 Welcome everyone to this fourth webinar in a workshop sponsored by the Environmental Health Matters Initiative of the National Academy of Sciences. My name is Kathy Klang. I am the chair of the organizing committee and I'm delighted to welcome you to this fourth week in our five week series. The topic is reducing the health impacts of the nitrogen problem. We are focused on ways in which we can work with agriculture to maintain productivity as well as to address some of the nutrient problems, nitrogen that come from our highly productive agricultural system. Today we will be talking to having a group of panelists and I will be introducing the moderator of the panel. But first I want to introduce and thank the rest of the organizing committee. Myself, as I said, I'm a professor at Cornell University. The other members are Elena Austin from the University of Washington, Jerry Hatfield from the USDA, Jim Galloway, University of Virginia, Jennifer McPartland from the Environmental Defense Fund, Robin Wilson from Ohio State who will be today's moderator. So you'll be hearing quite a bit from Robin today and Raj Koslaw from Kansas State. In addition to the intellectual contributions and help of this group of people, there have been three key National Academy staff members Carol Lainey, Janelle Walsh-Thomas and Sarah Harper who have done all of the heavy lifting in organizing logistics as well as providing lots of intellectual contributions to the effort. The goal of this workshop series is to a couple of three things I'll emphasize. First and probably foremost, at least in my mind is information exchange. Too often in addressing difficult problems in society, we stovepipe the disciplinary expertise and without bringing disciplinary expertise together across a wide slate of backgrounds, it's gonna be tough if not impossible to solve some of these problems. So for this workshop, a goal was information exchange, bringing these together is information exchange. Too often in addressing difficult problems. Hi, I'm getting an echo, so I think I'll just keep going and apologies for anyone who's having that. We'll be bringing a group together from natural, physical and social scientists and you'll be seeing some of each of those type of scientists today. The goal is then based on that kind of information exchange to have informed discussion and really provide a foundation for which people can talk to each other, they can communicate across. And ultimately the goal is to accelerate progress in solving this problem. These are issues and problems that are gonna be around for a while, they're not gonna be quick, but we're hoping by doing this kind of convening activity under the auspices of the academies, we can help to move the needle. Those of you who have been able to be with us in the past four weeks know that this is our fourth. The first of the webinars was a foundational overview of the nitrogen problem, its extent and coverage. And I'm gonna outline a couple of the key takeaways from that session before we kick off the rest of today. In addition, our second session took a look at the kinds of technologies and incentives to farmers and growers to adopt those technologies at the farm level. Our third session looked at the broader landscape and innovative technologies, as well as a variety of agricultural farm programs that are designed to support the development and implementation of technologies to reduce the loss of nutrients. Today, we're gonna continue with the theme of incentives and we'll be looking at policies again and the potentials for various market solutions and the limitations for those market solutions in order to address the problem. And then we hope to have a very engaging panel to discuss what seems doable, what next steps there might be, prospects for moving us forward. Next week, we will dedicate the entire time to reflection and synthesis. Very quickly, before I turn things over to Rob and I wanna kick off by a very quick overview of some of the key takeaways from our first foundational webinar. That's available for anyone who hasn't seen it and is interested to watch on the Academy's website. First, I give a very quick introduction to two key federal legislation policy directives. The Clean Water Act in 1972, which regulates water pollution from industry, but most of agriculture, about 40% of the US land area that is in agriculture is not directly regulated under that act. The Safe Drinking Water Act from 1974, likewise regulates drinking water for its quality from public providers, but there are many people who get their drinking water from private wells and that act does not require or enforce any kind of regulation on the quality of that water. Mary Ward gave us a wonderful overview of the evidence from the epidemiology and public health literature about what we know about risks from particularly nitrate ingestion for human health. In addition to the long-time known blueberry baby syndrome, there is now increasing evidence that there is some risk of colorectal cancer, thyroid disease and birth defects, neural tube defects. She noted that future studies of these and other health outcomes should include improved exposure assessment for those that are highly exposed. Craig Cox continued that frame of discussion by looking at what we know about the extent of contamination in drinking water and the amount of exposure. And he noted that there's still quite a bit we don't know about the extent of the problem. Ken Kasman introduced us to the incredibly important