Challenge Brought Against Decision to Approve Loan Guarantee for Maryland Poultry Farm
Updated: Jun 30
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Many of you may have seen the news that Food and Water Watch (FWW) was challenging the Farm Service Agency’s (FSA) approving a loan guarantee application for a poultry operation on the Eastern Shore of Maryland. FWW is challenging the FSA’s Environmental Assessment (EA) and Finding of No Significant Impact (FONSI) as a part of the National Environmental Policy Act (NEPA). FWW is looking to have the decision granting the loan guarantee set aside, meaning FSA will have to start the environmental review again. While the case is just in initial stages with the complaint file by FWW, the case will be playing out over the next few months.
NEPA requires federal agencies to assess the environmental impacts of all proposed actions. Agencies must prepare a detailed statement called an Environmental Impact Statement (EIS) when the actions would have a significant impact on the environment. An agency completes an EA to determine if the project will require an EIS.
At the time of FSA’s decision, federal agencies were required to complete an EA on all actions involving concentrated animal feeding operations (CAFO). An EA must show the need for the proposed action (in this case, guaranteeing the building of a poultry farm), alternatives to the project, environmental impacts of the proposed action and the alternatives, and a list of all agencies and persons consulted. In this case, FWW is arguing that the EA is incomplete for not taking into account how the poultry house will impact the quality of life for the neighbors and additional water problems caused. FWW is also arguing that FSA failed to list an adequate range of alternatives.
FWW is challenging the adequacy of the EA which FSA used to decide on issuing a FONSI and approving the loan guarantee. First, FWW is arguing that FSA should have considered more alternatives related to relocating the CAFO on the property, relocating to a new property, or engaging in a different form of agriculture. FWW is arguing FSA failed to look at these alternatives or consider them in the EA.
Second, FWW is arguing that FSA did not consider the project’s impact on relevant biological resources, such as migratory birds or other wildlife in the area.
Third, FWW argues that FSA did not consider the impact of the project on groundwater quality and quantity. The project did not require a groundwater permit from the State, but FWW is arguing that FSA still should have considered the impact of the project on local groundwater supplies.
Fourth, FWW is arguing that FSA should have considered the impacts of the project on surface water quality, saying the project will greatly affect surface water quality in the area, which FSA should have considered in the EA. According to FWW, FSA issued the EA before Maryland finalized the poultry operation’s nutrient management plan.
Next, FWW argues that FSA failed to consider air quality in issuing the EA, which FSA’s own regulations require. While draft EAs currently available on the Maryland FSA website suggest FSA is considering air quality, FWW is arguing FSA should have considered the amount of emissions from the proposed CAFO. FWW also wants the EA to consider vehicle traffic beyond construction and emissions resulting from land applications of manure.
FWW is also arguing that FSA relied too heavily on the not-yet-finalized nutrient management plan, stormwater management plan (SMP), and conservation plan in granting the EA. These documents contained mitigation methods mentioned but not provided in the EA. But the issue with this could be that many of the documents FWW wants to see in the EA are confidential under Maryland state law. FSA could be respecting state law or be considering an exemption to the Freedom of Information Act protecting personal data. FSA might have reviewed these plans and communicated with state officials and others, allowing FSA to understand the proposed mitigation practices. We will have to pay attention to FSA’s response to this claim.
FSA requires a NEPA review of the cumulative impacts. According to FWW, FSA considered the impacts in isolation, that is, only to the farm requesting the loan guarantee. FWW is arguing that FSA should have considered the concentration of the poultry industry on the Eastern Shore and the larger impacts from poultry farms without FSA loan guarantees.
Finally, FWW is arguing that the FONSI was inadequate and FSA should have developed an EIS. FWW is looking that the court set aside the EA and the FONSI decision, which would set aside the loan guarantee. This decision would require FSA to revisit the EA and potentially develop an EIS.
What Does All This Mean?
FWW is challenging FSA’s decision to grant this loan guarantee. It is important to remember that the EA/FONSI being invalidated in this case would only impact this individual loan guarantee and not existing loan guarantees. Future loan guarantees may have to go through a higher level of NEPA scrutiny depending on the outcome of this case.
FWW will have to address some initial issues. FSA will probably challenge FWW’s standing to bring this action. We have previously discussed standing, but this will be an area to pay attention to as this case moves forward.
The challenge that FSA failed to evaluate the environmental impacts of granting the guarantee is a new and developing area of the law. Other groups challenging FSA decisions to approve loan guarantees have used this approach. In a case out of Arkansas, the court found that FSA was improper in not completing an EIS. This case may provide us additional guidance on what FSA must do to meet its requirements under NEPA.
At this point, the case is only in the initial steps. We will have to see how FSA answers these arguments and potentially challenge FWW’s standing. This case will potentially be winding through the federal court system in the coming months.
Buffalo River Watershed Alliance v. USDA, No. 4:13-cv-450-DPM, 2014 WL 6837005 (E.D. Ark. Dec. 2, 2014).
Complaint, Food & Water Watch v. USDA, No. 17-1714 (D. D.C. August 23, 2017).