Study shows US became dumping ground for imports of fraudulent organic feed commodities

By Aerin Einstein-Curtis

- Last updated on GMT

The Cornucopia Institute is calling for stricter oversight and legal reform to curb infiltration of questionable organic feed raw material imports into the US.

The US organic industry watchdog has suggested a series of steps to improve the import process in its review​ – the Turkish Infiltration of the US Organic Grain Market: How Failed Enforcement and Ineffective Regulations Made the US Ripe for Fraud and Organized Crime.

Anne Ross, farm policy analyst with Cornucopia Institute and author of the study said the probe outlines how current US enforcement practices have left the country’s organic sector vulnerable to fraudulent imports of feed grains. 

“Cornucopia’s investigation into organic grain import fraud has been ongoing for some time now,” ​she told FeedNavigator.

The report tracks the involvement of several companies and importers, including some that have recently surrendered organic certifications.

There has been a feeling of distrust created, she claimed in the report. US markets remain vulnerable given the complicated nature of supply chains and what are seen as past enforcement failures, she added.

“Consumer confidence in organic integrity will continue to erode, putting the livelihoods of the many high-integrity organic producers at risk,”​ she said.

Imports now make up the majority of feed grains fed to US certified organic livestock, said the watchdog.

However, the US Department of Agriculture’s (USDA) National Organic Program has been making changes to improve its oversight of the organic supply chain, said a spokesperson with the department. The USDA’s Agricultural Marketing Service (AMS) also has an online forum later this month to discuss regulation.  

“Increased training for certifiers and staff are already having an impact on the department’s ability to detect and deter fraud in the organic market,”​ the spokesperson told us.

USDA’s commentary

There has been an increase in the resources available for investigations and enforcement practices, said the spokesperson.

“The new proposed enforcement rule would also require unannounced inspections of organic farms and businesses; require a standard organic certificate that expires each year; and clarify other labeling, accreditation and certification requirements,” ​she said. “All these steps make it harder for bad actors to commit fraud and help us enforce the law when violations are found.”

The USDA has already noted an increase in surrendered certificates and confiscated shipments, she said.

“USDA takes enforcement of the trusted organic label very seriously and whenever allegations of fraud can be substantiated, action is taken.”

This year, three suspected shipments of incorrectly labeled grains and feed ingredients were prevented from being imported, she said. This included about 39,000 metric tons of corn.

“Of the organic operations in Ukraine, Kazakhstan, Russia and Turkey, 96 have surrendered certification, and 30 more certificates have been suspended or revoked by certifiers since 2016,”​ the spokesperson said. “From 2016 to 2017, the quantity of organic corn imports from Turkey declined 35% and organic soybean imports declined 15%.”

Investigation highlights

Cornucopia’s investigation highlights a shipment of corn that was stopped in April and prevented from being unloaded based on US regulation related to the potential for pest or pathogen contagion. A legal dispute regarding the shipment focused on the processing of the corn in the shipment.

The importing company rerouted the ship and dismissed the lawsuit, but the event raised questions about shipments of corn coming through Turkey and the United Arab Emirates, and whether there is enough organic acreage to support the amount of feed grains labeled as organic that are being imported, said Ross in the review.

Several of the companies apparently affiliated with those involved with the halted shipment have since surrendered their organic certifications, according to the report.

EU case-study  

In her report, Ross noted an incident in late 2014, whereby 15,000 tons of fake organic sunflower cake, originating in the Ukraine and intended for use in livestock feed, was distributed throughout Western Europe. The sunflower cake had been treated with unapproved pesticides. Feed, animal products, and millions of eggs that had been distributed in the European market were downgraded to conventional status, at great economic loss, she noted.

But she said the EU responded quickly with strict organic controls to combat the high-volume shipments of fake organic products imported from Ukraine into the EU. The Member States agreed to implement controls on organic products imported from Ukraine and neighboring countries: Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Uzbekistan, and Russian Federation. These guidelines adopted n December 2015, required complete traceability of all “operators in the trade flow.”

However, Ross claimed the US has not made similar changes to its regulatory system, and it has seen an increase in the number of bulk shipments of organic feed grains since that time.

“As the EU cracked down, imports to the US soared, particularly from Turkey,” ​she said. “In 2014, the US imported 14,000 metric tons of organic soybeans from Turkey. That number increased to 165,000 metric tons in 2016. Organic corn imports from Turkey increased even more dramatically, going from 15,000 metric tons in 2014 to 399,000 by 2016.”

Problems with the import process have been documented, including in an audit by the Office of Inspector General, said Ross.

“More stringent enforcement is essential to ensure that commodities meet organic standards. Whether it be a lack of know-how, a lack of will, or perceived administrative hurdles, the problem has gone on far too long to warrant any justification the USDA could now offer in failing to take action," ​she said.

Regulatory steps

“The USDA has been aware of multiple problems with imported organic products over the past decade and has failed to remedy the situation,” ​added Ross. “I hope that readers will understand the severity of the problem and demand governmental authorities take action.”

The organization has been supporting a push for increased regulatory controls and enforcement to prevent import fraud in the future, she said. Regulations are needed to require at that all entities in the supply chain be certified, that aggregate production areas and yields are known and that all certified entities conduct full audit tracebacks.

Additionally, there needs to be a standardized certificate for transactions that identify the producers and follows a shipment of imported grain, she said. And all imported bulk shipments meeting a set value threshold should be checked for pesticide residue and the presence of biotech grains.

“In response to widespread producer and consumer demand, Cornucopia will soon release web-based buyer’s guides that identify organic feed operations and producers that source only North American-grown grain for livestock feed,”​ she added. “The guides are informational tools that can be used to identify domestic organic grain producers and avoid suspicious grain imports while the regulatory loopholes still exist.”

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