By Don Wauthier
The cover article in Water Finance & Management’s June issue by Michael Curley about agricultural nutrient runoff was a welcome wake up call to the water supply and treatment industry about this important issue. Despite what many think, the farm community is generally committed to protecting the environment and being good stewards of the land. However, I’d like to add a few points from the “farming perspective” that I think were missed, considering the complexity of the issue and the costs involved. Data for cash grain (corn, soybeans, wheat) farmers in Illinois is used to illustrate the extent of the issue.
READ WF&M’s JUNE 2019 COVER STORY BY MICHAEL CURLEY
The federal government mandated that all states within the Mississippi River basin reduce the runoff of agricultural nutrients into waterways by 50 percent or more. Each state has adopted a Nutrient Loss Reduction Strategy to implement that mandate. The annual cost of implementing the revised farming practices in Illinois is estimated at approximately $1.06 billion. There are three primary actions that will need to be implemented by every cash grain farmer in order to achieve the desired results. Those are: changes in fertilizer application; use of cover crops; and installation of water treatment systems. There are 22.6 million acres of farmland in Illinois devoted to cash grain crops. The annual cost to implement these practices is estimated at approximately $46.90 per acre, which represents an estimated 10 percent increase in production costs. Cash grain prices are based upon a global market, so price increases to cover these new costs are not possible.
Don Wauthier
Image if your water utility was mandated to increase costs by 10 percent, but was not allowed to raise rates to cover those costs. How would one achieve that mandate?
In Illinois 97 percent of the land is family farmed as a small business. These family farmers typically operate approximately 640 acres of cash grain crops. USDA statistics show that the typical cash grain farmer in Illinois had an average after tax income of approximately $80,000 in 2017. Thus, the cost of implementing these nutrient loss reduction methods represents a $30,000 permanent cut in family income! Implementation of these changes is simply not economically possible under current circumstances.
In Illinois approximately two thirds of the crop land is owned by non-farm absentee land owners. They lease land to the individual farmers at an average annual fee of $220 per acre. Treatment systems to remove nutrients include constructed wetlands, bio-reactors, and saturated buffers. A typical system might treat water from approximately 40 acres of crop land. An average cost to construct a mix of these systems is estimated to be approximately $25,000 per system. As permanent infrastructure, these systems must be installed by the land owner, not the farmer, on leased property. Installation of each such system will take approximately 2 acres of land permanently out of production, with a permanent loss of 5 percent of rental income. Few absentee land owners are likely to be willing to incur such costs on behalf of the “public good” of pollution reduction.
Another obstacle to installation of treatment systems is the watersheds involved. There are very few farms that are fully contained within a single watershed. The water being captured by a constructed treatment system typically comes from multiple farms. However, the treatment system is constructed at one location within the watershed. How does Farmer A get his neighbors to pay a fair share of the cost of construction and operation of the treatment system that provides nutrient reductions for multiple farms? Add on the likelihood that at least one farm has an absentee owner and the likelihood of having at least one stakeholder refuse to participate is high.
In addition, the average age of a family farmer in Illinois is 55 years. The upfront investments needed to install the treatment systems and to purchase new equipment will be daunting. Family farmers nearing retirement typically don’t invest in new equipment due to rapid depreciation. A significant number of current family farmers are unlikely to be willing to invest in the new equipment needed to implement the nutrient loss reduction methods.
Due to these obstacles there has been limited acceptance by individual farmers of the idea that they should install treatment systems and implement other practices to reduce nutrient losses. Urban homeowners and small businesses were not asked to make these kinds of economic sacrifices for the public good. Simply adding utility company sponsorship or adoption type programs for treatment systems as was suggested by the June article won’t cut it in the real world. If the water treatment industry truly wants to make an impact, much more will need to be done.
As Mr. Curley suggested, when the Clean Water Act was implemented in the 1970s, grant funding was routinely provided to communities to upgrade their wastewater treatment plants. Later we moved toward low-interest, long-term loans. Urban citizens received hundreds of billions of grant dollars and continue to receive tens of billions of subsides annually for pollution reduction. The agricultural community will need the same thing if the nation wants them to implement nutrient reduction strategies. Otherwise the sad truth is that it just won’t happen.
Don Wauthier is a consulting agricultural and biological engineer with the firm of Berns, Clancy and Associates. His extended family farms approximately 2,500 acres in Illinois. He can be reached at dwauthier@bernsclancy.com.
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