Oregon Tilth's Policy Recommendations for the Organic Certification Cost Share Program

The Organic Certification Cost Share Program (OCCSP) provides financial assistance to certified organic farmers and handlers throughout the United States through federal funds. The reimbursement reduces the financial burdens of seeking and maintaining organic certification. Federal funding for cost share started in the 2002 Farm Bill as a way to meet consumer demand for domestic organic products and incentivize farmers to employ biologically sound practices.

The OCCSP suffers from a convoluted process causing relatively low utilization rates.

Nationally, the usage rate of the OCCSP is 38.5%1. Significant structural changes, as well as program administration changes, should be considered to remedy the obstacles around the OCCSP.

1 Table 1: 2020 Utilization Rates

38.5%1

CERTIFICATION

increasing funding to 75% up to $1,500 per scope while expanding coverage;

partnering with organic certifiers on more program administration with the opportunity to fund staffing and other associated program administration costs;

enhancing and streamlining communication and outreach tactics around the application process and program.

These solutions will make the OCCSP more efficient and by doing so will positively impact farmers, the environment and consumers alike. This program has the potential to uplift communities, food systems, people and habitats by creating more access to the organic industry for historically underserved farmers, climate-conscious farmers and small to mid-sized farms.

1. INTRODUCTION:

The Organic Certification

Cost Share Program (OCCSP)

is funded by the United States Department of Agriculture (USDA) and administered by the Farm Service Agency (FSA).

Some state agencies also administer the program but participating states can vary year to year depending on funding and agency priorities. State agencies must apply to FSA to administer the program to producers.

The OCCSP program offsets some of the costs of organic certification for organic farmers and handlers. Organic producers and handlers may apply either to participating state agencies or to the FSA and can receive reimbursements for a range of certification costs including application fees and inspection costs.

Currently, as of 2022, the cost share program provides reimbursement of up to 50% of organic certification costs each year per scope, or, up to a maximum of $500 per scope. This is a reduction in funding levels.

In the past, organic producers and handlers could receive up to a 75% cost reimbursement or a maximum of $750 per scope. However, due to a combination of expected participation levels and limited funding for the fiscal year 2020, funding was reduced2.

As this reimbursement reduction coincided with the COVID-19 pandemic, organic producers and transitioning operations experienced greater financial challenges. Operators reported significant accounts of loss of markets, increased costs and labor shortages, along with the preexisting costs of transition, certification, and inspection3

Due to the ongoing challenges of the Covid-19 pandemic, the USDA created the Organic and Transitional Education and Certification Program (OTECP) as part of the USDA’s Pandemic Assistance for Producers initiative4 .

This year, 2022, OTECP covers up to 25% of eligible certification costs, or up to a maximum of $250 per scope. With the OTECP program, organic producers and handlers have the ability to apply to OTECP and OCCSP and receive a combined reimbursement of up to 75% or a maximum of $750 per scope. While producers may apply for OCCSP through participating state agencies or through the FSA, the OTECP application is only accepted through the FSA.

This white paper explores potential opportunities to improve OCCSP.

2 National and Agricultural Management Assistance Organic Certification Cost Share Programs 2020 Report to Congress

3 United States Department of Agriculture. (2022, June 7). Organic and Transitional Education and Certification Program. USDA Farmers.gov

4 NOTE: As part of the USDA’s Pandemic Assistance for Producers initiative, OTECP was created as a short-term program that is expected to be unavailable after 2022.

OF CERTIFICATION COSTS PER “SCOPE” * REFUNDED THROUGH THE NATIONAL ORGANIC CERTIFICATION COST SHARE PROGRAM 50%

OR A MAX OF $500

*CROP, LIVESTOCK, WILD CROP AND HANDLING (ELIGIBLE ORGANIC OPERATIONS)

2. POLICY SOLUTIONS AND

RECOMMENDATIONS:

Categorized from most beneficial to least

I. INCREASE FUNDING FOR THE ORGANIC CERTIFICATION COST SHARE PROGRAM

The most fundamental problem with the cost share program is the amount of reimbursement. This was exacerbated by the 2020 funding cut. Organic certification is no small feat. It involves record keeping, detailed planning, clear comprehension of regulations and input requirements, as well as a three-year transition period of organic practices without the benefits from organic premiums.

