Animal Agriculture: Information on Waste Management and Water Quality
Issues (Briefing Report, 06/29/95, GAO/RCED-95-200BR).

Pursuant to a congressional request, GAO provided information on the
management of animal agriculture waste and related water quality issues,
focusing on: (1) water quality concerns arising from animal agriculture
sources of nonpoint pollution; (2) consolidation trends and geographical
shifts in animal agriculture; (3) animal agriculture production covered
by point source permits; (4) commonly used animal waste management
practices and their associated costs; (5) Department of Agriculture
(USDA) cost-share assistance for animal waste management; and (6) the
management of wastes associated with animal breeding and feeding
operations.

GAO found that: (1) animal waste runoff can introduce excess nutrients,
organic matter, and pathogens into surface water and groundwater; (2)
agricultural nonpoint pollution is a major factor is water quality
degradation; (3) since 1970, the concentration of animal production in
large, confined operations has increased for each of the 6 livestock
categories studied; (4) geographical shifts in livestock production vary
with the specific livestock industry; (5) large, concentrated feeding
operations can obtain point source permits to control sources of
pollution discharges; (6) many feedlot operations are not required to
have point source permits because they do not discharge wastes during
most storm events, but many other operations that should have permits do
not because of erroneous exemptions or insufficient resources to
identify all operations needing permits; (7) commonly used animal waste
management practices include storage structures to hold animal wastes
until they can be used as fertilizer, buffers to filter nutrients and
organic matter from runoff before it reaches surface water, and nutrient
management which ensures proper timing and application of manure as
fertilizer; (8) waste management costs vary depending on the size and
type of operation; and (9) USDA provided about $89 million in cost-share
assistance to farmers for animal waste management for fiscal years 1992
through 1994.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-95-200BR
     TITLE:  Animal Agriculture: Information on Waste Management and 
             Water Quality Issues
      DATE:  06/29/95
   SUBJECT:  Water pollution control
             Agricultural production
             Animals
             Waste management
             Agricultural assistance
             Agricultural programs
             Water quality
             Waste disposal
             Cost sharing (finance)
             Licenses
IDENTIFIER:  National Pollution Discharge Elimination System Permit 
             Program
             USDA Agricultural Conservation Program
             USDA Water Quality Incentive Project
             USDA Small Watershed Program
             USDA Rural Clean Water Program
             USGS National Water Quality Assessment Program
             
**************************************************************************
* This file contains an ASCII representation of the text of a GAO        *
* report.  Delineations within the text indicating chapter titles,       *
* headings, and bullets are preserved.  Major divisions and subdivisions *
* of the text, such as Chapters, Sections, and Appendixes, are           *
* identified by double and single lines.  The numbers on the right end   *
* of these lines indicate the position of each of the subsections in the *
* document outline.  These numbers do NOT correspond with the page       *
* numbers of the printed product.                                        *
*                                                                        *
* No attempt has been made to display graphic images, although figure    *
* captions are reproduced. Tables are included, but may not resemble     *
* those in the printed version.                                          *
*                                                                        *
* A printed copy of this report may be obtained from the GAO Document    *
* Distribution Facility by calling (202) 512-6000, by faxing your        *
* request to (301) 258-4066, or by writing to P.O. Box 6015,             *
* Gaithersburg, MD 20884-6015. We are unable to accept electronic orders *
* for printed documents at this time.                                    *
**************************************************************************


Cover
================================================================ COVER


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

June 1995

ANIMAL AGRICULTURE - INFORMATION
ON WASTE MANAGEMENT AND WATER
QUALITY ISSUES

GAO/RCED-95-200BR

Animal Waste Management and Water Quality Issues


Abbreviations
=============================================================== ABBREV

  ACP - Agricultural Conservation Program
  AU - animal unit
  BMP - best management practice
  EPA - Environmental Protection Agency
  ERS - Economic Research Service
  GAO - General Accounting Office
  NASS - National Agricultural Statistics Service
  NAWQA - National Water Quality Assessment
  RCWP - Rural Clean Water Program
  SWP - Small Watershed Program
  USDA - U.S.  Department of Agriculture
  USGS - U.S.  Geological Survey
  WQIP - Water Quality Incentives Projects

Letter
=============================================================== LETTER


B-261629

June 28, 1995

The Honorable Richard G.  Lugar
Chairman
The Honorable Patrick J.  Leahy
Ranking Minority Member
Committee on Agriculture,
  Nutrition, and Forestry
United States Senate

Initiatives to address agricultural sources of water pollution are
likely to receive considerable attention during the debates over the
1995 farm bill.  In preparation for these debates, you requested that
we provide information on the management of animal agriculture
waste\1 and related water quality issues.  Specifically, you asked us
to provide information on (1) water quality concerns arising from
animal agriculture sources of nonpoint pollution--pollution not
traceable to a specific point of origin,\2 (2) consolidation trends
and geographical shifts in animal agriculture, (3) animal agriculture
production covered by point source permits,\3 (4) commonly used
animal waste management practices and their associated costs, and (5)
U.S.  Department of Agriculture (USDA) cost- share assistance for
animal waste management.  In addressing these objectives, you also
asked us to focus on the management of wastes associated with
breeding and feeding operations--generally farms, ranches, and
feedlots--for beef cattle, dairy cows, hogs, broilers, layers (laying
hens), and turkeys.  We briefed your offices on this request on June
26, 1995.  This briefing report summarizes the information provided
in that briefing. 


--------------------
\1 Animal agriculture waste generally refers to manure but also
includes urine, animal carcasses, bedding, poultry litter, and
wastewater. 

\2 Animal agriculture sources of nonpoint pollution include animal
waste runoff from animal feeding operations; cropland where manure
has been applied as fertilizer; and livestock feeding and watering
areas on rangeland and pastureland. 

\3 Point sources discharge into surface water from a discrete point,
such as a pipe or other conveyance. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Nonpoint pollution from animal waste runoff can impair surface water
and groundwater by introducing excess nutrients, organic matter, and
pathogens.  In general, impaired waters are those that do not fully
support one or more designated uses, such as providing drinking
water, allowing swimming, or supporting the existence of edible fish
and shellfish.  According to water quality assessments prepared by
the 50 states, agricultural nonpoint pollution (from both crop and
animal production) is a major source of impairment in the waters
assessed.  In addition, 18 states further reported on agricultural
nonpoint pollution by specific categories--feedlots, rangeland,
irrigated cropland, and nonirrigated cropland.  Their information
regarding animal waste runoff from feedlots and rangeland indicates
that this runoff is a significant factor in water quality impairment. 
(See section I.)

Consolidation (or concentration) of animal production in large,
confinement-type operations has increased since the 1970s for each of
the livestock and poultry sectors studied.  For example, in the hog
industry's top 10 production states, the inventory controlled by the
operations in the largest category (500 or more hogs) increased from
about 40 percent of the inventory of these states in 1978 to about 77
percent in 1994.  Also, in the broiler sector, sales attributable to
operations in the largest category (100,000 or more birds sold)
increased from about 70 percent of national sales in 1974 to about 97
percent in 1992.  Over the same period, however, the top 10
production states for each livestock and poultry sector remained
largely unchanged, although the relative share of production among
these states usually changed.  (See section 2.)

