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Journal of Environmental Quality 31:24-31 (2002)
© 2002 American Society of Agronomy, Crop Science Society of America, and Soil Science Society of America

SPECIAL SUBMISSIONS
Findings from the USDA-sponsored Lake Erie Agricultural Systems for Environmental Quality Project

Evaluating Agricultural Nonpoint-Source Pollution Programs in Two Lake Erie Tributaries

D. Lynn Forster* and Jonathan N. Rausch

Department of Agricultural, Environmental, and Development Economics, The Ohio State University, 2120 Fyffe Rd., Columbus, OH 43210

* Corresponding author (forster.4{at}osu.edu)

Received for publication August 12, 2000.

   ABSTRACT
TOP
 ABSTRACT
INTRODUCTION
 NONPOINT-SOURCE...
 NOTES
 NONPOINT-SOURCE ABATEMENT—...
 SUMMARY AND IMPLICATIONS
 REFERENCES
 
During the past three decades, numerous government programs have encouraged Lake Erie basin farmers to adopt practices that reduce water pollution. The first section of this paper summarizes these state and federal government agricultural pollution abatement programs in watersheds of two prominent Lake Erie tributaries, the Maumee River and Sandusky River. Expenditures are summarized for each program, total expenditures in each county are estimated, and cost effectiveness of program expenditures (i.e., cost per metric ton of soil saved) are analyzed. Farmers received nearly $143 million as incentive payments to implement agricultural nonpoint source pollution abatement programs in the Maumee and Sandusky River watersheds from 1987 to 1997. About 95% of these funds was from federal sources. On average, these payments totaled about $7000 per farm or about $30 per farm acre (annualized equivalent of $2 per acre) within the watersheds. Our analysis raises questions about how efficiently these incentive payments were allocated. The majority of Agricultural Conservation Program (ACP) funds appear to have been spent on less cost-effective practices. Also, geographic areas with relatively low (high) soil erosion rates received relatively large (small) funding.

Abbreviations: ACP, Agricultural Conservation Program • BMP, best management practice • CRP, Conservation Reserve Program


   INTRODUCTION
TOP
 ABSTRACT
 INTRODUCTION
NONPOINT-SOURCE...
 NOTES
 NONPOINT-SOURCE ABATEMENT—...
 SUMMARY AND IMPLICATIONS
 REFERENCES
 
THE Maumee and Sandusky River watersheds contain about 50% of the total cropland draining into Lake Erie from both the United States and Canada. Numerous agricultural nonpoint-source pollution abatement programs have been implemented in these two watersheds. Several of the programs provided financial incentives to farmers to implement conservation practices. After briefly describing the major programs, the allocation of incentive payments to farmers is analyzed. Specifically, the magnitude of the incentive payments from all sources is estimated, and the cost effectiveness of the payments is assessed.


   NONPOINT-SOURCE ABATEMENT—THE EARLY YEARS (1972–1987)
TOP
 ABSTRACT
 INTRODUCTION
 NONPOINT-SOURCE...
NOTES
 NONPOINT-SOURCE ABATEMENT—...
 SUMMARY AND IMPLICATIONS
 REFERENCES
 
Several activities during 1972 demonstrated concern with agricultural nonpoint-source pollution and its effect on Lake Erie water quality (Lake and Morrison, 1977). Conferences and meetings within the agricultural community addressed Lake Erie basin nonpoint-source pollution issues, research was proposed to study agricultural pollution across the Lake Erie basin and in watersheds within in the basin, and a planning grant was awarded to the Allen County Soil and Water Conservation District for the Black Creek Project (Lake and Morrison, 1977). Black Creek is a small subwatershed within the Maumee River basin. A primary goal of the project was to develop a working model for implementing conservation practices, which if successful, could be applied across the basin to improve the quality of water entering Lake Erie.

At about that same time, the International Joint Commission began to study the extent and cause of pollution from land use activities. Scientists and other specialists from the United States and Canada began an intensive investigation into pollution from land use activities in the Lake Erie System (International Joint Commission, 1980). This study, the Pollution from Land Use Activities Reference Group (PLUARG), concluded that the Great Lakes were being polluted from land drainage sources, especially from land areas of intensive agricultural and urban use. In 1972, Congress mandated that the United States Army Corps of Engineers design and develop a program for the rehabilitation and environmental repair of Lake Erie (P.L. 92-500, Sections 108d and 108e). In cooperation with the USEPA, USDA, and other federal and state agencies, the Corps undertook the Lake Erie Wastewater Management Study (LEWMS). This study identified phosphorus and sediments as the nonpoint-source pollutants of most concern for Lake Erie and its tributaries. The Lake Erie Wastewater Management Study developed a management strategy for the control of these pollutants and made recommendations for program implementation. In addition, the economic impact of implementation was estimated for individuals and society as a whole (United States Army Corps of Engineers, 1982).

