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From an enforcement perspective it's much easier and less costly to enforce the source. I regulate several large feed lots of 5,000 or more head of feeder cattle and many 2,450 head hog finishing units. The noise and odor are expected and considered (by the courts) a nuisance, so we regulate them by requiring setbacks to neighboring residences. We do allow the residence or the farmer to sign a wavier to allow a livestock operation or a home to locate within the setbacks. The equipment to measure odor is expensive and not really accurate. The main way to determine if odor is a nuisance is using (I'm not kidding) trained human sniffers. You can put pigs or cattle in a building, but cannot shut them up inside or outside. Iowa State University, the University of Nebraska-Lincoln, South Dakota State University and the University of Minnesota have all designed computerized "setback tools" for livestock based on weather based on prevailing winds, but generally they have not been accepted (in Nebraska) because data on open lots isn't really available.
As far as backyard chickens, I agree there are other things in a residential area that are bigger nuisances than a few chickens like vehicle motors (most communities prohibited parking of diesel tractors in residential areas or regulate warmup time), barking dogs (biggest small town complaints dealt with by cops), parties, children, more than 4 dogs and/or cats (this is a zoning standard for a kennel. Some communities raise or lower this number.) etc. The biggest problem with chickens in residential areas is proper handling of the manure. Improper composting or stockpiling coop cleanings can cause odor problems.
Dirtsaver I agree with you to a point, but would you like a 10,000 cattle feedlot built by your neighbors or a 24 hour store put next-door? A lot of people don't even want or Rottweiler or a Pit Bull (1) next-door. Use of a person's property IMO should be regulated only on the health, safety and well-fare of the neighbors. That's why in the two counties I work for, we regulate distances between potential nuisances like feedlots, hog buildings, ethanol plants, fertilizer manufacturing etc. We also regulate the number of non-farm homes located in the agricultural zoning districts, because most farming practices, even non-livestock, can be a nuisance at times.