Discharges from concentrated feeding operations may be controlled by
point source permits; these permits are issued by the Environmental
Protection Agency (EPA) or by states delegated permitting authority
by EPA.\4 Under EPA's regulations, concentrated animal feeding
operations are generally those that have more than 1,000 animal unit
equivalents\5 and that also discharge to U.S.  waters during most
storm events.  According to EPA, about 1,987 concentrated animal
feeding operations in the livestock and poultry sectors we examined
had point source permits as of April 1995.\6 USDA estimates that
there are about 6,600 animal feeding operations nationwide in these
sectors that have more than 1,000 animal unit equivalents.  According
to EPA, many operations with more than 1,000 animal unit equivalents
are not required to have point source permits because they do not
discharge during most storm events; others should have permits but do
not because of mistaken exemptions or limited federal or state
resources for identifying operations needing permits.  (See section
3.)

Commonly used animal waste management practices include (1) treatment
lagoons, retention ponds, and other storage structures to hold animal
wastes until they can be used as fertilizer; (2) vegetative filter
strips, constructed wetlands, and other buffers to remove nutrients
and organic matter from animal waste runoff before it reaches surface
water; and (3) nutrient management based on testing the nutrient
content of soil, plant tissue, and manure to ensure proper timing and
application rates when applying manure as fertilizer.  The waste
management practice selected depends on site-specific factors such as
soil composition and the proximity of an operation to surface water
or groundwater; practice costs vary depending on the size and type of
operation and climatic conditions.  (See section 4.)

USDA generally provides cost-share assistance to farmers for animal
waste management under four conservation programs:  Agricultural
Conservation Program; Water Quality Incentives Projects; Small
Watershed Program; and, Rural Clean Water Program.  For fiscal years
1992 through 1994, these programs provided about $89 million in
cost-share assistance to farmers to assist them in financing a
variety of waste management practices to prevent water pollution. 
Most of this funding (about $65 million) was provided under the
Agricultural Conservation Program.  (See section 5.)


--------------------
\4 Authority for issuing point source permits is contained in Section
402 of the Clean Water Act.  This section establishes the National
Pollutant Discharge Elimination System permit program to control
discharges to U.S.  waters from point sources such as wastewater
treatment plants and industrial facilities.  These facilities include
concentrated animal feeding operations such as large feedlots. 

\5 Animal unit equivalents are calculated for each livestock and
poultry sector according to estimated rates of manure production for
each species.  Thus, the number of animals representing "1,000 animal
unit equivalents" varies by sector. 

\6 According to EPA, the number of concentrated animal feeding
operations with point source permits in the livestock and poultry
sectors we examined may exceed 1,987.  EPA officials said that the
agency's database of permitted operations is incomplete because some
states that have been delegated authority for issuing point source
permits by EPA are not regularly reporting permit issuances to EPA. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :2

To address our objectives, we analyzed data from various sources,
including USDA's Consolidated Farm Service Agency, Economic Research
Service, National Agricultural Statistics Service, and Natural
Resources Conservation Service; EPA; the Department of the Interior's
U.S.  Geological Survey; and the Department of Commerce's Census of
Agriculture. 

We conducted our work between December 1994 and June 1995 in
accordance with generally accepted government auditing standards.  We
did not independently verify the data obtained from the agencies
contacted.  Appendix I contains further information on our scope and
methodology. 

We discussed the contents of this report with officials representing
USDA and EPA.  At USDA, these officials included the Assistant Deputy
Administrator, Economic Analysis and Appraisal Staff, Consolidated
Farm Service Agency; Assistant Director for Economics and
Communication, Resource and Technology Division, Economic Research
Service; Chief, Livestock Branch, Estimates Division, National
Agricultural Statistics Service; and Manager, Water Quality Program,
Conservation and Ecosystem Assistance Division, Natural Resources
Conservation Service.  At EPA, these officials included the Chief,
Nonpoint Source Control Branch, Assessment and Watershed Protection
Division, Office of Wetlands, Oceans, and Watersheds; and the Chief,
Pretreatment and Multi-Media Branch, Permits Division, Office of
Wastewater Management.  These officials agreed that the positions and
data attributed to their agencies were accurate.  They also provided
new or clarifying information that we incorporated as appropriate. 


---------------------------------------------------------- Letter :2.1

We are sending copies of this report to the appropriate Senate and
House Committees; interested Members of Congress; the Secretary of
Agriculture; the Director, Office of Management and Budget; and other
interested parties.  We will also make copies available to others on
request. 

If you or your staff have any questions, please contact me at (202)
512-5138.  Major contributors to this report are listed in appendix
II. 

John W.  Harman
Director, Food and
  Agriculture Issues


Briefing Section 1 WATER QUALITY
CONCERNS RELATED TO ANIMAL
AGRICULTURE PRODUCTION
============================================================== Letter 



   (See figure in printed
   edition.)

Note:  According to EPA officials, these state assessment data are
generally the best available information on water quality from a
national perspective.  However, these officials said the data have
several limitations:  water quality assessment methodologies were not
consistent across states; not all surface waters were assessed; and,
surface waters assessed do not constitute a representative sample for
projection purposes. 

Source:  National Water Quality Inventory:  1992 Report to Congress,
Environmental Protection Agency (Washington, D.C.:  Mar.  1994). 

In 1990 and 1991, each state assessed the condition of its surface
water and reported this information to the Environmental Protection
Agency (EPA) in accordance with section 305(b) of the Federal Water
Pollution Control Act, as amended,\1 commonly known as the Clean
Water Act.  These state assessment data show the following: 

  The states assessed about 18 percent of the nation's river and
     stream miles; 46 percent of its lake acres; and 74 percent of
     its estuary square miles.\2

  About 38 percent of the nation's assessed river and stream miles,
     44 percent of its assessed lake acres, and 32 percent of its
     assessed estuary square miles were impaired, meaning that they
     were not fully supporting their designated uses, such as
     providing drinking water, allowing swimming, or supporting the
     existence of edible fish or shellfish. 

  Crop and animal agriculture nonpoint pollution affected about 72
     percent of impaired river and stream miles, 56 percent of
     impaired lake acres, and 43 percent of impaired estuary square
     miles. 

  Among five general categories of pollution sources (Municipal Point
     Sources; Urban Runoff/Storm Sewers; Agriculture; Industrial
     Point Sources; and Natural Sources), agriculture ranked as the
     number one cause of impaired rivers and streams and lakes, and
     the number three cause of impaired estuaries. 

The states also assessed the condition of their groundwater.  On the
basis of these assessments, EPA concluded that although the nation's
groundwater quality is generally good, many local areas have
experienced significant groundwater contamination.  According to EPA,
agriculture is one of the main sources of groundwater pollution. 



   (See figure in printed
   edition.)

Note:  The sum of impaired miles for each source as a percent of
agriculturally impaired miles does not add to 100 percent because
impairment may be attributable to multiple sources. 

Source:  GAO analysis of EPA's 1992 Section 305(b) data. 

