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United States Department of Agriculture

Agricultural Research Service

Research Project: ENVIRONMENTAL AND SOURCE WATER QUALITY EFFECTS OF MANAGEMENT PRACTICES AND LAND USE ON POORLY DRAINED LAND Title: Integrated watershed economic model for non-point source pollution management in Upper Big Walnut Creek Watershed, OH

item Nair, Sujithkumar -
item Sohngen, Brent -
item King, Kevin
item Fausey, Norman
item Witter, Jonathan -
item Southgate, Douglas -

Submitted to: Meeting Abstract
Publication Type: Abstract Only
Publication Acceptance Date: January 27, 2010
Publication Date: July 25, 2010
Citation: Nair, S.S., Sohngen, B.L., King, K.W., Fausey, N.R., Witter, J.D., Southgate, D. 2010. Integrated watershed economic model for non-point source pollution management in Upper Big Walnut Creek Watershed, OH [abstract]. Agricultural & Applied Economics Association Joint Annual Meeting.

Technical Abstract: Today, non-point source pollution (NPS) is one of the major sources of water quality impairments globally (UNEP, 2007). In the US, nutrient pollution is the leading cause of water quality issues in lakes and estuaries (USEPA, 2002). The maximum concentration of nutrients in streams is found to be in agricultural basins, and it is correlated with nutrient inputs from fertilizers and manures. This clearly shows the role of agricultural practices in water quality degradation (USGS, 1999). To improve the quality of water bodies, the United States Environmental Protection Agency (USEPA) mandates individual states to implement the Total Maximum Daily Load (TDML) (USEPA, 2002). The state and federal governments are working with several conservation programs to reduce the NPS load from agriculture (Mausbach and Dedrick, 2004). However, the ever-increasing water quality impairment by agricultural NPS in US clearly shows that the task of formulating and implementing the cost-effective policies for controlling the NPS impact on water resources is challenging. An integrated watershed-economic modeling (IWEM) offers a holistic approach, where compounding effect of biophysical and anthropogenic variables can be identified and their impact on NPS can be partitioned by linking the biophysical process and the economic behavior models. Such an IWEM would have three components, a biophysical process model component, an economic behavior component and a tool to integrate both the biophysical and economic components. In this research IWEM methodology is applied to the Upper Big Walnut Creek (UBWC) watershed of central Ohio to derive socially benefiting choices of conservation practices to reduce nutrient nitrogen (N) load from agriculture. The UBWC watershed was identified by Ohio EPA as an impaired watershed due to nutrient enrichment from agricultural (Ohio EPA, 2005). Additionally, the watershed encompasses perennial and intermittent streams that drain into Hoover Reservoir, and serves as a primary source of drinking water supply and a favorite local recreational site for residents in the neighboring communities. Soil and Water Assessment Tool (SWAT), a widely used basin scale biophysical process model was used as biophysical component of IWEM. The baseline nutrient production function, watershed level N production function for corn and wheat, and phosphorous production function for soybean were estimated by using SWAT model for the UBWC watershed. A quadratic relationship between applied nutrients and the yield were established by regressing applied nutrient against simulated yields of for different crops for the watershed. In addition, SWAT model was also used to derive the baseline soil N balance equation. The conservation management options, such as split application of N fertilizer, conservation tillage, cover cropping and vegetative buffer were simulated using the SWAT model for deriving crop and technology specific quadratic nutrient production functions and N loading function. The predominant crop rotations in the watershed, corn-corn (C-C), corn-soybean (C-S) and corn- soybean-wheat (C-S-W) were considered for SWAT simulations. The economic component of IWEM consists of social cost of N load, cost of production of crops and technology cost of conservation practices. The benefits of water quality improvements were derived from two different studies, 1) The recreational value of water quality improvement were estimated based from a combined stated and revealed preference method applied to UBWC and 2) A conjoint analysis of the use (excluding recreation) and non-use value of water quality improvement in UBWC reported by Tennity (2005). The value of complete marginal benefit of per hectare N loading reduction by half from a farm was estimated as $328.77 for streams and $387.86 for Hoover reservoir, which was used to parameterize social damage cost (SDC) of N loading for UBWC. SDC was assumed as a power function of N loading and the elasticity parameter was fixed as 2 after series of simulation by different values for elasticity and intercept parameter for SDC. The benefit estimates of N load reduction and elasticity parameter value of 2 were used to fix the intercept parameter of SDC, as 0.101 for in-stream and 0.19 for SDC at Hoover reservoir in UBWC. Additional cost involved in adoption of conservation technologies were obtained from different source (Hoorman, 2009; Sohngen 2003). As different conservation practices were applied simultaneously by a farmer. Three different technology sets were considered for DP based scenario analysis 1) Technology Set-1: The current level of agricultural production and N loading 2) Technology set-2: Cover crop, vegetative buffer and conservation tillage and 3) Technology set-3: Technology set-2 + split-N fertilizer application. The changes in crop production and N-loading for technology set-2 and 3 were expressed as an exponential function of level of adoption of from the baseline (Technology Set-1) crop production and N-loading. Three different DP problems were specified for C-C, C-S and C-S-W crop rotations. In the case of C-S rotation and C-S-W rotations, total profit from each crops were weighted with the proportion of area under each crop. The DP problem was specified as deterministic with finite horizon and two state variables, N stock in the soil and N stock in the downstream reservoir. Fertilizer application was considered as action variable of DP (assuming 100% technology adoption). Thus, one action variable (N application for corn) for C-C rotation, two action variable for C-S rotation, N fertilizer application for corn and P fertilizer application for soybean and three action variable for C-S-W rotation, N fertilizer application for corn and wheat and P fertilizer application for soybean. The Bellman equation expressed as an internalized profit function for N loading. Each of the dynamic programs was sequentially run for different technology scenarios. The DP analysis for baseline crop production results were close to the Ohio field crop enterprise budget. In addition, N loading in baseline simulations was also in line with the modeled of the watershed. The analysis revealed that under no restriction on N loading, farmers would apply a maximum of 170.51kg/ha of N and the value function would be $7950 under C-S-W rotation. However, after introducing the social cost of pollution in objective function, the fertilizer application rate was reduced to 103 kg/ha. The analysis of conservation management options revealed that each of the crop rotation and technology combination would give higher value than the present level of production with internalized pollution cost. Within the crop-technology combinations, technology Set-3(split-N application, conservation tillage, cover crop and vegetative buffer) showed the lowest pollution load to the reservoir along with higher value function. From the results it could conclude that the present level of private profit and yield levels are not realized by adopting both the technology sets considered in this study. Additionally, more area under C-C and C-S rotation would result in more pollution load to the reservoir.

Last Modified: 11/26/2015
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