Organic Consumers Have New Weapon to Fight Fraudulent ImportsOctober 15th, 2018
Buyer’s Guide Highlights Brands Sourcing Exclusively from U.S. Farms
In response to consumer concerns after published reports of fraudulent organic grain imports flooding the American market, The Cornucopia Institute, an organic industry watchdog, has released a web-based Buyer’s Guide that identifies brands of organic dairy products, eggs, and poultry derived from animals that are exclusively fed U.S.-grown grains.
Cornucopia has also published a companion report, Against the Grain: Protecting Organic Shoppers against Import Fraud and Farmers from Unfair Competition, outlining over a decade of neglect by the USDA’s National Organic Program (NOP). USDA inattention has resulted in approximately half the organic corn and over 80% of the organic soybeans fed to domestic animals being imported from China and former Soviet Bloc countries with epidemic levels of commercial fraud.
“Identifying marketplace alternatives for consumers is critical to putting an end to the profiteering perpetrated by agribusinesses that fail to verify the authenticity of organic grains being used to produce their products,” said Mark A. Kastel, Cornucopia’s codirector.
The farm policy research group’s release of its mobile-friendly Buyer’s Guide follows its groundbreaking June 2018 white paper that chronicles how a small number of Turkish-based multibillion-dollar agribusinesses, with production in Russia, Kazakhstan, and Moldova, came to dominate the U.S. organic grain market.
Sham organic imports, commonly used as livestock feed, have made their way into the U.S. accompanied by altered paperwork that represents the corn or soy as organic when it is actually conventionally produced.
“The economic damage to U.S. organic grain producers is staggering, as they have struggled, in recent years, to compete with cheap imports that are often not even organically produced,” said Anne Ross, a Cornucopia farm policy analyst and the organization’s lead researcher on import issues.
One brand of organic chicken positively highlighted in Cornucopia’s study is Bell and Evans, based in Fredericksburg, Pennsylvania. “Although our chicken is distributed throughout the eastern half of the United States, we are a family-owned business, I grew up in the poultry industry, and we only feed our birds U.S. grains because we feel adamantly about the ability to stand behind the credibility of our products,” said Scott Sechler, the company’s founder and chairman.
The dairy section of the scorecard includes such venerable and highly rated yogurt brands as Butterworks in Vermont and Hawthorne Valley in New York.
“Based on our analysis, domestic organic corn and soybean producers lost over $400 million to dubious organic grain imports from 2015 through 2017,” according to John Bobbe, Executive Director of the Organic Farmers’ Agency for Relationship Marketing (OFARM), an umbrella organization representing organic grain marketing cooperatives in 19 states.
Complicated international supply chains present challenges in investigating sources of fraud, but the public, especially those involved in organic grain markets, can help by using purchasing power to increase pressure on poultry, beef, dairy, and egg operations to use U.S.-grown grain. Cornucopia’s guide also identifies feed operations where farmers and ranchers can procure commodities that do not contain imported grain.
“Cornucopia is to be highly commended for development of this guide that educates consumers and producers about brands that use U.S. grown organic grains for livestock feed. These efforts are vitally important in shifting market share to domestic producers and away from global sourcing of imports having highly questionable organic integrity,” said Oren Holle, , a farmer-owned marketing cooperative.
Cornucopia has repeatedly called upon the USDA to implement reforms and stricter enforcement protocols to prevent fraudulent organics from flowing across U.S. borders.
“Since we first spotlighted serious concerns about the propriety of imported organic soybeans from China over a decade ago, the NOP, major certifiers, and the industry’s leading lobby group, the Organic Trade Association, did nothing whatsoever to investigate fraud. They instead engaged in incessant cheerleading on behalf of ‘organic integrity,’” Kastel added.
The USDA and corporate interests seemed to wake up in the middle of 2017 when the Washington Post published a scathing investigative report on fraudulent organic corn shipped through Turkey that had been treated with banned agrichemicals in Ukraine. That was followed by a critical audit by the USDA’s Office of Inspector General calling out the NOP’s lack of diligence in scrutinizing imports.
Subsequently, in July 2017, The Cornucopia Institute submitted a formal Citizen’s Petition to the USDA, requesting emergency rulemaking that would require residue testing of every bulk shipment of organic grain from high-risk regions and regulatory changes that would require certification of every entity in the global supply chain.
Last month, over a year after Cornucopia submitted the petition, the USDA held a “virtual town hall” announcing plans to roll out a draft rule by March 2019 with final implementation at a still later date. The new regulations would purportedly require brokers, traders, marketers, and distributors to be certified under USDA rules if they sell or arrange the sale of, represent, or label organic products, while also increasing unannounced inspections.
“Remediating this problem cannot wait another year or two. We renew our call for emergency rulemaking which would temporarily bypass some of the legal noticing, public input requirements, and the typical phase-in period that will otherwise delay implementation,” Kastel stated. “U.S. farmers deserve a level playing field, and consumers need to be protected from fraud.” In the meantime, Cornucopia’s buyer’s guide empowers consumers and wholesale buyers with the ability to make discerning purchasing decisions.
Cornucopia’s new report on organic imports outlines how the U.S. became a vulnerable dumping ground for fraudulent organic corn and soybeans after the European Union cracked down on abuses from former Eastern Bloc states while the USDA failed to take similar action.
According to Cornucopia’s analysis of maritime shipping records, a small but powerful group of multibillion-dollar companies has capitalized on importing organic grain grown in former Eastern Bloc states. One of those companies, Tiryaki Agro Gida Sanayi ve Ticaret A.S., along with its wholly owned subsidiary, Diasub, FZE, have a commanding share of the U.S. grain market.
Tiryaki and its affiliates made news this year as the seller of 25,000 metric tons of organic corn, rejected by the USDA at the port of entry, that was the subject of a controversial lawsuit made public by Cornucopia in April 2018. The legal action was brought by Sunrise Foods International, a Canadian-based importer, which is also a Tiryaki- and Diasub-affiliated company.
“This one massive shipment was blocked due to a technicality that normally prevents corn grown in these specific countries from entering the U.S. due to concerns about pest and pathogen contamination,” said the Cornucopia Institute’s Ross. “This bulk shipment, carried aboard the M/V Mountpark, was denied entry by U.S. Customs on this basis and not because of diligence by the National Organic Program in ensuring the integrity of the organic certification system.”
Available organic acreage and production data for former Eastern Bloc states and Russia presents a troubling scenario which suggests the U.S. is importing more alleged organic grains than records indicate these countries are even producing.
John Bobbe, of OFARM, noted “If you take a look at the Mountpark shipment, it consisted of 25,000 metric tons of corn from Russia, Moldova, and Kazakhstan. Available data shows these three countries combined had 4,580 acres of organic corn in production in 2016. Using generous estimates, the yield would be 120 bushels per acre for organic corn, which is 549,600 bushels. This equates to 13,960 metric tons. The Mountpark shipment alone (25,000 MT) exceeded realistic yields for these three countries in that given year.”