USDA ends 15-year agreement with Apeda on organic products certification

The US Department of Agriculture (USDA) has ended its agreement with the Agricultural and Processed Food Products Export Development Authority (Apeda) that allowed the latter to accredit agencies certifying exports of organic products to the US.

In a statement, the USDA said that it was changing its approach towards organic “oversight” in India and ending its agreement with Apeda that was in force since 2006.

Revised approach

The USDA said its Agricultural Marketing Service (AMS) decided that a more active oversight presence in India was required to “directly protect organic integrity”. The US National Organic Program (NOP) has come up with an 18-month transition period for certified organic operations in India to become USDA-certified, it said.

From July 11, exporters of organic products from India to the US will have to apply for certification with a USDA-accredited organic certifier.

From July 12 next year, it will be mandatory for Indian exporters to have USDA organic certification from a certifier accredited by it.

When contacted, an USDA spokesperson told BusinessLine that as per the 2006 agreement, the USDA “did not have direct enforcement authority over many of the organic certifiers and operations in India that export products to the US”. The “revised” approach would allow Apeda-accredited certifiers to apply to the NOP for direct accreditation to the USDA organic standards. “It allows organic farms and businesses in India to apply for direct certification through a USDA-accredited certifier,” she said.

When contacted, an Apeda official asked BusinessLine to send any query by email. No response was received until this report was filed. An organic product exporter from the South said that Apeda could try and rectify the situation since it might not wish any outside agency overriding its authority.

Apeda was asked if any efforts were made to extend the agreement and whether there was any difference of opinion between it and USDA. The USDA spokesperson, too, did not respond to this query.

Costs may go up

According to Pankaj Sharma, an organic products exporter, the change in the certification method would increase the cost for all stakeholders, beginning from farmers.

“However, those who do ‘good’ work will not have any problem,” he said, adding that it could, however, increase the paperwork for exporters.

According to Sharma, there are different stages for organic products certification starting from farm to processing to exports.

“If many farmers or exporters or seek certification as a group, the cost comes down,” Sharma said.

According to Mukesh Gupta, Executive Director, Morarka Foundation, there are a couple of reasons for USDA ending its pact with Apeda.

“One, the US market is inundated with India products that affect US businesses. So, in regulating certification exports from India could be curbed,” he said.

According to the USDA and India’s Ministry of Commerce, the US is the biggest importer of India organic products. During 2018-19, it imported products weighing 3.34 lakh tonnes (lt) totally and valued at ₹2,922 crore ($429.70 million).

In a report on Indian Organic Foods Market, the USDA Foreign Agricultural Service said India is home to 30 per cent of total certified organic producers in the world.

According to the Indian Department of Commerce, the total area under organic certification was more than 3.43 million hectares, including 1.94 million hectares under cultivable area and the rest under wild harvest collection till March 2019.

USDA analysts expect the organic food sector in India to grow at a compound annual growth rate (CAGR) of 10 per cent during the 2016-2021 period from $386.32 million in 2015 and touch $10.75 billion-mark by 2025.

TAccording to Morarka Foundation’s Gupta, the second reason could be that the USDA for the USDA to end the pact with Apedacould that the former believes there is a gap in the oversight of organic certification, particularly with regard to quality.

Our procedures are 10 times stronger than US NOP norms but most of them are unnecessary as everyone is concerned over the process than checking if the produce is produced organically or not,” he said.

The third reason could be that no US agency is getting the business of certifying Indian products that are shipped to Washington. “The certification business is worth ₹150-200 crore. Now that the agreement is ending, it could pave way for the entry of US entities,” said Gupta.

An organic products exporter from the North said the Indian industry “will be happy to be out of Apeda clutches”.

“There are a lot of hassles with regard to the Apeda procedure and it seems to be interested only in the process and certification than farming,” said the exporter, who did not wish to be identified.

The exporter, who had worked with a US project in India on an organic product, said the USDA does not need even 10 per cent of the procedure that Apeda insists on.

Exporter Sharma said Indian shippers are used to working with other certifying agencies such as “Fair deal certification” that is unrelated to India.

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