No

Issue

Text

1

Aims

This policy establishes the guidelines for smallholder group certification by CERES.

2

Background

The cost of certification is a serious obstacle for smallholders, making access to organic markets for them difficult. Since nearly 20 years ago, group certification with internal control systems have been developed as an alternative. These systems have now obtained a certain level of official acknowledgement.

3

Normative framework

·         The EU-regulation 2092/91 and JAS prescribe that each single operation, independent from its size, has to be inspected individually by an independent certification body. Nevertheless, on November 6, 2003, the EU commission published a "Guidance document for the evaluation of the equivalence of organic producer group certification schemes applied in developing countries" (AGRI/03-64290-00-00-EN). As the name says, this is a guidance document, not a legally binding regulation. Nevertheless, several competent authorities in EU countries use this guidance as a basis, e.g. for approval of import li­censes for organic products.

·         NOP Final Rule (205.101) establishes that operations with less than 5,000 USD annual agricultural gross incomes from organic sales are exempt from certification. These producers are not allowed to use the USDA-NOP seal. This paragraph is intended more for individual growers, who sell their produce directly to consumers, not for groups, whose total gathered sales usually exceed the above-mentioned sum. Nevertheless, it gives a legal frame for systems of organic market access without individual inspection by profes­sional approved certifiers.

•     From 2001 to 2003, the International Federation of Organic Agricultural Movements (IFOAM) organised three workshops on group certification, with stakeholders from all over the world. The result was a "compilation" docu­ment (IFOAM ICS Compilation 03-03), which is a rich source of ideas, experiences, and proposals for producer groups and certifiers.

4

Terms

·         Internal Control System (ICS): is a tool of quality assurance, where the ex­ternal certifier delegates part of his work to the organisation. The proper work of the certifier is then to evaluate the ICS' performance.

·         Group: Groups can be organised on their own, but also by external entities, like e.g. processing or trading companies. They must have a formal structure, and, as a minimum, internal exchange of information.

·         Re-inspection rate: The sample, which is inspected by the external certifier, to evaluate the ICS' performance.

5

Policy

5.1

For which groups ICS can be used?

Obviously, any producer group can and should have its tools for quality assurance, independently from requirements of, or acknowledgement by external certifiers. In the context of group certification, however, CERES requires that a group must fulfil the following conditions, to use an ICS as a tool for group certification:

·         The group must have at least 15 members

·         Producers must be within geographic proximity and have similar production schemes.

·         The group must be composed of producers, for whom cost of individual certification would exceed 2% of the annual turnover, which they obtain with the certified crop.

·         The group must be structured, although not necessarily legally established, and have at least two meetings per year, where issues of organic production and marketing are discussed, among others.

We believe that group certification should be possible anywhere in the world, where these conditions are fulfilled. Nevertheless, groups should be aware that some EU authorities keep strictly to the EU guidance, and allow group certification only in countries defined as "developing countries" by the OECD (http://www.oecd.org/dataoecd/35/9/2488552.pdf).

ICS can be applied for crop or livestock production, including beekeeping.

Collective farms with a centralized decision structure, where the individual farmer has no power of decision on crop management, do not need formalised ICSs.

5.2

Internal regulation:

·         The group must have written internal rules, which can be very brief. Rules must include the ba­sic requirements of the respective organic standard(s) for the specific crop(s) and local conditions, but can, of course, go far beyond this.

·         These rules must include a catalogue of sanctions for different infringements of the rules. The group should work out sanctions, although the certifier must check, whether the infringements are adequately defined.

5.3

Internal inspectors:

·         The group must have a sufficient number of internal inspectors.

·         Internal inspectors must be adequately trained. They must have appropriate knowledge of:

o      Their role as inspectors

o      The essential requirements of organic farming standards

o      Management techniques of the respective crop(s) or livestock

o      Inspection procedures

o      Sanctions established by the group

o      Report writing.

·         Besides their knowledge, internal inspectors must have a high level of personal integrity and reliability.

