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Farmers as Producers of Clean Water:
Providing Economic Incentives for Reducing
Agricultural Non-point Pollution |
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The purpose of this experiment is to examine farmers’ willingness
and ability to respond to performance-based conservation payments.
Our experimental watershed, Cullers Run, is
located in a rural area of the Appalachian Mountains of West
Virginia, USA.
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Project Title: Farmers
as Producers
of Clean Water: Providing Economic Incentives
for Reducing Agricultural Non-point Pollution
Project
Investigators: Alan Collins, Neil Gillies, and Peter Maille
Institutions
Involved: Agricultural and Resource
Economics program at West Virginia
University and Cacapon Institute
Funding
provided By:
U.S. Department of Agriculture, Cooperative State Research,
Education, and Extension Service, National Research Initiative
Project Investigator Information:
Alan
Collins is Associate Professor and Chair of the Agricultural and
Resource Economics Program in the Division of Resource Management
within the Davis College of Agriculture, Forestry, and Consumer
Sciences at West Virginia University. His contact information is:
P.O. Box
6108
(304) 293‑4832 x4473
West Virginia
University
(304) 293-3752 (Fax)
Morgantown, West Virginia
26506
Email to: Dr. Alan
Collins
W. Neil
Gillies is Executive Director at the Cacapon Institute. His contact
information:
PO Box 68
High
View, WV 26808
304‑856‑1385
Email to:
Neil Gillies
Peter
Maille is a PhD graduate student in Natural Resource Economics in
Division of Resource Management at West Virginia University.
Email to: Peter Maille
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Experiment Description
The purpose of this experiment is to examine farmers’
willingness and ability to respond to performance-based conservation
payments. Our experimental
watershed, Cullers Run, is located in a rural area of the
Appalachian Mountains of West Virginia, USA.
Background
Mathes (1995) describes the region as having
long narrow valleys with a humid, temperate climate. From 1998 to
2004 the area averaged 103 cm of precipitation per year, with the
growing season (May through September) receiving about 70% more than
in the non-growing season (Cacapon Institute, unpublished data).
The Cullers Run watershed has an area of
approximately 2,978 hectares, with 16.8% devoted to agriculture, and
the remaining area mostly forested. It is located in Hardy County,
which is the number one poultry production county in West Virginia
(USDA National Agricultural Statistics Service, 2005). There are
approximately 12 poultry houses conducting intensive poultry
production in the watershed. Cattle and sheep production is also
important. Row crops comprise 3.63% of the agricultural land,
mostly in the floodplain, and the remaining agricultural land is
devoted to pasture and livestock.
The Lost River, of which Cullers Run is a
sub-watershed, is classified as "impaired" due to excessive fecal
coliform bacteria. It was placed on the USEPA 303(d) list in
1998. As required by law, a total maximum daily load (TMDL)
study was performed. The TMDL plan calls for reductions of
fecal coliform pollution by 12%, 37%, and 38% from forest, cropland,
and pasture respectively (USEPA, 1998).
Land ownership within the
watershed varies with parcels ranging from less than one hectare to
over 240 hectares.
In Hardy County, over 35% of farm operators had something other than
farming as their primary occupation (USDA National Agricultural
Statistics Service, 2004). A review of publicly available tax
information reveals that, while most of the landowners are
residents, a substantial portion of the watershed is owned by people
who live elsewhere. Both resident and non-resident owners seem to
include in their ranks new owners and traditional long-term owners.
Cullers Run was chosen
for this project
because:
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It
has a long history of water quality sampling data (since 1995)
collected at the same location |
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The data
consistently indicate that Cullers Run has relatively high
levels of nitrate-nitrogen (N) for the area. These levels
only very rarely exceed the potable water quality standard for
nitrate-N. No other standards apply.
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It offers a discrete area to work
in on a small stream with a known nitrate gradient. For the
above reasons. it is a stream where there is a reasonably good
chance of measuring an effect of changes in agricultural
practices. |
More
on the water quality component of the study is
here.
