Operations in excess of the 40: 1 range may achieve the minimum temperature but are likely to drop off quickly and result in a finished material that is inadequately mature and deficient in nitrogen. The producer is not required to perform a physical analysis of each feedstock component if he or she can demonstrate that an estimated value is reliable. For example,

estimates of the carbon and nitrogen content in specific manures and plant materials are generally recognized. Other feedstocks of consistent quality may be tested once and assumed to approximate that value.

The producer must develop in his or her organic system plan the management strategies and monitoring techniques to be used in his or her composting system. To produce an allowed composted material, the producer must use an in vessel, static aerated pile, or windrow composting system. Producers using an in vessel or static aerated pile system must document that the composting process achieved a temperature between 131 E F and 170 E F and maintained 68 that level for a minimum of 3 days. Producers using a windrow composting system must document that the composting process achieved a temperature between 131 E F and 170 E F and maintained that level for a minimum of 15 days. Compost produced using a windrow system must be turned five times during the process. These time and temperature requirements are designed to minimize the risk from human pathogens contained in the feedstocks, degrade plant pathogens and weed seeds, and ensure that the plant nutrients are sufficiently stabilized for land application.

The final rule does not contain provisions for the use of materials commonly referred to as " compost teas." A compost tea is produced by combining composted plant and animal materials with water and a concentrated nutrient source such as molasses. The moisture and nutrient source contribute to a bloom in the microbial population in the compost, which is then applied in liquid form as a crop pest or disease control agent. The microbial composition of compost teas are difficult to ascertain and control and we are concerned that applying compost teas could impose a risk to human health. Regulation of compost teas was not addressed in the proposed rule. The National Organic Program ( NOP) will request additional input from the NOSB and the agricultural research community before deciding whether these materials should be prohibited in organic production or whether restrictions on their use are appropriate.

In addition to managing crop nutrients with raw manure and composted plant and animal materials, a producer may use uncomposted plant materials. These are materials derived exclusively from plant sources that a producer manages in a manner that makes them suitable for application in a cropping system. For example, plant materials that are degraded and stabilized through a vermicomposting process may be used as a soil fertility and crop nutrient amendment.

( 3) Mined Substances of High Solubility. The proposed rule treated mined substances of 69 high solubility as a single category of soil amendment and allowed their use where warranted by soil and crop tissue testing. Many commenters objected to the general allowance for this category of substances and were particularly disappointed that the NOSB annotations on two such materials, sodium ( Chilean) nitrate and potassium chloride, were not included. Commenters cited the potential detrimental effects of these highly soluble and saline substances on soil quality and stated that several international organic certification programs severely prescribe or prohibit their use. One certifying agent recommended that natural substances of high solubility and salinity be handled comparably to similar synthetic materials such as liquid fish products and humic acids that appear on the National List, complete with their original NOSB annotations.

At its June 2000 meeting, the NOSB recommended that the NOP delete general references to mined substances of high solubility from the final rule, and incorporate the NOSB's specific annotations for materials of this nature. We have adopted this recommendation by retaining a place for mined substances of high solubility in the soil fertility and crop nutrient management practice standard but restricting their use to the conditions established for the material as specified on the National List of prohibited natural substances. Under this approach, mined substances of high solubility are prohibited unless used in accordance with the annotation recommended by the NOSB and added by the Secretary to the National List. We deleted the provision from the proposed rule that use of the substance be " justified by soil or crop tissue analysis." The final rule contains two materials sodium nitrate and potassium chloride that may be used in organic crop production with the annotations developed the NOSB.

While " mined substances of high solubility" is not a discrete, recognized category such as crop nutrients, the proposed rule mentioned sodium nitrate, potassium chloride, potassium nitrate 70 ( niter), langbeinite ( sulfate of potash magnesia), and potassium sulfate in this context. Based on the recommendation of the NOSB, the final rule would prohibit use of these materials, unless the NOSB developed recommendations on conditions for their use and the Secretary added them to the National List. The NOP would welcome further guidance from the NOSB on these materials.

( 4) Burning crop residues. The proposed rule prohibited burning as a means of crop disposal, except for burning prunings from perennial crops to suppress the spread of disease.

Many commenters supported the principle behind the prohibition but maintained that the proposed language was too restrictive and would preclude certain beneficial agronomic practices.

Several producers stated that the proposed rule would prevent them from collecting and burning residues from diseased annual crops, which they felt was an effective and beneficial practice.

Other producers cited their use of prescriptive burning as a management practice for certain native or wild crops. As evidenced by the allowance for burning to suppress disease with perennial crops, the proposed rule was not designed to preclude the selective use of fire in organic production. We agree with the commenters that a more flexible allowance for the practice is warranted, and we have amended the provision to allow burning of annual and perennial crop residues for the suppression of disease and to stimulate seed germination. Producers must establish their need and procedures for burning in their organic system plan, and the practice cannot be used solely to remove crop debris from fields.

( 5) Requirement for Organic Seed in Sprout Production. The proposed rule allowed nonorganically produced seeds for all purposes, including sprout production, when the certifying agent concurred with the producer that organically produced seeds were not commercially available. While commenters predominately supported this approach with seed used for planting, 71 they were virtually unanimous in stating that it is never appropriate to allow nonorganically produced and handled seeds in organic sprout production. Commenters cited the NOSB's June 1994 recommendation that seed used for the production of edible sprouts shall be organically produced and stated that existing certification standards do not provide an exemption based on commercial availability. We agree with these commenters and have modified the final rule to require that organic seed must be used for the production of edible sprouts.

( 6) Mitigating the Effects of a Biological, Botanical, or Synthetic Substance. The proposed rule required that producers who used a biological or botanical substance or an allowed synthetic substance to control crop pests, weeds, or disease evaluate and mitigate the effects of repetitive use of the same or similar substances. While agreeing that pest resistance and shifts in pest populations were important considerations, commenters stated that managing these issues was beyond the ability of individual operations. Commenters recommended that the NOP develop principles and practices for managing pest resistance and shifts in pest types that would apply to all production operations. We agree with these comments and have deleted the requirement to evaluate and mitigate the effects of using the same or similar crop pest, weed, or disease control substances. The final rule requires that producers document the use of such substances in their organic systems plans, subject to the approval of their certifying agent.

( 7) Prohibition on Use of Treated Lumber. The proposed rule did not specifically address the use of lumber that had been treated with a prohibited substance, such as arsenic, in organic production. Citing the explicit prohibition on these substances in existing organic standards, many commenters felt that treated lumber should be excluded in the final rule. Commenters also cited the NOSB's recommendation to prohibit the use of lumber treated with a prohibited substance for 72 new construction and replacement purposes effective upon publication of the final rule. We have included a modified version of the NOSB's recommendation within the crop pest, weed, and disease management practice standard. This provision prohibits the use of lumber treated with arsenate or other prohibited materials for new installations or replacement purposes in contact with an organic production site. We included this modification to clarify that the prohibition applies to lumber used in direct contact with organically produced and handled crops and livestock and does not include uses, such as lumber for fence posts or building materials, that are isolated from production. The prohibition applies to lumber used in crop production, such as the frames of a planting bed, and for raising livestock, such as the boards used to build a farrowing house.

( 8) Greater Rigor in the Wild Harvest Production Organic System Plan. A number of commenters stated that the wild crop harvesting practice standard was insufficiently descriptive and that the proposed rule failed to apply the same oversight to wild harvest operations as it did to those producing crops and livestock. Some commenters maintained that the proposed rule did not require a wild harvest producer to operate under an approved organic system plan. These commenters proposed specific items, including maps of the production area that should be required in a wild harvest operation's organic system plan. One commenter recommended that the definition for " wild crop" be modified to allow the harvest of plants from aquatic environments.

We amended the practice standard for wild crop harvesting to express the compliance requirements more clearly. Wild crop producers must comply with the same organic system plan requirements and conditions, as applicable to their operation, as their counterparts who produce crops and livestock. Wild harvest operations are production systems, and they must satisfy the 73 general requirement that all practices included in their organic system plan must maintain or improve the natural resources of the operation, including soil and water quality. We modified the practice standard to emphasize that wild harvest production is linked to a designated site and expect that a certifying agent would incorporate mapping and boundary conditions into the organic system plan requirements. Finally, we changed the definition of " wild crop" to specify that harvest takes place from a " site" instead of " from land," thereby allowing for aquatic plant certification.

Crop Production  Changes Requested But Not Made This subpart retains from the proposed rule regulations on which we received comments as follows:

( 1) Application of Raw Manure. The soil fertility and crop nutrient management practice standard in the proposed rule permitted the application of raw manure to crops not intended for human consumption and established restrictions for applying it to crops used for human food. For human food crops, the proposed rule required a 120 day interval between application and harvest of crops whose edible portion had direct contact with the soil or soil particles, and a 90 day interval for crops that did not. These provisions reflected the recommendations developed by the NOSB at its June 1999 meeting. The practice standard also required that raw manure must be applied in a manner that did not contribute to the contamination of crops, soil, or water by plant nutrients, pathogenic organisms, heavy metals, or residues of prohibited substances.

The majority of commenters supported the provisions for applying raw manure. Some commenters stated that the provisions effectively balanced the benefits of applying raw manure to the soil with the environmental and human health risks associated with its use. These commenters 74 stated that the lengthy intervals between application and harvest would not impose an unreasonable or unfeasible burden on organic producers. The NOSB strongly supported the provisions in the proposed rule, emphasizing that raw manure contributed significant benefits to soil nutrient, structure, and biological activity that other soil fertility practices and materials do not provide. Other commenters stated that the provisions were consistent with the requirements in existing organic standards and added that the restrictions were justifiable because they reflected responsible management practices.

For differing reasons, a number of commenters disagreed with the proposed provisions.

Some commenters cited the human health risks associated with pathogenic organisms found in raw manure and stated that the proposed intervals between application and harvest were not adequately protective. These commenters recommended that the NOP conduct more extensive risk assessment procedures before determining what, if any, intervals between application and harvest would adequately protect human health. Some of these commenters identified the risk assessment methodology and pathogen treatment procedures governing the production and use of sewage sludge as the most suitable precedent for guiding the additional work required in this area.

Conversely, a number of commenters stated that the provisions in the proposed rule were excessive because they exceeded the minimum 60 day interval between application and harvest established in the OFPA. Many of these commenters recommended eliminating the distinction between crops that come into contact with soil or soil particles and those that don't and applying a uniform 60 day interval between harvest and application for any crop to which raw manure had been applied. Some commenters stated that the 120 day interval severely limited the flexibility of producers who operated in regions such as the Northeast where the growing season lasted only 75 slightly longer. Other commenters maintained that the practice standard did not address specific practices, such as applying raw manure to frozen fields, that they maintained should be expressly prohibited.

