Environmental regulation, and the
added costs generally associated
with compliance, are considerations
often factored into the choice of a busi-
ness location. It has been hypothesized
that geographic variation in environmental
regulations and enforcement can induce a
migration of industries across state or
country boundaries to “pollution havens”
where compliance costs associated with
environmental regulations are lower.
Analysis of how environmental regulation
and enforcement at the state and county
level (instead of at the Federal level) have
affected location decisions by industrial
agriculture can provide some insight into
whether the pollution haven phenomenon
applies to agriculture. In addition, it may
help explain why efforts to regain some
national control of the regulatory process
by implementing national standards have
engendered negative reactions. For exam-
ple, local pressures could cause Congress
to balk at appropriating funds for enforce-
ment if the U.S. Environmental Protection
Agency (EPA) tightens existing Federal
water quality laws through regulations
proposed for confined animal feeding
operations.
Study of whether environmental regula-
tion causes agricultural businesses to relo-
cate may also shed some light on effects
of environmental regulation in the interna-
tional arena. Proposals to harmonize (rec-
oncile) environmental standards across
international boundaries add to the
urgency of the question because of con-
cerns raised that trade liberalization could
induce increased investment in agricultur-
al production in countries with lower
environmental standards.
Two emerging issues addressed by
USDA’s Economic Research Service
(ERS) are: 1) the relationship between
stringency of regulation and location of
animal production, and 2) environmental
implications of confined animal produc-
tion (see article on page 12). This article
discusses some of the reasons for height-
ened interest in the links between strin-
gency of environmental regulation and
location of the U.S. swine industry. ERS