In March 2014, the EC published “proposals for a new Regulation on organic production and the labelling of organic products”. The proposal focuses on three main objectives: “maintaining consumer confidence, maintaining producer confidence and making it easier for farmers to switch to organics”. The proposals identify six main areas of change:
- strengthening and harmonising the application of rules governing organic production (both domestic and imported), including by reducing current exceptions;
- ensuring that organic holdings are “entirely managed in compliance with the requirements applicable to organic production”;
- “[reinforcing] controls by making them risk-based”, removing the need for mandatory annual inspections, while maintaining regular controls throughout the supply chain;
- extending group certification to small farmers in the EU to reduce inspection and certification costs and associated administrative burden, in order to level the playing field with third countries where group certification is already allowed;
- addressing “the international dimension of trade in organic products” in order to level the playing field between EU and third-country suppliers and to maintain consumer confidence;
- improving transparency (including of fees charged) and simplifying and reducing the administrative costs of organic production.
The EC’s proposals include an action plan to assist EU operators. The plan includes:
- developing a system of electronic certification to ensure greater traceability;
- improving coordination between accreditation bodies and control authorities;
- exploring the scope for “a plurilateral agreement among leading organic partners”.
The proposals place EU organic policy in the context of the wider agricultural product quality policy and rapidly growing consumer demand. While the area under organic production in the EU has doubled since 2003 and production has correspondingly expanded, this has still not matched the increase in consumer demand for organic products.
The proposed regulation seeks to simplify the import regime, eliminating exceptions and increasingly applying common standards. Looking at changes introduced by the new proposals, the EC notes that “the possibility of equivalence agreements with Third Countries remains”, but confirms that “the system of unilateral equivalency is phased out”. The other main change noted is that “the recognition of control bodies” is to be “progressively shifted to a compliance regime, meaning that imported products will have to comply with the single set of EU production rules”.
A recent evaluation commissioned and published by the EC concluded that “the overall control system of organic farming is largely adequate… but with some shortcomings in implementation.” This applied equally to rules on imports, where three systems were traditionally applied:
- equivalency agreements;
- controls by authorised EU control bodies in third countries;
- individual authorisation of imports.
The third of these is in the process of being phased out.
The evaluation found there is “no indication that the control system in third countries is less effective per se than the control system in the EU”, although there are “concerns regarding the supervision of control bodies operating in third countries”. The evaluation noted that “the surveillance of recognised control bodies has become highly relevant, when Member State authorities are no longer involved in assessing single imports with respect to their equivalence.”
Imports of organic products from third countries are dealt with under Articles 28 to 31 of the proposed regulation. Article 29 sets out the conditions for organic certification of individual exporters by accredited control bodies, while Article 30 sets out the conditions for export under equivalency agreements negotiated with third-country national organic control authorities. Article 31 sets out the conditions for the phasing out, over 5 years, of unilateral equivalency recognition attained under Article 33 of Regulation 8348/2007. Given the potential cost benefits to private sector operators of equivalency agreements, on the assumption that EC proposals will be adopted, ACP governments will need to prepare for this transition.
The changes in the new proposed regulation can be seen as particularly important in the Dominican Republic, where fully three-quarters of banana producers and 60% of banana production for export are certified organic. Costa Rica, which has an FTA in place with the EU, and India, which is at the final stages of FTA negotiations, both have equivalency agreements in place for organic certification regimes, while Peru is actively seeking such an agreement. In this context, the government of the Dominican Republic may well need to consider strengthening the country’s overall organic certification and verification regime with a view to securing an equivalency agreement with the EU (see Agritrade article ‘ Government support effective in expanding Dominican Republic banana sector’, 23 April 2012).
The new EU regulation could also have important implications in ACP regions (such as the Pacific and the Caribbean) that are looking to expand organic exports to nearby EU territories under participatory guarantee systems (PGS) of organic certification (see Agritrade article ‘ An individual island in the Pacific goes entirely organic’, 26 August 2013). Participatory guarantee systems involve locally developed organic quality assurance systems that certify producers based on active participation of stakeholders within the local supply chain. According to the International Federation of Organic Agriculture Movements, PGS systems are “built on a foundation of trust, social networks and knowledge exchange” (see Agritrade article ‘ Report highlights expansion of organic production for local markets in t...’, 13 June 2013). This is a separate issue from group certification. It is unclear whether the elimination of “exceptions” underpinning the new regulation will terminate recognition of organic products certified under PGS systems.