As part of the water quality assessments they performed, 18 states\3
collected data on agricultural sources of nonpoint pollution
impairing river and stream miles within their borders.  These sources
were designated by four categories--feedlot, rangeland, nonirrigated
cropland, and irrigated cropland.  This information showed the
following: 

  Nonpoint pollution from feedlots impaired about 9 percent of the
     river and stream miles assessed and about 26 percent of the
     miles impaired by agricultural nonpoint pollution. 

  Nonpoint pollution from rangeland impaired about 8 percent of the
     river and stream miles assessed and about 25 percent of the
     miles impaired by agricultural nonpoint pollution. 

  Nonpoint pollution from nonirrigated cropland impaired about 14
     percent of the river and stream miles assessed and about 42
     percent of the miles impaired by agricultural nonpoint
     pollution. 

  Nonpoint pollution from irrigated cropland impaired about 10
     percent of the river and stream miles assessed and about 31
     percent of the miles impaired by agricultural nonpoint
     pollution. 

Feedlots contribute to river and stream impairment as a result of
animal waste runoff.  Rangeland contributes to this impairment
because of both animal waste runoff and soil erosion.  Animal waste
runoff can introduce excess nutrients (such as nitrogen and
phosphorus), organic matter, and pathogens.  Excess nutrient loadings
can overstimulate the growth of algae.  The decomposition of organic
matter requires oxygen that would otherwise be available for fish and
aquatic animals.  Pathogen contamination can result in restrictions
on using waters for drinking water, fish or shellfish harvesting, or
recreation such as swimming and boating. 

Nonirrigated and irrigated cropland contribute to river and stream
impairment as a result of commercial fertilizer and pesticide runoff
and soil erosion that reaches these waters; runoff of manure applied
to cropland as a fertilizer may also be a component of the pollution
associated with these categories. 



   (See figure in printed
   edition.)

   Note:  Atmospheric inputs are
   calculated as loadings to the
   entire land area of a
   watershed.  Fertilizer and
   manure inputs are calculated as
   loadings to the agricultural
   land in a watershed.  Point
   source inputs are calculated as
   loadings to the urban land area
   of a watershed.  According to
   the Department of the
   Interior's U.S.  Geological
   Survey (USGS), calculating
   loadings in this manner was
   necessary to allow comparisons
   among the watersheds. 

   (See figure in printed
   edition.)

   Source:  USGS' National Water
   Quality Assessment data.

   (See figure in printed
   edition.)


As part of its National Water Quality Assessment (NAWQA), USGS found
that manure was a significant source of nitrogen and phosphorus
inputs to the land areas of the 114 watersheds it studied using data
compiled for these watersheds between 1980 and 1990.\4 The watersheds
studied were in four geographical regions:  Northeast (64 watersheds
covering 17 percent of the region's land area); Southeast (20
watersheds covering 17 percent of the region's land area); Central
(11 watersheds covering 11 percent of the region's land area); and
Western (19 watersheds covering 8 percent of the region's land area). 

Manure was the primary source of nitrogen inputs in the Northeast
region; it was the second most important source of inputs in the
other regions.  For phosphorus, manure was the primary source of
inputs in the Northeast and Southeast regions; it was the second most
important source in the Central and Western regions.  According to
USGS, the relatively high inputs of nitrogen and phosphorus from
manure in the Northeast correspond to the high density of confined
animal production--especially dairy--in that region.  Similarly, USGS
cited confined poultry and hog production in the Southeast as a
reason for relatively high inputs of nitrogen and phosphorus from
manure in this region. 

According to USGS, most of the nutrient inputs to the land areas of
these watersheds will not end up in rivers, streams, or other surface
waters.  Most of these nutrients will be absorbed by plants or bound
up in the soil.  Also, part of the nitrogen will return to the
atmosphere as a gas.  Nevertheless, statistical studies of water
quality trends indicate that increases in in-stream loadings of
nitrogen and phosphorus are, in part, strongly correlated with
increases in the concentration of the livestock population in a
watershed. 



   (See figure in printed
   edition.)

   Source:  GAO analysis of NAWQA
   data.

   (See figure in printed
   edition.)


According to NAWQA data, animal manure was a significant source of
nitrogen and the primary source of phosphorus inputs in the
watersheds studied in the Northeast region.  Specifically, inputs of
these nutrients from manure accounted for 36 percent of median inputs
of nitrogen and 64 percent of median inputs of phosphorus in these
watersheds. 



   (See figure in printed
   edition.)

   Source:  GAO analysis of NAWQA
   data.

   (See figure in printed
   edition.)

NAWQA data indicate that animal manure was a contributing source of
nitrogen and the most significant source of phosphorus inputs in
watersheds studied in the Southeast region.  Specifically, manure
accounted for 22 percent of median inputs of nitrogen and 53 percent
of median inputs of phosphorus in these watersheds. 



   (See figure in printed
   edition.)

   Source:  GAO analysis of NAWQA
   data.

   (See figure in printed
   edition.)


According to NAWQA data, manure was the second most significant
source of nitrogen and the leading source of phosphorus inputs in the
watersheds studied in the Central region.  Specifically, inputs of
these nutrients from manure accounted for 37 percent of median inputs
of nitrogen and 65 percent of median inputs of phosphorus in these
watersheds. 



   (See figure in printed
   edition.)

   Source:  GAO analysis of NAWQA
   data.

   (See figure in printed
   edition.)

NAWQA data indicate that manure was the second most important source
of nitrogen and the leading source of phosphorus inputs in the
watersheds studied in the Western region.  Specifically, manure
accounted for 39 percent of median inputs of nitrogen and 53 percent
of median inputs of phosphorus in the watersheds studied. 

   Nonpoint and Point Sources of
   Nitrogen Inputs in NAWQA
   Watersheds

   (See figure in printed
   edition.)

   Source:  NAWQA data.

   (See figure in printed
   edition.)

This map depicts nitrogen inputs from nonpoint and point sources to
the land areas of 16 NAWQA watersheds.  Nonpoint sources include
atmospheric deposition, commercial fertilizer, and manure.  Point
sources include wastewater treatment and industrial discharges. 
Manure contributes more than 25 percent of the nitrogen inputs to 10
of these watersheds, and more than 50 percent of the inputs to 3
other watersheds. 

   Nonpoint and Point Sources of
   In-Stream Nitrogen Loadings in
   NAWQA Watersheds

   (See figure in printed
   edition.)

Source:  NAWQA data. 

This map depicts in-stream loadings (i.e., reaching surface waters)
of nitrogen from point and nonpoint (including manure) sources for 16
NAWQA watersheds.  Nonpoint sources contributed more than 50 percent
of in-stream loadings of nitrogen in all but one of these watersheds
(the South Platte River); in 12 of these watersheds, nonpoint sources
contributed more than 75 percent of the in-stream nitrogen loadings. 



   (See figure in printed
   edition.)

   Note:  Available cropland
   refers to the cropland on
   livestock and poultry farms in
   each county.

   (See figure in printed
   edition.)

   Source:  Economic Research
   Service analysis of 1987 Census
   of Agriculture data.

   (See figure in printed
   edition.)

