Chapter 2
Key issues
2.1The committee received submissions from individuals, organisations, companies, and industry associations with a direct interest in the National Organic Standard Bill 2024 (the bill).
2.2Most submitters were supportive of the need for the introduction of a national organic standard in Australia. However, several submissions raised some concerns relating to the content of the bill and the implementation of new legislation. This chapter outlines submitters’ views on the bill, including the concerns, impacts, and benefits to consumers and the organic industry in Australia. The chapter concludes with the committee’s views and recommendation.
Bringing Australia in line with other developed countries
2.3Submitters stressed that Australia was a ‘laggard’ amongst developed countries for organic legislation. Organic Operators Australia (OOA) emphasised that ‘75 countries have effectively enacted comprehensive regulations governing organic agriculture’, in addition to this ‘19 countries have put in place organic regulations that are not yet fully enforced, and 14 countries are presently in the process of drafting legislation’. OOA acknowledged that Australia did have some regulation of organic agriculture, although holistically ‘Australia has chosen not to partake in this process and has opted to regulate only export operations’.
2.4Some submitters raised concern with the disparity of Australian regulation having not kept pace and the resulting impact it may have on organic producers. PureHarvest, a manufacturer and organic brand owner located in regional Victoria, stated that ‘this bill is necessary to ensure [Australia is] not left behind in accessing key areas of the $300 billion export market’. They further stated in their submission of the hope that ‘Australia’s reputation and position as a global leader in organic production is not lost’ as a result of being the only Organisation for Economic Co-operation and Development (OECD) country to have not legislated a national organic standard.
2.5A submitter that has worked in the organic farming industry echoed this sentiment stating that the lack of a national standard could be ‘risking the livelihood of the approximately 3 000 certified operators’.
2.6Multiple submitters believed that aligning with global organic standards would help to enhance Australia’s credibility in the international market which would in turn open up new trade opportunities for certified organic producers. Santos Organics, a retailer of certified organic products located in regional New South Wales, believed that the bill would go as far as to position Australia as a ‘leader in promoting sustainable agriculture and ethical food production’. Other producers, like John Tidy’s Organics, believed that a national standard could result in ’economic growth’ that would ‘benefit the entire industry’.
2.7The benefits to the industry were said to stem from advantages like importers likely being required to obtain an organic certificate to demonstrate they meet similar requirements to the national organic standard, Australian Grape and Wine (AGW) described this as ‘levelling the playing field’ with importers.
2.8The bill would likely improve competition in Australia as well as in export markets, as it would possibly help exporters to simplify their accreditation and organic practices by meeting a recognised local standard. Burnham Grazing Beef, a small family-owned agricultural business in Central Queensland, wrote in their submission that they are currently producing ‘certified organic [by the United States Department of Agriculture] and Australian organic, grassfed, biodynamic and regeneratively raised beef to local and export markets’. They elaborated on their concerns of relying on overseas standards as part of their business practices:
Our business model is dependent on the premium that the aforementioned certifications allow however the certifications themselves are based on international models, leading to a reliance on externally regulated international expectations and potential cultural communication issues which filter down to us at a grass roots level … This experience leads us to conclude that our clean, green Australian Organic agriculture must move forward with its own identity and standards, which can be explained, proven and not just accepted but sought in both domestic and export markets.
2.9The difficulties of attaining foreign certification for export were also raised by Kehoe’s Kitchen, a submitter who described themselves as Australia’s largest certified organic producer of raw probiotic fermented vegetables. Unlike Burnham Grazing which exports product produced entirely within their premises, Kehoe’s Kitchen elaborated on the difficulties of exporting an organic product that has multiple inputs from various suppliers. They stated that the ‘lack of domestic regulation has been a chokehold on our export potential’, due to all the farmers supplying them being required to meet the same export standards overseas which they attributed to the ‘current lack of domestic regulation’, ultimately describing the process for them to attain foreign certification as ‘impossible’.
2.10Kehoe’s Kitchen emphasised that this is one of the reasons why organic producers who want to export overseas ‘need … domestic regulation, so that these countries instead respect the Australian Organic standard’ to simplify their accreditation process and allow more organic producers to export overseas.
