SOUTH DAKOTA – Trey Wharton of Sioux Falls has made many sacrifices in his life to maintain a healthy lifestyle centered around a vegan diet and consistent consumption of organic foods.
To afford organic produce that sometimes costs double or triple that of conventionally grown food, Wharton works two jobs, takes no vacations, and drives a bumpy SUV.
“I’m investing in this ship,” Wharton said pointing to himself, “rather than in this ship,” he added pointing to his 2011 Honda. “I’m paying more and sacrificing to invest my money in the foods I want.”
Wharton, 31, acknowledges that he has to trust the organic industry to deliver on its promise that the food is minimally processed, grown without chemicals or additives and is truly healthier than non-organic produce.
Like other organic consumers, Wharton sometimes wonders and worries if he is really getting what he thinks he is buying. He is well aware of a few high-profile cases of organic food fraud — including a recent multimillion-dollar organic fake grain scam in South Dakota — in which unscrupulous growers made millions illegally selling conventional grains packaged and sold as organic.
In the 2018 case in South Dakota, farmer Kent Duane Anderson of Belle Fourche made a fraudulent $71 million income selling thousands of tons of conventionally grown grain falsely labeled as organic. Anderson then used the proceeds to buy an $8 million yacht, a $2.4 million Florida home and a Maserati, among other extravagant items, according to a federal indictment. Anderson is now in federal prison.
In July 2022, a Minnesota farmer was indicted by federal prosecutors in a $46 million grain fraud scheme. In a federal indictment, authorities say James Clayton Wolf bought conventionally grown grain and resold it as organic over a period of about six years. Wolf has pleaded not guilty and will fight the allegations in court, his attorney told News Watch.
These instances of fraud or suspected fraud have created uncertainty and distrust among some consumers in an industry that relies heavily on the honesty of growers, processors and packers to maintain industry integrity and ultimately , allowing consumers to have the assurance that they are actually getting organic products for which they are paying a premium price.
“If there’s more money in it, there’s more people looking at the financial aspect and not the moral aspect,” said Charlie Johnson, a longtime organic farmer who grows soybeans, corn , oats and alfalfa southwest of Madison, SD “These types of people and operations need to be reported and prosecuted because they can bring us all down if we don’t keep the system clean and honorable.
In many ways, America’s organic food industry – which topped $63 billion in sales in 2021 – is reacting to the negative publicity of fraud cases and other weaknesses in the organic regulatory system by pushing for stricter requirements and stricter enforcement of existing rules to protect the reputation of the industry in the long term.
The organic food industry has exploded over the past 30 or so years as increasing numbers of Americans and people around the world seek healthier foods grown with fewer chemicals and less invasive farming practices.
South Dakota has been slower than other states to take advantage of the organic market boom and ranks 38th out of 50 states for the number of organic farms. South Dakota’s 124 certified organic farms and related businesses generated $14 million in product sales in 2019, a 42% increase from 2017, according to the Organic Trade Association. However, acres of farmland devoted to organic produce in South Dakota still make up less than 1% of all farmland in the state.
At the policy level, the organic industry has pushed for more regulation and oversight from the USDA and Congress to protect the integrity of the industry as it grows and evolves, Reana said. Kovalcik, Director of Public Affairs at OTA.
The group that represents organic farmers, processors and retailers is pushing for new rules and programs to improve transparency, oversight and enforcement of national organic regulations and processes, Kovalcik said.
“It’s kind of unique for an agriculture industry to say, ‘Hey, please regulate us more,’ but that’s exactly what the organic industry is asking for,” she said. “The industry wants to make sure everything is as buttoned up as necessary for the producers who do that extra work to get a price premium, and for the consumers who pay that premium.”
The incentive to commit outright fraud or manipulate the system is high in the organic industry, where organic products look exactly the same as non-organic products.
At its core, organic foods are non-genetically modified crops grown in the soil without chemical additives such as fertilizers, herbicides, or pesticides; and non-genetically modified livestock raised primarily on organic feed without added hormones or antibiotics.
Some people and organic industry groups say the USDA is too lenient and slow to respond to industry changes.
While the USDA is responsible for regulating and enforcing rules in most conventional agricultural processes – the meat industry, for example – the USDA outsources the certification and regulatory functions of the industry organic food. In the organic world, producers who wish to label their products as organic must be certified by one of approximately 80 independent groups or agencies, many of which are non-profit groups dedicated to promoting organic agriculture. Typically, these bodies only inspect the producers they certify once a year and they are compensated for their certification services, creating a potential incentive to maintain a high number of certified producers.
Angela Jackson gained an up-close view of the organic food industry from two distinct perspectives: as a grower who owns and operates the Prairie Sun Organics farm in Vermillion; and as someone with over a decade of experience as a biological expert and independent inspector.
But even though she is aware of the weaknesses in the organic certification and regulatory system, Jackson is confident that consumers who want organic products can rely on the systems in place to ensure safety and authenticity.
It only takes a few hours of visiting with Charlie Johnson and driving in a pickup truck around his farm in Lake County, SD to understand why organic grains cost more than conventionally grown grains at the commercial level of wholesale and retail.
Johnson and his family members have been growing and harvesting organic grains since the 1980s.
Johnson has 65 separate crop fields on his 1,600 tillable acres, and he uses a six-year crop rotation, in which each year a field grows a different crop to promote soil health.
Instead of using herbicides, he has to drive a cultivator over his crops to remove as many weeds as possible from the land between the rows of crops. Signs are placed in the ditches alongside his crops so pesticide contractors hired by conventional farmers won’t mistakenly apply chemicals to Johnson’s crops.
Johnson has no doubt that the resulting products are not only different, but also better than conventional crops.
“I just think organic food is just better; they are much richer and better in food quality and density,” he said.
His efforts slow the development of yields, but he is rewarded with higher prices when he sells them to a certified organic wholesaler. In mid-July 2022, Johnson was able to sell soybeans for over $30 a bushel while conventional soybeans fetched around $14 a bushel. His organic corn was selling for about $10 a bushel compared to the price of about $6.50 a bushel paid for conventional corn.
— This article was produced by South Dakota News Watch, an online nonprofit news organization at sdnewswatch.org.
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