Goldsmith Plants could be on the hook for $7 million in damages
due to regulations stemming from the Agricultural Bioterrorism
Protection Act of 2002.
GILROY – Goldsmith Plants could be on the hook for $7 million in damages due to regulations stemming from the Agricultural Bioterrorism Protection Act of 2002.
In a worst case – but increasingly realistic – scenario, wholesalers who lost inventory because of a deadly bacteria in Goldsmith-produced geraniums could recoup their losses in court. Already 22 greenhouses around the country have asked Goldsmith Plants for nearly $1.3 million in compensation after it was discovered in January that a strand of the Ralstonia bacteria has infected some Goldsmith geraniums, one of the 41-year-old company’s original crops.
If found liable, Goldsmith Plants – the sister company to Goldsmith Seeds, Inc. located on Hecker Pass Highway in Gilroy – could go out of business.
“Seven million dollars exceeds our annual gross sales (for Goldsmith Plants),” CEO Joel Goldsmith said. “But I don’t want to speculate about the company’s future at this point.”
Officials from the company and other leaders in the flower growing industry spent Monday afternoon at Goldsmith’s Hecker Pass farm lobbying Congressman Mike Honda. The industry officials hope Honda, the Gilroy district’s representative in Washington, can bring a two-part message back to the capital asking the United States Department of Agriculture to do at least one of two things:
Relax what they believe is an unnecessary and unscientific practice of destroying all product shipped with a plant contaminated by the Ralstonia bacteria.
Use government funds to compensate companies that have lost inventory.
“There are examples where the USDA compensated companies for the inventories they lost. In fact, I don’t know of another case where there wasn’t compensation,” Goldsmith said.
The deadly bacteria, a strand that is new to the United States, made its way to this continent from Africa. Seven geranium cuttings from a Goldsmith greenhouse in Kenya were unknowingly infected with Ralstonia when they were shipped to the United States.
Honda, who voted for the bioterrorism bill last year, promised Goldsmith and other industry leaders he would build a coalition of legislators that could include Speaker of the House Dennis Hastert. Hastert’s home state of Illinois is host to Ball FloraPlant, a major geranium producer that has worked with Goldsmith Plants in the past to identify and destroy plants plagued with various other pathogens.
“We need to go back and be nice and say we understand that Ralstonia got put on a (bioterrorism) quick list, but now that the law has been in effect for a while, it’s time to take a step back and evaluate some unintended consequences,” Honda told the group Monday.
The biggest unintended consequence would be bankrupting greenhouses across the nation who have been quarantined after receiving infected Goldsmith geraniums. As of today, no California-based geranium greenhouses have been impacted.
Ralstonia is a bacteria deadly to certain crops such as potato, tomato, peppers and tobacco. This particular strand of Ralstonia – which wilts and rots a plant – was included in a list of 10 pathogens that the USDA considers hazardous to U.S. food and plant crops.
Because the bacteria can live and travel through soil and water, affected greenhouses immediately destroyed infected geraniums when Ralstonia was found, starting with a grower in Indiana in January. In addition, growers also destroyed plants that shared soil or water with infected plants as well as any plant within a meter of Ralstonia-infested plants. Both measures are industry standard.
By March, the USDA ordered all plants shipped with an infected geranium plant to be destroyed, triggering the current swarm of greenhouse requests for compensation from Goldsmith Plants.
Longtime Virginia-based geranium grower Bill Miller says he destroyed 8,000 of his geraniums that have a Goldsmith Plants origin. He suspects another 7,000 will have to be destroyed as he awaits tests results on one of the geraniums shipped with that bunch. Miller, at the beginning of peak flower selling season, stands to lose more than $50,000 in inventory.
“I’m sure it never entered anyone’s mind that greenhouses would go under because of homeland security,” Miller said.
The flower-growing industry believes the USDA’s enforcement of the Bioterrorism Act is overkill and unjustified scientifically.
“You can’t take a bunch of Ralstonia and weaponize it by dropping it on a crop of potatoes,” said Lin Schmale, spokesperson for the Society of American Florists. “You need millions of these cells to wipe out a crop, and we know how to keep that from happening. We still don’t really understand why this strand of Ralstonia has to be on a terrorism list.”
On Monday, industry scientists told Honda, a former high school science teacher, that tests used to identify the strand of Ralstonia on the list may be invalid and unreliable.
“If a geranium has Ralstonia it looks ill, but we’re getting positive results from healthy looking plants,” Schmale said. “We may be quarantining greenhouses and destroying entire shipments of geraniums over a faulty test.”
Schmale stressed that food and plant products in retail stores do not contain Ralstonia because a grown product with the disease does not appear edible or aesthetic even to the lay person’s eye. Goldsmith officials promise its annual flower sale Saturday will also not be affected. All plants on sale are free of the Ralstonia bacteria, Goldsmith officials said.
Flower production companies like Goldsmith Plants believe the USDA should go back to using industry standards to dispose of infected plants. If the one-meter and shared soil and water guidelines were used, Goldsmith Plants estimates it would only be liable for around $50,000 in inventory damages.
“They’ve got to recall (their policy) or it will kill our industry,” said Richard Goldsmith, president of Goldsmith Plants.
The USDA is defending its practice so far.
“Our decisions are based on science,” USDA spokesperson Megan Thomas said. “We need to ensure that we contain it and not let get it get into the environment.”
Thomas said the USDA is considering compensating companies for lost inventory amongst other options. Thomas did not elaborate, but said a second option could involve giving Goldsmith a low-interest loan to pay the damages.
