Commentary: Another Scandal and Another Black Eye for Organics

by | May 6, 2022 | News Posts

OrganicEye Continues to Advocate for Testing of All Imports

According to the USDA, everything certified by an outfit accredited by the National Organic Program is organic. 

Until it isn’t.

For years I banged on the NOP to crack down on fraudulent imports of grain from former Eastern Europe. At the time, the head of the program during the Obama/Vilsack administration, Miles McEvoy, assured the public that everything was bulletproof. [After waltzing through the proverbial revolving door in Washington, Mr. McEvoy would go on to a consulting career working for two of the largest certifiers, CCOF and Oregon Tilth, and eventually the OTA.]

And the lobbyists/cheerleaders at the Organic Trade Association were not willing to join in pressuring the USDA to do a better job. According to them, it was already doing a great job! But after the organic manure hit the fan, with an investigative report in the Washington Post that I was involved in, the OTA suddenly sprang into action, forming a “working group” of its members to voluntarily address fraud. The working group included some of the same OTA members that were more than happy to wink/wink and nod/nod while buying the bogus grain at attractive prices.

Flash forward to after Mr. McEvoy’s departure from the USDA to have more time for “birdwatching” (coincidentally, after I filed an ethics complaint against him, in part, because of his cozy relationship with the certifiers he was supposed to be overseeing). The NOP was proud to tell us that 75% of the “Black Sea Region” certified organic operations had lost their certificates. Seventy five percent? And how many perpetrators were fined or prosecuted? Zero.

That fraudulent grain made up a tremendous percentage of the feed that certified organic livestock were consuming. Ethical farmers and eaters were all ripped off.

“Close enough for government work.”

Not close enough for OrganicEye.

Now here’s another black eye—organic cotton from India. Excellent investigative journalism, albeit disturbing, from the New York Times.

MAK

That Organic Cotton T-Shirt May Not Be as Organic as You Think

By Alden Wicker, Emily Schmall, Suhasini Raj and Elizabeth Paton
Published Feb. 13, 2022 Updated April 12, 2022

The organic cotton movement in India appears to be booming, but much of this growth is fake, say those who source, process and grow the cotton.

Michael Kors retails its organic cotton and recycled polyester women’s zip-up hoodies for $25 more than its conventional cotton hoodies. Urban Outfitters sells organic sweatpants that are priced $46 more than an equivalent pair of conventional cotton sweatpants. And Tommy Hilfiger’s men’s organic cotton slim-fit T-shirt is $3 more than its conventional counterpart.

“This product contains independently certified organic cotton grown without chemical pesticides, chemical fertilizers and genetically modified seeds,” the product description reads.

With the fashion industry trumpeting its sustainability commitments, those labels are both a means of value signaling and a lure to consumers willing to pay more to act better.

There’s only one problem: Much of the “organic cotton” that makes it to store shelves may not actually be organic at all.

The largest single producer of the world’s organic cotton supply is India, which accounts for half of the organic cotton sold globally, and where the organic cotton movement appears to be booming. According to Textile Exchange, a leading organic proponent, organic cotton production in India alone grew 48 percent in the last year, despite the pandemic.

However, much of this growth is fake, say Indians who source, process and grow organic cotton.

At the heart of the problem is an opaque certification system rife with opportunities for fraud. Consumers are assured of “organic” material by brands, which rely on official stamps of approval from external organizations. Those in turn rely on reports from opaque local inspection agencies that base their conclusions on a single planned yearly inspection (in the case of the facilities) or a few random visits (for farms).

In recent months, the credibility of these inspection agencies has been destroyed. In November, the European Union voted to no longer accept organic certifications on Indian raw products from the main companies responsible for organic cotton: Control Union, EcoCert and OneCert. And in January, the international agency that provides accreditation to organic inspection agencies, IOAS, withdrew OneCert’s ability to inspect and certify cotton processors for these labels.

Crispin Argento, founder and managing director of the Sourcery, a small consulting firm that helps brands source organic cotton, has spent the past year hunting down organic cotton with his team only to see suppliers disappear when they start asking for proof of authenticity. He estimates between one half and four-fifths of what is being sold as organic cotton from India is not genuine. And almost the entire supply chain is implicated in what he calls a game of “smoke and mirrors.”

