMS
Administrator, the NOP program manager, and the NOP staff where the
public had an opportunity to participate in question and answer sessions.

Proposed Effective Date of the Regulation

We have received inquiries about when the various provisions of a
final rule will be effective.
The final rule would establish a procedure and a time frame for
designating private persons and State officials as accredited
certifying agents under the program. One option would be to require
organizations desiring to be included on the initial list of certifying
agents accredited under the National Organic Program to submit their
applications within approximately two months after publication of the
final regulation. Applications submitted later than two months after
publication of the final rule would not be considered for inclusion on
the initial list of certifying agents, but would be reviewed as soon as
possible after publication of the initial list of accredited certifying
agents. Subsequent lists of accredited certifying agents would be
published as they are developed.
If we adopted this option, we would publish an initial list of
accredited certifiers in the Federal Register after

[[Page 65852]]

reviewing the applications received during the first two months after
publication of the final regulation. We will publish subsequent lists
of accredited certifying agents as new applicants become accredited. We
would expect publication of the initial list to occur within six months
after publication of the final rule. Only after publication of that
list would the provisions of the regulation applicable to certification
become effective. Thus, the provisions in the proposal that address the
application process for, and decisions to be made about, the
certification of farms, wild crop harvesting operations, and handling
operations, would become effective only after certifiers have become
accredited. Certifiers would begin certifying individual operations
under the NOP six months after publication of the final rule.
In order for accredited certifying agents to begin certifying
operations under the NOP six months after publication of the final
rule, we believe we would need, as we previously indicated, to have
accreditation applications submitted within two months after
publication of the final regulation. We believe that the initiation of
certification activities by accredited certifying agents six months
after publication of the final rule would permit the implementation of
the national standards for organic products within a reasonable time
frame after publication of the final rule.
We request comments from all interested parties, particularly small
businesses that want to obtain accreditation as certifying agents, as
to whether a two month time frame after publication of the final rule
for submission of applications for accreditation is a sufficient time
period, or whether an extended time period, such as three or four
months after publication of the final rule, should be permitted for
those who want to be listed on the initial list of accredited
certifiers. Any such extension, of course, would lengthen the
implementation schedule.
In this implementation option, we would expect to allow a 12-month
period of time after publication of the initial list of certifying
agents for operations to become certified under the relevant provision
of the final regulation. Thus, all provisions of the NOP would be
implemented 18 months after publication of the final rule. On that
date, which will be stated in the final rule, all organic operations
required to be certified will have to be certified in order to sell or
label their products as organic. Operations that are certified prior to
18 months after publication of the final regulation would be permitted
to use the USDA organic seal upon certification by a USDA accredited
certification organization.
We would like comments, particularly from small farm or handling
operations, as to whether the 12-month period of time we anticipate
allowing for farm, wild crop harvesting, and handling operations to
become certified is a reasonable period of time for such operations to
become certified. We are particularly interested in learning whether
there are any economic or other factors that would create difficulties
in obtaining certification within the 12-month time period we expect to
provide for obtaining certification.
Several people have raised questions about what the impact of the
rule would be when it is effective. Some farmers whose operations are
currently certified as organic under private or State standards have
asked what the status of their certified farming operations would be if
a substance allowed for use under their current private or State
certification is not on the National List, and, therefore, not allowed
under the National Organic Program.
The OFPA requires that a product sold or labeled as an organically
produced agricultural product must, except as otherwise provided in the
Act and excluding livestock, be produced on land to which no prohibited
substances, including synthetic chemicals, have been applied during the
three years immediately preceding harvest of the agricultural product.
We have incorporated this prohibition in our proposal. Thus, a farm
would not be able to become certified under the National Organic
Program until three years after the time any prohibited substance was
last applied. Therefore, at the time the final rule becomes effective,
such farming operations previously certified under private or State
programs would not be able to sell or represent their products as
organically produced if they could not satisfy the three year period
established for nonuse of a prohibited substance.
Petitions, however, to amend the National List may be submitted
immediately after publication of the final rule by using the petition
process proposed in section 205.28 of subpart B. It may be possible,
therefore, for a person who submits a petition immediately after
publication of the final rule to the NOSB for review of a new synthetic
substance to be included on the National List, to have this substance
approved for use by the Secretary prior to the effective date of the
program. If this were to occur, then prior use of the substance would
not prevent the products from being sold or represented as organically
produced.
Processors also have asked what impact the program's requirements
would have on their existing product and label inventories. With regard
to existing product and label inventories, we believe that our intended
18-month delayed effective date for the complete rule would provide
ample time for handlers to use up existing product and label
inventories required under their existing organic certification program
before the rule becomes effective.
States also have asked what effect the rule would have on their
current organic regulations. With regard to current State organic
regulations, we also believe that the anticipated 18-month delayed
effective date should provide State officials with ample time to make
the necessary changes to their State regulations and submit their State
proposed organic program to the Secretary for approval.
Because it is the intent of AMS to provide a final rule which
facilitates trade and which is the least disruptive as possible for the
production, handling and marketing of organic products, we request
comment on our intended schedule of effective dates for the provisions
of the rule. We also request comments on any problems that organic
farmers and handlers, States, and others may encounter when adjusting
their operations to meet the requirements of the National Organic
Program, including the OFPA requirement of a 3-year period prior to the
harvest of organic products from land to which a prohibited substance
is applied. A time-table for implementation of the program would be
published in the final rule.

Prior Documents in This Proceeding

The following notices related to the National Organic Standards
Board and the development of this proposed regulation have been
published in the Federal Register. Four notices of nominations for
membership on the National Organic Standards Board were published
between April 1991 and July 1996 (56 FR 15323, 59 FR 43807, 60 FR
40153, 61 FR 33897). Two notices of extension of time for submitting
nominations were published on September 22, 1995, and September 23,
1996 (60 FR 49246, 61 FR 49725). Twelve notices of meetings of the
National Organic Standard Board were published between March 1992 and
August 1996 (57 FR 7094, 57 FR 27017, 57 FR 36974, 58 FR 85, 58 FR 105,
58 FR 171, 59 FR 58, 59 FR 26186, 59 FR 49385, 60 FR 51980, 60 FR
15532, 61 FR

[[Page 65853]]

43520). One notice of public hearings on organic livestock and
livestock products was published on December 30, 1993 (58 FR 69315).
One notice specifying a procedure to submit names of substances for
inclusion on the National List was published on March 27, 1995 (60 FR
15744).

Executive Order 12988

This proposal has been reviewed under Executive Order 12988, Civil
Justice Reform. This rule is not intended to have retroactive effect.
States and local jurisdictions are preempted under section 2115 of
the OFPA (7 U.S.C. 6514) from creating programs of accreditation for
private persons or State officials who want to become certifying agents
of organic farms or handling operations. A governing State official
would have to apply to the USDA to be accredited as a certifying agent,
as described in section 2115(b) of the OFPA (7 U.S.C. 6514(b)). States
also are preempted under sections 2104 through 2108 of the OFPA (7
U.S.C. 6503 through 6507) from creating certification programs to
certify organic farms or handling operations unless the State programs
have been submitted to, and approved by, the Secretary as meeting the
requirements of the OFPA.
Pursuant to section 2108(b)(2) of the OFPA (7 U.S.C. 6507(b)(2)), a
State organic certification program may contain additional requirements
for the production and handling of organically produced agricultural
products that are produced in the State, and for the certification of
organic farm and handling operations located within the State, under
certain circumstances. Such additional requirements must: (a) further
the purposes of the OFPA; (b) not be inconsistent with the OFPA; (c)
not be discriminatory towards agricultural commodities organically
produced in other States; and (d) not be effective until approved by
the Secretary.
Pursuant to section 2120(f) of the OFPA (7 U.S.C. 6519(f)), this
proposal would not alter the authority of the Secretary under the
Federal Meat Inspection Act (21 U.S.C. 601 et seq.), the Poultry
Products Inspections Act (21 U.S.C. 451 et seq.) or the Egg Products
Inspection Act (21 U.S.C. 1031 et seq.), concerning meat, poultry, and
egg products, nor any of the authorities of the Secretary of Health and
Human Services under the Federal Food, Drug and Cosmetic Act (21 U.S.C.
301 et seq.), nor the authority of the Administrator of the
Environmental Protection Agency (EPA) under the Federal Insecticide,
Fungicide and Rodenticide Act (7 U.S.C. 136 et seq.).
Section 2121 of the OFPA (7 U.S.C. 6520) provides for the Secretary
to establish an expedited administrative appeals procedure under which
persons may appeal an action of the Secretary, the applicable governing
State official, or a certifying agent under this title that adversely
affects such person or is inconsistent with the organic certification
program established under this title. The Act also provides that the
U.S. District Court for the district in which a person is located has
jurisdiction to review the Secretary's decision.

Executive Order 12866

This proposed rule has been determined to be economically
significant for the purposes of Executive Order 12866 and, therefore,
has been reviewed by the Office of Management and Budget (OMB). When
proposing a regulation which has been determined to be economically
significant, agencies are required to: assess the costs and benefits of
available regulatory alternatives; base regulatory decisions on the
best reasonably obtainable technical, economic, and other information;
avoid duplicative regulations; and tailor regulations to impose the
least burden on society consistent with obtaining regulatory
objectives. Therefore, to assist in fulfilling the objectives of
Executive Order 12866, and the Unfunded Mandates Reform Act of 1995,
the USDA has prepared a Regulatory Impact Assessment (RIA) which is
attached as an appendix to this proposed rule and from which the
following summaries of the costs and benefits of the proposed National
Organic Program have been taken.
Ideally, the net benefits of the proposed rule would be estimated
by employing a quantitative analysis using information about the cost
structure of the industry, the demand for organic food, and projected
shifts in supply and demand resulting from the various factors
discussed in the assessment. However, although researchers have
conducted numerous small-scale studies to determine consumer
willingness to pay for organic products and to identify reasons why
conventional food buyers do not choose organic food products, the
available data are insufficient to support a quantitative assessment of
this type. At this time, USDA invites public input to provide
additional data that may aid in the development of a quantitative
assessment. This data should be submitted in response to the questions
included in the Conclusion section of the RIA. These questions are
intended to solicit information needed to develop baseline data about
the potential program participants, the costs of organic production,
revenues from organic sales, and the impact of the program on market
growth.

Summary of the Costs of the Proposed Rule

The proposed rule would impose direct costs in the form of fees
charged to certifiers for USDA accreditation and to farmers, wild crop
harvesters and handlers for support of the National Organic Program.
The proposed rule also would impose administrative costs, such as
submission of information, recordkeeping, and access to records that
may constitute an additional burden. The actual amount of the
additional administrative costs that would be imposed by the final rule
is expected to be different for those entities who currently are active
in the organic industry, as compared to those new entities who would
begin their activities only after the national program is implemented.
Certifiers, farmers, wild crop harvesters and handlers who currently
are active in the organic industry already perform most of these
administrative functions; therefore, the additional costs to them would
depend upon the extent to which their current practices are different
from the requirements of the final regulation.
Farmers, wild crop harvesters and handlers would be required to
produce and handle products in accordance with the standards set forth
in the rule and provide certifiers with the required information
necessary to verify certification requirements. Farmers, wild crop
harvesters, and handlers would be charged a fee by the certifying agent
for these certification services. We were not able to estimate the
exact cost of certification fees that would be charged by certifying
agents after implementation of the national program because these fees
currently vary widely among existing certifiers: some existing private
certifying agents are non-profit; some States who currently conduct
certification activities subsidize these activities from other revenue
sources; some existing certifying agents include the cost of inspection
and, in some cases, laboratory testing, in their certification fee; and
some existing larger certifying agents may charge lower fees because
they are able to spread their fixed costs over a larger number of clients.
Farmers, wild crop harvesters, and handlers may experience certain
costs to comply with the final regulations. For example, there may be
costs associated

[[Page 65854]]

with the proposed requirement that organic products not come in contact
with prohibited substances, or with the proposed requirement that pest
control substances be used only if pest prevention measures are
ineffective. However, since the proposed rule is a synthesis of
existing State and private organic certification programs and the NOSB
recommendations, we believe that farmers, wild crop harvesters and
handlers who currently participate in existing State or private organic
certification programs would experience little or no increased
compliance costs as a result of implementation of the National Organic
Program. Additionally, farmers and handlers who would be exempted or
excluded under the rule, but who choose to become certified in order to
receive the benefits of certification, would be subject to the
additional cost of certification and recordkeeping. USDA requests data
on the costs of organic production and the revenues from organic
farming, and on a comparison of these costs and revenues to
conventional systems.
The following are the upper-bound estimates of the cost of initial
certification under the National Organic Program:

Estimated Cost to Farmers and Wild Crop Harvesters for Initial
Certification

Certification fee *................................. $413
USDA fee............................................ 50
----------
Total fees...................................... 463
----------
Paperwork reporting burden.......................... \1\ 381
Paperwork recordkeeping burden...................... 34
----------
Total reporting and recordkeeping............... 415
=========
ESTIMATED COST TO FARMERS AND WILD CROP HARVESTERS
FOR INITIAL CERTIFICATION.......................... $878

Estimated Cost to Handlers for Initial Certification

Certification fee *................................. $943
USDA fee............................................ 500
----------
Total fees...................................... 1,443
----------
Paperwork reporting burden.......................... \2\ 433
Paperwork recordkeeping burden...................... 34
----------
Total reporting and recordkeeping............... 467
=========
ESTIMATED TOTAL COST TO HANDLERS FOR INITIAL
CERTIFICATION...................................... $1,910

* The estimated certification fee is based on the average of fees
charged by a representative group of certifying agents: private non-
profit, private for-profit and a State agency. Most certifying agents
in our representative group include the cost of inspection and, if
applicable, required laboratory testing in the certification fee.
\1\ For new organic producers.
\2\ For new organic handlers.

USDA requests data on certification fees currently paid by existing
organic farmers, wild crop harvesters, and handlers in order to better
assess the impact of the proposed program.
After implementation, all organic certification agencies, whether
private or State, would be accredited by USDA and would pay fees for
the following services provided by USDA: application review, annual
report review, site evaluation visits, and administrative duties. A
certifier who currently is accredited by a private accreditation
organization might pay USDA lower site evaluation visit fees than a
certifier who is not currently accredited, because of measures that are
implemented by the certifier to receive its private accreditation.
Additionally, as required by the OFPA, a private certifying agent would
have to furnish reasonable security for the purpose of protecting the
rights of farms and handling operations certified by the agent. The
amount and type of security would be established through future
rulemaking.
States that currently perform organic certification activities
under their own regulations, or that have laws pertaining to the
certification of organically produced and handled products, or that
plan to have an organic program in the future, may incur some
additional costs. For example, States with existing organic programs or
regulations may be required to supplement or revise them in order to
meet the criteria of the OFPA, including the provisions set forth in
section 2107 of the OFPA (7 U.S.C. 6506). A State without an existing
organic program that initiates a new State organic program would be
expected to incur greater costs to establish its program.
The following are the upper-bound estimates for the cost of initial
accreditation under the National Organic Program:

Estimated Cost to Certifying Agents for Initial Accreditation

Accreditation application fee....................... $640
Site evaluation fee *............................... 3,500
USDA Administrative fee............................. 2,000
----------
Total fees...................................... 6,140
----------
Paperwork reporting burden.......................... \1\ 23,9
31
Paperwork recordkeeping burden...................... 60
----------
Total reporting and recordkeeping............... 23,991
=========
ESTIMATED TOTAL COST FOR INITIAL ACCREDITATION...... $30,131

*Each certifying agent would have a site-evaluation to confirm
accreditation, and thereafter a subsequent renewal evaluation at least
every 5 years following confirmation of accreditation. In some cases,
a pre-confirmation site visit may be necessary. We anticipate that the
frequency of site evaluations would be based on the performance of the
certifying agent and would be higher during the initial years of the
program.
\1\ For new organic certifiers.

The USDA requests data on the fees currently paid by existing
organic certifying agents for accreditation in order to better assess
the impact of the proposed program.
The requirement in the proposed rule for qualified certification
personnel to be used to evaluate certification applications and
contribute to certification decisions may result in an increase in
labor and training costs for some existing certifiers. The amount of
additional costs to these certifiers would depend on the level of
expertise among current certification personnel, the extent to which
certifiers currently rely on volunteers, and the costs of training
these persons. Our proposed inspector training requirements conform to
current established practice in the industry and are not expected to
impose an additional burden on existing certifiers who utilize inspectors.
We also have identified non-quantifiable costs that may result.
Some certifiers consider the loss of independence in setting
certification standards under a national program as imposing a cost.
Other certifiers consider the establishment of uniform national
standards and an accreditation program as a benefit in that the risk of
potentially costly disputes over acceptance of other certifier's
standards (reciprocity) is eliminated. We anticipate that the net
impact would be positive because the reciprocity dispute problems would
be eliminated.
Another non-quantifiable cost could result from the proposed
requirements that certifiers provide access to all their records to the
Secretary and the applicable governing State official, and provide
access to laboratory analyses and certification documents, other than

[[Page 65855]]

confidential business information, to the general public. Although not
quantifiable, these requirements may represent a change in the way some
existing certifiers currently maintain these records.

Summary of Benefits of the Proposed Rule

In the absence of a nationally recognized definition of organic,
consumers may be mislead by labels on products claiming to be organic,
or claiming to contain organic ingredients, when in fact some of the
products or ingredients may not have been organically produced. Because
many consumers are willing to pay price premiums for organic food,
producers have an economic incentive to label their products organic.
But consumers generally are unable to distinguish organic products from
conventionally produced products by sight inspection; hence, consumers
rely on verification methods such as certification by private entities
or verification by retailers. The USDA requests data to determine the
extent to which mislabeling of non-organically produced products as
organic occurs and the market impacts of mislabeling in terms of
quantities of organic goods sold and the prices for organic goods.
Individual ingredients in multi-ingredient processed products may
be certified under different standards of organic production, thus
making it difficult for a consumer to determine the production
standards under which each of the ingredients was produced. The
proposed standards for organic production, enforced through
accreditation of certifiers, would assure consumers that the organic
ingredients were produced under one national standard. Furthermore,
USDA regulation of labeling claims for organic food would allow the
USDA and other federal agencies whose jurisdiction includes ensuring
the veracity of labeling claims to prosecute those who mislabel
products sold as organic.
Establishing a national definition for organic would be expected to
increase the supply and variety of organic products, especially meat
and poultry, available to consumers. The Food and Drug Administration
(FDA) and the Bureau of Alcohol, Tobacco and Firearms (ATF) currently
allow use of the word organic on most food and alcohol labels, but USDA
has withheld approval for the use of organic labels on meat and poultry
pending the outcome of this rule making. Without the regulation,
however, FDA may decide to disallow use of the term organic on labels
and USDA may continue their current restrictions on the use of organic
on meat and poultry labels. The increased variety of organic products,
especially meat and poultry, that might be marketed after
implementation of the final rule may increase the variety of available
organic products so as to parallel the variety of non-organic products.
The USDA requests data and analyses which would support projections of
the demand for organic meat and poultry.
By providing for the accreditation of certifiers, the proposed rule
would establish the requirements and enforcement mechanism to protect
producers and handlers from inconsistent certification services, lack
of reciprocity between certifiers, and competition from fraudulent
products, which can increase costs or reduce revenue for organic
farmers and handlers. In the absence of the National Organic Program,
the certifier of a final product may not be required to recognize the
certification of an intermediate organic product used in the final
product. Thus, both farmers and primary food processors face a risk of
being unable to sell an organic product identified as certified when
more than one certifier is involved. Monitoring by USDA of
certification inspections and certifier personnel training and
qualifications would help to ensure the quality of the certification,
the use of consistent criteria for certification, and the use of
certification personnel who are knowledgeable and free from conflicts
of interest.
National organic standards and the assurance provided by the USDA
accreditation of certifiers would benefit farmers and handlers by
opening access to international markets. The trade restrictions that
currently exist would be resolved if foreign countries who import
organic products recognize the National Organic Program as equivalent.
Farmers and handlers in the United States may expect larger growth in
exports of organic products to follow implementation of the final rule.
The contributions of national organic standards to increased
domestic demand and to expanded international markets for organic
products may provide opportunities for current organic producers to
expand the scale of their operations. Increased organic production also
may provide incentives for input industries to develop new technologies
which could lower producers' costs of organic production. Input costs
also may decline as a result of economies of scale being achieved in
input industries producing for the organic market. Expanded markets
could encourage additional farmers and handlers to enter the
marketplace, resulting in a potential decline of certifiers' average
costs of operation as fixed costs are spread over a growing number of
clients. The USDA requests information to determine whether the organic
industry and consumers of organic goods have benefitted from industry
growth resulting in economies of scale and production and marketing
efficiencies, and whether industry participants anticipate such
benefits from this rule.
There are three ways in which certifiers' administrative costs
could be reduced as a result of the regulation. First, certifiers'
costs of maintaining access to organic markets for their clients should
be reduced because costs associated with determining equivalency
between certifiers would be reduced or eliminated. Accreditation and
uniform national standards would alleviate the need to negotiate
individual reciprocity agreements with other certifiers. Furthermore,
USDA oversight of certifiers would simplify the process of certifying
multiple ingredient products, thus reducing certification costs. The
responsibility for meeting production and certification requirements of
each ingredient would rest with the certified producers and accredited
certifying agents of the individual ingredients. National standards
also would eliminate costly equivalency disputes between States which
may affect interstate commerce.
Second, certifiers would no longer have to pay private
organizations for the accreditation required to gain access to some
international markets. This would be of particular benefit to the
smaller certifiers who may have been unable to enter these markets
because of the high cost of international accreditation. A portion of
the administrative fees paid by each certifying agent would support
USDA activities to negotiate equivalency of organic standards in world
markets so that producer clients of all USDA accredited certifiers
could have access to these markets.
Third, in the long run, uniform standards of production,
certification and accreditation should reduce the cost of training
certification staff. Industry-wide training costs may increase
initially, but should decline as the pool of trained certifiers and
certification personnel increases and the corresponding cost of
training new certification personnel decreases, especially in those
instances where personnel transfer from one certifier to another.
Standardized materials, such as compliance guides and training manuals,
also should contribute to a reduction in the cost of training

[[Page 65856]]

certification staff. In addition, USDA accreditation of certifiers
would present opportunities for sharing information about standards,
practices and the general requirements of the program through the
National Organic Program staff.

Unfunded Mandates Reform Act

The Unfunded Mandates Reform Act (Pub. L. 104-4) requires (in
Section 202) that agencies prepare a qualitative and quantitative
assessment of the anticipated costs and benefits before proposing any
rule that may result in annual expenditures by State, local, and tribal
governments, in the aggregate, or by the private sector, of
$100,000,000 (adjusted annually for inflation) in any one year. As
discussed in the preceding section entitled ``Executive Order 12866'',
USDA has prepared a Regulatory Impact Assessment (RIA) to assess the
costs and benefits of this proposed rule. As explained in the RIA,
which is attached as an appendix to this proposed rule, USDA was unable
to provide a quantitative assessment of the costs and benefits of the
proposed rule, except for the cost of fees and recordkeeping that would
result from the proposed rule, because of insufficient data available
to support a quantitative assessment. The cost of fees resulting from
this proposed rule is estimated to be $1,000,000 during the first year
of program implementation, and the cost of recordkeeping is estimated
not to exceed $4,700,000 during any one of the first three years of
program implementation. The RIA does, however, provide a qualitative
assessment of the proposed rule's costs and benefits.
The USDA has posed a list of questions in the RIA to assist in the
development of a quantitative assessment for the final RIA that will be
published as part of the final rule for the National Organic Program.
We will utilize public input received in response to these questions
and to other provisions of this proposed rule, as well as other
resources available to USDA before publication of the final rule, to
develop a quantitative assessment of the costs and benefits of the
final rule.
Although USDA has not determined whether this proposed rule would
result in annual expenditures by State, local, and tribal governments,
in the aggregate, or by the private sector, of $100,000,000, USDA has
sought to meet the objectives of the Unfunded Mandates Reform Act. In
addition to its qualitative cost/benefit assessment, USDA has
identified in the RIA three regulatory alternatives to the proposed
rule. We also discuss in the preamble sections entitled ``Paperwork
Reduction Act of 1995'' and ``The Regulatory Flexibility Act and the
Effects on Small Businesses'', the analysis we have employed in
reaching a determination that this proposed rule is the least costly
and least burdensome to the regulated parties, in that we have designed
the proposed rule to be as consistent as possible with existing
industry practices, while satisfying the specific requirements of the
OFPA.
Additionally, we have had numerous occasions to communicate with
State governments during the development of the proposed rule.
Representatives of various State governments participated in several
public meetings of the NOSB and they have provided valuable input to
the NOSB for its recommendations on standards and the National List.
USDA also hosted a meeting on February 26, 1996, to discuss with many
State officials the status of the proposed rule and to listen to
concerns about such topics as fees, enforcement, certifier logo use,
and the range of additional requirements that States may include in
their State programs. On numerous other occasions, AMS staff has had
discussions with a wide array of State officials on subjects related to
this proposed rule or the establishment of, or amendment to, State
organic certification programs. USDA will continue to provide effective
opportunities for the broadest possible input by States and all
interested parties throughout the rulemaking process.

The Regulatory Flexibility Act and the Effects on Small Businesses

Pursuant to the requirements set forth in the Regulatory
Flexibility Act (RFA) (5 U.S.C. 601 et seq.), the Agricultural
Marketing Service (AMS) has considered the economic impact of the
proposed rule on small entities. The AMS' analysis, as required by the
RFA, considers the impact of this proposed regulation on small entities
and evaluates alternatives that would accomplish the objectives of the
rule without unduly burdening small entities or erecting barriers that
would restrict their ability to compete in the organic market. The
following Initial Regulatory Flexibility Analysis was written with
guidance from the Small Business Administration (SBA).
The size of the organic industry has risen dramatically in recent
years from a low of $78 million in 1980, to $1 billion in 1990, to a
total retail sales level of $3.5 billion in 1996. Certified organic
cropland production has expanded from 473,000 acres to 667,000 acres in
the period 1992 to 1994, and is expected to reach 2 million acres by
the year 2000. Despite this rapid growth, it should be noted that the
organic industry represents a very small percentage of total
agricultural production and sales, and that organic certifiers, farmers
and handlers tend to own smaller operations rather than larger ones.
Currently, organic certification is voluntary and self-imposed.
According to the most complete data available to the AMS, there are 33
private and 11 State certifying agencies certifying approximately 4,000
farmers and 600 handlers in the United States. Over half of the private
and State agencies certify both farm and handling operations, while the
others certify only farms. Over three-fourths of State and private
agencies each certify fewer than 150 farms and 20 handlers. Based on a
review conducted by AMS of 16 certifiers, who provided information on
the organic sales of products produced on certified farms, most of the
farms certified have less than $25,000 in gross sales.
A national organic program would benefit farmers by opening access
to international markets. U.S. exports of organic products totaled $203
million in 1994 or about 9 percent of the organic output. Export
markets may become more substantial and offer price premiums for
organic products with increased world-wide consumption of organically
produced food. For example, the organic market share in the European
Union (EU) has been projected to reach 2.5 percent of total food
consumption expenditures by 1998. Austria expects its organic market
share to equal one third of all food sales by the year 2000. In 1994,
France and Germany combined had total retail sales of organic foods
equal to that of the United States in the same year (approximately $2
billion). Japan's retail sales for that year were estimated to be $688
million. Other EU countries report growth rates equal to or greater
than the current growth rate in the United States of about 20 percent
per year.
The reason for regulatory action is fully explained in the
Regulatory Impact Assessment which is attached as an appendix to this
proposed regulation. In short, the organic market may be precluded from
reaching its full potential until there is a definition of the term
organic, which would be achieved by implementation of this proposed
regulation that provides regulations for production, handling,
labeling, certification and accreditation of U.S. certifiers. Domestic
and international trade in organic products may also be hampered by the
need to negotiate reciprocity agreements because of the differing
standards of

[[Page 65857]]

production and handling that currently exist; meat and poultry,
including processed products containing meat and poultry as
ingredients, cannot be labeled organic; and few enforcement mechanisms
exist to protect consumers against fraudulent organic labeling.
The statutory authority for this proposed rule is the OFPA, which
in section 2104(a) (7 U.S.C. 6503(a)) requires the Secretary of
Agriculture to develop a national organic program. In general, the
Secretary must establish an organic certification program for farmers
and handlers of agricultural products that have been produced using
organic methods as provided for in the OFPA. In addition, section 2115
of the OFPA (7 U.S.C. 6514) requires the Secretary to establish and
implement a program to accredit a governing State official and any
private person who meets the requirements of the OFPA and the
regulations in part 205 as a certifying agent for the purpose of
certifying a farm or handling operation as being in compliance with the
standards set forth in this proposed regulation.
The purpose of the RFA is to fit regulatory actions to the scale of
business subject to the actions in order that small businesses would
not be unduly or disproportionately burdened. To accomplish this
purpose, it first is necessary to define a small business. According to
the Standard Industrial Codes (SIC) (13 CFR Part 121) which are
developed by an inter-agency group, published by the Office and
Management and Budget (OMB), and used by the SBA to identify small
businesses, nearly all of the entities affected by this proposed
regulation would be considered small businesses. According to the SIC,
a small business in the agricultural services sector, such as
certifiers, includes firms with revenues of less than $3.5 million (SIC
Division A Major Group 07). In crop production, the SIC definition of a
small business includes all farms with annual gross sales under
$500,000 (SIC 0111-0191). (Most of the farms currently certified have
less than $25,000 in gross sales of organic production. However, many
farms combine organic and conventional production on the same
operation, some with total sales that may exceed $500,000). In handling
operations, according to the SIC, a small business is defined as having
fewer than 500 employees (SIC Division D Major Group 20). (The
workforce data needed to determine whether any organic handling
operations exceed 500 employees is not available, but anecdotal
information leads us to believe that no organic handling operations
employ more than 499 persons).
We consulted with the SBA Office of Advocacy regarding the use of
size standards different from those in 13 CFR 121. For the purpose of
identifying those entities who would be most affected by this proposed
regulation, alternative definitions were established for the purpose of
this analysis. The alternative definition of a small certifier which we
established for this analysis is one with total revenue from
certification of less than $25,000. The alternative definition of a
small farm which we established is one with a maximum of $5,000 in
gross sales of agricultural products, as is set forth in section
2106(d) of the OFPA (7 U.S.C. 6505(d)). Additionally, for this
analysis, we established the alternative definition of a small handling
operations to be one whose sales are $50,000 or less.
Development of regulations for the National Organic Program began
with the premise that the industry should be burdened as little as
possible by the OFPA regulation. To accomplish the goal of regulation
with minimal burden, we initially determined that most of the
information needed for organic farmers and handlers to become
certified, and for certifiers to become accredited, already exists for
those entities currently operating. The challenge was to create a
regulation which complied with the OFPA mandates and which embodied the
customary and usual business practices already being carried out by the
industry. No new forms have been proposed and few additional documents
would be required in this proposed regulation. Certifiers may need to
create some of the documents proposed for the application process;
farmers may have to keep records for longer periods of time; and
handlers may need to refine recordkeeping to ensure a clear audit
trail. However, they would be allowed the flexibility to use the
easiest and least expensive means available to provide information, as
long as the required information is adequate to ensure compliance with
the regulations.
Small and large farmers, handlers, and certifiers would be affected
by additional fees resulting from implementation of the National
Organic Program. Certifiers may be burdened with the accreditation
requirements for business related activities, such as the requirement
for a financial audit. However, because no particular form is required,
current business records may be sufficient to provide the necessary
information. The requirements to keep personnel records, explain
administrative procedures, and evaluate personnel may be burdensome to
small certification businesses. Yet, we have received the comment from
at least one small business that requirements such as these can
increase efficiency and make a small business more cost effective.
Section 2112(d) of the OFPA (7 U.S.C. 6511(d)) requires farmers and
handlers to maintain records for five years, and section 2116 (c)(1) of
the OFPA (7 U.S.C. 6515(c)(1)) requires certifiers to maintain records
for ten years. Our research of the industry indicates that farmers and
handlers already maintain records for five years and certifiers do not
discard historical documents. This regulation, therefore, should not
significantly increase the record retention burden beyond current
industry practice. However, under the requirements of the Paperwork
Reduction Act of 1995 (PRA) (44 U.S.C. 3506 and 3507), a burden is
created when a law or regulation requires the storage of information.
The burden to the industry is calculated on the time required to file a
document. Under the PRA we are required to estimate and account for
this burden.
No other burdens are expected to fall upon the organic industry as
a result of overlapping Federal rules. This proposed regulation would
not duplicate, overlap or conflict with any existing Federal rules. In
preparing this proposed regulation, AMS consulted other Federal
agencies such as the FDA, EPA, ATF, and the USDA's Food Safety and
Inspection Service (FSIS) to ensure that this proposed regulation would
complement existing regulations.
Whether using the SIC definitions for small businesses or the
alternative definitions created for this analysis, our proposed
regulation would have a significant impact on a substantial number of
small businesses. However, we have considered several options with the
intention of mitigating negative economic impacts. The following
options were considered by AMS prior to and during the development of
the proposed regulation.