2.11Improving access to overseas markets for Australian producers as a result of a national organic standard could be achieved quite quickly as demonstrated by the Organic Development Group (ODG), a body established by the nine largest organic industry organisations to address domestic regulation. ODG emphasised in their submission how New Zealand’s adoption of a domestic organic standard in 2023 had by 2024 ‘already enabled the government to advance equivalency negotiations with key trading partners, demonstrating the direct benefits of regulatory alignment for market access’.
2.12Multiple submitters stated that the global trend of organic regulation has helped consumers in other OECD countries ‘benefit from higher levels of trust and access to organic goods’ compared to Australia.
2.13However, the Department of Agriculture, Forestry and Fisheries (the department) highlighted that ‘the absence of a domestic organics regulatory framework does not prevent international trade in organic goods’. This is because Australia’s organic export system ‘is recognised as equivalent with the European Union, Japan, Switzerland, Taiwan, and the United Kingdom systems’. In markets where there is no equivalence, organic producers and exporters are able to export to those markets ‘through conformity arrangements between certain Australian certifiers and foreign governments’. The department acknowledged that ‘[e]quivalency negotiations can be difficult to pursue when domestic regulation is a foreign government requirement, as is the case for priority markets, such as [the] Republic of Korea, Canada and China’.
Reducing instances of false organics claims and greenwashing
2.14Submitters stressed how ‘inconsistent domestic standards, insufficient regulatory oversight, and greenwashing, have undermined the integrity of the organic market.’
2.15Greenwashing is the act of misleading the public regarding an organisations environmental impact. Peninsula Fresh Organics, a family–owned certified organic vegetable farm located in Victoria, described how ‘greenwashing, creates confusion and erodes consumer trust’ which is why they support the bill as the ‘onus is no longer on consumers to investigate product legitimacy’.
2.16Kialla Pure Organics summarised how the current system is perceived as being ‘unfair’ by organic producers like themselves as greenwashing ‘piggy backs on the environmentally sustainable benefits provided by certified organic products, without any requirement to do the work’.
2.17The need to protect organic producers by adopting a national standard was emphasised by AGW, as it gives producers ‘an even playing field’ by removing the current system of multiple standards and ‘ineffective compliance against false claims’. While AGW acknowledges that false claims are not thought to have occurred on wine labels, they stated that ‘it is quite possible that misleading claims are made through other marketing and promotional material’.
2.18Producers were not only concerned about unfair competition as a result of greenwashing, some raised the challenge that consumers face as a result of competing claims of organic practices. Greenhill Farm, a family cattle and vegetable growing business in regional New South Wales, ‘strongly’ supported the bill as they believed that the bill ‘protects consumers from being misled by false organic and biodynamic claims’. They also highlighted that often consumers ‘assume they are being protected by our laws and regulations’ which could be capitalised on by producers.
2.19Submitters raised similar concerns from the consumer perspective, expressing apprehension to the onus of understanding different organic standards being placed on them. Daniel Hodges, a consumer who ‘was advised to avoid heavy chemicals often used in conventional agriculture’ due to medical reasons, highlighted how the lack of a national organic standard has ‘created confusion and mistrust in the market’. Mr Hodges described his experiences negotiating the current standards:
I have seen products labelled as "organic" that, upon closer inspection, have no certification or transparency about their growing practices. This undermines trust and forces me to conduct my own research to determine if a product is genuinely organic.
2.20While Australian Consumer Law does have protections for consumers and producers from misleading, false or deceptive claims of organic produce, these protections have been described as ‘inadequate in regulating the organic market’ by OOA. They attribute this to products that can ‘still be sold with the suggestion they are ‘organic’, and achieve similar price points to certified products, which incur all the additional costs of being certified to an organic standard’.
2.21The Consumers’ Federation of Australia (CFA) Representative to the Standards Australia Committee FT-032 Organic and biodynamic products, highlighted in their submission that what can and cannot be considered organic is quite unclear in Australia. Mr Furbank referred to a judgement on the alleged misleading or deceptive representation of eggs that were labelled ‘organic’ in August 2007. This judgment acknowledged that ‘the meaning of the description ‘organic’ is imprecise and there is no general agreement on precisely what inputs may be regarded as artificial or chemical and to be avoided in the production of organic foods’.
