Healthy soil and sustainable growing

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California schemin’: How a fake organic fertilizer bamboozled farmers and 
watchdogs alike
http://www.grist.org/organic-food/2011-05-18-california-how-a-fake-organic-fertilizer-bamboozled-farmers/PALL
18 May 2011 11:52 AM

It's no secret that the organic food industry has seen explosive growth, 
taking only a mild drubbing through the recession and then continuing its 
assent. At the heart of that growth has been trust -- consumers are willing 
to shell out more bucks for organic because the food's been grown without 
synthetic chemicals, with that claim verified from farm to market.

Yet two major cases of federal fraud have been filed in the past six months, 
rocking the California farming world and alleging that probably millions of 
pounds of produce sold as organic over several years weren't worthy of the 
label.

So why haven't you heard about this? Because the shady practices came from a 
side of the farming world that few shoppers think about: the fertilizer 
industry. And the real dupes weren't consumers but organic farmers.

In March, Kenneth Nelson Jr. was indicted by a federal grand jury on 28 
counts of mail fraud as part of long-running scheme to sell liquid fertilizer 
through Port Organic Products and several related businesses. He claimed the 
juice was made from fish meal, bird guano, and other organic-friendly 
products -- but it turns out it may have been spiked with far cheaper 
synthetic fertilizer.

His was just the latest case. In October, FBI agents swooped into LAX and 
arrested Peter Townsley, who headed California Liquid Fertilizer in the 
Salinas Valley, the heart of the state's produce industry. Although the 
company's product was labeled as natural fertilizer made from fish, it also 
allegedly contained synthetic nitrogen -- and it had been widely used by 
organic farmers for years.

"This was probably one of the most significant cases of fraud in the history 
of the NOP," said Miles McEvoy, deputy administrator of the USDA's National 
Organic Program (NOP).

You can think of Townsley as the Bernie Madoff of the organic farming world, 
arrested and charged with mail fraud for submitting false statements about 
the juice, called Biolizer XN. Farmers applied his synthetic-nitrogen-rich 
fertilizer and then sold the crop as organic. Consumers at the end of the 
line were buying products they thought were grown organically but technically 
weren't.

Secret sauce

Fertilizer has been a weak link in the organic chain for a number of reasons, 
although it hasn't gotten little attention outside organic circles.

First, fertilizer companies fall outside of the USDA's National Organic 
Program, so they aren't required to be inspected by third parties and 
certified in the same way that farmers or food processors are. While organic 
rules spell out what can and can't be applied to fields -- and synthetic 
fertilizer is definitely not allowed -- regulators at the USDA have no 
authority to take the next step and certify fertilizer manufacturers. 
Fertilizer oversight has rested with states.

Second, fraudulent fertilizer has been hard to detect. Only recently have 
tests evolved that can trace the source of fertilizer ingredients.

Finally, fertilizer is pretty far down the list of consumers' reasons for 
buying organic, which tend to prioritize avoiding chemical residues over 
esoteric soil fertility practices.

"People are much more freaked out about pesticides than fertilizers," said 
Brian Baker, who evaluated substances at the Organic Materials Review Board 
(OMRI) and now heads the Institute for Sustainability at Alfred State College 
in New York.

But this might be ecologically shortsighted. Baker points out that the 
biggest difference between organic and conventional farming isn't the use or 
avoidance of chemical pesticides, "but the way the nitrogen cycle is 
managed." Soils are often doused with synthetic fertilizers to raise yields, 
but the end result can be more pest and disease pressures, which in turn can 
lead to more pesticide use.

Instead of relying on petroleum- or ammonia-derived fertilizers to energize 
plants, organic farmers feed their soil with crop rotations, cover crops, and 
compost. They may supplement with concentrated fertilizers such as fish 
emulsion, but that's an expensive measure and not the core of the soil 
fertility regime.

So how does a farmer know a substance conforms with organic methods? They 
rely on two bodies for help.

Both the nonprofit Organic Materials Review Institute in Eugene, Ore., and 
the Washington State Department of Agriculture evaluate products such as 
fertilizers, soil amendments, and pest controls, then "list" the substance as 
allowable. (Even home gardeners can make use of the OMRI site to check out 
products). But they have no statutory authority to investigate or ban a 
product. At best, they can withhold a listing. Farmers can still use a 
product, but do so at their own risk.

With Biolizer XN, however, there was no grey area: By allegedly submitting 
false statements to OMRI, California Liquid Fertilizer's product made the 
preferred list. And farmers used the stuff -- from as early as 2000 until 
2007.

Baker, the former OMRI official, said that he had inspected the company's 
plant, though he noted that finding evidence of fraud was especially 
difficult -- not only in this case but in others. He recalled that in the 
1990s, one company claimed that a particularly potent organic fertilizer came 
from a secret lake bed in the Midwest.

"Every time we asked to see the lake, they refused," he said. Turns out the 
lake didn't exist.

That was the drill with questionable substances. OMRI would ask for 
documentation, set deadlines, and on some instances, ask to inspect a plant. 
"They'd fail to get back to us, or a deadline would lapse and we would not 
approve the product," said Baker.

Stinking to high heaven

California Liquid Fertilizer was an especially popular product with a third 
of the California market, according to the Sacramento Bee, which broke the 
story. While growers for Earthbound, the largest organic produce company in 
the nation, and Driscoll's -- the big berry grower -- had used the product, 
it wasn't confined to large farms. Even organic CSAs used it.

