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NOP comes under fire following audit

by Tim Linden | March 28, 2010
Beginning in September, the U.S. Department of Agriculture's Agricultural Marketing Service will begin conducting spot residue checks at organic operations and of product on retail shelves that is labeled as organic on an ongoing basis because an audit of the National Organic Program revealed some serious violations and lack of proper oversight.

The USDA's Office of the Inspector General recently audited the 20-year-old program and issued the finding, which included many recommendations to improve the process of organic certification and to tighten procedures dealing with violations.

The report found that until now, reported violations often were not dealt with in an expedited manner, and that violators were allowed to continue to operate with no enforcement follow-up procedures.

Barbara Haumann, a spokesperson for the Organic Trade Association, said that her group welcomed the audit and basically agrees with the recommended checks and balances that will now be implemented.

While the report seems to point to a program with multiple problems, Ms. Haumann said that OTA believes there is very little fraud in the organic industry and that better oversight and training should solve the few problems with the system. She said that the audit itself shows that one of the major issues with the program has been inadequate funding.

"Over the years, AMS has not had adequate staff or adequate funding to provide the proper oversight," she said. "Funding has been increased, and this [audit] is the result."

As a point of fact, the program's budget increased by $3 million this fiscal year to $6.9 million and the staff has almost doubled to 31. In the latest budget proposal from the Obama administration, The organic program's budget has been penciled in at $10 million with another significant increase in staff expected.

Ms. Haumann said that this increase in budget and staff has allowed AMS to begin the process of providing proper oversight. However, she reiterated that while there have been issues with oversight, the vast majority of product certified as organic is properly labeled.

In 1990, the Organic Foods Production Act established national standards for the production and handling of organic products and required the secretary of agriculture to issue regulations to implement the legislation. That began a decade-long effort to write standards, which ultimately resulted in the creation of the National Organic Program in 2002 under the auspices of the USDA's Agricultural Marketing Services.

The NOP regulations have many provisions, but first and foremost was the establishment of state or private entities to provide certification that organic products meet uniform standards and that they are appropriately labeled. NOP regulations require that agricultural products labeled as organic originate from farms or handling operations certified by a state or private entity that has been accredited by the USDA.

The Office of the Inspector General conducted an audit in 2005, and then this latest one in 2009 largely because the organic industry has experienced double-digit growth on an annual basis. In 2008, the report stated that the organic industry had sales of $24.6 billion.

The 2005 audit revealed that AMS had not established protocols with the NOP Standards Board to resolve conflicts and violations, and that there was little oversight to assure that certifying agents operated in a consistent manner. This latest audit found that there had been improvements, but there were still areas of concern.

The latest audit states: "[W]e believe that NOP officials need to further improve the program administration and strengthen their management controls to ensure more effective enforcement of program requirements when serious violations, including operations that market product as organic while under suspension, are found. In addition, they need to strengthen their oversight of certifying agents and organic operations to ensure that organic products are consistently and uniformly meeting NOP standards."

The report further stated that "NOP officials did not have adequate procedures or a system for tracking the receipt, review and disposition of complaints and any subsequent enforcement actions."

Specifically, the audit found that some violators were not prevented from selling products improperly labeled as organic, even after serious violations were discovered.

It was also found that most certifying agents were not conducting periodic residue testing of organic product from certified handlers, despite the fact that the 1990 act requires such action.

The audit report stated, "None of the four certifying agents we visited conducted periodic residue testing of the approximately 5,000 certified operations for which they were responsible, and there is no assurance that certifying agents performed regular periodic testing at any of the approximately 28,000 certified-organic operations worldwide."

The report continued, "Without such testing, the potential exists that an operation's products may contain substances that are prohibited for use in organic products."

There is some debate on this issue because the previous NOP director had stated that the program's funding level did not allow for this type of testing. Another point of contention was that the regulations were process-based rather than a zero-tolerance standard, so residue testing was not required of certifying agents.

This specific oversight is the area that AMS plans to remedy through spot checks of organic product on retail shelves and at the operations of handlers. They are also asking for a written opinion from the Office of General Counsel with regard to requiring certifying agents to perform these spot residue tests.

Sam Jones, a USDA spokesperson, told The Produce News March 23 that the procedure to handle those in-store residue tests has not been revealed at this point. He indicated that the actual protocol will be worked out over the next several months before the testing begins in September.