The cost of organic certification (and inspection) comes on top of these investments. While average certification costs vary by state and range up to $5,000 a year in some states, the average cost of certification is $2,813.165 which is a dramatic increase of more than 85% from 2012 when the national average was only $1,5166. This increase in certification costs is directly linked to increased oversight and verification protocols to protect organic integrity. In those years organic certifiers have strengthened systems to prevent fraud and implemented additional regulations.

To keep up with this increased cost of certification, total funding for the OCCSP should be increased to meet 75% of certification costs, up to $1,500 per scope while reimbursing broader costs like transition, soil testing, technical assistance and more.

Further, the program should prioritize Historically Underserved operations that would benefit the most from the cost share. The 2018 Farm Bill definition of Historically Underserved includes socially disadvantaged, beginning, limited resource, and veteran farmers and ranchers7. These producers should be prioritized by giving them first access to funds and/or providing them higher cost share levels.

In the Oregon Tilth Client Farm Bill Feedback Survey, many respondents noted the cost of certification as a barrier. One respondent wrote that the cost of certification and inspection is “staggering & stifling for [a] smaller farmer,” with another respondent claiming certification and inspection costs are simply “Way too expensive,” especially considering how producers “must pay travel costs [of] inspectors.” It was also noted that the cost share program has to be significant enough in order to merit all of the paperwork and effort that is required.

Moreover, similar conclusions were found in the 2017 report, Breaking New Ground: Farmer Perspectives on Organic Transition, conducted jointly by Oregon Tilth and Oregon State University’s

Center for Small Farms & Community Food Systems. The Breaking New Ground report is based on survey responses from over 600 farmers who had identified as transitioning to organic between 2010 and 2015. Those surveyed were grouped into four different categories: one hundred percent certified organic farms, farms transitioning to organic, split farms (part organic and part non-organic), or farms not pursuing organic farming. The report concluded the cost of organic certification was a major obstacle for 43.2% of all respondents8. The cost of organic certification is simultaneously an impediment for those already certified organic and prevents producers from becoming certified organic in the first place.

The concept that certification cost is a barrier to producers is further reflected within the 2022 National Organic Research Agenda (NORA)9 . The NORA report specifically recommends increasing the per-farm reimbursement limit of the cost share program, maintaining that in order to increase support to organic producers and farmers during the organic transition, it is recommended to “Increase total funding and [the] per-farm funding limit for the National Organic Certification Cost Share Program (NOCCSP)”. This is notable because, as revealed in the report, certification costs and recordkeeping requirements both posed challenges for one-quarter to one-third of all respondents.

The time, labor, and cost necessary to become certified organic is noteworthy and should be better supported, in recognition of the multiple benefits organic practices and products offer.

Although the USDA attempted to remedy some of the cost share funds lost in 2020 with the introduction of the Organic and Transitional Education and Certification Program (OTECP) in 2021 and 2022, the complexity of the two separate applications for one year of cost share has deterred applicants. Further, the program is set to expire at the end of this year, leaving organic producers with a mere 50% or up to $500 per scope reimbursement.

To put the funding solution plainly, as one respondent wrote in the Oregon Tilth Client Farm Bill Feedback Survey, the cost share program needs “More funding, [and a] simpler application,” making “it as easy as possible for people to do the right thing.” After speaking with representatives from various organic certifiers and various State Departments of Agriculture, it appears increasing funding levels is a widely accepted solution. We maintain that funding levels should be increased so that maximum reimbursement is 75% of certification costs or $1,500 per scope and funding expands to cover costs of transitional certification, soil testing, and more.

5 See Appendix Table 2. These numbers used 2019 data from the National Agricultural Statistics Service (NASS) and were calculated to find the average cost of certification by state. It is important to note that looking at the median would give a more accurate depiction of costs incurred by the majority of organic producers because the average can be distorted by a minority paying notably higher fees. NASS did not provide median data, but it is recommended they calculate it in future reports.

6 Organic Production Expenses – Certified and Exempt Organic Farms: 2014

7 Historically Underserved Farmers and Ranchers

8 Breaking New Ground

9 The National Organic Research Agenda is a report released by the Organic Farming Research Foundation (OFRF) every five years and informed by surveys and focus groups made up of both certified organic producers and those transitioning to organic.

