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Fertilisers ‘Slice of Life’ Review

August 2009

To ensure that all stakeholders involved in the:

• importation

• manufacture

• testing

• bulk storage

• point of sale

• on farm end use and

• application

of fertilisers and fertiliser additives (see appendix) comply with ACVM requirements and exemptions, NZFSA’s Approvals and ACVM Group contracted the Compliance and Investigation Group (CIG) to conduct a ‘slice of life’ review. This type of review provides NZFSA with a preliminary overview of relevant activities in an industry sector not previously subject to a compliance or monitoring programme.

Relevant legislation

The reviewer considered relevant legislation, technical requirements and exemptions including but not limited to:

• the Agricultural Compounds and Veterinary Medicines (ACVM) Act 1997

• the ACVM Regulations 2001 (as amended October 2007).

The following is a summary of the final CIG report, which was completed earlier this year.

Review process overview

Categories of fertilisers for review purposes

For the purposes of this review, fertilisers sold in New Zealand were broadly split into three categories based upon methods of manufacture, trader promotion, substances/ingredients/ additives utilised and, to some extent, whether such fertilisers were used on organic or conventional farms. These categories were:

• conventional fertilisers

• organic (certified or uncertified) fertilisers

• novel fertilisers.

The category of ‘novel fertilisers’ was used by the reviewer to capture some possible emerging trends in fertilisers that appear to be used in both conventional and organic farming.

The farm type for intended end use of fertilisers (organic versus conventional) dictates to a large degree how fertiliser importers, manufacturers, and traders:

• select fertiliser substances/ingredients/additives

• further process such substances/ingredients/additives

• scientifically analyse substances/ingredients/additives, manufacturing processes and finished fertiliser

• conform to ACVM approved codes of practice/operating plans

• advertise and trade fertilisers

• label fertilisers.

It is important to recognise that these categories of organic, conventional, and novel are not strictly exclusive, but the division helps to explain review findings relating to emerging diversification and contrasting potential ACVM Act compliance issues that appear to be arising within each broad category.

Sample

This review assessed:

• two large conventional fertiliser importer/manufacturer/traders

• six organic fertiliser importer/manufacturer/traders

• a variety of novel fertiliser products

against the ACVM legislation and exemption requirements.

At each location the reviewer looked at background documentation and processes relating to fertiliser importation, manufacture, and trade. Once this background overview had been obtained, two or three randomly selected fertiliser products were looked at more closely at each site for ACVM compliance. Interviews were also conducted.

Findings

Awareness of requirements

The review identifies disparate awareness amongst fertiliser importer/manufacturer/traders (operators) of NZFSA's jurisdiction and ACVM Act requirements for fertilisers.

Conventional fertiliser operators

The two conventional fertiliser operators assessed as part of this review had very good awareness of NZFSA jurisdiction and ACVM Act requirements pertaining to fertilisers. They provided clear evidence that they were operating under strict process control, ensuring that product they produced was labelled appropriately and ‘fit for purpose’ as defined in the ACVM legislation (see appendix).

Organic fertiliser operators

Most of the organic fertiliser operators interviewed had acceptable awareness of NZFSA and ACVM Act requirements. Organic fertiliser operators tend to be smaller operators and might be considered to be less well resourced to achieve process controls comparable to conventional fertiliser operators. However, the majority of organic fertiliser operators provided acceptable evidence that product they produced and traded was acceptably labelled and ‘fit for purpose’ as defined in the ACVM legislation.

Novel fertiliser operators

Two fertiliser manufacturers or vendors involved in the novel fertiliser sale categories actively avoided or, in one case, signalled their refusal to be interviewed.

Some novel fertilisers were assessed in this review via a desktop analysis of websites and label claims. Novel fertilisers are subject to a review recommendation that this class of products be subject to formal NZFSA audit.

