By Julia Barton, Farmer Services Director, Organic Farmers Association
THE PROBLEM: For the last decade at least, a chief concern of organic producers has been fraudulent, but certified, “organic” grains being imported to the U.S. 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. This is not a new problem, it’s still here, and it’s still impacting domestic organic farmers in different ways based on their role and type of production.
The U.S. is a net exporter of conventional commodities and a net importer of certified organic commodities. The domestic demand for organic products, especially grains for livestock feed, has consistently grown for the past decade. U.S. farmers have invested in organic transition to meet this local demand with domestic production. The USDA recently invested $100 million in technical assistance to help U.S. farmers meet this growing organic demand. 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. Fraud has caused significant price fluctuations and destruction 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 (whole soybeans, soybean meal, corn, cracked corn, rape, rape meal, whole sunflowers, hulled sunflowers, sunflower oil, and sunflower meal) are hit the hardest. These products 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, and corruption challenges (not that we don’t struggle with corruption here, too!). This influx equaled 800,000 acres of organic production and almost $1 billion lost by U.S. farmers.
These organic grain import quantities, matched with the supply origins, heighten the risk of organic import fraud, adding volatility to an already fluctuating system, and harming U.S. farmers' ability to compete in the premium market. 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 dollars. 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.
THE IDEA: RESIDUE TESTING AT PORTS
Legislation requiring USDA to provide Congress with a full report on residue testing for imported organic feedstuff commodities transported via bulk could help to protect U.S. producers from this type of fraud. Because of the large quantities of organic feedstuff imports matched with their high-risk supply chains these imports should be classified as high risk. Because of the risk, testing to verify compliance on bulk[3] organic feedstuff maritime vessels should be prioritized. To prevent additional fraudulent grain from entering the U.S. supply chain, grain testing positive for prohibited substances should not be unloaded, so exclusion from organic sale would need to be part of the plan. Testing would need to take place quickly, so as to not disrupt supply chains. Such an effort could serve to curb volatility and help stabilize organic feed prices over time.
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. 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
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. Residue testing is a tool that, if conducted consistently and expeditiously at ports, 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 the testing costs of international shipments do not fall on the backs of domestic organic farmers. U.S. 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 US 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 US.
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). You can view it here: (https://tinyurl.com/OrganicImports It seems this idea will evolve into a marker bill[4], which could then potentially be included in the farm bill. Check out 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! She can be reached at julia@organicfarmersassociation.org
[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.
Posted: to Industry News on Fri, May 10, 2024
Updated: Sun, May 12, 2024