The responsibility to use raw manure in a manner that is protective of human health applies to all producers, whether organic or not, who apply such materials. We acknowledge the commenters who noted that the OFPA cites food safety concerns relative to manure use and,

therefore, that food safety considerations should be reflected in the practice standard for applying raw manure in the final rule. Some of the commenters favored more extensive risk assessment procedures or lengthening the interval between application and harvest. We have not, however,

changed the provisions for applying raw manure.

Although public health officials and others have identified the use of raw manure as a potential food safety concern, at the present time, there is no science based, agreed upon standard for regulating the use of raw manure in crop production. The standard in this rule is not a public health standard. The determination of food safety demands a complex risk assessment methodology, involving extensive research, peer review, and field testing for validation of results.

The only comparable undertaking in Federal rulemaking has been EPA's development of treatment and application standards for sewage sludge, an undertaking that required years of dedicated effort. The NOP does not have a comparable capacity with which to undertake a comprehensive risk assessment of the safety of applying raw manure to human food crops. To delegate the authority to determine what constitutes safe application of raw manure to certifying agents would be even more problematic. A certifying agent cannot be responsible for establishing a Federal food safety standard. Therefore, the standard in this rule is a reflection of AMS' view 76 and of the public comments that this standard is reasonable and consistent with current organic industry practices and NOSB recommendations for organic food crop production. Should additional research or Federal regulation regarding food safety requirements for applying raw manure emerge, AMS will ensure that organic production practice standards are revised to reflect the most up to date food safety standard.

Neither the identification of food safety as a consideration in the OFPA nor the inclusion of this practice standard in the final rule should be construed to suggest that organically produced agricultural products are any safer than nonorganically produced ones. USDA has consistently stated that certification is a process claim, not a product claim, and, as such, cannot be used to differentiate organic from nonorganic commodities with regard to food safety. National organic standards for manure use cannot be used to establish a food safety standard for certified commodities in the absence of as uniform Federal regulation to ensure the safety of all human food crops to which raw manure has been applied. The OFPA was designed to certify a process for informational marketing purposes.

Neither have we changed the practice standard in response to comments that the requirement in the final rule should not exceed the 60 day interval contained in the OFPA. The OFPA clearly establishes that the interval must be no less than 60 days and does not preclude a longer standard. The NOSB has strongly supported the proposed 90 and 120 day intervals, and the vast majority of commenters indicated that these provisions would be feasible for virtually all organic cropping systems. The requirement in the practice standard that raw manure must be applied in a manner that does not contribute to the contamination of crops, soil, or water by plant nutrients, pathogenic organisms, heavy metals, or residues of prohibited substances provides 77 certifying agents the discretion to prohibit specific practices that would not be in compliance.

With this discretion, a certifying agent could prohibit practices, such as applying manure to frozen ground or too close to water resources, that many commenters stated were not appropriate for organic production.

( 2) No Prohibition on Manure from Nonorganic Operations. The proposed rule identified animal and plant waste materials as important components in soil fertility and crop nutrient management without providing criteria for distinguishing allowed and prohibited sources. A large number of commenters objected to this provision and stated that manure from nonorganic sources may contain residues from prohibited substances, including animal medications. These commenters maintained that some of these residues, such as antibiotics, may remain active for extended intervals, and others, such as heavy metals, could accumulate on the organic operation.

Commenters stated that if either or both conditions prevailed, the integrity of the organic operation would be jeopardized. Many producers and certifying agents emphasized that the proposed rule conflicted with the Codex guidelines that prohibit the use of manure from factory farms. These commenters were concerned that failure to restrict the use of manure from nonorganic operations would put their products at a competitive disadvantage, particularly in European markets. When raising this issue, most commenters requested that the final rule either prohibit the use of manure from factory farms or state that certifying agents could regulate the practice by requiring residue testing and restrictions on application.

We have not changed the provisions for using manure from nonorganic operations in the final rule. In many discussions on the subject throughout the years, the NOSB has never recommended that manure from nonorganic farms be prohibited. Existing organic certification 78 standards routinely permit the use of manure from nonorganic operations with appropriate oversight, and the final rule incorporates a similar approach. Under the final rule, a certifying agent can require residue testing when there is reasonable concern that manure, either raw or as a component of compost, contains sufficient quantities of prohibited materials to violate the organic integrity of the operation. Providing certifying agents the discretion to require screening for prohibited materials will minimize the risk of introducing contaminants while maintaining the ecologically important practice of recycling organic material from nonorganic operations.

Additionally, the final rule requires that producers apply manure and compost in a manner that maintains or improves the soil and water quality of their operation. This provision provides an additional safeguard that certifying agents may use to ensure that the application of any form of manure protects the natural resources of the operation.

( 3) Rotating a Field in and out of Organic Production. Some commenters stated that a producer should not be allowed to rotate fields on their operation in and out of organic production. These commenters were concerned that producers could apply prohibited substances that persisted for many years, such as soil fumigants, and begin harvesting organically produced crops after 3 years. They stated that, without a prohibition on the rotation of fields in this manner, organic producers could effectively use a prohibited substance on their operation.

We have not amended the final rule to prohibit the rotation of a field on an operation in and out of organic production. The statutory prohibition on the application of a prohibited substance is 3 years, and this requirement is contained in section 205.202( b). This prohibition restricts the application of a prohibited substance, not its residual activity. If AMS receives evidence that the rotation of fields in this manner threatens to compromise organic production, the 79 NOP and NOSB will collaborate on developing standards to remedy it.

( 4) Use of Seed Treatments on the National List. The seed and planting stock practice standard in the proposed rule generated a very diverse array of responses that, while largely favorable, highlighted a potentially disruptive impact on organic producers. The practice standard favored organic seed and planting stock over nonorganically produced but untreated varieties and nonorganically produced, untreated seed and planting stock over nonorganically produced seeds and planting stock treated with an allowed synthetic substance. Producers could use the less preferable seed or planting stock variety if they demonstrated to their certifying agent that an equivalent variety in the preferred form was not commercially available. Most commenters endorsed the principle of requiring organic seed and planting stock and agreed that the proposed provisions were a workable approach to enforcement. They stated that the provisions created an incentive for seed and planting stock providers to develop supplies for organic markets, yet enabled producers who made a good faith effort but failed to locate seed or planting stock in the preferred form the ability to continue producing organically. Most commenters indicated that this approach would support the existing market for organic seed and planting stock while fostering its continued development.

A number of commenters, however, stated that the seed and planting stock practice standard was unreasonable and unworkable and would adversely affect organic producers. These effects would include significantly reduced planting options due to the nonavailability of seed in any allowed form and higher seed costs, which represent a significant percentage of the total production cost for some commodities. These commenters maintained that the three categories of seed and planting stock allowed in the order of preference could not reliably provide producers 80 with many commercial varieties currently being planted. They pointed out that there were no synthetic seed treatments on the National List in the proposed rule, thereby eliminating the use of treated seed in organic production. Commenters stated that producers often rely upon seed and planting stock varieties that are uniquely well adapted for their growing conditions or marketing requirements and that these particular varieties would very often not be available in untreated form. These commenters concluded that the proposed practice standard would compel many producers to abandon many tried and true varieties of seed and planting stock and perhaps phase out organic production entirely. One commenter maintained that the proposed rule's stated intention of using the practice standard to stimulate production of organic seed and planting stock was not within the purpose of the OFPA.

We have not changed the seed and planting stock practice standard in response to these commenters because the prohibition on using synthetic materials not on the National List is a requirement of the OFPA. The final rule cannot allow producers to use synthetic seed treatments that have not been reviewed, favorably recommended by the NOSB, and added to the National List by the Secretary. The practice standard creates incentives for producers to seek out seed and planting stock inputs that are the most compatible with organic production, yet includes allowances when preferred forms are not commercially available. While no seed treatments are included on the National List in the final rule, individuals may petition the NOSB for review of such substances. Additionally, the practice standard creates an incentive for seed and planting stock producers and suppliers to develop natural treatments suitable for organic systems that would not need to appear on the National List. The objectives of spurring production of organically grown seed and promoting research in natural seed treatments are compatible with the 81 OFPA's purpose of facilitating commerce in organically produced and processed food. We designed the practice standard to pursue these objectives while preventing the disruption that an ironclad requirement for organically produced seed and planting stock may have caused.

( 5) Practice Standard for Maple Syrup. Many commenters stated that the proposed rule lacked production and handling standards for operations that produce maple syrup. Commenters stated that maple syrup production is a significant enterprise for many organic producers and that the absence of a practice standard in the final rule would adversely affect existing markets for organic products. Many commenters recommended that the final rule incorporate the maple syrup practice standard from an existing certification program or the American Organic Standards.

We have not included a practice standard for the production and handling of maple syrup because the final rule contains sufficient provisions for the certification of these types of operations. After reviewing existing practice standards for maple syrup, we determined that the standards in the final rule for crop production, handling operations, and allowed and prohibited materials on the National List provided comparable guidance.

Crop Production  Clarifications Clarification is given on the following issues raised by commenters:

( 1) Applicability of Crop Rotation Requirement to all Operations. One State program commented that the crop rotation practice standard in the proposed rule was unreasonable for producers who operated in regions where limited rainfall and irrigation resources or unique soil conditions made cover cropping impractical. This commenter stated that certain dryland cropping systems, such as aloe vera production, function as " semi perennial" systems that do not include 82 rotations, yet fulfill the objectives of the crop rotation practice standard. A certifying agent expressed a similar concern by suggesting that the crop rotation practice standard be changed by adding " may include, but is not limited to" prior to the list of allowed management practices. This commenter felt that the " may include" clause afforded individual growers greater discretion by acknowledging that not every allowed management practice would be applicable to all operations.

We have retained the language from the proposed rule because it already provides the flexibility to develop site specific crop rotation practices requested by these commenters. The regulation as originally written includes the " but not limited to" clause that allows producers to include alternative management practices in their organic system plan. Additionally, the regulation states that the producer must implement a crop rotation that provides the required functions " that are applicable to the operation." This further establishes that the crop rotation component of an organic system plan must be considered within the context of site specific environmental conditions including climate, hydrology, soil conditions, and the crops being produced. The final rule requires implementation of a crop rotation, but the producer and certifying agent will determine the specific crops and the frequency and sequencing of their use in that rotation. Crop rotations must fulfill the requirements of this practice standard to maintain or improve soil organic matter content, provide for pest management, manage deficient or excess plant nutrients, and control erosion and are not obligated to use any specific management practice. We structured this and other practice standards, as well as the requirements of the organic system plan, to enable producers and certifying agents to develop organic system plans adapted to natural variation in environmental conditions and production systems.