The Lake Erie Wastewater Management Study was a three-phase project spanning five years from 1973–1978. Phase I LEWMS (1974–1975) was a large-scale sampling program of tributaries across the Lake Erie basin. The conclusion of this baseline study was that large quantities of pollution were entering the lake from land runoff during storms. Phase II LEWMS was an extensive monitoring and modeling program in 72 watersheds within the drainage basin. Results from this study reinforced the conclusion that diffuse-source control of phosphorus was necessary to achieve a phosphorus load reduction entering Lake Erie. This portion of the study identified priority watersheds and counties where best management practices (BMPs) could be most effective in reducing soil and phosphorus loading. In addition, education, demonstration, and technical assistance programs were identified as ways to accelerate the adoption of BMPs. Phase III LEWMS was a demonstration project based upon the findings in Phase I and II. The Honey Creek Demonstration Project (1978) provided educational, technical assistance, and demonstration programs on the application of conservation tillage and other BMPs. The objective of this project was to demonstrate that local agencies and organizations working with agricultural producers could bring about changes in agricultural land management practices (United States Army Corps of Engineers, 1979).

The Honey Creek Demonstration Project spawned numerous demonstration projects within the Maumee River basin. In the early 1980s, the Defiance County Soil and Water Conservation District received funding from the USEPA to demonstrate methods, or best management practices (BMPs), for improving water quality flowing from nonpoint sources. Also, monetary incentives, equipment, and technical assistance were used to stimulate adoption of BMPs among land owners (Cahill and Pierson, 1979). Over a five-year period, an estimated $1.4 million (1997 dollars) were spent.

Another program of significance was the Accelerated Conservation Tillage Demonstration Project sponsored by the Great Lakes National Program Office. Its goal was to accelerate adoption of conservation tillage in the Maumee and Sandusky watersheds by providing equipment rental and technical and educational assistance to farmers. The ACT project was in existence from 1981–1985 with some $1.3 million (1997 dollars) appropriated for this project (Great Lakes National Program Office, 1987).

In 1985, the Great Lakes Water Quality Agreement developed a strategy for phosphorus reduction in the Lake Erie basin. The supplement to Annex 3 of that agreement called for a total phosphorus load reduction to Lake Erie of 1700 metric tons (Mg); Ohio's portion was 1398 Mg. The Ohio Phosphorus Strategy evaluated the total phosphorus loads to Lake Erie from major tributaries and specific watersheds. The western basin of Lake Erie was identified for having the highest leads and targeted for implementation programs. The loading allocations for watersheds in the basin were translated into county-level goals and became a framework for funding agricultural abatement programs.1


   NONPOINT-SOURCE ABATEMENT— RECENT YEARS (1987–1997)
TOP
 ABSTRACT
 INTRODUCTION
 NONPOINT-SOURCE...
 NOTES
 NONPOINT-SOURCE ABATEMENT—...
SUMMARY AND IMPLICATIONS
 REFERENCES
 
Nonpoint-source pollution abatement efforts in these watersheds focused on voluntary adoption of soil and water conservation practices, which was to be accelerated by publicly supported education, technical assistance, financial incentives, demonstration projects, and research. Regulation was avoided. As shown in Table 1, numerous agricultural nonpoint-source pollution programs were initiated by several state and federal agencies: the United States Department of Agriculture (USDA), United States Environmental Protection Agency (USEPA), Ohio Department of Natural Resources, and Ohio Environmental Protection Agency. Some programs focused on individual producers, some on problem geographic areas, some on counties, and others on multicounty areas or the entire state. Some overlap in responsibilities was inevitable with so many agencies involved. However, there appears to have been a division of labor among agencies at the producer level. Those agricultural agencies in regular contact with farmers (Ohio State University Extension, USDA Natural Resources Conservation Service, Soil and Water Conservation District, and Farm Service Agency) assumed the principal educational role: inform the producer of the nonpoint problem, best management practices, and programs available to help manage the problem. (See Table 1 for names of agencies.) Technical assistance was primarily the responsibility of the USDA Natural Resources Conservation Service and the Soil and Water Conservation District. Research and technology development were the responsibility of the Land Grant University (Ohio State University), its extension service (Ohio State University Extension), and experiment station (Ohio Agricultural Research and Development Center). Realistically, much of the BMP research and development was conducted in the private sector, and in fact, many have attributed the region's accelerated adoption of no-till soybean [Glycine max (L.) Merr.] production in the early 1990s to farm machinery companies' introduction of improved no-till planters. Financial assistance (incentive program payments) were administered primarily through the Farm Service Agency with state agencies (Ohio Department of Natural Resources and Ohio Environmental Protection Agency) administering some funds.


