USDA Inspector General Finds Bush Administration Ignored Organic Laws

March 18th, 2010

New Management at USDA Reforms, Strengthens National Organic Program

WASHINGTON, DC: After an extensive audit and investigation of alleged improprieties at the USDA’s National Organic Program, the agency’s Office of Inspector General (OIG) made public their formal report, dated March 9, substantiating the allegations of prominent organic industry watchdog groups — that under the Bush administration, the USDA did an inadequate job of enforcing federal organic law.

Since 2002, when the USDA adopted the federal organic regulations, the agency has been plagued by underfunding and a number of scandals and complaints about its cozy relationship with agribusiness interests and lobbyists.

“We are satisfied with the thoroughness of the investigation conducted by the USDA’s Inspector General,” said Mark Kastel, Senior Farm Policy Analyst at The Cornucopia Institute. “And, we are pleased and impressed by the earnest response of the current management at the USDA’s Agricultural Marketing Service (AMS), and its National Organic Program, in responding to the report’s critical findings.”

The audit of the National Organic Program found that improvements in the program had been made, but also identified 14 major concerns requiring better management controls and the need to strengthen enforcement as well as oversight of organic certification agents.

In a letter dated May 10, 2008, The Cornucopia Institute, a farm policy research group, had formally requested the USDA’s Inspector General investigate questionable enforcement practices, and deficiencies, in the NOP’s oversight of the organic industry. An investigative report last year by the Washington Post concerning mismanagement at the NOP, and public concerns expressed by Congress, made the release of the OIG audit highly anticipated.

Some of the most troubling findings of the new audit include not following through on enforcement after violations were confirmed by federal law enforcement investigators. When enforcement was pursued, the USDA sometimes delayed action for as long as 32 months. And the NOP could not document for OIG investigators the status of 19 complaints it had received, since 2004, that alleged illegal activity.

“Justice delayed is justice denied,” said Will Fantle, The Cornucopia Institute’s Research Director. “Spotty enforcement of organic rules, since 2002, has enabled a number of giant factory farms, engaged in suspect practices, to place ethical family farmers at a competitive disadvantage, particularly in organic dairy, beef and egg production.”

The report pointed out that the State of California, which was given authority to oversee the USDA’s organic standards in that state, was woefully inadequate in its oversight and enforcement capabilities. With growing organic imports, from countries like China, the audit also found that foreign certifiers were not properly supervised.

“Obviously, these are troubling findings. But we are satisfied that, finally, these deficiencies are being taken seriously by the political appointees at the USDA,” added Fantle.

In a formal response to the OIG report, AMS administrator Rayne Pegg at the USDA stated that she “reviewed the report and agree[d] in principle with its findings and recommendations.”

Although a long-time critic of the management at the USDA’s National Organic Program, Cornucopia, an aggressive industry watchdog, affirmed its belief in the credibility of the current organic program and said it would continue to fight for “excellence” in public service at the federal agency.

“With mandatory annual inspections of farms and processors, and audits of transactional documents, consumers should feel comfortable with the credibility of the organic food they are purchasing,” Kastel added. “The organic label is still the gold standard for families seeking the safest and most nutritious food. We need to work earnestly to make sure that it continues to deserve the trust of consumers.”

Although not mentioned by name, the OIG audit identifies numerous actions and decisions by the former organic program manager (Dr. Barbara Robinson) for some of the most serious enforcement deficiencies in the agency.

After the Obama administration and USDA Secretary Tom Vilsack took the reins at the USDA, one of their first actions was to appoint Dr. Kathleen Merrigan, a former Tufts University professor who is widely respected in the organic community and is an expert in farming and food regulations, as the Deputy Secretary at the agency.

Last fall, Dr. Merrigan appointed Miles McEvoy to replace Robinson as the head of the organic program. McEvoy, with a distinguished 20-year career overseeing one of the largest state organic programs in the nation at the Washington Department of Agriculture, quickly announced “the age of enforcement” was at hand for the organic program.

“I think the Obama/Vilsack administration is serious about cracking down on abuses by corporate agribusiness, and others attempting to exploit the organic label,” noted Kastel. “We are organic watchdogs, not lapdogs, so we will continue to judiciously monitor progress at the USDA. But so far, the actions and words by the new managers at the organic program lead me to believe they are sincere in the statements they are making.”

