02-19668. Facilitating the Marketing of U.S. Agricultural Products With New Testing and Process Verification Services

AGENCY:

Agricultural Marketing Service; Grain Inspection, Packers and Stockyards Administration, USDA.

ACTION:

Notice.

SUMMARY:

In response to market needs, the U.S. Department of Agriculture's (USDA) Agricultural Marketing Service (AMS) and Grain Inspection, Packers and Stockyards Administration (GIPSA) have developed and are planning to develop additional voluntary testing and process verification programs to facilitate the marketing of agricultural products.

FOR FURTHER INFORMATION CONTACT:

Marianne Plaus, Chief, Market Analysis and Standards Branch, Federal Grain Inspection Service, GIPSA, USDA, 1400 Independence Avenue, SW., Room 1641-S, Washington, DC 20250-3630; e-mail: [e-mail]; tel: [phone]; fax: [phone].

SUPPLEMENTARY INFORMATION:

The marketing structure of the U.S. food and feed industry is undergoing significant change as it moves from a supply-driven to a consumer-driven market. The emergence of value-enhanced commodities and a niche market for non-biotechnology-derived commodities have created a greater need to differentiate products in the handling system. In light of these changes, USDA sought public comment, through an Advance Notice of Proposed Rulemaking (ANPR), on how USDA can best foster the marketing of grains, oilseeds, and other commodities in this evolving marketplace. The ANPR, which USDA's GIPSA and AMS published on November 30, 2000, in the Federal Register (65 FR 71272), closed on April 16, 2001. As a result of that ANPR, many respondents expressed a clear need for USDA to facilitate the marketing of products, not through the traditional grades and standards, but through the exchange of information and services concerning analytical testing and various marketing mechanisms, such as identity preservation and process verification. In response to market needs, USDA's AMS and GIPSA have begun to provide and are planning to develop a variety of programs and services to facilitate the marketing of agricultural products, as discussed below.

Standardizing Testing Methodology

The rising importance of value-enhanced products with specific quality attributes and the emergence of a non-biotech niche market have created a need in the marketplace for additional testing and standardization procedures. USDA's experience in providing testing, weighing, and inspection services provides a strong foundation to enhance the accuracy, standardization, and availability of tests for new value-enhanced products. To this end, USDA's AMS and GIPSA have begun to provide a variety of programs and services to meet market needs.

Sampling Guidelines

Recognizing that sampling is the single largest source of error in the analysis of grains, GIPSA developed and offered sampling guidelines to the grain-handling industry. As industry interest develops, AMS will provide a similar service for seed, fruit, and vegetable markets.

Proficiency Programs

At the Agency's Technical Center in Kansas City, Missouri, GIPSA conducted a Proficiency Study to assess the capability and reliability of DNA-based testing for U.S. commercialized biotechnology events in corn. This study provided evidence of a need for standardization and quality assurance tools in biotechnology analysis. On February 7, 2002, GIPSA began offering a voluntary Proficiency Program for organizations testing for biotechnology-derived grains and oilseeds to help improve the reliability of testing. As industry interest develops, AMS will provide a similar service for seed, fruit, and vegetable markets.

Rapid Test Performance Evaluation Programs

At GIPSA's Technical Center, the Agency also evaluates the performance of rapid tests developed to detect biotechnology-derived grains and oilseeds, and confirms the tests operate in accordance with manufacturers' claims. As industry interest develops, AMS will provide a similar service for seed, fruit, and vegetable markets at its laboratory facility in Gastonia, North Carolina.

Testing Services

AMS and GIPSA intend to provide voluntary testing services using rapid test kits and other testing technology whose performance the Agencies have verified.

Methods Development

AMS and GIPSA continue to develop methods and evaluate commercial test instrumentation to measure end-use value attributes that are meaningful to the marketplace. Examples of such attributes include oil concentration in soybeans and corn and protein concentration in wheat and soybeans.