role that nitrogen fertilizer has in our food system. It's not a coincidence that we use a lot of nitrogen. In fact, it is a very productivity enhancing for food fiber and fuel production that comes from agriculture. He called for our national research agenda to better understand how to balance production and environmental quality issues. Matt Helmers introduced us to nitrogen loss from large-scale row crop agriculture in particular in the United States and noted that it has been heavily exacerbated by the fact that we have adopted a very productive system of annual crops using tile-drained systems across 50 or 60 million acres that has fundamentally altered the hydrology of this landscape and unintentionally has created a situation where it's much harder to retain nitrogen on the land. Finally, Eric Davidson continued the discussion about the leakiness of nitrogen and noted that such leakiness occurs along the continuum of our food system in many ways. By learning more about it, we can of course hope to control and create policies and incentives to address the negative components of it. Before I hand this to Robin to moderate the rest of today's webinar, I thought I would leave you with this picture from the Agricultural Census. USDA's website has this and lots more information. The goal here is really just to put in your mind the scale of the agricultural footprint and therefore the nitrogen issue coming from agriculture. The dark green is areas of land where at least 50% of the land area is cultivated. These are heavy agricultural areas. The lighter green are also areas where there is a lot of cultivation. Roughly 44% of total land area in the United States is devoted to agriculture. It's a very important part of our economy. It obviously is very important for all of us and it has a large footprint with respect to the use of nutrients and nitrates and nitrogen. With that, I'm going to hand things over to Robin who is going to introduce our speakers and take us through the day. Thank you Robin, thanks all. Great, thanks Kathy and thanks everyone who's participating on the webinar. We're glad that you're here and thank you to all of our speakers and panelists today. So we're gonna start out with a series of four presentations depending on how quickly our speakers work through what they wanna say. We might have some time for questions in between so feel free to submit questions through the Slack discussion. We'll keep an eye on that. And then we're gonna transition into a panel with remarks from both farmers and folks who work on the ground doing conservation kind of reflecting on what they think some of the important steps might be to improve nutrient management and agriculture but also kind of responding to some of the comments that they've heard over the last couple of weeks and that they'll hear today. So that's where we're heading and we're gonna kick off with our first speaker. It's Dr. Leah Palmforster. She's an assistant professor in the Department of Applied Economics and Statistics and Associate Director of the Center for Experimental and Applied Economics at the University of Delaware. She examines farmer decision-making and the design of agri-environmental programs and policies to enhance ecosystem service provision and agricultural landscapes. And she's a fellow at the Center for Behavioral and Experimental Agri-Environmental Research which is a great resource for folks doing work in the space around behavioral science and farmer decision-making. She has a PhD in agricultural food and resource economics from Michigan State. Leah. Great, thank you, Robin. All right. Well, good afternoon, everyone and thank you for tuning in to today's session. So today I'll be talking about designing cost-effective voluntary programs that help us pay for enhanced agri-environmental performance. Next slide. To kickstart this session, I'm gonna provide a brief overview of payments for ecosystem services programs which can be used to compensate farmers for reducing nitrogen losses. And this overview will help tee up some of the other presentations that you'll see in this session. I'm gonna emphasize the importance of directing funds to high-impact practices and high-impact areas of the landscape in order to improve program outcomes. And I'll discuss how we can use conservation auctions as a tool to more cost-effectively allocate our PES funds. Now, in practice, there are numerous transaction costs both for farmers and administrators that can make these conservation auctions less cost-effective than we would think they may be from a theoretical perspective. So I'll close my talk with a few suggestions of ways we might move forward in streamlining these auctions and thinking about other refined targeting approaches that could help us procure ecosystem services at larger scales. Next slide. So the basic premise of payments for ecosystem services programs is that there are individuals who value ecosystem service provision at a level that is higher than the status quo. And these buyers are willing to make payments to providers, and these are the land managers, in order to change management practices to generate some intermediate outcomes, for example, reductions in nitrogen loading and then providing the final ecosystem services. Payments can be tied to the practice change itself, the intermediate outcomes or the final services. Typically we see these PES payments tied either to the practice or the intermediate outcome. Next slide. Now PES programs can be designed in many different