Scandal
Fuels Meltdown in Organic Dairy Industry
Farmers Seek Justice from Obama, USDA;
Consumers Headed Back to Court
WASHINGTON,
D.C. - A slowdown in the sales of organic milk and
dairy products, attributed in recent articles by the New York
Times and other media outlets to the weakened economy, has organic
dairy farmers from coast to coast at or near financial collapse.
But a worsening scandal in the industry might be doing more
to economically injure organic family farmers than the flattening
of demand for organic dairy products.
Since 2005, a handful of giant factory farms, each milking thousands
of cows, have been accused of skirting strict federal organic
regulations and creating a surplus of cheap "phony"
organic milk flooding the market and driving down profit margins
for legitimate industry participants. The Cornucopia Institute
estimates that as much as 30-40% of organic milk is now coming
from giant industrial operations, milking as many as 7000 cows
each.
Last
week, a judge in federal district court in St. Louis, rejected
19 class-action lawsuits filed by consumers who are claiming
fraud in the sale of "organic" milk coming from one
of the giant operations. In 2007, federal investigators found
the Aurora Dairy had "willfully" violated 14 different
federal organic regulations. Consumers in 40 states sued, alleging
fraud in the manufacture of organic milk sold as storebrands
in Wal-Mart, Target, Safeway, Costco and other national chains
served by Aurora.
Lawyers
representing consumers involved with the class-action lawsuits
vow that they will appeal the judge's initial ruling, especially
in light of a recent Supreme Court decision that clearly gives
citizens the right to sue corporations that allegedly act illegally
even though federal regulatory agencies provide statutory authority
over certain industries.
According
to Mark Kastel, the Senior Farm Policy Analyst for The Cornucopia
Institute, the dismissal was particularly distressing "because
Bush Administration officials had substantially softened USDA
penalties recommended by enforcement staff for Aurora's organic
transgressions." Cornucopia first alerted the USDA to Aurora's
violations by filing formal legal complaints with the agency.
"The
very essence of the checks and balances system in our three
branches of government provides for citizens to seek remedy,
when regulatory agencies fail to enforce laws passed by Congress,"
said Gary Cox, a Columbus, Ohio-based attorney with experience
in the organic industry. "It is our contention that a judicial
review of the alleged misconduct by these giant corporations,
and the lack of enforcement by the USDA, is not only appropriate
but imperative."
The
outcome of the pending suits will not only impact consumers
but many organic dairy farmers whose livelihoods are now threatened
by the giant corporate dairy marketers. A glut of organic milk
on the market now has the nation's organic processors attempting
to reduce their supply and cutting prices paid to farmers. Dean
Foods, the nation's largest milk processor, and owner of the
Horizon Organic brand, and H. P. Hood, a giant Boston-based
milk bottler, that controls the Stonyfield milk label, have
both terminated contracts with farmers or allegedly attempted
to strong arm some of them out of business.
"I
have invested my life in building this dairy farm, and Hood
encouraged many dairy producers to make major investments and
ramp-up for organic production, now my entire livelihood and
the financial future of my family is at risk," said Kevin
Poetker who milks 200 cows near Waterloo, IL, 24 miles SE of
St. Louis.
Even
Organic Valley, the farmer-owned cooperative that is second
only to Dean Foods in organic milk sales, has cut prices to
their members and asked them to reduce their milk production
by 7%. "Farmers who build their herds make long-term financial
and management decisions, and just shutting off even 7% of their
milk is no easy task," Kastel said. Thousands of letters,
mostly from organic farmers, have been sent to president Obama
and USDA secretary Tom Vilsack asking them to immediately intervene
and undertake aggressive enforcement of organic regulations,
something lackingduring the past administration.
The
USDA's handling of the Aurora violations is not the only instance
where its enforcement actions have gone awry. Other alleged
violations have gone uninvestigated by agency staff. Cornucopia
has filed several additional complaints, based upon direct observation
of practices employed on other huge feedlot dairies owned by
Aurora and Dean Foods.
"Either
the USDA refused to investigate or, when they actually found
violations, they have allowed illegal activities to continue,"
Kastel lamented. "We are now appealing to the Obama administration
for a more ethical approach to enforcement in these matters.
Congress gave the USDA the responsibility of overseeing the
organic industry and now we are happy that some on Capitol Hill
are considering launching an investigation into, seemingly,
favorable treatment for some corporate players."
If
there is good news for consumers, it's that they have alternatives
in the marketplace. "Consumers seeking authentic, nutritionally
superior organic milk have many choices and we hope they will
support the family farmers, the heroes who built the organic
industry," stated Ronnie Cummins of the Organic Consumers
Association.
A
multi-year research study by The Cornucopia Institute created
a scorecard, posted on its website (www.cornucopia.org), rating
all 110 organic brands based on their ethical and legal approach
to milk production. The study indicates that 90% of organic
milk, cheese, butter and yogurt marketer
are clearly subscribing to both the "spirit and letter
of the organic regulations."
"These giant factory farms are a bad aberration. Unfortunately
they are associated with a couple of the largest participants
in the industry. We need consumers to step up and make careful
choices in the supermarket so they reward the true heroes in
this industry and send a strong message to the bad actors,"
Kastel said. "Some organic farmers out there desperately
need the help and support of consumers."
A
copy of the judge's decision, from the US District Court, Eastern
Division of Missouri, in St. Louis, can be obtained by contacting
The Cornucopia Institute.
The organic dairy products scorecard can be viewed at:
http://www.cornucopia.org/2008/01/dairy-report-and-scorecard/
The
Cornucopia Institute website is: http://www.cornucopia.org
The
USDA's National Organic Program website is:
http://www.ams.usda.gov/AMSv1.0/NOP
The
Cornucopia Institute, a Wisconsin-based nonprofit farm policy
research group, is dedicated to the fight for economic justice
for the family-scale farming community. Their Organic Integrity
Project acts as a corporate and governmental watchdog assuring
that no compromises to the credibility of organic farming methods
and the food it produces are made in the pursuit of profit.
The
Cornucopia Institute P.O. Box 126 Cornucopia, WI 54827 www.cornucopia.org