Sand County Foundation When land does well for

Sand County Foundation When land does well for

Sand County Foundation When land does well for its owner, and the owner does well by his land; when both end up better by reason of their partnership, we have conservation. When one or the other grows poorer, we do not. - Aldo Leopold Use Ecosystem Services to Improve

Environmental Return on Investment Shift to Performance Based, Market Driven Agricultural Conservation Strategies Need to understand Environmental consequence of change in practices Costs of practices Farmer acceptance Then can calculate better environmental investment strategies Agricultural Causes of Nitrogen Runoff

3 Key Functions Altered Nitrogen Discharge Increase Use of Synthetic Nitrogen Move Water Off Landscape Very Efficiently Shift From Forage and Small Grains To Expanded Large Grand Production QuickTime and a TIFF (LZW) decompressor are needed to see this picture. Nitrogen Application Wetlands Loss Subsurface Agricultural Drainage QuickTime and a TIFF (LZW) decompressor

are needed to see this picture. Disconnect Riparian Functions Top 10% Nitrogen Contribution

Groundwater Contamination How Are Farm Decisions Made? Dont jeopardize future of the farm What can we do? what do we know how to do what do we have capability of doing How do we stay in business How do we maximize yield Largely economic decisions

Maybe good environmental management should help the economics QuickTime and a decompressor are needed to see this picture. US Corn Production For Ethanol Use 5.0 4.5 4.0 3.5 3.0

2.5 2.0 1.5 1.0 0.5 0.0 1980/81 1984/85 1988/89 1992/93 1996/97 2000/01 2004/05 2008/09 Source USDA Markets Highly Volatile 12 11

$ / Bu. - corn, soybeans and wheat $ / 10 Cwt - cotton 10 9 8 U.S. Crop Prices Received by Farmers Crop Price Change April 2008 vs. April 2007 Wheat Soybeans Corn Cotton

soybeans + 107 % + 72 % + 51 % + 27 % 7 6 cotton 5

4 wheat 3 corn 2 1 0 2000 2001

2002 2003 2004 2005 Source: USDA, NASS 2006

2007 2008 Fertilizer Prices Index of Fertilizer Prices Paid by Farmers, Jan. 1995 - April 2008 350 325 300 275 225 200

175 150 125 100 Source: National Agricultural Statistics Service, USDA. 2008 July 2007

July 2006 July 2005 July 2004 July

2003 July 2002 July 2001 July 2000

July 1999 July 1998 July 1997 July

1996 July 75 1995 1990-1992 = 100 250 Price of Ag Commodities

Commodity Price Change Wheat + 304 % Corn + 170 % Soybeans + 155 % Fertilizer + 228 % April 2008 VS January 2000 National Agricultural Statistics Service, USDA

So What do We Do? Becoming a Conservation Capitalist We expect to pay for most things we use We expect farmers to provide water quality for free* Regulatory strategies are resisted and inefficient for not point source issues How do we overcome impediments to more efficient conservation delivery? * See Water as a Crop presentation Improving Environmental Management:

Shifts to Performance Based Incentives Faster Cheaper Less Disruptive Pilot Use of Markets in Innovative Ways Prioritize investments Prioritize subsidies Create trades between sectors

Get farmers in ecosystem service business Conservation Delivery Highly Inefficient Current Farm Bill provides $24 Billion for Conservation Fund Distribution Strategy Designed largely in 1985 - does not target, focus on performance or use market principles Taxpayers are not getting good value Innovation is not encouraged The result is higher costs & lower

environmental quality Overcoming Impediments Creates Performance Data A Comparative Analysis of the Environmental And Economic Performance of Management Alternatives In other words Which practices are most effective at environmental improvement (recognizing location variations) What are the costs of various practices

What is the return on investment Prioritizing Investment Create Incentives for N Loss Reduction Which practices What location Management Options Source Reduction Sink Creation

Change Crops Examples of Source Reduction Nutrient Management Plans Calibrate manure spreaders Improving N application techniques Moving animal concentrations out of waterways Use

of N stabilizers ource Reduction:Nutrient Mgmt Plan Soil Test Determine Agronomic or Economic Need Credit Manure Credit Legumes Sink Creation Wetlands Restoration

Floodplain Restoration Drainage Management BioReactors Cover Crops Sink: Drainage Management Raised Water Table Water Level Control Structure Soil Surface Di

tch Solid Pipe Drain Water Riser Boards (Adjustable) The water level control device is installed in the tile drain near the outlet and at various locations within the field depending on topography Sink: Bio Reactor

Bio Reactor: Installation So What? Demonstrate a variety of management practices in variety of locations Assess farmer acceptance of practices Assess environmental effect of each practice Assess the cost of each practice Evaluate cost effectiveness of various practices In other words, ask the question where do we get a higher return on our environmental investment? Nitrogen Management Potential Discharge Reductions Agronomic Practices Cover Crops Drainage Management Bioreactors Bioreactors w/ Drainage Mgt. Wetlands Minimize drainage intensity (for replacement systems)

20 - 30% 10 - 40% 20 - 50% 20 - 40% 50 - 80% 5 - 60% 5 - 35% Cost Effective Practices Nutrient Planning Wetlands Restoration Manage Drainage Bio Reactors

Cover Crops Precision N Application $0.13/lb $0.10 - 0.90/lb $0.10 - 1.40/lb? $1.05 - 1.75lb Net Saving? Low Hanging Fruit Agronomic practices What is the price?

Wetlands What is the price? Drainage management Design to meet production needs Bio digesters What is the price? Sand County Foundation Alex Echols [email protected]

703/660-2366 Brent Haglund [email protected] 608/663-4605

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