October 01, 2015

Utilizing Farm Bill 2014 Incentives to Improve Lake Erie Water Quality

Clare E. Luddy

There is nothing like a crisis to clarify issues and motivate action. Prior to the summer of 2014, the western Lake Erie Basin had experienced harmful algae blooms (HABs) that made the lake water look like pea soup, a discouraging sight for boaters and swimmers. HABs are harmful cyanobacteria capable of producing toxins that can adversely affect the liver, nervous system, and skin. On August 2, 2014, the City of Toledo, Ohio, water treatment plant found the levels of toxins from the HABs near their Lake Erie water intake, even after treatment, warranted advising their 500,000 customers to stop drinking the water immediately. Residents were warned not to boil the water because that would only increase the toxic concentration and make it more dangerous. Suddenly there was a run on bottled water at stores, restaurants had to close, and businesses could not operate. Tyrel Linkhorn, Eateries Report Huge Losses, but Others Suffer too, Toledo Blade, Aug. 5, 2014. This was the three-day “Toledo water crisis.”

Toledo sits on the western shore of Lake Erie. Lake Erie, the shallowest of the Great Lakes, bordered by Canada, New York, Pennsylvania, Ohio, and Michigan, has acted as the canary in the coal mine before, quickly revealing the consequences of environmental stressors. In the 1980s, adoption of phosphorus reduction programs eliminated algal bloom problems. More recently, the stressors have included too many nutrients, mostly phosphorus, warmer water from weather and industrial use, the shallowness of the western basin, open lake dumping of dredged material, and invasive species such as zebra mussels that disrupt the local ecosystem. Although the crisis was new, the HABs problem was not, and there were studies, data, research, and theories available to apply to the problem and formulate solutions. Solutions, of course, require money to make them work.

Agricultural runoff was identified as the primary source of phosphorus into Lake Erie, and phosphorus was again identified as a major cause of HAB growth. Ohio Lake Erie Phosphorus Task Force Final Report (2010 Ohio Environmental Protection Agency (OEPA)); Ohio Lake Erie Phosphorus Task Force II Final Report (2013 OEPA). Agricultural runoff is a non-point source of phosphorus; most other phosphorus sources are point sources. Significant point sources for phosphorus include waste water treatment plants and combined or sanitary sewer overflows. Monitoring programs in the lake and its tributaries detected increasing dissolved reactive phosphorus (DRP), which is 100 percent bioavailable to HABs, even though total phosphorus (TP) loads are not increasing. DRP concentrations in the Maumee River and Sandusky River are more than twice that of any other source flowing into the western Lake Erie basin (WLEB). Id. Not surprisingly, these watersheds are predominantly farmland.

There is no single reason why the DRP is increasing while the TP is constant just as there is no single recommendation for reducing the DRP. The Task Force recommended a series of best management practices (BMPs) to reduce DRP in agricultural runoff, including precision nutrient management with more soil testing and improvement of fertilizer application methods. Ohio Lake Erie Phosphorus Task Force Final Report, Executive Summary, 8–10 (2010 OEPA). Other nutrients found in Lake Erie, specifically nitrogen, have been increasing over the years and may also be feeding the HABs. Id.

The water flowing into the WLEB comes from the upper Great Lakes through the Detroit River; the River Raisin watershed in Michigan; the Maumee River watershed in Ohio, Michigan, and Indiana; the Sandusky River watershed along the southern Lake Erie shore in Ohio; and the Huron River watershed just to the east, also in Ohio. Of all WLEB drainage (Maumee, Raisin, Sandusky, and Huron Rivers), 72.7 percent is cultivated cropland, more than any other drainage area around the Great Lakes. USDA/NRCS Conservation Effects Assessment Project, Assessment of the Effects of Conservation Practices on Cultivated Cropland in the Great Lakes Region, 14, (2011), (Great Lakes CEAP 2011). The USDA Agricultural Census of 2012 (2012 Ag Census) data shows that WLEB Ohio county cropland acreage has declined only 1 percent since 2007, indicating that the use of the land for farming remains relatively constant.

