Debate on Poultry Feed Subsidies Rekindled In U.S.

China 's imposition of countervailing duties, ranging from 3.8 percent to 31.4 percent, on imports of chicken products from the United States has renewed debate about the extent to which U.S. subsidies on feed raw materials have benefited poultry producers.

Political leaders including House Agriculture Committee Chairman Collin Peterson (D-Minn.) have dismissed poultry industry complaints about ethanol-induced increases in feed prices by noting that decades of U.S. subsidies for corn and soybeans have benefited chicken and turkey producers.

Beijing 's Ministry of Commerce recently made a preliminary determination that U.S. chicken producers unfairly benefit from the subsidies for corn and soybeans. The new duties were in addition to anti-dumping duties imposed Feb. 13, which ranged from 43.1 percent to 105.4 percent and essentially halted U.S. exports to China for chicken products covered by the duties.

The National Chicken Council says trade lawyers have estimated that China could make final determinations for both the anti-dumping and countervailing duty cases before the end of the year.

China 's finding corresponds with a critical study published in December 2007 by the Global Development and Environment Institute at Tufts University in Massachusetts . It estimated that the discount to the corporate broiler industry from U.S. agricultural policy averaged $1.25 billion a year between 1997 and 2005.

Under what they call the "Feeding the Factory Farm," project, the Tufts researchers found that the market price during that period averaged 23 percent below the production cost of corn and 15 percent below cost for soybeans.

During those nine years, chicken feed sold for 21 percent below the cost of production for its raw materials. Because feed accounts for 60 percent of broiler production cost, the institute said the "discount" kept total costs 13 percent lower than they would have been if corn and soybean meal were priced at full cost of production.

GDAE also claimed that subsidies annually saved $733 million for "industrial dairies," $501 million for "industrial beef cattle" and $433 million for egg producers. Over the nine years, it estimated savings to livestock production of nearly $35 billion.