CATO: Last December, regulators at the U.S. Department of Agriculture ruffled a lot of feathers by withdrawing a regulation published on the final full day of the Obama administration that would have created new requirements for producers of “organic” eggs and poultry.
Called the Organic Livestock and Poultry Practices (OLPP) rule, it would have, among other things, specified that to boost the coveted “USDA Organic” seal, animals would need to be raised with certain minimum amounts of space, light, and access to the outdoors. USDA officials offered several rationales for first delaying and then withdrawing the Obama rule. First, they argued that by being overly prescriptive, the rule could discourage the development of new, innovative organic farming practices that would both meet humane standards and also keep costs under control. Second, the Trump USDA interpreted the relevant enabling statute more narrowly than the previous administration and judged that the rule exceeded statutory authority. Finally, the USDA said that “withdrawal of the OLPP also is independently justified based upon USDA’srevised assessments of its benefits and burdens and USDA’s view of sound regulatory policy.” The notice itself included many passages justifying the withdrawal, including:
■ “The OLPP final rule consisted, in large part, of rules clarifying how producers and handlers participating in the National Organic Program must treat livestock and poultry to ensure their wellbeing…. [The Agricultural Marketing Service] is proposing to withdraw the OLPP final rule because it now believes [the Organic Foods Production Act (OFPA)] does not authorize the animal welfare provisions of the OLPP final rule. Rather, the agency’s current reading of the statute, given the relevant language and context, suggests OFPA’s reference to additional regulatory standards ‘for the care’ of organically produced livestock should be limited to health care practices similar to those specified by Congress in the statute, rather than expanded to encompass stand-alone animal welfare concerns.”
■ “USDA believes that it may not lawfully regulate outside the boundaries of legislative text … and that it lacks the power to tailor legislation to policy goals, however worthy, by rewriting unambiguous statutory terms. Rather, USDA believes it may properly exercise discretion only in the interstices created by statutory silence or ambiguity and must always give effect to the unambiguously expressed intent of Congress.”
■ “The OLPP final rule is a broadly prescriptive animal welfare regulation governing outdoor access and space, transport, and slaughter, among other things.… USDA’s general OFPA implementing authority was used as justification for the OLPP final rule…. But nothing in Section 6509 authorizes the broadly prescriptive, stand-alone animal welfare regulations contained in the OLPP final rule. Rather, section 6509 authorizes USDA to regulate with respect to discrete aspects of animal production practices and materials: Breeder stock, feed and growth promoters, animal health care, forage, and record-keeping. Section 6509(d) is titled ‘Health Care.’ Subsection 6509(d)(1) identifies prohibited health care practices, including sub-therapeutic doses of antibiotics; routine synthetic internal parasiticides; and medication, other than vaccinations, absent illness.”
Fundamental problem / Many large-scale organic egg producers applauded the USDA’s withdrawal of the OLPP rule because it would have required them to modify their facilities at significant expense. But proponents of the rule cried foul at the change in course. For them, the rule would have been a financial boon, inasmuch as they were already generally conforming to the standards they had spent years lobbying for. The rule would have permanently protected their businesses from larger-scale producers who sought to enter the organic marketplace with innovative animal welfare approaches. The Washington Post quoted the outraged comments of Jesse Laflamme, co-owner and CEO of egg producer Pete and Gerry’s Organics: “What’s so upsetting is that there is such a gap between what organic consumers expect and what these factory farms are producing.” Therein lies the fundamental problem with the premise of government standards for organic agriculture, whether it involves the production of meat and eggs or farming of grain, fruits, and vegetables. The entire enterprise is driven more by what the purchasers of organic products expect or feel, rather than any evidence-based criteria. They often resemble the members of a religious cult. People should be free to exercise their beliefs, to be sure, but the government should not be in the business of codifying or promoting them. Why, then, did the USDA become involved in organic certification in the first place? When the organic standards were promulgated in 2000, then–secretary of agriculture Dan Glickman was unequivocal about the fundamental meaninglessness of the organic designation: Let me be clear about one thing, the organic label is a marketing tool. It is not a statement about food safety. Nor is “organic” a value judgment about nutrition or quality. It’s worth repeating: the organic label is no more than a marketing tool. And it’s a cynical one, because so many unsuspecting consumers are ripped off by the higher prices