MORE:

Quotations attributable to Mark A. Kastel, Codirector and Senior Farm Policy Analyst at The Cornucopia Institute:

Although Congress passed the Organic Foods Production Act as part of the 1990 farm bill, charging the USDA with oversight of the burgeoning organic industry, it was not until 2002 that an acceptable set of regulations was presented to the industry to enable OFPA to be enacted.

    “The culture at the USDA, under the Clinton and Bush administrations, was outright adversarial.”

    “The Bush administration allowed factory farm production to proliferate, gaining as much as 30-40% of the organic dairy market, in addition to industrial-scale production of eggs and beef. Add to that exponential increases in Chinese imports, and imports from other countries that were not receiving adequate oversight, and you have a “perfect storm” for depriving American family-scale farmers of a fair living through participating in the organic marketplace.”

    “In every market in the United States organic consumers can find ethically produced organic food.”

In a years-long research project, The Cornucopia Institute has rated the 115 organic dairy brands and found that 90% are produced with high integrity. They have conducted a similar research and rating project for the nation’s organic soy foods: www.cornucopia.org

    The Cornucopia Institute is a nonprofit public interest group with a staunchly nonpartisan perspective in their oversight of the organic industry.

USDA Office of Inspector General NOP Investigation/Audit Highlights:

  • PROBLEMS IDENTIFIED: OIG issued 14 recommendations to NOP for improvements. AMS has agreed with all of them.
  • ENFORCEMENT DEFICIENCIES: NOP officials need to further improve program administration and strengthen their management controls to ensure more effective enforcement of program requirements when serious violations, including operations that market product as organic while under suspension, are found.
  • ACCREDITATION DEFICIENCIES: Need to strengthen NOP oversight of certifying agents and organic operations to ensure that organic products are consistently and uniformly meeting NOP standards.
  • ENFORCEMENT MISMANAGEMENT: The NOP failed to resolve 19 of 41 complaints, filed by The Cornucopia Institute and other industry stakeholders, since 2004 within a reasonable time frame. Average timeframe of 3 years. In January 2009 brought to the attention of management officials; they stated they were unaware of the status of the unresolved complaints. As of June 2009, NOP had taken action and resolved 13 of the 19 outstanding complaints.
  • WEAK EXCUSES: Former NOP director attributed the agency’s inability to effectively act on investigations and issue enforcement actions to a lack of resources. OIG determined that several other factors contributed to this deficiency, including that NOP lacked procedures for receiving, reviewing, and maintaining reports of investigations. OIG could not evaluate NOP officials’ decisions because NOP did not implement protocols for properly maintaining documentation related to these enforcement actions, including contacts made with Office of General Counsel and decision documents supporting the issued enforcement actions.
  • FAILURE TO FOLLOW THROUGH ON ENFORCEMENT: One operation entered into a compliance agreement but continued to operate in violation of organic regulations. The operation agreed not to apply for and receive certification as an organic handler or producer for a period of 5 years, from August 2006 to August 2011. However, on July 2, 2009, OIG found that this operation was selling its fruits and vegetables on the internet and still claiming to be a certified organic operation. NOP officials were unaware of this operation’s questionable activities.
  • FAILED ENFORCEMENT: Between January 2006 and February 2008, sworn law enforcement agents with the AMS’ Compliance and Analysis Program provided the results of its investigations of five certified organic operations to NOP. AMS recommended enforcement actions against these operations; NOP did not respond to these in a timely or effective manner. NOP did not monitor the organic operations to ensure compliance with those actions. As a result, NOP never issued the recommended enforcement action against one of the five organic operations, one that improperly marketed nonorganic mint under USDA’s organic label for 2 years; in the other four cases, the enforcement actions took between 7 and 32 months to issue. During this time, the operations continued to improperly market their products as certified organic.
  • FAILURE TO LEVY PENALTIES AFTER FINDING VIOLATIONS: NOP has not implemented a formal process for determining whether civil penalties – which may require concurrence from Office of General Counsel – can be assessed based on investigative results.