Using 1987 Census of Agriculture data and information from other
sources on manure production and manure nutrient content, the U.S. 
Department of Agriculture's (USDA) Economic Research Service (ERS)
estimated and mapped nitrogen from manure concentrations by county. 
These concentrations are expressed as a ratio of the quantity of
nitrogen from manure (in pounds) to the cropland acreage operated by
livestock and poultry producers in each county.  The estimates show
where nitrogen from manure is available as a crop nutrient; the
estimates are not necessarily an indication of water quality problems
or improper manure management.  These estimates indicate that the
counties with the highest manure nitrogen concentrations per acre are
generally located in the northeastern states; parts of the Southeast;
Wisconsin; northeastern Arizona; and southern California.  ERS'
estimates of manure phosphorus concentrations per acre are
distributed similarly to the estimates for manure nitrogen. 

Geographic variation in manure nitrogen concentrations per cropland
acre may be an important consideration in assessing water quality
problems, but a number of other factors must also be considered. 
According to ERS, to fully relate nutrient management to water
quality, information on nutrient inputs from chemical fertilizer
applications, crop nutrient uptake, soil leaching and runoff
properties, and rainfall patterns is needed.  In addition, livestock
and poultry producers with little available cropland may transfer
manure to non-livestock producers within the county who have greater
amounts of land available to utilize the manure nutrients.  Some of
this manure may also be used for other purposes such as methane gas
production. 

BRIEFING SECTION 2

--------------------
\1 33 U.S.C.  1251 et seq. 

\2 Estuaries are coastal areas where fresh water and salt water
mingle. 

\3 These states are Delaware, Illinois, Kansas, Maine, Massachusetts,
Michigan, Minnesota, Mississippi, Montana, Nevada, North Dakota,
Oklahoma, Oregon, Texas, Vermont, Washington, West Virginia, and
Wyoming.  Collectively, these states (1) contain about 39 percent of
the nation's river and stream miles and (2) assessed about 20 percent
of their river and stream miles. 

\4 USGS' study delineated nitrogen inputs by four sources: 
atmospheric deposition (nitrogen constitutes about 78 percent of the
earth's atmosphere, by volume); fertilizer (commercial fertilizers);
manure; and point sources (primarily wastewater treatment and
industrial discharges).  Phosphorus sources were delineated by three
sources:  fertilizer, manure, and point sources.  The 114 watersheds
studied do not constitute a representative sample for projection
purposes. 


CONSOLIDATION TRENDS AND
GEOGRAPHICAL SHIFTS IN ANIMAL
AGRICULTURE PRODUCTION
============================================================== Letter 

   U.S.  Beef Cattle Inventory and
   Operations (Selected Years)

   (See figure in printed
   edition.)

   Source:  GAO analysis of
   National Agricultural
   Statistics Service (NASS) data.

   (See figure in printed
   edition.)

From 1986 to 1994, the beef cattle sector (including ranches and
farms but excluding feedlots) experienced a slight growth in
consolidation--generally, the concentration of production in large,
confinement-type operations.  During this period, the inventory
controlled by operations in the largest category (100 or more cattle)
increased from about 46 percent of national inventory in 1986 to
about 48 percent in 1994.  Also, the number of operations in this
category increased by about 9 percent, while the total number of
operations (of all sizes) decreased by about 11 percent. 



   (See figure in printed
   edition.)

   Source:  GAO analysis of NASS
   data.

   (See figure in printed
   edition.)

From 1986 to 1994, the top 10 beef cattle production states
(excluding feedlots) experienced little change; Texas remained the
number one production state, Iowa dropped out of the top 10 states,
and Kentucky joined this group.  None of the other states experienced
a change of greater than 1 percent in its share of national
inventory.  Industry sources expect little change in terms of
geographic shifts or consolidation in the beef cattle industry over
the next few years. 

   U.S.  Feedlot Cattle Sales and
   Operations (Selected Years)

   (See figure in printed
   edition.)

   Source:  GAO analysis of Census
   of Agriculture data.

   (See figure in printed
   edition.)

From 1974 to 1992, the feedlot cattle sector experienced a growth in
consolidation.  During this period, sales by operations in the
largest category (1,000 or more cattle sold) increased from about 62
percent of national sales in 1974 to about 78 percent in 1992.  Also,
the number of operations in this category decreased by about 2
percent, while the total number of operations (of all sizes)
decreased by 30 percent. 



   (See figure in printed
   edition.)

   Source:  GAO analysis of Census
   of Agriculture data.

   (See figure in printed
   edition.)

From 1974 to 1992, Kansas moved from fourth to first place among the
top 10 feedlot cattle states, with its share of national sales
increasing from about 10 percent to about 19 percent.  Nebraska and
Texas also increased their share of national sales, while Oklahoma
and Idaho joined the list of the top 10 states.  In contrast, Iowa
and California lost about 5- and 4-percent shares, respectively, of
national sales, while Arizona and Minnesota dropped off the top 10
list. 

   U.S.  Dairy Cow Inventory and
   Operations (Selected Years)

   (See figure in printed
   edition.)

   Source:  GAO analysis of NASS
   data.

   (See figure in printed
   edition.)

From 1978 to 1994, the dairy cow sector became more consolidated. 
During this period, the inventory controlled by operations in the
largest category (100 or more cows) increased from about 30 percent
of national inventory in 1978 to about 52 percent in 1994.  Also, the
number of operations in this category increased by about 35 percent,
while the total number of operations (of all sizes) fell by nearly 60
percent. 



   (See figure in printed
   edition.)

   Source:  GAO analysis of NASS
   data.

   (See figure in printed
   edition.)

From 1978 to 1994, California moved from fourth to second place among
the top 10 dairy cow production states, increasing its share of the
nation's dairy cow inventory from about 8 percent to about 13
percent.  Washington State and Texas also increased their shares.\1
Dairy cow inventories dropped in the traditional dairy production
states of Wisconsin, Minnesota, and New York, while Missouri dropped
out of the top 10 states.  According to ERS, California's rapid
population growth increased demand for locally produced milk, which,
in turn, prompted dairy producers in this state to expand their
production. 

   Hog Inventory and Operations
   for the Top 10 Hog Production
   States (Selected Years)

   (See figure in printed
   edition.)

   Note:  The table shows
   inventory and operations for
   the top 10 production states in
   1978; data for subsequent years
   is for the same 10 states.  The
   actual top 10 states in 1994
   differed from the top 10 states
   in 1978 by only one state. 
   (See also, pp.  44-45.)

   (See figure in printed
   edition.)

   Source:  GAO analysis of NASS
   data.

   (See figure in printed
   edition.)

From 1978 to 1994, the top 10 hog-producing states\2 experienced a
dramatic increase in consolidation.  During this period, the
inventory controlled by operations in the largest size category (500
or more hogs) increased from about 40 percent of the top 10 states'
inventory in 1978 to about 77 percent of this inventory in 1994. 
Also, the number of operations in the largest size category increased
by about 30 percent, while the total number of operations decreased
by about 63 percent. 

   Hog Inventory and Operations
   for the Top 10 Hog Production
   States From 1988 to 1994

   (See figure in printed
   edition.)

   Source:  GAO analysis of NASS
   data.