ways, but essentially we can understand the structure of the program by answering four key questions. The first question is who pays? Now last week we heard from Stephen Wallander, he introduced a number of federal programs run by the US Department of Agriculture. And these are examples of programs in which the public is the buyer of ecosystem services. In the next talk we'll hear from Kurt Stevenson, he'll be talking about water quality trading in which regulated entities are considered the buyers. And then after that we'll be hearing from Kurt Waldman, he'll be talking about supply chain standards. And in this case, private individuals or groups can be the buyers of these services. Now I already mentioned what buyers are paying for, they're either paying for changes in practices or changes in final outcomes. This is what we call a pay for performance program. And this can be based on the predicted outcomes, which are determined based on modeling exercises or measured outcomes. The next question is who receives payment? Many programs use a first come first serve type of enrollment mechanism, but we can also target payments to the lowest cost providers, or those with high impact practices or vulnerable lands, which can increase the quality of the services that would be provided. And by considering both cost and quality, we can award payments to the most cost effective providers. And that's what I'm gonna discuss when I introduce using conservation auctions. Now as far as payment levels, many of our programs offer uniform or fixed payments. And we are also familiar with cost share programs that might offer to cover a certain percentage of the cost of adopting a best management practice. But there are opportunities to offer discriminatory programs through our PES programs, or discriminatory payments rather, through our PES programs, in which we would differentiate payments to farmers based on their costs, the practices that they're going to adopt, and the environmental benefits that they can provide. Next slide. So reverse auctions can be a valuable conservation tool to allocate these PES funds. Reverse auctions are also called procurement auctions or conservation auctions. Sometimes they're also referred to as conservation tenders. They're all referring to the same idea. It's a tool that allows us to allocate scarce program dollars to practices on areas of the landscape that provide the most environmental benefit per dollar spent. These auctions are a useful tool to clear over subscribed PES programs. They create competition among the individuals making offers, so in this case among farmers or land managers, to reduce the costs and increase the quality of offers. And importantly, auctions can help us move from a situation in which we're paying for practices to one in which we're paying for performance or predicted performance. Next slide. So how do conservation auctions work? I should note that there are many ways a conservation auction can be designed. I'm going to walk you quickly through one type of auction, which is commonly piloted, I should say, for working lands programs. In this situation, a farmer would submit an offer price. This is the amount of money they would require to be paid in order to adopt certain conservation practices on certain areas of land that they manage. Now the offer price and the practices that are submitted in the offer depend on a number of factors, including the farmer's preferences and characteristics of the farm operation and the land that the farmer manages. Practices can be evaluated using biophysical or ecological models in order to predict the environmental benefits that would be achieved if those practices were adopted. The offer ranking and selection process then considers the offer price, the predicted environmental benefits, program priorities and budget constraints in order to select projects. And that selection can be based on a number of metrics, including cost-benefit ratios and also optimization algorithms can be used to select those projects. So importantly, you're selecting based on who can provide the most benefit per dollar spent. So the lower cost of offers and higher quality of offers are going to be more highly ranked. Selected farmers are then paid their offer price and then adopt practices that can provide the environmental benefits. Next slide. There's a lot of theoretical potential for these auctions to really improve the way that we allocate funds and PES programs and specifically for working lands. Now, these theoretical benefits are achieved by this competition that's created for the scarce conservation funding. We're also able to reveal private information about costs. This information is revealed through the offers that farmers are submitting. And we can target vulnerable lands through the ranking and selection procedure. But on the ground, realities create some real challenges that limit the cost effectiveness of auctions. Importantly, the farmer needs familiarity with the auction process, with the practices that they're going to submit and their offer and the ability to formulate a bid. And this can take a significant amount of time. Both the agency and the farmer face challenges because the auction relies on timely participation in a relatively short window of time so that you can have a number of offers to evaluate together in order to figure out how to allocate your funds in the most cost-effective way. So a short time window can also create a challenge. And the agency needs to have time and resources