The Maumee River watershed, the source of much of the dissolved phosphorus in Lake Erie, is a case in point. Located mostly in northwest Ohio, it wants to be a swamp—an inhospitable, unhealthy, mosquito-swarming, water-inundated, marshy wetland. As wetlands do, it probably originally served to help clean and slow the water making its way into western Lake Erie, among other eco-services. However, since the mid-1800s Ohioans have converted the “Great Black Swamp,” as it was known, into highly productive farm fields through the use of man-made drainage ditches and field tiles. See Jim Mollenkopf, The Great Black Swamp (Lake of the Cat Publishing 1999). These fixtures keep the land dry enough to support crops of corn, soybeans, wheat, and hay. Farmers use fertilizers, either commercial or animal manure, to provide nutrients for their crops. This man-made drainage effectively provides a path for agricultural runoff, both water and soil, to drain excess nutrients such as phosphorus into the Maumee and Sandusky River watersheds and, eventually, into the WLEB to feed the HABs.

Conservation Funding Sources in the 2014 Farm Bill

One potential source of funds to help solve the HABs problem is the Agricultural Act of 2014, P.L. 113-79 (2014 Farm Bill) passed in February 2014—in particular, the Environmental Quality Incentives Program (EQIP), discussed in more detail below. See Kilbert Tuholske, Moving Forward: Legal Solutions to Lake Erie’s Harmful Algal Blooms, 111–113. While 80 percent of the projected 2014 Farm Bill outlays are for nutrition, the other 20 percent reauthorize existing or authorize new agricultural programs through 2018. Twenty percent of allocations for the 2014 Farm Bill—roughly $20 billion per year through 2018—are projected to fund agriculture programs, including 6 percent (almost $6 billion annually) specifically designated for conservation programs. Though the 2014 Farm Bill supports agriculture in order to secure the food supply, there are many programs in it that lend themselves to battling the phosphorus runoff problem in the WLEB to protect the water supply. Food and water are each essential prerequisites for life; solutions must support both natural resources.

The National Resources Conservation Service (NRCS) and the Farm Service Agency (FSA) are the primary Farm Bill implementation agencies under the U.S. Department of Agriculture (USDA). NRCS provides more technical assistance, research, and standards, while the FSA acts through local offices to link individual farmers to the federal programs. The NRCS and FSA both trace their roots to the dust bowl crisis of the 1920s and 1930s; the NRCS descends from the Soil Conservation Service, then authorized as a permanent agency of the USDA.

The 2014 Farm Bill’s economic incentives and disincentives are meant to motivate farmers to act voluntarily for the common good without forcing specific mandates or restrictions. Title II, Conservation, of the 2014 Farm Bill consolidates some existing conservation programs and defines new ones, including Conservation Reserve (CRP), Conservation Stewardship (CSP), Environmental Quality Incentives (EQIP), Agricultural Conservation Easement (ACEP), Regional Conservation Partnership (RCPP), and conservation compliance prerequisites for crop insurance. While broadly supporting U.S. farming endeavors, the Farm Bill’s conservation programs provide many incentives for farmers to positively affect their local environment.

The CRP (16 U.S.C. § 3831; 7 C.F.R. Part 1410) is a reauthorized USDA program that provides payments to farmers in exchange for removing highly erodible or environmentally sensitive land from agricultural production and implementing conservation practices. The FSA administers the CRP, the largest USDA conservation program. Its goals are to protect drinking water, reduce soil erosion, preserve wildlife habitat, preserve and restore forests and wetlands, and aid farms damaged by natural disasters. Contract duration is ten to fifteen years. The Conservation Reserve Enhancement Program (CREP), part of CRP, is a partnership between states or tribal entities and the federal government that targets high priority conservation issues and allows environmentally sensitive farm land to be removed from production in exchange for annual rental payments.

