OPINION: A free-market solution to NC hog-waste management
By Kelly Lester, John Locke Foundation
Hog waste management in North Carolina has become a subject of increasing concern over the last two decades. Hog farming in North Carolina primarily utilizes the open-pit lagoon system for waste disposal, which has raised substantial environmental and public health worries. Concerns are focused mainly on the potential for lagoon overflows leading to the contamination of waterways and local communities, as happened in the aftermath of Hurricane Floyd in 1999.
The absence of market-driven alternatives has been further compounded by regulatory and government interventions, stifling the freedom of hog farmers to seek out different systems of waste management and curbing innovation in the industry. After Floyd, North Carolina entered into an agreement with Smithfield Foods in 2000 to explore alternative methods. They included:
Closed-loop systems that eliminate the need for open pits, thereby reducing the risk of spills and contamination. While the initial investment in these systems is higher than in open-pit lagoon systems, they hold great potential for enhanced environmental safety and public health outcomes.
Wetland systems that process waste through wetland vegetation, which naturally absorbs nutrients and contaminants, reducing the environmental impact. These systems may require additional land, however, and also entail a higher implementation cost.
Waste-to-energy technologies and similar technology-based solutions convert hog waste into valuable resources such as biogas and electricity. While North Carolina offers a significant number of government programs and mandates for biofuels, the upfront investment for waste-to-energy technologies is substantial.
Fertilizing the forests offers an innovative approach using excess hog waste from lagoons to fertilize forest areas that require rejuvenation.
Despite the exploration of these alternatives, the lack of clear performance metrics in the agreement and the many regulatory challenges faced by hog-farm operations have hindered their widespread adoption. The 25th anniversary of the agreement finds the issue largely unresolved, necessitating a fresh approach to hog-waste management.
The state’s approach to the hog-waste management issue in North Carolina has been marked by regulatory overreach, insufficient respect for property rights, and discouragement of market-driven solutions.
Instead of relying on the tort system and allowing affected individuals to seek redress for actionable harms from hog-farm operations against their property or well-being, the state has imposed caps on damages, bounded by the assessed fair-market value of the affected property. Having these caps in place limits the accountability of the industry and lessens the incentive to find alternative waste management systems.
The government has largely ignored the potential for market-driven solutions in hog-waste management. The state even went so far as to impose a permanent moratorium on new and expanding hog farms, despite the industry’s significance to North Carolina’s economy. The state’s actions have deprived individuals of the freedom to make choices based on their preferences and values, and farms of the ability to seek out alternate waste-management technologies without fear of regulatory backlash. In a truly free market, consumer demand for eco-friendly and sustainable hog-farming practices could have driven the pursuit, innovation, and adoption of alternative technologies.
The government should step back and allow the market to drive technological innovation in hog-waste management. Entrepreneurs and farmers should be free to experiment with alternative waste-disposal methods, such as closed-loop systems, waste-to-energy technologies, or other eco-friendly solutions. Consumer preferences, rather than government mandates, should guide industry practices.
The challenges of hog-waste management presents an opportunity to implement a “regulatory sandbox” for agriculture. In 2021 the North Carolina General Assembly created a regulatory sandbox for finance and insurance products and services. With guidance from the North Carolina Innovation Council, the state’s regulatory sandbox temporarily waives certain regulations for emerging technologies, products, and services to see if they can succeed. Our regulatory sandbox could be expanded to include agricultural technology, products, and services. An agricultural sandbox would allow farmers who opt into the sandbox the opportunity to try innovative technologies that the standard regulatory approach would preemptively block.
A free-market approach to hog-waste management would require a lighter regulatory environment and prioritize the enforcement of property rights. Hog farmers should have the ability to try new, alternative hog-waste-management methods, which they would be free to do under an agricultural sandbox. When the property rights of individuals affected by hog-farm operations are respected and upheld, not only would farmers have the ability to start new hog-farming operations, but they also would have a direct incentive to adopt cleaner and safer waste-management practices. The tort system would enable affected parties to seek reasonable compensation for legitimate harms to their property or health while protecting especially small hog farmers from frivolous suits by environmental groups seeking to shut them down using the law as a weapon.
In conclusion, hog-waste management in North Carolina presents an opportunity to reevaluate the government’s role and uphold the principles of individual liberty, property rights, and free-market competition. A property-rights-based approach, where affected parties have the freedom to seek redress for harm, would provide a more equitable and efficient solution. Technological innovation and competition within a deregulated market would empower hog farmers to adopt alternative waste-management practices driven by consumer preferences. North Carolina could find a path forward that respects individual freedom, enhances environmental responsibility, and supports a thriving hog-farming industry through voluntary, market-driven alternatives to the current open-pit lagoon system.
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