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Published October 8, 2007 09:37 AM

Controversy Over Organic Dairy Continues

The U.S. Department of Agriculture said Friday it will not investigate complaints filed Sept. 13 by organic watchdog The Cornucopia Institute against Aurora Organic Dairy (AOD) and its two certifiers.

The news comes just days after three public interest groups, including Cornucopia, defiantly vowed to disobey a demand from AOD to stop making "false and disparaging" statements against the Boulder, Colo.-based dairy or face legal action.

"They're picking on the wrong people," Ronnie Cummins, executive director of the 850,000-member Organic Consumers Association (OCA), and one of the groups targeted by AOD, told Sustainable Food News. "We will never back down. If they dare sue us, they'll just make matters worse."

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Just before AOD's cease and desist letter, a 71-page "Statement of Position" from one of AOD's accredited certifiers surfaced containing serious allegations against the USDA's National Organic Program's (NOP) Associate Deputy Administrator Mark Bradley, and allegations of major failings in the execution of federal organic standards altogether.

The Colorado Dept. of Agriculture's (CDA) position statement was in response to a Notice of Proposed Suspension that NOP sent to CDA this spring charging its organic program "willfully" committed 65 violations of NOP regulations during its audit of AOD's organic certification.

Despite the apparent upheaval within the industry, Acting Agriculture Secretary Chuck Connors told SFN in a teleconference with reporters this week that it's all a tempest in a teapot.

"Now, I know there is controversy out there on a number of issues that really fall outside the bounds, if you will, of what constitutes that organic standard that is necessary in order for the product to have our seal," Connors said.

Consent Agreement spurs complaints
Cornucopia's complaints stemmed from a deal announced late last month between the AOD, the nation's largest provider of private labeled organic milk, and the USDA's National Organic Program (NOP). The deal superseded previous allegations of "willful" violations committed by AOD, and kept the dairy's organic certifications intact.

In Nov. 2005, the USDA launched an investigation based on a formal legal complaint over AOD's management practices filed by Cornucopia. Following a one-year investigation, the USDA sent a notice of noncompliance to AOD in April saying it had "willfully violated" 14 provisions of the Organic Food Production Act (OFPA).

But instead of revoking the organic certification, the agency and AOD worked out the Consent Agreement.

Incensed over the deal, but committed to exposing what it says are flagrant violations of organic production principles, Cornucopia filed another complaint against AOD Sept. 13 alleging that its High Plains, Colo., dairy, which went online last fall, was also skirting the law.

David Trykowski, director for the AMS's Compliance, Safety and Security division, referred only to the complaint against AOD in his response late Thursday to Cornucopia Research Director Will Fantle, explaining that his decision not to initiate an investigation into AOD's High Plains operation was based on the Consent Agreement's one-year review period, which means it will "exercise increased scrutiny over AOD's operations."

In his letter, Trykowski did refer to "factual evidence" that Fantle raised in the Sept. 13 complaint, and invited him to provide it to his office "at your earliest convenience so that we may examine it before our review plan is finalized."

Cornucopia had previously mentioned its initial investigations into violations of not providing pasture to cows at the High Plains facility consisted of photography, satellite imagery, and interviews with dairy industry professionals, who visited the facility.

Trykowski said Fantle's concerns would be "incorporated into the one-year review plan," and that his office "welcomes any future complaints you may have regarding potential noncompliance with [OFPA] and NOP regulations."

Fantle did not immediately respond to request for comment.

No investigation 'warranted,' complaints dismissed Also on Sept. 13, Cornucopia said it filed complaints against AOD's two USDA-accredited certifiers - Quality Assurance International (QAI) and the CDA's organic program - for failing to uncover the violations contained in AOD's original notice of revocation, and enforcing the law.

Responding to allegations that it failed to uphold organic production standards, QAI said the charges were false, but the agency would not return its phone calls to vindicate it.

Under the Consent Agreement with the USDA, Aurora was ordered to file an amended OSP (Organic System Plan) for its Dublin facility. Because QAI certifies Aurora's Dublin facilities, some in the organic foods industry allege that implicates QAI in the violations.

