Organic cost-share, the Farm Bill, and us

Among the hoopla and uproar over the still-delayed Farm Bill is one situation that has important implications for our farm. As a general rule we’re not directly sensitive to Farm Bill contents, as we don’t take government handouts, grants, subsidies or other funding as a matter of personal principle (though the Farm Bill has all sorts of implications for our competition, both locally and nationally). Our stubborn independence comes with one exception, though: the National Organic Certification Cost-Share Program (NOCCSP). Here’s why we reluctantly take this money, how it reflects the deeper problems in agricultural policy, and what will happen if the current Farm Bill doesn’t pass soon or loses this provision.

First, a quick overview of how organic certification works. The USDA sets the definitions and rules for what can be labelled organic, then licenses third-party entities to administer the certification program that allows certain businesses to use the O-word for qualified products. These certifiers can be anything from a state agriculture department (as in Iowa; Missouri cut its program years ago), a for-profit company (such as QAI), or a non-profit organization (such as MOSA or QCS). Farmers or food processors wishing to be certified organic must apply to one of these certifying agencies for inspection and approval. This involves lots of reports & record-keeping and an annual inspection to, in effect, prove a negative (that no forbidden substances or methods were used). Inspections can be conducted either by employees of the certifying agency, or by independent contractors hired to do so by the agency. Farmers/processors are expected to pay for the costs of all of the above.

The NOCCSP provides Federal funding (often handled by states) to pay up to 75% of the annual cost of organic certification, not exceeding $750. The idea is to help small farms afford certification which, in theory at least, lets them charge more for their products and thus recoup the expenses involved in being certified in the first place.

For reference, our 2012 certification cost $687.13 (before cost-share), NOT counting the significant value of our year-round time, skill, & energy in keeping the records and preparing the long reports necessary to achieve certification. We’ve been repeatedly praised by inspectors for the quality & organization of our records, though we get no actual reward for this compared to a disorganized farmer who takes far longer to certify properly. This is a very important point. The “cost of certification” only recognizes the payment to third-party inspectors and certification agencies as “cost”. Whatever the farmer has to do to get there doesn’t count, and is assumed to be made up by theoretical income gained by theoretically higher organic prices, with no particular reward for skill. When the only punishment is the draconian revocation of certification, applied very rarely, it’s no wonder there’s no real incentive to be organized or cost-effective.

In other words, we or other farmers don’t actually get a dime from NOCCSP. It’s a pass-through subsidy to independent certification agencies (and independent inspectors) who have a captive market of organic farms created by USDA rules and thus get their revenue near-guaranteed by the USDA. The farmers they “serve” don’t get the stable salaries and benefits that employees of such agencies do; we take most of the risk in this business but our inspectors & certifiers make more than we do for easier work. Not one penny of that NOCCSP “support” pays for the time and effort a farmer puts into keeping detailed year-round records of everything from seed sourcing to sales, assembling thick annual applications, and otherwise muddling through bureaucracy for the legal right to use the word which best describes our practices to the general public. We even have to do the unpaid paperwork of applying for the “funding”; there is a timing issue too as the limited funding is provided on a first-come basis. We then still have to pay the full cost up-front and hope our application for reimbursement goes through before too many other farms’ do and the annual funding runs out, leaving somebody out of luck.

Ironically, it’s not at all clear that we actually get a real price/income boost from being certified. It hasn’t mattered to most of our restaurant customers (they’ve told us so), and certainly hasn’t gotten us a higher wholesale price (several potential wholesale customers have rejected us based on price, generally in favor of non-certified but “sustainable” alternatives). In theory it brought in some customers at the farmers market, but far more assumed that everyone with a “no spray” sign was close enough but much cheaper. As we noted in our 2012 CSA review, we didn’t actually charge significantly more than non-organic CSAs, nor could we based on customer feedback. A much higher percentage of our members valued our small-o organic practices than our big-O Organic Certification, despite the two being legally intertwined.

We’re willing to stick with organic certification for now because (a) it gives us a defined legal status and an easy-to-use description of our methods, and (b) much of the record-keeping is a valuable tool for increasing our farming skills and knowledge. If NOCCSP falls through, though, we are going to give our CSA members the option to pick up the certification bill, because the farm business won’t. If they decline, we’ll let our certification lapse.

So, here’s what will happen under various scenarios:

Scenario 1: NOCCSP is reinstated. The farm pays the 25% that it has always paid, with us (effectively) volunteering loads of time to do paperwork for which our business does not pay us a reasonable wage. We maintain our legal status a Certified Organic farm, which does have its benefits.
Scenario 2: NOCCSP goes away. Members decide to pick up the difference (probably a bit under $20/member, if certification fees remain stable). Otherwise same as #1.
Scenario 3: NOCCSP goes away. Members decide that little-o is more important than big-O Organic. We retrain our vocabulary to drop the “o” word that we think best describes us. We will likely put more effort into clarifying the details of our practices on the website so that members and the world can judge our practices for themselves. We cease to exist on the national media/government radar of “organic farms”. Dropping certification would NOT, however, cause us to change our agricultural practices (or even 95% of our recordkeeping practices).

On our more cynical days, we feel that the organic certification program and NOCCSP is a classic example of well-meaning government creating more problems than it solves. It creates a complicated, multi-layer bureaucracy to regulate a widely abused but poorly enforced term that few consumers really understand, and passes most of the costs onto farmers who are expected to pay the salaries of the very bureaucrats keeping them in their offices rather than their fields. NOCCSP sounds great on the surface as a support for small farms, but still falls into this unavoidable trap whereby you take the government’s money or are punished for remaining independent (this is why even right-wing commodity farmers take corn subsidies). Creating a complicated system, requiring people to be part of it, then handing them inadequate money to pay for someone else’s better-paid expenses to “help” them navigate the original complications, is classic big & poor government. We’re barely willing to be part of it under current circumstances, and certainly won’t foot the whole bill alone. Then again, we don’t necessarily have a better suggestion for regulating growing practices.

 

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