Trey Wharton of Sioux Falls has made numerous sacrifices in his life in order to maintain a healthful lifestyle centered around a vegan diet and consistent consumption of organic foods.
To afford organic products that are sometimes double or triple the cost of conventionally grown foods, Wharton works two jobs, doesn’t take vacations and drives a dented SUV.
“I’m investing in this vessel,” Wharton said, pointing at himself, “rather than in that vessel,” he added, motioning toward his 2011 Honda. “I pay more and sacrifice to invest my money in the foods I want.”
Wharton, 31, acknowledges that he is forced to trust the organic industry to uphold its promise that the foods are minimally processed, are grown without chemicals or additives, and are truly more healthful than non-organic.
Like other consumers who buy organic, Wharton sometimes wonders and worries if he’s actually getting what he believes he is buying. He is well aware of a few high-profile cases of organic food fraud — including a recent multimillion-dollar fake organic grain scam in South Dakota — in which unscrupulous producers made millions of dollars by illegally selling conventional grains packaged and sold as organic.
In the 2018 case in South Dakota, Belle Fourche farmer Kent Duane Anderson made $71 million in fraudulent income by selling thousands of tons of conventionally grown grain falsely labeled as organic. Anderson then used the proceeds to buy an $8 million yacht, a $2.4 million home in Florida, and a Maserati, among other extravagant items, according to a federal indictment. Anderson is now in federal prison.
In July 2022, a Minnesota farmer was charged by federal prosecutors in a $46 million grain fraud scheme. In a federal indictment, authorities say James Clayton Wolf bought conventionally grown grain and resold it as organic over a period of about six years. Wolf has pleaded not guilty and will fight the allegations in court, his lawyer told News Watch.
Those cases of fraud or alleged fraud have caused uncertainty and mistrust among some consumers in an industry that relies largely on the honesty of producers, processors and packagers to maintain the integrity of the industry and, ultimately, to allow consumers to feel confident they are actually getting organic products for which they pay a premium price.
“If there’s more money in it, there’s more people looking at the dollars aspect and not the moral aspect,” Charlie Johnson, a longtime organic farmer who grows soybeans, corn, oats and alfalfa southwest of Madison, South Dakota, said. “Those types of people and operations need to be pointed out and prosecuted, because they can bring down all of us if we don’t keep the system clean and honorable.”
In many ways, the organic food industry in America — which topped $63 billion in sales in 2021 — is responding to negative publicity from fraud cases and other weaknesses in the organic regulatory system by pushing for more stringent requirements and stronger enforcement of existing rules to protect the industry’s reputation long term.
The organic food industry has exploded in roughly the past 30 years as a growing number of Americans and people around the world seek more healthful foods grown with fewer chemicals and less-invasive agricultural practices.
South Dakota has been slower than other states to take advantage of the exploding organic market and is ranked 38th of the 50 states in the number of organic farms. South Dakota’s 124 certified organic farms and related businesses generated $14 million in product sales in 2019, a 42 percent increase over 2017, according to the Organic Trade Association. However, acres of farmland devoted to organics in South Dakota still make up less than 1 percent of the overall agricultural land in the state.
At the policy level, the organic industry has been pushing for more regulation and oversight from the USDA and Congress to protect the integrity of the industry as it grows and evolves, Reana Kovalcik, director of public affairs at the OTA, said.
The group that represents organic farmers, processors and retailers is pushing for new rules and programs to improve transparency, oversight and enforcement of national organic regulations and processes, Kovalcik said.
“It’s kind of unique for an agriculture industry to say, ‘Hey, please regulate us more,’ but that’s exactly what the organic industry is asking for,” she said. “The industry wants to make sure everything is as buttoned up as it needs to be for producers who are doing this extra work to get a price premium, and for consumers who are paying that premium price.”
The enticement to commit outright fraud or manipulate the system is high in the organic industry, where organic products look exactly the same as non-organic products.
On a basic level, organic foods are non-genetically modified crops grown in soil without chemical additives such as fertilizers, herbicides or pesticides; and non-genetically modified livestock raised on mostly organic feed without added hormones or antibiotics.
Some people and groups in the organic industry say the USDA is too lenient and too slow to react to industry changes.
While the USDA is responsible for regulating and enforcing the rules in most conventional agricultural processes — the meat industry, for example — the USDA outsources the certification and regulatory functions of the organic food industry. In the organic world, producers who want to label their products as organic must become certified by one of about 80 independent groups or agencies, many of them nonprofit groups devoted to promoting organic agriculture. Typically, those agencies inspect producers they certify only once a year, and they are paid for their certification services, creating a potential incentive to maintain a high number of certified producers.
Angela Jackson has obtained a close-up view of the organic foods industry from two distinct vantage points — as a producer who owns and operates Prairie Sun Organics farm in Vermillion, and as someone with more than a decade of experience as an organic expert and independent inspector.
But even as she is aware of the weaknesses within the organic certification and regulatory system, Jackson is confident that consumers who desire organic products can rely on the systems in place to ensure safety and authenticity.
It only takes a few hours of visiting with Charlie Johnson and driving in a pickup around his farm in Lake County, South Dakota, to realize why organic grains cost more than conventionally grown grains at the wholesale and retail levels.
Johnson and his family members have been growing and harvesting organic grains since the 1980s.
Johnson has 65 separate fields of crops on his 1,600 tillable acres, and he uses a six-year rotation of crops, in which each year a field has a different crop grown on it to promote soil health.
Instead of herbicides, he must drive a cultivator over his crops to remove as many weeds as possible from the land between crop rows. Signs are placed in ditches along his crops so pesticide contractors hired by conventional farmers do not apply chemicals to Johnson’s crops by mistake.
Johnson has no doubt that the resulting products are not only different but also better than conventionally grown crops.
“I just think organic foods are simply better; they’re very much richer and better in quality and in food density,” he said.
His efforts make it slower to develop yields but he’s rewarded with higher prices when he sells them to a certified organic wholesaler. In mid-July 2022, Johnson was able to sell soybeans for more than $30 a bushel while conventional soybeans were bringing about $14 a bushel. His organic corn was selling for about $10 a bushel compared with the roughly $6.50 per bushel price being paid for conventional corn.
This article was produced by South Dakota News Watch, a non-profit news organization online at sdnewswatch.org.