But David Abney, QAI vice president told SFN, that he still does not know why the USDA wants a new OSP.

"We are unclear why USDA is requiring a new OSP (Organic System Plan) and USDA has provided no explanation to QAI, but we have obtained an updated OSP from AOD as required by the consent agreement," Abney said. "We can't get them to call us back."

Responding to a request for comment on why the USDA is not contacting QAI regarding the matter, NOP spokesperson Joan Shaffer told SFN that the agency does not "comment on the comments of our certifying agents."

Regarding Cornucopia's complaints against QAI and CDA, Shaffer said there were also dismissed as another investigation "is not warranted."

She explained "no evidence was found to suggest that [QAI] had violated [NOP] regulations," and that CDA agreed earlier this year to make "several changes in its operation including attending increased NOP training and making more personnel available."

But Jim Miller, CDA's director, Policy & Initiatives, told SFN that the USDA "erroneously" reported that the state's organic program was adding staff as a result of the Consent Agreement with AOD.

"It's just not necessary. We can't justify it," Miller said. "We just want to make sure our people are looking for the right thing. Some of those [NOP] regulations lack a great deal of clarity."

He also said reports that the state's organic program was not rotating organic inspection staff were false. "We already rotate [staff]," he said. "Now, we just have to write it down."

Allegations show cracks in the system Miller thinks the entire situation identifies cracks in the system. "If this doesn't demonstrate the need for additional USDA organic dairy training procedures, I don't know what does," he said.

Allegations contained in the CDA's 71-page "Statement of Position" issued on May 22 are certainly a runner-up.

In response to a Notice of Proposed Suspension that NOP sent to CDA in April charging its organic program "willfully" committed 65 violations of federal organic rules during its audit of AOD's organic certification, the Statement of Position rails against NOP's Associate Deputy Administrator Mark Bradley and sums up some major alleged failings in federal organic standards altogether.

CDA said in the statement that the "inadequacy" of AMS's notice it received in April contained "only summary conclusions with little or no description of the specific facts that constitute the 65 separate violations that the [CDA] stands accused of, much less any description of the factual basis for AMS's charges that all such violations, if they occurred, were 'willful.'"

CDA said the notice failed to satisfy "even the most basic requirements for notice under the Due Process Clause and should therefore be dismissed on legal grounds for this reason alone."

The document then states that Mark Bradley spoke by phone with the CDA's Plant Industry Division Director, Mitchell Yergert, and its Organic Program Coordinator, Don Gallegos, on April 18, just two days after mailing the Notice of Proposed Suspension.

Bradley allegedly informed Yergert and Gallegos that AMS "did not really want to suspend their accreditation," and that if CDA "would simply admit to the alleged 'willful'" violations, AMS might not even suspend their accreditation at all, or if it did, would reinstate it after a short period."

Bradley allegedly called again two weeks later to reiterate "AMS's desire to make such a deal," as long as the department admits "willful" misconduct.

That has officials at CDA steamed.

'Willful' is fightin' words "
The use of this term by AMS to characterize the Department's alleged errors in the Notice of Proposed Suspension is nothing short of outrageous and inexcusable," the Department said. "As a federal agency, AMS should recognize the consequences of such an accusation to another governmental entity such as the Department in terms of public credibility."

The CDA also said the term was used "falsely and recklessly" and suggested its usage in the notice "can only be explained by profound ignorance of its legal meaning and effect or by extreme indifference to the consequences of such usage."

The CDA's position statement said"Bradley's actions . raise obvious questions about both his memory and credibility that the Administrator should consider when evaluating the validity of his other accusations of 'willful' non-compliance by [CDA]."

CDA maintains that all its on-site inspections of AOD's operations indicated that AOD was in compliance with all of the NOP 'access to pasture' rules.

"The Department had no reason to believe, therefore, that it had any legal grounds or obligation to deny or revoke AOD's certification on the basis of AOD's alleged noncompliance as stated in this 'reason' for suspension"

The position statement also provided an assessment from Bradley regarding the basis of Cornucopia's original complaint.

