WINCHESTER, Ind. - The cleanup of a popular but algae-fouled Ohio lake has angered some Indiana residents who argue a federally backed effort to truck livestock waste across state lines is only moving the problem to their region.

Eastern Indiana resident Allen Hutchison said the trucks filled with manure are worsening the air quality around his farm, which he said was already thick with ammonia and dust from a nearby dairy. He and other residents worry that runoff from the manure that's applied to fields as fertilizer will harm nearby rivers and streams, just as it has tainted Ohio's largest inland lake, Grand Lake St. Marys.

"Here comes another one," Hutchison said recently as a truck loaded with poultry manure rumbled past his home, trailing dust. "You see what it's doing to Grand Lake St. Marys? It's going to do the same thing to our water before long."

The 68-year-old Hutchison blames the biting odor for breathing problems that he and his wife experience. It's convinced them to sell their 50-acre farm near Winchester, leaving behind the small white farmhouse where they have lived for 20 years and had planned to spend the rest of their retirement.

Ohio livestock farmers have for years sold their manure to Indiana crop farmers as a rich natural fertilizer that's significantly cheaper than commercial fertilizers.

But that manure traffic began growing in July after Ohio offered livestock farmers a new incentive under a U.S. Department of Agriculture subsidy program that partially covers the cost of shipping manure out of the Grand Lake St. Marys watershed. Officials took the action after manure runoff from fields was largely blamed for causing the shallow, 13,000-acre lake to become tainted with toxic blue-green algae, making it virtually off-limits to recreation last summer.

Some environmentalists warn that Indiana's existing problems with manure runoff will worsen if more manure is applied as fertilizer and is washed off fields by rain or snow.

Angela Hamm, the water quality director of the Hoosier Environmental Council, told an Indiana legislative panel this fall that without tougher state regulations, Indiana's waterways also are vulnerable to farm runoff.

"We really need to figure out how we're going to protect our waterways in Indiana from the water quality issues they're seeing in Ohio," Hamm told lawmakers.

Adding to the problem is that the state has no authority to stop or regulate the manure imports, said Bruce Palin, the Indiana Department of Environmental Management's assistant commissioner of land quality. He said Indiana's regulations only cover manure produced by in-state livestock farms.

"It's only been over the last couple of years where it's come to our attention that we need to address that," Palin said. "It's like many things - until it happens you don't really think about it."

A state administrative panel is considering new rules that would apply the same regulations to out-of-state manure as waste produced on Indiana farms. But Palin said the focus would be on protecting surface waters, not restricting odors from livestock farms or manure.

Barbara Sha Cox, a Richmond, Ind., resident and livestock activist who owns about 240 acres of farmland in the area abutting the Ohio state line, spent the summer and fall driving the area's rural roads, photographing poultry manure piles arriving from Ohio. Some were 7 to 8 feet tall and were dumped close to creeks without safeguards to prevent the rancid-smelling material from blowing around or washing into creeks and streams.

"All the dust from the chicken manure is just terrible," she said. "It's a serious issue and we're drowning in this dust and smell."

But Randy Barga, whose family's western Ohio operation has 65,000 hens, said they have been hauling and applying poultry manure to land they own in Indiana for more than 20 years without any health problems. The Ansonia, Ohio, resident said the waste emits "very little odor."

Mike Shelton, a spokesman for the Ohio Department of Natural Resources, said he's surprised by the uproar over the manure shipments to Indiana, saying it's just an effort to move the natural fertilizer to nearby farms where it's wanted to enrich the soil.

"We're not trying to dump a problem into another state where it's not wanted," Shelton said.

Farmers spread or inject that manure onto their cropland, and some of it inevitably runs off into waterways, bringing with it phosphorous that can fuel algae growth.

Ohio's plan to improve water quality in Grand Lake St. Marys also includes promoting conservation practices such as planting strips of vegetation between fields and creeks and addressing failing septic systems that add to the lake's woes.

Shelton said the 14 permitted livestock farms in the watershed - all but one of them poultry farms with more than 2.8 million animals - are generally able to absorb the costs of shipping some of their manure to customers. The subsidy payments are directed at the watershed's 300 or so smaller hog and dairy farms, which he said can't easily afford the cost of shipping manure.

Since July, 35 livestock farmers have signed manure-transfer contracts that include federal payments totaling $220,000 over one or more years that will subsidize the fuel costs they incur trucking manure out of the watershed, said Chris Coulon, a spokeswoman for the Ohio office of the Natural Resources Conservation Service.

Those payments will help move about 14,500 tons of solid manure and 17.5 million gallons of liquid manure out of the watershed, although Coulon said she did not have a breakdown of how much will end up in Indiana.

Joe Logan, director of agricultural programs with the Ohio Environmental Council, supports the effort but said the ultimate solution was to stop trying to keep so many animals in a small area.

"Frankly we don't want to get into a situation where we're allowing a watershed to get horribly degraded like this and then paying millions of dollars of taxpayer money to remediate this every few years," he said.