Swine production in North Carolina has mushroomed over the last decade. Despite a decreasing number of swine facilities, the number of hogs has increased threefold to ten million. The change from small independent farms with small herds to large industrial style operations creates a need for new waste management systems. Swine waste in North Carolina is currently managed predominately through anaerobic lagoons and sprayfields. This technology meets current federal and state standards and has been an accepted and encouraged practice. There are approximately 2,400 major swine facilities in North Carolina with approximately 4,000 active anaerobic lagoons, and there are about 650 inactive swine lagoons. The map on page 8 shows the distribution of active swine operations in North Carolina.

The Hunt Administration proposes this anaerobic swine lagoon conversion plan in an effort to move North Carolina towards a day when swine production produces no ill public health or environmental impacts so that it becomes a sustainable part of North Carolina’s economy.

Swine production has become a significant part of North Carolina’s economy. It supports over 8000 jobs in our state, generates $1.9 billion dollars annually, and produces about one-sixth of the nation’s pork. Pork production is the top agricultural economic enterprise in North Carolina – more than double the size of the tobacco economy. On the other hand, swine production in North Carolina can produce significant odor, reduce neighboring property value, and harm tourism. Also, as shown in the above graph, the number of hog farms has decreased from almost 70,000 to under 5,000 facilities.

Swine waste management practices have improved considerably since 1993. Waste management plans, lined lagoons, Waste Applicator Certification, and capital investments have all helped swine producers be better stewards of the environment. However, the environmental and public impacts of the swine industry demand further action by the State and the swine industry. Swine production impacts the environment and public health are listed below.

• Surface Water. Surface water can be contaminated by discharges from the lagoons or run-off from sprayfields. In 1998, there were 107 documented discharges from swine facilities with 31 of these reaching the surface waters.
• Groundwater. Groundwater can be contaminated either through leaking lagoons or leaching of sprayfield applied waste. An NCSU study showed that waste from 38% of older, unlined anaerobic lagoons leaked nitrogen compounds into the groundwater at "strong" or "very strong" levels, while preliminary estimates of a Department of Environment and Natural Resource (DENR) study indicate that 25% of lined facilities may leak to contaminate groundwater. DENR data show that conventional sprayfields seem to be just as problematic as lagoons.
• Odor. Odors are generated from lagoons, sprayfields, or swine houses. When odors are not confined to the property of the operations, they have the potential to cause health problems, heightened community tensions, and losses in property values.

• Atmospheric Deposition. Approximately 2/3 of the nitrogen in the swine excretions is emitted to the air in accordance with the design of a lagoon and sprayfield system. A DENR study estimates that swine facilities produce 20% of North Carolina’s total atmospheric nitrogen compounds which react with other constituents in the air and is deposited to land, vegetation, and water bodies. This figure is 53% for just Eastern North Carolina.
• Nutrient Imbalance. The rapid growth of the swine industry has resulted in a nutrient imbalance in parts of North Carolina. The feed imported to swine facilities generates more nutrients than receiving plants, land, and waters can absorb. For example, 95% of the nitrogen in manure produced in the Neuse River Basin is imported from outside the basin.
• Public Health. Swine waste is a source of nitrates in groundwater and pathogens in the ground and surface waters which can directly impact human health. Odors too can adversely impact human health as they can cause coughing, nausea, dizziness, headaches, and burning eyes as well as psychological effects.

Given the risks of swine production to ground and surface waters, air, and public health, the Hunt Administration proposes a widespread conversion of swine waste lagoons and sprayfields to new technologies. All swine facilities will be rated to determine their risks to public health and the environment. Facilities that fail to protect public health or the environment will be required to convert to new technologies or close out their lagoon and/or sprayfield systems. Facilities, which demonstrate through monitoring and other criteria that they are operating in an environmentally sound manner, will have the option of keeping their current waste management systems. Those that choose not to convert must meet stringent new protection standards according to their risks while converted facilities will have lower regulatory and monitoring requirements. This plan is the best way to ensure the public and the environment are protected while at the same time enabling swine production to remain a viable part of North Carolina’s economy.

The conversion plan divides lagoons and sprayfields into three main categories: inactive, active, and future.

• Inactive High Risk. Lagoons will be required to be closed-out immediately. Landowner will likely be required to empty contents of the lagoon
• Inactive Low Risk. Lagoons will be required to be closed out by a specified time period. Landowner may or may not need to empty contents of the lagoon.

Active

• Active With Problems. Producers with significant unresolved problems regarding odor, nitrogen emissions, surface water, groundwater or public health must install new technology.
• Active With Risks But No Current Problems. Producers will have the choice to convert to new technologies. Facilities identified with significant risks that retain their current systems will have to demonstrate an excellent compliance record and meet additional regulatory requirements. Dependent on the risks, the requirements would include surface and/or groundwater monitoring systems for pathogens and nitrates, individual permits, best management practices for odor, financial bonding and close-out plan requirements, and other strict standards.
• Active With No Significant Risks. Producers will not have to install new monitoring systems so long as the annual inspection determines that the facility poses no significant risks to public health or the environment.

• New facilities. Producers will be required to use new technologies, based on principles set forth by the 1997 General Assembly in HB 1480, to eliminate discharges to surface and groundwater and substantially eliminate odors, atmospheric deposition, and nutrient and heavy metal contamination of soil. Producers that use basins as an auxiliary part of a new technology should be required to use synthetic liners.

