On September 27, 2023, champions of our domestic food system introduced the Organic Market Development (OMD) Act. The bill was led in the Senate by Sen. Tammy Baldwin (D-WI), Sen. Angus King (I-ME), Sen. Peter Welch (D-VT) and Sen. Kirsten Gillibrand (D-NY) and its companion bill was led in the House by Rep. Anne Kuster (D-NH), Rep. Chellie Pingree (D-ME), and Rep. Andrea Salinas (D-OR). The legislation will go far in unlocking the potential of the organic marketplace and ensuring the continued growth of organic in the United States. Read our full press release here.
Since the Organic Foods Production Act was codified in 1990, the US organic industry has grown steadily each year. In 2022, the market reached a record $67 billion. 82 percent of U.S. households are buying organic. However, the number of domestic organic acres has been limited by poor market access in the United States. As a result, farmers often struggle to access processing infrastructure in their region, a phenomenon that has contributed to significant attrition in the organic dairy industry. Producers commonly have no options for marketing cover crops, which leaves money on the table when farmers are unable to diversify their income with the crops that build soil health. Without domestic processing infrastructure, livestock farmers are forced to rely on international grain markets that are subject to severe volatility. The stresses of international trade recently contributed to a feed crisis which led the USDA to create the historic Organic Dairy Marketing Assistance Program.
“Consumer demand for organic continues to grow, but too much of this demand is being met by imported organic food and fiber. The Organic Market Development Act ensures that we will have the infrastructure in place here in the US to process organic products, so that more American farmers can benefit from this market opportunity,” said Britt Lundgren, Senior Director of Sustainability, Stonyfield Organic.
Resilient networks, whether they be soil microbiomes or local communities, are the foundation of organic farming. Organic farmers have consistently voiced the need for increased domestic processing to meet consumer demand, diversify farm revenue, and support regenerative practices. The Organic Trade Association elevated the voice of farmers to USDA and insisted their specific concerns were addressed in the Pinpointed Organic Market Development grant program under the Organic Transition Initiative. The grant opportunity was heavily applied to, and the community quickly committed to go far beyond matching the $75 million made available through the program.
The OMD Act codifies the Pinpointed Organic Market Development grant program with minor changes and is aimed at leveraging investments in new and expanded organic markets by funding and supporting increased processing capacity, market development activities, targeted equipment purchases, and other activities to increase consumption of domestic organic commodities. This legislation is fundamentally about solving the supply chain gaps for the market to support organic farmers and businesses. It creates a development program, administered by USDA’s Agricultural Marketing Service, to offer grants annually to eligible applicants.
Grants under OMD will be structured in three project types, 24-month Simplified Equipment-Only with funding between $10,000 and $100,000, and 3-year Market Development and Processing Capacity Expansion with funding ranging between $100,000 and $3,000,000. OMD would maintain the 2023 funding base of $75 million annually through Commodity Credit Corporation funding. Additionally, OMD will allow authorization for appropriations of $15 million for 2024 and each fiscal year thereafter.
The simplified equipment-only grants allow farmers to purchase and install new processing equipment, empowering farmers to process, package, and store products or commodities on farm. This program can help farmers access markets and protect their crops from weather and pests while waiting to go to market.
The market development grants can help manufacturers develop new products. It could create new marketing avenues between producers, handlers, and consumers. It can be used for advertising and promoting organic products, or even expanding consumer education on organic. This funding bucket will both create and help farmers meet increased consumer demand for organic.
Finally, the processing capacity expansion grants will create or expand processing infrastructure to bring new organic products to market and increase capacity of existing lines. Increasing domestic processing of organic soybeans will protect farmers from market fluctuations. New processing for organic hemp and wool will allow the industry to meet consumer demand for organic textiles.
“The Organic Market Development Act will enable businesses and farmers to solve persistent supply chain gaps and move more value-added organic commodities to market. This organic infrastructure bill is aimed at creating the right-sized processing and market strategies that bring organic goods to more consumers who can decide to make that organic food choice. We are hopeful this bicameral legislation can ultimately be realized in the next farm bill. It is good policy and a big thanks to Senator Tammy Baldwin and Representative Annie Kuster for championing the bill with other congressional leaders,” said Adam Warthesen, Senior Director of Government & Industry Affairs for Organic Valley.
You can support OMD by signing on to OTA's industry endorsement letter and contacting your representative and senators to ask them to co-sponsor the bill. Particularly if you or your business are a constituent of a House Agriculture Committee member, please contact us to ask how you can help gather sponsors for the bill.