Port Organic's products were popular as well, becoming the largest source of 
organic fertilizer to farmers in the western half of the U.S., according to 
the federal indictment, generating $9 million in profits and a Porsche and 
BMW for Nelson.

These fertilizers tend to be applied in the winter months, when produce grow 
more slowly, and to heavy-feeding, shallow-rooted crops such as strawberries 
that produce month after month. The products were attractive because they 
were potent and could be delivered through drip irrigation lines that run 
down field rows and water plants. Fish emulsions with organic material can 
plug up drip lines.

"It was the cheapest stuff around and very popular," said Zea Sonnabend, a 
policy specialist and organic inspector at California Certified Organic 
Farmers (CCOF), the state's largest certifier.

Although Sonnabend said there had been suspicions about the products, notably 
from competitors, CCOF could not block a product based on rumor. While OMRI 
had misgivings about California Liquid Fertilizer, state regulators in 
California had asked OMRI to back off, pending the results of a state 
investigation that began in 2005. So with the OMRI seal, organic farmers 
continued to apply the stuff.

A state investigator in 2006 found rail cars that had delivered ammonium 
nitrate to the California Liquid Fertilizer plant, reported the Bee. As a 
result of the investigation, the product was pulled off the market in 2007, 
with no admission of guilt. The transgression didn't come to light until late 
2008.

Then, in the second instance of alleged fraud, the FBI raided Nelson's Port 
Organics in 2009 and found a tank of ammonia under the floor boards in its 
Bakersfield, Calif., headquarters. The ammonia was used to make synthetic 
fertilizer sold as organic.

Certifiers made a decision not to punish farmers who had unwittingly applied 
the products, even though synthetic fertilizers aren't allowed under organic 
regulations. There was, after all, no admission of wrongdoing. Plus, everyone 
from OMRI to the farmers were duped.

If certifiers had taken that step -- a move that ultimately would have been 
decided by the USDA --  California organic farms, which account for 22 
percent of organic farms in the nation and more than 430,000 acres of organic 
crops, would have taken a big hit.  After all, it takes three years to bring 
land back to organic once a prohibited substance is applied. The $25 billion 
industry might have stumbled too, given that organic produce is the largest 
single segment.

"It would have jeopardized a huge amount of crops at great cost if all 
growers had to go out of organic for three years," said Charles Benbrook, 
chief scientist at The Organic Center, an industry-backed think tank.

That risk is now over, since it has been three years since any of this stuff 
was applied and all fields would technically be free of a "disallowed" 
substance. Even if Townsend and Nelson are found guilty, farmers and the 
industry won't suffer.

Trust busters

The breadth of organic farming in California may have made it especially 
vulnerable to fraud, since it presents a welcome market -- for anyone. But 
the industry's maturity might also be a counterweight to this happening 
again, because it has prompted more vigilance.

A California state law overseeing organic fertilizer went into effect in 
2011, which requires inspection and certification of fertilizer sold in the 
state. The program may become a kind of pilot for the National Organic 
Program, the USDA's McEvoy said.

In 2009, the NOP also began requiring that all liquid fertilizers with 
greater than 3 percent nitrogen content must be reviewed by OMRI or an 
accredited certifier.

Earthbound didn't wait for the new state law to take effect. "By the time the 
regulators get involved it's often too late," said Will Daniels, Earthbound's 
vice president of quality, food safety, and organic integrity.

Once the scandal broke, the company began testing fertilizers. It now posts 
the information on an internal website so contract growers can see what soil 
amendments are approved.

Testing is a big part of the company's quality assurance regime. Aside from 
fertilizer, it also tests organic compost for pathogens. Salad mix and other 
crops delivered to its processing plants are tested for pesticides and 
pathogens. Then once they're washed and bagged, they're sampled again -- a 
particularly rigorous program the rest of the industry has yet to emulate.

But Earthbound has a reason for being so thorough. Its parent company, 
Natural Selection Foods, processed the spinach greens for Dole that were 
contaminated with E. coli and ended up sickening 205 people and killing two 
in 2006, only a year before the fertilizer case came to light.

While fraudulent fertilizer may not be in the same league as tainted spinach, 
the two cases have a lot in common. In both, a central source made its way 
into the middle of a robust system, tainting everything in its path. But they 
also have a notable difference: E. coli arose from the environment; while for 
the fake organic fertilizers, the root cause was fraud.

One way to prevent these type of incidents would be to beef up oversight -- 
something that the Food Safety Modernization Act that passed Congress late 
last year would attempt to do for, say, salad mix. California's state law 
will also mean greater oversight and inspections of fertilizer makers, adding 
another layer of assurance for farmers and creating a potential model for the 
National Organic Program.

But perhaps the biggest lesson from the case is that every link in the chain 
of the organic industry, from farmer to product testers to certifiers, should 
have been more suspicious all along. If the fertilizers were so good, so 
cheap, and so much more potent than the norm, maybe they were simply too good 
to be true.

In other words, everyone was duped, but perhaps too easily. Organic consumers 
can only hope that the renewed sense of vigilance will be present when the 
next case of fraud --with fertilizers, pesticides, or false labeling -- 
inevitably arises.

Samuel Fromartz is author of the recently published Organic, Inc.: Natural 
Foods and How They Grew. See excerpts and background at his website.