Performance–based Incentives for Conservation in Agriculture (PICA) Lisa Lurie, RCDSCC Presentation to the CARCD Conference November 14, 2014 In partnership with: Sustainable Conservation Preservation Inc. UC Cooperative Extension RCD Monterey County NRCS Participating growers and shippers The PICA 2013-2015 project is funded through the CDFA Specialty Crop Block Grant program with partner match and in-kind contributions.

PICA in a nutshell Water Quality Water Quantity PICA is a voluntary program assisting growers in tracking water use and nitrogen movement on their farms to demonstrate and incentivize environmental performance Objective Indicator(s) Target(s) Measurement Incentives Water Quality Reduce nitrate leaching & nitrate in storm runoff Water Quantity Reduce water pumped from aquifer Program goals: Develop a transferable public-private partnership model to test and refine practical performance metrics to improve on-farm water and nutrient management and to demonstrate environmental benefits of management changes. Confidential on-farm environmental performance monitoring and reporting can give growers useful tools to optimize agricultural inputs while providing consistent documentation to demonstrate achievement towards buyer sustainability standards and regulatory requirements. Environmental objectives we are focusing on: Water Quantity: reduce water pumped from aquifer. Indicator: Water use efficiency. Measurement: water pumped per irrigated acre compared to crop ET), Water Quality: Reduce nitrate pollution in surface water. Indicator: Nitrate runoff in stormwater. Measurement: sample runoff during at least two storm events, and Water Quality: Reduce nitrate pollution in groundwater. Indicator: Proxy of potential leaching of nitrogen below the root zone. Measurement: Ratio of nitrogen input vs. plant N uptake.

PICA metrics Water Use Efficiency Ratio Total water applied (irrig+rainfall) / crop specific evapotranspiration (ETc) Nitrogen Use Efficiency Ratio (as indirect measure of nitrate leaching) [N fertilizer applied + change in soil mineral N+ N water*ETc]/[N in plant biomass (fruit and vegetation)] Nitrogen and sediment loss in storm runoff Nitrate Concentration and Total Suspended Solids in runoff leaving the farm

Background and Context Grower need: increasing regulatory pressure, increased sustainability reporting burden, seeking information to improve management efficiency, risk management, evidence of practice effectiveness/no negative production impacts to justify investments/management changes Agency need: improve ability to demonstrate conservation outcomes of public and private investments Public need: critical resource concerns of limited water supply and water quality impairments Opportunities: Community Water Dialogue, WIN network, industry-led sustainability tracking initiatives (SISC, WGA, etc.), Driscoll’s leadership with RCDSCC in scoping concept of performance-based incentives leading to larger public-private partnership (SusCon, Preservation Inc, UCCE, more diverse growers)

performance-based metrics Benefits of performance-based metrics Provide measures to optimize water and fertilizer application and reduce costs, manage risk Provide documentation to meet buyer sustainability reporting requirements Provide documentation to meet regulatory requirements. Useful in combination with practice-based incentives to document conservation benefits of investment Practice incentives will still play a role in overcoming cost barriers to implementing some practices but the performance based incentives can reward effective use of those practices and new innovations over time.

PICA Accomplishments to date Preliminary framework for metrics and incentives developed and partially piloted in 2012-2013 Metrics and monitoring methodology revised and piloted on 10 strawberry farms for growing season 2013-2014 in the Pajaro Valley and Elkhorn Slough watersheds Work with private industry and public agencies to explore potential incentives for the program Starting 2014-2015 pilot with 13 new ranches

2013-2014 Pilot Growers 10 Strawberry Ranches 6 Companies 200 + acres How do these growers make irrigation decisions? Feel method Flow meter DU evaluations Soil moisture monitoring How do these growers make fertilizer decisions? Soil lab analysis leaf petiole analysis PCA recommendations Spectrum of sophistication of methods for record keeping

Metrics are only as useful as the quality of recordkeeping

Annual Sampling Schedule (Pilot) Pre-Plant (late summer / fall) Confirm water meter function, take initial reading Determine monitoring locations for surface runoff Determine monitoring locations for soil NO₃-N (lbs/acre), collect first sample Document fertilizer pre-plant application (lbs/acre) Throughout growing season Record readings from water meter (either main or block level) (AF) Measure and report NO₃-N during 2-3 runoff events (ppm) Measure and report soil NO₃-N (lbs/acre) (once or twice) Document fertilizer applications (lbs/acre) Measure irrigation water N concentration Post-Harvest Measure and report soil NO₃-N (lbs/acre) Take final water meter reading Measure N in plant biomass (fruit and vegetation)

Monitoring Performance Water Quantity Water Applied (AF)/Crop Evapotranspiration Water Quality – Stormwater runoff Flow Turbidity (lab) Nitrate Concentration (lab and quick test) Water Quality – Potential Nitrate Leaching Soil nitrate (nitrate quick tests) Irrigation water N Fertilizer N application N in plant biomass (fruit + vegetation) N Use Ratio

Monitoring Performance Lessons we are learning – insert lessons on stormwater sampling in particular INSERT picture of paper towel data tracking

Incentive Structure Options Practice incentives Practice implementation Farm-level Objectives Ambient-level Objectives Performance incentives Type of Incentive: On Farm Practice Incentives Private Performance Incentives Public Purpose: Public and private support to accelerate adoption of new management practices Reward achievement of outcomes that provide short-term financial advantage or long-term business viability Reward achievement of farm level outcomes that collectively will provide public good Examples: Cost-share on practices Education and Training Technical support Grower: cost savings from reducing inputs Buyer: sustainability reporting Contract preference pricing for crop quality Lender Land-owner Water District: Pricing/rebates Regulatory Agencies: Alternative reporting

What incentives do participating growers most value? Data to inform management Knowing where you stand relative to peers Regulatory relief Cost offsets Crop Pricing (linked to yield, quality, shelf life) Based on feedback from our Grower Advisory Committee Summarize value proposition info from SureHarvest report

Next Phases Develop a fully functional self-assessment program for berries in the Pajaro Valley Adjust monitoring methodology, implement on more ranches Pilot incentives with private industry and public agencies Adapt the PICA model to pilot with other crops and transfer to other geographic locations Develop business framework to sustainably manage PICA (including technical assistance, data management, performance reporting) Integrate the PICA model of farm-level performance assessment with industry sustainability tracking and other regional initiatives looking at ambient level metrics, performance and incentives. Explore performance metrics for soil health and climate change resiliency

Lisa Lurie – llurie@rcdsantacruz.org 831-464-2950 x 27 Questions? Lisa Lurie – llurie@rcdsantacruz.org 831-464-2950 x 27 The PICA 2013-2015 project is made possible through funding provided by the CDFA Specialty Crop Block Grant program and partner match and in-kind contributions from Sustainable Conservation, Preservation Inc., RCD of Monterey County, NRCS, Driscoll’s Berries, and participating growers. Thank you to all our supporters and partners!