available to implement the auction and importantly to evaluate the bids or offers. All of these different challenges create transaction costs for the agency and the participants. Next slide. Several years ago, my colleagues and I ran a pilot auction in the Western Lake Erie Basin. And what we found was that we had low participation. About 1% of the eligible land managers submitted an offer in our auction. And so we conducted a follow-up survey to try to understand why the participation rate was low. Of the people that responded to the survey, about 44% knew about the auction but they were not willing to submit an offer. They listed primary bidding deterrence. These were not mutually exclusive but about 40% said that they didn't understand the auction process or they found it overly complicated. And I'd also like to note that 28% listed concerns about land rental agreements being an impediment to participating in the auction. I'll highlight that we found a linkage as well between these concerns about rental agreements and a perceived ineligibility to participate in the auction because of the land rental contracts that these individuals were involved in. And I highlight this because this has been brought up several times that land rental could be a challenge that we need to think more carefully about in our PES programs. So this information highlighted to us that the transaction costs really limited participation. And although we were disappointed at first to have such a low participation rate, we actually found that this is a fairly common result in these pilot auctions. Next slide. Several years ago, John Roth and his colleagues did a really nice review study in which they were recording the participation rate for pilot auctions that had been conducted in many countries, both developed and developing countries. And what they found was that as the number of eligible participants grew, or in other words, the scale of the auction grew, the participation rate was low. So when the number of eligible participants exceeded about 500, participation rates dropped to below 10%. And in developed country settings, participation rates were often closer to 1%. Next slide. Now, this is my one supply and demand inspired figure that I'll show you so that my colleagues don't take away my economist card. But here I am highlighting the reason why it is so important to have high participation in these auctions. Here I'm showing you supply curves. And so what you see here is on the X axis, you see the nitrogen reduction, the total quantity, and this could be measured in different ways, but I've just put pounds on here. And on the Y axis, the unit payment, so the amount of money you would need to pay for each pound of nitrogen reduction. So the blue supply curve shows what that cost curve would look like if all farms submitted a offer. Now the purple supply curve now shows what it would look like if only a subset of those farms submitted an offer. The highlighted areas under each curve represent a limited budget for the PES program. And so as you can see with the same limited budget, we would be able to procure less total nitrogen reduction in the case when we have a smaller number of participants and we would be paying a higher unit payment for each pound of nitrogen reduced. So this reduces overall cost effectiveness and performance of our auctions. Next slide. So as we think about strategies to improve PES program design, I do think there are some opportunities to streamline the design of auctions in order to reduce transaction costs, increase participation, and improve overall performance of this mechanism. Additionally, there may be opportunities, well, I should say there certainly are opportunities to improve the way that we target where funds are being allocated in order to offer payments to high impact practices on vulnerable lands. This may involve limiting who is eligible for PES funds and also may involve encouraging more competition on the quality of the practices that are going to be adopted. Next slide. So I'll end on the key takeaway slide again and I'm happy to take questions if we have a few minutes. Thank you. Great, thank you, Leah. I think we do have time for a question. Do we have any hands raised? I can ask one too. A question from Kathy, it looks like, in the notes. Hi, sorry, I was having trouble unmuting. That was correctly a really, really interesting. Can you talk about the possibility to scale these payment for ecosystem service programs? I mean, one of the things we know is really problematic is the scale at which we have nitrogen and phosphorus problems and with nitrogen in particular, there's a lot of acreage where N is coming off. Can you comment about the ability to scale? It's a great question and I have a lot of thoughts kind of racing through my head right now. I guess there's a few things that I think about. One is the importance of considering how to solve a landscape problem like thinking about the whole landscape, right? So the piecemeal nature of some of our programs I think creates a real challenge because we're not stepping back and thinking about what it's going to take to really move the needle at a landscape scale. Now, so that would point to programs that are able to have coordination across a larger land area. Now, as I say that though, something that's jumping to mind is a few workshops I've been participating in recently about outreach which has really emphasized the one-on-one importance of outreach. So I think what is going to potentially