Deforestation & Poor Land Use

In our current society, there are a multitude of issues that are often analyzed by different experts such as scientists, politicians, and economists in an attempt to change the big problem of climate change. Within those problems there is a separation of the types of issues- one of them being environmental. While there are environmental issues that rule discussions, and get more attention in the media such as the broad concept of climate change or CO2 emissions there are some that get fewer attention but have just as detrimental effects to the environment.

The less noticed issue I want to focus on is industrial agriculture, specifically factory farming. Factory farming or more commonly known as concentrated animal feeding operations have detrimental effects to not only the physical environment but also to the health of society members.

Concentrated Animal Feeding Operations, CAFOs going forward are “industrial-sized livestock operations” (Sierra Club) that keep the animals being raised there constrained. Not only are animals in confined spaces but the operation as a whole is based on keeping things tight, meaning everything from raising the animals to the waste they produce and the actual production of meat are all in the same area.

The reason for this style of “farming” is to keep up with the high demand of meat. Although CAFOs are not highly regulated there are some requirements that distinguish a CAFO. To be considered a CAFO an operation must include 1000 animal units which can also transcribe to “an animal equivalent of 1000 pounds live weight and equates to 1000 head of beef cattle, 700 dairy cows, 2500 swine weighing more than 55 lbs.

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, 125 thousand broiler chickens, or 82 thousand laying hens or pullets” (USDA) all which must be in living in contained conditions, for more 45 days per year. According to the United States’ Department of Agriculture in addition to constraining living conditions if an operation disposes of manure or wastewater into any waterway it is automatically considered a CAFO regardless of the size. Because of their size and the conditions they fill I see CAFOs as big environmental threat individually but also as a contributor to climate change.

The effects of factory farming are something that can be examined through different lenses such as environmental or even with a business lens but I will be focusing on the economic standpoint analyzing factory farming. I want to look at factory farming through the externality theory, focusing on the negative externalities that arise from factory farming. Some of the externalities I want to touch base on are the impacts on aquatic ecosystems from the waste produced in those factories, deforestation, as well as land usage. In addition to discussing the more prominent issues of factory farming I want to include a more delicate subject that is the health repercussions of consuming factory raised meat, mainly focusing on beef and swine consumption. In correlation with that topic come the impacts on the communities surrounding the factory farms and how their health is on the line solely for the production of meat.

At the rate that our environment is being destroyed, there are handfuls of environmental impacts that arise from factory farming most if not all which are not being accounted for. Many of these problems seem overwhelming, but much can be changed through incremental steps. The first of many damaging impacts factory farming comes directly from one of the qualification to be considered a concentrated feeding operation- which is manure and waste disposal into any sort of waterway. Aside from manure there are a variety of different pollutants within CAFO waste, those which the Sierra Club identifies as hormones, cleaning agents, silage, and antibiotic-resistant bacteria to name a few. Runoff from the operations are a direct cause of CAFOs meaning the pollutants listed above and more end up contaminating local waterways. The pollutants enter the water and begin to alter the chemistry of that waterway which can then lead to different complications. For example, silage- “this leachate has a high biological oxygen demand” (Curell, 2011) to my understanding this means there is a need for a high amount of dissolved oxygen in water in order for organisms to begin to decompose the organic matter, meaning this leachate will use up all the oxygen in the water threatening the lives of whatever creatures inhibit the waterway. Additionally, other waste pollutants coming from the feeding operation cause threats to water ecosystems because it runs the risk causing algal blooms reducing oxygen and producing ammonia, both of which are not healthy for aquatic ecosystems.

Moving away from waterways, another environmental impact directly correlated with factory farming is deforestation. Currently forests are being cut down at an acre per second to make room for animal farming (Cowspiracy, 2014). All the forest being cut down for agricultural purposes previously served as carbon sinks helping sequester carbon and keeping it out of our atmosphere in combat with global climate changes. Not only does animal agriculture cause 91% of Amazon rainforest deforestation (12 Reasons Why ‘Cowspiracy’ Is the Next ‘Blackfish’) but out of habitable land 50% of it is occupied by agriculture 77% of which is livestock (Figure 1). Given that data I calculate that nearly 40% of habitable land on this planet is being used for animal agriculture which as seen already has detrimental impacts to the environment.

