[Federal Register Volume 77, Number 8 (Thursday, January 12, 2012)]
[Proposed Rules]
[Pages 1979-1996]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-354]
[[Page 1979]]
Vol. 77
Thursday,
No. 8
January 12, 2012
Part II
Department of Agriculture
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Agricultural Marketing Service
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7 CFR Part 205
National Organic Program (NOP); Sunset Review (2012) for Nutrient
Vitamins and Minerals; Proposed Rule
Federal Register / Vol. 77 , No. 8 / Thursday, January 12, 2012 /
Proposed Rules
[[Page 1980]]
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DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Part 205
[Document Number AMS-NOP-10-0083; NOP-10-09PR]
RIN 0581-AD17
National Organic Program (NOP); Sunset Review (2012) for Nutrient
Vitamins and Minerals
AGENCY: Agricultural Marketing Service, USDA.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would address a recommendation submitted to
the Secretary of Agriculture (Secretary) by the National Organic
Standards Board (NOSB) on April 29, 2011. The recommendation pertains
to the 2012 Sunset Review of the listing for nutrient vitamins and
minerals on the U.S. Department of Agriculture's (USDA) National List
of Allowed and Prohibited Substances (National List). As recommended by
the NOSB, the proposed rule would continue the exemption (use) for
nutrient vitamins and minerals for 5 years after the October 21, 2012
sunset date. In addition, the proposed rule would amend the annotation
to correct an inaccurate cross reference to U.S. Food and Drug
Administration regulations (FDA). The proposed amendment to the
annotation would clarify what synthetic substances are allowed as
nutrient vitamins and minerals in organic products labeled as
``organic'' or ``made with organic (specified ingredients or food
group(s)).''
DATES: Comments must be received by March 12, 2012.
ADDRESSES: Interested persons may submit written comments on this
proposed rule using the following addresses:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
Mail: Toni Strother, Agricultural Marketing Specialist,
National Organic Program, USDA-AMS-NOP, 1400 Independence Avenue SW.,
Room 2646-So., Ag Stop 0268, Washington, DC 20250.
Instructions: All submissions received must include the docket
number AMS-NOP-10-0083; NOP-10-09PR, and/or Regulatory Information
Number (RIN) 0581-AD17 for this rulemaking. Comments should:
Directly relate to issues or questions raised by the
proposed rule;
Clearly indicate if you are for or against the proposed
rule or some portion of it and your reason for your position. Include
recommended language changes as appropriate; and
Be supported by relevant information and data to support
your position (e.g., scientific, environmental, manufacturing, industry
impact information, etc.). Commenters may include a copy of articles or
other references that support their comments. Only the supporting
material relevant to your position will be considered.
All comments received will be posted without change to http://www.regulations.gov. The NOP is specifically seeking comments on:
1. The actual economic impacts of this action on the industry,
including any expected mitigation factors that the industry may use to
comply with the proposed action. We are most interested in refining the
upper limit estimates referenced in the Regulatory Impact Analysis to
specify the actual costs and benefits of this proposal. This would
include any comments on the proportion of sales for different sectors
of the organic market (i.e. infant formula, baby food, fluid milk,
breakfast cereals, and pet food) that will be impacted by this action;
2. The adequacy of the estimated impact of the proposed action on
small entities; and
3. The length of the proposed compliance date.
Please submit comments related to these topics using the numbering
scheme indicated above.
Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov. Comments submitted
in response to this proposed rule will also be available for viewing in
person at USDA-AMS, National Organic Program, 1400 Independence Avenue
SW., Room 2646-South Building, Washington, DC, from 9 a.m. to 12 noon
and from 1 p.m. to 4 p.m., Monday through Friday (except official
Federal holidays). Persons wanting to visit the USDA South Building to
view comments received in response to this proposed rule are requested
to make an appointment in advance by calling (202) 720-3252.
FOR FURTHER INFORMATION CONTACT: Melissa Bailey, Ph.D., Director,
Standards Division, Telephone: (202) 720-3252; Fax: (202) 205-7808.
SUPPLEMENTARY INFORMATION:
I. Background
The Organic Foods Production Act of 1990 (OFPA), (7 U.S.C. 6501-
6522), authorizes the establishment of the National List. The National
List identifies synthetic substances that are exempted (allowed) in
organic production and nonsynthetic substances that are prohibited in
organic crop and livestock production. The National List also
identifies nonagricultural nonsynthetic, nonagricultural synthetic and
nonorganic agricultural substances that may be used in organic
handling. The exemptions and prohibitions granted under the OFPA are
required to be reviewed every 5 years by the National Organic Standards
Board (NOSB). The Secretary has authority under the OFPA to renew such
exemptions and prohibitions. If the substances are not reviewed by the
NOSB within 5 years of their inclusion on the National List and
addressed by the Secretary, then their authorized use or prohibition
expires under OFPA's sunset provision.
The exemption for the use of nutrient vitamins and minerals in
``organic'' and ``made with organic (specified ingredients or food
group(s))'' processed products is scheduled to expire on October 21,
2012. The NOP is taking this action to implement the NOSB
recommendation to renew the allowance for nutrient vitamins and
minerals through October 21, 2017. The NOP has also determined that,
within the current listing for nutrient vitamins and minerals, the
cross reference to the FDA's fortification policy for food at 21 CFR
104.20 was not accurate and that a correction to the current listing is
necessary. This action would clarify what substances are covered under
this exemption, consistent with the intent of the current listing as
codified by the NOP final rule (65 FR 80548). This correction would
facilitate compliance for organic operations, provide certifying agents
greater certainty in assessing compliance and enable consumers to
discern what substances may be used in organic foods.
The potential impact of this action, including potential costs that
could be incurred, and the alternatives considered are presented as
part of the Executive Order 12866 section of this proposed rule. Upon
issuance of a final rule on this action, the NOP intends to provide a
compliance date of two years from the effective date of the amended
listing. Prohibitions on the use of ingredients affected by this action
would not be enforced until the compliance date. This timeline is
intended to allow time for the NOSB's review of petitions for
substances not within the scope of the current listing or amended
listing and provides the NOP with an opportunity to initiate rulemaking
if the Board recommends that such substances be added to the
[[Page 1981]]
National List. In addition, the NOP believes this timeline would
provide sufficient time for the organic trade to adjust product
formulations based on the Board recommendations and rulemaking or to
consider relabeling products.
The Secretary appointed members to the NOSB for the first time in
January 1992. The NOSB began holding formal committee meetings in May
1992 and its first full Board meeting in September 1992. The NOSB's
initial recommendations were presented to the Secretary on August 1,
1994.
In advance of the Board's November 1995 meeting, two technical
advisory panel (TAP) reports, one for ``Nutrient Vitamins'' and one for
``Nutrient Minerals'', were prepared. These reports were developed to
inform the Board's assessment of nutrient vitamins and minerals in
consideration of the evaluation criteria for substances considered for
inclusion on the National List as established in section 2119(m) of
OFPA. The vitamins identified in the TAP review included: vitamins A,
D, E, K, C, B6, B12; folic acid; thiamin (B1); riboflavin (B2); and
biotin. The minerals identified in the TAP report for nutrient minerals
included: Calcium; phosphorus; magnesium; sulfur; copper; iodine; iron;
manganese; and zinc.\1\
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\1\ NOSB, 1995. Nutrient Minerals Technical Advisory Panel
Review. NOP Web site, Petitioned Substances Database, ``N'',
available at http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5067005&acct=nopgeninfo NOSB, 1995.
Nutrient Vitamins Technical Advisory Panel Review. NOP Web site,
Petitioned Substances Database, ``N'', available at: http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5067006&acct=nopgeninfo.
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During the NOSB's November 1995 meeting, the NOSB finalized two
recommendations regarding the addition of nutrient substances to
organic food. These recommendations were developed to inform the
establishment of the National Organic Program (NOP) regulations,
including the National List. The first recommendation supported the
addition of nutrient vitamins and minerals to the National List with
the following annotation, ``Accepted for use in organic foods for
enrichment or fortification when required by regulation or recommended
by an independent professional organization.'' \2\ During the
deliberations on this recommendation, there was discussion about what
was meant by ``independent professional organizations'' and a
clarification was made that this recommendation did not mean that
vitamins and minerals should be exempt from the National List process.
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\2\ NOSB, 1995. Final Minutes of the National Organic Standards
Board Full Board Meeting Austin, Texas, October 31-November 4, 1995,
available at: http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5057496.
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The second recommendation entitled ``Final Recommendation Addendum
Number 13, The Use of Nutrient Supplementation in Organic Food,''
articulated the Board's preference regarding the use of vitamins,
minerals, and/or accessory nutrients.\3\ It stated, ``Upon
implementation of the National Organic Program (NOP), the use of
synthetic vitamins, minerals, and/or accessory nutrients in products
labeled as organic must be limited to that which is required by
regulation or recommended for enrichment and fortification by
independent professional associations.'' The Board clarified that the
term ``accessory nutrients'' referred to nutrients, ``not specifically
classified as a vitamin or mineral but found to promote optimal
health.'' The Board commented that excluding the use of accessory
nutrients could limit the potential for organic foods to capitalize on
future nutritional findings.
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\3\ NOSB, 1995, Final Recommendation Addendum Number 13, The Use
of Nutrient Supplementation in Organic Foods, available at: http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=stelprdc5058973.
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Based on the NOSB's recommendations, the Agricultural Marketing
Service (AMS) published a proposed rule on March 13, 2000 (65 FR
13512).\4\ The rule proposed an allowance for nutrient vitamins and
minerals in processed products labeled as ``organic'' or ``made with
organic (specified ingredients or food group(s))'' with the following
language: ``Nutrient vitamins and minerals in accordance with 21 CFR
104.20, Nutritional Quality Guidelines for Foods.'' The regulation
cited as part of this listing refers to the fortification policy for
food under the FDA's jurisdiction. This policy establishes uniform
principles for the rational addition of nutrients to foods. In response
to the proposed rule, the NOSB submitted a comment recommending that 21
CFR 104.20 ``not be the reference for the allowance of nutrient
vitamins and minerals'', but did not provide additional context for
this position or propose alternate regulatory references.\5\
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\4\ The proposed rule published in March 2000, was the second
proposed rule for the National Organic Program. The first proposed
rule was published on December 16, 1997 (62 FR 65850). The National
List section in the 1997 proposed rule contained an exemption for
``Nutrient supplements.''
\5\ NOSB Comments to Proposed Rule 7 CFR part 205 (Docket TMD-
00-02-PR); submitted June 12, 2000.
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On December 21, 2000, AMS published a final rule establishing the
National Organic Program (65 FR 80548). The final rule retained the
listing for nutrient vitamins and minerals as proposed. In the
discussion of comments received, the NOP acknowledged commenters'
suggestions that 21 CFR 104.20 was not adequate and should be
accompanied by a reference to 21 CFR 101.9(c)(8) for FDA-regulated
foods. In the preamble to the final rule, the NOP stated that such
suggestions were not appropriate because 21 CFR 101.9 pertained to the
declaration of nutrition information on the label and in labeling of a
food rather than provisions for nutritional supplementation (65 FR
80615). However, as discussed below, recent consultation with the FDA
clarified that 21 CFR 101.9 does identify essential vitamins and
minerals.
In 2006, the NOP received a complaint challenging the use of
docosahexaenoic acid (DHA) and arachidonic acid (ARA) derived from
algae and microbes, respectively (hereinafter referred to as DHA/ARA
single-cell oils), in organic infant formulas.\6\ The review of the
complaint also led to questions concerning the use of taurine and
nucleotides in organic infant formula. In November 2006, the NOP closed
the complaint stating, ``The NOP determined that accessory nutrients,
that are non-agricultural, are allowed in the production of products to
be sold, labeled or represented as organic under the NOP; provided,
they are used in full compliance with Food and Drug Administration
(FDA) rules and regulations. Non-agricultural accessory nutrients are
covered under Sec. 205.602(b) Synthetics allowed, of the NOP National
List (nutrient vitamins and minerals) * * * Nutrients allowed under
Sec. 205.605(b) are not limited to the nutrients listed in [21 CFR]
Sec. 104.20(d)(3), because [21 CFR] Sec. 104.20(f) provides that
nutrients may be added to foods as permitted or required by applicable
regulations established elsewhere by FDA; for example, 21 CFR Part 107
Infant Formula * * * In summary, we have determined that if added
ingredients
[[Page 1982]]
such as DHA, ARA, nucleotides and taurine are used in full compliance
with FDA rules and regulations, they would comply with the NOP National
List as currently written.''