·         Conflicts of interest:

o      In case internal inspectors are producers themselves, they should, if possible, perform inspections in other villages or subgroups, not in their own.

o      In case they are farm advisors, they should, if possible, not perform inspections in the same villages or subgroups where they do consulting. As a minimum requirement, consulting and control activities must be clearly separated, concerning time, budgets, etc.

5.4

Performance of internal inspections:

·         As a minimum, internal inspections must take place once a year. When new groups start, or in high risk situations, CERES may request that more inspections per year take place. In high-risk situations, at least 20 % of internal inspections must take place without previous an­nouncement.

·         Internal inspections are not just a matter of "filling in forms". Internal inspectors must basically perform the same control procedures as external inspectors, including double-checking of in­formation provided by the operator.

·         Depending on the size and complexity of the farms, inspectors should spend sufficient time on a farm unit for inspection. For normal farms, this will be between 1 and 2 hours. This means that the group must have a sufficient number of internal inspectors. Big groups must be subdivided in appropriate subgroups.

·         Internal inspections must cover the whole operation, including plots in other places, and at least a sample of crops, which are not requested for certification.

·         During announced inspections, the farmer or another responsible person must be present.

·         An inspection report must be written, containing all relevant information concerning the holding, and outlining non-conformities and corrective actions to be taken. We recommend the use of CERES forms, but own forms can be used, if they contain equivalent information. The report must bear a date and be signed by the producer and by the inspector.

·         A farm map or drawing of all plots and farm buildings must be attached to the report and up­dated yearly.

5.5

Internal approval body:

·         The internal approval body can be a group of persons, e.g. the management board of the organisation. Nevertheless, in many situations it may be more functional that only one or two persons are assigned to perform this role.

·         The functions of the internal approval bodies are:

o      To supervise permanently the internal inspectors.

o      To evaluate the internal inspection forms, fill in the internal inspection review matrix (IIRM) and, based on this, work out the organic management plan and internal audit report for the organisation.

o      To establish corrective actions and sanctions for the members.

o      Pre-approval of the producers' list.

5.6

Producers' list and map:

·         A complete, updated and transparent list of producers is one of the most essential require­ments for group certification.

·         As a minimum, the list must include the following information for all farmers:

o      Complete name

o      Complete address

o      Whole farm area

o      Area of crop(s) to be certified

o      Potential yield

o      Real yield, at least for the last year

o      Dates of the first and the last internal and external inspections

o      Dates of the last use of chemical inputs

o      Certification status.

·         Besides, it is highly recommended that the producers' list is managed as a real database, including complete information on:

o      Harvested and delivered quantities throughout the years

o      Dates of all internal and external inspections performed

o      Non-conformities, corrective actions, and their fulfilment.

The group must establish privacy rules for access to this database. The information must be available for the certifier, but not necessarily for all group members.

·         The internal approval body can suggest the inclusion of new members in the producers' list, but the external certifier must approve the new members, before their products can be pur­chased as organic. The producers' list approved by the certifier is an essential attachment to the group certificate. Only in the case of very experienced and reliable organisations, the certifier can concede the power of temporary approval of new members to the internal approval body.

·         A regional map must be provided, highlighting locations of all farmers (or, in case of big orga­nisations with several subgroups, at least location of these groups), wholesale points, storage rooms, and processing or packing units.

5.7

Parallel production:

·         Parallel production in the stricter sense means that the same crop is planted within the same farm on organic and conventional plots. Even for NOP, where parallel production is normally not prohibited, in producers groups with internal control systems, CERES does not allow this form of parallel production, because we consider the risk of commingling too high.

·         Parallel production of fields with organic and transitional status within the same farm is possi­ble for perennial crops, in case that a conversion plan exists and complete separation during and after harvest is assured and supervised by the organisation.

·         Transitional and organic producers can be part of the organisation, even in case of annual crops, if harvest and post-harvest separation is assured.

·         In case that the organisation includes both organic and conventional producers, the conven­tional producers not planning to convert to organic in the near future, the organic producers have to establish some kind of subgroup, which assures separate post-harvest handling, specific organic consulting, training, and internal control.

