General Summary  -  Summary of Principal Commitments  -  Itemized List of Commitments  -  Summary of Contingencies Which May Allow Delay in Conversion  - What the Agreement Does Not Do; Other Potential Concerns     Environmental Defense's Smithfield Agreement Summary   Press Release   Read the Agreement  (pdf file)   General Summary On July 25, 2000, after more than six months of intense negotiations, NC Attorney General Mike Easley and Smithfield Foods reached a landmark agreement that, if fully implemented, will require Smithfield Foods to eliminate open-air anaerobic lagoons and sprayfields on all 276 company-owned farms within the next five years.  Smithfield—the world's largest hog producer and processor— will replace lagoons with environmentally superior alternative technologies and has also committed to provide financial assistance to any or all of its 1,257 contract growers who choose to do the same.  In return, the Attorney General agreed to use his influence to pursue lagoon phase-out on all hog farms in NC. Though it is binding only on farms in NC owned by Smithfield and its subsidiaries (including Murphy Farms, Browns of NC, Carroll's Foods, and Quarter M Farms), the agreement is far-reaching and effectively breaks the stalemate in NC over whether anaerobic hog lagoons should be converted to better waste technologies.  This represents a major victory for us and could be the breakthrough we've needed to convince the NC General Assembly to mandate phase-out on all NC hog farms.  It is also extremely timely relative to work at the national level to persuade EPA to adopt regulations (through its revision of current effluent guidelines for animal feedlots) banning the use of anaerobic lagoons nationwide.  And finally, it may prompt other states to pursue similar agreements or enact state laws to avoid becoming the dumping ground for the industry.  (An Oklahoma state senator has already issued a press release praising the agreement and calling for something similar in that state.) Much needs to happen over the next two years to ensure that the agreement's high  promise is fully met.  Above all, success will depend upon NC State University's ability within the next two years to identify so-called ``environmentally superior technologies" that both meet strict environmental standards (including the substantial elimination of atmospheric ammonia nitrogen emissions) and are economically feasible.  Full implementation will also depend largely on the commitment of the next Attorney General to enforce the agreement.  Below, we have provided a brief summary of the agreement—what it does and does not do. You can also access it  at:  http://www.jus.state.nc.us/in/AGREE.PDF   Summary of Principal Commitments The agreement is between Smithfield Foods, its hog-producing subsidiaries and the Attorney General.  Smithfield has promised to provide $15 million to fund the testing of alternative hog waste technologies on a commercial scale and has agreed to make its company-owned farms available for such testing.  Dr. Mike Williams, the current director of the Animal and Poultry Waste Research Center at NCSU, will head up this two-year process to determine which technologies and/or systems meet specified environmental standards and are economically feasible.  Williams will recruit two peer-review panels to assist with the selection and evaluation of promising alternative technologies.  The first will be a scientific peer-review panel and will include representatives from the swine industry and environmental/community groups, as well as experts in the fields of environmental science and public health.  The second is a peer-review panel of economics experts, including representatives from the environmental community and the swine industry, to evaluate the ``economic feasibility" of the various alternative technologies.  At the end of the two year research period, Dr. Williams is to determine which technologies meet the environmental performance criteria and economic feasibility standards set forth in the agreement.  Once that determination is made, Smithfield Foods has pledged to implement this new technology or technologies on all of their company-owned farms (which presently number 276) within three years.  Although the agreement does not require its contract growers to utilize alternative technologies, the agreement does obligate Smithfield to provide its contract growers with the financial and technical assistance needed to make the conversions.  In addition to these commitments, Smithfield also agreed to take some immediate actions to reduce the environmental impacts from its company-owned farms.  These measures include the implementation of water quality protection measures for operations located within the 100-year floodplain, the identification and corrective action of all abandoned lagoons on company-owned farms, and the establishment of conservation easements or other protective measures for all wetlands situated on company-owned farms.  Again, Smithfield Foods has pledged to offer assistance to its contract growers to take these corrective measures.  Finally, Smithfield will provide $2 million per year for the next 25 years for water quality restoration and enhancement measures.  The Attorney General will decide how best to spend the money (e.g., through establish of a fund or through grants to land trusts and other organizations) after consulting with NC Dept of Environment & Natural Resources and other interests.   