Organic Labeling of olive oil

The Act provides that a person may sell or label an agricultural product as organically produced only if the product has been produced and handled in accordance with provisions of the Act and these regulations. This subpart sets forth labeling requirements for organic agricultural products and products with organic ingredients based on their percentage of organic composition. For each labeling category, this subpart establishes what "organic" terms and references can and cannot be displayed on a product package's principal display panel, information panel, ingredient statement, and on other package panels. Labeling is proposed for containers used in shipping and storing organic product and for denoting organic bulk products in market information which is displayed or disseminated at the point of retail sale. Restrictions on labeling organic product produced by exempt operations are described. Finally, this subpart proposes a new USDA organic seal or shield (hereafter referred to as the USDA Seal) and regulations for display of the USDA seal and display of the seals, logos, or other identifying marks of certifying agents.

The intent of these sections is to ensure that organically produced agricultural products are consistently labeled to aid consumers in selection of organic products and to prevent labeling abuses. These provisions cover the labeling of a product as "organic" and are not intended to supersede other labeling requirements specified in various Federal labeling regulations. For instance, we propose that the percent of organic ingredients and the name of the certifying agent be displayed on the information panel of packaged products and that the organic ingredients be identified as "organic" in the ingredient statement. The Food and Drug Administration (FDA) has authority to regulate the placement of information on package information panels and, thus, FDA labeling requirements in 21 CFR parts 100 through 169 must be complied with by handler when affixing organic labels to product packages. Display of the USDA Seal and certifying agent seals, logos, or other identifying marks also must be in accordance with those regulations. The requirements of FDA's Fair Packaging and Labeling Act (FLPA) and the Federal Food, Drug, and Cosmetic Act (FFDCA) must be followed. Likewise, the Federal Trade Commission has authority over product advertising and the extent to which a handler or retail food establishment engages in advertising as part of its market information activities. The Federal Trade Commission (FTC) regulations in 16 CFR must be followed. USDA's Food Safety and Inspection Service's (FSIS) Federal Meat Inspection Act, Poultry Products Inspection Act, and Egg Products Inspection Act also have implementing regulations in 9 CFR which must be followed. The labeling requirements specified in this subpart must not be applied in manner so that they would conflict with the labeling requirements of these and other Federal and State programs.

While this regulation does not require labeling of an organic product as organic, we assume that producers and handlers will choose to label their organic products and display the USDA Seal to the extent allowed in these regulations. They will do this to improve the marketability of their organic product.

In this proposal, assembly, packaging, and labeling of a multiingredient organic product are considered handling activities. The certification of handling operations is covered in subpart C of this regulation. No claims, statements, or marks using the term, "organic," or display of certification seals, other than as provided in this regulation, may be used. A handler which chooses not to use these required and prohibited labeling provisions may not otherwise label or represent a product as organic.

Once a handler makes a decision to market a product as organic or containing organic ingredients, the handler is required to follow the provisions in this subpart regarding use, display, and location of organic claims and certification seals. Handlers who may produce organic ingredients and/or assemble multiingredient products composed of more than 50 percent organic ingredients must be certified as an organic handling operation. Handlers of products of less-than-50-percent organic ingredients do not have to be certified unless the handler actually produces one or more of the ingredients used in the less-than-50-percent product. Repackers who purchase certified organic product from other entities for repackaging and labeling must be certified as an organic operation. Entities which simply relabel a product package would be subject to recordkeeping requirements to show proof that the product purchased prior to relabeling was, indeed, organically produced. Distributors which receive and transport labeled product to market are not subject to certification or any handling requirements of this regulation.

The general labeling principle employed in this proposal, and to which we think most commenters would subscribe, is that labeling or identification of the organic nature of a product should increase as the organic content of the product increases. In other words, the higher the organic content of a product, the more prominently its organic nature can be displayed. This is consistent with provisions of the Act which establishes the three percentage categories for organic content and basic labeling requirements in two of those categories.

Section 205.300 specifies the general use of the term, "organic," on product labels. Paragraph (a) establishes that the term, "organic," may be used only on labels and in market information of agricultural products and ingredients that have been certified as produced and handled in accordance with these regulations. The term, "organic," cannot be used on a product label for any purpose other than to modify or identify the product or ingredient in the product that is organically produced and handled. Products not organically produced and handled will not be able to use the term, "organic," on any package panel or in market information in any way that implies the product is organically produced.

The type of labeling and market information that can be used and its placement on different panels of consumer packages will be based on the percentage of organic ingredients in the product. The percentage will reflect the actual weight or fluid volume (excluding water and salt) of the organic ingredients in the product. Four categories of organic content are proposed: 100 percent organic; 95 percent or more organic content; 50 to 95 percent organic content; and less than 50 percent organic content.

For labeling and market information purposes, this proposal allows a "100 percent organic" label for an agricultural product that is composed of a single ingredient such as raw, organically produced fruits and vegetables. The product also may be composed of two or more organically produced ingredients, provided that the individual ingredients are organically produced and handled consistent with provisions in subpart C of this regulation. No processing aids may be used in the production of 100 percent organic products. This proposal provides that labeling provisions for "100 percent organic" products be the same as provisions for the 95 percent "organic" products specified below.

Products labeled or represented as "organic" will contain, by weight (excluding water and salt), at least 95 percent organically produced raw or processed agricultural product. The organic ingredients must be produced using production and handling practices pursuant to subpart C of this regulation. The nonorganic (5 percent or less) ingredients may be composed of nonorganic or nonagricultural substances. The difference between 100 percent organic products and 95 percent-plus products is that the latter may contain up to 5 percent nonorganic or nonagricultural products.

For labeling and market information purposes, the third category of agricultural products are multiingredient products containing by weight or fluid volume (excluding water and salt) between 50 and 95 percent organic agricultural ingredients produced pursuant to these regulations. Such products may be labeled or represented as "made with organic (specified ingredients)." By "specified," we mean the name of the agricultural product forming the organic ingredient. The organic ingredients must be produced using substances on the approved National List in subpart G and employing organic production and handling practices consistent with subpart C of this regulation. For instance, breakfast cereal made with 75 percent organically produced and processed wheat and 25 percent other, nonorganically produced grains, raisins, and nuts can be labeled as "made with organic wheat" on the principal display panel. To qualify for this organic labeling, the nonorganic ingredients (grains, raisins, and nuts) must be produced and handled without use of the first three prohibited practices specified in paragraph (e) (excluded methods, sewage sludge, or ionizing radiation). However, those nonorganic ingredients may be produced or handled using practices prohibited in paragraphs (e)(4) through (e)(7) (using substances not on the National List; containing added sulfites, nitrates, or nitrites; using nonorganic ingredients when organic ingredients are available; and using organic and nonorganic forms of the same ingredient).

The final labeling category covers multiingredient products with less than 50 percent organic ingredients (by weight or fluid volume, excluding water and salt). The organic ingredients must be produced using substances on the approved National List in subpart G and employing organic production and handling practices consistent with subpart C of this part. The remaining nonorganic ingredients (50 percent or more of the product) may be produced, handled, and assembled without regard to these regulations (using prohibited substances and prohibited production and handling practices). Organic labeling of these products is limited to the information panel only as provided in section 205.305.

