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In the News: Staff Columns

Nutrient trading: Conservation benefit

Tuesday, September 4, 2018   (0 Comments)
Posted by: Aaron Stauffacher, assoc. dir. government affairs
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As stewards of our natural resources, farmers hang their hats on preserving and protecting the water, soil and air. Thanks to breakthroughs in science and technology, farmers have a greater ability than ever before to lessen their environmental footprint.

That commitment might also be worth compensation.

The use of “Total Maximum Daily Loads” (TMDLs), a regulatory tool to reduce the amount of nutrients running into water-ways, is growing across Wisconsin. TMDLs establish a nutrient “budget” for a particular watershed and allocate reductions among each nutrient source so state and regional water quality goals can be met.

Farmers, manufacturers, wastewater utilities and processors all share in keeping the amount of nutrients from their businesses under certain individual thresholds. The financial cost to do so varies among those parties. For example, it may be more practical and cost effective for a farm to implement additional nutrient-reducing practices than for a processing facility. So, a farm could manage its nutrient load to make up for another party’s required reduction. The farmer would be providing a service to the other party, a service worth compensation. This is nutrient trading.

Nutrient trading is not new to Wisconsin. However, it is only being used on a limited basis due to hassles with technology verification requirements and facilitating trading relationships in a limited geographic area. The Dairy Business Association is partnering with others to work toward a market-based solution to enhance dairy farmers’ ability to benefit from nutrient trading.

The proposal calls for a system that would allow farms to implement nutrient-reducing techniques and obtain verified credits corresponding to their efforts through a clearinghouse. With credits in-hand, farms would have the ability to sell them according to the value manufacturers and processors place on those credits within the water-shed.
From a public policy perspective, a market-based nutrient-trading platform just makes sense. As a state, we can meet shared water quality goals at a reduced cost to the economy. We would provide a pathway for farmers to continuously improve upon existing sustainable conservation practices.

This would also create an opportunity for new diversified farm income streams to protect against low commodity prices. While a heavy state lift is required to make this system a reality, it fits squarely within the Trump administration’s goal of removing barriers for farmers to prosper and strengthening rural communities.

It is time for market-driven nutrient trading in Wisconsin.

For more on TMDLs, watch our webinar presented by Michael Best attorney Taylor Fritsch located on the members-only section. Contact Joanna Guza at jguza@widba.com with questions on accessing the webinar.


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