( 2) Excluding Annual Seedlings from Planting Stock. The proposed rule allowed a 83 producer to use nonorganically produced seeds and planting stock if organically produced equivalent varieties were not commercially available. Several commenters, including the NOSB,

were concerned that the definition of planting stock as " any plant or plant tissue, including rhizomes, shoots, leaf or stem cuttings, roots, or tubers, used in plant production or propagation"

was sufficiently broad to be applied to annual seedlings. While many commenters, including the NOSB, supported the commercial availability exemption in the case of seeds and planting stock,

they objected to extending it to annual seedlings. The proposed rule did not intend to include annual seedling within the definition of planting stock and included a separate definition of " annual seedling" as " a plant grown from seed that will complete its life cycle or produce a harvestable crop yield within the same crop your or season in which it is planted." The proposed rule addressed annual seedlings as a distinct category within the seed and planting stock practice standard. There was no allowance for using nonorganically produced annual seedlings based on commercial availability, and such seedlings can only be used when a temporary variance has been issued due to a catastrophic business interruption. The growth of markets for organically produced annual seedlings, unlike those for seeds and planting stock, obviates the need for the commercial availability provision. We have retained this approach in the final rule.

Livestock Production  Changes Based on Comments This subpart differs from the proposal in several respects as follows:

( 1) Whole Herd Conversion. The proposed rule required that livestock receive 1 year of continuous organic management prior to the milk or milk products they produce being labeled as organic. Based on the feed provisions in that proposal, producers would be required to provide a 100 percent organic feed ration ( exclusive of National List substances allowed as feed 84 supplements and additives) for that entire year. Many producers, consumers, State certification programs, and certifying agents commented that the full year organic feed requirement created an insurmountable barrier for small and medium size dairy operations wishing to convert to organic production. They maintained that the added expense of a full year, 100 percent organic feed requirement was economically prohibitive. These commenters stated that " new entry" or " whole herd" conversion provisions in existing certification standards have been instrumental in enabling established nonorganic dairies to make the transition to organic production. Commenters stated that these provisions typically allow producers to provide livestock 80 percent organic or selfraised feed for the first 9 months of a herd's transition, before requiring 100 percent organic feed for the final 3 months. Some commenters stated that many current organic dairies had capitalized on this whole herd conversion provision and that the consistent growth in demand for organic milk and milk products reflected consumer acceptance of the principle.

At its June 2000 meeting, the NOSB reiterated its prior endorsement of the conversion principle for operations that jointly convert dairy herds and the land on which they are raised. The NOSB recommended allowing a producer managing an entire, distinct herd to provide 80 percent organic or self raised feed during the first 9 months of the final year of conversion, and 100

percent organic feed for the final 3 months. The recommendation further required that dairy animals brought onto an organic dairy must be organically raised form the last third of gestation,

except that feed produced on land managed under an organic system plan could be fed to young stock up to 12 months prior to milk production.

While the preponderance of comments supported the whole herd conversion provision, a significant number of individuals, certifying agents, and State certification programs opposed it. 85 Some commenters felt that requiring less than 1 full year of 100 percent organic feed would not satisfy consumer expectations for an organically managed dairy. Other commenters stated that the whole herd conversion merely favored one segment of organic producers over another. They maintained that the full year, 100 percent organic feed requirement would stimulate markets for organically produced hay and grain, thereby rewarding good row crop rotation. One certifying agent was concerned that the conversion provision would create a permanent exemption and that split operation dairies could use it repeatedly to bring nonorganic animals into the organic operation.

The final rule contains a provision for whole herd conversion that closely resembles those found in the NOSB recommendation and the existing certification standards. The final rule requires that an entire, distinct dairy herd must be under organic management for 1 year prior to the production of organic milk. During the first 9 months of that year, the producer must provide a feed ration containing a minimum of 80 percent organic feed or feed that is raised from land included in the organic system plan and managed in compliance with organic crop requirements.

The balance of the feed ration may be nonorganically produced, but it must not include prohibited substances including antibiotics or hormones. The producer must provide the herd 100 percent organic feed for the final 3 months before the production of organic milk. The producer must comply with the provisions in the livestock health and living conditions practice standard during the entire year of conversion. After the dairy operation has been certified, animals brought on to the operation must be organically raised from the last third of gestation. We did not incorporate the NOSB's recommendation to provide young stock with nonorganic feed up to 12 months prior to the production of certified milk. By creating an ongoing allowance for using nonorganic feed 86 on a certified operation, this provision would have undermined the principle that a whole herd conversion is a distinct, one time event.

We anticipate that the provisions added to the final rule will address the concerns of commenters who objected to the conversion principle. Consumers have embraced milk and milk products from dairies certified under private whole herd conversion provisions essentially identical to that in the final rule. While the conversion provision may temporarily reduce demand for organic feed materials, it encourages producers to develop their own supplies of organic feed.

The conversion provision also rewards producers for raising their own replacement animals while still allowing for the introduction of animals from off the farm that were organically raised from the last third of gestation. This should protect existing markets for organically raised heifers while not discriminating against closed herd operations. Finally, the conversion provision cannot be used routinely to bring nonorganically raised animals into an organic operation. It is a one time opportunity for producers working with a certifying agent to implement a conversion strategy for an established, discrete dairy herd in conjunction with the land resources that sustain it.

( 2) Organic Management for Livestock from the Last Third of Gestation. The proposed rule required that organically managed breeder and dairy stock sold, labeled, or represented as organic slaughter stock must be under continuous organic management from birth. Many commenters stated that this requirement was an inappropriate relaxation of most existing organic standards, which require organic management for all slaughter stock from the last third of gestation. These commenters cited the NOSB's 1994 recommendation that all slaughter stock must be the progeny of breeder stock under organic management from the last third of gestation or longer. Commenters also recommended extending the organic management provision to cover 87 the last third of gestation to make it consistent with the requirements in section 205.236( a)( 4) for the organically raised offspring of breeder stock. We agree with the argument presented by commenters and have changed the final rule to require that breeder or dairy stock be organically raised from the last third of gestation to be sold as organic slaughter stock.

( 3) Conversion Period for Nonedible Livestock Products. The proposed rule required that livestock must be under continuous organic management for a period not less than 1 year before the nonedible products produced from them could be sold as organic. Several commenters questioned the basis for creating different origin of livestock requirements based on whether the operation intended to produce edible or nonedible products. These commenters stated that the OFPA does not sanction such a distinction, nor is it contained in existing certification standards.

They questioned why the proposed rule created such a provision in the absence of a favorable NOSB recommendation. We agree that the creation of a separate origin of livestock requirement for animals intended to provide nonedible products could be confusing. We have changed this provision in the final rule to require that nonedible products be produced from livestock that have been organically managed from the last third of gestation.

( 4) Provisions for Feed Supplements and Feed Additives. The proposed rule provided that nonagricultural products and synthetic substances included on the National List could be used as feed additives and supplements. Many commenters stated that allowing nonagricultural products and synthetic substances as feed supplements contradicted the definition for " feed supplement" found in the proposed rule. That definition stipulated that a feed supplement must,

itself, be a feed material, and the definition for " feed" in the proposed rule precluded using nonagricultural products and synthetic substances. These commenters requested that either the 88 definition of " feed supplement" be changed to make it consistent with the allowance for nonagricultural products and synthetic substances or else that the term be dropped from the final rule. The Food and Drug Administration ( FDA) recommended modifying the definitions for " feed additive" and " feed supplement" and further specifying the components required in a feed ration under the livestock health care practice standard.

We amended the definition in the final rule to state that a feed supplement is " a combination of feed nutrients added to livestock feed to improve the nutritional balance or performance of the total ration." We retained the second component of the proposed definition,

which described how a feed supplement could be offered to livestock. We amended the definition of " feed additive" to " a substance added to feed in micro quantities to fulfill a specific nutritional need; i. e., essential nutrients in the form of amino acids, vitamins, and minerals." The definitions for " feed supplement" and " feed additive" in the proposed rule were originally recommended by the NOSB. While our intent in the proposed rule was to codify as fully as possible the recommendations of the NOSB, we agree with commenters that the proposed definitions were was incompatible with the overall provisions for livestock feed. The definitions in the final rule are consistent with the NOSB's objective to create clear distinctions between feed, feed supplements, and feed additives while clarifying the role for each within an organic livestock ration. We also incorporated FDA's recommendation to include protein and/ or amino acids, fatty acids, energy sources, and fiber for ruminants as required elements of a feed ration in the livestock health care practice standard. These additions make the livestock health care practice standard more consistent with the National Research Council's Committee on Animal Nutrition's Nutrient Requirement series, which we cited in the proposed rule as the basis for feed requirements. 89 Many commenters addressed provisions in the proposed rule to allow or prohibit specific materials and categories of materials used in livestock feed. Among these, some commenters questioned whether enzymes were defined as a feed additive and, therefore, allowed. One certifying agent requested guidance on the status of supplementing livestock feed with amino acids. At its October 1999 meeting, the NOSB discussed the Technical Advisory Panel ( TAP)

reviews on the use of enzymes and amino acids in livestock feed. The NOSB determined that natural sources of enzymes exist and that their use should be allowed in organic production.

Their discussion of natural sources of enzymes concluded that enzymes derived from edible,

nontoxic plants and nonpathogenic bacteria or fungi that had not been genetically engineered should be allowed as a nonorganic feed additive. The NOSB did not take a position on amino acids during this meeting but indicated that it would revisit the subject in the near future. Based on these recommendations, the final rule allows the use of natural enzymes but not amino acids as nonorganic feed additives. The NOSB's recommendation that natural sources of enzymes existed and were compatible with organic livestock production supports allowing them without adding them to the National List. Some commenters discussed the animal welfare and environmental benefits associated with providing amino acids in livestock feed and supported allowing them.

However, without a recommendation from the NOSB that amino acids are natural or should be added to the National List as a synthetic, the final rule does not allow their use.

Commenters questioned whether nonsynthetic but nonagricultural substances, such as ground oyster shells and diatomaceous earth, would be allowed in agricultural feed. In 1994, the NOSB recommended that natural feed additives can be from any source, provided that the additive is not classified as a prohibited natural on the National List. We agree with this 90 recommendation and have amended the final rule to allow such materials as feed additives and supplements. The only additional constraint on these materials is that every feed, feed additive,

and feed supplement be used in compliance with the Federal Food, Drug, and Cosmetic Act, as stated in section 205.237( b)( 6).