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Project Objectives
The
primary goal of this project is to assess performance-based economic
incentives to improve the quantity and quality of water flowing from
Cullers Run watershed in Hardy County, West Virginia. Specific
objectives are:
(1)
Derive and assess a pricing formula based on water quantity and
quality that provides an appropriate incentive for farmers to
implement best management practices (BMPs) to conserve surface water
resources;
(2)
Given the availability of incentive payments, assess changes in
farmer attitudes and behavior towards BMPs that protect and conserve
water resources relative to the traditional cost share approach;
(3)
Monitor changes in water quality and quantity in response to
performance-based economic incentives and compare to monitoring in
other watersheds where these incentives are not offered; and
(4)
Compare the cost effectiveness of water quality improvements for
incentive payments relative to the traditional cost share approach.
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Economic Incentives
Under
this project, payments are made monthly to participating farmers in
Cullers Run watershed. Monthly payments are calculated based on the
equation below:
Water
volume is expressed in acre feet (1 acre foot of water is equal to
325,851 gallons). Water prices are shown below in Table 1. The
quality adjustment factor is the ratio of nitrate-N load (pounds per
month) in Waites Run divided by nitrate-N load (pounds per month) in
Cullers Run. Waites Run represents a natural (background) level of
nitrate-N.
To
participate, farmers must sign up. Then, acting as a group,
participating farmers will be responsible for determining how each
monthly payment is allocated among participating farmers.
Participating farmers are able to choose which BMP or other land
management change to implement in order to impact water quality.
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Table 1. Water Price Summary |
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Water Prices |
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May through September |
October through April |
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Cullers Run Stream Discharge
(ac-ft) |
Dollars per Acre-Foot |
Cullers Run Stream Discharge
(ac-ft) |
Dollars per Acre-Foot |
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Up to 320 |
18 |
Up to 740 |
8 |
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321-800 |
8 |
Over 740 |
5 |
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Over than 800 |
5 |
The base payments are multiplied by the quality adjustment factor,
the ratio of Waites Run nitrate-N lbs/month over Cullers Run
nitrate-N, to get the final payment…
As an example: May 1998 (444 ac-ft) ×
($8/ac-ft) × (0.091) = $672
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Annual Payment Summary
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Mean
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$7,721
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High
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$9,400
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Low
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$4,593
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Project Timeline
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The project was
introduced to the community in December 2006 at the Mathias
Ruritan Club Meeting. |
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Invitation letters to
participate were sent out to Cullers Run farmers in January
2007. |
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Four dinner meetings
were held in Mathias during February and March 2007 to introduce
farmers to the project, answer questions, and discuss how the
project would work. A final meeting was held on March 26 with
written agreements made available for interested farmers to
sign. |
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Year one of the
project began on April 1, 2007 (with the first payment during
May 2007) and ends on April 30, 2008. |
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Water Quality Component of
WV University's
"Farmers as Producers of Clean Water" Project
Cacapon Institute
Note: For more information about water
quality in the Cacapon River watershed, including Cullers Run, visit
our Publications
page.
The WVU "Farmers as Producers of Clean Water" project
will include a water quality monitoring component, with an
"experimental" stream – Cullers Run, and a "reference" stream –
Waites Run.
The big picture.
The states in the Chesapeake Bay watershed - Delaware, Maryland, New
York, Pennsylvania, Virginia, and West Virginia - the District of
Columbia, and the U.S. Environmental Protection Agency are working
together to reduce the flow of nutrients (nitrogen and phosphorus)
and sediment transported from each of the Bay States into the Bay.
Each of the Bay states has established Tributary Teams to develop
strategies for reducing nutrients and sediment, and to implement
their strategies. The goal of reducing nutrient flow from the land
to rivers and streams represents a long term commitment by the state
of West Virginia.
Why did we choose Cullers Run for this project?
There is a long history
of water quality sampling data on Cullers Run (since 1995),
collected at the same location by the WV Department of Agriculture,
Cacapon Institute, and the US Geological Survey. These data all
indicate that Cullers Run has relatively high levels of
nitrate-nitrogen (N) for the area.