In addition to deforestation, CAFOs to me represent poor land management and allocation of resources in the sense that there is more that can be efficiently produced out of the land than what comes from industrial feeding operations. In reference to Figures 1 it is clear that livestock takes up a good majority of habitable land but in addition to so Figure 2 demonstrates beef using the most land to produce one gram of protein. Land is being destroyed by the minute to graze these animals for humans to eat when it is visible that there are other sources that can provide equal nutrition. In simple economic terms the land management issue in itself is a failure in the market to allocate land usage to the best possible use for society.

When researching externalities to industrial sized animal farming an impact I found to be huge but not something that is commonly discussed is the health repercussions from meat consumption, specifically beef and pork.

-cancer

-heart disease

-illness for people living near CAFOs

-antibiotic immunity

-e.coli cases

Economic Standpoint

As an economist, after looking at a few of the impacts caused by Concentrated Animal Feeding Operations one way to deal with those problems would be through the externality theory. The externality theory addresses private benefit vs social benefit as well as private cost vs social cost by looking at externalities. In a simple statement as defined by Steven Hackett externalities are “unpaid-for benefits and uncompensated costs” (Hackett, 2015, pg. 441) which by definition automatically causes a market failure. At a slightly more in-depth view, externalities are unpaid for benefits and uncompensated costs which are external to the market, thus not reflected in supply, demand, price, or quantity exchanged (Chp 3 lecture, 9/13).

Since I am examining factory farming as an environmental issue the focal point will be on the negative externalities that arise from factory farming. A negative externality is something bad that occurs from producing something but it is not accounted for in the market price making the item cost less to the consumer than it should. Some examples unbiased to this topic can include second hand smoke that is inhaled by passerby who do not partake in smoking but are still facing the consequences of smoke. Another example could be barking dogs, ideally, they serve satisfaction to the owner but the disturbance to society from the dog barking is not accounted for. A common issue externalities is that price and quantity are incorrect which means resources haven’t been allocated correctly meaning the market is not at equilibrium nor meeting its maximum profit. With a negative externality, the market is pricing the item too low for the costs to society and prices are usually diverged to a third party. In this situation, the environment is that third paying the social cost of cheap meat.

The key goal of the externality theory is to internalize the impacts caused by- in this case CAFOs. In order to internalize the damages done the externality theory would use a Pigouvian Tax. A Pigouvian Tax is a tax on a market that has negative externalities. The tax aims to compensate for the social cost that was not previously accounted for in the market. By taxing the market price of meat, passing the cost onto consumers the harm done to the land, environment, water ecosystems and human health would be internalized in that price meaning the tax will be equal marginal external cost.

Internalizing the costs of factory farming through taxing by increasing the price on meat is one of the main ways to deal with the problems brought by CAFOs but with doing so there are some social implications that need to be considered. One of them would be assuming the damages would be accurately compensated in the new price. Part of the reason why internalization is so difficult to achieve and fully put into action comes from the fact that there are environmental degradations to take into consideration in addition to resources having ambiguous prices. The ambiguity comes from whoever is pricing the commodity and can lead to the externality not prices accurately to properly internalize the social cost. Another issue that can be considered are the consequences the farmers face. Shifting from producing and being able to sell meat at such low prices some which are sometimes subsidized to drastically increasing the price can end hurting farmers with the possibility of leaving them in debt. In that case internalizing the externalities would not be Pareto efficient because a member of society would be left worse off.

After looking at a few of the environmental impacts that come from factory farming in order to mass produce meat to meet demand I have come to the conclusion that internalizing all the damages does not seem something tangible in the near future.