Preventing Fraud in the Supply Chain - Transition to Organic Partnership Program

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2024

Strengthening Organic
Enforcement Rules

PHOTO BY PIXABAY

Prepared for USDA TOPP by Acres U.S.A.

www.acresusa.com | 1

Preventing Organic Fraud
BY HARRIET BEHAR, ORGANIC FARMERS ASSOCIATION FARMER SERVICES CONSULTANT

he word “organic” is pro-

are attracted to purchasing organic

ments

tected by a United States

products for many reasons, includ-

supply chain. There are now more

law that clearly defines this

ing for their health, environmental

oversight and enforcement tools to

label on agriculturally produced

protection, animal welfare, and food

verify the truthfulness of the organic

items. Those using the word in com-

production sustainability.

label, as well as to prevent fraudu-

merce have been inspected and cer-

Unfortunately, as the organic mar-

tified to use that label, and most

ket has grown, so has the preva-

businesses use it to gain an en-

lence of bad actors, both domestic

hanced price in the marketplace.

and foreign, into the organic stream

throughout

the

organic

lent products from entering the organic marketplace.

MONITOR, VERIFY OR FILE
A COMPLAINT

Organic is unique since it de-

of commerce. In early 2024, the U.S.

scribes a system of production and

organic regulations were greatly im-

There are numerous ways farm-

does not rely on testing alone to

proved to close loopholes through

ers, businesses and certification en-

obtain

inspection and traceability require-

tities can help prevent organic fraud.

certification.

2 | Copyright Acres U.S.A.

Consumers

Fraud:
Wrongful or criminal deception intended to result in financial or personal gain — the use of
dishonest methods to cheat another person of something valuable.

Each has their place in protecting integrity in the organic supply chain.
Understanding

who

needs

have an annual organic inspection,
and verifying that their organic certification is in good standing at the
time of an organic purchase, helps
provide the necessary oversight.
The NOP (National Organic Program) maintains an online current
database, the Organic Integrity Database (https://organic.ams.usda.gov/
integrity), where the public can verify
current

organic

standing.

While

organic certificates are useful, and

https://www.ams.usda.gov/services/enforcement/organic/file-complaint/onlineform

now have consistent information
and terminology between certification agencies, a quick check of the
database verifies the authenticity of
the organic certificate.
If there is a suspicion of fraud or if

to as the “supply chain.” The Nation-

ative, and any other useful informa-

there is a clear misuse of the organ-

al Organic Program has a robust

tion, can be uploaded along with the

ic label in the marketplace, there is

and easy-to-use complaint portal on

complaint. There may be a reason-

an online portal to file a complaint

their website.

able explanation, such as that the

with the National Organic Program.

On a farm, if it is suspected that

field was no longer being certified as

The public may also file a complaint

someone who is certified as organ-

organic, or an approved foliar feed

with the organic certification agency

ic has hired the local co-op to spray

was being used (weeds would not

associated with the entity being re-

herbicide on their organic field, an

have died if that was the case), or

viewed, and the certifier can do an

anonymous

that farm may have been drifted on

investigation as well.

made to the NOP. Providing as much

by a neighbor’s application. The NOP

information, including photos of the

will do their investigation and deter-

co-op’s sprayer, or signs of herbicide

mine if there was something that

damage in the organic field, along

warrants an enforcement action.

OVERSIGHT OF THE SUPPLY CHAIN
AND FILING A COMPLAINT

complaint

could

The organic label can be compro-

with a location of the incident, name

In one case of large-scale fraud,

mised anywhere between the field

and address of the organic farmer,

a business was buying thousands

to the retail store, which is referred

contact information for the cooper-

of bushels of non-organic corn and
www.acresusa.com | 3

soybeans and selling them as organ-

has their certification suspended or

considered agricultural and are not

ic, netting millions of dollars. The

revoked. This comprehensive listing

“certified as organic.” These produc-

Department of Justice got involved

includes the name of the operation,

tion inputs are reviewed by the certi-

after a complaint was filed, tracking

the people involved, the physical lo-

fier to make sure they are “approved

sales and clandestinely watching

cation, and all the products certified

for organic production.” These items

these activities to catch them in the

as organic by that operation.

are not listed in the OID. An organic

act of their deception. The U.S. Jus-

When verifying if the seed or feed

certifier or the Organic Materials Re-

tice Department built a strong case

you are buying is organic, you can

view Institute (omri.org) has listings

and won in court, with those com-

easily check the OID. If you are look-

of approved for organic production

mitting the fraud sentenced to pris-

ing to buy organic dairy heifers, or

farm inputs.

on. Vigilance on the part of everyone

organic apples or organic soybean

in the supply chain, as well as the

meal in Iowa, you can narrow your

complaint process, is meant to deter

search to find everyone in Iowa who

As with other cases of fraud or

those considering misuse of the or-

grows organic apples, for instance.

scams, if it is too good to be true,

ganic label and prevent commerce

When buying organic products to ei-

then it probably is. Those involved

of fraudulent organic products.

ther resell or use on your farm, like

in organic commerce should be vig-

seed or feed, it is your responsibility

ilant when a product in short supply

(and this will be reviewed at your an-

suddenly shows up in abundance,

The NOP maintains an online list-

nual inspection) to verify at the time

or at a reduced price.

ing of every operation around the

of purchase that there was current

world that is certified to their USDA

organic certification.