   (See figure in printed
   edition.)

Because of the strong consolidation trend in the hog sector, USDA
introduced a new size category in 1988 (1,000 or more hogs) and then
split this category into two categories in 1993 (1,000 to 1,999 and
2,000 or more hogs) to track production associated with large
operations.  From 1988 to 1994, the inventory controlled by
operations with 1,000 or more hogs increased from about 36 percent of
the top 10 states' inventory in 1988 to about 56 percent in 1994. 
Also, the number of operations in this size category increased by
about 31 percent. 



   (See figure in printed
   edition.)

   Source:  GAO analysis of NASS
   data.

   (See figure in printed
   edition.)

A number of geographical shifts in the level of hog production
occurred among the top 10 hog-producing states between 1978 and 1994. 
North Carolina moved from seventh to second place among these states,
increasing its share of the nation's hog inventory from about 4
percent to about 12 percent.  Minnesota also experienced an increase
in its share of this inventory, moving from about 7 percent to about
8 percent, while South Dakota joined the list of the top 10 states
and Georgia dropped out. 

In addition, hog production fell slightly in the Corn Belt states--
Illinois, Indiana, Iowa, Missouri, and Ohio--although nearly half of
the nation's hog production continued to be centered in this region. 
For example, although Iowa remained the top hog-producing state, its
share of the nation's inventory dropped from about 25 percent in 1978
to about 24 percent in 1994.  Illinois and Missouri experienced
similar reductions. 

According to USDA and industry sources, the strong consolidation
trend in the hog industry is a factor in both North Carolina's
emergence and the Corn Belt's decrease.  North Carolina has a
tradition of consolidated poultry production; pork production
companies in this state have modeled themselves after the
consolidated poultry sector, which features close business ties
between poultry producers and processors (slaughtering and packing
plants).  The result has been a rapid growth in the number of large
hog confinement operations in North Carolina.  In contrast, there has
been significant public opposition to the growth of these operations
in the Corn Belt, which has a strong tradition of family farm hog
production.  An industry source also cited North Carolina's proximity
to large consumer markets in the East and mild climate as other
reasons for this state's hog production gains. 

Hog industry sources generally believe that the consolidation trends
in the hog sector are likely to continue over the next few years. 

   U.S.  Broiler Sales and
   Operations (Selected Years)

   (See figure in printed
   edition.)

   Source:  GAO analysis of Census
   of Agriculture data.

   (See figure in printed
   edition.)

From 1974 to 1992, the broiler sector experienced a steady increase
in consolidation.  During this period, sales attributable to
operations in the largest category (100,000 or more broilers sold)
increased from about 70 percent of national sales in 1974 to about 97
percent in 1992.  Also, the number of operations in the largest size
category increased by nearly 67 percent, while the total number of
operations (of all sizes) decreased by about 24 percent. 



   (See figure in printed
   edition.)

   Source:  GAO analysis of Census
   of Agriculture data.

   (See figure in printed
   edition.)

From 1974 to 1992, the top 10 states in broiler sales remained the
same, with only minor fluctuations in their percentage of sales. 
While Virginia gained about 1 percent of the nation's sales,
Arkansas, Delaware, and Maryland each lost approximately 1 percent;
Texas lost about a half percent. 

According to ERS, broiler production developed and expanded in the
Southeast because of this region's relatively low production and
processing costs.  For example, broiler housing costs are lower in
the Southeast because of its warm climate.  Processing costs are
lower because of the region's relatively low labor costs.  In
addition, the Southeast has a strong infrastructure to support the
broiler industry. 

   U.S.  Layer Inventory and
   Operations (Selected Years)

   (See figure in printed
   edition.)

   Note:  This analysis includes
   data for all layers.  The layer
   flock consists of hens
   producing eggs for human
   consumption (table eggs) and
   hens producing eggs for broiler
   industry hatcheries (hatching
   eggs).

   (See figure in printed
   edition.)

   Source:  GAO analysis of Census
   of Agriculture data.

   (See figure in printed
   edition.)

The layer sector experienced an increase in consolidation from 1974
to 1992.  During this period, the inventory controlled by operations
in the largest category (100,000 or more layers) increased from about
31 percent of national inventory in 1974 to about 62 percent in 1992. 
In addition, the number of operations in the largest category
increased by about 50 percent, while the total number of operations
(of all sizes) decreased by about 57 percent. 



   (See figure in printed
   edition.)

   Source:  GAO analysis of Census
   of Agriculture data.

   (See figure in printed
   edition.)

From 1974 to 1992, Pennsylvania, Indiana, and Texas each increased
its share of the nation's layer inventory by about 1 to 4 percent. 
Ohio and Minnesota also joined the list of the top 10 layer states. 
California experienced the largest loss of inventory--about 4
percent--although it maintained its status as the leading layer
inventory state; Mississippi and Florida dropped out of the top 10
category. 

According to ERS, new technology has caused some relocation of the
layer industry for table egg production to the Midwest in order to be
near grain-producing areas.  This technology includes the
construction of large complexes (e.g., 1 million or more layers) that
include both egg production and processing facilities.  In addition,
greater demand for egg products has resulted in construction of
specialized facilities in the Midwest that produce dried, liquid, and
frozen egg products for shipment across the nation. 

   U.S.  Turkey Sales and
   Operations (Selected Years)

   (See figure in printed
   edition.)

   Source:  GAO analysis of Census
   of Agriculture data.

   (See figure in printed
   edition.)

From 1974 to 1992, the turkey sector experienced an increase in
consolidation.  During this period, sales by operations in the
largest size category (100,000 or more turkeys sold) increased from
about 43 percent of national sales in 1974 to about 60 percent in
1992.  Also, the number of operations in the largest size category
increased by over 200 percent, while the total number of operations
(of all sizes) increased by 42 percent. 



   (See figure in printed
   edition.)

   Source:  GAO analysis of Census
   of Agriculture data.

   (See figure in printed
   edition.)

From 1974 to 1992, North Carolina moved from third to first place
among the top 10 states in turkey sales, increasing its share of
national sales from about 11 percent to about 20 percent.  Arkansas,
Virginia, and Indiana also increased their shares of national sales,
while Pennsylvania joined the list of the top 10 states.  California,
Iowa, Minnesota, Missouri, and Texas each experienced a loss of about
1 to 3 percent of national sales.  Wisconsin dropped out of the top
10 group. 

BRIEFING SECTION 3

--------------------
\1 The federal dairy pricing system is a factor in encouraging
expanded dairy production in areas outside the Upper Midwest and the
Northeast.  For example, the distance differential paid under the
Milk Marketing Order Program increases the guaranteed price for milk
used for fluid consumption and is generally based on the distance of
a plant from Eau Claire, Wisconsin.  See our report, Federal Dairy
Programs:  Information on Dairy Pricing and Related 1995 Farm Bill
Issues (GAO/RCED-95-97BR, Mar.  27, 1995). 

\2 While USDA reports total hog operations and inventory data for all
50 states, it does so by size-of-operation categories for the top 10
hog production states only.  From 1978 to 1994, the total number of
operations (of all sizes) decreased by about 67 percent--from 635,000
to 209,000--while national inventory remained virtually the same at
about 60 million head. 


