New USDA Final Rule strengthens the organic goods supply chain

By | 2023-06-30T20:05:01+00:00 June 30th, 2023|Imports, Legislation, Trade|

The United States Department of Agriculture (USDA) and Agricultural Marketing Service have implemented a Final Rule strengthening the enforcement of the National Organic Program, which governs the production, handling, and sale of organic agricultural products.

The Final Rule, which came into effect earlier this year and will be implemented on March 19, 2024, is designed to protect the integrity of the organic supply chain and build consumer and industry trust in the USDA organic label.

Key action items include strengthening organic control systems, improving farm to market traceability, and providing robust enforcement of the USDA organic regulations.

You may be affected by this rule if you are involved in the organic industry, including the import, trade, retail, or brokering of organic products that currently certified under the USDA organic regulations.

According to the USDA, the organic market has grown considerably since its original organic regulations took effect in 2002. The Organic Trade Association reports that total U.S. organic sales grew from $3.4 billion in 1997 to $61.9 billion in 2020. That rapid growth has created challenges as the organic supply chains become more complex. Some segments of organic supply chains remain uncertified under current regulation, which created gaps in oversight, increased the opportunity for fraud, and complicated enforcement by the USDA and its partners.

Oversight and enforcement of organic supply chains are challenging because organic products are “credence goods,” meaning their authenticity is difficult to verify or guarantee on an individual basis; instead, it requires transparent supply chains, trusted interactions between businesses, and mechanisms to verify product legitimacy. The USDA concluded that this is best accomplished via certification, which requires operations to follow traceability and verification practices, and provides regular oversight in the form of audits and annual inspection.

This new Final Rule broadens the scope of who must be certified, opening more of the organic supply chain to oversight, reducing the types of uncertified entities in the organic supply chain that operate without USDA oversight (indulging brokers, traders, and importers), and mitigating the risks of noncertified businesses handling organic product.

The Final Rule also requires the use of NOP Import Certificates for all organic products entering the United States. This change expands the use of NOP Import Certificates to all organic products imported into the United States, improving the oversight and traceability of imported organic products.

Read the full rule, National Organic Program (NOP); Strengthening Organic Enforcement, here.

To stay informed on trade news and other important updates, stay connected with a customs broker.