The U.S. Agriculture Department on Tuesday was expected to release its new proposals to regulate the booming organic food industry, easing concerns among organic farmers and sellers, and potentially defusing some trade conflicts with Europe.

In late 1997, the U.S. Agriculture Department first proposed national guidelines for labeling and marketing organic food and clothing but was deluged with a record 300,000 comments -- most of them negative.

Environmentalists, farmers, consumers, the entire Vermont Legislature and celebrities, including musician Willie Nelson, wrote, mostly in opposition to the regulations as drafted.

Critics objected to putting the ``organic'' label on foods grown from genetically modified seeds, treated by disease-killing irradiation and fertilized by sewage sludge recycled by municipal waste plants.

Agriculture Department officials spent the last two years reviewing the letters and have rewritten guidelines to finally govern what exactly can be labeled as ``organic.''

Department officials have said this time around, biotechnology, sewage sludge and irradiation will not be considered organic.

``I do believe that USDA really has tried to incorporate what they received as comments,'' Katherine DiMatteo, head of the Organic Trade Association, said earlier this year as details of the government proposals emerged.

In addition to trying to satisfy the industry and the growing number of American consumers who shop for organic foods, the rules are also seen as a way to potentially defuse some trade conflicts with Europe.

When European governments banned some of the same controversial farming practices that would be banned by the proposed organic rules, the U.S. government objected, calling them unfair to trade, and imposed retaliatory trade sanctions.

Organic Industry Booming

The U.S. organic industry sold more than $4 billion worth of products, from food to clothing, in 1998. It is estimated that organic sales grew by more than 20 percent in 1999 and will increase by another 20 percent this year.

But the industry said it needed standards to maintain the surge in organic sales. Currently, organic standards vary among state and private sector certifiers. For example, an orange labeled ``organic'' in one state may be raised completely differently than an ``organic'' orange from another state.

The industry has said that without guidelines, there is nothing to back up the claim that a product is organic, raising questions among consumers about whether an organic label really means anything -- and whether it is worth paying more for food designated as such.

But some farmers expressed concern that the new guidelines will impose a costly system on organic producers, many of whom are small farmers who sell close to home.

``I am concerned that the charges connected with this new system will be so high that small farmers won't be able to afford it,'' said Elizabeth Henderson, an organic vegetable farmer in Wayne County, New York.

Organic industry representatives say that this time they are confident their voices have been heard, largely after the Agriculture Department hired someone who had been critical of the initial USDA proposal to head up the task of rewriting the government organic standards.

Kathleen Merrigan was hired by the USDA in June from the Henry Wallace Institute for Alternative Agriculture. After the initial rules came out, Merrigan wrote a 100-page, single-spaced response to the USDA on behalf of the Institute, most of it pointing out flaws in the agency's proposals.

And, when Congress passed a bill a decade ago that ordered the Agriculture Department to create rules for organic food and clothing that would be enforced nationwide, Merrigan was working for Vermont Democratic Sen. Patrick Leahy, who was head of the Senate Agriculture Committee. Merrigan drafted the legislation for the organic rules.

Rep. Peter DeFazio, a Democrat from Oregon, who led the legislation's passage in the House said on Monday he was happy the USDA had finally completed its second draft.

``I'm pleased to see that the USDA is finally working on a better deal for the consumers,'' he said.

Copyright © 2000 Reuters Limited.

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