The NOSB recommended that ruminants maintained under temporary confinement must have access to dry, unchopped hay. Although this position was an NOSB recommendation and not part of the proposed rule, several commenters responded to it. Most of these commenters stated that the language was too restrictive and could preclude the use of many suitable forage products. One dairy producer stated that the requirement would not be practical for operations that mix hay with other feed components. We agree that the NOSB's proposed language is too prescriptive and have not included it in the final rule.

( 5) Provisions for Confinement. The proposed rule established the health, nutritional, and behavioral needs of the particular species and breed of animal as the primary considerations for determining livestock living conditions. The proposed rule also identified essential components of the practice standard, including access to shade, shelter, exercise areas, fresh air, and direct sunlight, while stating that species specific guidelines would be developed in conjunction with future NOSB recommendations and public comment. Finally, the proposed rule outlined the conditions pertaining to animal welfare and environmental protection under which producers could temporarily confine livestock.

While supportive of the underlying principles of this practice standard, the vast majority of commenters stated that the actual provisions suffered from a lack of clarity and specificity. Many commenters were concerned that the proposed rule did not adequately ensure access to the 91 outdoors for all animals. While supportive of the access to pasture requirement for ruminant production, commenters stated that the final rule needed a clear definition of pasture to make the provision meaningful. Conversely, some commenters supported the less prescriptive approach adopted in the proposed rule. The NOSB added considerably to its earlier recommendations on livestock living conditions during its June 2000 meeting.

Many commenters stated that the criteria identified as required elements in the provisions for livestock living conditions did not specifically include access to the outdoors. One commenter stated that the requirement that animals receive direct sunlight could be interpreted to simply require windows in livestock confinement facilities. Commenters were virtually unanimous that,

except for the limited exceptions for temporary confinement, all animals of all species must be afforded access to the outdoors. Commenters also maintained that the outdoor area must accommodate natural livestock behavior, such as dust wallows for poultry and, in the case of ruminants, provide substantial nutrition. Many commenters specifically opposed dry lots as an allowable outdoor environment. The NOSB recommended that the final rule state that all livestock shall have access to the outdoors. As a result of these comments, we have revised the final rule to establish that access to the outdoors is a required element for all organically raised livestock.

We further amended the final rule to include a definition of " pasture." The definition of " pasture" we included emphasizes that livestock producers must manage their land to provide nutritional benefit to grazing animals while maintaining or improving the soil, water, and vegetative resources of the operation. The producer must establish and maintain forage speciesappropriate for the nutritional requirements of the species using the pasture. 92 Numerous commenters requested clarification on species specific living conditions, such as the use of cages for poultry and confinement systems for veal production. The use of continuous confinement systems including cages for poultry and veal production is incompatible with the requirement that organically raised livestock receive access to the outdoors and the ability to engage in physical activity appropriate to their needs. There will be times when producers must temporarily confine livestock under their care, but these instances must be supported by the exemptions to the outdoor access requirement included in the final rule. Other commenters requested additional guidance on whether confinement for the purpose of finishing slaughter stock would be allowed, and, if so, how long that confinement could last. Commenters who supported an allowance for finishing most often recommended that, in the case of cattle,

confinement should not exceed 90 days. The final rule does not include a specific length of time that cattle or other species may be confined prior to slaughter. We will seek additional input from the NOSB and public comment before developing such standards.

Several commenters questioned whether a Federal, State, or local regulation that required confinement would supersede the requirement for outdoor access. These commenters were aware of county ordinances that prohibited free ranging livestock production to protect water quality.

Organic operations must comply with all Federal, State, and local regulations. At the same time,

to sell, label, or represent an agricultural commodity as " 100 percent organic," " organic," or " made with...," the producer or handler must comply with the all applicable requirements set forth in this regulation. Federal, State, or local regulations that prohibit a required practice or require a prohibited one will essentially preclude organic certification of the affected commodity within that jurisdiction. 93 ( 6) Prohibition on Parasiticides During Lactation. The proposed rule provided that breeder stock could receive synthetic parasiticides included on the National List, provided that the treatment occurred prior to the last third of gestation for progeny that were to be organically managed. Many commenters supported this principle but were concerned that the wording would allow producers to administer parasiticides to lactating breeder stock while the offspring were still nursing. These commenters felt that such an allowance violated the intent of the provision because offspring could be exposed to systemic parasiticides or their residues through their mother's milk. The NOSB recommended a prohibition on using allowed synthetic parasiticides during lactation for progeny that are organically managed. We agree with these commenters and have modified the final rule to prohibit the treatment of organically managed breeder stock with allowed synthetic parasiticides during the last third of gestation or lactation.

Livestock Production  Changes Requested But Not Made This subpart retains from the proposed rule regulations on which we received comments as follows:

( 1) Prohibition on Factory Farms. Many commenters requested that the final rule prohibit the certification of " factory farms." These commenters stated that factory farms are dependent upon practices and materials that are inconsistent with or expressly prohibited in the OFPA. The final rule does not contain such a prohibition because commenters did not provide a clear,

enforceable definition of " factory farm" for use in the final rule. All organic operations, regardless of their size or other characteristics, must develop and adhere to an approved organic system plan that complies with these regulations in order to be certified.

( 2) Nonorganic Feed Protocol. The proposed rule required that, except for 94 nonagricultural products and synthetic substances included on the National List, a producer must provide livestock with a total feed ration composed of agricultural feed products, including pasture and forage, that is organically produced and, if applicable, handled. It also included provisions for temporary variances that, under very limited circumstances and with the approval of the certifying agent and the Administrator, would provide an exemption from specific production and handling standards. The preamble of the proposed rule described an emergency resulting in the unavailability of organic agricultural feed products as an example of a situation in which a temporary variance could be issued. Many commenters recommended that the final rule require a producer who received a temporary variance for a feed emergency to follow the order of preference for noncertified organic feed developed by the NOSB. This order of preference requires a producer to procure agricultural feed products from sources that are as close to complying with the standards for organic certification as possible. Commenters stated that adherence to the order of preference would most closely conform with the expectation of consumers that organically raised livestock received organic feed and would create an incentive for livestock feed producers to pursue certification.

We have not included the NOSB's feed emergency order of preference in the final rule because it would be too prescriptive and difficult to enforce during an emergency. Receiving a temporary variance categorically exempts a producer from the provision for which it was issued,

although that producer may not substitute any practice, material, or procedure that is otherwise prohibited, although that producer may not substitute any practice, material, or procedure that is otherwise prohibited under section 205.105 . Additionally, certified organic feed is far more available in terms of quantity and affordability than when the NOSB developed its order of 95 preference in 1994. We anticipate that producers whose original supply of organic agricultural feed products is interrupted will be able to fill the shortfall through the marketplace.

( 3) Prohibition on Physical Alterations. The proposed rule required that producers perform physical alterations as needed to promote animal welfare and in a manner that minimizes pain and stress. This provision was one component of the health care practice standard that required producers to establish and maintain preventive livestock health care practices. We stated in the preamble that there was insufficient consensus from previous public comment to designate specific physical alterations as allowed or prohibited and envisioned working with producers,

certifying agents, and consumers to achieve that goal. We requested comment on techniques to measure animal stress that could be used to evaluate whether specific physical alterations were consistent with the conditions established in the proposed rule.

We received significant numbers of comments both opposing and supporting the provision in the proposed rule for performing physical alterations. Many commenters opposed any allowance for physical alterations and argued that such practices are cruel and debilitating to animals. These commenters maintained that modifications in breed selection, stocking densities,

and the configuration of living conditions could achieve results similar to physical alterations without harming the animal. They stated that by adapting their production systems to promote the physical and psychological welfare of animals, producers could obviate the need for physical alterations. In particular, commenters cited physical alterations to the beaks and feet of poultry as unnecessary due to the availability of alternative production systems. Many commenters expressed concern that the allowance for physical alterations would facilitate the certification of large confinement operations. Commenters also stated that performing physical alterations was 96 inconsistent with Codex guidelines and objected to the allowance before full public deliberation on the subject through the NOSB process.

A large number of commenters stated that, if reasonable guidelines could be established,

the allowance for physical alterations would be a beneficial, and even necessary, condition for organic livestock production. These commenters maintained that producers engage in physical alterations for the overall welfare of the flock or herd and that the pain and stress of performing them must be weighed against the pain and stress of not doing so. For example, these commenters cited the traumatic effect of cannibalism on poultry flocks that had not undergone beak trimming or the injuries caused by animals whose horns had not been removed. Many of these commenters stated that producers could reduce but not eliminate the need for physical alterations through alternative production practices such as breed selection and stocking densities.

The NOSB supported the provision as written in the proposed rule, stating that it met the animal welfare requirements while allowing practices necessary for good animal husbandry.

We have retained the proposed provision for physical alterations without taking any further position on whether specific practices are allowed or prohibited. We did not receive substantial new guidance on techniques to measure stress in animals due to physical alterations and have made no revisions in that regard. The final rule establishes that, when appropriately performed and within the context of an overall management system, specific physical alterations are allowed.

It also mandates that, as an element of a preventative health care program, physical alterations must benefit the ultimate physical and psychological welfare of the affected animal.

( 4) Withdrawal for Synthetic Parasiticides in Lactating Livestock. The proposed rule required a 90 day withdrawal period before milk and milk products produced from livestock 97 treated with an allowed synthetic parasiticide could be labeled as organic. Referencing the statement in the preamble to the proposed rule that the 90 day withdrawal period was attributable to " consumer expectations of organically raised animals," a dairy producer commented that the provision ignored animal welfare and farm economic sustainability considerations. The commenter considered the 90 day withdrawal period capricious and problematic since, for bovine dairy operations, it would compel producers to either shorten an animal's natural drying off period, or lose 30 days of organic milk production. The commenter stated that the optimal extended withdrawal period for this situation would be 60 days since this is the approximate duration of a dairy cow's natural dry period. Under this approach, livestock requiring treatment could receive an allowed synthetic parasiticide at the time of drying off, thus allowing the withdrawal period to coincide with the natural 60 day period when the livestock were not lactating. Livestock could complete the withdrawal period prior to the birth of their offspring in approximately 60 days, at which time the mother's milk could again be sold as organic. The commenter maintained that the 60 day period would satisfy consumer expectation for an extended withdrawal period after treatment with an allowed synthetic parasiticide without imposing an unnecessary constraint on the producer.

We have retained the 90 day withdrawal period in the final rule. The provisions in the final rule for treating livestock with an allowed synthetic parasiticide reflect the 90 day withdrawal period recommended by the NOSB at its October 1999 meeting. The NOSB has the authority to reconsider this issue and propose an alternative annotation for the Secretary's consideration.

