Governmental agencies rejected the Mountpark’s cargo on the basis that the corn was harvested in Russia, Moldova, and Kazakhstan, all countries from which it is illegal to import whole corn seed (shelled corn) into the U.S. due to pests and pathogens endemic in those regions. This loophole appears to be exploited as a work-around in the organic marketplace.
Since reporting on the Mountpark shipment, Cornucopia uncovered corporate filings prepared by Tiryaki and records housed by the USDA’s National Organic Program database that show Tiryaki’s ownership interests and/or associations with farms in Russia and Kazakhstan.
In an interesting series of events, at least five foreign operations showing affiliations with Tiryaki also surrendered their organic certifications after U.S. authorities rejected the Mountpark shipment, including those operations in Russia and Kazakhstan from which the corn carried aboard the Mountpark was harvested. The operation located in Moldova, which supplied Sunrise’s Mountpark shipment, also surrendered its organic certification.
“The fact that these operations surrendered their organic certifications on the heels of the problematic Mountpark incident raises serious concerns about the organic integrity of not only that shipment, but the massive quantities previously imported by the same supply chain” said Anne Ross, a staff attorney and researcher with Cornucopia, and primary author of Cornucopia’s white paper.
Organic acreage and production data for Turkey, Russia, Moldova, and Kazakhstan substantiate these concerns, as these numbers cannot be reconciled with the quantities that are being imported into the U.S.
John Bobbe, Executive Director of Organic Farmers’ Agency for Relationship Marketing (OFARM), an umbrella organization representing organic grain marketing cooperatives in 19 states, noted, “Serious questions as to whether some countries, like Kazakhstan, even have organic production acreage are alarming, considering reports that imports from these regions have filled the U.S. organic supply chain.”
Turkey is of outsized concern. According to USDA statistics, it is one of the largest exporters of organic feed and food to the United States. Based on available data sources, in the year 2015, the U.S. imported over three and half times as much organic corn as the country purportedly produced.
“What we have is a mathematical impossibility,” said Ross. “When the organic acreage reported for these countries cannot produce the organic grain yields that the U.S. is importing, either the product is fake or the data is so unreliable that the U.S. ought to ban organic shipments from countries where meaningful records on organic production can’t be extrapolated.”
The Cornucopia Institute has repeatedly called upon the USDA to implement reforms and execute stricter enforcement protocols to prevent the infiltration of fraudulent organics across U.S. borders. In July 2017, the group submitted a Citizen’s Petition calling for agrichemical residue testing of every bulk shipment from high-risk regions.
Although the National Organic Standards Board, an expert industry advisory panel, has sponsored dialogue on remediating the fraud exposure in the U.S., as required by Congress, the USDA has not asked the body to help promulgate new rulemaking to date.
In a letter submitted to USDA’s Secretary Sonny Perdue, the watchdog group renewed its calls to the USDA for emergency rulemaking, which would require that every entity in the global supply chain be certified and required to conduct full-audit tracebacks.
While the E.U. acted promptly to control cross-border import fraud, U.S. domestic grain producers lost hundreds of millions of dollars in revenue, as they faced increasing competition from suspicious grain being imported to feed certified organic livestock in the U.S.
The financial reality for the multinational Tiryaki is far different. Tiryaki, with a fully integrated supply chain and its corporate affiliations with Sunrise Foods International, has a stronghold on the organic grains imports market. Tiryaki reports revenues in excess of one billion dollars, with millions in financing dedicated to expanding their organic operational infrastructure.
Another company, Lansing Trade Group (“Lansing”), based in Overland, Kansas, is also a formidable player in organic grain imports, particularly in the importation of organic cracked corn. Forbes lists it as one of America’s largest private companies, boasting revenues of approximately $5 billion in 2016.
Feed Factors, a subsidiary of Lansing, is identified as the shipper in over 20% of bulk vessel shipments of organic corn since 2015, positioning it only behind Diasub as a leading shipper.
Both Tiryaki and Lansing are associated with Zivana, SA, a Swiss company that has served as consignee for over 40% of bulk vessel shipments of organic corn from January 2017 to May 2018. Little is known about the company, as its website represents it trades in animal hides and sausage casings and is family-run by a Turkish national.
Tiryaki and its affiliates dominate the organic corn market. Maritime shipping records identify these companies in over 85% of U.S. organic corn imports since January 2018—possibly comprising over 40% of the corn in this country being fed to certified organic livestock.
Cornucopia’s Kastel stated, “The USDA could have followed, years ago, the template provided by our European counterparts, but instead the story in the U.S. is one of a decade of missed opportunities by our regulatory authorities and lost opportunities for U.S. farmers.” He continued, “Just think of the thousands of U.S. farmers who would have been incentivized to convert to organic production in a fair market, creating financial security for their families and rural communities.”
The USDA announced that on July 17 they will hold a webinar to explain new rulemaking designed to remediate the systemic problems related to the credibility of the organic supply chain—a problem that The Cornucopia Institute report clearly alleges is the responsibility of malfeasance by the agency’s National Organic Program.
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“When we first published the Behind the Bean report, over 10 years ago, outlining improprieties in organic Chinese soybean exports, the USDA ignored the problem,” said Mark Kastel, a senior farm policy analyst with The Cornucopia Institute. “Until embarrassing revelations in the media last year about counterfeit organic corn and soybeans, the agency’s National Organic Program, along with the industry’s leading lobby group, the Organic Trade Association, have done nothing but crow about ‘organic integrity.’”
Cornucopia’s report outlines how Tiryaki and its affiliates’ domination of the market coincides with the disintegration of another imports supply chain involving the Turkish supplier Beyaz Agro, which was ultimately decertified by the USDA-NOP after a 2017 Washington Post investigative story exposed fraud involving their shipments of fraudulent corn and soybeans.