This proposal prohibits labeling of whole products or ingredients as "organic" if those products or ingredients are produced using any of the following production or handling practices: (1) Ingredients or processing aids containing or created using excluded methods (genetically modified organisms (GMO)) or the products of excluded methods; (2) ingredients that have been produced using applications of sewage sludge (biosolids) as fertilizer; (3) ingredients that have been processed with ionizing radiation; (4) processing aids not approved on the National List; (5) sulfites, nitrates, or nitrites added to or used in processing of an organic product in addition to those substances occurring naturally in a commodity; (6) use of the phrase, "organic when available," or similar statement on labels or in market information when referring to products composed of nonorganic ingredients used in place of specified organic ingredients; and (7) labeling as "organic" any product containing both organic and nonorganic forms of an ingredient specified as "organic" on the label. The prohibitions on the use of excluded methods, sewage sludge, irradiated products, and prohibited processing aids are included here to be consistent with the revised National List of Approved and Prohibited Substances in subpart G.

These seven prohibitions apply to the four labeling categories of products and are not individually repeated as prohibited practices in the following sections. Table 1, Prohibited Production and Handling Practices for Organic Labeling, is a summary reference of how the seven prohibited practices must be applied in the production and handling of organic and nonorganic ingredients of products in the four labeling categories.

Table 1: Prohibited Production and Handling Practices for Labeling Categories

Labeling Category

Use Excluded Methods

Use Sewage Sludge

Use Irradiation

Use Processing Aids NOT on National List

Contain Added Sulfites, Nitrates, Ntirites

Use Organic Ingredients When Available

Use Both Organic & Non-Organic Forms of Same Ingredient

This proposal specifies procedures for calculating the percentage, by weight or fluid volume, of organically produced ingredients in an agricultural product labeled or represented as "organic."

The organic percentage of liquid products and liquid ingredients will be determined based on the fluid volume of the product and ingredients (excluding water and salt). When a product is identified on the principal display panel or the information panel as being reconstituted with water from a concentrate, the organic content will be calculated on the basis of a single-strength concentration.

Some products may contain both dry and liquid ingredients that are produced organically. In such cases, this proposal provides that the percentage of total organic ingredients will be based on the combined weight of the dry organic ingredient(s) and the weight of the liquid organic ingredient(s), excluding water and salt. For example, a product may be made using organically produced vegetable oils or grain oils or contain organic liquid flavoring extracts in addition to other organic and nonorganic ingredients. In these cases, the weight of the liquid organic oils or flavoring extracts, less any added water and salt, would be added to other solid organic ingredients in the product, and their combined weight would be the basis for calculating the percentage of organic ingredients. We believe this process provides the most appropriate and least burdensome method for calculating the organic percentage of such multiingredient products. Only one figure providing the total percentage of all organic ingredients will be shown on the information panel. The total percentage will be displayed on the information panel of the consumer package above or below the ingredient statement with the words, "contains X percent organic ingredients," or a similar phrase. If the total percentage is a fraction, it will be rounded down to the nearest whole number. The percentage of each organic ingredient will not be required to be displayed.

This proposal includes optional, required, and prohibited practices for labeling packages of agricultural products that are "100 percent organic" or "organic" (at least 95 percent organic). Only products that are composed of a wholly organic single ingredient or entirely of certified organic ingredients may be identified with a percentage number (100 percent) on the principal display panel. Products between 95 and 100 percent organic composition, when identified as "organic" on the principal display panel, will be required to state on the information panel the percentage of organic ingredients in the finished product and identify each organic ingredient in the ingredient statement.

The handler may display the following information on the principal display panel, the information panel, and any other part of the package and in market information representing the product: (1) The term, "100 percent organic" or "organic," as applicable, to the content of the product; (2) the USDA Seal; and (3) the seal, logo, or other identifying mark of the certifying agent (hereafter referred to as "seal or logo") which certified the handler of the finished product. The seals or logos of other certifying agents which certified organic raw materials or organic ingredients used in the product also may be displayed, at the discretion of the handler. If multiple organic ingredients are identified on the ingredient statement, the handler of the finished product that combined the various organic ingredients must maintain documentation, pursuant to subpart B of this regulation, certifying the organic content of the added ingredients.

While certifying agent identifications can appear on the package with the USDA Seal, they may not appear larger than the USDA Seal on the package. There is no restriction on the size of the USDA Seal as it may appear on any panel of a packaged product, provided that display of the Seal conforms with the labeling requirements of FDA and FSIS.

This proposal specifies three labeling practices that will be required if a handler labels a product "100 percent organic" or "organic" on the principal display panel. If a product is labeled as "100 percent organic" the ingredients may also be modified with the term, "organic," but would not have to be so labeled because it is assumed from the 100 percent label that all ingredients are organic. For 95 percent-plus products that contain more than one ingredient, each organic ingredient listed in the ingredient statement must be modified with the term, "organic." Water and salt in the ingredient will not be identified as "organic." Secondly, the total percentage of organic ingredients in the product must be shown on the information panel. The percentage statement should be placed in a manner that it can be viewed in relation to the ingredient statement.

The handler also must display on the information panel the name of the certifying agent which certified the handler producing the finished product. The handler has the option to include the business address or telephone number of the certifying agent. This information must be placed below or otherwise near the manufacturer or distributor's name.

With regard to agricultural products "made with organic (specified ingredients)"--those products containing between 50 and 95 percent organic ingredients--this proposal establishes the following optional, required, and prohibited labeling practices.

Under optional practices, the statement, "made with organic (specified ingredients)," may be placed on the principal display panel and other panels of the package. The same statement can also be used in market information representing the product. However, the following restrictions will be placed on the statement, "made with organic (specified ingredients)," when it appears on the principal display panel: (1) the statement cannot list more than three organic ingredients in the product; (2) the statement cannot appear in print that is larger than one half (50 percent) of the size of the largest print or type appearing on the principal display panel; and (3) the statement must appear in its entirety in the same type size, style, and color without highlighting. Display of the statement, "made with organic (specified ingredients)," on other panels must be similarly consistent with the size of print used on those panels. These restrictions are consistent with FDA regulations and similar to the recommendations of the National Organic Standards Board (NOSB). This provision will help assure that the statement, "made with organic (specified ingredients)," is not displayed in such a manner as to misrepresent the actual organic composition of the product.

We also propose that, at the handler's option, the certifying agent's seal or logo may be displayed on the principal display panel or other package panel.

Packages of products labeled as "made with organic (specified ingredients)" will be required to display on the information panel the total percentage of organic ingredients in the product and modify each organic ingredient listed in the ingredient statement with the term, "organic." The percentage of organic ingredients must be displayed so that it can be viewed in relation to the ingredient statement.

