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Federal Register / Vol. 86, No. 120 / Friday, June 25, 2021 / Rules and Regulations as a nonagricultural, synthetic substance. In order to preserve the intent of NOSB to encourage future availability of certified organic collagen gel, AMS is listing collagen gel casing as a synthetic nonagricultural substance at 205.605b with the annotation may be used only when organic collagen gel is not commercially available.
AMS understands that there are many different manufacturing processes for the production of collagen gel.26 It is our understanding that while there are many different processes for manufacturing collagen gel, the current predominant manufacturing process renders the final collagen gel as synthetic. While the main manufacturing process results in a synthetic product, there are manufacturing processes described which would result in a nonsynthetic product and are consistent with 205.270 i.e., could be a certifiable process. Aware of the fact that the addition of collagen gel to the National List would allow for the production of additional organic products, we classified collagen gel as synthetic due to the predominant manufacturing process to provide access to organic producers. Given that there are processing methods which could be certified, we are maintaining the commercial availability requirement to encourage the development of nonsynthetic, certified organic products.
General Opposition. AMS received comments opposed to adding collagen gel casing to the National List. Some of the opposing comments want organic products to be composed only of organic ingredients. AMS notes that OFPA
permits the use of specific nonorganic substances i.e., those on the National List in organic production and handling. OFPA describes the procedures for amending the National List and provides AMS and NOSB with criteria and guidelines to consider in evaluating changes to the National List.
These procedures were followed by NOSB and AMS, and this rule adds collagen gel to the National List.
Misleading to Consumers. A comment argued AMS will confuse consumers, especially vegan consumers, should collagen gel casings be allowed for use in organic plant-based sausage products.
AMS understands that labeling requirements implemented by other agencies would require disclosure of collagen casings in a products ingredient list. AMS believes that 26 Collagen Gel Technical Report, January 28, 2019: https www.ams.usda.gov/sites/default/files/
media/CollagenGelGelatinCasingsTechnicalReport 01282019.pdf.

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disclosure of the collagen casing as an ingredient provides sufficient transparency for consumers.
III. Related Documents AMS published notices in the Federal Register on August 9, 2018, announcing the Fall 2018 NOSB Meeting 83 FR
39376 and on November 26, 2018, announcing the Spring 2019 NOSB
meeting 83 FR 60373. These notices invited public comments on NOSB
recommendations addressed in this final rule. The AMS proposed rule that preceded this final rule was published on June 8, 2020 85 FR 35011.
IV. Statutory and Regulatory Authority OFPA authorizes the Secretary to make amendments to the National List based on recommendations developed by NOSB. Sections 6518k and 6518n of OFPA authorize NOSB to develop recommendations for submission to the Secretary to amend the National List and establish a process by which persons may petition NOSB for the purpose of having substances evaluated for inclusion on or deletion from the National List. Section 205.607 of the USDA organic regulations permits any person to petition to add or remove a substance from the National List and directs petitioners to obtain the petition procedures from USDA. The current petition procedures published in the Federal Register 81 FR 12680; March 10, 2016 for amending the National List can be accessed through the NOP
Program Handbook on the NOP website at https www.ams.usda.gov/rulesregulations/organic/handbook.
A. Executive Order 12866 and Regulatory Flexibility Act This final rule has been determined to be not significant for purposes of Executive Order 12866, and, therefore, has not been reviewed by the Office of Management and Budget OMB.
The Regulatory Flexibility Act RFA
5 U.S.C. 601612 requires agencies to consider the economic impact of each rule on small entities and evaluate alternatives that would accomplish the objectives of the rule without unduly burdening small entities or erecting barriers that would restrict their ability to compete in the market. The purpose of RFA is to fit regulatory actions to the scale of businesses subject to the action.
Section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an analysis, if the rulemaking is not expected to have a significant economic impact on a substantial number of small entities.
The Small Business Administration SBA sets size criteria for each industry
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described in the North American Industry Classification System NAICS
to delineate which operations qualify as small businesses.27 SBA has classified small agricultural producers that engage in crop and animal production as those with average annual receipts of less than $1,000,000 13 CFR 121.201. Handlers are involved in a broad spectrum of food production activities and fall into various categories in the NAICS Food Manufacturing sector. The small business thresholds for food manufacturing operations are based on the number of employees and range from 500 to 1,250 employees, depending on the specific type of manufacturing.
Certifying agents fall under the NAICS
subsector, all other professional, scientific, and technical services. For this category, the small business threshold is average annual receipts of less than $16.5 million.
Producers. AMS has considered the economic impact of this final rulemaking on small agricultural entities. Data collected by USDAs National Agricultural Statistics Service NASS and NOP indicate most of the certified organic production operations in the United States would be considered small entities. According to the 2019 Census of Agriculture, 16,585
organic farms in the United States reported sales of organic products and total farmgate sales more than $9.9
billion.28 Based on that data, organic sales average just under $600,000 per farm. Assuming a normal distribution of producers, we expect that most of these producers would fall under the $1,000,000 sales threshold to qualify as a small business.
Handlers. According to the NOPs Organic Integrity Database, there are 19,059 organic handlers that are certified under the USDA organic regulations.29 The Organic Trade Associations 2020 Organic Industry Survey has information about employment trends among organic manufacturers. The reported data are stratified into three groups by the number of employees per company:
Fewer than 5; 5 to 49; and 50 plus.
These data are representative of the organic manufacturing sector and the lower bound 50 of the range for the 27 Table of Small Business Size Standards Matched to North American Industrial Classification System Codes, August 19, 2019:
https www.naics.com/wp-content/uploads/2017/
10/SBA_Size_Standards_Table.pdf.
28 U.S. Department of Agriculture, National Agricultural Statistics Service. 2019 Census of Agriculture. https www.nass.usda.gov/
Publications/AgCensus/2017/Online_Resources/
Organics/ORGANICS.pdf.
29 Organic Integrity Database: https organic.ams.
usda.gov/Integrity/. Accessed February 1, 2021.

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