Requirements

Labelling requirements in ACVM Regulations

Fertilisers are exempt from registration under the ACVM Act providing the conditions outlined in Schedule 5 of the ACVM Regulations 2001 are met. This includes labelling requirements. Because of the variety of quantities of fertiliser sold, ranging from individually labelled containers to bulk truck or trailer loads, ‘labels’ are considered to be any printed information made available by the fertiliser manufacturer/trader. This includes web-based information, brochures, packing notes, fliers and any other printed material relevant to that consignment of that fertiliser and made available by the manufacturer/trader to the purchaser.

Most fertiliser traders interviewed complied with the labelling requirements laid out in Schedule 5, but potential labelling compliance issues were identified in a desktop analysis of some novel fertilisers.

‘Fit for purpose’ requirements in ACVM Regulations

The reviewer further considered the ‘fit for purpose’ criteria as explained in the ACVM Regulations 2001. The ‘fit for purpose’ criteria outlined in Schedule 5, clause 3 (a), (b) and (c) are mostly described in clear, unambiguous terms. However, sub-clause (d) of this legislation states:

"They are fit for purpose only if they are used as recommended and do not do any of the following: (d) have a selenium content that would result in the application of selenium as sodium selenate at a rate exceeding 10 grams per hectare".

Sub-clause (d) was considered to be ambiguous by some interviewees in that it does not:

• consider other sources of selenium such as Barium Selenate or Selenite seen to be present in some fertilisers being sold during the review

• delineate an allowable time frequency of application or reapplication of fertilisers containing selenium at a rate not exceeding 10 grams per hectare

• indicate if the area under consideration (hectare) is grazed pastoral land or land being cropped for primary produce for human or animal consumption.

Conventional fertilisers

Conventional fertilisers are, for the purposes of this review, defined as those made principally from substrates derived from petrochemical or geologic mining activities. These substrates are subjected to further chemical processing and addition of macro/micro nutrients and trace elements prior to marketing. Conventional fertilisers are mostly prohibited from use on organic farms wishing to maintain organic certification to BioGro and/or AsureQuality standards.

Conventional fertiliser manufacturer/trader numbers in New Zealand are decreasing as the industry consolidates. Import, manufacture and trade of conventional fertilisers in New Zealand are now principally undertaken by two large farmer/shareholder based co-operative organisations.

The two conventional fertiliser operators interviewed during the review jointly sell approximately 3 million tonnes of fertiliser per year. An assessment provided by industry sources is that this quantity represents approximately 95 per cent of the total fertiliser sold within New Zealand. These operators have nationwide importation, manufacture, distribution and sales plus fertiliser application capabilities.

Both of these organisations manufacture several of their fertiliser products under Fertmark™ registration (see below).

The reviewer visited major production facilities of these conventional fertiliser operators and interviewed key staff. Both are well resourced with:

• analytical laboratories, staffed full time, sited at major manufacturing sites

• specialist process scientists sited at major manufacturing sites

• agronomists/agricultural advisors sited in all rural sales regions

• comprehensive web-based label information databases or manuals that meet ACVM label requirements and are accessible by purchasers.

These two conventional fertiliser operators provided the reviewer with ready and open access to all necessary files, documents and processes. This access provided transparent evidence that they were operating under strict process control, ensuring that product they produced was labelled appropriately and ‘fit for purpose’ as defined in the ACVM legislation. During site visits the reviewer observed that ‘fit for purpose’ criteria were being systematically assessed (via process control and laboratory analysis) in an ongoing manner from importation to manufacture and trade by these two conventional fertiliser operators.

On the basis of background information obtained from these interviews and site visits plus in depth sample assessment of two or three randomly selected fertilisers at each location the reviewer concluded that these operators comply with NZFSA requirements.

Fertmark™ Code of Practice

Fertmark™ was developed in 1996 and is managed by Federated Farmers of New Zealand. It was initially established as a consumer surety programme to give New Zealand farmers confidence in the quality and nutrient plus trace element content of fertilisers and confidence in the associated advertising utilising this trade mark.

