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Regulatory Flexibility Analysis for 6 NYCRR 360 & 750

Regulatory Flexibility Analysis for Small Businesses and Local Governments

  1. 'Effect of Rule.' There are currently approximately 855 dairy farms that have 100-199 mature dairy cows in New York State. The Department of Agriculture and Markets estimates that as a result of this rulemaking approximately 285 of these farms will increase the size of their herds to more than 200 mature dairy cows over the next decade. Based upon input from dairy industry experts and agricultural service providers in the field, it is estimated that approximately 50 dairy farms are positioned to expand above 200 cows within the first year of the policy change. From that point, the balance of herd growth above 200 mature milking cows is likely to occur at a rate of 10-30 farms per year. This rulemaking is forecasted to increase the total NYS herd size by approximately 25,000 milking cows based upon 285 dairy farms expanding on average by 90 cows per farm. Based upon cow labor needs, it is estimated that one dairy farm job is created for every 40-50 cows added, so the addition of 25,000 cows over the next several years equates to 500-625 new on farm jobs.

    The Cornell University study, Schmit and Bills (2012; http://dyson.cornell.edu/outreach/extensionpdf/2012/Cornell-Dyson-eb1211pdf) finds that new on-farm jobs lead to additional jobs in the agricultural services industry (feed, animal health, fertilizer, farm equipment, crop protection, construction, milking systems, fuel, trucking, etc.). Therefore, a total of 700 to 875 jobs could be realized at the farm production level. The same study estimates job multipliers at the dairy processing level, as well. For every job created in the dairy processing sector, approximately 5 additional jobs are created in the various food processing service industries (dairy processing systems, manufacturing services, packaging, trucking, construction, fuel, marketing, etc). A June 2012 study by the NYS Department of Labor (http://www.labor.ny.gov/stats/PDFs/enys0612.pdf) shows that Greek yogurt processors have created approximately 1,300 jobs since 2007, with another major yogurt plant set to add nearly 200 jobs by the summer of 2013. Considering the multiplier for dairy processing jobs, the growth since 2007 equates to an additional 7,500 jobs, totaling 9,000 jobs overall in the dairy processing and associated service industries. Increasing milk production in New York State is considered critical to maintaining the processing plants responsible for the jobs and, based on the positive trends for Greek yogurt consumption, will be a key element for continuing the job growth in dairy processing and associated support industries.

    The Schmit and Bills study referenced above also finds that, like jobs, economic growth by farms and dairy processors is also coupled with multipliers, because those industries tend to make large portions of their business expenditures within the state. For dairy farms, for every $1 of output, $0.67 of additional economic activity is generated by the agricultural service industries. Assuming a milk price of $17.50/cwt and an eventual increase in milk production of 500 million lbs/year (5 million cwt/yr), the value of the increased production to farmers equates to $87.5 million/year. Applying the economic multiplier brings an additional $59 million/year, totaling nearly $150 million in additional economic activity with this policy. When applied to the dairy processing sector, the study finds that for every $1 of output, $1.18 of additional economic activity is generated by the dairy processing service industries. While the impact of this policy on Greek yogurt production is not quantified, Chobani estimates that it will achieve $1 billion in annual revenues in 2012 (http://www.nado.org/wp-content/uploads /2012/09/yogurt.pdf). The economic multiplier is substantial when added to direct economic output from dairy processing plants. With positive trends in Greek yogurt consumption, increasing milk production to help maintain and grow New York's dairy processing industries will likely result in significant economic growth. The Division of Milk Control has recently reported that they are aware of 37 different dairy processing projects that are under consideration. Of those 37 dairy processing facility projects, 26 are new plants. The majority of these new processors are primarily engaged in manufacturing of cheese; however at least 5 are yogurt facilities. Cumulatively, these new dairy processors represent a 10 % expansion of facilities inspected by the Department. The remaining 11 dairy processing projects involve expansions and upgrades. Specifically, 2 of these are larger dairy processors engaged in the manufacturing of yogurt.

    It is possible that some non-discharging Medium Concentrated Animal Feeding Operations (CAFOs) with 300 or more mature dairy cows may decrease the size of their herds to less than 300 mature dairy cows to relieve themselves from the permit requirement, but the number of Medium CAFOs downsizing for this reason is expected to be insignificant. CAFOs that are required to obtain an ECL SPDES permit must submit Comprehensive Nutrient Management Plans at the time that they are initially permitted and an annual Nutrient Management Plan thereafter. These Nutrient Management Plans are prepared by certified planners. This rule making will decrease the number of Medium CAFOs that must have permits and submit Nutrient Management Plans (although some of these farms may voluntarily opt to maintain permit coverage or maintain Nutrient Management Plans). As a result, it is estimated that a negligible number of certified planners may lose business as a result of this rule. These certified planners, however, should still have opportunities to prepare Nutrient Management Plans, provide other necessary agricultural services and may in fact see an increase in business from dairy herd expansion over time.
  2. 'Compliance Requirements.' There are no reporting, recordkeeping or other affirmative acts that a small business or local government will have to undertake to comply with this rule.
  3. 'Professional Services.' There are no professional services that a small business or local government is likely to need to comply with the changes associated with this rule.
  4. 'Compliance Costs.' This rule reduces capital costs for smaller AFOs that don't discharge by allowing them to expand to up to 299 mature dairy cows without needing to obtain an ECL SPDES permit and incurring the costs associated with structural and non-structural permit requirements.
  5. 'Economic and Technological Feasibility.' This rule making promotes economic development and does not impose any economic or technological burdens on small business or local government.
  6. 'Minimizing Adverse Impact.' This rule will have a positive economic impact on small businesses or local governments because the rule encourages economic expansion by allowing smaller non-discharging AFOs to expand to up to 299 mature dairy cows without having to obtain a permit and incur costs associated with permit requirements. This is expected to create on farm jobs and increase employment in the agricultural services industry, dairy processing industry, and food processing service industry.
  7. 'Small business and local government participation.' The New York State Department of Environmental Conservation (NYSDEC) has complied with SAPA §202-b(6) by assuring that small businesses and local governments have been given an opportunity to participate in the rule making. This participation has occurred through publication of the notice of proposed rulemaking in the State Register and through meetings and interaction with a CAFO Work Group composed of individuals from the following organizations:
    • New York State Department of Agriculture and Markets
    • New York State Department of Health
    • Cornell University
    • Environmental Advocates of New York
    • Citizens Campaign for the Environment
    • New York Farm Bureau
    • Northeast Dairy Producers Association
    • Certified Planners
    • CAFO farmers
    • NYSDEC central office and regional staff
      The NYSDEC also met with the Sierra Club, Riverkeeper, and the National Resource Defense Council with respect to the proposed rulemaking. The Department offered to meet with the New York League of Conservation Voters, but the invitation was not accepted. Furthermore, the NYSDEC will be accepting public comments to the Notice of Proposed Rulemaking and will be providing responses to any comments that are received. A public hearing will also be held. Finally, the following documents required by the State Environmental Quality Review Act (SEQRA) have been or will be published in the Environmental Notice Bulletin: Environmental Assessment Form, Positive Declaration, Draft Environmental Impact Statement, and Final Environmental Impact Statement. The NYSDEC will be reviewing comments to the Draft Environmental Impact Statement and will provide responses to comments prior to issuing the Final Environmental Impact Statement.
  8. 'Cure Period' This rulemaking does not involve the establishment or modification of a violation or of penalties associated with a violation. Therefore, no cure period is included in the proposed rule.

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