Organic sector fears decline after ingredients ruling
synthetic ingredients in products labeled organic could
significantly slow the sector's growth, writes Anthony
US District Judge D. Brock Hornby's decision to ban such ingredients and oblige dairy farmers to feed their cows 100 percent organic feed during the transition to organic could make the industry prohibitively expensive.
"My concern is that if food makers are no longer about to label their products as organic because they use, say, sugar that has been produced synthetically, they might be tempted to use less organic material," George Siemon, chief executive of organic food maker Organic Valley told FoodNavigator-USA.com
. At present regulations allow dairy farmers who want to go organic to feed their cows 20 percent conventional feed and 80 percent organic feed in the first nine months of the transitional year.
And for a product to be labeled 'organic', it must contain over 95 per cent organic materials. A 'made with organic' product must contain over 70 per cent. The new ruling however means that an 'organic' product must be 100 per cent from organic sources.
The ruling came after a Maine grower of organic blueberries, Arthur Harvey, contended that current regulations violated the Organic Foods Production Act of 1990. Siemon however disagrees.
"We've got a system that has worked for many years," said Siemon. "But now the applecart has been turned over."
He believes that the new ruling could significantly discourage producers going organic. "Sometimes it is just not possible to find 100 per cent organic ingredients."
It is therefore wrong, he contends, to label products that might contain 98 percent and 70 percent organic material respectively as being both "made with organic." If just one ingredient cannot be sourced from organics, then under the new rule there is little incentive for the manufacturer to push the organic content above 70 per cent.
Will the new ruling help slam the brakes on the booming US organics market? This year, retail sales of organic foods are expected to exceed $15 billion, with more than $32 billion projected by 2009.
While the conventional food industry still dwarfs the organic sector with $550 billion in yearly sales, it is only growing by 2 to 3 percent annually, while the organic industry enjoys annual growth rates of 17 to 20 percent.
"Last year we experienced a growth spike of 30 per cent," said Siemon. "It's amazing to see, and I think that quality and the recognition of quality in organic products has been a real factor."
Some in the organics market believe that the new ruling could even help to further this perception of organics as a quality product.
"It could particularly have an impact on the dairy sector," accepts Organic Farming Research Foundation policy program director Mark Lipson.
But he believes that there are also positive aspects to this ruling.
"First, it is positive that USDA - and the industry - is forced to comply more rigorously with the law. While this presents some difficulties, the alternative - i.e., interpretation based on economic convenience - would be highly detrimental in the long run.
"Second, it generally should drive the organic sector to a higher level of accomplishment with respect to integrity of the value chains. Third, it should bolster consumer confidence in the value of the organic label."
Indeed, consumers advocates claim that the decision will help ensure that people get higher-quality food when they buy products with the organic label.
Lipson believes that a degree of perspective is needed, and dismisses suggestions that the ruling could make the sector economically unfeasible.
"Such an outcome is highly unlikely," he said. "I see no evidence that this type of prediction is warranted.
"In all product areas, obstacles for particular companies will be an opportunity for others. The overall growth trajectory for the US organic market will be affected more by other issues (e.g. the USDA's regulatory performance, international competition and retail consolidation) than by this ruling.
"The nuanced conflicts over standards and labeling are indicative of the still-rudimentary state of collective knowledge about food systems that are ecologically, economically and socially healthful. Expansion and practice of this knowledge should be our primary focus."