II. PARTNERING WITH CERTIFIERS ON MORE PROGRAM ADMINISTRATION

Certifiers possess working relationships and frequent communication with the producers they certify. Cost share benefits certifiers’ clients and supports their viability. This foundation makes certifiers a natural fit to administer the program.

The OCCSP application requires a copy of an operator’s organic certificate, a completed W9, an invoice marked paid by the certifier as the primary contents of the cost share application packet. Often, an applicant will submit an invoice that is not marked paid by the certifying body. This can cause unnecessary back and forth and even a rejected cost share application. To streamline this process, it’s more productive for OCCSP program administrators to work directly with certifying bodies for the application material. With this insight in mind, a natural solution is to employ certifying bodies to apply directly to the program for the operations they certify.

The most predominant obstacle to this administrative change is most likely time. This additional task will take up a significant amount of time that is not readily available for many certifiers. A second likely obstacle is with potential for privacy or confidentiality concerns regarding the W9 paperwork needed to complete the cost share application. While certifiers have most of the information needed (including official certification documents and marked paid invoices), the W9 paperwork requires a social security number or employer identification number. While certifiers have established procedures to handle and protect their clients’ confidential business information, the W-9 disclosure is information that some certifiers may be uncomfortable acquiring and maintaining.

Allocating administrative duties of the OCCSP to certifying bodies would streamline the process and make it easier for organic producers to receive their reimbursements. This solution would solve the issues that arise when there is miscommunication between applicants, program administrators, and certifying bodies by relying on the expertise of certifiers and the relationships between certifiers and producers.

CASE STUDY: VERMONT ORGANIC FARMERS (VOF)

This opportunity to streamline the program is evident enough that some certifiers are trialing their own programs despite their limited resources to do so. Currently, certifiers cannot administer the program directly and must absorb the cost of staff time to support the program’s success. Regardless, with their efforts, Vermont Organic Farmers (VOF) is bolstering high program utilization rates. In Vermont, VOF works closely with the Agency of Agriculture to simplify the application process and issue cost reimbursement payments.

To begin, the Agency of Agriculture sends VOF the year’s official application. VOF has a spreadsheet of all their clients with the information needed to fill out the application. They then use it to generate and complete each application for each client automatically. VOF then sends out that completed application form to their clients, along with a blank W9 and a cover letter explaining instructions on filling it out. All the producer has to do is confirm the information is correct on the application, sign it, fill out the W9, and then submit both to the Agency of Agriculture. VOF and the Agency of Agriculture work together to provide the remaining requirements. That is, the organic certificate and the marked paid invoice. VOF sends the Agency of Agriculture that same spreadsheet used to generate the application form, as it contains the verification of organic certification and of fees paid/invoices.

Vermont producers do not have to handle submitting the certificate or the invoice documents -- that all occurs in partnership between VOF and the Agency of Agriculture.

Coincidentally, this solution can result in less work for certifiers and government agencies when they no longer have to manage mishaps and mistakes that can, and do, happen when documents are submitted incorrectly and forms are incorrect. This level of engagement between VOF and the Agency of Agriculture is possible because VOF invests its own time and resources into this partnership, essentially as a pro bono service.

II.a CERTIFIERS TO ADMINISTER THE ORGANIC CERTIFICATION COST SHARE PROGRAM IN FULL:

Taking the solution to utilize certifying bodies in the administration of cost share one step further, we recommend reallocating USDA cost share funds to compensate certifying bodies for this work.

Employing certifiers to administer cost share for all their clients including those outside the certifier’s home state is a start in remedying the problems with OCCSP, but to ensure this program is enduring, certifiers need funding to allocate time and resources to this vital program.

The work to administer the cost share program varies by organization and by state. Typically, it takes more than one staff person to administer the different aspects of the program. Staff time from accounting, administration, funding specialist, IT, and communications teams are involved in the cost share process. Accounts differ, but program administrators are generally allowed a maximum of 10% of allocated funding to run the program. This 10%, or future decided percentage, should go directly to support certifiers’ investment to administer the OCCSP for their clients.

