Internal Control System

Internal Control System

Although Biolaya only worked with a few farms, the model that we were developing was to work as an umbrella organisation for many farmers in the region. Only by scaling up could we develop economies of scale required to create a viable enterprise.

Managing multiple farms can be a challenging task, especially when they are scattered around remote Himalayan hillsides. The organisation needs to be very well organised (and physically fit) to keep a record of what has been planted, monitor the health of the plants and how much can be expected at harvest times, and so on.

Most importantly, there needs to be a system in place to ensure that the herbs are genuinely from a sustainable source, and that naïve or ‘enterprising’ farmers haven’t had an opportunity to take a shortcut – for example, by transplanting seedlings directly from the mountain (something I have often seen), or by slipping in some extra wild material at the time of harvest (something that several farmers did suggest!).

For anyone who has been involved in group organic certification these issues will sound familiar. Many of the controls required for organic certification are the same as they are for growing threatened herbs. You still have to keep a close eye out for farmers who, for example, might think it’s ok to use chemically treated seeds, or may be tempted to slip in extra produce harvested from a conventional farm.

The details vary, but the underlying principles of how risks are monitored and managed are the same for group organic certification as they are for sustainable herbs. These parallels proved to be very helpful for us, as it meant that we could make use of existing systems that have been tried and tested by the organic industry for decades to ensure – and provide assurance – that our herbs were coming from an organic and sustainable source.

Organic inspection at Chanyara Farm

Group Organic Certification and Internal Control Systems
In the early days of the organic movement, 3rd party certification was out of reach of most smallholders in developing countries; it was too expensive, too complicated and involved too much paperwork. The solution was to introduce group organic certification.

The key difference with group certification is that certain responsibilities of the certification body are delegated to an umbrella organisation (such as Biolaya), who organise farmers into groups, oversee the implementation of the organic standards and provide support through what is known as an Internal Control System (or ICS for short).

Just like a 3rd party certification body, an ICS operator is expected to do regular ‘internal inspections’ of every farm and implement a system of ‘sanctions’ for farmers that violate the internal organic standard. Unlike a certification body though, an ICS operator also plays a supportive role by helping with paperwork, paying the certification fees and ultimately buying the organic produce.

The responsibilities, rules and procedures of the ICS, including a list of all farmers, maps showing their location and templates for internal inspections and other key records, are all detailed in a governing document known as the ICS Manual.

With an ICS in place, there is no need for the external certification body to inspect every single farm; instead they focus on inspecting the ICS as a whole. On each farm they cross-check their findings with the relevant ICS records to ensure that everything matches up and the system is functioning properly. The frequency of external inspections and the number of farms they visit depends on how well the ICS is functioning and the perceived level of risk on each farm; the more rigorous the ICS, the less they need to monitor and intervene.

If any non-compliances or discrepancies are observed during an (internal or external) inspection, the farmer (or the ICS operator) is requested to take ‘corrective actions’ that need to be completed within a given period of time or face ‘sanctions’. The worst case scenario is that the farmer is unable or unwilling to take the necessary corrective actions and will need to be removed from the ICS programme.

In most Internal Control Systems farm groups are supported by field officers, who help them fill in their farmer’s diaries, coordinate the planning of crops, provide advice on organic farming methods and so on. Internal inspections are normally done by a designated internal inspector (or a field officer from another area) with no personal relationship to the farmers to ensure a higher degree of impartiality. If and when the ICS passes an inspection by the certification body, a single organic certificate is issued for whole group.

With an ICS in place the certification body can focus on auditing the system as a whole, and only needs to inspect a proportion of individual farmers
The key features of an Internal Control System
An extract from an Internal Inspection form; one of the most important control points is to do an accurate yield estimate (to minimise risk of any non-organic or wild produce from being added at the time of harvest)
A basic format for risk management (part of the internal inspection). A more detailed risk assessment should be done at the time of registering a new farmer
Most importantly, an Internal Inspection should result in a decision on whether the farmer is certified with or without conditions, and these conditions need to be closely monitored and acted on

Adapting an ICS for Sustainable Herb Production
Managing a full ICS for organic certification is no small task; it requires a team of committed people who are willing to do a lot of travelling between farms as well as to manage a lot of paperwork in the office. For many companies or organisations, organic certification may not be feasible or desirable, but there may still be many reasons to develop and implement some form of Internal Control System.

For Biolaya, maintaining group organic certification turned out to be prohibitively expensive at the scale we were operating on (we cancelled it after three years). But we still needed a system to ensure, and provide assurance, that the farmers were adhering to our internal quality standard.

An ICS is normally designed as an aid for organic certification, but it can easily be adapted to help monitor and manage other quality standards. In our case, we combined organic standards with Good Agricultural and Collection Practices (GACP) and the principles of sustainable herb production. Rather than being a burdensome requirement of a 3rd party, as it is often perceived, it can actually become a very useful management tool.

This is especially the case for growing CITES-listed species. Having a well-structured system in place (for maintaining planting records, internal inspections, application forms etc.) can significantly increase the chances of finding a way through the maze of unstructured government bureaucracy to obtain a CITES permit.

As with all quality assurance systems, there needs to be a balance between rigour and practicality. Generally speaking, if there are many risks (as there often are in group organic certification programmes) there need to be many controls in place. But if the risks are relatively minor, or the organisation simply doesn’t have the capacity to implement anything too complex, then the ICS can be stripped back to a basic internal standard, some simple inspection forms and a way of responding to ‘non-compliances’.

In the longer term, as the relationship between the ICS operator and a group of farmers develops, quality assurance will hopefully rely less on ‘control’ and more on trust. As risks diminish so too should the rigour and complexity of an Internal Control System.