ANIMAL AGRICULTURE PRODUCTION
SUBJECT TO POINT SOURCE PERMITS
============================================================== Letter 



   (See figure in printed
   edition.)

   Notes:  (1) EPA does not track
   the inventories of livestock
   and poultry production
   operations that have been
   issued point source permits. 
   Therefore, we cannot report the
   number of animals covered by
   these permits.  (2) EPA
   reported permitted operations
   in three other livestock and
   poultry categories:  beef
   cattle (not including cattle on
   feedlots); general livestock
   (mixed livestock operations,
   except dairy and poultry); and
   poultry hatcheries.  A total of
   326 operations in these
   categories had point source
   permits as of April 1995. 

   (See figure in printed
   edition.)

   Source:  EPA permit data.

   (See figure in printed
   edition.)

Section 402 of the Clean Water Act establishes the National Pollutant
Discharge Elimination System permit program to control discharges
from point sources\1 such as treatment plants and industrial
facilities, including certain animal feeding operations.\2 As of
April 1995, 1,987 animal feeding operations in the livestock and
poultry sectors we examined (excluding beef cattle not on feedlots)
had point source permits issued either by EPA or by states delegated
permitting authority by EPA.  Most of these operations were in the
beef cattle on feedlots and dairy sectors. 

Under EPA regulations, point source permits are required for animal
feeding operations that discharge to U.S.  waters during most storm
events and are "concentrated." These operations

  have more than 1,000 animal units (AU);\3 or

  have more than 300 AUs and either discharge through a man-made
     device into navigable waters or directly into waters of the
     United States that originate outside the facility; or

  are of any size but have been determined by EPA or the state
     permitting authority, on a case-by-case basis, to significantly
     contribute to water pollution, taking into account such factors
     as location and terrain.  If there are fewer than 300 AUs, one
     of the factors concerning discharge cited above must also be
     present for an animal feeding operation to fall within this
     category. 



   (See figure in printed
   edition.)

   Notes:  (1) Confined operations
   include feedlots or other
   operations where animals are
   concentrated in a small area. 
   (2) According to ERS, the
   columns in this table generally
   should not be totaled because
   of potential double-counting,
   i.e., some operations (farms)
   have more than one type of
   animal production.  However,
   ERS officials said that the
   number of operations with more
   than 1,000 AU equivalents could
   be totaled.  According to these
   officials, this total, about
   6,600 operations, is a
   reasonable estimate because
   very few of these operations
   will have more than 1,000 AU
   equivalents for more than one
   type of livestock or poultry. 

   (See figure in printed
   edition.)

   Source:  ERS estimates based on
   1992 Census of Agriculture
   data.

   (See figure in printed
   edition.)

According to ERS' analysis of 1992 Census of Agriculture data, about
6,600 operations (farms) in the livestock and poultry sectors we
examined (excluding beef cattle not on feedlots) have more than 1,000
AU equivalents.  This represents about 1.5 percent of the 450,000
operations nationwide with confined livestock or poultry
production.\4 ERS also estimated that the percent of animals on
site\5 for operations with more than 1,000 AU equivalents ranges from
about 13 percent for dairy to about 71 percent for beef cattle on
feedlots. 

The number of operations with more than 1,000 AU equivalents--about
6,600--exceeds the number of permitted operations in the
corresponding livestock and poultry sectors--1,987.  According to
EPA, a number of factors account for this difference.  For example,
many operations with more than 1,000 AU equivalents are not required
to obtain point source permits because they do not discharge into
U.S.  waters during most storm events.\6 Also, some confined animal
operations that should have point source permits do not because of
limited federal and state resources for identifying these operations
or inappropriate permit exemptions. 

Furthermore, according to EPA, the number of operations having point
source permits in the livestock and poultry sectors we examined may
exceed 1,987.  EPA officials said the agency's data base of permitted
operations is incomplete because some states that have been delegated
authority to issue these permits are not regularly reporting these
issuances to EPA. 

BRIEFING SECTION 4

--------------------
\1 Section 502 of the Clean Water Act defines point sources as
discernable, confined, and discrete conveyances from which pollutants
are or may be discharged. 

\2 Under EPA regulations, "animal feeding operations" are those that
confine livestock or poultry for 45 days or more in a 12-month period
in a facility that has no vegetative ground cover.  Animal feeding
operations that are "concentrated" because of their size and other
factors may be required to obtain a point source permit. 

\3 The 1,000 AU equivalents for the animal sectors we were asked to
examine are the following:  700 mature dairy cattle; 1,000 slaughter
and feeder cattle; 2,500 hogs (over 55 pounds); 30,000 broilers or
layers (liquid manure system); 55,000 turkeys or 100,000 broilers or
layers (continuous watering system). 

\4 According to ERS officials, the 1992 Census of Agriculture
reported that there were about 450,000 operations nationwide with
confined livestock and/or poultry production. 

\5 ERS' methodology for calculating animals on site varies by sector. 
ERS used annual sales and inventory data for the broiler, turkey, and
hog sectors to account for seasonal production variations; sales data
adjusted for the production cycle for the beef feedlot sector; and
inventory data for the dairy cattle and layer sectors. 

\6 Point source permits are generally required only for operations
that discharge into U.S.  waters during storm events less severe than
a 24-hour heavy precipitation event expected to occur only once every
25 years. 


BEST MANAGEMENT PRACTICES AND
ASSOCIATED COSTS
============================================================== Letter 



   (See figure in printed
   edition.)

   Note:  Confined operations
   include feedlots or other
   operations that concentrate
   animals in a small area. 
   Nonconfined operations include
   pasture and rangeland where
   animals are allowed to roam
   over a large area.

   (See figure in printed
   edition.)

   Source:  USDA.

   (See figure in printed
   edition.)

According to USDA, a variety of animal waste management practices,
generally referred to as best management practices (BMP), are
available to manage wastes and minimize their potential effects on
water quality.  In general, the approaches encompassed by these BMPs
include (1) minimizing the discharge of animal wastes by storing them
until they can be used as fertilizer or to increase the organic
content of soil, (2) preventing manure runoff from reaching surface
waters, and (3) incorporating nutrient management practices when
applying manure to cropland as a fertilizer.  BMP selection depends
on site-specific factors such as soil composition and the proximity
of an operation to surface water or groundwater. 

BMPs such as treatment lagoons, retention ponds, and other storage
structures are used to store animal waste and prevent runoff from
confined operations.  Irrigation equipment pumps liquid animal waste
from the storage structures onto agricultural land.  Some confined
operations--especially poultry operations--use composting systems to
dispose of dead animals and manure.  Composting reduces the volume
and weight of waste and produces an end product that can be used as
fertilizer. 

Vegetated filter strips and constructed wetlands remove nutrients and
suspended solids from the runoff of confined operations.  Filter
strips and wetlands also serve as buffers between range or
pastureland and surface water bodies; they perform a similar function
for agricultural land to which manure has been applied as fertilizer. 
Fencing restricts livestock access to surface water bodies,
preventing animals from depositing wastes directly into these waters. 

