Last week, the USDA suspended the organic certification of Promiseland Livestock, one of the largest organic cattle companies in the country. The suspension came not as a result of proven violations of mandated farming practices, despite suspicions that the company had for years been “laundering” conventional animals as organic, but because the company failed to provide adequate documentation required under the National Organic Program.

Promiseland is based in Nebraska, but the USDA’s action is a result of an investigation that started more than four years ago of Boulder-based Aurora Organic Dairy. Aurora had bought thousands of cows, on multiple occasions, from Promiseland that were said to be organic, but for which the appropriate documentation was not provided.

Documentation is important since farming practices are not monitored on a day-to-day basis. “The entire organic certification process, the backbone, is this audit trail that can verify what’s going on,” said Mark Kastel of the Cornucopia Institute, which helped to generate the USDA’s investigation of Aurora in the first place. “Whatever [Promiseland owner Anthony Zeman] claimed to do, he should be able to substantiate, and he could not or would not do that.”

The USDA first proposed revoking Promiseland’s organic certification in 2007  after the company repeatedly refused to provide records to agents authorized to audit the company’s facilities. Last month, Promiseland withdrew its motion to appeal the USDA’s decision in U.S. District Court. The agency then announced the suspension would go into effect for five years, during which time the company cannot represent its products as organic.

“The guy spent years in appeals trying to tie this up and has operated since then. That’s the sinful part of this,” Kastel said.

The USDA says it is “pleased” with this outcome, but if you ask the Cornucopia Institute, the problem is far from over.

Aurora is the country’s largest supplier of private-label organic milk, and sells its product under labels like Safeway, Wal-Mart, and Costco, in addition to its own label, High Meadows. Headquartered in Boulder, the company was started by Mark Retzloff and Marc Peperzak, also the team behind Horizon Organic Dairy, now owned by Dean Foods. Retzloff was an original founder of Alfalfa’s Market, and Peperzak is also known in Boulder for purchasing a $5,553,200 condo that in 2007 set a record for the town’s highest per-square-foot price at $1,051.30.

The inquiry into Promiseland began in 2007 after the USDA’s Agricultural Marketing Service (AMS) requested records from the company as part of an investigation it was conducting of Aurora Organic Dairy.

“AMS had asked for records from Promiseland in the investigation of Aurora Organic Dairy in Jan. 2007. It was after multiple failed attempts to obtain documents from Promiseland that the USDA eventually proposed adverse actions against Promiseland,” USDA spokesperson Soo Kim wrote in an email.

That initial investigation, however, was prompted by a letter of complaint filed with the USDA by the Cornucopia Institute, which had done its own investigating into the conditions at Aurora’s Colorado farm in Platteville. On April 16, 2007, 17 months after the Cornucopia Institute filed its complaint, the USDA issued a notice of proposed revocation of Aurora’s organic certification, detailing 14 willful violations of the Organic Foods Production Act of 1990.

In addition to inadequate record-keeping, the 14 willful violations included moving cows from its organic facility to a non-organic livestock operation and back again to its organic dairy, and the purchasing of cows that had not been under continuous organic management from at least the last third of gestation. Organic certification also requires that dairy cows spend time grazing on pasture, but that was another standard found to be lacking at Aurora.

“The day I was out there, they had about one to two percent of their cows on pasture. They had woefully inadequate amount of land–there was no way they could get their cows out,” said Kastel, who said he visited Aurora in 2005. “And then I met with a contractor who was raising their replacement animals and confirmed that they had brought conventional animals onto their farm and converted them to organic, which was illegal for them to do.”

Kim from the USDA said Aurora entered into a settlement agreement on August 23, 2007 to correct the points of noncompliance and has since made the necessary corrections and remains certified by the Colorado Department of Agriculture.

“In addition to visiting the site and reviewing the company’s organic system plan, which every certified operation is required to have and that details how organic producers and handlers will comply with all of the applicable organic regulations, the National Organic Program also audited the certifying agent for Aurora, the Colorado Dept. of Agriculture,” she said.

Kim supplied audit records for the Colorado Department of Agriculture, but said investigative reports could not be released without a Freedom of Information Act request.