Regulatory Options

Option 1: The Organic Market in the Absence of Regulation

We have explored the alternative of no government regulation of the
organic industry. However, current problems in the organic industry
would continue to affect small entities as well as large ones. In fact,
it is likely that the effect of no regulation would negatively impact
small businesses to a greater degree than larger ones. For example,
without regulation, smaller certifiers

[[Page 65858]]

entering the industry with growth expectations based on implementation
of the OFPA through Federal regulation would be negatively affected to
a greater degree than larger certifiers who can spread fixed costs over
a larger number of clients. Larger businesses do not depend as heavily
on industry growth to maintain their business operations.
Organic farmers who have integrated livestock into their
agricultural operation are negatively impacted in two ways without
regulation of the organic industry. First, they do not receive the
price premium for organic meat and poultry because at the present time
FSIS does not allow for the use of the term organic on meat and poultry
labels. This would impact small farmers to a greater extent because
they have fewer animals from which to profit from a price premium.
Second, to feed their livestock, farmers either must pay a higher price
for organically produced livestock feed or raise the feed on their own
land which otherwise could be used to produce organic cash crops.
Smaller farmers are disproportionately impacted because the ratio of
the number of livestock per acre of land is limited by the number of
acres they must use for organic crop production in order to be a
profitable business. Larger farmers face the same decision of whether
to purchase organic feed or raise their own, but they have more acres
over which to spread the cost of either choice.
Without Federal regulation, small certifiers and farmers wishing to
export agricultural products are negatively impacted to a greater
degree than larger organizations by a lack of resources and influence
over foreign market systems. Also, completing the paperwork required
for exporting products is disproportionately costly to small entities
because of their limited resources. The burden of completing this
paperwork can be eased if the certifier has attained private, third-
party accreditation. We are aware that certifiers currently may pay in
excess of $15,000 for accreditation by a private organization. Smaller
certifiers cannot afford these fees, and therefore, potential clients
wishing to export organic products choose to be certified by the
larger, privately-accredited organizations.
Finally, we are required by the OFPA to regulate the industry
through the National Organic Program. In fact, we have received
requests from many small businesses, certifiers, farmers, and handlers,
to move forward with implementation of a national program as quickly as
possible. Therefore, we believe that regulating the organic industry
would be the most appropriate action to help small businesses.

Option 2: Exemption of Small Certifiers From Accreditation

We considered the option to exempt small certifiers from
accreditation requirements, just as small farmers and handlers are
exempt from certification. However, the OFPA does not provide for such
an exemption and this, therefore, would require a legislative
amendment. Additionally, we do not believe that exempting small
certifiers would be in the best interest of the industry or the small
certifiers.
The exemption of small farmers carries with it limitations which
may discourage some small farmers from claiming exemption, preferring
instead to become certified. In this proposed regulation, small farmers
who are not certified and who use the term organic to identify their
products must comply with the USDA standards, yet they may not display
the USDA seal or a certifying agent's logo on the labels or the
labeling of their products. Furthermore, organic agricultural products
produced on small farms that claim exemption from certification
requirements cannot be labeled as organic ingredients in products
processed by a certified operation. As a result, consumers and
processors may not wish to pay a price premium for organic products
from a non-certified operation.
The exemption of small certifiers from accreditation would carry
with it limitations resulting from the absence of Federal oversight.
Interstate and international trade would be hampered because it would
likely be limited to products certified by accredited certifiers.
Distinguishing exempt certifiers from accredited ones might require
that product labels of accredited certifiers' clients include the USDA
logo and lead to consumer confusion over labels in the marketplace.
Protecting consumers from fraudulent certification claims on labels
would be difficult at the Federal level since AMS and other enforcement
agencies, such as the FDA, ATF, and FSIS, would have to distinguish
accredited certifiers from those who are exempt. Costly spot checks or
site visits would be required by AMS to verify that products sold or
labeled as organic are produced under systems that are consistent with
the national program. To accomplish this, a mechanism would have to be
established to charge exempt certifiers for spot checks or site visits
and these charges might be more costly than becoming accredited.
One of the purposes of the OFPA is to assure consumers that
organically produced products meet a consistent standard. Without the
assurance provided by Federal oversight of certifiers through USDA
accreditation, there is no way to ensure that one national standard of
production and handling for organic agricultural products would be
employed. The result could be the continuation of costly reciprocity
agreements among small, exempt certifiers and large, USDA accredited
certifiers. This could prove to be more costly to small entities than
accreditation. For all of these reasons, we have determined that option
2 is not a viable alternative.

Option 3: The Proposed Regulation

The regulation we propose is a synthesis of existing organic
standards and certification programs. We have done extensive outreach
which is explained in the SUPPLEMENTARY INFORMATION section entitled
``Public Input''. After gathering the necessary information, we
developed this proposed regulation to ensure industry integrity and
help the organic industry grow. In this section, we will discuss how
this proposed Federal regulation of the organic industry would:
eliminate costly administrative tasks now necessary under current
industry practice and thus mitigate the financial burden of USDA
accreditation; level the playing field, enabling small entities to
better compete in the industry; and benefit all farmers and handlers
through industry growth. Finally, this proposed regulation includes
three factors that would decrease its overall burden by providing
flexibility in compliance and fees.
Certification organizations currently develop and interpret their
own standards of production and handling. The consensus of our outreach
to the industry is that one national standard with interpretation,
decision making, and enforcement authority at the Federal level would
eliminate the need for certifiers to develop and amend standards.
Federal regulation also would provide a consistent process for
certifying operations that produce and handle products bearing an
organic label. Smaller certifiers would benefit to a greater degree
than larger certifiers because the resources saved from creating and
interpreting their own standards could be directed toward improving
their business operations and offsetting any additional burden imposed
by accreditation.
One national standard would eliminate the need to negotiate costly
reciprocity agreements and thus save

[[Page 65859]]

certifiers' resources used to negotiate the agreements, while also
expanding markets for organic farmers and handlers certified by smaller
organizations which currently do not have, or have a limited number of,
such agreements. Eliminating the need for accreditation by private
organizations prior to export would relieve certifiers of current
financial and paperwork burdens while leveling the playing field for
large and small organic entities wishing to export organic agricultural
products.
An expanded market caused by the introduction of organic meat and
poultry, added consumer confidence backed by consistent standards of
production and handling, and additional export volumes of organic
agricultural products would benefit all of the organic industry.
Another benefit of this proposed regulation to smaller certifiers
would be an extended network of information exchange. Presently,
information dissemination occurs on a one-to-one basis and through
participation in industry groups, meetings, workshops and international
trade fairs. Participation in these activities, which often are
dominated by issues of the larger certifiers, is costly and frequently
prohibitive to smaller entities. This proposed regulation would
facilitate providing certifiers with information about the program,
including standards, practices and general requirements. Small
certifiers would have access to the same information at the same time
as large certifiers, which could be passed on to their clients,
typically small farmers and handlers.
In our previously discussed implementation option, we consider
allowing a 6-month period of time after publication of the final rule
for certifying agents to gain initial accreditation, followed by a 12-
month period of time for farm, wild crop harvesting, and handling
operations to become certified under the relevant provision of the
final regulation. Thus, we intend that the provisions of the NOP would
be implemented approximately 18 months after publication of the final
rule. On that date, which will be stated in the final rule, all organic
operations required to be certified in order to sell or label their
products as organic would have to be certified. Operations that are
certified prior to 18-months after publication of the final regulation
would be permitted to use the USDA organic seal upon certification by a
USDA accredited certification organization.
We would like comments, particularly from small farm or handling
operations, as to whether the 12-month period of time we anticipate
allowing for farm and handling operations to become certified is a
reasonable period of time for such operations to become certified. We
are particularly interested in learning whether there are any economic
or other factors that would create difficulties in obtaining
certification within the 12-month time period we expect to provide for
obtaining certification.
Small certifiers have expressed concern that they may not have the
expertise necessary to become accredited by USDA or to carry out the
responsibilities associated with accreditation. However, we believe
that this proposed regulation is consistent with, and builds upon,
current industry practice. It was designed to allow existing
certifiers, farmers and handlers to continue to operate within the
organic industry.
In developing our proposal, we considered requiring that
accreditation be renewed annually by large certifiers and bi-annually
by small certifiers. However, annual or bi-annual preparation of
accreditation application materials and the review of applications
would be burdensome to accredited certifiers and the NOP staff,
respectively. Therefore, in this regulation we have proposed that
rather than extending the length of accreditation for small certifiers,
we would require that all certifiers submit annually only information
about their operation that had changed from the previous year. This
requirement would eliminate the burden of certifiers annually refiling
all of the information submitted in the initial accreditation. Renewal
of accreditation would occur every fifth year.
Finally, this proposed regulation has three elements of flexibility
that are advantageous to small entities: performance based production
and handling standards and certifier requirements; production and
handling standards that contain a range of allowable practices; and
certifier site-evaluation fees that would reflect actual costs incurred
in connection with the site-evaluation.
The standards in this proposed regulation are performance standards
based on the results of a management system, rather than prescriptive
or design standards that prescribe specific technology or a precise
procedure for compliance. Performance standards allow for flexibility
in compliance, which is especially important to organic farmers,
handlers and certifiers with limited resources. Performance standards
promote innovation and the development of new technologies which would
help the industry as a whole be more efficient. Finally, they provide a
less costly means of compliance than design standards. Small entities,
in particular, benefit because compliance with performance standards
allows for the adaptation of existing systems without costly capital
investment.
The proposed rule allows for flexibility by providing a range of
farming and handling practices that can be used when necessary to
maintain the organic integrity of the operation. The use of a practice
or substance that is allowable only when necessary must be described in
the organic plan, as set forth in section 205.205 of subpart D of this
proposed regulation, as a record for consideration by the certifier
during a certification review. The benefit in providing a range of
practices is that a farmer or handler would not lose their investment
in an organic operation because of certain conditions, such as adverse
weather or commercial unavailability. This is especially important to
small farmers and handlers who depend on the organic price premium to a
greater extent than larger firms.
Section 2107(a)(10) of the OFPA (7 U.S.C. 6506(a)(10)) authorizes
the collection of reasonable fees from farmers, handlers, and
certifying agents who participate in the national organic program. When
developing this proposed rule, two alternative fee models were
considered. The fee for direct services model proposed in sections
205.421 through 205.424 of this proposed regulation combines a fixed
fee for all farmers, handlers and certifiers with a variable fee for
certain direct services provided by AMS in the accreditation of
certifiers. The second model considered, but not used in this proposal,
was the fee per certification model which would have based
accreditation fees on the numbers of farmers and handlers certified.
The fee for direct services model proposes to distribute program
costs for services to certified farmers and handlers through fixed fees
of $50 and $500, respectively. The difference between farmer and
handler fees is designed to account for the greater overhead and staff
time devoted to handler and processed product issues as compared to
farmer and raw product issues. A more extensive explanation of farmer
and handler fees is provided in the SUPPLEMENTARY INFORMATION section
entitled ``Fees''. Additionally in this model, certifiers would be
required to pay a fee of $640 when applying for accreditation and
submitting annual reports to cover staff time needed to

[[Page 65860]]

process the application or review the report, and an annual
administrative fee of $2,000 for program costs that cannot be allocated
to a specific certifier. The balance of accreditation costs would be
billed to certifiers on a time rate for direct services. A certifier
would have to collect sufficient funds from the farmers and handlers it
certifies to cover these program fees. Due to the fixed components of
the fees in this model, large farmers and handlers, as well as large
certifiers, would have the ability to spread their costs over a larger
base and, consequently, lower their fixed costs per unit.
Under the fee for direct services model, labor hours, travel, and
per diem costs for the site inspections required for accreditation
would be included in the variable fee for direct services. AMS
estimates the average cost to conduct an accreditation site visit to be
$3,500 per visit. The travel cost component of this figure would vary
based on the certifier's distance from Washington, D.C., because site
visits would be conducted by the National Organic Program staff working
away from program headquarters. An alternative method of distributing
travel costs would be to estimate an average annual cost per trip,
given the expected number of trips and the geographic distribution of
certifiers, and charge that amount for all site visits regardless of
location.
The advantage of the fee for direct services model is that it
incorporates a measure of size in the fee structure, i.e., the time
spent on each accreditation by National Organic Program staff. The
variable portion of the fee would distribute program costs among
certifiers according to the resources actually consumed in providing
the accreditation service. The disadvantage of this model is that it
introduces a source of variation in fees for which the derivation is
not wholly transparent or predictable. With several National Organic
Program staff conducting accreditation evaluations, a complaint about
the efficiency of an individual accreditation would be difficult to
resolve on the basis of objective measures.
Under the fee per certification model that we did not use in this
proposal, in which certifiers would pay a fee to the USDA for each
certification performed, the smallest one half of certifiers, who
certify about 10 percent of organic operations, would pay about 10
percent of the estimated costs associated with accreditation. The
largest 10 percent of certifiers, who certify about 45 percent of
organic operations, would pay about 45 percent of accreditation costs.
The remaining 40 percent of certifiers in the middle would pay 45
percent of the costs. The fee per certification would be fixed,
regardless of the size of the operation being certified. This feature
has the potential to create a barrier to market access for the smaller
operations. Certifiers who charge farmers and handlers for
certification based on size and scope of the operation would maximize
their profits by certifying only the larger farmers and handlers from
whom they would realize a higher return. If certifiers were to
discriminate in this manner in favor of larger operations, smaller
farmers and handlers would find the certification services available to
them to be relatively limited and possibly more expensive than under
the fee for direct services model that includes a variable fee for site
visits. A fixed fee per certification also would not take into account,
in the distribution of costs, the large difference in size between
processors and primary producers. Processors are generally much larger
than primary producers in terms of both total output and total revenue.
Even with the flexibility proposed in the regulation and the
expanded market opportunities brought about by implementation of the
National Organic Program, some small organic certifiers, farmers and
handlers may choose not to continue because of the proposed fees. We
invite comments concerning the expected benefits and costs to small
entities as presented in this analysis.

Paperwork Reduction Act of 1995

This proposed rule contains recordkeeping and submission
requirements that are subject to public comment and to review by the
Office of Management and Budget under the Paperwork Reduction Act of
1995 (44 U.S.C. 3506 and 3507). Therefore, in accordance with 5 CFR
Part 1320, we are providing a description of the reporting and
recordkeeping requirements and an estimate of the annual burden on the
organic industry. The proposed requirements would not become effective
prior to OMB approval.
Title: National Organic Program.
OMB Number: New collection.
Expiration Date of Approval: Three years from date of approval.
Type of Request: New.
Abstract: The information collection requirements in this proposed
regulation are essential to carry out the mandate of the Organic Foods
Production Act of 1990 (OFPA or Act). The OFPA requires the Secretary
of Agriculture to establish and implement a program to accredit a
governing State official, or any private person, who meets the
requirements of the Act and the proposed regulations, as a certifying
agent for the purpose of certifying a farm, wild crop harvesting, or
handling operation as being in compliance with the standards set forth
in the Act and this proposed regulation. After implementation of the
National Organic Program, any agricultural product labeled as organic
or made with certain organic ingredients would have to originate from
an operation that is certified by an accredited USDA certifier.
The OFPA requires certified farms, wild crop harvesting operations
and handling operations to maintain records for 5 years and certifying
agents to maintain records for 10 years. The OFPA exempts from
certification farm operations with gross agricultural sales of less
than $5,000, and the proposed regulation also exempts handling
operations with gross agricultural sales of less than $5,000. We
propose that each exempt operation would be required to maintain
records for one year that verify that such sales are less than $5,000.
We also propose that operations that handle only multi-ingredient
agricultural products that only represent the organic nature of
ingredients in the ingredients statement would not have to be
certified. These operations would be required to maintain records for
one year that verify the source of organic products received and the
operations to whom final organic products are sold. The OFPA also
exempts from certification any retail operation, or portion of a retail
operation, that only handles organically produced agricultural
products, but does not process them. The exemptions and exclusions from
certification requirements proposed in this regulation are discussed in
the supplementary information provided for section 205.202 of subpart D.
Other information collection requirements proposed in this
regulation include: petitioning the NOSB to review a substance for
inclusion on the National List; developing labels; preparing inspector
and peer review panel reports; documenting methods to prevent
commingling of organic with non-organic products; notifying the proper
authority in the case of non-compliance with the regulations or the
possible violation of food safety laws; and submitting State organic
certification programs to the Secretary for approval.
The USDA conducted extensive research while developing this
proposed regulation so as to minimize disruption to the customary and
usual business practices of certifiers, farms, wild crop harvesting
operations and handling

[[Page 65861]]

operations. The research included consultation with administrators of
existing certification agencies; a review of certifiers' publications,
recordkeeping forms, and business characteristics; discussions at
meetings with State and private certifiers about their concerns
regarding accreditation; communications with the organic industry trade
association; and a review of the National Organic Standards Board
recommendations that were presented to the Secretary after extensive
public input. This research helped us determine that certifiers conduct
their certification of farms, wild crop harvesting operations and
handling operations in a similar manner and have similar recordkeeping
systems and business operating practices. We also determined that most
of the information we would require to conduct accreditation could be
collected from certifiers' existing materials without creating new
forms, and that the information currently used by certifiers to certify
farmers, wild crop harvesters and handlers could be adapted to comply
with this proposed regulation.
We are required under the PRA to report the amount of time
necessary for participants to comply with the proposed regulation as if
there were no previously existing documents. The PRA requires that our
total reporting (creation and submission of documents) burden cover the
greatest amount of reporting burden that might occur for any single
creation or submission of a document during any one of the first three
years following program implementation, i.e: 1999, 2000, and 2001.
Therefore, our total estimated reporting burden reflects the greatest
possible burden for each reporting activity that might occur during
this three year period. We also are required by the PRA to measure the
recordkeeping burden. The recordkeeping burden is the amount of time
needed to store and maintain records. For the purpose of measuring the
recordkeeping burden for our proposed rule, we use the burden for the
year 2001, the reporting year for which we estimated that the largest
number of records might be stored and maintained.
The USDA estimated the number of program participants who would be
required to either create, submit, or store documents as a result of
the proposed rule. To determine the number of organic farmers and
handlers, we conducted an analysis of existing certified organic
farmers and handlers in the United States for 1994, (Dunn, Julie Anton.
1995. ``Organic Food and Fiber: An Analysis of 1994 Certified
Production in the United States.'' U.S. Department of Agriculture,
Agriculture) and examined an analysis of data collected for the
California Department of Food and Agriculture Organic Program
concerning registered organic farms and handling operations in that
state (Klonsky, Karen, and Laura Tourte. September 1995. ``Statistical
Review of California's Organic Agriculture, 1992-93''. Cooperative
Extension, Department of Agricultural Economics, University of
California, Davis). Our analysis indicated that an estimated 4,000
farms and 600 handling operations were certified by 33 private and 11
State certifiers. The data collected in the USDA analysis indicated
that the number of certified organic farmers increased at an average
rate of 12 percent in the period from 1991 to 1994, and the number of
certified organic handlers increased at an average rate of 11 percent
over the same 3 years. Based on this rate of growth, we estimate that
7,049 farmers and 1,011 handlers will seek certification in the year
1999 and that these numbers would increase to 8,843 farmers and 1,245
handlers in the year 2001. We also estimate, based on our inquiries to
existing certifiers, that in the year 1999: 50 percent of certified
organic farms will include livestock, 25 percent of certified organic
farms and 75 percent of certified organic handling operations will be
split operations, and 150 wild crop harvesting operations will seek
certification.
Data from the California Department of Food and Agriculture study
indicated that 50 percent of registered organic farmers in California
had incomes below $10,000 in 1994. For the purposes of this burden
analysis, we estimated for the year 2001 that 25 percent of all organic
farmers and handlers would have an income of less than $5,000 from the
sale of agricultural products and, therefore, would be exempt from
certification. Based on our estimated rate of growth for organic
farmers and handlers, we anticipate that there would be a total of
11,788 non-certified and certified organic farms and a total of 1,660
non-certified and certified organic handling operations in the year
2001. Of these farms and handling operations, we estimated that 25
percent (2,947 farms and 415 handling operations) could be exempt from
certification. As proposed in this regulation, each exempt operation
would be required to maintain records to verify that its gross sales of
agricultural products is below $5,000. We request data and public input
that would assist us to better determine the percentage of certified
organic farms with livestock and the percentage of certified operations
that may be split operations, the percentage of organic farms and
handling operations that may be exempt from certification because they
have sales less than $5,000, and the number of wild crop harvesters.
Our inquires to several existing certifiers indicated that of the
total number of operations seeking certification, approximately 5
percent of farms and handling operations are denied certification; most
of the farms and handling operations denied certification received
certification after they reapply. Additionally, approximately 25
percent of certified operations were identified by certifiers during an
annual review as having some deficiency; most of these operations
retained their certification status.
Other than farmers and handlers, we have made burden estimates for
other entities who will create, submit or maintain records as a result
of the proposed National Organic Program. For instance, we expect to
receive 5 petitions annually for substances to be reviewed by the NOSB
for inclusion on the National List. We estimated a low number of
petitions because prior to proposing the National List the NOSB
researched and determined which substances are currently in use in the
organic industry, and because the NOSB itself will be identifying new
substances for inclusion on the National List.
We also estimated the time spent to develop product labels for
products sold, labeled, or represented as organic or made with certain
organic ingredients, or which use the term organic to modify an
ingredient in the ingredients statement. The time spent deciding about
use of the USDA seal, a State emblem, or the seal of a private
certifier also is included in this burden. Our research indicated that
operations using product labels containing the term organic handle an
average of 19.5 product labels. Additional research indicated that
there are currently about 16,000 products with the term organic used on
the product label and that the number has been increasing by 250
products annually, based on marketing data from 1994, 1995 and 1996. We
estimate, therefore, that by the year 2001, 17,000 products will be
marketed with the label term organic.
Regarding operations that handle products that only represent the
organic nature of ingredients in an ingredients statement, or that
handle prepackaged organic products and do not remove them from the
packaging (such as a warehouse or terminal market), the proposed rule
contains certain recordkeeping requirements in addition to the
requirement to document the procedures to prevent the commingling

[[Page 65862]]

of organic with non-organic products and the exposure of organic
products to prohibited substances. These recordkeeping requirements are
that documentation is to be maintained for 1 year to verify the source
and quantity of organic products received and to verify the destination
and quantity of products shipped from the operation. At this time, we
do not have information as to the number of such operations, nor can we
identify a means of collecting this information. We request public
input to assist us in determining the number of such operations.
We estimated that the number of certifying agents would remain
constant during the years 1999, 2000, and 2001 because our research
indicates that the total number has remained unchanged since 1994.
Although we predicted in the Regulatory Flexibility Analysis that some
of the smallest entities may cease operation as a result of the NOP, we
know of new certifying agents that have begun certifying operations,
and others who intend to begin so after implementation of the NOP. We
also know of existing certifiers who have ceased their operations. We
further estimated that the number of organic inspectors would increase
by the year 2001. We based this estimate on information obtained from a
private organic inspector organization which indicated that each
inspector performed approximately 35 inspections in 1996. Using this
average of 35 inspections per inspector, we estimate that 293
inspectors would be required in the year 2001 to inspect the estimated
10,238 operations to be certified.
The proposed regulation has certain requirements for laboratory
testing of products that are produced on certified organic farms or
wild crop harvesting operations and handled through certified handling
operations. These tests would be required to be conducted of certified
operations not less frequently than every five years; therefore,
approximately 20 percent of the total number of certified operations
would have products tested each year. Based on our estimate that 10,238
operations would be certified in the year 2001, we estimate that 2,048
operations would have products tested in that year. Other residue
testing may be conducted randomly of products at any point of
production or distribution. Pre-harvest tissue testing is proposed to
be conducted of crops grown on soil suspected of harboring a
contaminant. We estimate that certifiers would be required to collect a
combined total of 32 samples as part of this random and pre-harvest
testing, and would report violations of food safety laws to the
appropriate health agencies in 10 instances. We also propose that
producers, handlers, and wild crop harvesters report to their certifier
any instance of an application of a prohibited substance. We estimate
that 25 such instances would be reported to a certifier.
We estimate that approximately 30 foreign programs would submit
their programs to USDA in the year 1999 for review in order to seek
equivalency with the NOP. These programs are important to handlers of
multi-ingredient organic products, especially for the spices and
flavoring agents that cannot be produced in the U.S. We also estimate
that 15 approved foreign programs would be reviewed again by the
Secretary for continued equivalency in the year 2001 and that 5
approved programs would submit substantive program amendments to the
Secretary also in the year 2001.

Estimated Annual Reporting Burden
----------------------------------------------------------------------------------------------------------------
Average
Burden element Respondents Number of hours per Total hours Total cost
responses response
----------------------------------------------------------------------------------------------------------------
Monitor for measurable Farmers/handlers, 2,560 4.00 10,238.00 $102,380
degradation of soil and water. harvesters.
Petition to add to the National Interested parties. 5 10.00 50.00 500
List.
Development of a label........... Farmers/handlers, 17,056 2.00 34,113.00 682,260
harvesters.
Application for certification.... Farmers/handlers, 8,210 1.00 8,210.00 82,100
harvesters.
Farm organic plan (crops) \1\.... Farmers............ 7,049 14.75 103,972.75 1,039,730
Farms with livestock \2\..... Farmers............ 3,525 3.00 10,575.00 105,750
Split farms \2\.............. Farmers............ 1,762 2.50 4,405.00 44,050
Wild crop organic plan........... Harvesters......... 150 9.50 1,425.00 14,250
Handler organic plan............. Handlers........... 1,011 13.00 13,143.00 131,430
Handler split operation \2\.. Handlers........... 759 5.00 3,795.00 37,950
Statement of compliance to USDA Farmers/handlers, 8,210 0.50 4,105.00 41,050
regulations. harvesters.
Inspector report................. Inspectors......... 10,240 4.00 40,960.00 409,640
Determination of certification Certifying agents, 8,254 1.24 10,209.10 102,090
status \3\. farmers/handlers,
harvesters.
Annual continuation of Farmers/handlers, 10,238 3.78 38,648.70 386,490
certification. harvesters.
Notification to certified Certifying agents.. 2,561 2.23 5,711.44 114,220
operation of non-compliance.
Certifying agent notification of Certifying agents.. 12,769 0.85 10,848.20 216,960
Administrator \4\.
Accreditation requirements (other Certifying agents.. 8,272 03.06 25,344.00 506,880
than recordkeeping) \5\.
Accreditation application........ Certifying agents.. 44 1.67 73.50 1,480
Evidence of ability to certify... Certifying agents.. 44 23.28 1,024.50 20,500
Statements of agreement.......... Certifying agents.. 44 0.69 30.25 600
Peer review panel \6\............ Panel members, 72 11.00 792.00 15,840
certifying agents.
Annual continuation of Certifying agents.. 44 10.36 456.00 9,120
accreditation.
Transfer of records to Secretary. Certifying agents.. 2 40.00 80.00 1,600
Suspended certifying agent Certifying agents.. 1 16.00 16.00 320
submits new application.
State program application........ State officials.... 11 42.73 470.00 9,400
Periodic sampling for compliance. Certifying agents.. 2,048 3.00 6,144.00 122,880

[[Page 65863]]

Additional sampling and residue Certifying agents.. 22 3.00 66.00 1,320
testing.
Report residue and pre-harvest Certifying agents.. 20 0.50 10.00 200
test results.
Report application of prohibited Certifying agents, 25 0.15 3.75 80
substances. farmers/handlers,
harvesters.
Equivalency of foreign programs.. Foreign program 30 128.33 3,850.00 77,000
officials.
---------------------------------------------------------
Total........................ ................... ........... ........... 338,771.00 4,278,034
----------------------------------------------------------------------------------------------------------------
\1\ We do not have information to estimate the number of livestock operations that do not produce crops;
therefore, it is not possible to estimate the burden hours for such an operation.
\2\ Estimated hours for farms with livestock and split operations are in addition to the hours needed to
complete a farm plan for crops or a handler plan.
\3\ Respondents in the determination of certification status include 44 certifying agents who determine to grant
or deny certification to 8,210 applicants. The time elements include the exchange of information necessary for
a certifying agent to decide whether to grant or deny certification, issuance of a certificate, and
notification of the Administrator when certification is denied and when applicants do not reapply.
\4\ Notification of certification status includes notification of the Administrator by the certifier of both the
operations that have been certified and those operations not in compliance. We estimate that about 25 percent
of all operations will not be in compliance, and would be granted a continuation of certification with
restrictions.
\5\ The burden elements accounted for in this entry are not mentioned in other sections of the proposed rule.
These include the time necessary to provide information to persons seeking certification and to establish a
State or certifying agent logo, seal or identification.
\6\ We estimate that 72 persons (50 peer review pool members and 22 certifying agents) would participate in the
peer review panel process.

Annual Reporting and Recordkeeping Burden:
Estimated number of respondents: 13,967.
Total annual hours: 377,171.
Total Cost: $ 4,663,349.
It is important to note that the burden being reported is an
estimate of the amount of time that would be required of program
participants. It is not a measurement of the burden that would be
required of existing certifying agents and currently certified farmers,
harvesters and handlers in addition to the reporting and recordkeeping
activities that they currently perform. In writing the proposed
regulation, we carefully reviewed existing industry practice and made
every effort to incorporate the documents and practices currently being
used within the industry as a means of minimizing reporting and
recordkeeping costs when the program begins full operation.
The USDA encourages farmers, handlers and certifiers to use any
electronic means available to them to create, submit and store records,
including: keeping data base records of crops or livestock produced on
operations that are certified; lists of farm and handling operations
and their location; creating certification or training documents;
maintaining business accounting records; and sending documents by fax
or over the Internet. Research of the industry indicates that most
certifiers use electronic data creation and storage, fax machines, and
the Internet. Some farm and handling operations use computers and word
processors for their recordkeeping. Based on this information, we
estimated that 25 percent of the collection of information would be
performed by automated, electronic, mechanical, or other technological
means. We request comments to help assess the number of organizations
using computers, word processors, and other electronic equipment to
create and store documents, as well as the extent to which the Internet
is used to exchange information.
Additionally, comments are invited on: (1) whether the proposed
collection of information is necessary for the proper performance of
the functions of the USDA, including whether the information would have
practical utility; (2) the accuracy of the USDA's estimate of the
burden of the proposed collection of information, including the
validity of the methodology and assumptions used; (3) ways to enhance
the quality, utility, and clarity of the information to be collected;
and (4) ways to minimize the burden of the collection of information on
those who are to respond, including the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology. Comments should be sent to:
Office of Management and Budget, New Executive Office Building, 725
17th Street, N.W., Room 725, Washington, DC 20503, Attention: Lisa
Grove, Desk Officer. Comments also should be sent to: Don Hulcher,
Clearance Officer, USDA-OICO, Room 404W, Jamie Whitten Building, Ag
Stop 7602, P.O. Box 96456, Washington, DC 20090-6456. Additionally,
comments may be sent by fax to (202) 690-4632 or submitted via the
Internet through the National Organic Program's homepage at: http://
www.ams.usda.gov/nop.

[[Page 65864]]

Comments are best assured of having full effect if they are received
within 30 days after publication of the proposed rule in the Federal
Register.