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\6\ DHA and ARA are omega-3 and omega-6 fatty acids,
respectively, which are naturally present in certain foods. Dietary
sources of DHA include: cold water fatty fish, meats, and eggs.
Dietary sources of ARA include: meat, poultry and eggs. Humans can
convert the omega-3 fatty acid alpha-linolenic acid (ALA) to DHA and
the omega-6 fatty acid linoleic acid (LA) to ARA. Natural sources of
LA and ALA include: vegetable oils, nuts, seeds and some vegetables.
Reference: University of Maryland Medical Center, Omega-3 Fatty
Acids. Available online at: http://www.umm.edu/altmed/articles/omega-3-000316.htm.
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In November 2008, the NOP received an inquiry from a certifying
agent regarding the allowance of lutein ester (crystalline lutein), a
carotenoid, under the listing for nutrient vitamins and minerals in
Sec. 205.605(b). The NOP consulted with the FDA and provided a written
response which stated, ``The FDA has determined that ``Crystalline
Lutein'' does not fall under current fortification policy * * * The
nutrients listed in [21 CFR] Sec. 104.20(d)(3) are those that fall
under this policy.'' The NOP statement that the ``accessory nutrient'',
lutein ester, is not allowed under the nutrient vitamin and mineral
listing at Sec. 205.605(b) is in conflict with the 2006 NOP complaint
closure letter that stated that ``accessory nutrients'' were allowed
under the FDA fortification policy.
On March 26, 2010, the NOP published an Advance Notice of Proposed
Rulemaking (ANPR) to announce the pending sunset of substances on the
National List and opened the public comment process on whether existing
exemptions for specified synthetic and nonsynthetic substances in
organic handling should be continued (75 FR 14500).\7\ The ANPR
indicated that the exemption for the use of nutrient vitamins and
minerals as ingredients in or on processed products labeled as
``organic'' or ``made with organic (specified ingredients or food
group(s))'' would expire after October 21, 2012, if the listing was not
renewed. The public comment period lasted 60 days. Comments were
received from organic handlers, ingredient suppliers and trade
associations. Comments received supported the continued listing of
nutrient vitamins and minerals in organic handling. The written
comments can be retrieved at http://www.regulations.gov by searching
for the document ID number: AMS-NOP-09-0074. The NOP provided the NOSB
with these public comments to consider in their future deliberations on
the status of nutrient vitamins and minerals in organic products after
the 2012 sunset date.
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\7\ The Sunset 2012 ANPR also pertained to the exemptions for
synthetic substances and prohibitions for nonsynthetic substances
used in crop and livestock production.
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Because of continued confusion in the organic industry about the
allowance of certain added ingredients, such as DHA, ARA, taurine, and
nucleotides, in organic products, the NOP met with FDA staff from the
Office of Nutrition, Labeling and Dietary Supplements in April 2010 for
clarification of the scope of 21 CFR 104.20. The FDA explained that
``nutrients'' as referenced in 21 CFR 104.20(f) is intended to pertain
only to those nutrients listed in section 104.20(d)(3) and as specified
in the standards of identity (21 CFR parts 130-169) for a food or class
of foods. The standards of identity for enriched cereal-flours and
related products, for example, require fortification at specified
levels with thiamin, riboflavin, niacin, iron and folic acid (21 CFR
part 137). The FDA noted that some foods have separate requirements,
and are not subject to 21 CFR 104.20, such as infant formula which must
comply with the nutrient requirements at 21 CFR 107.100. The NOP
participated in a follow-up discussion with FDA in February 2011, the
details of which are discussed below.
In April 2010, the NOP issued an ``Action Memorandum to the
Chairman of the National Organic Standards Board'' at the NOSB meeting
to advise the NOSB about the clarifications provided by FDA.\8\ The
memorandum conveyed FDA's interpretation of the fortification policy,
as stated in the above paragraph, and requested that the NOSB reexamine
the codified listing for nutrient vitamins and minerals to determine
what substances are permitted under its scope as part of the scheduled
sunset 2012 review. The NOP specifically asked the NOSB to consider:
``Are the ``nutrient vitamins and minerals'' specified within 21 CFR
104.20 aligned with the 1995 NOSB recommendation? If not, are there
substances that should be prohibited or additional substances that
should be allowed?'' This memo stated that the previous interpretation
of 21 CFR 104.20 Nutritional Quality Guidelines for Foods was
incorrect. The memo also conveyed the NOP's plan to issue guidance on
nutrient vitamins and minerals that would align with the FDA
fortification policy. On March 9, 2011, the NOSB Handling Committee's
Sunset 2012 Proposed Recommendation for nutrient vitamins and minerals
was posted for public review and comment.\9\ The NOSB Handling
Committee recommended that the listing be renewed as follows:
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\8\ NOP, 2010, Action Memorandum for the Chairman of the
National Organic Standards Board, Scope of Nutrient Vitamins and
Minerals in Organic Food, available at http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5084068&acct=nosb.
\9\ NOSB, 2011, Handling Committee Sunset 2012 Proposed
Recommendation Nutrient Vitamins and Minerals, available at http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5089727&acct=nosb.
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Sec. 205.605(b): Nutrient Vitamins and Minerals, restricted to
materials required or allowed by law for the purpose of enrichment,
supplementation or fortification of foods including infant formula, and
materials the use of which is supported by the FDA or the Institute of
Medicine of the National Academies.'' The NOSB Handling Committee
stated that they intended to ``restore the 1995 NOSB recommendation,''
and reasoned that, ``Review of the original recommendations, historical
documents, and public comments does not reveal unacceptable risks to
the environment, human, or animal health as a result of the use or
manufacture of these materials.'' \10\
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\10\ Prior to the April 2011 NOSB meeting, the Board indicated
that nutrient vitamins and minerals would be withdrawn from the
agenda and postponed until the next meeting in Fall 2011. The NOP
voiced concern that delaying a sunset vote on nutrient vitamins and
minerals would not allow adequate time to publish proposed and final
rules to implement the Board's recommendation prior to the sunset
date of October 21, 2012. In that scenario, the listing for nutrient
vitamins and minerals would expire and use of synthetic vitamins and
minerals would be prohibited in organic foods. The NOP urged the
Board to complete the sunset recommendation at the April 2011
meeting as originally scheduled to allow time for completion of
rulemaking and to avoid significant disruption to the organic food
industry. The NOSB agreed to retain the nutrient vitamins and
minerals sunset recommendation on the April 2011 meeting agenda.
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The NOSB Handling Committee received approximately 2,000 comments
on their proposed recommendation to change the annotation for nutrient
vitamins and minerals. The majority of comments opposed the NOSB
Handling Committee's proposal. Many commenters voiced concern that the
proposal would allow, without NOSB review, any synthetic nutrient
additive to be allowed in organic products. These commenters stated
that only essential nutrients required by the FDA should be allowed in
organic products. A trade organization and an organic nonprofit
organization specifically suggested that the Committee instead consider
an annotation for nutrient vitamins and minerals that would allow
essential vitamins and minerals required by FDA in infant formula and
other foods. Some commenters further emphasized that the Committee's
proposal would allow an open ended list of allowed substances. These
commenters stated that the proposal was not consistent with the
required petition and NOSB review process for the National List and, if
passed, would provide for a list of substances that certifying agents
would have difficulty verifying for compliance
[[Page 1983]]
during the organic certification process. These commenters advocated
for the NOSB to individually review and approve any synthetic additives
not provided for on the National List per the OFPA requirements. Other
comments supported the proposal for an allowance for nutrient additives
based upon the idea that certain additives may have health benefits and
that, without these additives, consumers may consider organic products
nutritionally inferior to conventional products. In response to these
comments, the Committee withdrew the proposal prior to the April 26-30,
2011, NOSB meeting.
In April 2011, the FDA provided written responses to the questions
posed by NOP concerning whether the FDA recognizes or defines
``accessory nutrients'' and the scope of nutrients covered under the
fortification policy. The letter, dated April 14, 2011, reflects the
points of discussion during a February 2011 meeting between NOP and
FDA.\11\ FDA's responses reiterated and expanded upon the information
conveyed during an April 2010 NOSB meeting at which the NOP discussed
their understanding of FDA's fortification policy.
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\11\ FDA Response to NOP--Questions and Answers Regarding
Nutrient Fortification of Foods. April 14, 2011. Available at http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5090415.
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The FDA explained that the fortification policy at 21 CFR 104.20
provides for the rational addition of essential nutrients to food for
human consumption and the term, ``accessory nutrients,'' is not defined
or used in the fortification policy. FDA considers only ``essential
nutrients'' to be within the scope of its fortification policy at 21
CFR 104.20. The nutrients which FDA has determined to be essential are
enumerated in 21 CFR 101.9(c)(8)(iv) with corresponding Reference Daily
Intakes (RDIs), and 21 CFR 101.9(c)(9), which includes protein and
potassium and the corresponding Daily Reference Values (DRVs). FDA
stated that substances identified by USDA as ``accessory nutrients''
such as omega-3 and omega-6 fatty acids, inositol, choline, carnitine,
and taurine are not essential nutrients listed under 101.9(c)(8)(iv)
and are, therefore, not within the scope of FDA's fortification policy
at 21 CFR 104.20. The FDA also clarified that infant formula is not
within the scope of the fortification policy; the requirements in 21
CFR part 107 pertain to required and essential nutrients for infant
formula and include minimum and maximum amounts for those nutrients.
At the April 2011 NOSB meeting, the NOP suggested that the NOSB
amend the annotation for nutrient vitamins and minerals to cite the
regulatory references, 21 CFR 101.9, 21 CFR 107.10 and 21 CFR 107.100,
which identify essential and approved vitamins, minerals and other
nutrients for infant formula and fortification of food. The NOP
suggested that an annotation change would correct an inaccurate cross
reference to FDA fortification policy for food at 21 CFR 104.20. The
NOP further explained that this annotation change would expand the
allowance for certain nutrients by providing for the continued use of
essential nutrients in organic infant formula; the use of essential
nutrients in infant formula is not covered under the existing FDA
reference in the NOP regulations. The NOP also stated that the listing
for nutrient vitamins and minerals should encompass a clear,
discernible list of permitted substances. The proposed change would
convey the intent of the codified listing by coherently and accurately
stating which synthetic nutrient substances may be added to organic
food and organic infant formula.
At the conclusion of the April 2011 meeting, the NOSB approved a
recommendation to renew the listing for nutrient vitamins and minerals
as presently codified without amendment.\12\ The Board signaled its
intent to propose an annotation change to the nutrient vitamins and
minerals listing at its November 2011 meeting, after considering the
information provided by FDA and the numerous public comments addressing
this issue. However, since NOP is taking action to amend the listing
through this proposed rule, the NOSB has opted to remove proposing a
recommendation for an annotation change on nutrient vitamins and
minerals from their November 2011 meeting agenda. In addition to the
ANPR for Sunset 2012 published on March 26, 2010, the NOSB received
additional public comment concerning the pending sunset of this listing
in response to three Federal Register notices announcing meetings of
the NOSB and its planned deliberations on recommendations involving
Sunset 2012 substances. The notices were published in the Federal
Register as follows: March 17, 2010 (75 FR 12723), September 20, 2010
(75 FR 57194), and March 4, 2011 (76 FR 12013). The NOSB received
further written and oral testimony concerning nutrient vitamins and
minerals at all three of these public business meetings which occurred
in Woodland, CA on April 26-29, 2010, in Madison, WI on October 25-28,
2010, and in Seattle, WA on April 26-29, 2011. The written comments can
be retrieved via http://www.regulations.gov by searching for the
document ID numbers: AMS-NOP-10-0021 (May 2010 meeting); AMS-NOP-10-
0068 (October 2010 meeting); and AMS-NOP-11-05 (April 2011 meeting).
The oral comments were recorded in the meeting transcripts available on
the NOP Web site, http://www.ams.usda.gov/nop.
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\12\ NOSB, 2011, Formal Recommendation by the National Organic
Standards Board (NOSB) to the National Organic Program (NOP),
Nutrient Vitamins and Minerals Sunset, available at http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5091724.
