The organic market is about to enter a new age. Come March 2024, the Strengthening Organic Enforcement (SOE) rule is going to drastically alter the organic food landscape … for the better.
How will the SOE rule change existing USDA organic regulations?
The Strengthening Organic Enforcement (SOE) rule updates the USDA organic regulations to strengthen oversight and enforcement of the production, handling, and sale of organic products. These changes are aimed at boosting integrity in the organic supply chain while at the same time building consumer and industry trust in the USDA organic label.
The key updates include:
- Requiring certification of more businesses, like brokers and traders, at critical links in organic supply chains.
- Requiring NOP Import Certificates for all organic imports.
- Clarifying how certified operations may submit changes to their organic system plan, reducing paperwork burden for operations and certifying agents.
- Expanding the annual update requirements for certified operations.
- Improving compliance and appeals processes.
- Calculating organic content of multi-ingredient products.
Overall, the objective of the changes is to strengthen organic control systems, improve farm-to-market traceability, and provide robust enforcement of the USDA organic regulations.
Who will be affected by these changes?
The impact of the SOE rule is widespread, affecting USDA-accredited certifying agents, organic inspectors, certified organic operations, operations considering organic certification, importers, suppliers of organic products, and retailers that sell organic products. That leaves out only a few players in the supply chain, such as uncertified drivers.
However its widespread aim is understandable as it tries to close supply chain loopholes in previous regulations.
The SOE rule also provides stronger tools and processes at each stage of the supply chain to help ensure compliance while making robust and consistent enforcement in organic regulations a proactive part of the supply chain instead of a reactive one.
The hope is that, if everyone plays their part, farm-to-market traceability will be improved, consumer and farmer trust in the USDA organic label will be strengthened, and a level playing field for organic farms and businesses will be created.
But is it really necessary to pull so many parties into the compliance process? When you consider the complexities of a single organic supply chain, the answer is a definite yes.
What does a truly organic supply chain look like?
To illustrate the breadth of the rule’s impact, you just have to consider the true span of a fully organic supply chain.
The Federal Register illustrates the complexity of a truly organic product brilliantly in its discussion of the SOE, when it breaks down the supply chain of organic eggs.
It all begins with the harvesting of organic corn, soybeans, oats, wheat, etc. produced by certified organic farms. Because for eggs to be certified organic, the chickens need to eat organic feed.
And in the supply chain of each ingredient, there are multiple parties, both certified and uncertified, involved in the production of organic feed. From handlers and processors to brokers, wholesale importers, bulk suppliers, transporters, and buyers, organic certification of one ingredient can be compromised at any of these stages. And the loss of that single ingredient’s organic status nullifies the organic status of each product that follows it, including the eggs produced by chickens who had no idea how intricate the journey behind their feed was.
It’s easy to see why the need for increased oversight and transparency is necessary in supply chains. And it’s also clear why the responsibility of bulk and wholesale organic journeys has to be collaborative, with each party doing their bit to ensure the safeguarding of organic products.
It’s also easy to see why organic fraud is such a big concern.
Uncovering the truth behind organic fraud
Organic fraud has an impact of around $10-$15 billion annually on the organic food market. That’s not a number to scoff at. It’s a lot of money gained from a criminal activity that’s been far too easy to get away with up to now.
And as is made clear in the complex supply chain behind the supply of organic eggs, there are multiple stages where the organic status of products can be compromised, and multiple parties can use fraudulent actions to cover up the loss of that status. Especially if we’re talking about the bulk shipments that make up wholesale organic supply chains.
But thanks to the SOE rule, the USDA can now curtail the presence of organic fraud before it has an impact on the organic market.
The rule will broaden certification requirements, extending its reach to importers, handlers, suppliers, brokers, and traders alike; increase supply chain oversight and traceability; mandate the creation of fraud prevention plans for businesses within the organic supply chain; and give the USDA the necessary enforcement authority to actively unearth and act against organic fraud.
How will the SOE be enforced?
Without clearly defined responsibilities and a reliable way to make sure everyone is indeed pulling their way in the intended collaboration, all of this would be nothing but a collection of good intentions.
That’s why the SOE rule is serious about taking one thing: taking action. And this is how it does it:
Increased enforcement authority
The SOE rule provides the USDA with additional enforcement authority that enables it to investigate and take action against organic fraud. That increased authority includes the right to conduct unannounced inspections, issue subpoenas, and impose civil penalties or criminal sanctions for violations of the USDA organic regulations. Yikes.
Under the SOE rule, the USDA can also seek consumer redress from the respondent in federal district court for consumer injury caused by the conduct that was at issue in the administrative proceeding. This inclusion acknowledges the consumer’s role in the organic journey, ensuring that certified organic operations have a fair and transparent process for resolving disputes and addressing non-compliance issues.
Creation of a detailed fraud prevention plan
Where regulations used to be primarily reactive in their nature, the SOE rule aims to be proactive, which is why it requires certified organic operations to develop and implement a fraud prevention plan that describes the monitoring practices and procedures to prevent fraud and verify suppliers in the supply chain.
The fraud prevention plan helps ensure that certified organic operations are taking proactive steps to prevent organic fraud. The plan must describe the monitoring practices and procedures to prevent fraud, including the verification of suppliers in the supply chain, while also describing the procedures for identifying and reporting suspected fraud.
Compliance and appeals processes
The SOE rule also ensures that compliance doesn’t turn into a witch hunt. That’s why it improves compliance and appeals processes to ensure that certified organic operations have a fair and transparent process for resolving disputes and addressing non-compliance issues.
The rule clarifies how certified operations may submit changes to their organic system plan, reducing the paperwork burden for operations and certifying agents while expanding the annual update requirements for certified operations. The rule also improves the accuracy of organic labeling, providing consumers with more confidence in the organic label.
How will the SOE rule affect ingredient wholesalers, vendors, and organic brands?
The SOE rule will affect everyone in the organic market, from bulk suppliers and organic vendors to wholesale importers and consumer brands. And while the impact on each will be unique, we all need to prepare for a radically altered landscape.
With the SOE rule requiring the certification of more businesses at critical links in the organic journey, parties like brokers and traders will need to be certified to continue connecting suppliers with buyers. This includes ingredient wholesalers, who must be certified organic to be listed on the NOP Import Certificate.
The certification requirements aim to ensure that all parties involved in the production, handling, and sale of organic products are certified and comply with the USDA organic regulations. The SOE rule may create challenges during implementation, but it creates a critical opportunity for companies in the food space because it levels the playing field for all organic producers and handlers.
Just as with wholesalers, vendors are included in the list of businesses that must be certified organic to be listed on the NOP Import Certificate. What’s important is that vendors have to ensure the organic status of the farms they work with as well, making the due diligence a little more labor-intensive when establishing new supply relationships.
The result of this extensive compliance trial is that organic brands will have to choose their partners carefully to ensure that they obtain their USDA Organic Label. But going forward, the trust that’s placed in that label will be unwavering.
Are you ready for the change ahead?
It’s a daunting journey ahead of us, true. Never before has the spotlight shone brighter on the intermediate stages of the organic supply chain. But Ingredient Brothers is here to make sure we enter this new age together. So if you’re still unsure about your organic compliance, get in touch with our team, and let’s get ready for March 2024 and the launch of the Strengthening Organic Enforcement rule.
Browse through our Product Catalog to get a glimpse of our extensive organic importing experience and the diverse organic supply chains we’ve helped to preserve.