Livestock and the Environment: Precedents for Runoff Policy I Acknowledgements

TIAER PR 9909

LIVESTOCK AND THE ENVIRONMENT PRECEDENTS FOR RUNOFF POLICY

POLICY OPTIONS–CEEOT-LP

Jan McNitt, Ron Jones, Edward Osei, Larry Hauck, & Heather Jones

Prepared for the United States Environmental Protection Agency’s Office of Policy Development (formerly the Office of Policy, Plannng & Evaluation) Contract No. CR 820374-02

October 1999

Texas Institute for Applied Environmental Research • Tarleton State University Box T-0410, Tarleton Station • Stephenville, Texas 76402 • 254.968.9567 • FAX 254.968.9568 Livestock and the Environment: Precedents for Runoff Policy i Acknowledgements

This study represents a broad-based cooperative effort and would not have been possible without the generous participation of a number of individuals and agencies. Whereas it is impractical to mention all those who contributed to this effort, the authors would like to acknowledge various individuals whose assistance was vital to the production of this report.

Key information on local dairy production practices and conditions was provided by personnel from several agencies. Special thanks are offered to the employees of the Natural Resources Conservation Service–Sulphur Springs office: Jim Wyrick, Max Baker (currently at NRCS– Tyler, Texas) and Ed Hansalik (currently at NRCS–Vermont). Billy Brown, formerly of the Texas Agricultural Extension Service (TAEX), shared his experiences and detailed information from the Lake Fork Creek Hydrologic Unit Area Project, and was instrumental in putting Texas Institute for Applied Environmental Research (TIAER) in touch with a local dairy producers using pasture production systems. Dr. Max Sudweeks, Dairy Extension Specialist with the Texas Agricultural Experiment Station, Overton, Texas, answered numerous phone calls and graciously shared research information on specifications of crop and forage yields for the study area and local dairy production practices.

The authors would like to express their sincere appreciation to the Texas State Soil and Water Conservation Board (TSSWCB), and specifically to John O’Connor and David C. Powell from the TSSWCB Mount Pleasant Regional Office, for their assistance in calculating pasture and hayfield acreages. Messrs. O’Connor and Powell also gave extensive input and review of model specifications and policy scenarios.

TIAER would also like to thank Dr. Tim Brown, Tarleton State University and Dr. Sandy Stokes, TAEX, Stephenville, Texas for their assistance in developing the nutritional component of the model. The authors are greatly indebted to Drs. Bud Schwart, David Anderson, Joe Outlaw and Ron Lacewell of Texas A&M University, College Station, and Mr. Mike Gamroth of Oregon State University, who provided useful input for the economic modeling process.

Special thanks are given to Cletis Millsap, Hopkins County Judge and member of the TIAER Advisory Committee, for his early and continuing support of this project.

The analysis presented in this paper rests upon biophysical process models developed by the USDA Agricultural Research Service Grassland, Soil and Water Research Laboratory, collocated at the Blackland Research Center (BRC) Texas Agricultural Experiment Station. Biophysical modeling simulations were performed by the Blackland Research Center. The authors extend their thanks to Jimmy Williams, BRC, Jeff Arnold and Susan Neitsch, USDA–Agricultural Research Service and Phil Gassman, the Center for Agricultural and Rural Development (CARD) for the modeling runs. Economic modeling was conducted by Edward Osei, Research Economist, TIAER. The Sabine River Authority kindly provided TIAER with data from the study area and we would like to acknowledge their contribution.

Heather Jones, Research Assistant, TIAER, provided indispensable input and verification of model assumptions. Her tireless efforts were key to the project. We also owe a debt to Leslie- Rahye Strickland, Don Gosdin and Spencer Lanning, TIAER, for design and typesetting wizardry. Cover photographs were provided by Don Gosdin, Richard Trout, and Ron Jones.

Livestock and the Environment: Precedents for Runoff Policy iii Contents

Acknowledgements ...... i

Introduction Background—From Erath County to Hopkins County...... 1 The Lake Fork Watershed ...... 3 Policies for Analysis ...... 6 The LFRW Baseline ...... 9 Alternative Policy Scenarios...... 10

Modeling Results and Analysis The Models ...... 19 The Model Runs: Policy Options for Controlling Runoff ...... 20 Environmentally Protective Pasture Nutrient Management ...... 21 Environmental Results ...... 22 Economic Findings ...... 23 Summary ...... 25 Pasture & Hayfield Phosphorus Management Policies ...... 25 Environmental Results ...... 26 Economic Findings ...... 27 Summary ...... 28 Alternative Dairy Pasture Production System Policies ...... 29 Environmental Results ...... 29 Economic Findings ...... 31 Summary ...... 32 Reduced-Phosphorus Feed Ration Policies ...... 33 Environmental Results ...... 33 Economic Findings ...... 34 Summary ...... 35 Pasture–Edge Filter Strip Policy ...... 36 Environmental Results ...... 36 Economic Findings ...... 37 Conclusions...... 37

Implications for the Future: a Strategic Look at Policies for Polluted Runoff Introduction ...... 41 Looking to the Future ...... 42 Insight from TIAER Research in the Bosque River Watershed ...... 43 Tactical versus Strategic Approaches ...... 46 Tailoring Regulatory Programs to Fit Runoff Problems ...... 47 Scope of Oversight...... 47 iv Livestock and the Environment: Precedents for Runoff Policy

Record Keeping and Implications of Manure Over Application ...... 48 Components of Enhanced Voluntary Programs ...... 49 Assessment Based ...... 49 Community Led ...... 50 Performance Driven ...... 51 TMDLs and Polluted Runoff...... 52 Land Management Lessons from AFOs ...... 53 Is There A Simple Solution? ...... 55 Conclusions...... 56

Appendix A: Results For Lake Fork Reservoir Watershed Policy Scenarios, H1-H6 ...... 61

Appendix B: Model and Policy Assumptions...... 63

Appendix C: Calculation of Baseline Pasture Agronomic Rates The Required Agronomic Nitrogen Rates for Forages on OAG Dairy Pasture...... 72 Nitrogen Application to LFRW Dairy Pasture from Manure and Commercial Fertilizer ...... 72 Effective Nitrogen Application Rates on OAG Dairy Pasture ...... 73 Calculating the Ratio ...... 76

Appendix D: Example—Soil & Water Conservation District Enabling Legislation § 201.003. Eligible Voter ...... 77 § 201.041. Petition...... 78 § 201.101. Corporate Powers...... 78 § 201.102. Preventive and Control Measures ...... 79 § 201.103. Cooperation and Agreements With Other Entities...... 79 § 201.104. Acquisition, Administration, and Sale of Real or Personal Property...... 80 § 201.107. Conservation Plans and Information...... 80 § 201.108. Assumption of Government Projects; Acceptance of Government Grants ...... 81 § 201.121. Regulatory Powers; Petition for Adoption ...... 81 § 201.122. Hearing...... 82 § 201.123. Election ...... 82 § 201.124. Effect of Ordinance ...... 82 § 201.126. Amendment or Repeal of Ordinance ...... 83 § 201.127. Frequency of Elections ...... 83 § 201.128. Enforcement ...... 83 § 201.130. Procedures of Board of Adjustment...... 84 § 201.131. Petition for Variance ...... 85 § 201.133. Granting of Variance ...... 85 § 201.304. Eligibility for Cost-Share Assistance ...... 86 § 201.305. Eligible Soil and Water Conservation Land Improvement Measures...... 86 Livestock and the Environment: Precedents for Runoff Policy v

Appendix E: TIAER’s Planned Intervention Micro-watershed Approach A New Approach ...... 87 Planned Intervention ...... 87 The Micro-watershed Approach...... 88 Citizen Participation ...... 89

List of Figures Figure 1: Lake Fork Reservoir Watershed with Dairy Locations...... 4 Figure 2: Lake Fork Reservoir Watershed Land Use...... 5 Figure E-1. Planned Intervention Abatement Strategy...... 87 Figure E-2. National Institutional Framework for Agricultural Environmental Compliance.... 90

List of Tables Table 1: Key Features of Policy Scenarios ...... 9 Table 2: Comparison of Nitrogen Fertilizer and Pasture Forage Uptake for OAG and IRG ...... 14 Table 3: Changes in Phosphorus and Nitrogen Loads for Policies H2(a), H2(b) and H2(c) ..... 22 Table 4: Total Pasture Area and Commercial Nitrogen Rates for Policies H1, H2(a), H2(b) and H2(c) ...... 23 Table 5: Changes in Producer Net Returns for Policies H2(a), H2(b) and H2(c) ...... 24 Table 6: Adjustments to Total Pasture Acres for Phosphorus Agronomic Rate Policies ...... 24 Table 7: Changes in Phosphorus and Nitrogen Loads for Policies H2(d) and H2(e)...... 26 Table 8: Comparison of Changes in Phosphorus Loads for Policies H2(b) and H2(d), and Policies H2(c) and H2(e) ...... 27 Table 9: Comparison of Changes in Nitrogen Loads for Policies H2(b) and H2(d), and Policies H2(c) and H2(e) ...... 27 Table 10: Changes in Producer Net Returns for Policies H2(d) and H2(e) ...... 28 Table 11: Comparison of Changes in Net Returns for Policies H2(b) and H2(d), and Policies H2(c) and H2(e) ...... 28 Table 12: Changes in Phosphorus Loads for Policies H3 and H4 ...... 29 Table 13: Comparison of Changes in Phosphorus Loads for Policies H2(c), H3 and H4 ...... 30 Table 14: Percent Changes in Nitrogen Loadings from Alternative Production Policies ...... 31 Table 15: Percent Changes in Producer Net Returns for Alternative Dairy Production Policies ...... 31 Table 16: Cost Comparison for Purchased Dairy Feed—Policies H1 and H3...... 32 Table 17: Changes in Phosphorus and Nitrogen Loads for Policies H5(a) and H5(b)...... 33 Table 18: Changes in Producer Net Returns for Policies H5(a) and H5(b) ...... 34 Table 19: Comparison of Estimated Costs for Acquisition of Commercial Fertilizer & Additional Pasture Acreage, Policies H2(e) and H5(b) ...... 35 Table 20: Changes in Phosphorus and Nitrogen Loads for Policy H6...... 36 Table 21: Changes in Producer Net Returns for Policy H6...... 37 Table A-1: SWAT Results at Watershed Outlet (Lake Fork Reservoir); Annual Average over 30 year Simulation Period ...... 61 Table A-2: SWAT Results at Watershed Outlet (Lake Fork Reservoir); Percentage Changes from the Policy Baseline ...... 61 vi Livestock and the Environment: Precedents for Runoff Policy

Table A-3: Economic Results for Lake Fork Reservoir Watershed Policies ...... 62 Table A-4: Commercial Fertilizer Application Rates for Lake Fork Reservoir Watershed Pastures (lbs/pasture acre/year)...... 62 Table B-1: Assumptions for Pasture Acres by Dairy Size and Scenario ...... Table C-1: LFRW Forage Yields and Nitrogen Agronomic Rates ...... 72 Table C-2: Total Pasture Acres: Lactating and Dry Cows...... 72 Table C-3: Pasture Stocking Density Calculation (PSD) ...... 73 Table C-4: Lactating and Dry Cow Pasture Density for LFRW Dairies by Size ...... 74 Table C-5: Plant Available Nitrogen Deposited on Pastures in Manure, by Dairy Size Group ...... 75 Table C-6: Effective Nitrogen Application Rate on OAG Pastures (lbs/acre/year)...... 76 Table C-7: Ratio of Effective Nitrogen Application to Forage Needs of LFRW Pastures ...... 76 Livestock and the Environment: Precedents for Runoff Policy 1

INTRODUCTION

he environmental impacts from livestock production have become a major policy issue for Tthe United States.1 In recognition of the environmental concerns related to livestock operations, the Texas Institute for Applied Environmental Research (TIAER) has undertaken Livestock and the Environment: a National Pilot Project (NPP), a multiyear cooperative agreement with the U.S. Environmental Protection Agency’s (EPA) Office of Policy Development.2 The goal of the NPP is to determine technologies, management methods, policies and institutional settings that can reduce the negative environmental impacts of livestock production while fostering the economic vitality of the industry in increasingly open international markets.3 This report continues the NPP research agenda by examining environmental issues stemming from small-scale, pasture-based dairy production. In keeping with the multidisciplinary approach of the NPP, two distinct but related sets of analyses are presented. The mathematical modeling framework developed by TIAER under the NPP, the Comprehensive Economic and Environmental Optimization Tool-Livestock/Poultry (CEEOT-LP) is used to evaluate pasture-based dairy operations in Texas’ Lake Fork Reservoir Watershed (LFRW). The application of CEEOT-LP demonstrates how mathematical modeling can provide industry and government with viable options for informing policy decisions. The second set of analyses addresses policy issues relating to runoff from livestock operations. Government policy on runoff pollution is changing. Recent initiatives such as the President’s Clean Water Action Plan, the EPA-USDA Unified National Strategy for Animal Feeding Operations (AFO Strategy), and the revised Total Maximum Daily Load program reflect increased concern at the federal and state level about the impacts of runoff on water quality. Evolving approaches highlight the role of livestock production in contributing to runoff problems. New programs also raise questions about the recommendations and authority for managing land use on privately owned property to control runoff. With the inclusion of the policy discussion, TIAER hopes to contribute to the national dialogue on how to best address the runoff concerns related to the livestock industry. Background—From Erath County to Hopkins County

Since 1992, TIAER and its partners4 have worked to examine policy, scientific and economic issues related to NPP goals.5 Policy work centers on institutional analysis of the role of government in achieving water quality objectives. These studies have led to the development of a

1 See United States Environmental Protection Agency (EPA) and United States Department of Agriculture (USDA), Clean Water Action Plan: Restoring and Protecting America’s Waters, EPA Report No. 840-R-98-001 (Washington, DC: 1998); USDA and EPA, Unified National Strategy for Animal Feeding Operations (Washington, DC: Office of Wastewater Management-Small Communities, 1999). 2 Formerly the Office of Policy, Planning and Evaluation. 3 Texas Institute for Applied Environmental Research (TIAER) & Center for Agricultural and Rural Development, Iowa State University (CARD), Livestock and the Environment: A Proposal to the Office of Policy Analysis, United States Environmental Protection Agency (Stephenville, TX: TIAER, 1992). 4 CARD & the Texas Agricultural Experiment Station-Blackland Research Center (BRC). 5 See the TIAER website at http://www.tiaer.tarleton.edu for a selected list of TIAER publications. 2 Livestock and the Environment: Precedents for Runoff Policy

comprehensive yet practical conceptual approach for addressing livestock issues—the Planned Intervention, Microwatershed Approach (PIMA). TIAER’s scientific and economic investigations have built a body of basic knowledge that informs and explains issues underlying current concerns regarding livestock production. The NPP has also labored to develop methods and tools for assisting policy analysis of livestock and environmental issues. CEEOT-LP, for example, is an analytical and mathematical modeling framework that provides policymakers with an effective tool to evaluate watershed management strategies for areas with significant livestock production.6

The development and initial application of CEEOT-LP was the first step in construction of a mathematical modeling framework for aiding policy development and decision-making for water quality impaired areas. The first CEEOT-LP application examined the upper North Bosque River watershed (UNBRW), the headwaters of the North Bosque River. The UNBRW is located almost entirely within Erath County, the number one ranked milk-producing county in Texas. The UNBRW is an area experiencing cumulative impacts from concentrated, confined animal feeding operations operating under state and federal regulatory permits.7 The Lake Fork Reservoir watershed (LFRW) in northeast Texas has been selected for the second CEEOT-LP study. 8 This watershed is home to numerous small pasture-based dairy operations. The application of CEEOT- LP in the LFRW is intended to assess environmental impacts from a large number of small livestock operations and provide insight into the economic impacts of environmental policies on small operations. In addition, this study provides an opportunity to apply the modeling framework in a different geographic area.

Work under the NPP began with the collection and assessment of water quality data for the UNBRW. Early NPP efforts provided insight into the emerging problem of livestock production and water quality. Three key issues have been identified regarding the environmental impacts of livestock production.

• The paucity of reliable science and economics • The need for predictable government programs tailored to the needs of livestock operators • The variability of local community and regional response The UNBRW serves as TIAER’s outdoor laboratory to explore key issues and to develop basic information for local communities and policymakers. In particular, TIAER has been able to collect an extensive set of data on water quality in the UNBRW and the greater Bosque River watershed.9 Water quality samples have been gathered at both base flow and

6 CEEOT-LP was developed in concert with CARD and BRC. The environmental impact component of CEEOT-LP relies on biophysical models developed by the USDA Agricultural Research Service Grassland, Soil and Water Research Laboratory, Temple, Texas. 7 Staci Pratt, Ron Jones and Charles Allan Jones, Livestock and the Environment: Expanding the Focus, Policy Options—CEEOT- LP, Report No. PR 96-03 (Stephenville, TX: TIAER, 1997). 8 Watersheds have been selected as the basic unit for study in the NPP due to environmental model requirements and national policy emphasis. See, e.g., EPA, Watershed Approach Framework, EPA Report No. 840-S-97-001 (Washington, DC: Office of Water, 1996). Livestock and the Environment: Precedents for Runoff Policy 3

storm water conditions from various sites in the UNBRW since 1991. In-depth analysis of the data has generated information for assessing livestock-induced water quality impacts, and for calibrating and validating CEEOT-LP component biophysical models. The body of information gathered under the NPP has helped increase understanding of the mechanisms and processes involved in runoff from livestock facilities. Moreover, the information has been invaluable in determining the predictive capabilities of the biophysical models and facilitating their refinement. TIAER water quality data and modeling capabilities are being used to support development of a nutrient Total Maximum Daily Load (TMDL) project within the primarily nonpoint source impacted Bosque River watershed.10 The Lake Fork Watershed

The LFRW covers 313,808 acres including portions of Hopkins, Hunt, Rains, and Woods counties in Texas.11 The watershed has a post oak savanna ecological setting, characterized by gently rolling topography and a temperate climate.12 The Lake Fork Reservoir has eight major tributary streams,13 a surface area of 27,690 acres and is designated for use as contact recreation, high aquatic life, and public water supply. 14 Figure 1 indicates the watershed boundary, the major water bodies and the dairy locations within the watershed.

The largest portion of the LFRW is located in Hopkins County, Texas. From 1996 to the present, Hopkins County has been ranked second among Texas counties for milk production.15 In 1996,16 there were approximately 216 dairy operations housing on average 129 cows per dairy within the LFRW. 17 Pasture systems are the predominant mode of dairy production in the LFRW; cows spend most of each day grazing in pastures and are confined only when being

9 See Anne McFarland and Larry Hauck, Livestock and the Environment: A National Pilot Project–Report on Stream Water Quality in the Upper North Bosque River Watershed, Report No. PR 97-03 (Stephenville, TX: TIAER, 1997); Anne McFarland and Larry Hauck, Stream Water Quality in the Bosque River Watershed: October 1, 1995 through March 15, 1997, Report No. PR 97- 05 (Stephenville, TX: TIAER, 1997) 10 Quarterly update on this and other Texas TMDL projects can be viewed at the TNRCC’s website, http://www.tnrcc.state.tx.us/ water/quality/tmdl/. 11 Scott Ewer and Nancy Easterling, Lake Fork Reservoir Watershed and Running Creek Sub-Watershed Geographic Information System Data Report, Report No. WP 98-05 (Stephenville, TX: TIAER, 1998). 12 Ewer, Running Creek Sub-Watershed. 13 The eight tributaries are Lake Fork Creek, Glade Creek, Running Creek, Carroll Creek, Caney Creek, Elm Creek, Birch Creek, and Garrett Creek. Ewer, Running Creek Sub-Watershed. 14 Texas Natural Resource Conservation Commission (TNRCC), The State of Texas Water Quality Inventory, 13th Edition (Austin, TX: TNRCC, 1996). 15 USDA, The Milk Market Administrator’s Report, Texas Marketing Area – New Mexico – West Texas Marketing Area, XXII – XXIV (Carrollton, TX: 1996-1998). 16 The reference year for this report is 1996; all data on production practices and watershed characteristics within this report, and relied upon for the modeling framework, are from the year 1996. 17 Based on information on file with the authors from the Hopkins County Department of Public Health, the TNRCC, and the Texas State Soil and Water Conservation Board (TSSWCB). 4 Livestock and the Environment: Precedents for Runoff Policy

milked. While this region has retained a traditional, small-farm character, dairies have experienced a trend of increasing herd size. The watershed is also home to beef production and “cow/calf” farms that specialize in raising calves for slaughter or for replacement of milking cows on dairies.18 Both types of operations use commercial fertilizer on improved pasture to grow forage for herd needs.

Figure 1: Lake Fork Reservoir Watershed with Dairy Locations

18 Kameran L. Bailey and David W. Riggs, A National Pilot Project: Livestock and the Environment—Nutrient Budget Analysis for the Lake Fork Reservoir Watershed (Stephenville, TX: TIAER, 1996); Edward Osei and David W. Riggs, Livestock and the Environment: A National Pilot Project—Emerging Agricultural Industries in Hopkins County (Stephenville, TX: TIAER, 1996). Livestock and the Environment: Precedents for Runoff Policy 5

Land use within the watershed is dominated by improved pasture (44 percent) with relatively little cropland (2 percent) as shown by Figure 2.19

Figure 2: Lake Fork Reservoir Watershed Land Use

ATEGORY ACRES %TOTAL Improved Pasture 137,024 43.7 Unimproved Pasture 85,395 27.2 Forest and Brush 55,649 17.7 Water 27,898 8.9 Cropland 5,095 1.6 Barren & Roadways 1,596 0.5 Urban 1,149 0.4 TOTAL 313,808 100.0

19 Ewer, Running Creek Sub-Watershed, 4. 6 Livestock and the Environment: Precedents for Runoff Policy

Several reasons led to the selection of this region for examination by the CEEOT-LP framework. Information and data from multiple sources have identified water quality problems related to agriculture and livestock waste in the watershed since 1991.20 An assessment by the Texas Natural Resource Conservation Commission (TNRCC) in 1996 indicated that elevated levels of orthophosphorus were a concern in two areas of the reservoir and that depressed dissolved oxygen levels in the body of the reservoir had resulted in partial support for high aquatic life uses.21 In addition, nonpoint source pollution from agricultural activities has been identified as a major source of adverse water quality impacts in the watershed.

Application of CEEOT-LP in the LFRW provides a contrast to the work in the UNBRW. Both locations are major dairy production areas and water quality concerns regarding nutrients have been identified within both watersheds. However, the climate and production practices in each area differ. The UNBRW receives, on average, approximately 30 inches of rainfall per year while average annual rainfall in the LFRW is approximately 44 inches per year,22 creating a more humid and subtropical climate. The UNBRW is characterized by large, confined and concentrated livestock facilities with documented water quality problems. Dairy herds in the LFRW typically have less than 300 cows that are generally kept outdoors on open pasture. Dairies in the UNBRW handle large volumes of both solid manure and liquid waste from lagoons. In contrast, the majority of waste generated by dairy cows in the LFRW is solid manure that is naturally deposited by cows on pastures. The similarities between the UNBRW and the LFRW facilitate the application of CEEOT-LP with more modest but typical data sets, while the distinctions between the watersheds allows the investigation of dairy production on a different scale, with different production practices. Policies for Analysis

A number of policy scenarios were proposed for analysis in this report.23 The scenarios are based on prior NPP work, investigations of the study area and current production practices.24 Proposed policies have been also reviewed by local experts and refined for analysis. CEEOT-LP analysis begins with development of a baseline policy providing a point of reference. The baseline reflects current production systems, management practices and regulatory requirements for the study area. The major features and relevant assumptions of the baseline are specified for inclusion into the modeling framework. Alternative policy scenarios propose changes to the baseline by varying production and waste management practices. The model then simulates the potential

20 See Nancy Easterling, Scott Ewer and Anne McFarland, Pre-BMP Water Quality Monitoring on Demonstration Dairy Sites in the Lake Fork Reservoir Watershed, Final Report to the Texas State Soil and Water Conservation Board on Pre-BMP Water Quality Monitoring for the Section 319(h) Project: Lake Fork Reservoir Watershed NPS Project, Report No. PR 98-05 (Stephenville, TX: TIAER, 1998). 21 TNRCC, Texas Water Quality Inventory, 316-319. 22 Mike Kingston, ed., 1994-95 Texas Almanac (Dallas, TX: The Dallas Morning News, 1996). 23 Jan McNitt and Staci Pratt, Draft Policies for the Lake Fork Reservoir Watershed, Report No. WP 96-05 (Stephenville, TX: TIAER, 1996). 24 McNitt, Draft Policies; Pratt, Expanding the Focus. Livestock and the Environment: Precedents for Runoff Policy 7

environmental and economic impacts of the proposed changes. Model results are expressed as percentage changes in comparison to the baseline.

The research team has developed some basic information and concepts for application of the modeling framework. The baseline and all proposed policies specify that there is no discharge from animal confinement and process areas (ACPA). The “no discharge” standard assumes the following:

No waste discharge from animal confinement and process areas absent a chronic or catastrophic storm event exceeding the holding capacity of containment structures designed and maintained to contain a 25-year, 24-hour storm event. This policy applies to all dairies that confine animals, regardless of herd size, in a feedlot where crop or forage growth cannot be sustained due to animal activity.

This assumption reflects EPA and Texas Natural Resource Conservation Commission (TNRCC) regulations for controlling discharges from animal confinement and process areas.25 Generally, in Texas, dairies with less than 700 head of cows (or 200 cows in a Dairy Outreach Program Area)26 are not subject to regulatory permitting processes.27 Small producers are, however, subject to the same standard as livestock facilities that are required to obtain a permit—no discharge of livestock waste.28 Therefore, the baseline specifies that all dairies in the LFRW are subject to, and comply with, a no discharge standard for animal confinement and process areas regardless of the number of animals currently housed.29 The baseline and model simulations specify that all producers utilize a waste retention structure or lagoon to contain manure and wastewater, and comply with the no discharge rule.