The name of the certifying agent which certified the handler of the finished product must be displayed below or otherwise near the manufacturer or distributor's name. The statement may include the phrase, "Certified organic by..." or "Ingredients certified as organically produced by...." to help distinguish the certifying agent from the manufacturer or distributor. At the handler's option, this label may include the business address or telephone number of the certifying agent which certified the handler of the finished product.

The final labeling category covers packaged multiingredient agricultural product containing less than 50 percent organic ingredients.

Handlers of "less than 50 percent" multiingredient products, who choose to declare the organic nature of the product, may do so only on the information panel by declaring the total percentage of organic ingredients in the product and, in the ingredient statement, modifying the organic ingredients with the term, "organic." The percentage statement must be displayed so that it can be viewed in relation to the ingredient statement.

Products composed of less than 50 percent organic content cannot display the USDA Seal or any certifying agent's seal or logo anywhere on the product package or in market information.

Handlers of such products will be subject to this regulation in the following ways. Those handlers who only purchase organic and nonorganic ingredients and assemble a finished product of less than 50 percent organic content do not have to be certified as organic handlers. They will be responsible for appropriate handling and storage of the organic ingredients prior to product assembly and for maintaining records verifying the organic certification of the ingredients used in the product. To the extent that the packaging process includes affixing the label to finished product package, those handlers will be responsible for meeting the labeling requirements of this subpart. Handlers who produce an organic ingredient prior to assembly into a finished product, even though the finished product contains less than 50 percent organic content, and must be certified as to the source of the organic ingredient(s). The nonorganic ingredients may be produced, handled, and assembled without regard to the requirements of this part.

The handler who affixes the label to the product package will be responsible for calculating the percentage of organic ingredients in an organic product. As part of the certifying agent' annual certification of the handler, the certifier will verify the calculation and labeling of packages.

Table 2, Labeling Consumer Product Packages, provides a summary of the required and prohibited labeling practices for the four labeling categories.

Labeling Category

Principal Display Panel

Information Panel

Ingredient Statement

Other Package Panels

The labeling requirements of this proposal are intended to assure that the term, "organic," and other similar terms or phrases are not used on a product package or in marketing information in a way that misleads consumers as to the contents of the package. Thus, we intend to monitor the use of the term, "organic," and other similar terms and phrases. Should we find that terms or phrases are being used on product packages to represent "organic" when the products are not produced to the requirements of this regulation, we will proceed to restrict their use.

After consideration of alternative labeling terms that handlers might wish to use to qualify or modify the term, "organic," we have determined that handlers may not qualify or modify the term, "organic," using adjectives such as, "pure" or "healthy," e.g., "pure organic beef" or "healthy organic celery." The term, "organic," is used in labeling to indicate a certified system of agricultural production and handling. Terms such as "pure," "healthy," and other similar adjectives attribute hygienic, compositional, or nutritional characteristics to products. Use of such adjectives misrepresents products produced under the organic system of agriculture as having special qualities as a result of being produced under the organic system. Furthermore, use of such adjectives would incorrectly imply that products labeled in this manner are different from other "organic" products that are not so labeled.

Moreover, "pure," "healthy," and other similar terms are regulated by FSIS and FDA. These terms may be used only in accordance with the labeling requirements of FDA and FSIS. For example, the regulations implemented by FSIS, 9 CFR 317.363, define the terms, "healthy," "health," and similar derivations and the conditions of use as a nutritional claim. Also, according to FSIS regulations, 9 CFR 317.8(b)(34), the term, "pure," as well as the terms, "all," "100 percent," and similar terms, may only be used to indicate that a single ingredient product is composed of 100 percent of the product ingredient and contains no other ingredients. The term, "healthy," is regulated by FDA (21 CFR 101.14) and can be used, with documentation, only to indicate or characterize a relationship of the product to a disease or health-related condition. The prohibition on use of these terms to modify "organic" does not otherwise preclude their use in other labeling claims.

We also intend to monitor the use of the term, "organic," in corporate or company names and seek additional guidance from the FTC. We do not believe that the term, "organic," in a brand name context inherently implies an organic production or handling claim or inherently constitutes a false or misleading statement.

The determination as to whether the use of the term, "organic," in a brand name conveys a message about the product's attributes must be made by the Secretary. We will monitor use of the term, "organic," in product and company names at this time. However, if we find that the term is being used in a false or misleading way to misrepresent the organic nature of the product, we have the authority under section 6519(b) of the Act to take action against such use. Such determinations and actions will be taken on a case-by-case basis.

Domestically produced organic products intended for export may be labeled to meet the requirements of the country of destination or any labeling requirements specified by a particular foreign buyer. For instance, a product label may require a statement that the product has been certified to, or meets, certain European Union organic standards. Such factual statements regarding the organic nature of the product will be permitted. However, those packages must be exported and cannot be sold in the United States with such a statement on the label because the statement indicates certification to standards other than are required under this program. As a safeguard for this requirement, we require that shipping containers and bills of lading for such exported products display the statement, "for export only," in bold letters. Handlers also will be expected to maintain records, such as bills of lading and U.S. Customs Service documentation, showing export of the products. Only products which have been certified and labeled consistent with the requirements of the National Organic Program (NOP) may be shipped to international markets without marking the shipping containers "for export only."

Organic product produced under a foreign country's or international association's organic standards deemed equivalent to these standards and certified by a certifying agent accredited by the Secretary may be imported into the United States provided that the product labels are consistent with the requirements of this subpart. Any labeling on the product package or in market representation cannot imply that the product is also certified to other organic standards or requirements that are more restrictive than this national program. These provisions are consistent with international standards and will facilitate international trade of organically produced products and, thus, benefit the global organic industry.

Section 205.306 provides for labeling nonretail containers used to ship or store raw or processed organic agricultural products that are labeled "100 percent organic," "organic," and "made with organic (specified ingredients)." These labeling provisions are not intended for shipping or storage containers that also will be used in displays at the point of retail sale. They would be used for easy identification of the product to help prevent commingling with nonorganic product or handling of the product which would destroy the organic nature of the product (fumigation, etc.). Retail containers will have to meet labeling provisions specified in section 205.307.

Containers used only for shipping and storage of any product labeled as containing 50 percent or more organic content may, at the handler's discretion, display the following information: (1) the name and contact information of the certifying agent which certified the handler of the finished product; (2) the term, "organic," modifying the product name; (3) any special handling instructions that must be followed to maintain the organic integrity of the product; and (4) the USDA Seal and the appropriate certifying agent seal. This information is optional if handlers believe display of the information helps ensure special handling or storage practices which are consistent with organic practices.

Containers used for shipping and storage of organic product must display a production lot number if such a number is used in the processing and handling of the organic product being shipped or stored. The lot number must be included for inventory control and quality assurance purposes. To help assure export of organic product produced and labeled to foreign specifications, the shipping containers and shipping documents (bills of lading) must be marked with the phrase, "for export only," in bold letters. The handler also must maintain records showing export of the product to a foreign country.

Much of the required information may overlap information that the handler normally affixes to shipping and storage containers or information that is required under other Federal labeling regulations. Provisions in this proposal do not take precedence over food safety or quality control provisions which may be required for specified products or types of products covered by such Federal regulations. There are no restrictions on size or display of the term, "organic product," or the certifying agent seal unless otherwise required by other Federal or State statutes.

