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In the March issue of NODPA News, Arden Landis briefly comments on a major structural flaw in the entire organic certification regime, the apparent conflict of interest between certifiers and businesses seeking organic certification. This article elaborates on the nature of this problem, its consequences, and possible solutions. Landis reflects on his experience working as an independent certifier for four certifying agencies. He feels that these agencies are working hard to conduct certifications in accordance with the National Organic Standards. However, “if I see one real problem in the whole process, it is that the agencies make their money off the farms they certify….If a certifier is too tough, farmers find out and they will move from one agency to another. I don’t know how you’re going to get around this.”
The problem Landis is talking about here is not unique to organic certification; any 3rd party certification scheme is vulnerable to this dynamic of the certifiers’ independence being questioned because their economic survival is dependent on their providing positive reports to their clients. While a negative certification report is not necessarily fatal to the business relationship between a certifier and its client, it is only reasonable to expect businesses to seek out more lenient certifiers if they have the option of doing so and feel their current certifier is more exacting than others. The organic certification system may be more vulnerable to this conflict of interest, though, than industrial certification regimes because of the great variety between farms in what is grown or raised and what methods are used to grow crops or raise livestock. Farms have to adapt to local soil, weather, and topographical conditions, and likewise animal husbandry practices will vary in accordance with production goals, size of farm, and breeds. No two farms, even two organic farms are alike; this provides space for divergence perspectives on whether a particular farm is operating in accordance with organic standards.
The principle behind 3rd party certification is that the certifying body is providing highly qualified inspectors to assure the public and customers that certified entities are operating in accordance with a set of standards that have been set by a 3rd party, in the case of organic standards—the United States Department of Agriculture. Third party certification gives certified businesses a badge of approval that not only confirms adherence to a set of standards, but confers a certain status that translates into advantages in the market place. It may lead to less scrutiny from government regulators as the badge of certification indicates to regulators that the business in question is taking extra steps to operate its business in accordance with strict social, environmental, or quality standards. It generally translates into the ability to tout one’s certification status to consumers as an indicator of quality, of environmental stewardship, or of social consciousness. On a broader social level, certification provides assurances to the public that firms abiding by a particular certification are operating in a way that provides public benefits or unique benefits to consumers. Reflecting the former, certified organic farms are not supposed to use dangerous pesticides, which should reduce potential health hazards resulting from runoff into streams and groundwater. Reflecting the latter, some consumers believe that their health will benefit from cows that graze and are not injected with antibiotics or hormones that increase milk production.
Regardless, the critical point here is that while individual firms certainly benefit financially from getting a positive certification report, the certification regime provides benefits to the public and/or consumers. The firms being certified know this, and thus are likely to place pressure on their certifiers to produce favorable reports that will make them look better in the eyes of the consuming public. While such pressure may not be overt, the controversies around certification of mega organic dairies speak to this exact dynamic of very large farms looking for certifiers that will produce favorable certification reports, earning them the prestige and marketplace advantage that organic certification confers, while not having to pasture as much as smaller organic dairies that are inspected by different certifying agencies, with more stringent interpretations of the National Organic Standards. Even if certifiers have not been explicitly asked by these mega organic dairies to produce favorable certification reports, the ability of farms to “shop around” for lenient certifiers contributes to the current mess. Confined animal feeding operations are certified organic even though visual observation and laboratory tests of milk from such large farms points to little or no pasture in these cows’ dietary regimen during the grazing season, as required by the National Organic Standards. This reduces consumer confidence in the organic label and puts the economic squeeze on producers that strictly adhere to the pasture requirement.
Organic watchdogs such as Organic Consumers Association and the Cornucopia Institute have rightly called out bad actors for abusing loopholes in the standards and the lax government oversight of certifiers. They have even sued retailers for selling “organic” milk that was not produced in accordance with organic standards. However, blaming abuses on lenient interpretation of the standards and lax oversight of certifiers misses the fundamental flaw in the entire 3rd party organic certification system. The very entities that are charged with enforcement of standards depend for their survival on the repeated patronage of businesses that they could harm financially or even put out of business with negative reports. This brings us to a discussion of alternatives to this kind of financial arrangement. I propose a series of changes in the relationships between certifiers and certified entities that would go a long way towards eliminating this contradiction.
In order to sever the financial relationship between certifying agencies and their clients all organic farmers, processors and retailers would be assessed a small share of their previous year’s revenue, which would go into a general pool for paying certifiers. A committee would be set up by the National Organic Program, with representatives from all certifying agencies in the United States as well as two NOP staffers, two organic watchdog representatives, and six farmers from different regions of the country and of different sizes. This committee would create a uniform fee structure based on complexity and size of operations. Entities seeking to gain organic certification or renew their current certification would be assigned a certifier based on their location and the fee for the certification inspection would be paid to the certifying agency from the general certification pool. Breaking the financial ties between certifying agencies and certified entities, and stopping the shopping around process would reduce pressure to be lenient in order to maintain business, lead to less variation in interpretation of the standards, and ultimately increase consumer confidence in the organic label. Beyond severing financial ties, it is important to eliminate the prospect of certifiers competing with each other on price, as this could drive a race to the bottom. Furthermore, to eliminate the possibility of certifiers becoming more lenient after developing close relationships with their clients, certifier assignments for individual enterprises would be switched every two years, with the records from one certifying agency being transferred to the next one in line. Switching from the current arrangement to this alternative scenario is a challenge, to say the least, but this proposal is being put forth to stimulate discussion and debate on this crucial issue that severely impedes the overall potential of organic certification to reduce environmental harm from farming, increase animal welfare, and create a healthier, more sustainable food system.
Adam Diamond is an environmental and food systems consultant based in Takoma Park, MD. He has a Ph.D. in geography and has done extensive research on the structure and development of the organic dairy industry in the Northeast United States, as well as the evolution of supply management in Federal agricultural policy. Previously he did applied research on local and regional food systems at the U.S. Department of Agriculture’s Agricultural Marketing Service and worked at the School of International Service at American University, where he taught courses on global agricultural development, environmental sustainability and global health and commodity chains. He can be reached at email@example.com.
Posted: to Policy in the News on Wed, Jun 20, 2018
Updated: Wed, Jun 20, 2018