Kastel remains skeptical. He said the Cornucopia Institute did its own FOIA request inquiring about the USDA’s follow-up on Aurora, but was not provided with any meaningful documentation. He added that a Cornucopia staff member visited Aurora’s Colorado dairies in June.

“They are doing some level of grazing but we were not able to determine, based on our visit, whether they are meeting the benchmarks set out in the law (we do not have access to the documentation the USDA could review).”

Even before it goes into effect next month, Georgia’s new immigration law is having an effect as farm workers flee the state for friendlier environments in other southern states.

Some farmers say they have already lost about one third of their workers and are contemplating moving from labor intensive crops such as berries and lettuce to crops that can be machine harvested such as wheat.

Governor Nathan Deal, a strong proponent of the new law, suggests that farmers should hire ex-cons, many of whom are unemployed in the state.

From Time Magazine:

Even before it goes into effect, business leaders say Georgia’s law is crippling the state’s core agriculture industry: Migrant workers have started fleeing to nearby states, particularly North Carolina and Florida. Says Bryan Tolar, president of the Georgia Agribusiness Council: “What we have here is the equivalent of a giant scarecrow in the middle of a cornfield.”

Predictably, farmers have coldly received Deal’s suggestion that non-violent ex-offenders be hired. “Let them in the governor’s mansion, to be cooks,” sixth-generation blackberry farmer Gary Paulk says, “and I’ll let them on my farm. I want my family to be as safe as the governor’s.”

To understand what’s at stake for business, consider Paulk’s situation. In recent weeks, one-third of his 300 field workers have fled. His request for state temporary workers hasn’t been answered. Now, Paulk expects to abandon about 25% of his 125 acres, at a projected loss of $250,000 this season. To lure workers, he has raised the price he pays for every box of blackberry picked by about 15%, to $3.50. But he hasn’t been able to pass that higher cost onto suppliers. There are few places to shave costs, either: blackberry picking is typically done by hand. “We’ve gone into survival mode,” he says.

Overall, experts predict new immigration laws could cost American agriculture nearly $10 billion a year as more crops are imported from Mexico, where it is still apparently legal to hire Mexican workers.

The labor shortage may drive up food costs, especially for peaches, onions and chicken, which Georgia produces in abundance. There is anecdotal evidence that states’ new immigration policies is forcing farmers to eschew labor-intensive crops such as blackberries for wheat and corn, which can be harvested by machine. Certain crops, like lettuce, will be increasingly sourced not from leading U.S. producers like Yuma, Ariz., but Mexico. The labor shortage could result in as much as $9 billion in lost farm production annually. “This is the magnitude of the risk to the sector, if we can’t get the labor we need,” says Paul Schlegel, director of public policy at the American Farm Bureau Federation, in Washington. “It’s an extremely important issue.”

A study conducted by the United States Department of Agriculture and the University of California indicates that as the border between the United States and Mexico tightens and as immigration laws are more strictly enforced there could be dramatic changes in how American crops are harvested.

The study, reported on in Western Farm Press, says that the cost of running a farm will increase and farmers will rely more and more on mechanization as a way to make do with fewer workers.

From the Farm Press article:

Immigration reform and stricter enforcement of current immigration laws could significantly boost labor costs for California’s $20 billion fresh fruit, nut and vegetable crops, according to agricultural economists at UC Davis and the U.S. Department of Agriculture.

This, in turn, would likely prompt the industry to adjust by increasing mechanization and introducing harvesting aids to boost laborers’ productivity, they predict. Imports may also rise.

“California’s produce industry depends on a constant influx of new, foreign-born laborers, and more than half of those are unauthorized laborers, primarily from Mexico,” says Phillip Martin, a professor of agricultural and resource economics and one of the nation’s leading authorities on agricultural labor.

BusinessWeek reported similar findings earlier this week, as did The Christian Science Monitor.

Attorney General John Suthers discusses anti-trust laws as Congresswoman Betsy Markey listens. (Photo by Joseph Boven)

“We have a Colorado Antitrust Act of 1992 that forbids the monopolization and attempts to monopolize bid rigging and mergers to lessen competition,” Suthers said. However, he noted his office can do little if a federal agency declines to challenge the merger.