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  		Table 1. Functions of agencies and geographic focus in Ohio agriculture nonpoint-source pollution abatement (Ohio Environmental Protection Agency, 1983).{dagger}

 
Financial Assistance Programs
Several programs provided financial incentives to farmers to spur adoption of conservation practices (Table 2). Expenditures included here are only incentive payments paid to land owners for implementing conservation practices (i.e., the "Financial assistance" row in Table 1). They do not include resources used for education, technical assistance, research, etc. by various agencies and organizations. We focus only on incentive payments for two reasons. First, the benefits of education, technical assistance, and research activities are broadly distributed across the landscape, and it is difficult to allocate expenditures on these activities to these watersheds. Second, and most important, we found it impossible to estimate expenditures on these activities in the two watersheds with any precision. Our sense is that these omitted expenditures are about the same magnitude as the incentive payments summarized here, which average $680000 annually in each county. Omitted expenditures would include personnel and overhead expenses for county-level soil and water conservation programs (Ohio State University Extension, USDA Natural Resources Conservation Service, and Soil and Water Conservation District), Ohio Agricultural Research and Development Center research projects, and special watershed projects sponsored by the Ohio Environmental Protection Agency and Ohio Department of Natural Resources.


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  		Table 2. Environmental incentive programs in Ohio (USDA Natural Resources Conservation Service, personal communication, 1998; Ohio Environmental Protection Agency, 1998; Ohio Department of Natural Resources, 1987–1997).{dagger}

 
To compare programs with different starting dates or time horizons requires finding a common reference point. Here, the common reference point is 1997, and all program expenditures are adjusted to 1997 dollars using the annual increase in the Producer Price Index, which averaged 2.4% per year during this period.

About $143 million were spent on financial incentives to induce adoption of conservation practices in the Maumee and Sandusky River watersheds during 1987–1997. Each program, its associated time period, total expenditure, average per farm, and per farm hectare expenditure are shown in Table 3. About $137 million or 95% of the funds were from federal programs while $6.4 million were from state-level funds. All programs spent nearly $7000 per watershed farm over this period or about $75 ha-1 for farmland within the watershed ($5 ha-1 annualized equivalent).


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  		Table 3. Environmental incentive program expenditures, 1987–1997.

 
Major Programs: Conservation Reserve Program and Agricultural Conservation Program
The Conservation Reserve Program (CRP), which identifies and protects highly erodible and environmentally sensitive lands by withdrawing them from crop production, was responsible for nearly three-fourths of total incentive payments. From 1986–1997 some $110 million were spent on CRP in these two watersheds or about $5400 per watershed farm. The Agriculture Conservation Program (ACP) has been in existence since the mid 1930s. From 1987–1997 some $24 million were spent in the Maumee and Sandusky River watersheds, or nearly one-fifth of total incentive payments. The ACP subsidized the cost of implementing conservation practices that reduced soil loss and/or improved water quality. The ACP separated conservation practices into those targeting soil erosion and those targeting water quality improvement. The USDA estimates that ACP expenditures targeted for soil erosion were $7.53 Mg-1 of soil saved, which compares favorably with CRP expenditures of $20.87 Mg-1 of soil saved (Table 4). Estimates of soil savings and incentive payments for each practice were provided by the USDA Farm Service Agency (1987–1997).


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  		Table 4. Cost effectiveness of alternative soil loss reduction practices, Maumee and Sandusky watersheds, 1987–1997 (USDA Farm Service Agency, 1987–1997).