of organic products, without palpable benefit. That’s why, far from setting more rigid standards for the organic label, the feds should fully extricate themselves from defining “organic.” That definition would be best adjudicated by the market, at the expense of those who are willing to pay the premium. Organic agriculture has morphed into a massive special-interest bonanza. Annual sales of organic food in the United States now exceed $40 billion. Federal spending on organic agriculture has mushroomed from $20 million in the 2002 Farm Act to more than $160 million in the 2014 version (with further increases under consideration). And according to the USDA, during the Obama administrationtheUSDA “signed five major organic trade arrangements and has helped organic stakeholders access programs that support conservation, provide access to loans and grants, fund organic research and education, and mitigate pest emergencies.” Free to choose / The government should not be putting its thumb on the scales in those ways. It is especially noteworthy that other, analogous special interests—such as the producers of kosher and halal foods— don’t receive similar government benefits. And for that they are better off. There are enough kosher food–certifying organizations to meet a very wide range of belief systems, for example, and consumers are free to choose products only from groups that meet their standards. This approach allows those who seek to adhere to the strictest standards to have certifying agencies on which they can rely, while also allowing those who accept more relaxed standards to have a wide range of affordable products that meet their religious needs. They are, in Milton Friedman’s memorable phrase, free to choose. This democratized private-sector approach has had the effect of expanding the market for fresh kosher meat in the United States. In smaller communities that can’t support a market for the significantly more expensive “glatt” kosher meat (which must meet the strictest standard), kosher consumers can go to Trader Joe’s stores throughout the country and purchase meat that satisfies a more basic and affordable kosher standard. Some of this stratification is taking root in the organic industry already. Some true believers are promoting a kind of stricter standard, “organic-plus” designation. That’s fine: as long as the government isn’t involved and there isn’t fraudulent advertising, we don’t care if, in order to avoid earthly contamination, organic-plus produce is required to be produced on the moon. The private-sector approach to certifying faith-driven food purchases expands the market and keeps cost down by allowing consumers to pay premiums that reflect their beliefs. And it doesn’t cost nonbelievers a penny. Organic food companies know this. That’swhy those who favor the OLPP are so outraged about its withdrawal.Without new, more rigid, federally mandated standards, they’re forced not only to compete among a range of organic options but also have to justify the higher cost of their own products through marketing—attheir own expense. Organic boosterism at the federal level is not without consequences. Consumers have been snookered into believing that organic food is healthier, safer, or better for the environment than non-organic options, although the scientific evidence argues otherwise. Lower crop yields are inevitable given organic farming’s systematic rejection of many advanced methods and technologies. Those lower yields, in turn, increase the pressure for the conversion of more land to farming and more water for irrigation, both of which are serious environmental issues. Because prices for organic food are much higher, those misconceptions eat away at consumers’ buying power. And while organic marketers like to promote the idea that “organic” implies “locally grown,” the United States is actually a net importer of organic goods,including (supposedly) organic grains from countries like China, India, Turkey, and Romania,with no way to be sure those countries adhere to “organic” standards that even remotely resemble those in the United States.Moreover, there is documented widespread cheating in the organic designation of eggs, milk, and imported grains. Let’s return to the OLPP rule and the USDA’s decision to withdraw it. The withdrawal elicited bitter condemnation from many organic farmers and the Organic Trade Association, whose long-standing lobbying for the rule was rent-seeking, pure and simple. The group knows its constituency, whose views were reflected in a March 2017 survey by Consumer Reports. In that survey, some 60% of Americans said that it is extremely or very important that animals used to produce organic food “are raised on farms with high standards for animal welfare.”Further,54% said that it is extremely or very important that eggs labeled “organic” come from hens that are “able to go outdoors and move freely outdoors.” We support the withdrawal of the OLPP rule, but see it only as a first step in ending the federal imposition of belief-based food production standards. If industry and consumers want such standards, they are free to form nongovernmental entities at their own expense to develop whatever rules or sets of rules they prefer. If they do so,we—as believers in market-driven solutions—will gladly give them our blessing.