The costs of going organic can be substantial, so the USDA offers some cost share programs that can help cut costs, making organic certification more attainable for producers and handlers. Below are some common questions related to organic cost share programs.
The quick answer is that U.S. Organic Certification Cost Share Programs can help reimburse eligible certified organic producers and handlers for a portion of the costs involved with organic certification. This means the actual cost of certification, not the costs of going organic. For example, one way that it can cost more to go organic is due to organic inputs costing more than conventional. Still this doesn't mean you can pay for higher cost inputs with the cost share program. The cost share programs help cover costs directly related to getting certified.
There are actually two different cost share programs in place, both administered by the US Department of Agriculture (USDA). There's the Agricultural Management Assistance (AMA) Cost Share Program which provides cost share reimbursements to producers in Connecticut, Delaware, Hawaii, Maine, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Utah, Vermont, West Virginia, and Wyoming and is both in addition to, and separate from the National Organic Certification Cost Share Program (NOCCSP). NOCCSP is open to producers in all 50 states, District of Columbia and the Commonwealth of Puerto Rico, Guam, American Samoa, the United States Virgin Islands, and the Commonwealth of the Northern Mariana Islands.
2. Who is Eligible for the Cost Share Programs?
Eligible applicants for reimbursement must have successfully received their first organic certification or have incurred expenses related to the renewal of certification by a specific date set by the USDA. In 2012, that date range is between October 1, 2011 and September 30, 2012.
The applicant's business must be accredited by a certifying agent. An applicant's USDA organic certification must be both current and in good standing in order to be eligible to receive reimbursements. If your operation has been suspended or you've had a revoked certification, you're automatically ineligible for the programs.
3. Which Expenses are Eligible for Reimbursement?
No more than 75% of an individual producer’s or handler’s certification costs, up to a maximum of $750.00 per certification, per year can be reimbursed. The four categories of certification that can be reimbursed include crops, wild crops, livestock, and processing/handling. State agencies are allowed to assess 10% in indirect costs or overhead costs associated with conducting the cost share agreement.
Although you need to direct specific cost share expense questions to your local Cost Share Program Manager, below are some generally accepted and non-accepted costs.
Allowable Cost Share Costs
- Application fees.
- Inspection costs.
- First-time USDA National Organic Program certification fees.
- Inspector travel costs.
- User fees.
- Sale assessments.
Non-Allowable Cost Share Costs
- Late fees.
- Inspections due to violations of NOP regulations.
- Charges unrelated to USDA organic certification.
- Transitional certifications.
- Materials, supplies and equipment.
4. How Do You Apply if You Operate in More Than One State?
For producers or handlers operating in more than one state, you need to apply for the cost share program run by the state in which your physical business headquarters are located. Another way to look at it, is file in the same state in which you file your taxes.
5. Is the Cost Share Program Competitive?
The cost share programs available are not competitive, but based on funding and application submission times. All organic cost share funds are administered on a first-come, first-served basis and once they're exhausted, you're out of luck. If you're looking for a more competitive program, and have some sustainable projects in mind, check out the NRCS Organic Initiative.
6. Do You Apply Nationally?
There's no national application process, instead, all eligible organic producers and handlers must apply for the cost share program with their participating State agency.
7. How Does the Application Process Work for First Time Applicants?
First, you need to make sure you meet requirements for eligibility and you must have your proof of organic certification in hand. You also should keep track of all invoices and payments that relate to certification expenses. Then contact your local state cost share program for an application.
Note that to apply you may need the following documents beyond the application:
- USDA organic certificate, or other proof of certification issued by a USDA-accredited certifying agent.
- Itemized invoice for all certification-related expenses. Your accredited certifying agent may also be allowed to verify your expenses.
- IRS W-9 tax form Request for Taxpayer Identification Number and Certification or State vendor form.
8. How Does the Application Process for Renewals Work?
If you're filling out a renewal application, you need to talk to your local state cost share program and see which documents are required. This could include an application form, itemized invoice, and W-9 tax form. The state agency will attempt to verify applicants using the USDA’s database of certified organic operations. If your operation is not listed in the database, then you'll need to provide an alternative proof of certification.
9. What if You Miss the Deadline to Apply?
Late applications for cost share programs are not accepted. In order to receive reimbursement, applications must be turned in by the deadline no later than October 31st of the current year. This is because the USDA allocates funds for each state based on the federal fiscal year. States must close out each year’s cost share funds by December 30th.
10. What if You're Not Certified Until After the Deadline?
If you happen to get your operation certified organic on or after October 1st, you'll have to apply for the cost share reimbursement the following year.
11. What if Your Agent Certifies Your Operation Late?
If you think that your certifying agent is taking an unreasonably long time to make a decision about, or approve your application for USDA organic certification, you'll have to refer your complaint the USDA National Organic Program’s Compliance and Enforcement division.