Section 205.101(b)(2) of subpart B on Applicability provides regulations regarding the certification of retail food establishments under this program. Those operations are subject to labeling and market information requirements concerning products offered to consumers at the point of retail sale. Such labeling and market information must truthfully represent the organic nature and handling of the product.

Section 205.307 applies to organically produced products that are not prepackaged prior to sale and are presented in a manner which allows the consumer to select the quantity of the product purchased.

To be labeled as "100 percent organic" or "organic" at the point of retail sale, the processing and assembly of such products must be carried out by a certified manufacturing facility for distribution to a retail food establishment. For instance, a tossed salad may be labeled as "100 percent organic tossed salad" or "organic tossed salad" (consistent with the percentage of organic ingredients in the salad) provided the salad and ingredients have been produced and assembled under organic certification. If the multiingredient product is identified as "organic" at the point of retail sale, any ingredient statement displayed at retail sale must identify the organic ingredients as "organic." The retail materials may also display the USDA Seal and the seal or logo of the certifying agent. If shown, the certifying agent seal must not be larger than the USDA Seal.

Using the same example, a product made with 95 percent or more certified organic salad components but which is assembled at an uncertified operation may be labeled "tossed salad made with organic (specified ingredients)." The retail food establishment may not display the USDA Seal or the seal or seals of cerftifying agents involved in ingredient certifications because the final assembly of the product was not certified pursuant to the handling requirements of this regulation.

Our position on the applicability of these regulations to different business entities is more completely explained in subpart B, Applicability, of this regulation.

"Section 205.308 addresses processed products "made with organic (specified ingredients)" that are not prepackaged prior to sale and are presented in a manner which allows the consumer to select the quantity of the product purchased. These products will include, but will not be limited to, multiingredient products containing between 50 and 95 percent organic ingredients. Retail displays, display containers, and market information for such products may display the phrase, "made with organic (specified ingredients)" provided that the product has been assembled by a manufacturing facility certified pursuant to this regulation. Up to three organic ingredients may be identified in the statement. If such statement is declared in market information at the point of retail sale, the ingredient statement must identify the organic ingredients as "organic." Retail display and market information of such bulk products cannot use the USDA Seal but may display the seal or logo of the certifying agent which certified the finished product, provided that assembly of the product was carried out at a certified manufacturing facility. The certifying agent's seal or logo may be displayed at the option of the retail food establishment. If such a product has not been assembled at a certified manufacturing facility, the retail display and market information may not identify the product as "made with organic (specified ingredients)."

Prepared food products containing less than 50 percent organic ingredients at retail sale may not be identified as organic or containing organic ingredients. The USDA Seal and any certifying agent seal or logo may not be displayed.

This proposal provides limited organic labeling provisions for organic product produced or handled on exempt and excluded operations. Such operations would include retail food establishments, certain manufacturing facilities, and production and handling operations with annual organic sales of less the $5,000. They are discussed more thoroughly in subpart B, Applicability.

Under this proposal, any such operation that is exempt or excluded from certification, or which chooses not to be certified, may not label its products in a way which indicates that the operation has been certified as organic. Primarily, this means that the exempt or excluded operation may not display the USDA Seal or any seal or logo of a certifying agent. Any packaged organic product from an exempt or excluded operation may not use the labeling terms "100 percent organic," or "organic," or "made with organic (specified ingredients)," on the principal display panel. Those labeling terms are reserved for products produced by certified operations. The organic representation of exempt or excluded operation products may only be made on the information panel where the organic percentage can be displayed and the organic ingredients identified as "organic."

Retail displays and market representation of such products may not indicate that the product has been certified as organic. For instance, a whole, raw, organic product marketed directly to consumers at a farmers market or roadside stand as "organic apples" or "organic tomatoes." However, no terms may be used which indicate "certified" organic apples, etc. No organic seal or logo may be displayed with the product at the point of retail sale.

We propose these restrictions simply as truth in labeling provisions because use of terms or phrases reserved for certified operations and products and display a certification seal will indicate that the product has been certified. We believe this requirement will help differentiate between certified and not certified products and help maintain the integrity of certified products while providing limited organic labeling opportunities for exempt and excluded operations.

Finally, this rule proposes that exempt organic producers cannot sell their product to a handler for use as an ingredient or for processing into an ingredient that will be labeled as "organic" on the information panel. However, this restriction is raised for public comment in subpart B, Applicability, of this part.

Small producers or handlers who qualify for exemption but who choose to be certified pursuant to these regulations can label their product as certified organic and can sell that product to certified handlers for further processing as an organic ingredient.

This proposal introduces a new, redesigned, USDA Seal, that can be placed on consumer packages, displayed at retail food establishments, and used in market information to show that products have been produced and handled in accordance with these regulations. The Seal can only be used to identify raw and processed products that are labeled as "100 percent organic" or "organic." It cannot be used for products labeled as "made with organic (specified ingredients)" (50 to 95 percent organic ingredients) or on multiingredient products with less than 50 percent organic ingredients.

The USDA Seal presented in this proposal will consist of the phrase, "USDA Certified Organic," on a shield or badge design. When used, the seal must be the same form and design as shown in figure 1 of section 205.310 of this proposal. The seal must be printed legibly and conspicuously. On consumer packages, retail displays, and labeling and market information, the Seal may be printed on a white, light colored, or transparent background with contrasting dark colored words and shield outline or on a dark colored background with contrasting words and shield outline in one or two light colors. The Seal also may be printed in the colors red, white, and blue as follows: a white background, with dark blue shield outline, and red words. The choice of color scheme is left to the discretion of the producer, handler, or retail food establishment based on other colors on the product package and other considerations.

(1) Use of terms other than "organic." The first proposal stated that informational statements which imply "organic" production and handling should be used only on products that are produced and handled in accordance with these regulations. The proposal identified several informational statements commonly referred to as "eco-label" or "green" terms and phrases such as: "produced without synthetic fertilizers," "pesticide free farm," "no drugs or growth hormones used," "raised without antibiotics," "ecologically produced," "sustainably harvested," etc. We asked for comments on these and other terms or phrases which directly or indirectly imply that a product was organically produced and handled.

Commenters favored use of "eco-label" and "green" terms and phrases on any product labels. The general consensus expressed in the comments is that producers and handlers should be able to make claims about their product provided the claims are truthful.

While commenters did not oppose the use of eco-label terms or phrases on nonorganic products, they made it clear that the term, "organic," should only be used on products produced and handled in accordance with these regulations. Several commented that consumers respond favorably to the term, "organic," when used on a product label, and, therefore, proper use of the term must be closely protected.

We also received several comments regarding use of the terms, "biological" and "ecological," on product labels. A few comments indicated that the terms should be allowed on nonorganic products to truthfully describe an alternative agricultural system under which the product was produced or processed. However, most commenters opposed use of the terms as substitutes for the term "organic" on product labels.