All inactive lagoons and active facilities will be rated to determine their risks to public health and the environment as such risks will be the basis for (1) phasing in regulatory requirements, (2) distributing Agriculture Cost Share funds and (3) prioritizing DENR inspections to focus on problem facilities. The Environmental Management Commission will be responsible to develop performance and technology standards to provide clear expectations to the swine industry. Some overarching requirements may pertain to all existing and new facilities such as reduction in water usage and low protein feed to reduce nitrogen levels in the waste. Technologies that rely on the evaporation of nitrogen into the air should no longer be allowed if nutrient sensitive waters are impacted. Requirements for existing and new technologies should also apply to swine houses, as they tend to be the predominant sources odor. Additionally, research on atmospheric deposition, odor, groundwater, and other aspects of swine waste will continue.

Precise costs of the conversion plan will depend on the risk rating process, the number of facilities that convert, and the cost of new technologies. The State will sponsor an economic study of the conversion process to estimate its total cost and the impacts on swine producers. As a general principle, those who can afford to pay and severe violators should bear the costs of conversion, while the state should assist those without the ability to pay. Criteria for determining who will be eligible for public funds will be developed with stakeholder input and could include (1) the ability to pay, (2) assets of the integrator / producer, (3) amortization of previously installed systems and new technologies, and (4) the size and number of facilities. Public funds for both inactive and active sites will be distributed according to a prioritization scheme based on facility risks. If a facility qualifies for public funds and the site is not high risk, then close-out and conversion would take place as funds are available. Once a site is designated as being in significant violation, rules should be written so that the facility must correct the problem immediately and/or convert to a new technology within one year regardless of available funding, but reimbursement for eligible costs will be provided when funds are available.

The State will also seek federal grants (EPA or USDA) to help fund the conversion process. The recently issued Smithfield permit will drive the private funding of new technologies as increased slaughter capacity can only come from converted facilities. It is anticipated that through this plan all major water and air related problems will be resolved within a ten-year period, provided adequate funding.

It is the State’s role to establish performance standards but not to be prescriptive about which technologies should be adopted. Such prescriptive command and control regulations would only serve to stifle innovation and hurt facilities in the long run. Considering the need for new technologies quickly, the Department of Environmental and Natural Resources will appoint a Technology Panel which will identify acceptable new waste treatment technology types, encourage technologies that convert wastes to usable products, and evaluate the economic feasibility of technologies. DENR, working under the authority of the EMC, would still approve specific technologies on a site by site basis to avoid a one size fits all solution. The Technology Panel will be represented by DENR, NCSU, other state agencies, farmers, and additional experts. Farmers will not be encouraged to adopt technologies that have not been adequately evaluated or for which the capital or operational costs are excessive. In addition to meeting environmental standards, the Hunt Administration encourages technologies that convert wastes to usable and value-added by-products as well as systems that conserve water. Technologies that convert waste to saleable products enable producers to recoup some operational costs and provide a means to export nutrients from the river basin. To this end, the Soil and Water Commission will develop a State Nutrient Plan to manage excess swine nutrients. The challenge over the next few years is to identify waste management technologies that are both effective and affordable to facilities. Additionally, technologies must be appropriate to the expertise of the workforce at swine facilities.

This framework was developed through extensive discussions with university scientists, swine industry representatives, producers, environmentalists, and community groups. The state will continue to rely on stakeholders in the process of resolving critical issues and implementing the lagoon conversion plan. Tasks that will involve stakeholder input include development of the following: (1) criteria to rate swine facility risks, (2) performance and technology standards, (3) a plan for funding conversion, and (4) a plan to manage excess nutrients.

In order to implement this framework the following actions should be taken in the near and long term.

The Governor will establish a timeline for close out of inactive sites, development of performance standards, and conversion to new technologies.

• DENR will continue process to close-out inactive lagoons.
• DENR will develop -- with input from a stakeholder process -- criteria to rate swine facility risks. The first risk rating cycle will be complete by September 1, 2000.
• DENR will establish an expert Technology Panel by July 1, 1999 to evaluate the available technology types for performance as well as cost feasibility.
• NCSU will conduct an economic feasibility study of conversion scenarios to be completed by May 1, 2000.
• The Governor will request the EMC to write performance and technology standards for new swine waste management technologies by September 1, 2000.
• Governor will request the Soil and Water Commission, in coordination with the Commissioner of Agriculture, Department of Commerce, NCSU, and A & T University, to develop a State Nutrient Plan to manage excess swine nutrients. The plan should suggest uses of excess nutrients, incentives for developing markets, and a policy for feed alternatives.

General Assembly actions needed to implement the conversion plan in the 1999 session are:

• Extend the moratorium. Permits for innovative technologies will continue to be available during the moratorium.
• Allow DENR to establish its inspection schedule based on risk so that DENR can focus its staff resources to the areas of greatest need.
• Provide DENR with administrative authority to order chronic violators who fail to correct deficiencies to convert to new technologies or close down.
• Expand Cost Share by $2 M to support (1) close-out of inactive lagoons, (2) the risk rating process, and (3) the conversion of facilities in violation of current standards.
• Direct the ERC to study all remaining issues and report back to the 2000 General Assembly regarding the timeline for and funding of conversion implementation.

Based upon information gathered through the above actions, the Hunt Administration will call for legislation to create a comprehensive conversion plan that includes (1) interim deadlines for close-out of all inactive lagoons and conversion of active facilities and (2) a financing system based on the ability to pay.

 Essential Elements of Governor’s Conversion Plan

1. Rate facilities for their risks.
2. Close out and clean up inactive lagoons.
3. Create an expert panel to identify acceptable new technology types.
4. Set new technology and performance standards for environmental and public health protection.
5. Require lagoon and sprayfield systems in violation to convert to new technologies.
6. Institute economic and regulatory incentives to encourage conversion to new technologies.
7. Provide financial assistance to farmers.
8. Bring stakeholders to the table.
9. Conversions would be completed by 2009 or earlier.