This article describes an idea proposed by farmer, Amy Bruch, as a potential solution to help address import fraud issues impacting grain farmers in the Plains region.
Plains
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Residue Testing For Import
Organic Compliance Verification
By Julia Barton
For the last decade, at least, a chief concern of
domestic organic producers has been fraudulent
“organic” grains being imported to the U.S. and
undercutting their domestic production with lower
prices for fraudulent organic products. Conversations
on this topic have occurred at kitchen tables, farm
gates, winter conferences, in Zoom rooms, at the
National Organic Standards Board meetings, on the
Hill, and at USDA. Unfortunately, this problem is
unsolved and has big impacts on domestic organic
farmers.
THE PROBLEM
The U.S. is a net exporter of conventional commodities
and a net importer of organic Commodities, but the
domestic demand for organic products, especially
grains for livestock feed, has consistently grown over
the past decade. Organic commodities, which typically
command a price premium over conventional, based
on increased production costs, encourage U.S.
transition to organic, but the price premium has also
lured fraudulent players into the marketplace based
on economic incentive. This fraud has caused
significant price fluctuations in recent years and an
unstable organic market for domestic organic
producers.
While import fraud appears across commodities in the
organic sector, organic feedstuff commodities are hit
the hardest. These products (such as whole soybeans,
soybean meal, corn, cracked corn, rape, rape meal,
whole sunflowers, hulled sunflowers, sunflower oil, and
sunflower meal) often enter the U.S. market through
high-risk, complex, and opaque supply chains.
In the past year, 1.3 million metric tons of organic
feedstuffs 1 were imported via maritime vessels,2 80% of
which originated from countries with underdeveloped
agriculture sectors, poor infrastructure, questionable
organic enforcement, and corruption challenges. This
influx of organic feedstuffs equaled 800,000 acres of
organic production and almost $1 billion lost by U.S.
farmers.
The quantities of organic grain imports, matched with
the supply origin growing capacity and organic
certification oversight, heighten the risk of organic
import fraud. This adds volatility to an already
fluctuating system, harming U.S. farmers’ ability to
compete in the premium market and creating
uncertainty for purchasers of organic feedstuffs.
The justification for prioritizing the creation of the
USDA Strengthening Organic Enforcement Rule (SOE)
was built on the fact that maritime imports represent
the most significant risk by volume. A single ship of
cracked corn can represent 1 million bushels or $10
million of product. SOE provides enhanced supply
chain traceability by requiring importers, brokers, and
previously exempt handlers to obtain organic
certification and provide import certificates for every
imported load of organic commodity. While the SOE
provisions will help, they are not enough.
1.3
Million metric tons of
organic feedstuffs
imported via maritime
vessels
80%
800k
Acres of domestic organic
production this influx equaled
Originated from
countries with
questionable
organic enforcement
$1 Billion lost by U.S.
organic farmers
THE IDEA: RESIDUE TESTING
AT POINTS OF ENTRY
Legislation requiring residue testing for imported
organic commodities via bulk transport could help to
protect U.S. producers from this type of fraud. To
start, the large quantities of organic feedstuff
imports coming through high-risk supply chains
should be classified as high risk since SOE allows for
additional enforcement and verification based on
risk. Because of the risk, testing to verify compliance
on bulk 3 organic feedstuff imports should be
prioritized.
Every load should be tested, just as it is for
domestic organic producers.
To prevent additional fraudulent grain from entering
the U.S. supply chain, grain testing positive for
prohibited substances should not be sold as organic,
so imports would need to be tested before leaving
the point of entry. Testing would need to take place
quickly, so as to not disrupt supply chains, but such
an effort could serve to curb volatility and help
stabilize organic feed prices over time. These efforts
would also support workforce development for
organic import verification inspectors.
While this seems like a new idea, it would actually be
a typical stateside practice, newly applied to
imported bulk shipments at the ports. Domestic
grains are already being regularly tested at grain
mills as required, not by the National Organic
Program (NOP), but rather by mills and marketers.
Furthermore, exported U.S. organic grains are
undergoing similar residue testing at points of entry
around the world. In the U.S., the USDA is legally
responsible for ensuring the NOP has adequate
regulatory standards, enforcement guidelines, and
residue testing procedures.
Residue testing is already an essential and required
tool for verifying compliance with organic
regulations, with certifiers required to test 5% of the
operations they certify each year. The Organic Foods
Production Act (OFPA) and USDA organic
regulations include authority and guidelines for
Accredited Certification Agencies (ACAs) to collect
residue samples and respond to sample results.
Organic certification is also already intended to be a
risk-based assessment process and places scrutiny
on high-risk operations. Additional compliance
verification through residue testing of imported
organic commodities would help to level the playing
field which is the next needed step.
WHAT WE NEED
FOR MORE INFORMATION
U.S. organic farmers need continuous improvement in
oversight and enforcement to strengthen the integrity
of the organic movement and marketplace, and
continuous improvement beyond the SOE rule. We
need risk-based enforcement that is practical, timely,
and rigorous. Residue testing is a tool that, if
conducted consistently and expeditiously at points of
entry, could help in compliance verification for organic
regulations and in the stabilization of organic markets.
We also need to set up a system that ensures that the
testing costs of international shipments do not fall on
the backs of domestic organic farmers. Importers
should bear the cost of verifying that the products
they are bringing into the U.S. are actually organic.
Organic Farmers Association (OFA) was grateful to
Amy Bruch of Cyclone Farms who shared her thinking
and ideas about this proposed next step with OFA
farmers on a webinar supported by the Transition to
Organic Partnership Program (TOPP).
Domestic producers have invested time and money
into organic transition and production and deserve to
operate in a stable and equitable marketplace.
Residue testing of imported organic commodities
would subject all farmers to the same testing, whether
domestic or international organic producers, and
further secure organic consumers’ trust in organic
integrity. By leveling the playing field, we can retain
U.S. organic producers, rather than losing them to
market volatility, and leverage the investments in the
Organic Transition Initiative to grow the number of
organic farms in the U.S.
4
This idea will evolve into a marker bill, which could
then potentially be included in the Farm Bill. Watch
the webinar, discuss it with your organic colleagues,
and let us know your thoughts.
Julia Barton serves as the Farmer
Services Director of the Organic Farmers
Association. She loves working with
farmers to identify challenges and find
solutions.
1. Source: S&P Connect Global Trade and Commodity Analytics
Suite/Maritime and Trade.
2. Maritime imports represent approximately 67% of organic
feedstuff imports.
3. Bulk: Loose feedstuffs in ship holds, containers, super sacks, etc.,
not packaged goods.
4. A marker bill is a bill introduced in Congress to signal policy
ideas and gather support for those ideas, most often with a goal
of inclusion in an omnibus bill like the farm bill.