The Loan Loophole Trump Created To Fast-Track Factory Farms

It’s hard to keep up with the Trump Administration’s tidal wave of rules weakening or outright eliminating environmental protections, but the rollback of decades-old rules for federal agencies under NEPA, which required a review of environmental effects of their actions, has made headlines because it is so devastating. 

NEPA is America’s “basic national charter for protection of the environment.” Enacted in 1969, the law requires federal agencies to evaluate the environmental impacts of their actions before they act — whether to approve a pipeline, build a highway, or issue oil and gas leases on federal lands — and to engage the public in the process. 

This process, though it doesn’t prohibit a government action that will harm the environment, has improved government decision-making and transparency. It can also prevent fast-tracking of harmful projects, allowing communities the time to organize opposition, which can improve proposals or stop dangerous projects altogether. It has also emerged as a surprising tool in the fight against the fast-growing factory farm industry — one of the worst industries for water pollution and climate change. 

Federal Loans For Large Factory Farms Trigger NEPA Environmental Review

NEPA comes into play for “major federal actions” — so what do privately owned and operated factory farms have to do with it? The answer should be “nothing.” Unfortunately, the USDA’s Farm Service Agency (FSA) has made a habit of financing factory farms — both through direct loans and through loan guarantees, where the agency will provide a private lender assurance that if the factory farm defaults on the loan, the American public will cover its losses. 

The FSA is considered a “lender of last resort” — if it didn’t provide this financing, the would-be factory farm operator likely would not be able to obtain it elsewhere and may not be able to set up shop at all. And we’re not talking small change — public records show that the FSA approved billions in loans and loan guarantees to livestock operations between 2009 and 2015. For the largest factory farms, these loans and guarantees are federal actions that trigger NEPA’s requirement to conduct an environmental review and allow for public input.

This Loan Trigger Helps Communities Defend Their Health In Court

In 2017, we sued the FSA for its inadequate NEPA review of a $1.2 million loan guarantee that paved the way for a chicken factory in Maryland large enough to raise over a million birds — and produce a million birds’ poop — each year. Several concerned neighbors, after noticing an ad in the local paper, commented on the Environmental Assessment, urging the agency to consider how the factory farm would affect their water and air, health, and quality of life. FSA had glossed over the intense concentration of factory farms already on Maryland’s Eastern Shore and barely acknowledged the risk of pollution (even though factory farms are a leading source of pollution degrading the Chesapeake Bay). 

The NEPA process gave us the legal ground to work with community members and challenge the FSA’s bad decision in court. The case is ongoing.  

The FSA clearly does not want environmental harms to get in the way of its factory farm lending, because it recently curbed public participation by issuing rules to dodge NEPA reviews, eliminating the process for most “medium” sized operations getting financing. With a coalition, we’re also challenging that rule in court. 

Under Trump, NEPA Will Do Nada For Rural Communities

Both of these lawsuits to hold the FSA accountable to rural communities are ongoing, but under the Trump Administration’s new rule no impacted community will be able to raise a similar challenge or even use NEPA’s public notice requirement to learn about a proposal and organize community opposition. The rule changes the definition of “major federal action” by specifically carving out FSA loans and loan guarantees. If there’s no major federal action, there’s no NEPA review. And if there’s no NEPA review, rural residents will be left in the dark about factory farms being proposed in their communities, losing an important tool to fight back.

This handout to the factory farm industry is a response to increased community involvement in FSA’s NEPA reviews and legal challenges to ensure that it’s doing its job. And like the rest of this rollback rule, it is illegal. With a broad coalition, we’re once again taking the Trump Administration to court for putting polluters over people and the environment. 

We won’t stop with defeating this rule in court. We will continue to hold FSA accountable for using public resources to fund factory farms — and we’ll continue our fight for a factory farm ban. 

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