Report: Fraud Prevalent Among Recent 'Organic' Grain Imports

The U.S. system for labeling products as organic is susceptible to fraud from overseas entities looking to boost their profits, a new report suggests.

(AP Photo)
(AP Photo)

The U.S. system for labeling products as organic is susceptible to fraud from overseas entities looking to boost their profits, a new report suggests.

The Washington Post, citing documents provided by an unnamed industry expert, examined recent shipments of corn and soybeans imported into the U.S. from Turkey with organic labels — despite ample evidence that they were treated with pesticides just like conventional crops.

The paper particularly chronicled a shipment of 36 million pounds of soybeans grown with the help of pesticides in Ukraine before showing up in California in December with organic labels.

Global Natural, the Maryland company that brokered the soybean shipment, acknowledged it could have been “provided with false certification documents” for some Eastern European shipments, but the report particularly showcased vulnerabilities in the U.S. Department of Agriculture's organic labeling system.
 

(AP Photo)(AP Photo)

Although most products affixed with the "USDA Organic" label are grown in the U.S., large shares of organic corn, soybeans, coffee and other commodities come from overseas. Companies importing those products must use suppliers verified by the USDA, but the requirements do not reach back to farm fields.

Critics also argued that inspection regimens are weak and pesticide testing uncommon.

Officials from the USDA told the Post that regulatory oversight was strong and that authorities were investigating the grain shipments in question, but the report said that the soybean shipment was tested only after the paper began asking questions about it.

By that time, more than half of the soybeans were already on their way to customers. The shipments were largely intended to serve as animal feed for the organic dairy and meat sectors.

The agency also did not issue any sanctions over fraudulent grain labeling in recent years as imports of organic corn and soybeans tripled.

The motivation to cheat, meanwhile, is strong. The Post said that products with a "USDA Organic” label can sell for twice as much as a non-organic product, and that the organic labeling of the 36-million-pound soybean shipment led to an extra $4 million somewhere along its supply chain.

“The U.S. market is the easiest for potentially fraudulent organic products to penetrate because the chances of getting caught here are not very high,” John Bobbe of the Organic Farmers’ Agency for Relationship Marketing cooperative told the paper.

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