National Organic Program Overview

Pursuant to the OFPA, this rule proposes regulations for the
production, handling and marketing of organically produced agricultural
products and for the management of the National Organic Program. The
major components of the national organic program are summarized below.
A reference to the placement of the regulatory text of the summarized
topic is entered at the end of each program component's summary.
Definitions: Various terms used in the proposal are defined to
ensure that regulatory requirements that must be met are clear. Subpart A.
Production and handling requirements: The OFPA requires that
national standards be established for the organic production and
handling of agricultural products. Agricultural products are any
agricultural commodity, whether raw or processed, including any
commodity or product derived from livestock that is marketed in the
United States for human or livestock consumption. To establish
consistent national standards for organic production and handling of
agricultural products, this proposed rule provides for the
implementation of a system of organic farming and handling that is
consistent with the provisions of the OFPA. The standards proposed
would apply to the production of crops and livestock and the harvesting
of wild crops, and to fresh or processed agricultural products that
are, or that are intended to be, sold, labeled, or represented as
organically produced or as containing organic ingredients.
The proposed regulation provides for flexibility in the application
of the proposed national organic standards and takes into account
specific conditions that may occur at different production and handling
sites. Under the proposal, each organic farmer and handler would be
required to develop an organic plan for their operations. The plan
would be evaluated and approved by an accredited certifying agent if it
were determined to meet the requirements of the OFPA and the
regulations promulgated under the OFPA. The performance of each farmer
and handler in meeting the approved practices in their organic plans
would be monitored by their certifiers. Subpart B.
National List: This proposal includes a National List of allowed
synthetic substances that can be used, and provides for the development
of a list of non-synthetic substances that cannot be used, in the
production and handling of organically produced agricultural products.
The NOSB provided recommendations to the Secretary with regard to
synthetic substances it believed should be permitted to be used and the
non-synthetic substances it believed should be prohibited for use. The
Act establishes the criteria that must be considered before a synthetic
substance can be placed on the National List of substances approved for
use, and criteria that must be considered before a non-synthetic
substance can be placed on the National List of substances prohibited
for use. A procedure for petitioning the Secretary and the NOSB to have
changes made to the National List of substances approved or prohibited
for use is incorporated in the proposed regulations. Subpart B.
Labeling: This rule proposes regulations for the label, labeling,
and market information for organically produced agricultural products.
The proposal applies to agricultural products that contain various
percentages of organic ingredients. The proposal also provides for the
use of the USDA organic seal, States' organic seals, and a certifying
agent's name, seal or logo, under certain conditions. Subpart C.
Certification: The proposed rule provides the requirements and
procedures for farms, wild crop harvesting operations, and handling
operations applying for organic certification under the NOP. The
proposed rule would permit Indian tribes that as an entity operate a
farm, a wild crop harvesting operation, and/or a handling operation, as
well as individual tribal members who carry out such operations, to
apply for organic certification for these operations. The application
process for certification and the requirements that must be met to
obtain certification, including the submission of an organic plan, are
in the proposed regulations. The proposed regulations provide, in
accordance with the Act, that the determination of whether a farm, wild
crop harvesting, or handling operation should be certified as an
organic farm, wild crop harvesting, or handling operation, would be
made by certifying agents accredited by the Secretary. If a certifying
agent initially determines that certification should not be granted,
the proposed rule allows the applicant for certification to reapply
under certain conditions. Additionally, the proposed rule provides for
the denial of an application for certification and the termination of
certification. It also provides for notice of these actions to the
applicant or certified operation and an opportunity for the applicant
or certified operation to respond to the notice prior to the denial or
termination action. Subpart D.
Accreditation: This proposed rule establishes an accreditation
program for persons who want to be accredited as a certifying agent.
Persons who could become accredited if they meet the OFPA's
requirements for accreditation would include Indian tribes or
individual tribal members. Accredited certifying agents would be
authorized to certify operations that meet the requirements of the OFPA
and the regulations in part 205 as certified farms, certified wild crop
harvesting operations, and certified handling operations. State
governing officials and private persons may apply for and be accredited
by the Secretary as certifying agents. Qualifications needed to obtain
and to maintain accreditation are specified in the proposed rule.
Procedures for denying, terminating, and suspending accreditation also
are proposed. Subpart E.
State organic programs: This proposal permits States to establish
or continue to operate their own organic programs, provided that the
program reflects the requirements of the OFPA and its implementing
regulations, and is approved by the Secretary.
In order for a State program to be approved as meeting the general
requirements set forth in section 2107 of the OFPA (7 U.S.C. 6506), the
program must have regulatory provisions that meet the following
requirements: (1) provide that an agricultural product to be sold or
labeled as organically produced must be produced only on certified
organic farms and handled only through certified organic handling
operations in accordance with the OFPA's requirements and be produced
and handled in accordance with such program; (2) require that producers
and handlers desiring to participate under such program establish an
organic plan as provided for in section 2114 of the OFPA (7 U.S.C.
6513); (3) provide for procedures that allow producers and handlers to
appeal an adverse administrative determination under this Act; (4)
require each certified organic farm, certified organic wild crop
operation, and each certified organic handling operation to certify to
the governing State official, on an annual basis, that such farmer or
handler has not produced or handled any agricultural product sold or
labeled as organically produced except in accordance with this title;
(5) provide for annual on-site inspection by the certifying agent of
each farm, wild crop

[[Page 65865]]

harvesting, and handling operation that has been certified under the
OFPA requirements; (6) require periodic residue testing by certifying
agents of agricultural products that have been produced on certified
organic farms and handled through certified organic handling operations
to determine whether such products contain any pesticide or other
nonorganic residue or natural toxicants and to require certifying
agents, to the extent that such agents are aware of a violation of
applicable laws relating to food safety, to report such violation to
the appropriate health agencies; (7) provide for appropriate and
adequate enforcement procedures; (8) protect against conflicts-of-
interest; (9) provide for public access to certification documents and
laboratory analyses that pertain to certification; (10) provide for the
collection of reasonable fees from producers, certifying agents and
handlers who participate in the program; and (11) require such other
terms and conditions as may be determined by the Secretary to be necessary.
Once a State program is approved, farm, wild crop harvesting, and
handling operations in that State that wish to sell, label, or
represent their product as organically produced would have to be
approved as a certified operation under the State program. The
determination as to whether or not a farm, wild crop harvesting, or
handling operation meets a State's certification requirements would be
made by an agent accredited by the USDA under the National Organic
Program. The accredited agent who would make this determination either
can be a private person who has been accredited by the USDA or a
governing State official who has been accredited by the USDA.
In order to be certified under the State program, an operation
would have to meet the State certification requirements. These
certification requirements, as discussed previously, must reflect the
requirements in the National Organic Program. Thus, certified
operations in States that have their own program would be producing
products that are represented as organically produced in accordance
with the requirements of the National Organic Program that have been
included in the State program, in accordance with section 2107 or the
OFPA (7 U.S.C. 6506). Therefore, the provisions set forth in our
proposal in part 205 would be applicable to operations that are located
in States that have their own programs since these provisions would be
included in programs that are approved by the Secretary.
States, however, could have requirements that are in addition to
those of the NOP if they are approved by the Secretary and meet the
statutory criteria for approval. This means that if a State has applied
for, and received, approval from the Secretary for requirements in its
program that are in addition to those in the NOP, farm, wild crop
harvesting, and handling operations that operate in that State would
have to comply with these additional requirements that have been
approved. However, a State would not be allowed to require farm, wild
crop harvesting, and handling operations in other States to comply with
any additional requirements that the Secretary has approved for use by
that State.
Fees: The proposed rule establishes a system of fees to be paid by
farmers, wild crop harvesters, handlers, and certifying agents based on
the services provided to them by the USDA. The fees collected from
applicants for accreditation and from accredited certifying agents
would be for reviewing applications and annual reports, performing
administrative services for the benefit of all accredited certifying
agents, and for conducting site evaluations to evaluate the certifying
agent's performance. The fees collected from farmers, wild crop
harvesters, and handlers would be assessed as a fixed fee for each
category. Farmers, wild crop harvesters, and handlers operating under a
State organic program would pay fees directly to USDA. Subpart F.
Compliance review and other testing: This proposal establishes a
system for sampling and testing organically produced and handled
products. It provides for pre-harvest tissue testing and residue
testing to aid in enforcement of the regulations. Subpart F.
Appeals: The OFPA provides for the Secretary to establish an
expedited administrative appeals procedure under which persons may
appeal an action of the Secretary or a certifying agent under this
title that adversely affects such person or is inconsistent with the
organic certification program established under this title. This
proposal provides a procedure for the appeal of these actions. Subpart F.
Equivalency of imported organic products: This proposal, in
accordance with the OFPA, permits organic products produced and handled
in foreign countries to be imported into the United States, and
represented as organically produced, under certain conditions. These
products would have to be produced and handled under an organic
certification program that provide safeguards and guidelines that are
at least equivalent to the requirements of the OFPA and the National
Organic Program. Under this proposal, the Secretary would review and
approve, if equivalent, the foreign organic programs. Subpart F.

Subpart A--Definitions

A number of the definitions provided in this proposed rule are
terms defined in the Act, and for these definitions we have used the
language provided in the Act. Some definitions are discussed in other
parts of the supplementary information and other definitions provided
are self-explanatory. However, for certain definitions, we have
discussed below our reasons for establishing these definitions to help
ensure that appropriate and consistent procedures are followed in
complying with other requirements proposed here.
Active ingredient is a term found in section 2118(c)(1)(B)(i) of
the OFPA (7 U.S.C. 6517(c)(1)(B)(i)). This section describes categories
of substances that may include active synthetic ingredients that may be
considered to be included on the National List. Although the Act does
not specifically define the term active ingredient, EPA does define
this term in section 2(a) of the Federal Insecticide, Fungicide, and
Rodenticide Act (FIFRA) (7 U.S.C. 136(a)), as amended. The EPA defines
the term active ingredient to be pesticides, herbicides, and other
substances covered by the FIFRA. We have included the EPA definition of
active ingredient as one of our definitions for this term, i.e., the
definition that covers active ingredients in pesticide formulations.
The EPA definition, however, does not cover the full scope of all
active synthetic substances that the Act would authorize for inclusion
on the National List. Therefore, our other proposed definition for
active ingredients, ``active ingredients in any input other than
pesticide formulations'', covers these other substances. One type of
substance that is included in this definition of active ingredient is a
substance used in any aspect of organic production or handling that
becomes chemically functional within an agroecosystem. A chemically
functional substance is one that would be absorbed by plants or that
would affect soil chemistry when used as permitted under this proposal,
such as a micronutrient or a cation balancing agent. Substances or
materials that do not fit this description, such as plastic mulches,
sticky barriers or row covers, thereby would not be considered as

[[Page 65866]]

active ingredients under this definition. Our proposed definition also
covers substances required to be listed as ingredients or additives on
food labels, but it does not include incidental additives and
processing aids that are not required to be listed on food labels.
The agroecosystem is a term that encompasses all the elements of a
system of organic farming and handling, and as such is the primary
focus of the proposed organic crop and livestock production standards.
Section 2119(m)(5) of the OFPA (7 U.S.C. 6518(m)(5)) specifically
indicates that the effects of a substance on the agroecosystem is a
criterion that must be evaluated before a synthetic substance can be
included on the National List of substances allowed for use.
Biodegradable refers to a specific quality of a material or
substance that is used on or applied to the soil that makes the
material or substance susceptible to biological decomposition. Most
biodegradable materials are organic matter obtained from plant or
animal sources. A material such as plastic that is not biodegradable
will resist decomposition and persist in the soil, and may enter into
unknown chemical interactions with soil and water. While chemical
degradation of non-biodegradable materials into simpler compounds
eventually occurs, this process happens very slowly compared to
biological decomposition. The use of non-biodegradable materials as
production inputs is considered to be incompatible with a system of
organic farming or handling because they may leave residues of
synthetic substances in the soil.
Chapter is defined here with reference to our proposal for the
accreditation of certifying agents in subpart E. We are aware of two
existing certifying agents that each operate as a single certification
body through a system of chapters. We believe that this is an
acceptable practice. Such chapters would, however, be expected to
comply with the Act and the regulations in this part.
Commercially available is a term that was the subject of extensive
deliberation by the NOSB, and our proposed definition reflects their
recommendation. We believe that this definition is essential in order
for producers and handlers to make appropriate decisions about whether
it is necessary to use certain materials, such as the use of non-
organically produced planting stock or livestock feed. It also is
necessary to help certifying agents evaluate whether the use of such
materials is justified or should be discontinued.
Contaminant is a term used in section 2112(b) of the OFPA (7 U.S.C.
6511(b)) with reference to substances that persist in the environment,
that may be suspected to be present in soil, and which may necessitate
a preharvest tissue test of crops grown on that soil to determine the
level of the contaminant in an organically produced crop.
Cytotoxic mode of action is used in sections 205.9(f) and 205.21(a)
of subpart B to describe the activity of a type of synthetic substance
that is prohibited for use in organic production. Substances of this
type chemically interact with plant and animal cells and interfere with
normal cell functions. Our definition describes synthetic substances
that are cytotoxic and that, therefore, would be prohibited for use.
Degradation is defined to allow organic producers, handlers and
certifying agents to accurately identify when the use of a practice or
substance that is otherwise permitted under this proposal should be
ended or modified. This would occur when it results in measurable
degradation of soil or water quality. For example, if nitrate levels in
an adjacent well are found to increase over two or more crop years
following application of a highly soluble mined source of nitrogen to
soil, as set forth in proposed section 205.7 (c)(2) of subpart B, then
the practice would have to be terminated or modified to prevent further
adverse effects on water nitrate levels.
Detectable residue level (DRL) is proposed for the purposes of this
part as being a residue of a pesticide or other prohibited substance
that is five percent or greater than the established EPA tolerance
level for the product that was tested, provided that if there is no
tolerance level established but an action level has been established,
the DRL will be the action level established by the FDA for the product
tested. EPA tolerance levels, expressed in terms of parts of a
pesticide residue per million parts of the food (ppm), refer to the
amount of a pesticide residue that may be present in or on a raw
agricultural commodity, processed food or processed feed. These
tolerance levels are listed in 40 CFR Part 180 (raw agricultural
commodities), Part 185 (processed foods) and Part 186 (processed feed).
The FDA action levels are used to regulate the occurrence of very low
levels of pesticide residues that result from the persistence of a
pesticide in the environment and for which there is no tolerance level
established by EPA. The action levels for certain pesticides found as
residues in agricultural commodities, processed foods or processed
feeds are listed in the FDA publication entitled ``Action Levels for
Poisonous or Deleterious Substances in Human Food and Animal Feed.''
Certain pesticide residues may not be detectable by available residue
testing techniques at a level as low as five percent of the EPA
tolerance level; in these cases, we would consider the detectable
residue level to be the lowest level measurable by available techniques.
The purpose of defining the DRL at the proposed levels is to
establish a practical level for determining when to conduct an
investigation, as required in section 2112(c)(2)(B) of the OFPA (7
U.S.C. 6511(c)(2)(B)), to determine when a residue is the result of an
intentional application or when it is justified by site-specific
unavoidable residual environment contamination due to the persistence
of the detected substance. The proposed DRL should help eliminate
unnecessary investigations and test procedures and is within the range
of tolerance levels developed by existing State and private organic
programs. As discussed with reference to unavoidable residual
environmental contamination, the Secretary would establish on a case by
case basis the residue levels which would indicate that a prohibited
substance had been intentionally applied.
Fertilizers are addressed in section 2109(b)(1) of the OFPA (7
U.S.C. 6508(b)(1)), which prohibits the use in organic production of
fertilizers that contain synthetic ingredients or any commercially
blended fertilizers that contain prohibited substances under the Act or
a State program. Although the Act does not define the term fertilizers,
we have proposed a definition in order to clarify the kinds of
synthetic soil amendment substances that may be considered for
inclusion on the National List. Our proposed definition of fertilizers
is consistent with those used by various State agencies that regulate
the labeling of fertilizers, and refers to materials that supply the
major plant nutrients nitrogen, phosphorus and potassium. Synthetic
mineral substances, such as micronutrients and cation balancing agents,
which do not supply quantities of the three major plant nutrients,
would not be considered fertilizers under this definition and could,
therefore, be considered for inclusion on the National List because
they are not prohibited under section 2109(b)(1) of the OFPA (7 U.S.C.
6508(b)(1)).
Incidental additive is defined so that handlers clearly know that
the substances included in this category may be used in handling organic

[[Page 65867]]

products, even though the incidental additive itself may not be
included on the National List.
Inert ingredient refers to any substance or group of structurally
similar substances if designated by the EPA, other than an active
ingredient that is intentionally included in a pesticide or formulated
product. Inert ingredients used in pesticides are specifically
regulated by EPA and have been classified by EPA with respect to their
relative toxicity. This EPA classification of inert ingredients is
referred to in Section 2118(c)(1)(B)(ii) of the OFPA (7 U.S.C.
6517(c)(1)(B)(ii)) and has been used in this proposal to indicate the
types of inert ingredients that may be used in any pesticide product
allowed for use on a certified farm or handling operation.
However, the EPA definition does not cover the full scope of inert
ingredients that may be used in formulated products allowed for use in
organic farming. Our proposed definition of this term also includes
inert ingredients intentionally included in any product used in organic
crop production, such as fertilizers or foliar sprays.
Non-agricultural ingredient is a term we use in various sections of
this proposal to delineate the type and category of substances allowed
for use as ingredients in or on organically produced agricultural
products if the substance is included on the National List in section
205.26 of subpart B. As discussed in the supplementary information
section in reference to the National List, we have used this term in
order to accurately describe those substances that would satisfy the
provisions of section 2118(c)(1) of the OFPA (7 U.S.C. 6517(c)(1))
related to handling.
Non-synthetic is a term used throughout our proposal to describe
those substances that are not synthetic. As discussed in the
supplementary information for the National List, we determined that
this term is more appropriate than the word natural, which is not
defined in the Act and which has other regulatory and marketing meanings.
Packaging is defined here as any material used to wrap, cover, or
contain an agricultural product, and also includes wax applied directly
to an edible surface of an agricultural product. This definition is
proposed in response to the public input that expressed concerns that
waxes that contain synthetic fungicides or preservatives may be used on
organic products, such as fresh produce or cheese. We believe that this
definition is needed to implement the prohibition against the use of
packaging materials containing such prohibited substances, as set forth
in section 2111(a)(5) of the OFPA (7 U.S.C. 6510(a)(5)), to any
material that contacts an edible surface of an organic product.
Production aid is any substance, material, device or structure, but
not an organism, that is used to produce an agricultural product. A
production aid may or may not be synthetic, and may or may not function
as an active ingredient. Examples of production aids are provided in
section 2118(c)(1)(B)(i) of the OFPA (7 U.S.C. 6517(c)(1)(B)(i)) and
include netting, tree wraps and seals, insect traps, sticky barriers,
row covers, and equipment cleansers. Any production aid that is
determined to be active and synthetic must appear on the National List
in either sections 205.22 or 205.24 of subpart B before it may be used
in organic farming.
Putrefaction is defined in order to clarify the reasons why plant
and animal materials that are prone to putrefaction are less preferable
for use in proper manuring practice than those materials that are not
prone to putrefaction, as proposed in section 205.7 of subpart B.
Soil quality is a term that serves as a central performance
standard for the use of any method or substance in an organic farming
system, in that such use may not result in measurable degradation of
soil or water quality, as proposed in section 205.3(b)(1). In order to
determine whether a given operation is in compliance with the
regulations, farmers and certifiers must have a clear understanding of
what soil quality is and how it may be measured. Our proposed
definition of this term encompasses physical, chemical and biological
soil quality indicators that could readily be measured or observed at a
given location. Examples of soil quality indicators commonly measured
in organic farming systems include erosion, aggregation, compaction,
drainage, organic content, nutrient content, pH, cation balances,
presence of contaminants, leaf tissue analysis, presence of indicator
weed species, presence of pathogens, earthworm populations, and legume
nodulation.
Subtherapeutic is a term used in section 2110(d)(1)(A) of the OFPA
(7 U.S.C. 6509(d)(1)(A)) to refer to a dosage level of antibiotics that
is prohibited for administration to organically managed livestock. Our
proposed definition of this term indicates one of the circumstances in
which use of an antibiotic is prohibited.
System of organic farming and handling is a term used throughout
our proposal to refer to the general set of principles and objectives
of the Act. This term also serves as the foundation of the organic
production and handling provisions proposed here, and is discussed more
fully in the supplementary information that introduces Subpart B.
Unavoidable residual environmental contamination (UREC) is a term
used in section 2112(c)(2)(B) of the OFPA (7 U.S.C. 6511(c)(2)(B))
which we define as the residue level of a prohibited substance that
could be expected to exist in the soil at, or in a product originating
from, a specific production site to which the prohibited substance had
not been applied for a minimum of three years. If a residue test of an
organically produced product originating from a specific certified site
reveals a detectable residue level of a prohibited substance, then the
UREC level for the specific certified site would be determined by the
Secretary in consultation with the applicable governing State official,
and the appropriate environmental regulatory agency. A product found to
contain a detectable residue level exceeding the UREC level for the
specific site may not be sold or labeled as organic.

Subpart B--Organic Crop and Livestock Production and Handling Requirements

Introduction

USDA's proposed requirements for organic farming and handling,
encompassed in subpart B, sections 205.3, 205.5 through 205.9, and
205.11 through 205.28, set forth the requirements for organic crop
production, wild crop harvesting, organic livestock production, organic
handling, and for products and substances allowed and prohibited in
organic farming and handling. These requirements are proposed to
implement the purposes of the Act as set forth in section 2102 of the
OFPA (7 U.S.C. 6501) to establish national standards governing the
marketing of organically produced agricultural products; to assure
consumers that organically produced products meet a consistent
standard; and to facilitate interstate commerce in fresh and processed
food that is organically produced. Section 2106 of the OFPA (7 U.S.C.
6505) requires that any agricultural product that is sold or labeled as
organically produced be produced and handled in accordance with the
standards established under the Act. Section 2118 of the OFPA (7 U.S.C.
6517) requires that a National List of substances approved and
prohibited for use in organic farming

[[Page 65868]]

and handling established by the Secretary be included in the standards.
Active synthetic substances must appear on the National List as
approved substances in order to be used in organic production, and a
non-synthetic (natural) substance may not be used if it appears on the
National List of substances prohibited for use.
We would like to point out that the word substance is used in a
variety of ways in this docket. When the word substance refers to a
material that meets the OFPA's definition of a synthetic substance, it
is described as a ``synthetic substance''. When the word substance
refers to a non-synthetic material (i.e., natural material), which is
one that does not come within the OFPA's definition of a synthetic
substance, it is described as a ``non-synthetic substance.'' When the
word substance refers to a material prohibited for use in the organic
program, whether it be synthetic or non-synthetic (i.e., natural), it
is described as a ``prohibited substance.'' An example of such a
prohibited material is a synthetic substance that does not appear on
the National List of synthetic substances permitted for use in organic
farming and handling. When the word substance is used without any
modifiers, it is used to describe all materials (substances),
regardless of whether such substances are synthetic or non-synthetic,
or prohibited or allowed for use in organic farming and handling.
We have crafted this subpart to be consistent with the requirements
of the Act, including its principles for organic farming and handling
systems. Although the Act does not specifically define what a system of
organic farming and handling is, it does refer in sections 2103(4) and
(5) of the OFPA (7 U.S.C. 6502(4) and (5)) to a system of organic
farming and a system of organic handling, respectively, as described in
the Act. In order to establish consistent national standards for
organic production and handling, we have determined that it is
necessary to define what a system of organic farming and handling is,
and to describe those practices that are consistent with such a system.
Another purpose of this definition will be to provide an explicit point
of reference for the organic industry to make determinations as to
whether various practices and substances are consistent with organic
farming and handling. We further expect the proposed definition of a
system of organic farming and handling to serve as a reference point
for program matters it is determined need further development.
We have defined a system of organic farming and handling to be: a
system that is designed and managed to produce agricultural products by
the use of methods and substances that maintain the integrity of
organic agricultural products until they reach the consumer. This is
accomplished by using, where possible, cultural, biological and
mechanical methods, as opposed to using substances, to fulfill any
specific function within the system so as to: maintain long-term soil
fertility; increase soil biological activity; ensure effective pest
management; recycle wastes to return nutrients to the land; provide
attentive care for farm animals; and handle the agricultural products
without the use of extraneous synthetic additives or processing in
accordance with the Act and the regulations in this part.
Our proposed definition has been derived from the underlying
premises of what constitutes organic farming and handling systems, as
reflected in various provisions of the Act. This definition also is
consistent with the definitions and principles established by the
existing public and private organic programs that we have reviewed and
the definitions and principles of organic agriculture and production
systems adopted by the National Organic Standards Board. The principles
reflected in our definition of a system of organic farming and handling
are incorporated in the regulations we are proposing.
The concept of maintaining the integrity of organic agricultural
products is established by one of the purposes of the Act, stated in
section 2102(2) of the OFPA (7 U.S.C. 6501(2)), to assure consumers
that organically produced products meet a consistent standard. The Act
generally delineates methods and substances that may or may not be used
in organic farming and handling in furtherance of this purpose.
Additionally, in section 2104 of the OFPA (7 U.S.C. 6503) it
specifically provides for an organic certification program for
producers and handlers of organic agricultural products. Such a program
helps to ensure the integrity of organic products.
There is a preference for the use of cultural, biological and
mechanical methods wherever possible, as opposed to using substances,
in organic farming and handling. Examples of methods that do not
involve the use of any substances are the planting of green manure
crops instead of applying fertilizer substances, and the use of crop
rotations and disease resistant plant varieties instead of applying
disease-suppressing substances. Section 2105(1) of the OFPA (7 U.S.C.
6504(1)) provides that an organically produced agricultural product
must be produced and handled without the use of synthetic chemicals,
except as otherwise provided for in the Act. Further, the Act provides
in section 2118 (7 U.S.C. 6517) a detailed scheme and criteria for
determining whether a particular active synthetic substance may be
exempted from the general prohibition on the use of synthetic
chemicals, and further provides in that section for the prohibition of
the use of certain substances that are not synthetic. Also, the Act
specifically directs in section 2119(m)(6) of the OFPA (7 U.S.C.
6518(m)(6)) that the NOSB consider the use of practices or other
available materials as alternatives to a synthetic substance being
included on the National List. Furthermore, the use of certain
substances in organic crop and livestock production and organic
handling is specifically prohibited in several provisions of the Act,
such as portions of sections 2109, 2110, and 2111 of the OFPA (7 U.S.C.
6508, 6509 and 6510). Therefore, we are proposing in our definition of
a system of organic farming and handling that, where possible,
cultural, biological and mechanical methods, as opposed to using
substances, are preferred. These provisions support the concept that
both non-synthetic substances and methods that do not involve the use
of any substances, such as cultural, biological, and mechanical
methods, are preferred alternatives to the use of synthetic chemicals.
The tenets of maintaining long-term soil fertility and increasing
soil biological activity are established in section 2114(b)(1) of the
OFPA (7 U.S.C. 6513(b)(1)), which requires that an organic plan contain
provisions designed to foster soil fertility, primarily through the
management of the organic content of the soil. The Act further
addresses soil biological activity in section 2119(m)(5) of the OFPA (7
U.S.C. 6518(m)(5)) when it requires that the physiological effects of a
synthetic substance on soil organisms be taken into consideration
before the substance is allowed for use in organic production.
The need for effective pest management methods in an organic
farming system is established in section 2109(c) of the OFPA (7 U.S.C.
6508(c)) which prohibits the use of certain substances and materials
for the control of pests, weeds, and diseases. This section, considered
together with the Act's prohibition of the use of most synthetic
chemicals in organic production systems, necessitates that crop pest
management methods be implemented that avoid the need to use

[[Page 65869]]

synthetic substances and materials. In addition, the inclusion of crop
rotation practices in an organic plan, as set forth in section
2114(b)(1) of the OFPA (7 U.S.C. 6513(b)(1)), is critical to
implementing effective pest management strategies and soil fertility
management in an organic farming system.
Recycling wastes to return nutrients to the land is a principle
expressed in the language of section 2114(b)(1) of the OFPA (7 U.S.C.
6513(b)(1)) which requires the fostering of soil fertility and which
provides for proper manuring to be used to manage soil organic content,
and in section 2114(b)(2) of the OFPA (7 U.S.C. 6513(b)(2)) which
delineates more specific requirements for the application of manure to
crops. Although the use of livestock manure is one means of complying
with this requirement, our proposed definition of proper manuring also
includes the use of other plant or animal wastes to improve soil
organic content and provide crop nutrients.
Attentive care for farm animals is implicit in the provisions of
sections 2110(c) and (d) of the OFPA (7 U.S.C. 6509(c) and (d)), which
specify what may or may not be fed to organically managed livestock,
prohibit certain health care practices, and require the NOSB to
recommend additional standards for the care of organic livestock. The
alternative to using the methods and practices prohibited under this
section of the Act is expressed by the concept of attentive care which
is essential when relying on management methods, rather than substances
such as medications, to maintain livestock health.
This proposed rule also incorporates the principle that organic
agricultural products are to be handled without the use of extraneous
synthetic additives and processing. Examples of extraneous additives
are synthetic preservatives, coloring agents and flavors. These are not
allowed because the Act, in section 6510(a)(1), prohibits the addition
of any synthetic ingredient during the processing or postharvest
handling of an agricultural product. Extraneous processing generally
involves the use of additional substances during and after the
processing. Extraneous processing would entail, for example,
unnecessarily subjecting a product to temperatures that degrade its
inherent antioxidant content, thereby requiring supplementation with an
antioxidant to maintain the product's stability.
Our proposed program encompasses all agricultural products, as
defined in section 2103 of the OFPA (7 U.S.C. 6502), and all aspects of
their production and handling, ranging from soil fertility management
to the packaging and labeling of the final product. Our requirements
address the systems used to produce an agricultural product rather than
the physical qualities of the product itself. No distinctions should be
made between organically and non-organically produced products in terms
of quality, appearance, or safety.
We believe that an effective regulatory scheme, which has to be
applicable to diverse types of operations and geographic regions must
be as flexible as possible and take into account site-specific
conditions. We accordingly have developed this proposal to provide,
within the parameters of the Act, provisions that take into account
site specific conditions without impairing the organic integrity of the
product produced. In creating this proposal, we examined various
examples of, and ideas for, such provisions, including standards
developed by existing organic programs, guidelines of international
organic interest groups and standards setting organizations,
recommendations of the NOSB, and suggestions provided in public input
received in the course of NOSB meetings and as response to NOSB draft
documents.
Existing organic certification programs, both State and private,
have grappled with the need to provide flexibility in their allowed
standards and procedures. One method that existing organic programs
have used is to distinguish in their standards between practices that
they consider to be acceptable for use without restrictions, those that
they consider to be acceptable for use only in certain conditions
(i.e., restricted practices), and those that they do not consider to be
acceptable for use under any circumstance. An example of restricted use
is illustrated by the case of botanical pesticides, which most organic
practitioners consider to be a last resort for pest control, and which
are considered acceptable for use only under certain circumstances.
Many existing organic certification programs have thus included such
substances within the area of restricted practices that must be closely
evaluated and justified by site-specific needs.
We have approached this need for flexibility by incorporating two
types of regulatory provisions into our proposed standards. The first
type of regulatory provision establishes, where appropriate, an order
of preference for selecting practices or materials. For example, we
propose in section 205.7(b) of subpart B an order of preferred
selection of five types of materials that would be acceptable for use
in proper manuring. We also propose in section 205.9 of subpart B an
order of preferred selection for the use of practices and substances to
prevent and control crop pests, weeds, and diseases. We would like to
solicit public comment as to whether or not the establishment of orders
of preference would impose an unnecessary burden on organic producers.
The second type of regulatory provision we propose would permit the
use of certain practices or substances only if necessary. The producer
or handler would base their determination of the need to use a
particular method or substance on site specific circumstances. The
basis for a producer or handler determining that a certain practice or
substance is necessary would be described in the organic plan, or
update to the organic plan, and would be reviewed and evaluated by the
certifying agent. An example of a practice that we are proposing be
used only if necessary is the use of non-organically produced
feedstuffs as a portion of an animal's feed ration, as proposed in
section 205.13(a) of subpart B.
A number of the regulations are written as performance standards.
Performance standards are generally written in terms of the results
expected, rather than the specific actions that must be taken to
achieve the desired result. An example of a performance standard is the
requirement proposed in section 205.3(b) of subpart B that the use or
application of any practice or substance must not result in measurable
degradation of soil or water quality. This proposed provision requires
that practices used in an organic operation be implemented in a manner
that maintains soil and water quality, but does not specify the
practices that have to be used.

Subpart B--Regulatory Overview

Subpart B of part 205 consists of USDA's proposed organic
production and handling requirements, and a proposed list of (1)
synthetic substances allowed and non-synthetic (natural) substances
prohibited for use in organic crop and livestock production and (2)
non-agricultural substances and non-organically produced agricultural
products allowed in or on processed organic products. The proposed
requirements for organic production and handling, and the provisions
for the proposed National List and use of substances, have been
integrated as a unified whole consistent with our

[[Page 65870]]

proposed definition of a system of organic farming and handling.
Section 205.3 (applicability) of subpart B delineates proposed
general requirements and conditions for organic production and
handling. Section 205.3 of subpart B includes the general requirement
that the use of any method or substance not result in measurable
degradation of soil or water quality. This section is followed by the
sections that set forth the requirements for organic crop production
(sections 205.5 through 205.9), wild crop harvesting (section 205.11),
organic livestock management (sections 205.12 through 205.15), and
organic handling (sections 205.16 through 205.19). Following the
sections on production and handling, sections 205.20 through 205.28
contain the proposed National List. The proposed National List
regulations consist of sections that describe the active synthetic
substances that are allowed for use in organic crop and livestock
production, the non-synthetic (natural) substances that are prohibited
for use in organic crop or livestock production, and the non-
agricultural and non-organically produced ingredients allowed in or on
processed organic products. (The OFPA does not require non-synthetic
(natural) substances allowed for use in organic crop and livestock
production, or non-organically produced products prohibited for use in
or on processed organic products, to be included in the National List).
Sections 205.20 and 205.21 summarize all of the categories and types of
substances allowed and prohibited for use in organic farming and
handling, as provided under the Act and the proposed regulations in
Subpart B.

