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Organic Fertilizer Maker Charged with Fraud

Some organic farms in the western United States may have been duped into using non-organic fertilizer, and consumers who thought they were buying organic food may instead have been paying a premium for goods grown with synthetic chemicals.

An indictment handed down by a federal grand jury in California Thursday alleges that fertilizers supplied by companies owned by Kenneth Noel Nelson Jr. were made with synthetic ingredients not approved for organic farming, U.S. Attorney Benjamin Wagner announced in a news release.

Nelson, of Bakersfield, CA, was charged with 28 counts of mail fraud. The largest seller of “organic” fertilizer in the West, Nelson has owned and operated various companies, including Port Organic Products Ltd., AgroMar Inc., Sail-On Ag Products Inc., Desert Organic Express Inc., Action Fertilizer, and Microbial Assisted Soil Health Inc. 

As alleged in the indictment, from at least 2004 to January 2009, liquid fertilizer Nelson labeled and marketed as made with all-natural ingredients such as fish meal, bird guano, or blood meal, instead contained aqueous ammonia, ammonium sulfate, synthetic urea, and other nonorganic, synthetic substances — additives in conventional fertilizers that are not permitted in organic-crop production.

The indictment accuses Nelson of submitting false applications and renewal applications to obtain and maintain organic listings for his fertilizers from Organic Materials Review Institute and Washington State Department of Agriculture.

If convicted, Nelson faces a maximum sentence for each count of 20 years in prison, a $250,000 fine, and up to three years of supervised release.

According to the LA Times’ P.J. Hufstutter, the indictment, the second in recent months, is part of an effort by the U.S. Department of Agriculture’s Office of the Inspector General to crack down on fraud and corruption in the more than $24 billion organic industry.

© Food Safety News
  • http://blog.sustainablog.org/author/sdsavage/ Doc Mudd

    The organic emperor has no clothes. Never did.
    Ah well, ‘organic’ consumers are accustomed to being “duped”; heck, duped is a lifestyle choice for them. It is their version of trendy conspicuous consumption; it’s their ‘Hummer in the driveway’, their ‘sailcruiser at the yacht club’.
    ‘Organic’ is a lucrative little market niche, though – loads of cash changes hands and enough of it slips through the fingers of otherwise ineffective little growers to keep them afloat. It’s profitable business and, as such, should be coveted in this economy.
    Pretty much the whole organic phenomenon is built on a foundation of farce but the most egregious fraudsters in organics should occasionally be made an example of, if only to cast an illusion of relative credibility upon the greater body of lesser bunko artists. That’s marketing. Gotta keep up appearances, right?

  • Michael Bulger

    Thank goodness I am in grad school. I have files of studies that illuminate the limitedness Doc Mudd’s (probably neither an MD’s or Ph.D.’s) views on agriculture. Other websites are populated by commenters who would jump at the opportunity to claim Mudd is a paid representative of Monsanto or agribiz or whatever. I don’t give him/her that much credit. More likely Mudd is someone with just enough time to comment, and none that he/she chooses to devote to objective inquiry. And so we are often rewarded with Doc Mudd’s opinion of organics, backed up only by Doc Mudd’s other opinion of organics.
    That being said, organic agriculture is made up of individuals, some of them more scrupulous than others. Some are more skilled and knowledgeable, others are just obtaining the certification with marketing in mind. It is important that standards remain strong and that there is adequate oversight.

  • http://news.bbc.co.uk/2/hi/health/8174482.stm Doc Mudd

    Here’s a brief review of some down-to-earth reading suitable even for atmospherically idealistic grad students:
    http://www.acsh.org/factsfears/newsID.896/news_detail.asp
    Written, reviewed and read by experienced professional agrarians, each of whom have forgotten more about practical agriculture and its science than any dozen ditzy journalism majors-turned-wishful organic dreamers will ever comprehend.
    Kumbaya, campers!

  • Anthony Boutard

    Please be gentle with Mudd. She does her level best. Science fiction is a tough genre, especially when the author has to make farmers look greedy and evil, consumers stupid, and Monsanto a saintly charity. Second-rate science fiction authors tend to skimp on character development, a failing of the genre. They are also challenged by plot consistency. If we looked at Mudd’s plot line, everyone eating organic food should have been dead long ago.

