Are You Certifiable?

By Mark Mulcahy

One of the hottest topics in the retail environment is how the new Organic Rule will affect us. One of the main areas in question is the certification of a retail produce department.

I recently spoke with Edward Brown, who works for the Wedge Co-op in Minneapolis. Edward was one of the founding members of the Organic Trade Association's retail standards committee and helped to write GORP (good organic retailing practices).

1) What is retail certification?

Retail certification is the process whereby the organic retailer assures the end consumer of:

a) the authenticity of organic product and proper labeling of organic product;
b) organic product handling integrity, which includes display (protecting against co-mingling), proper inventory management (keeping product away from prohibited materials), and training of employees to handle organic product.

2) What are the potential benefits for a certified retailer?

Retail certification will provide:
a) the ability to assure the consumer of the store's practices and integrity in handling and labeling organic product;
b) a marketing tool if properly promoted -- this could potentially provide pressures for other retail competitors to ante up, thus giving maximum credibility to the organic network;
c) assurance of the ongoing integrity of the store's organic handling program, through the training of employees under the store's organic handling plan.
d) support for the organic certification industry in general: where no state program is in place, private certifiers benefiting from new retail dollars could lessen their dependence on growers' fees, and lessen the costs to growers.

3) What are the potential costs and challenges for the retail certification?

Retail certification will require resources dedicated to writing and implementing on organic handling program. Problems that likely will be encountered:
a) If the store is implementing an audit trail, the supplying "organic" wholesalers will need to provide the store with an audit trail through their own facility. Due to the certification exemption provided in the USDA's final rule, some wholesalers may not be able to provide the needed information to maintain the audit trail (e.g., lot numbers).
b) Time and expense will be needed to develop and implement an audit system that tracks commodities through the store and register system.
c) Additional minor expenses will be incurred for handling requirements (e.g., different colored baskets to display conventional and organic produce).
d) Stores will incur costs of implementing a training program for all employees and handlers of organic product.

4) Is certification mandatory?

No, not initially. But if you make fresh organic orange juice or process your fresh produce in any way, you would fall under the designation of handler and there for be required to be certified.

5) By when do I have to do this?

There is an implementation period of 18 months. Enforcement of the new rules will start in October 2001.

6) How do I get more information?

a) You can go to the OTA's website: www.ota.com.
b) You can attend retail training at the OTA's All Things Organic Conference in Austin on May 19 and 20.
c) You can visit the USDA web site and review the rule: www.ams.usda.gov/nop.

Why Certify Retailers?

By Cissy Bowman

Under the Organic Foods Production Act (OFPA) a product that is sold or labeled as "organic" must be produced only on certified organic farms and handled only through certified organic handling operations. Such products shall have been produced and handled without the use of synthetic chemicals, nor be produced on land to which any prohibited substances, including synthetic chemicals (except those placed on the National List), have been applied during the 3 years immediately preceding the harvest of the agricultural products. In addition, the items must have been produced and handled in compliance with an organic plan agreed to by the producer and handler of such product and the certifying agent. Where does retailer certification fit into this picture?

Retailers are considered "handlers" under OFPA if they engage in the "processing" of products which will be labeled "organic." "Processing" includes: "cooking, baking, heating, drying, mixing, grinding, churning, separating, extracting, cutting, fermenting, eviscerating, preserving, dehydrating, freezing, or otherwise manufacturing, and includes the packaging, canning, jarring, or otherwise enclosing food in a container" -- actions which happen in many retail stores every day. The idea is to prevent the store's organic products from commingling with non-organic products or contamination with prohibited materials that may be used in handling, as well as to ensure that the products coming into the stores for resale are from certified organic sources.

The Rule is supposed to provide standards that offers consumers such assurance, but it falls short of doing so. According to the Rule, a retail food establishment or portion of a retail food establishment that processes on the premises raw and ready-to-eat food from certified agricultural products labeled "organic" is excluded from the requirements of certification except for the provisions for prevention of commingling and contact with prohibited substances. Excluded are retail food establishments including: restaurants; delicatessens; bakeries; grocery stores; or any retail outlet with an in-store restaurant, delicatessen, bakery, salad bar, or other eat-in or carry-out service of processed or prepared raw and ready-to-eat food.

The organic community has mixed feelings about this exclusion. Whereas it may appease some retail stores who feel certification is unnecessary, too costly and burdensome, it does little to reassure the consumer. Some groups find the exclusion an outright violation of OFPA and want it changed. Others, such as the Organic Trade Association, have worked toward an industry practice standard to address the need for prevention of commingling and contact with prohibited substances. GORP, or Good Organic Retailing Practices, has been found to be a useful tool for stores that carry organic products. Some states and private certifiers have already been certifying retailers for years. In most cases such certification, mandatory or not, has been a positive experience for the retail stores and their staffs and has been an excellent marketing tool, drawing consumer trust and confidence.

While there are many who agree with the Rule's current exclusion of retailers, there has been an outcry from others. Stores, after all, are the source of organic products and information for most of the public, especially processed organic products.

Juli Brussell, a longtime consumer of organic products who with her husband Kevin farms organically in Casey, IL, shares the attitude of many regarding the exclusion: "What is the point of maintaining a paper audit trail -- from production supposedly all the way to the consumer -- when the retailer is allowed to be in a position of screwing that up? I sure would hate to raise product with great organic care, at great expense, just to have the audit system fall apart at the retail level."

USDA is aware of this concern. They say they have not required certification of retail food establishments at this time because of a lack of consensus on whether they should be certified, what retailer certification standards should be, and a concern about the capacity of existing certifying agents to certify the sheer volume of such businesses. But without certification there is no requirement for documentation of compliance -- making this a regulatory nightmare.

It all gets back to the purpose of OFPA -- retailer certification is supposed to be in place to provide consumers with an organic standard, making the label meaningful. The future of retailer certification is in the hands of those who would draft workable standards that meet the needs of OFPA as well as the stakeholders, including consumers, who are affected by such regulation. This should include a broad range of people who could work as a task force with the National Organic Standards Board (NOSB) to draft proposed language.

The creation of a "Retail Standards Committee" and task force would seem to be the means to develop language that USDA could use as a basis for changing the current exclusion in the Rule to a standard that is consistent with OFPA. States have the option of requiring retailer certification through their organic programs and will likely be the first to offer working models of regulation and enforcement. Many of the folks reading this publication should be involved in this process on the state and federal level, carrying your comments as well as those of your customers to NOSB.

The next NOSB meeting is in June, tentatively planned to be held in Wisconsin. Input can be sent in writing if you cannot attend. For details, visit www.ams.usda.gov/nop or call USDA at 202-720-3252. NOSB's retail representative is Mark King. Messages to NOSB members can be sent through the NOP website. For information on your state's organic program, contact your Department of Agriculture.