Applicability--Section 205.3

In paragraph (a) of this section, we propose to establish the
requirement that any agricultural product that is sold, labeled or
represented as organic be produced in compliance with the relevant
proposed crop, wild crop, livestock and handling requirements,
including those of the National List. Crops and livestock would have to
be produced or harvested on a certified organic farming operation and
handled by a certified organic handling operation under a system of
organic farming and handling.
We propose in paragraph (b) of this section that any use or
application of a method or substance under these proposed requirements
must be used in accordance with all applicable requirements of part 205
and must not result in measurable degradation of soil or water quality.
This provision is proposed to clarify that all methods and substances
used in a certified operation shall be consistent with a system of
organic farming and handling, the purposes of the Act, and any other
requirements in the regulations in part 205. This provision also is
consistent with the recognition in the Act of the relation between
organic practices and soil and water quality.
In most instances we are not proposing to require that any specific
indicators of soil or water quality be monitored for compliance with
this provision. Rather, we expect that appropriate and reliable
indicators of soil or water quality would be chosen according to site-
specific considerations, such as the nature of the crops or livestock
being produced, the location and scale of the operation, and the kinds
of practices being used. By not requiring monitoring of specific
indicators, except in certain cases, we thus intend to leave the
decision as to whether to monitor the effects of a method or substance,
as well as the choice of indicators to be monitored, to the producer or
handler in consultation with the certifying agent. We would expect any
such monitoring activities to be described in the applicable organic
plan, and therefore subject to approval by the certifying agent, who
might require changes.
For example, if a certifying agent had some concerns about the
impact on soil quality of any practice, such as the planting of a
sloping field prone to erosion with corn or sorghum, the certifying
agent might require the producer to monitor erosion in that field to
ensure that soil quality was not being degraded. This could occur
following a review of an organic plan or any required annual inspection
of a certified operation. This provision also would address the
requirement set forth in section 2114(b)(1) of the OFPA (7 U.S.C.
6513(b)(1)) that soil fertility be addressed in an organic farm plan
for crop production. Additionally, a certifier who was concerned about
the compliance of a cattle feeding operation with the manure management
requirements proposed in section 205.15(c) might require that the
producer monitor nitrate levels in a nearby well to show that cattle
holding areas were not discharging manure-laden runoff into
groundwater. A wild crop harvester similarly might be required by a
certifier to estimate the population of the harvested plant species
that remain in a given area after each harvest, to ensure that the
harvesting was being done in compliance with section 2114(f) of the
OFPA (7 U.S.C. 6513(f)), which requires that harvesting does not
deplete the plant species being harvested (as proposed in section
205.11(b)).
Other indicators of soil or water quality that might be appropriate
to monitor, depending on the situation, would include: residues in soil
or water of substances prohibited for use in organic farming; soil
biological activity as indicated by earthworm populations; soil organic
matter and nutrient content; or soil compaction. It should be noted
that much of this monitoring activity is widely practiced in the course
of managing a farm or handling operation, and in many cases would
coincide with measurements, assessments or observations already being
undertaken routinely by a producer.
Although not required by statute, the NOSB recommended that
irrigation and water management be addressed within an organic farm
plan. At this time, however, we are not proposing regulations
specifically for the quality of irrigation water.
Section 205.3(b)(2) further would require that, if the same
function within an organic farming or handling operation may be
fulfilled by either a commercially available non-synthetic substance or
an allowed synthetic substance equally suitable for the intended use,
then the producer or handler must choose the non-synthetic substance in
preference to the synthetic substance if there is no discernable
difference between the two in terms of impacts on soil or water
quality. We recognize that such choices may seldom have to be made in
any operation. However, we are proposing this provision to further
reinforce the preference for the use of non-synthetic substances, as
opposed to synthetic substances, that is implicit in the Act, as
previously discussed. Any allowed synthetic substance will have been
evaluated by the NOSB according to section 2119(m)(6) of the OFPA (7
U.S.C. 6518(m)(6)), regarding alternative practices and available
materials, and our proposed requirement makes clear the choice
producers and handlers must make in a situation where an equally
suitable non-synthetic alternative is available.

Organic Crop Production Requirements

Land Requirements--Section 205.5

This proposed section addresses overall land management practices
that we have determined are needed to ensure that the area on which
organic crops are produced meets the requirements of the Act and the
proposed regulations in subpart B. We have proposed in paragraph (a) of
this

[[Page 65871]]

section, in accordance with section 2105 of the OFPA (7 U.S.C. 6504),
that land not have had any prohibited substances applied to it for at
least three years prior to harvest of an organically produced crop.
We are proposing further that any land on which organic crops are
produced have clearly defined and identifiable boundaries, as provided
under section 2107(b)(1)(A) of the OFPA (7 U.S.C. 6506(b)(1)(A)). We
believe that this requirement should apply to all land on which crops
are grown under organic management for two reasons. First, organically
managed fields must be clearly identifiable so that an inspector may
verify that the observed conditions on a farm operation are consistent
with the information provided by the producer in the application for
certification. Secondly, organically managed fields need to be clearly
identifiable to anyone who may be using prohibited substances on
adjoining lands in order to help prevent unintentional application of
prohibited substances to organically managed areas.
Paragraph (b) of this section would apply to any organically
managed land area that adjoins land that is not organically managed,
and would require that a producer implement, or propose a plan to
implement, some means to prevent the possibility of unintended
application of prohibited substances to land and contact of a
prohibited substance with the land from which organically produced
crops are to be harvested. This could be done through establishment of
physical barriers, diversion of runoff, buffer zones, or other means,
in accordance with section 2107(b)(1)(A) of the OFPA (7 U.S.C.
6506(b)(1)(A)). Existing State and private organic standards have
customarily required producers to establish and maintain adequate
buffer zones between adjoining organic and non-organic field units and
usually specify the minimum size of a buffer area. The information we
have reviewed indicates that such specific minimum size requirements
should not be included in our proposal because they would not be
applicable to every situation and could impose unnecessary burdens on
some organic producers.

Crop Rotation--Section 205.6

Crop rotations, or other means of ensuring soil fertility and
effective pest management, are the cornerstone of successful organic
crop production. They are essential considerations in establishing and
maintaining an organic farm system because they help to prevent pest,
weed and disease problems; disrupt crop pest, weed, and disease cycles;
provide habitat for beneficial organisms; stimulate positive biological
and chemical interactions in the agroecosystem; and maintain soil and
water quality in a manner that diminishes the need for the use of
synthetic substances.
Section 2114(b)(1) of the OFPA (7 U.S.C. 6513 (b)(1)) requires a
crop production farm (organic) plan to foster soil fertility through
practices that include crop rotation. Although the Act includes a
provision for crop rotations as a means of improving soil fertility,
crop rotations also serve additional critical functions in an organic
farming system. Primary among these functions are: the prevention of
weed, pest and disease problems by the planting of species that do not
support the pest organisms or that provide food or habitat for
beneficial insects; the stimulation of populations of beneficial soil
organisms, such as mycorrhizal fungi and predacious nematodes; and the
occurrence of alellopathic effects that suppress weed growth.
Such functions similarly may be accomplished by techniques other
than crop rotation. Additionally, crop rotation practiced in the
production of annual crops, such as corn or soybeans, may not be
feasible in the production of perennial crops, such as tree fruits or
hay. Therefore, we are providing for alternative practices to crop
rotations that also serve the purposes of ensuring soil fertility and
effective pest management.
Examples of alternative practices which a producer might use
include the following: one method would be to establish or preserve
non-agricultural areas such as hedgerows, wetlands, native prairies and
woodland, adjacent to or adjoining a farm or field, to serve, for
example, as habitat for beneficial organisms. A second related method
would be to plant species that serve this same function adjacent to or
between rows of crops. A third related method would be the use on
pasture areas of rotational or intensive grazing methods in which
animals are moved frequently to fresh pasture in order to optimize
nutritional content of the forage and extend the pasture season. Other
methods commonly used in managing perennial plantings, which cannot be
rotated from field to field, include interplanting, alley cropping,
strip cropping and introduction of livestock into perennial systems.
As proposed in section 205.2, a crop rotation is defined as the
practice of alternating the annual crops grown on a specific field in a
planned pattern or sequence in successive crop years, so that crops of
the same species or family are not grown repeatedly without
interruption on the same field during two or more crop years. This
rotation might include the use of sod, legumes or other nitrogen-fixing
plants, or green manures in alternation with cultivated crops. These
crops are universally recognized in the applicable literature as highly
desirable methods of improving soil organic matter content and long-
term fertility, as well as conferring other benefits associated with
crop rotation.
However, a producer could repeatedly plant the same species or
family in a given field over more than two crop years, provided that
practices which ensure soil fertility and effective pest management,
and which do not result in measurable degradation of soil or water
quality, as proposed in section 205.3(b)(1), are used. For example, use
of living mulches, such as clover interplanted between rows of carrots,
could accomplish the same result as a more frequent rotation of carrots
with other crops. Other examples of practices that might be used in
place of the rotation of annual crops are the application of large
amounts of leaf mulch or compost to beds in which the same crop family
is grown several seasons in succession by a small-scale vegetable
producer, and a grain operation in which early annual weeds may serve
as a green manure crop that replenishes soil fertility and provides the
other beneficial effects of crop rotations despite the continual
commercial production of a single species in a field.

Soil Fertility and Crop Nutrient Management--Section 205.7

Section 2114(b) of the OFPA (7 U.S.C. 6513(b)) requires that an
organic plan provide for the management of soil organic content through
proper tillage, crop rotation and manuring, thereby acknowledging the
importance of soil fertility for organic crop production. A fundamental
tenet of organic management systems is that the primary objective of
soil management is to nourish soil organisms which will in turn ensure
soil fertility and properly balanced crop nutrition. We have
incorporated this concept in drafting this proposal.
We consider the term proper manuring as used in section 2114(b) of
the OFPA (7 U.S.C. 6513(b)) to mean any use or application of plant or
animal materials, including green manure crops, to improve soil
fertility, especially its organic content. The use of compost and other
recycled organic wastes, whether or not they contain

[[Page 65872]]

livestock manure, are therefore considered to be part of proper
manuring. Any practice, however, that could contribute significantly to
water contamination by nitrates and bacteria, including human
pathogens, or otherwise result in measurable degradation of soil or
water quality, would accordingly not be considered proper manuring.
Section 2109(b) of the OFPA (7 U.S.C. 6508(b)) specifically
addresses prohibitions on the use of certain materials as fertilizers
and soil amendments; these provisions also are addressed in this
section of the proposal. The practices we propose for fertility and
nutrient management are also relevant to and essential for the
prevention of pest, weed and disease problems that might otherwise have
to be controlled through the use of synthetic substances.
Section 205.7(a) would require that any tillage or cultivation
implements and practices be selected and used by an organic producer in
a manner that does not result in measurable degradation of soil
quality. Soil physical qualities include soil structure, aggregation,
aeration, drainage and erodibility, all of which are indicators of soil
fertility. While we have not proposed to prohibit any specific tillage
or cultivation implement or practice, our proposal would require
producers to select tools and practices that do not harm soil quality.
For example, excessive use of rototillers has been shown to damage soil
structure and lead to accelerated loss of organic content, while
improper moldboard plowing may induce soil compaction. We would expect
an organic producer to manage such tools or practices so that no
measurable degradation of soil quality resulted.

Proper Manuring--Section 205.7(b)

In section 205.7(b) we propose the types of plant and animal wastes
that may be used in an organic system. These materials would represent
the methods, in conjunction with crop rotations and green manure crops,
that can be used to build soil organic matter and provide essential
crop nutrients in accordance with section 2114(b) of the OFPA (7 U.S.C.
6513(b)). The practices proposed are stated in an order of preference
for choosing among available alternatives because we believe that these
preferences most accurately reflect the concept of proper manuring. As
proposed here, the preferred choices in this order of preference are
for the practices that are least likely to result in measurable
degradation of soil or water quality. For example, the application of
compost, as provided in paragraph (b)(1) of this section, is least
likely to contribute to contamination of water by nitrates and
bacteria, including human pathogens, whereas uncomposted materials
having a high soluble nutrient content, as provided in paragraph (b)(3)
of this section, are more likely to adversely affect water quality.
Because section 2114(b)(2)(C) of the OFPA (7 U.S.C. 6513(b)(2)(C))
requires manuring practices to not significantly contribute to water
contamination by nitrates or bacteria, this section also would require
that any application of plant or animal waste materials does not do so.
The first choice of materials, as stated in paragraph (b)(1) of
this section, would be certain composted materials; these include
materials such as livestock manure, food processing wastes, crop
residues, spoiled hay and similar materials. The use of composted plant
and animal matter recycles nutrients and builds soil organic content
with minimal concern for measurable degradation of soil or water
quality, and is fully compatible with our proposed definition of a
system of organic farming and handling. This practice does not include
composts made with certain materials that may pose greater concerns for
soil or water quality, which are addressed in paragraphs (b)(4) and
(b)(5) of this section.
Paragraph (b)(2) of this section includes plant or animal materials
that are neither susceptible to anaerobic decomposition (which presents
potential odor and pathogen problems) nor high in soluble nutrients
(that may pollute water) and which therefore are suitable for
application to soil without first being composted. These materials are
the second best choice because applying them directly to soil permits
them to decompose and contribute to soil organic content and fertility,
thereby functioning in a manner similar to composted materials. This
choice also is consistent with the proposed definition of a system of
organic farming and handling because it furthers the use of methods in
preference to substances. Paragraph (b)(2) of this section would cover
materials such as seaweed, sawdust, peat, earthworm castings, leaves,
rice hulls and similar dry, stable substances. Well-aged and fully
decomposed animal manure that has not been subjected to a composting
process might also be used under proposed paragraph (b)(2) of this section.
We propose in section 205.7(b)(3) to allow the use of agricultural
waste materials that are known to be susceptible to anaerobic
decomposition or that are high in soluble nutrients. These materials
are the third choice because they require care in use and application
in order to avoid causing measurable degradation of soil or water
quality. However, we believe that their use should still be permitted
because they are a potentially valuable source of soil organic content
and crop nutrients. Examples of such materials include food processing
wastes, such as fruit peelings or culls, slaughterhouse by-products,
fish wastes, whey, and highly nitrogenous plant concentrates like
alfalfa or soybean meal. This category also would include the use of
raw animal manure.
Section 2114(b) of the OFPA (7 U.S.C. 6513(b)) permits the
application of raw manure to any green manure crop, any perennial crop,
and any crop not for human consumption. This section of the OFPA also
restricts the use of raw manure, in that raw manure may only be applied
to a crop intended for human consumption if the crop is harvested after
a reasonable period of time determined by the certifying agent to
ensure the safety of the crop, but in no event may the period be less
than 60 days after the application of raw manure. Furthermore, section
2114 (b)(2)(C) of the OFPA (7 U.S.C. 6513 (b)(2)(C)) prohibits raw
manure from being applied to any crop in a way that significantly
contributes to water contamination by nitrates or bacteria.
Over recent months and years, there has been an increase in the
incidence of food borne illness caused by certain human pathogens found
in animal manure. In consideration of this increased incidence of
illness, this proposed regulation does not address in detail the use of
raw animal manure in crops intended for human consumption because of
the need to develop more and better scientific data regarding the
safety of the crop after application of raw manure. Although we
acknowledge that the use of animal manure, whether applied directly to
the field or composted, is common in organic agriculture, there is
inadequate data to make the determinations necessary regarding the
safety of the crop after application of raw manure. Similarly, data are
needed to make the determinations necessary to ensure that livestock
exposure to pathogens does not occur in cases where raw manure is used.
We are soliciting public comment and scientific and technical data
in regard to the minimum time which must pass before a crop raised for
human consumption on land to which raw manure has been applied may be
harvested. Such technical information might include differentiating the
type of crops to which differently treated manure can be applied with
safety and,

[[Page 65873]]

in addition, suitable time and temperature standards for composting
animal manures. The Act specifies that when raw manure has been applied
to land used to raise a crop intended for human consumption, at least
60 days must pass between application and harvesting to ensure the
safety of the crop. If and when regulations regarding the safety of any
food grown on land to which raw manure has been applied are promulgated
by FDA, EPA and/or USDA, these regulations would be applicable to the
use of raw manure in organic agriculture.
We also would like to obtain public comment and scientific and
technical data as to whether there are any situations where composted
manure would have essentially the same characteristics as raw manure,
thus necessitating special measures to ensure the safety of the food.
We would like to receive data as to whether under any circumstances,
and if so which circumstances, the application of composted material to
crops, or the method of preparation of composted material which is
intended to be applied to crops, would create any human health or food
safety concerns.
On October 2, 1997, President Clinton announced a plan to further
ensure the safety of the nation's food supply. The plan, entitled
``Initiative to Ensure the Safety of Imported and Domestic Fruits and
Vegetables,'' is geared towards increasing assurances that fruits and
vegetables, whether produced domestically or imported, are safe. As
part of this initiative, the President directed the Secretary of Health
and Human Services, in partnership with the Secretary of Agriculture,
and in close cooperation with the agricultural community, to issue
guidance on good agricultural practices (GAP's) and good manufacturing
practices (GMP's) for fruits and vegetables.
In response to this directive, FDA and USDA are developing guidance
to minimize microbial food safety hazards for fresh fruits and
vegetables. The guidance is intended to assist growers and handlers in
continuing to improve the safety of domestic and imported produce. The
agencies have identified several potential vehicles or mechanisms for
pathogenic contamination of fruits and vegetables, including but not
limited to: (1) Water; (2) the application of manure and municipal
wastewater; (3) worker and field sanitation and hygiene; and (4)
transportation and handling. The agencies will be publishing draft
general guidance for public comment shortly.
Proposed paragraph (b)(4) of this section addresses the use of
plant and animal waste materials containing a non-active residue of a
substance. We define a non-active residue in section 205.2 as: any
synthetic substance that does not appear on the National List of
synthetic substances allowed for use, any non-synthetic substance that
does appear on the National List of non-synthetic substances prohibited
for use, or any non-synthetic (natural) poison (such as arsenic or lead
salts) that has long-term effects and persists in the environment, and
which occurs in a very small quantity as a non-active substance in a
production input or water. This provision would apply to plant or
animal waste materials resulting from industrial food or fiber
processing, municipal solid waste streams, and similar sources in which
the materials have been treated or mixed with other substances. These
kinds of materials include non-organically produced cotton gin trash,
cocoa hulls, and confinement livestock manure from animals that are
known to have been treated with synthetic substances. Municipal yard
wastes, including leaves, grass trimmings and prunings, also might fall
into this category.
As discussed in the supplementary information to the National List,
plant or animal materials that only have been treated or mixed with
synthetic substances, but not chemically altered by such treatment, are
not considered synthetic under the definition provided by section
2103(21) of the OFPA (7 U.S.C. 6502(21)), and are therefore not
prohibited under the Act. Additionally, any non-active residues of
substances found on such materials would have minimal or no impact on
the organic agroecosystem and therefore the residues are not consistent
with the definition of an active substance or ingredient when found in
a compost feedstock. Furthermore, the residues themselves are not used
to produce an organic crop since they occur as unintended additives
that are not intentionally applied and do not perform nor interfere
with any function in the agroecosystem.
Such materials would therefore be permitted for use as compost
feedstock in organic crop production, but we are proposing that their
use be restricted by the requirements that they be composted prior to
application to soil, and that levels of any non-active residues
detected in the raw plant or animal waste materials not increase in
soil. Although certain synthetic substances resist decomposition or may
persist if composting is incomplete, most residues present in these
materials will decompose sufficiently when subjected to proper
composting processes so as to be of negligible concern. A producer
using these composted waste materials would be expected to use them in
such a way that any persistent residues did not increase in the soil or
accumulate to a level that caused measurable degradation to soil or
water quality.
In paragraph (b)(5) of this section, we propose to permit the use
of plant and animal waste materials that have been chemically altered
(by the industrial process), and which are therefore considered active
synthetic substances under section 2103(21) of the OFPA (7 U.S.C.
6502(21)), and can only be used if they appear on the National List of
active synthetic substances allowed for use in organic farming. Unlike
non-synthetic materials that may contain synthetic substances as non-
active residues as permitted under paragraph (b)(4) of this section,
this provision refers to materials derived from a process that
chemically changes the material. Such materials might include leather
meal, newspaper and kiln dust. Although this type of material would not
have to be composted prior to application, a farmer using such
substances in a system of organic farming would be expected to use them
in such a way so that measurable degradation of soil or water quality
did not occur.

Providing Mineral Nutrients--Section 205.7(c)

In section 205.7(c), we propose that certain mineral substances
could be used as a means of fostering soil fertility by providing major
nutrients or micronutrients. While use of proper rotations and recycled
plant and animal wastes can often provide all the mineral nutrients
required by crops, supplemental sources of these nutrients sometimes
are needed. We have divided paragraph (c) into two subsections, which
represent two broad types of mineral substances that may be used. The
first two types consist of non-synthetic substances of low solubility
and salinity, including mined substances such as lime, greensand and
rock phosphate, and substances extracted from a plant or animal
substance, such as liquid seaweed extracts, or from a mined mineral.
Such substances historically have been accepted in organic production,
and because they are not synthetic chemicals their use is consistent
with the Act and with a system of organic farming and handling. It
should be noted that, as we discuss in the supplemental information to
the National List, we do not consider the extraction method to be
consequential

[[Page 65874]]

when used to obtain substances from non-synthetic sources that are used
in crop production. The extraction method alone would not cause the
substance to be considered synthetic nor would we expect the resultant
substances to have detrimental effects on biological and chemical
interactions in the agroecosystem or cause any measurable degradation
of soil or water quality. Fish emulsion products which contain
synthetic stabilizers also would not be considered to be synthetic
under this proposal because the stabilizers are not active synthetic
ingredients, as discussed in the supplementary information to the
National List.
The use of ash derived from the burning of a plant or animal
material, such as wood or sunflower hulls, is also included in this
category of non-synthetic mineral nutrient sources, except for certain
instances. The use of ash would be prohibited if the ash is obtained
from a practice prohibited under paragraphs (d)(2) or (3) of this
section or if the ash appears on the National List of prohibited non-
synthetic substances or if the material burned to create the ash had
been treated or combined with a prohibited substance. It should be
noted that a product of the combustion of an inorganic or mineral
substance, such as sulfur or calcium carbonate, would be considered a
synthetic substance under this proposal.
The second category of substances that could be used as sources of
crop nutrients comprises any highly soluble or synthetic substance,
which we propose may be added to soil to correct a known nutrient
deficiency provided that its use does not result in measurable
degradation of soil or water quality. These substances have
historically been permitted by most organic certification programs we
have reviewed, but with restrictions placed on their use. We would like
to receive comment as to whether or not further restrictions on the use
of any of these substances would be appropriate. Such restrictions
might, for example, include designating this type of substance as
representing a lower order of preference than substances included in
paragraph (c)(1) of this section, or might include permitting their use
only if necessary.
The three types of substances that would be covered by this second
category include synthetic micronutrient substances, non-synthetic
minerals that are highly soluble and have a high salt index, and cation
balancing agents. Synthetic micronutrient minerals, such as soluble
boron and chelated trace minerals (e.g. zinc, manganese, iron, and
copper), may often be the most effective and practical choice for
correcting soil deficiencies of these essential nutrients, and when
properly used can be considered a beneficial practice in an organic
soil management system. Their proposed use is restricted because, in
addition to being synthetic substances, misuse or overuse of these
substances can cause measurable degradation of soil or water quality.
Synthetic micronutrients, which are minerals that we propose to
consider as active ingredients in an organic system, are proposed in
section 205.22(f) for inclusion on the National List as allowed
synthetic crop production substances. However, the NOSB has
recommended, and we agree, that it is not acceptable to use any of
these substances in a way that takes advantage of their herbicidal
nature which could result in measurable degradation of soil quality.
Other substances in this category include highly soluble and saline
non-synthetic mined minerals, such as sodium (Chilean) nitrate or
potassium nitrate (niter), which may be applied as a source of
nitrogen, as well as potassium chloride (muriate of potash),
langbeinite (sulfate of potash magnesia), and potassium sulfate, which
are sometimes used to balance the soil cation nutrient content. Such
substances are usually available as non-synthetic mined minerals, but
are proposed to be restricted to cases of known nutrient deficiency
because of their potential to degrade soil quality by contributing to
soil salinization when excessively applied. While the Act makes no
mention of these specific materials, section 2109(b)(2) of the OFPA (7
U.S.C. 6508(b)(2)) indicates that certain mineral nutrients and
nitrogen should not be permitted if they are inconsistent with the
applicable organic certification program. Soil amendment substances,
such as langbeinite and potassium sulfate, used to balance cation
nutrients are more widely considered to be acceptable adjuncts to an
organic fertility management system, but are included in this category
due to their high solubility and salinity, which could cause measurable
degradation of soil quality if overused. As previously stated, a
producer could use these substances only to correct a known nutrient
deficiency.
As proposed and discussed in section 205.22(c) for allowed
synthetic crop substances, certain cation balancing agents, such as
potassium sulfate, may be available on the market either as non-
synthetic mined minerals or as synthetic by-products of an industrial
process. In cases where the origin of such a substance cannot be
determined from readily available information, such as a label or
labeling accompanying the product, the mineral is presumed to be
synthetic and must appear on the National List as an allowed synthetic
crop production substance before it may be used. This presumption would
prevent the inadvertent application of a prohibited substance when the
producer cannot readily determine the origin of a cation balancing agent.
Finally, we propose in paragraph (d) of this section to prohibit:
the use of any fertilizers or commercially blended fertilizers that
contain an active synthetic ingredient not allowed for use in crop
production as provided for in section 205.22, or that contains an
active prohibited substance; the use of ash obtained from the disposal
of manure by burning; and burning as a means of disposal of manure or
of crop residues produced on the farm. The first prohibition is
proposed in accordance with section 2109(b)(1) of the OFPA (7 U.S.C.
6508(b)(1)) which requires that such a prohibition be established. The
second and third prohibitions are proposed in agreement with the
recommendations received from the NOSB. Burning these materials is not
an appropriate method to use to recycle organic wastes and would not be
considered as a proper method in a manuring program because burning
removes the carbon from these wastes and thereby destroys the value of
the materials for restoring soil organic content. Burning as a disposal
method of these materials would therefore not be consistent with
section 2114(b)(1) of the OFPA (7 U.S.C. 6513(b)(1)).

Selection and Use of Seeds, Seedlings and Planting Stock--Section 205.8

Section 2109(a) of the OFPA (7 U.S.C. 6508(a)) prohibits an organic
producer from applying materials to or engaging in practices on seeds
or seedlings that are inconsistent with the program established under
the Act. Therefore, we are proposing that all seeds and planting stock,
including annual seedlings and transplants, be organically produced.
However, we recognize that at the present time this is impractical for
many farms because organically produced seeds and planting stock are
not widely commercially available; thus, we are proposing to permit
exceptions to this requirement. It is our expectation that our
requiring organic producers to use organic seed and planting stock
except in limited circumstances will stimulate increased organic
production of these essential farm inputs.
This proposal would permit the use of non-organically produced
seeds and planting stock in producing an organic

[[Page 65875]]

crop only when an equivalent organically produced variety is not
commercially available. Planting stock includes, as we define it, any
plant material used for plant reproduction, except seeds, and includes
such materials as seedlings, cuttings, tubers, roots, slips, rhizomes,
crowns, and plantlets derived through tissue culture techniques. Our
proposal also would require that untreated planting stock be selected
in preference to treated planting stock whenever there is a choice.
With the exception of annual seedlings, most organic farm operations
are not equipped to produce planting stock on the farm. In addition,
certain planting stock, such as berry plants and tubers, are required
by some State regulations to be treated with pesticides to prevent the
introduction of plant diseases and other pests.
Although we have received some input in favor of prohibiting all
uses of non-organically produced annual seedlings, we believe that the
inclusion of such annual seedlings under this proposed rule is
justified. The flexibility of allowing the use of non-organically
produced annual seedlings would permit a farmer who lost a crop due to
unanticipated or emergency circumstances shortly after transplanting to
replant with a similar non-organically produced variety that was either
treated or untreated. It should be noted that any annual seedlings that
are produced and replanted on the same certified organic farm are
considered transplants and could not be treated with prohibited
substances, as proposed in section 205.8(c).
We are proposing that treated seeds could only be used if untreated
seeds of the same variety are commercially unavailable or it is
infeasible to obtain untreated seeds due to unanticipated or emergency
circumstances. As discussed in the supplementary information for the
National List, we are not proposing any seed treatment substance to be
included on the National List because we are not proposing to allow a
producer to use any seed treatment on a certified organic farm. Treated
seeds under our proposal are not an active synthetic ingredient in the
organic farming system and therefore are not required to appear on the
National List. A producer could not use the treated seed in order to
take advantage of the functional application of the seed treatment
(this would be using the seed treatment as an active ingredient) or to
use up treated seed remaining from the previous year if the appropriate
untreated seed had since become available.
Because a full range of untreated non-organically produced crop
seeds is widely available, the circumstances under which this exception
would be justified are limited. These circumstances might include
situations in which untreated seeds are not obtainable due, for
example, to the fact that untreated seeds must sometimes be ordered
well in advance of expected delivery or the fact that it may not be
possible to order very small amounts of untreated seed of a new seed
variety that a producer wishes to use on a trial basis. Emergency or
unanticipated circumstances would include loss of a crop to flood or
frost and untreated seeds were no longer available for replanting.
In section 205.8(b) we propose the requirements for how non-
organically produced planting stock used as planting stock to produce a
perennial crop could be sold, labeled or represented as organic. We
propose this provision, as authorized by section 2107(a)(11) of the
OFPA (7 U.S.C. 6506(a)(11)), in order to provide the means by which a
nursery operation that operates in accordance with the Act and our
proposed regulations in part 205 could purchase planting stock from a
non-organic operation and later resell this stock as organically
produced. This proposal would permit perennial planting stock to be
represented as organic after it had been maintained under organic
management on a certified organic farm for a period of at least one
crop year. For example, a certified organic nursery operation could
purchase non-organic dwarf apple rootstock and graft it with locally
adapted varieties, then sell the resultant planting stock as
organically produced after raising it organically for at least one
year. We have proposed the one year period because we do not consider
nursery stock that is held on a certified operation for less than a
year before it is resold to have been organically produced. This
provision is intended to stimulate a wider availability of key organic
production inputs and thus make the ability to comply with the
requirement that organic sources of planting stock be used, as set
forth in proposed section 205.8(a), more feasible for organic producers.
In section 205.8(c), we propose to prohibit the use of transplants
treated with a prohibited substance, as provided for in section
2109(c)(3) of the OFPA (7 U.S.C. 6508(c)(3)). It should be noted that
we have defined a transplant as an annual seedling produced on an
organic farm and transplanted to a field on the same farm operation to
raise an organically produced crop. This definition also is consistent
with section 2109(a) of the OFPA (7 U.S.C. 6508(a)) which prohibits
farm producers from applying substances to seeds or seedlings that are
contrary to or inconsistent with the proposed program. We do not
propose to prohibit the use of seedlings or other planting stock that
may have been treated with synthetic substances before reaching the
organic farm since the treatment itself is not applied on, or intended
to be used on, the organic farm.
While the OFPA mandates that the Secretary develop organic
standards, it is silent on the issue of genetically engineered
organisms (GEOs) and their products. However, the accompanying Senate
report language states that ``* * * as time goes on, various scientific
breakthroughs, including biotechnology techniques, will require
scrutiny for their application to organic production. The committee is
concerned that production materials keep pace with our evolving
knowledge of production systems.''
In the time since the OFPA was passed, GEOs and their products have
assumed a more significant role in agricultural production. The policy
of the United States Government is that GEOs and their products should
be regulated based on risk, not on how they are produced. The NOSB has
recommended to the Secretary as a policy matter that GEOs should not be
allowed in organic farming and handling.
Public comment is invited with respect to the use of GEOs or their
products in a system of organic farming and handling. The USDA
specifically invites comments on whether the use of GEOs or their
products in organic farming and handling should be permitted,
prohibited, or allowed on a case-by-case basis. Comments should detail
the basis for the commenter's recommendations, including the
agricultural, technical, or scientific factors involved. Comments
should also identify the criteria that should be applied to case-by-
case determinations.

