EU’s move to shift to ‘compliance regime’ may burden Indian organic exports

The European Commission recently published a draft memorandum with the aim of implementing strict measures starting from January 2025 with regard to compliance with standards for organic products in third countries. This decision comes in response to the committee’s observation that some governments in various countries have relaxed regulations during the Covid-19 pandemic, which has had negative impacts on the ability of accreditation bodies to ensure compliance of these products.

It is feared that the move could increase certification costs in India, which exported more than $300m of organic products to the EU in 2021-22.

According to the committee, a draft amendment has been issued regarding specific procedural requirements for the recognition of the authorities and governing bodies responsible for conducting inspections of certified organic operators and operator groups, as well as on organic products coming from third countries. The amendment also sets certain requirements regarding their oversight. She said, “National measures taken in third countries due to the Covid-19 pandemic have had a negative impact on the ability of accreditation bodies and competent authorities to schedule and carry out witness audits for the purpose of being recognized by control authorities and oversight bodies under the compliance regime.” Therefore, to ensure a smooth transition from a parity regime to a compliance regime and to avoid the risk of trade disruptions, witness audits will expire in December 2023.

Under the microscope

Last November, the EU in its audit report for India acknowledged the existence of an inclusive structure with all the elements needed to control organic products, including a complex IT system to oversee controls and ensure traceability. However, there are many weaknesses in control and implementation of controls at various levels. Most importantly, recent unannounced controls by APEDA as well as findings by the audit team show a high degree of non-compliance with NPOP in producer groups and poor quality of inspections,” the report said.

The Agricultural and Processed Food Export Development Authority (APEDA) regulates under the National Organic Production Program (NPOP), recognized by the European Union as equivalent to some products, the quality standards for the export of organic products.

“Changing the EU regime from process certification to product authenticity is a serious change to the ecosystem in organic farming. This disruption will allow only exporters with ‘new competence’ to remain in the export market,” said S Chandrasekaran, trade policy expert, referring to a revision report. The European Union accounts, he said, that he identifies APEDA’s laxity in the enforcement and supervision mechanism, and that the requirements of confidence-building measures are a prerequisite for achieving bilateral understanding.

He added that if producer groups had to seek recognition from an additional agency recognized in the European Union, it would increase their costs. Organic producers are already paying certification agencies, which are recognized by APEDA under the NPOP, to export their products outside India.

The current EU procedural rules and requirements came into force from January 1, 2022 and will expire on December 31, 2024. “To ensure a smooth transition between the two regimes and avoid risks of trade disruptions, it is necessary to temporarily depart from the rule provided for in Article 1(2)(1) and in Point 3(a) of Part B of Annex I to Commissioners Regulation (EU) 2021/1698, by extending the period during which previous witness checks can be carried out. The EU said in the notification:

Oversight authorities and oversight bodies can only start operating under a compliance regime when they have been recognized by the Commission. It is necessary to establish a time frame within which the oversight authorities and oversight bodies must notify the committee that they have updated the technical file used for their identification through new witness audits conducted based on their performance under the compliance regime.