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II. Overview of Proposed Amendments
This proposed rule would amend Sec. 205.605 of the National List
regulations by amending paragraph (b) that currently reads: ``Nutrient
vitamins and minerals, in accordance with 21 CFR 104.20, Nutritional
Quality Guidelines For Foods'' to be revised as follows: ``Vitamins and
minerals. For food--vitamins and minerals identified as essential in 21
CFR 101.9. For infant formula--vitamins and minerals as required by 21
CFR 107.100 or 107.10.''
This proposed change conveys the intent of the codified listing by
coherently and accurately stating which synthetic nutrient substances
may be added to organic food and organic infant formula. The parameters
of the amended listing are based upon FDA's determination of which
vitamins and minerals are essential for human nutrition and required in
infant formula which is consistent with the intended purpose of the
current listing. Nutrients which are not considered essential vitamins
and minerals, by the FDA (under 21 CFR 101.9(c)(8)(iv)), would be
subject to individual evaluation in accordance with the criteria set
forth in sections 6517(c) and 6518(m) of OFPA and Sec. 205.600 of the
NOP regulations. Petitions for the addition of such substances to the
National List need to be submitted in accordance with the Guidelines on
Submitting National List Petitions (72 FR 2167).\13\
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\13\ The Guidelines on Submitting National List Petitions is
available at http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5048809&acct=nopgeninfo.
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The NOP regulations as promulgated, contained the listing for
``Nutrient vitamins and minerals in accordance with 21 CFR 104.20,
Nutritional Quality Guidelines for Foods,'' in Sec. 205.605(b) of the
National List. In effect, that provision permits the addition of
synthetic forms of nutrient vitamins and
[[Page 1984]]
minerals to processed products labeled ``organic'' or ``made with
organic (specified ingredients or food group(s)).'' However, the NOP
incorrectly interpreted FDA's fortification policy, codified at 21 CFR
104.20, and allowed substances that are not authorized under the
current reference in the NOP regulations.
Two sections, 21 CFR 104.20(d)(3) and (f), have caused confusion
and incorrect interpretations of which substances are allowed in
organic foods. Section 104.20(d)(3) identifies 21 nutrients (19
vitamins and minerals with a Recommended Dietary Intake (RDI), plus
protein and potassium which each have a Dietary Reference Value (DRV))
which may be added to foods in accordance with conditions specified
within section 104.20. The FDA fortification policy specifies the
circumstances under which these 21 nutrients may be added to food: To
correct a dietary insufficiency; restore nutrients to a level
representative of the food prior to storage, handling and processing;
maintain a balanced nutrient profile; improve the quality or a
replacement food; or be added as permitted or required by another FDA
regulation. In the context of organic production, the fortification
policy referenced in the current nutrient vitamins and minerals listing
covers only the vitamins and minerals identified in Sec. 104.20(d)(3).
In 2006, the NOP incorrectly interpreted 21 CFR 104.20(f), which
states, ``Nutrient(s) may be added to foods as permitted or required by
applicable regulations established elsewhere in this chapter.'' The NOP
interpreted ``or required by applicable regulations established
elsewhere in this chapter,'' as allowing the addition of a broader
range of nutrients to organic products than those specified in Sec.
104.20(d)(3). According to this interpretation, the fortification
policy for food included the nutrition specifications for infant
formula and nutrients for which there is Generally Regarded as Safe
(GRAS) notification or the manufacturer's self-determination of GRAS.
The FDA maintains a GRAS Notice Inventory: http://www.fda.gov/Food/FoodIngredientsPackaging/GenerallyRecognizedasSafeGRAS/GRASListings/default.htm.
Fortification of Foods
To correct the previous interpretation and provide firm guidance to
the organic industry, the NOP sought clarification from FDA regarding
the scope of nutrients, vitamins and minerals permitted by the
fortification policy for addition to foods. The FDA informed the NOP
that the fortification policy covers the nutrients identified in (i) 21
CFR 104.20(d)(3), (ii) an additional 6 nutrients that have been
determined essential listed in 21 CFR 101.9(c)(8)(iv), and (iii)
nutrients as required by other FDA regulations, which include those
pertaining to a common or usual name (21 CFR part 102), standard of
identity (21 CFR parts 130-169), or nutritional quality guideline (21
CFR 104.47). This contrasts with current practices in certain sectors
of the organic industry which have added nutrients to types of organic
products, such as infant formula or pet food, which are not covered
under the fortification policy. Added ingredients which are confirmed
or self-determined as GRAS, but not designated as essential nutrients
by FDA, have also been added to organic products. Examples of
ingredients added to organic products which are outside the parameters
of FDAs fortification policy include certain forms of DHA and ARA in
fluid milk and dairy products, and taurine in pet food.\14\
---------------------------------------------------------------------------
\14\ Section 205.606 of the National List identifies two
components of fish oil, by Chemical Abstracts Service (CAS) numbers,
that are allowed as ingredients in organic products. These are the
omega-3 fatty acids, eicosapentaenoic acid (EPA) and docosahexaenoic
acid (DHA). Forms of DHA which do not meet these criteria are not
otherwise allowed in organic products as a nutrient vitamin or
mineral, regardless of GRAS designation. FDA has not determined that
either DHA or ARA are essential nutrients for the fortification of
food. Pet food does not fall within the scope of FDA's fortification
policy. The NOP will address nutrient vitamins and minerals in pet
food through a separate rulemaking.
---------------------------------------------------------------------------
Since the establishment of the fortification policy in 1980, the
FDA has designated six other nutrients as ``essential'' and permitted
for fortification in foods. These include Vitamin K, manganese,
selenium, chromium, molybdenum and chloride. As indicated in 21 CFR
104.20(a), the list of nutrients in (d)(3) was not expected to remain
static: ``It is reasonable to anticipate that the Reference Daily
Intakes (RDI's) as delineated in Sec. 101.9 of this chapter and in
paragraph (d) of this section will be amended from time to time to list
additional nutrients and/or to change the levels of specific RDI's as
improved knowledge about human nutrient requirements and allowances
develops.''
Therefore, the FDA suggested to NOP that a more appropriate
reference to capture all of the essential vitamins and minerals that
may be permitted for fortification of food, in accordance with the
conditions specified in the fortification policy, is 21 CFR
101.9(c)(8)(iv) and potassium (101.9(c)(9)). The NOP is proposing to
amend the current listing for nutrient vitamins and minerals to include
this reference for fortification of foods. Paragraph (c)(8)(iv) in
Sec. 101.9 identifies 25 vitamins and minerals which are essential in
human nutrition and their corresponding Reference Daily Intake (RDI)
values. Paragraph (c)(9) in Sec. 101.9 includes the listing for
potassium and the corresponding Daily Reference Value (DRV). The RDI
and potassium DRV values specified in 21 CFR 101.9 are based on the
National Academy of Sciences' Recommended Daily Allowance and
``Estimated Safe and Adequate Daily Dietary Intakes.'' The NOP expects
that the NOSB will review any FDA updates or additions pertaining to
the requirements for essential vitamins and minerals, as codified in 21
CFR 101.9, during future sunset reviews of the vitamins and minerals
listing.
Infant Formula
The NOP is also proposing to amend the current listing for nutrient
vitamins and minerals by adding the regulatory references that are
applicable to the FDA nutrient specifications for infant formula.
According to FDA, the fortification policy for food does not apply to
infant formula. The FDA developed separate nutrient specifications for
infant formula. The NOP allowance for nutrient vitamins and minerals,
as codified, references only the fortification policy for food, and,
therefore, does not provide for the addition of vitamins and minerals
in organic infant formula.
In practice, however, NOP-certified organic infant formulas which
comply with the FDA nutrient requirements have been produced for years.
This was based upon an interpretation advanced by the NOP that the FDA
fortification policy extended to the nutrient specifications for infant
formula. Most of the organic infant formulas in the current marketplace
contain some added ingredients which are permitted, but not required by
FDA, such as, ARA, DHA, nucleotides, taurine, carnitine, lutein and
lycopene. This proposed action, incorporating the FDA nutrient
requirements for infant formula, would ensure that there is no
unintended impediment to the continued formulation of organic infant
formula with vitamins and minerals to comply with FDA requirements.
This proposed action would also prohibit the use of non-required
ingredients added to organic infant formula, such as ARA, DHA,
nucleotides, taurine, carnitine, lutein, and lycopene, unless the NOSB
issues recommendations to add any such substances to the National List
and
[[Page 1985]]
such recommendations are codified through rulemaking.
The infant formula nutrient specifications at 21 CFR 107.100
stipulate the required vitamins and minerals and the corresponding
minimum and maximum levels at which these may be present in infant
formula. Section 21 CFR 107.100 identifies all required vitamins and
minerals for infant formula with the exception of selenium, the
addition of which is allowed for in 21 CFR 107.10. Paragraph (b)(5) of
section 107.10 provides that any additional vitamin or mineral may be
declared on the label provided it has been identified as essential by
the National Academy of Sciences or FDA and is provided at a level, if
known, considered to have biological significance through publications
by the National Academy of Sciences or by FDA in the Federal Register.
Selenium has been identified as essential by the National Academy of
Sciences. The FDA advised that sections 107.100 and 107.10, in
combination, would account for all of the vitamins and minerals
required in infant formula. The incorporation of section 107.10 will
ensure that any vitamins and minerals which are declared essential and
added to infant formula in the future will be allowed in organic infant
formula. This will enable manufacturers of organic infant formula to
apply significant nutritional findings concerning vitamin and mineral
requirements without delay. Section 107.100 also requires certain
levels of protein, fat and linoleic acid in infant formula. As these
nutrients are available from agricultural sources, the NOP expects that
these will be provided in organic form.
As a result of this proposed action, the essential vitamins and
minerals listed as RDI in 101.9(c)(8)(iv) and potassium listed as DRV
(101.9(c)(9)) would be permitted for addition to organic foods; in
addition, the vitamins and minerals required by FDA for infant formula,
would be permitted for addition to organic infant formula. An essential
vitamin or mineral must have a safe and lawful source, e.g., the
substance must be an approved food additive or GRAS under the
conditions of the intended use, and there should be no determination by
FDA, in regulation or matter of policy, that fortification with that
nutrient is inappropriate. To convey that vitamins and minerals are the
only types of substances permitted under this categorical allowance,
the proposed amendment omits the word ``nutrient'' because that term
encompasses a wider range of substances.
Over the last ten years, the NOP incorrectly allowed a broad
allowance of ``accessory nutrients'' that is not aligned with the
codified allowance for nutrient vitamins and minerals in organic
products, as confirmed by FDA's clarification of the scope of the
fortification policy. In practice, added ingredients, which are
considered GRAS (either via GRAS notification submission or a
manufacturer's self-determination), but are not designated as essential
vitamins and minerals per FDA (21 CFR 101.9(c)(8)(iv)), are being added
to organic products based upon an incorrect NOP interpretation of FDA
fortification policy. The proposed action will clarify which vitamins
and minerals are allowed in organic food products, allow organic infant
formula to contain essential vitamins and minerals, and ensure the NOSB
reviews and approves all substances used in organic production and
handling. Moreover, this proposed action does not preclude the
potential to add individual exemptions for additional nutrients to the
National List. Such substances can be petitioned for inclusion on the
National List and would be subject to individual evaluation by the NOSB
according to the criteria established in OFPA and the NOP regulations
for such purpose.
In effect, this proposed action would permit the following vitamins
and minerals in organic foods (in accordance with FDA specifications
for use): Vitamins A, C, K, D, E, thiamin, riboflavin, niacin, B6, B12,
biotin, folate, pantothenic acid, calcium, iron, phosphorus, magnesium,
zinc, iodine, copper, potassium, selenium, manganese, chromium,
molybdenum, and chloride. This proposed action would also permit the
following vitamins and minerals in organic infant formula: Vitamins A,
C, K, D, E, thiamin, riboflavin, niacin, B6, B12, biotin, folic acid,
pantothenic acid, choline, inositol, calcium, iron, phosphorus,
magnesium, zinc, iodine, copper, sodium, potassium, selenium,
manganese, and chloride. Table 1 compares the vitamins and minerals
allowed under the current 21 CFR 104.20 reference and illustrates the
complete set of vitamins and minerals that would be permitted in
organic food and infant formula per this proposed action.