Prevention and Control of Crop Pests, Weeds, and Diseases--Section 205.9

Section 2109(c) of the OFPA (7 U.S.C. 6508(c)) sets forth
practices, such as the use of natural poisons that persist in the
environment, or plastic mulches, that are prohibited or restricted in
the control of pests, weeds and diseases in organic crops. Section
2118(c)(1)(B)(i) of the OFPA (7 U.S.C. 6517(c)(1)(B)(i)) lists the
following categories of active synthetic substances (used for pest,
weed, and disease control) that may be considered for exemption if they
are

[[Page 65876]]

included on the National List: copper and sulfur compounds; toxins
derived from bacteria; pheromones, soaps, horticultural oils, vitamins
and minerals, and production aids including netting, tree wraps and
seals, insect traps, and sticky barriers.
This section is designed to implement these two provisions of the
Act and is consistent with the NOSB recommendations and public comments
received by the NOSB, as well as being consistent with the proposed
definition of a system of organic farming and handling. The structure
of this section reflects an order of preference, in which the first
choice is the use of management methods to prevent the occurrence of
weeds, pests, and diseases, and the second choice is the use of methods
and certain substances to control occurrences that may develop. This
section is consistent with the definition of a system of organic
farming and handling and with the NOSB recommendations because it
requires that methods be chosen in preference to substances and that
toxic substances, whether allowed synthetic substances or non-synthetic
substances, be permitted only as a last resort.
In section 205.9(a), we propose to require that preventive measures
be used by an organic producer for the prevention of pest, weed and
disease problems in crops, including, but not limited to: crop
rotations or other practices provided for by section 205.6;
replenishment and maintenance of soil fertility, as proposed in section
205.7; appropriate sanitation measures, such as composting plant debris
to remove disease vectors, weed seeds and pest habitat; cultural
practices such as irrigation or timing of plantings to enhance crop
health and avoid peak pest hatchings; and selection of species and
varieties for traits such as disease resistance and suitability to
local climate conditions.
When prevention is inadequate, sections 205.9(b) through (d) of our
proposal would provide for a range of practices that could be used to
control pest, weed, and disease problems. These methods are consistent
with the section 2105(1) of the OFPA (7 U.S.C. 6504(1)) requirement
that organic production not include the use of synthetic chemicals
unless otherwise provided for in the Act. Although a preventive
management approach, as exemplified in proposed section 205.9(a), would
be preferable, we recognize that once pests or weeds are present they
must be controlled in order to avoid economic or otherwise significant
damage to crops. Pest control practices, as proposed in section
205.9(b), are: augmentation or introduction of predators or parasites,
such as trichogramma wasps and ladybugs; mechanical or physical
controls, such as pest barriers or traps; and use of non-synthetic and
non-toxic controls, such as repellants or lures. All of these methods
are fully consistent with a system of organic farming, as defined in
section 205.2, and do not entail the use of any active synthetic
substance.
Practices proposed in section 205.9(c) that could be used for weed
control when preventive measures are not effective are: mulching with
fully biodegradable materials, which include plant-derived matter such
as straw, bark, leaves and paper, but do not include plastics that
disintegrate but do not biodegrade; livestock grazing to reduce weed
competition; any mechanical or physical controls, such as weeding and
cultivation techniques; and, in accordance with section 2109(c)(2) of
the OFPA (7 U.S.C. 6508(c)(2)), plastic or other synthetic mulches
provided that they are removed from the field at the end of the growing
or harvest season. It should be noted that the use of cultivation to
control weeds under this proposal also would have to be consistent with
the provisions proposed in section 205.7(a) for protecting soil quality.
In paragraph (d) of this section, we propose that practices that
are intended to prevent the spread of diseases, such as steam
sterilization to eliminate disease organisms from greenhouse growing
media, could be used if disease preventive measures are not effective.
Plant diseases, once they occur, are difficult to control with existing
organic technologies, although some success has been demonstrated with
the use of compost preparations that actively suppress plant pathogens,
a practice that would be included in this provision.
In paragraph (e) of this section, we are proposing to permit the
use of certain methods and substances to control pests, weeds, and
diseases in an organic farming system if the practices proposed in
paragraphs (a) through (d) are not effective, provided that their use
does not result in measurable degradation of soil or water quality.
Although the use of the proposed substances is often necessary, the use
of these substances may pose concerns for soil or water quality when
overused. Therefore, a producer who used any substance proposed for use
in paragraph (e) of this section would have to describe in the organic
plan how use of the substance was not resulting in measurable
degradation of soil or water quality.
Botanical pesticides are specifically addressed in section
2119(k)(4) of the OFPA (7 U.S.C. 6518(k)(4)) as requiring a special
review to determine whether any of them should be placed on the
National List of prohibited natural substances. This review was
undertaken by the NOSB at its meeting in Rohnert Park, California, in
October, 1994. Considerable public input also has been received
concerning the use of botanical pesticides in organic production. Some
public input expressed concern as to whether organic farmers should be
permitted to use any pesticide sprays, even if they are non-synthetic.
Many organic practitioners who acknowledged the need to use botanical
pesticides stated that they used them only after more ecologically
compatible alternatives proved to be unsuccessful. Our review of
existing organic programs and public input also indicated that non-
synthetic substances used as biological controls may pose concerns for
soil and water quality if used indiscriminately. Concerns also have
been expressed that the use of these substances may impact biological
and chemical interactions in the agroecosystem, including the
possibility of inducing accelerated resistance in pest populations.
While many producers may not need to use botanical pesticides,
prohibiting these materials entirely would severely restrict the
availability of a wide range of organically produced crops. After
concluding its technical review process, the NOSB recommended that
neem, pyrethrums, rotenone, ryania, and sabadilla be allowed for use in
organic agriculture. We agree with the NOSB recommendations on the
basis of the aforementioned public input, and therefore provide in
section 205.9(e) for the use of botanical pesticides under certain
circumstances, provided that the botanical substance is not included as
a prohibited non-synthetic (natural) substance on the National List.
Our proposal also would allow the use of any synthetic weed, pest,
or disease control substance that is included on the National List as a
crop production substance, such as dormant oils, vitamin-D based
rodenticides, pheromones, and copper or sulfur fungicides. In addition,
non-synthetic, biologically based materials, such as bacterial toxins,
that are used to kill pests, weeds or plant diseases also would be
included under this paragraph of our proposal.
This paragraph of section 205.9 also would permit the use of
allowed synthetic substances for the purpose of cotton defoliation. We
have determined that this provision should be proposed

[[Page 65877]]

after reviewing testimony from organic cotton producers and scientific
evidence that the substances in question, which are mineral compounds
having a high salt index and solubility (and usually synthetically
derived) are ordinarily not used in amounts that could cause concern
for adverse impacts on soil fertility.

Prohibited Pest, Weed and Disease Control Practices--Section 205.9(f)

In section 205.9(f), we propose to prohibit the use of a synthetic
carbon-based compound that kills insects, weeds, diseases or other
pests through a cytotoxic mode of action. We have defined the phrase
cytotoxic mode of action to mean having a toxic effect by means of
interference with normal cell functions. We believe this proposal is
appropriate because section 2118 (c)(1)(B)(i) of the OFPA (7 U.S.C.
6517(c)(1)(B)(i)) does not delineate this category of substances as a
category of active synthetic substances that could be considered for
inclusion on the National List of permitted synthetic substances. In
addition, these substances are prohibited under all existing State,
private and international organic programs that we reviewed, and public
input received from organic producers and other members of the public
has raised frequent concerns that such substances potentially might be
allowed for use in organic production. We therefore have determined
that the use of any substance in this category would be inconsistent
with a system of organic farming, as defined under proposed section
205.2, and with the organic certification program established under the
Act.

Wild Crop Harvesting--Section 205.11

Wild crops are generally not produced and managed on a farming
operation, but rather are harvested from public or private lands;
therefore, most of the farming and management practices and materials
described in this proposal, such as soil management practices or weed,
pest and disease control, would not be applicable. However, because
wild crops are addressed in section 2114(f) of the OFPA (7 U.S.C.
6513(f)) and because they are used extensively as ingredients in many
organic products, we are proposing in this section provisions for the
harvesting of organic wild crops. We note here that if management
practices such as cultivation or fertilization are undertaken prior to
the harvest of a wild crop, the wild crop would be considered as a
managed agricultural product and would be subject instead to the
relevant requirements proposed for organic crop production. This idea
is reflected in our proposed definition of a wild crop as being
harvested from an area of land that is not maintained under cultivation
or other agricultural management. It should be noted that this section
would apply only to crops harvested from the wild, and that game
animals harvested from the wild are not addressed in this proposal.
As required under section 2105(2) of the OFPA (7 U.S.C. 6504(2))
and section 2114(f)(2) of the OFPA (7 U.S.C. 6513(f)(2)), we propose in
section 205.11(a) that the land from which wild crops are harvested for
sale as organic must have had no prohibited substances applied to it
for the three years immediately preceding the harvest of the wild crop
and any time thereafter. Our proposal requires that wild crop
harvesting be done in a manner that would not be destructive to the
environment and which would sustain the growth and production of the
wild crop, as required under section 2114(f)(3) of the OFPA (7 U.S.C.
6513(f)(3)).

Organic Livestock Production Requirements

Section 2110 of the OFPA (7 U.S.C. 6509) sets forth certain
requirements and prohibitions for organic animal production. It
requires the Secretary to hold public hearings to guide the
implementation of standards for livestock products. It also states that
the NOSB shall recommend additional standards for livestock health care
to ensure that such livestock is organically produced. Accordingly, the
Secretary held public hearings in Washington, DC, on January 27-28,
1994; Rosemont, IL, on February 10, 1994; Denver, CO, on February 24,
1994; and Sacramento, CA, on March 22, 1994 on this matter.
Additionally, the NOSB provided recommendations to the Secretary on
August 1, 1994 and subsequently, as required in the Act. We have
developed the provisions proposed in sections 205.12 through 205.15 in
accordance with section 2110 of the OFPA (7 U.S.C. 6509), the input
received at the public hearings, and the NOSB recommendations.

Origin of Livestock--Section 205.12

Livestock as defined in section 2103(11) of the OFPA (7 U.S.C.
6502(11)) are cattle, sheep, goats, swine, poultry, equine animals used
for food or in the production of food, fish used for food, wild or
domesticated game, or other nonplant life. Organically raised livestock
should be the offspring of organically raised parents and live under
organic management beginning with their first day of life. We propose
in paragraph (a) of this section that livestock raised on a certified
organic farm for the production of meat, milk, eggs, or other products
to be sold, labeled, or represented as organically produced be under
organic management from birth or hatching, or be the offspring of
parents that have been under organic management, except in certain
cases. These exceptions are based on the provisions of section 2110 of
the OFPA (7 U.S.C. 6509) that provides that breeder stock, poultry from
which meat or eggs are derived, and dairy animals from which milk and
milk products are derived, can be purchased from non-organic sources
and subsequently raised as organic livestock.
Paragraphs (a)(1) through (3) of this section are proposed in
accordance with section 2110 of the OFPA (7 U.S.C. 6509). Paragraph
(a)(1) of this section would permit the purchase of livestock from any
source for use as breeder stock of organic livestock, except that a
gestating mammal would have to be brought onto a certified facility
prior to the last third of pregnancy. Paragraph (a)(2) of this section
would permit dairy animals from which milk or milk products will be
sold, represented, or labeled as organically produced to be brought
onto a certified facility beginning no later than 12-months prior to
the production of milk or milk products that are to be sold,
represented, or labeled as organic. Paragraph (a)(3) of this section
would permit the purchase of poultry from any source for use as organic
slaughter stock (meat) or for organic egg production provided that the
poultry are brought onto a certified facility no later than the second
day of life.
We have proposed other provisions that cover what the practices are
for bringing other types of livestock, such as bees, fish, and
mammalian livestock designated as organic slaughter stock, into an
organic operation to produce such products as fiber, honey, meat and
caviar. These provisions are based on public input received at the USDA
livestock hearings, NOSB meetings and public response to NOSB draft
recommendations.
In section 205.12(a)(4) we propose that livestock may be designated
for the production of non-edible organic products, such as hides,
feathers, fur and fiber, if the animal is raised in compliance with one
of the other provisions proposed in paragraph (a) of this section, as
appropriate to the species. Additionally, we propose that livestock not
raised under organic management from birth or hatching,

[[Page 65878]]

such as male breeder stock purchased from non-organic sources and
subsequently raised as organic livestock for the production of certain
non-edible products, shall have been maintained under organic
management no less than 90 days prior to harvest of the organic
product. For example, wool from a buck sheep designated as organic
breeder stock in accordance with paragraph (a)(1) of this section could
be sold or represented as organically produced only after the buck had
been maintained under organic management for at least 90 days prior to
the time of shearing. This time period is proposed in order to ensure
that non-edible products, such as wool or hides, from breeder animals
brought under organic management could not be represented as
organically produced until the producer had included the livestock in
the overall farm management system.
In section 205.12(a)(5) we are proposing how livestock types such
as fish, crustaceans, mammalian livestock designated as organic
slaughter stock, and other species not addressed in the previous four
provisions, could be introduced onto an organic operation for the
production of edible organic products.
We specifically propose in paragraph (a)(5)(i) that bees may be
brought onto a certified facility at any stage of life. We propose this
because we determined that the production of honey depends on the
nature of the forage available to the bees at the time of honey flow.
Additionally, because of the ephemeral life cycle of individual bees,
previous locations of the hive would be inconsequential to the honey
harvested at the certified organic facility.
We propose in paragraph (a)(5)(ii) of this section that, if
necessary, mammalian livestock from any source could be used as organic
slaughter stock for the production of meat if it is brought onto a
certified facility no later than the 15th day of life. This proposed
provision would allow producers a reasonable length of time to
integrate animals from non-organic sources into their organic
operation, while still ensuring that the animal is brought onto the
certified facility early enough in life to develop primarily and
substantially under organic care. Allowing a mammal up to 15 days to be
introduced onto the certified facility would provide adequate time for
the young stock to receive its mother's first milk, gain strength and
be transported over any distance to the organic farm.
As noted, a producer could use non-organic sources of mammalian
livestock to be designated as organic slaughter stock only if the use
of non-organic livestock is necessary. The determination of necessity
would be based on site-specific conditions that would be described by a
producer in an organic plan, or updates to an organic plan, and
reviewed by the certifying agent. Examples of site specific conditions
that may serve as a basis for supporting the determination to purchase
livestock from non-organic sources are: commercial unavailability of
livestock from organic sources, and unanticipated or emergency
circumstances that prevent the purchase of commercially available
organic livestock.
We are requesting public comment as to the conditions under which
non-organic mammalian livestock may be used as organic slaughter stock.
For example, we would like public comment as to whether specific
conditions, such as commercial unavailability of organic livestock or
an emergency situation, should be a prerequisite for allowing mammalian
livestock of non-organic origin to be designated as organic slaughter
stock and, if so, what these conditions should be. We also request
comment as to whether we should provide for the use of mammalian
livestock of non-organic origin in the production of organic meat.
We propose in paragraph (a)(5)(iii) that all livestock types other
than those described in paragraphs (a)(1) through (5)(ii) may be
brought onto a certified facility no later than the earliest
commercially available stage of life. Other livestock types represent a
wide range of life spans and levels of commercial availability, and
there is no basis for proposing specific time limits for their
introduction into an organic facility. Sufficient time is required to
raise the young of any such species from its earliest commercially
available stage to reach marketable size; this time period will ensure
that the stock is raised primarily under organic management.

Prohibited Practices for Origin of Livestock--Section 205.12(b)

In section 205.12(b)(1), we propose that producers be prohibited
from moving animals in and out of organic care for the purpose of
circumventing the proposed requirements. This provision addresses our
concerns that the leeway provided by proposed paragraph (a)(1) of this
section for the purchase of non-organic breeder stock might be misused
by a producer who might, for example, repeatedly bring a pregnant
mammal onto a certified farm just prior to the last third of pregnancy,
remove the mammal from organic care after the offspring is born, and
then reintroduce her to organic management again just before the last
third of the next pregnancy. Paragraph (b)(2) of this section is
consistent with section 2110(c)(3) of the OFPA (7 U.S.C. 6509 (c)(3)),
which prohibits the use of hormones to stimulate the growth or
production of organically produced livestock. In paragraph (b)(2) of
this section we propose that the use of hormones for any breeding
purposes be prohibited.

Livestock Feed--Section 205.13

Organically produced feed is one of the foundations of organic
livestock management. Section 2110(c)(1) of the OFPA (7 U.S.C.
6509(c)(1)) requires producers of organic livestock to provide
organically produced feed that meets the requirements of the Act to
their livestock. Therefore, we propose in paragraph (a) of this section
that the total feed ration for organically raised livestock be
organically produced. This requirement would include all pasture or
rangeland on which the livestock are grazed. Forage from rangeland
would be considered a wild crop and, thus, would be considered to be
organically produced if it complied with the proposed wild crop
harvesting requirements proposed in section 205.11. Purchased feed
supplements, such as soybean protein concentrates, would have to be
produced in compliance with the Act and the regulations in subpart B to
be considered organically produced.
During the livestock hearings conducted by USDA, producers
expressed concerns that unless an allowance was provided for non-
organic animal feed, the organic status of livestock could be
jeopardized by unavoidable circumstances that would cause or prevent
livestock from consuming non-organic feed. Some of the circumstances
cited by the producers were poor growing conditions, severe weather,
commercial unavailability and fence jumping. We believe that these
concerns are valid and, therefore, propose in paragraph (a)(1)(i)
through (iv) of this section to permit, if necessary, that livestock
under organic management be allowed to receive other than a total feed
ration that is organically produced. We believe that our additional
proposed provisions are consistent with a system of organic farming and
handling and that they will not result in a compromise of the integrity
of organic products.
We propose in paragraph (a)(1)(i) of this section that an animal be
allowed to receive up to twenty percent non-organic feed as part of its
total feed ration in a given year. Paragraph

[[Page 65879]]

(a)(1)(ii) of this section proposes that in emergency situations which
affect the commercial availability of organic feed, such as weather
related disasters, the Administrator could authorize the use of non-
organic feed greater than the twenty percent non-organic feed allowed
in paragraph (a)(1)(i) of this section.
As noted, a producer could use non-organic sources of feed if the
use of non-organic feed is necessary. As previously described in regard
to the use of non-organic sources of mammalian livestock to be
designated as organic slaughter stock, determination of necessity would
be based on site-specific conditions that would be described by a
producer in an organic plan, or updates to an organic plan, and
reviewed by the certifying agent.
We are requesting public comment as to conditions under which non-
organic feed may be used. For example, we would like public comment as
to whether specific conditions, such as commercial unavailability of
organic feed, regional environmental factors, or an unanticipated
situation, should be a prerequisite for allowing non-organic feed and,
if so, what these conditions should be. We also request comment as to
whether we should provide for the use of feed of non-organic origin in
the production of organic livestock on certified organic farms.
In paragraph (a)(1)(iii) of this section, we propose an exemption
that would allow an entire, distinct dairy herd, that is converted to
organic management for the first time, to be fed non-organic feed up to
90 days prior to the production of milk or milk products labeled, sold,
or represented as organic. In testimony received at the USDA public
hearings, milk producers expressed concern that purchasing organic feed
for twelve months prior to selling the milk as organic could hinder or
prevent a producer from deciding to make the transition from non-
organic to organic production. They further explained that the twelve-
month period for feeding organic feed grown on the farm could not be
initiated until after the farm was certified as organic, which might be
three years after the producer first decided to make the transition to
organic production so as to comply with section 2105(2) of the OFPA (7
U.S.C. 6504(2)) regarding prohibited substances applied to the land.
Our proposal would permit use of this exception only one time for
any given discrete dairy herd. This exception applies only to feed;
producers still would have to comply with all other organic livestock
management requirements for the 12-month period prior to selling the
milk or milk products from these animals as organic, as required in
section 2110(e)(2) of the OFPA (7 U.S.C. 6509(e)(2)).
We propose in section 205.13(a)(1)(iv) that bees from which organic
honey and other products are harvested be provided with access to
enough organically managed forage to provide them with a predominant
portion of their needs. The NOSB received many comments about organic
honey production and considered several suggestions without making a
recommendation to the Secretary. One suggestion considered by the NOSB
was that the producers monitor their honey bees to ensure that only
organic forage was accessed by the bees; honey producers maintain that
it is infeasible to monitor and control all bee forage areas. Another
suggestion considered was to require the hive to be surrounded by
organic forage areas for the total radius of the distance for which
bees are known to fly. However, this radius may vary and is impractical
in most regions because the estimated two mile radius that bees are
known to cover would entail more than 12.5 square miles of continuous
organic forage area surrounding each hive.
In creating the proposed provision for bee forage areas, we
considered the applicability of the proposed provision in paragraph
(a)(1)(i) of this section for twenty percent non-organic feed. However,
we decided that it would not be possible for a producer or certifier to
ascertain the exact forage percentages for bees. We expect that
producers of organic honey would meet our proposed requirement that bee
forage areas be predominantly organic by actively managing on-farm
plantings, including crops, buffer zones, biological islands, roadsides
or other available areas during honey flows. A producer also could
satisfy this provision by moving hives to other organically managed
areas to take advantage of organic off-farm acreage.
The NOSB received public comments regarding the addition of vitamin
and mineral supplements to an organic feed ration to prevent deficiency
diseases. In their deliberations, the NOSB recognized that producers
cannot easily determine whether an animal's nutritional requirements
are being satisfied solely by the organically grown feed provided to
them, especially in the case of grazing animals.
The NOSB subsequently recommended that organic feed be allowed to
be supplemented with vitamins and minerals, as needed, to ensure an
animal's health. Deficiency diseases, such as milk fever, may not be
recognized until an animal becomes debilitated; moreover, allowing any
animal to become weakened because of vitamin and mineral deficiencies
may lead to more serious health problems. Accordingly, we propose in
paragraph (a)(2) of this section that the use of non-agricultural
products as vitamin and mineral supplements to satisfy the health
requirements of livestock be permitted, provided that any synthetic
supplement used in organic livestock production is included as an
allowed synthetic on the National list in section 205.24. In accordance
with section 2118(c)(1) of the OFPA (7 U.S.C. 6517(c)(1)), trace
minerals and dietary supplements are included in proposed section
205.24 as synthetic substances permitted for use in organic livestock
production.
We propose in section 205.13(a)(3) that producers be allowed to use
synthetic amino acid additives as necessary for the purpose of
fulfilling the nutritional requirements of the livestock, if the
synthetic amino acid used is included as an allowed synthetic on the
National list in section 205.24. During the USDA public hearings and
NOSB meetings, organic livestock producers stated that it is sometimes
necessary to add amino acid (protein) additives to feed rations to
ensure optimal health and growth. They explained that producers cannot
control, even by diversifying the feed ration, the quantity and type of
protein available in organic feedstuffs. For example, the lysine
content of many feedstuffs is known to be inadequate.
Tests to analyze the essential amino acid content in feed are
inexpensive, and the National Research Council's Committee on Animal
Nutrition publishes nutrient requirements for domestic animals,
including requirements for essential amino acids, where applicable.
These levels could be used as guidelines for producers and certifying
agents to ensure that the amino acids were not used at levels high
enough to artificially stimulate growth or production in the animal,
which is proposed to be prohibited under section 205.13(b)(2). An
analysis of feed showing that it required use of amino acid
supplementation would constitute a site-specific condition that could
be used to demonstrate that its use was necessary to fulfill the
nutritional requirement of the livestock.

Prohibited Livestock Feeding Practices--Section 205.13(b)

Sections 2110(c)(2) and (3) of the OFPA (7 U.S.C. 6509(c)(2) and
(3)) prohibit the use of plastic pellets for roughage; manure
refeeding; feed formulas containing urea; and the use of

[[Page 65880]]

growth promoters and hormones, including antibiotics and synthetic
trace elements to stimulate growth or production. We therefore propose
in paragraphs (b)(1) through (3) of this section that these materials
and practices be prohibited. It should be noted that this proposal
differs from the language given in the Act for the purpose of
clarifying the intent of this prohibition. This clarification is
necessary because synthetic trace elements and other feed supplements,
which are stated in the Act as prohibited when used to stimulate
livestock growth or production, are proposed to be permitted, as
allowed by the Act, in section 205.13(a) when used only to provide
essential nutritional elements to supplement livestock feed. In
accordance with section 2118(c)(1) of the OFPA (7 U.S.C. 6517(c)(1)),
trace minerals and nutritional supplements are proposed to be included
as synthetic substances permitted for use in organic livestock
production in section 205.24 of the proposed National List.

Livestock Health Care--Section 205.14

In developing our proposed organic livestock health care
requirements, we considered information from a number of sources. This
research was necessary because the Act does not provide affirmative
requirements for the health care of livestock in an organic operation.
The primary sources of information we used were the NOSB
recommendations, provided in accordance with section 2110(d)(2) of the
OFPA (7 U.S.C. 6509(d)(2)), and public input received during the USDA
organic livestock hearings held in accordance with section 2110(g) of
the OFPA (7 U.S.C. 6509(g)). We also reviewed comments from the public
provided during input sessions at NOSB meetings and in response to NOSB
draft recommendations. And, finally, we reviewed the livestock
production standards of the existing State and private certification
organizations in an effort to learn as much as possible about the
practices currently being used.
As a result of the research we did, we determined that health care
in organic livestock production should be based on the prevention of
diseases and should include the provisions of adequate feed, living
conditions and attentive care so as to ensure a healthful living
environment and prevent the occurrence of disease and injury.
We propose in paragraph (a) that the practice for maintaining
livestock health would be a preventive management system. Preventive
management includes providing diverse feedstuffs while minimizing
conditions favorable to disease, illness, injury and parasites.
Techniques such as providing isolation facilities for sick animals,
rotating pastures, and introducing species that disrupt parasite
reproduction would be appropriate for a certified operation. Sanitation
practices, such as the use of antiseptics to cleanse wounds, and the
removal of manure, spilled fodder, and soiled bedding material, would
be suitable practices to prevent the occurrence and spread of
infectious organisms.
We further propose to permit the use of veterinary biologics, such
as vaccines and inoculants, as well as vitamins and minerals, to
effectively prevent disease or injury. In fact, Federal and State
regulations may require the use of vaccines and inoculants, and organic
livestock producers would be expected to comply with any applicable
regulations regarding mandatory vaccinations. Additionally, the
practice of breeding animals for adaptability to site-specific
conditions, including resistance to local diseases and parasites, also
would play an important role in a system of organic farming.
The OFPA does not contain affirmative requirements for
administering animal drugs in the event of illness or injury; section
2110(d)(1) of the OFPA (7 U.S.C. 6509(d)(1)) prohibits administering
medications, other than vaccinations, in the absences of illness. This
suggests that the use of medications in organic livestock production
may be permitted. In determining the appropriate use of medications in
organic livestock production, we reviewed the NOSB recommendations,
public input received at NOSB meetings, livestock hearings testimony,
and existing State and private standards. The result of this research
indicated that there is little agreement about the kinds of medications
that are appropriate in organic livestock production and how they
should be used. There was agreement, however, that even with the best
preventive management, animals sometimes become ill, injured or
infested with parasites and that producers should be provided with a
means of administering medications to sick or injured animals. We have
used the term animal drug to include three of the terms used in the
Act: ``medication, antibiotic and parasiticide'', since animal drug is
the term commonly used by the Center for Veterinary Medicine of the FDA
in referring to these substances.
In section 205.14(b) we propose that, in a situation where the
preventive measures provided for in paragraph (a) were not effective in
maintaining livestock health, animal drugs, except as prohibited in
paragraph (d) of this section, may be administered to organic livestock
and that they may be used at any life stage; restrictions are provided
only for mammals and other stock intended for slaughter stock.
Our research indicated that it is appropriate in organic livestock
health care to administer parasiticides either internally or externally
to any animal at any life-stage, provided that the producer complies
with the prohibition against routine use of a synthetic internal
parasiticide, set forth in section 2110(d)(1)(B) of the OFPA (7 U.S.C.
6509(d)(1)(B)). Routine use is defined in section 205.2 as
administering a parasiticide to an animal without cause. While some
public comment favored prohibiting the use of internal parasiticides
and the NOSB recommended a restricted use of parasiticides, many
producers stated that parasites can threaten animal health at any life-
stage and that the use of parasiticides is essential in certain regions
of the country. Even under highly controlled situations, some parasites
endemic to certain regions can be carried by wild birds, water, or
feed. Concerns for the overall health of an animal would indicate that
parasiticides be used as soon as possible after determining the
presence of parasites at a level that would affect the health of the
infected livestock.
Our review of information concerning organic livestock health care
revealed a good deal of difference in the use of antibiotics. We found
that most of the concern about this drug use in animals was with the
subtherapeutic use of antibiotics, which is prohibited by the Act. The
NOSB recommended prohibiting the use of antibiotics in the production
of organic slaughter stock and restricting the use of antibiotics for
other livestock. Public comment suggested that the health of organic
livestock might benefit from receiving antibiotics. We would like to
solicit public comment on the use of animal drugs in the production of
organic livestock, including organic slaughter stock.
Based on the above reasons and after careful consideration of the
information available, we propose to restrict the use of animal drugs
in animals intended as organic slaughter stock. We propose in sections
205.14(b)(1) and (2) that animal drugs, other than those administered
topically and parasiticides, could be administered to mammals intended
as slaughter stock only during the first 21 days of life, and to all
other slaughter stock only during the first 7 days after arrival at the
certified facility. Animal drugs administered topically and

[[Page 65881]]

parasiticides could be administered at any time of life.
We propose to permit this limited allowance for the use of animal
drugs in slaughter stock due to the concerns about the vulnerability of
newly born or hatched livestock brought onto a certified operation from
a non-organic source. Newborn animals are particularly vulnerable to
diseases, such as diarrhea and pneumonia, during the time immediately
following transport, as a result of the stress of adapting to a new
environment. Allowing the use of animal drugs would be an appropriate
safety net for young organic livestock during their first week of
organic management. Since mammals may be as old as 15 days of age when
brought onto an organic operation, as proposed in section
205.12(a)(5)(ii) dealing with the sourcing of animals, mammals could
receive animal drugs up to the 21st day of life, or 7 days after the
last possible date after arrival at the certified facility. This is
consistent with the 7-day time period in which animal drugs may be
administered to non-mammals after their arrivals onto an organic
facility. We believe that restricting the use of animal drugs in
organic slaughter stock production is consistent with a system of
organic farming and handling which uses prevention methods, rather than
substances, to optimize health.
Proposed section 205.14(c) restricts the sale of products from
organic livestock to which an animal drug has been administered. We
propose in this paragraph that the products from treated livestock
could be obtained and thereafter sold, labeled, or represented as
organic only after the producer has determined that the animal had
fully recovered from the conditions being treated, but in no case
sooner than the applicable withdrawal period stated on the label or
labeling of the animal drug or as required by the veterinarian. This
proposal was developed after a lengthy and extensive review of
significant amounts of public input. Also, the NOSB submitted to the
Secretary a subsequent addenda to their recommendations on the use of
antibiotics and parasiticides in livestock used to produce milk and
eggs, which stated:

Just as soil health must be restored after the use of restricted
materials, animals whose health has been threatened by illness or
infection must be allowed adequate time to recuperate after
administration of an antibiotic or parasiticide. The restoration of
health is effected through adequate recovery management. Products
from both restored soil and restored animals may then be labeled as
organically produced.

In determining when animal health has been restored, a producer
might observe the somatic cell counts in milk, the resumption of normal
weight gain in a young animal, or an increase of egg production in a
laying flock. Under this proposal, an organic producer might reasonably
decide to withhold a product from the organic market beyond the
withdrawal period specified on the label based on observations of the
animal's health.
Some of the input received by the NOSB and the USDA requested
extending FDA withdrawal period after internally administering animal
drugs, particularly antibiotics or parasiticides, to organic livestock.
The extended withdrawal periods suggested by the public input ranged
from twice the FDA withdrawal time to a minimum of 90 days. However,
our proposal does not make such a requirement because an extended
withholding time does not further the goals of a system of organic
farming and handling. We wish to point out that under our proposal,
animals used for breeding or as a source of other products could later
be sold as organic slaughter stock only if the animal complied with all
of the other requirements for organic slaughter stock.

Prohibited Livestock Health Care Practices--Section 205.14(d)

Section 2110(d) of the OFPA (7 U.S.C. 6509(d)) prohibits producers
from using subtherapeutic doses of antibiotics, synthetic internal
parasiticides on a routine basis, or medications, other than
vaccinations, in the absence of illness. Accordingly, we propose in
paragraph (d) of this section to prohibit administering any medication,
other than vaccinations, in the absence of illness; the routine use of
synthetic internal parasiticides; and the subtherapeutic use of
antibiotics.