For at least a decade, in reports and at conferences convened by agitated large brands and the network of nongovernmental organizations that serve them, the organic cotton industry in India has been described as in “crisis,” but the problems have been kept largely out of the public eye.

N.G.O. workers worry exposure would lead to the total collapse of the industry and harm the small subset of farmers who are, in fact, growing organically. They also fear the wrath of Prime Minister Narendra Modi’s government, which has come down hard on those who dare to criticize the country. Others are profiting handsomely from the certification system.

When confronted with the allegations of fraud, many fashion brands and their sourcing partners that use Indian organic cotton admitted that the system wasn’t perfect but affirmed their commitment to organic cotton and said any problems that existed were located outside their own supply chains.

A spokeswoman for PVH, the owner of Tommy Hilfiger, wrote in an emailed statement that organic cotton was one of a variety of sustainable materials they had committed to sourcing and noted, “We know that rigorous standards and reliable verification processes are critical for sourcing sustainable materials.” Michael Kors and Urban Outfitters did not respond to emails requesting comment on their organic cotton sourcing.

At least one brand has decided it no longer wants to look the other way, however. Though organic cotton used to be a centerpiece of its commitments, the women’s wear brand Eileen Fisher now has a page on its website describing why it is moving away from certified organic cotton, the better to address what the brand calls “an uncomfortable fact.”

“The ‘organic’ cotton that’s sold each year far exceeds the amount that is actually grown,” it says.

In Khargone district in India’s central state of Madhya Pradesh, one of the country’s largest producers of certified organic cotton, farmers have cultivated the plant known locally as white gold for generations.

“Cotton is the life giver for us,” said Niyaj Ali, 60, sitting on a charpai, a traditional South Asian woven bed, next to his son, his wife, a daughter-in-law and several grandchildren in a spacious front room of cool concrete floors under a thatched roof. “It takes care of everything — the labor in the fields, the school fees for the children, the food on the table.”

In the late 1990s, when cotton grown without chemical pesticides or synthetic fertilizer was a rarefied product purchased exclusively by high-priced yoga and wellness brands, two Swiss companies formed the bioRe Foundation to support organic cotton growing in Madhya Pradesh.

Through India’s contract production system, which allows cotton suppliers to register up to 500 farmers as a single corporate entity, bioRe started sourcing and selling organic cotton regulated by India’s Agricultural and Processed Food Products Export Development Authority.

Four years ago, employees of bioRe came to Chandanpuri, Mr. Ali’s village, with a pitch: If the cotton farmers would convert their fields to organic, bioRe would provide the training and the seeds, teach them how to make organic fertilizer from animal dung and organic insecticide from native herbs, and pay them a premium over the market price for conventional cotton. BioRe also promised to buy whatever volume they managed to grow.

Mr. Ali and nine other farmers agreed. The way he saw it, genetically modified seeds were expensive and drying out the soil. The pesticides and chemical fertilizers were toxic and unhealthy. He would happily return to natural methods, like the ones his grandfather used, especially if organic cotton was more profitable. Three years ago, Mr. Ali started the painstaking process of converting his 11-acre farm from conventional cotton farming to organic.

Last fall, he finally harvested his first organic cotton crop. It was so much skimpier than what he was used to with conventional farming that his costs on seeds and labor far exceeded the premiums bioRe paid.

Madhya Pradesh organic cotton farmers on average earn 17,079 rupees (about $227) from a harvest, almost 21 percent less than conventional cotton farmers, according to a 2017 report by Organic Cotton Accelerator, an organization founded in 2016 to pinpoint and address the barriers to scaling up cotton.

“I will have to shut this down because I am suffering losses,” Mr. Ali said. “These brands are making big money, but the money is not being passed onto us.”

What the farmers did not know, however, was that growing without pesticides and fossil-fuel fertilizer produces on average 28 percent lower yields than conventional cotton farming; that organic cotton seeds produce lower quality, shorter fibers; and that increasingly brands were using their market power to negotiate the price of organic cotton down to the same price as conventional cotton or even cheaper because of its lower quality.

