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Organic Trade Association guards against food fraud schemes

foodsafetynews.com by Dan Flynn, June 13, 2017

Once you’re big enough, it’s only matter of time before you must begin to worry somebody is ripping you off. That pretty well sums up the current mindset of the Organic Trade Association which figures that organic sales last year totaled about $47 million or about 5.3 percent of all food sales in the country.

And because organic generally fetches higher prices than normal food, it’s almost certain to be targeted in food fraud schemes. That’s much of why the Organic Trade Association (OTA) has opted to form its own Anti-fraud Task Force. As first reported by POLTICO, the organization’s anit-fraud unit is scheduled to be up and running later this month to develop best practices for the private sector to use in verifying international supply chains.

Laura Batcha, OTA’s chief executive, said the action is in response to reports last month about shipments of “organic” corn and soybeans entering the United States from Turkey that were fradulent. The OTA task force plans to share information with organic certification agencies and the documentation that importers report to the USDA’s National Organic Program when they reject shipments and tell why the action was taken.

Also, as recently as last week, the USDA’s National Organic Program (NOP) alerted the organic trade about the presence of fraudulent organic certificates. Fraudulent organic certificates listed the following businesses are in use and have been reported to the NOP:

•Morgan Cosmetics LLC
•Biofir S.A De C.V
•Agrobioos
•Qingdao Devotion Chemical Co., Ltd.
•Cooper Venture Associates
•Lala Jagdish Prasad & Co.

The NOP said these certificates falsely represent agricultural products as certified organic under the USDA organic regulations, violating the Organic Foods Production Act of 1990. It says fraudulent certificates may have been created and used without the knowledge of the operator or the certifying agent named in the certificate.

The USDA’s posting of fraudulent certificates does not necessarily mean that the named operator or certifying agent was involved in illegal activity. If an operation named on a fraudulent certificate is certified, it’s certifying agent, identified in the list of certified operations, can provide additional information and verification to the organic trade. Organic handlers should continue to review certificates carefully, validate with their certifying agents where needed, and send any suspicious certificates to the NOP Compliance and Enforcement Division.

Any use of these certificates or other fraudulent documents to market, label, or sell non-organic products as organic can result in a civil penalty of up to $11,000 per violation. Persons with information regarding the production or use of this or other fraudulent NOP certificates are asked to send information to the NOP Compliance and Enforcement Division.

OTA previousy announced that organic sales in the U.S. totaled around $47 billion in 2016, reflecting new sales of almost $3.7 billion from the previous year. The $43 billion in organic food sales marked the first time the American organic food market has broken though the $40-billion mark. Organic food now accounts for more than five percent — 5.3 percent to be exact — of total food sales in this country, another significant first for organic. Organic food sales increased by 8.4 percent, or $3.3 billion, from the previous year, blowing past the stagnant 0.6 percent growth rate in the overall food market. Sales of organic non-food products were up 8.8% in 2016, also handily surpassing the overall non-food growth rate of 0.8 percent.

OTA also showed that organic is creating jobs. More than 60 percent of all organic businesses with more than five employees reported an increase of full-time employment during 2016, and said they planned to continue boosting their full-time work staff in 2017.

“The organic industry continues to be a real bright spot in the food and ag economy both at the farm-gate and check-out counter,” says Batcha. “The theme of our conference is ‘Organic. Big Results from Small Seeds’ because of the wide and positive impact of organic,” noted Batcha. “Organic farmers are not just staying in business, they’re often expanding.

She continued saying, “organic handling, manufacturing and processing facilities are being opened, enlarged and retooled. Organic farms, suppliers, and handlers are creating jobs across the country, and the organic sector is growing and creating the kinds of healthy, environmentally friendly products that consumers are increasingly demanding.”

The popularity of organic produce and protein
The $15.6-billion organic fruits and vegetables sector held onto its position as the largest of the organic food categories, accounting for almost 40 percent of all organic food sales. Posting an 8.4 percent growth rate, almost triple the 3.3 percent growth pace of total fruit and vegetable sales, organic fruits and vegetables now make up almost 15 percent of the produce that Americans eat. Produce has traditionally been the entry category for consumers new to organic, in large part because in the produce aisle the benefits of organic are probably the easiest to understand.

The Organic Trade Association is a membership-based business association for organic agriculture and products in North America, representing over 9,500 organic businesses across 50 states. Its members include growers, shippers, processors, certifiers, farmers’ associations, distributors, importers, exporters, consultants, retailers and others.