Livestock Agriculture: Increased EPA Oversight Will Improve	 
Environmental Program for Concentrated Animal Feeding Operations 
(16-JAN-03, GAO-03-285).					 
                                                                 
Congress is concerned that waste from animal feeding operations  
continues to threaten water quality. In light of this concern,	 
GAO was asked to review the Environmental Protection Agency's	 
(EPA) administration of its regulatory program for animal feeding
operations and to determine the potential challenges states and  
EPA may face when they begin to implement the revisions to this  
program. GAO surveyed all EPA regional offices and four states	 
with large numbers of animal feeding operations that may be	 
subject to EPA regulations.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-285 					        
    ACCNO:   A05882						        
  TITLE:     Livestock Agriculture: Increased EPA Oversight Will      
Improve Environmental Program for Concentrated Animal Feeding	 
Operations							 
     DATE:   01/16/2003 
  SUBJECT:   Animals						 
	     Environmental monitoring				 
	     State programs					 
	     Waste management					 
	     Wastewater 					 
	     Water pollution control				 
	     Water quality					 
	     EPA Concentrated Animal Feeding			 
	     Operations Program 				 
                                                                 
	     EPA National Pollutant Discharge			 
	     Elimination System 				 
                                                                 
	     Iowa						 
	     Michigan						 
	     North Carolina					 
	     Wisconsin						 

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GAO-03-285

Report to the Ranking Member, Committee on Agriculture, Nutrition and
Forestry, U. S. Senate

United States General Accounting Office

GAO

January 2003 LIVESTOCK AGRICULTURE

Increased EPA Oversight Will Improve Environmental Program for
Concentrated Animal Feeding Operations

GAO- 03- 285

Until the mid- 1990s, EPA placed little emphasis on and had directed few
resources to its animal feeding operations permit program because it gave
higher priority to other sources of water pollution. In addition,
regulatory exemptions have allowed many large operations to avoid
regulation. As a result of these problems, many operations that EPA
believes are polluting the nation*s waters remain unregulated.

Implementation of revised regulations raise management and resource
challenges for the states and the agency. For example, because the number
of animal feeding operations subject to the regulations will increase
dramatically, states will need to increase their efforts to identify,
permit, and inspect facilities and take appropriate enforcement actions
against those in noncompliance. For its part, EPA will need to increase
its oversight of state programs to ensure that the new requirements are
adopted and implemented. Neither the states nor EPA have determined how
they will meet these challenges.

Concentrated Animal Feeding Operation

A concentrated animal feeding operation is a facility that discharges
animal wastes to surface waters under certain conditions and is,
therefore, subject to regulation. LIVESTOCK AGRICULTURE

Increased EPA Oversight Will Improve Environmental Program for
Concentrated Animal Feeding Operations

www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 285. To view the full report,
including the scope and methodology, click on the link above. For more
information, contact Larry Dyckman at (202) 512- 3841 or dyckmanl@ gao.
gov. Highlights of GAO- 03- 285, a report to

the Ranking Member, Committee on Agriculture, Nutrition and Forestry, U.
S. Senate

January 2003

Congress is concerned that waste from animal feeding operations continues
to threaten water quality. In light of this concern, GAO was asked to
review the Environmental Protection Agency*s (EPA) administration of its
regulatory program for animal feeding operations and to determine the
potential challenges states and EPA may face when they begin to implement
the revisions to this program. GAO surveyed all EPA regional offices and
four states with large numbers of animal feeding operations that may be
subject to EPA regulations.

GAO recommends that EPA  develop and implement a

comprehensive tactical plan that identifies resource requirements and how
the agency will carry out its increased oversight responsibilities under
the revised program; and  work with authorized states

to develop and implement their own plans that will identify resource needs
and how they intend to carry out their increased permitting, inspection,
and enforcement responsibilities within specified time frames.

Page i GAO- 03- 285 Concentrated Animal Feeding Operations Letter 1

Results in Brief 3 Background 5 Shortcomings in Regulatory Approach and
Oversight Problems

Have Limited Effectiveness of the CAFO Program 6 EPA*s Revised Regulations
Offer Potential to Improve the

CAFO Program, but States and EPA Will Face Implementation Challenges 11
USDA*s Role in Developing Revised Regulations Increased

Over Time 13 Conclusions 14 Recommendations for Executive Action 15 Agency
Comments 15

Appendix I Scope and Methodology 17

Appendix II Comments from the Environmental Protection Agency 19

Appendix III GAO Contact and Staff Acknowledgments 21

Figures

Figure 1: Uncovered Operation 8 Figure 2: Covered Operation 9 Figure 3:
EPA Full- Time Equivalent Positions Assigned to Its

