Nicholas Burnham
Externalities
CAFO Regulations tough enough? (591 Words)
http://ydr.inyork.com/ci_11961259
29th of April, 2009
Factory Farming in itself ensures market failure. When thousands of livestock are crammed into insufficiently sized cages to reduce the size, the cost of keeping land for farmers decreases. They externalize the cost of maintaining their land, (an externality being when a firm or individual uses a commons to reduce what they have to pay to produce). Unfortunately, negative externalities of production create market failure, as there is a change in marginal costs and an under-allocation of resources towards providing land for the livestock. The suffering livestock causes people of a certain moral persuasion to use time and resources in order to help the suffering creatures, raising the costs to other people unfairly. The waste from the animals is improperly disposed of, and people are made to suffer fouled waters downstream when the waste is simply washed away. All of the aforementioned are negative externalities. In Pennsylvania, “Half of the manure in Pennsylvania comes from the farms” says Doug Goodlander, director of nutrient and odour management for the state conservation commission. Factory Farms like those run by the Gemmills family externalize their costs whenever they can, understandably. It is then the government’s job as management of a country to solve this market failure. However, in this article, John Repetz, state Department of Environmental Protection spokesman, claims “We have regulations that are much more stringent than in the nation.” He insists that the regulations are tough enough already. However, when thought about logically, they can’t be tough enough if they don’t solve the problem. Also, health concerns give rise to doubts about whether or not Repetz’s statement is entirely true. In the Pennsylvanian state, farmers have to decide themselves whether or not they need a permit to pollute the rivers and streams. The argument against stricter regulation for factory farms is that the state already has one of the strictest systems in the country. As valid as the argument is, it doesn’t change the fact that the market is still failing. What the government should do is put its foot down and set much higher animal health standards. If animals are given a minimum living space of 10m squared, or some such other reasonable measurement to go by, the farmers will be encouraged to use traditional farming methods, meaning that waste is wider spread and acts as a fertilizer as soon as it is dropped. Without the need to wash away any waste, the water supplies would remain clean and health issues are less likely to become a problem. The moral issues are also resolved with this method, for the cows have better living conditions. H.Pylori infection was contracted when a small girl drank from the water around CAFOs, but when waste doesn’t enter the water supply, the chance of infection spreading is almost nonexistant. This solution may lower the quantity supplied for the meat markets, but since it corrects the market failure, it will adjust the price until it reaches the optimum value. No more welfare is lost when the
market is in action because it is working at the best of its ability.
Where the dotted lines cross is the point where the market is working at it's best. Really, no one loses in this situation, because the only people who have to pay in order to make it work are the same people who caused the issue by not spending in the first place. It’s the closest thing to reversing the process that can be reasonably achieved, and it is simply a matter of paying dues. How the state will choose to handle the problem is yet to be decided, but hopefully public support will help them realize that market failure is never worth it and getting rid of dead weight loss is a lot more important, especially if a side effect of making the right decision is a rise in health standards for humans and animals.
