Organic fraud cases risk hurting consumer trust in Italian food

by Paolo Riva | 01.06.2023

Cross-border forgery trials in Italy’s organic agriculture cast doubt on the viability of the country’s certification system

In the court of the town of Ragusa in Sicily, organic food is on trial. 

According to the public prosecutor, the owners and representatives of nine local fruit and vegetable farms are responsible for fraud in trade, fraud and forgery to obtain public subsidies from the Italian agency which grants EU cash to farms, AGEA.

The case dates back to 2015-2017, when the defendants sold conventional carrots, potatoes, tomatoes and courgettes to distributors and supermarket chains in Italy, France, and Germany, using organic labeling, according to the indictment.

Investigators allege the companies have unjustly taken EU money for organic products, for a profit of close to one million euro.  

This is despite the Sicilian farms’ possession of organic certification and accredited by the control bodies Bioagricert, QCertificazioni and Suolo e Salute, “as required by current national and European regulations,” the prosecutor states.

In the process, the control bodies — also known as certification companies —  are cited as victims. 

The picture described by the magistrates, however, leads one to wonder: how was it possible for the defendants to prevent the control bodies from detecting irregularities for years? 

IrpiMedia asked the three control bodies involved, and received a response only from Bioagricert. The company explained that “all control and certification bodies, if they find non-conformities (even minor ones), are obliged to report them to the public authority, through a system called the supervisory database of the Agriculture Ministry (Banca Dati Vigilanza del Ministero dell’agricoltura, della sovranità alimentare e delle foreste), which is also used to support investigative activities”. 

Whether this happened for the companies in Ragusa is not yet clear, because Bioagricert will not go into details as “the trial is still ongoing”.

Legal proceedings such as this one in Ragusa fuel the debate on the effectiveness of the certification system.

At the end of February, the Public Prosecutor’s Office of Santa Maria Capua Vetere, near Naples, placed seven people under investigation for conspiracy to commit fraud,  reports Ansa. The investigators allege the suspects sold large quantities of products falsely declared as organic, such as almonds and tomatoes, between 2016 and 2022. 

“What we have seen uncovered [in Santa Maria Capua Vetere] comes as no surprise,” says Paolo Carnemolla, an agronomist and secretary general of organic association Federbio. “The same fraud scheme has been repeated for years, which has already been the subject of other investigations and enquiries.”

At the Court of Pisa a trial has been underway since last April against a criminal association that, ​​according to the prosecution, operated between Italy and Serbia to produce and trade adulterated apple juices that posed as organic. 

Similarly, in Verona, in October 2020, the trial of a local company that allegedly marketed fake organic wheat, flax, spelt and soya resulted in a series of settlements. The company involved also operated in Romania. 

Despite these cases, the inspection system is functioning, argues the president of the Italian Association of Organic Agriculture (AIAB), Giuseppe Romano,

“Fraud is limited, but very noisy,” he adds, referring to a trial for organic fraud that ended last December in Pesaro in Italy’s Marche region called ‘Vertical bio’, with all the defendants acquitted.  

This is also confirmed by a communiqué from AIAB, which was a plaintiff in the Ragusa proceedings. “The fact that a scam of such proportions has been discovered means that the control system has worked and is working, and that citizens can trust it,” the statement reads.

Yet, in the Ragusa case, as with the others, the Italian authorities discovered the fraud after the products were sold on the market, and eaten by customers across the EU.

"Fraud risks undermining people's trust very deeply"

Organic farming is experiencing an important moment in Italy. 

Between 2010 and 2021, operators in the sector grew by 80.7% and cultivated areas by 96.3%.

“There is more attention on the sector than ever before,” says Francesco Giardina, director of Coldiretti Bio. 

At the European level, in 2020, the EU Commission, within the Farm to Fork strategy, wants to see 25% of EU land cultivated organically by 2030. In 2021, over 17% of its land is organic and, in 2022, after fifteen years of waiting, a law was passed to further grow the sector. 

For the consumer and the distributors who buy from producers, ‘organic’ means certified products. The higher prices of these products is justified by the logo of a green leaf bordered by white stars, granted to the company by a third body. 

Italy is historically one of Europe’s largest producers of organic products, with a strong emphasis on export. These exports of organic products in 2022 reached 3.4 billion euro, a growth of +16% compared to the previous year and +181% compared to 2012. 

But the certification system does not provide sufficient guarantees in authenticity, some actors in the sector claim.

“Fraud is a huge problem, because it risks undermining people’s trust very deeply,” says Simona Limentani, founder of Zolle, a company that delivers organic and short supply chain food in Rome. “Organic has not found a system where certification could recreate this relationship of trust [between customer and producer] on a solid basis.”

EU: master regulator of system

How does this system of organic certification function?

The framework is provided by the European Union. 

Organic production, labeling and controls have been regulated at the European Union level since 1991 and, in particular, by the new Organic Regulation (EU) 2018/848, which came into force in 2022. Each member state now appoints a competent authority, which for Italy is the Ministry of Agriculture, Food Sovereignty and Forestry, to implement the rules. The latter authorizes control bodies, which can carry out controls and issue certification of organic production. Their competence, independence and impartiality is certified by the national body Accredia. 

Finally, there are the operators in the organic sector — producers, processors and distributors — who pay inspection bodies to obtain certification and are thus able to operate in the sector. 

“It starts from a minimum cost of a few hundred euros for small and marginal farms, up to several thousand euros for very large farms with complex crops (such as fruit and vegetables) or those which carry out food processing,” Bioagricert explains. The annual cost of the certification and the number of checks required to obtain the certification varies depending on the type of operator, the size of the farm, and the operator’s level of risk.

