Organicology conference

Connie Karr, certification director at Oregon Tilth, speaks about preventing organic fraud at the Organicology conference in Portland, Ore., on Feb. 15.

To avoid fraud, the organic food industry should “think like a criminal” to identify its vulnerabilities and shore up defenses against corrupt suppliers, according to experts.

The exposure of both massive and small-scale schemes to misrepresent conventional crops as organic has compelled organic companies to analyze their supply chains for weaknesses, industry representatives said Feb. 15 at the Organicology conference in Portland, Ore.

The Organic Trade Association, for example, plans to offer a training program later this year to food companies that want to update their organic system plans with fraud prevention measures, said Gwendolyn Wyard, the group’s vice president of regulatory and technical affairs.

When asked whether the exercise could result in “a textbook of how to cheat,” Wyard replied that organic food companies are simply trying to pre-emptively understand the strategies of unscrupulous actors.

“Fraudsters are going to do what they are going to do,” she said. “Any way you slice it, they are already thinking that way.”

The Organic Valley cooperative has focused on the risks to its supply of livestock and poultry feed, most of which is produced by members but which does include some imports from overseas, said Logan Peterman, the company’s agricultural research analyst.

The company’s assessment identified several “rabbit holes” in its supply chain that were potentially susceptible to fraud, such as the “spot market” for crops that are purchased without a long-term contract, he said.

Convincing brokers to divulge the source of crops is inherently difficult, as they prefer to keep such information confidential so customers don’t circumvent them by going straight to suppliers, Peterman said.

Organic Valley was able to gain some certainty about such crops by communicating with organic certifiers, who were able to provide generalized information rather than the sensitive data contained in transaction certificates, he said.

The possible problem with this approach is that some brokers aren’t certified as organic because they don’t take physical possession of the crop, Peterman said.

Even a company as large as Organic Valley, which has more than $1 billion in annual revenues, cannot easily dictate terms to suppliers in the global food industry, he said.

“If you go in there like a bulldozer, it’s amazing how fast you can burn bridges,” he said.

Based on what it’s found, Organic Valley is trying to rely more on its pool of growers for supplies, as opposed to external parties who may not have as strong a commitment to the cooperative’s values, Peterman said.

The company also recognizes that it must build long-term trust with brokers who are willing to cooperate on verification, he said. Brokers don’t deal directly with consumers and so aren’t as affected by scandals, such as the extensive importation of fraudulent organic grains uncovered in 2017.

“It speaks to the importance of managing those relationships,” he said. “How do we get them to care the consumers will eat us alive if something else comes up?”

Organic certificates are now often issued and conveyed electronically, allowing for more “creative” forgeries that match fonts and add certified crops, said Connie Karr, certification director for Oregon Tilth.

“If you’re relying on just the organic certificate, you’re potentially at risk,” Karr said.

To verify the authenticity of a certificate, companies can compare information from suppliers with lists maintained by certifiers, she said.

For brokers that aren’t organically certified, Oregon Tilth requires such extensive corroborating information that some have opted to obtain certification instead, Karr said. “It’s not really easy for them to be uncertified with us anymore.”

Proving fraud is often an arduous process: In one case, it took seven unannounced visits over two years to find evidence of deceit by a Southern Oregon alfalfa grower, she said.

Another key lesson is that collaboration with other certifying agencies and USDA’s National Organic Program is crucial to unearthing instances of fraud, Karr said. “We’ve never been successful finding fraud on our own.”

I've been working at Capital Press since 2006 and I primarily cover legislative, regulatory and legal issues.

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