The 2014 Farm Bill progressively reduces the allowed CRP covered acreage from 27,500,000 in 2014 to 24,000,000 in 2018. Regulations implementing the CRP have been extended (79 Fed. Reg. 32435 (June 5, 2014)) and a Draft Supplemental EIS has been published (79 Fed. Reg. 41247 (July 15, 2014)). CRP utilizes an Environmental Benefits Index (EBI) to compare applicants for the program. See Megan Stubbs, Conservation Reserve Program (CRP): Status and Issues (Congressional Research Service, Aug. 29, 2014).

The CSP (16 U.S.C. §3838(d)–(g), 7 C.F.R. Part 1470) is a reauthorized USDA program that provides technical and financial assistance for conservation activities on agricultural land. Land typically remains in production while the applicant implements conservation practices. Contracts are for five years. In 2013, national CSP contracts totaled more than $882 million, with shares to WLEB states as follows: Ohio, $5,886,300; Michigan; $9,355,100; Indiana, $8,288,700. While these are the highest funding levels since the program’s inception in 2009, they may be reduced under the 2014 Farm Bill, which reduces the enrollment cap from 12.769 to 10 million acres annually. An interim rule to incorporate 2014 Farm Bill changes was published (79 Fed. Reg. 65835 (Nov. 5, 2014)). For a concise outline of most of the 2014 Farm Bill conservation programs, see Megan Stubbs, Agricultural Conservation: A Guide to Programs (Congressional Research Service, Apr. 2, 2015).

The EQIP (16 U.S.C 3839aa-3839aa-9; 7 C.F.R. Part 1466) is a reauthorized USDA program that provides financial and technical assistance to farmers to implement conservation practices that address natural resource concerns on their land using contracts up to ten years duration. Eligibility includes meeting an income limitation, meeting the conservation compliance requirements of the Highly Erodible Land (HEL) and Wetlands Conservation (WC) regulations, and developing an EQIP plan of operations. NRCS has developed Conservation Action Plans (CAP) to help farmers with their EQIP plans. Conservation Innovation Grants (CIG) are one of several subprograms under EQIP. An interim final rule to incorporate 2014 Farm Bill changes was published (79 Fed. Reg. 73953 (Dec. 12, 2014)).

The ACEP (16 U.S.C. § 3865–3865(d); 7 C.F.R. Part 1468 as proposed) is a new program created to take the place of three repealed programs: Farmland Protection, Grassland Reserve, and Wetlands Reserve. ACEP provides financial and technical assistance for agricultural and wetland reserve easements but is funded at a significantly lower level than the prior programs. Financial assistance to purchase easements is available for farmers directly or through governmental or nongovernmental organizations, up to 50 percent of fair market value. Agricultural easements limit nonagricultural uses on farmland and wetland reserve easements protect and restore wetlands. Even though ACEP’s agricultural easement program protects farmland from other land development, it is unclear if this protection affects local water quality significantly. However, the wetland reserve easement program directly affects local water quality by preserving or improving the ecological function of wetlands. ACEP participants must meet HEL and WC conservation compliance requirements.

The RCPP (16 U.S.C. § 3871–3871(f)) is a new program for multistate or watershed-scale project that consolidates and expands on former geographically defined programs. RCPP provides funds for public-private partnership projects through competitive state or national processes, allowing partners to invest in regional conservation projects. RCPP is funded at $100 million per year. In addition, 7 percent of the funding for, or administration of 7 percent of the acreage in, several other conservation programs will be funneled through RCPP. Thirty-five percent of funding goes to Critical Conservation Areas (CCAs) as defined by NRCS, 40 percent goes to projects chosen nationally, and 25 percent goes to state level projects. The Great Lakes Watershed has been designated as a CCA, along with seven other regions totaling roughly three-quarters of the lower United States.

Conservation compliance is defined by Highly Erodible Land Conservation (HELC) and Wetlands Conservation (WC) programs and is reestablished under the 2014 Farm Bill as a prerequisite for crop insurance subsidies and conservation programs. Participants are required to certify that they will not produce on HEL without using NRCS approved conservation plans, produce on converted wetlands, or convert wetlands on their properties. While direct commodity payments have been eliminated, the now more extensive crop insurance programs are meant to provide an alternative safety net and should maintain environmental benefits along with providing cost savings. See Dennis A. Shields, Crop Insurance Provisions in the 2014 Farm Bill (P.L. 113-79) and Farm Commodity Provisions in the 2014 Farm Bill (P.L. 113-79) (2014 CRS). USDA has reminded farmers that they are now required to have certification AD-1026 on file to participate in most conservation or crop insurance programs. USDA News Release No. 0155.14, July 22, 2014.

