(Nov. 13, 2014) After weeks of delays, the Business Economic and Community Outreach Network at Salisbury University has released its study on how imposing major restrictions on fertilizers containing phosphorus would affect Maryland farmers financially.
The cost is big, ranging from $22 million to $51.6 million, depending on which of three proposed scenarios the study outlines.
The problem with phosphorus, which is found in the chicken manure often used as fertilizer, is that it is a nutrient that not only boosts crop growth, but also spurs the growth of oxygen-depleting algae in the Chesapeake Bay after it finds its way there via runoff from tilled lands.
The study, “A Scenario Analysis of the Potential Costs of Implementing the Phosphorus Management Tool (PMT) on the Eastern Shore of Maryland,” was tacked on to the state’s 2014 budget after it appeared Gov. Martin O’Malley would introduce legislation regulating phosphorus levels in chicken.
The Department of Agriculture commissioned the study and SU professor Dr. Memo Diriker handled the writing duties.
Input from MDA, the Environmental Protection Agency and others involved in the agricultural business yielded more than 4,500 pages of research and the proposal of three scenarios.
The first scenario employed a two-year implementation schedule with nutrient management plans being developed in 2016, by using the existing measuring tool, the Phosphorus Site Index, and the new PMT. In year two, farmers could not apply any fertilizer containing phosphorus on farms that receive a PMT Risk Score of 100 or greater. The scenario provided $1.4 million in subsidies to offset manure transportation during the first year and an additional $1.4 million beginning in year two.
The second scenario calls for a two-year phase-in of restrictions allowing for development of storage and transportation infrastructure, while scenario 3 proposes a six-year implementation schedule along with additional subsidies, incentives and investments for capital expenditure and infrastructure development.
All three scenarios assumed farmers would need to haul 228,000 tons of chicken litter from Maryland farms annually with an average traveling distance of 50 miles and a cost of $28 per ton. Scenario 3 proved to have the lowest six-year subsidized cost with an estimated $22.5 million, versus $30 million for scenario 2 and $51.6 million in scenario 1.
Diriker said the southern part of the Eastern Shore would shoulder the majority of the cost, while the northern nine counties would see most of the benefits.
Although the study used the Chesapeake Bay Foundation’s Oct. 2014 “Clean Water Blueprint” study, claiming a $4.6 billion increase in annual revenue after PMT implementation, Diriker admitted determining the actual value was not an exact science.
“It is not that difficult to determine the value of moving a ton of manure 50 miles within a certain range … however there is no such metric available that says for every ton of phosphorus you remove the bay value increases by ‘x’ dollars,” he said.
The study did develop a template that farmers could use to calculate what Diriker called “impact cost benefits” once the PMT is put into place.
Diriker admitted there were significant differences in opinions and a “lack of “trust” by some of the stakeholders, but said he was confident in his findings.
“I spent countless hours trying to make sure that I captured all those differences of opinion, captured those variances and created a very robust simulation model,” he said. “Given what we know … nobody will be able to say it will be 100 percent accurate, but I’m pretty confident that if [scenario 3] is implemented the way it is [written] that it is the most accurate scenario we have.”
Diriker declined to estimate a cost to the average farmer.
“Having lived there on the shore for 26 years, honestly there is no such thing as an average or typical farm,” he said.
State Secretary of Agriculture Earl Hance called the study “intense” and said the delays were necessary to allow, “Dr. Diriker to have all the time he needed to evaluate all the data that had been collected.”
“I don’t think he anticipated as much data as he finally did end up receiving, so we wanted to be sure there was adequate time to analyze all that data.”
Hance echoed Diriker’s support of the third scenario.
“I think that we all agreed that a longer implementation spreads out the impact,” he said. “Farmers are going to have to change the way they operate their farms based on the PMT and it gives them more time to adapt, both on a resource base and on a financial base.”
Hance deflected GOP allegations that the delay of the study was politically motivated, despite the fact that the release occurred exactly three days after the off-year elections.
“There were some issues with the writing of the report,” he said. “The date when we actually got the report in hand and started reading it ourselves I think we had some concerns about people having a better handle on what the data meant and what the findings were. There were some last-minute changes made, and as soon as those were done and approved is when we finally made the release last week.”
