Business owners say consumers paying premiums for organic products are being ripped off because of a lack of national standards.
Australian Organic Limited chief executive Niki Ford said Australia was the only developed country in the world not to have consistent domestic regulation for organic products.
She said statistics showed 33 per cent of consumers had been misled into buying organic products that were not actually certified.
"So that's a whole third of organic consumers that are distrusting the industry," she said.
"You can simply put organic on your packaging in Australia if you have one [organic] ingredient or you simply claim a process has been undertaken with no verification — and the ACCC aren't able to stop this."
Ms Ford said there was a definition difference between certified organic and organic in Australia that did not exist anywhere else in the world.
"If you ask for an organic product in the US or in Germany, you'll get a certified organic product … we don't have that definition here," she said.
Regulation needed to stop greenwashing
Ms Ford said plans to stop greenwashing in Australia's organic industry had been stifled by the federal government after it failed to implement regulation worked on by the former government.
"This is not more red tape; this is actually cleaning up the very murky area we have and all the greenwashing that happens in relation to organics," she said.
Katrina Hobbs, managing director of organic producers Inglewood Farms, said the lack of standards was a logistical nightmare for her organic poultry production business.
"We're mums and dads … a lot of the organic growers are family businesses and we're just trying to make a go of making a business that provides quality products here in Australia," she said.
"What we're feeding through our chain is totally complicated because we've got multiple different standards.
"We're having to be dictated to by international markets because we haven't got a base in Australia for the domestic side of things."
Lost trade opportunities
Kialla Foods managing director Quentin Kennedy said some of his products available in Australia could not be sent to Japan or Korea because of the lack of equivalence, which stymied the ability to grow export markets.
"It just continues to restrict your business and no self-respecting business owner likes to have red tape in the way of growing a business," he said.
Mr Kennedy said it was hard to quantify the cost to his business because it was a lost-opportunity cost.
"Our exports to Korea, for instance, we could easily grow them by half a million dollars in one year," he said.
"We're doing a lot of highly value-added products, so it creates a lot of employment in these small-town communities.
"That's multiplied out across pretty much all the organic growing areas in Australia."
Independent report
The previous government commissioned an independent report by PwC Australia on Australia's dual regulation system and it was finished in May 2022.
The report detailed included cost-benefit analysis of extra regulation.
"[It] indicated that the cost of extra regulation, as requested by the industry, would be too big a burden for smaller players in the industry to withstand," federal Agriculture Minister Murray Watt said.
"And may end up being passed on to consumers at the checkout.
"At a time when consumers and businesses are facing cost of living pressures, we are conscious of our responsibility to not add to that burden."
Nationals leader David Littleproud said the report was not comprehensive enough and criticised the Department of Agriculture for excluding export figures.
"You only have to have a 1 or 2 per cent increase in exports into that report and it shows that there's a net benefit," he said.
"We're just saying, Murray [Watt] should take the department by the scruff of the neck and he should own this.
"The science is there, the economics are there."
Ms Ford said businesses did a lot of work to verify their claims, but they were not on the same playing field as operators trading internationally.
"It's not just grain, it's not just horticulture, you have everything from sanitary items all the way through to livestock," she said.
Ms Ford said she had reached out twice to the government and followed up again for a request to meet the minister to discuss a solution.
"We will continue to work with the organics industry to open new trade pathways for organic products," Mr Watt said.
