Incidents of fraud with conventional product being intentionally passed off as organic product became so frequent in the organic grain sector that they put into question the very existence of the organic marketplace in Italy, with both retailers and consumers questioning their investments and trust in organic certification. And considering the importance of pasta production to Italy’s economy and image, the implications of a lack of trust in organic wheat traded in and from Italy has even gone beyond the organic sector alone.
FederBio, the federation of Italian national associations of farmers and other operators involved in all stages of organic and biodynamic food and farming, and Organic Services initiated the creation of an organic integrity management solution for the Italian organic marketplace, which required all supply chain actors involved in the organic grain trade in Italy to participate. The platform employs two fraud risk mitigation measures, a real-time volume plausibility check or mass balance calculation for each supply chain actor and the availability of real-time certification data. The Platform was rolled out for only three traders as a pilot in 2014. As of January 2017, the Italian Ministry of Agriculture, Food and Forests made participation mandatory for all producers and traders in Italy. Following this decision, the ownership of the platform was handed over from FederBio to the organic certifiers in Italy, who founded a joint company to run the system, named ‘Rete OIP’ (OIP stands for Organic Integrity Platform). As of June 30, 2017, more than 200 traders were registered on the platform, 63,046 farmers and about 600,000 tons of organic grain from harvest 2016 were traded using the platform.
For the volume plausibility check/ mass balance, every supplier to the Italian grain market, whether located in Italy or abroad[1], is included in the system. In the case of product purchases from growers, the product amount available is calculated based on the plausible yield of the acreage the grower has under certified organic production. For traders, the input is calculated based on organic product purchases from farmers and other suppliers, while the output are sales figures. The information on certified acreage of Italian operators is provided by accredited Control Bodies and integrated through a web service from DataBio, the central database on organic data run by Accredia, the Italian Accreditation Body. Information on production areas of operators certified outside of Italy is transferred to Check Organic directly by the respective certifier, and from Check Organic to the Italian platform. Real-time transaction data on purchases and sales, including product, volume, seller and buyer is provided by organic grain traders either through web service interface from their ERP system, excel upload or web access.
The mass balance calculation informs whether traded volumes are plausible (based on acreage and yield) or likely the result of an over-delivery that might have its cause in fraudulent influx. This is made visible in the products’ “integrity status” through a traffic light with green, yellow or red integrity status. The integrity status is displayed consistently throughout the supply chain, meaning that when a trader buys product from a grower with red integrity status, then the trader’s integrity status will turn yellow to alert himself and the respective Control Body.
For the real-time certification status, every supplier to the Italian grain market, whether located in Italy or abroad, must be included in the system. The information on the real-time certification status is provided by the certifiers, who are required to participate. The certification status is displayed per organic grower, product and trader, following the traffic light principle as green, yellow or red. If not connected through the web service to DataBio, data may also be input through web access or uploaded.
The collective action taken by the organic sector in Italy, heavily pushed by major retail companies, has resulted in a greatly reduced risk of fraud in Italy and all countries that import from Italy. Starting end of October 2017, the olive oil sector will be fully integrated. A transformation factor from olives to oil was introduced to calculate from raw material to processed product. For 2018, OIP and Organic Services are looking at further rolling out the system to the tomato sector.
Please read more here about the user experiences of Molino Casillo and Progeo.
[1] The integration of foreign supply is a continuous process