Since May 2000 Fertmark™ has been an ACVM Act-approved code of practice. Fertiliser manufacturers may voluntarily subscribe individual fertilisers they manufacture or sell to this code. Fertilisers that meet Fertmark™ criteria on the basis of regular audit assessment are permitted to use the Fertmark™ branded logo. Fertmark audits on individual fertilisers are conducted by Quality Consultants of New Zealand (QCONZ).

Fertmark™ is principally utilised by conventional fertiliser manufacturers, but not all conventional fertilisers manufactured are subject to Fertmark™ branding. For example, of the 6000 or so different combinations of fertiliser/trace element combination products manufactured by one conventional fertiliser organisation interviewed, ten core fertiliser products were Fertmark™ audited and registered.

During the course of this review the QCONZ Fertmark™ manager was interviewed and several QCONZ audit reports for Fertmark™ registered fertilisers were examined.

Although Fertmark™ audits are conducted by IANZ 17020 qualified auditors, they do not have any formal NZFSA ACVM training. The QCONZ audit programme focuses primarily on fertilisers under examination meeting commercially advertised content parameters. While the audit programme conducted by QCONZ addresses some ACVM requirements, there is no formal process of reporting untoward audit findings to NZFSA.

It is the opinion of this reviewer that NZFSA should not draw any surety that this Fertmark™-QCONZ audit programme is providing a significant overview (relevant to ACVM requirements) of all fertilisers traded in New Zealand.

Organic fertilisers

Organic fertilisers manufactured according to certification criteria and used on organic farms are mostly approved by the two main organic certification bodies, AsureQuality and BioGro.

Organic type fertilisers lacking such formal certification are also manufactured and sold in New Zealand. Organic certified or uncertified fertilisers may also be used without restriction on conventional farms.

AsureQuality and BioGro fertiliser certification programmes are not recognised as approved codes of practice or operating plans under the ACVM Act and NZFSA does not currently have any regular formal overview of these fertiliser certification activities. However, NZFSA does provide ‘organic official assurances’ (based upon these certification programmes) to overseas market access requirements (OMAR) stipulated by individual countries importing such produce under their own country organic protocols.

Organic certified fertilisers are made from various combinations of uncomposted or composted broiler or layer poultry shed litter, composted green waste, seaweed, mined rock (not chemically treated) plus approved source and composition biological innoculants. Approved trace elements or macro nutrients also may be added as required.

Organic fertiliser manufacturers frequently rely on the large conventional fertiliser companies as a source of mined rock (not chemically treated) supplies. This source is utilised because these conventional fertiliser companies have consistent quality assured supply chains of such rock.

Currently organic (non certified) fertilisers seem to be made from a variety of products including the above listed under organic certified fertilisers and others such as biosolids from municipal waste water effluent treatment facilities. (Note that BioGro and AsureQuality organic certification processes prohibit the use of fertilisers containing inputs derived from biosolids from municipal waste water effluent treatment facilities.)

The organic fertiliser industry in New Zealand is characterised by the presence of several small operators -- most produce on average up to 10,000 tonnes of organic fertiliser for sale each year. However, one manufacturer interviewed during this review produced both organic and conventional litter-based fertilisers. This manufacturer was selling 26,000 tonnes of poultry broiler/layer litter based fertiliser per annum (tonnage comprised both conventional and organic certified product).

In comparison to the conventional fertiliser industry, the organic fertiliser industry does not operate under any NZFSA approved code of practice such as Fertmark. The Ministry of Environment’s NZS 4454 2000 Composted Fertilisers Code of Practice and AsureQuality or BioGro standards and audit protocols appeared to be used by some organic fertiliser operators interviewed, but none of these are NZFSA-approved codes of practice. Other organic fertiliser operators interviewed appeared not to utilise any code of practice or standard other than their own self-developed recipes and process controls with variable input (as deemed necessary by the operator) from contracted scientists or advisors.

The review shows that those organic fertiliser operators examined produce fertilisers to high process control and product specifications. These organic fertiliser operators comply with the labelling and ‘fit for purpose’ requirements in the ACVM Regulations. However, the lack of a consistently utilised manufacturing code of practice or standard that is approved by NZFSA and the burgeoning number of smaller operators in this sector is notable.

