Sludge is the thick muddy stuff you get after running raw sewage through a sewage treatment plant.
There are whole journals devoted to the science of sludge management.
According to the U.S. National Research Council, in 1996 the U.S. produced 5.7 million tons of sludge, dry weight. About a third of that sludge was used to fertilize golf courses, farms, or landscaping. There is some concern about the toxic chemical concentration in sludge, its role as a vector for parasites, and its use in agriculture.
Basically, environmental groups don't want sludge dumped on their local land. Government and industry are pushing the idea of re-using sludge; "recycling biosolids" sounds much nicer than "dumping chemically treated shit on your cornfield".
But it has to go somewhere. At least, processing it and using it is better than pumping raw sewage into a nearby river.
The main problem is not the actual human shit - which makes pretty good fertilizer - but the other stuff that gets dumped down the drain. Industrial chemicals - dioxin, lead, all kinds of stuff - go into those sewers too.
I would suggest to the EPA: why not go all the way? 5 million tons of sludge a year could build a whole mountain. Rather than filling up strip mines and spreading it on farmland, build an amusement park! On "Sludge Mountain", a harrowing roller coaster ride would flush visitors down a giant toilet, send them through the rushing rapids of the sewer, and then end up baking under the hot lights of a treatment plant.