BILL ANALYSIS �
SENATE AGRICULTURE COMMITTEE
Senator Anthony Cannella, Chairman
BILL NO: AB 1625 HEARING: 7/3/12
AUTHOR: Allen FISCAL: Yes
VERSION: 06/18/12 CONSULTANT: Anne Megaro
Transition to Organics Act.
SUMMARY:
Existing law:
1. Established the state organic program in 1990 to protect
against the use of the term "organic" for products not
produced and handled under regulations promulgated by the
National Organic Program and by the secretary of CDFA.
2. Provides for definitions, certification process,
registration of organizations, inspections, recordkeeping,
an advisory board, fees, penalties, violations,
enforcement, and regulations for products sold or labeled
as organic.
3. Establishes the California Organic Products Advisory
Committee to advise the secretary of CDFA on organic
matters. The committee consists of 15 members: six
producers, two processors, one wholesale distributor, two
consumer representatives, one environmental representative,
two technical representatives, and one retail
representative.
Existing federal law:
1. Requires USDA to develop national standards and
regulations for organically produced agricultural products
to assure consumers that products labeled as "organic" meet
consistent, uniform standards and originate from farms with
organic certification, as authorized by the Organic Foods
Production Act of 1990.
2. Provides for definitions, regulations, organic
certification process, compliance requirements, production
and handling practices, accreditation program for
certifying agents, violations, penalties, and
appropriations.
3. Establishes a National Organic Standards Board and a
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National Organic Certification Cost Share Program. The
Program provides reimbursement to farms up to 75% (maximum
$750) of the organic certification cost.
This bill:
1. Establishes the Transition to Organics Fund (Fund), to
be administered by CDFA, which would consist of moneys
contributed from any industry, citizen, person, and state
agency sources. No moneys from the General Fund will be
used. The Fund shall be located within the State Treasury
or in a state depository bank approved by the State
Treasurer, and funds shall be available upon appropriation
by the Legislature.
2. Limits Fund spending to providing financial assistance
to persons who are transitioning their farms from
conventional to certified organic farming systems, as well
as administrative and operational expenses incurred by
CDFA.
3. Provides definition for "conventional" to mean any farm,
or portion of a farm, that is not a certified organic farm,
and has submitted a pesticide use report for that farm
prior to January 1, 2013.
4. Reimburses 25% of the costs associated with obtaining
organic certification for a person transitioning from
conventional to organic farming. Reimbursement is limited
to the first year of certification and includes inspection,
application, and annual fees.
5. Restricts maximum payment to $250 for any farm. The
maximum total payments made to a person (individual, group
of individuals, corporation, association, organization,
cooperative, foundation or other entity) shall not exceed
$1,000 per year.
6. Restricts consideration to newly transitioned farms
obtaining organic certifications on or after January 1,
2013.
7. Restricts reimbursement to a first-come, first-served
basis, contingent upon sufficient funds available in the
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Fund.
8. Requires the secretary to receive and accept, on behalf
of the Fund, any monetary contributions to the Fund from
any person or agency of the state and deposit those
contributions in the Fund.
9. Authorizes the secretary to adopt regulations, as
needed, to carry out this act.
10. Authorizes the secretary to administer disbursement of
moneys from the Fund in coordination with the procedures
associated with the National Organic Certification Cost
Share Program.
11. Authorizes the secretary to levy civil penalties on any
person who renders or furnishes false information in their
application seeking reimbursement moneys from the Fund.
12. Requires the secretary to keep records of contributions
to and payments from the Fund. These records must be
publically available upon request and reported annually to
the California Organic Products Advisory Committee.
COMMENTS:
1.Purpose of Bill: Persons wanting to transition from
conventional to organic farming face a number of financial
challenges. The most predominant is the three-year "wash-out"
period where farms must operate in organic fashion (i.e. sans
conventional fertilizers, pesticides, medicines) but are not
allowed organic certification or organic labeling, which
typically would recoup the higher cost of organic production.
In addition, once the farm is eligible to receive organic
certification, the farm must pay fees to obtain organic
certification. The author voices concern that these financial
challenges discourage many farmers from converting to organic
practices.
2.This bill reduces the cost (25%) of organic certification for
farms transitioning from conventional to organic farming
systems within their first year of certification, if initial
organic certification is granted on or after January 1, 2013.
A new program is established to carry out this goal and is
funded through voluntary donation of moneys from industry and
citizen sources, but may also include contributions from other
state agencies. No General Funds shall be used.
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3.Existing Federal Support : The National Organic Certification
Cost Share Program annually reimburses organically certified
operations for 75% of the costs of organic certification, not
to exceed $750. This program does not differentiate between
existing and newly converted organic farms, and Cost Share
applications are processed on a first-come, first-served
basis. According to a USDA FY 2011 report, CDFA received $1
million to operate the Cost Share program. All applicants
(1,475) within California received reimbursements on an
average of $625 each.
4.Dovetailing : The proposed state legislation would dovetail
the current federal organic program and when combined would
reimburse 100% (maximum $1,000) of the fees associated with
organic certification for conventional farms newly certified
as organic for the first year of operation. The author of
this bill is concerned that if federal moneys run out, new
organic farms will only be reimbursed for 25% of their
certification costs; however, the author recognizes that this
bill could be amended in future years to increase the
percentage of costs covered by the state program.
5.Funding : According to the author, this bill ensures that any
additional administrative costs incurred by CDFA will be
covered by moneys from this Fund, and in the event that there
are not enough moneys in the Fund to provide for these
additional costs, CDFA will simply not disburse any moneys.
The committee may wish to consider the vitality of this
program when, to date, a specific source of funding has not
been named or identified. The committee may also wish to
consider if the $250 reimbursement is a strong enough
incentive to overcome the financial burden of the three-year
transition to organic farming techniques.
RELATED LEGISLATION:
AB 1401 (Ma) of 2009. Vetoed by Governor. Nearly identical to
the present bill, with few technical amendments.
Governor Schwarzenegger's veto message stated: "While I support
the author's goal to assist individuals converting to organic
farming, I cannot support establishing an assistance program and
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expanding the workload of the California Department of Food and
Agriculture when there is no guarantee of a funding mechanism."
PRIOR ACTIONS:
Assembly Floor 52-19
Assembly Appropriations12-4
Assembly Agriculture 9-0
SUPPORT:
American Federation of State, County and Municipal Employees,
AFL-CIO
California State Grange
Sierra Club California
OPPOSITION:
None received