Why is fraud prevention important in the organic market?

Why is fraud prevention important in the organic market?

Key elements as to why fraud plans are crucial include:

• Maintaining consumer trust and meeting expectations – Consumers that choose to purchase organic products have the expectation that organic products were produced in accordance with organic principles. Fraud undermines this trust and can erode confidence in the entire organic industry. Fraud prevention plans ensure the consumer expectation is being met and that the organic label remains meaningful.
• Preserving market integrity – Fraudulent practices can distort the market and create unfair competition. Organic fraud prevention helps maintain the integrity of the organic market.
• Protecting farmers and businesses – Organic farms and businesses invest considerable time and resources in adhering to organic standards. Fraud can lead to unfair competition and thus losses for those that follow the rules.
• Ensuring environmental sustainability – Organic principles are designed to promote environmental sustainability whereas, fraudulent practices that deviate from these standards can contribute to environmental harm
• Verifying compliance with regulations – Fraud prevention plans are built to help producers comply with existing organic regulations
• Ensuring compliance with global trade – Having robust fraud prevention plans is crucial for meeting the diverse regulatory requirements for different countries and ensures a smooth flow of organic products in the global market

An Organic Fraud Prevention Plan (or OFPP) is the plan or document that producers develop as part of their OSP to outline the vulnerabilities and mitigation strategies for preventing organic fraud in their supply chain. The OFPP is a separate OSP document that is submitted by all operations. The goal of an OFPP is to document how each operation ensures only compliant suppliers and organic products are used and details the steps taken to prevent instances of organic fraud. 

The plan must evaluate all certified organic items (products, ingredients, livestock, etc.) that are purchased or brought onto the operation. It also must describe how the suppliers are verified as being compliant, as well as how the actual products are verified to retain their organic status from the supplier to the operation.

Examples of what needs to be included in the OFPP by certification scope (Crop, Livestock and Handling):

• CROP: A crop operation may purchase certified organic seedlings and with that being the only certified organic agricultural product purchased, that would be the only product that would need to be reflected in their OFPP.
• LIVESTOCK: A livestock operation may purchase certified organic livestock, organic bedding (if it’s roughage), and organic feed (such as grain or hay). For this kind of operation, each of those certified organic products the operation purchases and brings on-site needs to be included in the OFPP.
• HANDLING:  A handling operation needs to include all organic ingredients that are purchased and brought on-site in order to produce processed and/or packaged products. The OFPP must also include activities where an operation is facilitating the sale of organic ingredients or products where there may or may not be physical possession of the ingredients or products. 

When an operation is assessing their supply chain, consideration must be given to all activities tracing back to the last certified entity. This includes storage or transport events that occur between the supplier and the operation.