Sides square off in battle over five-cent chicken tax

Staff Writer

ANNAPOLIS, Md. (March 10, 2015) — State agriculture industry representatives faced off last week against a Montgomery County senator and group of environmental organizations pushing a bill that would require poultry companies to pay a 5-cent tax for every bird grown in the state.
Representatives from several environmental groups and bill supporters said large poultry companies abandon contracted growers on manure removal issues while reaping the bulk of the profits in an industry they said is the largest polluter of the Chesapeake Bay.
The bill would use the tax revenue to pay for the state’s cover crop program.
“I think we made the decision long ago that, for lack of a better term, the polluter pays whether it’s through our own waste or through the different things we contribute through, say, our automobiles,” said Sen. Richard Madaleno Jr., D-District 18, sponsor of the bill known as the Bay Tax Equity Act. “This is a large and growing source of pollution in our state, and the entities that are responsible — large chicken aggregators — right now are able to avoid their responsibility by pushing off the issue of manure onto the contract growers. [They] should pay their fair share to clean up the Bay.”
Madaleno and others testified before the Senate Education, Health & Environmental Affairs Committee on March 3.
The state has also too easily given in to poultry industry threats to leave the state if more restrictive costs are legislated, said Michele Merkel, an attorney and co-director of Food & Water Justice, the legal arm of Food & Water Watch, a Washington-based environmental nonprofit.
The agriculture, fishing and forestry industries represent just 0.35 percent of the state’s gross domestic product, she said, and poultry isn’t the biggest employer even in poultry-rich Eastern Shore counties. In some cases, such as Wicomico, medical centers are.
“What if these medical centers threatened to leave the state unless we allowed them to dump medical waste into our rivers and into the Bay?” Merkel said. “Would we let them do that because they provide really good jobs? I’m guessing that we wouldn’t.”
Companies like Perdue throw growers “under the bus” by leaving manure removal to the growers, she said. The growers work under tighter profit margins and often live at or below the poverty line.
“The Bay Tax Equity Act recognizes that integrators should not be able to hide behind the growers. They’re effectively using them as human shields to avoid spending some of their billions of dollars in profits to help clean up the mess that their chickens make,” she said. “Paying the fee should be affordable for them.”
The relationship between growers and poultry companies is decades old, however, said Bill Satterfield, executive director the Delmarva Poultry Industry Inc.
The contracts yield considerable benefits for growers, including security.
As an example, he cited high grain prices that bankrupted 10 chicken companies across the nation several years ago, including two companies in Maryland.
“The farm families working with those companies continued to get paid. They did not take the losses those companies took in times of high grain prices,” Satterfield said. “So there are protections in there for the growers, and they’re not at poverty level as you heard.”
Satterfield cited the recent increase in poultry house construction on the Shore as evidence of the industry’s appeal to growers.
“If things were so bad, and they were at the poverty level, why would they be borrowing money for $350,000 worth of each house?” he said.
Satterfield also said he disagreed with a claim that the Shore’s 300 million chickens produce 1.5 billion pounds of manure each year.
It’s closer to 900 million, and between 1 and 3 percent is phosphorous while about 3 percent is nitrogen, he said. The rest is mostly wood shavings.
Perdue also ships a significant amount of the manure produced by poultry growers to regions outside the Bay watershed, Satterfield said, and organizations such as the Delmarva Poultry Industry Inc. are constantly looking at new technologies to more efficiently and effectively handle manure.
“It’s not a one-to-one connection that all the Maryland manure is Maryland land-applied, and therefore cover crop money should be paid for by the chicken companies,” Satterfeld said. “That correlation does not exist. This is a $15 million tax on five companies.”
The bill would also eliminate the process through which cover crops are currently funded — a Bay restoration fund from users of septic systems and sewage holding tanks. That would be a shame, said Lynn Hoot, executive director of Maryland Grain Producers.
“Maryland’s cover crop program is the envy of the country,” she said. “[The bill] sort of seems like it’s anti-poultry industry. … We would hate to lose that industry. I guess I just feel very concerned about the tone when you see this legislation.”
Supporters were also considering the size of industry’s piece of the GDP in the wrong way, said Kurt Fuchs, government affairs officer with MidAtlantic Farm Credit.
“What if that 0.35 percent were zero?” Fuchs said. “Agriculture is 100 percent of the food on your plate.”