Corn Fraud
ANAHEIM, Calif. — Last May, the food industry awoke to troubling news, when The Washington Post published an in-depth article exposing fraud in the organic supply chain. The newspaper documented a shipment of fumigated soybeans from Ukraine to Turkey to Stockton, California, where it arrived falsely bearing an organic label.

“This is the kind of thing that you don’t want in your industry, you don’t want the thing you care about, in The Washington Post in this way,” said Jake Lewin, president of CCOF Certification Services LLC, during a March 9 panel discussion at Natural Products Expo West in Anaheim. “But, for us, we would rather it be in The Post and be able to do something about it than never hear about it.”

Over the past year, much advocacy work has been done to address the issue of organic fraud by groups including the National Organic Standards Board, the Accredited Certifiers Association and the Organic Trade Association. A Global Organic Supply Chain Task Force was formed to develop a best practice guide for detecting and reporting fraud. The OTA has proposed a bipartisan bill authorizing increased funding for US Dept. of Agriculture's National Organic Program to keep pace with organic industry growth.

While these efforts are important, “fraud prevention starts in your own business,” Lewin said.

There is a lot on the line for brands and industry if consumers lose faith in the integrity of the organic label, said Tom Chapman, director of ingredient sourcing at Clif Bar & Co. and NOSB chair.

“All brands have a role in making sure this gets rooted out of their supply chains if it’s there or addressing it once it’s discovered,” Chapman said. “There’s reputational risk for every CPG company out there.”

It's a complex issue with no simple solution. Supply chains are fragmented and layered. Fraud or contamination may happen at any point, Chapman said.

“An oat might go from a field in Canada to an elevator to a mill before it comes to a bakery to be made into granola, then gets added into (yogurt),” he said. “It gets complicated very quickly before it gets to that consumer product.”

C.J. Eisler, director, Specialty Feeds at Pipeline Foods, advises companies to “know your supplier, and ultimately know your suppliers’ suppliers.”

“We always like to talk about getting as close to the farm as possible... not always easy to do, but if you can work with partners that shorten the supply chains for you, it helps a lot,” Eisler said.

Companies must not rely on regulators and suppliers to eliminate fraud, said Kim Dietz, senior manager of environmental, natural and organic policy at J.M. Smucker Co. and president of the OTA board.

“Every single person in the supply chain has to be accountable for this to work,” she said.