USDA strengthens organic oversight, transparency to protect against fraud, mishandling
As part of the Strengthening Organic Enforcement final rule published today in the Federal Register, USDA’s National Organic Program lays out an aggressive strategy that it says will “close gaps in the current regulations to build consistent certification practices to deter and detect fraud, and improve transparency and product traceability.”
The changes also should help reassure consumers “that organic products meet a robust, consistent standard and reinforce the value of the organic label” – something USDA’s Agriculture Marketing Service says it has no doubt about, even as it sees room for improved oversight.
“AMS is confident in the integrity and value of the USDA organic seal. Consumers can trust the organic label due to a rigorous oversight system that operates globally,” USDA emphasizes in the final rule.
However, it also acknowledges that since the original USDA organic regulations were drafted more than 30 years ago the organic industry has “experienced significant change” with US sales of organic products steadily rising to more than $63bn in 2021 – requiring the number of businesses involved to similarly increase to meet demand. This has created a level of complexity not foreseen when the regulations were first drafted.
Improving supply chain management, transparency
For example, USDA notes that one of the most common risks to the integrity of an organic product is mishandling – which goes up exponentially as supply chains become longer, more complex and include businesses that are not certified organic.
“When the organic regulations were published in 2000, organic products were marketed mostly locally or regionally, and supply chains tended to be short and transparent; for example, farm to wholesale to retail to consumer,” USDA notes in the final rule.
Now though, the supply chain for one ingredient that goes into one organic product could involve dozens of players, some of which are not certified organic. For example, the organic corn destined for organic chicken feed may be purchased from an importer by an uncertified broker or transported in an uncertified truck or be sold through an uncertified distributor. Currently, USDA has no way to verify these players are properly handling organic goods.
“It is largely because of this complexity that this rule introduces more specific traceability, verification, oversight and enforcement practices for high-risk portions of organic supply chains,” USDA explains in the rule.
These changes include reducing the types of uncertified entities in the organic supply chain that operate without USDA oversight, clarifying that NOP may enforce against any violator whether they are certified or not, and require nonretail containers used to ship or store organic products be labeled with organic identity and traceable.
Increasing transparency, inspections could protect against fraud
To defend organic against more nefarious intentions, such as adulterating organic product with conventional product or trying to pass conventional off as organic in order to cash in on higher premiums for organic, USDA also is increasing the NOP’s ability to audit operations – going so far as to require unannounced inspections of at least 5% of the operations they certify, complete mass-balance audits during annual on-site inspections and verify traceability back to a previously certified point in the supply chain.
Other enforcement and oversight enhancements include:
- Standardizing organic operation certificates to simplify verification of valid certificates,
- Requiring on-site inspections at least once per calendar year,
- Requiring minimum education, experience and ongoing training to ensure “high-quality and consistent certification” by certifiers,
- Clarifying when equivalence determinations with foreign government organic programs can be established, evaluated and terminated,
- Outlining specific requirements for producer group operations,
- Clarifying how the percentage of organic ingredients in a multi-ingredient product are calculated, and
- Improvements to required recording keeping and fraud prevention processes and procedures.
‘The new regulation represents the biggest change to organic regulations’
Organic stakeholders will have one year to comply with the sweeping changes in the rule, and the Organic Trade Association promises to provide the “support and resources needed to its members to ensure successful compliance” with the rule.
While OTA acknowledged the rule is “significant and far-reaching,” it lauded the long-awaited and hard fought for changes as necessary to prevent fraud and improve traceability and transparency.
“The new regulation represents the biggest change to the organic regulations since the creation of USDA’s National Organic Program,” notes OTA, but it adds “fraud in the organic system – wherever it occurs – harms the entire organic sector and shakes the trust of consumers in organic.”
This is why OTA aggressively advocated for the 2018 Farm Bill to mandate provisions in the rule and for the National Organic Standards Board to make key recommendations in the regulation.