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The Lost River watershed had the
highest levels of nitrate-N in the WV Department of
Agriculture's Potomac Headwaters Water Quality Study area, and
Cullers Run had the highest nitrate-N levels within the Lost
River watershed (WVDA, 2006). |
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Cullers Run consistently had the
second highest nitrate levels at regular Lost River sampling
sites in Cacapon Institute's studies going back to 1997. The
highest levels have been in the Lost River just above Upper
Cover Run in Mathias. |
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Interest in the source(s) of
nitrate-N in Cullers Run led Cacapon Institute to collect
periodic water samples at the intersection of CR-18 and CR18-1,
as well as the usual site at the intersection of CR 18 and Route
259. These samples show a consistent but variable increase of
nitrate-N between these two sites. |
Why are we focusing on nitrogen and not phosphorus?
Due to the proportions of nitrogen and phosphorus in the manure used
to fertilize fields in our area, phosphorus is actually applied at a
greater rate, in relation to plant needs, than is nitrogen.
However, phosphorus binds to our soils, and mostly moves into
streams only during major storms. This makes phosphorus very
difficult to study in our streams. Because of this, nitrate can be
used as an indicator of fertilizer use.
Why is nitrate-N in Cullers Run high?
It's not because the farmers there are doing a "bad" job.
The water quality literature consistently finds that nitrogen in the
form of nitrate "leaks" from cropland more easily than from other
fertilized agricultural (or residential) lands, such as pasture.
Nitrate is relatively high in Cullers Run because it is a small
watershed with a significant amount of row crop agriculture, which
is unusual in this area.
Why did we choose Waites Run as our water quality reference
watershed? This 12.8 sq. mi. watershed near Wardensville is over 96%
forested, lies within the region, and monitoring data indicates that
its nitrate-N levels are quite low and respond very little to a wide
range of rainfall regimes (Cacapon Institute 2002). Waites Run also
has a USGS Flow Gage site.
The graph below shows historical nitrate-N data
collected by Cacapon Institute from 1999 to January 2007. Sample
sites are Cullers Run a short distance upstream of the Rt. 259
bridge (CuR Downstrm), Cullers Run at the intersection of CR-18 and
CR18-1 (CuR Upstrm), Waites Run in Wardensville, and the Lost River
just above Upper Cover Run in Mathias (LR Mathias). The data for
the period from September 1999 to September 2002, and from April
2006 to the present, represent samples collected on the same day at
all four sites. The period in between is for samples collected at
CuR Downstrm and LR Mathias only.
Water quality monitoring
for this project will be conducted by Cacapon Institute under a
subcontract with WVU. Water quality sampling will consist of
regularly scheduled twice monthly samples, and up to four storm
samples per year. Water quality parameters will include
conductivity, pH, temperature, nitrate-N, total phosphorus, fecal coliform bacteria, and turbidity. Pebble counts
will be used to assess changes in the rate, quality and quantity of
sedimentation. Water quantity will be assessed in Cullers Run by
the flow at time of sampling at at the outlet of Cullers Run just
above Route 259 with a flowmeter.
Additionally, a water level sensor will be installed at Cullers Run
to allow continuous recording of stream water levels.
Cullers Run
offers a discrete area to work in on a small stream with a known
nutrient gradient. It is a stream where we have a reasonably good
chance of measuring an effect of changes in agricultural practices.
One issue of great concern to the Chesapeake Bay Program and its
West Virginia partners is determining how well agricultural and
other Best Management Practices work in the real world, versus how
well they work in controlled university studies. The Cullers Run
project has the potential to help shed light on that question.
