A long-awaited study on the economic cost of new regulations on manure from Maryland’s Eastern Shore farms estimates that reducing pollution from poultry operations would cost between $21.3 million and $52.5 million.
The study released Friday examined three scenarios for implementing the phosphorus management tool, which would limit the use of manure on cropland already saturated with phosphorus where runoff potential is high.
The first scenario involves Maryland farmers reducing the phosphorus they put on their fields over the course of two years and was the most expensive option, at a range of $50.6 million to $52.5 million. The second scenario allows farmers to reduce phosphorus over three years, and would cost between $29.7 million and $30.7 million. The third scenario would phase in the regulations over six years and would cost between $21.3 million and $23.7 million.
In all scenarios, the reductions would begin in 2016.
The analyses, led by a Salisbury University economist, only examined the costs associated with reducing phosphorus use, not the benefits of the cleaner water that would be a result.
The new phosphorus management tool would increase costs to farmers because they could no longer apply manure, a relatively cheap fertilizer, on large areas of Eastern Shore cropland. Manure is high in both nitrogen and phosphorus, but the phosphorus is less available to plants. As a result, when farmers apply enough nitrogen to meet the demands of crops, they are usually over-applying phosphorus. If phosphorus-saturated lands become off-limits for manure, farmers would need to purchase inorganic fertilizer to meet the nitrogen demands of their crops.
They would also bear additional costs such as having to write new nutrient management plans. Haulers would also incur more costs as they would have to take the manure further from areas with large amounts of phosphorus-saturated soils to find new customers.
For at least the last decade, scientists have warned that the widespread application of poultry manure on the Shore was harming the Chesapeake Bay, contributing to algae blooms and oxygen-starved dead zones that can be lethal to fish, crabs and other marine life.
Recent estimates by soil scientist Josh McGrath, who used to be at the University of Maryland but has since moved to the University of Kentucky, showed that nearly half the farms on the Eastern Shore had so much phosphorus that they could safely absorb no more.
Since 2005, Maryland farmers have been required to have phosphorus management plans, as well as nitrogen plans, to guide manure and fertilizer applications. As part of those plans, farmers have used a phosphorus index to estimate the likelihood that the nutrient would reach waterways. But, if phosphorus levels were too high, farmers were still allowed to “offset” the impact with other best management practices, such as stream buffers and cover crops, to reduce runoff. But regulators rarely measured the practices to make sure they were delivering the intended reductions.
Maryland made a commitment as part of its plan to achieve the Chesapeake Bay Total Maximum Daily Load nutrient reduction goals to substantially reduce phosphorus from agriculture. Gov. Martin O’Malley, who is leaving office in a few weeks, has pledged to honor his commitment.
Under the new phosphorus management tool, the state would prohibit farms that receive a PMT risk score of 100 or greater from receiving any more phosphorus. The score, which takes into account a number of factors, is supposed to help better gauge the soil saturation and therefore the likelihood that the phosphorus will run off.
The various implementation scenarios examined in the study vary in the amount of time farmers would have before that prohibition on additional phosphorus applications would be fully phased in, with the longest, six-year threshold also using a higher 150 score during the phase in period.
One concern is that the shorter the phase-in, the less time farmers have to figure out what to do with excess manure. Some farmers say it has already become difficult to find haulers willing to accept manure when they clean out their poultry houses.
“This is as good as it gets in determining the actual implementation costs,” said study author Memo Diriker, a professor with the Perdue School of Business at Salisbury University, during a media briefing. “I spent countless hours trying to make sure I captured all opinions and created very robust simulation models.”
But the economic study was not without controversy. It was supposed to have been released several weeks earlier but was delayed several times because Diriker needed to review more data.
Maryland tried three times to mandate the phosphorus management tool, but pulled it back each time due to protest from farmers. During the 2014 legislative session, Sen. Jim Mathias and Del. Norm Conway, both Eastern Shore Democrats, inserted budget language requiring an economic study on how the new restrictions would impact farmers, although the Maryland Department of Agriculture had already been looking into that issue.
Department spokeswoman Julie Oberg said Diriker was one of two bidders on the new study, and the only one who said he could get it done on time.
Some questioned the selection of Diriker, though, because of his lack of agricultural background which was of concern to both farmers and environmentalists. As a result, Diriker set up advisory panels from both sides of the phosphorus debate to take in various views.
But at some point, Diriker stopped holding the meetings, said Abel Russ, a staff attorney with the Environmental Integrity Project who served on one of the panels. Russ and several other representatives of environmental groups wrote Diriker a letter complaining they felt shut out of the process.
Some also questioned how Diriker reached some of his conclusions. For example, the report estimates the cost of replacing manure with conventional fertilizer at $60 to $75 a ton, and as high as $90 in some scenarios.
Because replacement fertilizer only needs to be nitrogen, it could be considerably cheaper. Tom Simpson, a longtime agriculture specialist who was not on the panel or part of the study, said the current price per ton would be less than half of Diriker’s estimates. Also, the inorganic fertilizer is more efficient to apply.
“With litter, you’re using equipment not designed for rapid application,” Simpson said. “That’s one reason a lot of non-poultry growers are not interested in it, even with the nigh costs of inorganic fertilizer.”
Diriker said his work did factor in the difference in application rates. Still, he could not estimate the added cost to the average farmer.
“It is not in our scope of work to look at quote an average farm, a typical farmer,” he said. “It would have been less than a guestimate to be able to do that.”
Despite his dissatisfaction with the process, Russ said the outcome is better than he feared. “It’s flawed, it’s overly simplistic and it’s not very good. But the conclusion is the benefits of the tool outweigh the cost,” Russ said of the study. “He’s admitting there are problems with the model, and to do a better analysis, they have to track implementation. That’s the right thing to say. Because this rule is long overdue, and it’s desperately needed.”