Reinventing Regulation of Agriculture: Alternative Performance Standards for Concentrated Animal Feeding Operations

By Pease, James W.; Bosch, Darrell J. | Journal of Agricultural and Applied Economics, August 2004 | Go to article overview

Reinventing Regulation of Agriculture: Alternative Performance Standards for Concentrated Animal Feeding Operations


Pease, James W., Bosch, Darrell J., Journal of Agricultural and Applied Economics


Concentrated Animal Feeding Operations (CAFOs) are point sources of pollution and require Clean Water Act permits. The 2003 regulations allow Large CAFOs to propose alternative performance standards (APS) that offer equivalent or better environmental performance than the baseline technology. Principal obstacles to APS success include the complexities of demonstrating superior performance, cost uncertainties for obtaining approval, CAFO risks of participation, inter- and intra-organizational barriers of permitting agencies, and potential lawsuits brought by environmental groups. Despite obstacles, APS offers potential for technology innovations and reduced environmental compliance costs.

Key Words: Clean Water Act, Concentrated Animal Feeding Operation, performance standards, permitting, regulation

JEL Classifications: L51, Q51, Q52, Q53, Q55, Q58

Concentrated Animal Feeding Operations (CAFOs) are point sources of pollution under the Federal Water Pollution Control Act, which is popularly known as the Clean Water Act (CWA, 33 U.S.C. 1251 et seq.). The federal environmental regulations governing CAFOs were revised by the Environmental Protection Agency (EPA), for the first time in 25 years, in early 2003 (68 FR 7176, February 12, 2003). Approximately 10,500 of the largest CAFOs will require a National Pollutant Discharge Elimination System (NPDES) permit by 2006. Effluent limitations and standards (effluent limitation guidelines, or ELGs) in CAFO permits apply to management and disposal of manure, litter, and process wastewater and generally contain technology-based effluent limits based on specified pollution control technologies and practices, plus additional best management practices (BMPs).

Although land application is the most common form of waste disposal, a land-constrained CAFO may find that the adoption of a technology such as higher-order treatment/ utilization technologies used in public wastewater treatment plants is less costly than land application and may be able to demonstrate that pollutant discharges are less than those achieved with standard pollution-control technology. The revised regulations will allow a CAFO to propose alternative performance standards (APS) that will produce equivalent or better environmental performance (less discharge) than the baseline ELGs.

Sweeten, Miner, and Auvermann suggest that the APS approach offers significant opportunities for research and demonstration projects between the private and public sector, including methods and technology to (1) reduce dietary nutrient requirements and nutrient excretion, (2) improve vegetative systems that reduce loadings to bodies of water, (3) develop treatment systems to convert ammonia emissions to harmless nitrogen gas, (4) improve cost effectiveness and reduce atmospheric emissions of anaerobic digestion and thermal conversion systems, and (5) recover nitrogen and phosphorus byproducts from manure.

For the EPA, APS represents a significant departure from technology-based permit requirements for livestock feeding operation point sources and is a further step in the movement initiated by the Clinton administration to "reinvent regulation." For CAFO owners, APS offers the opportunity to develop and implement site-specific pollution prevention or treatment technologies that might lower compliance costs. As the APS program is launched, critical issues to be examined include the criteria and process that CAFOs must use to demonstrate equivalent or better than baseline performance, the consideration of multiple environmental pollutants and media in permits, incentives to participate, permit and monitoring requirements of delegated permitting authorities, and risks to CAFOs of participation. The focus of the present article is the APS approach and obstacles to its implementation.

Background

The CWA rules that regulate animal feeding operations were last modified with establishment of ELGs for feedlots in 1974 and subsequent CAFO regulations in 1976. …

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Reinventing Regulation of Agriculture: Alternative Performance Standards for Concentrated Animal Feeding Operations
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