In moderation, manure is a great soil fertilizer, but the sheer amount (and concentration) of untreated waste generated by CAFOs is a serious liability. When too much manure is spread out over fields for soil to properly absorb it, or when manure lagoons leak, overflow, or rupture, rain and stormwater runoff can carry the waste into groundwater and nearby waterways. This over-application or discharge of CAFO animal waste is an egregious example of nonpoint source pollution, where the source(s) is diffuse and can have a wide distribution area. Untreated animal waste is a hazard for both public health and ecosystems because it can contain harmful quantities of nutrients, pathogens, and heavy metals.
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I'm not sure I would even call this a step in the right direction though. I think the right direction is to wean people off such a huge dietary reliance on the products from these farms and point them in the direction of small, sustainable, organic and relatively local farms. I say relatively, because even though there are several farms near the outskirts of my city (Seattle), places like New York City may have to go a little further afield for beef and milk. It costs more, yes, but these are things we should eat less of for health anyway, so in terms of personal finances it would be a wash. There are non-cow sources of protein and calcium that are more sustainable to raise. However, in the meantime, I am glad the farm is being held accountable for polluting and hope that this starts a trend of looking closely at CAFOs around the country and holding them all accountable. Maybe even clean up their acts. Hey, a girl's gotta have dreams.