The United States Department of Agriculture (USDA) issued a Proposed Rule and a Proposed Order relating to the development of an Organic Research, Promotion, and Information Order. The Proposed Rule invites comments for conducting a referendum to determine whether entities are in favor of the issuance of the Proposed Order. The Proposed Order, on the other hand, could result in a mandatory research and promotion program that would require entities with gross sales in excess of $250,000 for the previous marketing year of certified organic agricultural commodities, would pay an assessment to the program of one-tenth of one percent of net organic sales. The range of “organic products” covered by the proposed order includes “personal care products,” i.e., cosmetics. The comment period ends March 20, 2017.
The Proposed Rule is the result, at least in part, to a May 2015 proposal by the Organic Trade Association (“OTA”) to USDA for an organic research and promotion program (“R&P programs”). Although the Proposed Rule recognizes that the Organic Foods Production Act covers agricultural products, the Proposed Rule states:
…this proposal would assess only the value added of the certified organic ingredient content of “made with organic” products rather than the entire certified product. Consequently, the scope of covered products spans a range of agricultural commodities such as fruits, vegetables, dairy, meat, poultry, breads, grains, snack foods, condiments, beverages, and packaged and prepared foods, as well as non-food items such as fiber (linen and clothing), personal care products, pet food, and flowers. While the USDA organic regulations do not detail standards specific to non-food items, items that are agricultural products (e.g., pet food) and that meet the certification requirements of the USDA organic regulations can be certified and labeled “organic”, irrespective of the end use of the product.
Thus, if the Proposed Rule results in an Order, certified organic cosmetics, and other non-food items, may find themselves obligated to pay into the resulting R&P program. Accordingly, if your cosmetic company either has certified organic products or plans to obtain certification in the future, you may want to review the Proposed Order and submit your comment of whether you, as an organic handler or producer, are in favor of an R&P program Order.