HARVEY VS. VENEMAN: BACK TO THE STATUS QUO

KAREN RAUGUST

WHEN THE HARVEY VS. VENEMAN DECISION first came down in 2005, organic food producers and retailers worried that it would radically change organic product marketing. Some foods using the organic label would be decertified, others would require labeling changes, and supply would fall far behind the growing demand.

In the past year and a half, however, appeals courts and Congressional riders have muted or reversed many of the expected ramifications.

Arthur Harvey, a Maine blueberry farmer and National Organic Program inspector, sued the U.S. Department of Agriculture and its then-chief Anne Veneman in 2002, arguing that the recently established Organic Food rule violated the Organic Food Production Act of 1990. Initially the court sided with Harvey, but an appeals court later ruled that he had prevailed on just one of the three major issues in the suit, and that certain actions had to be taken on the other two. The issue on which Harvey prevailed — that there should be changes to the national list of synthetic ingredients that could be used in processing organic products — was later effectively overturned by a Congressional amendment.

The part of the original lawsuit that may turn out to have the greatest impact going forward has to do with the rule permitting organic products to include up to 5% non-organic ingredients if those ingredients are not commercially available in organic form.

“This was sort of the stepchild of the three claims,” said Joe Mendelson, legal director for the Center for Food Safety. “But it will probably add up to the most change for the industry.”

In the past, there was a list of ingredients that were allowable if they were commercially unavailable, but organic certifiers could use their judgment, based on evidence provided by the manufacturer, as to whether additional ingredients might fall under the “commercially unavailable” definition.

“There was asymmetry in the way this issue was handled,” explained William J. Friedman of Covington & Burling, the lead attorney who represented the Organic Trade Association in Harvey vs. Veneman.

As a result of the lawsuit, any non-organic ingredient used in an organic product must now appear on the list of commercially unavailable ingredients; organic certifiers do not have the leeway they did in the past. As of this writing, companies are in the process of petitioning to have ingredients included on the list, which will take effect on June 9, 2007. Depending on what substances ultimately are included, there may be some alterations in formulations, labeling or certification of certain organic products.

Another change is that initial determinations of whether an organic ingredient is commercially unavailable will be made by the National Organic Program after a petition is filed, instead of on an ad-hoc basis by each certifying agent, as was done before the change. The process for being granted an emergency exemption for ingredients that don't appear on the initial list will be the same, but any emergency decision will have to be ratified by the National Organic Standards Board. The Secretary of Agriculture is heavily lobbied by many companies and organizations, leading consumer advocates to worry about the integrity of the list.

“It will mean more dilution and weakening of the standards,” said Craig Minowa, environmental scientist at the Organic Consumers Association, which favors strong standards for organic products.

For supermarkets, one ramification of the new process could be supply issues, at least in the short term.

“It's possible that a sudden loss of an ingredient by a manufacturer may cause disruptions in the supply, if they can't make the product without that ingredient and can't get it declared commercially unavailable immediately,” Friedman said.

The first year under the new rules is likely to be problematic, believes Margaret Scoles, executive director of the Independent Organic Inspectors Association. Some products could disappear from shelves for a while, while others could be decertified. But in the long term, supply is likely to come back to previous levels.

“Manufacturers really want the organic label,” she noted.

A second part of the lawsuit focused on the dairy category. The courts eliminated the so-called 80/20 rule, which allowed dairy farmers to use 20% conventional feed in the first nine months of the year in which the herd was converted to organic. Now, the feed has to be 100% organic during the entire year of conversion. To soften the blow and prevent production disruptions, the decision takes into acccount the fact that converting land to organic takes three years, vs. one year for the herd. Farmers are now allowed to use feed that is in the third year of organic management, even though it has not yet been certified organic. As of June 9, 2007, all organic dairy products will have to come from cows given 100% organic feed. Since production of organic dairy continues to grow amid skyrocketing demand, there is not likely to be any noticeable ramification on store shelves.

The part of Harvey that had been expected to cause the greatest flux was the elimination of the national list of synthetics. The 36 ingredients on this list can account for up to 5% of the content of organic processed foods. These include substances such as pectin, baking powder and yogurt cultures that are necessary for the production of processed foods but are non-agricultural and cannot be produced organically.

Originally, the appellate court found in favor of Harvey when he argued that Congress had not intended to allow synthetic substances in products certified as organic. The OTA estimated at the time that if synthetics were banned, 80% to 95% of the multi-ingredient products bearing the USDA Organic seal would have to have the seal removed and the labeling changed, according to Friedman. But after some industry lobbying, an amendment to the law was attached to the agriculture appropriations bill, and it essentially restored the pre-Harvey status quo, effective June 2006.

One still-pending issue, which was part of a second Harvey lawsuit, involves the use of allowable synthetics as processing aids. These come into contact with food during processing but are not included in the final product. Many believe this suit ultimately will fail; the fact that up to 5% synthetic ingredients are already allowed most likely means food contact substances will be permitted as well. But if this aspect of the Harvey suit succeeds, it could lead to changes in labeling, certification and supply. For now, however, it's business as usual.

Harvey vs. Veneman

October 2002: Arthur Harvey sues USDA in U.S. District Court for the District of Maine, which sides with USDA. Harvey subsequently appeals to the First Circuit court, which sides with him on three of the original nine counts and leaves it to the District Court to determine further action.

June 2005: District Court establishes a two-year time frame for the Secretary of Agriculture to create and enforce new rules for the implementation of the National Organic Program.

November 2005: President signs into law a rider to the 2006 agriculture appropriations act, in which Congress restores the national list of allowable synthetics to its pre-Harvey status.

June 2006: USDA publishes its revised rules for the National Organic Program, outlining the changes resulting from the Harvey ruling and subsequent appeals and Congressional action.

June 2007: Changes take affect, including new procedures for converting dairy cattle to organic and those regarding commercially unavailable ingredients.