This document summarizes a presentation on a pay-for-performance conservation program in Ohio's Old Woman Creek Watershed. The program aims to motivate farmers to reduce nutrient loss by paying them based on measured reductions rather than practices implemented. Tools like the Nutrient Tracking Tool and BMP Cost Analysis Tool were used to quantify baseline losses, estimate reductions from scenarios, and calculate costs to determine incentive payments. Under the program, three farms with 20 fields and 766 acres enrolled. This resulted in estimated reductions of 4,638 pounds of nitrogen and 116 pounds of phosphorus, earning the farmers $27,257 in incentive payments.

1. Motivating Farmers to Move the Needle on
Nutrient Loss Reduction in
Ohio’s Old Woman Creek Watershed
through Pay-for-Performance Conservation
SWCS Annual Conference
Pittsburgh, PA
July 30th, 2019

2. Presenation Overview
• Concept of pay-for-performance (PFP)
conservation
• Tools and process
• Results - Old Woman Creek watershed

3. Lake Erie – Harmful Algal Blooms (HABs)

4. Current Approach:
“Pay-for-Practice” Conservation
• USDA spends >$5 Billion/Year on practices
• Outcomes are not quantified
• Approach does not motivate farmers to
solve problem

5. Landscape is Diverse:
Information is Essential

6. New Approach:
“Pay-for-Performance” Conservation

7. The Economic Justification
 Market failure
 Performance-based incentives can serve as a
“price” for pollution control
 Environmental performance becomes
incorporated into farm business planning

8. Work with Farmers to Help Develop
Appropriate Solutions
Steps:
• Identify actions for specific fields (scenarios)
• Estimate nutrient loss reductions and costs
• Provide information to farmers for decision-making

9. -$10
$0
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Individual Farm-level P Reduction Actions
CostperPoundofPLossReduction
Manure/Fertilizer Management
Feed Management
Crop Rotation Changes
Tillage
Sediment Traps
Contouring
Buffers
Cover Crop
Highly Variable Cost-Effectiveness

10. “Model-at-the-farm,
Measure-at-the-watershed”

11. Quantification
in a Pay-for-Performance Program
• Need to quantify:
• Nutrient loss
• Full economic cost
• Cost-effectiveness
• Payments, profit/loss

12. Nutrient Loss Quantification
• Estimates of field-specific losses from
baseline and BMPs
• Methods for quantification:
– Simulation models (e.g. Nutrient Tracking
Tool (NTT))
– Simple index
– Proxy measures

13. For More on Quantifying Performance

14. Quantifying Cost
• Why do we need to estimate costs?
– Farmers deserve to know.
– We need to know the cost-effectiveness.
• We need a tool that lets the technician
easily produce field-specific cost
estimates.

15. BMP Cost Analysis Tool (BMP-CAT)
• Transparent spreadsheet-based tool
• Simple and quick for the technician
• Easy to fully describe change by
checking boxes
• BMP-CAT program calculates cost/acre
and cost/field

16. BMP Cost Analysis Tool (BMP-CAT)
• Calculate cost-effectiveness
• Paste in nutrient loss information
• BMP-CAT produces tables and graphs
for farmer decision-making

17. Provide Results to Each Farmer:
Loss Reductions

18. Provide Results to Each Farmer:
Payment, Cost, and Profit

19. Paying for Performance
Old Woman Creek Project:
• Project pays $35/lb P and $5/lb N
• Estimate baseline P losses very low
• Avg. cost/lb P loss reduction = $112
• N losses are much greater
• N loss reductions much less expensive
○ Avg. cost/lb N loss reduction ≈ $2

20. Results by Farm

21. Results by BMP

22. Results by BMP (per acre basis)

23. Farmer Sign-up Stats
• Farmers Contacted – 32(mailer)/11(phone call)
• Farms run through NTT -
– # of farms – 5.5
– # fields - 68
– # acres - 1680
– # scenarios run – about 100
• Farms Signed up
– # of farms - 3
– # fields – 20
– # acres – 766
$27,257
In Incentive Payments
Nitrogen Reduced
4,638 lbs
Phosphorus Reduced
116 lbs

24. Pay-for-Performance Conservation:
A How-To Guide
 Describes steps and
data needs
 Goals:
 Reduce transaction costs
 Create opportunities for
scale
 Funded by Great Lakes
Protection Fund
https://www.winrock.org/project/running-off-pollution-
paying-midwestern-farmers-to-improve-water-quality/

25. Contact Information
Jonathan R. Winsten
Email: jwinsten@winrock.org
Tel: (802) 343-3037
www.PFPconservation.com