When Oregon organic hazelnut grower Bruce Kaser started looking into why organic hazelnut imports from Turkey were priced so low, close to conventional hazelnuts, he found he was pulling on a thread that had the USDA certification of foreign commodities unraveling. His research exposed a systemic, conflict-ridden scandal, and led to the filing of a federal lawsuit in October 2023 against the USDA, alleging a breach in the intent of Congress’ Organic Foods Production Act (OFPA).
Kaser, a certified organic farmer and semi-retired attorney, teamed up with well-known organic industry watchdog, OrganicEye. Their inquiry revealed that growers in Turkey and other exporting countries were being allowed to skip the legally-mandated annual inspections, including field inspections and audits of the documentation of all purchased inputs and commodity sales, which are required of growers in the US.
In the initial federal lawsuit, the USDA successfully challenged Mr. Kaser’s standing to bring suit. On November 18, he submitted his appeal to the 9th District Court.
The appeal includes the following points:
Pratum Farm argues the USDA organic seal means that the food product it is affixed to comes from farmland that was inspected and certified as generally not using synthetic fertilizers or chemical insecticides or chemical herbicides (“organic”). This is based on provisions of Organic Foods Production Act passed by Congress in 1990.
The appeal states that, although the USDA has been allowing farms in uncertified “groups” to import food for decades, it has more recently intentionally designed a regulation that favors agribusinesses importing organic food, undercutting the livelihoods of US farmers, by eliminating foreign farm inspection and organic certification requirements for their supplier-farms, entirely or nearly entirely. The USDA is allowing the agribusinesses to wrongly use the USDA organic seal in the supply chain and misinform US consumers, i.e., that all organic food products come from inspected and certified farms.
If the regulation is allowed to stay in place, it will destroy the integrity of the USDA seal because of the USDA’s constant messaging to the public that the seal is only used in connection with food that comes from inspected and certified farms. From the beginning, consumers have been assured that “independent, third-party” certifiers were verifying organic claims.
Agribusinesses are aggregating produce from hundreds, and sometimes thousands, of uncertified farms who are their captive suppliers — a gross conflict of interest, violation of federal law, and abuse of consumer goodwill.
The USDA has never told the public about the “other” system it has been allowing for a long time that misleads the public vis-à-vis misuse of the USDA seal.
The industry, with the backing of its primary lobby group, the Organic Trade Association, has argued that small farmers in developing nations need support to access markets. But OrganicEye counters that this has created a two-tier organic system that US farmers can’t compete with.
“Not only are US farmers losing their livelihoods, and consumers being increasingly exposed to the potential for fraudulent, imported organic commodities and ingredients, but small subsistence farmers are vulnerable to abuse, becoming, in essence, indentured servants who can only access the organic market through one, exclusive buyer,” said Mark Kastel, Executive Director of OrganicEye, a Wisconsin-based farm policy research group.
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INTRODUCTION (access full appeal)
This is an appeal of the lower court’s ruling that the plaintiff lacked standing to bring a complaint under the Administrative Procedure Act (“APA”). This case raises questions about what the USDA organic certification mark (referred to here as “the mark”; “the seal”; “the USDA seal”; or “the USDA organic seal”) will mean to consumers if the mark is used to certify food as “organic” pursuant to a new federal regulation that effectively eliminates a decades-old statutory requirement for on-site farm inspections as a prerequisite for “organic” food labeling.
The Appellant, Pratum Farm, LLC (“Pratum Farm”), is a certified organic hazelnut farm operation in Oregon. Pratum Farm is licensed to use the USDA organic seal by Appellee, United States Department of Agriculture (“USDA”).
Pratum Farm has been making licensed use of the USDA seal since 2022 in connection with growing and selling organic hazelnuts direct to consumers and wholesale/processor entities. This litigation arose because the new regulation enables Turkish hazelnut crop aggregators to use the USDA seal to falsely certify as “organic” certain hazelnuts that are imported into the United States (“U.S.”) (Pratum Farm’s assertion on the merits).
Pratum Farm’s APA complaint alleges that the new regulation (called “the 2% rule” by Pratum Farm) exceeds the statutory authority of the Organic Foods Production Act of 1990 (“the OFPA” or “OFPA”). OFPA organic certification statutes require that the USDA organic seal only be used in connection with food that comes from “certified” organic farms. As a prerequisite to organic certification, the OFPA requires each farm to be inspected, on-site, every year by a USDA-accredited certifier.[1] The 2% rule eliminates the farm inspection requirement nearly entirely, if not entirely.
The challenged rule is specifically designed by the USDA to favor nonfarmer foreign food processor or trader entities (“aggregators”) who acquire crops from large numbers of uncertified foreign supplier farms that were never visited by organic farm inspectors of any kind. This serves to grant the aggregator (not the farmers) the first-in-line license to use the USDA seal in a supply chain that begins with the aggregator and ends in the U.S. market, wrongly indicating to the U.S. public that food originates from “certified” organic farms when they do not. In the case of aggregators who are Turkish hazelnut shellers, the rule enables aggregators/shellers to acquire in-shell hazelnuts from uninspected and uncertified Turkish farms and piggyback the USDA seal onto the aggregator’s shelled hazelnut kernel products.
Because the USDA seal is a “certification mark” that certifies the aggregator’s hazelnuts come from farms that were inspected and certified for organic compliance, the rule serves to convert what would be “illegal” organic labeling (i.e., misuse of the USDA seal), under the OFPA and other statutes, to “legal” organic labeling under the new federal regulation. The resulting public deception and confusion harms the reputation and integrity of the USDA seal, with the reputational harm reaching to Pratum Farm as a licensed user of the seal. In addition to the deception and confusion that is created, the rule enables Turkish aggregators to acquire licenses to use the USDA seal at low cost, which is a factor that enables cheap imports of purportedly “certified organic” hazelnuts from Turkey that suppress Pratum Farm’s prices in high-value organic integrity markets where Oregon organic hazelnuts are sold
[1] Pratum Farm is inspected by the Oregon Department of Agriculture (“ODA”), which is one of many USDA-accredited certifiers.