Incorporating certifiers in this way has the potential to allow the cost share program to be conducted on an ongoing basis. If certifiers are granted funding, it can eliminate the need for producers to complete the application each year as certifiers can simply credit them their reimbursement as part of the certification process.

There would still be one initial paperwork step, acquiring the completed W9 form, but afterward, as long as producers confirmed no information had changed, there would be no additional paperwork11. This eliminates the need for annual deadlines for the OCCSP and increases accessibility which will, in turn, raise utilization rates nationwide.

11 This is similar to how WSDA ran the program prior to the shift from the NOP to the FSA.

CASE STUDY: THE WASHINGTON STATE DEPARTMENT OF AGRICULTURE (WSDA)

While this concept has never been accomplished before, the Washington State Department of Agriculture (WSDA) both certifies organic producers and administers the cost share program.

WSDA has administered cost share since the early 2000s when the National Organic Program (NOP) ran the program. During this time, WSDA would process the cost share in conjunction with their clients’ annual renewal fees.

WSDA was able to enroll those who previously participated and only sent a letter to everyone else to prompt them to apply10. This system erased a layer of bureaucracy and simplified the program for all parties involved.

During this time, WSDA’s outreach about the program was minimal, however, because cost share was intertwined with the certification process, a robust outreach campaign was not necessary for high rates of program utilization.

When program funding was reduced in 2020, WSDA no longer had sufficient reimbursement funds to meet the demand. In the following year, they were forced to move away from the streamlined process and revised the process to require a new application from all producers to ensure producers who were not already in the system had an equal opportunity to receive cost share.

10 It is important to note that those who received cost share reimbursements were issued checks, similar to how other states reimburse producers through the program currently. WSDA never credited their clients’ accounts with the reimbursement, their clients always had to pay in full and would later receive their check.

III. STREAMLINE AND INCREASE COMMUNICATION EFFORTS ABOUT THE ORGANIC CERTIFICATION COST SHARE PROGRAM:

A simple change within the existing structure of the cost share program is to improve communication around the OCCSP. Despite years of outreach and announcements, some producers are still unfamiliar with the cost share program.

In responses from the Oregon Tilth Client Farm Bill Feedback Survey, several producers indicate they are unaware of the program. Of those producers surveyed who did not participate in the cost share, the primary reason was that they were simply unaware of the program12. Further, the OCCSP application should be simplified, asking organic producers for only pertinent information. Streamlining this application process may encourage more applicants.

Our recommendation is to increase communication efforts about cost share and streamline the process. This recommendation has the potential to remedy awareness but does not offer the same level of potential increased program utilization as recommendations I and II do.

When feasible, these additional outreach strategies are well worth the investments of time and funding to implement them. It is important to note that there are instances where weak outreach campaigns result in lower utilization rates. Whether from a lack of funds to facilitate all of the printing and postage costs, or from a shortage of staff time, when there is low outreach, there are lower observed utilization rates.

The more thorough a group’s outreach, the more producers will apply to the cost share program, and the more organic operations will be reimbursed for certification.

12 The second most prominent reason being that it was not worth producers’ time for the amount of reimbursement available.

CASE STUDY: MONTANA STATE DEPARTMENT OF AGRICULTURE

Improving the comprehensibility of the application itself has shown to increase utilization. For example, Montana has relatively high utilization rates at 62.46% as compared to the national average of 38.58%13.

An integral piece that has led to success in Montana is an application that is simple and straightforward. The cost share application released by the Montana State Department of Agriculture underwent multiple revisions to become one concise page that asks for only what is required. In conjunction with this, Montana has a three-level outreach initiative which includes sharing information on the cost share program during the certification process, sending notices of the application’s release, and later on, sending out a reminder email for those who have yet to submit paperwork.

CASE STUDY: VERMONT ORGANIC FARMERS (VOF)

We can also look at Vermont Organic Farmers (VOF) as a case study for a productive promotion campaign. Vermont, who also boasts relatively high utilization rates at 52.62% as compared to the national average of 38.58%14, has a strong outreach program

VOF sends out emails as well as mailed letters announcing the application’s opening along with instructions on the process of applying. After the email and letter, a postcard is sent. This has shown to be quite helpful, as it can be less daunting to receive a postcard from an organic certifier that highlights an opportunity for reimbursement instead of an enclosed letter that could contain a more serious message potentially involving compliance or a bill. VOF goes one step further, sending out a robocall to producers. It’s important to note, this outreach is supported by the Agency of Agriculture in Vermont, as they have a working agreement and provide funds to VOF to do this.

