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USDA Wants To Change Organic Regulations To Prevent Fraud

The United States Department of Agriculture (USDA) wants to update organic regulations to prevent fraud and improve transparency. The proposed rule focuses on closing gaps in certification to improve consistency in the supply chain. Comments about the proposed rule are open until October.

Fraud has always been an issue in the industry, and the Organic Trade Association (OTA) points out that it can occur at many levels.

“Organic product fraud can be defined as an intentional misleading or deceptive action carried out for illicit financial gain. Fraudulent acts may include adulteration, substitution, falsified records and the deliberate mislabeling of goods, as well as false statements made on applications, organic system plans, and during inspections. Of primary concern are intentional and economically motivated substitutions and the fraudulent mislabeling of organic products, including fabrication of fraudulent organic certificates. Such misrepresentation may occur at any point along the value chain from the product source to selling point,” according to the OTA.  

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Some of the areas that need improvement include organic certification, import oversight, fraud prevention, trade arrangements and inspector qualifications. For example, the USDA mentions setting a minimum number of unannounced inspections that must be done by accredited agents to increase the total number of inspections they must conduct every year.

“The need for more consistent oversight to protect organic integrity is a product of the rapidly expanding organic market, increasingly complex organic supply chains, and price premiums for organic products,” according to the Federal Register.

The OTA has shared its approval of the proposed rule from the USDA and mentions that it shows a commitment to the integrity of the industry.

“Today’s global organic marketplace is marked by a multifaceted supply chain with organic products increasingly sold and handled by entities not regulated by the USDA. The absence of direct enforcement authority over some entities in the organic supply chain, in combination with price premiums for organic products, presents the opportunity and incentive for organic fraud, which has been discovered in the organic sector by both the National Organic Program (NOP) and organic stakeholders,” according to the Federal Register.

The USDA explains that organic product sales reached $55.1 billion in 2019 in the United States. As the market expands, the supply chain is becoming more complicated and more difficult to trace.

During the coronavirus outbreak, sales of organic products increased as more people searched for ways to stay healthy. Organic produce sales went up 22% in March when many U.S. cities and states started quarantine while consumers sheltered at home. Sales are expected to continue to rise, so preventing fraud in the organic industry is essential.

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