1. Assessing Alternative Policies for the Control of Nutrients in the Upper Mississippi River Basin Catherine L. Kling, Silvia Secchi, Hongli Feng, Philip W. Gassman, Manoj Jha, and Lyubov Kurkalova Center for Agricultural and Rural Development, Iowa State University. For presentation at the Mississippi River Basin Nutrients Science Workshop, October 4-6, St. Louis, Missouri. For more information on this project and related work, please see www.card.iastate.edu/environment. www.card.iastate.edu/environment

2. “What that Mud in Our Rivers Adds up to Each Year” Ding Darling, 1946

3.  189,000 square miles in seven states,  dominated by agriculture: 67% of total area,  > 1200 stream segments and lakes on impaired list,  Primarily nutrients (esp. phosphorous) & sediment,  Multiple conservation practices can ameliorate (Land retirement, tillage, grassed waterways, contours, terraces, etc.) (Land retirement, tillage, grassed waterways, contours, terraces, etc.) The UMRB

4. Integrated Economic, Land use, and Water Quality Model for the UMRB  Couple large-scale, spatially-detailed watershed model with economic model to study costs and water quality changes of conservation policy  Focus on agricultural land use decisions – cropland  Use NRI as basis for both economics and watershed model  Purpose of modeling system is to provide policy level information  Consider both upstream water quality (within the UMRB), and downstream effects (Gulf of Mexico)

5. Outline I. Intro to Watershed/water quality model II. Intro to Economic model III. Policy Scenario description IV. Results of Preliminary Analysis V. Direction for future

6. I. The Water Quality model: Soil and Water Assessment Tool (SWAT)  SWAT is watershed based: predicts changes in environmental quality at watershed outlets, highly nonlinear between practices, land characteristics, soil types, and water quality  Features simulates a high level of spatial detail, operates on a daily time-step simulates a high level of spatial detail, operates on a daily time-step calibrated to observed water quality and quantity data calibrated to observed water quality and quantity data can/has been used in both regional analyses and small- scale studies can/has been used in both regional analyses and small- scale studies  Key data sources, flow calibration, see poster

7. Watershed Schematic 7100 Grafton 7010 7020 7110 7060 7030 7050 7040 7070 7090 7120 7130 7140 7080

9. Upper Mississippi River Basin Baseline - Pollution Loadings a Outlet of WatershedSediment loadNitrates loadTotal P load 70103,85720,4799,745 70202,87910,3477,848 70302693,136512 704010,06741,26115,418 70507908,312882 706018,63666,13324,110 707084510,7583,431 708032,357132,38953,501 70903,15822,80010,261 71001,00022,1529,417 711050,083249,94492,561 71203,83942,1846,402 713017,22681,55623,318 714056,567291,389101,122 a.Loads are measured in thousand of tons, 18 year averages.

10. II. Economic Models and Cost Information  Adoption model to estimate returns to conservation tillage 1. Specification, Estimation, and Prediction Samples (Kurkalova) 2. Separate model for each 8-digit HUC (14 models) 2. Separate model for each 8-digit HUC (14 models) 110,000 total NRI “points” and expansion factors, over 37,500 cropland points 110,000 total NRI “points” and expansion factors, over 37,500 cropland points  Other data sources: 1992 and 1997 NRI data (soil and tillage), Census of Agriculture (farmer characteristics), Climate data of NCDC, Conservation tillage data from CTIC, Cropping Practices Surveys (budgets), cash rental rates  Cash rental rate as a function of yields to estimate opportunity cost of land retirement, vary by county and state  Costs of Buffers, Grassed Waterways, Terraces, Contours, and Nutrient Management from various sources and expert opinion (Iowa DNR)

11. III. Policy Scenarios 1. What are the costs of implementing a broad set of conservation practices that focus on sediments and phosphorous? 2. What are the local water quality gains? 3. What are the effects for the Gulf? 4. How much additional reduction in N flows occur from an across the board reduction of 10% N applications to corn production?

12. Implementation: Local Policy: “Sound Conservation Practices”  Step 1. Land Retirement. Retire all cropland within (<=) 100 ft. of a waterway, retire additional land to reach 10% total based on erosion index,  Step 2. Terraces. Terrace all remaining land with slope above 7%,  Step 3. Contours. Contour all remaining cropland with slopes above 4%,  Step 4. Grassed Waterways (GW). Place GWs on all remaining land with slopes of 2% or greater,  Step 5. Conservation/no till. For all cropland with slopes of 2% or greater not already in conservation tillage, place 20% of each watershed in no till and 80% in conservation tillage.

13. IV. RESULTS Sound Conservation Practices Implementation: Acreage and Costs Watershed Land Retirement (1000 acres) CT (1000 acres) Structural Practices (1000 acres) Total Cost ($000) 7010801820149049,570 702038036003000110,780 70301051044012,750 7040302290182049,190 7050308907608,270 7060102610191051,380 7070101240100016,410 70804303770531097,810 709017031202330162,440 71002304780265052,280 7110302180127032,370 71203502500107045,250 71306906110283099,180 7140 Total 160 2610 2780 43190 1490 27410 25,740 813,420

14. Sound Conservation Practices Implementation: Percentage gains in water quality Outlet of Watershed SedimentNitrate Phosphorous 701041337 702036338 703054-340 704050535 705053032 706048637 70704030 7080426 709032-246 71004138 7110 Grafton35737 712027217 713039329

15. Additional N Control  SCP yields 7% reduction at Grafton  Targets: Gulf Hypoxia Task Force set of 30% N decrease to meet (2001) Gulf Hypoxia Task Force set of 30% N decrease to meet (2001) Scabia, et al (2003) suggest 40% may be needed to hit goal Scabia, et al (2003) suggest 40% may be needed to hit goal  Wetlands likely to be important part of solution, omitted here  Consider 10% N application reduction

16. Uniform 10% N application reduction HUC4 N application reduction (1000mt)Cost ($million) 701010.6413.05 702020.5119.24 70302.593.18 70408.938.15 70503.022.85 706011.1512.13 70704.494.5 708035.2436.01 709016.6816.82 710019.8321.31 711012.0517.81 712015.0316.15 713030.735.22 Total190.86206.42

17. SCP + 10% N Reduction Results

18. Next Steps  Calibrate SWAT to nutrients  Most cost-effective conservation practice combinations  Targeting of watersheds (costs and water quality)  Trading programs  Longer term: wetlands