Uncertainty and dysfunction have overtaken the National Organic Standards Board (NOSB) and the regulations associated with the National Organic Program (NOP), Senate Agriculture Committee chairman Pat Roberts (R., Kan.) said during a committee hearing Thursday. Witnesses as well as members dug into some of the woes currently impeding the organic industry, which has been faced with fraudulent imports and U.S. producers' inability to keep up with domestic demand.
“A recent Washington Post article highlighted the issue of fraudulent organic imports, but my constituents in Kansas brought this issue to my attention a year ago,” Roberts said. “We pushed the U.S. Department of Agriculture to do something then, and it is clear that if it takes this long to get action, something needs to change.”
Roberts said some changes need to be made to ensure that domestic organic producers are competing on a level playing field and are not being held back by U.S. regulations and processes.
In his testimony, Ken Dallmier, president and chief operating officer of Clarkson Grain Co. based in Cerro Gordo, Ill., gave suggestions to mitigate the risks associated with the fraudulent organic grain imports. He said low global commodity prices, international conflict zones, a process-based certification system and lack of enforcement authority have contributed to the fraudulent shipments of organic grain from southeastern Europe through Turkey.
Demand for organic feed grains has increased with growing demand for organic poultry and dairy products. In 2016, more than 50% of the organic corn and more than 70% of the organic soybeans used in the U.S. were imported, representing 1 million acres and $410 million in lost revenue alone, Dallmier testified.
He said one way to prevent future fraudulent imports is to utilize existing domestic programs to support the expansion of domestic organic grain supply. This could be done by instructing USDA to finalize the USDA Certified Transitional seal with associated process verification programs (PVP).
In 2015, Clarkson Grain designed and submitted a PVP aligned with the requirements to transition land into organic production. USDA is currently studying the implementation of a USDA Certified Transitional seal to provide customer confidence in the process of bringing land into organic production. Brands such as Kashi developed a private PVP verified by Quality Assurance International to improve market access for producers “in transition.”
Dallmier said NOP should have been more aggressive in developing a transition program to build the U.S. supply by encouraging scalable farming operations to incorporate organic production into their business plans. For organic producers, crop loan infrastructure, crop disaster insurance and producer revenue insurance should recognize the established Risk Management Agency organic crop price rather than the standard commodity price -- a practice similar to existing crops for seed.
“At that transition period between organic production generally considered small-scale enterprises and making the leap so we’re not reliant on those imports, we need to get to scale,” Dallmier said. This can be encouraged by investing more in organic research and extension as well as working with regional and community colleges to encourage that transition to organic production.
He said the integrity of the organic seal also could be enhanced by increased transparency through the supply chain using robust physical tracking mechanisms that can withstand grain transit while being easily removed from the grain stream at the final destination.
Amber Ag is commercializing a working system whereby a radio frequency-transmitting puck about the size of a key fob is inserted into a bag of grain in the field (or truck, container, etc.) and is readable throughout the supply chain to the end user. Each puck has a unique identifier that could be registered with the NOP and traced. As the puck and grain move through the system, a blockchain system of trace and track is established. Once the puck reaches the end user, it is easily removed from the grain stream due to its size and weight. The puck then could be reused or discarded.
Personal and corporate accountability and responsibility must be introduced throughout the import supply chain. By embedding NOP staff at specially designated ports and making them accountable to U.S. law and penalties related to corruption and fraud, consumers have a final guard at the loading gate.
Makeup of boards
Theo Crisantes, vice president of operations at Wholesum Harvest and a third-generation organic farmer with operations in Arizona and Mexico, discussed problems with the current NOSB, which serves as a federal advisory committee to USDA’s NOP. He said the 15-member board has a difficult time capturing and reflecting the variety of operations that make up the organic industry.
“Of those 15 seats on the NOSB, four of them are filled by small operators who grow a combined acreage of less than 120 acres. Likewise, the only seat allocated to retailers is currently occupied by a 17-store chain. Stated another way, NOSB’s current composition fails to reflect the breadth and diversity of the industry,” Crisantes said.
“The organic sector is no longer a niche industry. There are approximately 24,000 certified organic operations nationwide supporting tens of thousands of farm sector jobs in a $50 billion-per-year industry,” he testified. “I believe that to continue the organic industry’s positive trajectory, it will be important for this committee to discuss the current process for developing standards and other policy priorities.”