Selling conventional products as high-quality organic ones has become a sadly common income source for fraudsters worldwide. How come? To understand this, it’s worth having a look at the three preconditions, the «ingredients» of fraud: incentive, opportunity, and attitude. They were first unveiled by Donald R. Cressey who then arranged them in the so-called «fraud triangle». Because even though, from case to case, these ingredients may be present to a different extent, they create the basis for every single fraud to occur – be it organic or not.

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Incentives, opportunities and attitude

Incentives motivate people to do something, and one of the biggest incentives out there is: money. Latest figures from Germany show that consumer prices for organic food are between 30 and 175% higher than those for their conventional equivalents. «In organics, production costs tend to be higher whilst yields are lower. On top of that, there are extra costs for audits, controls, and certification to prove organic integrity», explains Gerald A. Herrmann, director of Organic Services. Having worked in the organic sector for 40 years, Gerald knows that, unfortunately, there is plenty of money out there to encourage organic fraud.

An incentive is nothing without opportunity, meaning the existence of favourable circumstances for fraud to occur. «In Europe, organic legislation dates back to the early 90s. I was a farm consultant at that time, and organic audits and certification schemes were still in their infancy», remembers Gerald. Although both preventive and detective measures have since been further developed, he is convinced that more can be done. Despite manifold rules and regulations and an organic accreditation and certification sector that is worth millions, opportunities and loopholes for organic fraud persist. At the same time, technologies to conceal fraud have become more advanced.

Understanding the ingredients for fraud in the organic sector is crucial to fight it

The attitude behind fraud generally comprises two aspects. Firstly, the conclusion that the gain (incentive) outweighs the possibility to be detected (opportunity), and secondly, a moral justification. «Everyone is doing it!» or «I have to make a living somehow» are claims we often hear from perpetrators in this context, and they always stem from very personal motives: perceived injustice, jealousy, or simply the belief that nobody really produces proper organic products in the first place.

Organic fraud: recipe and antidote

Once we have all three main ingredients together, the question remains how organic fraud is ultimately committed. Besides falsifying certification documents, Gerald provides another example: «Imagine there is a farmer who has 3.000 hectares of organic soy production. He has three organic certificates: one for the United States, one for the EU, and one for China. All certificates have been issued by accredited certification bodies – but luckily, these don’t know of each other. So, the farmer can sell three times of what he has actually grown – all with a valid certificate!»

Understanding the ingredients for fraud in the organic sector is crucial to fight it. Incentives will persist as long as conventional producers don’t have to pay the «true costs» for their economic activities (e.g., the costs for the loss of biodiversity through intense use of pesticides) and as long as the costs for audits and certifications continue to increase rather than decrease. The responsibility for reducing opportunity clearly lies with our organic regulators, who above all, must encourage digitalisation and facilitate access to supply chain data within the organic sector. The most difficult part, however, will remain to change the attitude behind organic fraud.

Author: Ina Hiester, freelance journalist for the organic sector

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