Transitioning Organic Extract Suppliers After End of USDA Organic Certification Agreement with India: 2022 SupplySide West Report

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Companies supplying organic ingredients grown in India are adjusting to a major regulatory change that came into effect this year after the USDA Agricultural Marketing Service’s (AMS) National Organic Program (NOP) ended a regulatory agreement with India. This agreement had previously allowed Indian regulators to accredit India-based certification agencies, which were then authorized to inspect farms and businesses in the country and grant NOP certification on behalf of the USDA.

The Agreement between AMS and Indian Agricultural and Processed Food Export Development Authority (APEDA) was established in 2006 and allowed APEDA to accredit certifiers who would certify farms and businesses in India according to USDA NOP standards. AMS announced on January 11, 2021 that it was terminating this agreement, citing the USDA’s need for more direct oversight of NOP organic certification in India. The AMS has set a transition deadline of July 12, 2022, by which time all companies exporting products from India labeled as USDA Organic must have their facilities and farms inspected and certified directly by an AMS-accredited certifier. USDA.

At the SupplySide West show in November, Nutritional Insights spoke to Orgenetics (Brea, CA), a company that provides certified organic extracts from India, about how the company transitioned to this new way of doing business. At the show, Orgenetics Senior Vice President of Business Development, Saumil Maheshvari, spoke about the challenges faced by his company as it brought its supply chain in India into compliance with the new USDA NOP certification requirement. “This new curve that was started by the USDA, we have to learn to live with it and adapt to it. And I think we are getting there,” he said.

Orgenetics became one of many companies in India that needed AMS certifiers to come to India to certify its facilities to continue carrying the USDA NOP logo. “It has been a headache here and there for many Indian suppliers of organic extracts or organic products,” he recounted.

One of the biggest challenges was the fact that there was a shortage of USDA accredited certifiers available to inspect and certify farms in India. “[AMS] authorized a transition period of 18 months between January 2021 and July 2022,” Maheshvari explained. “While this may seem long, the problem is that during this transition period there have been staffing shortages” in the certifier workforce. To make matters worse, he said, at that time the European Union also decided to no longer recognize organic certifications issued by APEDA-accredited certification bodies, which further weighed on the number of USDA accredited certifiers needed to certify organic farms in India. for US and European exporters.

“This all happened at once, which meant that even though we were bringing in NOP organic certifiers and inspectors to inspect our farms and facilities in India, there was a backlog. [of available certifiers]Maheshvari explained.

Orgenetics has now overcome that hurdle, and Maheshvari said other organic companies in India are also emerging from the predicament. “It was messy,” he said. “But I think next year [people will get used to it].” He compared the situation to the COVID-19 pandemic: “Initially people didn’t know what it was. They didn’t know where to get tested. They didn’t know what to do, how to travel. Eventually people got the rhythm.

Anticipate and move forward with innovation

Maheshvari credits the team at Orgenetics with helping the company through the transition. “I’m proud of our team,” he said. “While we were dealing with this, we obviously had the help of consultants, and we had help from our team in India.”

But what also helped the company were the efforts it had made in previous years to diversify its global supply chain. “We were innovating and investing in new supply chains, looking to the future,” Maheshvari explained. For example, even before the COVID-19 pandemic hit, Orgenetics had been working to establish new botanical supply chains in New Zealand and California.

The company has focused on introducing new ingredients to its customers in other parts of the world. For example, the newest ingredient in its portfolio is a rambutan fruit extract in Costa Rica.

In that sense, said Maheshvari, “Orgenetics has become a platform for innovation. We are not just a traditional distributor. We find innovative plant species in which we can identify biomarkers and bioactives that could benefit human or animal health industries. And then we look at manufacturing techniques or technologies to make sure that we can standardize that ingredient and bring it to the United States in a safe and healthy way.

And in terms of expanding supply chains in the United States, he said, “domestic supply chains have also helped us because we can stay under the USDA umbrella and the FDA rather than dealing with international laws.” At SupplySide West, Orgenetics highlighted its partnership with American Aronia Accelerator (A3; Fargo, ND), which represents aronia berry growers in the United States and Canada. Together, the groups are focused on expanding chokeberry’s presence in the sports nutrition market. Maheshvari also highlighted Orgenetics Orai-KP FD Organic Kakadu Plum Freeze Dried Powder from Western Australia.

The company’s recent experiences as an international exporter have led to key achievements. “Unfortunately the case we are looking at, especially post-COVID, is that the world is de-globalizing,” Maheshvari said. “So before, where it was about globalization and expanding trade, it’s more fragmented now. Each country wants to make its own laws, perhaps because of the border closures that have happened during COVID. And so, for better or worse, it’s more of a political or philosophical debate, but at least for us, when we’ve looked at the stability of domestic supply chains both from a regulatory perspective and supply chain than availability, that was a huge plus for us.

It remains to be seen how de-globalization will change the market for organic products. For now, Maheshvari said, demand for organic products remains strong. “It just keeps growing,” he said. “The latest full year figure again showed robust growth. With the pandemic, what you’ve seen is people are prioritizing their health and what they’re ingesting. This year I think we will have a challenge with high inflation to see how people prioritize their dollars. It remains to be seen whether they will continue to spend on organic or not, but I personally believe that there will always be growth in the organic sector. Organic extracts definitely remain popular.

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