Livestock Living Conditions and Manure Management--Section 205.15

Living conditions play a significant role in livestock health and
production. At the USDA hearings and NOSB meetings, extensive testimony
was received addressing the issue of livestock living conditions. As
provided for under section 2110(d)(2) of the OFPA (7 U.S.C.
6509(d)(2)), the NOSB developed specific recommendations for additional
standards for livestock living conditions, including manure management.
This proposal is consistent with the NOSB recommendations.
In section 205.15(a), we propose to require that the following
living conditions be provided, as appropriate to the species, to
promote livestock health: protection from the elements; space for
movement; clean and dry living conditions; and appropriate access to
the outdoors, food and clean water. These conditions would provide a
healthful environment to raise organically produced livestock and
reduce or eliminate the need to administer animal drugs.
We propose in section 205.15(b) that, if necessary, animals could
be maintained under conditions that restrict the available space for
movement or access to outdoors, provided that other living conditions
are adequate to maintain the animals' health without the use of animal
drugs, except as provided in 205.14(b). In developing this proposal, we
considered public input regarding the effects of climate, geographical
location and physical surroundings on the ability of animals to have
access to the outdoors. The premise that organic management is soil
based and that animals should be allowed, as appropriate, access to the
soil was considered in balance with animal health issues, such as
prevention of exposure to harmful organisms carried by wild animals and
the need to keep animals indoors during extended periods of inclement
weather. The flexibility provided by the provisions of 205.15(b) would
allow operations without facilities for outdoor access to be certified
for organic livestock production and also would permit animals to be
confined during critical periods such as farrowing.
As noted, the producer could maintain animals under conditions that
restrict the available space for movement or access to outside only if
the practice is appropriate and necessary. As previously discussed in
regards to the use of non-organic sources of livestock feed and
mammalian livestock designated as organic slaughter stock, the
determination of necessity would be based on site-specific conditions
that would be described by the producer in an organic plan, or updates
to an organic plan, and reviewed and evaluated by the certifying agent.
We are requesting public comment as to the conditions under which
animals may be maintained so as to restrict the available space for
movement or access to outdoors. Examples of site-specific conditions
which might serve as a basis for maintaining animals under conditions
that restrict the available space for movement or access to outdoors
are: emergency or unanticipated circumstances and site-specific soil,
climate, animal health, or other environmental factors. We also

[[Page 65882]]

request comment as to whether we should allow practices that restrict
the available space for movement or access to outdoors.

Manure Management--Section 205.15(c)

In section 205.15(c), we propose that in any area where livestock
are housed, pastured or penned, manure would have to be managed in a
way that does not cause measurable degradation of soil quality; does
not significantly contribute to contamination of water by nitrates and
bacteria, including human pathogens; optimizes nutrient recycling; and
does not include burning or any practice inconsistent with section
205.14(a) of this subpart which addresses prevention of livestock
health problems. These provisions are consistent with sections
2114(b)(1) and (2) of the OFPA (7 U.S.C. 6513(b)(1) and (2)) that
address proper manuring and methods for applying livestock manure to
soil. The proper management of manure requires that it be used in a way
that optimizes nutrient recycling to be consistent with a system of
organic farming. As discussed in the supplementary information for
proposed section 205.7(d)(3), the disposal of manure by burning cannot
be considered proper manuring.

Organic Handling Requirements

Product Composition--Section 205.16

This section of our proposal addresses the requirements and
prohibitions for ingredients used in products that would be permitted
to use the word organic in some manner on a label or labeling of an
agricultural product. These provisions are in accordance with: section
2106(a)(1)(A) of the OFPA (7 U.S.C. 6505(a)(1)(A)) which requires that
any product that is sold, labeled, or represented as organic must be
produced and handled in accordance with the Act; section 2111(a)(4) of
the OFPA (7 U.S.C. 6510(a)(4)) which provides for an organic product to
contain up to 5 percent by total weight of the finished product,
exclusive of water and salt, of non-organically produced ingredients
that are on the National List; and sections 2106(c)(1) and (2) of the
OFPA (7 U.S.C. 6505(c)(1) and (2)) which permit certain exemptions for
agricultural products that contain more than 5 percent non-organically
produced ingredients.
In paragraph (a)(1) of this section, we propose that an
agricultural product, including a raw agricultural product, sold,
labeled, or represented as organic, contain only organically produced
agricultural ingredients, exclusive of water or salt, except in one
circumstance. This exception is based on section 2111(a)(4) of the OFPA
(7 U.S.C. 6510(a)(4)) which allows an organically produced agricultural
product to contain up to 5 percent non-organically produced ingredients
that are on the National List. Accordingly, we propose in paragraphs
(a)(1)(i) and (ii) of this section that a product sold, labeled, or
represented as organic could contain non-organically produced
agricultural products and non-agricultural ingredients that are
included on the National List, up to 5 percent of the total weight of
the finished product, exclusive of water or salt. As proposed and
discussed in the supplementary information to the National List section
205.27 for non-organic agricultural products, all non-organically
produced agricultural products are proposed to be included on the
National List, and therefore would be permitted for use in an organic
product in accordance with section 2111(a)(4) of the OFPA (7 U.S.C.
6510(a)(4)).
We propose in paragraph (a)(2) of this section the order of
preference by which all ingredients used in an organic product would
have to be selected. We have determined that the provisions of
paragraph (a)(2) of this section are needed to ensure the integrity of
products sold, labeled, or represented as organic and to ensure that
organic products are handled in accordance with a system of organic
farming and handling, as defined in proposed section 205.2 of subpart
A. Accordingly, we propose in paragraph (a)(2)(i) that a handler would
have to select commercially available organically produced agricultural
products as ingredients in preference to non-organic agricultural
products and non-agricultural ingredients. For example, in a bread that
contains 97 percent organically produced flour and also sesame seeds, a
handler would have to use organically produced sesame seeds whenever
they were commercially available.
We propose in paragraph (a)(2)(ii) that a handler would have to
choose a commercially available non-organically produced agricultural
product as an ingredient in preference to a non-agricultural
ingredient. For example, a thickener such as corn starch or arrowroot,
if commercially available, would need to be selected as an ingredient
in a salad dressing in preference to a non-agricultural ingredient,
such as disodium phosphate. Paragraphs (i) and (ii) of this section
together would direct a handler toward the use of an organically
produced agricultural product whenever possible for a given function in
the product. The provisions of these two paragraphs are consistent with
the NOSB recommendation that organic ingredients be used in a multi-
ingredient product to the extent possible.
We propose in paragraph (a)(2)(iii) of this section that a non-
organically produced agricultural product or non-agricultural
ingredient that is extracted without the use of a synthetic volatile
solvent, or which does not contain propylene glycol as a carrier, if
commercially available, must be used as an ingredient in preference to
a non-organically produced agricultural product or non-agricultural
ingredient that is extracted with a synthetic volatile solvent or which
contains propylene glycol as a carrier.
Although the NOSB recommended that substances extracted with a
synthetic volatile solvent (such as hexane) or that contain propylene
glycol as a carrier be prohibited for use in organic products, we
believe our proposal to allow their use only when alternative
substances or products are not commercially available does not affect
the integrity of organically produced products.
Section 2106(c)(1) of the OFPA (7 U.S.C. 6505(c)(1)) authorizes
products that contain at least 50 percent (but less than 95 percent)
organically produced ingredients to use the word organic on the
principal display panel of the product to describe those ingredients
that are organically produced. Accordingly, the Secretary, in
consultation with the NOSB and the Secretary of Health and Human
Services, is proposing in subpart C of this part to allow the statement
made with certain organic ingredients to appear on the principal
display panel of this type of product.
We propose in paragraph (b) the composition requirements for a
product labeled as made with certain organic ingredients. These
proposed requirements are that the total weight of the finished product
that is not comprised of organic agricultural products, excluding water
and salt, shall consist of some combination of non-organically produced
agricultural products and non-agricultural ingredients included on the
National List. This is consistent with the proposed composition
requirement for non-organic ingredients in products labeled as organic
and is consistent with the composition requirements of section
2111(a)(4) of the OFPA (7 U.S.C. 6510(a)(4)).

[[Page 65883]]

Proposed paragraph (b)(3) of this section would require that
products sold, labeled, or represented as made with certain organic
ingredients have been produced in compliance with sections 205.16
through 205.19 of this proposal, with the exception of sections 205.16
(a) and (c) of this subpart. Section 205.16(a) applies to agricultural
products, including raw agricultural products, that are labeled as
organic. Section 205.16(c) applies to multi-ingredient agricultural
products that only represent the organic nature of such ingredients in
the ingredients statement and which themselves are not sold, labeled or
represented as organic or made with certain organic ingredients. The
provisions of proposed paragraph (b)(3) are necessary to assure
consumers that products in which the predominant portion of ingredients
are represented as organically produced have been produced and handled
in accordance with a consistent standard, as provided under section
2102(2) of the OFPA (7 U.S.C. 6501(2)).
We note that processed agricultural products sold, labeled, or
represented as made with certain organic ingredients are exempted by
section 2106(c)(1) of the OFPA (7 U.S.C. 6505(c)(1)) from complying
with the provisions of the Act, except as required by the Secretary in
consultation with the NOSB and the Secretary of HHS. Therefore,
handlers of this type of product can be exempted from complying with
certain provisions of this proposal, provided that the exemptions do
not affect the integrity of the organic ingredients in the product.
Accordingly, as proposed and discussed in the supplementary information
for section 205.201(b) of subpart D regarding an exemption for handlers
of this type of product from the requirement set forth in section
205.3(b)(2) of subpart B that a commercially available non-synthetic
substance be selected in preference to an allowed synthetic substance,
we note that a handling operation that produces products sold, labeled,
or represented as made with certain organic ingredients also would not
be subject to the provisions in section 205.16(a) and (c) with respect
to the handling of this type of product. For example, a manufacturer of
a product sold, labeled, or represented as made with certain organic
ingredients could use a non-organic agricultural ingredient instead of
a commercially available organic agricultural ingredient, as is
required in proposed section 205.16(a)(2) for the manufacturer of a
product to be sold, labeled or represented as organic. However, the
handling operation would be required to be certified and to demonstrate
in the organic plan compliance with the applicable handling
requirements in subpart B. We believe that these provisions will help
assure the integrity of the organic ingredients in this type of product
without imposing undue requirements on the handlers who produce them.
Paragraph (c) of this section is proposed in accordance with
section 2106(c)(2) of the OFPA (7 U.S.C. 6505(c)(2)) and would exempt a
multi-ingredient product that only represents the organic nature of
such ingredients in the ingredients statement, and which itself is not
sold, labeled or represented as organic or made with certain organic
ingredients, from complying with the requirements proposed in this
subpart. It is not critical for either the purposes of the Act or the
integrity of the organic ingredients if a finished product that cannot
be sold, labeled, or represented as organic or as made with certain
organic ingredients on its principal display panel is not subject to
the provisions of this subpart. We note, however, that although a
finished product that contains less than 50 percent organically
produced ingredients, or any other multi-ingredient product that
represents the organic nature of ingredients in the ingredients
statement and which is not labeled as organic or made with certain
organic ingredients, need not be handled by a certified organic
handling operation, the ingredients represented as organic in such a
product must have been produced and handled in accordance with all the
applicable provisions of the Act and the regulations of this part. In
addition, while handling operations which handle only this type of
product would not be required to become certified under the provisions
proposed in section 205.202 of subpart D, this proposal would still
require such operations to maintain records to show that any organic
ingredients listed on product labels were obtained from operations that
were certified in compliance with the Act and the regulations of this part.
Paragraph (d) of this section would prohibit the use of organic and
non-organic forms of the same agricultural ingredient if the ingredient
is listed as organic in the ingredients statement. We believe that such
a provision is needed in order to avoid any possibility of confusion
concerning the source and percentage of the organic ingredients in the
product.
Paragraph (e) of this section would prohibit, in accordance with
sections 2111(a)(3) and (7) of the OFPA (7 U.S.C. 6510(a)(3) and (7)),
the addition of sulfites, nitrates, or nitrites to an organic food
product, or the addition to the food of water that does not meet the
Safe Drinking Water Act requirements (42 U.S.C. 300f et seq.).

Processing Practices--Section 205.17

In paragraph (a) of this section we propose that biological
methods, such as fermentation, or mechanical methods, such as grinding,
pressing, heating or drying, be used to process an agricultural product
intended to be sold, labeled, or represented as organic or made with
certain organic ingredients for the purpose of retarding spoilage or
otherwise preparing an agricultural product for market. However, an
incidental additive, except for the prohibition on the use of volatile
synthetic solvents proposed in section 205.17(b)(3), may be used, if
necessary, to process an agricultural product intended to be sold,
labeled, or represented as organic or made with certain organic
ingredients. An incidental additive used in the processing of
agricultural products is defined in proposed section 205.2 as an
additive present in an agricultural product at an insignificant level
and that does not have any technical or functional effect in the
product, and is therefore not considered an active ingredient. As
discussed in the supplementary information for section 205.26 of
subpart B, incidental additives may be used in organic handling without
inclusion on the National List. Section 205.17(a) is consistent with
the principles stated in our proposed definition of a system of organic
farming and handling (section 205.2) and as further discussed in the
introduction to the supplementary information for subpart B.
The NOSB recommended that handlers document that a food could not
be processed without the use of a synthetic incidental additive and
that the handler demonstrate progress to replace the synthetic
incidental additive over time. The NOSB language is consistent with our
proposal to permit the use of such substances only if necessary. By
including several synthetic incidental additives in its National List
recommendations, the NOSB also recognized that a wide range of
currently available organic products could not be manufactured feasibly
without the use of incidental additives, such as defoaming agents,
adjuvants, clarifiers, filtering agents and equipment cleansers.
As noted, a producer could use an incidental additive if the use of
the additive is necessary. As previously

[[Page 65884]]

described in the supplementary information for sections 205.12, 205.13,
and 205.15 of subpart B regarding livestock production, determination
of necessity would be based on site-specific conditions that would be
described by a producer in an organic plan, or updates to an organic
plan, and reviewed by the certifying agent.
We are requesting public comment as to the conditions under which
incidental additives may be used. For example, we would like public
comment as to whether specific conditions, such as the inefficacy or
unavailability of mechanical or biological methods, should be a
prerequisite for using an incidental additive and, if so, what these
conditions should be. We also request comment as to whether handlers
who handle only products sold, labeled, or represented as made with
certain organic ingredients should be exempted from the restriction of
using incidental additives only if necessary.
Paragraph (b) of this section proposes several practices that would
be prohibited for the processing and preparation of any raw
agricultural product, and on a finished agricultural product, sold,
labeled, or represented as organic or as made with certain organic
ingredients.
Paragraphs (b)(1) and (b)(2) of this section are proposed in
accordance with sections 2111(a)(5) and (6) of the OFPA (7 U.S.C.
6510(a)(5) and (6)) and would prohibit the use of storage containers or
bins, including packages and packaging materials that contain synthetic
fungicides, preservatives or fumigants, and also would prohibit the use
or reuse of any bag or container that previously had been in contact
with any substance that could compromise the organic integrity of its
contents. Our proposed definition of packaging set forth in section
205.2 encompasses waxes used in contact with an edible surface of an
agricultural product.
Proposed paragraph (b)(3) of this section would prohibit the use of
a volatile synthetic solvent. Volatile synthetic solvents, such as
hexane or isopropyl alcohol, are used in processing and extraction.
This proposed prohibition is made under the authority of section
2107(a)(11) of the OFPA (7 U.S.C. 6506(a)(11)) which authorizes this
program to require such terms and conditions as are determined
necessary. The prohibition of the use of a volatile synthetic solvent
is in agreement with the NOSB recommendation that the use of a volatile
synthetic solvent is not essential, and therefore should not be
permitted in the handling of an organically produced product or a
product sold, labeled, or represented as organic or made with certain
organic ingredients.
As previously discussed in regard to the use of raw manure in
organic crop production (section 205.7 of subpart B), there has been an
increase in the incidence of food borne illness caused by certain
pathogens. The application of ionizing radiation as a sanitation or
preservation treatment currently is permitted by FDA for a wide range
of agricultural products. Additionally, a request to permit the use of
ionizing radiation on red meat products was recently approved by FDA.
The NOSB has recommended to the Secretary that the practice of ionizing
radiation should not be allowed in organic handling, and its use is
prohibited by most existing organic certification programs which we
have reviewed.
Public comment is invited with respect to the compatibility of the
use of ionizing radiation with a system of organic farming and
handling. The USDA also invites comments on whether there are effective
alternatives to ionizing radiation, such as sanitary practices, heat
pasteurization and incidental additives, that are compatible with a
system of organic farming and handling, and, if so, how they are
compatible. Additionally, we are soliciting comment as to whether the
use of ionizing radiation is considered an essential standard industry
practice, or good manufacturing practice, in the processing of any
agricultural product: for example, in the sanitary handling of herbs
and spices.

Prevention and Control of Facility Pests--Section 205.18

We are proposing provisions to safeguard the integrity of organic
products that are handled in facilities in which pest control
substances may be used. The NOSB recommendations and our review of most
existing organic programs indicate that this area needs to be
addressed. We have accordingly determined, as authorized by section
2107(a)(11) of the OFPA (7 U.S.C. 6506(a)(11)), which authorizes this
program to require such terms and conditions as are determined
necessary, that the proposed requirements for facility pest management
in an organic handling operation are necessary and appropriate for an
organic certification program.
As is true with crop production and livestock health care,
prevention of pest occurrences should be the first strategy used by an
organic handler. This is also consistent with the goal of maintaining
the integrity of organic products by avoiding the need to use pest
control substances in handling facilities, as reflected in our
definition of a system of organic farming and handling. We propose in
paragraph (a) of this section that the best practice for control and
prevention of facility pests would be a preventive management system.
This system would include measures to remove pest habitat and to
prevent pests from gaining entrance to the handling facility, as well
as managing environmental factors inside the facility such as
temperature, light, air circulation and humidity to discourage
proliferation of pest populations.
If prevention measures are not effective and pests do appear in
organic handling facilities, we propose in paragraph (b) of this
section for facility pest control to permit the use of pest control
techniques, which include: mechanical controls such as traps or
barriers; augmentation and introduction of predators and parasites for
the pest species; and non-toxic, non-synthetic substances such as lures
and repellants. Pest prevention and control is further discussed in the
supplementary information provided in section 205.9 for crop pests,
weeds and diseases.
However, if pest prevention or control measures provided in
paragraph (a) and (b) of this section are not effective, we propose in
paragraph (c) of this section to permit the use of any substance to
control pests, provided the substance is approved for its intended use
by the appropriate regulatory authority and the substance is applied in
a manner that prevents such substance from contacting any ingredient or
finished product intended to be sold, labeled, or represented as
organic or made with certain organic ingredients. We have proposed
paragraph (c) in recognition of the fact that handling facilities are
subject to federal, state, and local regulations concerning food
safety. The use of the practices in paragraph (c) of this section would
entail maintaining adequate safeguards to protect organic products and
ingredients from being contacted by any pest control substance.
As noted, proposed paragraph (c) would allow the use of any
substance to control pests, provided such substances were used only
when methods to prevent or control pests were not effective.
Additionally, any substance used must be applied in a manner that
prevents such substance from contacting any ingredient or finished
product intended to be sold, labeled, or represented as organic or made
with certain organic ingredients. Because eradication of a pest
infestation may necessitate the use of substances, we are proposing to
allow the use of any

[[Page 65885]]

substance approved for use by the appropriate Federal, State or local
regulatory agency to assure that organic handling operations have
sufficient practices available to deal effectively with severe pest
infestations. Structural pest control is unique in that substances used
for this purpose are not considered to be used in the production and
handling of organic crops, and are not applied to land used in the
production of organic crops.
Many existing certification programs restrict synthetic substances
used to control pests in certified handling facilities to substances
reviewed and allowed for use by the certification agency. We request
comment as to whether only those substances included on the National
List of active synthetic substances allowed for use in organic crop
production, as set forth in section 205.22, should be permitted to be
used to control pests in certified handling facilities. Additionally,
if the use of synthetic substances in structural pest control should
not be restricted solely to those synthetic substances included on the
National List of active synthetic substances, we request comment as to
whether handlers should be required to use synthetic substances
included on the National List of active synthetic substances (or a non-
synthetic biological or botanical substance) before the use of
synthetic substances not included on the National List.

Prevention of Commingling and Contact With Prohibited Substances--
Section 205.19

There are two primary threats to organic integrity: the possibility
of commingling organic products with similar products that were not
organically produced, and the possibility of the organic product coming
into contact with a prohibited substance. Since there is no apparent
physical difference between an organically produced product and a non-
organic product, commingling is a serious concern and an organic
handling operation must make every effort to provide adequate measures
to ensure that commingling does not occur, in addition to adopting
measures to protect organic products from contacting prohibited substances.
Sections 2107(b)(1)(C) and 2111(b) of the OFPA (7 U.S.C.
6506(b)(1)(C) and 6510(b)) specifically provide for the prevention of
commingling of organic and non-organic products, especially meat, in
any operation that handles both types of products, and the
implementation of practices that protect organic products from contact
with prohibited substances. Therefore, we propose in this section that
a certified handling operation, and a handling operation that is exempt
or excluded from certification in accordance with section 205.202(a)(3)
or section 205.202(b) of subpart D, shall be required to establish
appropriate safeguards during handling, storage and transportation to
both prevent the commingling of organic and non-organic products and to
assure that organic products are protected from contact with prohibited
substances.
These safeguards could take many forms depending on the nature of
the products and the certified handling operation, and should encompass
each step of the manufacturing or handling process, including storage
and transportation. A certified handling operation that receives
certification under our proposal might consist of disparate locations
and facilities, including some that handle both non-organic and organic
products. The public input we have received indicates that many
certified handling operations use subcontractors to perform certain
processing functions, such as dehydrating or freezing, rather than
performing the function within the facilities maintained by the
certified operation. Our primary concern in these instances is that
adequate safeguards are maintained by the certified operation and the
subcontractor to ensure that commingling and contact of organic
products with prohibited substances did not occur. A certified handling
operation that subcontracted with different facilities for cold
storage, for example, would have to make sure that its products were
clearly segregated from non-organic products and that an inspector
examined all such subcontracted facilities as a part of the site visit
to the certified operation. A certified handling operation also would
have to take appropriate measures to ensure that organic products or
ingredients were transported under conditions that protected their
integrity. We note that the best method to prevent commingling or
contact with prohibited substances would be to eliminate the
possibility of such occurrences, such as when a certified operation
handles only organic products and uses no prohibited pest control
substances.

Subpart B--National List

Purpose and Basis of the Proposed National List

The National standards for organic production, provided for in
section 2105 of the OFPA (7 U.S.C. 6504), include the requirement that
an organically produced agricultural product shall have been produced
without the use of synthetic chemicals, except as otherwise provided
for in the Act. The exemptions to which section 2105 refers are
specifically delineated in section 2118 of the OFPA (7 U.S.C. 6517),
which provides for the establishment of a National List of substances
that may be allowed for use in an organic farming or handling operation
that are otherwise prohibited for use under the Act. This section also
provides for the establishment of a National List of non-synthetic
substances, that are otherwise allowed under the Act, that may not be
used in organic farming or handling.
Section 2118(a) of the OFPA (7 U.S.C. 6517(a)) provides that the
Secretary shall establish the National List of approved and prohibited
substances, and section 2118(d)(1) of the OFPA (7 U.S.C. 6517(d)(1))
provides that the National List shall be based upon a proposed national
list developed by the NOSB. In accordance with section 2119 of the OFPA
(7 U.S.C. 6518), the NOSB conducted the prescribed review process, and
solicited public comment at meetings, before recommending an initial
proposed national list to the Secretary. The NOSB recommendations were
based on at least one technical advisory panel review of each substance
in question, as required in section 2119(k)(3) of the OFPA (7 U.S.C.
6518(k)(3)). The NOSB also reviewed available information from the
Environmental Protection Agency, the National Institute of
Environmental Health Studies, and other appropriate sources, as
required in section 2119(l)(1) of the OFPA (7 U.S.C. 6518(l)(1)), to
assist it in evaluating each substance under consideration in
accordance with the criteria delineated in section 2119(m) of the OFPA
(7 U.S.C. 6518(m)). The criteria that were considered for each
substance are: the potential of the substance for detrimental chemical
interactions with other materials used in organic farming systems; the
toxicity and mode of action of the substance and of its breakdown
products or any contaminants, and their persistence in the environment;
the probability of environmental contamination during manufacture, use,
misuse or disposal of the substance; its effects on human health; the
effects of the substance on biological and chemical interactions in the
agroecosystem; the alternatives to using the substance; and the
compatibility of the substance with a system of sustainable
agriculture. The NOSB recommendations, along with the results of the
required evaluation and technical advisory panel review for each

[[Page 65886]]

substance, were considered by the Secretary in accordance with the
requirements of section 2118(d) of the OFPA (7 U.S.C. 6517(d)).

Basis for Inclusion of Substances and Ingredients on the National List

Basis for Inclusion of Specific Synthetic Substances on the National
List of Synthetic Substances Allowed for Use in Organic Farming and
Handling

Section 2118(c)(1) of the OFPA (7 U.S.C. 6517(c)(1)) provides three
sets of criteria upon which determinations to allow the use of
substances that are otherwise prohibited by the Act must be based. The
first set of criteria, in section 2118(c)(1)(A) of the OFPA (7 U.S.C.
6517(c)(1)(A)), requires that the Secretary, in consultation with the
Secretary of the Department of Health and Human Services and the
Administrator of EPA, determine that: use of the substance would not be
harmful to human health or the environment; the substance is necessary
to the production or handling of an agricultural product because of the
unavailability of wholly natural substitute products; and the use of
the substance is consistent with organic farming and handling.
The second set of criteria in section 2118(c)(1)(B) of the OFPA (7
U.S.C. 6517(c)(1)(B)) describes the types of substances that may be
considered for use if they are included on the National List. The first
type of substance is one that is used in production and contains an
active synthetic ingredient that falls into one of the following
categories: copper and sulfur compounds; toxins derived from bacteria;
pheromones; soaps; horticultural oils; fish emulsions; treated seed;
vitamins and minerals; livestock parasiticides and medicines; and
production aids, including netting, tree wraps and seals, insect traps,
sticky barriers, row covers, and equipment cleansers. The Secretary has
accordingly reviewed each substance proposed in sections 205.22 and
205.24 for inclusion on the National List to determine that it is an
active synthetic ingredient or includes an active synthetic ingredient.
The second type is a substance that is used (in a formulation) in
production and (the formulation) contains synthetic inert ingredients
that the Administrator of the EPA has not classified as inerts of
toxicological concern; and the third type of substance is one that is
used in handling and is non-synthetic but is not organically produced.
The third criterion in section 2118(c)(1)(C) of the OFPA (7 U.S.C.
6517(c)(1)(C)) is that each specific exemption be developed according
to the procedure described in section 2118(d) of the OFPA (7 U.S.C.
6517(d)) for establishing and amending the National List. This
procedure includes basing the proposed National List on the
recommendations received from the NOSB, and publishing such proposed
National List in the Federal Register for public comment before
establishing the National List. The same procedure must be used in
developing any amendments to the National List.
After receiving the NOSB's recommendations, the Secretary
determined, in consultation with the Secretary of HHS and the
Administrator of the EPA that the use of each substance or ingredient
being considered for inclusion on the proposed National List of
synthetic substances allowed for use in organic farming would meet the
first set of criteria. We then examined the second set of criteria to
make determinations concerning substances being considered for
inclusion on the National List of allowed synthetic substances. For
each substance considered, it was first necessary to determine whether
the substance is synthetic according to the definition provided by the
Act. The Act defines a synthetic substance to be ``a substance that is
formulated or manufactured by a chemical process or by a process that
chemically changes a substance extracted from naturally occurring
plant, animal, or mineral sources, except that such term shall not
apply to substances created by naturally occurring biological processes.''
The language in section 2118(c)(1)(B)(i) of the OFPA (7 U.S.C.
6517)(c)(1)(B)(i)), which provides one set of criteria for placing a
substance on the National List, makes it clear that only synthetic
substances that contain active ingredients need to be on the National
List in order to be permitted for use in organic production. This
provision only encompasses active synthetic ingredients that are used
in production and that come within certain categories. We have
accordingly proposed a definition of an active ingredient or substance
(in any input other than pesticide formulations) to include any
substance that, when used in a system of organic farming or handling,
becomes a chemically functional part of that system, or is otherwise of
significant consequence to the production, handling and integrity of an
organically produced product. This definition excludes substances that
are present in insignificant amounts in the agroecosystem, such as
equipment cleansers; do not chemically interact with the system, such
as plastic mulches or row covers; or are otherwise inconsequential to
the performance of any function within the system.
It should be noted that a formulated product that contains a
substance that is an active synthetic ingredient and which also
contains a synthetic inert ingredient may only be used if the active
synthetic ingredient is included in one of the proposed allowed
synthetic categories. Section 2118(c)(1)(B)(ii) of the OFPA (7 U.S.C.
6517(c)(1)(B)(ii)) does not require that inert ingredients be included
as a separate category of the National List in order to be permitted
for use in organic production. Rather, the Act requires only that the
inert ingredients not be classified by the Administrator of the EPA as
inerts of toxicological concern in order for the substance to be
permitted for use. Our proposal for evaluating formulations that
contain synthetic inert ingredients is included and discussed in
proposed sections 205.20 through 205.21 and the corresponding
supplementary information.
The discussions held by the NOSB as they evaluated substances under
consideration, and their recommendations for their proposed National
List, served as the primary basis for our determinations as to whether
or not a particular substance is active and synthetic, and if so,
whether to include it as an allowed synthetic substance on the proposed
National List. A discussion of those substances that we have determined
to be synthetic, but not active, and which therefore are not required
to be included on the National List in order to be used in organic
farming and handling, is included in the supplementary information to
section 205.20 of this proposal, which sets forth all the categories of
substances and ingredients that can be used in organic production and
handling.

Basis for Including Specific Natural (Non-synthetic) Substances on the
National List of Non-synthetic Substances Prohibited for Use in Organic
Farming and Handling

In this proposal the word non-synthetic is used to address
substances that are described in the Act as either natural or non-
synthetic. No definition is provided in the OFPA for the word natural.
There is also a great deal of ambiguity currently surrounding the use
and meaning of the term in regard to production inputs, nutritional
supplements, cosmetics and other products. The use of the term non-
synthetic in section 2118 of the OFPA (7 U.S.C. 6517) provides us with
the basis for using this term in our proposed rule to describe
substances that are not

[[Page 65887]]

synthetic. By using this one term to describe substances that are not
determined to be synthetic, we hope to avoid the uncertainty that
surrounds the current use of the term natural in the marketplace.
Therefore, in agreement with the recommendations provided by the NOSB,
we will use the word non-synthetic in this and all other provisions of
this proposal to address substances that are described in the Act
either as natural or non-synthetic substances.
Natural (non-synthetic) substances are generally allowed under the
Act for use in organic farming and handling and thus do not have to be
included on the National List in order to be used. However, the Act
does provide for specific natural (non-synthetic) substances to be
prohibited for use in organic farming and handling if certain criteria
are met. The Act also provides that the specified natural (non-
synthetic) substances which are prohibited for use in organic farming
and handling are to be put on the National List of prohibited substances.
Section 2118(c)(2) of the OFPA (7 U.S.C. 6517(c)(2)) delineates the
criteria upon which the decision to prohibit the use of a specific
natural substance is to be based. These criteria require that the
Secretary determine, in consultation with the Secretary of HHS and the
Administrator of the EPA, that the use of the substance would be
harmful to human health or the environment, and that its use would be
inconsistent with organic farming or handling and the purposes of the Act.

Basis for Inclusion of Non-agricultural Substances and Non-organically
Produced Agricultural Products on the National List as Substances
Permitted for Use as Ingredients In or On Processed Organic Products.

One criterion provided by section 2118(c)(1)(A)(ii) of the OFPA (7
U.S.C. 6517(c)(1)(A)(ii)) for inclusion of a substance on the National
List of synthetic substances permitted to be used is that it must be
necessary to the production or handling of the agricultural product
because of the unavailability of wholly natural substitute products.
Thus, synthetic substances used in handling an organic product may be
considered for inclusion on the National List of substances permitted
to be used. Such substances, however, must be evaluated according to
the same criteria as synthetic substances permitted to be used in crop
or livestock production, in accordance with section 2118(c)(1)(A) of
the OFPA (7 U.S.C. 6517(c)(1)(A)). Section 2118(c)(1)(B)(iii) of the
OFPA (7 U.S.C. 6517(c)(1)(B)(iii)) permits the consideration of the
inclusion of non-synthetic non-organically produced substances on the
National List for use in handling organic processed products if they
meet the same criteria set forth for synthetic substances in section
2118(c)(1)(A) of the OFPA (7 U.S.C. 6517(c)(1)(A)). Because a substance
that is not an agricultural product is considered to be non-organically
produced, this OFPA provision requires that the NOSB and the Secretary
evaluate non-synthetic non-agricultural substances according to the
same criteria and procedure as an active synthetic substance used in
crop or livestock production or handling. For these reasons, we are
proposing in section 205.26 a National List category of non-
agricultural substances allowed as ingredients in or on organic
processed products, that consists of both synthetic and non-synthetic
substances. A separate category of non-organically produced
agricultural products allowed as ingredients in organic processed
products is proposed in section 205.27, also in accordance with section
2118(c)(1)(B)(iii) of the OFPA (7 U.S.C. 6517(c)(1)(B)(iii)).

