A step forward on CAFOs


When the EPA finalized the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and the Emergency Planning and Community Right-to-Know Act (EPCRA) in 2008 and specified which entities were required to report the release of hazardous substances, it granted an exemption to Concentrated Animal Feeding Operations (CAFO’s). (My earlier posts on CFO’s are here and here). While all other agricultural entities – small family farms, mid-size cattle operations, etc. – were required to report all releases of such materials, CAFO’s only had to report them if they exceeded an extraordinarily high threshold. EPA reasoned that CAFO’s were exempted because their releasing of these substances is continuous and would therefore make it very difficult to regulate (http://agrisk.umd.edu/blog/court-of-appeals-rules-against-animal-ag-reporting-exemption-in-two-environmental-laws?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MarylandAgriculturalLawBlog+%28Maryland+Risk+Management+Blog%29). The substances in question include sulfates, nitrates, methane, ammonia, and others. Almost all of them are products of at least some form of agricultural activity. For instance, ammonia and methane are released from cattle manure, and when the manure decomposes it releases hydrogen sulfide (http://www.williamsmullen.com/news/dc-circuit-strikes-down-cercla-reporting-exemptions-animal-feeding-operations). Nitrates are released into water sources when they are applied to corn fields, and many other substances are released when synthetic applications become part of the crop cycle.

When this directive was issued, environmental interest groups immediately filed suit against the EPA. The DC Circuit Court of Appeals has now made a judgement and has removed the exemption given to CAFO’s back in 2008. The court found that there was no legal basis in either CERCLA or EPCRA for EPA to exempt CAFO’s from the reporting requirement (http://www.jdsupra.com/legalnews/d-c-circuit-strikes-down-cercla-12189/). CAFO’s are now required to report all releases of hazardous substances to the EPA, and EPA is legally bound and authorized to enforce the guidelines contained in CERCLA and EPCRA.

This is very good news. Complying with the reporting will be significantly costly for CAFO’s. CAFO’s therefore have a very powerful incentive to either pay the price for all of their past environmental harms and change their practices or go out of business (http://www.williamsmullen.com/news/dc-circuit-strikes-down-cercla-reporting-exemptions-animal-feeding-operations). Some of them will probably try to  fight the ruling in court, but whatever happens, CAFO’s are now under a significant amount of pressure to improve their waste management practices.

However, there is one catch. In their ruling, the Court allowed CAFO’s to utilize an annual reporting cycle, which is only acceptable when releases are continuous and stable according to CERCLA’s definition. We might see CAFO’s trying to prove that their releases are not continuous, which would be ironic indeed given that the EPA’s original rational for not regulating CAFO’s was that their releases were inherently continuous. As unlikely as it may be, some CAFO’s could try to bend the rules to classify their releases as continuous.

A set of rules called the Farmer Fair Practice Rules are in the pipeline for ratification and enactment, but the current administration has delayed the process at certain points. These rules would be tremendously helpful for contract farmers who have suffered injustice at the hands of large agribusiness corporations (http://civileats.com/2017/05/17/chicken-farmer-to-president-trump-its-time-to-drain-the-big-meat-swamp/). Solidification and enforcement of these rules is a massive priority for those fighting for justice in this realm.

At the same time, a new strategy for pressuring CAFO’s to change their ways has recently emerged from, of all places, the investment and banking sector. Several financial experts with an eye toward environmental issues have proposed that investors could divest themselves of their share in a CAFO’s stock (or threaten to do so) unless practices are changed (http://www.gracelinks.org/blog/7920/can-factory-farm-divestment-work?utm_source=GRACE+Newsletter&utm_campaign=0434c91669-EMAIL_CAMPAIGN_2017_05_09&utm_medium=email&utm_term=0_d8918a9897-0434c91669-119808721). I’ve written on this blog many times about the paramount importance of using financial incentives to create change because money is the most powerful and efficient motivator in the political and economic world. I am therefore a proponent of this idea of potential or actual divestment by investors as a way of incentivizing much-needed change. This process requires alerting investors to the financial risks associated with investing in CAFO’s. For instance, one might highlight to investors the environmental issues associated with CAFO’s and the rapidly increasing possibility for litigation on such issues now that the DC Circuit Court has removed the previous exemption. One could also point out the environmental injustices and governance problems associated with waste overflow and water contamination and the litigation possibilities there.

This is going to be even more difficult because of expansion efforts that are currently being undertaken by the pork industry in particular. By the close of 2018, it is highly likely that four new CAFO’s will have been opened in Michigan, Iowa, and other places. And hog CAFO’s aren’t just increasing in number – they are increasing (sometimes even doubling or tripling) the number of sows they can handle at a time (http://www.agriculture.com/livestock/pork-powerhouses/pork-powerhouses-2017-expansion-spells-trouble?utm_source=ag-newsletter&utm_medium=email&utm_campaign=todaysnews_100217&did=175672). This is possible because the price of grain for feeding animals is cheap; cheap grain gives the meat production industry an incentive to take advantage of the low prices in order to make a profit. This has resulted in explosive growth rates for many of the nation’s largest hog CAFO’s, which have added up to 30,000 sows to their operations by buying up already-existing farms and expanding their facilities. These expansions have created a labor vacuum, and many CAFO executives are replacing human tasks with technological developments. This creates concerns about what will happen when the labor market finally catches up to these CAFOs and none of the previous jobs are available. These new developments, as well as the increasing level of vertical integration in the pork industry, are slowly raising the price of pork. Pork producers, of course, do not like this development and are pushing for an expansion of pork consumption. My concern is that, if it gains enough momentum, the pork industry will become what the chicken industry has become. This makes the implementation of the Fair Farmer Practice Rules all the more important.







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