Economic Implications of Water Pollution Abatement in Family Farm Livestock Production

Investments in livestock waste management systems on family farm would range from a few dollars to half or more of total initial cost of modern confinement systems. Control of animal wastes beyond what farmers are already doing would add to cost with no offsetting change in returns on most farms. The immediate impact of additional pollution abatement is a reduction in income. It would fall more heavily on some producers than others. Farmers who annually produce about 50 hogs on pasture may be little affected. Net income may be severely reduced, however, on many farms where more hogs are produced in open lots. Added drainage control and waste storage could increase costs as much as $6 per head for a 500-head, open-lot operation. Continued operation might then be unprofitable. Producers who use complete confinement can very likely meet environmental quality standards for little added cost. Shifting from surface application to soil injection of wastes would raise costs only about $0.16 per hog in a 1,500-head operation. Large volume (5,000 head) producers without a cropland base could encounter either intolerable added costs or net gains if new ways to capture values from wastes are devised. A high-quality environment is important to farmers, but impediments to change exist: (1) Farmers and lenders are not certain of the performance of alternative methods of pollution control or the level of environmental quality that will eventually be required; (2) the market offers no economic incentive to change; (3) diseconomies of size exist; (4) age and tenancy make durable investments unattractive; and (5 ) technical assistance is not yet available in the amount that will be required by new and pending legislation.