Conservation Farming Practices Likely to Affect Water Quality

If farms are the source of phosphorus that feeds HABs in Lake Erie, it stands to reason that they are putting fertilizers or manure on their land that is literally going down the drain and providing them no benefit at all. Eighty-four percent of phosphorus applied to agricultural land in the Great Lakes basin was from commercial fertilizer, and 16 percent was from animal manure. Ohio Lake Erie Phosphorus Task Force II Final Report, 5. Conservation practices to reduce this loss of nutrient from their fields should provide cost savings on fertilizer.

Conservation practices have already reduced total instream loads for phosphorus in the Great Lakes watershed by 36 percent, based on CEAP-modelled reduction in edge-of-field losses during 2003 and 2006 time studies. This translates to a 20 percent reduction in loads to the Great Lakes. However, more can be done to reduce the phosphorus from farm fields. The CEAP report quantified the opportunities throughout the Great Lakes watershed for further conservation treatment: 19 percent of cropland has a high level of need for further conservation, 34 percent has a moderate level of need, and 47 percent has a low level of need. The report estimates that phosphorus loading to the lakes could be reduced an additional 15 percent if known comprehensive conservation treatments were applied to the areas of high and moderate level of need. Great Lakes CEAP 2011, 156, 159.

The Great Lakes CEAP report identified three types of conservation practices that affect local water quality: (1) structural practices to reduce soil erosion, sedimentation, and nutrient leaving the fields, such as riparian buffers, grass filter strips, terraces, grassed waterways, and contour farming; (2) annual practices that conserve resources to maintain land productivity such as conservation tillage, crop rotation, cover crops, nutrient management, and irrigation water management; and (3) long-term practices that take land out of production by planting grass, trees, or wetland vegetation instead. Great Lakes CEAP 2011, 21. All these were being utilized in the Great Lakes region during the CEAP study period. Additionally, the study identified further benefits that could be provided using emerging technologies such as new means to apply nutrients precisely (e.g., variable rate technologies, improved manure application equipment, soil testing and GIS based applications), controlled release fertilizers, drainage water management and treatment, constructed wetlands, and improved crop genetics. Great Lakes CEAP 2011, 8.

These conservation practices are the same practices that the 2014 Farm Bill Conservation programs aim to incentivize and encourage. CRP removes environmentally sensitive land from production either through structural practices (riparian buffers and grass filter strips) or simply taking land out of cultivation. CSP implements all appropriate conservation practices on farm land, which could be any of the three types. EQIP implements practices to address natural resource concerns and CIG investigates innovative methods of conservation, either of which supports all three types of conservation practices. ACEP funds wetland easements that act as both a structural practice and taking land out of production. RCPP supports regional multipartner projects that could utilize all three types. Even crop insurance becomes an incentive for conservation practices because it requires conservation compliance.

For WLEB counties in Ohio, the 2012 Ag Census shows a slight increase of total government farm payments from 2007 to 2012, to just over $94 million. The next census is 2017 and may show whether the Toledo water crisis motivated an increase in government farm payments to the WLEB area. Further water quality monitoring, also motivated by the crisis, will quantify whether these funds are having any effect on the HABs in the WLEB.

Some farms in the LEB are utilizing conservation practices, but there is ample opportunity for improvement. The Great Lakes CEAP found that only 37 percent of acres designated as highly erodible land had structural elements designed to control water erosion, but reduced tillage was in use on all but 9 percent of cropland. Some evidence of timing or rate management of nitrogen or phosphorus applications was found for most acres, but there was less evidence of consistent, comprehensive implementation of nutrient management plans. Great Lakes CEAP, 155. Nutrient management is defined as “[m]anaging the amount (rate), source, placement (method of application), and timing of plant nutrients and soil amendments.” NRCS, Conservation Practice Standards Nutrient Management Code 590 Ohio (Nov. 2012). A catchier phrase with similar meaning, “4Rs,” is being promoted by The Fertilizer Institute: “Right fertilizer, Right time, Right rate, Right place.”

