A farm in the Kaohsiung County township of Daliao saw 9,000 ducks culled after tests showed up to 5 times the maximum allowed level of dioxin.
The Environmental Protection Administration (EPA) said none of the birds had been sold to the public, though lawmakers and academics were doubtful.
The ducks reportedly absorbed the dioxin by drinking water from a pond contaminated by a nearby illegal dumping site for slag from a steel furnace.
The EPA reportedly told opposition Democratic Progressive Party lawmaker Huang Sue-ying that inspectors first visited the farm on Nov. 7 and banned the movement and sale of the birds. Later tests showed 2-5 times the maximum permissible level of 2 picogram per gram of fat in the birds.
The ducks were slaughtered and destroyed at the Kangshan incinerator, reports said. Dioxin was also found in animal feed and in the soil at the farm, according to the EPA.
Huang said she had first told the EPA of suspected problems at the site of the farm last June, 5 months before the government department went to conduct tests.
Local environmental activists said there were 7 locations in the area where polluted materials from the steel plant were dumped.
Lawmakers doubted whether the birds were the only problem, since the local water was also used to raise fish and pineapple fields were located close by the suspected heavy metals.
There was no requirement for toxic refuse from steel factories to be registered until 2001, said EPA official Wang Chun-yuan, suggesting the site might have been used for dumping heavy metals beginning a long time ago.
The case of the dioxin ducks followed the alleged discovery of pesticides in green tea leaves for sale at the National Palace Museum in Taipei, and the general unease about the safety of bone-in beef imported from the US.