Selling/Buying Procedures

1. Selling/Buying Procedures • The buying, handling, processing, and exporting of products are usually the responsibility of the ICS operator, but is is also possible that another party (e.g. the processor) takes responsibility for product flow right from the farm gate.( see chapters “project organisation”) • Buying procedures ensure that the product is purchased from certified farmers only. • The product once it enters the processing system it remains certified organic and must not be contaminated or commingled with un-certified products.

2. Options for Selling/Buying There are a number of variations in the selling and buying of products. The ICS operator is responsible for ensuring all the requirements are met. • Farmers may sell directly to the purchase officer at the farm gate. • Farmers may transport products themselves to a buying center. • Combination of both options.

3. Buying/ Selling Procedures & Documentation Buying Procedures (from farmer) Buying Documentation Prepare/set up buying point (scales, farmer list, cash for payments, receipt book). Buying officer to check each farmer’s identification and organic status. Buying list or (official) Certified Farmers List – check farmer’s status. Buying officer inspects farmer’s product quality and weigh or count. Buying list – enter amount of product for purchase, farmer’s name, date of sale, organic quality. Pay money and prepare receipt. Receipt issued– farmer’s details, date, quantity sold, organic quality, and price paid. Intermediate storage. Labeling of bags (organic, code/lot); keeping updated stock registers. Load on to transport. Optional documents: usually a consignment note including a copy of the Buying List. Receive at processing plant – check consignment against buying list. Optional documents: usually sign-off on buying list by warehouse manager.

4. Sample Buying List • Important for buying documentation: • indicated organic quality • quantity • farmer‘s name &code number • farmer receives a receipt • product named (if different products)

5. How to Avoid Mistakes During Buying To ensure that the buying process is managed efficiently the ICS buying officers or contract buyers should: • Ensure there are enough staff to handle the buying in a managed way. • Ideally have at least two persons, one assessing and weighing the product the other recording the details and paying the farmer. • Close supervision by other ICS staff. • Ensure that the buying staff are trained and know their job. • Staff should receive at least one training per year to update changes to documents and procedures for recording and reporting data on products.

6. Product Flow Control Product flow is is a term used to track the movement of a product through the various stages of processing, handling and storage Purchase Center Central Warehouse ContractedProcessor Farm Export

7. Purchase Center Central Warehouse ContractedProcessor Farm Export Who Is In Charge? The ICS should supervise and control the product flow from farm through to export. Alternatively the responsibility of the ICS operator may stop at any point that the product is sold to a processor or trader. In this case the processor or trader must be individually certified with procedures in place for the ensuring the compliance with the handling criteria. ICS operator Buying processor/trader

8. Your Product Flow Indicate the different steps in your product flow in the boxes and connect them with arrows and explainations if necessary

9. Example Product Flow Pepper (overview) Packing/Storage at farm Farmer harvests Drying at farm Transport of product to collection centre by farmer Transportation to warehouse Collection(Procurement) Warehouse: storage & consolidation (combination in bigger lots) Processing & packing Export: transport, packing of container

10. Example Product Flow Pepper India with risks (1) Farmer harvests Packing/Storage at farm Drying at farm • Pest Protection Drying Yard • Hygienic contamination • Product Quality • Commingling (dry product of other farms, joint drying) • Contamination (drying at road,close to spraying farmer, malaria prevention program) • use of any ingredients/auxiliaries • Quality aspects (ripe) • Use of pesticides against ants. • Any protection againstinsects, other animals. • Use of inputs in intercrops. • Contaminated picking bags • mixing org. - buffer zone crops • Contaminated bags. • Labeled • Commingling with last years product stock (other status) • Product Quality • Storage Pest control

11. Example Product Flow Pepper India with risks (2) Transport of product to collection centre by farmer Collection(Procurement) Transportation to warehouse • Weighing, wrong data recorded • Unregistered/sanctioned farmers deliver. • Purchase officer is not informed on farmers status. • Commingling • Fraud by purchase officer • --> Have 2 persons, well trained • --> clear system & procedures • --> labelling • Contamination by previous truck loads. • Lack of accompanying documents • Co-mingling • Labelling • delivery to wrong warehousing area • Adding uncertified product • common vehicle - commingling? • Proper labelling /prelabelled bag would help? • Or avoid transport by farmers? One farmer delivering for several