We agree with the majority of comments received on this subject, and we, therefore, propose to regulate the term, "organic," and no other terms. We propose that the term, "organic," may only be used on labeling and market information of products that are produced and handled in accordance with these regulations. We understand that the terms, "ecological" and "biological," are a special case in that they are used synonymously with the term, "organic," in other countries. However, they cannot be used interchangeably with the term, "organic," in this country. These terms may be used as eco-labels at this time. However, we will proceed to restrict use of these or any other terms if we find that they are used on product packages in the United States to represent "organic" when the products are not produced to the requirements of this regulation.

(2) 100 percent organic category. Our first proposal did not provide for a "100 percent organic" category because that level of organic composition is not specifically provided for in the Act. While the Act and the first proposal provide for a labeling category of 95 percent or higher organic content, commenters appealed for a labeling category for product that is 100 percent organic. Many suggested that being able to use the term, "100 percent," will give handlers added incentive to use only certified ingredients in multiingredient products. Some commenters suggested that if a product is composed only of organic ingredients, with no additives or other substances, it should be allowed to be labeled and represented in market information as 100 percent.

We agree that a "100 percent organic" labeling category may increase the effectiveness of marketing efforts and may provide incentives for handlers to use more certified organic ingredients in their multiingredient products. Therefore, this proposal will allow the term, "100 percent organic," to be used on labels affixed to or market information representing raw or processed organic products that are composed entirely of organically produced agricultural product.

(3) Identification of private certifying agents. Under the first proposal, identification of private certifying agents was not permitted on the principal display panel with the USDA Seal and the State organic seal. While a few commenters suggested that only the USDA Seal should be displayed on the principal display panel, the majority of those commenting on this topic requested that private certifying agent seals be displayed on an equal basis with a seal of the appropriate State's organic program. Although the number of State certifying agents is relatively small, private certifying agents believe that State organic programs and State certifying agents may implement measures in States that work against the interests of private certifying agents. The Department believes those concerns to be unfounded. Under the NOP, the Secretary will approve all State organic programs and accredit all State certifying agents. However, any of those programs or agents that might discriminate or work against the interests of private certifying agents in the State would not be approved by the Secretary.

Some commenters suggested that many private certifying agent seals are widely recognized and respected and their seals influence consumer choices in product purchases. It is appropriate that private certifying agents be afforded the same treatment with regard to labeling as the State certifying agent. We agree with commenters' requests for equal treatment of certifying agents and that certifier seals may have marketing potential in some areas. Therefore, we specify in this proposal that a private certifying agent's seal or logo can be displayed to the same extent as the seal of a State certifying agent. This change is reflected throughout this subpart.

(4) Use of a certifying agent's seal or logo. Many commenters believe that the certifying agent's seal, logo, or identifying mark shown on "100 percent organic" and "organic" products should be the seal or mark of the certifying agent that certifies the handler of finished product. Commenters also stated that labels should not be used to misrepresent one product as being more organic than another product, which might happen if multiple seals are displayed on one product package and only two are displayed on a competing product package. While we understand the commenters' points, we believe that display of certifying agent seals on products labeled "100 percent organic," "organic," and "made with organic (specified ingredients)" should remain optional for handlers. If two or more certifying agents are involved in certifying raw organic agricultural product and organic ingredients used in a finished product, the seals or marks of those certifying agents may be displayed, at the discretion of the handler. There should be only two restrictions to using multiple certifying agent seals: (1) the seal of the certifier of the handling operation producing the finished product should be displayed; and (2) only the seals of those certifying agents actually involved with certification of the product or ingredients may be displayed. For instance, a private certifying agent may certify a product assembled using organic ingredients produced in Texas and certified by the Texas State certifying agent. The product package may, at the handler's option, display the Texas State agent's seal in addition to the seal of the private certifying agent which certified the operation creating other organic ingredients and creating the finished product. Likewise, display of a seal of a foreign country's organic program or foreign certifying agent will be permitted only if the foreign agent certified the finished product or a product ingredient.

Some commenters say that display of two State agent seals may confuse consumers. However, we do not believe it is likely that handlers will choose to display multiple certifying agent seals to misrepresent a product. We also do not believe that possible consumer confusion from display of multiple seals should take precedence over the handler's right to provide product information. If multiple certifying agent seals or marks are displayed on a product package or in market information, the handler or retail food establishment must maintain appropriate records showing proof of all organic certifications.

(5) Display of certifying agent name and business address. Commenters also suggested that the certifying agent's name and business address be displayed adjacent to identification of the handler or distributor of products labeled "organic" and "made with organic (specified ingredients)." The commenters stated that such information should be available for consumers who may have questions about the organic nature of a product or product ingredients. We agree that the name of the certifying agent should be included on a product package but believe that display of the business address or telephone number should be optional to the handler who assembles the finished product and affixes the label on the package. If a consumer wants to inquire about the organic nature of a purchased product, the consumer can obtain contact information through the certifying agent database listed on the NOP homepage. Finally, to clearly identify the information provided, the statement, "Certified organic by...." or "Ingredients certified as organically produced by...," may be used to distinguish the certifying agent from the manufacturer or distributor of the product.

The statement and agent identification is intended for information purposes only and is not to promote the organic nature of the product. The certifying agent identification may be placed below the manufacturer or distributor information and must not interfere with display of that information.

(6) Size of certifying agent seal. There was a general consensus among commenters that the seals of State and private certification agents should not be larger than the USDA Seal. To emphasize the market value of such a national organic seal and maintain some consistency of treatment with regard to the different organic content categories, we propose that State and private certifying agent seals can be the same size as but must not exceed the size of the USDA Seal on any package label or in market information. The size of the USDA Seal on a package is left to the discretion of the handler.

(7) Displaying the percentage of organic ingredients. The first proposal permitted use of the word, "organic," in the ingredient statements to modify those ingredients that were produced and handled pursuant to these regulations, but did not require the percentage of organic ingredients to be displayed on the label. Most all commenters responding to this labeling issue stated that identification of organic ingredients as "organic" will encourage handlers to increase the organic composition of multiingredient products. However, some commenters did not favor any use of the word, "organic," on packages of multiingredient products containing less than 50 percent organic ingredients. Some commenters also suggested that including the total percentage of organic content adjacent to the ingredient statement (in which the organic ingredients are identified) would give relevance to the ingredient statement. We concur with commenters' recommendations about the display of the total percentage of organic content and propose that the percentage of organic ingredients be placed on the information panel. The percentage statement and the ingredient statement should be shown in a way that indicates the relationship of the information. If a product is labeled "100 percent organic," all ingredients (except water and salt), by definition, would have to be certified organic ingredients, and each ingredient may be but would not have to be identified as "organic." Identification of organic ingredients would be required for products labeled "organic" and "made with organic (specified ingredients)," and for products containing less than 50 percent organic ingredients. We did not change the identification of organic ingredients for products containing less than 50 percent organic ingredients because we believe the uses of the term on the information panel and ingredient statement of such product packages do not imply that the product is organic.