Dairy production in the LFRW is predominately pasture-based; cows are allowed to freely roam pastures for most of each day. Dairies grow forage on hayfields and pastures as feed for dairy cattle. The roughage and nutritional value of hay and pasture forage is supplemented by purchased feed to satisfy the nutritional needs of dairy herds. Animal waste and commercial fertilizer are the sources of nutrients—nitrogen and phosphorus—used as fertilizer to promote crop and forage growth on LFRW dairy farms.30 Nutrients used on dairies are land applied to two different

25 See, e.g., “Notice of National Pollutant Discharge Elimination System (NPDES) General Permit and Reporting Requirements for Discharges from CAFOs,” Federal Register 58, no. 24 (8 February 1993): 7610; TNRCC, “Revised Regulations for CAFOs” Texas Register 23, no. 37 (11 September 1998): 9354. 26 Dairy Outreach Program Areas include the following Texas counties: Erath, Bosque, Hamilton, Comanche, Johnson, Hopkins, Wood, and Rains. Texas, Administrative Code Title 30 (West 1998) sec. 321.32(11). 27 Texas, Administrative Code Title 30 (West 1998) sec. 321.33(f) and 321.32(9)(A)(ii). 28 Texas, Administrative Code Title 30 (West 1998) sec. 321.31; Texas Register 23, no. 37 (11 September 1998): 9354. 29 The majority of LFRW dairies have elected to implement water quality management plans pursuant to the Texas Agricultural Code. Texas, Agriculture Code Annotated (West Supp. 1999) sec. 201.026 (c). Water quality management plans for small livestock producers are typically developed with technical support from the USDA-NRCS and cost share assistance from the TSSWCB. 30 A number of substances are classified as nutrients. Nitrogen and phosphorus are the focus of analysis because they are the primary nutrients needed for plant growth and, as components of direct discharges and runoff from livestock facilities, they have the greatest impact on aquatic communities. 8 Livestock and the Environment: Precedents for Runoff Policy

areas—pastures and hayfields. On livestock operations, animal waste typically exists as either a solid (manure) or a liquid (manure contaminated water captured in waste containment structures, or lagoons). Cows in the LFRW naturally deposit manure on pastures while grazing.31 Liquid waste is generated in milking parlors, dripsheds, or open lots, stored in lagoons and applied to hayfields. The baseline assumes dairy producers also apply commercial fertilizer to pastures and hayfields. Commercial fertilizer is used on hayfields only when there is not sufficient liquid waste available to provide adequate nutrients for the forage or crop being grown.

The amount of nutrients that crops or forage need for optimum health and growth is referred to as the agronomic rate.32 The agronomic rate can be set to assure that a crop or forage receives a specific amount of a particular nutrient, such as nitrogen or phosphorus. There are two different ways of accounting for phosphorus in manure when calculating an agronomic application rate. Under the “High P” approach, the application rate is determined by accounting for the amount of manure phosphorus in an inorganic form and considered readily available for use by the plants. The organic form of phosphorus in manure is not considered available. On the other hand, the “Low P” approach assumes that all manure phosphorus, both organic and inorganic, will eventually be available for plant use. When calculating agronomic application rates for livestock facilities that require a permit, the State of Texas assumes that about 40 percent of nitrogen in cow manure is readily available to plants for their use in growth.33 This assumption was followed in estimating agronomic rates for model simulations. Model simulations for the LFRW also assume that Coastal bermudagrass overseeded with winter wheat is grown on all dairy pastures and Coastal bermudagrass only is grown on all of the dairy hayfields.34

The policies examined for this study are summarized in Table 1 and described below.

31 It is assumed that there is no collection or manual land application of manure in the LFRW because cows spend the majority of time in pastures and proportionately very little land area is devoted to confinement of dairy cows. 32 See Texas, Administrative Code Title 30 (West 1999) sec. 321.32(1). The typical rate for nutrient crop application is quantity per land area per time, or pounds per acre per year. 33 Appendix B, sec. I.,A.,2.,b. 34 Coastal bermudagrass is a perennial forage that stops growing during winter months. Producers may plant a winter annual on Coastal bermudagrass pastures or hayfields to maintain vegetative cover and supply a source of forage while the perennial crop is dormant. Although local experts indicated some producers plant a winter annual on hayfields, simulations were run assuming no overseeding due to the potential for reduced yields for the individual crops. See, e.g., Texas Agricultural Experiment Station (TAES), TSSWCB and TNRCC, Animal Waste Management System Evaluation, Principal Investigators, John Sweeten and Mary Leigh Wolfe. A final report prepared for EPA section 319 Agricultural Nonpoint Source Pollution Project, July 1994. Livestock and the Environment: Precedents for Runoff Policy 9

Table 1: Key Features of Policy Scenarios

The LFRW Baseline

Policy Pasture Management System Pasture Hayfield Other Assumptions Application Application Rate Rate H1 Open access grazing (OAG) 1.5 times N 50% N/50% Low P H2(a) OAG N 50% N/50% Low P Assumes no commercial nitrogen or phosphorus fertilizer is applied to pastures. H2(b) OAG High P 50% N/50% Low P H2(c) OAG Low P 50% N/50% Low P H2(d) OAG High P Low P H2(e) OAG Low P Low P H3 Intensive rotational grazing (IRG) 1.2 times N 50% N/50% Low P Cows rotate through paddocks; maximizes forage & eliminates denuded areas. H4 Grassed loafing lot (GLL) 1.5 times N 50% N/50% Low P Cows rotate through loafing lots; eliminates denuded areas. H5(a) OAG/ 1.5 times N 50% N/50% Low P Reduced phosphorus Reduced phosphorus feed ration feed decreases phosphorus in cow manure. H5(b) OAG/ Low P Low P Reduced phosphorus Reduced phosphorus feed ration feed decreases phosphorus in cow manure. H6 OAG/ 1.5 times N 50% N/50% Low P Filter strips fenced to Pasture-edge filter strip restrict cow access. Policy H1, the baseline, characterizes the current, predominant conditions in the LFRW.

Policy H1: Dairy herds are managed in an open access grazing (OAG) production system with no discharge from animal confinement and process areas (ACPA); pastures receive quantities of nutrients from manure and commercial fertilizer that combined are effectively 1.5 times the nitrogen agronomic rate; 50 percent of producers apply ACPA waste to hayfields at a nitrogen agronomic rate and 50 percent apply at a Low P rate.

Under OAG production, cows spend the majority of time grazing in open pastures. Herds roam pastures freely for 21 hours a day, and cows are confined only for milking which occurs twice daily. 35 Dairy pastures in OAG production receive amounts of manure and commercial fertilizer combined that average 1.5 times the nitrogen agronomic rate.36 Approximately 300 pounds of nitrogen per acre annually is required to maintain current OAG pasture yields.37 Producers apply 220 pounds of commercial nitrogen fertilizer and 53 pounds of commercial phosphorus per acre

33 Billy Brown et al., eds. NRCS-USDA, Lake Fork Creek Hydrologic Unit Project Annual Project Report Fiscal Year 1994 (Sulphur Springs, TX: NRCS, 1994); NPP Modeling Applications Meeting, November 18, 1996, Sulphur Springs, Texas. 36 Appendix C provides a detailed explanation of how the agronomic application rate was calculated for pastures in the baseline. 10 Livestock and the Environment: Precedents for Runoff Policy

of pasture annually. 38 Dairy herds deposit 223 pounds of nitrogen in manure on each acre of LFRW dairy pasture. Both sources combined result in a total of 443 pounds of nitrogen being applied each year to each acre of dairy pasture in the LFRW. In addition, cows frequently congregate near fixed areas such as barns, feeding and watering areas within pastures creating denuded areas. The baseline simulates this condition by assuming that 5 percent of dairy pastures in the LFRW are denuded,39 manure solids are not scraped from denuded areas and no runoff controls are in place. Because LFRW dairy cows are confined for milking only, 100 percent of the waste from ACPA is presumed to be in liquid form. One half or 50 percent of hayfields receive liquid waste at a nitrogen agronomic rate while the remaining one half receive liquid waste at a Low P agronomic rate. The use of two different agronomic rates for LFRW hayfields reflects empirical information regarding changes in prevailing management practices and the paucity of data available regarding actual fertilizer application rates for the watershed.40

Alternative Policy Scenarios

The amount of nitrogen that pastures receive under the baseline effectively exceeds the nitrogen agronomic rate (i.e., pasture forage receives more nitrogen than it needs for optimum growth). This represents a potentially significant source of nutrient loadings to the LFRW. Policy H2(a) requires producers abide by a nitrogen agronomic rate (N rate) for pastures.41 This is achieved by adjusting pasture stocking densities42 and eliminating the application of commercial nitrogen and phosphorus fertilizers. Policy H2(a) adjusts the area designated as pasture so that herds will deposit manure in amounts equivalent to a nitrogen agronomic rate. Because cow manure is the only source of nutrients for pastures under this scenario, achieving a nitrogen rate actually allows a slight increase in pasture stocking density. The amount of denuded pasture remains the same as specified for the baseline. Policy H2(a) continues to assume that 50 percent of LFRW producers apply ACPA waste to hayfields at the N rate and 50 percent apply at a Low P rate.

Policy H2(a): OAG with no discharge from ACPA; dairy herds are maintained on pasture at

37 The assumptions regarding manure nutrient values, crop nutrient uptake and yields are provided in Appendix B. This information is derived from literature standards, dairy waste management plans and communications with local experts. 38 Appendix B. LFRW dairy producers apply commercial fertilizer to pastures in order to maintain vegetative cover and because cows do not deposit manure uniformly. Local experts have also suggested that producers generally do not consider the manure deposited from grazing cows as a sufficient fertilizer. 39 Appendix B. Denuded pasture areas are modeled as a single contiguous piece of land at the highest elevation point in a pasture. Nutrients and sediment from these areas flow through the remaining vegetated portion of the pasture. 40 Local experts indicate that approximately 70 percent of LFRW dairies have waste management plans. The majority of plans issued in the several years prior to this report specify phosphorus waste application rates. In recognition that actual practices differ, project personnel have assumed that one half of dairies apply liquid waste at the nitrogen agronomic rate and the other half do so at the Low P phosphorus agronomic rate. 41 A specific number of acres per dairy has been set aside as pasture for heifers. See Appendix B, section I.A.2.d. Management of the heifer areas is not affected by changes in the scenarios and the acreage is not counted in total pasture acres referred to herein. This reflects differences in management for heifer pasture from the rest of the herd (milk and dry cows). 42 Information from agencies in the LFRW and producers indicates that pasture stocking densities are currently determined by land availability rather than management of nutrients. Livestock and the Environment: Precedents for Runoff Policy 11

a stocking density equivalent to a nitrogen agronomic rate; 50 percent of producers apply liquid waste from ACPA to hayfields at a nitrogen agronomic rate and 50 percent apply at a Low P rate.

Policies H2(b) and H2(c) respond to concerns regarding phosphorus buildup in soil by changing the stocking density of cows to achieve phosphorus agronomic rates for pastures (High P or Low P rates). Plants utilize different amounts of nitrogen and phosphorus for growth. Forages grown on dairy pasture in the LFRW typically require approximately 6 times more nitrogen than phosphorus; or 6 parts of nitrogen for every 1 part phosphorus. However, the ratio of nitrogen to phosphorus found in dairy cow manure is different than the ratio required by pasture forage for optimum growth. Based on typical assumptions used in the study area, the amount of plant available nitrogen in manure deposited on pasture is less than 2 times the amount of total phosphorus in manure. Therefore, when a dairy herd deposits enough manure on pastures to meet nitrogen needs of the forage, pastures will receive more phosphorus than the plants require. Setting a nitrogen agronomic rate for pastures may, therefore, still result in problematic phosphorus runoff.

Policies H2(b) and H2(c) respond to this concern by reducing the number of cows per acre, so that the quantities of manure deposited meet the phosphorus needs of the forage being grown. The pasture stocking density for these scenarios is based on one of the two interpretations previously described—a High P rate or a Low P rate. No commercial phosphorus is applied to pastures; the phosphorus needs of pasture forage are provided by cow manure. Commercial nitrogen is applied at rates lower than under the baseline to meet the nitrogen needs of pasture forage.

Policy H2(b): OAG with no discharge from ACPA; dairy herds are maintained on pasture at a stocking density equivalent to a High P agronomic rate; 50 percent of producers apply liquid waste from ACPA to hayfields at a nitrogen agronomic application rate and 50 percent apply at a Low P rate.

Under the High P approach, the application rate is determined by accounting for the amount of inorganic phosphorus in manure. Policy H2(b) reduces pasture stocking densities to achieve a High P rate. These adjustments will result in less manure nitrogen deposition on pastures. Producers will apply 162 pounds per acre per year of commercial nitrogen fertilizer compared to 220 pounds per acre per year under the baseline; no commercial phosphorus is applied to pastures.43 Policy H2(b) continues the ACPA waste application rates specified under the baseline.

Policy H2(c): OAG with no discharge from ACPA; dairy herds are maintained on pasture at a stocking density equivalent to a Low P agronomic rate; 50 percent of producers apply liquid waste from ACPA to hayfields at a nitrogen agronomic rate and 50 percent apply at a Low P rate.

Policy H2(c) adjusts pasture stocking densities to achieve a Low P application rate. This change

43 See Appendix B for detailed information on forage yields and agronomic uptake rates assumed for the scenarios. 12 Livestock and the Environment: Precedents for Runoff Policy

should maximize the potential for reducing phosphorus loadings attributable to pasture runoff. The Low P approach assumes that both the inorganic and organic components of phosphorus in manure will eventually be available for plant uptake. To achieve a Low P rate, producers must acquire more pasture acres than under a High P approach. Achieving a Low P rate for pastures will further reduce the number of cows per pasture acre. The amount of nitrogen available per acre from manure will also decrease therefore 210 pounds per acre per year of commercial nitrogen fertilizer is applied to maintain pasture forage yields.

Policies H2(d) and H2(e) respond to a portion of the potential phosphorus loading that may be attributed to application of liquid waste from ACPA to hayfields. On average, LFRW dairies use only 18 percent of the land they own or lease for hayfields. To put this in perspective, less than 2 percent of the total acres in the watershed are dairy hayfields. Therefore, dairy hayfields do not appear to represent a significant source of nutrient loadings for the watershed. However, the baseline specifies that 50 percent of producers continue to apply ACPA waste at the nitrogen agronomic rate. Lake Fork dairy hayfields are, therefore, likely to be a potential but not significant source of nutrient loadings.

Policy H2(d): OAG with no discharge from ACPA; herds are maintained on pasture at a stocking density equivalent to a High P agronomic rate; all producers apply liquid waste from ACPA to hayfields at a Low P agronomic rate.

Policy H2(d) requires producers to adjust application of ACPA waste on hayfields to a uniform Low P rate. This is a refinement of Policy H2(b) that specifies a uniform High P rate for pastures but specifies 50 percent of producers apply waste to hayfields at a nitrogen agronomic rate and the other 50 percent of producers apply at a Low P rate. Because phosphorus application rates will not provide enough nitrogen, producers will apply commercial nitrogen fertilizer as needed to both pastures and hayfields to maintain yields. No commercial phosphorus is applied to pastures or hayfields.

Policy H2(e): OAG with no discharge from ACPA; herds are maintained on pasture at a stocking density equivalent to a Low P agronomic rate; all producers apply liquid waste from ACPA to hayfields at a Low P agronomic application rate.

Policy H2(e) refines Policy H2(c) by adjusting both pasture stocking densities and ACPA waste application to a Low P phosphorus agronomic rate. Commercial nitrogen fertilizer is applied as needed to maintain yields on pastures and hayfields with no additions of commercial phosphorus fertilizer.

Beneficial management practices for pasture-based systems extend beyond simple adjustments to nutrient application levels. The adoption of alternative systems for dairy-pasture production in Policies H3 and H4, offers two options for herd and forage management that may reduce runoff. Under OAG systems dairy cow pastures develop bare or denuded spots due to the congregation of cows (assumed to equal 5 percent of the total pasture area under the baseline). Without vegetative cover, rainfall runoff from denuded pasture areas represents a potentially Livestock and the Environment: Precedents for Runoff Policy 13

significant source of nutrient transport to local surface waters. Policy H3 institutes an intensive rotational grazing (IRG) system for pasture management to address concerns about possible nutrient runoff from pastures.

Policy H3: Dairy herd pastures are managed in an intensive rotational grazing (IRG) production system; the effective rate of manure from cows and commercial fertilizer applied to pastures is 1.2 times the nitrogen agronomic rate; no discharge from ACPA; 50 percent of producers apply liquid waste from ACPA to hayfields at a nitrogen agronomic rate and 50 percent apply at a Low P rate.

Policy H3 requires LFRW dairy producers to adopt an IRG system where pastures are divided into paddocks that are alternately grazed and rested in a planned sequence. The herd grazes one paddock for a determined period and is moved after new growth is consumed.44 When combined with commercial fertilizer applications, these practices maximize the quality and nutritional value of pasture forages, leading to greater forage productivity. 45 Policy H3 also specifies that producers rely on pasture forage to provide a significantly greater portion of herd nutritional needs than is assumed under the baseline. Greater reliance on pasture forage may result in positive economic benefits for producers.

To achieve desired forage yields for IRG, producers apply commercial nitrogen fertilizer to pastures at significantly higher rates than under the baseline but apply less commercial phosphorus fertilizer. The baseline assumes producers apply 220 pounds of commercial nitrogen and 53 pounds of commercial phosphorus fertilizer per acre of LFRW pasture per year. Policy H3 assumes that producers will apply 450 pounds of commercial nitrogen and only 13 pounds of commercial phosphorus per pasture acre per year. The intensive management of forage under IRG allows pasture forage to utilize nutrients at a higher rate than OAG pastures (Table 2). Because of the increased nitrogen uptake, the combined application of nitrogen from cow manure and commercial nitrogen fertilizer to IRG pastures is 1.2 times the nitrogen agronomic rate. Table 2 illustrates the difference in uptake and agronomic rate between OAG and IRG.

44 See D. L. Zartman, ed., “Intensive Grazing/Seasonal Dairying: the Mahoning County Dairy Program 1987-1991,” Ohio Agricultural Research and Development Center Research Bulletin (Wooster, OH: Ohio State University, 1994); Gregory D. Hanson, “Adoption of Intensive Grazing Systems,” Journal of Extension 33 no. 4 (1995); Jonathan R. Winsten and Bryan T. Petrucci, “The Vermont Dairy Profitability Project: An Analysis of Viable Grass-Based Options for Vermont Farmers,” (Dekalb, IL: Center for Agriculture in the Environment, 1996); Brian Loeffler et al., Knee Deep in Grass: A Survey of Twenty-nine Grazing Operations in Minnesota, Report No. BU-6693-S (St. Paul MN: University of Minnesota Extension Service, 1996); Dan Undersander et al., Pastures for Profit: a Guide to Rotational Grazing (Madison, WI: University of Wisconsin-Extension, 1993). 45 The difference in target forage yield (reported as pounds per year) for the baseline and for the IRG scenario is summarized in the following table.

Forage crop Baseline – OAG Yield IRG Yield (lbs/yr) (lbs/yr) Coastal bermudagrass 5700 12000 Winter wheat 2700 3850 14 Livestock and the Environment: Precedents for Runoff Policy

Table 2: Comparison of Nitrogen Fertilizer and Pasture Forage Uptake for OAG and IRG

Description OAG Pasture IRG Pasture Agronomic uptake rate of nitrogen for pasture forage 300 540 (lbs/acre/year) Application rate to pasture (lbs/acre/year) Commercial nitrogen fertilizer (lbs/acre/year) 220 450 Plant available nitrogen from manure (lbs/acre/year) 223 202* Effective application rate (lbs/acre/year) 443 652 Ratio of application rate to crop (agronomic) uptake rate 1.5 1.2 for pastures *The rate of plant available nitrogen in manure is slightly lower for IRG since the stocking density is slightly lower for IRG on an annual basis. An IRG system may also minimize water quality impacts by increasing infiltration, slowing runoff, increasing natural filtration and decreasing trampling of grasses.46 This policy further specifies the elimination of denuded areas in pastures and more uniform manure deposition by cows due to greater control of their physical movements. Pasture denudation can be eliminated by frequently moving herds to new paddock areas and using fencing and walkways to create paddocks and facilitate herd movement. Policy H3 continues to assume that 50 percent of LFRW producers apply ACPA waste to hayfields at the nitrogen agronomic rate and 50 percent apply at a Low P rate.

Policy H4: Dairy herd pastures are managed in a grassed loafing lot (GLL) production system; the effective rate of manure from cows and commercial fertilizer applied to pastures is 1.5 times the nitrogen agronomic application rate; no discharge from ACPA; 50 percent of producers apply liquid waste from ACPA to hayfields at a nitrogen agronomic rate and 50 percent apply at Low P rate.

Policy H4 examines a shift in LFRW dairy production from OAG to grassed loafing lot systems (GLL). To isolate the potential environmental benefits of adopting GLL, Policy H4 specifies pasture stocking density, ACPA waste application rates and commercial fertilizer applications identical to the baseline. The focus of GLL is maintenance of vegetative cover and not improvement of forage yield or nutritional value. GLL divides pastures into loafing areas to avoid creation of denuded areas by groups of cows. Loafing lots are set up through use of portable fencing and include portable feeding and watering equipment. To avoid creation of bare spots, portable fencing and herds are moved periodically, and containers used for administering water and feed are moved when needed. Loafing areas are typically larger than paddocks utilized in IRG systems and the cows remain in loafing areas longer than the cows in IRG paddocks. Policy H4 assumes that GLL management practices will stop the trampling of vegetation and creation of denuded areas within pastures. The model also assumes producers do not rely on pasture forage to meet a significant portion of herd nutritional needs.

Policies H5(a) and H5(b) examine modifying the nutrient content of dairy cow feed rations as an alternative means for reducing the amount of nutrients present on livestock operations. Information indicating that there are long-term environmental implications from soil build-up

46 Planned grazing can also enhance wildlife habitat, buffer adverse effects of drought and promote reduced use of fossil fuel. USDA, Natural Resource Conservation Service Field Manual, Section IV (Washington, DC: Government Printing Office, 1995). Livestock and the Environment: Precedents for Runoff Policy 15

of nutrients and nutrient runoff highlight the need for innovative nutrient strategies.47 Policies for controlling potential nutrient loads from livestock production typically focus on altering structural or management practices. However, modifying the dietary nutrient level of feed rations for some livestock species, including dairy cattle, is being examined as an innovative and potentially cost-effective means to control the phosphorus content of livestock waste.

Because phosphorus has many functions in animals, dairy cows are often fed dietary phosphorus levels in excess of requirements.48 Dairy herds may be fed rations reflecting 0.55 to 0.60 percent dietary phosphorus.49 Feeding more phosphorus than needed is partially based on the perception that it will enhance reproductive performance, thereby ensuring consistent milk production.50 Studies indicate, however, that dairy cattle typically require dietary phosphorus concentrations of less than 0.40 percent to support normal functioning. 51 It was estimated that the dietary phosphorus concentration of dairy cow feed rations in the LFRW is approximately 0.55 percent. Policies H5(a) and H5(b) change components of the dairy herd feed ration to result in a dietary phosphorus concentration of 0.40 percent. This change in the diet of LFRW dairy cows is estimated to decrease the phosphorus in manure from 60 lbs./cow/year to 40 lbs./cow/year.52

Policy H5(a): OAG with no discharge from ACPA; pastures receive nutrients naturally deposited in manure and commercial nitrogen in quantities effectively 1.5 times the nitrogen agronomic rate; 50 percent of producers apply liquid waste from ACPA to hayfields at a nitrogen agronomic application rate and 50 percent apply at a Low P agronomic rate; feed rations are altered to reduce manure phosphorus.

Policy H5(a) incorporates reduced phosphorus feed ration into the baseline, isolating the potential environmental benefits of reducing the phosphorus content of manure. Production practices for Policy H5(a) are the same as under the baseline with the exception of the feed ration and nutrient management for hayfields. Hayfields operating at a nitrogen rate are treated the same as under the baseline. However, the 50 percent of fields operating at a Low P rate receive somewhat less commercial nitrogen than under the baseline (198 pounds per acre per year

47 Pratt, Expanding The Focus, 20; Sharpley et al., “Forms of Phosphorus in Soil Receiving Cattle Feedlot Waste,” Journal of Environmental Quality 13 (1984) 211-15; Sharpley et al., “Managing Agricultural Phosphorus for Protection of Surface Waters: Issues and Options,” Journal of Environmental Quality 23 (1994) 437. 48 D. Morse et al., “Effects of Concentration of Dietary Phosphorus on Amount and Route of Excretion,” Journal of Dairy Science 75 (1992) 3039; L.E. Chase, “Phosphorus Nutrition of Dairy Cattle,” in Mid-South Ruminant Nutrition Conference Proceedings, May 7-8, 1998, Ellen Jordan, ed. (The Texas Animal Nutrition Council & the Texas Agricultural Extension Service, Dallas, TX); see Larry D. Satter and Zhiguo Wu, “New Strategies in Ruminant Nutrition: Getting Ready for the Next Millenium,” in Southwest Nutrition & Management Conference Proceedings, February 25-26, 1999 (The University of Arizona, Tucson, AZ). 49 H.H. Van Horn, G.L. Newton and W.E. Kunkle, “Ruminant Nutrition from an Environmental Perspective: Factors Affecting Whole-Farm Nutrient Balance,” Journal of Animal Science 74 (1996) 3082-3102; Satter and Wu, “New Strategies.” 50 See Chase, “Phosphorus Nutrition,” 4; Satter and Wu, “New Strategies.” 51 National Research Council, “Nutrient Requirements of Dairy Cattle” (6th Rev. Ed.) (Washington, DC: National Academy Press, 1989); Morse, “Effects;” H. H. Van Horn, “Recycling Manure Nutrients to Avoid Environmental Pollution,” in Large Dairy Herd Management, H. H. Van Horn and C. J. Wilcox eds. (Champaign, IL: American Dairy Science Association, 1992). 52 Appendix B, section II.B. 16 Livestock and the Environment: Precedents for Runoff Policy

versus 264 pounds per acre per year) because the reduced phosphorus feed changes the ratio of nitrogen to phosphorus in manure. Changes in phosphorus loadings for Policy H5(a) should be attributable to reduction of manure phosphorus and attendant changes in commercial fertilizer and/or land areas.

Policy H5(b): OAG with no discharge from ACPA; herds are maintained on pasture at a density equivalent to a Low P agronomic rate; all producers apply ACPA waste at a Low P agronomic application rate; feed rations are altered to reduce manure phosphorus.

Policy H5(b) combines the reduced-phosphorus feed ration with a Low P pasture policy and a uniform Low P rate for application of ACPA waste on hayfields to maximize phosphorus control. Commercial nitrogen fertilizer is applied to pastures and hayfields at rates less than the baseline to maintain yields, and no commercial phosphorus is applied to either area. Policy H5(b) essentially modifies Policy H2(e) which assumes a Low P pasture policy and a 100 percent Low P application rate for ACPA waste to hayfields. The uniform Low P policy for pastures in H5(b) also assumes purchase of additional pasture acreage. Because the reduced phosphorus feed ration increases the ratio of nitrogen to phosphorus in manure, producers will need to obtain some additional pasture acreage to achieve a Low P agronomic rate. However, they will not need to secure as much additional acreage as under the preceding Low P pasture policies. Therefore, Policy H5(b) requires more pasture acres than the baseline but not as many acres as Policy H2(e).

Policy H6 simulates the possible benefits of using filter strips within pastures to reduce nutrient- laden runoff. Filter strips are a traditional tool for managing nutrient and sediment laden runoff from agricultural lands. This practice is typically applied to hayfields or row crop acreage that is being cultivated and/or tilled. It has been recognized that livestock on pasture can degrade riparian areas53 and increase sediment/nutrient loads through creation of denuded areas (through trampling and consumption of vegetation) within pastures. In addition, nutrients deposited on pastures by grazing animals and/or applied via commercial fertilizer represent potential sources of polluted runoff.

