Farmer Andy McElmurray inspects a dead patch of a field he owns Oct. 15, 2007, in Hephzibah, Ga. McElmurray says the patches are from fertilizer that contained industrial sludge given to him by the city of Augusta.

Augusta, Ga. ? It was a farm idea with a big payoff and supposedly no downside: ridding lakes and rivers of raw sewage and industrial pollution by converting it all into a free, nutrient-rich fertilizer.

Then last week, a federal judge ordered the Agriculture Department to compensate a farmer whose land was poisoned by sludge from the waste treatment plant here. His cows had died by the hundreds.

The Associated Press also learned some of the same contaminants showed up in milk regulators allowed a neighboring dairy farmer to market, even after officials said they were warned about it.

In one case, according to test results provided to the AP, the level of thallium – an element once used as rat poison – found in the milk was 120 times the concentration allowed in drinking water by the Environmental Protection Agency.

The contaminated milk and the recent ruling by U.S. District Judge Anthony Alaimo raise new doubts about a 30-year government policy that encourages farmers to spread millions of tons of sewage sludge over thousands of acres each year as an alternative to commercial fertilizers.

The program is still in effect.

Alaimo ordered the government to compensate dairy farmer Andy McElmurray because 1,730 acres he wanted to plant in corn and cotton to feed his herd was poisoned. The sludge contained levels of arsenic, toxic heavy metals and PCBs two to 2,500 times federal health standards.

Also, data endorsed by Agriculture and EPA officials about toxic heavy metals found in the free sludge provided by Augusta’s sewage treatment plant was “unreliable, incomplete, and in some cases, fudged,” Alaimo wrote.

EPA-commissioned research by the University of Georgia based on the Augusta data was included in a National Academy of Sciences report and served as a linchpin for the government’s assertion that sludge didn’t pose a health risk.

In his 45-page ruling, Alaimo said that along with using the questionable data, “senior EPA officials took extraordinary steps to quash scientific dissent, and any questioning of EPA’s biosolids program.”

Benjamin H. Grumbles, EPA’s assistant administrator for water programs, said Thursday that the judge’s order underscored the significance of what he called strong national standards on sludge rather than undercutting the giveaway program.

“This unfortunate instance of poor recordkeeping and biosolids sampling techniques on the part of one plant reiterates the importance of our national biosolids program,” Grumbles said in a written response to AP questions about the ruling.

About 7 million tons of biosolids – the term that waste producers came up with for sludge in 1991 – are produced each year as a byproduct from 1,650 waste water treatment plants around the nation.

Slightly more than half is used on land as fertilizer; the rest is incinerated or burned in landfills. Giving it away to farmers is cheaper than burning or burying it, and the government’s policy has been to encourage the former.

Alaimo’s decision was a bittersweet victory for McElmurray, whose silos and dairy barns sit mostly empty since his herd was wiped out. He contends the cows were done in by grazing on sludge-treated hay for more than a decade, beginning in 1979.

Interviewed before the ruling, McElmurray crossed his arms, scowling at the empty pastures and idle equipment where his prize-winning herds once grazed here in eastern Georgia. “This farm never would have looked like this if we hadn’t used the city’s sludge,” he said angrily.

Augusta recently settled a lawsuit with him over the dead cows for $1.5 million. Another nearby dairy farmer, Bill Boyce, won a $550,000 court judgment against the city on his claim that sludge was responsible for the deaths of more than 300 of his cows.