Course:ECON371/UBCO2009WT1/GROUP4/Article8

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Group 4 - The Environmental Impacts of Agriculture in British Columbia

Article:[1]

Summary:

Feed lot operators (meat producers) proposed building slaughterhouse waste disposal operations in three BC interior communities. The proposal has been turned down by the BC Government. The current practice of animal waste products from slaughterhouse operations, including those that may contain prion proteins (mad cow disease) and other bi-products that may cause human health problems, are trucked to disposal sites in Alberta.

Local residents opposed the proposal to have animal waste products disposed of in their communities. One community raised funds to hire an independent consultant to identify the potential risks (externalities) associated with a disposal operations on local water supplies. The consultant apparently identified risks to water quality associated with the proposed animal waste disposal operation.

In contrast to the government's position, a Ministry of Agriculture employee is on record indicating that command and control standards would provide adequate security against health risks - providing support to the feed lot operators proposal.

Instead of supporting the locally developed business proposal, Provincial funding support (a subsidy) will be spent on improving collection and handling infrastructure in the three interior communities. The government subsidy will support the current Alberta company's business activities of handling the special waste and transport to a disposal site located in Alberta. Local waste disposal operations may generate negative externalities. Some potential problems that were identified by communities include: increased risk to the local water supply, risk of air quality problems associated with the smell of waste disposal operations, environmental degradation, and other health and aesthetic problems.

Despite the lack of support from the BC government, local feed lot operators don't appear to be deterred and are planning the expansion of their operations.

Analysis:

Social Benefits:

The social benefits of introducing slaughterhouse waste composting sites would largely be in the reduction of production costs of the slaughterhouses and ranchers as well as some questionable environmental benefits. By having local waste composting sites in B.C., the transportation costs to the slaughterhousees and ranchers would be greatly reduced. This could lead to slightly lower costs that would ultimately benefit consumers who purchase the meat. In the absence of such local waste sites, they are forced to ship the waste to Alberta at significant cost. The reduction in transportation required could also have some environmental impacts by reducing the amount of emissions required to ship the waste. The proposals were touted as being environmentally safe and supported by the community. However, this may not be the case as there may also be significant social costs as well.

Social Costs:

The social costs that could arise as a result of the slaughterhouse waste proposal include its environmental impacts and the nuisance it would be for residents. The slaughterhouse waste could leach into and contaminate the water supply as confirmed by the independent water analysis. Water is a large concern to people who need clean water for everything from personal hygiene to drinking. The proposals could also lead to large inconveniences for residents, such as the waste giving off bad scents and the composting locations being unsightly. The smell would likely be quite bad as bacteria flourishes on decaying organic matter. Local area residents also raised $6000 in a short period of time to fund the independent water analysis. This demonstrates that they have a high willingness to pay to keep the slaughterhouse waste composting sites out of their community.

Government Policy:

Currently, though there is some discrepancy over how great the detriment of composting slaughterhouse waste, it is clear that there is opposition to the practice. The local communities where such composting would be taking place believe such practice would have a serious impact on the environment and human health.

The slaughterhouses, however, are still proceeding with the development of composting facilities. The first priority for the government, before it could take action, is to bring a conclusion to the debate of the potential impacts of composting. Should there be a substantial risk to the environment and health of the human population, action would need to be taken. Government knows the importance of health and environment to the communities given the amount of money raised and attention given in order to oppose the composting practice. As such, it would be reasonable for policy to limit risk to a very low amount.

Policy tools that could be used could be setting a standard. Cheap and effective, it would keep the composting facilities from polluting. An alternative solution, which could also be effective in this situation would be a tax of some sort which could benefit both sides. The levy would need to be large enough to provide incentives to innovate, such that a more environmentally friendly method of composting could be found. Another potential solution would be to prohibit the waste, through environmental preservation laws, from being near residential areas and local water supplies. This could be quite effective, but could also lead to inefficiency if the farmers spend considerable time and money trying to overturn the laws.

Prof's Comments

A known externality - pollution from transport and other transport related risks - against a risk uncertainty, risk of contamination of groundwater, unknown odor potential, etc. Odor, noise, etc. can be easily dealt with through incentive based policies. Groundwater contamination is largely irreversible, at least in the short term, so less easy to control. Liability rules could be applied, but small slaughter facilities may not have the resources to cover the costs they are liable for, should contamination occur. Thus, the solution being adopted may be the most cost effective.

The little political jab, that we were trying to do something for the cattle industry, is humorous.