(8) Labeling of products containing 50-95 percent organic ingredients. The first proposal specified that products with 50-95 percent organic content could use "made with certain organic ingredients" on the label. Many commenters suggested that the word, "certain," may appear confusing to consumers and that a stronger statement is needed to identify the organic nature of the product. One commenter sought clarification of whether the term, "certain," is a substitute for the name of the ingredient in a single-ingredient product. Many requested that the statement be changed to allow specific identification of the organic ingredients on the principal display panel. Because that is the panel first and most often observed by consumers, the commenters indicated that the information presented on the principal display panel should be clear and accurate to assist consumers in making their purchasing decisions.

After review of the comments, we believe that, if the statement is going to be displayed on the principal display panel, it should state the specified organic ingredient in the product; e.g., "made with organic (specified ingredients)." Replacing the word, "certain," with the actual organic commodity name or organic ingredient will add the specificity sought by commenters and assist consumers in making more informed choices. Under this proposal, the statement, "made with organic (specified ingredients)," must be used on the principal display panel and on other package panels of a product containing between 50 and 95 percent organic ingredients.

Several commenters suggested that the size of the letters in the phrase be limited to a fraction of the size of the product name as it appears on the principal display panel. They stated that limiting the size of the letters will keep the statement from making the product appear more organic than products with 95 percent organic ingredients. For instance, if a product contains 55 percent organic ingredients and the statement, "made with organic (specified ingredients)," is displayed on the principal display panel in large, bold letters, the product may appear more organic than a 97-percent product simply labeled "organic." Commenters recommended letter sizes from one-half to three-fourths the size of the product name as it appears on the principal display panel.

We also believe that the labeling for these products should not use typeface or letter sizes which would mislead consumers. FDA labeling requirements in 21 CFR 101.3(d) specify that required statement of identity of the product shall be in a size most reasonably related to the largest printed matter on a panel. FDA enforces "reasonably related" as being one half the size of the largest printed matter, which is usually the product name. Therefore, to be consistent with FDA labeling requirements, we have established the print size of the statement, "made with organic (specified ingredients)," to be not more than 50 percent, or one half, of the largest print size appearing on the principal display panel. This print size is consistent with the recommendation of many commenters but is smaller than the 75 percent recommended by the NOSB. We propose that the statement, "made with organic (specified ingredients)," appear in only one print style and color, without highlighting.

We believe that these additional restrictions on display of the statement will enable the message to be delivered and yet provide some structure and consistency to display of the statement. It is our intention that the statement not be used to disproportionately dominate the principal display panel or other panels and not be used to misrepresent the organic nature of the product.

(9) Limiting the number of organic ingredients listed. Some commenters suggested limiting the number of organic ingredients that could be included in the statement "made with organic ingredients." This topic was the subject of much NOSB deliberation and public discussion. Commenters reasoned that if the list of organic ingredients became too long, the product could appear to be more organic than "95 percent" products. For instance, a product could have 10 organic ingredients, but those 10 ingredients may comprise only 51 percent of the product. The consensus of comments suggested that the statement should be limited to three organic ingredients, which is the industry standard. We believe their recommendation has merit and, therefore, propose that up to three organic ingredients can be shown in the statement. We encourage additional comments on the maximum number of ingredients that should be allowed to appear in the statement on the principal display panel. Commenters should provide reasons for the number they recommend.

(10) Qualifications for display of the USDA Seal. In the first proposal, we permitted the display of the USDA seal on products with 50 percent or more organic ingredients. Commenters objected. They overwhelmingly endorsed a high organic content standard for a product to be labeled as "organic." They believe products containing less than 95 percent organic ingredients do not have sufficient organic content to justify an "organic" label on the principal display panel, and should not be so labeled under the NOP regulations. Commenters also stated that display of the USDA Seal will be very desirable. Many stated that a prohibition on display of the USDA Seal on 50-to-95-percent products would encourage handlers who assemble multiingredient products to use more organically produced ingredients and fewer nonorganic ingredients. They suggested that the USDA Seal and the certifying agent's seal or logo not be displayed on any package panel of products "made with organic (specified ingredients)" or on products with less than 50 percent organic ingredients.

We agree that some distinction should be made between 95 percent-plus organic products and the 50-95 percent organic products. Handlers of 95 percent-plus organic products may display both the USDA Seal and the certifying agent seal or logo on the principal display panel of the product. The commenters propose that handlers of 50-95 percent organic products not be allowed to display either seal on the principal display panel. However, we believe that, because handlers of 50-95 percent organic product are required to be certified under this program, it is appropriate that they should be allowed to display some evidence of that certification. We propose, therefore, that handlers of 50-95 percent organic product may display the seal or logo of the certifying agent which certified the finished product. Display of the USDA Seal will still be restricted to only to 100 percent organic products and to 95 percent-plus products. We believe this provision will provide more equitable treatment for handlers of 50-95 percent products who are required under this regulation to obtain and maintain organic certification in order to label their organic product. It will also maintain a distinction between the two product levels by continuing the restriction on display of the USDA Seal. We believe that, while display of the USDA seal is less likely to be an incentive for handlers of products at the lower end of the 50 to 95 percent range of organic content, handlers of products at the higher end of the 50 to 95 percent organic content range may be encouraged to increase the organic content in order to display the USDA Seal.

An organic product produced or handled by an exempt or excluded operation, including those with less than $5,000 annual organic sales, may not display the USDA Seal or the seal of a certified agent because the operation has not been certified. Even if the organic content of the product is 95 percent or higher, the product still cannot be labeled as "certified" organic or marketed using an organic seal or logo.

(11) Design of the USDA Seal. The final change prompted by comments is redesign of the USDA Seal. The Seal in the first proposal was a triangular shape behind a circle of recycling arrows around a globe figure with the word, "organic," printed diagonally across the globe. That proposed seal was opposed by hundreds of commenters. Comments included: the triangle resembles a radioactive warning symbol or fallout shelter sign; the diagonal line across the circle appears to be the universal "no" sign (such as "no walking," "no smoking"); the globe design doesn't show up; the globe design implies an international program; the design is too busy; simplify the design; use the words, "certified organic"; use a text logo; the seal will be too costly to produce; and the triangle points will puncture or tear plastic when printed.

Given the overwhelming negative response to the first seal, we propose a simplified design composed of the words, "USDA CERTIFIED ORGANIC," inside a shield or badge design. This design is consistent with comments requesting simplicity and use of the words, "certified organic." At the request of commenters, this proposal provides for labeling on transparent material. We believe the proposed basic dark on light or light on dark requirement is broad enough to allow handlers the flexibility needed to match color schemes compatible with their product packages. The alternative red, white, and blue color scheme offers handlers what consumers may identify as a more official or patriotic display of the Seal. We believe it is important that the Seal be displayed in a consistent manner, within general light/dark guidelines so that the Seal becomes easily recognizable to consumers.