USDA will continue to monitor market trends and needs and will continue to expand its testing and standardization programs in response to market need. If new regulations are necessary, USDA will propose them when appropriate. At this time, USDA is not proposing any rulemaking or regulatory actions.

Process Verification

Many of the ANPR respondents also described a wide variety of differing identity preservation and marketing systems used in the private sector. Given the growing importance of these marketing systems as more value-enhanced grains enter the commercial market and the non-biotech niche market continues, USDA is exploring options for expanding its process verification programs to include seeds and bulk commodities such as grains and oilseeds. USDA's experience in providing voluntary, audit-based programs for fruits, vegetables, and livestock products provides a strong foundation upon which to expand.

Voluntary Market-Based Process Verification Program for Seeds

Under the authority of the Agricultural Marketing Act of 1946, 7 U.S.C. 1621-1627, USDA's AMS anticipates that it will propose a voluntary, audit-based system of process verification for the production and labeling of seed. This program would be based on existing seed certification (or equivalent) standards and procedures, and existing AMS process verification programs, with additional quality assurance criteria as needed to substantiate label claims regarding seed quality, including genetic purity. This program will be based on market need and is expected to be of particular benefit to participants who intend to market seeds that have regulatory restrictions or concerns with transgenic event(s) that have been deregulated and commercialized in the United States but not in certain other markets.

Under this program, AMS would verify that minimum criteria for seed production and handling have been followed, thus providing a reasonable assurance that claims regarding seed quality and genetic purity are truthful. AMS will use auditing documentation and onsite monitoring in the process verification program for seeds. AMS will certify that the seed lots produced under this program have met established quality assurance criteria. A statement could be included on a seed label to the effect that USDA-approved quality assurance procedures have been followed. Seed buyers will be assured that appropriate production and handling practices were followed to ensure the accuracy of seed quality claims.

Further, minimum seed certification standards and procedures, as well as labeling requirements, are published in the Federal Seed Act regulations (7 CFR 201). The Federal Seed Act, 7 U.S.C. 1592 et seq., is a truth-in-labeling law that applies to agricultural and vegetable seed in interstate commerce. In addition to labeling requirements of the Federal Seed Act, additional information is allowed on the seed label, provided the claims are truthful. Additional label claims could include information pertaining to identity preservation of the seed lot, specific claims regarding genetic purity or maximum level of occurrence of transgenic material. Under the Federal Seed Act, techniques similar to those under the prospective 1946 Act program, could be used to support any additional claims.

Voluntary Market-Based Process Verification Program for Agricultural Commodities

Under the authority of the Agricultural Marketing Act of 1946, USDA's GIPSA anticipates that it will propose a voluntary, audit-based system of process verification for grains, oilseeds, rice, pulses, and products derived from these products. The proposed system will involve defining minimum requirements for process-based programs to provide assurances through third party process verification services. This program will be based on internationally-recognized quality management system standards. The program will verify existing quality system plans developed by the private sector. It will be flexible enough to incorporate, where appropriate, already existing standards and procedures such as those developed by private organizations. At the same time, the program will have sufficient safeguards to ensure the integrity of its results. This program will be based on market need and is expected to be of particular benefic to participants who intend to market commodities with specific end-use attributes or that have regulatory restrictions or concerns with transgenic event(s) that have been deregulated and commercialized in the United States but not in certain other markets.

Under this prospective program, GIPSA would verify that minimum requirements for commodity production, handling, and processing have been followed. GIPSA will verify compliance with the requirements by reviewing required process documentation plans and auditing the performance adherence to the prescribed plan to ensure the plan is followed. GIPSA will certify as to the market partipants' adherence to their processes, when applicable.

GIPSA and AMS plan to propose process verification service programs in the Federal Register in the near future.

Authority: 7 U.S.C. 71 et seq. and 7 U.S.C. 1621 et seq.

Dated: July 31, 2002.

Donna Reifschneider,

Administrator, Grain Inspection, Packers and Stockyards Administration.

A.J. Yates,

Administrator, Agricultural Marketing Service.