Effectiveness of Organic Certification: a study on an Italian organic certificator's data

The aim of this paper is to implement risk-based models for the inspection procedures in the organic certification. Organic products have a specific regulation concerning labelling at the European level. The European organic logo assures that products are obtained respecting common standards set by organic regulation. The implementation of the certification is delegated to national and regional competent authorities, which then assign the inspection and certification procedures to accredited and approved control bodies. A risk-based approach, that could inform control bodies in planning inspections, can contribute to a more efficient and cost-effective certification system. Our analysis is based on a dataset obtained from the largest Italian organic certification body concerning the records of the inspection made over the period 2007-2009. The dataset contains structural and managerial data for the certified farms, and the outcomes of the inspection visits, in terms of types and number of sanctions issued for each inspected farm. Sanctions for non-compliance are classified as slight or severe, respectively referring to formal-bureaucratic noncompliance, and to more important violation of the disciplinary. Our aim is to analyse the relationship between the type of sanctions a farm receives, and the farm’s structure and productions, aiming at the definition of potential risk factors. Two distinct models are considered, respectively for slight and severe sanctions. Given the large share of farms with zero sanctions, we apply zero inflated Poisson models to farm-level panel data. Results show that there is evidence of the role of co-dependence effects between the two types of sanctions in predicting the risk of non-compliances. Other common risk factors for both types of sanctions are grapes and livestock production. Specific factors increasing the risk of non-compliance are also found for slight sanctions (dry pulses, root crops, farm size and processing) and severe sanctions (cereals), while fruit and olives production reduce the risk on slight and severe sanctions respectively.