Baseline conditions in the LFRW indicate pastures are likely sources of nutrient runoff. Dairy herds on OAG pastures congregate near fixed areas such as barns, feeding and watering stations, and shady portions of pastures, resulting in loss of all vegetative cover in and surrounding those areas. The resulting denuded pasture areas are estimated to encompass five percent of total pasture acreage per farm. The baseline further assumes that manure solids are not collected from these spots and that no runoff controls are in place for denuded areas. Based on empirical information it is assumed that barns and other buildings are typically located at the topmost portion or highest elevation point of a farm, and that feed and water fixtures are placed in proximity to those buildings. It is also assumed that denuded pasture areas occur near the buildings, and that runoff flow moves from these areas through the pasture to filter strips located

53 NRCS-USDA, Lake Fork Creek Hydrologic Unit Project Annual Project Report Fiscal Year 1992 (Sulphur Springs, TX: NRCS, 1992), 3. Livestock and the Environment: Precedents for Runoff Policy 17

at the down-slope, or lowest elevation point in pastures. Policy H6 adopts all baseline specifications regarding pasture conditions and adds pasture filter strips to examine their potential for reducing nutrient runoff.

Policy H6: OAG with no discharge from ACPA; pastures receive nutrients in quantities effectively 1.5 times the nitrogen agronomic rate; filter strips are maintained along the downslope edge of pastures with fencing to restrict cow access; 50 percent of producers apply liquid waste from ACPA to hayfields at a nitrogen agronomic rate and 50 percent apply at a Low P rate.

Livestock and the Environment: Precedents for Runoff Policy 19

MODELING RESULTS AND ANALYSIS

The Models

he results presented in this report rely upon the modeling framework developed through Tthe NPP. CEEOT-LP is a functional modeling framework for examining the economic and environmental consequences of proposed policy options. The economic effects of policies are estimated through the immediate geographic region at the individual farm level. Because dairies with different herd sizes possess different biophysical and economic characteristics, the economic model categorizes dairy herds into groups by the number of animals. For each group, a representative dairy is specified which closely reflects the characteristics of farms that size. Use of representative dairies permits appropriate generalization of production practices and farm characteristics for economic modeling. The dairies within the LFRW have been categorized into four size groups.54

· Very small dairies up to 100 cows Representative herd size of 95 cows · Small dairies 101 to 200 cows Representative herd size of 178 cows · Medium dairies 201 to 300 cows Representative herd size of 275 cows · Large dairies over 300 cows Representative herd size of 556 cows By incorporating various technology systems or management practices, the model can simulate the impact of a particular environmental policy on farmers’ net revenues.55 Economic model results for the policies are calculated for each size group and for all dairies in the aggregate.

Environmental impacts are simulated first at the farm level using the Agricultural Policy/ Environmental eXtender (APEX). APEX enables the modeling framework to address a number of complexities:

[APEX] is being constructed to evaluate the effects of a variety of land management and conservation practices in complex landscapes at the scale of a farm or a small watershed. Farms or small watersheds may be divided into fields or areas differing in soil type, landscape position, land use, crop management, or other factors. Management and conservation practices include tillage, crop rotation, fertilization, pesticides, irrigation, drainage, furrow diking, strip cropping, buffer strips, terraces, waterways, manure

54 The 4 dairy size categories were developed based on a financial profile of Hopkins County dairies prepared by Bobby McDonald of McDonald Bookeeping Service, Sulphur Springs, Texas. 55 See, Edward Osei et al., Livestock and the Environment: A National Pilot Project–The Policy Space, Economic Model and Environmental Model Linkages (Ames, IA: CARD, 1995), for a full explanation of the analysis underpinning the economic model. 20 Livestock and the Environment: Precedents for Runoff Policy

application, and pond or wastewater lagoon management. The model also considers the effects of uncontrolled variables like weather and climate (including atmospheric carbon dioxide), soil chemical and physical properties, and topography. The model predicts the effects of these factors on hydrology, erosion (sheet, gully, and channel), water quality (sediment, nitrogen, phosphorus, and pesticides), soil fertility, soil organic matter, crop growth and yields and economics. APEX operates on a daily time step and is capable of simulating hundreds of years if necessary. 56

The APEX model functions in the following manner. For each dairy simulated, a list of fields available to receive solid manure and liquid waste is developed. Each field is described by basic characteristics, such as slope, soil type and size. For small dairies, public information is typically not available. Field location and size are estimated from available land use information and by applying accepted NRCS methods to estimate waste production and land requirements. Based on the disposal practices and restrictions assigned to each policy scenario and the crop to be simulated, modelers determine the amount of land required for both solid and liquid waste application on a per dairy basis.

The APEX outputs are aggregated to the watershed level through the Soil Water Assessment Tool (SWAT), a biophysical process model. In addition to aggregating APEX output, SWAT is applied to simulate water quality and runoff from all non-dairy related land uses, e.g., wooded and improved pasture. The results from SWAT indicate changes to parameters including nutrients (organic, soluble and total nitrogen and phosphorus), sediment and flow. Model runs estimate changes in loadings to the watershed for each parameter under each scenario simulated. The biophysical simulations are performed on a daily time step. Due to the dynamics inherent in rainfall and the fate and transport of nutrients, the outputs of these simulations have spatial and temporal dimensions. This report uses average annual loadings from the drainage basin to the Lake Fork Reservoir for key water quality indicators. Annual values were obtained as averages over a thirty-year simulation period. The accuracy of the water quality indicators simulated by the biophysical models is evaluated by comparison to water quality data and stream flow data for the study area. While the data available for this study are representative of the types and amounts of data commonly available from existing sources, those data are relatively limited compared to that used for the CEEOT-LP study in the upper North Bosque River watershed. As a result, the evaluation of water quality indicators from the biophysical models for the LFRW was conducted on a relatively gross scale. Modelers were, however, able to rely on their experience in applying CEEOT-LP in the UNBRW to assess the reliability of model results. The Model Runs: Policy Options for Controlling Runoff

The proposed LFRW policies change waste management and production practices on dairy farms to address the potential for nutrient runoff. Information and assessments by state agencies indicate nutrients are a concern within the LFRW; however, insufficient data are available to

56 J.R. Williams et al., “Simulation of Animal Waste Management with APEX,” in Innovations and New Horizons in Livestock and Poultry Manure Management (Austin, TX: TAES, 1995), 23. Livestock and the Environment: Precedents for Runoff Policy 21

determine whether phosphorus or nitrogen is the predominant nutrient of concern. Based on previous research and CEEOT-LP work, the potential for phosphorus loadings to LFRW surface waters is significant.57 Accordingly, the following policies propose controls for both nutrients however they emphasize controls for phosphorus.

The policy options for reducing nutrient loads modeled by CEEOT-LP can be grouped into five general strategies. The first strategy focuses on pasture management, adjusting only the nutrients applied to pasture areas in order to achieve environmentally protective agronomic application rates. These policies change the pasture stocking density (the number of cows per pasture acre), reducing the amount per acre of livestock waste cows deposit while grazing.58 Commercial fertilizer rates are also adjusted as needed. The second strategy focuses on phosphorus land management for pastures and hayfields. These policies simulate the potential for maximizing reductions to nutrient loadings by requiring that nutrients be applied to both pastures and hayfields at phosphorus agronomic application rates. The third strategy examines the benefits of alternative pasture production systems for reducing denuded areas and improving forage yield and nutrient uptake. The fourth strategy investigates dietary management by reducing the amount of phosphorus in dairy cow feed rations to reduce the amount of phosphorus in manure. The last strategy simulates the potential nutrient reduction benefits from implementation of filter strips for pastures.

The model results for each policy scenario is compared with the policy baseline, Policy H1, which reflects the predominate state of current management and production practices in the study area. The results are expressed as percentage changes in environmental indicators and net returns for dairy operators in the LFRW in relation to the baseline policy. 59 Environmentally Protective Pasture Nutrient Management

Under the baseline, LFRW pastures receive more nutrients than needed for the forages being grown. To reduce the potential for nutrient runoff, the following policies reduce the amount of manure and/or commercial fertilizer applied to pastures. As a reminder, Policies H2(a), H2(b), and H2(c) specify:

Policy H2(a): OAG with no discharge from ACPA; dairy herds are maintained on pasture at a stocking density equivalent to a nitrogen agronomic rate; 50 percent of producers apply liquid waste from ACPA to hayfields at a nitrogen agronomic rate and 50 percent apply at a Low P rate. 57 See, Pratt, Expanding the Focus. The land application of livestock waste has been identified as a potentially significant source of phosphorus loadings to surface waters. Dairy manure is not a balanced fertilizer; for many crops the ratio of nitrogen to phosphorus in manure does not meet plant needs. This results in more phosphorus being present in manure than required by the crop. Traditional research suggests that under nitrogen based application rates, phosphorus will be over applied by a factor of 2 to 4–½ times beyond plant needs. See, H. H. Van Horn et al., Dairy Manure Management: Strategies for Recycling Nutrients to Recover Fertilizer Value and Avoid Environmental Pollution (Gainsville, FL: Florida Cooperative Extension Service, 1991). 58 Model simulations for pastures include land areas utilized for both lactating and dry cows. 59 The percent changes simulated for nutrients in the modeling framework represent estimated changes in nutrient loadings to the Lake Fork Reservoir. 22 Livestock and the Environment: Precedents for Runoff Policy

Environmental Results

The environmental model results for Policies H2(a), H2(b) and H2(c) are expressed in terms of percentage changes relative to the policy baseline, Policy H1, and are summarized as follows:60

Table 3: Changes in Phosphorus61 and Nitrogen Loads for Policies H2(a), H2(b) and H2(c)

Scenario Organic-P Soluble-P Total-P (% Change)62 (% Change) (% Change) Policy H2(a): Hayfields, 50% N/50% Low P; Pastures, N rate - 3 - 18 - 12 Policy H2(b): Hayfields, 50% N/50% Low P; Pastures, High P - 7 - 33 - 23 Policy H2(c): Hayfields, 50% N/50% Low P; Pastures, Low P - 13 - 54 - 38 Organic-N Soluble-N Total-N (% Change) (% Change) (% Change) Policy H2(a): Hayfields, 50% N/50% Low P; Pastures, N rate 0 - 10 - 7 Policy H2(b): Hayfields, 50% N /50% Low P; Pastures, High P - 2 - 4 - 4 Policy H2(c): Hayfields, 50% N /50% Low P; Pastures, Low P - 5 3 1

As summarized in Table 3, each scenario shows an appreciable decrease in total phosphorus loads. Changing the agronomic application rate for nutrients being applied to pastures is simulated to decrease total phosphorus loads 10 percent or more between each scenario. Changing nutrient management of pastures also produces significant decreases in soluble phosphorus loads: 18 percent at the nitrogen rate, 33 percent at a High P rate, and 54 percent at a Low P rate. Organic phosphorous was also reduced under each scenario, although at lesser rates; 3 percent at the nitrogen rate, 7 percent at the High P rate, and 13 percent at the Low P rate.

The changes to nitrogen loads estimated to result from these policies present a more complex picture. The nitrogen and the High P pasture policies moderately reduce total and soluble nitrogen loadings, but produce little change in organic nitrogen loads. The Low P pasture policy decreases organic nitrogen but slightly increases soluble and total nitrogen. The results for nitrogen loadings can be explained by the changes in land area and commercial fertilizer rates for Policies H2(a), H2(b) and H2(c). To achieve an effective N rate, Policy H2(a) eliminates

60 See Appendix A, for tables listing the full set of water quality parameters simulated by the SWAT model for the LFRW. 61 SWAT results are expressed as relative changes to in-stream loads of organic phosphorus, soluble phosphorus and total phosphorus. Organic phosphorus and soluble phosphorus comprise total phosphorus. 62 The negative sign indicates a decrease in a parameter relative to the policy baseline. Livestock and the Environment: Precedents for Runoff Policy 23

application of commercial fertilizer to pastures. This results in a predictably moderate decrease in soluble and total nitrogen. To realize phosphorus agronomic application rates, Policies H2(b) and (c), producers will acquire additional pasture acres. The total amount of animal waste that is land applied remains constant for these two scenarios while the amount of land area increase. As a result fewer nutrients will be present to meet plant needs on a per acre basis. Producers who shift to phosphorus-based pasture stocking densities are assumed to continue to apply commercial nitrogen fertilizer on pastures to maintain forage yields. While the application rate per acre for commercial nitrogen fertilizer is assumed to be lower for phosphorus-based pasture scenarios than the baseline, the total pasture area will be larger. Thus, the per acre amount of commercial nitrogen applied under phosphorus-based pasture policies decreases, while the total amount of commercial nitrogen fertilizer applied increases in comparison to the baseline. The application of greater total amounts of commercial nitrogen increases the likelihood of soluble nitrogen losses, as estimated by the model. Table 4 illustrates the rates of and land areas for application of commercial nitrogen fertilizer as estimated for the LFRW under each of the pasture-nutrient management policy scenarios.

Table 4: Total Pasture Area63 and Commercial Nitrogen Rates for Policies H1, H2(a), H2(b) and H2(c) Scenario Very Small Small Medium Large Dairy Dairy Dairy Dairy Policy H1 (Policy Baseline): Hayfields, 50%N/50%Low P; Pastures, 1.5 times N rate Total Pasture Land (acres/dairy) 36 86 107 252 Pasture Nitrogen Fertilizer Rates (lbs/acre) 220 220 220 220 Total Lbs. Nitrogen Fertilizer Applied on Pasture 7,920 18,920 23,540 55,440 Policy H2(a): Hayfields 50%N/50%Low P; Pastures N Total Pasture Land (acres/dairy) 31 58 90 181 Pasture Nitrogen Fertilizer Rates (lbs/acre) 0 0 0 0 Total Lbs. Nitrogen Fertilizer Applied on Pasture 0 0 0 0 Policy H2(b): Hayfields, 50%N/50%Low P; Pastures, High P Total Pasture Land Required (acres/dairy) 67 126 195 394 Pasture Nitrogen Fertilizer Rates (lbs/acre) 162 162 162 162 Total Lbs. Nitrogen Fertilizer Applied on Pasture 10,854 20,412 31,590 63,828 Policy H2(c): Hayfields, 50%N/50%Low P; Pastures, Low P Total Pasture Land Required (acres/dairy) 104 194 300 606 Pasture Nitrogen Fertilizer Rates (lbs/acre) 210 210 210 210 Total Lbs. Nitrogen Fertilizer Applied on Pasture 21,840 40,740 63,000 127,260

Economic Findings

The following table presents economic model results indicating the impacts to producers from implementing Policies H2(a), H2(b) and H2(c). The economic model runs are presented for each of the four dairy size categories and in the aggregate. The results presented are expressed in terms of percentage changes in net returns relative to the baseline, Policy H1.

63 The amount of pasture land required and fertilizer application rates assumed under Policies H2(b) and H2(c) are calculated by the model to achieve appropriate pasture stocking densities. 24 Livestock and the Environment: Precedents for Runoff Policy

Table 5: Changes in Producer Net Returns for Policies H2(a), H2(b) and H2(c)

Very Small Small Dairy Medium Dairy Large Dairy Aggregate Dairy (% Change) (% Change) (% Change) (% Change) Scenario (% Change) Policy H2(a): Hayfields, 50% N/50% Low P; Pastures, N rate 2 5 4 0 3 Policy H2(b): Hayfields, 50% N/50% Low P; Pastures, High P -9 -4 -8 -4 -6 Policy H2(c): Hayfields, 50% N/50% Low P; Pastures, Low P -24 -17 -23 -14 -18

The economic results for Policies H2(a), H2(b) and H2(c) show that changes in commercial fertilizer use and pasture area can also have marked impacts on producer net returns. Similar to the environmental results, Policy H2(a) indicates favorable economic results. Policy H2(a) is estimated to actually increase net returns from 2 to 5 percent for the very small, small and medium dairies, and to produce a 3 percent increase for all dairies in the aggregate. At the same time, the large size dairy group is estimated to experience no increase or decrease in net returns from implementation of Policy H2(a). The predicted increases to net returns for Policy H2(a) reflects the savings associated with eliminating commercial nitrogen fertilizer application under this policy. In contrast, both of the phosphorus-based pasture management policies, H2(b) and H2(c), project decreases in producer net returns of 4 to 24 percent. These decreases vary moderately across the dairy size categories by policy (from 4 to 9 percent decrease for Policy H2(b) and a 14 to 24 percent decrease for Policy H2(c)). While the small dairies are projected to receive the largest increase to net returns from Policy H2(a), the very small dairies are estimated to receive the greatest decreases to net returns for Policies H2(b) and H2(c) (9 and 24 percent respectively). Two factors appear primarily responsible for the overall results. First, the application of livestock waste at phosphorus agronomic rates (High P or Low P) effectively reduces the amount of manure being applied on a per acre basis. The producers are assumed to incur costs for the purchase of additional commercial nitrogen fertilizer to maintain expected pasture forage yields. Second, moving from a nitrogen- to a phosphorus-based pasture stocking density would increase, by about 2 to 3 times, the amount of pasture area needed. Phosphorus-based pasture policies will require operators to purchase additional pasture acres, incurring additional costs. The amount of additional acreage required is illustrated in the following table:

Table 6: Adjustments to Total Pasture Acres for Phosphorus Agronomic Rate Policies

Very Small Small Dairy Medium Large Dairy Dairy Dairy Policy H2(b): Hayfields, 50%N/50%Low P; Pastures, High P rate Pasture Acreage for High P Agronomic Rate 67 126 195 394 Available Pasture Acreage 41 92 121 316 Additional Pasture Acreage to Purchase 27 34 74 78 % Change From Baseline 66% 37% 61% 25%

Policy H2(c): Hayfields, 50%N/50%Low P; Pasture, Low P rate

Pasture Acreage for Low P Agronomic Rate 104 194 300 606 Available Pasture Acreage 41 92 121 316 Additional Pasture Acreage to Purchase 63 102 179 290 % Change From Baseline 154% 111% 148% 92% Livestock and the Environment: Precedents for Runoff Policy 25

While Policy H2(b) assumes that producers will have to increase their pasture acreage from 25 percent to 66 percent to achieve High P pasture stocking densities, Policy H2(c) assumes that producers will have to acquire between 92 percent and 154 percent more pasture acres to adjust to a Low P rate.

Summary

Policy H2(a) mandating that all dairy producers adopt a nitrogen agronomic rate for application of livestock waste and commercial fertilizer on pastures offers clear environmental benefits by producing predicted reductions in both phosphorus and nitrogen loads for the watershed. These benefits are obtained by simply taking full account of the nutrient value in the manure being naturally deposited by dairy cows on pastures. As Table 4 shows, the nutrient value available from cow manure at baseline stocking rates is sufficient to permit operators to cease all application of commercial nitrogen and phosphorus to LFRW pastures under Policy H2(a).

Policy H2(a) is projected to produce a slight increase in net return for LFRW dairy producers. In contrast, Policies H2(b) and H2(c) offer greater potential for phosphorus reduction. This positive environmental benefit is tempered by the mixed results these policies are projected to produce in nitrogen-loads: slight decreases under Policy H2(b) and both decreases and increases in nitrogen loads under Policy H2(c). The mixed results stemming from the phosphorus policies are, in part, attributable to changes in commercial fertilizer regimes and the amount of land area utilized for pastures. The phosphorus-based pasture policies also are estimated to impose a greater economic burden on producers, decreasing producer net returns 6 to 18 percent in the aggregate. These changes in economic impacts are again associated with the assumptions that producers will purchase additional pasture and commercial nitrogen fertilizer under these policies in order to achieve the specified nutrient agronomic application rate. Policies H2(a), H2(b) and H2(c) offer relatively distinct benefits and trade-offs in relation to one another. Weighing which policy would ultimately be preferential will partly depend on whether a need is identified to control one or both nutrients to improve water quality. Pasture & Hayfield Phosphorus Management Policies

The policy baseline assumes that livestock waste collected from ACPA—the milking parlor and dripshed—is collected in waste storage ponds as liquid and applied to hayfields as fertilizer. The application of nutrients to hayfields represents a combination of animal waste and commercial fertilizers, where waste is applied first to meet crop needs and supplemented by commercial fertilizers as warranted to achieve desired agronomic rates. Due to reported changes in prevailing management practices, the baseline assumes that one half of LFRW dairy producers apply liquid waste from ACPA to hayfields at a Low P rate. However, one half of producers continue to land apply liquid waste at the nitrogen agronomic rate. Although the amount of land in the LFRW receiving ACPA waste—dairy hayfields—is small in comparison to the amount of pasture, the application of liquid waste to hayfields at nitrogen agronomic rates represents a potential source of nutrient loadings. Policies H2(d) and H2(e) specify management of hayfields for phosphorus loading reductions. Under each of the policies in this group, all producers are assumed to apply ACPA waste to hayfields at a Low P rate. At the same time, pasture management 26 Livestock and the Environment: Precedents for Runoff Policy

is adjusted to achieve either a High P or Low P application rate. Policies H2(d) and H2(e) intend to examine the projected nutrient load changes resulting from extending phosphorus-based management to hayfields in conjunction with pastures. As a reminder, Policies H2(d) and H2(e) are as follows:

Policy H2(d): OAG with no discharge from ACPA; herds are maintained on pasture at a density equivalent to a High P agronomic rate; all producers apply liquid waste from ACPA to hayfields at a Low P agronomic rate.

Policy H2(e): OAG with no discharge from ACPA; herds are maintained on pasture at a density equivalent to a Low P agronomic rate; all producers apply liquid waste from ACPA to hayfields at a Low P agronomic application rate.

Environmental Results

The SWAT results for these policies, expressed in terms of percentage changes from the policy baseline, H1, are summarized as follows:

Table 7: Changes in Phosphorus and Nitrogen Loads for Policies H2(d) and H2(e) Scenario Organic-P Soluble-P Total-P (% Change) (% Change) (% Change) Policy H2(d): Hayfields, Low P; Pastures, High P - 8 - 35 - 25 Policy H2(e): Hayfields, Low P; Pastures, Low P - 14 - 56 - 40 Organic-N Soluble-N Total-N (% Change) (% Change) (% Change) Policy H2(d): Hayfields, Low P; Pastures, High P - 2 - 5 - 4 Policy H2(e): Hayfields, Low P; Pastures, Low P - 5 3 0 In comparison to the baseline, model simulations of Policies H2(d) and H2(e) indicate moderate to significant decreases in phosphorus loadings, from an 8 percent reduction in organic phosphorus to a 56 percent reduction in soluble phosphorus, and moderate decreases to slight increases in nitrogen loadings. As presented in Table 7, these policies are estimated to produce changes ranging from a 3 percent increase in soluble-nitrogen loads to a 5 percent decrease in organic-nitrogen when compared to the baseline. Pasture acres under these policies continue to receive commercial nitrogen to meet crop needs, although at somewhat lower rates (162 lbs./ acre/year for Policy H2(d) and 210 lbs./acre/year for Policy H2(e) compared to 220 lbs./acre/ year for Policy H1). Improved pasture management may explain some of the decreases to estimated nitrogen loads for these policies, while continued commercial nitrogen application (albeit at lower rates than the baseline) and/or increased retention of organic nitrogen possibly increasing mineralization to soluble nitrogen, may explain some of the gains.

When compared to phosphorus-based pasture policies, i.e., Policies H2(b) and H2(c), the hayfield policies appear to produce only minimal additional reductions to projected phosphorus loadings, and insignificant changes to estimated nitrogen loadings. The slight environmental benefits of extending phosphorus-based nutrient management to hayfields when pastures are already under Livestock and the Environment: Precedents for Runoff Policy 27

phosphorus application rates is reflected in Tables 8 and 9 comparing the nutrient load changes for Policy H2(b) to Policy H2(d), and the changes for Policy H2(c) to those for Policy H2(e), for both phosphorus and nitrogen.

Table 8: Comparison of Changes in Phosphorus Loads for Policies H2(b) and H2(d), and Policies H2(c) and H2(e)

Scenario Organic-P Soluble-P Total-P (% Change) (% Change) (% Change) Policy H2(b): Hayfields, 50% N/ 50% Low P; Pastures, High P -7 -33 -23 Policy H2(d): Hayfields, Low P; Pastures, High P -8 -35 -25

Policy H2(c): Hayfields, 50% N/ 50% Low P; Pastures, Low P -13 -54 -38 Policy H2(e): Hayfields, Low P; Pastures, Low P -14 -56 -40 As Table 8 shows, the lack of substantial difference in the load reductions estimated for the two groups of policies reveals that little additional environmental benefit will result from mandating hayfields in the LFRW be managed at phosphorus-based agronomic rates.

Table 9: Comparison of Changes in Nitrogen Loads for Policies H2(b) and H2(d), and Policies H2(c) and H2(e)

Scenario Organic-N Soluble-N Total-N (% Change) (% Change) (% Change) Policy H2(b): Hayfields, 50% N/ 50% Low P; Pastures, High P - 2 - 4 - 4 Policy H2(d): Hayfields, Low P; Pastures, High P - 2 - 5 - 4

Policy H2(c): Hayfields, 50% N/ 50% Low P; Pastures, Low P - 5 3 1 Policy H2(e): Hayfields, Low P; Pastures, Low P - 5 3 0

As Table 9 shows, the hayfield policies essentially produce no appreciable changes to nitrogen loads beyond the reductions already projected to result from the phosphorus pasture policies. The slight changes in nitrogen loads is understandable given the relatively small area of land represented by the hayfields on one half of the LFRW dairies. Of the 313,808 total acres within the watershed, 44 percent are estimated to be improved pasture.64 While dairy hayfields are included in this land-use category, they represent only 4 percent of the total acres of improved pasture. In addition, one half of LFRW dairy producers are already managing waste from ACPA applied to hayfields at a Low P rate. Thus, changes in nitrogen loads due to adoption of phosphorus hayfield management policies would already be reflected in the baseline, and in Policies H2(b) and (c) for one half of the total dairy hayfield area.

Economic Findings

The economic model results displayed in Table 10 indicate the impacts of implementing Policies H2(d) and H2(e), expressed as percentage changes in net returns relative to the baseline. Results are presented for each of four LFRW dairy size categories and for dairies in the aggregate.

64 Ewer, Running Creek Sub-Watershed, 4. 28 Livestock and the Environment: Precedents for Runoff Policy

Table 10: Changes in Producer Net Returns for Policies H2(d) and H2(e)

Very Small Dairy Small Dairy Medium Dairy Large Dairy Aggregate Scenario (% Change) (% Change) (% Change) (% Change) (% Change) Policy H2(d): Hayfields, Low P; Pastures, High P -12 -5 -10 -5 -7 Policy H2(e): Hayfields, Low P; Pastures, Low P -27 -18 -24 -15 -20 Policies H2(d) and H2(e) follow the prior pattern for policies adjusting nutrient management. Projections across dairy size categories indicate decreases to net producer returns for Policy H2(d) of 5 percent to 12 percent. Changes for Policy H2(e) are projected to decrease 15 to 27 percent, where nutrients are applied to both pastures and hayfields at a Low P rate. Among the dairy size groups, the very small and medium producers are projected to experience the greatest decreases in net returns under either policy. Very small dairies show an estimated 12 percent decrease in net returns for Policy H2(d) and a 27 percent decrease for Policy H2(e). Medium dairies would experience a 10 percent decrease to net returns under Policy H2(d) and a 24 percent decrease under Policy H2(e). The relative economic impacts for dairy producers resulting from Policy H2(d) and H2(e) are largely attributable to the costs associated with purchasing additional commercial nitrogen fertilizer and acquiring additional acreage to achieve phosphorus- based pasture stocking densities. Moreover, as illustrated in Table 11, the expected decreases in net returns resulting from the hayfield policies are only slightly more than the decreases predicted for corresponding phosphorus-based pasture policies, H2(b), and H2(c).