Table 1--Summary of Regulatory References for Vitamins and Minerals in Organic Food and Organic Infant Formula
----------------------------------------------------------------------------------------------------------------
Proposed reference for vitamins and minerals
Current reference for -------------------------------------------------------
Substance nutrient vitamins and Infant formula Required
minerals per 21 CFR Food Essential per 21 CFR per 21 CFR 107.100 or
104.20(d)(3) 101.9(c)(8) or 101.9(c)(9) 107.10
----------------------------------------------------------------------------------------------------------------
Vitamin A................... Yes....................... Yes....................... Yes.
Vitamin C................... Yes....................... Yes....................... Yes.
Calcium..................... Yes....................... Yes....................... Yes.
Iron........................ Yes....................... Yes....................... Yes.
Vitamin D................... Yes....................... Yes....................... Yes.
Vitamin E................... Yes....................... Yes....................... Yes.
Vitamin K................... .......................... Yes....................... Yes.
Thiamin..................... Yes....................... Yes....................... Yes.
Riboflavin.................. Yes....................... Yes....................... Yes.
Niacin...................... Yes....................... Yes....................... Yes.
Vitamin B6.................. Yes....................... Yes....................... Yes.
Folate...................... Yes....................... Yes....................... Yes.
Vitamin B12................. Yes....................... Yes....................... Yes.
Biotin...................... Yes....................... Yes....................... Yes.*
Pantothenic acid............ Yes....................... Yes....................... Yes.
Choline..................... .......................... .......................... Yes.*
Inositol.................... .......................... .......................... Yes.*
[[Page 1986]]
Phosphorus.................. Yes....................... Yes....................... Yes.
Magnesium................... Yes....................... Yes....................... Yes.
Zinc........................ Yes....................... Yes....................... Yes.
Iodine...................... Yes....................... Yes....................... Yes.
Copper...................... Yes....................... Yes....................... Yes.
Sodium...................... .......................... .......................... Yes.
Potassium................... Yes....................... Yes....................... Yes.
Selenium.................... .......................... Yes....................... Yes.
Manganese................... .......................... Yes....................... Yes.
Chromium.................... .......................... Yes....................... ..........................
Molybdenum.................. .......................... Yes....................... ..........................
Chloride.................... .......................... Yes....................... Yes.
----------------------------------------------------------------------------------------------------------------
* Required only for non-milk based infant formulas.
Table 2 shows examples, but is not an exhaustive list, of
ingredients which are used in organic products and would be prohibited
from use under this action. This table also indicates whether a
petition to add the substance to the National List has been submitted
to the National Organic Standards Board.
Table 2--Examples of Affected Ingredients in Organic Products
------------------------------------------------------------------------
Ingredient Petition submitted to NOSB
------------------------------------------------------------------------
Docosahexanoic Acid (DHA) algal oil..... Yes.
Arachidonic Acid (ARA) single-cell oil.. Yes.
Taurine (separate petitions for infant Yes.
formula and pet food).
Inositol................................ Yes.
Choline (two separate petitions for Yes.
infant formula and infant food, and all
other foods).
Ascorbyl Palmitate...................... Yes.
Beta-carotene *......................... Yes.
L-carnitine............................. Submitted to NOP and under
revision by petitioner.
Lycopene................................ Yes.
Nucleotides............................. Yes.
Lutein.................................. Submitted to NOP and under
revision by petitioner.
L-Methionine............................ Yes.
------------------------------------------------------------------------
* The beta-carotene petition is for the synthetic form. Beta-carotene
extract color is currently listed in section 205.606 as a
nonorganically produced agricultural ingredient allowed in products
labeled ``organic'' when an organic version is not commercially
available.
III. Related Documents
Three notices were published announcing meetings of the NOSB and
its planned deliberations on recommendations involving Sunset 2012
substances including nutrient vitamins and minerals. The notices were
published in the Federal Register as follows: (1) March 17, 2010 (75 FR
12723); (2) September 20, 2010 (75 FR 57194); and (3) March 4, 2011 (76
FR 12013).
On March 26, 2010, the NOP published an Advance Notice of Proposed
Rulemaking (75 FR 14500) to make the public aware that the allowance
for synthetic nutrient vitamins and minerals, among other substances,
will expire for use in organic handling, if not reviewed by the NOSB
and renewed by the Secretary.
IV. Statutory and Regulatory Authority
The OFPA, as amended [7 U.S.C. 6501-6522], authorizes the Secretary
to make amendments to the National List based on proposed amendments
developed by the NOSB. Section 6518(k) and 6518(n) of OFPA authorize
the NOSB to develop proposed amendments to the National List for
submission to the Secretary and establish a petition process by which
persons may petition the NOSB for the purpose of having a substances
evaluated for inclusion on or deletion from the National List. The
current petition process (72 FR 2167, January 18, 2007) can be accessed
through the NOP Web site at: http://www.ams.usda.gov/nop. The Sunset
Provision in section 6517(e) of the OFPA provides that no exemption or
prohibition on the National List will remain valid after 5 years unless
the exemption or prohibition has been reviewed and the Secretary renews
the listing.
A. Executive Order 12866 and Executive Order 13563
Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This rule has been designated an ``economically
significant regulatory action'' under
[[Page 1987]]
section 3(f) of Executive Order 12866. Accordingly, the rule has been
reviewed by the Office of Management and Budget.
AMS is specifically seeking comments on the actual economic impacts
of this action on the industry, including any expected mitigation
factors that the industry may use to comply with the proposed action.
We are most interested in refining the upper limit estimates referenced
in the Regulatory Impact Analysis to specify the actual costs and
benefits of this proposal. The costs and benefits are summarized in
Table 3, below, and described in detail in this section. Comments on
the proportion of sales for different sectors of the organic market
(i.e. infant formula, baby food, fluid milk, breakfast cereals, and pet
food) that will be impacted by this action would be pertinent.
Table 3--Summary of Costs and Benefits
------------------------------------------------------------------------
Costs (range) Benefits
------------------------------------------------------------------------
$500 million-$4.2 billion.............. Establishes a clear, finite
list of essential and required
vitamins and mineral for use
in organic food and infant
formula.
--------------------------------
Facilitates the use of
essential or required vitamins
and minerals in organic food
and infant formula.
--------------------------------
The upper limit is the upper limit for Fosters certainty in
sales of product categories that would determining whether a specific
be impacted by this action. ingredient can be used in an
organic product.
--------------------------------
Facilitates enforcement of
organic product composition
standards.
------------------------------------------------------------------------
Need for the Rule
The National List within the NOP regulations provides for the use
of ``Nutrient vitamins and minerals, in accordance with 21 CFR 104.20,
Nutritional Quality Guidelines For Foods,'' under 7 CFR 205.605(b). The
reference to 21 CFR 104.20 is to FDA's fortification policy. In 2006,
the NOP asserted that the scope of the FDA fortification policy
provided for the use of a broader range of nutrients than those
explicitly listed in those guidelines. The NOP interpretation affected
an allowance for ``accessory nutrients,'' permitting the use of
substances which are Generally Recognized As Safe (GRAS), but are
neither vitamin or mineral, nor required by regulation. In 2010, the
NOP consulted with FDA to clarify the parameters of the fortification
policy and confirmed that the NOP interpretation did not align with the
intent of the FDA guidelines. The FDA clarified that the fortification
policy provides for the use of only essential vitamins and minerals
(under 21 CFR 101.9(c)(8)(iv)) plus potassium and protein (21 CFR 101.9
(c)(9)), which is a more prescribed set of substances than permitted
under the NOP interpretation of that policy.\15\
---------------------------------------------------------------------------
\15\ Correspondence from Office of Nutrition, Labeling and
Dietary Supplements, Center for Food Safety and Applied Nutrition,
U.S. Food and Drug Administration to National Organic Program, U.S.
Department of Agriculture. April 14, 2011. Available at
www.ams.usda.gov/nop.
---------------------------------------------------------------------------
The NOP's interpretation facilitated the potential for the use of a
wide spectrum of substances, having unique properties and functions. It
incorrectly suggested to organic producers and handlers that a number
of unspecified substances could qualify for use under the nutrient
vitamins and minerals exemption and be added to organic products. It
also suggests that the exemption provides an allowance for an open list
of substances, potentially encompassing dozens of nutrients, the
complete inventory of which is difficult for the NOP and consumers to
discern. As a result, the existing exemption remains vulnerable to
misinterpretation, which undermines the ability of the certifying
agents and NOP to make consistent decisions about the use of nutrient
substances in organic products. It is imperative to eliminate
uncertainty and enable organic operations to make confident business
decisions and to demonstrate effective oversight of organic production
to maintain consumer trust.
Furthermore, the NOP thought that the fortification policy provided
for the addition of nutrients to infant formula. The FDA indicated that
this was inaccurate as the nutrient specifications for infant formula,
provided at 21 CFR part 107, are separate from the fortification policy
at 21 CFR 104.20. Absent this reference to 21 CFR part 107, the NOP
regulations do not correctly provide for the formulation of infant
formula that would meet FDA requirements. Therefore, this action is
also necessary to incorporate the correct FDA citation with respect to
the addition of required vitamins and minerals to organic infant
formula.
The NOP and NOSB have provided four opportunities for public
comment on this issue and the total number of comments submitted
exceeds two thousand.\16\ Public comment surged in response to the NOSB
April 2011 meeting notice which announced that the NOSB Handling
Committee would present a recommendation for nutrient vitamins and
minerals. The NOSB Handling Committee recommended that the listing be
renewed as follows: ``Sec. 205.605(b): Nutrient Vitamins and Minerals,
restricted to materials required or allowed by law for the purpose of
enrichment, supplementation or fortification of foods including infant
formula, and materials the use of which is supported by the FDA or the
Institute of Medicine of the National Academies.'' As described
earlier, the majority of comments opposed the NOSB Handling Committee's
proposal. Some expressed the preference for a complete prohibition on
nutrient additives in organic products, while others advocated for the
review of each individual nonagricultural substance for inclusion on
the National List. This proposed rule is responsive to numerous public
comments advocating for a clearly defined exemption.
---------------------------------------------------------------------------
\16\ An Advanced Notice of Proposed Rulemaking (ANPR) announcing
the pending sunset of the nutrient vitamins and minerals listing was
published in the Federal Register on March 26, 2010 (75 FR 14500)
and requested comments. Three NOSB meeting notices also provided
opportunity for public comment on this issue. The notices were
published in the Federal Register as follows: March 17, 2010 (75 FR
12723), September 20, 2010 (75 FR 57194), and March 4, 2011 (76 FR
12013).
---------------------------------------------------------------------------
Regulatory Objective
The primary purpose of this proposed action is to clarify and
accurately provide for the parameters of the exemption for the use of
nutrient vitamins and minerals in organic
[[Page 1988]]
products in accordance with FDA regulatory provisions. The FDA
fortification policy is referenced in the current listing to establish
parameters for what nutrient vitamins and minerals may be used in
organic handling. The proposed rule would correct the regulatory
references to clearly delineate that only essential vitamins and
minerals are permitted in organic foods under this exemption. This
proposed action would correctly identify FDA required vitamins and
minerals that may be added to organic infant formula. Other synthetic
substances that are not specifically referenced by the proposed
exemption would be prohibited from use in organic products unless there
is an explicit National List exemption for such use.
This action would clarify for certifying agents, organic
operations, consumers, and other interested persons which vitamins and
minerals are permitted for use in organic products. It would also
ensure that other nutrient substances are subject to the thorough and
public review that is accorded all substances petitioned for addition
to the National List.
Alternatives Considered
Alternatives to this proposed rulemaking that were considered
include: (1) Renew the existing listing for nutrient vitamins and
minerals; or (2) in lieu of a rule, issue guidance stating NOP's intent
to interpret the current listing for nutrient vitamins and minerals as
proposed in this action.