  • http://www.spokesmanreview.com/pf.asp?date=081802&ID=s1201371&cat=section.commentary Doc Mudd

    “If we looked at Mudd’s plot line, everyone eating organic food should have been dead long ago.”
    Well, not everyone, not just yet Tony.
    All of the ones in the 19th century, though. The majority of those characters scrupulously ‘ate organic’ and still failed, each and every one of them, to cheat the grim reaper (their average lifespan was <50 years, BTW)…
    http://www.foodsafetynews.com/2011/02/the-bug-that-poisoned-the-president/
    Among lingering 20th and 21st century contemporaries, some of us dense plodding common eaters will outlive some of you enlightened proselytizing orthorexics. Just a statistical reality – it happens all the time.

  • http://ellidavis.com/ Elli Davis

    The whole concept of organic food seems to be a scam. Most people believe that organic products are pesticide free. In reality, majority of organic farms are using pesticides on a daily basis. Even though there is evidence of progress, small amounts are still being used. Maybe consumers should be given more information on how chemistry and agriculture truly work to understand the whole thing better.

  • Michael Bulger

    Ah, thank you for the link to the “American Council on Science and Health,” an industry-funded spin center specializing in the promotion of junk food and chemical pollutants. In the end, just another page of opinions with not a study in sight. So now we have, Mudd’s opinion backed up by Mudd’s other opinion backed up by the chemical corporation’s opinion.
    It is curious you would use the word “atmospheric” in this discussion. Would you care to discuss agricultures impact on the atmosphere? Perhaps you could present to me a study. You might consider science to be “pesky” when you are determined to demonize organic, but I’ll offer you some nonetheless.
    This UN FAO report references several you might be interested in: http://orgprints.org/15690/1/niggli-etal-2009-lowgreenhouse.pdf
    Organic and its interactions with climate change:
    http://literatur.vti.bund.de/digbib_extern/bitv/dk040426.pdf
    This report is for-sale. If you don’t want to purchase it, the second link is a power-point with some of the relevant data tables included.
    http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V67-4BT8H2F-1&_user=10&_coverDate=09%2F30%2F2004&_rdoc=1&_fmt=high&_orig=gateway&_origin=gateway&_sort=d&_docanchor=&view=c&_searchStrId=1676826328&_rerunOrigin=google&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=69f661b6642310c4013a5e12ef88ec98&searchtype=a
    http://kearney.ucdavis.edu/OLD%20MISSION/Workshop%20presentations/Davis_Freibauer%20%5BRead-Only%5D.pdf

  • http://www.sare.org/grants/ Doc Mudd

    OK, Bulger, if you’re eatin’ you’re pollutin’. Yep, agriculture disturbs the natural habitat of your precious weeds and bugs…to produce something edible for me (an undeserving evil polluter by your estimate) and for you (apparently not a polluter by some inexplicable feat of magic).
    So, what is your grand alternative to big bad agriculture, describe your genious alternative that will halt all ‘pollution’ but still feed the world’s human population?
    Are ya givin’ up fossil fuels altogether – how ya gonna do that, huh? If you’re thinking you’re gonna con me into flailing with a long-handled hoe to feed you and your fellow academic elitists, well guess again, Demeter.
    Are ya gonna avoid all ecosystem disturbance by simply reaping bountiful harvests of delicious naturally occuring weeds and bugs that, until now, have been overlooked by home cooks? What, precisely, is your grand plan to eliminate our footprint in its entirety? You’re gonna feed 6 or 7 billion human souls each and every day without even stirring up any dust, without inconveniencing even a lowly stinkbug? Show me, son, please show mw how!
    Oh, you’re just gonna ‘reduce’ the dreadful environmental impact of feedin’ folks, you say. Can you really reduce it ‘enough’ to mollify the intrepid delusional hand-wringers in the peanut gallery? Can you really even reduce it at all – up to now you waive around one or two wishful redundantly published opinions you’ve scrupulously cherrypicked and naively speculate upon your certain success…in those rare moments when your cult isn’t preoccupied spuriously bashing the status quo.
    Here’s the deal: After you’ve shown us your grand alternative wondermethod on a practical commercial scale we will begin to take you self-styled experts seriously. Until then we clearly recognize that your ‘organic’ philosphy is far from an original thought. We also realize that for the past half century your cult has been sucking up the grant funding, ‘researching’ a known quantity to no globally significant effect.
    You’ve created your own parasitic industry of dependent grant consuming hobby farmers who think they can keep us taxpayers hoodwinked with dreamy storytelling in lieu of real progress. You characters seem to have lots of flawed thoughts like that. We grow imaptient awaiting the magical zero-impact alternative agriculture of your Kool-Aid intoxicated revery to be demonstrated on a global scale. We’ve funded the ‘research’, now what do we have to show for it? Have we drilled an expensive dry hole with you guys?
    Enough talk. Just show us. Show us. Shhhh – action now, no more jabber. It’s been half a century of grant-funded muddlin’ around with it, for cripe’s sake. Show us the money, already.
    http://www.springerlink.com/content/xv211244574w4206/