NPDES Permit Program in Four EPA Regions, 1997- 2001 10

Abbreviations

CAFO concentrated animal feeding operation EPA Environmental Protection
Agency NPDES National Pollutant Discharge Elimination System USDA U. S.
Department of Agriculture Contents

Page 1 GAO- 03- 285 Concentrated Animal Feeding Operations

January 16, 2003 The Honorable Tom Harkin Ranking Member Committee on
Agriculture, Nutrition

and Forestry United States Senate

Dear Senator Harkin: Livestock production generated $106 billion in farm
revenue, or more than one- half of all farm revenue in 2001. Intensive
livestock production* in which large numbers of poultry, swine, and dairy
and beef cattle are held in confinement facilities* accounted for about
$80 billion of this revenue. These confinement facilities raise concerns
about water quality because the animals produce large quantities of waste*
many times more waste than humans annually* and these wastes contribute to
impairment of the nation*s waterways. To minimize environmental problems,
animal feeding operations contain these wastes in storage facilities and
periodically dispose of them, usually by spreading them on the land as
fertilizer. Despite these efforts, animal feeding operations are
significant contributors to impaired water quality in the nation*s rivers
and lakes, according to the Environmental Protection Agency (EPA).

Because wastes from animal feeding operations may degrade water quality,
the Clean Water Act requires EPA and authorized states to regulate these
operations similar to the way they regulate municipal and industrial waste
treatment facilities. Specifically, EPA developed effluent guidelines for
establishing limits on the discharge of pollutants from these operations
into surface waters. As stipulated in the act, the agency and authorized
states enforce these limits through permits issued under the National
Pollutant Discharge Elimination System (NPDES) permit program.

Animal feeding operations that discharge wastes to surface waters under
certain conditions are called concentrated animal feeding operations
(CAFO) and are required to obtain discharge permits. CAFOs are generally
defined as animal feeding operations that have more than 1,000 animal
units 1 but also include smaller operations that discharge

1 An animal unit is a representation of size among animal types EPA uses
for permitting purposes. For example, one animal unit is equivalent to one
beef cattle or 2.5 adult swine.

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 03- 285 Concentrated Animal Feeding Operations

directly into surface waters. EPA has authorized 44 states and the U. S.
Virgin Islands to administer the discharge permit program for CAFOs since
passage of the act in 1972. 2 To become an authorized state, the state
must have discharge permit requirements that are at least as stringent as
the requirements imposed under the federal program and must contain
several key provisions such as public participation in issuing permits.
The act provides for EPA*s withdrawal of a state*s authorization if the
state has not adequately administered its program. EPA*s 10 regional
offices oversee the 44 authorized states and the U. S. Virgin Islands and
administer the program directly in the remaining states. 3 EPA also
provides grants to authorized states to help them implement the permit
program. In fiscal year 2002, $145 million were appropriated for these
grants.

Although it has regulated waste discharges since the mid- 1970s, EPA
continues to report serious impairment to the nation*s waters from these
discharges. On October 30, 1989, the Natural Resources Defense Council and
Public Citizen sued EPA, 4 alleging that the agency had failed to comply
with the Clean Water Act. 5 In the ensuing settlement, EPA agreed to,
among other things, revise its effluent limitation guidelines and
permitting regulations for CAFOs. 6 As agreed, EPA published proposed
revisions to the regulations for public comment in January 2001 and issued
its final regulations on December 15, 2002.

You asked us to (1) identify the key shortcomings of the of CAFO program,
(2) assess the potential challenges the states and EPA may face when
implementing revisions to the CAFO regulations, and (3) determine the
extent of U. S. Department of Agriculture*s (USDA) involvement in
developing the proposed revisions to EPA*s regulations. To address the
first and second objectives, we, among other things, surveyed all 10 EPA

2 Although Oklahoma is authorized to implement other aspects of the permit
program, it is not authorized to administer the CAFO program. 3 Alaska,
Idaho, Massachusetts, New Hampshire, New Mexico, and Oklahoma are not
currently authorized. 4 Natural Resources Defense Council and Public
Citizen are nonprofit organizations that advocate for environmental and
consumer protection, among other issues. 5 Natural Resources Defense
Council, Inc. v. Reilly, Civ. No. 89- 2980 (RCL) (D. D. C.), October 30,
1989. 6 Plaintiffs and EPA agreed to an initial settlement on January 31,
1992, which has been modified several times, to establish a schedule for
EPA to propose and take final action on 18 point source categories,
including CAFOs.