“Our office cannot challenge any merger or acquisition that has been reviewed by any federal agency under section 7A of the Clayton Act where the federal agency declined to challenge the merger. That was put into law in 1992.”

Mike Saccone, spokesman for Suthers, said though Suthers understands the reasoning behind the 1992 antitrust rules was to assuage business concerns over the cost and time related to a two-tiered regulatory structure, if a legislator wanted to propose a bill to change Colorado’s law, Suthers’ office would testify and likely support such legislation.

USDA officials say that as a result of the consolidation throughout the agriculture industry, small farms are fading away. The Colorado Independent’s sister site, The Iowa Independent, reported , “there were more than 660,000 hog farms in 1980, but only 71,000 exist today. In the cattle industry, there were 1.6 million farms in 1980, but only about 950,000 exist today. In addition, hog producers received 50 percent of the retail value of a hog in 1980, but only received 24.5 percent in 2009. Cattlemen, who received 62 percent of retail steer value in 1980, received slightly more than 42 percent of value in 2009.”

Suthers said at the event last month that he had joined with a number of states to fight off the JBS buyout of National Beef packing, a merger he said his office found would have caused considerable reduction in prices paid to livestock farmers as a result of consolidation.

“I have to say that virtually all of the concerns that have been expressed to our office about the agricultural industry in Colorado have revolved around consolidation,” Suthers said. “Just to be precise, in the high plains, we believe that that merger would have put over 85 percent of packer capacity in the hands of three survivors: JBS, Tyson and Cargill.”

Suthers said that such consolidation would have forced ranchers to sell livestock at lower prices and that the savings would not have been passed on to consumers. With only three major packing companies, retail could be compelled to pay higher prices.

Chris Peterson, a hog farmer and current president of Iowa Farmers Union, said that he doesn’t sell a single hog to packers because he has gotten screwed over too many times.

“Packers routinely pay 5 to 6 cents per pound in volume based premiums to the larger producers simply because they are large,” Peterson said, adding that 6 cents could mean the difference of $50,000 or more for some farms.

“We don’t need the whole slice of pie; we just need fairness and equality.”

Farmers in favor of the new Grain Inspection, Packers and Stockyards Adminstration (GIPSA) rules say they have lost the ability to competitively bid with larger feedlots and producers who times make long-term agreements with large packing plants. They say deals conducted privately or between packers have reduced the price of an animal on the auction block.

Other’s, including the National Cattlemen’s Beef Association and larger beef packing companies, oppose the rules. They say that removing captive supply and contracts would simply force packing companies to give the average price for an animal to ranchers.

Cattlemen, some who said they were risking their ability to sell to large packing companies by being at last month’s event, said Packers and Stockyards Act has almost never been enforced.

Former state legislator Kathleen Kelley, a rancher, teacher and advocate for independent ranchers, said that she was happy with the new GIPSA rules, but said giving teeth to Colorado’s anti-trust laws would go a huge way in ensuring market access to small livestock producers across the state.

Poudre Canyon (Jim Frazier, cc Flickr)

Ken Neubecker, president of the state counsel of Colorado Trout Unlimited and a member of the Colorado River Basin Roundtable, points out that already 64 percent of the upper Colorado River above Hot Sulfur Springs in Grand County is diverted across the Continental Divide to the Front Range population centers of the state.

With the State Demography Office forecasting Colorado’s population to jump 50 percent over the next 25 years from current levels of around 5 million to more than 7.6 million, Neubecker and others say there needs to be a major shift in land-use planning, water conservation efforts and energy policies to head off looming disaster for the Colorado and other state rivers.

Drought by a thousand cuts

“In the long run, especially if you’re going to take the climate change thing seriously, the fossil fuels have got to just come to an end,” Neubecker said of commercial oil shale production and its potential impacts on the Colorado River basin. “[Former Vice President] Dick Cheney made the comment that the American way of life is not negotiable. Well, in a hundred years it’ll be drastically negotiated if we don’t do something now.”