The fraudulent shipments documented by the Post resulted in a lawsuit in Maryland, which Cornucopia recounts in its report. The complaining party in that case, Global Natural, LLC, alleged a Turkish supplier and its affiliates duped it into selling fraudulent organic grain, which resulted in $20,000,000 in losses and Global Natural’s total demise. The legal filings also allege that Beyaz Agro’s Turkish competitor, Tiryaki, orchestrated the collapse of Beyaz Agro and its supply chain to retain market dominance.
Not only do the organic acreage and U.S. import data defy Turkey’s reasonable production capacity, the use of Turkish free trade zones to transship organic grain has made complete audit-trail traceback more challenging.
While free trade zones can stimulate investments through financial incentives, they are outside customs boundaries and can be used to carry out illicit activities due to less stringent regulatory controls.
According to Ross, Cornucopia has seen instances where Turkey is listed as the country of origin on an organic transaction certificate, when the grain was, in fact, harvested in another country. “The NOP must require certifiers to issue uniform, standardized transaction certificates that identify the farm where the grain was harvested and require that these certificates accompany the shipment’s entire journey throughout the supply chain.”
Data on organic acreage in Russia is equally problematic. The European based Research Institute of Organic Agriculture, an independent, non-profit that focuses on data collection on organic farming, reports that in 2016 there were 4,852.60 hectares (11,861 acres) of Russian land dedicated to organic corn production. Not only is this a very small area, Russia does not collect and report data on organic agriculture.
Although the Sunrise/Diasub/Tiryaki shipment of cracked corn carried on the Mountpark did not make it onto U.S. soil, large quantities of cracked corn have been imported into the U.S.
During the years that Cornucopia and OFARM rang the alarm bell, the industry’s leading lobby group, the Organic Trade Association (OTA), along with the USDA’s National Organic Program (NOP), continued to praise the performance of federal regulators. The NOP staff director, Miles McEvoy, told Politico in 2014, concerning the rumblings about Eastern European grain being shipped through Turkey, “…he is confident the global organic control system is ‘rigorous and comprehensive.’”
After the scandal was documented last year by the Washington Post, the OTA formed a task force and created a voluntary system for traceback of imported commodities. In response, Cornucopia said the OTA members, through their patronage, had spent over a decade conveniently “looking the other way,” and now they want organic farmers and consumers to have confidence in their voluntary system which amounts to the “foxes watching the organic chicken coop.”
In addition to concerns associated with shipments moving through free trade zones and insufficient transaction certificates, Cornucopia’s report also illustrates how processing corn from countries from which the importation of raw corn seed is prohibited could be an act of subterfuge employed by unscrupulous importers. “Cracking” corn can serve to obfuscate questions about the organic corn’s true country of origin, since processed corn is allowed to be imported into the U.S. (even if from prohibited countries), as long as USDA-APHIS is satisfied with the extent of the processing.
“This is only happening for organic corn. The U.S., as a major exporter of conventional corn, does not have a demand for conventional corn imports,” said Ross.
Recent congressional efforts have echoed industry concerns. The draft of the Farm Bill presented by the Senate Agriculture Committee includes provisions addressing information sharing between governmental agencies and the development of electronic tracking systems.
The Cornucopia Institute is currently finishing up extended research in developing a web-based tool which shoppers can use to identify brands of certified organic eggs, dairy products, and poultry where producers and marketers have gone out of their way to procure 100% North American-grown feed. “Consumers can reward high-integrity domestic farmers while simultaneously protecting their family’s food supply by flexing their muscles in the marketplace,” said the Cornucopia’s Kastel.
“Cornucopia’s online buyers guides are intended to empower consumers and wholesale buyers in shifting their purchasing to organic livestock-derived brands produced exclusively with domestic feed and to highlight companies that have gone out of their way to patronize U.S. farmers,” said Kastel. One example is Bell and Evans, a modern, family-owned Pennsylvania poultry processor, whose products are available in the eastern half of the U.S. through member-owned cooperatives and specialty stores such as Whole Foods. The Cornucopia guide should be released to the public sometime in late June or early July.
Who’s Who
Tiryaki Agro Gida Sanayi Ve Ticaret A.S. is a Turkish company headquartered in Istanbul. It is the self-described “top grains, pulses, and oilseed producer, exporter and supplier for certified agriculture in the world.”
Diasub, FZE is a wholly owned subsidiary of Tiryaki, and is its organic division. Diasub is headquartered in the United Arab Emirates (UAE).
Sunrise Foods International, Inc. is a Canadian corporation with affiliations to Tiryaki and Diasub. Corporate disclosures reveal Ertan Akbulut, CFO of Tiryaki, and Suleyman Tiryakioglu, CEO of Tiryaki, are board members/directors of Sunrise Foods.
Lansing Trade Group, based in Overland, Kansas, is one of the largest private companies in the U.S. Lansing wholly owns Feed Factors, a UK-based trading company that focuses on agricultural commodities. Lansing, along with The Andersons, Inc., based in Maumee, Ohio, acquired Thompsons Limited, a grain and agronomy input provider headquartered in Blenheim, Ontario.
Zivana, SA is a small Swiss company whose principal is Turkish. Zivana’s stated its business is selling raw hides and sausage casings and is a frequent consignee on shipments of organic grain involving both Lansing and Tiryaki affiliated companies. From January 2017 to May 2018, Zivana is listed as a consignee on over 40% of organic corn and cracked corn imports.
To view financial and court documents related to Tiryaki and the content of this release: https://www.cornucopia.org/tiryaki-reading-room/