Page 3 GAO- 03- 285 Concentrated Animal Feeding Operations

regional offices and interviewed EPA officials in four of the regions.
These four regions oversee the 23 states that have an estimated 70 percent
of large animal feeding operations that could be defined as CAFOs under
the revised regulations. We also interviewed state officials in four
states* Iowa, North Carolina, Pennsylvania, and Wisconsin* that have large
numbers of confined poultry, swine, dairy, and beef cattle operations. To
address the third objective, we interviewed agency officials, reviewed
relevant documents, and observed meetings between the agencies. Appendix I
contains further details of our scope and methodology.

The CAFO program has had two major shortcomings. First, exemptions in
EPA*s regulations allowed an estimated 60 percent of animal feeding
operations with more than 1,000 animal units to avoid regulation.
Specifically, animal feeding operations that discharged waste into
waterways only during a 25- year, 24- hour storm event* the amount of
rainfall during a 24- hour period that occurs on average once every 25
years* or greater were not explicitly defined as CAFOs and did not require
permits. Additionally, chicken operations with dry manurehandling systems
were not generally required to obtain permits. Finally, animal wastes
applied to crop and pastureland were generally not regulated under the
CAFO program.

Second, EPA*s limited oversight of the states has contributed to
inadequate implementation by some authorized states. For example, our
surveys show that 11 authorized states with over 1, 000 large animal
feeding operations do not issue discharge permits that contain all
required elements. Three of these states have not issued any discharge
permits to their operations, thereby leaving these facilities and their
wastes essentially unregulated by the CAFO program. EPA officials
acknowledge that they have historically paid little attention to the state
CAFO programs because they gave higher priority to other sources of
pollution, such as industrial and municipal waste treatment facilities,
considered the major sources of water impairment. In addition, EPA
officials stated that the agency*s only leverage to compel states to
implement the program with all federal requirements is to either withhold
the grant funding to states for program operations or retract the state*s
authority to run the entire NPDES permit program* including the components
that regulate industrial and municipal waste treatment facilities. EPA is
reluctant to use these tools because it maintains that withholding grant
funding would further hamper the states* ability to effectively implement
their programs, and EPA does not have the resources to directly implement
the entire permit program in additional states. However, EPA has recently
devoted Results in Brief

Page 4 GAO- 03- 285 Concentrated Animal Feeding Operations

more attention and resources to the CAFO program and, as a result, has had
some limited success in persuading authorized states to improve their
programs without resorting to these tools. For example, in 2002, EPA
persuaded several states to begin to issue discharge permits that meet all
EPA requirements.

EPA recently issued revisions to its regulations that would (1) eliminate
the 25- year, 24- hour storm discharge exemption, (2) require chicken
operations that use dry manure- handling systems to obtain permits, and
(3) subject wastes applied to crop and pastureland under the control of
the CAFO operator to permit requirements. Although the revised regulations
address some of the key shortcomings of the program, they raise even
greater management challenges for the states and EPA. By extending
coverage to previously exempt animal feeding operations, we estimate that
the revised regulations could increase the number of operations required
to obtain permits by an estimated 7,000* from the about 4,500 permits
currently issued to about 11,500. These changes, along with extending
permit coverage to the application of animal waste to crop and pastureland
controlled by the CAFO operator, will create a resource and administrative
challenge for the states. Specifically, states will need to increase their
efforts to identify, permit, and inspect CAFOs and take appropriate
enforcement actions against those in noncompliance. For its part, EPA will
need to increase its oversight of state programs to ensure that the new
requirements are adopted and implemented. This oversight effort will be
significant in light of the large number of animal feeding operations that
will need permits under the revised regulations. However, neither EPA nor
the states we reviewed have developed plans* including the identification
of resource requirements* for carrying out their increased
responsibilities. We are making recommendations to EPA designed to
increase the probability that the new program will be effective.

EPA did not formally consult with USDA when developing the proposed CAFO
regulations, but USDA was increasingly involved in developing the revised
regulations. EPA published the proposed regulations in January 2001
without allowing sufficient time for USDA to fully assess the proposed
revisions. In June 2001, to help address USDA*s concerns, EPA and USDA
established a collaborative interagency working group. USDA*s role in the
working group was to provide technical information that identified how the
regulations might adversely affect the livestock industry and to suggest
alternative approaches that would mitigate these effects, such as allowing
states greater flexibility in regulating smaller animal

Page 5 GAO- 03- 285 Concentrated Animal Feeding Operations

feeding operations. EPA and USDA officials said this arrangement has
worked well.