Stakeholder concerns with the bill
2.22While industry stakeholders generally supported the bill there were some who emphasised the importance of what is used as the definition for ‘organic’. The CFA representative, through their extensive experience in consumer advocacy, standards development and writing technical guides, elaborated on what the bill should use as the definition:
The National Organic Standard Bill 2024 Explanatory Memorandum states that National Standard for Organic and Bio-Dynamic Produce published by DAFF is to be the National Organic Standard for domestic purposes.This of concern because, following consideration of the two standards (AS 6000 and the National Standard), I consider the adoption of an updated Standards Australia AS 6000-2015 Organic and biodynamic products and the related ‘control document’, the MP100 Procedures for certification of organic and biodynamic products is a much better option.
2.23Standards Australia (SA) stated that they are ‘ready to support the industry through the development of consensus driven standards’. SA acknowledged that ‘AS 6000:2015, Organic and biodynamic products is now aged’, going further to ‘welcome proponents to submit a proposal in accordance with our Standardisation Guidelines, Preparing Standards (SG-0013) to begin the revision process to ensure the standard remains relevant’.
2.24Some producers also disagreed with the bill’s definition for ‘organic’. Santos Organics believed that the definition ‘should draw from widely recognised organic standards, such as those established by [the International Federation of Organic Agriculture Movements] and existing Australian certification bodies.’ The Australian Seed Federation stated in their submission that the bill ‘should include clear and precise definitions of organic standards and certification criteria to minimise ambiguity and ensure practical implementation’. Most importantly when determining the definition, current organic producers like Peter Barrs and Judith Kerr hope that ‘legislation be constructed so as not to penalise [them] for describing [their] produce as organically grown’.
2.25Whilst they are supportive of a national organic standard, the Australian Honey Bee Industry Council (AHBIC) believed that the $25 000 turnover threshold ‘is too high and undermines the intent [of the bill]’. This is due to ‘uncertified label claims in the honey bee industry often com[ing] from the smaller producers or recreational beekeepers’. Therefore, the AHBIC advocated for the removal of the $25 000 exemption clause. CropLife Australia echoed this sentiment in their submission which stated that the $25 000 threshold ‘undermines the overarching objectives of a national standard’. CropLife Australia believed that any exemptions like this could ‘open the door for misuse of the term “organic” by small-scale producers who may not adhere to the required standards’ which may not enhance consumer trust in the certification process’.
2.26Greg Oliver, who owns and operates a family cattle and vegetable growing business in regional New South Wales reinforced ‘that regulation of the terms “organic” and “biodynamic” should apply regardless of the size of the operator’. However, CropLife Australia acknowledged the potential ‘burden on smaller producers would be impractical’, therefore they proposed ‘a tiered compliance framework based on the scale of operations, where smaller producers meet simpler reporting requirements but remain subject to audits and the overarching standards’.
2.27The CFA representative highlighted an issue with the exemption for cosmetics as they believed that this ‘is a backwards step detrimental to both consumers and those suppliers already certified under AS 6000 or the National Standard for Organic and Bio-Dynamic Produce.’ He elaborated that this is because ‘Australian Standard AS 6000 and the National Standard both contain requirements for cosmetics and skincare.’ Therefore, the exemption of cosmetics will create different domestic and export requirements.
2.28CropLife Australia also raised concerns with the use of an organic standard as ‘a promotional or advertising campaign’ for organic producers with fears that it will be ‘at the expense of others’. Instead they state that it should ‘focus on delivering accurate, evidence-based information that empowers consumers to make informed choices based on facts, rather than marketing-driven narratives’. This leads into CropLife’s main concern with the organic industry as a whole whereby:
… consumer appeal to organic foods relies on misleading and deceptive promotion of products as “healthier”, “safer” and “more sustainable” than non-organic produce. These public perceptions have been shaped by demonstrably false claims that seek to alter public perception of the safety and environmental profile of conventional agricultural production systems in order to create the price premium commanded by organic produce.
2.29Therefore, they believed that the bill should have provisions for ‘providing clear information to consumers’ such as when organic goods are produced using pesticides that are approved by the Australian Pesticides and Veterinary Medicines Authority. In addition to potential confusion around the definition of organic, CropLife believed that organic producers that ‘use of terms such as "GMO-Free" on products where no [Genetically Modified (GM)] varieties exist let alone are approved for consumption or cultivation in Australia’ is ‘inappropriate’ and therefore should be addressed by the bill. They consequently propose that ‘regulation should prohibit a business holding an organic certification to inappropriately make non-GM claims about their produce’.