The first alternative considered was to renew the listing for
``Nutrient vitamins and minerals, in accordance with 21 CFR 104.20,
Nutritional Quality Guidelines For Foods,'' without change would extend
the National List exemption for the use of nutrient vitamins and
minerals until the next sunset date of October 21, 2017. The current
listing contains an inaccurate reference to FDA's fortification policy
for food, the scope of which the NOP erroneously interpreted to be
broader than intended by the original NOSB 1995 recommendations on the
nutrient fortification of foods. This option would leave in place a
regulatory provision that remains vulnerable to misinterpretation
regarding what substances are permitted in organic products. Failing to
take action could perpetuate business decisions that are based on an
inaccurate reading of the fortification policy resulting in the use of
various ingredients which are not explicitly provided for on the
National List. The continued use of synthetic ingredients which do not
appear on the National List, whether by renewing the current listing or
grandfathering in the affected substances, is not a plausible option
because this is inconsistent with the Organic Foods Production Act of
1990. The statute prohibits the Secretary from allowing synthetics
substances in the National List other than those proposed by the
National Organic Standards Board (7 U.S.C. 6517(d)(2)). Only the NOSB
has the authority to recommend adding a synthetic substance to the
National List and grandfathering in these substances would bypass the
NOSB review process which is mandated in order for such substances to
be used in organic handling. In addition, pursuing this alternative
runs counter to the prevailing public support, as expressed through
comments to the Sunset 2012 ANPR and the NOSB meeting notices, for NOP
action to precisely clarify the permitted nutrient vitamins and
minerals in organic handling.
Furthermore, the NOP is now cognizant that the FDA fortification
policy does not cover infant formula. Infant formula is comprised of
agricultural products and falls within the scope of NOP certification.
It has developed into a robust organic product category and recorded a
2.3 percent growth in sales in 2010.\17\ The NOP believes that it is
imperative to confirm the eligibility of infant formula for organic
certification by accurately providing for the use of vitamins and
minerals to meet FDA requirements for infant formula. Therefore, the
NOP did not believe this alternative was appropriate.
---------------------------------------------------------------------------
\17\ Organic Trade Association, 2011. 2011 Organic Industry
Survey. Brattleboro, VT.
---------------------------------------------------------------------------
The second alternative considered would result in the issuance of
guidance, rather than a regulatory change. Upon receiving FDA
clarification on the fortification policy, the NOP considered conveying
which nutrient vitamins and minerals would be permitted in organic
processed food through guidance. However, upon further review, the NOP
believes that this route would not adequately address the issue of
correcting the incomplete and inaccurate FDA references in the
regulatory annotations as well as the resultant overly broad NOP
interpretations. The NOP believes that correcting the inaccuracies in
the regulation is preferable and the appropriate course of action to
bring certainty to the vitamins and mineral area of organic food
production.
Baseline
Based on USDA data from the Economic Research Service (ERS), the
total acreage of certified organic land grew from 1.8 million acres in
2000 to 4.8 million acres in 2008, of which approximately 2.2 million
acres was pasture and rangeland.\18\ The number of certified organic
producers in the U.S. nearly doubled in that time period rising from
approximately 7,000 in 2000 to nearly 13,000 in 2008.\19\
---------------------------------------------------------------------------
\18\ U.S. Department of Agriculture, Economic Research Service.
2008. U.S. Organic Agriculture, 1992-2008, data set, available at
www.ers.usda.gov/data/organicERS.
\19\ Ibid.
---------------------------------------------------------------------------
The increasing production capacity for organic agricultural
products parallels growth trends in sales of organic products. Since
implementation of the NOP, the organic industry has experienced
consecutive years of growth demonstrated by increasing sales to
consumers. In 2010, U.S. retail sales of organic food and beverages
totaled $26.7 billion.\20\ The pace of double-digit sales growth that
persisted from 2002-2008 has dipped, but the 7.7 percent growth
recorded from 2009-2010, marked an increase from the previous year. The
top grossing organic food categories in terms of sales for 2010 are
fruits and vegetables (39.7%), dairy (14.6%) and packaged/prepared
foods, which includes baby formula and baby food (13.9%). Sales of dry
breakfast goods, which includes cereals, grew 3.0% in the year 2010,
exceeding $1 million. Organic frozen prepared foods account for the
highest sales within the packaged/prepared foods category. According to
the Organic Trade Association's Organic Industry Survey 2011, the most
often cited barrier to growth in this category, is rising commodity
costs.\21\
---------------------------------------------------------------------------
\20\ Organic Trade Association, 2011.
\21\ Ibid.
---------------------------------------------------------------------------
The year-to-year increases in sales of organic foods coincides with
changes in marketing, as organic products have become increasingly
available through conventional marketing channels, in addition to
natural product retailers. In 2006, nearly equal shares of organic
products were sold in conventional venues and natural product outlets
and by 2010, the balance shifted to mass-market groceries which sold 54
percent of organic food.\22\ There is also evidence of a shift in
consumer purchasing patterns, expanding beyond the traditional
consumption of organic fruits and vegetables to other organic products,
such as dairy, beverages, packaged foods, and breads and
[[Page 1989]]
grains.\23\ After fruits and vegetables, the organic food categories
which experienced the greatest sales growth in 2010 were dairy,
condiments, snack foods, and breads and grains.\24\
---------------------------------------------------------------------------
\22\ Dimitri, Carolyn, and Lydia Oberholtzer. Marketing U.S.
Organic Foods: Recent Trends From Farms to Consumers. Economic
Information Bulletin No. 58. U.S. Dept. of Agriculture, Economic
Research Service. September 2009.
\23\ Ibid.
\24\ Organic Trade Association, 2011.
---------------------------------------------------------------------------
This Regulatory Impact Analysis (RIA) focuses on five product
categories in which the NOP believes the impact of the proposed rule
will be concentrated: infant formula; baby food; milk; breakfast
cereal; and pet food. The NOP used the Organic Trade Association's
April 2011 White Paper on the Fortification of Organic Foods to
identify several product categories that would likely be impacted by
regulatory action with respect to the listing for nutrient vitamins and
minerals.\25\ A fuller description of current fortification in these
products is provided in the discussion of costs below. Table 4 provides
an overview of the recent market statistics for these product
categories.
---------------------------------------------------------------------------
\25\ Organic Trade Association, 2011. Fortification of Organic
Foods, OTA Task Force White Paper.
Table 4--2010 Organic Sales and Growth Rates for Select Organic Products
------------------------------------------------------------------------
Category 2010 Sales 2010 Growth
------------------------------------------------------------------------
Infant Formula \a\.............. $695 million....... 1.9%
Baby Food \a\................... 296 million........ 2.3%
Milk/cream \a\.................. 2.14 billion....... 10.2%
Dry Breakfast Goods \a\*........ 1 billion.......... 3.0%
Pet Food \b\.................... 116 million........ 18.4%
---------------------------------------
Total....................... 4.2 billion........ .................
------------------------------------------------------------------------
\a\ Figures obtained from Organic Trade Association, ``2011 Organic
Industry Survey''.
\b\ Figures obtained from Sundale Research, 2011. ``State of the
Industry: Natural and Organic Pet Food in the U.S., 4th Edition'',
Bayshore, N.Y.
* For the purposes of this proposed action, the NOP used ``dry breakfast
goods'' as a synonym for breakfast cereal.
Benefits to the Proposed Rule
The current regulatory provisions present challenges to certifying
agents and organic operations in complying with and enforcing
regulations regarding the use of nutrient vitamins and minerals. In
April 2010, the NOP informed certifying agents of the corrected
interpretation of the FDA fortification policy and the impact on the
exemption for nutrient vitamins and minerals.\26\ This proposed
correction provides certifying agents with a more clear direction for
future certification decisions concerning vitamins, minerals and other
substances in organic product formulations. Further, this proposed
action also would ensure that exemptions for the use of vitamins,
minerals and other nutrients are subject to NOSB evaluation in
accordance with the criteria established in 7 U.S.C. 6518(m). Finally,
the proposed amendment also would correct the regulation with regard to
infant formula under the NOP. Organic infant formula has been marketed
since the implementation of the NOP regulations in 2002. The current
NOP regulations, however, do not specifically provide a correct
reference for the use of vitamins and minerals required by FDA in
organic infant formula.
---------------------------------------------------------------------------
\26\ NOP, 2010, Action Memorandum for the Chairman of the
National Organic Standards Board, Scope of Nutrient Vitamins and
Minerals in Organic Food, available at http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELPRDC5084068&acct=nosb.
---------------------------------------------------------------------------
This proposed action would facilitate the use of any additional
vitamins or minerals that the FDA may determine to be required or
essential for human nutrition. The FDA regulatory citations, 21 CFR
101.9, 107.100 and 107.10, that would replace the current reference to
21 CFR 104.20, contain lists of vitamins and minerals for food and
infant formula. The lists within these sections are updated as
warranted to incorporate additional nutrients which FDA has designated
as essential or required. For example, since the implementation of the
fortification policy in 1980, the FDA has modified the list of
essential nutrients to include vitamin K, manganese, selenium,
chromium, molybdenum and chloride. By including the proposed references
to 21 CFR 101.9, 107.100 and 107.10, any essential or required vitamins
and minerals which are added to those regulations would also be allowed
for use in organic food and infant formula. During the sunset review of
the proposed listing for vitamins and minerals, the NOSB would review
any updates to the vitamins and minerals listed in those sections.
Costs of Proposed Rule
This action would impact any certified organic operation which adds
substances to organic products that are not essential vitamins and
minerals for human nutrition, as enumerated in 21 CFR 101.9, or
required vitamins and minerals for infant formula, as enumerated in 21
CFR 107.100 and 107.10. Based on information provided in the OTA White
Paper on the Fortification of Organic Foods, the impacts would be
concentrated within 5 categories of organic products discussed herein
in which nutrient supplementation has been more prevalent: infant
formula, baby food, milk, breakfast cereal, and pet food. In aggregate,
we anticipate that the upper limit for sales of the organic product
categories affected by this proposed action would be $4.1 billion. We
emphasize that this is an estimated upper limit that reflects the total
sales of the 5 categories of organic products. Because AMS believes
that only a subset of these sales would be impacted by this action, the
actual costs of mitigation to comply with the regulatory change are
expected to be significantly lower than the total sales value. However,
the AMS does not have sufficient data to estimate these costs and is
therefore seeking public comment to further analyze the costs of the
final rule. OTA provided a conservative estimate that the economic
impact of fortified organic product sales is in the range of $500
million annually. However, it is not possible for AMS to evaluate the
accuracy of this estimate due to the use of proprietary data and lack
of information of what assumptions were used to determine this economic
impact.
[[Page 1990]]
The following discussion explains the basis for AMS's estimate by
product category, any underlying assumptions and potential mitigating
factors.
Infant Formula. Organic handlers which are not in compliance with
this proposed rule would be required to reformulate or relabel their
products or exit the organic infant formula market.\27\ According to
measurements by the USDA Economic Research Service, 99.5 percent of
organic infant formula contained DHA/ARA as of the first quarter in
2009.\28\ The NOP assumes that the percentage of organic infant formula
containing DHA algal oil and ARA single-cell oil has not fluctuated and
for the purposes of this analysis, that essentially all organic infant
formula contains DHA algal oil and ARA single-cell oil. The OTA
reported that sales of organic infant formula were $689 million in
2010. Therefore, we anticipate that the entire $689 million organic
infant formula industry would be impacted by this proposed action.
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\27\ According to NOP research, it appears that there are 5
major entities which offer organic infant formula exclusively with
DHA algal oil and ARA single-cell oil. Three of the five also market
nonorganic infant formulas; therefore, the impact of this action to
each entity could be buffered by sustained business related to the
nonorganic formulas. Data from ERS which shows that organic infant
formulas have a minimal share, 0.8 percent, of the total infant
formula market supports the prediction of a more limited impact on
the entities which offer both organic and nonorganic formulas.
\28\ ERS determined this number from Neilsen Scantrack data
which contains weekly sales information from a sample of over 14,000
U.S. grocery stores.
---------------------------------------------------------------------------
AMS believes the estimate impact of this proposed action on organic
infant formula may be inflated for several reasons. At the April 2011
NOSB meeting, the NOP informed the organic industry that the prior NOP
interpretation of the listing for nutrient vitamins and minerals was
incorrect. The NOP indicated its intent to implement the fortification
policy, referenced in the codified listing as 21 CFR 104.20, in
accordance with FDA's interpretation of that policy . The NOP also
advised that other substances could be petitioned for addition to the
National List. Since that announcement, six petitions have been
submitted for substances that are added to organic infant formula, but
are not required by FDA. As of the publication of this proposed action,
petitions for the following substances have been submitted to the NOP:
DHA algal oil, ARA single-cell oil, taurine, choline, inositol,
ascorbyl palmitate, beta-carotene, L-carnitine, lycopene, nucleotides,
lutein and L-methionine. The NOSB will consider the petitions for DHA
algal oil and ARA single-cell oil at the November 29-December 2, 2011
meeting.