To help ensure that the potential benefits of the CAFO program are
realized, we are recommending that EPA develop and implement a
comprehensive tactical plan that identifies how the agency will carry out
its increased oversight responsibilities under the revised program. In
addition, we are recommending that EPA work with authorized states to
develop and implement their own plans that identify how they intend to
carry out their increased permitting, inspection, and enforcement
responsibilities within specified time frames.

We provided EPA and USDA with a draft of this report for review and
comment. Both EPA and USDA provided technical comments that we
incorporated into the report as appropriate. EPA and USDA agreed with our
findings and recommendations. EPA provided written comments that are
presented in appendix II; USDA provided oral comments.

Discharge permits establish limits on the amounts and types of pollutants
that can be released into waterways. Under the Clean Water Act,
concentrated animal feeding operations that discharge pollutants to
surface waters must obtain permits from EPA or authorized states. However,
unlike municipal and most industrial facilities that are allowed to
discharge some waste, concentrated animal feeding operations are required
to construct and operate facilities that do not release any waste to
surface waters, except in extraordinary circumstances.

Under EPA*s prior regulations, animal feeding operations could be defined
as CAFOs and require discharge permits if they, among other things

 had more than 1,000 animal units,  had more than 300 animal units and
either discharged through a man- made

device into navigable waters or directly into waters of the United States
that originate outside the facility, or  were of any size but had been
determined by EPA or the state permitting

authority to contribute significantly to water pollution. Under these
regulations, a large animal feeding operation did not need a permit if it
only discharged during a 25- year, 24- hour storm event* the amount of
rainfall during a 24- hour period that occurs on average once every 25
years or more. In addition, the regulations did not generally require
permits for chicken operations that use dry manure- handling Background

Page 6 GAO- 03- 285 Concentrated Animal Feeding Operations

systems* that is, systems that do not use water to handle their waste.
Further, animal wastes that were applied to crop and pastureland were
generally not regulated.

EPA has authorized 44 states and the U. S. Virgin Islands to administer
the discharge permit program for CAFOs. To become an authorized state, the
state must have discharge permit requirements that are at least as
stringent as the requirements imposed under the federal program and must
contain several key provisions. These provisions include allowing for
public participation in issuing permits; issuing permits that must be
renewed every 5 years; including authority for EPA and authorized states
to take enforcement action against those who violate permit conditions;
and providing for public participation in the state enforcement process by
either allowing the public to participate in any civil or administrative
action or by providing assurance that the state will investigate citizen
complaints. According to EPA, public participation in the permitting and
enforcement process is critical because it allows the public to express
its views on the proposed operations and to assist EPA and state
authorities in ensuring that permitted operations remain in compliance.

The CAFO program has had two major shortcomings that have led to
inconsistent and inadequate implementation by the authorized states. These
shortcomings include (1) exemptions in EPA*s regulations that have allowed
as many as 60 percent of the largest animal feeding operations to avoid
obtaining permits and (2) minimal oversight of state CAFO programs by EPA.
Although EPA maintains that it has limited tools to compel states to
properly implement the CAFO program, it recently has had limited success
in persuading some authorized states to begin issuing discharge permits
that include all program requirements.

Two exemptions in CAFO regulations have allowed large numbers of animal
feeding operations to avoid obtaining discharge permits. However, EPA
believes that many of these operations may degrade water quality. The
first exemption allowed operations to avoid obtaining discharge permits if
they discharge waste only during 25- year, 24- hour rainstorm events.
However, based on its compliance and enforcement experience, EPA believes
that many of the operations using this exemption should, in fact, have a
discharge permit because they are likely discharging more frequently. For
example, when EPA proposed changes to the CAFO regulations, it stated that
operations using this exemption were not taking into consideration
discharges that may occur as a result of overfilling the Shortcomings in

Regulatory Approach and Oversight Problems Have Limited Effectiveness of
the CAFO Program

Exemptions in EPA*s Rules Allowed Most Animal Feeding Operations to Avoid
Regulation

Page 7 GAO- 03- 285 Concentrated Animal Feeding Operations

waste storage facility, accidental spills, or improper land application of
manure and wastewater. The second exemption allowed about 3,000 confined
chicken operations that use dry manure- handling systems to avoid
obtaining permits. EPA believes that chicken operations using dry manure-
handling systems should obtain permits because EPA and state water quality
assessments found that nutrients from confined chicken operations, similar
to other large livestock operations, contaminate waters through improper
storage, accidental spills, and land application.

