organic fraud (7)

Organic products have seen a 69% increase in sales from €18.1 billion in 2010 to €34.3 billion in 2017. Following up on the ECA's Special Report No 9/2012 published in June 2012, the ECA decided in 2018 to make another audit into the EU's organic market. The latest report has just been published, and it found that the control system had improved, and its earlier recommendations had generally been implemented, but some challenges remained. In this report, the ECA makes further recommendations to address the remaining weaknesses it identified.  In particular it recommends that MSs improve the supervision of imported organic products through better cooperation, as well as to carry out more complete traceability checks. The EU imported organic products from more than 100 countries in 2018, but many products in the recent audit still could not be traced back to the producer or the process took longer than three months. In addition, the changes in the legal framework, coordination and procedures recommended previously, are not EU-wide and vary between MSs.

Organic products are marketed at prices up to 150% higher than the price of comparable conventionally produced food. This price differential drives an increase in production, but also an increase in fraud, which recent cases had shown. Mafia ties were found in Italy related to wheat imports from Romania that had been incorrectly labelled as organic. Another example of fraud was 40 tonnes of German strawberries labelled as organic, which were found to contain 25 pesticides.

  Read the article here and the ECA's full report

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The three farmers ran a certified organic farm in Overton, Nebraska, but also farmed other non-certified fields in the area. Maize and soyabeans produced from these fields were sold as organic, at much higher prices to customers both directly and via an as-yet unnamed business. They are thought to have made $11 million over 7 years by defrauding their customers.

Earlier this year, the US Department of Agriculture raised concerns about organic produce imports (see News blog 13 March 2018), and published a preliminary list of businesses allegedly using fraudulent certificates to claim their products are organic. It has since extended that list to more than 100, and of these around 20 were US-based businesses. To try to address the problem, a three-month pilot was launched in the US to prevent and detect fraud in the country’s organic food chain. The pilot will focus on identifying and assessing specific weaknesses or vulnerabilities in the supply chain, identifying and taking measures to reduce those vulnerabilities, establishing a monitoring programme for fraud prevention measures, and developing a complaint system to be used when fraud is suspected or detected.

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US import figures suggest countries are selling more organic agricultural products than they have capacity to produce, raising questions about the likelihood of food fraud and mislabelled organic products entering the US market. According to the figures presented at a recent USDA Agricultural Outlook Forum, US-produced organic corn and soybean increasd 12.9 per cent and 12.3 per cent respectively since 2014, making the US the largest producer of both these crops. Import data, however, shows that foreign-produced organic-labelled products have also increased, with imports of organic soybean increasing 13 per cent and imports of organic corn increasing 5.9 per cent in 2017. According to Peter Golbitz, founder of organic consulting service Agromeris, the amount of organic-labelled corn and soybean being imported from some countries into the US is above what those countries can produce, raising concerns of mislabelling and fraud. This is one of the reasons why a new Bill is being proposed called the "Organic Farmer and Consumer Protection Act", which would seek to provide the USDA's National Organic Program with between $15m and $20m a year from 2018 to 2023 to upgrade compliance and enforcement actions in the US and abroad, while an additional $5m would improve tracking of international organic trade.

Read the article at: Organic Import Data

 Also look at our previous News on this USDA initiative


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Following Washington Post revelations casting doubt on the authenticity of the products from some of the largest "organic" producers of milkeggs and imported grains, Republican Senator John Faso is proposing a bill in Congress, which would effectively double the budget of the USDA's National Organic Program. The Bill would also call for the modernisation of the USDA system that tracks imports of purportedly "organic" foods, allowing organic inspectors to share investigative information across a supply chain. In addition the USDA would have to file an annual report to Congress detailing its organic investigations. It is hoped the Bill would restore consumer confidence in the USDA organic system, which covers a $47 billion industry.

Read the article at: US Organic Fraud

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A recent investigation by the US personal finance site, NerdWallet reveals that some fruit are incorrectly labelled as organic when they are not. The report states that the United States Department of Agriculture (USDA) is aware that some labelling fraud is occurring, but it has not taken necessary action to ensure the integrity of the organic label. NerdWallet found that pineapples grown in Costa Rica by the Del Valle Verde Corp. pineapples (under the brand name "Costa Verde") were approved as organic by a USDA-accredited certifier, even though the grower was using pesticides that are not approved as organic, among other practices not conforming with the US organic regulations. The USDA had investigated the case but no action has been taken. The  author of NerdWallet blog also found that a Costa Rican exporter, Ricardo Rudin Mathieu, mislabelled roughly 400,000 pineapples as organic, and those pineapples were later shipped to the U.S. and Canada.

Read the article at: US Organic fruit fraud, and the NerdWallet blog

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A 36 million lbs shipment of "ordinary" soybeans sailed late last year in a cargo ship from Ukraine to Turkey to California. By the time the ship docked in Stockton, California in December, the soybeans had been labelled “organic,” according to receipts, invoices and other shipping records obtained by the Washington Post. That switch — the addition of the “USDA Organic” designation — boosted their value by approximately US$ 4 million, creating a windfall for at least one company in the supply chain. Two other shipments consisting of millions of lbs of maize was discovered to have undone the same mysterious transformation. They found that the Romanian company that provided the maize is not certified organic, and originally purchased the maize from a supplier – also not certified organic. All three shipment originated from Turkey, and USDA officials are investigating the companies involved in the shipments. The soya and maize involved was destined for the organic meat, milk and chicken production sectors as animal feed.

Read the full article at: US imported organic soya and maize fraud

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An investigation by Italian authorities has put 3 Maltese companies registered to Italian nationals at the centre of a criminal activity in which thousands of tons of conventional wheat, maize, soybeans, rapeseed and sunflower seed were being imported from non-EU countries (Moldova, Ukraine, Kazakhstan) and exported to Italy as organic products. 

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