1. Seventh Framework Programme Grant Agreement No. 207727 Costs of Certification Matthias Stolze FiBL Improving the Organic Certification System Workshop in Brussels, October 14, 2011

2. Model: Costs of certification Standard owner Operator Acc. Body CACB standard admin. Cert. fee accreditation Accred. fee pub. support supervision AB charge CB CB charge operator control control, certificate, investments, TCs pub. support Costs of certification Private costs Public costs

3. 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

4. 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)

5. Average control duration per control 2008 (in h/control) Source: own calculation based on costumer records from four control bodies

6. Share of perceived workload per year for control & certification: Farmer 2008 Median of Farms and Farm with processing

7. Share perceived workload per year for control & certification: Processor 2008 Median of processors

8. 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)

9. Business costs of organic certification farmers 2008 (€ / farmer & year) CHCZDEDKITUK Opportunity costs253133303642*379*590 +Certification fee535318495–**513647 +Annuity of investments02210001 +Outsourcing38160014400 -Subsidies0049504300 Total business costs8268323037864621’238 * 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

10. Business costs of organic certification processors 2008 (€ / processor & year) CHCZDEDKITUK Opportunity costs7191,4391,9902,022*922*484 +Certification fee834477727–**9001,400 +Investments000000 +Outsourcing01000000 Total business costs 1,5532,0162,7172,0221,8221,884 Organic turnover948,630587,115337,2003,487,124200,00413,755 Business costs of organic certification in % of organic turnover 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

11. Estimated average administrative costs of organic certification in 2008 (in Euro per operator & year) CHCZDEDKITUK Standard owner EU Commission5555 Private Standard179 37** Supervision Competent authorities30*33793255*58 Public control system DK 253 Total20938845831095 * 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

12. Workloads per operator Control Authorities & Control Bodies 2008

13. Estimated total certification costs in 2008 (in Euro / operator & year) CH**CZDEDKIT**UK*** Farms1,035870387 (882*) 1,369472 (902*) 1,333 Processors1,7622,0542,8012,6051,8321,979 * 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

14. 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

15. Seventh Framework Programme Grant Agreement No. 207727 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.http://www.certcost.org