There is no timetable for phosphorus management implementation, according to Hance, although he said the O’Malley administration is “doing some analysis and trying to figure out the next steps forward.”
The cost is big, ranging from $22 million to $51.6 million, depending on which of three proposed scenarios the study outlines.
The problem with phosphorus, which is found in the chicken manure often used as fertilizer, is that it is a nutrient that not only boosts crop growth, but also spurs the growth of oxygen-depleting algae in the Chesapeake Bay after it finds its way there via runoff from tilled lands.
The study, “A Scenario Analysis of the Potential Costs of Implementing the Phosphorus Management Tool (PMT) on the Eastern Shore of Maryland,” was tacked on to the state’s 2014 budget after it appeared Gov. Martin O’Malley would introduce legislation regulating phosphorus levels in chicken.
The Department of Agriculture commissioned the study and SU professor Dr. Memo Diriker handled the writing duties.
Input from MDA, the Environmental Protection Agency and others involved in the agricultural business yielded more than 4,500 pages of research and the proposal of three scenarios.
The first scenario employed a two-year implementation schedule with nutrient management plans being developed in 2016, by using the existing measuring tool, the Phosphorus Site Index, and the new PMT. In year two, farmers could not apply any fertilizer containing phosphorus on farms that receive a PMT Risk Score of 100 or greater. The scenario provided $1.4 million in subsidies to offset manure transportation during the first year and an additional $1.4 million beginning in year two.
The second scenario calls for a two-year phase-in of restrictions allowing for development of storage and transportation infrastructure, while scenario 3 proposes a six-year implementation schedule along with additional subsidies, incentives and investments for capital expenditure and infrastructure development.
All three scenarios assumed farmers would need to haul 228,000 tons of chicken litter from Maryland farms annually with an average traveling distance of 50 miles and a cost of $28 per ton. Scenario 3 proved to have the lowest six-year subsidized cost with an estimated $22.5 million, versus $30 million for scenario 2 and $51.6 million in scenario 1.
Diriker said the southern part of the Eastern Shore would shoulder the majority of the cost, while the northern nine counties would see most of the benefits.
Although the study used the Chesapeake Bay Foundation’s Oct. 2014 “Clean Water Blueprint” study, claiming a $4.6 billion increase in annual revenue after PMT implementation, Diriker admitted determining the actual value was not an exact science.
“It is not that difficult to determine the value of moving a ton of manure 50 miles within a certain range … however there is no such metric available that says for every ton of phosphorus you remove the bay value increases by ‘x’ dollars,” he said.
The study did develop a template that farmers could use to calculate what Diriker called “impact cost benefits” once the PMT is put into place.
Diriker admitted there were significant differences in opinions and a “lack of “trust” by some of the stakeholders, but said he was confident in his findings.
“I spent countless hours trying to make sure that I captured all those differences of opinion, captured those variances and created a very robust simulation model,” he said. “Given what we know … nobody will be able to say it will be 100 percent accurate, but I’m pretty confident that if [scenario 3] is implemented the way it is [written] that it is the most accurate scenario we have.”
Diriker declined to estimate a cost to the average farmer.
“Having lived there on the shore for 26 years, honestly there is no such thing as an average or typical farm,” he said.
State Secretary of Agriculture Earl Hance called the study “intense” and said the delays were necessary to allow, “Dr. Diriker to have all the time he needed to evaluate all the data that had been collected.”
“I don’t think he anticipated as much data as he finally did end up receiving, so we wanted to be sure there was adequate time to analyze all that data.”
Hance echoed Diriker’s support of the third scenario.
“I think that we all agreed that a longer implementation spreads out the impact,” he said. “Farmers are going to have to change the way they operate their farms based on the PMT and it gives them more time to adapt, both on a resource base and on a financial base.”
Hance deflected GOP allegations that the delay of the study was politically motivated, despite the fact that the release occurred exactly three days after the off-year elections.
“There were some issues with the writing of the report,” he said. “The date when we actually got the report in hand and started reading it ourselves I think we had some concerns about people having a better handle on what the data meant and what the findings were. There were some last-minute changes made, and as soon as those were done and approved is when we finally made the release last week.”
There is no timetable for phosphorus management implementation, according to Hance, although he said the O’Malley administration is “doing some analysis and trying to figure out the next steps forward.”