Aashish Joshi, who leads the team which oversees bioRe’s organic cotton project in India, acknowledged that the premiums customers were paying for organic cotton rarely reached legitimate organic cotton farmers. “I would say that people are benefiting,” he said, “but these are who are indulging in fraudulent cotton.”

As premiums dried up, organic cotton entrepreneurs went bust, leaving a trail of empty warehouses and gins across Madhya Pradesh. But even when the market price of organic cotton spikes — as it has in the last year because of rising demand — and farmers are again persuaded to convert their farms, most of that money is siphoned off by opportunistic middlemen who have an incentive to pass off conventional cotton produced by others as organic.

According to yearly reports on the state of the industry by Textile Exchange, an American organization founded in 2002 to promote sustainability, organic cotton production in India has more than doubled in the last four years: to 124,000 metric tons in 2021 from 60,000 metric tons in 2017. Yet based on the limited quantities of organic seed in circulation, industry insiders say the amount of organic cotton on the market today is impossible.

“Seeds are not available,” said Mr. Joshi of bioRe.

As a result, said Hilde van Duijn, who from 2017 to 2018 was the executive director of Organic Cotton Accelerator, “You have a situation where you have a growing demand, supply that’s in decline, and the paper-based certification scheme. What happens? You get a market for certificates.”

Arun Ambatipudi, executive director of Chetna Organic, one of a few nonprofits that provides training and support to organic cotton farmers in India, said, “It led to a lot of cheating.”

The two main links in the long supply chain between farmers and shoppers are Western organizations that provide organic cotton labels, and local inspection offices.

The gold-standard organic cotton label comes from a German company, Global Organic Textile Standard, or GOTS. Founded in 2006 to harmonize the various other organic labels circulating at the time, it provides the basis for the other main organic cotton label: Textile Exchange’s Organic Content Standard. Funded by brands such as adidas, Patagonia and H&M, both GOTS and Textile Exchange rely on consumers and brands believing in the uplifting story of organic cotton.

In India as well as other cotton-producing countries, GOTS and Textile Exchange certification starts at the gin, where the cotton fiber is separated from the seed. A paper transaction certificate is issued each time the cotton is sold along the supply chain: from the gin to a certified spinner, where the fibers become thread; to a certified mill, where the threads become fabric; and on until it lands in the form of a shirt or sheet set in a store near you.

But neither GOTS nor Textile Exchange performs inspections themselves. Instead, they use the local offices of international inspection businesses, including OneCert, EcoCert and the behemoth Control Union, which certifies more than 100 programs in 70 countries, to verify claims.

These businesses — which are paid by the very ginners, spinners and farmers they are supposed to be policing — visit farms, test seeds for G.M.O. contamination, and once a year inspect and verify the facilities that process, spin, weave, dye and sew the garments. They then produce a paper certificate, which is sent to GOTS and Textile Exchange, who pass on the paper to clothing manufacturers, who pass it on to brands.

Insiders call this system “trading paper,” and say that at each step, there is little to stop a facility from selling a pile of conventional cotton as organic, then changing a paper transaction certificate to match the larger volume. Inspectors visit once a year only to verify that a facility is capable of following protocol for keeping organic cotton separate — they do not inspect all the cotton moving through. Furthermore, there is no central database to look up the transaction numbers to make sure a certificate hasn’t already been used. In this way, the volume of certified organic cotton doubles, triples or even quadruples as it moves up through the supply chain.

In 2009, India’s agricultural export agency discovered wide-scale fraud in the country’s cotton belt, with entire villages certifying genetically modified cotton as organic. The government promised it would release digital tracking software the next year. It never did.

India’s government could share how much organic cotton moves through the supply chain, allowing watchdogs to verify that the volume of organic cotton being harvested in the fields matches the volume being exported. It does not, and neither do inspection agencies, such as Control Union. Large fashion brands do not share how much they buy. The companies contacted by The New York Times — Control Union, EcoCert, OneCert, GOTS, Textile Exchange and a half dozen major brands who tout their sustainable cotton commitments — all declined to provide these numbers.