Summary of the National List and Petition Process for Adding New
Substances

Sections 205.20 and 205.21 of subpart B provide a summary of all
the categories of substances, ingredients and formulated products that
are either allowed or prohibited for use in organic farming and
handling. These sections are proposed in order to make clear the status
of any substance that may be considered for use in a certified
operation. The following are the categories of substances that we
propose comprise the National List: active synthetic substances allowed
for use in organic crop production (section 205.22); non-synthetic
substances prohibited for use in organic crop production (section
205.23); active synthetic substances allowed for use in organic
livestock production (section 205.24); non-synthetic substances
prohibited for use in organic livestock production (section 205.25);
non-agricultural substances allowed as ingredients in or on processed
products labeled as organic or as made with certain organic ingredients
(section 205.26); and non-organically produced agricultural products
allowed as ingredients in or on processed products labeled as organic
or as made with certain organic ingredients (section 205.27).
The six categories of substances we propose for the National List
delineate the substances that can and cannot be used in organic crop
production, in organic livestock production, and in processed products
labeled as organic or made with certain organic ingredients.
Accordingly, only a substance that appears in more than one category,
such as synthetic mineral nutrients that are proposed for use in both
crop production and as livestock feed supplements, may be used for more
than one purpose.
Proposed section 205.28 delineates the process by which a person
may petition the NOSB to add new substances to the National List in any
of the six aforementioned categories, which entails the submission of
specified information to USDA.

Relationship of the National List to the Organic Production and
Handling Requirements

Section 2118(a) of the OFPA (7 U.S.C. 6517(a)) requires the
Secretary to establish a National List to be included in the standards
for organic production and handling established under the Act. We have
accordingly developed the proposed production and handling requirements
(sections 205.3 through 205.19) and the National List (sections 205.22
through 205.28) as a unified whole. The practices delineated within the
proposed requirements for organic production and handling include
appropriate restrictions and conditions on the use of substances, while
the National List delineates what substances may or may not be used.
These standards also are intended to be consistent with our proposed
definition of a system of organic farming and handling, which, as
discussed previously, was created in order to provide a concise summary
of the underlying principles implicit in the Act. Under this proposal,
any substance that is permitted to be used in organic farming or
handling must be used in compliance with the regulations delineated in
sections 205.5 through 205.19 of subpart B and must also meet the
requirements proposed in section 205.3(b)(1) that its use not result in
any measurable degradation of soil or water quality. We believe that
the provisions proposed here for the appropriate use and application of
substances is consistent with the provisions of the Act that address
the National List and with the definition of a system of organic
farming and handling.

General Rules for Categories of Substances and Ingredients Permitted
for Use in Organic Farming and Handling--Section 205.20

Section 205.20 has been proposed to make it clear that a substance or

[[Page 65888]]

ingredient on the National List of substances permitted to be used in
organic farming and handling may have its use restricted under other
proposed regulatory provisions.
In section 205.20(a) we propose that all active synthetic
substances or non-organically produced ingredients that are included on
the National List in sections 205.22, 205.24, 205.26, or 205.27, and
therefore permitted to be used in organic farming and handling, would
have to be used in compliance with the Act and all the regulations we
are proposing. In paragraph (b) of this section we propose that any
other substance that may be used in a system of organic farming and
handling also would have to be used in compliance with the Act and the
regulations. Thus, any substance or ingredient that is permitted for
use only could be used if its use complied with any applicable
restrictions on its use that are provided for in other sections of the
proposed regulations. For example, section 205.7(c)(2)(i) permits the
use of synthetic micronutrients to produce organic crops provided that
the micronutrients are not applied in a manner intended to be
herbicidal, and section 205.16(a) permits the use of non-organically
produced ingredients in a product labeled as organic provided that the
ingredients comprise less than 5 percent of the total weight of the
product, excluding water and salt. Of course, all substances used in
organic farming or handling also must be used in accordance with any
other applicable Federal, State, or local regulations.
In section 205.20(b) we propose three categories of substances that
are not required to be included on the National List in order to be
permitted for use in the production or handling of organic products. A
substance that does not appear on the National List would have to be
included in one of these categories in order to be used in organic
farming or handling, as applicable.
The first category of substances permitted for use in organic
farming or handling, as proposed in paragraph (b) of this section,
comprises non-synthetic substances that are not included on the
National List in section 205.23 or section 205.25 as a non-synthetic
substance prohibited for use. Section 2118(c)(2) of the OFPA (7 U.S.C.
6517(c)(2)) provides for a non-synthetic substance to be prohibited in
organic farming and handling only when it is included as a prohibited
substance on the National List. Also, section 2113 of the OFPA (7
U.S.C. 6512) states that a production or handling practice is permitted
under the Act unless it is prohibited or otherwise restricted, or is
determined to be inconsistent with the certification program
established under the Act.
The following list contains various substances that we have
reviewed in consultation with the NOSB and determined to be both non-
synthetic and as not meeting the Act's criteria that would prohibit
their use. Therefore, these substances are permitted for use in organic
crop production. This list is not intended to be inclusive of all non-
synthetic substances allowed for use. It is, however, based on lists of
substances historically permitted for use in organic production by
existing certification programs and is included here as a reference guide.

A List of Natural (Non-Synthetic) Substances Reviewed for Use in
Organic Crop Production (Non-Inclusive, for Reference Only)

Animal substances or byproducts:
Blood meal
Bone meal and bones
Feather meal
Fish emulsions
Fish hydrolysate
Fish products (fish meal, fish bones, and fish powder)
Fish solubles
Guano, bat or bird
Hoof and horn meal
Insect extracts
Manures, animal
Manure tea
Oyster shells and other sea shells
Oyster shell lime
Sea animal wastes
Tankage
Whey, dairy
Worm castings
Beneficial organisms
Algae
Bacteria [including Bacillus thuringiensis (Bt)]
Fungi
Higher animals
Higher plants
Insects
Microbial soil, compost, plant and seed inoculants
Mites
Nematodes
Protozoa
Viruses
Fermented or bio-processed substances and composts (see animal,
plant and mineral categories for compost feed stocks):
Alcohol-from natural sources only (Ethyl)
Biodynamic preparations
Compost
Compost tea
Gibberellic acid
Leaf mold
Mushroom compost
Vinegar
Mined minerals and other mined substances:
Basalt
Borate and boron products
Calcium sulfate (gypsum)
Chilean nitrate (sodium nitrate, nitrate of soda)
Clays
Colloidal phosphate
Cryolite (sodium fluoaluminate)
Diatomaceous earth
Dolomite
Feldspar
Granite dust
Greensand
Humates, mined sources
Humic acid derivatives
Kieserite
Lignite
Limestone
Marl
Muriate of potash
Niter (potassium nitrate)
Peat moss
Perlite
Phosphate rock, raw
Potassium sulfate
Pumice
Rock dust
Sand
Sulfur
Sulphate of potash magnesia (langbeinite)
Sodium bicarbonate
Vermiculite
Plant substances or byproducts:
Alfalfa pellets, or meal
Aquatic plant extracts
Citrus products
Citrus oil
Cocoa bean hulls
Cotton gin trash
Cottonseed meal
Food processing wastes
Garlic
Grape and other pomaces
Herbal preparations
Hay
Kelp or seaweed, unprocessed, meal, extracts or other
derivatives
Leaves
Molasses
Neem and Neem extracts
Peanut meal
Peanut hulls
Plant extracts
Propolis
Pyrethrums
Rice hulls and other residues
Rotenone
Ryania
Sabadilla
Saw dust, bark, wood chips and other wood wastes
Soybean meal
Straw
Tobacco, and tobacco by-products
Wood ash
Vegetable waste, cannery waste

We consider a non-synthetic substance that is an industrial by-
product to be synthetic only if the substance becomes chemically
altered as a result of a manufacturing process. This is consistent with
section 2103(21) of the OFPA (7 U.S.C. 6502(21)) which defines a
synthetic substance as one that is formulated or manufactured by a
chemical process or by a process that chemically changes the substance.
Examples of industrial by-products that are synthetic substances are:
paper

[[Page 65889]]

manufacturing wastes, kiln dust, and leather meal. Whey solids and
sawdust are examples of industrial by-products that are not chemically
altered and are therefore non-synthetic.
We do not consider non-synthetic substances that have been treated
with a s ynthetic substance, but which have not been chemically altered
by a manufacturing process, to be synthetic under the definition given
in the Act. This is because the residues of synthetic substances that
may be present in these materials do not chemically combine with or
change the chemical composition of the original substance.
Additionally, the presence of these residues has no significant effect
on biological and chemical interactions in the agroecosystem, including
physiological effects on soil organisms, crops and livestock, nor would
the residues cause measurable degradation to soil or water quality. The
synthetic residues therefore are not considered to be active synthetic
ingredients or substances under the definition we have proposed.
Examples of non-synthetic substances that may have been treated with a
synthetic substance, but not chemically altered, include municipal yard
wastes and processing wastes from non-organically produced crops, such
as cotton gin trash or cocoa hulls.
We also do not consider certain categories of substances that are
delineated in section 2118(c)(1)(B)(i) of the OFPA (7 U.S.C.
6517(c)(1)(B)(i)), which provides one set of criteria for substances
which may be included on the National List of synthetic substances
allowed for use in organic farming and handling, as synthetic
substances according to the definition of synthetic given in the Act.
We are therefore proposing to allow the use of the following substances
in organic production and handling without being included in the
National List of active synthetic substances allowed for use in organic
farming.
Toxins derived from bacteria are not synthetic and the use of non-
synthetic toxins as pest control substances in organic crop production
would be regulated under section 205.9(e)(1). We note, however, that
toxins derived from genetically engineered microorganisms are included
in this document as a separate listing on the proposed National List of
active synthetic substances allowed for use in crop production, as set
forth in section 205.22(d) of subpart B. We have included toxins
derived from genetically engineered bacteria on the proposed National
List primarily so that we can receive comment on the proper
classification of these substances, and on whether they should be
allowed, prohibited, or approved on a case-by-case basis.
Fish emulsions are non-synthetic, although they may contain
synthetic preservatives or stabilizers. These preservatives or
stabilizers would be considered as inert ingredients, as defined in
section 205.2, because they are not active ingredients in the
formulated product. Also, these preservatives or stabilizers do not
chemically alter the non-synthetic fish emulsion; therefore, their
presence in a formulated product would not make the fish emulsion
synthetic under the definition in the Act. However, if the level of a
synthetic stabilizer in the fish emulsion is higher than necessary to
stabilize the product, the stabilizer would then be considered as a
synthetic fertilizer and thus prohibited under section 2109(b)(1) of
the OFPA (7 U.S.C. 6508(b)(1)).
Treated seed, i.e., seed treated with pesticides, itself is not a
synthetic substance because seed is an agricultural product and the
treatment does not chemically alter or combine with the seed. When a
treated seed is used as permitted in proposed section 205.8(a), the
seed treatment does not function as an active ingredient for its
intended use, nor do we consider it as causing measurable degradation
of soil or water quality; therefore, the seed treatment is incidental
or inconsequential when treated seed is used in organic production.
The second category, proposed in paragraph (b)(2) of this section,
includes those substances or devices that are not active synthetic
ingredients or substances, as defined in section 205.2, in a system of
organic farming and handling. This category encompasses certain
production aids used in crop and livestock production, such as plastics
or other synthetic materials used as mechanical devices, treatments
used for structures, and substances that otherwise do not enter into
chemical interactions in the agroecosystem under normal conditions of
use. It also includes certain production aids and other substances used
in handling that are considered to be incidental additives, as is
consistent with FDA and FSIS regulations governing ingredients that
must be included on product labels.
The following list of substances or categories of substances have
been determined by us to fall into this category because they are aids,
devices, or incidental additives that do not contain active synthetic
ingredients and do not meet the proposed definition of active
ingredient or substance, and are therefore permitted for use in organic
production or handling without inclusion on the National List. Included
in this listing are some categories of substances delineated in section
2118(c)(1)(B)(i) of the OFPA (7 U.S.C. 6517(c)(1)(B)(i)), which
establishes one set of criteria for substances that may be included on
the National List, as well as additional substances that were
considered by the NOSB for inclusion on the National List. This
discussion is not intended to be an all-inclusive listing of non-active
substances that may be used in organic production or handling.
Production aids such as netting; tree wraps and seals; sticky
barriers; row covers; equipment cleaners; flocculants; pelletizers;
adjuvants; and surfactants and other substances added to water to
change its physical properties do not contain or function as active
ingredients under our proposed definition of active ingredient because
proper use of these substances has no consequential effects on
biological and chemical interactions in the agroecosystem and does not
cause measurable degradation of soil or water quality. Agricultural
plastics, whether used as insect barriers, mulch, irrigation pipe,
season extenders, or similar purposes, cannot be said to enter into
chemical interactions in the agroecosystem. Substances used to adjust
the texture of dry materials (e.g., flocculants or pelletizers) or to
change the physical qualities of water (e.g., adjuvants or surfactants)
are considered to be inconsequential additives rather than active
ingredients in fertilizer, pest control, tank mixes, or other types of
product formulations.
Synthetic substances used in insect or rodent traps are not active
synthetic ingredients because they are not integrated into an organic
production or handling system and do not interact chemically with any
element of the agroecosystem. They are, additionally, prohibited from
directly contacting an organic product or crop and therefore would not
affect the integrity of an organic product.
We do not consider wood that is treated with synthetic
preservatives and used in buildings, trellises and fences to have a
significant potential to cause degradation of soil or water quality
because the wood preservatives do not chemically interact with, or
affect the integrity of, any aspect of the agroecosystem when used for
structures, even structures that are used in contact with the soil.
However, in certain situations, treatments used to preserve wood have
been shown to have effects on biological and chemical interactions in
the agroecosystem that would cause the treated wood to be considered an

[[Page 65890]]

active substance under our proposed definition. These situations are
conditions that bring the wood into prolonged contact with soil that
has a very high organic content, as is commonly found in compost bins
and containers used for greenhouse potting mixes. We therefore would
consider treated wood to be an active synthetic substance in any such
situation, and thus prohibited for use in conditions of prolonged
contact with soil that has a very high organic content. Further, as
discussed in the supplementary information for section 205.21, if
treated wood were to be used as a bin or container for an organic
product, its use would be prohibited under section 2111(a)(5) of the
OFPA (7 U.S.C. 6510(a)(5)), which prohibits the use for the handling of
organic products of any storage containers or bins that contain
synthetic fungicides, preservatives or fumigants.
An incidental additive used in the processing of agricultural
products, which we define as an additive present in an agricultural
product at an insignificant level and that does not have any technical
or functional effect in the product, does not therefore meet our
definition of an active ingredient. As discussed in the supplementary
information for section 205.26, incidental additives may be used in
organic handling without inclusion on the National List, but their use
is regulated in section 205.17(a).
In section 205.20(b)(3), we propose that formulated products
containing inert ingredients may be used in a certified organic farming
operation if the formulated product does not contain an active
synthetic ingredient that is prohibited for use in organic farming, and
any synthetic inert ingredient contained in the formulation is not
classified by EPA as an inert of toxicological concern. In order for a
formulated product to be used in organic crop production, each active
ingredient it contains must be a substance that is permitted under the
Act and subpart B of part 205.
Additionally, the Act in section 2118(c)(1)(B)(ii) of the OFPA (7
U.S.C. 6517(c)(1)(B)(ii)) specifically prohibits products containing
substances classified by EPA as inerts of toxicological concern. We
have determined that this prohibition applies only to EPA List 1 inerts
(Inerts of Toxicological Concern), as explained in the supplementary
information for section 205.21(d). Accordingly, formulations containing
synthetic inert substances included on EPA List 2, Potentially Toxic
Inerts; EPA List 3, Inerts of Unknown Toxicity; and EPA List 4, Inerts
of Minimal Concern would be permitted in organic production under our
proposal.

General Rules for Categories of Substances and Ingredients Prohibited
for Use in Organic Farming and Handling--Section 205.21

Section 205.21 delineates five general categories of substances
that would be prohibited for any use in organic production or handling.
The first of these, proposed in paragraph (a) of this section, would be
an active synthetic substance that is not included as an active
synthetic substance permitted for use in either organic crop or
livestock production in sections 205.22 or 205.24 of the National List.
This category is proposed, as stated previously, in accordance with
sections 2105(1) and 2118(c)(1)(B)(i) of the OFPA (7 U.S.C. 6504(1) and
6517(c)(1)(B)(i)) which prohibit the use of any active synthetic
substance in organic production unless it is on the National List. Our
proposed category specifically includes any synthetic carbon based
substance that has a cytotoxic mode of action, as defined in section
205.2. These synthetic carbon based substances are discussed in the
supplementary information for section 205.9(f). They are not one of the
categories of substances that is identified in section 2118(c)(1)(B)(i)
of the OFPA (7 U.S.C. 6517(c)(1)(B)(i)) as a possible category of
synthetic substances that may be put on the National List, thus
allowing their use. It should be noted that any active synthetic
substance that does not belong to any of the categories of substances
identified in this section of the Act could not be included on the
National List and thus could not be permitted for use in organic
farming or handling.
Paragraph (b) of this section would prohibit the use of a non-
agricultural substance used as an ingredient in or on a processed
product that is labeled as organic or as made with certain organic
ingredients if the substance is not included in section 205.26 as an
allowed non-agricultural substance. This category, as previously
discussed, is proposed in accordance with section 2118(c)(1)(B)(iii) of
the OFPA (7 U.S.C. 6517(c)(1)(B)(iii)), which permits the use of a non-
organically produced ingredient in handling an organic product only if
the substance is included on the National List.
The third category, proposed in paragraph (c) of this section,
would include any prohibited non-synthetic substance included in either
sections 205.23 or 205.25. The absence of any prohibited non-synthetic
substances in this proposal is discussed in the supplementary
information for proposed section 205.23.
The fourth category of substances prohibited under this proposal,
in section 205.21(d), is in accordance with section 2118(c)(1)(B)(ii)
of the OFPA (7 U.S.C. 6517(c)(1)(B)(ii)), which prohibits the use of
formulated products that contain any synthetic inert ingredient that is
classified by the Administrator of the EPA as an inert of toxicological
concern. Inert ingredients of toxicological concern are those inert
ingredients included on the EPA List 1 Inerts of Toxicological Concern
(54 FR 48314, November 22, 1989). Our proposed provision would prohibit
the use of any formulation containing an inert ingredient included on
the EPA List 1, even if that product contained an active ingredient
that was otherwise allowed in this subpart. Formulated pesticidal
products that contain EPA List 1 inerts can be identified by organic
producers and handlers because the EPA requires the phrase ``This
product contains the toxic inert ingredient . . .'' to appear on the
label of such products.
Paragraph (e) of this section would prohibit the use of any
fertilizer or commercially blended fertilizer that contains an active
synthetic ingredient not allowed for use in crop production as provided
for in section 205.22, or that contains an active prohibited substance.
This prohibition is consistent with section 2109(b)(1) of the OFPA (7
U.S.C. 6508(b)(1)) and would apply in this proposal only to substances
or products which meet the definition of fertilizer which we propose in
section 205.2. Under our proposal, the provisions of paragraph (e) of
this section would not apply to substances used as micronutrients,
foliar nutrients, soil cation balancing agents, soil conditioners, or
substances with similar functions which do not meet our proposed
definition of fertilizer as a single or blended substance applied to
the soil to supply any of the three primary plant nutrients, nitrogen
(N), phosphorus (P) and potassium (K), needed for the growth of plants.
Micronutrients and these substances with similar functions are
permitted for use in organic crop production in most of the existing
organic programs we have reviewed, and to include them within the
category of synthetic fertilizers, which are prohibited under the Act,
would unnecessarily restrict the options available to organic farmers
for providing essential plant nutrients and maintaining soil fertility.

[[Page 65891]]

The National List of Active Synthetic Substances Allowed for Use in
Organic Crop Production--Section 205.22

This section of the proposed regulation lists the active synthetic
substances that have been reviewed for use in organic crop production
and which the Secretary proposes be allowed for such use because each
meets the criteria in the Act that permits their use. These substances
have been reviewed by the NOSB as required by the Act, and have been
determined by the Secretary to contain or function as an active
ingredient in one of the categories the Act permits for inclusion on
the National List as a substance permitted for use.
Any synthetic substance included on the National List appears only
according to its generic or most commonly used name. In some cases, we
have indicated other commonly-known terms for certain substances, such
as horticultural oils. A farmer or handler is expected to request
clarification from the applicable certifying agent in the case of
uncertainty about the generic name of a particular brand-name
substance, or about the use of any substance for which there might be
any other questions.
Section 205.22, the list of active synthetic substances allowed for
use in organic crop production, is organized into groups according to
the functions for which the substances may be used. These groups are:
horticultural oils used as insect pest smothering or suffocating
agents; soaps used as insecticides, algicides, de-mossers, large animal
repellants, and herbicides; production aids; toxins derived from
genetically engineered bacteria (that are not released live into the
agroecosystem) for use as pesticides; copper and sulfur compounds used
as pesticides; minerals used as micronutrients; and minerals used as
defoliants in fiber production.
Most of the substances included in this section of the National
List are proposed in accordance with the recommendations provided by
the NOSB. There are, however, a few cases in which we have determined
it necessary to amend the NOSB recommendations concerning a particular
substance in consideration of the Act, public input, and other
information, including evaluations by the technical advisory panels.
The following are substances for which the NOSB recommendations differ
from our proposed list in section 205.22.
The NOSB recommended restricting the use of herbicidal soaps
(proposed in section 205.22(b)) to non-field applications. We
determined, however, that the uses of herbicidal soaps allowed by EPA
would not be harmful to human health or the environment and are
consistent with the other criteria provided by the Act, and thus do not
need to be restricted to non-field applications. The available evidence
suggests that these soaps are not persistent in the agroecosystem and
would not cause measurable degradation of soil or water quality or have
discernable effects on biological and chemical interactions in the
agroecosystem.
The NOSB recommended allowing certain specific antibiotics as
pesticides in crop production, but did not recommend to allow others
for this use, particularly Avermectin. Based on a review of the
technical information for these substances, we determined that all the
antibiotics labeled for use as pesticides by EPA are of equally minimal
consequence in their effects on biological and chemical interactions in
the agroecosystem and would not cause measurable degradation of soil or
water quality when properly used according to label instruction and use
restrictions, and there are no other criteria specified in the Act that
any specific substance in this category fails to meet.
The synergist piperonyl butoxide (PBO) (proposed in section
205.22(c)(9)) was not recommended by the NOSB for inclusion on the
National List; the vote to approve PBO failed by only one vote to
achieve the two-thirds majority required for approval. PBO is extracted
from a non-synthetic substance, but is modified synthetically in the
process of extraction and refining; it does not appear to persist in
the environment or otherwise have significant effects on biological and
chemical interactions in the agroecosystem or cause measurable
degradation of soil or water quality, and is consistent with the other
criteria specified in the Act. It also functions in a manner that
significantly reduces the amounts required of some botanical pesticides
that may be applied. In consideration of the benefits of reducing the
amount of botanical pesticides used in an organic farming operation,
which the scientific evidence clearly indicates is more likely to
effect biological and chemical interactions in the agroecosystem than
the PBO, we have determined that PBO should appear as an allowed
synthetic substance on the proposed National List.
The NOSB did not recommend to include on the proposed National List
killed microbial pesticides (toxins derived from genetically engineered
bacteria that are not released live into the agroecosystem), such as
the Bacillus thuringiensis toxin (proposed in section 205.22(d)).
However, several technical experts to the NOSB reviewed these
substances positively, and did not raise concerns about their effects
on biological and chemical interactions in the agroecosystem when these
substances are properly used. We have included toxins derived from
genetically engineered bacteria that are not released live into the
agroecosystem on the proposed National List.
Our research indicates that the genetically engineered bacteria
from which the toxins proposed for inclusion on the National List in
section 205.22(d) are derived are not released live into the
agroecosystem and therefore do not have the potential to reproduce. Our
research, however, indicates that the toxins themselves if overused may
have the potential to induce accelerated resistance of pest
populations. In this regard, we would like to receive public comment
and technical and scientific data as to the effects of the use of
toxins derived from genetically engineered bacteria that are not
released live into the agroecosystem on the biological and chemical
interactions in the agroecosystem.
The NOSB recommended that minerals used as defoliants in organic
fiber production (proposed in section 205.22(g)) should be restricted
according to their use and source because of their potential to cause
measurable degradation of soil and water quality. However, technical
information we reviewed about the use of these substances indicates
that they are unlikely to result in measurable degradation of soil and
water quality in the amounts applied for the defoliation of fiber
crops. We have, therefore, listed calcium chloride, magnesium chloride,
sodium chlorate, and sodium chloride as allowed synthetic substances
used to defoliate fiber crops. In accordance with proposed section
205.3(b)(2), a non-synthetic substance, such as sodium chloride
extracted from brine, would have to be chosen in preference to any
synthetic defoliant, whenever possible. However, we determined that all
four substances reviewed should appear on the National List because
they are relatively indistinguishable with respect to their potential
for measurable degradation of soil and water quality. In addition, all
these minerals are available in both synthetic and non-synthetic forms
that are not readily distinguishable, and thus would have to appear on
the National List in order to be permitted for use.
The NOSB has reviewed amino acids (proposed in section
205.22(b)(5)) but has not yet made a recommendation as to whether to
include them on the

[[Page 65892]]

National List as allowed synthetic crop production substances. However,
the NOSB did vote to allow the use of certain vitamins, which are
similar to amino acids in their use as a crop production aid and their
effects on soil and water quality. We did not find any scientific
evidence that amino acids, which are synthetically derived but
chemically identical to substances that are normally found in soil
organic matter, pose any concern for measurable degradation of soil and
water quality and they meet all the other criteria established in the
Act. We therefore have included amino acids on the proposed National
List for use as an organic crop production aid.
The NOSB recommended the following substances for inclusion on the
National List of allowed synthetic substances, but we have not included
them on the proposed National List because we determined that they were
non-synthetic. Therefore, they may be used in organic farming without
being included on the National List.
Fish products, aquatic plant extracts, and humic acid and its
derivatives are not included because, as discussed previously, we
determined that they are non-synthetic. Although the NOSB also had
concerns about synthetic extractants used to produce these non-
synthetic substances, we determined that the extraction methods for
substances used in crop production are inconsequential in their effects
on biological and chemical interactions in the agroecosystem or to
measurable degradation of soil and water quality. Additionally, the
addition of small amounts of synthetic stabilizers or preservatives to
these products is of minimal concern and, as discussed in the
supplementary information for section 205.20 of this proposal, the
inclusion in a formulated product of synthetic inert ingredients that
are not of toxicological concern does not cause the product to be
prohibited for use in organic production. However, we are aware that
synthetic stabilizers sometimes may be added to such products at levels
higher than necessary to stabilize the formulation in order to increase
its fertilizer value. In such cases, the stabilizers would be
considered to be synthetic fertilizers, which are prohibited for use in
organic production by section 2109(b)(1) of the OFPA (7 U.S.C.
6508(b)(1)) and proposed section 205.7(d)(1). A certified producer or
handler is expected to request clarification from the certifying agent
in the case of uncertainty about whether a specific product would be
prohibited according to this definition.
Elemental sulfur also was recommended by the NOSB for inclusion in
proposed section 205.21. However, we consider elemental sulfur to be
non-synthetic regardless of its source.
Potassium nitrate (niter) was reviewed by the NOSB as a synthetic
substance and was not recommended for inclusion as an allowed synthetic
substance for organic crop production. However, we reviewed information
that potassium nitrate also exists as a natural mineral deposit that
may be mined for agricultural use. Although we agree with the NOSB and
do not consider synthetic potassium nitrate to meet the criteria for
inclusion as a synthetic substance on the National List, niter in the
form of a non-synthetic mined product would be allowed for use in
organic production under the Act and the proposed regulations in
subpart B of this part.
The following substances were recommended by the NOSB for inclusion
as allowed synthetic substances for organic crop production. We have
not included them on the National List because we consider them not to
be active substances or ingredients in the applications for which they
are used and therefore, as previously discussed, are substances that
may be used in a certified organic operation without inclusion on the
National List:
Plastic mulches and row covers do not interact chemically with the
agroecosystem and are specifically permitted under section 2109(c)(2)
of the OFPA (7 U.S.C. 6508(c)(2)) if they are removed at the end of
each harvest season.
Disinfectants, such as alcohols, hydrogen peroxide and chlorine
bleach that are used to clean equipment; sticky traps and barriers; and
ammonium carbonate used as bait in traps are not used directly on soil
or crops and thus are not active because they have no significant
consequence to the organic production system.
Lignin sulfonate, which is used as a dust suppressant or as a
chelating agent, is not active in either use because, in the former
instance it is not applied to soil used for crop production and, in the
latter instance, it is not an active ingredient in a formulated
(micronutrient) product.
Detergents and other emulsifiers used as surfactants or adjuvants
often are added in very small quantities directly to tank mixes used
for spraying and are considered to be non-active, just as inert
ingredients within a formulated product are. Similar considerations
apply to sodium silicate and other substances used to affect the
surface tension of water, as is sometimes done to improve the buoyancy
of tree fruit during packing.
The NOSB also recommended that lumber treated with arsenates not be
included on the National List as an allowed synthetic substance.
However, as previously discussed, we determined that a substance used
to treat lumber that is used for such purposes as buildings, fences and
trellises cannot be considered to be an active ingredient under our
definition of an active ingredient. However, evidence we have reviewed
indicates that arsenates and other synthetic lumber preservatives may
become active when in contact with soil having a very high organic
content, such as soil used in greenhouse beds or compost bins. Because
arsenates and other synthetic substances used to preserve lumber are
not proposed by us to be included on the National List as active
synthetic substance, and because section 2109(c)(1) of the OFPA (7
U.S.C. 6508(c)(1)) specifically prohibits the use of arsenic or lead
salts in organic crop production, the use of arsenates and other
synthetic lumber preservatives in any manner that might be considered
an active use would be prohibited under the Act and this proposal.
Furthermore, section 2111(a)(5) of the OFPA (7 U.S.C. 6510(a)(5))
prohibits the use of storage containers or bins that contain any
synthetic fungicides or preservatives in handling organic products and
this would include bins constructed of arsenate treated lumber.
Finally, the NOSB recommended that biosolids, or municipal sludge,
should be classified as synthetic and were not appropriate for use in
organic crop production. The EPA defines biosolids as the primarily
organic residuals, produced by current wastewater treatment processes
that treat domestic sewage, that can be beneficially recycled. Under
current EPA regulations, such recycling can include land application of
biosolids to provide primary plant nutrients and micronutrients to
crops and vegetation produced in agriculture and to improve soil
characteristics by providing necessary moisture and/or organic matter
to enhance soil tilth. Over the years, EPA, USDA, and FDA have issued
joint policy statements that have endorsed the beneficial utilization
of biosolids on land for purposes that include the production of fruits
and vegetables. However, to prevent potential problems, the guidance
contains steps that must be taken relative to issues such as the amount
of cadmium and lead that can be applied to the soil, the amount of PCBs
in the biosolids, and the relative accumulation

[[Page 65893]]

of heavy metals into edible plant parts. Under these and other
restrictions contained in 40 CFR Part 503, biosolids can be safely used
in conventional agriculture. However, we are requesting comments to
assess the extent to which biosolids may be used in organic production.
The USDA specifically invites comments on whether the use of biosolids
(municipal sludge) should be permitted or prohibited in organic
production. The USDA also invites comments on the classification of
biosolids as a synthetic rather than a non-synthetic substance.
Comments should detail the basis for the commenter's recommendation,
including the agricultural, policy, technical, or scientific factors.

