Researchers Provide Tool for Assessing Water Policy Options

Cathy Kling;
Silvia Secchi;
Sandy Clarke;

July 8, 2005

Researchers at the Center for Agricultural and Rural Development (CARD) have developed a method for better assessing the costs and benefits of a range of conservation practices in agriculture to mitigate water pollution. The conservation practices are estimated to be costly but provide significant reductions in water pollution from agricultural runoff, with expenditures not out of the range of recent outlays for commodity programs in Iowa.

Water pollution from nonpoint sources, the diffuse runoff from farms and other areas, represents a large and pervasive portion of Iowa's water quality problems. But because of its diffuse nature, nonpoint source pollution is difficult to address. State policymakers need to quantify the contributions of agriculture to the problem and what effect different land-use decisions might have on meeting water quality objectives. This new research, funded by the Iowa Department of Natural Resources, is a first step in a more comprehensive assessment of Iowa's options.

The approach is cutting-edge because it combines economic models and data on land use and conservation practices with a physical-based model, the Soil and Water Assessment Tool, that predicts stream flow, sediment, and nutrient loads (phosphorous and nitrogen) for 13 watersheds in Iowa based on selected conservation practices. Using this combination of models and data, the researchers were able to test the effects of such practices as grassed waterways, terracing, contouring, conservation tillage, land set-asides (such the Conservation Reserve Program), and nutrient management strategies.

The opportunity cost—the minimum compensation necessary for voluntary adoption—was estimated for each of the conservation practices. It includes the direct costs of implementation, as well as any lost revenue, increased risk, or undesirable consequences associated with the practice relative to conventional practices.

The annual costs of the conservation practices ranged from about $300 million to $320 million. Land set-aside and conservation tillage were found to be the most costly practices (with terracing costs spread out over 25 years). The environmental effects of the practices varied among the watersheds. Sediment decreases ranged from 6 percent in the Little Sioux River Watershed to 65 percent in the Turkey River Watershed. The majority of the watersheds had a predicted decrease in phosphorous of over 40 percent, and nitrate reductions ranged from 6 to 20 percent. The results suggest a targeted approach as the most cost-effective, matching a specific watershed to its most effective conservation practice or mix of practices.

A report, "The Cost of Clean Water: Assessing Agricultural Pollution Reduction at the Watershed Scale," is available online at