Hidden Subsidies for Concentrated Animal Feeding Operations (CAFOs)

Various forms of agriculture in the United States receive government support or subsidies. For example, it is well established that production of ethanol from corn would not be economically feasible in the absence of government support. This used to come in the form of a subsidy of $0.45/gallon of ethanol. What is interesting, however, is that this subsidy expired in 2012. Did anyone hear a gigantic howl or protest from corn farmers in Iowa? Right, neither did I. The reason that corn lobby let this subsidy expire is because President Obama signed the Renewable Fuel Standard (RFS) into law. The RFS mandates that more than one third of the U.S. corn crop be converted to ethanol, which is then blended with gasoline. This mandate effectively creates an artificial demand for corn that props up the price, making it economical for farmers to grow corn for ethanol production. Now, corn is not the issue at hand. Ethanol production from corn is economical because the government mandates that it be so. However misguided, whether direct or indirect, this type of subsidy is obvious, measurable and lawful.

CAFO buildings and manure "lagoon"

Let me turn your attention to large animal feeding operations, or CAFOs as they are known. Animal production was concentrated in such a manner from smaller individual farms over the last 20-30 years, allegedly for reasons of economy. Whether this is true is doubtful, and something that can be discussed separately.

In these operations, such as the facility shown, animals are housed in large, cement-floored buildings. They are fed automatically, and their manure and urine is flushed from the floor into a holding tank below the facility, and then into a large reservoir or "lagoon." Simplistically, the economics of running a CAFO would seem to be the cost of the facility (land, buildings and infrastructure), food, animals, labor, electricity, fuel, and waste disposal, relative to the financial gains obtained from selling the animals. Sales minus costs equals profit. Business 101.

The liquid in the lagoon contains animal feces and urine, but also a large amount of bacteria, residues from feed additives, including hormones and antibiotics, and large amounts of nitrogen-based compounds including nitrate. Animals in CAFOs are fed a continuous stream of antibiotics to counteract the high rates of disease from concentrating animals in such a small space. A significant proportion of these drugs end up in the waste stream. Needless to say, bacteria growing in the presence of antibiotics is basically a Petri dish for developing antibiotic resistant bacteria.

So what happens to the contents of the manure lagoon? Here is where the problem with the CAFO model rears its head. Hogs produce about 6 lbs waste/day. Each building holds around 1,000-1,500 hogs, and hogs are raised until they are about six months old, so after a bit of simple multiplication, a facility such as that shown could produce well over two million pounds of waste per year, and this facility is relatively small. This waste is generally spread onto neighboring land, onto what is known as a sprayfield, but since CAFOs are by nature concentrated, there isn't enough land in the vicinity of the facility to safely dispose of all the waste.

Manure Cannon

So why isn't the CAFO waste sent to a sewage treatment plant for safe disposal? Manure is a valuable fertilizer, so why isn't it trucked somewhere to be processed and used? The answer to the first question is that such a plant would be enormous, both in size and cost. It isn't trucked somewhere to be used as fertilizer, to answer the second question, because the cost of removal is prohibitive. This where the Business 101 model breaks down. Paying for waste disposal leads to a negative profit. Negative profits are bad.

The waste is generally disposed of in a manner that violates either or both of the Clean Water Act and the Clean Air Act, and CAFOs fall under the jurisdiction of both of these laws. Overloading soils with liquid manure and/or dumping the waste directly into waterways has dire environmental consequences. Without going into detail, state and federal environmental protection agencies either allow these violations to occur without penalty or heavily subsidize waste disposal with taxpayer money. If our governments were to require CAFOs to follow the law and dispose of their waste in a safe manner – at their own expense – the production of meat by this method would not be economically feasible. Plain and simple, lack of enforcement of these laws is a hidden subsidy that is operationally no different than paying farmers to grow corn to produce ethanol. In one case, a cost that should be born by the corporation is passed onto the taxpayer, in the other, a direct or indirect government payment is made to the corporation.

This discussion does not even begin to discuss the myriad problems of CAFOs. Humane treatment of animals, meat quality, antibiotic use, corporate ownership, near poverty levels of income for CAFO farmers, these are completely separate topics that should, and eventually will turn the public's stomach and bankrupt CAFOs. This cannot happen too soon.

I would like to thank Nicolette Hahn Niman, whose talk at the 2013 OEFFA conference inspired this post. Her book, "The Righteous Porkchop" is an excellent read on the subject of meat production.