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SACRAMENTO, Calif. - For up to seven years, California Liquid Fertilizer sold what seemed to be an organic farmer's dream, brewed from fish and chicken feathers.

The company's fertilizer was effective, inexpensive and approved by organic regulators. By 2006, it held as much as a third of the market in California.

But a state investigation caught the Salinas, Calif.-area company spiking its product with ammonium sulfate, a synthetic fertilizer banned from organic farms.

As a result, some of California's 2006 harvest of organic fruits, nuts and vegetables - including crops from giants like Earthbound Farm - wasn't really organic.

According to documents obtained by The Sacramento Bee through a Public Records Act request, California Department of Food and Agriculture officials were notified of the problem in June 2004 but didn't complete their investigation and order the company to remove its product from the organic market until January 2007.

State officials knew some of California's largest organic farms had been using the fertilizer, the documents show, but they kept their findings confidential until nearly a year and a half after it was removed from the market. No farms lost their organic certification.

The nonprofit California Certified Organic Farmers, which certifies about 80 percent of the state's organic acreage, decided not to penalize farms that had used the product on the grounds that farmers did not know they were using an unapproved chemical.

The state could have pursued harsher penalties against California Liquid Fertilizer, including violation of the California's organic-product law, which carries fines of up to $5,000, according to agriculture department spokesman Steve Lyle. It also could have referred the case to the attorney general's office for civil action as an unfair business practice.

"We did not pursue those courses of action because our priority was to remove the product from the market," Lyle said. "More process would have delayed that." The investigation took as long as it did, he said, because the case was complex.

The trouble has continued. In November 2007, the distributor of another organic liquid fertilizer, representing about 5 percent of the market, pulled its product in the middle of another state investigation. Rumors in the industry point to another major disclosure as soon as this month.

Synthetic fertilizers don't present food safety risks, but the organic movement has always opposed them because they take a great deal of energy to produce, decrease natural soil fertility and can pollute water.

Above all, the California Liquid Fertilizer case shows how much the organic regulatory system depends on trust.

Sales of organic products have soared from $5 billion nationwide a decade ago to $24 billion today, according to the Organic Trade Association. California accounts for nearly 60 percent of the U.S. harvest of organic produce.

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