Comments reflecting different opinions on the same topic are covered above (e.g., the number of organic ingredients listed on the principal display panel, the size of "organic" letters on the principal display panel, a recommended redesign of the USDA Seal, etc.). Obviously, not all such conflicting recommendations can be accepted. Two comments were received which are not accepted but which we believe warrant further consideration by the public and the organic community. We request additional comments regarding the following two recommendations. Commenters should specify their recommendation regarding each topic and provide reasons for their recommendation.

(1) Changing the "organic" threshold for multiingredient products. At least one commenter suggested that the 50-95 percent labeling category sets too low a threshold for organic labeling of multiingredient products. The commenter suggested that, for increased international acceptance of USDA standards, the lowest acceptable percentage for receiving an organic label should be 70 percent organic ingredients, based on the European Union (EU) standard which now requires a minimum of 70 percent organic ingredients for the product to be labeled as "organic" (or, "biological" or "ecological").

The EU standard allow products with a 70 percent organic content to be labeled as " organic," where our proposal will require at least 95 percent organic content before a product could be labled as "organic." This 95 percent standard in the Act. Where the two standards differ is that the EU standard doe not have a "made with organic (specified ingredients)"category proposed in this rule.

While the Act establishes a 50-percent minimum ingredient content, that percentage can be adjusted upward if doing so would further the purposes of the Act. To do so, however, the Secretary must have good cause and justification for establishing a higher minimum organic ingredient content. In other words, we could raise the minimum organic ingredient content threshold to 70 percent, redefining two of our four categories. The four categories would be: less than 70 percent, 70-95 percent, greater than 95 percent, and 100 percent. Under this scenario, the prohiitions on excluded methods, iradiation, and sewage sludge would not apply to the nonorganic ingredients of products with less than 70 percent organic content. At the same time, these products would only be able to list the organic ingredients on the information panel. The "made with organic ingredients" category, to whicn the prohibition would apply, would be 70-95 percent organic content. The only products that would get the "organic" designation would still be those with at least 95 percent organic content.

Because we find no compelling reason to raise the 50-percent minimum ingredient content threshold established in the Act, we have not accepted the commentor's recommendation in this proposal. However, if comments on this proposal suggest an appropriate justification, the minimum ingredient content threshold could be raised in the final rule.

(2) Minimum content requirements for organic ingredients. One commenter suggested that a minimum percentage of the entire product weight be established to qualify for a single ingredient to be included in the statement, "made with organic (specified ingredients)." The commenter suggested that this would help prevent misrepresentation of the organic nature of a product. The commenter suggested that the minimum content for any ingredient should be 15 percent. The commenter did not justify the 15-percent minimum (as opposed to another minimum percentage). Because such a recommendation could prevent important ingredients from being specified on a product label, we have not incorporated the comment in this proposal. However, we believe the comment may have merit. One factor in establishing a minimum percentage for any individual ingredient listed on the principal display panel would be the established minimum percentage for all organic ingredients in a product, the question raised in the paragraph above. For instance, if the minimum percentage of all ingredients is established at 70 percent to conform to EU standards, should there be a minimum percentage for any individual organic ingredient that could be listed on the principal display panel as one of three organic ingredients in the product? Would such a labeling restriction prevent identification of an important organic ingredient from being displayed on the principal display panel?

Commenters on questions (1) and (2) should state whether they think the recommendations would further the marketing of organic products and, if so, clearly state the recommended percentage for each question and the reasons for their opinions regarding each issue.

(3) Labeling requirements for small operations. A majority of those who commented on the exemption for small operations (less than $5,000 organic sales) in the first proposal stated that such operations are not exempt from labeling requirements under the Act. In this proposal, we provide limited labeling provisions which prohibit exempt and excluded operations, including those with less than $5,000 in annual organic sales, from labeling their products in a way that indicates the operations or the products have been certified as organic. These provisions will not allow such operations to use labeling terms and organic seals and logos specified for certified operations. We believe those terms, logos and seals should be reserved for operations and products that are certified under these regulations.

Upon further review of the label and market information provisions in the first proposal, we propose the following additions and changes.

(1) Display of a State organic seal. Under the first proposal, each State organic certification program would have been allowed to display a seal or logo of its State organic program. The first preamble stated that it was appropriate for a State to have a seal representing its organic program, thus allowing product produced under that program to bear the State's seal.

Currently, 13 State departments of agriculture (or other State agency) and approximately 40 private agents certify to a variety of private and State organic requirements. After establishing a policy which more clearly defines the criteria for approval of a State organic program, we believe that, in the interest of consistent and uniform national standards, product packages should not display the seal of a State organic program if the seal is different from the seal or mark used by the State's organic certifying agent.

This determination is based on a proposed change in State programs. A State organic program will be approved by the Secretary for specific, need-based reasons particular to that State (see State Programs under subpart G). To establish and maintain uniform national standards, States will not be authorized to implement more restrictive organic standards simply to promote State products that are "more organic" than products produced and handled in other States or under NOP requirements. Rather, the Secretary will approve only those State programs that need more restrictive requirements to protect or preserve unique environmental conditions or to accommodate product and handling practices unique to a State or portion of a State. In the absence of such environmental conditions or production practice needs, a State's organic program must have the same requirements as this NOP. If this is the case and if a relatively few State programs are approved to have more restrictive requirements, then no real purpose is served by permitting State organic programs to display a separate and distinct seal on a product label. Such a seal would not represent a "more organic" product.

In the place of a State organic program seal, this proposal provides for the seal or logo of a State certifying agent to be displayed on packages, if that certifying agent certifies the organic operation producing the product. Selection of a State or private certifying agent is the choice of the organic producer or handler being certified. A State's department of agriculture (or other equivalent State agency) may establish one or more State certifying agent offices as part of its governmental operations, or the State may license a private certifying agent to certify organic operations on behalf of the State. In either case, the certifying agent would certify these national requirements and not the particular requirements of a State organic program unless those requirements were approved by the Secretary. Therefore, the only organic seal or mark representing a State will be the seal or mark of a State's certifying agent or licensed certifying agent. Any certifying agent licensed by the State must be accredited by the Secretary pursuant to subpart F of this proposal.

(2) Labeling for international markets. We have added two paragraphs under section 205.300 to provide for labeling of products intended for international markets. Domestically produced organic products intended for export may be labeled to meet the requirements of the country of destination or any labeling requirements specified by a particular foreign buyer.

If labeled to meet foreign labeling requirements, such packaged products cannot be sold in the United States. Pursuant to section 205.306, shipping containers and bills of lading for these products would have to be marked "for export only" to assure that the product was not distributed domestically. We are providing this exception to labeling requirements for the convenience of exporters only. If the foreign country or buyer does not require different product labeling, domestic product which has been produced, certified, and labeled pursuant to these regulations may be shipped without the statement, "for export only," on the containers and bills of lading.

Organic product produced in another country for export to the United States may be certified to the requirements of this regulation or to an approved foreign organic certification program that has been recognized as equivalent to the requirements of the NOP. Such products must be labeled pursuant to the requirements of this subpart.