As a result of these exemptions, we estimate that only about 40 percent
(4,500 of 11,500) of confined animal feeding operations currently have
discharge permits. 7 In addition, EPA believes about 4,000 smaller animal
feeding operations may threaten water quality and may also need to be
permitted. According to EPA and state officials, these smaller operations
are generally not permitted because federal and state programs have
historically focused their limited resources dedicated to CAFOs on
regulating only the largest operations.

EPA*s limited oversight of the states has contributed to inconsistent and
inadequate implementation by the authorized states. 8 In particular, our
surveys show that 11 authorized states* with a total of more than 1,000
large animal feeding operations* do not properly issue discharge permits.
Although eight of these states issue some type of permit to CAFOs, the
permits do not meet all EPA requirements, such as including provisions for
public participation in issuing permits. The remaining three states do not
issue any type of permit to CAFOs, thereby leaving facilities and their
wastes essentially unregulated. EPA officials believe that most large
operations either discharge or have a potential to discharge animal waste
to surface waters and should have discharge permits.

7 Since EPA and most states do not know precisely how many animal feeding
operations should have discharge permits, USDA estimated the number of
potential CAFOs based on livestock type and the number of animals on the
farm from the 1997 Census of Agriculture. See USDA, Profile of Farms with
Livestock in the United States: A Statistical Summary

(Washington, D. C.: February 2002). 8 We did not evaluate how EPA
administered the program in the states not authorized to implement the
CAFO program because these states contained fewer than 5 percent of large
CAFOs. EPA*s Limited Oversight of

States* CAFO Programs Has Contributed to Inconsistent and Inadequate
Implementation

Page 8 GAO- 03- 285 Concentrated Animal Feeding Operations

The two states that lead the nation in swine production illustrate how
programs can meet some EPA permit requirements but not others. For
example, while Iowa*s permits for uncovered operations (see fig. 1) meet
all program requirements, its permits for covered operations (see fig. 2)
do not. Contrary to EPA requirements that permits are renewed every 5
years, Iowa issues these permits for indefinite periods of time. While
North Carolina issues permits to both covered and uncovered animal feeding
operations, these permits do not include all EPA requirements, such as
provisions for public participation or allowing for EPA enforcement of the
state permit.

Figure 1: Uncovered Operation

Page 9 GAO- 03- 285 Concentrated Animal Feeding Operations

Figure 2: Covered Operation

Michigan and Wisconsin also illustrate how two authorized states with a
similar number of animal feeding operations differ in program
implementation. According to USDA estimates, both states have over 100
operations with more than 1,000 animal units that could be defined as
CAFOs. While Wisconsin had issued 110 permits to these operations,
Michigan had not issued any, according to our survey. 9 As a result, waste
discharges from facilities in Michigan remained unregulated under the CAFO
program.

EPA officials acknowledged that until the mid- 1990s the agency had placed
little emphasis on and directed few resources to the CAFO program and that
this inattention has contributed to inconsistent and inadequate
implementation by authorized states. Instead, the agency gave higher
priority and devoted greater resources to its permit program for the more
traditional point sources of pollution* industrial and municipal waste

9 On December 13, 2002, Michigan established procedures for issuing CAFO
discharge permits.

Page 10 GAO- 03- 285 Concentrated Animal Feeding Operations

treatment facilities. However, as EPA*s and the states* efforts have
reduced pollution from these sources, concerns grew in the 1990s that the
increasing number of large concentrated animal feeding operations could
potentially threaten surface water quality. In response, EPA began placing
more emphasis and directing more resources to the CAFO program. As a
result, some states that had not previously issued discharge permits began
to do so.

As shown in figure 3, EPA has historically assigned significantly more
personnel resources to the industrial and municipal portions of the NPDES
permit program. In the four regions we reviewed, the number of full- time
equivalent positions dedicated to the CAFO program has increased since
1997* from 1 to 6 percent* but this increase has, for the most part, been
at the expense of the industrial and municipal portions of the permit
program. EPA officials told us that due to budget constraints, any
increase in resources in one program area requires the reduction of
resources in others.

Figure 3: EPA Full- Time Equivalent Positions Assigned to Its NPDES Permit
Program in Four EPA Regions, 1997- 2001

Page 11 GAO- 03- 285 Concentrated Animal Feeding Operations

In addition to resource constraints, EPA officials say that the agency has
little leverage to compel states to issue permits with all required
elements because the agency*s primary recourses in such situations are to
either (1) withhold grant funding it provides to states for program
operations or (2) withdraw the states* authority to run the entire NPDES
permit program, including the regulation of industrial and municipal waste
treatment facilities. EPA has been reluctant to use these tools because it
maintains that withholding grant funding would further weaken the states*
ability to properly implement the program and EPA does not have the
resources to directly implement the permit program in additional states.
To date, EPA has never withheld grants or withdrawn a state*s authority.