AMS proposes a two year implementation phase before this rule
becomes effective. AMS believes that the NOP's advance disclosure of
its intent with respect to nutrient vitamins and minerals, in
combination with a proposed two year implementation phase, will
minimize disruption to the organic industry. The length of time is
calculated to provide time for the NOSB to conclude its recommendations
on petitions for substances impacted by this rule and to complete any
rulemaking necessitated by NOSB recommendations to add substances to
the National List. AMS recognizes that a petition submission does not
guarantee a favorable outcome for the petitioner, but the process
provides ample opportunity for stakeholders to inform the NOSB and the
public of the reasons to support a National List exemption. AMS does
not have data to more accurately estimate the potential costs of this
action on the organic infant formula market and seeks public comments
to refine the estimated impact.
Baby Food. The OTA 2011 Organic Industry Survey states that sales
of organic baby food totaled $296 million in 2010. Organic baby food
represents a small, but growing share of the baby food market.
According to ERS data, sales of organic baby food accounted for
approximately 12.2% of the supermarket sales of all baby food in the
first quarter of 2009.\29\ The NOP has observed a range of organic baby
food products in various forms, including canned, dry and frozen and
has observed the addition of DHA algal oil, choline bitartrate and
unidentified sources of DHA and ARA to a few organic baby food
products. Within each type, there are organic baby food products which
would comply with this proposed action with respect to the addition of
vitamins and minerals.\30\ However, AMS does not have data to determine
the proportion of baby food which would be affected by this proposed
action and seeks comments to refine this estimate.
---------------------------------------------------------------------------
\29\ ERS determined the market share for organic baby food by
using data from Neilsen Scantrack, which contains weekly sales
information from a sample of over 14,000 U.S. grocery stores.
\30\ For the purpose of labeling, the amount/levels of essential
vitamins and minerals in 21 CFR 101.9(c)(8)(iv) are for 4 years and
above. Foods that are represented for use for infants (up to 12
months of age), children 1 to 4 years of age, pregnant or lactating
women, must use the Recommended Daily Intakes that are specified for
the intended group.
---------------------------------------------------------------------------
AMS believes that the two year implementation phase would minimize
any disruption to the organic baby food industry. During this time, the
impacted stakeholders have the opportunity to submit petitions to add
substances to the National List that would be excluded from use in
organic products. The implementation period also provides affected
entities with time to consider reformulating products to comply with
the proposed action.
Fluid Milk and Dairy Products. The total sales of organic milk and
cream sales for 2010 was reported to be $2.1 billion. \31\ ERS has
calculated that 2.8 percent of the universal product codes (UPCs) for
organic milk are codes for milk products which contain DHA.\32\
However, due to variability in the retail price and sales volume for
different types of organic milk products, the percentage of UPCs cannot
be extrapolated to the percentage of sales that would be affected by
this proposed action. AMS does not have data to quantify the percent of
organic milk sales that are attributed to milk with DHA and ARA.
However, even assuming that the $2.1 billion in sales could be the
upper limit cost of this proposed action, AMS believes that this
significantly over estimates the impact of this proposed rule. As
indicated by the organic milk UPC data from ERS, the organic fluid milk
market includes many products which do not contain added DHA. In
addition, not all organic milk products are available in a version
containing added DHA. AMS is aware that retail prices for organic milk
with added DHA are typically higher than prices for organic milk
without added DHA.\33\ However, we lack numerical data to describe the
economic impact of DHA in the organic milk market, particularly in
comparison to other growth drivers such as a narrowing gap between
organic and nonorganic milk prices.\34\ AMS seeks public comments to
[[Page 1991]]
refine the estimated impact of this proposed action upon organic fluid
milk and dairy products.
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\31\ This estimate does not include potential impacts to organic
yogurt. The NOP believes such impact would be minimal as there
appears to be very few organic yogurt products on the market which
contain DHA algal oil. Organic yogurt which contains DHA derived
from fish oil is available; this is acceptable for use in organic
production currently and under this proposed action.
\32\ ERS determined this estimate by utilizing data from the
Gladson UPC (Universal Product Code) database which contains 160,000
food UPC codes and detailed nutritional information. The 2.8%
estimate is based on 2010 data. ERS searched that database for
organic milk products containing one or more of the 11 nutrients
specified by the NOP: docosaheaxaenoic acid (DHA), arachidonic acid
(ARA), taurine, inositol, choline, ascorbyl palmitate, beta-
carotene, carnitine, lycopene, nucleotides, and lutein.
\33\ NOP analysis of milk prices revealed that organic whole
milk with added DHA generally ranged from 30 to 80 cents higher than
prices for organic whole milk.
\34\ The Organic Trade Association 2011 Organic Industry Survey
attributes the strong growth of the organic milk/cream category in
2010, to a narrower price gap between organic and nonorganic milk as
a result of higher conventional commodity prices.
---------------------------------------------------------------------------
AMS believes there are additional factors that would mitigate the
projected $2.1 billion impact on the organic dairy sector. One factor
is the existence of an alternative form of DHA, derived from fish oil,
which is acceptable for use in organic milk and dairy products. Section
205.606 of the National List provides for the use of two components of
fish oil, specifically, the omega-3 fatty acids, DHA and
eicosapentaenoic (EPA). This estimated cost to the organic dairy sector
does not include organic milk which contains DHA from fish oil because
the addition of those substances would not be prohibited by this
proposed action. While AMS is aware that DHA algal oil has a unique
market appeal as a vegetarian source of DHA, there is an allowed source
of omega-3 fatty acids to enable operations affected by proposed action
to maintain a stake in the niche market for omega-3 organic milk.
AMS' estimate assumes that all sales attributed to organic milk
with DHA could be potentially affected in the organic milk sector.
However, the NOP believes, but does not have affirmative data that some
portion of DHA organic milk purchases would transfer to other organic
milk products without algal DHA, mitigating the potential loss of
organic milk sales to the organic dairy sector. Further, AMS expects
that some portion of consumers is chiefly motivated by the perceived
benefits of organic certification and would keep their purchases within
the organic dairy sector. Such consumer behavior would decrease the
estimated sales impact of this proposed action.
In addition, AMS is proposing a two year implementation period. As
of the publication of this proposed rule, petitions have been submitted
to the NOSB for the addition of DHA algal oil and ARA single-cell oil.
During the implementation period, affected entities will have the
opportunity to present their public comments to the NOSB regarding DHA
algal oil and ARA single-cell oil. If the NOSB approves a
recommendation to add these substances to the National List, the length
of the implementation period is expected to be adequate to cover the
necessary rulemaking and minimize disruption to the industry.
Breakfast Cereal. The sales for organic breakfast cereal totaled
approximately $1 billion in 2010.\35\ ERS has calculated that 2.8
percent of the UPCs for organic breakfast cereals are codes for cereals
which contain a substance that would be prohibited from use in organic
products as a result of this proposed rule.\36\ AMS lacks data on
market share of breakfast cereals with any of the identified substances
(referred to ``added nutrients'' for the remainder of this section).
While assuming an upper limit of $1 billion for the estimated impact of
this proposed action on organic breakfast cereal, the agency considers
that this figure is significantly inflated. As evidenced by the ERS
data, not all organic breakfast cereals contain an added nutrient(s)
that would be affected by this proposed action.
---------------------------------------------------------------------------
\35\ Organic Trade Association, 2011. The 2011 Organic Industry
Survey reported $1.049 billion in sales of ``dry breakfast goods''
for 2010.
\36\ ERS determined this estimate by utilizing data from the
Gladson UPC (Universal Product Code) database which contains 160,000
food UPC codes and detailed nutritional information. The 2.8%
estimate is based on 2010 data. See footnote 19 for a list of the
substances included in the search criteria.
---------------------------------------------------------------------------
AMS' estimate assumes that all sales attributed to organic
breakfast cereal with added nutrients would potentially be affected in
the organic breads and grains sector. However, the NOP believes, but
does not have affirmative data, that some portion of these purchases
would transfer to other organic breakfast cereals, mitigating any
potential adverse impact. Further, AMS believes it is accurate to infer
that some portion of purchases are motivated by perceived benefits of
the organic certification rather than the nutrients added, which would
decrease the estimated sales impact.
In addition, the proposed two year implementation period is
expected to be sufficient for NOSB consideration of petitions for added
nutrients received as of publication of this rule and any rulemaking
necessitated by NOSB recommendations on these petitions. As AMS does
not have data to more accurately estimate the potential costs of this
action on the organic breakfast cereal market, the agency is seeking
public comments to refine the estimated impact.
Pet Food. AMS estimates that the potential impact of this proposed
action on the organic pet food industry to be $42 million. According to
a Sundale Research report, the 2010 sales for organic pet food totaled
$116 million, 36 percent of which was attributed to sales of cat
food.\37\ The estimated impact of $42 million is equivalent to the 2010
sales of organic cat food. AMS anticipates that all organic cat food
would be impacted by this proposed action because cat food must contain
the substance taurine. Taurine is an organic acid which is essential
for healthy heart function and prevention of blindness in cats. The
amount of taurine must meet the minimal requirement as established for
cats by the National Research Council's Nutrient Requirements of Cats
and Dogs (2006).\38\ The National List does not contain a specific
exemption for the use of taurine, nor does the FDA fortification policy
provide for the use of this substance because the policy does not
pertain to pet foods.
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\37\ Sundale Research, 2011. State of the Industry: Natural and
Organic Pet Food in the U.S., 4th Edition, Bayshore, N.Y.
\38\ The FDA considers the nutrients listed in Tables 15-10, 15-
12 and 15-14 to be essential nutrients for cats where a Minimal
Requirement or Adequate Intake value has been established in order
for the product to be labeled, ``complete and balanced.''
---------------------------------------------------------------------------
The $42 million in sales of organic cat food includes sales of cat
treats. According to the Sundale Research data, sales of cat food
treats accounted for 12.5 percent of 2010 sales, or $5.25 million. Pet
treats, however, are exempt from including a nutritional adequacy
statement and cat treats are not required to include taurine.
Therefore, AMS expects that some portion of organic cat treats would
not be affected by this proposed action. AMS does not have data on the
percent of cat treats that do or do not contain taurine to further
refine this estimate. Therefore, the estimate is based on an underlying
assumption that all cat treats contain taurine.\39\ Because AMS does
not have data to more accurately estimate the potential costs for
organic pet food, the agency is seeking public comments to refine the
estimated impact.
---------------------------------------------------------------------------
\39\ Although taurine is not a required nutrient for dog food,
some organic dog foods may contain taurine. However, AMS believes
the amount of organic dog food products affected would be minimal.
---------------------------------------------------------------------------
AMS intends to address the overall use of nutrient vitamins and
minerals in pet food through a separate rulemaking that would establish
standards for organic pet food. A petition to add taurine to the
National List for use in pet food was submitted to the NOP in September
2010. AMS believes that the NOSB review of the petition and the
promulgation of organic pet food regulations will conclude within the
implementation phase of this proposed action to mitigate disruption to
the organic pet food industry.
In summary, AMS expects that potential impacts on sales of organic
products in the aforementioned categories could be mitigated through
several factors. The proposed two year implementation period is
intended to
[[Page 1992]]
provide time for NOSB to consider petitions for substances that are
affected by this action and for AMS to conclude rulemaking to add
substances to the National List. The implementation phase would also
provide affected entities time to explore reformulation or relabeling
of affected products. AMS is seeking comments on the length of the
proposed compliance date. Further, AMS believes that if some products
are discontinued as a result of this proposed rule, some consumers will
purchase, as an alternative, an organic product within the same
category rather than a nonorganic product.
B. Executive Order 12988
Executive Order 12988 instructs each executive agency to adhere to
certain requirements in the development of new and revised regulations
in order to avoid unduly burdening the court system. This proposed rule
is not intended to have a retroactive effect.