Table 11: Comparison of Changes in Net Returns for Policies H2(b) and H2(d), and Policies H2(c) and H2(e)

Very Small Dairy Small Dairy Medium Dairy Large Dairy Aggregate Scenario (% Change) (% Change) (% Change) (% Change) (% Change) Policy H2(b): Hayfields, 50% N/ 50% Low P; Pastures, High P -9 -4 -8 -4 -6 Policy H2(d): Hayfields, Low P; Pastures, High P -12 -5 -10 -5 -7

Policy H2(c): Hayfields, 50% N/50% Low P; Pastures, Low P -24 -17 -23 -14 -18 Policy H2(e): Hayfields, Low P; Pastures, Low P -27 -18 -24 -15 -20

Summary

Policies H2(d) and H2(e) would achieve significant phosphorus load reductions, similar to Policy H2(b) and H2(c). However, the additional environmental benefits produced by requiring a uniform Low P policy for nutrient application to hayfields would be minimal when compared to the gains produced by Policies H2(b) and H2(c). In addition, the hayfield policies are projected to produce mixed results for nitrogen loads. The changes estimated to nitrogen loads from adoption of Policies H2(d) and H2(e) are virtually identical to those already projected for Policies H2(b) and H2(c). The bulk of estimated changes to nitrogen and phosphorus loadings resulting from Policies H2(d) and H2(e) appear to be attributable to changes in nutrient management for pastures rather than changes for hayfields. These results appear consistent with two factors. First, the proportion of total acres used for ACPA waste application is small relative to total pasture acres within the LFRW, making the effect of a useful practice less pronounced Livestock and the Environment: Precedents for Runoff Policy 29

In addition, the pasture and hayfield policies are estimated to result in negative economic consequences for producers comparable to those predicted for the corresponding phosphorus- based pasture policies. Similar to the environmental results, the decreases in producer net returns projected to result from H2(d) and H2(e) appear to stem primarily from management changes in pasture policies, not from management of waste applied to hayfields. Alternative Dairy Pasture Production Systems

Policies H3 and H4 propose adoption of alternative pasture-based production systems to respond to concerns that denudation of OAG pasture may contribute nutrient loadings to the LFRW. The previous scenarios show that the implementation of nutrient management strategies for controlling runoff is estimated to result in significant reductions in dairy producer net returns. Policies H3 and H4 examine two alternative dairy production systems currently in use within the LFRW with potential to remediate these effects.65 Following are the descriptions for Policies H3 and H4:

Policy H3: Dairy herd pastures are managed in an intensive rotational grazing (IRG) production system; the effective rate of manure from cows and commercial fertilizer applied to pastures is 1.2 times the nitrogen agronomic application rate; no discharge from ACPA; 50 percent of producers apply liquid waste from ACPA to hayfields at a nitrogen agronomic rate and 50 percent apply at a Low P rate.66

Environmental Results

The SWAT results for these policies, expressed in terms of percentage changes from the policy baseline, H1, are summarized as follows:

Table 12: Changes in Phosphorus Loads for Policies H3 and H4

Scenario Organic-P Soluble-P Total-P (% Change) (% Change) (% Change) Policy H3: IRG—Hayfields, 50% N/50% Low P; -73 -58 -64 Pastures, 1.2 times N rate Policy H4: GLL—Hayfields, 50% N/50% Low P; -63 -3 -26 Pastures, 1.5 times N rate

65 Brown, Lake Fork Creek 1994, 10. 66 Although some research indicates that there would not be environmental benefits from rotational grazing, the biophysical model indicates significant reductions may accrue to this policy. 30 Livestock and the Environment: Precedents for Runoff Policy

Environmental model results estimate that Policy H3 will significantly decrease contributions of all forms of phosphorus to the LFRW: organic phosphorus decreases 73 percent, soluble phosphorus drops 58 percent and total phosphorus decreases 64 percent relative to the baseline. The authors are aware of research indicating IRG may not provide nutrient reductions estimated by SWAT. TIAER staff will take steps to reconcile SWAT estimates with other research activies. The phosphorus reduction potential of Policy H3 stems from several assumptions within the scenario. Under IRG, dairy producers apply less commercial phosphorus fertilizer to pastures than under the baseline: 13 pounds per acre per year for Policy H3 versus 53 pounds per acre per year for the baseline. In addition, IRG assumes elimination of all denuded pasture areas, more uniform manure deposition and greater phosphorus uptake by pasture forage due to higher projected yields. Policy H4 (implementing GLL production throughout the LFRW) is also estimated to result in appreciable reductions of organic and total phosphorus, 63 and 26 percent respectively relative to the baseline. The small change in soluble phosphorus for the GLL policy reflects that commercial phosphorus is applied to pastures at the baseline rate, and there is less forage uptake than for the IRG scenario.

Comparing the relative changes in phosphorus loadings from the baseline for IRG and GLL production to those for Policy H2(c) further clarifies the potential positive environmental benefit of alternative pasture production practices (Table 13). Policy H2(c) specifies a Low P agronomic rate for pastures and baseline rates for hayfields. For the three forms of phosphorus considered, an IRG production policy is estimated to produce greater phosphorus load reductions relative to the baseline than the GLL policy and Policy H2(c). Interestingly, while Policy H4 is projected to decrease organic phosphorus more than Policy H2(c), the latter is estimated to reduce soluble and total phosphorus more than Policy H4, relative to the baseline.

Table 13: Comparison of Changes in Phosphorus Loads for Policies H2(c), H3 and H4

Scenario Organic-P Soluble-P Total-P (% Change) (% Change) (% Change) Policy H2(c): Hayfields, 50% N/50% Low P; Pastures, -13 -54 -38 Low P Policy H3—IRG: Hayfields, 50% N/50% Low P; -73 -58 -64 Pastures, 1.2 times N rate Policy H4—GLL: Hayfields, 50% N/50% Low P; -63 -3 -26 Pastures, 1.5 times N rate As presented in the Table 14, the environmental impacts of IRG production presents a mixed picture regarding estimated changes in nitrogen loadings. While the model projects that organic and total nitrogen will decrease under Policy H3 relative to the baseline (66 percent and 7 percent respectively), loadings from soluble nitrogen are estimated to increase 20 percent over Policy H1. The IRG policy eliminates denuded areas and increases forage yields (and associated forage nutrient uptake). However, it is assumed that dairy producers will apply 450 pounds per acre per year of commercial nitrogen fertilizer to IRG paddocks to achieve desired forage yields compared to 220 pounds per acre per year under the baseline. Similarly, model results for Policy H4 (GLL) indicate loads will decrease for organic and total nitrogen (63 and 10 percent, respectively), and soluble nitrogen will increase 14 percent. Livestock and the Environment: Precedents for Runoff Policy 31

Table 14: Percent Changes in Nitrogen Loadings from Alternative Production Policies

Scenario Organic-N Soluble-N Total-N (% Change) (% Change) (% Change) Policy H3: IRG—Hayfields, 50% N/50% Low P; - 66 20 - 7 Pastures, 1.2 times N rate Policy H4: GLL—Hayfields, 50% N/50% Low P; - 63 14 - 10 Pastures, 1.5 times N rate Economic Findings

The following economic model results indicate the relative economic effects of implementing Policies H3 and H4 for four different dairy size categories and in the aggregate, expressed in terms of percentage changes in net returns from the baseline, Policy H1.

Table 15: Percent Changes in Producer Net Returns for Alternative Dairy Production Policies

Scenario Very Small Small Dairy Medium Dairy Large Dairy Aggregate Dairy (% Change) (% Change) (% Change) (% Change) (% Change) Policy H3: IRG—Hayfields, 50% N rate, 50% Low P rate; Pastures, 1.2 times N rate 4 2 8 3 4 Policy H4: GLL—Hayfields, 50% N rate, 50% Low P rate; Pastures, 1.5 times N rate - 4 - 3 - 2 - 1 - 2 The implementation of Policy H3 is estimated to result in slight to moderate increases to producer net returns in the aggregate and for each of the dairy size groups. Policy H3 is one of only two policies analyzed in this report that produce an estimated increase in producer net returns (Policy H2(a) is the other). Adoption of GLL, in contrast, produces slight decreases to net returns in the aggregate and for each dairy size group. Decreases in net revenue for Policy H4 reflect costs associated with acquisition of portable fencing, feeding and watering equipment and herd management. Purchased feed costs represent a significant portion of dairy producers’ total operating costs.67 Positive changes to net returns associated with Policy H3 relate to differences in costs for purchased feed. Because the model assumes pastures under Policy H3 supply more of the herd’s nutritional needs than under the baseline, model results project that costs for feed purchased will be 22 to 33 percent less under an IRG system. The increases to net returns estimated for Policy H3 are primarily a function of these reduced costs.68 The differences in feed costs for Policies H1 and H3 are presented in the Table 16.

67 Purchased feed rations represent between 40 to 60 percent of a typical dairy’s total operating costs. USDA-Economic Research Service (ERS), Milk Costs and Returns Data-Table 61A-Milk Production Cash Costs and Returns, per cwt, Southern Plains, 1993- 97, http://www.econ.ag.gov/Briefing/fbe/car/milk3.htm. 68 Expected increases in net revenue under IRG are limited by two factors. Fertilizer costs under Policy H3 would increase slightly in order to maintain IRG pasture forage growth and enhance its nutritional value. In addition, the model assumes that relying solely on pasture forage to meet the nutritional needs would reduce milk yields under Policy H3. It is also important to mention that the economic results predicted for Policy H3 do not take into account the risks of moving from current OAG pastures to IRG systems. For example, if there is adequate annual rainfall to grow IRG forage at required rates, the model predicts that net returns, over a thirty-year average, should increase. If rainfall rates actually drop and forage growth rates decline, producers will have to purchase feed to make up for the loss of IRG forage. In that event, net returns would be expected to decrease. 32 Livestock and the Environment: Precedents for Runoff Policy

Table 16: Cost Comparison for Purchased Dairy Feed—Policies H1 and H3

Scenario Very Small Small Dairy Medium Dairy Large Dairy Dairy Policy H1—Policy Baseline: Hayfields, 50% N/50% Low P; Pastures, 1.5 times N rate Purchased Feed Costs $69,020 $128,770 $332,359 $406,642 Policy H3: IRG—Hayfields, 50% N rate/50% Low P rate; Pastures, 1.2 times N rate Purchased Feed Costs $47,958 $86,695 $258,108 $284,556 Percent Change in Purchased Feed Cost from H1 to H3 - 30% - 33% - 22% - 30% Summary

Policies H3 (IRG) and H4 (GLL) were modeled to evaluate the potential of alternative pasture production practices to address nutrient runoff concerns and the cost issues associated with agronomic-rate policies. Alternative production practice scenarios appear to result in overall environmental improvements. While all the policies examined thus far are projected to decrease phosphorus loadings, reductions in phosphorus for Policies H3 and H4 are as great or greater than those for the open access grazing pasture and hayfield policies H2(a) through H2(e). In addition, Policies H2(a) through H2(e) result in moderate decreases to slight increases in nitrogen loadings while the alternative production policies are estimated to produce significant decreases in organic nitrogen loadings, moderate decreases in total nitrogen, but significant increases in soluble nitrogen loads within the LFRW (14 to 20 percent). The substantial decreases in organic loads may be associated with elimination of denuded pasture areas (an assumption under IRG and GLL only). The IRG policy, H3, additionally assumes greater forage uptake, which may partially offset the increase in commercial nitrogen fertilizer application. Increased soluble nitrogen loadings are likely a function of greater commercial nitrogen fertilizer application in Policy H3. Both Policy H3 and H4 offer better pasture management, keeping more organic nitrogen on fields where it can mineralize into soluble nitrogen. Determining which policy is preferable may depend on which nutrient decision-makers consider a greater concern in the watershed.

Economically, Policies H3 and H4 compare very favorably to Policies H2(a) through H2(e). The only policies yet examined that produce estimated increases in producer net returns are H2(a) and H3. Although Policy H4 is estimated to decrease producer net returns across dairy size groups and in the aggregate, the reductions are not large; 1 to 4 percent. In comparison, the remaining phosphorus-based pasture policies, H2(b) through H2(e), are projected to result in moderate to significant decreases in producer net returns. Overall, Policy H3 implementing IRG production for dairy producers would appear to produce the most favorable environmental and economic results. And with the exception of Policy H2(a), Policy H4 is estimated to reduce nutrient loads (except for the soluble forms of nitrogen and phosphorus) at less estimated cost than Policies H2(b) through H2(e). Livestock and the Environment: Precedents for Runoff Policy 33

Reduced-Phosphorus Feed Ration Policies

Prior analysis suggests that controlling runoff by changing waste application rates may have significant economic implications.69 An alternative to modifying nutrient application rates is to decrease the phosphorus content of livestock manure thereby reducing the phosphorus loading potential of areas receiving livestock waste. Policies H5(a) and H5(b) specify dairy herds receive feed rations with reduced phosphorus content thereby reducing the phosphorus content in manure. As a reference, the descriptions for Policies H5(a) and H5(b) are as follows:

Policy H5(a): OAG with no discharge from ACPA; pastures receive nutrients naturally deposited in manure and commercial nitrogen in quantities effectively 1.5 times the nitrogen agronomic rate; 50 percent of producers apply liquid waste from ACPA to hayfields at a nitrogen agronomic application rate and 50 percent apply at a Low P rate; feed rations are altered to reduce manure phosphorus.

Policy H5(b): OAG with no discharge from ACPA; herds are maintained on pasture at densities equivalent to a Low P rate; all producers apply liquid waste from ACPA at a Low P agronomic application rate; feed rations are altered to reduce manure phosphorus.

Environmental Results

The SWAT results for these policies, expressed in terms of percentage changes from the policy baseline, H1, are summarized in Table 17:

Table 17: Changes in Phosphorus and Nitrogen Loads for Policies H5(a) and H5(b)

Scenario Organic-P Soluble-P Total-P (% Change) (% Change) (% Change) Policy H5(a): Reduced P Feed Ration; Hayfields, 50% -24 -16 -19 N/50% Low P; Pastures, 1.5 times N rate Policy H5(b): Reduced P Feed Ration; Hayfields, Low P; -32 -60 -49 Pastures, Low P Organic-N Soluble-N Total-N (% Change) (% Change) (% Change) Policy H5(a): Reduced P Feed Ration; Hayfields, 50% 0 0 0 N/50% Low P; Pastures, 1.5 times N rate Policy H5(b): Reduced P Feed Ration; Hayfields, Low P; -2 -4 -3 Pastures, Low P Policy H5(a) produces the estimated environmental results expected; there are virtually no changes in nitrogen loadings compared to the baseline, and reductions are projected of 16 to 24 percent for phosphorus loads. The reductions for soluble and total phosphorus loads from Policy H5(a) are comparable to Policy H2(a), while reductions projected for organic phosphorus loads are greater than any of the pasture or hayfield policies H2(a) through H2(e). The lack of change in nitrogen loadings is understandable given that the policy made no changes to baseline assumptions regarding agronomic rates for pastures and hayfields, and only changed the amount of commercial

69 Pratt, Expanding the Focus. 34 Livestock and the Environment: Precedents for Runoff Policy

nitrogen fertilizer applied per acre for the Low P hayfields. A relatively simple change in the feed ration from the baseline for Policy H5(a) is estimated to produce sizable decreases in phosphorus loads with no increase in nitrogen loadings.

Policy H5(b) is projected to produce slight decreases to loads for all three forms of nitrogen (Table 17).70 In comparison, only three other scenarios examined thus far are estimated to decrease nitrogen loads across the board: Policies H2(a), H2(b) and H2(d). The SWAT results for Policy H5(b) indicate nitrogen loadings that are similar to Policies H2(b) and H2(d) (which set High P agronomic rates for pastures). Policy H5(b) may produce smaller changes in nitrogen loads relative to other Low P policies, such as H2(c) and H2(e) because it uses less additional pasture acres to achieve a Low P agronomic rate, thereby requiring less additional commercial nitrogen fertilizer. Estimated reductions to phosphorus loads for Policy H5(b) are larger, in comparison to the baseline, than for any of the other pasture or hayfield scenarios. In addition, Policy H5(b) decreases soluble phosphorus loads more than any policy, total phosphorus more than any policy except H3 and organic phosphorus more than all policies other than H3 and H4. The phosphorus load reductions projected for the alternative pasture production policies are as good or better than those for the reduced-phosphorus feed policies. However, the reduced- phosphorus feed scenarios produce consistent results regarding nitrogen loads, while the alternative pasture production policies gave mixed results both reducing and increasing individual forms of nitrogen.

Economic Findings

The following table presents the economic model results estimated for Policies H5(a) and H5(b), expressed in terms of percentage changes in net returns from the baseline, Policy H1.

Table 18: Changes in Producer Net Returns for Policies H5(a) and H5(b) Scenario Very Small Small Dairy Medium Dairy Large Dairy Aggregate Dairy (% Change) (% Change) (% Change) (% Change) (% Change) Policy H5(a): Reduced P Feed Ration; Hayfields, 50% N/50% Low P; Pastures, 1.5 times N rate 0 - 1 0 0 0 Policy H5(b): Reduced P Feed Ration; Hayfields, Low P; Pastures, Low P - 12 - 7 - 10 - 5 - 8 The model simulations indicate that Policy H5(a) will have a negligible effect on the net returns of LFRW producers, while Policy H5(b) projects reductions of 8 percent in the aggregate to producer net returns. Producers did not incur an increase in costs for reduced-phosphorus feed under either policy because it was assumed that the new feed components needed are easily substituted. It is important to note that Policy H5(b) decreases net returns the least of any Low P pasture scenario; Policies H2(c) and H2(e) estimate aggregate reductions to net returns of 18 percent and 20 percent, respectively. Moreover, while Policy H5(b) projects decreases to net returns, it is estimated to result in some of the greatest reductions in phosphorus loads.

70 The SWAT results for Policy H5(b) indicate changes in nitrogen loadings similar to some of the policies with High P pasture agronomic rates. The need to use less additional pasture acres under Policy H5(b) to achieve a Low P rate, thereby requiring less additional commercial nitrogen fertilizer, produces lower nitrogen loads relative to other Low P policies such as H2(c) and H2(e). Livestock and the Environment: Precedents for Runoff Policy 35

Decreases in producer net returns under Policy H5(b) stem from the costs of land acquisition and commercial fertilizer needed to implement the Low P agronomic rates for pastures and hayfields.71 To illustrate this point, a comparison of commercial fertilizer and land acquisition costs for Policies H2(e) and H5(b) are presented in the Table 19. Policy H2(e) was selected for comparison as the scenario most similar to H5(b); both require a uniform Low P agronomic application of nutrients on pastures and on hayfields.

Table 19: Comparison of Estimated Costs for Acquisition of Commercial Fertilizer & Additional Pasture Acreage, Policies H2(e) and H5(b)

Scenario Very Small Small Dairy Medium Dairy Large Dairy Policy H2(e): Hayfields, Low P; Pastures, Low P Dairy Fertilizer Costs $12,694 $21,898 $36,414 $54,445 Land Acquisition Costs (annualized) $4,678 $7,582 $13,133 $21,893 Policy H5(b): Reduced P Feed Ration; Hayfields, Low P; Pastures, Low P Fertilizer Costs $8,670 $14,360 $24,768 $30,898 Land Acquisition Costs (annualized) $2,008 $2,610 $5,508 $6,261

Policy H2(e) assumes that producers will have to acquire a substantial amount of acreage to achieve Low P agronomic application rates for pastures and hayfields. As reflected in Table 19, producers will still incur land acquisition costs under Policy H5(b) to achieve a Low P rate for pastures, however those acquisition costs are less than the costs for Policy H2(e). Policy H2(e) also requires that producers purchase a substantial amount of commercial nitrogen fertilizer to offset the reduction in manure nitrogen deposited per acre under the Low P pasture scenario. However, the reduced-phosphorus feed in Policy H5(b) changes the ratio of nitrogen to phosphorus in the manure, allowing LFRW dairy herds to deposit more manure nitrogen on a given acre of pasture without exceeding the Low P pasture rate. Because of this fact, while producers are assumed to apply commercial nitrogen to pastures under Policy H5(b), the amount of commercial nitrogen needed is less than that used under Policy H2(e).

Summary

From an environmental perspective, Policies H5(a) and H5(b) are neutral to slightly positive regarding nitrogen loads, and both offer distinct advantages in phosphorus load reduction. When combined with economic model results, Policy H5(a) offers significant phosphorus reduction potential with no change in nitrogen loads and with essentially no negative impact on producer net returns. These results are also accomplished with no effective change in production practices from the baseline. In contrast, Policy H5(b) offers positive environmental benefits but, other than Policies H2(c) and H2(e), it is projected to result in the largest aggregate decrease to producer net returns.

71 Economic results indicate that purchased feed costs are slightly higher under Policy H5(b) than under Policy H5(a) because producers lose hayfield acres to expanded pastures under a Low P policy. However, most of the impact to net returns for Policy H5(b) is due to the costs associated with increasing the pasture area. 36 Livestock and the Environment: Precedents for Runoff Policy

Pasture–Edge Filter Strip Policy

Policy H6 examines the possible benefits from implementation of filter strips along the downslope edges of pastures. Because dairy cows in the LFRW spend most of each day grazing on pastures, effects noted previously include creation of denuded areas and potential high nutrient loads. Simulation of pasture-edge filter strips provides an opportunity to study the possible benefits of this practice, typically employed for crop fields, in a pasture setting. As a reminder, this policy specifies:

Environmental Results

The environmental model results for this policy are presented in the Table 20, which follows.

Table 20: Changes in Phosphorus and Nitrogen Loads for Policy H6

Scenario Organic P Soluble P Total P (% Change) (% Change) (% Change) Policy H6: Hayfields, 50% N/50% Low P, Pasture-edge -16 0 -6 filter strip; Pastures, 1.5 times N rate Organic N Soluble N Total N (% Change) (% Change) (% Change) Policy H6: Hayfields, 50% N/50% Low P, Pasture-edge -17 -2 -7 filter strip; Pastures, 1.5 times N rate Policy H6 essentially represents the baseline with pasture-edge filter strips and hot-wire fence added to prevent dairy cows from entering and damaging filter vegetative cover. Based on slopes in the study area, filter strips average 50 feet in width; this average figure was carried into the assumptions for the economic model. The biophysical models, however, calculate a specific width for each filter strip simulated in the LFRW pastures using information from digital elevation maps on slope and hydrologic soil type, and specifications established by NRCS.72 The model simulates runoff flow as being evenly dispersed as it passes through the filter strip. This assumption represents a somewhat idealized situation; under actual conditions, runoff flow may be more or less channelized based on factors including topography, vegetative cover and flow volume.

The environmental model results estimate that implementation of pasture-edge filter strips will result in decreases to both nitrogen and phosphorus loadings when compared to the policy baseline. The greatest decreases occur in the organic forms of each nutrient: organic

72 NRCS-USDA, “Conservation Practice Standard for Texas, Filter Strip (ACRE), Code 393,” Field Office Technical Guide (Washington, DC: NRCS, 1997). Livestock and the Environment: Precedents for Runoff Policy 37

nitrogen is projected to decrease 17 percent, and organic phosphorus is reduced an estimated 16 percent. Moderate decreases are simulated for total nitrogen and total phosphorus, 7 and 6 percent, while the soluble nutrient species show no change (for phosphorus) and only a 2 percent drop (for nitrogen). Filter strips are intended primarily to retard runoff flow and allow sediment and sediment-attached nutrients to settle out of flow. Therefore, it follows that the largest load reductions from Policy H6 are projected to occur in the organic forms of nitrogen and phosphorus that typically are associated with sediment.

Economic Findings

Table 21 summarizes the changes to producer net returns estimated for Policy H6, in comparison to the baseline, Policy H1.

Table 21: Changes in Producer Net Returns for Policy H6

Scenario Very Small Dairy Small Dairy Medium Dairy Large Dairy Aggregate (% Change) (% Change) (% Change) (% Change) (% Change) Policy H6: Hayfields, 50% N/50% Low P, Pasture-edge filter strip; Pastures, 1.5 times N rate -2 -2 -1 -1 -2 As simulated by the economic model, Policy H6 is projected to result in slight decreases in producer net returns—only 1 to 2 percent across dairy size groups and in the aggregate. These results reflect the fact that Policy H6 closely tracks the policy baseline, making no changes in projected nutrient agronomic application rates for either pastures or hayfields, thus not incurring any additional costs for the purchase of land or commercial fertilizer. The relatively small proportion of total land used for filter strips, and the low-cost of hot-wire fencing, make Policy H6 an economically attractive way to reduce organic nutrient loads. In addition, the pasture filter strip policy would require little adjustment to current production practices while providing environmental benefits with relatively little impact on the producers’ bottom line. Conclusions

Agriculture is confronting rapidly changing expectations about controlling water pollution from runoff. Responding to these changes requires reliable information on the right issues. Using the CEEOT-LP modeling framework, TIAER has analyzed a range of policy options for controlling nutrient runoff from small, pasture-based dairy operations in the Lake Fork Reservoir Watershed. CEEOT-LP provides an advantage by allowing evaluation of different options without the cost and time needed for actual implementation. The outcome of this work will hopefully contribute to the development of pragmatic and effective policies for controlling water pollution from runoff.

Four general strategies for reducing nutrient loads have been examined: nutrient-based pasture management, alternative production systems, dietary management, and filter strips. Several points are worth noting in order to place the analysis in context and evaluate its usefulness for informing policy development. While the Lake Fork Reservoir is nutrient-impaired, it is not known whether 38 Livestock and the Environment: Precedents for Runoff Policy

controls should focus on nitrogen or phosphorus. The policies presented focus on phosphorus management because the results from prior research in the Upper North Bosque River Watershed and developing science indicate phosphorus runoff associated with livestock production is a greater concern for many fresh water systems. In addition, a policy may increase some nutrient loads while decreasing others. Therefore, it can be important to know which nutrient, and possibly which form(s) of the nutrient, require controls in order to select the most appropriate policy or policies for a situation.

In weighing the environmental model results, focus should be put on the soluble forms of nitrogen and phosphorus. The soluble nutrient forms are able to move off fields via runoff (and for nitrogen through percolation) and they are readily plant available potentially stimulating increased plant growth (algae) in surface waters. Percolation of soluble nitrogen (specifically nitrates) into groundwater could also impact wells, a potentially serious health concern. The soluble forms of nutrients are also a particular concern for the LFRW because the majority of land associated with dairy production has perennial crop cover and little or no tillage occurs in the area. Therefore, runoff from these fields is likely to contain proportionately less sediment and sediment-related organic nutrients and more soluble nutrients than runoff from row crop areas.