However, EPA has had limited success in persuading some authorized states
to begin issuing discharge permits with all EPA requirements. For example,
Michigan has been an authorized state since 1973, but only agreed in 2002
to begin issuing discharge permits. This agreement followed an EPA
investigation that revealed several unpermitted CAFOs. Similarly, EPA
recently persuaded Iowa to increase the issuance of discharge permits to
uncovered feedlots. However, to date the agency has not been able to
convince the state to issue permits to its covered operations, even though
EPA believes these types of operations should also have permits. In 2002,
EPA was also successful in persuading three other authorized states*
Florida, North Carolina, and South Carolina* to begin issuing discharge
permits that meet all program requirements.

According to our surveys of the regions and states, EPA*s revised
regulations* eliminating the 25- year, 24- hour storm exemption;
explicitly including dry- manure chicken operations; and extending permit
coverage to include the land application areas under the control of CAFO*
address some key problems of the CAFO program. However, they will also
increase EPA*s oversight responsibility and require authorized states to
increase their permitting, inspection, and enforcement activities.
Furthermore, neither EPA nor the states have planned how they will face
these challenges or implement the revised program. EPA*s Revised

Regulations Offer Potential to Improve the CAFO Program, but States and
EPA Will Face Implementation Challenges

Page 12 GAO- 03- 285 Concentrated Animal Feeding Operations

EPA*s decision to eliminate regulatory exemptions should strengthen the
permit program because the revised regulations will extend coverage to
more animal feeding operations that have the potential to contaminate
waterways. As previously mentioned, the 25- year, 24- hour storm exemption
has proven particularly problematic for EPA and the states because it
allowed CAFO operators to bypass permitting altogether. By eliminating
this exemption, we estimate that an additional 4,000 large animal feeding
operations will require permits. According to our survey results, the
elimination of this exemption could significantly improve the program. In
addition, EPA*s decision to also explicitly require permits for large dry-
manure chicken operations will increase the number of permitted facilities
by another 3,000. Lastly, CAFO operators are, for the first time, required
to either (1) apply for a permit or (2) provide evidence to demonstrate
that they have no potential to discharge to surface waters.

In addition to eliminating regulatory exemptions, EPA also extended permit
coverage to include the application of animal waste to crop and
pastureland controlled by the CAFO. Specifically, CAFO operators who apply
manure to their land will be required to develop and implement nutrient
management plans that, among other things, specify how much manure can be
applied to crop and pastureland to minimize potential adverse effects on
the environment. CAFO operators will need to maintain the plan on site
and, upon request, make it available to the state permit authority for
review.

Although EPA believes that the revised regulations will improve the CAFO
program, the changes will create resource and administrative challenges
for the authorized states. We estimate that the revised regulations could
increase the number of operations required to obtain permits by an
estimated 7,000* from about 4,500 permits currently issued, to about
11,500. States will therefore need to increase their efforts to identify,
permit, and inspect animal feeding operations and, most likely, will have
to increase their enforcement actions. However, many states have not yet
identified and permitted CAFOs that EPA believes should already have been
covered by the CAFO program. Therefore, increased permitting requirements
could prove to be a daunting task. For example, Iowa has only permitted 32
operations out of more than 1,000 of its animal feeding operations that
have more than 1,000 animal units. Furthermore, states may need to
identify and permit an estimated 4, 000 operations with fewer than 1,000
animal units that EPA believes may be discharging. Finally, when states
inspect CAFOs, they will need to determine if the operation*s nutrient
management plan is being properly implemented. Revisions Will Help

Address Regulatory Problems by Requiring Potential Dischargers to Obtain
Permits

Authorized States Will Face Challenges Implementing the Revised
Regulations

Page 13 GAO- 03- 285 Concentrated Animal Feeding Operations

According to state officials, meeting these demands will require
additional personnel. However, most of the states we visited cannot hire
additional staff and would have to redeploy personnel from other programs.
For example, Iowa and North Carolina, two states with a large number of
potential CAFOs, each have less than one full- time employee working in
the CAFO program.

While the burden of implementing the revised regulations will fall
primarily on the states, EPA will need to increase its oversight of state
programs to ensure that the states properly adopt and implement the new
requirements. This oversight effort will be especially important in light
of the large number of animal feeding operations that will need permits
under the revised regulations. Although most of the regions have not
determined precisely what additional resources they will need to
adequately carry out their increased responsibilities, EPA officials told
us that, like the states, they will have to redeploy resources from other
programs.