States and local jurisdictions are preempted under the OFPA from
creating programs of accreditation for private persons or State
officials who want to become certifying agents of organic farms or
handling operations. A governing State official would have to apply to
USDA to be accredited as a certifying agent, as described in section
2115(b) of the OFPA (7 U.S.C. 6514(b)). States are also preempted under
sections 2104 through 2108 of the OFPA (7 U.S.C. 6503 through 6507)
from creating certification programs to certify organic farms or
handling operations unless the State programs have been submitted to,
and approved by, the Secretary as meeting the requirements of the OFPA.
Pursuant to section 2108(b)(2) of the OFPA (7 U.S.C. 6507(b)(2)), a
State organic certification program may contain additional requirements
for the production and handling of organically produced agricultural
products that are produced in the State and for the certification of
organic farm and handling operations located within the State under
certain circumstances. Such additional requirements must: (a) Further
the purposes of the OFPA, (b) not be inconsistent with the OFPA, (c)
not be discriminatory toward agricultural commodities organically
produced in other States, and (d) not be effective until approved by
the Secretary.
Pursuant to section 2120(f) of the OFPA (7 U.S.C. 6519(f)), this
proposed rule would not alter the authority of the Secretary under the
Federal Meat Inspection Act (21 U.S.C. 601-624), the Poultry Products
Inspection Act (21 U.S.C. 451-471), or the Egg Products Inspection Act
(21 U.S.C. 1031-1056), concerning meat, poultry, and egg products, nor
any of the authorities of the Secretary of Health and Human Services
under the Federal Food, Drug and Cosmetic Act (21 U.S.C. 301-392), nor
the authority of the Administrator of EPA under the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 136-137).
Section 2121 of the OFPA (7 U.S.C. 6520) provides for the Secretary
to establish an expedited administrative appeals procedure under which
persons may appeal an action of the Secretary, the applicable governing
State official, or a certifying agent under this title that adversely
affects such person or is inconsistent with the organic certification
program established under this title. The OFPA also provides that the
U.S. District Court for the district in which a person is located has
jurisdiction to review the Secretary's decision.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612) requires
agencies to consider the economic impact of each rule on small entities
and evaluate alternatives that would accomplish the objectives of the
rule without unduly burdening small entities or erecting barriers that
would restrict their ability to compete in the market. The purpose is
to fit regulatory actions to the scale of businesses subject to the
action. Section 605 of the RFA allows an agency to certify a rule, in
lieu of preparing an analysis if the rulemaking is not expected to have
a significant impact on a substantial number of small entities.
Pursuant to the requirements set forth in the RFA, AMS performed an
economic impact analysis on small entities in the final rule published
in the Federal Register on December 21, 2000 (65 FR 80548). AMS has
also considered the economic impact of this proposed action on small
entities. Small entities include producers engaged in crop and animal
production and handlers that process organic products or develop,
market and sell organic products. AMS has determined that this proposed
rule will not have a significant impact on a substantial number of
small entities.
AMS notes that several requirements to complete the RFA overlap
with the Regulatory Impact Analysis (RIA) and the Paperwork Reduction
Act (PRA). For example, the RFA requires a description of the reasons
why action by the agency is being considered and an analysis of the
proposed rule's costs to small entities. The RIA describes the need for
this proposed rule and provides an analysis of the benefits and costs
of a proposed rule. Further, the RFA requires a description of the
projected reporting and recordkeeping requirements of the proposed
rule. The PRA provides an estimate of the reporting and recordkeeping
(information collection) requirements of a proposed rule. In order to
avoid duplication, we combine some analyses as allowed in section
605(b) of the RFA. The RIA also provides summary information on the
size of the organic industry, production capacity and sales by category
of organic products with a focus upon those products likely to be
affected by this rulemaking. It also provides information on potential
costs to handlers that have chosen to obtain organic certification. The
RIA and PRA should be referred to for more detail.
This proposed rule would affect handlers involved in manufacturing
and/or marketing certain types of organic processed products including,
infant formula, baby food, fluid milk, breakfast cereal and pet food.
Organic handlers engage in the selling, processing and/or packaging of
agricultural products. Some handlers have processing facilities, while
others develop formulations and labels and market products, but
contract with a co-packer for the manufacturing. For the purposes of
this analysis, AMS considered co-packers and marketing operations to be
a single handling entity due to the inter-dependent relationship for
producing organic products. The Small Business Administration (SBA) (13
CFR 121.201), defines small food manufacturers by the number of
employees. SBA identifies various subsectors of the food manufacturing
industry by the North American Industry Classification System
(Subsector 311--Food Manufacturing). Entities which manufacture the
organic products listed above, with the exception of breakfast cereal,
would qualify as a small business if the number of employees does not
exceed 500. The small business threshold for breakfast cereal
manufacturing is a maximum of 1,000 employees.\40\
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\40\ AMS determined that the following North American Industry
Classification System categories, from among those listed in the SBA
regulations, are relevant to the manufacturing activity that could
be affected by this proposed rulemaking: Dry, condensed and
evaporated dairy product manufacturing (organic infant formula);
Miscellaneous food manufacturing (organic baby food); Fluid milk
manufacturing, Breakfast cereal manufacturing, Dog and cat food
manufacturing.
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Based on USDA data, the total acreage of certified organic land
grew from 1.8 million acres in 2000 to 4.8 million acres in 2008, of
which approximately 2.2 million acres was pasture and
[[Page 1993]]
rangeland.\41\ The number of certified organic producers in the U.S.
nearly doubled in that time period rising from approximately seven
thousand in 2000 to nearly 13,000 in 2008.\42\ ERS estimated the number
of certified handling operations was 3,225 in 2007.\43\
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\41\ U.S. Department of Agriculture, Economic Research Service.
2008. U.S. Organic Agriculture, 1992-2008, data set available at
http://www.ers.usda.gov/data/organicERS.
\42\ Ibid.
\43\ U.S. Department of Agriculture, Economic Research Service,
2009. Data Sets: Procurement and Contracting by Organic Handlers:
Documentation available at http://www.ers.usda.gov/Data/OrganicHandlers/Documentation.htm.
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Legal Basis and Objective of Proposal
In 1990, Congress enacted the Organic Foods Production Act of 1990,
as amended (OFPA) (7 U.S.C. 6501-6522). The OFPA requires all
agricultural products labeled as ``organically produced'' to originate
from farms or handling operations certified by a State or private
agency that has been accredited by USDA. The OFPA authorizes the
Secretary of Agriculture to establish a National List of approved and
prohibited substances that meet criteria enumerated in the Act. The
exemptions for the use of synthetic substances must be based on
proposed amendments of the National Organic Standards Board.
This proposed rule would correct the National List exemption for
nutrient vitamins and minerals by replacing the reference to FDA's
fortification policy (21 CFR 104.20) with references to the FDA
regulatory provisions that clearly convey what substances are permitted
for fortification of food (21 CFR 101.9). This proposed action would
also add references for the FDA regulations for the required vitamins
and minerals for infant formula (21 CFR 107.100 and 107.10) because the
fortification policy does not address the addition of nutrients to
infant formula.
Applicability of Proposal
The population that would be directly impacted by this proposed
rule is a subset of certified organic handlers of infant formula, baby
food, milk, breakfast cereal and pet food. While we do not have precise
data, AMS expects the number of organic handlers that could be affected
by this proposed action to be substantially less than the entire
population of organic handlers which ERS estimated to be 3,225 in 2007.
In general, AMS has ascertained that the use of substances that could
no longer be added to organic products as a result of this proposed
action tends to be concentrated among certain national brands. AMS
believes that few of these handlers would be considered small entities
under the criteria established by the SBA, as discussed below. AMS is
seeking comments on the adequacy of the estimated impact of the
proposed action on small entities.
Costs of Proposed Rule--Direct Costs to Handlers
Infant Formula. The Organic Trade Association reported that sales
of organic infant formula were $689 million for the year 2010.\44\
According to measurements by ERS, as of the first quarter in 2009, 99.5
percent of organic infant formula contained added DHA and ARA.\45\ AMS
believes that approximately five brands of organic infant formula
produced by two manufacturers dominate the U.S. organic infant formula
market. Organic infant formula sold under five of these brands contains
ingredients, such as, DHA algal oil, ARA single-cell oil, taurine and
inositol, which would not be permitted by this proposed action. AMS is
confident that two of these entities would not be considered a small
business under the SBA criteria.
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\44\ Organic Trade Association, 2011. 2011 Organic Industry
Survey. Brattleboro, VT.
\45\ ERS determined this number from Neilsen Scantrack data
which contains weekly sales information from a sample of over 14,000
U.S. grocery stores.
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Baby Food. The Organic Trade Association disclosed that sales of
organic baby food totaled $296 million in 2010.\46\ According to ERS
data, sales of organic baby food accounted for approximately 12.2
percent of the supermarket sales of all baby food in the first quarter
of 2009.\47\ The baby food category includes products in a variety of
forms and ingredients for different age groups ranging from cereals,
pureed fruits, vegetables, grains and proteins, snacks and yogurt.
According to the database of NOP certified operations, the number of
U.S. operations handling organic baby food is less than 20.
---------------------------------------------------------------------------
\46\ Organic Trade Association, 2011. 2011 Organic Industry
Survey.
\47\ ERS determined the market share for organic baby food by
using Neilsen Scantrack data, which contains weekly sales
information from a sample of over 14,000 U.S. grocery stores.
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AMS has observed DHA algal oil, choline bitartrate and unidentified
sources of DHA and ARA as ingredients in a few organic baby food
products. These ingredients would not be permitted in organic formula
by this proposed action unless and until there are specific exemptions
on the National List for these substances. In general, however,
prevalent use of substances that would be prohibited as a result of
this proposed action in organic baby food has not been detected. AMS
believes that approximately three entities, which distribute products
nationally, would be impacted by this proposed rule. AMS is confident
that one of these entities would not meet the criteria for a small
business. Based upon the extent of the distribution of products and the
marketing channels, AMS is uncertain whether either of the two other
entities would qualify as a small business. The products that would be
affected by this proposed rule, however, represent only a portion of
the organic baby food offerings of these entities. Therefore, AMS
believes the impact of this rule, if any, on small entities in the
organic baby food category would be negligible. AMS welcomes comments
to further inform its determination.
Fluid Milk. The total sales of organic milk and cream for the year
2010 were reported to be $2.1 billion.\48\ ERS has calculated that 2.8
percent of the universal product codes for organic milk are codes for
milk products which contain DHA.\49\ According to ERS, as of May 2007,
two suppliers were providing about 75 percent of the nationally branded
organic milk.\50\ That balance has likely shifted due to the growth in
private label brands, many of which are supplied by one organic milk
handler. Based on ERS analysis, AMS believes that three organic dairy
handlers supply most of the organic milk in the U.S. market (two
supplying national brands and one supplying various private label
milk). AMS is aware of other organic dairy handlers which distribute on
a smaller scale and that the dairy handlers may collect milk from
hundreds of organic producers.
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\48\ Organic Trade Association, 2011. 2011 Organic Industry
Survey. This estimate does not include potential impacts to organic
yogurt. The NOP believes such impact would be minimal as there
appears to be very few organic yogurt products on the market which
contain DHA algal oil or other substances that would not be allowed
per this proposed action. Organic yogurt which contains DHA or
omega-3 fatty acids derived from fish oil is available; this is
acceptable for use in organic production currently and would
continue to remain compliant under this proposed action.
\49\ ERS determined this estimate by utilizing data from the
Gladson UPC (Universal Product Code) database which contains 160,000
food UPC codes and detailed nutritional information. The 2.8%
estimate is based on 2010 data. ERS searched that database for
organic milk products containing one or more of the 11 nutrients
specified by the NOP: docosaheaxaenoic acid (DHA), arachidonic acid
(ARA), taurine, inositol, choline, ascorbyl palmitate, beta-
carotene, carnitine, lycopene, nucleotides, and lutein.
\50\ Dimitri, Carolyn, and Venezia, Kathryn M. Retail and
Consumer Aspects of the Organic Milk Market/LDP-M-155-01. U.S.
Department of Agriculture, Economic Research Service, May 2007.
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One of the national organic milk brands offers several organic milk
varieties with added DHA algal oil.