A study by the National Institute for Food and Agriculture (NIFA) and the NRCS, How Farmers and Ranchers Make Decisions on Conservation Practices (NC State University, 2012) found that farmers look for conservation practices that preserve or increase profit; that have an obviously observable impact on the property (e.g., less erosion, less need for fertilizer); have benefits other than conservation (e.g., health of livestock); are supported by technology from trusted providers (e.g., switching to conservation tillage only when John Deere equipment became available); support their own ethics, provide a network of support from peers, industry, and government; and are flexible. The most disliked conservation practices were riparian buffers and implementing nutrient management plans, in that order.

Funding to Western Lake Erie Basin States

The 2014 Farm Bill continues many programs that have been part of the fabric of the agriculture industry for many years. Farmers have ongoing contracts under CRP and CSP and can enter new ones under EQIP. Wetland easements purchased under ACEP or predecessor programs may remain easements forever. Once farmers comply with conservation standards under HELC and WC, it is more likely that the land in question will continue in compliance into the future. Operational plans such as nutrient management plans may be difficult to establish but become easier to continue year after year, especially because there are economic incentives provided by the 2014 Farm Bill conservation programs to do so.

The 2012 Ag Census shows that between 2007 and 2012 the number of farms in the northwest Ohio counties in the Lake Erie watershed declined by 5 percent with average farm size increasing 4 percent. Overall acreage in cropland decreased just over 1 percent. Some 42 percent of the farms in 2012 had fewer than $20,000 in value of sales and only roughly 20 percent had sales that were more than $250,000. These statistics paint a picture of an area where many small farms may struggle, because of the economics of scale, to utilize higher tech solutions or even to take advantage of the 2014 Farm Bill incentive programs. However, the slight trend toward larger, more consolidated farms could help make conservation efforts more economically feasible. Government payments to farmers in the Ohio WLEB only slightly increased between 2007 and 2012, a trend that needs to become more pronounced if the 2014 Farm Bill is to aid in the decrease of nutrients such as phosphorus from farm runoff.

Recent allocations from the 2014 Farm Bill for projects affecting WLEB HAB reduction include: (1) $328 million from ACEP (USDA News Release No. 0197.14, Sept. 8, 2014) that will fund 380 easement projects to protect and restore 32,000 farmland acres, 45,000 grassland acres, and 52,000 wetland acres. Individually, WLEB states received: Indiana, $3,381,570; Michigan, $3,057,773; and Ohio, $8,333,497. (2) A $15.7 million CIG through EQIP (USDA News Release No. 0200.14, Sept. 15, 2014) will fund 47 organizations to develop and demonstrate new technologies and systems. At least 50 percent of the cost will come from nonfederal matching funds, and projects in both Michigan and Ohio received grants. (3) $370 million from the new RCPP, including two years of funding (USDA News Release No. 0009.15, Jan. 14, 2015) for 115 projects that will leverage an estimated $400 million more in partner contributions to improve water quality, support wildlife habitat, and enhance the environment. Funding goes to Indiana to prevent nutrient loss by providing cover crops and two-stage ditches, implementation with monitoring; to Ohio to promote BMPs for phosphorus (not in WLEB but the technology may transfer); and to Michigan for the Tri-State Western Lake Erie Basin Phosphorus Reduction Initiative. Other programs have accepted applications on a scheduled or continuous basis, such as CSP under EQIP and CRP.