The brands pointed to their affiliation with Cotton Connect and the Organic Cotton Accelerator, who both offered genetically modified-seed testing programs as proof the cotton they source for clients is organic.

However, none of the organizations The Times spoke to said they regularly test for pesticide residue to ensure the cotton was grown organically. Cotton Connect said that at least two of its brand clients have chosen to pay for optional pesticide residue testing.

Neither Control Union, which performs an estimated 70 percent of facility inspections and certifications in India, nor the Indian office of OneCert responded to requests for comment. Patagonia and Inditex (the owner of Zara) sent written statements affirming their commitment to organic cotton, but declined to make anyone available for an interview. Decathlon did not respond to requests for comment.

U.K. Vats, the government official who oversees scope certificates for India’s organic cotton industry, did not respond to multiple interview requests.

In October 2020, as concerns grew about the credibility of organic cotton certification, GOTS announced that it had uncovered a fraudulent scheme by certain producers to create fake government-approved transaction certificates and websites. GOTS banned 11 companies from its system, which affected at least 20,000 tons of organic cotton fiber, one-sixth of India’s total output.

Meanwhile, the United States began blocking cotton shipments from China in early 2021 because of evidence of forced Uyghur labor in the cotton-producing province of Xinjiang. Organic cotton prices skyrocketed to $3.00 per kilogram from $1.70. More players piled into the market. In the last year as many as 75,000 new organic cotton farmers have been registered with India’s agricultural authority.

When asked where Textile Exchange gets data reporting this huge growth, LaRhea Pepper, chief executive of Textile Exchange, did not answer. Instead she said: “There’s people working within the system that are doing a great job. There’s also people that are making claims on products that have no verification that are working outside the system. And we have no control over what they say or what they do.”

GOTS points to its ban on producers engaged in certificate forgery as proof of its credibility. It maintains that no other types of fraud occur in its system.

But Ms. Pepper said her organization finds fraud such as nonexistent farm groups or fake farmers’ names listed on scope certificates, and has passed on evidence to GOTS.

A GOTS representative said that it acted on substantial documentary evidence of fraud and that its approved certification bodies had not reported any irregularities.

Now international trust in India’s ability to oversee organic agriculture has cratered.

The U.S. Department of Agriculture terminated its agreement last year to recognize organic products certified by companies that are overseen by the Indian authority, citing the government body’s lack of transparency. All such companies in India must now be accredited by the U.S.D.A’s National Organic Program standards.

In November, the European Union started rejecting Indian organic exports certified by five companies — including Control Union, EcoCert and OneCert — after shipments of sesame were found to contain a carcinogenic substance. Chastened by the U.S. and E.U. actions, the Indian government also fined the companies and barred them from registering new processors or exporters.

This problem is not confined to India, experts say; questions have been raised about organic cotton from China and Turkey, which account for another quarter of the global supply. And the organization that audits and certifies the certifiers, IOAS, withdrew OneCert’s ability to inspect and approve cotton-processing facilities globally in January.

At this point, some industry insiders believe the only way for a brand to ensure its organic cotton is actually organic is to invest in farmers directly through credible organizations before any seed is even sown.

As for those farmers, dozens of whom were visited by Times reporters, few grew organic cotton or knew where any could be found.

During the rush of the last cotton harvest in Khargone, a group set up chairs on the shoulder of a busy road to talk.

“There are no organic cotton fields here,” said Dashrath Yadav, a sugar cane and soya bean farmer. “Nobody grows it around here.”

Correction: Feb. 17, 2022 An earlier version of this article misstated the name of the organic cotton label certified by Textile Exchange. It is the Organic Content Standard, not the Organic Cotton Standard.

Correction: April 12, 2022 An earlier version of this article referred imprecisely to the Indian exports affected by the European Union’s decision to no longer accept organic certifications from the main companies involved in certifying cotton. The decision applies to raw products, not processed or manufactured exports. 

Source: The New York Times