Modeling results in the LFRW indicate that viable options may exist for small pasture-based livestock operations to meet environmental goals without dramatic changes in production practices or excessive costs. The prime example of this is the intensive rotational grazing scenario. Implementing IRG is projected to significantly reduce soluble phosphorus loadings while potentially providing modest increases in producer net returns. Approaches including nutrient accounting (fully valuing the nutrient content of manure in conjunction with commercial fertilizers) and reducing the phosphorus content of feed rations also offer small pasture operations cost effective alternatives for meeting environmental goals. Achieving runoff reductions at acceptable costs may require producers to adopt new practices. However, controlling the costs of environmental compliance by changing production or management practices can avoid exacerbating trends toward consolidation. By instituting some of the low cost strategies for achieving environmental objectives, small-scale producers will not have to choose between exiting the industry or moving to large-scale confinement production systems in order to pay for the costs of environmental compliance.

It is also important to note that although some of the traditional practices for pasture management are very environmentally protective they can also result in large costs. The vast majority of land owned and/or operated by dairies in the LFRW is used as pasture (82 percent). Policies that attempt to control runoff from pastures using nutrient-based management alone decrease nutrient loads; however, they also decrease producer returns. This trade-off is pronounced where policies implement phosphorus agronomic rates for pastures. All five of the scenarios that implement phosphorus agronomic rates (either High or Low P) for pastures result in potentially serious decreases to producer net returns. In particular, the two policies setting Low P agronomic rates on pastures reduce soluble phosphorus 54 and 56 percent; however, they also decrease producer net returns 18 and 20 percent in the aggregate. These costs represent a potentially crippling burden to an industry with limited ability to increase the price of its product and pass environmental compliance costs forward to consumers. Areas experiencing phosphorus-loading Livestock and the Environment: Precedents for Runoff Policy 39

problems can realize significant reductions by moving to phosphorus-based management. However, the large increases in land area and supplemental commercial nitrogen applications needed to implement these policies and their attendant costs make phosphorus-based policies less desirable than some of the other alternatives examined in this report.

The policies also demonstrate the benefits of producers fully accounting for the nutrient value of livestock waste being applied to pastures by grazing animals. In the LFRW, full accounting and strict adherence to a nitrogen-agronomic rate for nutrient application to pastures can be a cost- effective means of reducing nutrient loads. Policy H2(a)—setting a nitrogen-agronomic rate for pastures—decreases at least ten percent both soluble nitrogen and phosphorus and results in a three percent increase in producer net returns. In areas where livestock manure is applied or deposited on land, taking full credit for the nutrient value of manure and using commercial fertilizer only when necessary offers a simple, cost-effective strategy for reducing runoff and controlling costs.

The alternative production systems, IRG and grassed loading lot, present mixed results. As stated above, the IRG potentially policy offers one of the best options for reducing phosphorus runoff while controlling producer costs. In contrast, the GLL scenario does little to control soluble phosphorus loads (a 3 percent decrease) and decreases producer net returns (2 percent). At the same time, both policies are estimated to increase soluble nitrogen loadings significantly: 20 and 14 percent respectively—the largest increases in soluble nitrogen loadings for any of the policies. These increases are coupled with very large decreases in organic nitrogen loads, the form associated with sediment—66 percent for IRG and 63 percent for GLL. The reduction of organic nitrogen loadings may explain the increase in soluble nitrogen runoff estimated by the models. The improved pasture management called for in both policies should decrease sediment runoff, in turn lowering the loss of organic nitrogen. If more organic nitrogen is kept on fields it can then mineralize into soluble forms. The model results for alternative production systems demonstrate the importance of understanding which nutrient or nutrients, and which forms of each need to be controlled in a given watershed.

Some of the more innovative policies studied involved reducing the phosphorus content of dairy feed rations. Emerging studies indicate that limiting the phosphorus intake of dairy cattle will decrease phosphorus in manure while maintaining cow productivity (both reproductive and milk output). Reduced-phosphorus feed will also reduce both the amount of extra land needed to apply manure at phosphorus agronomic rates and the amount of supplemental commercial nitrogen needed to maintain crop and forage yields. Simply feeding less phosphorus results in no cost to producers and reduces a soluble phosphorus losses 16 percent. Interestingly, combining reduced phosphorus feed with Low P agronomic rates for both pastures and hayfields Policy H5(b) reduces net returns 8 percent in the aggregate and reduces soluble phosphorus losses 60 percent. In comparison, Policy H2(c) requiring Low P rates only on pastures reduced net returns 18 percent to achieve a 54 percent reduction in soluble phosphorus losses. Policy H2(e) which sets a Low P phosphorus rate for both pastures and hayfields cut net returns 20 percent in the aggregate to achieve a 56 percent reduction in soluble phosphorus losses. Therefore, while Policy H5(b) generated the third largest decrease in producer net returns, this policy could offer producers the ability to reduce runoff loads at less cost than traditional phosphorus agronomic rates in areas with serious phosphorus problems. Overall, the reduced-phosphorus feed ration policies demonstrate 40 Livestock and the Environment: Precedents for Runoff Policy

the importance of continuing, reliable research and education in addressing environmental concerns related to livestock production.

Using filter strips to capture runoff from pastures presents another low cost option for reducing nutrient loads from small, pasture-based dairy operations. Filter strips are designed to capture sediment and sediment-born nutrients, making filter strips more likely to reduce organic nutrients than soluble nutrients. Even though there is typically a low expectation of organic nutrient runoff and sediment from pastures with perennial vegetative cover, the LFRW baseline indicated that the existence of denuded pasture areas in the watershed created the potential for increased sediment runoff, making filter strips a likely solution. As expected, this scenario decreased the organic forms of nitrogen and phosphorus. Organic nitrogen loads were reduced 17 percent, and organic phosphorus fell 16 percent. The policy only decreased net returns two percent in the aggregate.

The filter strip scenario confronted the modelers with a number of questions regarding how to simulate surface runoff flows into filter strips. Reaching appropriate generalizations for modeling runoff flow through a filter strip is challenging given the variations in topography, vegetative cover, and flow volume. Additional research on the interaction between filter strips and runoff flows from pasture and other uncultivated areas would enhance our understanding of the usefulness of filter strips. Based on the simulations studied here, pasture filter strips may offer an attractive option for controlling runoff, where other more costly options, such as reducing stocking density, may not be practicable or available.

Achieving environmental goals for small, pasture-based dairies requires developing a more comprehensive and integrated view of the relationships between livestock production systems and water quality as well as nutrients and land management. The emerging picture of milk production is one of a highly interrelated system in which animals, crops, climate, hydrology, topography, and the forms and sources of nutrients have varying interactions with one another and with receiving waters. A range of options exists for reducing the nutrient runoff potential from small, pasture-based dairies, and importantly, the options offer each milk producer flexibility in determining which approach is best. Not surprisingly, the constraining factors in reducing nutrient runoff are cost and the requirement for water quality improvement. This analysis shows the limitations of traditional perspectives focused on agronomic rates for nutrient application and highlights the need to use more creative and flexible approaches for solving the environmental impact of milk production. As agriculture moves into the next century, producers face the demands of meeting environmental standards while remaining profitable. To meet these demands set by producers, government, and the public, agriculture is challenged to innovate in developing appropriate responses. Livestock and the Environment: Precedents for Runoff Policy 41

IMPLICATIONS FOR THE FUTURE: A STRATEGIC LOOK AT POLICIES FOR POLLUTED RUNOFF by Ron Jones and Jan McNitt

Introduction

ver the last twenty-four months unprecedented activity has taken place at the state and Onational level to address water quality impacts associated with livestock production. The EPA and USDA have taken a significant first step toward greater cooperation by drafting the Unified National Strategy for Animal Feeding Operations (AFO Strategy).73 The federal government is also devoting considerable resources to implement a revised TMDL program and to address persistent, widespread degradation of the nation’s waters through the President’s Clean Water Action Plan (CWAP). Broad awareness of the pollution potential from livestock production has created great interest at the state level to control adverse environmental impacts from livestock operations. State and federal agencies also continue to strengthen and extend traditional command and control regulatory programs. The EPA is moving forward to re-issue a new general permit for concentrated animal feeding operations (CAFOs)74 in Region 6, revise effluent standards for CAFOs and set new water quality criteria and standards for nutrients and microbial pathogens in support of the CWAP. 75 Twenty-five years after passage of the Clean Water Act government is now engaging the complex process associated with controlling polluted runoff caused by land use and land management activities.

Efforts to confront runoff problems raise questions about government authority over land use and land management of privately owned property. In 1972, Congress considered five major pieces of environmental legislation—the Clean Water Act, the Clean Air Act, the Endangered Species Act, the Coastal Zone Management Act and the Land Use Policy and Planning Assistance Act. The first four acts became law giving the federal government sweeping power to deal with environmental problems. However, Congress declined to adopt the Land Use Policy and Planning Assistance Act.76 In addition, the nonpoint source provisions which eventually became part of the Clean Water Act (CWA) reflect the belief in Congress at that time that responsibility for environmental problems that raise land use and land management issues should be left with states. Issues that were put aside for the better part of thirty years are once again emerging, raising tough questions about effective and acceptable means for achieving environmental objectives.

73 USDA and EPA, Unified National Strategy. 74 The term CAFO is used herein to denote a livestock operation required to have an NPDES permit under the EPA’s rules. AFO, as used throughout, refers to all other livestock facilities (i.e., those not currently required to have an NPDES permit). 75 EPA, Office of Water, Water Quality Criteria and Standards Plan–Priorities for the Future, EPA Report No. 822-R-98- 003,(Washington DC: Office of Water, 1998). 76 S. 268 93d Cong. 1st session (1973). 42 Livestock and the Environment: Precedents for Runoff Policy

Looking to the Future

Water quality programs and the manner in which government organizes itself to achieve compliance objectives associated with livestock agriculture are at an important juncture. The original focus of government programs was on point source discharges. CAFOs were the only agricultural operations captured by CWA regulatory programs, and, initially, regulatory programs were narrowly focused on CAFO production areas. Recently regulatory interest has expanded to crop fields receiving animal waste77 and TMDL programs are bringing entire watersheds including agricultural operations under EPA scrutiny.

Agricultural producers are wary of programs with environmental goals that place regulatory authority over farmers’ production and land management practices. Historically, conservation and environmental programs for agriculture have been voluntary. When the federal government asserted regulatory authority over CAFO production areas, it posed little concern for the greater agricultural community. Agricultural producers recognized that large-scale CAFO facilities were different from the rest of production agriculture. However, as government broadens the scope of its interest in the livestock sector, activities similar to those occurring throughout agriculture are receiving greater scrutiny under regulatory programs. Steps taken by government to expand the focus of environmental programs have set off an alarm for leaders in the agricultural community. Once government expresses an interest in agricultural lands beyond CAFO production areas, proposed solutions to water quality problems rest squarely on the manner in which land is used and managed.

Agricultural producers would prefer purely voluntary programs but over the past twenty years it has become obvious that traditional government sponsored voluntary programs alone will not produce the desired water quality end points. New industry led programs by the National Pork Producers and others provide hope for better results in achieving water quality objectives through voluntary programs.78 Although the EPA has a long history of using “top down” regulatory programs to achieve water quality objectives traditional command and control approaches are not likely to prove effective at remedying runoff pollution. Inspection- based regulatory programs have been successful for municipal and industrial point sources (including CAFO production areas). Yet, technology-driven regulatory approaches are not well suited for controlling polluted runoff.

Although agricultural producers find regulation repugnant, as they examine long term policy and political implications they may want to seize the current opportunity to propose new compliance alternatives that feature a combination of voluntary and regulatory programs. Future programs based on good science and economics, which keep private land one step removed from government regulatory programs and maintain the competitiveness of the industry may be the best outcome agriculture can achieve.

77 EPA, Guidance Manual and Example NPDES Permit for Concentrated Animal Feeding Operations: Review Draft, August 6, 1999, (Washington, DC: Office of Wastewater Management, 1999). 78 See EPA, Clean Water Act Compliance Audit Program for Pork Producers at http://es.epa.gov/oeca/ore/porkcap/index.html. Livestock and the Environment: Precedents for Runoff Policy 43

Insight from TIAER Research in the Bosque River Watershed

The dairy industry has been an important part of the Erath County and Upper North Bosque River Watershed communities for over seventy-five years. In the last twenty years a large inflow of producers from the Netherlands and the Western United States has significantly changed the structure of the local industry increasing its importance to the local economy. During this period the Erath County dairy industry has mirrored changes experienced by CAFOs across the United States. Economies of size and scale have moved the industry to larger operations with a much greater polluting potential.

Early research by TIAER in the Bosque River provided little evidence that EPA regulatory programs directed to the CAFO industry might have implications beyond CAFO production areas or for production agriculture as a whole. State and federal regulatory programs were focused on water quality issues related to production areas that bore little resemblance to the rest of production agriculture. Instead, CAFOs looked much like industrial point sources that could be addressed through regulatory programs characteristic of EPA activities under the Clean Water Act.

In the mid-1990’s TIAER water quality monitoring programs in the Bosque River, as well as research focusing on nutrient runoff from manure application fields, began to raise issues that had the potential to dramatically broaden the scope of EPA compliance programs. Phosphorus, thought to be immobile in the soil, was running off manure application fields at high levels. This finding had the potential to complicate and broaden CAFO compliance programs.

TIAER research activities in the Lake Fork Reservoir watershed have focused on small dairy operations that are remarkably similar to many small farming enterprises across the United States. Programs to achieve water quality objectives on these small operations are for the most part voluntary. As mentioned earlier experience indicates that traditional voluntary programs alone hold little promise for successfully dealing with water quality problems. Although the AFO Strategy provides for both voluntary and regulatory programs there is no direct or predictable tie between the two. In the end the EPA must suspect that voluntary programs within the AFO Strategy will not succeed leaving one compliance option for both small and large operations, the National Pollutant Discharge Elimination System (NPDES) program. An EPA decision to capture nutrient enrichment problems related to rainfall runoff from manure application fields through point source programs plus the high probability that voluntary programs in the AFO Strategy will fail would, in effect, stretch EPA point source strategies across millions of acres of agricultural land–an event never contemplated by authors of the Clean Water Act.79

An EPA decision to classify CAFO manure application fields as point sources of pollution would explode the geographic interface between government regulatory programs and privately owned lands. Should this event occur agricultural producers would be faced with government

79 See for example, Senate, Senator Dole of Kansas speaking during Senate Consideration and Passage of S. 2770, 92nd Cong., 1st sess., Congressional Record (2 November 1971) 117, 38814-16. 44 Livestock and the Environment: Precedents for Runoff Policy

regulators inspecting the manner in which private lands are used and managed. In addition, setting the precedent of classifying manure application fields as point sources would serve notice to the rest of production agriculture that agricultural lands in general could be subject to point source provisions of the Clean Water Act. As a result, government sponsored land use and land management programs to achieve environmental quality objectives, long feared by agriculture, would move from a possibility to a distinct probability.

Through this paper TIAER hopes to stimulate and contribute to a national dialogue on compliance programs designed to control rainfall runoff problems occurring as a result of farming activities on areas other than CAFO production sites (that is, CAFO waste application fields and AFO production areas and waste application fields). Steps taken by the EPA and USDA to control water quality issues related to AFOs have important implications to a number of interest groups.

• Environmental groups have concerns over the long-term health of our nation’s waters. Will EPA take steps necessary to ensure predictable programs are put in place to achieve national water quality objectives? • Many AFO operators are caught-up in structural changes within their industry that are placing life long investments at risk. Small operations, in many cases, are looking to government to provide a measure of protection and support for their investment. On the other hand, some large operators want government to establish reasonable environmental programs but provide no assistance to producers. • Agricultural leaders in general are watching the AFO issue develop and mature. Farm Bureau, initially a fairly silent player in the process, has more recently become a vocal opponent to the AFO Strategy. Agricultural leaders are beginning to recognize the precedent setting nature of the AFO Strategy for the whole of production agriculture. In many cases water quality problems related to AFOs are perceived to be significant, therefore government can be expected to move forward to implement compliance programs. There are, however, a number of fundamental issues yet to be resolved.

• Can point source programs be modified to be an effective, predictable and affordable approach to the problem? Manure application fields, a landscape based problem, present a huge challenge. • Is there a way, absent policy statements regarding congressional intent, to predict program end points? Congress did not intend that point source programs directed to CAFO production areas be nullified through improper nutrient management activities on crop fields. On the other hand, there is no evidence that Congress intended to deal with rainfall induced nutrient runoff problems from manure application fields through point source controls. Although the EPA seems to be changing Livestock and the Environment: Precedents for Runoff Policy 45

its position, early NPDES regulations reflected the agency’s intent to cope with rainfall runoff issues from manure application fields through state nonpoint source programs.80 • Is the point source approach desirable from a long-term land use policy perspective? Production agriculture in the U. S. has been successful in producing a bountiful supply of cheap food. A key to the success of domestic food production is agriculture’s capacity to remain free from regulatory programs enabling immediate adoption of new technologies and response to changing market forces. • Can small AFOs effectively cope with enforcement programs designed for a regulated community with “deep pockets?” Under the NPDES program attorneys and consulting engineers frequently play major roles on behalf of municipal and industrial clients. Small AFOs cannot afford to participate in an adversarial process that requires extensive and often costly professional support. Local dispute resolution should be included as a step in any new environmental compliance programs directed to agriculture. • Are compliance programs that seek to control land use and land management activities through direct regulatory programs affordable? States will carry the primary enforcement responsibility for achieving water quality goals. Some states may be unwilling or unable to appropriate funding required to run effective enforcement programs. A decision to apply current point source programs to AFOs carries with it implications that should be carefully analyzed. The AFO Strategy could represent the first step in a long process that will inevitably lead to direct government regulation of land use and land management activities on most of the private lands in the United States. It has been almost thirty years since there was a public dialogue on the appropriateness of government land use and land management programs on private lands. Is the AFO Strategy the most appropriate solution for rainfall induced nutrient related water quality problems from livestock operations? Is the AFO Strategy an appropriate precedent for the manner in which government will deal with agricultural related water quality issues? Will government take time to consider other alternatives and perhaps design and tailor programs to the specific needs of the agricultural community and the peculiar water quality problems created by the agricultural industry? Over the long term, is there a way to achieve clean water objectives while keeping agricultural land one step removed from direct government regulation? TIAER believes that programs like the Planned Intervention Micro- watershed Approach (PIMA)81 may provide such hope.

80 EPA, “Pollutant Discharge Elimination: Form and Guidelines Regarding Agricultural and Silvicultural Activities,” Federal Register 38, no. 128 (July 5, 1973): 18000; N. William Hines, “Farmers, Feedlots, and Ferderalism: The Impact of the 1972 Federal Water Pollution and Control Act Amendments on Agriculture,” South Dakota Law Review 19 (1974): 540. Hines insightful 1974 analysis identified agricultural nonpoint source pollution as the unrecognized but greater long term environmental problem and private property ideals as the essential source of opposition to runoff controls. 81 A more detailed description of the Planned Intervention Micro-watershed Approach is presented in Appendix E. 46 Livestock and the Environment: Precedents for Runoff Policy

Tactical versus Strategic Approaches

Two basic approaches are available to the agricultural industry as it assesses evolving environmental programs—the tactical approach and the strategic approach. The primary objective of a tactical approach, the industry choice for the past 25 years, is to oppose and defeat regulatory programs. If regulatory programs cannot be avoided the objective is to postpone regulation for as long as possible. Only when regulatory programs become inevitable does the industry seek to strike the best possible compromise. Following a tactical approach over the long term may result in unintended and negative consequences for the agricultural industry. If voluntary programs in the AFO Strategy fail to meet environmental objectives the agricultural industry could lose the opportunity to advocate other farmer friendly alternatives featuring a combination of voluntary and regulatory programs. Approaches like PIMA, for example, provide a high probability of achieving compliance objectives while keeping private land one step removed from government regulatory programs.

Clean drinking water supplies are a high priority for urban constituencies. In the past two decades, the influence of rural and agricultural communities has waned in Congress as the voice of urban and suburban residents grows with population. Water issues have a long, volatile history, and growing residential populations will increasingly demand an adequate supply of clean water for drinking and recreation. If health issues related to water become apparent, urban dwellers and legislatures may react quickly and emotionally. 82 Voluntary programs that fail to prevent water quality problems may be rapidly replaced with direct regulatory controls that place government in the middle of producer land use and land management decisions. The long-term risks associated with a tactical approach may prove unacceptable.

The strategic approach offers agricultural producers an alternative that avoids direct regulation of agricultural lands yet provides a high probability of achieving state and national water quality objectives. The agricultural industry could take advantage of the current lack of consensus on how best to solve runoff problems and move forward with strategies tailored specifically for its producers. It may also be timely for industry to propose an initiative that requires producers, who do not embrace voluntary approaches, be subject to regulatory programs.

The strategic approach is not risk free. The challenges facing agriculture in pursuing a strategic approach through a Clean Water Act amendment lie in coping with competing proposals that go beyond program elements needed to develop a sound agricultural nonpoint source program and with proposals that extend new programs or tighten existing government programs directed to agricultural land. After carefully examining the tactical and strategic options, agriculture may wish to support amending the CWA to craft specific programs that predictably resolve land runoff issues while ensuring other essential concerns are protected. Key producer concerns addressed could include: keeping private land one step removed from government regulatory programs, maintaining initial state responsibility for program implementation, allowing states flexibility to achieve program objectives, maintaining competitiveness of the industry and establishing a small business division in the EPA.

82 For example, the images of dead hogs and lagoon effluent in North Carolina rivers and streams as a result of Hurricane Floyd may provide support for environmental groups advocating a “get tough” policy by the EPA. Livestock and the Environment: Precedents for Runoff Policy 47

Many agricultural groups prefer state-based programs for environmental compliance. Environmental initiatives that place total reliance on state programs pose their own set of risks and problems. Individual states that do not develop effective programs for achieving national water quality objectives could stimulate federal regulatory requirements. In such circumstances, states that have instituted sufficient compliance programs could be faced with developing and implementing an additional layer of requirements to comply with new federal rules. The uncertainty associated with responding to multiple and/or overlapping requirements may outweigh the advantage of letting states develop independent programs. There is another important consideration. Producers located in states with protective environmental programs will be put at a competitive disadvantage to producers located in states with less stringent programs. The U.S. industrial sector faced the same issues three decades ago. While agriculture prefers state-based oversight and compliance programs, some federal coordination will be needed. The specter of land use planning and management inherent in runoff issues creates significant uncertainty for agriculture as it positions itself to cope with the next generation of environmental issues. Tailoring Regulatory Programs to Fit Runoff Problems

Regardless of which compliance programs are ultimately implemented, they must be capable of producing changes needed to meet environmental goals. The following issues in particular should be addressed in order to formulate effective approaches for addressing widespread runoff problems.

Scope of Oversight

As noted earlier, relying solely on inspection-based regulatory programs to achieve compliance objectives would dramatically expand the geographic interface between agricultural lands and government. Previous CWA programs dealt with a comparatively small number of treat and discharge facilities located on tracts of land occupying a small percentage of the total area within a given watershed. Even if new point source initiatives are confined to CAFO and AFO fields receiving animal waste, inspection programs to oversee management practices for these areas would be required to address millions of acres of land.83 The cost of supporting such programs would be substantial and perhaps prohibitive. The prospect of unfunded regulatory programs should provide little comfort to agricultural interests since ineffective environmental programs typically lead to more restrictive controls. Source water protection issues will ensure that problems related to livestock and water quality will not go away and in fact will place AFOs in a prominent position on the agenda of those responsible for protecting drinking water supplies for urban constituencies.

Record Keeping and Implications of Manure Over Application

Nutrient management plans and record keeping for management activities will be an integral part of any compliance program directed to animal feeding operations. However, compliance

83 For example, Erath County has 150 dairies and each have four manure application fields on average. If the production sites and manure application fields for each dairy (regardless of its size) were included in the point source programs a total of 750 site inspections would be required. 48 Livestock and the Environment: Precedents for Runoff Policy

records maintained by producers to substantiate land management activities may provide regulators, producers and other interested parties with a false sense of security.

Absent new legislation, top down regulatory programs underpinned by record keeping and inspection activities may be the best alternative available to EPA for achieving AFO-related water quality objectives. However, EPA’s primary experience with record keeping and inspection based programs lies in compliance activities directed at a limited number of relatively homogeneous, technology-based wastewater treatment facilities occupying, in total, a very small physical area. In comparison, inspection of land use and land management practices associated with AFOs has the potential to become a web of complexity. The following factors should be weighed as compliance programs directed at land use and land management activities are established.

• AFOs are spread over a large diverse landscape. • Record keeping programs are useful to document producer activities related to the capture and retention of animal waste at the production area. Ongoing land management practices associated with manure disposal will not easily lend themselves to documentation activities. • Disposal activities normally occur on multiple fields. • Individual application fields are not homogeneous units. There may be significant variations in soil type, land slope and proximity to water bodies. • Management programs occur in an uncontrolled environment and are subject to the whims of nature. • The nutrient content of manure varies complicating manure management activities. • Producers use a wide range of manure application technologies. • The nutrient level reported by soil tests will vary at different points in a field and by the depth from which a soil test is taken; and in some cases the test results will not represent the pollution potential of a field. • Polluted runoff occurs as a result of rainfall events and therefore does not lend itself to annual or semi-annual inspection programs. Successful compliance programs directed to agricultural operations may require novel approaches. Solutions to landscape-based water quality problems may look more like highway litter and beautification programs than point source water quality initiatives. The Highway Beautification Act of 1965, which enabled the removal of billboards along America’s highways, also spawned a number of state and voluntary educational and promotional programs. In the mid-1980s anti-litter rules, often in place for many years, were reinvigorated by the creation of grass-roots civic initiatives like “Adopt-A-Highway” and the “Don’t Mess With Texas” public service advertising campaign. For their part, governmental programs to control litter Livestock and the Environment: Precedents for Runoff Policy 49

and keep highways clean have moved from small fines toward progressive enforcement penalties over the last 25 years. Highway beautification and litter control programs provide examples of environmental programs using innovative techniques tailored to address a specific problem.

No matter what the approach, cost will be a factor in development of new programs. Ultimately, most environmental programs will increase producer costs and add little or nothing to farm income. While government is signaling agriculture that environmental compliance is the top priority, the market system is signaling producers that profitability is the most important goal. Unlike their industrial counterparts, agricultural producers cannot incorporate the costs of new environmental measures into overall production cost and pass them forward to a large number of consumers. Producers will, therefore, have strong incentives to give production issues priority over environmental compliance.