Following the Accredia guidelines, control bodies carry out a risk assessment for each operator to be accredited, which determines the number of annual inspections the control bodies carry out. These range from low risk activities, which only need one official inspection to high-risk activities, which require three inspections, one of which is unannounced.

In the case of Ragusa, it is likely that the companies involved were considered to be medium or high risk, because they produced and traded fruit and vegetables, which carry higher scores in this assessment. If the allegations are confirmed, however, more inspections could not have prevented the fraud. 

The trial revealed that the companies accused purchased some of the allegedly non-compliant products from third parties, and that the defendants had an “accomplice” laboratory analyst who carried out “sampling and chemical analyses of the organic fruit and vegetable products of the companies involved, also altering the test reports”. 

The Prosecutor states the companies involved managed a separate record documenting all the treatments carried out in the fields (Registro di campagna), parallel to the official version. The hidden record detailed phytosanitary treatments and fertilisations, with regard to plot, date and crop, and was “carried out with products not allowed in organic farming”, states the prosecutor. The companies are alleged to have continued operating this parallel operation until November 2017, when they were visited by agents of the Guardia di Finanza and the Central Inspectorate for the protection of quality and fraud repression of agri-food products (LCQRF).

Irregular organic operators in Italy “double” in ten years

LCQRF publishes an annual report on its activities in the organic sector. In 2021, it carried out 6,097 inspections, verifying 3,355 operators and 5,040 products.

Irregular operators were found to be around 12%, and irregular products 9% of the total. The percentages are much lower than those recorded by LCQRF for products guaranteed by designated of origin certification (such as Dop/Igp/Stg). 

Yet, they are much higher than in the past. In 2011, LCQRF found irregularities in operators in just over 5% and almost 4% for products. 

For Coldiretti’s Giardina, the organic sector has undergone “an enormous evolution” in recent years, but “the certification system has not been adequately developed”. “Certification is necessary, but it should evolve,” echoes Massimo Solano, president of the Valdibella agricultural cooperative, which has been producing organic food in the province of Palermo since 1998. “A structural reform is needed, without the relationship between the control body and producer. A farmer alone does not commit fraud.” 

According to Federbio’s Carnemolla, the organic certification system in Italy is “hyperbureaucratic and inefficient: at the moment it produces paper but not enough reliability”. 

There is a paradox, he argues. The control bodies who put more pressure on producers to comply with organic regulations will charge more for their services, and become less attractive as a market option for farmers. 

“The control bodies that work better are penalized by the current system,” he says.

There are 19 authorized control bodies for organic production in Italy. According to several industry observers, the large and growing number of these bodies has generated some negative consequences. The increased competition, for example, may have affected the prices of certifications and also the quality of the inspections, as Carnemolla suggests. Such a wide choice could favor less strict companies.

But the question remains: are there too many control bodies? 

All the existing companies meet Accredia’s requirements, as stipulated in the regulations. But the doubt remains, and it is worth examining how much of Europe has taken a different approach.

France has fewer organic farm plots than Italy in percentage terms, but stronger growth, and has authorized ten control bodies. Spain, which manages these bodies on a regional level, has nine bodies in Andalusia, five in Aragon and again nine in both Castile-León and Castile-La Mancha. In other regions such as Catalonia and Galicia, however, the model is totally different, and the control body is single and public. 

It is not just in Spain: the EU Commission’s DG AGRI explains there are public bodies of this type in Finland, Denmark, Estonia and the Netherlands (a public-private body). This public structure could also be a solution in Italy. However, insiders come with other proposals. One is to make the cost of organic certification a tax credit. Another is to create a single, public transaction database. This digital tool would monitor how many hundreds of kilograms a company produces, how many it sells, and how many, if any, are of suspicious origin, because they are in excess of the declared production. 

Both Federbio and Aiab support the database idea, which would allow frauds such as those alleged to have happened in Ragusa to be combated more effectively. “We have been asking for it for years, it is urgent,” Romano warms up. 

“We need a platform that allows the exchange of data and information in real time,” adds Carnemolla.

The hope of the sector’s organizations is that the Ministry of Agriculture’s National Action Plan for Organic Farming will address the issue of inspection and certification. Whether and how this will be done, however, remains to be seen. In the end, the government may decide against this.  

Inaction would bring negative consequences. In a phase of potential growth, organic certification could become tempting for dodgy companies. Both the EU subsidies for organic and the prices of organic products, which are still higher than those of conventional, could attract them. Not placing a limit on the entry of these actors into the sector would negatively affect the reputation of the industry, which is very much devoted to exports.

“The risks,” Giardina admits, “are high, and we are aware of them.”

Organic: not worth the bother

Some medium-sized producers are now renouncing organic certification, or abandoning it in favor of a trust relationship between consumers and producers. 

“[In Veneto] there are many producers who work well sustainably and are not certified,” says Stefano Bianchi, of Aiab Veneto. “They try, they approach us, they come to us for training, but then in the end they do not get certified. Others leave the certification system because they have local consumers who have trusted the company for decades and who go directly to the company to check.” 

Bianchi explains that these are companies that sell at the farm-gate or in farmers’ markets and, after years of certification, they ask themselves: why spend money and time with bureaucracy? If my customers buy anyway, who makes me do this?

Text: Paolo Riva

Illustration: Andrei Cotrut

Graphics and dataviz: Razvan Zamfira