"Mr. Bradley and Mr. [Don] Gallegos [of CDA] discussed the concerns raised by Cornucopia's complaint that AMS had recently dismissed. In the course of that discussion, Mr. Bradley told Mr. Gallegos that Cornucopia's concerns with AOD were not really about pasture; they were about 'big versus little,'" the position statement said.

"Mr. Bradley explained to Mr. Gallegos that the people Mark Kastel represents at Cornucopia don't understand that the milk industry needs operations like AOD and Horizon to develop the market and are afraid there will not be room for them," the position statement said.

NOP: 'No comment'
In an emailed response to SFN, Shaffer wrote that the agency "does not comment on documents of this kind. The questions that you ask arise from the response the Colorado Department of Agriculture (CDA) sent to USDA after CDA received the proposed notice of suspension of their accreditation."

Meanwhile, AOD's letter to Cornucopia Institute, the OCA and the Center for Food Safety, demanding that they cease publication of false, disparaging statements about the company and its products, was met with defiance.

AOD said statements by these groups have mischaracterized USDA's findings and its agreement with the dairy, and the company said it believes the false statements have been made deliberately to injure the company and its customers.

AOD has since admitted that it has lost no customers since the situation arose. AOD President and Chief Organic Officer Mark Retzloff told SFN that the company serves about 15 customers, all in the top 25 retailers, but he declined to name them.

"These letters to OCA, CI and CFS is our way of saying, 'enough is enough,'" Retzloff said. "These are false statements are we're not going to put up with it any longer."

But that resolve didn't seem to have the intimidating effect Retzloff might have hoped for.

OCA's Cummins said he "wears the letter as a badge of honor given that a corporate entity that is breaking the law, and has admitted breaking the law, would threaten us for basically speaking out publicly about this situation."

He pointed to the Consent Agreement as evidence that AOD and its "friends at Horizon [organic milk division of country's largest milk producer Dean Foods] have good connections at the top of USDA. Now, we see the corruption is much deeper."

"The problem is not Cornucopia Institute or OCA," he said. "The problem is you have to play by the rules. And, if the feds won't enforce the rules, then we have to do it."

Cornucopia's attorney Gary Cox scoffed at AOD's letter threatening legal action.

"What I found interesting was that the letter did not come from an attorney, it was on Aurora's stationary," Cox told SFN. "It's obvious a lawyer didn't draft it."

He said all Cornucopia's statements "are statements based in truth, investigation and evidence that [Cornucopia] has in their possession."

Joseph Mendelson is the Center for Food Safety's legal director. He told SFN that the AOD letter is "factually inaccurate, we don't have any statements or any other information on our Web site [about AOD]. They are barking up the wrong tree with CFS."

Retzloff declined to provide revenues but said annual sales growth is up about 35 percent over last year, typical of the growth the company has experienced since it began operations three years ago.

Meanwhile, a coalition of organic dairy farmers called The Federation of Organic Dairy Farmers (FOOD Farmers) sent a letter to Acting Secretary Chuck Conner on Sept. 25 to protest the USDA's Consent Agreement with Aurora

FOOD Farmers is the umbrella organization for the Northeast Organic Dairy Producers Alliance (NODPA), the Midwest Organic Dairy Producers Association (MODPA), and the Western Organic Dairy Producers Alliance (WODPA) who represent organic dairy farmers across the country.

"We are extremely disturbed by the Consent Agreement between USDA and AOD for many reasons," the letter read. "It does not bring closure to this situation."

When asked by SFN earlier this week during the teleconference call with reporters about the industry infighting the organic dairy category is experiencing and whether it will impact consumer confidence in the sector, Connors shrugged off the significance of the imbroglio.

"I will tell you as well that from the USDA standpoint, we have organics certification standards that are in place that we work with states and private certification agencies to make sure that products being marketed to consumers in this country that have the USDA organic label on them meet those standards," he said.

"There's a lot of controversy about that, but we feel we have in place the right system, again working with the states. And we've taken some tough enforcement action in certain situations against this to ensure again that the products that are being marketed out there to the consumers meet that particular label standard that took this agency 10 years to put in place but has been really a highly, highly successful program," he said.

AOD released on Tuesday its performance metrics on animal welfare and sustainability. Details are on its Web site.

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