( 5) Delineation of Space Requirements for Animal Confinement. The proposed rule did not establish space requirements for livestock living conditions but stated that a producer must 98 accommodate the health and natural behavior of animals under his or her care. Some commenters stated their preference for space requirements because they are more uniform and enforceable.

These commenters stated that some existing certification standards include space requirements in standards for livestock living conditions and that Codex guidelines support this approach. While not disagreeing that space requirements could be an effective certification tool for organic livestock production systems, we have not incorporated any such provisions in the final rule. We anticipate that additional NOSB recommendations and public comment will be necessary for the development of space requirements. At its June 2000 meeting, the NOSB agreed that it would be premature to include space requirements in the final rule.

( 6) Access to pasture versus pasture based. Commenters stated that the proposed rule's requirement that ruminants receive " access to pasture" did not sufficiently characterize the relationship that should exist between ruminants and the land they graze. Many of these commenters recommended that the final rule require that ruminant production be " pasture based."

Many commenters stated that the final rule needed a more explicit description of the relationship between livestock and grazing land. The NOSB shared this perspective and recommended that the final rule require that ruminant production systems be " pasture based." In contrast, an organic dairy producer maintained that a uniform, prescriptive definition of pasture would not be appropriate in a final rule. This commenter stated that the diversity of growing seasons,

environmental variables, and forage and grass species could not be captured in a single definition and that certifying agents should define pasture on a case by case basis. This commenter also disagreed with the " pasture based" requirement, stating that pasture should be only one of several components of balanced livestock nutrition. Singling out pasture as the foundation for ruminant 99 management would distort this balance and deprive other producers of the revenue and rotation benefits they generate by growing livestock feed.

We retained the " access to pasture" requirement because the term, " pasture based," has not been sufficiently defined to use for implementing the final rule. The final rule does include a definition for pasture, and retention of the " access to pasture" provision provides producers and certifying agents with a verifiable and enforceable standard. The NOP will work with the NOSB to develop additional guidance for managing ruminant production operations.

( 7) Stage of Production. The proposed rule contained provisions for temporary confinement, during which time livestock would not receive access to the outdoors. Many commenters were concerned that the stage of production justification for temporary confinement could be used to deny animals access to the outdoors during naturally occurring life stages,

including lactation. Commenters overwhelmingly opposed such an allowance and stated that the stage of production exemption should be narrowly applied. One commenter stated that a dairy operation, for example, might have seven or eight distinct age groups of animals, with each group requiring distinct living conditions. Under these circumstances, the commenter maintained that a producer should be allowed to temporarily house one of these age groups indoors to maximize use of the whole farm and the available pasture. At its June 2000 meeting, the NOSB stated that the allowance for temporary confinement should be restricted to short term events such as birthing of newborn or finish feeding for slaughter stock and should specifically exclude lactating dairy animals.

We have not changed the provision in the final rule for the stage of production allowance in response to these comments. The NOSB has supported the principle of a stage of production 100 allowance but has not provided sufficient guidance for determining, on a species specific basis,

what conditions would warrant such an allowance. Without a clearer foundation for evaluating practices, we have not identified any specific examples of practices that would or would not warrant a stage of production allowance. We will continue to explore with the NOSB specific conditions under which certain species could be temporarily confined to enhance their well being.

In the final rule, temporary confinement refers to the period during which livestock are denied access to the outdoors. The length of temporary confinement will vary according to the conditions on which it is based, such as the duration of inclement weather. The conditions for implementing temporary confinement for livestock do not minimize the producer's ability to restrain livestock in the performance of necessary production practices. For example, it is allowable for a producer to restrain livestock during the actual milking process or under similar circumstances, such as the administration of medication, when the safety and welfare of the livestock and producer are involved.

Handling  Changes Based on Comments The following changes are made based on comments received.

( 1) Commercial Availability. A large number of commenters, including organic handlers and certifying agents, stated that " commercial availability" must be included as a requirement for the 5 percent of nonorganic ingredients that are used in products labeled " organic."

We agree and have added a commercial availability requirement as part of a handler's organic system plan under section 205.201 of this subpart. Up to 5 percent ( less water and salt)

of a product labeled " organic," may be nonorganic agricultural ingredients. However, handlers must document that organic forms of the nonorganic ingredients are not commercially available 101 before using the nonorganic ingredients.

( 2) Prohibited Practices. Commenters were unclear about the extent of the prohibition on use of excluded methods and ionizing radiation. To make that prohibition clear, we have moved the handling prohibitions in proposed rule sections 205.270 ( c) to 205.105, Applicability, subpart B. Paragraphs ( c)( 1) and ( c)( 2) which listed excluded methods and ionizing radiation in the proposed rule are combined into paragraph ( c)( 1) that cross references new section 205.105.

( 3) Use of Predator Pests and Parasites. Paragraph ( b)( 1) of section 205.271 proposed that predator pests and parasites may be used to control pests in handling facilities. Under FDA's Good Manufacturing Practice, 21 CFR part section 110.35( c), it states that " No pests shall be allowed in any area of a food plant." Some commenters believed use of predator pests in handling facilities is prohibited by the FDA regulation. Other commenters stated that predator pests could be used in certain handling facilities under the FDA regulation. One commenter claimed that the FDA regulation in 21 CFR part 110.19 allows exemptions for certain establishments that only harvest, store, or distribute raw agricultural product. Another commenter suggested that use of predator pests should be allowed when FDA does not prohibit their use.

We do not intend to be inconsistent with the FDA requirement and, thus, have removed proposed paragraph ( b)( 1) of section 205.271. Use of predator pests in various organic handling and storage areas is subject to FDA's Good Manufacturing Practice. Paragraphs ( b)( 2) and ( b)( 3)

are redesignated.

( 4) Use of Synthetic Pheromone Lures. Proposed paragraph ( b)( 3) provided for use of nonsynthetic lures and repellant. A few handlers and certifying agents commented that nearly all pheromone lures use synthetic substances. Because pheromone lures do not come into contact 102 with products in a handling facility, commenters argued that such lures should be allowed,

provided that the synthetic substance used is on the National List.

We agree and have added " synthetic substances" to redesignated paragraph ( b)( 2) for use in lures and repellents. The synthetic substances used must be consistent with the National List.

( 5) Restrict Initial Use of Synthetics to National List Substances. Paragraph ( c) in the proposed rule provided for use of any synthetic substance to prevent or control pests. Several handlers and certifying agents stated that use of nonsynthetic and synthetic substances should initially be limited first to substances which are allowed on the National List. This would mean that substances not allowed for use on the National List could not be used initially to control or prevent pest infestations.

We agree with these comments. Use of allowed substance before use of other substances is a fundamental principle of organic agriculture. Therefore, if preferred practices under paragraphs ( a) and ( b) are not successful in preventing or controlling pest infestations, handlers may then use, under amended paragraph ( c), only nonsynthetic or synthetic substances which are allowed for use on the National List.

We have removed the proviso that applications of a pest control substance must be consistent with the product's label instructions. This requirement is readily understood and does not need to be explicitly stated in the regulations.

Because paragraph ( c) now provides for use only of allowed National List substances, a new paragraph ( d) is added to allow for use of other synthetic substances, including synthetic substances not on the National List, to prevent or control pest infestations. These substances may be used only if the practices in paragraphs ( a), ( b), and ( c) are ineffective. Before the substance is 103 used, the handler and the operation's certifying agent must agree on the synthetic substance to be used and the measures to be taken to prevent contact of the substance with organic products and ingredients in the facility. We expect that this communication can be accomplished with telephone calls or by electronic means.

This regulation does not preempt Federal, State, or local health and sanitation requirements. We recognize that inspectors who monitor compliance with those regulations may require immediate intervention and use of synthetic substances, not on the National List, before or at the same time as the methods specified in paragraphs ( b) and ( c). Therefore, to make this clear,

we have added a new paragraph ( f). To ensure that the use of the substances does not destroy a product's organic integrity, we are requiring that the handler take appropriate measures to prevent contact of the product with the pest control substance used.

( 6) Preventing Contact with Prohibited Substances. Commenters recommended that, if prohibited substances are applied by fogging or fumigation, the organic product and packaging material must be required to be completely removed from the facility and reentry of the product or packaging be delayed for a period three times longer than that specified on the pesticide label.

Commenters believed removal and reentry should be mandatory, regardless of the organic product or container.

We understand the commenters' concerns. However, their recommendations are not appropriate for all pest infestations. We believe that measures needed to be taken to prevent contact with a synthetic substance must be determined on a case by case basis by the handler and certifying agent. As stated earlier, new paragraph ( d) of section 205.271 requires a handler and certifying agent to agree on control and prevention measures prior to application of a synthetic 104 substance. We believe that such an agreement will help safeguard a product's organic integrity.

Use of a synthetic substance in fogging or fumigation should be based on, among other things,

location of the pest relative to the organic products in the facility; the extent of the pest infestation; the substance and application method to be used; the state of the organically produced product or ingredient ( raw, unpackaged bulk, canned, or otherwise sealed); and health and sanitation requirements of local, State, and Federal authorities.

Paragraph ( e) is changed to clarify that an operation's organic handling plan must be updated to document all measures taken to prevent contact between synthetic pest control substances and organically produced products and ingredients.

( 7) Repetitive Use of Pest Control Measures. One commenter suggested a change in the paragraph ( e) requirement that handlers' organic plans must include " an evaluation of the effects of repetitive use" of pest prevention and control materials. The commenter believed that the requirement was excessive and beyond what should be expected of handlers. The commenter indicated that handlers' organic plans should address the " techniques that will be used to minimize" the negative effects of repetitive use of pest control materials.

We agree that " an evaluation of the effects of repetitive use" is more than what is reasonable to expect of handlers in their organic plans. We do not agree, however, that an organic plan should be required to address the " techniques" used to minimize the effects of repetitive use of pest control materials. However, we believe that handlers should update their organic handling plans to account for the use of pest control or prevention substances, particularly if the substances are prohibited substances. The update should include a description of the application methods used and the measures taken to prevent contact between the substance used 105 and the organic product. We have added these requirements in redesignated paragraph ( e).

Proposed paragraph ( e) of section 205.271 is removed.

Handling  Changes Requested But Not Made ( 1) Exceptions to Handling Processes. A commenter stated that many herbal products are extracted from organically produced herbs but that the extraction of those products " can employ significantly different methods than those used in the manufacture of more traditional foods." To be labeled as " organic" ingredients, substances such as herbs, spices, flavorings,

colorings, and other similar substances, must be derived from a certified organic source and be extracted without the use of prohibited substances.

