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VII. Capture of Environmental Externalities

The utilization and disposal of animal manure and dead animals has become a concern, as discussed in Chapter 3, as the structure of the industry has shifted toward fewer but larger operations, and the percentage of animals raised in confinement has increased. Traditionally, farmers applied manure to agricultural land to promote plant growth thereby recycling much of the nutrients. With fewer but larger operations, relying on inputs trucked in from the outside, the manure has become more concentrated in localized areas. When application rates exceed the carrying capacity of the land to assimilate nutrients, repeated applications can lead to a buildup of nutrients in the soil. This in turn, increases the potential for nutrients to move from the field through leaching and runoff and to pollute ground water (Kellogg et. al., 2000).

In this study there are two disposal issues originating from livestock operations that are of particular concern. These are the manure generated from each animal and dead animals generated from mortality. It is estimated that broilers and dairy produce 80 lbs (36 kg) of manure per day per animal unit, layers produce 60.5 lbs (27 kg) per day per animal unit, and swine produce 63.1 lbs (29 kg) per day per animal unit. With the current livestock populations in the study countries and their expected growth there may be a problem. In this chapter, two measures are used to look at differences across size of farms in their ability to internalize the environmental externality associated with manure and dead animal disposal. One measure looks at the ability of different size farms to assimilate the entire nutrients produced on farm in terms of the estimated mass balance of nutrients produced from the manure. The second looks at expenditure differences across different size of farms to mitigated negative environmental effects from manure and dead animal disposal. These measures are used to test hypothesis 3, viz: small-farmers expend a higher amount of effort/investment in abatement of negative environmental externalities per unit of output than do large farmers, and to understand why this may be the case.

This chapter first discusses the relationship between concentration of livestock production and mass nutrient balances in the environment. Then pathways for nutrient disposal from livestock production are portrayed from the country chapters. Next calculations are made for the relative contributions of large and small farms to excess nutrient balances in the study countries. Finally, results are presented comparing differences across large and small farms in average effort to mitigate negative environmental externalities, using the approach laid out in Chapter 4. Thus this chapter attempts a both a direct and an indirect approach to the issue of who pollutes more per unit of livestock output in the study countries: large or small farms?

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