Residential development alone has dramatically impacted the upper Colorado, Neubecker said, referring to a plan by the Denver Water Board to divert even more of the Fraser River in Grand County through the Moffat Tunnel to the Front Range. A key tributary of the Colorado, the Fraser already sees about 60 percent of its flow diverted east of the Continental Divide.

“They’re sort of making light of the true nature of the cumulative impacts on the whole Colorado basin,” Neubecker said. “Essentially, the whole upper Colorado, from Dotsero up, is suffering a death from a thousand cuts, and everybody who makes a cut says, ‘Oh, mine won’t hurt; mine’s too small to be significant.’”

But all the cuts are condemning the river to a permanent drought-year status that adversely impacts riparian areas, degrades aquatic habitat and results in too much sediment building up in the river’s channel, Neubecker said. Couple those impacts with contamination from natural gas drilling and other industrial and agricultural uses, and the Colorado and other Western Slope rivers are in big trouble, others say.

People get to drink that stuff

“That’s one thing in this whole oil and gas industry that kind of gets short shrift is these drinkable or potable aquifers,” said Bob Elderkin, a biologist and retired oil and gas specialist for the U.S. Bureau of Land Management who now lives near Silt.

“When something happens and you have [a chemical spill] — and you’re going to have it because we’ve got people involved with [drilling] and people are fallible — that aquifer is polluted with a bunch of stuff, and unless they’re required to go in and pump that out and mitigate the problem, that stuff stays in that aquifer until it eventually surfaces wherever it’s going to surface.

“Most of that stuff either ends up in the White River or the Colorado River, and either way a lot of people are going to get to drink it.”

Routt County Commissioner Doug Monger, whose northwestern Colorado county sits at the epicenter of any future oil shale boom, applauds Interior Secretary Ken Salazar for recently tightening Bush administration research and development leases and requiring more accountability.

Oil shale and nuclear industry water gulpers

He said residents of impacted communities and Americans in general need to know if oil shale is economically and environmentally realistic. The former president of Colorado Counties Inc. has his doubts.

“I hope America can’t come here and trash out my country here to support the current industry,” Monger said of existing oil shale technology, which requires between three and five barrels of water per barrel of oil. “They talk about 500-megawatt power plants to commercially extract this oil shale with Shell’s technology, and all of the rest of the water out of Yampa and White river systems, as well as some further water out of the Colorado River system, which basically obligates all of the rest of the water in the Colorado Compact that we have.”

The 1920s Compact that Arizona Sen. John McCain last year so famously — and disastrously — suggested should be renegotiated, dictates Colorado must send 3.88 million acre feet downstream a year no matter how the state divvies it up for local use. Oil and gas companies have been snapping up water rights in the Colorado basin since the 1940s, but the big knock on oil shale has been how much power it takes to extract petroleum from shale rock and sand.

Some have suggested nuclear reactors could solve the energy demands of full-scale commercial oil shale production, but Neubecker scoffs at that notion.

“[Nuclear] uses twice the water [of fossil-fueled-based power plants], and I don’t think Sen. [Mark] Udall gets it, because he’s a big proponent for nuclear power,” Neubecker said. “I’m all for nuclear power east of the Mississippi because they have the water, just so long as they have to store the waste in their own backyard, not ship it out here for storage. We’re not the country’s trashcan.”

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State water officials, in conjunction with the Western States Water Council, are trying to sort out conflicts between growing residential development, agriculture, recreation and the thirsty industrial sectors such as energy production, the Herald reported Tuesday.

Gov. Bill Ritter was scheduled to speak Tuesday, but Colorado Department of Natural Resources director Harris Sherman, who prompted the water confab, was unable to attend because he’s prepping for his U.S. Senate confirmation hearing for an undersecretary of agriculture post that would have him overseeing the U.S. Forest Service for the Obama administration.

“He’s the one who kind of got us – how do I put this nicely? He kicked us in the butt and told us to get these conversations going,” Jennifer Gimbel, director of the Colorado Water Conservation Board, told the Herald.
Conspicuously absent Monday, however, were representatives of the residential development and planning sectors, the paper noted.

