Real life gardeners put all sorts of repulsive things on their gardens, especially if they are trying to avoid using "chemical" fertilizers. I admit that I've only grown things outdoors or in sunny greenhouses, but from what I've heard indoor mushroom farms also use a variety of repulsive growing mediums too.
With the miasma problems indoors and their ever increasing dislike of going outdoors, I can see why our dwarfs might not take to composting and-well rotted manure as sources of fertilizer. It is their loss, but then dwarfs aren't known as great farmers. But it is a shame that dwarfs on wood-poor maps are deprived the benefits of fertilizer. Even when the tower caps start to mature after 3 years, there never seems to be enough wood.
However, in many fortresses fish, bones and blood are abundant and unappreciated resources. Often the halls are awash with blood, though it can't actually be collected yet. It would be cool if alternate fertilizer could be created using these resources.
Fish meal or fish emulsion fertilizer is made from fish, mostly the undesirable bits that are probably discarded by the "prepare raw fish" job, but for simplicity it could be made from whole fish.
Bone meal is of course made mostly from ground bone, bone marrow, and various things stuck to the bones.
Blood meal is made mostly from blood. Since blood isn't collectible, we could cheat a bit and make the blood meal out of "chunks" which are probably pretty bloody.
Or we could make a slightly more complex fertilizer using a stack of fish, a stack of bones, and a stack of chunks, all ground up and mixed together into a nice slurry, or dried to a fine meal.
These jobs would work in the fishery, butchery or farmer's workshop, but that might be too cheap and easy. Potash is a pain in the butt to make, so any non-wood alternative should be similarly inconvenient. Move it to the alchemist's shop and you make it more difficult to get running, and also get to use your alchemist's shop for something other than soap. Depending on how concentrated you make it, it could work either in barrels or vials.
Or the Human Caravans could start selling Miracle Grow.
http://en.wikipedia.org/wiki/Fertilizer http://en.wikipedia.org/wiki/Blood_meal http://en.wikipedia.org/wiki/Bone_meal http://en.wikipedia.org/wiki/Fish_meal http://en.wikipedia.org/wiki/Fish_emulsion