need to happen is to have programs that can be run at larger scales but to have this local coordination so to have a whole team, a collaboration of partners that can be the local contacts and able to reduce transaction costs for participants and really think about how these funds can be allocated. So the allocation would happen on the bigger scale and the one-on-one outreach to engage people would happen on a more local scale. Just a quick follow-up. Do you see any potential for sort of grouped payment for ecosystem service type contracts? Can you comment on that so that you could get a critical mass in a certain area in a more coordinated way? Are there any thoughts about that? Yeah, I'm smiling because that was something that I had hoped to investigate with the auction that we conducted several years ago and we actually did allow for group offers. We did not receive any and the feedback that we got was that there was even additional coordination that was needed among land managers to make this happen. That said, I know that in the past several years there's been more work investigating this as an option for our programs and I know there's a number of laboratory economics experiments that have thought about mechanism design that could be useful for us to look to. Great. Well, thank you, Lea. I really appreciate that and I think you did an excellent job providing this overview of the challenges we face with voluntary programs. I think people are often very critical of the fact that they're not working to solve our nutrient issues but I think part of the challenge there is how do we design them to be more effective and I think you gave a great overview of that. So thank you. We're going to move on to our next speaker. It's Dr. Kurt Stevenson. He's a professor in the Department of Agricultural and Applied Economics at Virginia Tech. Dr. Stevenson's research interests include incentive-based environmental policy and water resources management planning and policy. He currently serves on a number of governmental advisory committees including EPA, Chesapeake Bay Program, Scientific and Technical Advisory Committee and National Academy's National Research Council committees, multiple ones. Dr. Stevenson received his PhD in Economics from the University of Nebraska-Lincoln. Kurt, take it away. All right, thanks. I'd like to thank the organizing committee for inviting me and glad to be here this afternoon. Next slide. Next slide. So I was asked to talk about water quality trading and the role water quality trading would might have for addressing agricultural non-point source pollution from nitrogen. Next slide. And so I just wanted to get up front. Summary points. This is where I'm going to end up. So this is my starting slide and ending slide. There's three points that water quality trading is the way to think about these types of programs that these are a compliance system for parties that are facing regulatory requirements. And they're designed as such. The second point that sometimes people seem to misunderstand is that water quality trading is not a financing mechanism to pay for voluntary ag non-point source reductions for nitrogen. It's not a financing mechanism to get BMPs on the ground to reduce nitrogen. That might be a means to the first end, which is a compliance mechanism. We'll get into that. And the third thing is as currently being designed in the United States anyway that water quality trading will make at best a minimal contribution. This is my opinion to reducing ag-based nitrogen loads. So I could stop there, but then we'll end up here. I'll tell you why I think that in the course of the next few minutes. So next slide. So this is just a simple diagram sort of to lay out what water quality trading is, how it's conceived. You've got a river system, for instance, that goes into a water body, an estuary, a reservoir, whatever. And you have these sources of nitrogen, these in-pipes that are discharging nitrogen into that system. The whole idea of a water quality trading program is that it is based on an effort to limit the total amount of nitrogen from a group of sources into the system. And so what we would want to do is we want to create this, if you think about it, this regulatory fence that limits the total amount of nitrogen from these five sources, for instance, and sets a cap on it, and then next hit the advance. And then we would allow flexibility to those sources, maximum flexibility to those sources to figure out how is the most cost effective way to control those in either by controlling the nitrogen at the source or moving the rights or the allowances to discharge back and forth among between sources. Now, let's see. Whoops. What happened? Give me one second to reshare your slides. Okay. I'm not exactly sure. What do I hit to do it to advance the slides? Just... That's okay. I'll keep doing it. Just let me know when to advance. I'll just say advance. Okay. But this is what happens when you let the economy must drive. So you never want to do that, Sarah. So ideally, next advance. So what we have is a delineation of responsibilities to public agencies. Responsibility is to define what the system can receive in terms of nitrogen loads to achieve our environmental objectives and what the private sector is supposed to be responsible for is figuring out the best way to do it, the least cost most effective way to get there. So it also allows us to an opportunity to set aggressive goals if we provide the flexibility to do that. Next slide. So that's the