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Only two of those cities – Grand Junction and Pueblo – are actually in Salazar’s 3rd Congressional District, but the message of the campaign may resonate better with Front Range city dwellers than in blue-collar Pueblo or the Western Slope gas patches around Grand Junction.

The ad features a ranching neighbor of the blue-dog Democrat, Colin Henderson of La Jara: “You can grow just about anything in Colorado sunshine, and these days all our sun and wind are growing something pretty special.”

Then a voice over: “Clean energy jobs, all across the state, but when John Salazar voted no on the American Clean Energy and Security Act [aka, Waxman-Markey], he voted no on wind, on solar, and on more clean-energy jobs.”

Back to Henderson: “Congressman Salazar, let’s work together to give clean-energy jobs a bright future in Colorado.”

In an LCV release put out late Wednesday, Henderson is quoted on the ag issues that prompted Salazar to vote no a bill the Senate will take up after the August recess:

“As my congressman, I know representative Salazar believes in defending rural values, but he missed an opportunity to use our state’s natural resources to create clean energy jobs.”

Salazar’s office did not provide an immediate response Thursday.

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The Telluride Daily Planet reported that last week’s Montrose County commissioner’s hearing on a special use permit for a uranium mill proposed by Energy Fuels became a jobs debate, with longtime mining families touting the potential employment while an army of Audi and Prius drivers from the tony ski resort of Telluride invaded Nucla High School to champion their way of life.

Caught in the middle were farmers and ranchers who fear uranium dust from the Piñon Ridge Mill will seriously curtail the agrarian way of life in the bucolic Paradox Valley.

A sampling of quotes from all sides:

“All the West has mining history. It’s a boom or bust industry. The towns that have survived are the ones that have farmers. Nucla and Naturita would not have survived the mining busts without agriculture.”

– Vernie Demille, owner of Paradise Family Farms CSA in Paradox Valley

“The recreation-based economy is important to Gateway and up and down Highway 141. The proposed mill is in direct conflict with the recreation business because of transportation safety, environmental impact, the numbers of trucks and public perception of the area.”

– John Williams, attorney for the John Hendricks family, owners of Gateway Canyons Resort

“I’m an environmentalist. Uravan and Moab [uranium mining] was a bad idea … but Telluride is a bad idea … They carved up a mountain in the name of recreation … Our dump trucks and our garbage trucks are driving up to Telluride every day. … Up there they say, ‘We don’t want oil and gas mining, but keep that oil and gas coming.’”

– Thomas Kyle of Norwood

But by far the best quote of the night came from mill backer Chris Daniels of Nucla: “I hope you guys have a safe drive home. The deer are not glowing in the dark yet, so we gotta be careful.”

The commissioners did not make a decision on the special use permit, which has already won the nod of approval from the county planning commission. The county commissioners are expected to make a decision at a September meeting.

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The IBCC and nine river-basin roundtables were set up by the Colorado Legislature in 2005 to try to bring together all the various water users and stakeholders on both Colorado’s Front Range and Western Slope to reach consensus on some long-range trans-basin water projects.

But the projected doubling of the state’s population to 10 million people by 2050, most of whom would live on the relatively parched Front Range, means there’s growing pressure to divert the more bountiful water supplies of the Western Slope mountains to suburban lawns in Aurora, Colorado Springs, Fort Collins, Pueblo and Denver.

The Chieftain quoted Western Slope ranchers worried about their way of life drying up in the face of unrelenting growth on the Front Range, and questioning why agriculture is always the presumed sacrificial lamb. Throw into that mix Western Slope energy development — especially the specter of oil shale development — and it’s little wonder the IBCC has been able to accomplish very little but talk over the last four years.

This from today’s Chieftain article: “The Western Slope has revived the specter of oil shale, which could drink up the remaining allocation of water to Colorado under the 1922 Colorado River Compact. Many are skeptical because the energy and water costs of producing oil shale are so high, no matter what price is set by the world market.”

In fact, even industry officials acknowledge oil shale production consumes as much as three barrels of water for every barrel of oil. Some forms of production take up to five barrels of water for every barrel of oil. Even with those daunting numbers in mind, oil companies for decades have been buying up Western Slope water rights and continue to do so to this day despite the commercially unproven nature of the oil shale industry.

