The Department of Agriculture has unveiled new regulations designed to protect the integrity of USDA’s organic seal and deter and detect organic fraud throughout the supply chain.
USDA Undersecretary for Marketing and Regulatory Programs Jenny Lester Moffitt said the action represents the most significant rule change to the organic regulations since the National Organic Program was established in 2001.
On a webinar Wednesday afternoon, Moffitt, who operated her family’s organic walnut farm in California for 10 years, said the final rule safeguards the integrity of the organic industry so “both consumers as well as producers are operating on a fair and level playing field.”
“The organic industry is thriving and growing and changing over time, and we learn things as we go,” Moffitt said, adding that it is important for the industry to adapt to account for those changes.
National Organic Program Deputy Administrator Jennifer Tucker said the rule will become effective in March but compliance will not be required until March 2024.
Tucker said the rule takes a risk-based approach to fraud prevention.
The 2018 farm bill mandated key provisions, including reducing "the types of uncertified entities in the organic supply chain that operate without USDA oversight, such as importers, certain brokers and traders of organic products," according to the final rule, which also requires the use of import certificates for all organic products entering the U.S.
Tucker said both of these provisions are huge steps toward ensuring traceability and supply chain protection of organic products.
Total U.S. sales of organic products reached more than $63 billion in 2021. When organic regulations were first published, organic products were marketed mostly locally or regionally. Today significant growth throughout the supply chain has attracted more participants, but the absence of direct enforcement and high organic price premiums increases the opportunity and incentive for fraud, the agency said.
Federal investigations show that organic grain and oilseed fraud can lead to tens of millions of dollars in fraudulent sales within just a few months, and the proposed rule highlighted several instances of fraud involving sales of organic grain.
“The rule closes gaps in current organic regulations and builds consistent certification practices to prevent fraud and improve the transparency and traceability of organic products," the Organic Trade Association said in a statement following the rule's release. "Fraud in the organic system – wherever it occurs – harms the entire organic sector and shakes the trust of consumers in organic.”
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In 2018 and 2019, NOP began making changes to improve oversight of organic imports, especially grain and oilseeds from the Black Sea region. As a result of this heightened oversight and enforcement action, at least 180 operations, or about 60% in the Black Sea region, have lost their organic certifications, the rule said. The rule continues to address gaps in oversight regarding import certificates, and bolsters NOP’s ability to detect and prevent fraudulent organic imports.
It also clarifies the National Organic Program’s authority to oversee certification activities and authority to act against an agent or office of a certifying agent. It requires certifying agents to conduct unannounced inspections of at least 5% of the operations they certify and verify traceability back to the previous certified operation during on-site inspections.
Additional oversight in India also revealed potential fraud in that marketplace. After India’s own certified agents were required to become USDA-accredited, the number of certified operations in that country dropped 63% and the value of imports of certified organic products from India dropped 39%.
Tucker said the rule also adopts National Organic Standards Board recommendations to require additional training and qualifications for inspectors and requirements for grower groups. Overall, the provisions “work together to take a risk-based approach to protecting the market.”
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