  • Mark

    I appreciate the detailed analysis folks have provided on this topic but I’m disappointed by the undercurrent that seems to be leading to an “us” versus “them” approach, organic versus conventional. The bigger question might be how businesses, big and small, juggle efficiency and responsibility. Remember the 500 million egg recall last year? According to technical best practices the eggs came from a supplier rated as “superior” by a qualified 3rd party auditor. Ooopss the audit didn’t include the hen house. In testimony before Congress the egg supplier admitted their hen house operations were less than ideal but deflected blame to contaminated feed…a rather tough position to take given that they admitted to never having tested any of their feed. Imagine, a critical input that never got tested even in terms of some composite testing but instead taken on faith in accepting a supplier’s COA at face value. Why? Because testing costs money. Can any of the experts posting here tell me if testing methods exist to determine whether or not a sample of fertilizer can be tested for the presence of synthetic compounds/ingredients? If so, shouldn’t those buying the fertilizer be testing for it? If not, given how critical this input is in the entire organic process, shouldn’t folks buying organic fertilizer take adequate steps to prove a supplier’s COA is up to snuff? Shouldn’t “trust but verify” be part of their due diligence given the above market returns organics enjoy over conventional production? Isn’t it because of the perception that this is the level of due diligence being executed by organic suppliers that consumers are willing to pay the organic premium?
    In the end is there really all that much difference between conventional and organic if both equally fail to get beyond the simple due diligence of accepting COA’s at face value? We source foodstuffs from suppliers with sophisticated testing systems but we still arrange independent pesticide/chem residue testing at our expense. We source product from big name trusted suppliers but we still arrange random post import pesticide/chem residue testing before releasing to our clients. It all adds costs that our competitors don’t incur and won’t until the FSMA fully kicks in but we do it anyway. I’ve been to food processing plants big and small in North America and overseas that are only too proud to show their food safety certificates housed in very impressive picture frames signed off by big global food safety auditors and yet on the days we visit they fail on the most basic of sanitation standards…can anyone guess why? I’m not looking to blame the victims of this fraud but one way or the other the folks who’ve been buying this fertilizer have at least some share of responsibility in allowing non-organic inputs into their supply chains….

  • Michael Bulger

    So that’s what happens when Mudd is confronted with actual science? She grasps onto the specter of food supply? Obviously, Mudd is not familiar with the subject. Maybe we should refer to the Special Rapporteur on the Right to Food of the United Nations.
    Here is a recent press release and the report. I’ll extract a couple quotes from the Special Rapporteur of the last three years.
    “To feed 9 billion people in 2050, we urgently need to adopt the most efficient farming
    techniques available,” says Olivier De Schutter, UN Special Rapporteur on the right to food and
    author of the report. “Today’s scientific evidence demonstrates that agroecological methods
    outperform the use of chemical fertilizers in boosting food production where the hungry live -especially in unfavorable environments.”
    “Conventional farming relies on expensive inputs, fuels climate change and is not resilient to
    climatic shocks. It simply is not the best choice anymore today,” De Schutter stresses.”
    Anyways, here are the links for those interested. Mudd you don’t have to read them.
    http://www.srfood.org/images/stories/pdf/press_releases/20110308_agroecology-report-pr_en.pdf
    http://www.srfood.org/images/stories/pdf/officialreports/20110308_a-hrc-16-49_agroecology_en.pdf