Novel fertilisers

For the purposes of this review ‘novel fertilisers’ are defined as those products where traders appeared to be principally holding out such products to be:

• nutrients

• composts (biosolids)

• foliar feeds

• plant nutrients

• systems

• soil stimulants

• fruit sizers

• root sizers

• adjuvants.

The reviewer obtained background information from a variety of sources (including websites and labels) on products termed ‘novel fertilisers’. The word ‘fertiliser’ was often either absent or used within the lower case text of these labels/advertisements.

There is no ACVM statutory requirement for labels of products (that would be interpreted as fertiliser under the definition supplied in the ACVM Regulations 2001) to use the word ‘fertiliser’ on that label. Hence, during the review it was found that novel products (fertilisers) were being traded with generalised label claims that, in the opinion of the reviewer, classified these products as fertilisers.

The ACVM Regulations 2001 defines fertiliser and fertiliser additive (see appendix). Within these definitions it is stated: “Does not include substances that are plant growth regulators that modify the physiological functions of plants”.

There is no formal ACVM definition of a plant growth regulator other than by inference -- these are substances that “modify the physiological functions of plants”. However, the NZFSA ACVM Approvals database lists 72 trade name products plant growth regulators that are subject to conditions 2, 3, 8 and 37 of the ACVM conditions of registration.

There are six plant growth regulator trade name products in this above mentioned ACVM list of 72 that contain the active ingredient Napthylacetic acid. The reviewer was supplied (by an anonymous party) with laboratory analysis of two products being openly sold respectively as a ‘nutrient’ and a ‘nutrient/fertiliser’. The laboratory analysis of these products revealed that both contained Naphthylacetic acid (NAA). Although these products are being “held out to be” fertilisers (as defined in the ACVM Regulations 2001) by manufacturers or traders, laboratory analysis reveals that they contain plant growth regulators albeit unregistered as such with NZFSA.

In essence, it is not clear where substances and products might be classified as fertilisers and thus be exempt from registration subject to clause 9 of the ACVM Regulations 2001 or where these same products need to be registered as trade name product plant growth regulators.

Composts (biosolids)

One green waste composting fertiliser manufacturer/trader was interviewed. This operator complied with ACVM legislation.

During the course of the review the reviewer was notified of manufacturers utilising human biosolids derived from municipal waste water treatment facilities. One of these operators ceased to accept phone calls aimed at organising an interview from the reviewer once they had received the review Terms of Reference. This operator will be formally audited should Recommendation 3 (see below) be actioned.

The New Zealand Press Association (NZPA) reported on 23/04/2009 "Sewage being Composted" that a trial is now underway to asses the viability of using biosolids waste from two wastewater treatment plants as an ingredient to mix with green waste for production of compost.

Systems

The reviewer contacted one novel fertiliser trader advertising under the ‘Fertilisers’ section of the Yellow Pages. However, the General Manager of this organisation denied that they were trading fertiliser, insisting that they were selling a ‘system’ and not a fertiliser.

Scrutiny of the company website identifies the following fliers:

• sustainable biological farming systems

• supplier of measuring systems to monitor soil and plant nutrient levels

• supplier of mineral amendment systems to achieve optimum soil conditions to support balanced soil biology

• supplier of systems that deliver nutrient availability to the plants.

The reviewer made repeated attempts to organise an appointment with this organisation. Ultimately, the reviewer received a formal letter threatening punitive financial or legal recourse. This operator will be formally audited should Recommendation 3 (see below) be actioned.

Recommendations

1. To NZFSA: Consideration to define the ACVM Regulations 2001 Schedule 5 sub-clause 3 (d)

It is a recommendation of this review that consideration be given to more clearly define the ‘fit for purpose’ criteria required for selenium outlined in the ACVM Regulations 2001 Schedule 5 sub-clause 3 (d).