 
Cost effectiveness (cost per metric ton of soil erosion saved) of ACP-funded conservation practices varied considerably, as illustrated in Table 4. Practices that affected cover of an entire field, such as no-till and cropland protective cover, achieved soil erosion reduction with relatively little expenditure. Those practices that affected a relatively small proportion of a field (e.g., sod waterways) or involved earth moving or structures (e.g., diversions or sediment retention, erosion, or water control structures) were less cost effective.

Total ACP expenditures and soil saved, by farming practice, are illustrated in Fig. 1 . Interestingly, almost 75% of ACP funds were spent on two of the least cost-effective practices: sod waterways and sediment retention, erosion, or water control structures. Relatively little went to no-till systems and cropland protective cover, which were responsible for the majority of soil savings in the watersheds and the most cost effective (Fig. 1).



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  		Fig. 1. Agricultural Conservation Practice expenditures and soil savings by management practice (Forster, 2000).

 
Other Programs
The Environmental Quality Incentive Program is the newest USDA program. It began in 1997 and replaced the Agricultural Conservation Program. In 1997, this program paid farmers about $0.7 million in the two watersheds to induce adoption of various conservation practices, which was much less than ACP paid farmers in previous years (over $2 million per year). On average this program spent about $35 per farm or $0.37 per farm hectare in this region in 1997.

The Emergency Conservation Program had some 64 contracts for less than $30000 during this time period. Also, the Forestry Incentive Program had two contracts totaling less than $1000. Due to minimal activity of these two programs, they are not included in total expenditures in the Maumee and Sandusky River watersheds. The Resource Conservation and Development Program (RC&D) did not provide any direct financial assistance to these two watersheds. The majority of funding for this program covered personnel and other expenses not included in this summary, and the program encouraged communities to search for other sources to fund conservation efforts.

The Ohio Environmental Protection Agency had one major program providing financial support for nonpoint abatement projects, or "319" funds, which originated with the USEPA and are administered through the Ohio Environmental Protection Agency to fund local projects through a competitive grant process. Grants were awarded on an annual basis for implementation of nonpoint-source projects, and many of these projects targeted agricultural nonpoint-source pollution abatement activities. According to the Ohio Environmental Protection Agency (1998), nearly $4.0 million were spent in this region since 1990 for financial incentives. Most 319 projects were designed for watershed-level implementation; therefore, the reporting of 319 projects is also at a watershed level.

Several agricultural nonpoint-source abatement programs were available through the Ohio Department of Natural Resources. These programs include the Conservation Works of Improvements, Manure Nutrient Management, Manure Composting Program, Conservation Action Program, Watershed Management, Wetland Reserve Piggy-Back Program, and Agriculture Pollution Abatement Program. During this time period, Ohio Department of Natural Resources spent nearly $2.7 million in this region on financial incentives for various nonpoint-source pollution abatement programs.

Geographic Distribution of Incentive Payments
The majority of the pollution abatement programs followed county boundaries rather than watershed boundaries. Summarizing these programs at the watershed level requires identifying those counties contained within each watershed boundary. Table 5 lists the individual counties in the Maumee and Sandusky River watersheds. In addition, county-level estimates are shown for total abatement expenditures, expenditures per hectare, and 1982 and 1992 soil loss comparisons. Total expenditures over the 1987–1997 period are expressed in 1997 dollars. Expenditures per year are expressed as the equivalent annual annuity of 1987–1997 expenditures assuming a 6% discount rate. Payment data were provided by USDA Farm Service Agency (1987–1997), Ohio Environmental Protection Agency (1998), and Ohio Department of Natural Resources (1987–1997). Soil loss data were provided by USDA Natural Resources Conservation Service (1982, 1992).


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  		Table 5. Farm description and abatement payments, by county in the Maumee and Sandusky watersheds, 1987–1997. Payment data were provided by the USDA Farm Service Agency (1987–1997), Ohio Environmental Protection Agency (1998), and Ohio Department of Natural Resources (1987–1997). Soil loss data were provided by the USDA Natural Resources Conservation Service (personal communication, 1998).

