MSU Agricultural, Food, and Resource Economics
Under the Federal Water Pollution Control Act of 1972, or also commonly known as the Clean Water Act (CWA) since 1977, the Environmental Protection Agency (EPA) classifies concentrated animal feeding operations (CAFOs)1 as point source polluters and non-CAFOs as non-point source polluters. The CWA requires that all CAFOs or dairy farms with 700 or more milking cattle maintain a performance standard consisting of National Pollutant Discharge Elimination System (NPDES) permits (Section 402). Dairy farms with less than 700 cows or non-CAFOs are not required to maintain NPDES permits though non-CAFOs are sources of water quality contamination. Due to economies of size in the adoption of newer milk producing technologies, the dairy industry in the United States is rapidly moving towards fewer dairy producers and larger herds. This restructuring of the dairy industry has resulted in an increase in the number of CAFOs.
Point-source pollution problems have been addressed by the U.S. federal government through efforts to prevent degradation resulting from the treatment of sewage plants, businesses and factories (Batie and Arcenas, 1998). However, non-point source pollution problems are more pressing concerns with the agricultural sector as the primary source of non-point source pollution. These problems result in water and soil quality changes as a result of the emission of pollutants, mainly nitrogen, phosphorus, and patbogens that are difficult to detect and measure.
The EPA, with the help of the CWA, launched a massive effort to restore the quality of the nation's waters. In its efforts to deal with non-point sources of pollution, the EPA initiated NPDES permits as an enforcement tool for CAFOs. Although these NPDES pennits are a federal requirement, due to lack of personnel, CAFO permits are administered by the state environmental agencies (Casey et al., 1999).
The state of Michigan, striving to design programs to prevent environmental degradation from all livestock operations, in May 1998, created the Michigan Agricultural Environmental Assurance Program MAEAP. The MAEAP is a voluntary program for all livestock operations. This study, focuses solely on Michigan dairy operations. The MAEAP encourages participating Michigan dairy farmers to develop their own farm specific Comprehensive Nutrient Management Plans (CNMPs). A CNMP is a voluntary effort by the dairy farmers that assists in meeting desired pollution prevention and reduction goals at both, the federal and state level. Since the state of Michigan has not yet administered CAFO permits, it is expected that participation in the MAEAP might fulfill federal policy expectations offering voluntary and potentially less expensive alternatives for manure management.