Response

NZFSA is currently reviewing the Class Determination Rules. A further ‘fit for purpose’ criteria relating to the application of selenium has been included. These reviewed Rules are expected to be published on the ACVM website in the near future.

2. To NZFSA: Consideration to require fertiliser traders to label fertilisers as such

It is a recommendation of this audit that consideration be given to require fertiliser traders to clearly and unambiguously identify fertilisers as such on labels.

Response

NZFSA does not consider it necessary for producers to use the term ‘fertiliser’ on the label. The main delineation between a product being a fertiliser, or not, is whether its label (and all associated advertising material) make definitive claims for control of pests or diseases. As a guide, making a generic claim that the product promotes strengthening and health of a plant by promoting the plant’s immune system to resist pest attack would probably make the product fall into the category of a fertiliser. Where definitive claims are made (eg, controls blackspot), then the product would not meet the exempt category.

3. To NZFSA: Consideration for a formal audit of novel fertiliser operations

It is a recommendation of this audit that consideration be given to formally audit a targeted selection of novel fertiliser importers, manufacturers, and traders under ACVM Cost Recovery provisions.

Response

NZFSA’s compliance policy for products exempt from registration is to respond to suspicions or allegations of non-compliance rather than pro-active monitoring and audit. Fertilisers are considered low risk (that is why they are exempt from registration) and therefore a formal audit programme is considered as placing an undue compliance cost to this industry sector.

Appendix: Definitions and conditions of exemption from registration

Definitions

Fertiliser as defined in the ACVM Regulations 2001:

a. Means a substance or biological compound or mix of substances or biological compounds that is described as, or held out to be for, or suitable for, sustaining or increasing the growth, productivity, or quality of plants or, indirectly, animals through the application to plants or soil of

i. Nitrogen, phosphorus, potassium, sulphur, magnesium, calcium, chlorine, and sodium as major nutrients; or

ii. Manganese, iron, zinc, copper, boron, cobalt, molybdenum, iodine, and selenium as minor nutrients; or

iii. Fertiliser additives; and

b. Includes non-nutrient attributes of the materials used in Fertiliser; but

c. Does not include substances that are plant growth regulators that modify the physiological functions of plants

Fertiliser additive as defined in the ACVM Regulations 2001:

a. Means a non-nutrient substance added to a Fertiliser, or applied by itself to land or plants, that

i. Improves the supply and uptake of nutrients; or

ii. Increases the biological activity; or

iii. Modifies the physical characteristics of a fertiliser to make it more fit for its purpose; but

b. Does not include substances that are plant growth regulators that modify the physiological functions of plants.

Conditions of exemption from registration

Fertilisers and fertiliser additives may be exempt from the requirement for registration as agricultural compounds under the ACVM Act 1997 pursuant to Regulation 9 of the ACVM Regulations 2001. Such products may be imported, manufactured, sold or used as fertilisers or fertiliser additives without registration under section 21 or section 27 of the Act if the conditions of Schedule 5 are complied with.

Schedule 5 conditions are:

1. They must be supplied with a label containing the following information:

a. trade name:

b. the name and address of the producer, if applicable:

c. the name and address of the manufacturer, if applicable:

d. batch number, if applicable:

e. the order number, if applicable:

f. the date of delivery, if applicable:

g. nutrient content and modifying pH value, if applicable:

h. details of any precautions to be taken to prevent or manage risks described in section 19 of the Act when being used, particularly potential hazards to animals exposed to them:

i. directions for use.

2. They must be fit for the purpose specified in the directions for use.

3. They are fit for their purpose only if they are used as recommended and do not do any of the following:

a. produce residues in primary produce that fail to comply with applicable food residue standards set in or under any enactment;

b. (cause pain and distress in animals due to toxic reactions or physical damage;

c. contain micro-organisms at pathogenic levels or any other plant or animal pest that is likely to promote disease or pest transmission;

d. have a selenium content that would result in the application of selenium as sodium selenate at a rate exceeding 10 grams per hectare.