ORGANIC INTEGRITY DATABASE (OID)

WATCH OUT FOR SCAMS!

Cases of domestic and foreign
fraud have brought to the attention

organic standards. This list is updat-

Inputs like soil amendments or

of the USDA by farmers and busi-

ed within 72 hours if an operation

pest management products are not

nesses. The origins of the “organic” products for sale, as well as the
volumes being offered, were suspicious — for example, large volumes
of organic corn and soybeans originating from countries with insufficient certified organic land to grow
these crops. These fraudulent sales
lowered the organic market prices,
affecting authentic organic producers, as well as stealing their valuable
organic markets. As these scams
were discovered, it became clear
that more oversight was needed to
close the doors to this type of deceptive labeling. This stimulated the
introduction in March 2024 of the

https://organic.ams.usda.gov/Integrity/Search

Strengthening Organic Enforcement
(SOE) rule.
Organic regulations clearly state
that any label that does not fully
comply with the organic law and reg-

4 | Copyright Acres U.S.A.

ulations is considered deceptive and

ducers selling to a buyer (not direct

of certification. This will prevent

will be subject to civil penalties — up

sales) must ensure they provide suf-

the timeframe between inspections

to $11,000 per violation. This would

ficient information to their buyers

from being overly long and will bet-

include selling nonorganic products

to aid in the tracking of their unique

ter identify potential fraud in a more

under the organic label or misusing

product back to their organic farms

timely many.

the word “organic” in a description

and fields.

or business name when not certified

All certifiers are required to per-

Organic certification agencies will

form traceback supply chain audits,

be reviewing specific supply chains

usually based upon risk factors (very

Protecting the integrity of the or-

and verifying there were sufficient

large operations with many loca-

ganic label is the responsibility of

acres and/or crop in storage to sup-

tions could be considered “riskier”).

everyone involved, since it is unfair

port organic sales. The information

When complaints are made detail-

to those who are following the rules

in an operation’s Organic System

ing a variety of suspicions of fraud,

to compete with those that are not,

Plan and the records maintained at

those operations may be subject

and long-term consumer confidence

the farm or business are more im-

to an unannounced inspection and

in organic can be damaged if the

portant than ever. Every certified

a very detailed audit of their docu-

truthfulness of the label is continu-

entity will have a “mass balance” au-

mentation.

ally questioned.

dit to verify that there was enough

Complaints made to certification

organic feed produced or purchased

agencies and/or to the NOP will not

to supply the needs of the organic

fall on deaf ears, since there are

livestock on the farm, for example.

mechanisms in place to delve into

as organic.

ORGANIC CERTIFICATION COVERS
MORE BUSINESSES
Numerous businesses are now

If a farm or business is involved

the circumstances behind the pos-

newly subject to organic certification

with both organic and nonorganic

sible fraud and, if found, to stop it

under the SOE rules. Handlers —

products, detailed documentation

and punish those responsible. Certi-

those who process, package or sell

must verify that there was no com-

fiers are mandated to work together

products — must meet all organic

ingling between the two products at

and share information, which builds

regulations, including maintaining

any time, to ensure only the organ-

more transparency into the system.

traceable documentation and hav-

ic was sold under the organic label.

Individuals and companies can tell

ing a yearly inspection to verify their

Bills of lading, invoices, weight tick-

certifiers of suspicious activities and

compliance.

ets and other documentation used

should include details to help guide

Brokers who do not take physical

between sellers and buyers must

the certifier in their investigations

possession of organic products, but

have the word “organic,” “org,” or

buy and sell them, now must have

another designation, along with the

their books audited during their

lot numbers and the names of those

There are only a few entities ex-

mandated organic inspection to ver-

involved in the commerce. Helping

empt from the yearly organic inspec-

ify that everything they sold as or-

the inspectors and certifiers track

tion: retail stores and transportation

ganic was purchased as a legitimate

the authentic organic sales with de-

companies. That said, these entities

organic product. The documenta-

tailed documentation, can also help

still must protect organic integrity

tion that goes with each organic sale

them find the fraudulent ones.

when the organically labeled prod-

must have the name of the last certified entity that handled the product, as well as a lot number or other

EXEMPT BUSINESSES

uct is in their possession.

