The USDA’s wide-sweeping regulatory update may affect your company, even if it is only a small ingredient in the multi-billion dollar organic foods supply chain.
On January 18, 2023, the USDA National Organic Program previewed the Strengthening Organic Enforcement (“SOE”) Final Rule, which will be effective March 20, 2023, and enforced March 19, 2024. The SOE is the first major update to the USDA’s organic regulatory scheme since the Organic Foods Production Act of 1990.
The SOE impacts not just farmers or food retailers but players throughout the supply chain, including:
- Entities considering organic certification;
- Operations dealing in the production and handling of organic products;
- Brokers, traders, and importers of organic products;
- Operations using nonretail containers for shipping or storing organic products;
- Retailers selling organic products; and
- Operations that import or export organic products.
By targeting labeling fraud and increasing transparency, the SOE is designed to increase industry confidence in USDA organic labeling. To do this, the SOE tackles several key areas, including the production, handling, and sale of organic goods and the USDA’s ability to oversee and enforce the SOE. More specifically, the SOE’s updates address the following:
- Reducing the number of uncertified entities in the supply chain by requiring broader certification;
- Requiring organic identification on nonretail containers that are used to ship or store organic products;
- Standardizing organic operation certificates;
- Authorizing the USDA to engage in more robust recordkeeping, traceability practices, and fraud prevention procedures;
- Clarifying how to calculate the percentage of organic products in a multi-ingredient product;
- Increasing the frequency and rigorousness of inspections of affected entities; and
- Requiring certification for all organic imports and specific certification depending on the producer group.
With affected companies having only one year to comply with the SOE (March 19, 2024), companies should start planning compliance now.