The numbers are in, and the full costs of unsustainable agriculture to a local community (and Nature’s bottom line) have been put on the table, and the community (and Nature) have won!
A highly controversial industrial mega-dairy CAFO (Confined Animal Feeding Operation) had been planned and partially constructed near the town of Nora, in picturesque rural Jo Daviess County, Illinois.
The land and people of Jo Daviess County promptly sounded an alarm about what could happen to the surrounding communities due to the economic, ecological, and social impacts of a project that would have been magnitudes larger than the scale of farming activities currently practiced in the region. The project had already generated toxic (high-BOD) purple effluent discharges to local tributaries and streams even before the facility was officially completed, and upon learning of the situation, Landen Consulting responded: I called my team of modelers and economists into action to put together a full-cost-accounting Ecosystem Services Valuation of the project that puts all of the costs, along with the potential benefits, onto the same balance sheet, so a balanced assessment of the project’s impact on the community could be made.
After months of research, interviews, fine-tuning of economic models, creation of new ecosystem risk modeling approaches, and thoughtful review by scientists, academia, agricultural & ecological economists, NGOs, regional & international environmental law & policy organizations, and other leading experts in sustainable agriculture science and economics, the numbers have been crunched and the results are in:
If ignoring the ecological and social costs, the implementation of the CAFO facility may have appeared to deliver economic value to the surrounding region based on the estimated revenue benefits to the community. However, according to our analysis, the long-term potential environmental, social, and economic costs associated with the CAFO did not support this view. In our analysis, the facility (if completed and brought online) demonstrated an average one-time cost of $9.31M and an average annual community impact cost of $7.19M. Based on our model, the benefits derived from the facility’s operations were not enough to outweigh the costs and are estimated to be $7.01 million in one-time investment and $2.12 million in annual economic benefits from new income, jobs, and taxes.” Looking at the final balance sheet, the average net economic impact to the region is estimated to be a one-time cost of $2.30 million, and an average net annual cost of $5.07 million.”
Like many business and public-policy decisions made without a sustainable ‘triple bottom line’ focus, the community’s economic cost-benefit conversation was focused primarily on the economic benefits the facility could bring to the region. However, CAFOs frequently arrive with significant ecological and social costs. Our report defines these costs in tangible terms that both property owners and community leaders can understand, and supports the owner’s eventual decision to abandon the project and put the land up for sale.
According to a recent report by HOMES, the local environmental NGO who played a key role in opposing the project:
“Lawyers for the partially constructed megadairy near Nora, Illinois, filed documents at the Jo Daviess County Courthouse to record the sale of the facility site, land A.J. Bos [the planned CAFO’s owner/investor] left in un-farmable condition. This filing marks the disposal of the last two parcels of land originally purchased as the site for two 5,500-head animal factories.
Sold this week, this once pristine farmland now bears the scars of Bos’s failed attempt to build one of the two factories—a four-acre cracked silage pad, foundations for six of the eight 1,000-foot-long barns, fractured walkways that failed long before thousands of cows trod upon their surfaces, a partially built milking parlor, and several half-dug manure ponds deeply gutted from erosion.”
The project has been alleged to have created noticeable environmental damage (such as turning a local river bright purple) even before the facility was completed and brought online – the story that has not been told, until now, involves these and other considerations that bring real economic and social costs to the community: What’s the cost of a CAFO-caused fishkill? What’s the cost to the community of public health and psychological impacts? What’s the aggregate cost of property value decline? What’s the related community cost due to lost tax revenue? What’s the cost to the regional economy due to the changes a CAFO often brings to the local dairy industry? Our report, Milking Nature’s Bottom Line, has the answers.
This type of analysis can be used by business decision-makers, government officials, policy makers, concerned citizens, and anyone who seeks to better understand the effects that a current or planned project is having or may have on their community. This method of full-cost economic, environmental, and social accounting gives business and government decision-makers additional tools when weighing investment/development options, go/no-go decisions, or determining the optimum parameters for a project so it is designed in a way that provides maximum benefits to all stakeholders in the community.
It is our hope that our report, and the conversation it produces, expands consciousness and awareness of the economic, environmental, and social value that’s at stake if development is not pursued in a sustainable manner. And on the flipside, this type of full-cost analysis can help decisionmakers appreciate nature’s value and protect our planet’s precious natural capital which underpins our local, regional, and global economies.
In our work with business & government leaders and trendsetters that are leading the charge for global sustainability, we prefer to perform this ecosystem economic valuation in a proactive manner, so that potential ecological and social issues can be assessed and mitigated at the outset of a project, and measures put in place to ensure that a project sustainably delivers positive “win-win-win” benefits to all stakeholders.
Eric Landen is the founder and president of Landen Consulting, an environmental strategy consulting firm that helps companies and governments capture the hidden value of Nature’s capital and account for how the organization’s financial health depends on ecological sustainability. Landen Consulting also helps the private & public sector value and mitigate the risks posed by local and global degradation of natural capital. Eric serves on the Committee that is creating a National Sustainable Agriculture Standard, and has chaired the project’s Sustainability Economics subcommittee, which is determining guidelines for how farmers can account for the economic costs of ecological and social un-sustainability, along with the economic, environmental, and social benefits of running a sustainable operation.