In conclusion, existing environmental programs need refinement to adequately address rainfall runoff issues. The spatial scope of runoff issues requires voluntary approaches be part of the solution. The history of voluntary programs, however, indicates that enforcement back-up is necessary to assure compliance. Options exist for enhanced voluntary approaches with enforceable compliance provisions that maintain traditional flexibility and local control of agricultural programs. New programs that link local voluntary approaches provided by conservation agencies (or other agricultural agencies) to state driven regulatory activities can overcome weaknesses in each approach. Congress may find programs attractive that first provide producers the opportunity to achieve compliance objectives through voluntary programs while assuring bad actors will be identified and subject to regulatory action when needed. Components of Enhanced Voluntary Programs

Effective control of pollutants from nonpoint sources will require broad-based support at the local level. The Planned Intervention Micro-watershed Approach (PIMA) is based on the concept that a combination of voluntary and regulatory initiatives, focused at the local level, is the most effective means of changing behavior. PIMA integrates local stakeholder input and participation to create an assessment based, community led and performance driven institutional framework for controlling polluted runoff from agricultural practices, that can satisfy state and national water quality objectives. PIMA has a unique capacity to deal with land management issues on private lands without expanding direct regulatory oversight. By structuring cooperation among landowners, conservation agencies, other local agricultural agencies and environmental regulators, PIMA combines the strengths of agency guidance with community led input to create an approach capable of successfully managing landscape-related water quality issues in a predictable manner.

Assessment Based

Compliance programs should include assessments with sufficient inquiry to determine whether a problem exists, the nature and magnitude of the problem, major contributors to the problem and the spatial extent of the problem. Assessment based water quality initiatives provide several advantages. 50 Livestock and the Environment: Precedents for Runoff Policy

Assessments help to identify, organize and prioritize relevant information regarding a problem in the context of a watershed. The approach enables programs to cope with complexity inherent in watershed approaches. For example, the level of detail needed to understand the interrelationships between land use, pollutant sources, stream systems and multiple drainage areas can be overwhelming. Assessments also assure that pollution problems within watersheds are scientifically validated. Scientific methods provide a framework for rigorous analysis and verification of data and information including water quality data, land use information, pollutant sources and watershed assimilative capacity. Scientifically grounded assessments also provide a common language that facilitates development of consensus by stakeholder groups and increases acceptance of the information gathered about a watershed.

Assessment of water quality impaired areas within large watersheds will allow government to direct compliance programs to known problem areas, provide a focus for limited government resources and provide flexibility in designing abatement programs. Information generated by assessments can also target discrete impaired areas within watersheds—micro-watersheds—for further focus. Compliance programs can be tailored to site-specific needs through the assessment of pollutant sources, their impacts and areas of influence. Assessments can also establish source locations and the spatial extent of problems and, therefore, can provide insight into locations suitable for measuring success.

Community Led

Carefully designed, community led initiatives may hold significant promise for coping with water quality issues related to agriculture. Community led initiatives provide opportunity for innovation, flexibility of approach, community input and peer pressure. Although there are no perfect local delivery systems to implement community led programs, PIMA anticipates that state conservation agencies will implement programs at the community level through local conservation districts. Bad actors would be referred to state regulatory agencies for compliance and enforcement actions when needed. Under this approach, USDA delivery systems have the potential to play an essential role in achieving environmental objectives. NRCS can link its traditional activities providing technical expertise and planning to EPA policy initiatives implemented at the community level through state agencies.

Local conservation districts are uniquely situated to handle agricultural land management issues.84 Developed in response to soil and water conservation problems occurring in the 1930s, by 1945 every state had adopted enabling legislation allowing the creation of local conservation districts.85 PIMA envisions local districts as the vehicle for linking voluntary and regulatory programs at the local level, where changes are needed in land management. To perform effectively under PIMA, most conservation districts will require increased funding and significant capacity development. Enabling legislation varies by state and may need adjustment to allow districts to effectively address water quality issues. Although most local districts currently have no responsibility for achieving expressly environmental goals, participation in PIMA may be

84Refer to Appendix D for an example of the scope of local conservation district powers. 85Edwin E. Ferguson, “Nation-Wide Erosion Control: Soil Conservation Districts and the Power of Land-Use Regulation,” Iowa Law Review 345 (1949):166. Livestock and the Environment: Precedents for Runoff Policy 51

attractive. If the voluntary component of the AFO Strategy fails to control polluted runoff, the only option left will be a regulatory approach. Industry leaders may want to take steps to ensure NPDES programs do not become the cornerstone of U. S. environmental policy directed to production agriculture. For producers actively working to meet environmental objectives, PIMA offers an alternative that would allow local districts to preserve local land management programs and voluntary approaches.

Performance Driven

Flexible approaches are needed to resolve water quality problems created by land use and land management activities. Performance driven systems look to end points or results of control activities rather than the means used to achieve results. Using a performance based approach provides landowners the flexibility to develop compliance measures tailored to their particular circumstances. Performance driven approaches fit well into assessment based programs. Current government programs specify management practices with on-site inspections as the means of assuring agricultural producer compliance with environmental programs. This approach works well for so-called structural BMPs (e.g., lagoons). However, a large portion of water quality problems attributed to agriculture result from improper land use and land management decisions. Management BMPs (e.g., manure application rates) can easily be specified and are crucial to successful pollution prevention. However, it can be very difficult to determine through inspection or record keeping whether producers have implemented and are properly maintaining management BMPs. Moreover, it would be a daunting task for a state or federal inspection program to oversee millions of individual land use and land management decisions.

The challenge in developing an appropriate compliance program for agriculture lies in developing programs that take advantage of existing agricultural agency delivery systems at the state and federal level to drive successful voluntary programs. Voluntary programs can resolve many of the problems related to government involvement in land use and land management decisions in the production process. However, by themselves, agricultural agency sponsored voluntary programs offer little hope for providing successful solutions and like state or federal regulatory programs they will be very expensive. The manner in which voluntary and regulatory programs are combined in PIMA provide hope for outcomes that neither voluntary nor regulatory approaches taken individually can provide–acceptable, economical and predictable solutions.

The link between conservation agencies and regulatory backup is the linchpin of PIMA. The approach offers agricultural producers an initial opportunity to use voluntary approaches to achieve compliance objectives. In addition PIMA promotes measuring success in-stream rather than through inspection of BMPs. However, in many instances it may take years for water quality to improve in response to new programs. In the interim, government cannot simply assume that adequate land management is taking place, and that, in the future, water quality will improve. PIMA proposes that conservation agencies establish intermediate performance goals for measuring producer compliance. NRCS and state conservation agencies have a long history of developing and implementing conservation programs on private lands. Individuals staffing these agencies have the capacity to determine if producers are acting in good faith to implement compliance programs. PIMA proposes that agricultural producers who are bad actors be turned over to regulatory agencies for enforcement action. 52 Livestock and the Environment: Precedents for Runoff Policy

The question is whether traditionally farmer friendly agencies can be relied upon to refer bad actors to state regulatory agencies for enforcement penalties. Two factors support the belief inherent in PIMA that conservation agencies recognize their interest in actively supporting achievement of environmental goals. First, agricultural leaders earnestly want to provide and maintain farmer friendly approaches for achieving water quality objectives. The momentum behind nonpoint source initiatives has increased awareness within the agricultural community that not only regulators but also the public expects producers to find environmentally sound means for their production activities. Second, conservation agencies recognize their performance is under scrutiny. In order to preserve farmer friendly programs, producers who are meeting environmental compliance standards expect conservation agencies to ensure that all producers comply and that bad actors are dealt with promptly. Conservation agencies that do not perform, risk losing their constituencies and may actually be incorporated into state regulatory agencies.

PIMA represents a community led, assessment based, and performance driven option for combining voluntary and regulatory approaches.86 PIMA focuses attention on problem areas and retains voluntary programs as a key tool for achieving environmental compliance objectives. Each of these factors helps keep government costs down and reduce the need for direct government regulation of private land use and land management decisions. TMDLs and Polluted Runoff

The total maximum daily load (TMDL) program is a provision of the Clean Water Act that applies to water bodies for which environmental programs have not achieved water quality standards. Recently, in response to EPA requirements and the impact of judicial decisions, states have begun working on TMDL projects for hundreds of impaired water bodies nationally. TMDLs take a comprehensive approach, addressing all sources of pollutants identified as impairing water quality. There is some debate whether EPA has regulatory authority to reach nonpoint sources of pollution through the TMDL program. Most TMDLs will, however, have to confront nonpoint source problems to be successful. The TMDL program can give agriculture early insight into the strategies EPA will use to address environmental problems caused by improper land use and land management activities absent specific direction from Congress.

The ultimate goal of TMDLs is to achieve environmental objectives for water bodies. In watersheds where nonpoint sources contribute to impairment, those responsible for implementing TMDLs will be asked to provide “reasonable assurance” that diffuse pollution sources will restrict their pollutant load to the amount allocated under the program. Until recently, there has been little guidance on what constitutes reasonable assurance.87 Given the nature of nonpoint source pollution, it seems clear that how lands are managed and the control that can be exercised over land use will be central factors in meeting TMDL program requirements. The focus on nonpoint source pollution in TMDLs will, therefore, ultimately lead to land use and land management issues.

86 Several components of PIMA were included in the 1993 amendments to the Texas Agricultural Code. Texas, Agricultural Code Annotated (West Supp. 1999) sec. 201.026. 87 On August 23, 1999, the EPA published proposed new rules for the TMDL program which, in section 130.2(p), define what the agency will accept as “reasonable assurance.” Federal Register 64, no. 162 (August 23, 1999). Livestock and the Environment: Precedents for Runoff Policy 53

TMDLs introduce the notion of scarcity into the allocation of loads and waste loads by capping the amount of a pollutant that a water body may receive. New draft regulations require that TMDL projects reserve a portion of the water bodies’ load capacity to allow for future growth.88 Without a provision for future growth, impaired watersheds may be faced with a no growth scenario. The idea that growth may be limited in TMDL watersheds will raise new, difficult questions. In watersheds where nutrients or other pollutants associated with runoff are at issue, limiting load capacity will increase the focus on land use and land management controls. Greater land use controls may also be perceived as an option for tracking dwindling supplies of nutrient loading allocations. Where TMDL watersheds are source waters for urban areas, urban populations will have significant input into the determination of load reductions and the development of procedures for allocating growth reserves. If TMDL allocations are perceived as placing a disproportionate burden on municipal point sources to achieve compliance objectives, it can be expected that urban interest groups will encourage Congress to extend EPA regulatory authority to capture agricultural land.

Individuals, businesses and communities will want to understand how future growth reserves will be allocated among competing uses.89 Who will be eligible to use portions of the growth reserve, on what basis and who will make decisions allowing use of the reserve? In addition, how will the reserve be allotted and who will track changes in the reserve over time? All affected groups will want to understand the impact of load restrictions on future economic growth in load-limited watersheds.

Where water impairment is linked to polluted runoff, controlling runoff sources will be a logical and likely step. As the TMDL program moves toward full implementation, the federal government will be looking to state and local governments and the agricultural community to provide viable options with sufficient assurance for successfully managing polluted runoff. While the EPA retains final responsibility for carrying out provisions of the CWA should states not take action, questions exist about federal authority over local land use decisions. As a result, state and local governments will likely continue to bear most of the burden for controlling runoff because of their historic control over land use and land management activities. Land Management Lessons from AFOs

The AFO Strategy is the first attempt by federal government to directly confront environmental problems of small agricultural producers. The new program represents the best efforts of the EPA and USDA to deal with a complex issue where there is inadequate authority and direction from Congress. Without specific legislative guidance, it is impossible to predict future program activities. Although the AFO Strategy recognizes the importance of combining EPA and USDA

88 Under the draft TMDL regulations an allowance for future growth would be mandatory. 89 Effluent trading is frequently mentioned as an option for addressing concerns over limitations to future growth resulting from TMDLs. Sources can exchange or purchase credits from one another providing a pool of available loadings. Effluent credits could be created when a source ceases business, adopts more efficient pollution control technologies or purchases another source and/or its credits. While effluent trading is widely discussed, it has received only limited application with mixed results. 54 Livestock and the Environment: Precedents for Runoff Policy

programs to achieve compliance objectives the strategy has shortcomings and may set some unwanted precedents for the agricultural community.

• The AFO Strategy is a top down program and not ideally structured to achieve change at the local level, where land use and land management activities occur. • The ability of NRCS and local conservation districts to address runoff problems will make them attractive partners for EPA, however it may be difficult to link USDA’s New Deal orientation to EPA’s cooperative federalism approach. Connecting USDA programs to EPA water quality initiatives may also raise concerns about federal land use controls. Local conservation districts may be reluctant participants in such programs. • Because of the similarities between production agriculture and AFOs, the AFO Strategy could set unwanted precedents for row crop agriculture. • Voluntary programs in the AFO Strategy have a high probability of failure due to the lack of a direct link to regulatory back-up. The role of federal agencies in addressing water quality issues related to agriculture is still an open question. Solutions to agricultural pollution problems need not be tied to 30 year old strategies developed for municipal and industrial point sources. New worldviews could materialize and lead to rethinking the way federal agencies deliver environmental programs to agriculture.

The structure of the AFO Strategy resembles a traditional top-down program. This is in contrast to the trend advocating “bottom-up” community led approaches as the preferred means of implementing environmental programs. The “unified” AFO Strategy also features a peculiar partnership at the federal level between the USDA and EPA. The operational structure of the USDA was developed in the 1930’s under the New Deal philosophy. USDA activities run from the cabinet to the county; local control is achieved through contracts with local conservation districts that sponsor federal programs. Under USDA programs state government has no significant role. In contrast, EPA programs are built on the notion of cooperative federalism wherein a federal agency is responsible for developing regulations to implement national environmental programs but states are vested with initial authority for program implementation.

The link in the AFO Strategy between NRCS programs—historically popular with agricultural groups—to EPA regulatory programs gives pause to the agricultural industry. Some farm groups view this association as a step that could lead to direct federal regulation of private lands. The concern lies in the belief that NRCS land planning programs, very successful over the years, could be turned in to a delivery system to support federally sponsored land use planning activities. While the actual connection between the two agencies is rather informal, the fact that USDA would cooperate with a regulatory compliance and enforcement program troubles some agricultural producers. Although the NRCS has significant expertise and capacity to confront agricultural-related environmental problems, association of its programs with enforceable regulatory controls could alienate the agency from its traditional agricultural constituency. Livestock and the Environment: Precedents for Runoff Policy 55

Smaller livestock facilities addressed in the AFO Strategy fit easily into long-held notions of traditional, family farms. These enterprises typically have animal numbers that fall below threshold levels for regulatory programs, and they do not resemble so-called “factory” farms or industrial point sources. The approaches prescribed to address water quality issues related to AFOs could, therefore, be perceived as appropriate for the rest of agriculture.

The AFO Strategy is presented as a joint effort combining USDA and EPA programs. However the connection between voluntary and regulatory approaches may be inadequate to enable voluntary programs to play a significant role in solving runoff problems. The AFO Strategy does not explain how an approach whose primary link to regulatory back up is at the national level will create change locally. There is no meaningful way to tie NRCS voluntary programs to state based regulatory activities. Voluntary programs alone are unlikely to achieve environmental goals while regulatory programs by themselves may lack adequate authorization to address nonpoint source pollution. In addition, regulatory programs will be very costly to implement.

Is There A Simple Solution?

Land use and land management activities associated with application of manure on crop fields complicate water quality compliance programs directed to AFOs. Costs of effective inspection programs will be high and inspection activities could place government regulators in the middle of production activities. Many elected officials may prefer simpler, more economical, less intrusive and more predictable programs. There are a number of technology-based alternatives surfacing around the country. Producers, however, are reluctant to adopt new technologies because of higher cost. And policy makers are reluctant to force such changes because of potential impacts on industry structure.

Private firms in the industrial sector are price makers and can treat environmental compliance costs as an ordinary cost of production. Production costs can be incorporated into the price of a product, thereby spreading the financial burden of compliance over a large number of consumers. The industrial sector provides an example of how the “polluter pays” principle was designed to operate. In contrast, individual dairy farmers are not price makers; over the short term these businesses cannot pass increased costs forward to consumers in the price of milk.90 As a result marginal producers, in many cases small producers, may exit the industry leading to further industry consolidation.

As a group, dairy producer milk cooperatives can be price makers. Involving milk cooperatives may be a way to help individual producers offset increased costs of environmental compliance. Cooperatives could operate manure marketing centers for their members and certify that manure solids are properly managed. Such marketing centers would be located in close proximity to dairy production areas and could agree to accept manure and return a balanced fertilizer composed of manure or manure products and commercial fertilizer tailored to individual soil and crop needs. Centers could also develop marketing programs to provide a wide array of fertilizer and soil amendment products to a number of different end users. In theory, bringing cooperatives

90 In the long term the cost of producing milk in an environmentally friendly manner will be reflected in the price of milk. 56 Livestock and the Environment: Precedents for Runoff Policy

into a national manure management program could provide an attractive means to help cover producers’ costs for environmentally sound production practices.

Focus groups conducted by TIAER with representatives of compost companies indicate that over the long-term compost operations show significant potential to be profitable.91 Most compost operations are driven by tipping fees leaving little incentive at the present to explore new marketing opportunities. However, a compost marketing study conducted by TIAER has identified a few firms producing dairy compost at a profit. Until markets for manure products are developed, unprofitable marketing activities by cooperatives could be treated as an ordinary cost of production and passed forward to consumers in the price of milk. Initial studies conducted by TIAER indicate that the price of milk might increase by as much as four cents per gallon to cover losses associated with manure marketing centers. Compliance programs where cooperatives manage manure products would function much like current technology-based point source programs. The costs to government for ensuring compliance would be low (a good manifest system) and probability for long term success would be high.

Dairy producers in many areas of the country are moving to the use of freestall barns. Freestalls provide the ultimate opportunity to manage animal waste: animals are kept under roof 24 hours a day, and rainfall can be directed away from production areas and lagoons so it does not come into contact with animal waste. Freestall barns provide the opportunity to carefully manage nutrient levels in lagoon water. In most cases, freestall systems use water to clean or flush animal waste from inside the barn. Water entering lagoons using this technology will contain high nutrient levels. On the other hand, using a dry scrape technology would allow dairies to handle almost all manure in dry form diverting it from the lagoon.92 In areas where liquid disposal fields have high soil test phosphorus levels freestall barns provide an opportunity to significantly reduce nutrient loads in lagoons and the opportunity to continue to use existing application fields for lagoon de-watering.

Freestall barns are not a “silver bullet” solution; they are more expensive to build than “open lot” operations and they require higher management skills. Freestall barns may not be a good fit for all producers but they provide the opportunity for better management of animal waste. In nutrient impaired watersheds, freestall barns using dry scrape technology may be one of few solutions available to producers with high soil test phosphorus levels. Government may want to consider incentives to encourage producers to upgrade to freestall barn technology. Conclusions

This is an important moment in the nation’s quest for environmental quality. Government is taking on issues that were left unresolved by authors of the CWA. The issues are steeped in complexity, they challenge value systems held by many landowners and they have the potential to create divisions between rural and urban residents. Environmental programs directed to

91 Camp Dresser & McKee, Inc., Brazos River Authority Erath County Animal Waste Management Study (Austin, TX: Camp Dresser & McKee, Inc., 1998). 92 The authors recently visited dairies in Idaho and Vermont that use dry scrape technology in freestall barns. Livestock and the Environment: Precedents for Runoff Policy 57

agriculture have expanded the focus from point source discharges by CAFOs to polluted runoff from small livestock operations that look like millions of other agricultural enterprises across the United States. Solutions to rainfall runoff problems will require programs to address the use and management of privately held agricultural lands—a scientifically complex and emotion-laden task.

The political climate concerning environmental programs has changed and the agricultural industry may wish to consider taking a strategic approach to address environmental concerns. Water quality interventions will, increasingly, focus on land use and land management issues. Tactical approaches place agriculture in the position of reacting to government initiatives. If the agricultural industry fails to acknowledge legitimate environmental concerns, events or political responses may overrun the tactical approach leaving agriculture no options for farmer friendly environmental programs. In order to keep private land one step removed from government regulatory programs, strategies must create a strong link between voluntary and regulatory programs enabling government to predictably deal with bad actors. New approaches must incorporate good science and economics to ensure correct signals are sent to producers and continue the successful relationship between state and federal regulatory agencies based on cooperative federalism. A strategic perspective offers agriculture an opportunity to preempt incremental inclusion of agricultural lands under direct government regulation through NPDES programs.

Successful solutions to agricultural related environmental problems will most likely come from a new worldview. The NPDES program offers little hope for successfully dealing with landscape based water quality issues. The same can be said for traditional USDA voluntary programs. The tendency in the public sector is to look to the European community for a model. Instead, it may be in order to address Clean Water Act concerns through new initiatives that look 25 to 50 years into the future. A new environmental ethic, surfacing in this country over the past decade, may enable development of successful environmental programs that do not require direct government regulation of private lands. Instead, government may want to focus its efforts on designing new programs that recognize, highlight and reinforce the emerging change in value systems of the American public. Newly designed and funded community-based programs featuring peer pressure and a combination of voluntary and regulatory programs provide significant hope for correcting past polluting activities in agriculture. Finding ways to ensure the “polluter pays” principle operates correctly will increase the probability of success. Strategies should be developed to assist agricultural producers incorporate new environmental compliance costs into their overall cost of production and pass those cost forward in the price of their products.

The agricultural community, recognizing the current opportunity to promote a “rethinking process” may want to take the lead in proposing new congressional initiatives. New programs with new roles for NRCS and state conservation agencies can provide the stimulus for development of a community support system that enables a new environmental ethic to take root and prosper at the local level. Successful programs need not

• Decrease profitability or competitiveness of U. S. agricultural enterprises, nor • Provide for direct government regulation of privately held lands. 58 Livestock and the Environment: Precedents for Runoff Policy

Agricultural producers may want to be prepared to provide Congress with a program that will predictably resolve agriculture related water quality problems that is based on good science and economics, maintains the competitiveness of the industry and keeps privately held agricultural lands one step removed from government regulatory programs.

A congressional initiative could include new programs as well as reorientation of existing programs. New levels and methods of funding for NRCS and its state partners may be needed to achieve these changes. In the future, the NRCS could receive funding to support Clean Water Act environmental programs. Contrary to the approach taken in previous Farm Bills, funding may also be directed to states in the form of block grants. State conservation agencies and local conservation districts, NRCS’ historical state partners, will face significant changes if they are to be effective in implementing environmental programs. Expanding the focus of conservation districts to include state environmental programs where there is state regulatory back-up will require: 1) careful articulation of a new vision, 2) model legislation and 3) funding for capacity development.

The backbone for federal programs to support Clean Water Act initiatives directed to agriculture and private lands in general could come from newly developed USDA programs. Nevertheless, overall policy objectives for the environment including development of water quality standards, timeframes for achieving success and enforcement responsibility would be retained by the EPA and its state counterparts. The notion of cooperative federalism would define the relationship that the EPA and USDA have with state agencies.

Given the scientific complexity, political volatility and precedent setting propensity of livestock- related water quality issues, technology-based solutions involving cooperatives, processors and integrators could offer an attractive alternative to some policy makers. In the case of the dairy industry, producer cooperatives can accomplish what individual producers cannot, passing the cost of environmental compliance forward to the consumer in the price of milk and milk products. Cooperative-operated manure marketing centers could ensure dairy biosolids are used in an environmentally friendly manner.

Ineffective voluntary programs in the AFO Strategy could discredit approaches that link voluntary and regulatory programs. In fact, failed voluntary programs leave the EPA one alternative for addressing agricultural pollution problems, the NPDES program. Evolution of the TMDL program also raises the question whether government will continue to accept voluntary programs for addressing runoff concerns. To be successful, voluntary agricultural programs for controlling runoff must prove they can achieve environmental goals.

The Planned Intervention Micro-watershed Approach can be part of a strategic response to emerging environmental issues. PIMA creates an institutional framework for addressing landscape-based water quality issues that is assessment based, community led and performance driven. The approach links voluntary and regulatory programs at the local level to address compliance concerns. The structure of PIMA also responds to public concerns that state regulatory agencies retain responsibility for setting water quality standards, developing timeframes Livestock and the Environment: Precedents for Runoff Policy 59

for achieving success and addressing problems from bad actors. PIMA offers a flexible, water quality management program with enforcement backup but avoids direct government regulatory controls over land use and land management activities on privately owned agricultural lands.

Successful abatement and control of runoff pollution has eluded government since the inception of the Clean Water Act. Some of the issues that led Congress to defer tackling widespread landscape based pollution have matured. Resolving the problems from polluted runoff will require government, business and the public to confront how privately owned land is used and managed. Nationally there is growing awareness and momentum within the public and private sectors to act. It may be advantageous if Congress has the opportunity to revisit issues that, with good reason, have been left unaddressed until now. Federal agencies and their state partners will require clear direction to complete the work begun to revise the TMDL program and to bring AFOs into environmental compliance. The issues are complex, however the time has arrived for the nation to face this challenge and tailor programs appropriate for agriculture that solve nonpoint source problems.