Despite the challenges that EPA and the states will face in implementing
the revised CAFO program, they have not yet prepared for their additional
responsibilities. According to our survey of 10 EPA regions, the regions
and states have not estimated the resources they will need to implement
the revised CAFO program. EPA, for its part, has not developed a plan for
how it intends to carry out its increased oversight responsibilities under
the revised regulations, such as ensuring that authorized states properly
permit and inspect CAFOs and take appropriate enforcement action. EPA and
state officials told us they intend to wait until the revised regulations
are issued before they begin planning for their implementation.

EPA did not formally consult with USDA when it was developing the proposed
CAFO regulations published in January 2001, but the department has played
a greater role in providing input for the revised regulations. EPA and
USDA developed a joint animal feeding operation strategy in 1998 to
address the adverse environmental and public health effects of animal
feeding operations. However, USDA*s involvement in developing the proposed
CAFO regulations was generally limited to responding to EPA requests for
data. USDA officials told us that they were asked to provide substantive
comments only after the Office of Management and Budget suggested that EPA
solicit USDA*s views. However, USDA officials maintained that they did not
have sufficient time to fully assess the EPA*s Oversight of States

Will Need to Increase EPA and States Have Not Prepared for Additional
Responsibilities

USDA*s Role in Developing Revised Regulations Increased Over Time

Page 14 GAO- 03- 285 Concentrated Animal Feeding Operations

proposed regulations and discuss its concerns with EPA before the proposed
regulations were published in January 2001.

In June 2001, to address USDA concerns, EPA and USDA established an
interagency workgroup on the proposed revisions to the CAFO regulations.
Under this arrangement, USDA provided technical information that
identified how the proposed regulations could adversely affect the
livestock industry and suggested alternative approaches that would
mitigate these effects. For example, through this interagency workgroup,
USDA suggested that EPA consider allowing states greater flexibility in
regulating smaller operations. USDA also raised concerns that EPA*s
proposed nutrient management plan was not entirely consistent with USDA*s
existing comprehensive nutrient management plan and would be confusing to
operators. EPA agreed to take these concerns into consideration when it
prepared the final revisions to the regulations.

In July 2001, to further strengthen the cooperative process, EPA and USDA
developed Principles of Collaboration to ensure that the perspectives of
both organizations are realized. In essence, the principles recognize that
USDA and EPA have clear and distinct missions, authorities, and expertise,
yet can work in partnership on issues on mutual concern. To ensure that
both EPA and USDA work together constructively, the principles call for
EPA and USDA to establish mutually agreeable time frames for joint efforts
and provide adequate opportunities to review and comment on materials
developed in collaboration prior to public release. According to USDA and
EPA officials, this new arrangement has improved the agencies* working
relationship.

Although EPA has historically given the CAFO program relatively low
priority, it has recently placed greater attention on it as a result of
the 1989 lawsuit and the growing recognition of animal feeding operations*
contributions to water quality impairment. The implementation of the CAFO
program has been uneven because of regulatory exemptions and the lower
priority EPA and the states have assigned to it. Although EPA has had some
recent success in persuading states to begin issuing discharge permits
that include all program requirements, agency officials say that their
ability to compel states to do so is limited. While the revised
regulations will help address the regulatory problems, they will also
increase states* burdens for permitting, inspecting, and taking
enforcement actions. Because several states have yet to fully implement
the previous, more limited, program, EPA will need to increase its
oversight of state programs in order to ensure that the new requirements
are properly Conclusions

Page 15 GAO- 03- 285 Concentrated Animal Feeding Operations

adopted and carried out by the states. EPA and the states have not
identified what they will need to do* or the required resources* to carry
out these increased responsibilities. For example, they have not
determined how they intend to accomplish their expanded roles and
responsibilities within current staff levels.

To help ensure that the potential benefits of the revised CAFO program are
realized, we recommend that the Administrator, EPA,

 develop and implement a comprehensive tactical plan that identifies how
the agency will carry out its increased oversight responsibilities under
the revised program. Specifically, this plan should address what steps the
agency will take to ensure that authorized states are properly permitting
and inspecting CAFOs and taking appropriate enforcement actions against
those in noncompliance. In addition, the plan should identify what, if
any, additional resources will be needed to carry out the plan and how
these resources will be obtained; and  work with authorized states to
develop and implement their own plans

that identify how they intend to carry out their increased permitting,
inspection, and enforcement responsibilities within specified time frames.
These plans should also address what, if any, additional resources will be
needed to properly implement the program and how these resources will be
obtained.