( 2) Allowed Synthetics Used in Packaging Materials and Storage Containers. A State department of agriculture commented that section 205.272( b)( 1) prohibits use of synthetic fungicides, preservatives, or fumigants in packaging materials and storage containers or bins. The comment stated that it is inconsistent to permit use of allowed substances as ingredients in processed products but prohibit their use as a preservative or fumigant in the packaging materials and storage containers and bins. The commenter suggested that paragraph ( b)( 1) be amended to permit use of National List allowed substances in section 205.605, particularly carbon dioxide and ozone, in packaging materials and storage containers or bins.

We understand the commenter's concern. However, section 6510( a)( 5) of the Act specifically prohibits use of any packaging materials, storage containers, or bins that contain synthetic fungicides, preservatives, or fumigants.

( 3) Additional Measures to Prevent Product Contamination. A few commenters suggested changing paragraph ( e) of section 205.271 to require that handlers' organic handling 106 plans specify measures that would be taken to prevent contact between a pest control substance and " packaging materials." This would be in addition to measures preventing contamination of " any ingredient or finished product" in the handling facility.

We understand the commenters' objective. However, for the reasons stated earlier in regard to commenters' request that mandatory removal of product during pest control treatment be required, we believe that such a requirement should not be mandatory for all packaging materials. Measures to prevent contamination of packaging material should be left to the handler and certifying agent to specify in the handling plan.

Handling  Clarifications Clarification is given on the following issues raised by commenters.

( 1) Use of Nonorganic Ingredients in Processed Products. We have corrected paragraph ( c) of section 205.270 to clarify what must not be used in or on organically produced ingredients and nonorganically produced ingredients used in processed organic products. The prohibition on use of ionizing radiation, excluded methods, and volatile synthetic solvents applies to all organically produced ingredients. The 5 percent of nonorganic ingredients in products labeled " organic," also are subject to the three prohibited practices. The nonorganic ingredients in products labeled " made with organic ingredients" must not be produced using ionizing radiation or excluded methods but may be produced using volatile synthetic solvents. The nonorganic ingredients in products containing less than 70 percent organically produced ingredients may be produced and processed using ionizing radiation, excluded methods, and synthetic solvents.

( 2) Water Quality Used in Processing. A handler questioned whether public drinking water containing approved levels of chlorine, pursuant to the Safe Drinking Water Act, is 107 acceptable for use in processing products labeled " 100 percent organic." Water meeting the Safe Drinking Water Act may be used in processing any organically produced products.

Temporary Variances  Changes Based on Comments Additional Causes for Issuing Temporary Variance. A few State department of agriculture commenters suggested that " drought" should be added to the regulatory text as a natural disaster warranting a temporary variance from regulations.

We agree and have added drought to the regulatory text in paragraph ( a)( 2) of section 205.290. We have also added " hail" as a natural disaster warranting a temporary variance. Both drought and hail were mentioned in the preamble of the proposed rule but were unintentionally left out of the regulatory text.

Temporary Variances  Changes Requested But Not Made Allowance of Temporary Variances. A few commenters suggested that SOP's governing State officials should be able to authorize temporary variances due to local natural disasters which may occur in a State. We do not agree that with these comments. For consistency of application,

we believe that only the Administrator should have the authority to grant a temporary variance.

Citing local conditions, an SOP's governing State official and certifying agents may recommend a temporary variance to the Administrator. We are committed to providing quick responses to such recommendations.

Subpart D  Labels, Labeling, and Market Information 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 108 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 ( pdp), information panel,

ingredient statement, and on other package panels. Labeling requirements also are established for organically produced livestock feed, 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 established. Finally, this subpart provides for a USDA seal and regulations for display of the USDA seal and the seals, logos, or other identifying marks of certifying agents.

The intent of these sections is to ensure that organically produced agricultural products and ingredients 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 other Federal labeling regulations.

The Food and Drug Administration ( FDA) regulates the placement of information on food product packages in 21 CFR parts 1 and 101. USDA's Food Safety and Inspection Service's ( FSIS) Federal Meat Inspection Act, Poultry Products Inspection Act, and Egg Products Inspection Act have implementing regulations in 9 CFR part 317 which must be followed in the labeling of meat, poultry, and egg products. The Federal Trade Commission ( FTC) regulations under the Fair Packaging and Labeling Act ( FLPA) in 16 CFR part 500 and the Alcohol Tobacco and Firearms ( ATF) regulations under the Federal Alcohol Administration Act ( FAA) in 27 CFR parts 4, 5, and 7, also must be followed, as applicable to the nature of the product. The labeling requirements specified in this subpart must be implemented in a manner so that they do not 109 conflict with the labeling requirements of these and other Federal labeling requirements.

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

Under the National Organic Program ( NOP), the assembly, packaging, and labeling of multiingredient organic products 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. Based on comments received, several important labeling changes from the proposed rule are made in this final rule. ( 1) The term, " organic," cannot be used in an agricultural product name if it modifies an ingredient that is not organically produced ( e. g., " organic chocolate ice cream" when the chocolate flavoring is not organically produced). ( 2) The 5 percent or less of nonorganic ingredients in products labeled " organic" must be determined not " commercially available" in organic form. ( 3) Display of a product's organic percentage is changed from required to optional for " organic" and " made with ..." products. ( 4) The minimum organic content for " made with..." products is increased from 50 percent to 70 percent. ( 5) In addition to listing individual ingredients, the " made with..." label may identify a food group on the label (" made with organic fruit"). ( 6) A new section is added to provide labeling of livestock feed that is organically produced. ( 7) Finally, a revised design for the USDA seal is established. In addition to these changes, we have made a few changes in the regulatory text for clarity and consistency purposes. These do not change the intent of the regulation. 110 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 produce and label organic ingredients and/ or assemble multiingredient products composed of 70 percent or more organic ingredients must be certified as an organic handling operation. Handlers of products of less than 70 percent organic ingredients do not have to be certified unless the handler actually produces one or more of the organic ingredients used in the 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 an organic product package are subject to recordkeeping requirements which show proof that the product purchased prior to relabeling was, indeed,

organically produced and handled. Distributors which receive and transport labeled product to market are not subject to certification or any labeling requirements of this regulation.

Many commenters appealed for " transition" or " conversion" labeling. This issue is discussed under Applicability in subpart B. Transition labeling is not provided for in the Act or the proposed rule and is not provided for in this regulation.

Description of Regulations General Requirements The general labeling principle employed in this regulation is that labeling or identification of the organic nature of a product increases 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 establish the three percentage categories for organic content and basic labeling requirements in those categories. 111 Section 205.300 specifies the general use of the term, " organic," on product labels and market information. Paragraph ( a) establishes that the term, " organic," may be used only on labels and in market information as a modifier 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 or in market information for any purpose other than to modify or identify the product or ingredient in the product that is organically produced and handled. Food products and ingredients that are not organically produced and handled cannot be modified, described, or identified with the term, " organic," on any package panel or in market information in any way that implies the product is organically produced.

Section 6519( b) of the Act provides the Secretary with the authority to review use of the term, " organic," in agricultural product names and the names of companies that produce agricultural products. While we believe that the term, " organic," in a brand name context does not inherently imply an organic production or handling claim and, thus, does not inherently constitute a false or misleading statement, we intend to monitor the use of the term in the context of the entire label. We will consult with the FTC and FDA regarding product and company names that may misrepresent the nature of the product and take action on a case by case basis.

Categories of Organic Content Section 205.301 establishes the organic content requirements for different labeling provisions specified under this program. The type of labeling and market information that can be used and its placement on different panels of consumer packages and in market information is based on the percentage of organic ingredients in the product. The percentage must reflect the actual weight or fluid volume ( excluding water and salt) of the organic ingredients in the product. 112 Four categories of organic content are established: 100 percent organic; 95 percent or more organic; 70 to 95 percent organic; and less than 70 percent organic.

100 Percent Organic For labeling and market information purposes, this regulation allows a " 100 percent organic" label on: ( 1) agricultural products that are composed of a single ingredient such as raw,

organically produced fruits and vegetables and ( 2) products composed of two or more organically produced ingredients, provided that the individual ingredients are, themselves, wholly organic and produced without any nonorganic ingredients or additives. Only processing aids which are,

themselves, organically produced, may be used in the production of products labeled " 100 percent organic." With the exception of the description phrase " 100 percent" on the pdp, the labeling requirements for " 100 percent organic" products are the same as requirements for 95 percent organic products specified in section 205.303.

Organic Products labeled or represented as " organic" must 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. Up to 5 percent of the ingredients may be nonagricultural substances ( consistent with the National List) and, if not commercially available in organic form pursuant to section 205.201,

nonorganic agricultural products and ingredients in minor amounts ( hereinafter referred to as minor ingredients) ( spices, flavors, colorings, oils, vitamins, minerals, accessory nutrients,

incidental food additives). The nonorganic ingredients must not be produced using excluded methods, sewage sludge, or ionizing radiation. 113 Made with Organic Ingredients 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 70 and 95 percent organic agricultural ingredients. The organic ingredients must be produced in accordance with subpart C and subpart G. Such products may be labeled or represented as " made with organic ( specified ingredients or food group( s))." By " specified," we mean the name of the agricultural product( s) or food group( s) forming the organic ingredient( s).

Up to three organically produced ingredients or food groups may be named in the phrase.

If one or more food groups are specified in the phrase, all ingredients in the product which belong to the food group( s) identified on the label must be organically produced. For the purposes of this labeling, the following food groups may be identified as organically produced on a food package label: beans, fish, fruits, grains, herbs, meats, nuts, oils, poultry, seeds, spices,

sweeteners, and vegetables. In addition, processed milk products ( butter, cheese, yogurt, milk,

sour creams, etc.) also may be identified as a " milk products" food group. For instance, a vegetable soup made with 85 percent organically produced and handled potatoes, tomatoes,

peppers, celery, and onions may be labeled " soup made with organic potatoes, tomatoes, and peppers" or, alternatively, " soup made with organic vegetables." In the latter example, the soup may not contain nonorganic vegetables. For the purposes of this labeling provision, tomatoes are classified, according to food use, as a vegetable.

To qualify for this organic labeling, the nonorganic agricultural ingredients must be produced and handled without use of the first three prohibited practices specified in paragraph ( f)

of section 205.301, but may be produced or handled using practices prohibited in paragraphs 114 ( f)( 4) through ( f)( 7).

Because of the length of the labeling phrase " made with organic ( specified ingredients or food group( s))," such products are referred to in this preamble as " made with..." products. The labeling requirements for " made with..." products are specified in section 205.304.

