A proposed new rule to combat fraud in relation to organic products has been published by the US Department of Agriculture (USDA) to protect “vulnerable” supply chains.
The proposed regulation is aimed at expanding oversight and enforcement of the production, handling and sale of organic products after an industry watchdog warned the US was becoming a “dumping ground” for imports of fraudulent organic produce.
The market for organic agricultural products has grown dramatically, from $3.4bn in 1997 to $55.1bn in 2019, leaving the sector vulnerable to fraud due to the complexity of organic supply chains, the Cornucopia Institute warned.
It claimed fraudulent organic corn, soybeans, and other commodities had been entering the country after the European Union cracked down on abuses originating in countries including Ukraine, Kazakhstan, Romania, and Russia.
It said that was especially problematic as imports made up the majority of feed grains fed to domestic certified organic livestock.
Last year, a Missouri man was sentenced to prison after pleading guilty to selling millions of dollars of non-organic grains that were falsely marketed as organic. The seven-year scheme involved over $142m in grain sales and was the largest such fraud in US history. Most of the grains were sold as animal feed to companies that marketed organic meat. Three farmers from Nebraska also pleaded guilty.
USDA said the proposed regulations would reduce the number of uncertified businesses in the organic supply chain, standardise organic certificates, require the use of import certificates for all imported organic products, increase the minimum number of unannounced inspections, increase inspector qualifications, and strengthen fraud prevention procedures.
It also aims to increase data reporting requirements to make it easier to identify and focus enforcement resources on higher-risk locations, activities and commodities.
USDA said it was committed to supporting organic farmers and ranchers by developing clear standards and creating a level playing field.
It said: “If implemented, this proposed rule will improve organic integrity across the organic supply chain, and benefit stakeholders throughout the organic industry.
“The proposed amendments will close gaps in the current regulations to build consistent certification practices to deter and detect organic fraud, and improve transparency and product traceability.
“In addition, the proposed amendments will assure consumers that organic products meet a robust, consistent standard and reinforce the value of the organic label.”
Greg Ibach, under secretary for marketing and regulatory programmes at USDA, said: “Organic agriculture is one of the fastest growing sectors in the food market. As the organic market has grown, organic supply chains have become more complex.
“Stronger market oversight is needed to protect farmers and consumers who choose the organic option.”
The Organic Trade Association (OTA) welcomed the USDA’s recognition of its fraud-fighting programme in the proposed rule, which has been published on the Federal Register and is subject to a public consultation.
The OTA’s fraud prevention programme is designed to meet the unique needs of the organic supply chain and is based on “buyer responsibility and supplier verification” to help detect and deter fraud.
OTA chief executive Laura Batcha said protecting the integrity of organic products required the efforts of all organic stakeholders, both public and private.
“This historic rulemaking by USDA will do much to protect organic from fraud through tougher enforcement and oversight, as our programme helps organic companies put into place on-the-ground systems to deter and prevent fraud,” she said.
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