Academic journal article International Review of Management and Business Research

Financial Evaluation of the Technology Used for Waste Management in Swine Farms in Mexico

Academic journal article International Review of Management and Business Research

Financial Evaluation of the Technology Used for Waste Management in Swine Farms in Mexico

Article excerpt

Introduction

Food and Agriculture of the United Nations (FAO) studied, in January 2000, the effects on the environment caused by pork production operations in central Mexico. The results of these studies showed that certain procedures require a restructuring to mitigate the effects of pollution caused by waste, as they are discharged into land or water without treatment.

The National Institute for Forestry, Agriculture and Livestock (INIFAP), the National Autonomous University of Mexico (UNAM) and the Swiss College of Agriculture created a report for the FAO in 2002, stating that when manure is applied to land properly, it increases soil fertility, improves its structure and does not cause pollution. However, when manure is uncontrollably spread on the land, this results in a major environmental risk to air, soil, and water (surface and groundwater) quality. They also mentioned that methane, nitrous oxide, and nitric acid are produced there for increasing the greenhouse effect which contributes to increased temperatures then transcends to climate change.

Nowadays, there is great concern about human activities that contribute to the increase of gases that cause the greenhouse effect, therefore, the Mexican government implemented projects using clean technology to help the environment and contribute to regional development. Sierra (2009) states that more projects of Clean Development Mechanism (CDM) are waste management in pig farms, making this an option for sustainable and regional development.

The proposed mitigation of greenhouse gas (GHG) emissions from pig farms have a local impact, which includes the creation of jobs and economic benefits for the region via alternative energy generation and sale of carbon credits, both situations promote the profitability of the company and encourage investment. Sutter (2003) and Olsen (2007) argue that profitability is the main idea in CDM projects; Wara (2006) concurred stating that projects are profitable because they dominate the market and some generate huge economic benefit in sale of credits. The same way Ezcurra and Gaioli (2007) mention that one advantage of these projects is the ability to sustain itself through revenues generated from the sale of certified emission reductions (CERs); therefore facilitating a project that could not be implemented because it was not economically viable, or facing technical and high financial risk, can finally be implemented, thereby reduce GHG emissions.

Background of the Problem

Globally, Mexico ranks in 15th place in pork production. In 2008, the number of cattle was 15,230,631 and meat production was around 1,160,677 tons of which 67,800 tons were exported and the rest consumed domestically. In this same year (2008) the rate of consumption increased by 3% and estimated that the per capita consumption was about 14 kg. Of the total meat production, pork has 21% nationwide (SAGARPA. 2009).

This increase in production has led to an increase in the size and number of pig farms, the results of the Census of Agriculture - Livestock INEGI (2007) indicates that there were 979,348 units (pigs) in the country. This resulted in an increase in pollutant capacity of pig farms, especially in regions where pig population density is high.

The decomposition of manure causes serious environmental consequences from the production of gases such as methane and nitrous oxide, in the vast majority of farm this is not collected; instead it is released into the atmosphere. These gases are released through fermentation of animal manure, as well as nitrification and denitrification, the latter as the process associated with nitrogen volatilization also unpleasant odors and the pollution of land and water resources occur.

This situation has prompted the Mexican government in coordination with FAO, have implemented a series of actions to support the reduction of greenhouse gases, including the collection, burning or exploiting biogas is one of them, this will mitigate environmental impacts including odors. …

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