52.62%

III.a CREATE MORE EDUCATIONAL AND COMMUNICATIONS RESOURCES FOR INSPECTORS TO USE

Another way of improving communication and efficiency is to provide more materials and tools to inspectors. It is not uncommon for producers to inquire about the cost share program to their inspectors. While not allowed to assist with completing paperwork, inspectors can point producers in the right direction and provide beneficial resources.

Ensuring that inspectors are well-informed on the cost share program and how to access it is an essential first step to leveraging the opportunity of transferring that knowledge to organic operations during the inspection. Creating both electronic documents and physical pamphlets for inspectors to share with those interested can encourage more use of the cost share program.

Again, these efforts can be costly and timely (both in staff time and printed materials), but there is an important correlation between education and awareness and usage of the OCCSP.

3. CONCLUSION

The goal of the cost share program is to ease the financial burden of organic certification for producers, especially for small and mid-sized operations that depend on the cost share program to keep certification accessible and affordable.

Program utilization rates differ state by state, with an average of 38.58% across the US15. Under the current structure, there is a need for improvement.

A larger conversation is necessary between certifying bodies and the FSA. Certification entities should have the opportunity to come together and discuss improvements and report to the FSA for review. There is a shared goal in supporting organic agriculture amongst all involved, which we can improve by working together.

TO CREATE SUBSTANTIVE CHANGE FOR THIS VITAL PROGRAM, OUR POLICY SOLUTIONS ARE ADVISED AS FOLLOWS:

I. INCREASE FUNDING FOR THE OCCSP

A. Reinstate the 75% cap

B. Increase maximum reimbursement to $1,500 per scope

C. Allow more organic and transitional costs incurred during certification to be reimbursed

II. ORGANIC CERTIFIERS TO APPLY AND ADMINISTER THE COST SHARE PROGRAM

A. Organic certifiers partner with the USDA and state agencies to manage the OCCSP program on behalf of their clients

B. Organic certifiers to administer the OCCSP in full for all their clients

C. Compensate certifiers for the staffing and material expenses necessary to support program success via partnerships or administration

III. STREAMLINE AND INCREASE COMMUNICATION EFFORTS

A. Organic certifiers should enhance and expand communications efforts to raise awareness and educate producers on the cost share program

B. The OCCSP should be simplified, asking those applying only relevant information

C. Certifiers should provide inspectors with cost share information and materials to spread awareness and usage of the program

D. Offer funding to certifiers that offsets outreach and education campaigns and materials

4. METHODOLOGY

To identify common problems and potential solutions, our methodology utilized both quantitative and qualitative approaches of information gathering.

Quantitative information and insights were acquired through USDA data on cost share program utilization and certification costs as well as organic producer survey results.

Qualitative information was acquired through eleven interviews with a diverse group of stakeholders, representing eleven states and ranging from government agencies with dedicated cost share program staff, to organic certifiers, to those who both administer the cost share program and certify organic.

5. APPENDIX

US State

Number of farms (crops, livestock, handling, and wild crops) certified (per Organic Integrity Database)

Table 1: 2020 Utilization Rates

farms assisted with cost share program (per FY 2020) - State Agencies

6. ACKNOWLEDGMENTS

This white paper, and the research involved, was made possible through the Building Ecological Skillsets for Transitions to Sustainability in Agriculture and Food Systems (BEST) Research and Extension Experiential Learning Fellowship for Undergraduates (REEU) program, as part of USDA’s National Institute of Food and Agriculture’s Research and Extension Experiential Learning Fellowships for Undergraduates program (grant no. 2021-68018-34620).

The research presented in this white paper was conducted by Adie Cheyne during her 2022 summer internship with Oregon Tilth. Adie would like to thank program co-directors Barbara Gemmill Herren and Robin Currey from Prescott College for their teachings and for their fellowship facilitation. Adie would like to give great thanks to Ben Bowell, for his guidance, support, and advice throughout this project. Adie would also like to thank Chris Schreiner for his revisions and feedback.

