Sunday, January 16, 2022

CAFOs and Surface Water Quality: Evidence from Wisconsin

Concentrated animal feeding operations (CAFOs)—animal feeding operations with over 1,000 animal units in confined spaces—have proliferated over the past thirty years in the United States. CAFOs provide operational cost savings, but higher animal concentrations in confined spaces can generate external costs, for example, non-point source water pollution. In this study,  Zach Raff  and Andrew Meyer improve on previous research designs to estimate the relationship between the growth in CAFOs and surface water quality using longitudinal data on a large spatial scale.  Raff and Meyer use a panel dataset from 1995–2017 that links CAFO intensity with nearby surface water quality readings in Wisconsin to perform our analysis. Leveraging variation in CAFO intensity within hydrological regions over time, they find that increasing CAFO intensity increases the levels of nutrients, specifically total phosphorus and ammonia, in surface water; adding one CAFO to a Hydrologic Unit Code-8 (HUC8) region leads to a 1.7% increase in total phosphorus levels and a 2.7% increase in ammonia levels, relative to sample mean levels. As an important contribution of our work, they use these results to calculate the external costs of surface water quality damages from CAFOs in Wisconsin. Our results imply that the marginal CAFO in Wisconsin produces non-market surface water quality damages of at least $203,541 per year.
Raff and Meyer ... use water quality index and benefit transfer methodologies to convert increased nutrient concentrations associated with CAFO expansion to losses in non-market surface water quality benefits, that is, damages. This methodology estimates changes in a water quality index and monetizes the changes with a benefit transfer function. They estimate an annualized WTP (Willingness-To-Pay) of $3–$12 per Wisconsin household for the improved water quality that would exist in the counterfactual world with one fewer CAFO in each HUC8 region. Aggregated to the entire state, Wisconsin households would be willing to pay between $6.9 million and $27.9 million annually for one fewer CAFO in each HUC8 region.
Raff and Meyer are aware of only two monetized estimates of CAFO related external costs in dimensions other than surface water quality. First, Herriges, Secchi, and Babcock (2005) estimate that, in Iowa, upwind CAFOs decrease home prices by 3%, which is roughly $2,500 for the average home in their sample. Second, Sneeringer (2010) estimates that the annual air pollution related damages from hogs in the United States are $31 per animal. Applying this value, a CAFO with 2,500 hogs (equivalent to 1,000 animal units) produces $77,500 in air pollution damages per year. In addition to these monetized damages, previous studies find that CAFO exposure is associated with damages to individual health (Sigurdarson and Kline 2005; Radon et al. 2007)50 and occupational safety (Ramos, Fuentes, and Carvajal-Suarez 2018). Other potential, but not yet studied, damages include commercial fishing impacts, increased contamination of private wells, and increased water treatment costs (EPA 2002b).51 To achieve efficiency in CAFO product markets, policymakers and regulatory agencies can use our results, combined with those of previous studies, to develop policy that factors the external costs of CAFOs into their production decisions.

Also important for CAFO policy, they present evidence that the extreme concentration of manure in fewer locations likely drives the surface water quality damages. Thus, CAFO control policy should require better manure management, for example, subsidies to transport the manure off site, to better control the surface water damages from these operations. However, future work should examine the specific avenue by which nutrients enter surface waterbodies, for example, leaching, spreading....
by Zach Raff 1 and Andrew Meyer 2
1. University of Wisconsin-Stout, Menomonie, Wisconsin, USA.
2. Marquette University, Milwaukee, Wisconsin, USA.
American Journal of Agricultural Economics via Wiley Online American Journal of Agricultural Economics - Wiley Online Library

No comments:

Post a Comment