Product With Less Than 70 Percent Organic Ingredients The final labeling category covers multiingredient products with less than 70 percent organic ingredients ( by weight or fluid volume, excluding water and salt). The organic ingredients must be produced in accordance with subparts C and G. The remaining nonorganic ingredients 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.

Products that fail to meet the requirements for one labeling category may be eligible for a lower labeling category. For example, if a product contains wholly organic ingredients but the product formulation requires a processing aid or less than 5 percent of a minor ingredient that does not exist in organic form, the product cannot be labeled " 100 percent organic" and must be labeled as " organic." If a multiingredient product is 95 percent or more organic but contains a prohibited substance in the remaining 5 percent, the product cannot be labeled as " organic,"

because of the presence of the prohibited substance, but may be labeled as a " made with..."

product. Further, a handler who produces a " 100 percent organic" or " organic" product but chooses not to be certified under this program may only display the organic percentage on the information panel and label the ingredients as " organic" on the ingredient statement. The handler must comply with recordkeeping requirements in subpart E. 115 Livestock feed All agricultural ingredients used in raw and processed livestock feed that is labeled as " 100 percent organic" and " organic" must be organically produced and handled in accordance with the requirements of these regulations. The difference between the two labels is that feed labeled as " 100 percent organic" must be composed only of organically produced agricultural ingredients and may not contain nonorganic feed additives or supplements. The agricultural portion of livestock feed labeled as " organic" must contain only organically produced raw and processed agricultural ingredients and may contain feed additives and supplements in conformance with the requirements of section 205.237. Additionally, labeling of livestock feed containers must follow State livestock feed labeling laws.

Prohibited Practices The labeling of whole products or ingredients as organic is prohibited if those products or ingredients are produced using any of the following production or handling practices: ( 1)

ingredients or processing aids produced using excluded methods; ( 2) ingredients that have been produced using applications of sewage sludge; ( 3) ingredients that have been processed with ionizing radiation; ( 4) synthetic substances not 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 ( except the use of sulfites in the production of wine); ( 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. 116 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, shows how use of the seven prohibited practices affects the labeling of organically produced products and ingredients used in those products. 117 TABLE 1: PROHIBITED PRODUCTION AND HANDLING PRACTICES FOR LABELING CATEGORIES Organic and use label Use excluded methods Use sewage sludge Use ionizing radiation Use substances not on National List Contain added sulfites, nitrates, nitrites Use nonorganic ingredients and label " when available" Use both organic and nonorganic forms of same ingredient " 100 percent organic" Single/ multiingredients completely organic NO NO NO NO NO NO NO " Organic" Organic ingredients ( 95% or more) Nonorganic ingredients ( 5% or less) NO NO NO NO NO NO NO NO NO NO NO NO NO NO " Made with organic ingredients" Organic ingredients ( 70 95%) Nonorganic ingredients ( 30% or less) NO NO NO NO NO NO NO OK NO except wine OK NO NA* NO NA*

Less than 70% organic ingredients Organic Ingredients ( 30% or less) Nonorganic Ingredients ( 70% or more) NO OK NO OK NO OK NO OK NO except wine OK NO NA* NO NA*

* Not applicable, provided that the nonorganic ingredient is not labeled as " organic" on the ingredient statement and is not counted in the calculation of the product's organic percentage. 118 Calculating the Percentage of Organic Ingredients Section 205.302 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 calculation is made by the handler at the time the finished product is assembled.

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

For products that contain organically produced dry and liquid ingredients, the percentage of total organic ingredients is 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 such 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.

At the discretion of the handler, the total percentage of all organic ingredients in a food product may be displayed on any package panel of the product with the phrase, " contains X percent organic ingredients," or a similar phrase. If the total percentage is a fraction, it must be rounded down to the nearest whole number. The percentage of each organic ingredient is not required to be displayed in the ingredient statement.

A certified operation that produces organic product may contract with another operation 119 to repackage and/ or relabel the product in consumer packages. In such cases, the repacker or relabeler may use information provided by the certified operation to determine the percentage of organic ingredients and properly label the organic product package consistent with the requirements of this subpart.

Labeling " 100 Percent Organic" and " Organic" Products Section 205.303 includes optional, required, and prohibited practices for labeling agricultural products that are " 100 percent organic" or " organic." Products that are composed of wholly organic ingredients may be identified with the label statement, " 100 percent organic," on any package panel. Products composed of between 95 and 100 percent organic ingredients may be identified with the label statement " organic" on any package panel, and the handler must identify each organic ingredient in the ingredient statement.

The handler may display the following information on the pdp, 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; and ( 2) for products labeled " organic," the percentage of organic ingredients in the product. The size of the percentage statement must not exceed one half the size of the largest type size on the panel on which the statement is displayed. It also must appear in its entirety in the same type size, style,

and color without highlighting; ( 3) the USDA seal; and ( 4) 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 finished product handler. If multiple organic ingredients are identified on the ingredient 120 statement, the handler of the finished product that combined the various organic ingredients must maintain documentation, pursuant to subpart B of this regulation.

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.

If a product is labeled as " 100 percent organic" the ingredients may be identified with the term, " organic," but will 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, each organically produced ingredient listed in the ingredient statement must be identified with the term, " organic," or an asterisk or other mark to indicate that the ingredient is organically produced. Water and salt cannot be identified as " organic" in the ingredient statement.

The handler of these products also must display on the information panel the name of the certifying agent which certified the handling operation that produced the finished product. The handler may include the business address, Internet address, or telephone number of the certifying agent. This information must be placed below or otherwise near the manufacturer or distributor's name.

Labeling Products " Made with Organic ( specified ingredients or food group( s))"

With regard to agricultural products " made with..." those products containing between 70 and 95 percent organic ingredients this rule establishes, in section 205.304, the following optional, required, and prohibited labeling practices.

Under optional practices, the " made with..." statement is used to identify the organically 121 produced ingredients in the product. The statement may be placed on the pdp and other panels of the package. The same statement can also be used in market information representing the product. However, the following restrictions are placed on the statement: ( 1) the statement may list up to three ingredients or food group commodities that are in the product; ( 2) the individually specified ingredients and all ingredients in a labeled food group must be organically produced and must be identified as " organic" in the ingredient statement on the package's information panel; ( 3)

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 pdp; and ( 4) The statement and optional display of the product's organic percentage must appear in their entirety in the same type size, style, and color without highlighting.

The following food groups can be specified in the " made with" labeling statement: fish,

fruits, grains, herbs, meats, nuts, oils, poultry, seeds, spices, sweeteners, and vegetables. In addition, organically produced and processed butter, cheeses, yogurt, milk, sour cream, etc., may be identified as a " milk products" food group. For the purposes of this labeling, tomatoes are considered as vegetables, based on their use in a product. As noted immediately above, all of a product's ingredients that are in the specified food group( s) must be organically produced.

Display of the " made with.." statement on other panels must be similarly consistent with the size of print used on those panels. These restrictions are in accordance with FDA labeling requirements and similar to the recommendations of the National Organic Standards Board ( NOSB). This provision helps assure that the " made with..." statement is not displayed in such a manner as to misrepresent the actual organic composition of the product.

The USDA seal may not be displayed on the pdp of products labeled " made with organic 122 ingredients." However, at the handler's option and consistent with any contract agreement between the organic producer or handler and the certifying agent, the certifying agent's seal or logo may be displayed on the pdp and other package panels.

Packages of " made with..." products may display on the pdp, information panel, or any package panel, the total percentage of organic ingredients in the product. Any organically produced ingredient, including any ingredient that is a member of a food group listed on the " made with..." statement, must be identified in the ingredient statement with the term, " organic."

Alternatively, an asterisk or other mark may be placed beside each organically produced ingredient in the ingredients statement with an explanation that the mark indicates the ingredient is organically produced.

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. The handler may include the business address, Internet address, or telephone number of the certifying agent which certified the handler of the finished product.

If the percentage of organic ingredients in the product is displayed, the handler who affixes the label to the product package is responsible for determining the percentage. The handler may use information provided by the certified operation in determining the percentage. As part of the certifying agent's annual certification of the handler, the certifier must verify the calculation and labeling of packages.

Labeling Products with Less Than 70 Percent Organic Ingredients 123 Section 205.305 covers the final labeling category of packaged multiingredient agricultural products containing less than 70 percent organic ingredients.

Handlers of " less than 70 percent" multiingredient products, who choose to declare the organic nature of their product, may do so only in the ingredient statement by identifying the organically produced ingredients with the term, " organic," or with an asterisk or other mark. If the handler identifies the ingredients that are organically produced, the handler also may declare the percentage of organic content in the product. The percentage may only be placed on the information panel so that it can be viewed in relation to the ingredient statement.

Processed products composed of less than 70 percent organic content cannot display the USDA seal or any certifying agent's organic certification seal or logo anywhere on the product package or in market information.

Handlers of such products are 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 70 percent organic content do not have to be certified as organic handlers. However,

they are responsible for appropriate handling and storage of the organic ingredients ( section 205.101( a)( 3)) and for maintaining records verifying the organic certification of the ingredients used in the product ( section 205.101( c)). To the extent that the packaging process includes affixing the label to finished product package, those handlers are responsible for meeting the labeling requirements of this subpart. The nonorganic ingredients may be produced, handled, and assembled without regard to the requirements of this part.

Table 2, Labeling Consumer Product Packages, provides a summary of the required and prohibited labeling practices for the four labeling categories. 124 TABLE 2: LABELING CONSUMER PRODUCT PACKAGES Labeling category Principle display panel Information panel Ingredient statement Other package panels " 100 percent Organic" ( Entirely organic; whole, raw or processed product) " 100 percent organic" ( optional)

USDA seal and certifying agent seal( s) ( optional) " 100% organic" ( optional)

Certifying agent name ( required); business/ Internet address, tele. # ( optional) If multiingredient product, identify each ingredient as " organic" ( optional) " 100 percent organic" ( optional)

USDA seal and certifying agent seal( s) ( optional)

" Organic" ( 95% or more organic ingredients) " Organic" ( plus product name) ( optional) " X% organic" ( optional) USDA seal and certifying agent seal( s) ( optional) " X % organic" ( optional)

Certifying agent name ( required); business/ Internet address, tele. # ( optional) Identify organic ingredients as " organic" ( required if other organic labeling is shown) X% organic" ( optional)

USDA seal and certifying agent seal( s) ( optional)

" Made with Organic Ingredients" ( 70 to 95% organic ingredients) " made with organic ( ingredients or food group( s))" ( optional)

" X % organic" ( optional)

Certifying agent seal of final product handler ( optional)

Prohibited: USDA seal " X % organic ingredients" ( optional)

Certifying agent name ( required); business/ Internet address, tele. # ( optional) Prohibited: USDA seal Identify organic ingredients as " organic" ( required if other organic labeling is shown) " made with organic ( ingredients or food group( s))" ( optional) " X % organic" ( optional) Certifying agent seal of final product handler ( optional) Prohibited: USDA seal Less than 70% organic ingredients Prohibited: Any reference to organic content of product Prohibited: USDA seal & certifying agent seal " X % organic" ( optional)

Prohibited: USDA seal & certifying agent seal Identify organic ingredients as " organic" ( optional) ( required if % organic is displayed) Prohibited: USDA seal & certifying agent seal Misrepresentation in Labeling of Organic Products. The labeling requirements of this final rule are intended to assure that the term, " organic," and other similar terms or phrases are not 125 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. If terms or phrases are 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.