CERTIFICATION AGENCIES MUST
PERFORM MORE AUDITS

Trucks, railcars, totes, etc., must
be documented clean and not treat-

identifier, that can specifically track

Organic certification agencies are

ed with prohibited-in-organic ma-

that load back to its organic source.

now required to perform all organic

terials (such as fumigants). Retail

Crop, vegetable and livestock pro-

inspections within the calendar year

stores cannot have deceptive labelwww.acresusa.com | 5

ing, such as a large organic sign over
a display of nonorganic strawberries. If the organic handling and labeling rules are not followed, these
are now considered cases of fraud,
and punishment would be based on
how widespread the issues are and
how quickly they are fixed.
The USDA organic seal is trademarked and cannot be used by any
business that is not certified organic.
Farms with gross sales sell less than
$5,000 a year in organically labeled
products do not need to be inspected and certified, but they must still
follow all of the organic rules, including the maintenance of documentation that verifies their compliance.
Statements like “beyond organic,”
“better than organic,” and “organically grown,” are misleading since
they include a reference to organic;
they can only be used by certified
organic operations in their promotional literature. Everyone who has
used the word organic, exempt or
not, is subject to an investigation by
the NOP or a certifier if a complaint
is filed.

ONLINE SALES
Another large area of commerce
covered under the NOP rules is internet sales. An entity that is not already exempt, such as a retail store,
selling an organically labeled agricultural product must now be certified
organic to do this type of marketing.
Those businesses without a physical
location and selling online are now
mandated to be certified.
It will take some time to clean
up the deceptively labeled organic
products sold through the internet,
6 | Copyright Acres U.S.A.

These “organic” seeds for sale recently on Amazon are not truly certified organic —
the company cannot be found in USDA’s Organic Integrity Database.

and the more help the NOP gets

voices, so that specific shipment can

each shipment must be issued by a

from the public identifying these

be tracked back through cleaning

certification agency that is verifying

non-compliant products, the quicker

and to the field of origin.

the source of the products in that

this can be solved. There are many

If there is a supply-chain audit that

shipment. Brokers can no longer

legitimate organic companies sell-

your farm’s products were part of,

purchase or import organic prod-

ing online, and they should not have

you might have an unannounced

ucts without this certificate. A USDA

unfair competition with businesses

inspection to specifically track one

pilot program with the Federal Grain

that do not invest in the same doc-

shipment. Try to ensure your sys-

Inspection Service is doing spot

umentation and traceability to pro-

tem is compliant at all times in order

residue testing on some incoming

tect organic integrity. There is usu-

to meet these requirements at your

organic grain shipments. The same

ally a name of the company selling

annual inspection and at a possible

complaint system can be used for

or distributing the organic product

unannounced inspection.

international trade transactions.

online. Try to find a website for that

If you know that your buyer is

specific company if you can, and if

processing or reselling your organic

they do not list a certification agen-

products, you could verify they are

CONCLUSION: MAINTAINING TRUST IN
THE ORGANIC LABEL

cy, they are probably not certified

certified and are maintaining organ-

The many facets of organic over-

organic. You can also search for that

ic integrity as a way to prevent fraud,

sight work together to build integrity

business on the Organic Integrity

but this is not mandated. Organic

in the organic supply chain. Farmers,

Database.

certification makes the promise to

processors, buyers, retailers and

consumers that products can be

consumers all have a part to play

traced from farm to store, and farm-

in ensuring the organic label is only

If you use an off-farm storage lo-

ers must maintain organic integri-

used on NOP-compliant products.

cation, such as a cold-storage ware-

ty in their link of the supply chain.

Protecting against deception and

house, grain elevator, or your neigh-

This means any organically certified

fraud in the organic marketplace

bor’s empty grain bin, or if have your

products used (like seed, feed and

relies on the vigilance of consum-

soybeans roasted and then returned

bedding) are certified and the next

ers, farmers and businesses and the

to you as organic feed, all of these

entity receiving your product who

strong enforcement by organic cer-

off-farm handling entities must now

would then further sell it, like a dis-

tifiers and the NOP.

have an annual organic certification

tributor, processor or a broker, is

inspection.

also certified.

WHAT IS REQUIRED OF FARMERS?

On the farm, organic and nonorganic storage and transportation
vehicles, such as wagons, should be

INTERNATIONAL TRADE
Organic

certification

agencies,

clearly noted when they have organ-

brokers, Customs and Border Pro-

ic product, with documentation they

tection and the National Organic

were cleaned before organic use.

Program are working with new sys-

All employees should know organ-

tems to verify the authenticity of

ic protocols, including writing the

organically labeled products being

word organic with a lot number on

imported into the U.S.

cases, totes, bills of lading and in-

A specific import certificate for

This article was written by Harriet Behar of the
Organic Farmers Association, in coordination
with Acres U.S.A. and the Organic Crop Improvement Association (OCIA) International. OCIA is
the TOPP administrator for the Plains Region.
This article is supported through the United
States Department of Agriculture (USDA) Transition to Organic Partnership Program (TOPP).
TOPP is a program of the USDA Organic Transition Initiative and is administered by the USDA
Agricultural Marketing Service (AMS) National
Organic Program (NOP).