Viewpoint: The USDA ‘organic’ label misleads and rips off consumers

This article originally appeared at Forbes and has been republished here with the author’s permission.

There is a Japanese proverb that goes, “Faith makes even the head of a sardine the object of worship.” That’s the sort of devotion that seems to be driving many Americans to buy overpriced organic products such as food, bed linens, pillows and clothes, sales of which increased 83% between 2007 and 2012.

An important spur to the popularity of these products is the USDA-regulated “organic” label, which implies to many consumers that these food products are somehow superior. But that is not what the label actually means. Nor is it true. Nor, arguably, does the label pass constitutional muster, especially in light of a recent U.S. Supreme Court decision.

The organic food production movement began in the early 1900’s to seek ways to conserve and regenerate the soil by having farmers fertilize primarily with organic waste such as manure and crop residues. Because of growing confusion about what constituted “organic” agriculture, in the late 1980’s industry pressured Congress to establish a single label that would reflect conformance with a national standard.

The outcome was the 1990 “National Organic Food Production Act,” which directed USDA to establish: (1) a national organic production certification program, (2) a label for organically produced agricultural products, (3) a national list of approved and prohibited substances to be included in the organic production standards, and (4) an accreditation program for agents who would certify conformance. The meaning of the USDA organic label was muddled from the beginning. At the release of the final national organic standards, Secretary of Agriculture Dan Glickman emphasized the fundamental meaninglessness of the designation:

“Let me be clear about one thing, the organic label is a marketing tool. It is not a statement about food safety. Nor is ‘organic’ a value judgment about nutrition or quality.”

By creating this marketing tool, USDA conferred a valuable seal of approval on products made by USDA-certified producers with government-sanctioned processes and procedures that are in no way related to safety, nutrition or quality. It is arguably an example of the kind of governmental paternalism described by economists Richard Thaler and Cass Sunstein in their controversial book, “Nudge: Improving Decisions About Health, Wealth and Happiness.” Their thesis is that individuals often don’t know what’s in their own best interest but that simple changes to the social environment–including via public policy–can sway people in subtle ways toward more “rational,” or favored, behavior. They would propose, for example, putting the fruit before the hamburgers in the college cafeteria line because they believe that hungry students are prone to grabbing the first thing they see. An example of a policy nudge put in place when Sunstein served as President Obama’s regulatory head in the Office of Management and Budget shifted the burden on employees to opt out of Individual Retirement Accounts rather than opting in, with the goal of increasing participation in these savings plans.

Conversely, USDA’s organic seal is an endorsement that “nudges” consumers toward irrationality–the purchase of organic products at markedly inflated prices and without evidence of palpable benefits. As though we needed another example, USDA’s National Organic Program illustrates that whether we do or not, politicians and bureaucrats often don’t know what’s best for us.

It is noteworthy that with the release of the standards for organic agriculture, no longer was the organic movement focused solely on conserving or regenerating the soil; animal welfare and the exclusion of certain modern technologies that would improve the efficiency of production and the safety and quality of products were added to the paradigm. In response to public comments, for example, USDA excluded foods from the organic definition if they were irradiated to eliminate insects and pathogenic microorganisms, a process popular in the spice industry, as well as crops such as corn, canola and soybeans crafted with the most precise and predictable techniques of genetic engineering.

An important unknown was how the new USDA regulation and promotion of organic food practices would affect the environment–exactly the sort of issue that the National Environmental Policy Act dictates must undergo an Environmental Impact Statement. One was never performed, however, because USDA located the National Organic Program (NOP) in its Agricultural Marketing Service, an organization whose mission is to promote U.S. agriculture, and which USDA has “categorically exempted” from the EIS requirement because, supposedly, “AMS programs and activities have been found to have no individual or cumulative effect on the human environment.”

Thus, employing a peculiar kind of circular reasoning, the environmental impacts of the Organic Food Production Act–which was ostensibly designed to improve food production practices in order to benefit the environment–were not reviewed because USDA assumed it would have no impact on the environment.

However, contrary to USDA’s assumptions, there is ample evidence that organic agriculture can be harmful to the environment. Its substantially lower yields in real-world settings–typically 20-60% less than conventional agriculture – impose various stresses on farmland and substantially increase water consumption.

In the jury-rigged world of organic agriculture, although synthetic chemical pesticides are generally prohibited, many exceptions are allowed (some of which are listed here) on the basis of “need,” and most “natural” ones, which can be extremely toxic, are permitted.

Are organic foods more healthful? A landmark study published in 2012 in the Annals of Internal Medicine by researchers at Stanford University’s Center for Health Policy analyzed data from 237 studies to determine whether organic foods are safer or healthier than non-organic foods. They concluded that fruits and vegetables that met the criteria for “organic” were on average no more nutritious than their far cheaper conventional counterparts, nor were those foods less likely to be contaminated by pathogenic bacteria like E. coli or Salmonella.

In fact, organic foods are highly vulnerable to contamination. Recalls of organic foods in 2015 jumped to seven percent of all food units recalled in 2015, compared to two percent the previous year (and one percent in 2012 and 2013). Organic agriculture accounts for only about one percent of farm acreage.

Perverting the original concept, organic agriculture morphed from a marketing tool into a massive public/private, special-interest bonanza. Every link in the organic production chain benefits, but at the expense of consumers, the environment and taxpayers. Mandatory federal spending on organic agriculture mushroomed from $20 million in the 2002 Farm Act to more than $160 million in the 2014 Farm Act.

Ironically, the organic label that is the touchstone of the National Organic Program may have made it vulnerable. A 2015 U.S. Supreme Court case, Reed v. the Town of Gilbert, strengthens the basis for a challenge to its constitutionality.

The Reed decision calls into question the legality of special labeling to identify foods produced by a particular process(es) that is unrelated to the health or safety of the protected product. Information required on labels is considered to be “commercial speech,” which must therefore conform to the speech requirements of the First Amendment to the U.S. Constitution. The essence of the Reed case is that special labeling laws are subject to “strict scrutiny,” the most rigorous standard of review for constitutionality. It requires that the government surmount the high hurdles of proving that the labeling furthers a “compelling interest” and also that the requirement is “narrowly tailored” to that interest.

Because the USDA organic designation is based on food production processes and procedures unrelated to quality, health or safety, it would appear to fail the standard of strict scrutiny.

We need legal challenges to USDA’s organic label, but a critical question is who would be willing and able to bring such legal challenges, because the law requires that a plaintiff have “standing”–the requirement that the person bringing the suit must have suffered some direct or substantial injury or be likely to suffer such an injury if a particular wrong is not addressed. An example of a person who qualifies might be a small organic farmer in a drought-plagued region who needs to cultivate genetically engineered, drought-resistant crops for his business to survive but will lose his organic certification if he does so.

However, it is unlikely that such a person could afford the expense of a suit against the government. If a trade association, producer or consumer group, or other entity with legal standing was willing to take on USDA, the elimination of the government’s imprimatur on organic agriculture could confer real benefits on consumers and U.S. agriculture in the form of agricultural innovations, lower prices, reduced federal subsidies, greater transparency in the marketplace and enhanced protection of the natural environment. Equally important, it would remove the federal government from an expensive and expansive arena where it doesn’t belong.

Henry I. Miller, a physician, is the Robert Wesson Fellow in Scientific Philosophy & Public Policy at Stanford University’s Hoover Institution.  He was the founding director of the FDA’s Office of Biotechnology. Follow him on Twitter @henryimiller.

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