The National List of Non-Synthetic (Natural) Substances Prohibited for
Use in Organic Crop Production--Section 205.23

The NOSB has recommended that the rodenticide strychnine, the
fertilizer ingredient manure ash, and the pesticide sodium
fluoaluminate, which are non-synthetic (natural) substances, be
prohibited for use in organic farming and handling. As stated
previously, in order for the Secretary to prohibit the use of a non-
synthetic (natural) substance in an organic farming or handling
operation, it must be determined that the use of such substance both
would be harmful to human health and the environment and inconsistent
with organic farming or handling. Further, the Secretary of HHS and the
Administrator of EPA must be consulted.
The Secretary of HHS and the Administrator of EPA, respectively,
have the authority to regulate crop production substances according to
human health and safety and environmental protection. These two
agencies have the responsibility to review and establish appropriate
restrictions on the use of any substance as a pest control, food, feed
or drug, and the applicable agency must determine that allowed use of
the substance poses no threat to human health and the environment
before permitting a substance to be used in agricultural production or
handling. In consulting with these agencies, they concluded that their
review of these substances showed that, when used according to the
requirements established by these agencies, the substances do not meet
the criteria in the Act for inclusion on the National List of
prohibited non-synthetic (natural) substances. In concurrence with this
conclusion, we have determined that there can be no non-synthetic
substance that meets both of the OFPA criteria for being designated as
a prohibited non-synthetic substance, and we did not accept the NOSB's
recommendation for the prohibition of strychnine, manure ash, and
sodium fluoaluminate. We only include sections 205.23 and 205.25 in our
proposal so that appropriate substances may be included on the National
List in the future should this be determined to be necessary.

The National List of Active Synthetic Substances Allowed for Use in
Organic Livestock Production--Section 205.24

The substances proposed for inclusion in this section of the
National List are listed as the following six categories: trace
minerals; nutrients and dietary supplements; feed additives (provided
they are also included in section 205.26); animal drugs and other
animal health care substances; vaccines and biologics; and pest control
substances (provided they also are included in section 205.22).
This section would permit any active synthetic substance permitted
by FDA, EPA and USDA in the specified categories to be allowed for use
in organic livestock production when used in accordance with the
restrictions specified by the approving agency and the restrictions
specified in this section. We have proposed these active synthetic
substances to be permitted for use after reviewing the NOSB
recommendations for livestock substances to be included on the National
List, and their recommendations for the use of vitamins, minerals,
inoculants, vaccines, antibiotics and parasiticides in livestock
production. Our proposed list is consistent with sections 2110 and 2118
of the OFPA (7 U.S.C. 6509 and 6517), which delineate feeding and
health care practices to be used in organic livestock production and
the categories of synthetic substances related to livestock production
that may be included in the National List.
Section 2110(d) of the OFPA (7 U.S.C. 6509(d)) prohibits certain
uses of veterinary medications, specifically subtherapeutic doses of
antibiotics and routine administration of synthetic internal
parasiticides, in organic livestock production. The use of other
veterinary medications, except vaccines, is prohibited only in the
absence of illness. This indicates that therapeutic doses of
antibiotics, non-routine use of synthetic internal parasiticides, any
use of vaccines, and administration of any veterinary medication to
treat an illness are all permitted under the Act, without the need to
include these substances on the National List of synthetic substances
permitted to be used. However, because livestock parasiticides and
medicines are also included among the categories of active synthetic
substances in section 2118(c)(1)(B)(i) of the OFPA (7 U.S.C.
6517(c)(1)(B)(i)) that would need to be included on the National List
in order to be permitted to be used, we have included animal drugs
(veterinary medications) in this section of the proposed National List
in order to clarify that their use is permitted.
All of the categories proposed for inclusion in this section of the
National List, other than animal drugs and other animal health care
substances and vaccines and biologics, have been explicitly reviewed by
the NOSB itself and proposed for inclusion as either crop production
substances in section 205.22 or as ingredients allowed in processed
products in section 205.26. We are including the categories of animal
drugs and animal health care substances and vaccines and biologics in
the National List because these substances have already been evaluated
by the applicable regulatory agency that approves them for general use
by criteria similar to those in section 2119(m) of the OFPA (7 U.S.C.
6518(m)) that are to be used by the NOSB in evaluating a substance.
A representative of the FDA's Center of Veterinary Medicine (CVM)
addressed the NOSB in Rohnert Park, California, in October 1994, to
explain in detail the review process conducted by CVM in reviewing
veterinary drugs and establishing withdrawal times. The NOSB voted at
its meeting in Austin, Texas, on October 31, 1995, to accept the FDA
evaluations of antibiotics, parasiticides, vitamins and minerals and
the USDA evaluations of inoculants and vaccines as equivalent to the
substance review process established for the NOSB in sections 2119(k),
(l) and (m) of the OFPA (7 U.S.C. 6518 (k), (l) and (m)). However, in
doing so, the NOSB did indicate that it would: defer the initial
technical advisory panel review of synthetic vitamins and minerals for
a period of two years unless a specific vitamin or mineral is
identified in the interim as being in conflict with organic principles
and therefore requires an immediate review; defer the initial review of
vaccines and inoculants for a period of two years, except in the case
of a substance that may be in conflict with organic principles and
therefore requires an immediate review; and establish a priority
ranking of antibiotics and parasiticides to be used by producers when
administering animal drugs. To date, the NOSB has not yet established a
priority ranking for preferred use of the antibiotics and parasiticides
approved by FDA.

[[Page 65894]]

The National List of Non-Synthetic Substances Prohibited for Use in
Organic Livestock Production--Section 205.25

As previously discussed with reference to proposed section 205.23,
no substances are proposed in this section because we have determined
that no non-synthetic substances meet the criteria provided in section
2118(c)(2) of the OFPA (7 U.S.C. 6517(c)(2)) for prohibiting their use.

The National List of Non-agricultural Substances Allowed as Ingredients
in or on Processed Products Labeled as Organic or Made With Certain
Organic Ingredients--Section 205.26

We propose in Sec. 205.26 the National List category of non-
agricultural substances allowed as ingredients in or on processed
products labeled as organic or made with certain organic ingredients.
As discussed previously, this section of the National List is proposed
to satisfy the provision in section 2118(c)(1)(B)(iii) of the OFPA (7
U.S.C. 6517(c)(1)(B)(iii)) that a non-organically produced substance
used in handling be evaluated as if it were synthetic, and therefore
the use of such a substance is prohibited unless it appears on the
National List.
The inclusion of both synthetic and non-synthetic non-agricultural
substances in this category is necessary because, as was indicated in
the NOSB's deliberations, it is often very difficult to decisively
classify many non-agricultural ingredients as synthetic or non-
synthetic. For example, citric acid is a naturally occurring substance
that may be obtained from citrus fruits. However, after reviewing and
discussing the process by which virtually all commercially available
citric acid is formulated, the NOSB was almost evenly divided in its
vote as to whether or not this process rendered the substance synthetic
under the definition provided in section 2103 of the OFPA (7 U.S.C. 6502).
We have not, however, proposed to include in this section of the
National List any substance (ingredient) that does not meet our
definition of an active ingredient. Substances that are not active
ingredients are considered to be incidental additives, and such
substances are not consistent with the FDA and FSIS requirements for
substances that must be listed on a product label. As previously
discussed, because incidental additives are not active ingredients,
they are not otherwise prohibited by the Act and may thus be used in
handling organic products without having to be included on the National
List. We are accordingly including only substances that do meet the
definition of an active ingredient, and that therefore are required by
the FDA and FSIS to be listed on a product label, in the National List
of non-agricultural substances allowed as ingredients in or on
processed organic products.
Proposed Sec. 205.26 contains an alphabetical listing of the
generic name of the non-agricultural substances which meet the Act's
criteria for inclusion on the National List as substances permitted to
be used. These substances have been reviewed by the NOSB and included
in recommendations made by them to the Secretary regarding substances
to be included on the proposed National List. In most cases, substances
are listed individually, such as ammonium bicarbonate or lactic acid,
but in many cases categories of substances, such as cultures (dairy,
non-synthetic) or nutrient supplements, are listed. When a category is
listed, the use of any substance that belongs to that category is allowed.
This section diverges from certain recommendations provided by the
NOSB. As discussed with respect to allowed synthetic substances used in
crop production, proposed in Sec. 205.22, certain substances that the
NOSB recommended be included on the National List of substances allowed
for use as ingredients in or on processed organic products are not
active, and are thus not included in this section. These substances,
which may be used without inclusion on the National List, are
diatomaceous earth, clays including kaolin and bentonite, nitrogen,
oxygen, ozone, chlorine bleach, perlite, sodium hydroxide, ethylene,
hydrogen peroxide, and potassium hydroxide.
Kelp was reviewed and recommended by the NOSB as a permitted non-
agricultural substance in processed products. We have not included kelp
as a non-agricultural substance permitted for use because kelp and
other seaweeds are plants harvested from the wild, and so are
considered agricultural products as opposed to non-agricultural
products when used as ingredients in processed organic products. Kelp
also might be considered a nutrient supplement when used as a source of
iodine in food meant for human consumption and as a source of iodine
and trace minerals in livestock feed.
The NOSB recommended the plant derived waxes carnauba wax and wood
rosin for inclusion on the proposed National List. (Wood rosin also is
referred to as lac-resin, shellac-based wax, or resin). We have
included carnauba wax and wood rosin in this proposed section and
additionally propose to include candelilla wax and beeswax as allowed
non-agricultural substances. Candelilla wax is a plant derived wax that
is commonly used, as is beeswax, in coatings for fresh produce. We
consider both waxes to be necessary to the handling of agricultural
products and as meeting the other requirements of section 2118(a) of
the OFPA (7 U.S.C. 6517(a)) that must be met before such substances may
be permitted to be used. In accordance with section 2111(a)(5) of the
OFPA (7 U.S.C. 6510(a)(5)), which prohibits the use of any packaging
materials that contain synthetic fungicides or preservatives, any wax
used as a coating on fresh produce could not contain synthetic
preservatives or fungicides.
The NOSB recommended the inclusion of unmodified cornstarch as a
permitted substance and postponed a decision on other unmodified
starches. Unmodified starches are agricultural ingredients because they
are manufactured from agricultural products through methods that do not
meet the Act's definition of synthetic. Their use would therefore be
permitted as non-organic agricultural ingredients in proposed
Sec. 205.27.
The NOSB reviewed whey protein and did not recommend it for
inclusion on the National List of allowed non agricultural ingredients.
We consider whey protein to be necessary to the handling of certain
agricultural products because of the unavailability of wholly natural
products, which use is then provided for in section 2118(c)(1)(A)(ii)
of the OFPA (7 U.S.C. 6517(c)(1)(A)(ii)). This substance also meets the
other criteria in the Act for inclusion on the National List, and we
accordingly propose that it be included as an allowed non-agricultural
ingredient as part of our category whey and its fractions.
The NOSB also recommended not to include magnesium carbonate,
potassium phosphate, magnesium stearate, and potassium iodide on their
proposed National List of non-agricultural ingredients allowed in
agricultural products labeled as organic. However, the NOSB recommended
that these four substances be permitted in products labeled as made
with certain organic ingredients. Because our proposed National List is
applicable to both types of labeled products, we propose to include
magnesium carbonate, potassium phosphate, magnesium stearate and
potassium iodide in this section and allow their use in products
labeled organic and made with certain organic ingredients.

[[Page 65895]]

(Potassium iodide is not listed separately because it is included
within the nutrient supplement category).
Chymosin is an enzyme that occurs naturally in animals and
currently is being produced through genetically engineered
microorganism in quantities suitable for cheese production. The NOSB
recommended that chymosin not be included on the proposed National List
of non-agricultural substances because it is derived from a genetically
engineered microorganism. We have included chymosin on the proposed
National List so as to solicit public comment.
The NOSB recommended that enzymes derived from bacteria which were
not genetically engineered are appropriate for use as non agricultural
ingredients in agricultural products labeled as organic or made with
certain organic ingredients. Although the NOSB has not completed its
review of sources of non-synthetic enzymes, such as plant, animal, and
micro-organisms other than bacteria, we have included the category of
enzymes, non-synthetic in this section of the proposed National List
for the purpose of receiving comment during the period that the NOSB
completes its review and develops its recommendation. When they have
completed their review, appropriate notice will be provided. We would
consider animal-derived rennet to be included in the category of non-
synthetic enzymes.
The NOSB classified calcium sulfate as synthetic and did not
recommend it for inclusion on the proposed National List of non-
agricultural substances permitted to be used. However, we are aware of
at least one source of mined gypsum (non-synthetic) that is refined to
food grade calcium sulfate. Also, we received comments from some
manufacturers of tofu who stated their preference for calcium sulfate
over other coagulants. Non-synthetic calcium sulfate could serve in
some cases as a wholly natural alternative to the use of synthetic tofu
coagulants, and otherwise meets the Act's criteria for inclusion on the
National List of non-agricultural substances permitted to be used. We
have therefore included calcium sulfate in this section of the proposed
National List.
Some substances included in this proposed section 205.26 as non-
agricultural substances are manufactured from feed stocks that are
agricultural products, such as corn. Some persons may thus consider
these substances to be agricultural products, and therefore not
appropriate for inclusion in this section of the National List. We have
included these substances because they are not easily recognizable as
agricultural products, or because there is some likelihood that the
processing methods used to purify these substances would render them
synthetic as defined under the Act. The inclusion of these substances
in this section is based on our definition of a non-agricultural
ingredient (proposed in section 205.2) as a substance that is
extracted, isolated from, or is a fraction of an agricultural product,
so that the identity of the agricultural product is unrecognizable in
the extract, isolate or fraction. Examples of these proposed substances
include: ascorbic acid, beeswax, citric acid, candelilla wax, carnauba
wax, carrageenan, non-synthetic colors, lactic acid, lecithin, mono and
diglycerides, pectin, potassium acid tartrate, tartaric acid and whey
and its fractions. Since many of these substances originate from
agricultural products, it is possible that these substances could be
available in the future as organic agricultural products.

Non-organically Produced Agricultural Products Allowed as Ingredients
In or On Processed Products Labeled as Organic or Made With Organic
Ingredients--Section 205.27

Non-organically produced agricultural ingredients are permitted for
use in processed organic products under section 2111(a)(4) of the OFPA
(7 U.S.C. 6510(a)(4)), provided that they comprise less than five
percent by weight of the finished product, exclusive of water and salt,
and are included on the National List. Section 2118(c)(1)(B)(iii) of
the OFPA (7 U.S.C. 6517(c)(1)(B)(iii)) requires non-organically
produced substances to be evaluated according to the same criteria used
for active synthetic ingredients in order to be permitted for use as
ingredients in organic products. In its review of non-organically
produced agricultural products, the NOSB concluded that all
agricultural products, considered as a category, meet the criteria for
including substances on the National List, as set forth in sections
2118(c)(1)(A) and 2119(m) of the OFPA (7 U.S.C. 6517(c)(1)(A) and
6518(m)). In concurrence with the NOSB, we are proposing in this
section that all non-organically produced agricultural products be
allowed as ingredients in organic processed products. Under this
proposal, any agricultural product could be used if such use complied
with the provisions proposed in section 205.16.

Amending the National List--Section 205.28

Section 2119(n) of the OFPA (7 U.S.C. 6518(n)) requires the
establishment of a petition procedure by which interested parties may
request the NOSB to evaluate substances for inclusion on the National
List. We accordingly have proposed in section 205.28 a process by which
an interested party may petition the NOSB to review a substance and
make a recommendation as to whether the substance should be included in
the National List as an allowed active synthetic substance, a
prohibited non-synthetic substance, or a non-agricultural substance
allowed to be used as an ingredient in or on processed organic
products.
This section also proposes the information that, to the extent it
is available to the petitioner, should be included in the petition to
assist the NOSB review of the substance and the Secretary's
determination as to its inclusion on the National List. The information
requested by proposed paragraph (d) of this section would provide
information relevant to the issues that are to be examined when
considering placing a substance on the National List. This would
include information that would enable the Secretary to determine
whether a substance functions as, or contains, an active synthetic
ingredient, and whether it falls into one of the categories of active
synthetic substances that may be included on the National List of
approved substances. This would also include information needed to
evaluate the health, environmental, and agroecosystem effects of the
substance.
This proposed section also would require regulatory information,
such as registration of the substance in question with EPA or FDA.
Other required information would include a description of the
manufacturing process of the substance, product characteristics, safety
information relating to the substance, and bibliographies of scientific
literature relating to the substance that may be available to the
petitioner to be submitted. The petitioner would be requested to submit
information that describes alternative substances or alternative
cultural methods that could be utilized in place of the substance, and
that summarizes the effects on the environment, human health, and farm
ecosystem that might support the use of the substance. This information
is needed to help determine whether a substance is an active synthetic
ingredient in one of the categories that the Act, in section
2118(c)(1)(B)(i) of the

[[Page 65896]]

OFPA (7 U.S.C. 6517(c)(1)(B)(i)), permits to be used if it is on the
National List and whether allowance of a synthetic substance is
justified by the lack of a suitable non-synthetic or cultural
alternative, as required under section 2118(c)(1)(A)(ii) of the OFPA (7
U.S.C. 6517(c)(1)(A)(ii)). Other information required to be submitted
is needed to determine whether a non-synthetic substance will be
prohibited for use under the criteria specified in section 2118(c)(2)
of the OFPA (7 U.S.C. 6517(c)(2)).
Section 2118(d) of the OFPA (7 U.S.C. 6517(d)) includes provision
for the procedure by which amendments may be made to the National List.
Following receipt of a petition, as proposed in this section, the
Secretary would determine whether the substance is within one of the
categories of the National List. If the substance is within one of the
defined categories, it would be reviewed by the NOSB in accordance with
the criteria provided in the Act.
After the NOSB submits its recommendations concerning a petitioned
substance to the Secretary, the Secretary would then determine whether
the substance satisfies the criteria listed in section 2118(c) of the
OFPA (7 U.S.C. 6517(c)) regarding the inclusion of substances on the
National List as an allowed or prohibited substance. If the Secretary
determines that the substance does meet these criteria, the addition of
the substance to the National List would then be proposed as an
amendment to the National List according to the procedure established
in section 2118(d) of the OFPA (7 U.S.C. 6517 (d)), which includes
publication in the Federal Register of a proposed amendment to the
National List and an opportunity for public comment.
As provided for in section 2118(e) of the OFPA (7 U.S.C. 6517(e)),
the NOSB also would review any substance on the National List within
five years of the substance being allowed or prohibited for use, and
would provide the Secretary with recommendations as to whether the
substance should remain on the National List. The Secretary would
decide whether to renew each allowance or prohibition in order for an
allowed or prohibited substance to remain on the National List. The
Secretary's decisions concerning this then would be published in the
Federal Register.

Subpart C--Labels, Labeling, and Market Information

Sections 2106(a)(1)(A) and (B) of the OFPA (7 U.S.C. 6505(a)(1)(A)
and (B)) state that persons may sell or label agricultural products as
organically produced only in accordance with the Act, and that persons
may affix a label to and provide other market information concerning
organically produced agricultural products only when the products are
produced and handled in accordance with the Act.
In accordance with the Act, we are proposing in subpart C of this
part provisions regarding labels, labeling, and marketing information
for agricultural products that are organically produced and for any
agricultural products that contain organically produced ingredients.
Additionally, provisions also are included for the use of the USDA seal
on labels, labeling, and other market information as authorized by
section 2106(a)(2) of the OFPA (7 U.S.C. 6505(a)(2)), and this subpart
also addresses the use of products that originate from operations that
sell no more than $5,000 annually in value of agricultural products.
These operations are exempt from certain provisions of the Act.

Agricultural Products in Packages Sold, Labeled, or Represented as
Organic--Section 205.100

In accordance with section 2106 of the OFPA (7 U.S.C. 6505) which
provides for selling and labeling a product as organically produced, we
propose in section 205.100 of this subpart our labeling provisions for
agricultural products in packages described in section 205.16(a) that
are sold, labeled, or represented as organic. These are finished
products that contain at least 95 percent organically produced
ingredients, by weight, excluding water and salt, hereafter referred to
as ``products that contain at least 95 percent organic ingredients''.
The percentage of the product that is not organic must be made of some
combination of non-agricultural ingredients and/or non-organically
produced agricultural products included on the National List. Packages
are defined in our proposal as a container or wrapping that bears a
label and which encloses an agricultural product, except for
agricultural products in bulk containers, shipping containers, or
shipping cartons.
In paragraph (a) of this section, we propose the terms that may be
used on agricultural products described in section 205.16(a) that are
sold, labeled, or represented as organic, (i.e., products that contain
at least 95 percent organic ingredients). We propose to allow the term
organic to be used on the principal display panel to modify the name of
the product and in the ingredients statement to modify the name of each
ingredient organically produced and handled in accordance with the Act
and the regulations in this part. We have defined the principal display
panel to be that part of a label that is most likely to be displayed,
presented, shown or examined under customary conditions of display for
retail sale. The ingredients statement is defined as the listing of the
ingredients contained in a product listed by their common or usual
names in the descending order of predominance. The ingredients
statement is usually located on the information panel of products other
than meat and poultry products and is often located on the principal
display panel of meat and poultry products, but may be placed on other
package panels because of package restrictions.
We are proposing to allow the term organic to appear on the
principal display panel to ensure a clear, consistent and conspicuous
identification of organically produced agricultural products for
consumers. Examples of the use of this term are organic grapes, organic
beef, organic peppermint tea, organic vegetable soup, organic whole
wheat bread, and organic ice cream. We are proposing to allow the term
organic to be used in the ingredients statement to modify the name of
each organically produced ingredient in order to provide consumers with
a means of knowing which ingredients have been organically produced.
Many consumers would consider information about the specific organic
ingredients contained in a product to be essential information to have
as a part of their purchasing decision.
Section 2106(a)(2) of the OFPA (7 U.S.C. 6505(a)(2)) provides for
products that meet USDA standards for organic production to incorporate
the USDA seal on such agricultural products. Additionally, section 2108
of the OFPA (7 U.S.C. 6507) provides for a State to establish a State
organic program that meets the requirements of the national organic
program. If a State does so, and its program is approved by USDA, we
believe it is appropriate to allow the State to have a seal
representing its program, and to allow agricultural products produced
under such a State program to bear a State seal. Accordingly, we
propose in paragraph (a)(3) of this section that a USDA seal, and a
State seal that represents a State organic program approved by the
Secretary, as provided for in section 205.402 of subpart F, may be used
on the principal display panel of packages of agricultural products
labeled as organic. These seals would reflect that

[[Page 65897]]

the product was produced and handled in accordance with the Act and the
regulations in this part, and if applicable, the requirements of a
State organic program approved by the Secretary.
We think that the terms and marks used on the principal display
panel, which is the most visible panel, should be those terms and marks
which simply and clearly present information about the organic nature
of the agricultural product and its compliance with the national
organic program requirements and, if applicable, the requirements of an
approved State organic program. This is consistent with the purposes
stated in sections 2102(2) and (3) of the OFPA (7 U.S.C. 6501(2) and
(3)) to assure consumers that organically produced products meet a
consistent standard and to facilitate commerce.
We propose in paragraph (a)(4) of this section the terms and marks
which may appear on the information panel of products in packages that
are sold, labeled, or represented as organic (i.e., products that
contain at least 95 percent organic ingredients). We have defined the
information panel to be that part of the label immediately contiguous
and to the right of the principal display panel as observed by an
individual facing the principal display panel, unless an allowance has
to be made for another section of the label to be designated as the
information panel because of size or other limitations. Many meat and
poultry products do not have an information panel.
Most of the terms and marks proposed to be permitted to be used on
the information panel of products that contain at least 95 percent
organic ingredients are the same terms and marks previously proposed to
be allowed to be used on the principal display panel: the term organic,
the USDA seal, and a State seal representing a State organic program
approved by the Secretary. Additionally, we propose to permit on the
information panel the use of a certifying agent's name, seal, logo or
other identification which represents that the farm, wild crop
harvesting, or handling operation that produced or handled the finished
product is a certified operation. We are proposing here to allow only
the identification of the certifying agent that certified the operation
that produced or handled the finished product. We believe that
allowance of the use of multiple identification of certifying agents
who certify any operation involved in the production or handling of the
product would be unwieldy and confusing to the consumer. We invite
comments on this issue.
The NOSB received some public comment which requested that
identification of a certifying agent on product labels be prohibited.
Other public comments, however, indicated that the identification of a
certifying agent should be required on product labels to inform
consumers of the specific organization that performed the certification
of the operation. Additionally, some public comments requested that the
identification of a certifying agent be optional, so that each
individual producer and handler could decide whether to include this
identification on their label.
After evaluating the public comments, we agree that the decision as
to whether to include the certifying agent's identification on a label
should be optional. We believe that inclusion of the identification of
the certifying agent who certified the operation that made the finished
product is not essential. Therefore, we have included this
identification of a certifying agent in our proposal as optional
information that may be included on the information panel of a label of
products that contain at least 95 percent organic ingredients.
We propose to allow the placement of the identification of the
certifying agent on the information panel, but not on the principal
display panel, because we want the principal display panel to include
only those terms or marks that would be important to everyone, i.e.,
those terms or marks that present information about the organic nature
of the agricultural product, its compliance with the national organic
program requirements and, if applicable, the requirements of an
approved State organic program; we do not feel that the identification
of a certifying agent is this type of information. We propose to allow
the placement of the identification of the certifying agent on the
information panel, rather than restricting its use to other less
prominent panels, because we agree with the public input we received
that stated that this information would be important to some consumers
in their purchasing decisions.
In paragraph (a)(5) of this section, we propose that the terms or
marks that may appear on the information panel for products sold,
labeled, or represented as organic (i.e., products that contain at
least 95 percent organic ingredients) also may be used on any package
panels of the product, excluding the principal display panel.
Additionally, we are proposing that these same terms and marks may be
used on the product's labeling and on market information about the
product. We have defined labeling to be written, printed or graphic
material accompanying a product at any time or displayed about the
product at the retail store. Market information has been defined to be
any written, printed, audio-visual or graphic information, including
advertising, pamphlets, flyers, catalogues, posters, and signs, that
are used to assist in the sale or promotion of a product. This
provision is consistent with section 2106(a)(1)(B) of the OFPA (7
U.S.C. 6505(a)(1)(B)), which provides for labels and market information
to be provided for and affixed on agricultural products that are
produced and handled in accordance with the Act and the regulations in
this part.

Agricultural Products in Packages Sold, Labeled, or Represented as Made
With Certain Organic Ingredients--Section 205.101

Section 2106(c)(1) of the OFPA (7 U.S.C. 6505(c)(1)) authorizes the
Secretary, in consultation with the NOSB and the Secretary of Health
and Human Services, to allow the use of the word organic on the
principal display panel of an agricultural product that contains at
least 50 percent organically produced ingredients by weight, excluding
water and salt, only for the purpose of describing the organically
produced ingredients. Our proposed section 205.16(b) makes it clear
that this type of product is one containing at least 50 percent, but
less than 95 percent, organically produced ingredients. The Secretary
has consulted with the Secretary of Health and Human Services and
reviewed the NOSB recommendations for this matter. We are proposing to
allow the word organic to appear on the principal display panel of
products described in section 205.16(b) as discussed below, hereafter
referred to as ``products that contain between 50 and 95 percent
organic ingredients''.
We propose, in paragraph (a) of this section, the terms that must
be used on agricultural products sold in packages, described in section
205.16(b), that are sold, labeled, or represented as made with certain
organic ingredients, (i.e., products that contain between 50 and 95
percent organic ingredients). We propose in paragraph (a)(1) of this
section that the statement made with certain organic ingredients must
be used on the principal display panel of a product described in
section 205.16(b). We believe that allowing the word organic to appear
on the principal display panel of these products only when used within
the statement made with certain organic ingredients would enable
consumers to easily distinguish this type of product from a product that

[[Page 65898]]

contains at least 95 percent organic ingredients, on which the term
organic must appear on the principal display panel to modify the name
of the product.
We request comments from industry, consumers, consumer interest
groups, and all other interested persons on our proposed use of the
statement made with certain organic ingredients on the principal
display panel of products that contain between 50 and 95 percent
organic ingredients. We are soliciting information as to whether there
are alternative label proposals, and if so, a description of them, that
would accomplish our purpose of clearly distinguishing on the principal
display panel between products that contain at least 95 percent organic
ingredients and those that contain between 50 and 95 percent organic
ingredients.
We also propose in paragraph (a)(2) of this section to require that
the term organic be used in the ingredients statement to modify
organically produced ingredients. We are proposing this in order to
provide consumers with a means of knowing which ingredients have been
organically produced.
We propose in paragraph (b) of this section the terms and marks
that may, but that are not required to, be used on agricultural
products described in section 205.16(b) that are sold, labeled, or
represented as made with certain organic ingredients (i.e., products
that contain between 50 and 95 percent organic ingredients). In
paragraph (b)(1) of this section, we propose to allow the statement
made with certain organic ingredients to appear on the information
panel. We believe this would further assist consumers in readily
identifying products that contain between 50 and 95 percent organic
ingredients, and additionally may be useful in certain retail display
situations where the view of the principal display panel may be
obscured from the consumer. We also propose in paragraph (b)(1) of this
section to allow the identification on the information panel of the
certifying agent who certified the farm, wild crop harvesting, or
handling operation that produced or handled the finished product. Our
reasons for allowing the optional inclusion of the certifying agent's
identification on the information panel and the prohibition of its
placement on the principal display panel for these type of products,
are the same ones we previously discussed with regard to products that
contain at least 95 percent organic ingredients.
In paragraph (b)(2) of this section, we propose that any of the
terms and marks proposed to be allowed to be used on the information
panel may also be used on labeling, market information and any package
panel, excluding the principal display panel, of products labeled as
made with certain organic ingredients. The allowed terms or marks would
be the statement made with certain organic ingredients and the
certifying agent's identification. This provision is consistent with
section 2106(a)(1)(B) of the OFPA (7 U.S.C. 6505(a)(1)(B)), which
provides for labels and market information to be provided for and
affixed on agricultural products that are produced and handled in
accordance with the Act and the regulations in this part.

Multi-ingredient Agricultural Products That Only Represent the Organic
Nature of Such Ingredients in the Ingredients Statement--Section 205.102

Section 2106(c)(2) of the OFPA (7 U.S.C. 6505(c)(2)) authorizes the
Secretary, in consultation with the NOSB and the Secretary of Health
and Human Services, to allow products that contain less than 50 percent
organically produced ingredients by weight of the finished product,
excluding water and salt, to include the word organic on the ingredient
listing panel to describe those ingredients that are organically
produced. The Secretary has consulted with the Secretary of Health of
Human Services and reviewed the NOSB recommendations on this matter. We
propose the following provisions for the use of the word organic in the
ingredients statement of multi-ingredient agricultural products that
only represent the organic nature of such ingredients in the
ingredients statement.
We propose in section 205.102 that the term organic may be used in
the ingredients statement of this type of product to modify the name of
an ingredient organically produced and handled in accordance with the
Act and the regulations in this part. We also propose in section
205.102 that agricultural products that are composed of more than one
ingredient may represent in an ingredients statement that the
ingredients are organic without the finished product having to be
produced and handled in a certified operation, if certain conditions
are met. One of the conditions that must be met is that the producer or
handler of the finished product would have to maintain certain records
that are required for non-certified operations. The second condition
that must be met is that the only representation made about the organic
nature of the product is a statement in the ingredients statement that
identifies organic ingredients.
We also propose in paragraph (b) of this section that the term
organic may be used on labeling, marketing information and package
panels of labels other than the principal display panel and information
panel, to describe the organic ingredients in products discussed above.
We are permitting the identification of organic ingredients under these
conditions for a variety of organic products in order to allow the
organic industry flexibility in the production and marketing of organic
products.

Use of Terms or Statements That Directly or Indirectly Imply That a
Product is Organically Produced and Handled--Section 205.103

Section 2106(a)(1)(B) of the OFPA (7 U.S.C. 505(a)(1)(B)) provides
that a person may affix or provide a label or other market information
about an agricultural product, including an ingredient, that directly
or indirectly implies that the product is organically produced and
handled only when the product has been produced and handled using
organic methods in accordance with the Act. Accordingly, we propose in
this section that labels, labeling or market information that directly
or indirectly imply organic production and handling practices may be
provided for or affixed only on agricultural products produced and
handled in accordance with the Act and the regulations in this part.
Our proposed regulations would authorize the use on a label,
labeling, or market information of the term organic and other terms and
phrases that directly or indirectly imply that the product was
organically produced and handled. Therefore, under our proposal, any
terms or phrases that directly or indirectly imply that a product has
been organically produced or handled would be prohibited from being
used on the label, labeling, or market information of products that are
not produced in accordance with the Act and the regulations in this part.
We considered putting in our proposed requirement a specific list
of the terms and phrases that we believe would directly or indirectly
imply that a product was organically produced and handled. We have not
done this because we are uncertain as to what terms and phrases should
appropriately be placed on such a list. We request comment from the
public as to what terms or phrases, other than organic or made with
certain organic ingredients, they believe could directly or indirectly
imply that a product was organically produced and handled and the
rationale for the allowance of their use. Examples

[[Continued on page 65899]]

Notices For
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2003
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2001
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1996
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1994

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