Thoughts on the Tradeoffs between Food Production and Water Quality in the U.S.

Thoughts on the Tradeoffs between Food Production and Water Quality in the U.S. Catherine L. Kling I owa State University IFPRI Board Policy Seminar December 5, 2011 Washington DC

Source of Tradeoffs
Relationship between costs of conservation and land prices
Conservation Reserve Program and crop price/land price increases (Secchi et al.)
Opportunity costs of many conservation actions directly related to profitability/crop prices
Historically, concern by environmental groups that as land prices (profitability) increases, conservation budgets will go less far.
But, this is corollary of todays topic: if we demand more environmental improvement, this raises food prices

How to Measure these Tradeoffs?
Integrated land use water quality modeling system
Water quality and hydrology
Economics/land use models
Genetic Algorithms to find least cost solutions or more directly costs of
Hypoxic conditions: Gulf of Mexico

Gulf Hypoxia
Over 400 hypoxic areas worldwide, combined affected area of 245,000 km2 (Diaz and Rosenberg, 2008) Depleted oxygen creates zones incapable of supporting most life
Naturally occurring, but significantly enhanced by anthropogenic sources of nutrients
43% N and 41 % P reaching hypoxic zone originates from UMRB (USGS)
Hypoxic zones result in stressed marine and estuarine systems, mass mortality and dramatic changes in the structure of marine communities (Diaz and Rosenberg, 1995).
Gulf of Mexico effects still poorly documented, brown shrimp fishery effects, recreational fishing,

World wide hypoxic zones

Square kilometers Year n.d. Area of Mid-Summer Bottom Water Hypoxia (Dissolved Oxygen < 2.0 mg/L) Data source: N.N. Rabalais, Louisiana Universities Marine Consortium, R.E. Turner, Louisiana State University Funded by: NOAA, Center for Sponsored Coastal Ocean Research 5-yr average goal long-term average

189,000 square miles in seven states,
dominated by agriculture: 67% of total area,
> 1200 stream segments and lakes on EPAs impaired waters list,
Upper Mississippi River Basin

Reduced Fertilizer
Reduces both costs and yields, may increase risk
Currently some/much “Over application” according to agronomic needs
Other abatement strategies: cover crops, buffers, denitrification, etc.

Approximating costs of fertilizer reductions

Land Retirement (CRP) Panoramic view of gamma grass-big blue stem planting http://www.fsa.usda.gov/Internet/FSA_Image/ia_767_15.jpg

Ag Farmland Values “ Two recent land value surveys reported a 22% increase in Nebraska from February 2010 to February 2011, and prices up 25% in Iowa from March 2010 to March 2011. (Johnson, Wilson, and Van Newkirk, 2011; Iowa Farm and Land, Chapter 2, 2011)” Mike Duffy, Choices,

Tradeoffs of NPS control costs and water quality benefits
Nitrate loadings at the outlet vs. costs
“ Least Cost Control of Agricultural Nutrient Contributions to the Gulf of Mexico Hypoxic Zone,” Sergey Rabotyagov, Todd Campbell, Manoj Jha, H. Feng, Philip W. Gassman, Lyubov Kurkalova, Silvia Secchi, and Catherine L. Kling.

Consequences of seeking a 30% reduction in NO 3
Conservation and Land use to achieve reduction
N fertilizer reductions
grassed waterways (extensive)
terraces (combined with N fertilizer reductions)
additional (substantial) land retirement
The annual additional cost is estimated to be
$ 1.4 billion (more than quadrupling baseline cost)

Final Thoughts
Pressure to improve environmental performance will in some cases be costly in terms of yield or higher need for other inputs
Lessons
Need to design policy to most cost effectively achieve environmental goals
Policies can be designed to place burden of these costs in different sectors (subsidies=taxpayers, taxes = producers and consumers, etc.)

Thoughts on the Tradeoffs between Food Production and Water Quality in the U.S.

by International Food Policy Research Institute (IFPRI) on Dec 06, 2011

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Thoughts on the Tradeoffs between Food Production and Water Quality in the U.S. — Presentation Transcript