NEWS RELEASE: Chesapeake Bay Farmers Could Benefit from Nutrient Trading

Photo Credit: NRCS Pennsylvania

Farmers in Pennsylvania, Maryland and Virginia could earn thousands a year in additional revenue if Congress passes legislation to create an interstate nutrient trading program – a cost-effective solution to restoring the health of the Chesapeake Bay.

An analysis by the World Resources Institute (WRI) of nine farm scenarios across the three states, finds that farmers who participate in a bay-wide trading program could potentially increase their profits by an average of $11,000 per year with a credit price of $20 per pound of nitrogen or make a 55 percent return on their investment in nutrient reduction practices. The reports use a WRI-created Farm Profit Calculator tool that takes into account capital, maintenance, land rental, and transaction costs farmers face when investing and maintaining such practices.

“By investing in cover crops, riparian buffers, and other nutrient-reduction practices, farmers in the Bay area could earn substantial profits from participating in nutrient trading,” said John Talberth, a senior economist at WRI and lead author of the reports.

Under a trading program, farmers who reduce nutrient pollution from their farms could sell credits to other sources of nutrient pollution, such as wastewater treatment plants. Farmers, however, first have to meet baseline requirements representing their farm’s portion of their state’s Bay clean-up goal, before investing in additional pollution reducing measures and trading credits.

“Many but not all farms will profit from trading since profitability depends on the type and location of the farm and availability of state payments to share the cost of baseline practices, among other factors,” said Cy Jones, WRI’s Water Quality Team Leader and co-author of the reports. “It’s clear from our analysis that trading is not only a cost-effective investment for some farmers but also a cost-saving mechanism to clean up the Bay.”

How Nutrient Trading Could Benefit Pennsylvania Farms is the last report in the three-part series. How Baywide Nutrient Trading Could Benefit Maryland Farms is the second report and How Baywide Nutrient Trading Could Benefit Virginia Farms is the first.