[[Page 1994]]
There is at least one other organic milk brand which contains DHA algal
oil, but which is not distributed on a national scale. Both of these
entities would be impacted by the proposed action because DHA algal oil
would not be allowed in organic milk unless and until there is a
specific exemption on the National List for this substance. AMS
believes that one of these companies, which is part of a multinational
corporation, would not qualify as a small business as defined by the
SBA for fluid milk manufacturing. AMS expects that this action could
impact some small milk handlers which offer organic milk with DHA algal
oil. However, the Agency concludes that this proposed action would not
have a significant impact on these entities as organic milk brands have
diversified organic dairy offerings and do not produce or market
organic milk with DHA exclusively. The diversification in the product
line could help to offset any costs impacts of reformulating or
discontinuing some products within a brand. Furthermore, there are
alternative sources of DHA from fish oil, which are allowed as
ingredients in organic products per section Sec. 205.606 of the
National List, and would be available to organic handlers that want to
remain in or enter the DHA/omega-3 organic milk market niche.
Breakfast cereal. The sales for organic breakfast cereal totaled
approximately $1 billion in 2010.\51\ ERS has calculated that 2.8
percent of the universal product codes for organic breakfast cereals
are codes for cereals which contain a substance that would be
prohibited from use in organic products as a result of this proposed
rule.\52\ AMS has not identified which organic cereals, other than
those marketed for babies, contain substances which would be prohibited
from use in organic products as a result of this proposed action. The
projected impacts to organic baby food are described above and in the
Regulatory Impact Analysis. AMS believes that this proposed rule would
not have a significant impact on a substantial number of small
breakfast cereal manufacturers for several reasons. Due to the numerous
varieties of organic breakfast cereal on the market, the estimated 2.8
percent of universal product codes which would be impacted by this
proposed action represents few products. Organic cereal brands
typically offer a variety of cereals, improving the likelihood that not
all formulations would be adversely affected by this proposed action.
AMS welcomes comments to further inform our consideration of the
impacts of this proposed rule upon the organic breakfast cereal market.
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\51\ Organic Trade Association, 2011. The 2011 Organic Industry
Survey reported $1.049 billion in sales of ``dry breakfast goods''
for 2010.
\52\ ERS determined this estimate by utilizing data from the
Gladson UPC (Universal Product Code) database which contains 160,000
food UPC codes and detailed nutritional information. The 2.8%
estimate is based on 2010 data. See footnote 19 for a list of the
substances included in the search criteria.
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Pet Food. According to a report by Sundale Research, the 2010 sales
for organic pet food totaled $116 million, growing approximately 18
percent over the previous year. AMS believes that this action would
adversely impact organic cat food, which accounts for 36 percent of the
organic pet food market.\53\ Organic cat food must contain the
substance taurine, an organic acid which is essential for healthy heart
function and prevention of blindness in cats. The amount of taurine
must meet the minimal requirement as established for cats by the
National Research Council's Nutrient Requirements of Cats and Dogs
(2006). The National List does not contain a specific exemption for the
use of taurine, nor does the FDA fortification policy provide for the
use of this substance because the policy does not pertain to pet foods.
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\53\ Sundale Research, 2011. State of the Industry: Natural and
Organic Pet Food in the U.S., 4th Edition, Bayshore, N.Y.
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AMS has observed that pet food companies which market organic pet
foods also offer natural pet food products. AMS is not aware of any pet
food companies that exclusively manufacture organic pet foods and
believes that the product and market diversification within individual
entities to include pet treats, organic dog food and natural pet foods,
respectively, provides insulation from the impacts of this proposed
action. Furthermore, AMS intends to address the use of nutrient
vitamins and minerals in pet food through a separate rulemaking that
would establish standards for organic pet food. A petition to add
taurine to the National List for use in pet food was submitted to the
NOP in September 2010. AMS believes that the NOSB review of any
petitions and the promulgation of organic pet food regulations will
conclude within the implementation phase of this proposed action to
mitigate disruption to the organic pet food industry.
Indirect Costs to Organic Producers
OTA's April 2011 White Paper on the Fortification of Organic Foods
includes an estimate of the sales of organic commodities used as
ingredients in fortified organic products, which could potentially be
impacted by regulatory action to restrict substances used for
supplementation in foodstuffs.\54\ OTA calculated the estimated farm
gate sales as $11 million dollars based on a ratio of 1:4:8, for the
variables, farm-gate sales, retail sales and total size of the
industry, respectively. The OTA White Paper also identifies the range
of commodities which supply impacted organic categories. The organic
commodity supply stream includes meats and poultry, grains, tree fruit,
vegetables, nuts, fluid milk and milk powder, and soy.
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\54\ This is available on the Organic Trade Association Web
site, http://www.ota.com.
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Small agricultural producers are defined by the Small Business
Administration (SBA) (12 CFR 121.201) as those having receipts of less
than $750,000. The majority of organic ingredient producers whose
agricultural products are diverted to organic infant formula, baby
food, milk, breakfast cereal and pet food would likely qualify as small
agricultural producers. While we do not have precise data, AMS expects
the number of producers of organic ingredients that could be affected
by this proposed action to be substantially less than the entire
population of organic producers which ERS estimated to be nearly 13,000
in 2008. This proposed rule is not expected to have an impact on a
substantial number of small agricultural producers. According to ERS,
the demand for organic products has historically exceeded the supply of
organic ingredients. In 2004, ERS conducted a survey of organic
handlers and found that 13% experienced critical shortages for one of
their organic products and concluded that 38% were importing raw,
organic materials produced outside the U.S.\55\ That discrepancy
persists according to the OTA ``2011 Organic Industry Survey'' which
reported difficulty, ranging from major to occasional, with the supply
of organic raw materials. This report also indicated that 62 percent of
companies surveyed in 2010 intended to increase their use of organic
ingredients over the next three years. Given the projections for
continued expansion of the organic sector, AMS expects that there will
be opportunities for producers to divert organic agricultural products
to other purchasers to buffer the impact of any disruption to the
manufacture of certain
[[Page 1995]]
processed organic products as a result of this proposed action.
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\55\ Greene, Catherine, Carolyn Dimitri, Biing-Hwan Lin, William
McBride, Lydia Oberholtzer, and Travis Smith. Emerging Issues in the
U.S. Organic Industry. EIB-55. U.S. Dept. of Agriculture, Economic
Research Service. June 2009.
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Organic meat and poultry producers that supply the organic pet food
industry, however, could face more formidable challenges. The organic
pet food market facilitates carcass utilization for organic meat and
poultry parts which do not enter human food chain. Poultry producers,
in particular, would be prone to experience a greater impact because
chicken comprises most of the protein in organic pet food. AMS does not
know the number of organic poultry producers that supply the organic
pet food sector.
Conclusion
This proposed rule would correct the National List exemption for
nutrient vitamins and minerals by replacing the reference to FDA's
fortification policy (21 CFR 104.20) with references to the FDA
regulatory provisions that clearly convey what substances are permitted
for fortification of food (21 CFR 101.9). This proposed action would
also add references for the FDA regulations for the required vitamins
and minerals for infant formula (21 CFR 107.100 and 107.10) because the
fortification policy does not address the addition of nutrients to
infant formula. Overall, this proposed action would narrow the number
of potential substances for addition to organic foods in comparison of
NOP's current interpretation of the exemption for nutrient vitamins and
minerals. This proposed rule would establish a finite list of essential
and required vitamins and minerals for food and infant formula.
Sustained consumer demand is essential to the economic stability of
organic producers and handlers, and this proposed action would bridge
consumer expectations and the innovation of organic operations.
The proposed revisions to the exemption for nutrient vitamins and
minerals could entail costs for certified operations which are
manufacturing and/or marketing organic products that contain substances
which fall outside the revised parameters for nutrient vitamins and
minerals. The costs associated with this proposed rule could include
reformulating products to remove nonagricultural ingredients that are
clearly prohibited by the National List and relabeling products to
reflect formulation changes. The types of substances that would be
restricted by this proposed action are nutrients which are not added to
have a functional effect on the product, but for nutrient content and
may be associated with a nutritional claim. Therefore, the removal of
these ingredients from product formulations is not expected to
necessitate procurement of substitute ingredients. Due to the diversity
of products and ingredients that may be affected by this rule, AMS is
not attempting to quantify the range of possible of reformulation and
relabeling to individual operations.
AMS believes that this proposed rule would facilitate increased
consumer confidence in organic products. This proposed action would
clearly delineate the requirements for adding vitamins and minerals to
organic foods and infant formula, and foster the consistent
implementation and enforcement of these requirements. Furthermore, this
proposed action does not preclude the potential for substances excluded
from use to be considered for future use in organic products, but it
would require that use be predicated upon the review and recommendation
of the NOSB. That process will ultimately bolster the certainty of
organic handlers about the regulatory status of ingredients, deter
consumer skepticism and improve the competitiveness of the market for
organic foods.
D. Paperwork Reduction Act
No additional collection or recordkeeping requirements are imposed
on the public by this proposed rule. Accordingly, OMB clearance is not
required by section 350(h) of the Paperwork Reduction Act of 1995, 44
U.S.C. 3501, Chapter 35, or OMB's implementing regulation at 5 CFR part
1320.
AMS is committed to complying with the E-Government Act to promote
the use of the Internet and other information technologies to provide
increased opportunities for citizen access to Government information
and services, and for other purposes.
E. Civil Rights Impact Analysis
AMS has reviewed this proposed rule in accordance with the
Department Regulation 4300-4, Civil Rights Impact Analysis (CRIA), to
address any major civil rights impacts the rule might have on
minorities, women, and persons with disabilities. After a careful
review of the rule's intent and provisions, AMS has determined that
this rule would only impact the organic practices of handlers and that
this rule has no potential for affecting handlers in protected groups
differently than the general population of handlers. This rulemaking
was initiated to clarify a regulatory requirement and enable consistent
implementation and enforcement.
Protected individuals have the same opportunity to participate in
the NOP as non-protected individuals. The NOP regulations prohibit
discrimination by certifying agents. Specifically, Sec. 205.501(d) of
the current regulations for accreditation of certifying agents provides
that ``No private or governmental entity accredited as a certifying
agent under this subpart shall exclude from participation in or deny
the benefits of the NOP to any person due to discrimination because of
race, color, national origin, gender, religion, age, disability,
political beliefs, sexual orientation, or marital or family status.''
Paragraph 205.501(a)(2) requires ``certifying agents to demonstrate the
ability to fully comply with the requirements for accreditation set
forth in this subpart'' including the prohibition on discrimination.
The granting of accreditation to certifying agents under Sec. 205.506
requires the review of information submitted by the certifying agent
and an on-site review of the certifying agent's operation. Further, if
certification is denied, Sec. 205.405(d) requires that the certifying
agent notify the applicant of their right to file an appeal to the AMS
Administrator in accordance with Sec. 205.681. These regulations
provide protections against discrimination, thereby permitting all
handlers, regardless of race, color, national origin, gender, religion,
age, disability, political beliefs, sexual orientation, or marital or
family status, who voluntarily choose to adhere to the proposed rule
and qualify, to be certified as meeting NOP requirements by an
accredited certifying agent. This proposed rule in no way changes any
of these protections against discrimination.
List of Subjects in 7 CFR Part 205.
Administrative practice and procedure, Agriculture, Animals,
Archives and records, Imports, Labeling, Organically produced products,
Plants, Reporting and recordkeeping requirements, Seals and insignia,
Soil conservation.
For the reasons set forth in the preamble, 7 CFR part 205, is
proposed to be amended as follows:
PART 205--NATIONAL ORGANIC PROGRAM
1. The authority citation for 7 CFR part 205 continues to read as
follows:
Authority: 7 U.S.C. 6501-6522.
2. Section 205.605(b) is amended by:
A. Removing the listing for ``Nutrient vitamins and minerals''.
B. Adding a listing for ``Vitamins and minerals''.
The addition reads as follows:
[[Page 1996]]
Sec. 205.605 Nonagricultural (nonorganic) substances allowed as
ingredients in or on processed products labeled as ``organic'' or
``made with organic (specified ingredients or food groups(s)).''
* * * * *
(b) * * *
* * * * *
Vitamins and minerals. For food--vitamins and minerals identified
as essential in 21 CFR 101.9. For infant formula--vitamins and minerals
as required by 21 CFR 107.100 or Sec. 107.10.
* * * * *
Dated: January 6, 2012.
David R. Shipman,
Acting Administrator, Agricultural Marketing Service.
[FR Doc. 2012-354 Filed 1-11-12; 8:45 am]
BILLING CODE 3410-02-P