EU Audit in Belgium on organic production and labeling – Are we still surprised of “organic frauds”?

Here below the summary of the above mentioned audit report:

“This report describes the outcome of a DG Health and Food Safety audit in Belgium, carried out between 19 September 2017 to 29 September 2017, under the provisions of Regulation (EC) No 882/2004 on official food and feed controls.

The objective of the audit was to evaluate the controls on organic production and labelling of organic products.

The control system for organic production in Belgium is only partially in place. There is no competent authority responsible for import controls of organic goods, and market controls only cover follow up of complaints and control bodies are not annually supervised by all regional competent authorities.

Although inspections by control bodies at operators are overall effective and the number of additional and unannounced inspections and sampling by control bodies goes far beyond EU requirements, enforcement is weak, in particular, in cases of severe and recurrent irregularities.

This, together with the fact that the likelihood of irregularities are neither reported to competent authorities nor fully investigated by them reduces the effectiveness of the control system.”

This report highlights some typical factors that increase the likelihood of frauds in the organic sector:

  • weak import controls are the main gate for fraudulent activities. The organic market is assuming a huge dimension in EU and we cannot rely on internal production to cover the needs of raw materials. Certain commodities are in large parte – or mainly – imported: this is the case for instance of many grains and cereals, lentils, tree nuts…
  • the hybrid nature of the control bodies (CBs) is a major weakness as well: in most Member States they are private bodies invested of a public function (namely do the controls for the competent authorities). That means that they have the obligation to report irregularities to the competent authorities (CAs), but they are also competing hard with other CBs to survive on the market. Therefore they could be not so keen to share information about investigations, especially on sensitive cases, with the CAs. They often tend to protect the certified food business operators, that to a certain extent are also their “clients”;
  • the weak supervision of the CAs on the CBs can foster illegality and in any case allows a less transparent management of non compliance cases, for reasons explained in point 2.

The good news is that in most countries the number of inspections is above EU requirements and that they are unannounced, but in our experience on the ground in several Member States the CBs are too focused on paperwork and much less on the fields. An illegal treatment of crops might be spotted much better from a walk beneath them, than from a registry.

Consumers and regulators often rely on labeling and traceability as tools to prevent similar frauds (conventional food passed as organic, country of origin different from what declared), but since these tool are only “paper” they are quite easy to fake for any experienced fraudster. Moreover, they increase the final costs of the products, increasing as well incentives for fraudsters.

The organic sector is mainly involved in what we can call “commercial frauds”: they involve quality and usually are not likely to cause any risk for the public health. As a consequence, in my opinion, this could be one of the sectors where new technologies that might secure transactions along the supply chain and reinforce traceability, including blockchain, should be applied first and get the better added value.


EU-USA trade agreements negotiations

José Manuel Durão Barroso
José Manuel Durão Barroso (Photo credit: Wikipedia)

USA is the first export destination for EU’s food and drink products: the value of these trades in 2012 amounted to € 13.6 bn.

So it is understandable the interest to an agreement on both sides of the ocean, and the enthusiasm for the formal launch of negotiations announced at the G8 summit in Northern Ireland. The Transatlantic Trade and Investment Partnership (TTIP) could bring great benefits, both in terms of economic growth, and employment.
The President of the European Commission, José Manuel Barroso, said:

“We intend to move forward fast. We can say that neither of us will give up content for the sake of speed, but we intend to make rapid progress. I’d rather see the core challenge, moving our regulatory regime closer, and addressing the harmful effect of behind-the-border trade barriers. Huge economics benefits are expected from reducing red tape, avoiding divergent regulations for the future. The potential economic gains for the EU are estimated at around € 120 billion a year. And the real beauty of this deal is that it will offer real returns of around € 545 per average household in Europe almost for free. This makes it the cheapest stimulus package one can imagine”.

These are the reactions of FoodDrinkEurope President, Jesús Serafín Pérez:

“Europe’s food and drink industry welcomes the formal launch of trade negotiations between the European Union and the United States. We particularly welcome President Barroso’s announcement that the parties will look at ways to ‘reduce red tape and avoid divergent regulations for the future’. As Europe’s largest manufacturing industry, and the world’s largest exporter and importer of food and drink products, we look forward to playing an active role and providing input to the negotiations on this Agreement, which has the potential to drive growth and facilitate access to a major export market, thereby generating new opportunities for Europe’s food and drink manufacturers”.

David Cameron said the deal would be the biggest in history and was a “once in a generation prize” he was determined to seize.

“There is no more powerful way to achieve that than by boosting trade and there’s no better way than by launching these negotiations on a landmark deal between the European Union and the United States of America, a deal that could add as much as £100 billion to the EU economy, £80 billion to the US economy and as much as £85 billion to the rest of the world”.

He added: “We are talking about what could be the biggest bilateral trade deal in history. A deal that will have a greater impact than all the other trade deals on the table put together.”

However several regulatory barriers remain: just think about the different positions about the hormone treated beef meat.

An example of the cooperation between EU and US could be the recent bilateral cooperation arrangement on organic equivalence. The EU and U.S. have recognised each other’s organic production rules and control systems as equivalent under their respective rules. This type of recognition, also referred to as an “equivalence arrangement”, means that organic products certified to the USDA organic or European Union (EU) organic standards may be sold and labelled as organic in both the U.S. and the EU. As long as the operation is certified by a USDA-accredited certifying agent or an EU Member State recognised control body or control authority, this recognition eliminates the need for EU organic operators to have a separate certification to the U.S. standards (NOP) and vice versa.

The first round of negotiations it will be in Washington on July 8th and the process is expected to take up to two years.