Organic scams prompt changes
Updated: Friday, April 13, 2012 1:29 AM
State gains authority to test fertilizers, assess fees on labels
By CECILIA PARSONS
For the Capital Press
Two high-profile organic fertilizer scams have triggered a change in oversight.
The California Department of Food and Agriculture now has the authority to verify organic materials in all soil amendment products manufactured or distributed in the state.
Rick Jensen, director of inspection services for CDFA, said all organic fertilizer labels would be reviewed by the department for compliance with National Organic Program rules. The department will also perform efficacy assessments. The new regulatory authority allows for a $500 biannual license renewal per label.
Jensen said there would be additional on-site inspections and sampling of organic fertilizers. Manufacturing plants will be inspected annually, he said. CDFA has added more investigators and registration specialists to handle the additional authority.
Legislation awarding the authority was passed in 2010 and became effective this year.
Prior to this change, the National Organic Program charged the end users of the products to verify a product's organic label. The Organic Materials Review Institute provides third party verification for organic growers. Products with a label from the Organic Materials Review Institute are considered compliant with NOP regulations.
If the state could have sampled the bogus fertilizers, two much-publicized organic fertilizer scams could have come to light sooner.
California Liquid Fertilizer owner Peter Townsley admitted in federal court that he sold an organic fertilizer product called Biolizer XN that he claimed contained only approved organic materials. The product actually contained synthetic chemicals ammonium chloride and ammonium sulfate.
According to a plea agreement, when Townsley applied for third-party approval from OMRI, he submitted a list of ingredients that contained only organic materials. However, he changed the formulation and did not inform customers or OMRI of the changes. Court documents show Townsley sold Biolizer XN from 2000 through 2006 as organically certified and according to USDA, grossed more than $6.5 million in sales.
He faces up to 40 years in prison and fines of more than $250,000 when he is sentenced in June.
Kenneth Noel Nelson Jr., owner of Port Organic Products faces 28 counts of mail fraud in connection with the substitution of organic fertilizer components with lower cost and nonorganic approved materials from 2003 to 2009. The products, like Biolizer XN were approved by OMRI, but prosecutors said the certifiers were duped.
A federal grand jury indictment on March 10 said Nelson defrauded his customers by falsely claiming his fertilizers were certified organic.
Investigations into both fraud cases were by the USDA Office of the Inspector General and the FBI.
Hundreds of organic growers used the products, but were not penalized for using the non-organic fertilizer.