The Great Lakes Restoration Initiative (GLRI) is another source of funding for projects or programs that could benefit water quality in the western Lake Erie basin. Unfortunately, this fund has not fared well in the current federal budget, but the USEPA announced $17 million in grants for projects related to preventing phosphorus runoff and soil erosion that contribute to algal blooms. WLEB projects include $3,696,182 to Ohio EPA to “retire 270 acres of cropland, restore six miles of streams, stabilize 1,000 feet of eroding stream banks and restore 70 acres of wetlands at eight locations in the Maumee River watershed to prevent phosphorus from entering Lake Erie,” and $745,000 to The Stewardship Network to “provide farmers in the River Raisin watershed with technical assistance on best practices to prevent nutrient runoff and soil erosion into the river and Lake Erie.” USEPA Chicago, EPA Awards Great Lakes Restoration Initiative Grants to Reduce Runoff that Contributes to Algal Blooms (News Release Date: 03/26/2015). Other funded projects may aid the WLEB by reducing phosphorus runoff in the upper Great Lakes, thus reducing the phosphorus loading from the Detroit River. Previously, USEPA had announce $12 million in grants to support monitoring and forecasting of water quality, increased incentives to farmers to reduce phosphorus runoff, and improved measurements of phosphorus loading in surface waters. USEPA Washington, Great Lakes Restoration Initiative Provides Funding to Target Harmful Algal Blooms in Lake Erie (News Release Date: 09/03/2014).

The Ohio Board of Regents, colleges, and universities dedicated an additional $4 million in January 2015 to reducing the HAB threat in the WLEB. The planning focused on “five key areas, among which the funds are divided: Lake Erie harmful algal blooms (HAB) and lake water quality; drinking water testing and detection; agricultural land use practices, sources of enrichment, water quality, and engineered systems; human health and toxicity; and economics and policy reform.”

Ohio has taken further steps to reduce phosphorus loading from farms by signing Ohio amended S.B. 1 into law on April 2, 2015. This state law requires operators to have certification for manure or fertilizer spreading, and it restricts fertilizer application on frozen, snowy, or water-saturated ground. The law is more restrictive for land in the WLEB, also restricting application when the weather forecast calls for rain within a twenty-four-hour period. Citizens can make complaints if they feel the law is being violated, and the Ohio Department of Agriculture may investigate and access civil penalties. In addition, Ohio EPA is charged with coordinating HAB management and response to protect against cyanobacteria in the drinking water supply and limit nutrient loading to the WLEB. It is unlikely that this law could have been passed prior to the Toledo water crisis of 2014. Prior to that, the political strength of the agriculture business community limited consideration of any restrictions beyond voluntary compliance. However, in the wake of the crisis, more farmers have taken advantage of voluntary certification and the mandatory restrictions are now seen as less onerous.

The farming community has begun to take public responsibility for its role in the HABs crisis. A public legislative algae hearing in Van Wert County in northwest Ohio found the Ohio AgriBusiness Association and the Ohio Farm Bureau Federation recognizing the need for government regulation and moving water quality issues “to the forefront of our most pressing challenges.” Tom Henry, Manure Runoff Debated—Farmers Urge House to Employ Sound Science, Toledo Blade, Jan. 30, 2015. The President of the Ohio Farmers Union wrote in the local Toledo newspaper that farmers “pride ourselves on our stewardship” and that the Toledo water crisis shows that Ohio farmers need to immediately and directly confront the downstream effects of some of their practices. Joe Logan, Healing, or Troubling, the Waters? Toledo Blade (editorial), Jan. 4, 2015.

Implementation of the 2014 Farm Bill conservation programs must focus on meeting these farmers halfway. Research can be supported, through CIG or NRCS studies, that clarifies the economics, identifies related beneficial impacts, encourages manufacturers to design equipment to support conservation practices, and makes nutrient management easier. The 2014 water crisis in Toledo can be used, where appropriate, to push WLEB farmers and other stakeholders to the top of the lists for available funding. Meanwhile, other sources of phosphorus, especially wastewater treatment plants and combined and sanitary sewer overflows cannot be overlooked. Ongoing efforts to reduce their pollutant effluent to Lake Erie must also continue.

There is some evidence to suggest that the Toledo water crisis has been a rallying point, attracting funding for programs and helpful legislation. Perhaps a cleaner western Lake Erie basin will be worth the three days without water.

Clare E. Luddy

Ms. Luddy is a professional engineer and solo attorney in Toledo, Ohio.