Improving the Organic Certification System
Workshop in Brussels, October 14, 2011
Costs of Certification
Matthias Stolze
FiBL
Seventh Framework
Programme
Grant Agreement
No. 207727
Model: Costs of certification
Private costs
CB charge operator
AB charge CB
Public costs
Acc.
Body
CA
CB
standard admin.
accreditation
supervision
control
Cert. fee
Accred. fee
pub. support
Standard
owner
Operator
control, certificate,
investments, TCs
pub. support
Costs of
certification
Costs of certification: Cost types
Private costs
Cash based costs: e.g. inspection fee, certification
fee
Opportunity costs: time spent in connection with
organic certification: information search, advice,
documentation, preparation for control
Public costs
control cost support
public transaction costs: monitoring, supervision etc
Data Basis
Custumer records from six control bodies (2007,
2008, 2009)
2008 Survey organic operators (n=379)
2008 Survey of standard owners (2), control
authorities (12), accreditiation bodies (6), control
bodies (33)
Average control duration per control
2008 (in h/control)
Source: own calculation based on costumer records from four control bodies
Share of perceived workload per year
for control & certification: Farmer 2008
Median of Farms and Farm with processing
Share perceived workload per year for
control & certification: Processor 2008
Median of processors
Average inspection fee per operator
2008 (in Euro)
Source: own calculation based on costumer records from four control bodies
Conversion to Euro based on average exchange rates of the year 2008 based on European Central Bank (2010)
Business costs of organic certification
farmers 2008 (€ / farmer & year)
+
+
+
-
Opportunity costs
Certification fee
Annuity of investments
Outsourcing
Subsidies
Total business costs
CH
253
535
0
38
0
826
CZ
133
318
221
160
0
832
DE
303
495
0
0
495
303
DK
642*
–**
0
144
0
786
IT
379*
513
0
0
430
462
UK
590
647
1
0
0
1’238
* duration of control estimated by farmers (operators’ survey) as data from inspection records were not available
** not applicable due to public control system free of charge in DK
Median of Farms and Farm with processing
Business costs of organic certification
processors 2008 (€ / processor & year)
Opportunity costs
+ Certification fee
+ Investments
+ Outsourcing
Total business
costs
Organic turnover
Business costs of
organic certification in
% of organic turnover
CH
719
834
0
0
1,553
CZ
1,439
477
0
100
2,016
DE
1,990
727
0
0
2,717
DK
2,022*
–**
0
0
2,022
IT
922*
900
0
0
1,822
UK
484
1,400
0
0
1,884
948,630
587,115
337,200
3,487,124
200,00
413,755
0.16%
0.34%
0.81%
0.06%
0.91%
0.46%
* duration of control estimated by processors (operators’ survey) as data from inspection records were not available
** not applicable due to public control system free of charge in DK
Median of processors
Estimated average administrative
costs of organic certification in 2008
(in Euro per operator & year)
CH
Standard owner
EU Commission
Private Standard
Supervision
Competent authorities
CZ
DE
DK
IT
5
5
5
5
179
30*
37**
33
79
Public control system
DK
Total
UK
325
5*
58
10
95
253
209
38
84
583
* only national public expenditures; without public expenditures of regional authorities (Italy: 20 regions, Switzerland: 26
Cantons)
** not including costs for standard implementation, managing imports, mutual acceptance of other standards or recertification
respectively as such data were not available
Workloads per operator
Control Authorities & Control Bodies 2008
Estimated total certification costs in
2008 (in Euro / operator & year)
CH**
CZ
DE
DK
IT**
UK***
Farms
1,035
870
387
(882*)
1,369
472
(902*)
1,333
Processors
1,762
2,054
2,801
2,605
1,832
1,979
* without public control cost support
** only national public expenditures; without as public expenditures of regional authorities (Italy: 20 regions,
Switzerland: 26 Cantons)
*** not including costs for standard implementation, managing imports, mutual acceptance of other standards or
recertification respectively as data were not available
Conclusions
For operators: actual control time take only small share of
the total time required in the context of control &
certification
More relevant are perceived time required for
preparation for control
Information search
Inspection fee is most relevant monetary expenditure
Control bodies: On-site control plus preparation and
processing of the control visit are the of most relevant
workload at CBs
Control authorities: workload substantial in CZ, DE
Differences between countries are higher than differences
between certification systems
Thank you!
Special thanks to the European Commission for their support and the members of the
project consortium for their ongoing cooperation
This presentation was generated as part of the CERTCOST Project, agreement no.
207727 (http://www.certcost.org), with financial support from the European
Community under the 7th Framework Programme. The publication reflects the views
of the author and not those of the European Community, who is not to be held liable
for any use that may be made of the information contained.
Seventh Framework
Programme
Grant Agreement
No. 207727