5.8

Conversion period:

Conversion normally starts with the first documented internal inspection – except for the cases explained in CERES policy on organic conversion period (see Policy on Conversion Period).

5.9

Post-harvest handling:

·         In many cases, the really critical points in farmer groups are not so much related to crop man­agement, but to post-harvest handling. Risks of commingling certified and non-certified prod­ucts exist on the farms (farmers, who also trade with the respective products), during trans­port, storage, packing, processing, etc. Farmers are often not even aware of this problem, especially in cases, where no major differences exist between crop management on certified and non-certified farms.

·         All post-harvest facilities have to be visited by the external inspector. Nevertheless, the orga­nisation is responsible for assuring and supervising correct separation, documentation, and traceability at all these points. In the case of very advanced and reliable ICSs, CERES can reduce external control of post-harvest facilities to a sample, which has to be determined by the inspector in coordination with the certification officer.

·         The organisation is responsible for training all members, explaining them, how important it is, to keep certified and non-certified products separate.

·         Approved farmers lists must be available at all wholesale points, where farmers deliver their products. The organisation has to establish reliable mechanisms, which allow responsibles at wholesale points to assess realistic quantities, which can be delivered by each producer.

·         From the moment on, where the product leaves the farm, it has to be put transported in some kind of closed container (e.g. bags or boxes) and labelled. Transports have to be accompa­nied by way-bills.

·         Farmers, who trade with the same products, for which they request certification, must be dealt with as traders. They have to keep records on purchased, stored, processed, and sold quantities. Some kind of "invoice", signed by the producer/seller of the product, has to be filed. These "trading farmers" have to subject to annual external inspections.

·         "Trading farmers" are allowed to handle both certified and non-certified products only in case that they have achieved a high level of professionalism, concerning separation, record keep­ing, labelling, and traceability

5.10

Contracts:

·         The external certifier has a contract with the organisation as a whole, not with the individual producer.

·         Each member has to sign a contract with the organisation. As a minimum, this contract must include a commitment to fulfil organic standards (specifying the most important of them), and to give free access to internal and external inspectors to the farm, including all plots and buildings, and to the necessary information and documents.

·         Instead of individual contracts, group contracts are accepted. Fingerprints can be used in­stead of signatures in the case of illiterate members.

5.11

Re-inspection rate:

·         As suggested by the EU guidance and by the IFOAM guidelines, we use the square root ap­proach for establishing the re-inspection rate: as a minimum, the external certifier must in­spect the square root of all members. Besides this, a "risk factor" is used to calculate the re-inspection rate:

y = r * vx

(x = total number of producers

y = minimum number of producers to be inspected by certifier

r = risk factor)

The minimum number of producers to be re-inspected is 10.

·         Differing from the above-mentioned guidelines, our risk factors (r) vary not only from 1 to 1.4, but also from 1 to 4. Risk assessment is based, among others, on the following criteria:

o      Performance of the ICS: a good ICS means lower risk, a poor ICS high risk

o      Risk of commingling certified and non-certified products

o      Risk of use of non-allowed substances, especially chemical pesticides and fertilis­ers

o      Records: a good record system, from the level of the individual producer up to the export level, reduces risks

o      Price difference between organic and conventional products: the bigger the differ­ence, the higher the risk of fraud.

·         In case of big organisations with different subgroups, samples for re-inspection have to be re­presentative for all subgroups.

·         The evaluation of the performance of internal inspectors is not only an issue of quantities, but also even more of quality. To get a real insight in the work of internal inspectors, it is not enough to evaluate their reports. Therefore, CERES performs witness audits during internal inspections.

The following table presents examples of a high, a medium, and a low risk situation, and the respective size of the sample to be re-inspected by the certifier:

Situa­tion

Use of chemicals in the area

ICS

Risk factor

Total number of producers

15

25

50

100

200

400

Number of producers to be re-inspected

1

Common

poor

4.0

15

20

28

40

56

80

2

Uncommon

some defi­ciencies

2.5

10

13

18

25

35

50

3

Unknown

good

1.0