Itemized List of Commitments   Smithfield will pay $15 million to fund research of alternative hog waste technologies and systems.  Dr. Mike Williams, Director of the Animal and Poultry Waste Management Center at NC State University will direct the research.  If Dr. Williams is removed or leaves the University, the Chancellor is authorized to replace him upon consulting with the Attorney General and the president of the UNC system. Dr. Williams will identify alternative technologies/systems for testing on a commercial scale; SF will make its farms (or its contractors farms) available for testing these technologies.  Williams expects to select and put five (5) technologies on the ground shortly after the agreement takes effect and at least six (6) more within six months.  Williams will appoint a balanced expert peer review panel to assist in the selection of alternative technologies. Within two (2) years, Williams will issue a report with determinations of which technologies/systems meet the definition of Environmentally Superior Technology (EST) for particular categories of farms.  Following the initial two years, Williams may issue additional technology determinations as necessary.  The NC Department of Environmental Resources has final say through permitting on whether ESTs may be used. An EST is a technology(ies) that is 1) permittable; 2) technically, operationally and economically feasible; and 3) meets specific performance standards for surface and groundwater water quality, air quality, odor and disease-bearing pathogens. Smithfield agrees to convert all company-owned farms to an EST (appropriate to specific categories of farms) within three (3) years of Williams' initial report of technology determinations (i.e., within 5 years of the effective date of the agreement.)  The agreement provides the possibility that the 5-year deadline will be extended for some or all categories of farms if certain contingencies occur. Smithfield agrees to provide financial and technical assistance to contract growers who are willing to convert to ESTs. Smithfield agrees to take some immediate actions to reduce the environmental impacts from its company-owned farms.  These measures include the implementation of water quality protection measures for operations located within the 100-year floodplain, the identification and corrective action of all abandoned lagoons on company-owned farms, and the establishment of conservation easements or other protective measures for all wetlands situated on company-owned farms.  Again, Smithfield Foods has pledged to offer assistance to its contract growers to take these corrective measures. SF agrees to provide up to $50 million over 25 years for water quality restoration, preservation and protection projects. In consideration of SF's commitments, Attorney General agrees to pursue expeditious lagoon/sprayfield conversion on all regulated hog farms in the state.   Attorney General does not waive any rights to pursue enforcement actions against SF or its subsidiaries for any past, present or future violations of federal or state laws or regulations.   Summary of Contingencies Which May Allow Delay in Conversion Williams' must make a finding of economic feasibility for each technology before he can make a technology determination of EST.  Williams must also determine that a technology meets specified environmental standards before he can make a technology determination.  Failure to identify ESTs within two years will extend the five-year deadline for conversion.  Under the agreement, Williams will continue his research beyond two years as necessary. If Williams issues a technology determination which finds that the EST cannot be fully implemented on farms within a particular category within three years, the time for implementation can be extended as necessary. Delays by technology vendors may be used to justify a commensurate delay in conversion. If DENR fails to issue a permit within 3 months of a complete application, an operation may be granted an extension to implement the technology. SF is not required to comply with Agreement if laws or regulations are enacted which prohibit it from doing so. Issuance of a permit by DENR that includes requirements that Williams determines would have materially affected the finding of economic feasibility for that technology.   What the Agreement Does Not Do; Other Potential Concerns The Agreement does not apply to Smithfield's contract growers, to other companies and their contract growers or to independents.  The Agreement only requires the conversion of lagoon/sprayfield systems on the company's approximately 276 farms. The Agreement does not provide for third party enforcement.  Enforcement is dependent upon current and future Attorneys General.  Does not require Smithfield to post a bond to ensure its performance of its commitments. The Agreement does not define economic feasibility, but does provide some criteria that we recommended.  Objective and comprehensive economic analysis will be crucial toward ensuring full implementation of this Agreement. The Agreement provides some opportunities to delay conversion.  These opportunities are limited, however, and full and faithful enforcement of the Agreement by the Attorney General should protect against too much delay.

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