  • Doc Mudd

    More cherrypicking and hyperbole there, Mike, but the paper you cite is only 20 pages, or so, and no hardship to read in its entirety. Apparently you haven’t troubled yourself, though. Let me fill you in on the context and pertinent details.
    Seems Mssr. De Schutter is of the opinion that ‘agroecology’ techniques may have application in those regions (Malawi specifically) where farming is so hopelessly backward that practically anything would be an improvement. No objection there.
    Now, as one might have expected, the UN’s Special Poseur is short on details of proven ‘agroecology’ technique and long on cries for the traditional spectrum of generous ‘assistance’ in the form of policy and…wait for it…economic support. Heh, we’ve been ‘supporting’ this dreamy ‘organic’ farce for half a century with nothing more than a vague promise of incredible results to show for our investment – results that have never materialized…and never will, likely as not.
    Another interesting point, one that you’ve conveniently overlooked, Mike (surprise, surprise!) is that ‘agroecology’ methods might best be “complementary to better known conventional approaches such as breeding high-yielding varieties”. And De Schutter wisely further hedges his dreamy bet by conceding; “while investment in organic fertilizing techniques should be a priority, this should not exclude the use of other fertilizers”. Also, the necessity of “integration of livestock into farming systems” is discretely acknowledged. Heh, ol’ Missus De Schutter didn’t raise no fools, at least none that will paint themselves irrevocably into a philosophical zealot’s corner. Far more clever than some folks I know around here.
    I would be completely content to have you silly dreamers amuse yourselves in Malawi, piously lecturing the natives on the very trendiest manure handling etiquette…if that would distract you from your relentless insipid bashing of our functional modern American food system. What would really be great is if you would demonstrate in real time, on a realistic commercial scale the merits of your dreamy, fantasy hypothetical farming methods. Just show us. Heh, see, I can be a hopeless dreamer sometimes, myself!

  • Michael Bulger

    Just sometimes?
    G’night, ye Mudd. As you burn the store of technique in clear defiance of common need, I only wish you had the wherewithal to view this not as plateau, but plain.

  • Doc Mudd

    We need more poets instructing us how to farm.

  • Pettibone Creek Farm

    Obvious that the good Doctor Mudd is not a farmer.
    Perhaps just a troll paid by one of those industry front
    groups the(good?)Doc is so quick to use as a reference.
    Besides what’s wrong with a little poetry?

  • http://en.wikipedia.org/wiki/Journalism_ethics_and_standards Doc Mudd

    Petti, couldn’t you at least have composed that childish accusation as a haiku?
    Journalism majors make piss-poor poets…and worse farmers. Seems like anymore journalists can’t even report accurately – they’re all spinning like a child’s top.

  • Mark

    So very disappointing.
    Obviously there’s some history between this Doc Mudd person and others posting here and while there could be a very interesting section devoted to their discussions on the pros/cons of organic and conventional production….this story is about fraud and as such is only a difference of degree not of kind with the Chinese melamine milk fraud.
    As someone with 20 years experience in the international trade of foodstuffs and as a consumer…you know, the people who actually eat…I would really have appreciated some insightful thoughts on how to tackle food fraud. Hardly any mea culpas here by anyone admitting that despite all the certificates and best practices followed by the organic industry it is just as susceptible to bad actors as the conventional side of the food business. Yes I said business because organic production is a business as dirty a word as some think it to be. Marketing messages implying that organics are somehow produced in far more responsible ways than conventional production fosters a willingness among consumers to pay the organic premium. Organics are traded on and valued on faith. Faith that the products actually have been produced per the standards advertised. Failing to demonstrate that this fraud is an extreme exception will erode some consumer confidence like those consumers who’ve lost some faith after reading about “local” California farmer’s markets being supplied by folks who’ve committed fraud in selling produce they’ve actually bought from other distributors with some of it…horror of horrors…actually being imported. I’m sure this fertilizer fraud and the “local” farmer fraud in California are being committed by a minority of the stakeholders in both industries but failing to honestly address the issue sows the seeds of doubt.
    Instead of responding to this Doc Mudd like some petty partisan politician defending the party line at all costs….I would really have liked to have seen some insightful thoughts with honest reflection on combating food fraud because that is what this article is about.

  • Karl

    the american agribusiness jaggernaut is sucking the subsidy nipple to the point the market forces have been so distorted Americans now appear to support diabetes, cancer, obesity, heart disease as lifestyle choices. Please tell me how the government did anything but obstruct, delay, and blunt Americans desire for health and wellness. Conventional agribusiness is currently completely unsustainable without the externalization of the costs of its methods, and massive government subsidy.
    Organic agriculture, virtually WITHOUT being subsidized, grew into the massive industry it is today SOLELY on the MARKET DEMAND of Americans for sane choices despite their governments absurd and often insane position of supporting the fiduciary impetus of corporations above all other considerations.
    Sorry doc, all your idiotic ranting will not stop California from requiring GMO labelliing, and the USA will be dragged by its people, and led by California with its effective proposition system, kicking and screaming-as always (read slavery, segregation, nuclear testing, cigarette advertising)- out of the dark ages and into the community of modern nations. In this community, governments BALANCE the interests of big corporations with those of ordinary people.