Environmental impact assessment survey reflecting farmers` opinion on the residence and production space in rural settlement area by ORD showed that more than 86% of respondents thought their reservoirs and waterways (small rivers) were getting seriously contaminated primarily by garbage and livestock manure. A typical rural settlement unit was taken to assess the impact of improper management of livestock manure in the farms on the water quality of small river flowing down along the villages where swine and dairy farms were situated in Daejook 2, 3-ri, Seolseong-myun, Icheon-gun. Nitrogen compounds such as NO$_3$-N, NO$_2$-N, NH$_3$-N, and phosphorus compound H$_x$PO$_4$, DO, BOD$_5$, COD, and microbial density were analyzed to evaluate water quality at five test sites designated along the water stream. Tests showed. for example, BOD$_5$ at site 4 was average 9.2mg/l which was about 3~8 times higher than that of observation site 2 and 3, at which most livestock houses were situated. This is a clear evidence that the nutrients of livestock manure illegally discharged to small river can lead to an eutrophication of the river at downstream. A soil absorption system with aeration could be one of alternatives to treat the contaminated wastewater by livestock manure. The place at downstream, inbetween observation site 1 and 2, could be the best construction site for the treatment facility from the standpoint of the overall treatment efficiency, An enclosed composting system can also be regarded as a good alternative for treatment of the sludge which is the by-product of the soil absorption system operation.