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 may misrepresent 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 FDA and FSIS.

These terms may be used only in accordance with the labeling requirements of FDA and FSIS.

The prohibition on use of these terms to modify " organic" does not otherwise preclude their use in other labeling statements as long as such statements are in accordance with other applicable regulations. Representations made in market information for organic products are also subject to the requirements and restrictions of other Federal statutes and applicable regulations, including the Federal Trade Commission Act, 15 U. S. C. 45 et seq.

Labeling Organically Produced Livestock Feed Products New section 205.306 is added to provide for labeling of the two categories of livestock 126 feed that are organically produced under this regulation. Feed labeled " 100 percent organic" may contain only organically produced agricultural product. Such feed must not contain feed additives, supplements, or synthetic substances. Feed labeled " organic" must contain only organically produced agricultural products and may contain feed additives and supplements in accordance with section 205.237, Livestock Feed, and section 205.603 of the National List. This rule does not limit the percentage of such additives and supplements in organic feed products,

which may be required under various State laws.

Livestock feed labeled " 100 percent organic" and " organic" may, at the handler's option,

display the USDA seal and the seal or logo of the certifying agent. The organic ingredients listed on the ingredient statement may be identified with the word, " organic," or other reference mark.

The name of the certifying agent must be displayed on the information panel. The business address, Internet address, and other contact information for the certifying agent may be displayed.

These are the only labeling options to indicate that livestock feed that is organically produced.

Labeling of Products Shipped in 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. For instance, a product label may require a statement that the product has been certified to, or meets, certain European Union ( EU) organic standards. Such factual statements regarding the organic nature of the product are 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 127 exported products display the statement, " for export only," in bold letters. Handlers also are 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 in accordance with the requirements of the NOP may be shipped to international markets without marking the shipping containers " for export only."

Organically produced products imported into the United States must be labeled in accordance with the requirements of this subpart. Labeling and market representation of the product cannot imply that the product is also certified to other organic standards or requirements that differ from this national program.

Labeling Nonretail Containers Section 205.307 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..." Labeling nonretail containers as containing organically produced product should provide 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 labeling provisions are not intended for shipping or storage containers that also are used in displays at the point of retail sale. Retail containers must meet labeling provisions specified in section 205.307.

Containers used only for shipping and storage of any organic product labeled as containing 70 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 128 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 available to handlers if they 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 product. Much of this information may overlap information that the handler normally affixes to shipping and storage containers or information that is required under other Federal labeling regulations. There are no restrictions on size or display of the term, " organic," or the certifying agent seal unless required by other Federal or State statutes.

Labeling Products at the Point of Retail Sale Section 205.308 applies to organically produced " 100 percent organic" and " organic"

products that are not packaged prior to sale and are presented in a manner which allows the consumer to select the quantity of the product purchased.

The terms, " 100 percent organic" and " organic," as applicable, may be used to modify the name of the product in retail displays, labeling, and market information. The ingredient statement of a product labeled " organic" displayed at retail sale must identify the organic ingredients. If the product is prepared in a certified facility, 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.

Section 205.309 addresses " made with..." products that are not packaged prior to sale and are presented in a manner which allows the consumer to select the quantity of the product 129 purchased. These products include, but are not limited to, multiingredient products containing between 70 and 95 percent organic ingredients. The " made with..." label may be used to modify the name of the product in retail displays, labeling, and market information. Up to three organic ingredients or food groups may be identified in the statement. If such statement is declared in market information at the point of retail sale, the ingredient statement and market information must identify the organic ingredients. Retail display and market information of bulk products cannot display the USDA seal but may, if the product is prepared in a certified facility, display the seal or logo of the certifying agent which certified the finished product. The certifying agent's seal or logo may be displayed at the option of the retail food establishment.

Products containing less than 70 percent organic ingredients may not be identified as organic or containing organic ingredients at retail sale. The USDA seal and any certifying agent seal or logo may not be displayed for such products.

Labeling Products Produced in Exempt or Excluded Operations Section 205.310 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. These operations are discussed more thoroughly in subpart B, Applicability.

Any such operation that is exempt or excluded from certification or which chooses not to be certified may not label its organically produced products in a way which indicates that the operation has been certified as organic. Exempt producers may market whole, raw organic product directly to consumers, for example, at a farmers market or roadside stand as " organic 130 apples" or " organic tomatoes." Exempt producers may market their products to retail food establishments for resale to consumers. However, no terms may be used which indicate that such products are " certified" as organic. Finally, exempt organic producers cannot sell their product to a handler for use as an ingredient or for processing into an ingredient that is labeled as organic on the information panel.

These provisions are truth in labeling provisions because display of a certification seal indicates that the product has been certified. We believe this requirement helps differentiate between certified and uncertified products and helps maintain the integrity of certified products while providing organic labeling opportunities for exempt and excluded operations.

USDA Organic Seal This final rule establishes a USDA seal that can be placed on consumer packages,

displayed at retail food establishments, and used in market information to show that certified organic products have been produced and handled in accordance with these regulations. The USDA seal can only be used to identify raw and processed products that are certified as organically produced. It cannot be used for products labeled as " made with organic ingredients"

( 70 to 95 percent organic ingredients) or on products with less than 70 percent organic ingredients.

The USDA seal is composed of an outer circle around two interior half circles with an overlay of the words " USDA Organic." When used, the USDA seal must be the same form and design as shown in figure 1 of section 205.311 of this regulation. The USDA seal must be printed legibly and conspicuously. On consumer packages, retail displays, and labeling and market information, the USDA seal should be printed on a white background in earth tones with a 131 brown outer circle and separate interior half circles of white ( upper) and green ( lower). The term,

" USDA," must appear in green on the white half circle. The term, " organic," must appear in white on the green half circle. The handler may print the USDA seal in black and white, using black in the place of green and brown. Size permitting, the green ( or black) lower half circle may have four light lines running from left to right and disappearing at the right horizon, to resemble a cultivated field. The choice between these two color schemes is left to the discretion of the producer, handler, or retail food establishment.

Labeling  Changes Based on Comments The following changes are made based on comments received.

( 1) Use of " Organic" in Product Names. The NOSB, State organic program ( SOP)

managers, certifying agents, and a large number of individual commenters strongly recommended that USDA prohibit use of the term, " organic," to modify an ingredient in a product name if the ingredient, itself, is not produced organically. The examples offered were " organic chocolate ice cream" and " organic cherry sweets" in which the ice cream and candy are at least 95 percent organic but the chocolate and cherry flavoring is not organically produced.

We agree with commenters that such product names can be misleading and would be a violation of section 205.300( a). In the examples, the word, " organic," precedes the words,

" chocolate" and " cherry," and clearly implies that those ingredients are organically produced. The chocolate and cherry flavorings must be organically produced to be used in this way. If the product is at least 95 percent organically produced but the flavoring is nonorganic, the word sequence must be reversed or the word, " flavored," must be added to the name; e. g., " chocolate organic ice cream" or " chocolate flavored organic ice cream." A sentence has been added to 132 section 205.300( a) to specify that the term, " organic," may not be used in a product name to identify an ingredient that is not organically produced.

A similar comment was received asking how a single product with two separately wrapped components can be labeled if one of the components is organically produced and the other is not.

The commenter's example was a carrot and dip snack pack in which the carrots are organically produced and the dip is a conventional product. Another example is ready to eat tossed green salad in which the salad greens are organically produced but the separately pouched salad dressing is a nonorganic component of the product.

Such products also must be labeled in accordance with section 205.300( a). It would be misleading to label the snack pack " organic carrots and dip" or " organic green salad and ranch dressing," if the dip and ranch dressing are not produced with organic ingredients. The salad may be labeled " organic green salad with ranch dressing."

Section 6519( b) of the Act provides the Secretary with the authority to take action against misuse of the term, " organic." USDA will monitor use of the term, " organic," in product names and will restrict use of the term in names that are determined to be deliberately misleading to consumers. Such determinations must be made on a case by cases basis.

( 2) Labeling Livestock Feed. In the definition of " agricultural product," the Act includes product marketed for " livestock consumption." This means that NOP regulations have applicability to livestock feed production. The Association of American Feed Control Officials ( AAFCO) and a few States departments of agriculture commented that the proposed provisions conflict with widely followed standards for livestock feed labeling. AAFCO's " Model Bill and Regulation" standards are incorporated in many State feed laws. The commenters claimed that 133 the requirement to identify organic ingredients in the ingredient statement conflicts with feed regulations which prohibit reference to an ingredient's " quality or grade." They also claimed that the percentage of organic content requirement is a quantitative claim that must be verified by independent sources ( e. g., sources other than the certifying agent). The commenters suggested that a provision be added to address labeling of commercial livestock feed.

We have added new paragraph ( e) of section 205.301 which provides for two kinds of feed that can be labeled as " organic." The first is feed that contains only organically produced agricultural ingredients and contains no added nutrients or supplements. The second organic feed category also must contain only organically produced agricultural ingredients but may contain feed additives and supplements that are needed to meet the nutritional and health needs of the livestock for which the feed is intended. Feed labeled as " organic" must conform with the requirements of section 205.237, Livestock feed. That section provides that feed additives and supplements produced in conformity with section 205.603 of the National List may be used. The NOP requires that livestock under organic management must only be fed organically produced agricultural ingredients.

We also have added new section 205.306 to address commenters' labeling concerns. The new section provides for optional display of a feed's organic percentage and optional identification of the feed ingredients that are organically produced. The labeling requirements are not intended to supersede the general feed labeling requirements established in the FFDCA and those found under various State laws. Handling processes, feed formulations and recordkeeping must be sufficient to meet the requirements of applicable State regulations.

We believe the provisions in new paragraph ( e) of section 205.301 on feed content and 134 new section 205.306 on labeling will allow livestock feed producers to produce and label organic livestock feed that is in accordance with these regulations and State requirements.