The Organic Crop Improvement Association (OCIA), which is based in Nebraska but also has a small team in China, has allegedly been banned from certifying Chinese foods as organic due to a conflict of interest, as it used government officials to inspect state-run facilities. It is usual practice for the USDA’s National Organic Program (NOP) to delegate foreign certifying bodies to inspect overseas facilities for compliance with standards that would enable foreign products to carry the green USDA organic seal. However, the independence of the organic certification process is a large part of its appeal for consumers and food manufacturers alike.

The OCIA was a leading inspector of Chinese organic production facilities, but had already closed down most of its Chinese operations last year in expectation of the USDA’s move, the Times said.

Organic import dependence​

As demand for organics has increased, American farmers have struggled to keep up, leaving the organic sector increasingly dependent on imported ingredients, according to the USDA. A departmental report flagged up the problem of squeezed organic ingredient supply last year when it said that nearly half of US organic handlers found ingredients in short supply, and in 2004, 13 percent failed to meet market demand for at least one of their products.

Indeed, demand has been rising at a far faster rate than supply. Although certified organic acreage has doubled in the US since 1997, organic food sales have quintupled over the same period, from $3.6bn to $24.6bn last year, according to USDA figures. This has led handlers to look to international markets for supplies – which can often be cheaper due to lower labor and input costs.

US organic demand has outstripped supply since the early 1990s – when many organic suppliers were forced to sell their products on conventional markets due to a lack of consumer demand. Now, the most problematic supply issues are found with coffee, soybeans, milk, seeds, corn, and nuts.

The organic sector accounts for about three percent of total US food sales, and is forecast to experience “slowing but steady growth” ​of 19 percent to 2013, according to market research organization Mintel.