United States
Environmental Protection
Agency
(4204)
Washington, DC 20460
October 1998
DRAFT
Using the Clean Water State Revolving Fund
to Reduce Animal Feeding Operation Pollution
The Problem
Animal Feeding Operations (AFOs) are livestock-raising
operations, such as hog, cattle and poultry farms, that
congregate animals, feed, waste, and production
operations on a small land area. In these operations, food
is brought to the animals rather than having them graze or
otherwise seek food in pastures or fields. Manure and
wastewater from AFOs have the potential t& impact
nearby water bodies and cause serious water quality and
public health risks. There are approximately 450,000
animal feeding operations in the United States. AFOs can
range from livestock production, facilities with a small
number of animals to extremely large production facilities
that generate as much animal manure and wastewater as
the amount of biosolids generated by a medium-sized city.
Improperly managed manure and wastewater from AFOs
have been associated with significant environmental and
public health concerns, including nutrient over-enrichment
of surface water and groundwater, contamination of
drinking water supplies and fish kills.
The Clean Water Action Plan
The 25th anniversary of the Clean Water Act in October
1997 sparked the development of the Clean Water Action
Plan (CWAP), which calls for a renewed commitment to
providing "fishable and swimmable" waters to all
Americans. One key action in the Plan directs USDA and
EPA to develop a unified national strategy to minimize the
environmental and public health impacts atAF^Sr-Ai^
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expectation that ajt AFOs develop and
compienensive nujtrient management plans/
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CWS£$\History CX^-/ /
In crea|tiig the CleanNw_at^ State Revolving Fund
(C WSR||'? Cqngressren^redj^jljou^ be able to fund
a wide range
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program for details.
AFOs/CWSRF Success Stories
The Missouri Agricultural and Small Business
Development Authority (MASBDA) is borrowing
C WSRF funds and lending
the money to farmers so
they can purchase animal
waste collection equipment
and construct animal waste
storage and distribution
facilities. The animal
waste is used to irrigate row crops and pastures, providing
both water and nutrients. The Missouri SRF lends funds
to MASBDA at an interest rate of 3%, which in turn lends
them to farmers at interest rates of 5% to 6%. The
farmers use the revenues from selling their livestock to
pay back their loans.
Minnesota's Department of Agriculture operates a Best
Management Practices (BMP) loan program which has
successfully funded a large number of AFO projects. The
State lends counties and soil and water conservation
districts CWSRF monies at 0% interest. The county or
district, through banks that act as agents, lends the money
at up to 3% interest (maximum) for a 10-year term. This
financial framework demonstrates a unique and effective
public/private partnership. Local governments determine
environmental priorities and the banks, in turn, determine
the financial feasibility of the targeted projects. The
counties and districts pay the principal back to the State
within 20 years. To date Minnesota has issued $7.1
million in loans to fund 366 AFO projects. Interest in the
program is growing as word of its success spreads.
Delaware has developed an Agricultural Nonpoint Source
Loan Program (AgNPSLP) as part of their Water
Pollution Control Revolving Loan Fund Program.
AgNPSLP loans are made available to producers,
underwriting up to 90% of the producer's share of the
cost of building manure and composting structures. The
AgNPSLP also provides loans to purchase front end
loaders, manure spreaders, and outside composters.
Restrictions
AFOs that meet certain specified criteria in the National
Pollutant Discharge Elimination System (NPDES)
regulations are referred to as concentrated animal feeding
operations (CAFOs). Under the Clean Water Act,
CAFOs are point sources. Point sources can only receive
CWSRF funding if publicly owned. However, a privately
owned agricultural operation that includes a CAFO may
still be eligible for CWSRF funding for a nonpoint source
project if
1. The proposed remediation takes place outside the
CAFO;
2. The agricultural operation has a Comprehensive
Nutrient Management Plan (CNMP) developed by a
public official or certified private party and is
implementing the CNMP; and
3. The proposed project is consistent with this CNMP.
At these facilities, for example, stormwater runoff from
land application areas may be viewed as a nonpoint source
discharge and, thus, eligible for CWSRF funding. Please
reference the draft Unified National AFO Strategy
(http://www.epa.gov/cleanwater/afo) for further details.
Sources of Loan Repayment
The property owner's or business's ability to repay the
loan will be determined during the loan application
process. The CWSRF does allow for flexibility in that the
source of repayment need not come from the project itself.
Challenges Ahead
We need to make better use of the CWSRF for important
water quality projects. Greater understanding of the
tremendous buying power and advantages of CWSRF
loans should dramatically boost their use.
EPA has been encouraging the states to use their CWSRF
resources to finance the widest variety of water quality
projects while addressing high priority projects in targeted
watersheds. Those interested in cleaning up polluted
runoff resulting from AFOs should seek out their CWSRF
programs, gain an understanding of how their state
program works, and participate in the annual process that
determines which projects are funded.
For more information on the Clean Water State
Revolving Fund Program, contact:
The Clean Water State Revolving Fund Branch
U.S. Environmental Protection Agency
401 M Street, SW (Mailcode 4204)
Washington, D.C. 20460
Phone: (202) 260-7359 Fax: (202) 260-1827
Internet: http://www.epa.gov/OWM
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