FSA lowers reimbursements for organic certification

The USDA Farm Service Agency is reducing payments to assist organic producers with their annual certification costs through fiscal year 2023.

Under the Organic Certification Cost Share Program, farmers may be partially reimbursed for organic certification in four main production areas, or “scopes,” including crops, livestock, post-harvest handling and wild crops — things that grow in the wild, as opposed to cultivation.

On Aug. 10, the FSA announced payment rates will be lowered from 75% or up to $750 per scope, to 50% or up to $500 per scope.

While the agency says the decision was “due to expected participation levels and the limited funds available,” organic farming groups and certifiers say they are dubious.

Chris Schreiner, executive director of Oregon Tilth, said the change caught him by surprise. Based in Corvallis, Ore., Oregon Tilth certifies organic operations in 49 states.

In Oregon, the Organic Certification Cost Share Program is administered jointly by the FSA and state Department of Agriculture. Figures from ODA show Oregon received $284,000 from the USDA last year and paid out $177,679 to 239 applications.

Leftover funds are supposed to roll over to future years, as required by the 2018 Farm Bill. According to a notice in the Federal Register, the program had approximately $4 million in national funding available from previous years to use in 2020.

However, the USDA stated in 2019 that it had $16.4 million in carryover to use for future years. Schreiner said that disparity has left him scratching his head.

“Where did those dollars go? I think that is the question on most people’s minds,” he said. “What’s the accounting here?”

USDA spokeswoman Amanda Heitkamp said the $16.4 million in carryover funding for 2019 did not take into account money that still needed to be disbursed to state departments of agriculture for the previous fiscal year. She said the agency going forward will only announce the amount of funding for “new” program applications, hence the difference.

Heitkamp said carryover funds vary from year to year, depending on the number of approved applications. Between local FSA offices and state departments of agriculture, the USDA received 12,700 applications in fiscal year 2017, 15,600 in fiscal year 2018 and 13,600 in fiscal year 2019.

Kate Mendenhall, director of the Organic Farmers Association, also questioned USDA’s accounting. She said the program should have enough money to maintain payments at the 75% rate, if not provide additional support for organic producers reeling financially from the COVID-19 crisis.

Organic farmers were largely excluded from other USDA pandemic relief programs including the Coronavirus Food Assistance Program, Mendenhall said. The Organic Farmers Association and National Organic Coalition have advocated increasing the organic certification cost share to 100% as a means of providing some stimulus.

Instead, Mendenhall said regulators are doing the opposite.

“I think all (organic) farmers are feeling unsupported by the USDA,” she said. “These are farmers that feed our communities. We do a good job to steward our clean earth, water and air, and we need better support from our USDA.”

The USDA Census of Agriculture shows the number of organic farms increased from 14,326 to 18,166 nationwide between 2012 and 2017, and product sales more than doubled from roughly $3.1 billion to $7.2 billion.

In Oregon, the number of organic operations rose from 554 to 567, while sales jumped from $1.9 million to $2.7 million.

Abby Youngblood, executive director of the National Organic Coalition, said the group is outraged about reducing payments for certification in the midst of a pandemic.

”Producers and their organic operations need this support now more than ever because they are faced with loss of markets due to COVID-19 and increasing costs as they modify their operations to keep workers and customers safe and implement new sanitation and staffing procedures,” Youngblood said.

Changes in the payment calculation will allow more certified organic operations to receive assistance, the USDA stated, adding that reimbursements could return to 75% if Congress authorizes additional funding.

Schreiner said it is not certain that will happen, and even if it does, it may be too little too late for some farms.

”Unfortunately, it’s going to have a disproportionate impact on those operations that could use the help the most,” Schreiner said. “Everyone is trying to weather this storm, but those dollars stretch longer for those small to mid-size operations.”