 
Comparing abatement payments among counties illustrates differences in the distribution of incentive payments in the two watersheds (Fig. 2) . Again, most of the payments were from the Conservation Reserve Program (CRP); therefore, farmers' willingness and ability to enroll in that program mostly determined a county's level of payments. With respect to the level of payments, counties appear to fall in one of four categories:
  1. High program payments counties (>$9.25 ha-1 yr-1 during 1987–1997): Williams, Hardin, and Shelby counties;
  2. Moderately high program payments counties ($7.20–$8.40 ha-1 yr-1): Allen, Defiance, and Auglaize counties;
  3. Moderately low program payments counties ($3.50–$5.70 ha-1 yr-1): Seneca, Wyandot, Fulton, and Crawford counties; and
  4. Low program payments counties ($1.00–$2.70 ha-1 yr-1): Mercer, Paulding, Lucas, Putnam, Wood, Sandusky, Van Wert, Hancock, and Henry counties.



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  		Fig. 2. Expenditures and soil erosion by county (Forster, 2000).

 
A few observations about these data raise questions about the efficiency of these programs. First, payments per farm acre were less in the Sandusky watershed than in the Maumee watershed even though average soil loss rates were higher in the Sandusky watersheds. Second, some counties with high soil loss rates (e.g., Crawford, Mercer, and Wyandot counties) received moderately low program payments. Conversely, some counties with relatively low average soil loss rates (e.g., Defiance) received moderately high program payments.


   SUMMARY AND IMPLICATIONS
TOP
 ABSTRACT
 INTRODUCTION
 NONPOINT-SOURCE...
 NOTES
 NONPOINT-SOURCE ABATEMENT—...
 SUMMARY AND IMPLICATIONS
REFERENCES
 
Over the past 25 years, our society, through state and federal government agencies, has made a sustained commitment to improving water quality in Lake Erie and its tributaries. In the 1970s, programs focused on identifying the pollutants responsible for poor water quality, identifying sources of those pollutants, and designing remediation programs. At this stage, agriculture was identified as the principal nonpoint source of pollution, and programs were designed by numerous state and federal agencies to address the problem. Newly designed programs used financial incentives to encourage change, along with education, technical assistance, and research, as the policy mechanisms to cause change. Unlike point-source pollution, regulation was not used to correct nonpoint-source problems.

In the 1980s and 1990s, programs and expenditures accelerated. The USDA, USEPA, Ohio Department of Natural Resources, Ohio Environmental Protection Agency, and Ohio State University Extension each had programs that addressed water quality in Lake Erie. As a part of this effort, a dozen programs administered by at least five agencies provided incentive payments to farmers to encourage adoption of conservation practices that reduce water pollution from agricultural sources.

About $143 million were paid to farmers as incentives to implement agricultural nonpoint-source pollution abatement programs in the Maumee and Sandusky River watersheds from 1987 to 1997. About 95% of these funds were from federal sources. On average, farmers received incentive payments totaling nearly $7000 per farm or about $75 ha-1 for farmland within the watershed ($5 ha-1 annualized equivalent).

Our analysis raises questions about how efficiently these incentive payments were allocated. Were funds distributed across the landscape in the most efficient manner? Probably not. In some cases, geographic areas with relatively low (high) soil erosion rates received relatively large (small) funding. Were funds allocated to the most cost-efficient practices? Again, probably not. The majority of ACP funds appear to have been spent on less cost-effective practices.

Efficient use of scarce water quality program funds depends on government agencies carefully allocating funds among regions and among the multitude of available practices or projects. Funds allocated to a particular region or to promote a particular technology have an opportunity cost, which is the benefit that could have been received had the funds been allocated to the best alternative use. Effective fund allocation requires recognition of the concept of opportunity cost, the value of the best opportunity forgone when making a choice.

During the period of this analysis, farmers adopted conservation practices, and evidence supports the contention that these changes in farming practices were responsible for observed water quality improvements in Lake Erie tributaries (Forster et al., 2000). In part, farmers adopted conservation practices because of financial incentives offered by these programs. Of course, farmers changed practices because of other reasons, such as their economic viability, and water quality changes cannot be credited completely to government programs. However, these programs undoubtedly provided the impetus for many farmers to become better stewards of soil and water resources.


   NOTES
TOP
 ABSTRACT
 INTRODUCTION
 NONPOINT-SOURCE...
 NOTES
NONPOINT-SOURCE ABATEMENT—...
 SUMMARY AND IMPLICATIONS
 REFERENCES
 
1 Thanks to an anonymous reviewer for contributing information in this paragraph. Back


   REFERENCES
TOP
 ABSTRACT
 INTRODUCTION
 NONPOINT-SOURCE...
 NOTES
 NONPOINT-SOURCE ABATEMENT—...
 SUMMARY AND IMPLICATIONS
 REFERENCES
 




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