Organic Check-off: Who pays

Organic Checkoff Program Proposed Assessment Framework

  • Assess broad and shallow
  • Voluntary participation for small farmers and businesses
  • Assess imports

UPDATED: 3/13/2015

Who would pay for an Organic Check-off program?

The Organic Check-off proposal is as unique as the sector itself. In order to accomplish fair and equitable participation by certified organic entities, the assessment will be broad and shallow. The vision is that if everyone pays a little, then everyone gets a big benefit. Everyone means not only producers but all certificate holders throughout the supply chain—handlers, brand manufacturers, co-packers, importers.

The proposal calls for organic certificate holders with organic sales in excess of $250,000 to be subject to a mandatory organic check-off assessment, and organic certificate holders with organic sales less than $250,000 to have the choice of whether to voluntarily be assessed. The check-off fee would apply to the entire supply chain.

Would an Organic Check-off program assess imports?

Yes. Imports would get assessed, and dollars would be used to promote organic and provide research to U.S. organic farms and ranches. There are two ways this could be accomplished: 1) establish import certificates under the National Organic program, or 2) utilize Harmonized System Trade Codes. Both of these options have been vetted by USDA and are considered feasible.

How would an Organic Check-off program assessment rate be determined?

The complexity and diversity of the organic value chain makes it impossible to establish a commodity-based assessment that is fair. Therefore, the Organic Check-off proposal outlines an assessment that is based on organic sales.

Based on a value-added model that would assess 1/10th of 1% of Net Organic Sales (i.e. total gross sales, minus your certified organic cost of goods such as feed, seed and planting stock for producers; or fluid milk, organic chocolate. etc., for processors). For example, there would be a $100 assessment at $100,000 Net Organic Sales and a $1,000 assessment at $1,000,000 Net Organic Sales.

Would an Organic Check-off program assessment have exemptions?

The Organic Check-off proposal does not have a de minimis exemption, but includes a provision to allow producers and handlers with revenue below $250,000 per year (which is how USDA defines a “small” farm) to choose whether or not to participate.  If they voluntarily participate, they would be assessed at the same 1/10th of 1% of Net Organic Sales rate.

This voluntary participation model was developed in response to producer polling that explored alternative contribution options such as an exemption set at $100,000 or $250,000 or the possibility of no exemption at all.

The law states that only assessed entities (through mandatory or voluntary assessments) are eligible to vote in any referendum and have a direct say in how the funds are spent, the program is designed to assure that benefits are not disproportionate to any segment of the industry. While smaller businesses may choose not to pay into the collective fund, they will still benefit, along with the entire sector, from the promotion and research programs funded by the Check-off.

What if you’re already paying in to another Check-off program?

If you participate in another federal check-off, you would get to choose where to direct your assessment.