Nutrient management encompasses testing the nutrient content of soil,
plant tissues, and manure to determine the proper timing and rates of
application when applying manure as a fertilizer.  Diet or feed
manipulation reduces the amount of waste generated by livestock or
reduces the nutrient content of this manure. 



   (See figure in printed
   edition.)

   Note:  Ranges depicted
   represent total investment
   costs and are extremes in terms
   of anticipated storm water
   volume and temperature. 
   Low-end costs assume storm
   water volumes of up to 4 inches
   of rain in a 24-hour period and
   a non-northern location. 
   High-end costs assume storm
   water volumes of up to 10
   inches of rain in a 24-hour
   period and a northern location. 
   Also, EPA's cost estimates
   assume that no waste management
   practices are in place under
   baseline conditions.

   (See figure in printed
   edition.)

   Source:  EPA data.

   (See figure in printed
   edition.)

EPA has estimated the range of investment costs for employing various
BMPs for typical small- and medium-sized livestock confinement
operations; these BMPs include the retention pond and irrigation
system and vegetative filter strip options.  According to EPA's
analysis, BMP investment costs vary by operation, depending on the
BMP selected and the operation's size and type.  The retention pond
and irrigation system option, for example, is more costly than the
filter strip option.  In addition, as operation size increases, total
investment costs for a particular BMP generally increase; however,
investment costs calculated on a per animal basis may decrease.  The
type of operation--e.g., dairy versus beef cattle--will also affect
costs; a dairy cow generally produces significantly more manure than
a beef feedlot animal because dairy cows are usually larger and are
fed a diet high in roughage. 

According to EPA, investment costs may also be greater if climatic
conditions, such as periodically large storm water volumes or
prolonged periods of subfreezing temperatures, require additional
manure storage capacity.  Investment costs for manure storage
capacity, for example, are significantly higher for operations in
locations expected to experience high storm water volumes than in
locations expected to experience low storm water volumes.\1
Similarly, storage costs are higher in northern states, which
generally experience longer periods of subfreezing temperatures than
other parts of the country; manure must be stored for longer periods
of time to preclude its application to frozen cropland, from which it
might easily be washed off into surface waters during thaws. 



   (See figure in printed
   edition.)

   Source:  EPA data.

   (See figure in printed
   edition.)

This table depicts EPA's estimated investment and annual operations
costs for use of the retention pond and irrigation system option on
medium-sized feedlot, dairy, and hog operations.  This option
involves storing wastes until they can be spread on fields as
fertilizer.  The estimates assume (1) a settling basin and retention
pond large enough to handle runoff associated with storms of up to 6
inches of rain in 24 hours and (2) a non-northern location.\2



   (See figure in printed
   edition.)

   Source:  EPA data.

   (See figure in printed
   edition.)

This table depicts EPA's estimated investment and annual operations
costs for use of the filter strip option on medium-sized feedlot,
dairy, and hog operations.  This option involves disposal of liquid
wastes on a vegetated strip where nutrients and suspended solids are
filtered out and absorbed into the soil.  The estimates assume (1) a
vegetated strip large enough to handle runoff associated with storms
of up to 6 inches of rain in 24 hours and (2) a non-northern
location. 



   (See figure in printed
   edition.)

   Source:  EPA data.

   (See figure in printed
   edition.)

This table depicts EPA's estimated investment and annual operations
costs for a waste storage and composting system used on an 80,000-
bird poultry operation.  Under this system, the majority of the
poultry bedding and manure are stored dry and covered for subsequent
use as fertilizer.  The remainder of the bedding and manure is placed
in aerobic composters with dead bird carcasses; these composted
wastes are also used as fertilizer.\3

BRIEFING SECTION 5

--------------------
\1 EPA's analysis separates locations into four categories for
expected storm water volumes in a 24-hour period:  4 inches; 6
inches; 8 inches; and 10 inches.  These are the storm water volumes
that are expected to occur once every 25 years; the 25-year criterion
is provided for in USDA's design standards for waste management
systems. 

\2 Estimates for the hog operation also assume that irrigation
equipment would not be purchased because the retention pond for this
operation would be relatively small.  Accordingly, it would be
cheaper to pay a commercial service to periodically drain the pond
than to purchase irrigation equipment to pump the pond's contents
onto fields as fertilizer. 

\3 According to EPA, composting is more expensive for broiler
operations than for layer operations of the same size because broiler
mortality rates are higher and broiler operations therefore require
larger composting storage capacity. 


USDA CONSERVATION PROGRAMS
PROVIDING COST-SHARE ASSISTANCE
FOR ANIMAL WASTE MANAGEMENT
============================================================== Letter 



   (See figure in printed
   edition.)

A number of USDA conservation programs share the cost of implementing
conservation practices with farmers through direct payments.\1 In
general, these cost-share programs address one or more conservation
objectives, including soil erosion control, water pollution abatement
for animal agriculture or crop production, or other (including fish
and wildlife enhancement, flood control, water conservation, and
forestry).  During fiscal years 1992 through 1994, about half of the
cost-share assistance provided under these programs was for soil
erosion control.  However, many conservation measures may have
secondary conservation purposes and result in multiple environmental
benefits. 

Four USDA conservation programs--Agricultural Conservation Program
(ACP), Water Quality Incentives Projects (WQIP), Small Watershed
Program (SWP), and Rural Clean Water Program (RCWP)--account for most
of USDA's cost-share assistance to abate water pollution resulting
from animal agriculture.  For fiscal years 1992 through 1994, these
programs provided about $89 million for this purpose, according to
USDA program activity data for ACP, WQIP, and RCWP and estimated
expenditures for SWP. 



   (See figure in printed
   edition.)

   Source:  GAO analysis of USDA
   program activity data.

   (See figure in printed
   edition.)

For fiscal years 1992 through 1994, ACP provided approximately $65
million in cost-share assistance for animal waste management; this
represented about 12 percent of the cost-share funds available under
the program.  This assistance was provided for a variety of waste
management practices, including treatment lagoons and storage
facilities, constructed wetlands systems, and composting facilities. 
Under ACP, cost-share assistance is generally limited to 50 percent
of the total cost of the financed activity; the maximum assistance
level per participant is $3,500 annually or $35,000 under 10-year
agreements. 



   (See figure in printed
   edition.)

   Source:  GAO analysis of USDA
   program activity data.

   (See figure in printed
   edition.)

For fiscal years 1992 through 1994, WQIP provided about $2 million in
cost-share assistance for animal waste management; this represented
about 26 percent of the cost-share funds available under the program. 
WQIP cost-share assistance may only be used for management practices
such as waste utilization and nutrient management; it may not be used
for structural practices such as waste storage facilities.\2 Under
WQIP, cost-share assistance is limited to $3,500 annually per
participant for up to 5 years. 



   (See figure in printed
   edition.)

   Source:  GAO analysis of USDA
   estimated expenditures for SWP.

   (See figure in printed
   edition.)

For fiscal years 1992 through 1994, SWP provided an estimated $21
million in cost-share assistance for animal waste management; this
represented about 15 percent of the cost-share funds available under
the program.  SWP cost-share assistance may be used for a variety of
waste management practices, including waste treatment lagoons and
storage structures.  Under SWP, cost-share assistance is limited to
50 percent of construction costs, with a maximum of $100,000 per
participant for the life of the program. 