12. Example Product Flow Pepper with Risks (3) Warehouse: storage & consolidation Processing & packing • Own or contracted? • Commingling of qualities • incorrect records of consolidation • labelling • facility pest management incl. Fumigation • Product conservation agents • contamination from previous use of warehouse • - stock records • - process record of consolidation • - organic “sign” • - palett system (Not on ground) • Own or contracted? • Ingredients/Auxiliaries • same as warehouse • contamination by machines • mixing of lots • Packing Material (even ink, glue, etc.) • certification of all incoming suppliers: product certificates before processing • Attention: check of incoming goods • certification of all processing steps • --> cleaning • --> have clear recipes and processing documentation • announce change of recipes, all recipes. • Export documentation (“organic” missing) • Container (fumigation, etc.) stuffing where? • Warehouse at harbour any risk of contamination? • Application for Inspection certificates • Inform certifier (and client) of changes in suppliers Export level

13. Minimum Requirements for Handling I • Identification of the product in all stages in the storage, processing and handling of a product. Examples • Dedicated containers, one colour for organic only, distinctive sack labels with “organic” • Distinctive packaging for finished product (often minimum label wording is prescribed) • Indication of “organic” in records, transport papers, etc.. • Strict separation of the product (certified organic and not certified organic), Examples: • Dedicated handling areas, • Arrows directing organic product flow throughout the facilities, • Dedicated store areas, store areas clearly marked organic only, • Dedicated machinery • Dedicated transport • Separation can also be guaranteed if the same machines, handling areas etc. are used (see later)

14. Minimum Requirements for Handling II • No prohibited methods used to process product or fumigate storage and processing areas. • No fumigation of warehouses or containers with products • No ionization or irridiation of products • Declaration of all inputs • Protocols to manage possible problems in accordance with standards • Pest management of storage areas must be in accordance with standards • Pest management protocol and records • Check types of possible pests to assess possible problems and implement organic treatment options

15. Storage of Organic Products Clean Store, protect products in store OrganicOnly storage areas Clearly labeledcontainers Storage of organic products Contract storage covered by contract Organic pest control

16. Example: Processing Steps I • Post-harvest Treatment • on the farms • drying • peeling/de-shelling • cutting • de-pulping (coffee) Coffee de-pulping Fruit drying in Turkey Drying and selecting parchment coffee in Bolivia Tea processing at farmer‘s place in China

17. Example: Processing Steps II • At central processing site • and/or contracted processor • washing/drying • sorting/grading • blending and mixing • grinding/cutting • de-hulling (e.g. dry processing coffee) • multi-ingredient processing (e.g. frying banana chips in oil) • packaging Grading and sorting bananas in the Phillipines Packaging potato starch in China Frying of bananas in oil

18. Important Requirements for Organic Processing Separation & Identification - separation during processing - separation during storage & transport - labelling as „organic“ at all stages - lot number system if possible Organic ingredients & processing aids - only organic ingredients - only permitted processing aids Documentation - processing records - warehouse records - inventory records

19. How Is Separation During Processing Ensured? • Examples of how separation of organic and non-organic products can be achieved: • only handle organic goods • separate production lines (e.g. processing machinery) • process organic goods at separate times e.g. only every Monday morning when all machines are clean • all processing is striclty batch-wise • well-trained staff • continous supervision during organic processing

20. Important Aspects of Organic Export Separation No contamination (fumigation etc.) Documentation SABA Farmers AssociationTown A, Karnataka, India Organic Cocoa Beans Lot N° 2003/25packed 25.10.2003 certified organic (EU & NOP) by IMO Labeling

21. Special Aspects of Organic Exports into EU Certificates of Inspection for each consignment Import Authorizations (German authorization as example)