The Chieftain story paints this grim picture of Colorado’s water future as detailed during last week’s IBCC meeting:

“The state has between 445,000 and 1.438 million acre-feet of water to develop from the Colorado River basin under the Colorado River Compact, although prolonged drought or climate change could affect the amount.

”Right now, the state uses 1.2 million acre-feet for treated water supplies, and will need at least 2 million acre-feet by 2050. Only about one-third of the new supply will be developed under identified projects such as Colorado Springs Southern Delivery System, the Arkansas Valley Conduit, the Northern Integrated Supply Project, Aurora’s Prairie Waters or the Windy Gap water supply firming project. Oil shale development could require as much as 500,000 acre-feet of water, if it ever happens.

“We need to recognize that decisions made on oil shale are made on the international oil market, and not water availability,” said Chips Barry, manager of Denver Water. “In order to do a risk analysis, you need to put a number in and express that you have no faith whatsoever in that number.”

The Western Slope interests counter that energy development is a real factor, not an intangible variable.

“Energy is actively seeking new water rights and buying existing water rights,” said Dan Birch, deputy general manager of the Colorado Water Conservation District.”

The issue has become so politically charged that it blew up on Gov. Bill Ritter last week during testimony on Colorado’s New Energy Economy on Capitol Hill. U.S. Sen. James Inhofe, an Oklahoma Republican, questioned why Ritter wasn’t back home developing the state’s massive oil shale reserves. Ritter later fired back that the industry first needs to prove it can coexist with other water users in the state.

Observers of this debate might recall that Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.), both ardent environmentalists, have already diluted their bill considerably in order to win the support of House Democrats from states with powerful gas, coal and auto industries. In the latest episode, it was the Democrats representing the farm states who threw the fuss, threatening to kill the American Clean Energy and Security Act if two key provisions weren’t changed.

The first involved a program allowing polluting farmers and agricultural companies to offset their emissions by planting trees or investing in green technologies. The Waxman-Markey bill proposed that the Environmental Protection Agency would oversee the program, arguing that the agency would be the most reliable monitor of an initiative designed to protect the environment.

But farm-state Democrats, rallying behind Rep. Collin Peterson (D-Minn.), who chairs the House Agriculture Committee, insisted that the U.S. Department of Agriculture be given that responsibility — a scenario opposed by environmentalists, who fear the USDA will prioritize farm industry concerns above the effectiveness of the offset program.

Indeed, The New York Times reports today of USDA’s shoddy record when it comes to overseeing environmental programs under its jurisdiction.

In particular, the department’s conservation agency “routinely ignored” compliance standards when giving out wetlands and wildlife grants, an investigator for the House Agriculture Committee found. The Government Accountability Office said there is potential for duplicative payments with the conservation programs, allowing the agency to release billions of dollars in payments to landowners who do not deserve them.

Another assessment from the USDA inspector general found shoddy accounting at the Natural Resources Conservation Service. The agency was unable to provide sufficient information on transactions and account balances.

No matter. The result of the Waxman-Peterson negotiations was to give USDA the job.

The second sticking point revolved around a controversial EPA initiative — mandated by Congress — designed to ensure that the country’s shift to biofuels like ethanol doesn’t lead to a spike in greenhouse gas emissions elsewhere around the globe. This happened in Indonesia, for example, where there was a widespread clearing of rain forest a few years ago to make way for palm plantations to feed Europe’s emerging biofuels market. The EPA proposed to take such global events into account as it pertains to the U.S. shift to food-based fuels.

For Peterson and the other agriculture-friendly Democrats, the so-called indirect land-use plan was a non-starter. The result? Under the compromise, EPA won’t be allowed to account for indirect land-use when calculating ethanol-production emissions until the USDA has signed off of the methodology.

“We have reached an agreement that works for agriculture and contributes to the reduction of greenhouse gas emissions in the United States,” Peterson said in a statement last night.

The House is planning to vote on the Waxman-Markey bill Friday.

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