idea of trading in concept. Now, so how does agriculture fit into all this? So advance. So there's many more sources than just these regulated sources out there contributing in nitrogen to the system. So this is my little simple diagram. You've got lots of farms, and then you have even urban areas contributing collectively non-point source loads to the system. Advance. And so the way agriculture fits in is that you then allow these regulated sources within the CAP to exchange what's called nitrogen credits with agricultural sources. And so what happens in advance is that, yes, there you go. So you allow somebody within the CAP to increase their discharges and while the agricultural source reduces their discharges and the reason why they would do that would be so the point source could reduce their compliance costs. Next slide. So just to give you an illustration of the rationale about why somebody within the CAP would trade with an agricultural non-point source is this is a diagram from the World Resources Institute. It's several years old now, but it's still effective in conveying the point. So you'll see the vertical axis is the cost to control nitrogen, cost to reduce nitrogen from the various sources. And on the right-hand side is a variety of agricultural non-point sources that have calculated very small costs, less than $5 a pound per year to reduce nitrogen. On the left-hand side you see point sources and urban non-point sources that have very high costs. So the idea is you'd let those sources that are inexpensive to reduce advance trade with the folks that face regulatory requirements and very expensive costs to move pollution obligations around between them in exchange advance for money. And so conceptually at least the regulated sources can save a good deal of money by paying these low-cost sources to do some nitrogen control advance. So is it a solution to add non-point sources? I think there's some just key conceptual issues that people need to understand in some practical experiences. I'll share a few of those with you now. Advance some kept sexual issues. Non-point source trades with regulated sources are an offset. So it's not a net reduction. It's somebody gets to increase the loads or somebody else gets to decrease the loads. So a trade in and of itself is not a net reduction of nitrogen to the system. And the other point is that typically that fenced off part, the regulated part of the total load of nitrogen is small relative to the unregulated source. So you're trying to regulate achievement of water quality goals or environmental goals with a relatively small segment. So next slide, just as an illustration of that last point, these are the simulated nitrogen loads to the Chesapeake Bay from different sources. And in the blue there is agriculture. In 2019, Chesapeake Bay program estimates that 45% of all nitrogen running in the Chesapeake Bay is from agricultural sources. And that sliver of green there, the wastewater treatment plants are 13%. And the potential trading portion of that is even much smaller. So conceptually, what you're trying to ask somebody to do is that 13% to pay for a portion of that 45% and it's going to be, it's a tough lift. And this is the Chesapeake Bay. So even the urban loads are greater percentage of the total than saying what you have in the Midwest. So the blue pie square gets much bigger as you move to the Midwest. Next slide, advance. So you'll see in the literature a lot of people say, well, what about if we just put in trading ratios and we required the point sources to buy twice as much reductions from the nonpoint source loads in order to constitute a trade or a retirement ratio? That's been advanced as a way to try to extract extra nitrogen reductions from these regulated sources. Advance. And you also hear people say, well, all we need is to lower the cap and lower and put this increased stringency on the regulated sources in order to give them more incentive to trade with nonpoint sources. So these have been sort of, well, how can we sort of reimagine this trading program to get stuff out so we can make some progress on the nonpoint source loads? You can do those things, but they haven't worked well in the past. Next slide. So the practical reality is our experience with water quality trading is that we have observed that there's very little demand from regulated sources to buy nonpoint source credits, nitrogen credits from agriculture sources. And there's a whole raft of reasons why that's the case and it has to do with regulatory requirements, like the regulatory program, stresses, avoid, minimize type of a logic. The Clean Water Act is about zero discharge. So when you get somebody to reduce, you really don't want to let them back up again to let their loads go back up again. There's a whole variety of regulatory requirements that restrict the ability of point sources to buy. So there's a whole raft of issues associated with the lack of demand for nonpoint source credits. So there's just very little activity out there with respect to buying nonpoint source credits, in particular for unworking lands. The programs that we do see tend to be retirement programs. So you buy agricultural land and you retire it into a tree, into a forest. There are some programs that have quite a bit of activity in that type of program. But again, that's a one-to-one offset. And then there's ag nonpoint source supply problems. In the sense that the transactions costs that Leah was mentioning earlier, they've seen transactions across