Discussing the Private Sector’s Role
By Jon Fogarty
Fraud can be a dirty word. The thought can lead one to speak in hushed tones. Some people are hesitant to admit they
know something about fraud for fear it might mark them with a
scarlet letter or be a pox on their company. The fact is that fraud
happens in every industry—even in organics. While there’s no way
to stamp it out completely, not talking about fraud won’t make the
problem go away.
In the organic industry, we have a large head start in preventing fraud. We
have third-party certification programs backed by government that add a
layer of oversight not present in other industries.
But, we cannot let this extra layer lead to a false sense of security. Currently, most organic inspections are focused on confirming that the rules are
being followed and are not always designed to uncover intentional abuse.
Thus, the industry has a major role to play, in concert with accreditation and
certification, in preventing and detecting fraud. Industry must keep a watchful eye and when we find something that doesn’t seem above board, we need
to ask questions and talk about it.
In Europe, industry leaders have been meeting to discuss organic fraud
under the banner of the Anti Fraud Initiative (AFI). Recently this conversa-
tion was brought across the Atlantic at
the AFI North America meeting, held
Oct 11-12, 2010 in Cambridge, Massachusetts. These meetings have
brought together people representing
all segments of the organic food industry, leading to productive conversations about how to address fraud.
The Growth of
While our industry is relatively
small and once upon a time it was
possible to know everybody, or at least
to know all of your suppliers and customers, personally—that is not the
After decades of 15 to 20 percent
annual growth, the industry is much
larger than it was even three or four
years ago. Organic products have long
carried a price premium throughout
the supply chain from farm to consumer, which has attracted many actors with good intentions but also a
few with less-than-honest intentions.
The high demand for organic has
also led to an explosion in products
from new companies entering the
market as well as established companies introducing organic versions of
their conventional products. Some
new actors in the supply chain may
lack experience to properly implement organic rules or the dedication
to follow the rules. This sets the stage
for problems, whether intentional or
Further complicating the issue is
the globalization of the supply chain.
As supply chains wrap around the
globe, it becomes increasingly difficult to determine whether, or to what
extent, organic rules are followed by
suppliers. In some locales the skills of
inspectors may be lacking or suspect
and transparency and traceability difficult to attain.
What is Fraud?
How does one distinguish between
honest mistake, sloppy business practices and fraud? If the stocker at a gro-