Livestock and the Environment: Precedents for Runoff Policy 61

APPENDIX A Results For Lake Fork Reservoir Watershed Policy Scenarios, H1 – H6

Table A-1: SWAT Results at Watershed Outlet (Lake Fork Reservoir); Annual Average over 30 year Simulation Period

Scenario Flow Sediment Organic-N Soluble N Total-N Organic-P Soluble-P Total-P (cms) (tons) (kg) (kg) (kg) (kg) (kg) (kg) Policy H1 9.40 26,000 88,310 199,800 288,200 22,340 36,010 58,350 Policy H2(a) 9.44 26,600 88,300 179,800 268,100 21,610 29,570 51,180 Policy H2(b) 9.43 25,950 86,940 190,900 277,900 20,700 24,000 44,700 Policy H2(c) 9.42 25,400 83,720 206,500 290,200 19,350 16,640 35,990 Policy H2(d) 9.43 25,900 86,840 190,300 277,100 20,560 23,380 43,940 Policy H2(e) 9.42 25,350 83,600 206,000 289,600 19,210 16,010 35,220 Policy H3 9.28 24,570 30,230 239,100 269,300 6,046 15,250 21,296 Policy H4 9.36 24,870 32,270 228,000 260,300 8,267 34,980 43,247 Policy H5(a) 9.40 26,090 88,480 200,200 288,700 17,080 30,200 47,280 Policy H5(b) 9.42 25,820 86,130 192,800 278,900 15,140 14,440 29,580 Policy H6 9.54 25,690 73,450 195,900 269,300 18,830 36,130 54,960

Table A-2: SWAT Results at Watershed Outlet (Lake Fork Reservoir); Percentage Changes from the Policy Baseline

Scenario Flow Sediment Organic-N Soluble-N Total-N Organic-P Soluble-P Total-P (cms) (tons) (kg) (kg) (kg) (kg) (kg) (kg) Policy H1 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Policy H2(a) 0.43 2.31 -0.01 -10.01 -6.97 -3.27 -17.88 -12.29 Policy H2(b) 0.32 -0.19 -1.55 -4.45 -3.57 -7.34 -33.35 -23.39 Policy H2(c) 0.21 -2.31 -5.20 3.35 0.69 -13.38 -53.79 -38.32 Policy H2(d) 0.32 -0.38 -1.66 -4.75 -3.85 -7.97 -35.07 -24.70 Policy H2(e) 0.21 -2.50 -5.33 3.10 0.49 -14.01 -55.54 -39.62 Policy H3 -1.28 -5.50 -65.77 19.67 -6.56 -72.94 -57.65 -63.50 Policy H4 -0.43 -4.35 -63.46 14.11 -9.68 -62.99 -2.86 -25.88 Policy H5(a) 0.00 0.35 0.19 0.20 0.17 -23.55 -16.13 -18.99 Policy H5(b) 0.21 -0.69 -2.47 -3.50 -3.23 -32.23 -59.90 -49.31 Policy H6 1.49 -1.19 -16.83 -1.95 -6.56 -15.71 0.33 -5.81 62 Livestock and the Environment: Precedents for Runoff Policy

Table A-3: Economic Results for Lake Fork Reservoir Watershed Policies

Policy Results: Net Returns in Dollars Percentage Changes from Policy Baseline Very Small Small Medium Large Aggregate Very Small Small Medium Large Aggregate Policy H1 $35,500 $74,80 $105,70 $260,00 $17,000,700 0 0 0 0 0 Policy H2(a) $36,100 $78,200 $109,400 $260,000 $17,496,000 2 5 4 0 3 Policy H2(b) $32,300 $71,800 $97,0000 $248,600 $16,044,400 -9 -4 -8 -4 -6 Policy H2(c) $27,100 $62,300 $81,600 $222,400 $13,877,100 -24 -17 -23 -14 -18 Policy H2(d) $31,200 $71,100 $95,500 $247,000 $15,835,100 -12 -5 -10 -5 -7 Policy H2(e) $26,000 $61,600 $80,100 $220,800 $13,667,800 -27 -18 -24 -15 -20 Policy H3 $36,900 $76,400 $114,40 $268,200 $17,642,400 4 2 8 3 4 Policy H4 $34,200 $72,800 $103,300 $256,400 $16,580,000 -4 -3 -2 -1 -2 Policy H5(a) $35,600 $74,400 $105,800 $260,100 $16,973,000 0 -1 0 0 0 Policy H5(b) $31,200 $69,900 $95,3000 $246,100 $15,684,200 -12 -7 -10 -5 -8 Policy H6 $34,700 $73,600 $104,20 $257,900 $16,744,200 -2 -2 -1 -1 -2 0 0 0

Table A-4: Commercial Fertilizer Application Rates for Lake Fork Reservoir Watershed Pastures (lbs/pasture acre/year)

Pasture specifications Scenario Agronomic rate Commercial N Commercial P (lbs/acre/yr) (lbs/acre/yr) H1 1.5 times the N rate 220 53 H2(a) N rate 0 0 H2(b) High P 162 0 H2(c) Low P 210 0 H2(d) High P 162 0 H2(e) Low P 210 0 H3 1.2 times the N rate 450 13 H4 1.5 times the N rate 220 53 H5(a) 1.5 times the N rate 220 53 H5(b) Low P 166 0 H6 1.5 times the N rate 220 53 Livestock and the Environment: Precedents for Runoff Policy 63

APPENDIX B Model and Policy Assumptions

This appendix presents a brief list of the key assumptions made for the LFRW biophysical and economic model simulations. Due to the heterogeneity of economic and biophysical conditions in the watershed, various alternatives could apply for any given model parameter. Project personnel investigated the conditions and production practices in the study area and received generous input from local experts to specify the characteristics of the watershed and its dairy operators. The assumptions relied upon in applying the models for this report have been generally accepted by modelers and other members of the research team as reflecting most closely the economic and biophysical characteristics of the study area.

I. Baseline Assumptions The following assumptions were used for simulation and analysis of the policy baseline. A. General 1. Production a. The dairy farm maximizes net returns to risk and management which are obtained by subtracting all fixed and variable costs and annual debt payments (excluding living expenses of the dairy owner, e.g., home mortgage and food) from total revenues. b. The price of milk at the time of the study was $13.51 per hundredweight (cwt). c. Herd size is based on the total number of dry and lactating cows; the number of heifers, if any, is not included. d. Dairy enterprises are categorized in four classes based on herd size: very small if 100 or fewer cows; small if between 101 and 200 cows; medium if between 201 and 300 cows; and large if over 300 cows. e. The four representative dairies used in the simulations are a 95-cow dairy, a 178-cow dairy, a 275-cow dairy and a 556-cow dairy. f. The dairy farmers engage in forage production for use in feed rations. g. Dairy farmers can receive revenue from crop or forage sales only when crop production exceeds ration requirements of the herd. h. The baseline and all policies assume a stock of manure equal to 22 tons of manure per cow per year. i. All pasture land acreage is Coastal bermuda overseeded with winter wheat during winter months and is continually grazed by cattle. j. All hayfield acreage is Coastal bermuda and is cut for hay. k. Dairy operators fertilize their pastures using commercial fertilizer (in addition to the manure deposited by the cattle) to ensure that enough nutrients are available for crop growth and desired yields. This results in an application rate that exceeds the nitrogen rate for the Coastal/wheat pastures. 64 Livestock and the Environment: Precedents for Runoff Policy

2. Waste Management There are two relevant sources of dairy waste. Liquid waste from confinement areas is stored in containment structures for subsequent disposal on hayfields. Direct deposition of manure occurs on pasture while the cows are grazing. a. Containment Structures i. All dairies have a waste storage pond for containment of process wastewater used in the milking parlor. ii. Wash water storage time is approximately 150 days. iii. Producers dewater waste storage ponds 2-3 times per year. b. Manure Nutrient Production and Availability i. A typical dairy cow produces 279 lbs. of nitrogen and 60.3 lbs. of phosphorus annually based on “mean plus one standard deviation” figures in the ASAE standards. ii. Dairy cows spend approximately 21 hours per day grazing on pastures and 3 hours in confinement for milking. iii. Manure nutrient production in confinement areas and on pastures is directly proportional to the amount of time the cows spend in each of these respective areas. Thus one-eighth (3/24) of manure nutrients is handled as liquid waste, and the remaining seven-eighths (21/24) is deposited directly on pasture. iv. After accounting for typical pre-land application losses, the amount of liquid waste nitrogen available at the time of land application is 27.9 lbs/cow/year. v. Nutrient-based application rates are premised on the following assumptions regarding manure nitrogen. After land application, 20 percent of liquid waste nitrogen is lost from the soil through volatilization. Of the remainder, 80 percent is plant available nitrogen within 1 year. Thus 64 percent of land-applied liquid waste nitrogen is considered plant available within 1 year. After taking assumptions regarding losses into account the biophysical simulations model the fate and transport of manure nitrogen based on the dynamics of the soil environment and climate. vi. Nutrient accounting for pasture and nutrient-based stocking densities are based on the following assumptions regarding manure nitrogen. Twenty percent of manure nitrogen directly deposited on pasture is lost from the soil through volatilization. One half of the remaining manure nitrogen is plant available nitrogen within 1 year. Thus, only 40 percent of manure nitrogen directly deposited on pasture is regarded as plant available within 1 year. After accounting for these assumptions, biophysical simulations model the fate and transport of manure nitrogen deposited by grazing cows based on the dynamics of the soil environment and climate. vii. Dairy manure phosphorus is 35 percent organic and 65 percent inorganic (readily available for plant uptake). No losses are assumed prior to land application for the phosphorus in liquid waste or manure. c. Land Characteristics i. About 50 percent of available land is owned and about 50 percent is leased. Livestock and the Environment: Precedents for Runoff Policy 65

ii. Land use data indicates that, on average, about 82 percent of available agricultural land associated with dairies is pastureland while the remaining 18 percent is hay land. iii. Denuded areas occur around feeding and watering areas. Denuded areas equal 5 percent of total pastureland area in the baseline. Producers operating GLL and IRG systems rotate their cattle frequently thereby eliminating all denuded areas. d. Land Application/Manure Deposition i. Nutrient losses that occur in waste treatment systems (e.g., nitrogen volatilization) and surface losses after land application, as well as that portion of the nutrients not available for plant uptake, are considered when estimating manure application rates. ii. Lactating cows, dry cows and dairy heifers directly deposit manure onto pastures while grazing. iii. Manure deposition from dry cows and heifers is simulated separately from that of lactating cows. iv. Model simulations apply policy changes to pastures for lactating and dry cows. Heifer pastures receive commercial fertilizer at baseline rates. The relatively small amount of land used for heifer pasture is modeled as improved pasture receiving commercial fertilizer: policy changes are not simulated for heifer pasture. The number of heifer pasture acres varies by dairy size group. Heifer pasture acreage also differs under the IRG scenario across the dairy size groups due to differences in the culling rate for that dairy production system. The following table presents the pasture acres assumed for heifers and lactating and dry cows by scenario. Table B-1: Assumptions for Pasture Acres by Dairy Size and Scenario (acres/dairy)

Very small dairy 25 30 36 31 67 104 Small dairy 31 40 86 58 126 194 Medium dairy 67 84 107 90 195 300 Large dairy 0 5 252 181 394 606

v. Manure is deposited evenly throughout all pastures areas (i.e., denuded spots and area with normal vegetation). However, denuded areas within pastures typically have higher manure deposition rates than the remaining pasture area. vi. When pasture acreage is insufficient to accommodate manure deposition at a stipulated agronomic rate, adjacent land will be purchased by the dairy farmer. e. Irrigation/Liquid Manure i. Liquid manure is applied to Coastal bermudagrass hayfields. ii. Waste storage ponds have a typical retention time of 150 days. iii. Big gun irrigation sprinklers are used to dewater waste storage ponds. 66 Livestock and the Environment: Precedents for Runoff Policy

f. Crops/Forage i. Waste disposal on application fields entails a cost to the dairy farmer; however, a reduction in feed cost is also achieved from the forage cultivated on the waste application fields. ii. Commercial fertilizer may be applied to waste application fields to bring limiting nutrients (typically nitrogen) to par with the agronomic rate of the crop as stipulated by the given policy. 3. Assumptions About Representative Dairies a. Very Small Dairies: Up to 100 cows i. The very small representative dairy maintains 79 lactating cows and 16 dry cows on a daily basis. The total acreage used by the very small dairy is 79 acres (1 acre per lactating cow), of which half is owned. Pastureland represents 83 percent of total land available to the dairy. ii. Milk yield is 147.95 cwt./cow/year, and the voluntary cull rate is 25.4 percent. b. Small Dairies: 101 – 200 cows i. The typical small-sized OAG dairy has 178 cows, 30 of which would be dry on a daily basis. For this representative dairy, total land area available is 148 acres. About 86 percent of this is pastureland. Half of the total land area is owned; the remainder is leased. ii. The milk yield on small OAG dairies is 150.26 cwt./cow/year, and the voluntary cull rate is 25.4 percent. c. Medium Dairies: 201 – 300 cows i. The representative medium dairy has 275 cows, 46 of which are dry on a daily basis. Medium-sized dairies also have about 1 acre of land per lactating cow, for a total of 229 acres. About 83 percent of this is pastureland. Half of the total land area is owned, and the remainder is leased. ii. Medium-sized OAG dairies have the highest milk yield in the watershed: 174.35 cwt./cow/year. Correspondingly, the voluntary cull rate of 30 percent is also the highest. d. Large Dairies: Over 300 cows i. Large OAG dairies in the study area have less land per cow available to them than the smaller sized dairies: 0.8 acres/lactating cow. Furthermore, the proportion of pastureland is smaller, about 69 percent. The typical large OAG dairy used for the economic analysis has 556 cows, 93 of which are dry on a daily bases. Like the others, large dairies also own half of the total land available to them and lease the remainder. ii. The milk yield on large OAG dairies is 167.44 cwt./cow/year, and the voluntary cull rate is 28.8 percent. 4. Dairy Production System: Open Access Grazing (OAG) OAG dairies turn their lactating cows out to pasture after milking, but do not manage the pasture intensively. Since lactating cow movement is not carefully managed, denudation occurs on an area of pasture equivalent to about 5 percent of pasture area. The size of the denuded area does not change when pasture area is changed from its current (baseline) size. Livestock and the Environment: Precedents for Runoff Policy 67

a. Forage Yields 100 percent dry matter basis i. Hayfields Coastal: 8 tons/acre ii. Pasture (a) Coastal: 2.85 tons/acre/year (b) Wheat: 1.35 tons/acre/year b. Agronomic Uptake Rates i. Hayfields

(a) Coastal: 400 lbs/acre of nitrogen; 130 lbs/acre of phosphate (P2O5), which is equivalent to 57.2 lbs/acre phosphorus (P). ii. Pasture (a) Coastal: 140 lbs/acre of nitrogen, 50 lbs/acre of phosphate (22 lbs/acre P) (b) Winter wheat: 160 lbs/ acre of nitrogen, 60 lbs/acre of phosphate (26.4 lbs/acre P) (c) Total for Coastal/wheat: 300 lbs/acre of nitrogen, 110 lbs/acre of phosphate (48.4 lbs/acre of phosphorus) c. Commercial Fertilizer Application Rates i. Hayfields Coastal: Liquid waste is utilized first to supply crop nutrient needs. Where there is more hayfield acres than liquid waste available, commercial fertilizer

(N-P2O5-K2O) is applied at agronomic rates (400-130-300) to supply crop needs. ii. Pasture (a) Coastal: 80 lbs/acre of nitrogen, 40 lbs/acre of phosphate (17.6 lbs/acre P) (b) Winter wheat: 140 lbs/ acre of nitrogen, 80 lbs/acre of phosphate (35.2 lbs/acre P) (c) Total for Coastal/wheat: 220 lbs/acre of nitrogen, 120 lbs/acre of phosphate (52.8 lbs/acre of P) II. Policy Assumptions It is assumed for this study that each scenario applies to all dairies in the watershed. A. Agronomic Rates Agronomic rates are used to determine acreage for liquid waste application and/or cow stocking density on pastures. 1. Nitrogen Agronomic Rate On land managed with the nitrogen agronomic rate, acreage receiving manure is determined by the amount of plant available manure nitrogen. 2. Phosphorus Agronomic Rate a. General i. On land managed with the phosphorus agronomic rate, acreage receiving manure is determined by the amount of plant available manure phosphorus. ii. Typically, more acreage is needed to satisfy the phosphorus agronomic rate than the nitrogen rate. 68 Livestock and the Environment: Precedents for Runoff Policy

iii. If expansion of pasture acreage is necessary, hayfield acreage not used for liquid waste application may be reduced to accommodate the increased need for pasture. iv. Operators supplement manure with commercial nitrogen fertilizer tailoring the nitrogen-to-phosphorus ratio to meet crop needs. v. Dairy manure phosphorus is 35 percent organic and 65 percent inorganic (readily available for plant uptake). vi. There are two alternative interpretations of manure phosphorus accounting for crop agronomic rates: the High P and the Low P interpretations. b. High Phosphorus Rate This interpretation of phosphorus agronomic rates assumes that the proportion of manure phosphorus that exists in organic form is essentially unavailable for plant uptake; therefore, dairy operators may apply more manure per acre than with the Low P interpretation. c. Low Phosphorus Rate All manure phosphorus (organic plus inorganic) is assumed to be available for plant uptake, even though only the inorganic component may be readily available; dairy operators apply less manure per acre than under the High P interpretation.

B. Reduced-P Feed Ratio 1. Current manure phosphorus production of 60.3 lbs/cow/year reflects the typical dietary phosphorus concentration of 0.55 percent. 2. Dietary phosphorus concentrations required for the target milk yields in the study area are less than 0.4 percent. 3. Restricting dietary phosphorus concentration to a maximum of 0.4 percent will have no adverse impacts on physiology or performance of dairy cattle. 4. A dietary phosphorus concentration of 0.4 percent would result in manure phosphorus production of 40 lbs/cow/year. C.Alternative Grazing System 1. Grassed Loafing Lot (GLL) This system rotates cows from one loafing lot (constructed of portable fencing) to another on a weekly basis; this eliminates denudation within pastures. a. Forage Yields Same as for OAG b. Agronomic Uptake Rates Same as for OAG c. Commercial Fertilizer Application Rates i. Hayfields Same as for OAG ii. Pasture Same as for OAG Livestock and the Environment: Precedents for Runoff Policy 69

2. Intensive Rotational Grazing (IRG) This system rotates cows from one paddock to another on a daily basis. Paddocks are set up with moveable fence. Forage use is maximized, and there is no denudation. Milk yields on IRGs are about ten percent less than on corresponding OAG dairies. a. Forage Yields on a 100 Percent Dry Matter Basis i. Hayfields Same as for OAG ii. Pasture (a) Coastal: 6 tons/acre/year (b) Wheat: 1.9 tons/acre/year b. Agronomic Uptake Rates i. Hayfields Same as for OAG ii. Pasture (a) Coastal: 300 lbs/acre of nitrogen, 100 lbs/acre of phosphate (44 lbs/ acre P) (b) Winter wheat: 240 lbs/ acre of nitrogen, 80 lbs/acre of phosphate (35.2 lbs/acre P) (c) Total for Coastal/wheat: 540 lbs/acre of nitrogen; 180 lbs/acre of phosphate (79.2 lbs/acre P) c. Commercial Fertilizer Application Rates i. Hayfields Same as for OAG ii. Pasture (a) Coastal: 250 lbs/acre of nitrogen, no phosphate (b) Winter wheat: 200 lbs/ acre of nitrogen, 30 lbs/acre of phosphate (13.2 lbs/acre P) (c) Total for Coastal/wheat: 450 lbs/acre of nitrogen, 30 lbs/acre of phosphate (13.2 lbs/acre P) D. Pasture-edge Filter Strips 1. NRCS guidelines for phosphorus-based filter strips were used to obtain specifications for simulations. Typically filter strips designed for phosphorus would be adequate for trapping sediment-bound nitrogen as well. 2. Based on typical slopes of LFRW dairy pastures, the width of the average filter strip simulated was approximately 50 feet. 3. Runoff flow is assumed to be evenly dispersed as it passes through the filter strip (100 percent sheet flow). This provides the best case scenario for filter strip management.

Livestock and the Environment: Precedents for Runoff Policy 71

APPENDIX C Calculation of Baseline Pasture Agronomic Rates

This appendix describes the information and calculations used to determine the effective agronomic application rate for pastures on LFRW dairy operations. Scientific understanding regarding the behavior of livestock waste nutrients when applied to land has undergone significant refinement within the last five years. Livestock producers in particular have received policy signals from regulatory agencies and information from groups such as NRCS indicating the need to refine livestock waste management to avoid nutrient enrichment of local soils and surface waters.

At the time of this study, dairy producers in the LFRW exhibited a wide range of pasture nutrient management practices. The heterogeneity of pasture management practices in the study area provided interesting challenges to project personnel. Using available data and information from local experts, it was estimated that a number of producers simply utilized the available pasture acres for their herds. Interestingly, these producers appeared aware that overstocking pastures can lead to denuded areas creating environmental concerns, yet at the same time they did not fully account for the nutrient value of manure deposited by cows while grazing.93 As a result, these producers applied commercial fertilizer to pastures to maintain forage cover and yield. The combined application of commercial fertilizer and manure raises the possibility that some LFRW pastures may receive more nutrients than needed thereby increasing the potential for runoff.

To specify the baseline and suggest appropriate alternative policies, it was then necessary to determine the rate at which manure nutrients and commercial fertilizer combined are being applied to LFRW pastures. Determining the effective nitrogen agronomic rate under the baseline requires dividing the amount of nitrogen actually applied to LFRW pastures from manure and commercial fertilizer by the amount of nitrogen required to maintain vegetative cover on the same pastures. The ratio of effective N applied to crop nitrogen needs is illustrated in the following equation.

y R where

y = the effective nitrogen application rate to pastures, and R = the nitrogen agronomic rate

The result of this ratio tells us whether dairy producers are applying too little, enough, or too much for plant needs.

93 This is partly explained by the fact that grazing cows will not disperse their manure evenly across the area. 72 Livestock and the Environment: Precedents for Runoff Policy

The Required Agronomic Nitrogen Rates for Forages on OAG Dairy Pasture

Local experts established the primary forage system for LFRW dairies (Coastal bermudagrass overseeded with winter wheat) and provided information on the yields typical for the crops specified in the study area. The expected yields are outlined in the following table. To maintain the indicated yields, it is recommended that nitrogen be applied at the rates indicated below. 94

Table C-1: LFRW Forage Yields and Nitrogen Agronomic Rates

Coastal bermudagrass 5700 lbs/acre/year 140 lbs/acre/year Winter wheat 2690 lbs/acre/year 160 lbs/acre/year Total ------300 lbs/acre/year

Therefore, it is recommended that pastures receive a total of 300 pounds of nitrogen, per acre, per year to maintain the typical yields of Coastal bermudagrass and winter wheat on the OAG dairy pastures in the LFRW. Nitrogen Application to LFRW Dairy Pasture from Manure and Commercial Fertilizer

Specifying the amount of nitrogen LFRW pastures receive per acre from commercial fertilizer and dairy cow manure required several steps, and was based on several assumptions. Starting with the total number of acres (pasture and hayfield combined) per dairy, 95 the percentage of acres used for hayfields and heifer pastures was calculated and subtracted. This resulted in an estimate of the percentage of total acres available for pasture per dairy farm, by size group. This information is summarized in the following table.

Table C-2: Total Pasture Acres: Lactating and Dry Cows

Very small 0.83 100% 0.14 16.5 0.32 38.0 0.38 45.5 Small 0.83 100% 0.12 14.2 0.22 27.0 0.49 58.8 Medium 0.83 100% 0.14 16.6 0.31 36.7 0.39 46.6 Large 0.67 100% 0.20 30.6 0.01 1.3 0.45 68.1

94 Agronomic rates are a function of target yields. The nitrogen application rates specified above were obtained from tables used in dairy waste management plans across the State of Texas. Note that the anticipated yield from pasture forage is lower than the yield expected from hayfields. Therefore, the agronomic rate recommended for pastures is lower than the rate recommended for the same crops on hayfields. .95 The total number of acres (pasture plus hayfields) per dairy was estimated for each size group using data for 134 dairies from the four county region encompassing the LFRW watershed (10 very small, 61 small, 54 medium, and 9 large), provided by the Texas State Soil & Water Conservation Board. Livestock and the Environment: Precedents for Runoff Policy 73

Several assumptions underpin this analysis. First, the number of hayfield acres is subtracted from total dairy acres. Model assumptions for the LFRW specify that dairies retain process wastewater in waste storage ponds. To avoid possible regulatory action, the contents of waste storage ponds are pumped for irrigation of hayfields 3 times per year. Because of the necessity to dewater waste storage ponds acreage needed for hayfields was reserved from total dairy acres producing an estimate of the total acres available for pasturing cows. Next, all LFRW dairies were also assumed to set aside some portion of total acres for pasturing heifers. However, because of the age and size of heifers, nutrient deposition on heifer pasture areas is not the same as pasture devoted to mature cows. In addition, heifer pasture is managed differently. 96 Therefore, it was decided for purposes of the baseline to obtain the number of pasture acres available to lactating and dry cows by subtracting heifer pasture acreage.97

Once the total number of acres available for lactating and dry cows per dairy was identified, it was possible to determine the pasture stocking density (cows per pasture acre). This calculation is needed to determine how much manure nitrogen grazing cows contribute to pastures. The following table shows the calculations made to determine pasture stocking density per dairy by size.

Table C-3: Pasture Stocking Density Calculation (PSD)

Very small 35.9 95 2.63 Small 87.0 178 2.04 Medium 106.7 275 2.56 Large 252.1 556 2.22

Having determined the required nitrogen agronomic rate for LFRW pasture forages and the pasture stocking density, it is now possible to calculate the effective nitrogen application rate for the baseline.

Effective Nitrogen Application Rates on OAG Dairy Pasture

The effective nitrogen application rate equals the pounds of plant available nitrogen (i.e., the amount remaining in plant available form after volatilization), which is deposited by cows via

96 Communications with local experts indicated that heifer density was about 2 heifers per acre and that the heifer death rate was about 10 percent. Using information on voluntary culling rates, the number of replacement heifers purchased, the number of replacement heifers raised and the death rates of heifers and death rates of mature cows, heifer pasture acreage for each dairy size group was estimated. Heifer pasture acreage also differs for the IRG scenario due to differences in the culling rates for that dairy production system. 97 Similar to earlier modeling of the UNBRW, policy changes were not applied to heifer pasture. It was assumed that heifer pasture was managed in a manner similar to cattle pasture, and an equivalent value for nutrient runoff was attached to the heifer pasture in the LFRW. 74 Livestock and the Environment: Precedents for Runoff Policy

manure per acre/per year, plus the amount of commercial nitrogen fertilizer applied to pastures per year. The effective nitrogen application rate on dairy pasture can be represented by the following equation:

y = [xm(1-v)(1-p)] + f

Where:

y = the effective nitrogen application rate on dairy pasture, expressed in pounds of nitrogen per acre; And

x = the number of cows per acre of pasture (pasture stocking density); m = the amount of nitrogen in the manure deposited by each cow on pasture, expressed in pounds per cow, per year; v = the proportion of nitrogen in manure lost to volatilization, so (1-v) represents the proportion of nitrogen in manure left after volatilization; p = the proportion of nitrogen unavailable to plants, so (1- p) represents the proportion of plant available nitrogen. f = the rate of commercial nitrogen fertilizer applied on dairy Coastal/wheat pasture, expressed in pounds per acre, per year.

The xm(1-v)(1-p) portion of the equation represents the amount of plant available nitrogen, left after volatilization, which is naturally deposited by dairy cows, expressed in pounds per acre, per year.

The values for these coefficients are as follows.

x = the number of cows per acre of pasture:

As previously noted, the pasture stocking density, by dairy size group, for the LFRW are summarized in the following table.

Table C-4: Lactating and Dry Cow Pasture Density for LFRW Dairies by Size

Dairy size Cows per acre Very Small 2.63 Small 2.04 Medium 2.56 Large 2.22 m = the amount of manure nitrogen deposited by cows on pasture, expressed in pounds per cow, per year

The amount of nitrogen in manure deposited on pasture by grazing cows each year is obtained by multiplying the total amount of nitrogen in each cow’s manure by the proportion of time each cow spends on pasture. According to the ASAE tables, a cow deposits 279 pounds of Livestock and the Environment: Precedents for Runoff Policy 75

nitrogen via manure each year. Assumptions approved by LFRW experts suggest that OAG cows spend 87.5 percent of a typical day on pasture. Thus, each cow deposits about 244 pounds of nitrogen on OAG pasture each year.

v = the proportion of nitrogen in manure lost to volatilization; (1-v) represents the proportion of nitrogen in manure left after volatilization

The proportion of manure nitrogen lost to volatilization is assumed to be 20 percent based on the specifications used in dairy waste management plans. Therefore, 80 percent of the nitrogen originally deposited in manure is left after volatilization.

p = the proportion of nitrogen unavailable to plants, so (1- p) represents that proportion of plant available nitrogen

Of this 80 percent, one half is unavailable to plants based on specifications used in dairy waste management plans. Therefore, 40 percent of total manure nitrogen is deposited by cows on pastures remains in the soil in plant available form.

