California schemin’: How a fake organic fertilizer bamboozled farmers and watchdogs alike
Truck photo (left): Iris Shreve Garrott
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 ascent. 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.
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.
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