Perspective from Non-point Source Credit Generators

July 18, 2013Hilton Cincinnati Netherland Plaza

Cincinnati, Ohio

Roger Wolf, Director of Environmental Programs and Services, Iowa Soybean Association

2

Overview

Drivers and Motivation

Our Understanding, Concerns and Challenges

A Watershed Infrastructure Perspective

Question and Discussion

8/5/2013 3

Wheat

Upper Midwest Crop Area

1920 1940 1960 1980 2000

Cro

p A

rea H

arv

este

d (

1000 h

a)

0

5000

10000

15000

20000

25000

Corn

SoybeanHay

OatWheat

Source: Jim Baker - ISU

• Upper Midwest

dominated by

privately owned and

managed croplands.

• Nutrients lost from

agricultural

landscape due to

land use change

over time

• Finding

mechanisms to

increase

management

capabilities key

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Our understanding and concerns regarding trading:

- We recognize that Water Quality Standards and Caps are what generates the drivers for a trading opportunity.

- We believe we can supply lots of credits, however given the geography of the Pt and Nonpoint source communities is variable there may not be enough buyers to be meaningful.

- What is liability for farmer if performance is not realized?

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Our understanding and concerns regarding trading:

- What are the specific terms and conditions of the trade?

- Who are the ultimate gate keepers of trades? - Farmers believe they are already using

many/most of BMPs recommended and as such not sure what trading does for them specifically.

- Trades perceived to be very structured and will require brokers/middleman and paperwork.

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Challenges for advancing water quality trading with farmers:

• Land tenure – owners / operators

• Technological limitations – weather and landscape variability year to year

• Validating performance, is it site specific or at some other scale?

• Overcoming the regulated vs non regulated dynamic and equity concerns –Urban vs Rural.

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Iowa Soybean Association Watershed Work

Actively working on 225 farms, 52 defined watersheds - 8 HUC 8’s and 44 HUC 12’s (27 active and 17 supporting) covering over 6.4 million acres and coordinating with over 35 public and private partners.

• A comprehensive plan for the watershed (follows

IDNR/EPA watershed planning protocol)

• Goals/Objectives/Actions

• Infield/Edge of Field

• Set of integrated solutions; no silver bullet

• Implementation

Projects:

• Upper Cedar River watershed- Rock Creek (Walton Foundation)

- Beaver Creek (IFC/WMA)

- IEDA/HUD; sub-watershed planning (WMA/MSA)

• Chequest Creek (Davis County)- Watershed management Plan (IFC/WMA)

• Other Watershed Management Authorities

• Priority watersheds/Nutrient Management Strategy

Environmental Programs and Services

Watershed Services - Planning

Implementation Funding:

• National Water Quality Initiative

~$250,000; 2012

~$328,000; 2013

• EPA Section 319

~$420,000

• Iowa DNR - TBD

• Local Match/Other - TBD

Watershed Planning and Implementation• Watershed Implementation Plans

• Dedicated Technical and Financial Assistance

• Implement, track and validate practices

• Stakeholder engagement

Iowa Nutrient Reduction Strategy

A science-based framework for assessing and reducing nutrient loss from both point and nonpoint sources.

Nonpoint Source Goals

Reduce Total N by 41%

Reduce Total P 29%

Dedicated and leveraged funding

Agriculture Nitrogen Reduction PracticesPractice

% Nitrate-N Reduction

[Average (Std. Dev.)]

Nitrogen

Management

Timing (Fall to spring) 6 (25)

Source (Liquid swine

compared to commercial)4 (11)

Nitrogen Application Rate Depends on starting point

Nitrification Inhibitor 9 (19)

Cover Crops (Rye) 31 (29)

Land Use

Perennial – Land retirement 85 (9)

Living Mulches 41 (16)

Extended Rotations 42 (12)

Edge-of-Field

Drainage Water Mgmt. 33 (32)*

Shallow Drainage 32 (15)*

Wetlands 52

Bioreactors 43 (21)

Buffers 91 (20)**

* Load reduction not concentration reduction**Concentration reduction of that water interacts with active zone below the buffer- Source Iowa State University Nutrient Science Assessment Team

Annual Enviro Performance depends on where practices are applied. Perf. not same every year.Operators control decision making.

Multiple Year Impl.Higher capital cost to install.Will require owner in decision. Better able to predict and validate performance.

Data Aggregation

Source: Preliminary STAARS Data Analysis N= 72 Producers 149 FieldsIowa Soybean Association Environment Programs and Services, February 2013Funded by: Soybean Checkoff, USB and 6 QSSB’s

Quantifying Practices

No Till33%

1 Tillage Pass6%

3 Tillage Passes5%

Fall Disk/Spr Cultivate

Fall Plow/Spr Cultivate

Fall Deep Till/Spr Cultivate

Other Till

2 Tillage Passes56%

Frequency of Tillage among 2010 Iowa Soybean Fields (n=151)

Source: Preliminary STAARS Data AnalysisIowa Soybean Association Environment Programs and Services, February 2013Funded by: Soybean Checkoff, USB and 6 QSSB’s

Drainage Water TreatmentWoodchip Bioreactor

Source: Christianson, Laura and Matthew Helmers. 2011. Woodchip bioreactors for nitrate in agricultural drainage. Iowa State University Extension Publication. PMR 1008. Available at: https://store.extension.iastate.edu/ItemDetail.aspx?ProductID=13691.

Lyons Creek Watershed Management Plan

5. Goals and Objectives

5.1 LYONS CREEK GOALS AND OBJECTIVESGoal 1: Within 20 years of project start date reduce nitrate-N loads leaving the Lyons Creek watershed by 34% or 80,616 pounds per year while maintaining agricultural productivity. This is the required reduction from the Des Moines River Nitrate TMDL.

Objective 1: Implement best management practices aimed at avoiding, trapping andtreating nitrate-N in surface water within the Lyons Creek watershed.Task 1: Enroll 4,000 acres of nutrient management plans.Task 2: Install 12 denitrifying bioreactors.Task 3: Install 3 nitrate removal wetlands.Task 4: Implement 3,000 acres of cover crops.Task 5: Implement 150 acres of pasture management.Task 6: Install 200 acres of streamside buffers.Task 7: Implement 2,000 acres of reduced tillage practices.Task 8: Restore 8 oxbow wetlands.

Page 25 Lyons Creek Watershed Plan http://www.iowadnr.gov/Portals/idnr/uploads/water/watershed/files/lyonscreekwmp.pdf

Lyons Creek Watershed - Implementation

Validating Performance

• 600 – 1,100 acres

• Two treatment; one control

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Summary:

• Nutrient issue are real, complex and challenging to tackle in variable landscape.

• We are working on these issues by engaging famers in watershed management.

• Working with both point and non point source community in a watershed context is desirable.

• Targeting locations in landscape where we can achieve reductions makes sense to farmers.

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Summary:

• Watershed infrastructure to produce services to meet downstream outcomes presents a logical framework for achieving outcomes.

• Financing watershed infrastructure – similar to wastewater and drinking water infrastructure will need to be realized to achieve downstream expectations.

• Financing mechanisms – trading other services – recreation ? carbon?