Calculating xm(1-v)(1-p)

Placing the appropriate values into the equation will yield the amount (lbs/acre/year) of plant available nitrogen naturally deposited by cows on pastures. The results from the equation, by dairy size, are presented in the following table.

Table C-5: Plant Available Nitrogen Deposited on Pastures in Manure, by Dairy Size Group m = lbs of deposited (v) (1-p) Dairy size x =cows/ acre N/year % volatilization loss % PAN xm(1-v)(1-p) Very small 2.63 244 .20 .50 258 Small 2.04 244 .20 .50 200 Medium 2.56 244 .20 .50 252 Large 2.22 244 .20 .50 215 Note: Numbers may not add up exactly due to rounding. f = the application rate of commercial nitrogen fertilizer on dairy Coastal/ wheat pasture, expressed in pounds per acre, per year

Based on conversations with local experts, the amount of commercial nitrogen typically applied on grazed Coastal/wheat pasture is approximately 220 pounds per acre annually. This amount is obtained by adding the amount of commercial nitrogen applied on Coastal bermudagrass on OAG pastures (80 lbs/acre) to the amount applied on winter wheat overseeded on Coastal bermudagrass (140 lbs/acre).

Calculating the Effective Nitrogen Application Rate on OAG Dairy Pastures

Putting the appropriate values into the equation produces the effective nitrogen application rates for LFRW pastures. This information is presented in the following table, according to dairy size and expressed in pounds of nitrogen, per acre, per year. 76 Livestock and the Environment: Precedents for Runoff Policy

Table C-6: Effective Nitrogen Application Rate on OAG Pastures (lbs/acre/year)

Dairy Size Category Very small Small Medium Large Weighted Average xm(1-v)(1-p) 258 200 252 215 223 f 220 220 220 220 220 Effective nitrogen application rate 478 420 472 435 443

Calculating the Ratio

Once the agronomic application rate and the effective nitrogen application rates for OAG dairy pastures are established, calculating the ratio requires dividing the amount of nitrogen applied on LFRW pastures (the effective nitrogen application rate) by the amount of nitrogen recommended to maintain the typical forage yield on those pastures (the nitrogen agronomic rate). The ratio is calculated and highlighted at the bottom of the following table:

Table C-7: Ratio of Effective Nitrogen Application to Forage Needs of LFRW Pastures

An effective nitrogen application rate 478 420 472 435 443 (lbs/acre/yr) of Divided by the agronomic rate 300 300 300 300 300 (lbs/acre/yr) of Equals a ratio of 1.59 1.40 1.57 1.45 1.48

Based on the foregoing, the combined amounts of nitrogen from commercial fertilizer and manure deposited by grazing cows on pastures results in an effective nitrogen application rate of 1.5 times the nitrogen agronomic rate on average. This rate exceeds the nitrogen agronomic rate by 50 percent. Therefore, under the baseline LFRW dairy producers are assumed to have effective nitrogen agronomic rates on pasture 1.5 times the nitrogen agronomic rate. Livestock and the Environment: Precedents for Runoff Policy 77

APPENDIX D Example—Soil & Water Conservation District Enabling Legislation

Each state adopts its own enabling legislation to create local soil and water conservation districts. These governmental bodies can have far-reaching authority. The following statutory example from Texas98 illustrates the extent of local district powers, including local land use ordinance authority that local conservation districts may exercise.

TEXAS STATUTES AND CODES AGRICULTURE CODE TITLE 7. SOIL AND WATER CONSERVATION CHAPTER 201. SOIL AND WATER CONSERVATION SUBCHAPTER A. GENERAL PROVISIONS…

§ 201.003. Eligible Voter

(a) A person is eligible to vote in an election under this chapter if the person:

(1) is an individual who holds title to farmland or ranchland lying within a conservation district, a conservation district proposed by petition, or territory proposed by petition for inclusion within a conservation district, as applicable;

(2) is 18 years of age or older; and

(3) is a resident of a county all or part of which is included in the conservation district, the conservation district proposed by petition, or the territory proposed for inclusion, as applicable.

(b) If a family farm corporation owns farmland or ranchland in a conservation district, in a proposed conservation district, or in territory proposed for inclusion in a conservation district, the corporation is entitled to one vote in each election under this chapter that would affect the land owned by the corporation. The corporation shall designate one corporate officer to vote for the corporation in the election. The designated officer must be:

(1) 18 years of age or older; and

98 Article XVI, Section 59a of the Texas Constitution authorizes the creation of a state agency to oversee the preservation of the states’ soil and water. Section 201.001(d) of the Texas Agriculture Code vests the Texas State Soil and Water Conservation Board with responsibility for implementing the constitutional provisions and state laws relating to the conservation and protection of soil resources. 78 Livestock and the Environment: Precedents for Runoff Policy

(2) a resident of a county all or part of which is included in the conservation district, the proposed conservation district, or the territory proposed for inclusion in a conservation district.…

§ 201.041. Petition

(a) The eligible voters of any territory may petition the state board for the organization of a soil and water conservation district. The petition must be signed by at least 50 persons eligible to vote in an election to create the conservation district unless the territory contains fewer than 100 eligible voters, in which case the petition must be signed by a majority of the eligible voters in the territory.

(b) The petition must contain:

(1) a proposed name for the conservation district;

(2) a description of the territory proposed to be organized as a conservation district;

(3) a statement that there is need for a conservation district to function in the described territory in the interest of the public health, safety, and welfare; and

(4) a request that:

(A) the state board define the boundaries of the conservation district;

(B) an election be held within the defined territory on the question of creation of a conservation district in that territory; and

(c) The petition is not required to describe the territory by metes and bounds or by legal subdivisions, but must be generally accurate in order to be sufficient.

(d) If more than one petition is filed covering parts of the same territory, the state board may consolidate any or all of the petitions.…

§ 201.101. Corporate Powers

(a) A conservation district is a governmental subdivision of this state and a public body corporate and politic. A conservation district may:

(1) sue and be sued in the name of the conservation district;

(2) have a seal, which shall be judicially noticed; Livestock and the Environment: Precedents for Runoff Policy 79

(3) make and execute contracts and other instruments necessary or convenient to the exercise of its powers; and

(4) adopt rules consistent with this chapter to carry into effect its purposes and powers.

(b) A conservation district may execute notes on the faith and credit of the conservation district for the purpose of making repairs, additions, or improvements to any property or equipment owned by the conservation district. The notes may be issued payable from current funds or reasonably contemplated revenues, but the conservation district may not issue notes payable from funds derived from the state.

(c) Any note issued by a conservation district may be secured by a lien on the property or equipment to which the repairs, additions, or improvements are to be made if the property or equipment was not acquired from the state or with funds derived from the state. A note executed in connection with the purchase of real property may be secured only by the purchased real property.

(d) A conservation district may not levy taxes.

(e) Debts incurred by a conservation district may not create a lien on the land of owners or occupiers of land in the district.

(f) As a condition to extending benefits to, or performing any work on, land in the conservation district not owned or controlled by the state or a state agency, a conservation district may:

(1) require contributions to the operation in services, materials, or another form; and

(2) require owners or occupiers of land to enter into and perform an agreement or covenant as to the permanent use of land that will tend to prevent or control soil erosion on that land.

§ 201.102. Preventive and Control Measures

A conservation district may carry out preventive and control measures within its boundaries, including engineering operations, methods of cultivation, growing of vegetation, changes in the use of land, and measures listed in Section 201.001(c) of this code. The conservation district may carry out the measures on any land that is owned by the state or a state agency with the cooperation of the agency administering and having jurisdiction of the land. If the land is owned by another person, the conservation district may carry out the measures on obtaining the consent of the owner or occupier or the necessary rights or interests in the land.

§ 201.103. Cooperation and Agreements With Other Entities

(a) A conservation district may cooperate or enter into an agreement with any other entity, including a state or federal agency or an owner or occupier of land within the conservation district, in the carrying on of erosion control and prevention operations in the conservation district as the directors consider necessary to advance the purposes of this chapter. Within the limits of appropriations 80 Livestock and the Environment: Precedents for Runoff Policy

made available to the conservation district by law, the conservation district may furnish financial or other aid in accordance with the cooperative program or agreement.

(b) The directors of two or more conservation districts may cooperate with one another in the exercise of any power conferred by this chapter.

(c) The directors of a conservation district may invite the legislative body of a municipality or county located within or near the conservation district to designate a representative to advise and consult with the directors on all questions of program and policy that may affect the property, water supply, or other interests of the municipality or county.

(d) A state agency that has jurisdiction over or administers state-owned land in a conservation district, or a county or other subdivision of this state that has jurisdiction over or administers other publicly owned land in a conservation district, shall cooperate to the fullest extent with the directors of the conservation district in the effectuation of programs and operations undertaken by the conservation district under this chapter. The state agency, county, or subdivision shall provide the directors free access to enter and perform work on that land, and a land-use regulation adopted under Subchapter F of this chapter has the force and effect of law over that land and shall be observed by the entity administering the land.

§ 201.104. Acquisition, Administration, and Sale of Real or Personal Property

A conservation district may obtain options on or acquire in any manner, including purchase, exchange, lease, gift, grant, bequest, or devise, any real or personal property or rights or interests in real or personal property. In addition, the conservation district may:

(1) maintain, administer, or improve the property;

(2) receive income from the property and expend that income in carrying out this chapter; or

(3) sell, lease, or otherwise dispose of the property or interests in the property in furtherance of this chapter.…

§ 201.107. Conservation Plans and Information

(a) A conservation district may develop comprehensive plans for the conservation of soil resources and for the control and prevention of soil erosion within the conservation district. In as much detail as possible, the plans shall specify the acts, procedures, performances, and avoidances that are necessary or desirable for the effectuation of the plans, including the specification of engineering operations, methods of cultivation, growing of vegetation, cropping programs, tillage practices, and changes in the use of land. Livestock and the Environment: Precedents for Runoff Policy 81

(b) A conservation district may publish the comprehensive plans and bring them to the attention of owners and occupiers of land in the conservation district and may demonstrate, publish, or otherwise make available to those owners and occupiers any pertinent information relating to legumes, cover crops, seeding, tillage, land preparation, and management of grasses, seed, legumes, and cover crops, and the eradication of noxious growth under good conservation practices.

§ 201.108. Assumption of Government Projects; Acceptance of Government Grants

(a) A conservation district may take over, by purchase, lease, or other method, and administer any soil conservation, erosion control, or erosion prevention project located within its boundaries and undertaken by the federal government, the state, or a state or federal agency.

(b) A conservation district may act as agent for the federal government, the state, or a state or federal agency in:

(1) managing a soil conservation, erosion control, or erosion prevention project within the boundaries of the conservation district; or

(2) acquiring, constructing, operating, or administering a soil conservation, erosion control, or erosion prevention project within the boundaries of the conservation district.

(c) A conservation district may accept a donation, gift, or contribution in money, materials, services, or other form from the federal government, the state, or a state or federal agency and use and expend the donation, gift, or contribution in carrying out its operations.

§ 201.121. Regulatory Powers; Petition for Adoption

(a) If petitioned by 50 or more eligible voters in the conservation district, the directors of a conservation district may propose an ordinance governing the use of land within the conservation district in the interest of conserving soil and soil resources and preventing and controlling soil erosion.

(b) An ordinance adopted under this subchapter may:

(1) require the carrying out of necessary engineering operations, including the construction of terraces, terrace outlets, check dams, dikes, ponds, ditches, and other necessary structures;

(2) require observance of particular methods of cultivation, including:

(A) contour cultivating, contour furrowing, lister furrowing, or strip cropping;

(B) planting, sowing, or seeding land with water-conserving and erosion-preventing plants, trees, or grasses; and 82 Livestock and the Environment: Precedents for Runoff Policy

(3) specify cropping programs and tillage practices to be observed;

(4) require the retirement from cultivation of highly erosive areas or of areas on which erosion may not be adequately controlled if cultivation is carried on; or

(5) provide other means, measures, operations, or programs that may assist conservation of soil resources or prevent or control soil erosion in the conservation district, having due regard for the legislative determinations made in Section 201.001 of this code.

(c) Land-use regulations must be uniform throughout the conservation district, except that the directors may classify land in the conservation district according to relevant factors, including soil type, degree of slope, degree of erosion threatened or existing, or cropping or tillage practices in use. The land-use regulations may vary with the type or class of land affected, but must be uniform as to all land within the type or class.

§ 201.122. Hearing

The directors of a conservation district may conduct public hearings and public meetings on proposed land-use regulations as necessary to assist the directors in the adoption of an ordinance.

§ 201.123. Election

(a) The directors may not adopt an ordinance prescribing land-use regulations unless adoption of the ordinance is approved by at least 90 percent of the eligible voters voting in an election under this section. If the voters approve the ordinance by that percentage, the directors shall adopt the ordinance.

(b) The directors shall give notice of the election that either recites the contents of the proposed ordinance or states where copies of the proposed ordinance may be examined. The directors shall make copies of the proposed ordinance available for public inspection during the period between publication of notice and the election.

(c) The ballot for the election shall be printed to provide for voting for or against the proposition: “Approval of the proposed Ordinance No. , prescribing land-use regulations for conservation of soil and prevention of erosion.”

(d) The directors shall adopt rules governing the conduct of the election, supervise the election, and announce the result.

§ 201.124. Effect of Ordinance

An ordinance adopted under this subchapter has the force and effect of law in the conservation district and is binding on all owners or occupiers of land in the conservation district.… Livestock and the Environment: Precedents for Runoff Policy 83

§ 201.126. Amendment or Repeal of Ordinance

(a) An owner or occupier of land in a conservation district may at any time file a petition with the directors requesting the amendment, supplementation, or repeal of land-use regulations prescribed by ordinance.

(b) Land-use regulations prescribed by ordinance may be amended, supplemented, or repealed in accordance with the procedure prescribed by this subchapter for adoption of an ordinance, except that an ordinance may be suspended or repealed on majority vote of the eligible voters voting in the election.

§ 201.127. Frequency of Elections

An election on the adoption, amendment, supplementation, or repeal of land-use regulations may not be held more often than once every six months.

§ 201.128. Enforcement

(a) The directors are entitled to go upon any land in the conservation district to determine if land-use regulations adopted under this subchapter are being observed.

(b) If the directors find that provisions of land-use regulations prescribed by ordinance are not being observed on particular land and that the nonobservance tends to increase erosion on that land and is interfering with the prevention or control of erosion on other land in the conservation district, the directors may bring suit in a court of competent jurisdiction against the occupier of the land. If the occupier of the land is not the owner, the owner shall be joined as a party defendant. The petition to the court may request that the court:

(1) require the defendant to perform the work, operations, or avoidances within a reasonable time;

(2) order that if the defendant fails to perform, the directors may go upon the land and perform the work or other operations or otherwise bring the condition of the land into conformity with the land-use regulations; and

(3) order that the directors recover their costs and expenses, with interest, from the defendant.

(1) set forth the adoption of the ordinance prescribing the land-use regulations;

(2) set forth the failure of the defendant to observe the regulations and to perform the particular work, operations, or avoidances required by the regulations; and 84 Livestock and the Environment: Precedents for Runoff Policy

(3) state that the nonobservance tends to increase erosion on that land and is interfering with the prevention or control of erosion on other land in the conservation district.

(d) On presentation of the petition, the court shall cause process to be issued against the defendant and shall hear the case. If it appears to the court that testimony is necessary for the proper disposition of the matter, the court may take evidence or appoint a referee to take evidence as the court directs and to report the evidence to the court with findings of fact and conclusions of law. The findings and conclusions of a referee constitute part of the proceedings on which the court may make its determination. The court may dismiss the petition or may:

(1) require the defendant to perform the work, operations, or avoidances;

(2) order that, on the failure of the defendant to initiate performance within a time specified in the order of the court and to perform to completion with reasonable diligence, the directors may enter on the land involved and perform the work or operation or otherwise bring the condition of the land into conformity with the regulations; and

(3) order that the directors recover their costs and expenses, with interest.

(e) The court shall retain jurisdiction of the case until after the work has been completed. If the work is performed by the directors under the order of the court, the directors, after completion of the work, may file a petition with the court stating the costs and expenses sustained by them in the performance of the work and seeking judgment for those costs and expenses, with interest. The court may enter judgment for the amount of the costs and expenses, with interest, and for the costs of suit, including a reasonable attorney’s fee fixed by the court, but the total charge to a defendant for work done by the directors or anyone under the directors may not exceed in any one year an amount equal to 10 percent of the assessed valuation of the land for state and county purposes.

(f) A judgment under Subsection (e) of this section shall be collected in the same manner provided by Chapter 202 of this code for the collection of assessments in wind erosion conservation districts.…

§ 201.130. Procedures of Board of Adjustment

(a) A board of adjustment shall adopt rules to govern its proceedings that are consistent with this chapter and the land-use regulations adopted for the conservation district.

(b) A board of adjustment shall designate a chairman from among its members and may change that designation from time to time.

(d) The chairman of the board of adjustment, or the chairman’s designee as acting chairman from among the board’s members, may administer oaths and compel the attendance of witnesses. Livestock and the Environment: Precedents for Runoff Policy 85

(e) All meetings of a board of adjustment are open to the public.

(f) A board of adjustment shall keep a full and accurate record of all proceedings, of all documents filed with the board, and of all orders entered. The record is public information and shall be filed in the office of the board of adjustment.

§ 201.131. Petition for Variance

(a) An owner or occupier of land within a conservation district may petition the board of adjustment of that conservation district to authorize a variance from the terms of land-use regulations in the application of those regulations to land owned or occupied by the petitioner.

(b) A petition for a variance must allege that there are great practical difficulties or unnecessary hardships in the manner in which the land-use regulations require the petitioner to carry out the strict letter of those regulations.

(c) A petitioner for a variance shall serve copies of the petition on the chairman of the directors of the conservation district in which the petitioner’s land is located and on the chairman of the state board.…

§ 201.133. Granting of Variance

(a) If, on the basis of the facts presented at a hearing on a petition for a variance, the board of adjustment determines that there are great practical difficulties or unnecessary hardships in the manner of applying the strict letter of any land-use regulation on the land of the petitioner, the board shall record that determination and make and record findings of fact as to the specific conditions that establish the difficulties or hardships.

(b) On the basis of the board’s determinations and findings under Subsection (a) of this section, the board of adjustment by order may authorize a variance from the land-use regulations that will:

(1) relieve the great practical difficulties or unnecessary hardships;

(2) not be contrary to the public interest;

(3) observe the spirit of the land-use regulations;

(4) secure the public health, safety, and welfare; and

(5) do substantial justice.… 86 Livestock and the Environment: Precedents for Runoff Policy

§ 201.304. Eligibility for Cost-Share Assistance

As a condition for assistance under this subchapter, the state board may require that a person:

(1) own or operate agricultural land within the boundaries of the conservation district providing cost-share assistance;

(2) have a conservation plan approved by the conservation district covering the land for which a soil and water conservation land improvement measure is proposed; and

(3) include in the conservation plan practices for which cost-share assistance is proposed.

§ 201.305. Eligible Soil and Water Conservation Land Improvement Measures

(a) Soil and water conservation land improvement measures eligible for cost-share assistance shall be determined by the state board and must be consistent with the purposes provided by Section 201.302 of this code. The state board may consider local priorities and needs in determining eligible measures.

(b) Each conservation district receiving an allocation of cost-share assistance funds shall designate the soil and water conservation land improvement measures that are eligible for cost-share assistance within its boundaries, subject to approval by the state board.… Livestock and the Environment: Precedents for Runoff Policy 87

APPENDIX E TIAER’s Planned Intervention Micro-watershed Approach

A New Approach

The Planned Intervention Micro-watershed Approach (PIMA) proposes an institutional policy concept for controlling water pollution, particularly nonpoint source nutrient loads associated with livestock production. PIMA is based on the recognition that governmental programs have experienced limited success in controlling runoff connected to livestock facilities. This approach links the strengths of regulatory and voluntary programs to achieve environmental goals while maintaining a economically healthy livestock production industry.

Planned Intervention

Planned intervention can be visualized as a flexible voluntary compliance loop inserted into the customary deadline driven, technology forcing regulatory process. As depicted in the following figure, traditional command-and-control environmental regulation is a sequential process. Planned intervention inserts a voluntary loop into that process, which provides specific objectives, standards, time and potentially financial assistance for agricultural producers to reach compliance with established environmental goals.

Figure E-1. Planned Intervention Abatement Strategy

Through linking voluntary conservation programs with regulatory environmental activities, planned intervention offer a means for developing flexible and site-specific landscape-based pollution control strategies while keeping existing regulatory and enforcement mechanisms firmly in place. The planned intervention component of PIMA envisions that state agricultural lead agency and local soil and water conservation districts (LCDs) will serve as the primary 88 Livestock and the Environment: Precedents for Runoff Policy

institutions to induce voluntary behavioral change among agricultural producers. Federal conservation agencies, such as the NRCS, will maintain their role providing technical support to agricultural producers. State and federal regulatory agencies will continue to set water quality standards and carry out enforcement and compliance activities for recalcitrant producers. Producers who do not follow plans developed with their LCD for waste/land management or who fail to address non-compliance issues will be referred to an enforcement agency for appropriate action.

Three program components are crucial to the success of planned intervention. These elements are:

1) the amount of time livestock producers will be provided to implement abatement BMPs once a pollution problem is identified; 2) the amount of time regulatory agencies will allow for BMP implementation to positively affect water quality in the impacted area; and 3) the criteria by which the regulatory agency will measure improvements in water quality through BMP implementation. The agencies responsible must establish clear and predictable rules or approaches for these components early in the process to assure success.

The Micro-Watershed Approach

Planned intervention represents only the first step in addressing landscape-based water pollution. Addressing water quality problems within watershed approaches requires identifying building blocks for action. The micro-watershed component of PIMA employs these small drainage areas as the natural focal point in the development process.

The micro-watershed component of PIMA breaks watersheds down into more manageable geographic units. TIAER defines micro-watersheds as areas within a watershed, roughly 3,000 - 5,000 acres with identifiable hydrologic boundaries that are sufficiently small to allow targeting of limited resources, manageable analysis and natural resource problem amelioration. Intentionally flexible, the strategy can respond to site specific factors such as differences in the size of watersheds, number of landowners, types of soils and the number of water bodies. In addition, these hydrologic units provide a manageable forum for organizing communities to implement watershed based water quality programs and for local participation in setting priorities and determining treatment measures.

Because individual sources of landscape-based pollution are difficult and costly to isolate and control, this strategy offers a promising methodology for addressing landscape-based water quality issues. A single watershed may house a variety of activities that contribute to water quality impairment, including industrial operations, municipal wastewater treatment plants, livestock production, surface deposition, crop production, residential/urban development and background sources of pollution. Downstream water quality reflects the combined Livestock and the Environment: Precedents for Runoff Policy 89

contribution of all these pollution sources. The micro-watershed approach assumes that the best way to identify and control landscape-based polluted runoff is to subdivide watersheds into these smaller, more discrete areas. Individual micro-watersheds that are pollution “hot spots” can be targeted for management activities using various scientific tools and individual pollution sources can be effectively identified and remedied. Targeting, instead of setting program standards of uniform application, allows focusing of scarce resources where they will provide the greatest environmental benefit.

The micro-watershed approach will provide specific advantages to regulatory agencies. While water quality monitoring will continue to be a component of watershed programs, the high cost involved will require development and implementation of efficient and effective monitoring programs. Under a micro-watershed approach regulators can focus efforts on impaired areas while responding to factors specific to each watershed, such as its size, number of landowners, land uses, soil types and the number of receiving water bodies within the watershed. As a result, regulatory agencies can more closely monitor the efficacy of control and abatement programs without compromising water quality standards. In the long run, a micro-watershed approach offers opportunities to increase regulatory efficiency and create economies of scale that would allow agencies to redirect personnel and resources toward continuing sources of pollution.

Citizen Participation

Because of the direct link between human activity and water quality, widespread citizen support is crucial for achieving and maintaining desired water quality within watersheds. Citizen participation, therefore, provides an integral part of PIMA. At the grass roots, micro-watershed level, the LCDs will take the lead in facilitating implementation of PIMA in areas identified as experiencing adverse water quality impacts through organizing stakeholders into a council of local landowners.

Micro-watershed councils act as the point of interface between private landowners and public sector regulatory and natural resource agencies. As illustrated in the following figure, LCDs have historically served as liaison between agricultural producers and federal and state natural resource agencies on soil conservation programs and other initiatives. PIMA envisions a broader role for LCDs. Micro-watershed councils provide a focal point at the local level for integrating water quality programs with landscape-based conservation programs. LCDs can help council members tailor micro-watershed plans to local conditions while ensuring that plans remain consistent with broader state and federal natural resource objectives.

Development of successful, sustainable natural resource management programs requires integration of local perspectives for natural resource problem solving. PIMA can provide for long-term continuity and local program ownership. Community-based forums allow local stakeholders to voice their views and resolve conflicting positions regarding management of local natural resources. At council meetings, members will have the opportunity to develop rapport and build solidarity in addressing water quality issues within their community. They can share information on successful abatement strategies and collaborate on innovative solutions. 90 Livestock and the Environment: Precedents for Runoff Policy

Figure E-2. National Institutional Framework for Agricultural Environmental Compliance

Ultimately, PIMA envisions that micro-watershed councils will develop a sense of ownership for the success of water quality programs within their communities. Some councils may even exceed state and federal water quality requirements as a matter of community pride. By incorporating the input of local individuals in creating pollution reduction plans, the PIMA framework provides a grass roots methodology for addressing natural resource issues.

The council will also provide a forum for building community consensus and taking responsibility for water quality issues. Positive peer pressure will motivate voluntary action to achieve environmental goals by raising consciousness of environmental norms within the local Livestock and the Environment: Precedents for Runoff Policy 91

community, and developing awareness of the potential for regulatory action. Land use management plans link the success of landowner initiatives to actual improvements in water quality. With this link in place, positive community peer pressure gives landowners added incentive to improve individual land use practices and encourage neighbors to act responsibly as well. In addition, this forum will facilitate constructive dialogue with any individuals who may be unwilling or unable to implement protective management strategies, and will hopefully stymie land use activities detrimental to environmental goals. Recalcitrant members who, faced with potential censure from their peers, may be more inclined to reform their land use and business practices to align them with community standards. Should community pressure fail, planned-intervention provides the needed link to back up regulatory intervention.

The strategy embodied within PIMA allows policy makers to formalize the institutional connections between natural resource and environmental regulatory agencies while exploiting the strengths of each. Natural resource agencies offer:

• technical expertise of agricultural production • county-based, nationwide local presence • orientation to land management • traditional role as educators and disseminators of information to agricultural producers While environmental agencies contribute:

• technical expertise regarding pollutants • authority to set enforceable pollution criteria • legal mechanisms and experience in enforcement PIMA offers an approach for organizing state and federal regulatory and natural resource agencies, local governments, and landowners to implement water pollution control and abatement programs in areas where agricultural production activities have adverse effects on water quality.