The trade group hopes to apply as early as this spring to launch an organic check off program, which it says if approved by USDA could generate at least $30 million to $40 million – a significant portion of which would go toward educating consumers about organic is, its benefits, how it is distinguished from other “unregulated seals,” such as natural, and why organic food sometimes costs more, says Laura Batcha, CEO of OTA.
“‘Organic’ is a value-added seal that is harder to” to qualify for than “natural” or “local,” and yet, most consumers do not fully understand what it means, what is required for qualification and how it differs from other claims, she said.
For example, a 2010 consumer survey conducted by Context Marketing found 50% of consumers said the term “natural” was important or very important to them, compared to only 35% who said the same about organic. Likewise, a more recent survey from April 2014 found more than 80% of consumers though “natural” meant the food was free of pesticides, artificial ingredients and genetically modified organisms, when in reality FDA has not defined the term beyond excluding added color, artificial flavors and synthetic substances. (Read more about consumer perceptions of organic and natural HERE.)
Misunderstandings about what each word stands for makes it difficult for consumers to understand why organic can cost more than natural – placing organic at a disadvantage.
A check-off program could help the industry fill this gap in education by funding a long-term education and promotion campaign, Batcha said, noting the success of the check off campaign for the beef and dairy industries, which used funds to create the “Beef. It’s what’s for dinner,” and the “Milk does a body good,” campaigns.
Batcha noted that a one-and-done campaign would be insufficient because 35% to 45% of consumers buying organic products have been doing so for less than two years and the influx of consumers new to the market in need of education will continue.
“The education burden will not go away” after one campaign – it will be continuous, she said.
Funding recruitment and research
The level of outreach generated by a check off campaign also could help the industry recruit more farmers to grow certified organic food, which would ease the supply crunch that currently is hindering overall industry growth, Batcha said.
“We are in a tremendous supply crunch. There is not enough organic production coming off farms and there are pinches everywhere in the system. One of the highest needs is to use the collective funds to encourage new farmers to come into organic,” so that the industry can grow beyond a high volume niche market into an industry that “not only touches people’s lives, but impacts the environment and local economy,” Batcha said.
Funding from a check off campaign also would go toward organic-specific research that otherwise could be overlooked because only 1% of farmed acres in the U.S. are organic, Batcha said.
She explained most research currently focuses on tools that are prohibited in organic farming, such as chemicals. But dedicated funds for organic research could cover agronomic and husbandry research focused on farmer needs, nutritional value, market data and environmental and human health benefits.
While OTA has worked closely with stakeholders during the past three years to draft its check-off campaign application and ensure those with a vested interest understand the program’s value, it still has a few hurdles to overcome.
For example, some stakeholders oppose mandatory payments worth one-tenth of 1% of their organic sales to the program for fear that the board managing the funds would not represent them or that there would be no way to end the program if it was not successful.
Batcha says the organic check off would address these historic concerns by requiring stakeholders every seven years to “take a step back and ask if this continues to be a good business decision,” and if the answer is no it gives them a chance to dissolve the program and end payments.
She also said the board for the organic check off would be balanced regionally and have strong producer representation with at least eight of the 16 voting seats for producers.
Even once the OTA submits the proposal, stakeholders will have a chance to comment publicly after USDA published the proposal in the Federal Register. Given how long this, combined with USDA’s review, could take the check off likely would not be actionable until 2016 at the earliest.