  • INADEQUATE CALIFORNIA OVERSIGHT: CA State Organic Program lacks required compliance and enforcement procedures to oversee certification. California has the most organic acreage in the country, with over 2,000 certified organic operations and organic product sales of over $1.8 billion in 2007. NOP officials have continued to work with California, as of November 2009, but procedures have yet to be finalized. OIG was unable to determine the volume/number of complaints filed in the state. This is highly troubling since California produces a tremendous percentage of the nation’s organic produce and many other commodities.
  • INADEQUATE CERTIFIER OVERSIGHT: Still no peer review panel to annually evaluate NOP accreditation procedures for certifiers. This is a failure to comply with the federal law Congress passed.
  • INADEQUATE CERTIFIER OVERSIGHT: Three of four certifying agents audited by OIG did not ensure that six split operations (handling both conventional and organic) adequately described procedures to prevent the commingling of organic products with nonorganic substances.
  • POOR ACCREDITATION/COMMUNICATIONS WITH CERTIFIERS: OIG visited four agents and 20 of their certified organic operations and found that all four agents were enforcing different requirements on their organic operations.
  • DEFICIENCIES BY CERTIFIERS: Six of the 16 split operations that OIG reviewed did not have adequate descriptions of these practices in their Organic System Plans (OSPs). These operations produced organic beef, poultry, flour, tea, and tofu. While OIG did not see evidence that commingling was occurring, no description on how to prevent organic products from coming into contact with prohibited substances was provided.
  • INADEQUATE ENFORCEMENT OF LIVESTOCK STANDARDS—ABUSES BY FACTORY FARMS: One certifier had outdoor access requirements for poultry while the other three agents did not. One poultry facility OIG visited had considerably less outdoor access compared to the other two poultry facilities visited. This facility had a total of 300 square feet of outdoor access for approximately 15,000 chickens. Two other poultry facilities OIG visited had large pastures for the birds to access and had significantly fewer birds at their facilities.
  • INADEQUATE RECORDS: Five livestock operations had inadequate records to document that animals had access to the outdoors, had received appropriate health care using approved practices and substances, and had been fed only organic feed.
  • CERTIFIER OVERSIGHT: Different certifiers had different noncompliance procedures and were not consistent in corrective actions that were required.
  • INADEQUATE CERTIFIER PERFORMANCE: Seven of the 20 organic operations visited by OIG did not have their OSPs available during site visits. None of the 20 operations submitted updated OSPs to their certification agents on an annual basis, as required.
  • ORGANIC SYSTEM PLAN DEFICIENCIES: OIG witnessed an operation producing meatless burgers as organic even though it did not list this product on its OSP. This product was labeled as certified organic.
  • INADEQUATE RECORDS: Organic certificates lack expiration and renewal dates, and listing of specific products certified varies. This impacts the credibility of organic commerce.
  • RESIDUE TESTING: The Organic Foods Production Act of 1990, the law passed by Congress giving the USDA the mandate to regulate organics, requires certifying agents to conduct periodic residue testing of organic products; NOP does not incorporate these provisions into its regulations. OIG questions whether the regulatory text is consistent with the wording of the Act, and recommends obtaining a written legal opinion from USDA Office of General Counsel (OGC) on whether NOP regulations, as currently written, comply with the requirement of the Act for periodic residue testing of organic operations by certifying agents. If OGC determines that the regulations are not in compliance, OIG will instruct AMS/NOP to develop a time-phased plan to amend the regulations and implement the required testing provisions.
  • FOREIGN CERTIFIERS: NOP did not complete required onsite reviews at five of 44 foreign certifying agents (generally in dangerous countries).
  • FOREIGN PROBLEMS IDENTIFIED: Seven of 10 NOP onsite visits for foreign certifying agents revealed major non-compliances. One included a mislabeled product and the use of uncertified organic feed at its certified operations. Another included failure to maintain conflict of interest disclosures.
  • UNACCEPTABLE DELAY AND FOREIGN OVERSIGHT: Reviews performed at 24 of the 44 foreign certification agents did not occur until over two years after they were conditionally accredited.
  • IMPROVEMENTS: AMS officials made improvements to the program since a 2005 OIG audit (available upon request), and implemented corrective actions for 8 of the 10 recommendations issued in prior audit report.
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