US: New Rules Target Fraud in Organic Food Sales

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Facts

  • On Thursday, the US Department of Agriculture (USDA) announced new regulations that will allow for better oversight and enforcement over foods labeled and sold as organic.
  • The Strengthening Organic Enforcement (SOE) rule, which takes effect in March, mandates the USDA’s National Organic Program certification for all organic imports to plug loopholes that allowed non-organic products to infiltrate the supply chain.
  • Further, the updated SOE standardizes training and operations requirements for organic businesses, increases on-site inspections, and requires companies to prove all parts of their supply chain are organic.
  • Farmers, certifying agents, and other organic stakeholders will have one year to comply with the changes.
  • Sales of organic products in the US reached more than $63B between 2020 and 2021, while organic food sales — which comprise over 90% of organic sales — rose to $57.5B.
  • The announcement comes months after a Minnesota farmer was charged with felony wire fraud for making $46M by passing off chemically treated corn and soybeans as organically grown.

Sources: Usda, Washington Post, Finance, Abc, Ota and NBC.

Narratives

  • Pro-establishment narrative, as provided by CNN. The new regulation is a significant step toward protecting legitimate organic producers and consumers who pay a premium to buy organic products. It potentially enforces a system that will prevent non-organic products from slipping through the cracks and create a level playing field for organic farmers. It will also increase people's confidence when buying organic goods as well as improve the market and the farmer's bottom lines.
  • Establishment-critical narrative, as provided by Nerdwallet. While a step in the right direction, this new regulation doesn't go far enough as there are grave flaws within the USDA itself. Its conflicting and compromised system is what allows ill-intended producers to flood the market with fraudulent products. Moreover, its failure to close holes in its certifications, investigations, and penalties undermines authentic producers and tarnishes the agency’s organic seal.