INDUSTRY EXPERTS INTERVIEWED:

• Gabrielle Ugalde, Oregon Department of Agriculture

• Andi Emrich, Florida Organic Growers

• Amalie Lipstreu and Carol Goland, Ohio Ecological Food and Farm Association

• Georgana Webster, Montana Department of Agriculture

• Ryan Burnette, Kentucky Department of Agriculture

• Cassie Dahl, Minnesota Department of Agriculture

• Alexandra Petrovits, MOSA Certified Organic

• Alice Smolinsky, Vermont Organic Farmers

• Katie Baildon, Northeast Organic Farming Association of New York

• Scott Rice and Brenda Book, Washington State Department of Agriculture

• Angie Stuehrenberg and Kim Hamilton, USDA-Indiana Farm Service Agency

7. REFERENCES

Farm Service Agency. (2021). Organic Certification Cost Share Fact Sheet Retrieved July 13, 2022, from fsa.usda.gov/news-room/fact-sheets/index

National Agricultural Statistics Service. (2019). 2019 Organic Farm Data. 2017 Census of Agriculture. Retrieved July 13, 2022, from nass.usda.gov/Publications/AgCensus/2017/Online_Resources/Organics/

Natural Resources Conservation Service. (n.d.). Historically Underserved Farmers & Ranchers. United States Department of Agriculture. Retrieved July 13, 2022, from www.nrcs.usda.gov/wps/portal/nrcs/detail/national/ people/outreach/slbfr/?cid=nrcsdev11_001040

Oregon Tilth and Oregon State University’s Center for Small Farms & Community Food Systems. (2017). (rep.). Breaking New Ground: Farmer Perspectives On Organic Transition. Oregon Tilth. Retrieved July 13, 2022, from tilth.org/app/uploads/2017/03/OT_OSU TransitionReport_03212017.pdf.

Organic Farming Research Foundation. (2022). (rep.). 2022 National Organic Research Agenda: Outcomes and Recommendations from the 2020 National Organic & Transitioning Farmer Surveys and Focus Groups. Organic Farming Research Foundation. Retrieved July 13, 2022, from ofrf.org/wp-content/uploads/2022/05/ OFRF_National-Organic-Research-Agenda-NORA_2022-report-1.pdf.

United States Department of Agriculture. (2020). (rep.). Report To Congress Fiscal Year (Fy) 2020 National And Agricultural Management Assistance Organic Certification Cost Share Programs. USDA. Retrieved July 13, 2022, from fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/organic-certification-costshare-program/pdf/2020-report-to-congress.pdf.

United States Department of Agriculture. (2022, June 7). Organic and Transitional Education and Certification Program. USDA Farmers.gov. Retrieved July 13, 2022, from farmers.gov/pandemic-assistance/otecp

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8. OREGON TILTH - 47 YEARS OF SERVICE

We believe food and agriculture should be biologically sound and socially equitable. This belief has guided Oregon Tilth for nearly five decades.

Support and promote biologically sound and socially equitable agriculture.

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TILTH /tilTH/ noun

• Quality of cultivated soil.

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In 1974, farmer-poet Wendell Berry spoke at the “Agriculture for a Small Planet” symposium in Spokane, Washington. In an auditorium surrounded by farmers and environmentalists, Berry said, “If we allow another generation to pass without doing what is necessary to enhance and embolden the possibility of strong agricultural communities, we will lose it altogether.”

Four months later, the Tilth movement was born.

Oregon Tilth envisioned a resilient environment, economy and community sustained by transparent agriculture. Tilth formed diverse alliances across the Pacific Northwest and organized for substantive change with public education and outreach.

Oregon Tilth organic certification services became one of the first national organic certifiers in 1982. Our leadership and hard-earned credibility propelled us to help create the USDA National Organic Program in place today.

Knowledge empowers people and we believe in sharing our technical expertise to educate and uplift. We develop programs and services that make producing sustainable food and market vitality possible and then amplify those resources to make them accessible. Since our inception, we’ve advocated for rigorous and sensible guidelines to maintain our food’s integrity. We continue to invest and promote farm viability, conservation efforts, soil health and access to equity in food and agriculture.

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