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Cullers Run
Wetland Construction |
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The Farmers
as Producers of Clean Water project has had a number of
notable successes:
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50% of the
farmers in the watershed chose to participate. |
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The farmers,
functioning as a group, decided to “bank” 90% of their
incentive payments to pay for nitrogen reduction
projects. |
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The farmers
decided it was in their interest to learn as much as
possible about sources of the nitrogen in their stream –
which led them to request widespread stream sampling in
the watershed. |
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The extensive
sampling led to the discovery of nitrogen rich
groundwater following a concentrated flow path that
flowed into Cullers Run, raising baseflow concentrations
of nitrate as much as 4-fold in just a few feet of
stream. |
The above
sequence of events, together, made it possible to complete
the project by constructing a precision BMP -- a wetland
designed to remove nitrogen from the nitrogen rich
groundwater before it reaches Cullers run. If the wetland
works as intended, it will reduce baseflow nitrate-nitrogen
levels in the stream by as much as 50 percent. |
Construction Slide Show
Updated on 4/12/2010 to include
wetland planting. |
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Papers and
Presentations
Papers:
Maille,
Peter, and Alan Collins,
"Farmers as Producers of Clean Water: A Field Experiment” in
Water, Agriculture and Sustainable Well-being, Eds. U. Pascual,
A. Shah, J. Bandyopadhyay. Oxford University Press: Delhi, India,
forthcoming. (PDF, 100 kb)
Collins, Alan R. and Peter Maille,
“Farmers as
Producers of Clean Water: Getting Incentive Payments Right and
Inducing Farmer Participation”, Selected Paper prepared for
presentation at the American Agricultural Economics Association
Annual Meeting, Orlando, FL, July 27-29, 2008. (PDF, 157 kb)
“Farmers as Producers of Clean Water: Getting Incentive Payments
Right”, Peter Maille and Alan Collins, Paper presented at the
Virginia / West Virginia Water Research Symposium, Blacksburg, VA,
November 29, 2007. (PDF, 135 kb)
“Inducing Farmer Participation in a Watershed Level Program to
Improve Water Quality”, Alan Collins, Peter Maille, and Neil
Gillies, Paper presented at the Virginia / West Virginia Water
Research Symposium, Blacksburg, VA, November 29, 2007. (PDF, 100 kb)
Maille, Peter.
Performance Based Payments for Conservation: Experience from a Water
Quality Field Experiment. Dissertation submitted to the
Davis College of Agriculture, Forestry, and Consumer Sciences at
West Virginia University in partial fulfillment of the requirements
fort the degree of
Doctor of Philosophy in Natural Resource Economics. November 2008.
Collins, Alan, Peter Maille, and Neil Gillies.
Final Report: “Farmers as Producers of Clean Water: Providing
Economic Incentives for Reducing Agricultural Non-point Pollution”
Agency: USDA, National Research Initiative Grant # 2006-35102-17261.
Contracts:
Participating farmer contract. First Year.
Presentations and Posters:
Collins, Alan, Neil Gillies, and Danny Welsch.
Wetland Treatment of Nitrates: Design and Cost Efficiency.
Presented at: Land and Sea Grant National Water Conference,
Portland, OR, May 23, 2012. (PDF, 5 MB)
Collins, Alan and Neil Gillies.
Solving Agricultural Nitrate Pollution by Conversion of Non-Point
into Point Sources. Presentation at: 2010 USDA-CSREES National
Water Conference, Hilton Head, SC, February 24, 2010 (PDF, 4 MB)
“Controlling Pollution with Opportunities, not Regulations”,
Peter Maille and Alan Collins, Poster presented at the USDA-CSREES
National Water Conference, Sparks, NV, February 3-7, 2008. (PPT, 820
kb)
“Farmers as Producers of Clean Water: Getting Incentive Payments
Right”, Alan Collins and Peter Maille, presented at the USDA-CSREES
National Water Conference, Sparks, NV, February 5, 2008. (PPT, 881
kb)
“Farmers as Producers of Clean Water: Providing Economic Incentives
for Reducing Agricultural Non-Point Source Pollution”, Alan R.
Collins and Peter Maille, paper presented at USDA-CSREES National
Water Conference, Savannah, GA, January 30, 2007. (PPT, 328
kb)
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