We provided EPA and USDA with a draft of this report for review and
comment. The Director of Animal Husbandry and Clean Water Programs, along
with other USDA officials, provided oral comments for USDA. EPA provided
written comments. Both agencies expressed agreement with the findings and
recommendations in the report. EPA and USDA also provided technical
comments that we incorporated into the report as appropriate. EPA*s
written comments are presented in appendix II.

We are sending copies of this report to the Administrator of the
Environmental Protection Agency, the Secretary of Agriculture, appropriate
congressional committees, and other interested parties. We will also make
copies available to others upon request. In addition, the report will be
available at no charge on the GAO Web site at http:// www. gao. gov.
Recommendations for

Executive Action Agency Comments

Page 16 GAO- 03- 285 Concentrated Animal Feeding Operations

If you or your staff have any questions about this report, please call me
at (202) 512- 3841. Key contributors to this report are listed in appendix
III.

Sincerely yours, Lawrence J. Dyckman Director, Natural Resources

and Environment

Appendix I: Scope and Methodology Page 17 GAO- 03- 285 Concentrated Animal
Feeding Operations

To determine the problems EPA faced in administering the CAFO program and
the potential challenges the states and EPA may face when implementing
revisions to its CAFO regulations, we surveyed all 10 EPA regional
offices. Our survey asked regional officials to provide information on
program management and oversight of authorized states* CAFO programs,
resources dedicated to the program, problems EPA has faced administering
the program, and the potential challenges the states and EPA might face in
implementing revisions to the CAFO program.

In addition, we interviewed EPA officials in 4 of the 10 regions. We
judgmentally selected the 4 regions that represent 23 states with an
estimated 70 percent of large animal feeding operations that could be
designated as CAFOs under the revised regulations. Because EPA and most
states do not know precisely how many animal feeding operations should
have discharge permits, we used USDA*s estimate of the number of potential
CAFOs based on livestock type and the number of animals on the farm from
the 1997 Census of Agriculture. These regions and their represented states
are

 Region 3* Philadelphia: Delaware, Maryland, Pennsylvania, Virginia, and
West Virginia;  Region 4* Atlanta: Alabama, Florida, Georgia, Kentucky,
Mississippi, North

Carolina, South Carolina, and Tennessee;  Region 5* Chicago: Illinois,
Indiana, Michigan, Minnesota, Ohio, and

Wisconsin; and  Region 7* Kansas City: Iowa, Kansas, Missouri, and
Nebraska.

To determine how the 44 authorized states and the U. S. Virgin Islands
administer the program and to obtain their views on the challenges they
might encounter in implementing the revised regulations, we interviewed
program officials in four authorized states* Iowa, North Carolina,
Pennsylvania, and Wisconsin. We judgmentally selected these states from
among the four regions we visited because they have large numbers of
confined poultry, swine, and dairy and beef cattle operations. We did not
evaluate how EPA directly administers the program in the states and
territories not authorized to implement the CAFO program because these
states contained less than 5 percent of large CAFOs. EPA administers the
program directly because these states have not asked for authority to
administer the program. Appendix I: Scope and Methodology

Appendix I: Scope and Methodology Page 18 GAO- 03- 285 Concentrated Animal
Feeding Operations

To examine the extent of USDA*s involvement in developing the proposed
revisions to EPA*s CAFO regulations, we interviewed officials in USDA*s
Natural Resources Conservation Service and EPA. We also observed an EPA
and USDA Working Group Meeting on Concentrated Animal Feeding Operations.

We conducted our review from January 2002 through October 2002 in
accordance with generally accepted government auditing standards.

Appendix II: Comments from the Environmental Protection Agency Page 19
GAO- 03- 285 Concentrated Animal Feeding Operations

Appendix II: Comments from the Environmental Protection Agency

Appendix II: Comments from the Environmental Protection Agency Page 20
GAO- 03- 285 Concentrated Animal Feeding Operations

Appendix III: GAO Contact and Staff Acknowledgments

Page 21 GAO- 03- 285 Concentrated Animal Feeding Operations

Greg Kosarin, (202) 512- 6526 In addition to the individual named above,
Mary Denigan- Macauley, Oliver Easterwood, Lynn Musser, Paul Pansini, and
John C. Smith made key contributions to this report. Appendix III: GAO
Contact and

Staff Acknowledgments GAO Contact Acknowledgments

(360166)

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