Government policy on a national organic standard
2.30While the bill addresses a number of key concerns at the heart of the organic industry in Australia, the Department of Agriculture Fisheries and Forestry (the department) is aware of these issues and the department acknowledges that the introduction of a mandatory domestic standard:
… would ensure all organic producers are certified to the same standard, which may give consumers more trust in the sector and remove any competitive advantage enjoyed by producers who unfairly claim ‘organic’ status.
2.31The department noted that within the bill, there is no definition of organics, as is the same for the Food Standards Code or in the Australian Consumer Law. However, there are locally recognised standards like the national standard for export and the Australian Standard for organic and biodynamic products (AS6000-2015), developed by Standards Australia. Some organic producers currently work towards meeting these standards and definitions. Should a producer not meet these standards despite claiming that they do, then under Australian consumer law, the Australian Competition & Consumer Commission (ACCC) can enforce an organic claim.
2.32The Department of Health and Aged Care also provided a submission that stated it ‘welcomes efforts to standardise organic produce in Australia’. They indicated that ‘any future work regarding regulation of organic food must align with the existing Food Standards Code’. This code is enforced by state and territory food authorities and the commonwealth government for food that is imported into Australia. The Department of Health and Aged Care also acknowledged that the ACCC ‘can enforce organic claims on food labels under the Australian Consumer Law’.
2.33Analysis and consultation was conducted between 2020 and 2022, through two separate cost–benefit analyses (CBA). The second CBA was conducted following concern with the data used in the development of the first one conducted by Deloitte.The analysis contained in the second CBA prepared by PWC Australia does not consider any potential benefits arising from an increase in exports.The report does suggest that if there was a small positive effect on imports the result would support the implementation of a domestic regulatory regime.
2.34The department outlined several implications that need to be taken into consideration for Australia to adopt a national organic standard including:
monitoring compliance;
trade obligations;
administering organic certification; and
impacts on organic operators.
Monitoring compliance
2.35The creation of a domestic standard will require the government to determine how organic goods would be regulated. Currently there are multiple standards that require various agencies to regulate them. Therefore, consideration would need to be ‘given to issues regarding the practical implementation of the bill, in particular monitoring compliance with requirements to hold an organic certificate’. The department raised the issue of monitoring compliance with the $25 000 dollar threshold which would ‘require auditing commercial and/or financial records, which may be resource intensive’.
Trade obligations
2.36The department acknowledged that a mandatory standard for organic products regardless of whether they are produced locally or imported would be subject to obligations under the World Trade Organisation (WTO) Agreement on Technical Barriers to Trade (TBT). As part of the TBT Agreement, Australia must notify the WTO TBT Committee to provide an opportunity for WTO Members to comment, and this notification ‘must occur when the measure is at a draft stage so that comments from WTO Members may be taken into account in the finalisation of the measure’. If the bill were to pass without WTO notification, ‘Australia would be in breach of TBT Agreement obligations’ therefore the department stated that it ‘should be undertaken prior to its progress through Parliament’.
2.37The department also recommended that consideration would be required of a potential constitutional impacts and interaction with state and territory legislation.
Administering organic certification
2.38The department has arrangements between it and an approved certifying body (ACB) that govern conditions and arrangements that allow operators to plan accordingly to meet departmental requirements. These existing arrangements ‘cannot be used to regulate the domestic certification activities of issuing bodies, because this would be beyond the scope of the Export Control Act’. The department highlighted that ‘the bill does not propose to provide for regulatory oversight of issuing bodies’ domestic certification activities’. The department believed that:
Adequate resourcing and data will be important for ensuring ACB’s ability to complete annual inspections and audits for existing organic operators that export, whilst simultaneously certifying domestic producers and sellers.