   (See figure in printed
   edition.)

   Source:  GAO analysis of USDA
   program activity data.

   (See figure in printed
   edition.)

For fiscal years 1992 through 1994, RCWP provided about $1 million in
cost-share assistance for animal waste management; this represented
about 53 percent of the cost-share funds available under the
program.\3 This assistance was provided for a variety of waste
management measures in 22 states, including waste storage structures
and constructed wetlands systems.  Under RCWP, cost-share assistance
is limited to 75 percent of the total cost of the financed activity,
with a maximum of $50,000 per recipient. 


--------------------
\1 These programs include the Agricultural Conservation Program,
Colorado River Basin Salinity Control Program, Emergency Conservation
Program, Forestry Incentives Program, Great Plains Conservation
Program, Rural Clean Water Program, Stewardship Incentive Program,
Small Watershed Program, and Water Quality Incentives Projects. 
Detailed information on the goals and funding for these and other
USDA conservation programs is contained in our report entitled
Agricultural Conservation:  Status of Programs That Provide Financial
Incentives (GAO/RCED-95-169, Apr.  28, 1995). 

\2 Technically, WQIP provides "incentive payments" to encourage
farmers to use improved waste management practices, rather than
cost-share assistance for the construction of storage facilities. 
However, WQIP has been funded through ACP's appropriation; ACP is a
cost-share program.  Also, assistance available to a farmer under
WQIP is limited by any payments made to that farmer under ACP in the
same year. 

\3 According to USDA, funds were last appropriated for RCWP in fiscal
year 1981 under long-term contracts to establish best management
practices.  The final payment under this program is scheduled to be
made in 1999. 


OBJECTIVES, SCOPE, AND METHODOLOGY
=========================================================== Appendix I

The Chairman and Ranking Minority Member of the Senate Committee on
Agriculture, Nutrition, and Forestry asked us to provide information
on animal agriculture waste management and related water quality
issues.  Specifically, the requesters asked us to provide information
on (1) water quality concerns arising from animal agriculture sources
of nonpoint pollution--pollution not traceable to a specific point of
origin, (2) consolidation trends and geographical shifts in animal
agriculture, (3) animal agricultural production covered by point
source permits, (4) the most commonly used animal waste management
practices and associated costs, and (5) U.S.  Department of
Agriculture (USDA) cost-share assistance for animal waste management. 
In addressing these objectives, the requesters asked us to focus on
the management of wastes associated with breeding and feeding
operations--generally farms, ranches, and feedlots--for beef cattle,
dairy cows, hogs, broilers, layers (laying hens), and turkeys. 

To address the first objective, we analyzed data from the
Environmental Protection Agency's (EPA) 1992 inventory of water
quality; the Department of the Interior's U.S.  Geological Survey's
National Water Quality Assessment program; and USDA's Economic
Research Service's analysis of counties with high ratios of nutrients
from manure to cropland. 

To address the second objective, we analyzed data from (1) USDA's
National Agricultural Statistics Service (NASS) for the years 1978
through 1994 and (2) the Department of Commerce's Census of
Agriculture for census years 1974, 1978, 1982, 1987, and 1992.  For
the beef cattle (except feedlots), dairy cow, and hog sectors, we
used NASS inventory data because they were more current than Census
of Agriculture inventory data.  For the layer sector, we used Census
of Agriculture inventory data because they were more complete than
the NASS inventory data for this sector.  For the feedlot cattle and
broiler sectors, we used Census of Agriculture annual sales data
(number of animals sold) because these data were generally more
complete than either Census of Agriculture or NASS inventory data for
these sectors.  We also used Census of Agriculture annual sales data
for the turkey sector because inventory fluctuates seasonally with
demand.  In addition, we interviewed USDA and animal producer
organization officials to obtain their views on future consolidation
trends and the reasons for geographical shifts in these sectors.\1

To address the third objective, we analyzed data from EPA's Office of
Wastewater Management and Region VII and ERS' analysis of confined
animal production operations as reported in the 1992 Census of
Agriculture.  We also interviewed EPA officials and reviewed relevant
documentation to obtain a better understanding of point source permit
requirements. 

To address the fourth objective, we obtained and analyzed information
from a variety of sources, including waste management handbooks
prepared by USDA and the Poultry Water Quality Consortium\2 and EPA's
analysis of the economic impacts on confined animal operations of
waste management measures specified in the Coastal Zone Act
Reauthorization Amendments of 1990.\3 We also interviewed officials
from USDA's Natural Resource Conservation Service and Agricultural
Research Service, the American Society of Agricultural Engineers, and
animal producer organizations to obtain their views on preferred
waste management practices and associated costs. 

To address the fifth objective, we analyzed program activity data for
fiscal years 1992-94 for USDA conservation programs providing
cost-share assistance.  We also reviewed prior GAO reports that
discuss USDA conservation programs providing cost-share assistance. 

We conducted our work between December 1994 and June 1995 in
accordance with generally accepted government auditing standards.  We
did not independently verify the data obtained from the agencies
contacted. 

We discussed the contents of this report with officials representing
USDA and EPA.  At USDA, these officials included the Assistant Deputy
Administrator, Economic Analysis and Appraisal Staff, Consolidated
Farm Service Agency; Assistant Director for Economics and
Communication, Resource and Technology Division, Economic Research
Service; Chief, Livestock Branch, Estimates Division, National
Agricultural Statistics Service; and Manager, Water Quality Program,
Conservation and Ecosystem Assistance Division, Natural Resources
Conservation Service.  At EPA, these officials included the Chief,
Nonpoint Source Control Branch, Assessment and Watershed Protection
Division, Office of Wetlands, Oceans, and Watersheds; and the Chief,
Pretreatment and Multi-Media Branch, Permits Division, Office of
Wastewater Management.  These officials agreed that the positions and
data attributed to their agencies were accurate.  They also provided
new or clarifying information that we incorporated as appropriate. 


--------------------
\1 We contacted the following animal producer organizations:  the
National Cattlemen's Association; National Milk Producers Federation;
National Pork Producers Council; National Broiler Council; and
National Turkey Federation. 

\2 The Poultry Water Quality Consortium is a cooperative effort
involving the Southeastern Poultry and Egg Association, EPA, USDA,
and the Tennessee Valley Authority.  The Consortium's purpose is to
identify and adopt environmentally prudent uses of poultry wastes and
by-products. 

\3 Pub.  L.  No.  101-508, Title VI, Subtitle C, Nov.  5, 1990, 104
Stat.  1388, 1388-299.  Section 6217 of the 1990 act identifying
these management measures is codified at 16 U.S.C.  1455b. 


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II

FOOD AND AGRICULTURE ISSUE AREA

Luther L.  Atkins, Jr., Assistant Director
James R.  Jones, Jr., Project Leader
Larry D.  Van Sickle, Staff Evaluator
Sara B.  Vermillion, Staff Evaluator
Gary T.  Brown, Staff Evaluator
Shirley A.  Klaudt, Staff Evaluator
Lynne L.  Goldfarb, Publishing Advisor