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Fraudulent organic grain imports uncovered

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Fears that an increased amount of organic corn and soybean imports are fraudulent may be true, with reports indicating that an estimated 7% of annual organic corn imports and 4% of organic soybean imports may have been conventional varieties, even though their paperwork stated otherwise.

The Washington Post documented massive shipments of fraudulent organic grains entering the U.S. from China and Eastern Europe. The May 13 article – “The Labels Said ‘Organic.’ But These Massive Imports of Corn & Soybeans Weren’t” – details shipments from countries such as Turkey and China.

The Post highlighted a shipment of 36 million lb. of soybeans that sailed late last year from the Ukraine to Turkey to California. From the Ukraine, they were labeled as ordinary soybeans and fumigated with a pesticide. When the 600 ft. cargo ship arrived in California, the soybeans had been labeled “organic,” and their valued was boosted by $4 million.

Additional shipments of “organic” corn were also called into question and, likewise, went through Turkey before arriving in the U.S.

U.S. imports of organic corn more than doubled from 2015 to 2016 and accounted for nearly half of the U.S. organic corn supply. The domestic shortfall was even greater for organic soybeans, with roughly 80% of U.S. organic soybeans having to be imported in 2016, according to a CoBank report released in January 2017.

To keep up with the growing consumer demand, food manufacturers have worked with brokers to import organic corn and soybeans from countries with less-developed agricultural sectors. India, Ukraine, Romania and Turkey are the four largest exporters to the U.S., CoBank noted.

Whisperings of widespread fraud with grain imports have been circulating for more than a decade in the organic farming community, according to Cornucopia Institute, an organic industry watchdog group. The Cornucopia Institute first published a report on increasing Chinese “organic” soybean sales in the U.S. in 2009.

“Regulators have ignored U.S. organic farmer co-ops sharing information about domestic markets being destroyed by imports sold at bewilderingly low prices,” Cornucopia co-director Will Fantle said. “U.S. farmers simply cannot compete with organic alchemy.”

The Washington Post noted that the rise of imports has led to prices declining by more than 25%.

Bob Joos, 57, a fourth-generation North Dakota farmer, who has just finished his conversion to organics, is caught in the squeeze, “Three years of financial sacrifice and hard work later I have achieved organic certification and I am now feeling financial stress because I have bins full of organic grains that the end users don’t want because they are now getting production cheaper than my cost of production, from overseas.”

Cornucopia reinforced previous calls to Agriculture Secretary Sonny Perude to fix what it calls “gross corruption” at the U.S. Department of Agriculture’s National Organic Program (NOP) and criticism of NOP administrator Miles McEvoy.

Cornucopia stated, “The USDA’s National Organic Program inexplicably continues to recognize the credibility of certifiers that have been banned from organic certification activities in Europe, and there are widespread reports of cargoes being rejected in the United Kingdom and instead being diverted to the U.S. The lax oversight of the U.S. organic program has turned bad actors — here and abroad — loose against unsuspecting U.S. organic consumers. Our National Organic Program is failing at its most basic duty: to enforce the organic standards.”

The Organic Trade Assn. called on the USDA and NOP to thoroughly and immediately complete investigations of any reports of fraudulent imported organic livestock feed and said it’s necessary to maintain the integrity of the USDA organic standard.

It is federal law that all “organic” labeled agricultural products sold in the U.S., regardless of origin, must be certified as meeting USDA organic certification standards. USDA oversees the term “organic” and accredits all certifiers (both domestic and foreign) using the same requirements in order to uphold the integrity of the organic label.

“The oversight of foreign organic suppliers and the enforcement of organic standards must be rigorous and robust. Consumers trust in the organic label. That label should assure consumers that the product – wherever it was grown — was produced, handled and processed according to the strict set of federal rules and regulations of the U.S. organic label. Improved oversight under these circumstances protects organic consumers and farmers from the potential of unscrupulous actors looking to illegally capitalize on the growing hunger for organic food,” OTA said.

“While the issues identified in the article do not constitute a systemic flaw in oversight of the organic claim, they raise serious red flags that need to be addressed,” OTA said. The group called on traders to immediately report any concerns of fraud to the NOP compliance division and USDA accredited certifier. “The entire trade, along with the certification bodies, should exercise caution and fully verify imported organic livestock feed from areas of concern until full investigations are completed,” OTA warned.

OTA also asked for a modernized approach to trade oversight, as “such an approach utilizes the latest technology to audit imports back to the farm and facilitates investigations where certifiers, inspectors, the National Organic Program and other government agencies share information readily to investigate and resolve allegations of fraud quickly and effectively.”

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