Impacts on organic operators
2.39The department acknowledges that the introduction of a mandatory domestic standard ‘would ensure all organic producers are certified to the same standard’ and, as a result of this, ‘may give consumers more trust in the sector and remove any competitive advantage enjoyed by producers who unfairly claim “organic” status’. The department does believe that the use of the current national standard for export may reduce complexity for certification as well as ‘increasing integrity in the domestic organic market and, for exporters, reduced certification and audit costs’. This is because organic operators would only need to be certified to one standard rather than having two separate standards for domestic use and for export.
2.40Conversely, the department is cautious of any new standard being introduced as it may cause some organic operators who already meet the export standard to have an advantage over businesses that are ‘making a genuine effort to produce organic goods, but whose practices do not align with the new standard’. This may result in additional costs associated with organic producers meeting a new standard being passed on to consumers.
2.41The financial burden to organic producers could be compounded by the need to have an operator certificate to sell which may be raise the cost of products from smaller producers, who exceed the $25 000 threshold limit, or it could ultimately force them out of the organic industry. The department therefore proposes to resolve this by having ‘low or no cost certification’. The department also acknowledges that this potential issue may be intensified by:
… the fact that the Bill allows issuing bodies complete discretion as to the amount of fees that can be charged (provided they do not amount to taxation) and does not include a mechanism for the Commonwealth to set fees (for example, by way of subordinate instrument). Under the Bill, there would be no mechanism for the Commonwealth to facilitate low or no cost certification.
2.42A key concern the department has is that any new national organic standard will require currently certified organic farmers to re-certify. The cost to benefit analysis that the department conducted found that the cost of a mandatory regulatory scheme through new legislation ‘would have a disproportionate impact on smaller operators and may be passed onto consumers’. At the same time, farms that are making a ‘genuine effort to produce organic goods’ may be faced with ‘additional hurdles and cost to continue to make organic claims’ if their current practices do not align with the new standard.
2.43Further, the requirement to have an operator certificate to sell organics will put a financial imposition on small operators who exceed the $25 000 threshold limit. This may result in a reduction in the number of farmers selling organic produce, especially small operators. To resolve this, low or no cost certification would be necessary.
2.44The department does believe that there is scope for changing organic standards, however, further investigation is required to provide insight into the impact on all relevant stakeholders. As part of this, the department would be able to determine the cost to producers, consumers and the government.
Committee view
2.45The committee thanks all organisations and individuals for their engagement with the inquiry.
2.46The committee acknowledges that instances of greenwashing and false organic claims may be occurring in the domestic organic market. Stakeholders told the committee about these issues and the effects to their operations, and emphasised their desire for greater protections. A mandatory domestic standard could be one way to ensure all genuine organic operators are certified to the same standard, which may remove any competitive advantage from producers who use the term ‘organic’ without justification.
2.47Organic industry stakeholders were concerned that the absence of a domestic standard has impacted their ability to export to several markets overseas, noting the difficulties in seeking and adhering to international standards. The committee understands that genuine organic producers see the potential for improved competition with importers, and enhanced export potential, as key benefits of a national organic standard.
2.48While there is a need for better regulation of the organic industry, any new regulation would need to be carefully designed. The committee agreed with submitters' concerns regarding elements of the bill, including:
the definition of ‘organic’;
the scope of what would be covered under the proposed national organic standard;
impacts on smaller operators; and
the suitability of the proposed revenue threshold.
2.49The committee understands that if the government were to implement a national organic standard, the department would require time to ensure that any new regulation was carefully designed and implemented. In addition to this, the committee understands that more time would be required to allow the government to comply with international trade obligations as part of its World Trade Organisation membership. However, these issues should not be used as an impediment to designing and implementing a regulatory regime.
2.50The committee recommends that the Senate does not pass the bill in its current form.Additional consideration needs to be given to the matters raised by submitters, including but not restricted to those of a proposed definition of “organic” and providing legislative capacity for the Department of Agriculture, Fisheries and Forestry (or another relevant agency) to act as the regulator.
2.51The committee notes that the need for a domestic regulatory regime was first identified in the early 1990s.
2.52The committee recommends that the Australian government works with industry and other stakeholders regarding the need for a domestic regulation for the organics industry, including through a scoping exercise led by the Department of Agriculture, Fisheries and Forestry.
2.53The committee believes that a properly designed regulation could be beneficial for import and export markets along with the domestic market and could provide additional consumer confidence in Australian organic produce.
Senator Glenn Sterle
Chair