(3) Product composition. Under new section 205.301, Product Composition, we have clarified the composition of organic and nonorganic ingredients in products covered in the four labeling categories. All ingredients labeled as "organic" in the ingredient statement of the product package must be produced and handled pursuant to these requirements. No substances prohibited on the National List in subpart G and no production or handling practices prohibited in section 205.301(e) may be used in the production or handling of any ingredient labeled as "organic." Regulations covering the production and handling of nonorganic ingredients varies with the labeling category. The higher the percentage of a product's organic composition, the more restrictive the production and handling requirements of the nonorganic ingredients in the product. These requirements are found under section 205.301 and explained above under Proposal Description.

(4) Prohibited practices. Section 205.301(e) lists seven production and handling practices that are prohibited from being used to produce whole products or product ingredients that would be labeled as "organic" under the NOP. Some of these prohibited practices appear for the first time in this proposal, and others were specified in the first proposal and were supported by all those who addressed them in their comments.

The first proposal prohibited organic labeling of a product or ingredient produced using water that does not meet requirements of the Safe Drinking Water Act (42 U.S.C. 300(f) et seq.). We have not included that provision in this proposal because potable water is required in other FDA and FSIS processing regulations and does not need to be repeated as a requirement in this regulation.

The first three practices (use of excluded methods, sewage sludge, and irradiation) are discussed elsewhere in this proposal and are added as prohibited practices in this labeling section for consistency purposes.

Only processing aids and substances on the National List in subpart G of this regulation may be used in the production and handling of 95 percent-plus organic products and 50-95 percent organic products and in any ingredient labeled as organic on a product package.

The first proposal prohibited use of sulfites, nitrates, and nitrites in production or processing of organic products or ingredients. We have amended the wording of this provision to clarify that a handler cannot add any sulfites, nitrates, and nitrites to a product and still label the finished product or ingredient as "organic." We make this clarification because these substances are found naturally in many substances and may appear naturally in potable water used in processing.

The last two processing practices that would prohibit an "organic" label appeared in separate sections of the first proposal and are included in this proposal in section 205.301(e)(6) and (e)(7). The first is that products and organic ingredients assembled using organic or nonorganic forms of the same ingredient or component ingredients--depending on availability of the organic ingredients--cannot be labeled as "organic when available" or a similar phrase. Similarly, products and organic ingredients assembled using both organic and nonorganic forms of the same ingredient or component ingredients cannot be labeled as organic if that ingredient is identified as organic on the ingredient statement and included in the percentage of organic content on the information panel.

(5) Calculating organic content. Because labeling requirements are based on the amount of organic ingredients in a product, we have added new section 205.302, which addresses the calculation of organic percentages. Provisions in this new section were not included in the first proposal. While this should be a simple mathematical procedure, the section proposes certain guidelines for calculating and labeling organic percentages.

Only one percentage figure for total organic ingredients will be shown on a package. The percentage of individual organic ingredients will not be displayed.

An organic product may be constituted completely of organic liquid products. Therefore, this proposal adds the phrase, "or fluid volume," in several places in the proposal when referring to liquid products and ingredients. For ingredients in liquid form that are reconstituted with water from a concentrate, the calculation would be based on a single-strength solution of the liquid concentrate. For products that may contain both dry and liquid organic ingredients, the percentage calculation would be based on the combined weight of the organic ingredients, including the weight of the liquid ingredients, minus water and salt.

(6) Labeling of nonretail containers. We have added new section 205.306, covering labeling of nonretail containers--those used only for shipping and storage of agricultural products labeled as organic or containing organic ingredients. While the same containers are commonly used for both shipping and storage, the first proposal did not reference storage containers or specify labeling requirements for those containers. These provisions are proposed only for products labeled as "100 percent organic," "organic," and "made with organic (specified ingredients)." Some may believe that use of the USDA Seal on a shipping container of products "made with organic (specified ingredients)" may be inconsistent with other labeling provisions prohibiting display of the Seal on consumer packages of those products. However, in the case of shipping and storage containers, the display of seals is not intended for marketing purposes but would be used for easy identification of the product to help prevent commingling with nonorganic product or handling of the product which would destroy the organic nature of the product (fumigation, etc.). These provisions will not apply to shipping and storage containers of products containing less than 50 percent organic ingredients.

(7) Retail Food Establishments. The extent of the regulatory authority of this regulation has been the subject of intense discussions in comments received, NOSB deliberations, and AMS discussions. Commenters claimed that it makes no sense to regulate and certify the production and handling of organic product but not require certification and regulate retail food establishments where some fresh foods containing organic ingredients are processed and assembled and where they can become adulterated or misrepresented to the consuming public.

Retail food establishments that market organic product, whether produced in-store, in a corporate commissary, or by others, will be subject to the labeling provisions of this subpart as that labeling applies to: (1) point-of-purchase, in-store displays describing the organic nature of the product; and (2) other market information and media advertising regarding the product being marketed at the retail food establishment. Food retail establishments must describe the product in in-store retail displays, market information, and media advertising that is consistent with the organic content of the finished product. Any labeling of a product that is inconsistent with the percentage of organic content of the product will be considered a violation of truth in labeling and/or truth in advertising regulations of FDA and the FTC. Multiingredient products which are described as organic product in retail displays and market information must be assembled by a certified manufacturing facility, pursuant to the Applicability subpart of this regulation.

Packaged organic products, organic fresh produce, and organic bulk bin food items must be described in point-of-purchase displays, pricing information, and consumer information in terms consistent with the organic content of the product. For instance, an in-store retail display would describe an 87 percent organic product by specifying the percentage of organic content of the product and identifying the organic ingredients in the ingredient statement, as may be required by FDA. The market information for such a product must not, for instance, label the product as "organic" or "100 percent organic." This would be a violation of truth in labeling and advertising regulations of FDA and FTC. The USDA Seal and the seal of the certifying agent may be displayed at retail sales and in market information on products certified as containing 95 percent or more organic content. Multiingredient products containing 50-95 percent organic ingredients may display the seal or logo of the certifying agent of the organic handling operation.

We believe these labeling practices will help assure appropriate representation of bulk organic products at retail sale and will encourage handlers to use more organic ingredients.

Products containing less than 50 percent organic ingredients at the point of retail sale may not be identified in any way as "organic" or containing organic ingredients. In addition, the USDA Seal and seal, logo, or other identifying mark of the certifying agent is prohibited from being used in retail displays and market information.

(8) Change in calculating the $5,000 exemption. We are proposing a change in calculating the $5,000 exemption for producers and handlers. The $5,000 annual exemption will be cslculated on sales of organically produced product and not on all agricultural products marketed by the exempt producer or handler, as provided in the first proposal. This exemption means that qualifying exempt organic producers and handlers may annually sell up to $5,000 of organically produced products and not be certified as an organic operation under this regulation. The exemption could apply to a large, conventional agricultural operation that also has a small amount of acreage designated for organic production--the products of which, for example, is sold at a roadside stand. Any sale of other, nonorganic products will not count against the $5,000 sales total. The labeling and market information requiremetns for organic products produced by such exempt operations are specified in section 205.309 of this regulation.

Olive Oil Organic Labeling