in many instances applied to agricultural nonpoint source trades, which really increases the cost of credits. Farmers concerned about risk and tying up land and flexibility in terms of getting mixed up with a regulatory program, a whole raft of issues there. So if you look and you look at what's happened, and I think there was a reference, if people want to read sort of a review of the experience in the United States, there's a reference that we just published a couple of years ago, paper we published a couple of years ago explains this. But for 25 years of experience since the first trading guidelines were issued back in the Clinton administration in 1996, we have very few instances of a program being developed that's created sustained agricultural nonpoint source with agriculture. And even less, very few with working lands. So next slide. So if somebody wanted to use water quality trading to make a dent and to make it in addressing the nitrogen issue, you really have to start thinking about expanding that regulatory cap. So advance. So for instance, you know, you can put regulatory requirements, mass load limits on nonpoint, urban nonpoint sources like urban stormwater systems, advance, or you can think about trying to regulate a portion of different types of different agriculture and trying to and then introduce, well, if we put these regulatory limits on there, what kind of flexibility can we provide to make this requirement less costly? Advance. So I'm back to the end. The water quality trading, you got to think about got to remember folks got to remember that water quality trading is a compliance mechanism for those facing requirements to limit nitrogen. And it is not a very effective mechanism to try to fund nonpoint source reductions the way it's currently designed. And if you want to make water quality trading play a bigger role, and that's an if it's an if then statement, if you want water quality trading play a bigger role in trying to redress the nonpoint source in problem, you got to think about bringing more sources under the cap, including agriculture, portions of agriculture. Thank you. Great. Thanks for I think we have time for a quick question. So I'm going to actually ask one and if others have any we have discussion time at the end to circle back to these first set of speakers as well. One of the things that occurred to me while you were talking is, I guess, another potential challenge for water quality trading programs, but how do you deal with spatial inequity. So I'm picturing a community around an environment where water quality is not comfortable with the idea that that local source is allowed to pollute in order to offset that elsewhere. So I just wondered if that gets accounted for in the way we think about kind of justice and ethics in water quality trading. Well, it it it. Well, I think this is related to the lack of demand that generally doesn't come up because when particularly for nitrogen because, you know, nitrogen is not historically is not a regulated pollutant and so when when there's a local when there's a water quality problem and nitrogen's been identified, the first thing folks do is the first thing the regulatory program does is to oppose limits on wastewater treatment plants for those nitrogen. So you see right off the bat, like in the Chesapeake Bay program, nitrogen levels from wastewater treatment plants have been reduced by 60-65% since 1985 and that's with population growth. So there's and so what you're talking about is a little bit of increase over, you know, a 60 or 65% decrease. Okay. No, that's helpful. Thank you. Yeah. So the urban and actually the urban areas or anybody the large wastewater treatment plant sees an immediate large reduction usually when you have these programs. Okay. Excellent. Well, thank you. Thank you so much. We will move on to our next speaker. Next we have Dr. Kurt Waldman. He's an assistant professor in the Department of Geography at Indiana University in Bloomington, Indiana. His research focuses on perceptions, judgment and decision-making related to agricultural sustainability, environmental change and food security. And Dr. Waldman holds an MS in applied economics from Cornell University and a PhD in food and agricultural policy from the Department of Sustainability at Michigan State. Hand it over to you, Kurt. Thank you, Robin. All right. So I'm going to talk about certification and supply chain standards. Today I'm going to spend more of my time on the latter. But what supply chain, well supply chain standards are also often referred to as voluntary sustainability standards and these are essentially retailer or buyer led standards. Next. So the big picture here is that companies have started responding to perceived reputational environmental risks. They're starting to develop their own sustainability metrics. But there's really significant data challenges that limit their efficacy and I'll get into some of the details of that. And this is particularly challenging for commodity products. Sorry, Kurt. Give me one second. Okay, I'll just keep going. So in the 70s we see the rise of a lot of product certifications of eco labels and a lot of these have just proliferated since then. We're seeing about as many as 500 now in the United States. They typically operate under this logic that we're trying to generate enough demand for the practices that we're certifying that they become the de facto rule. They typically only work under certain conditions and cover a limited portion of the market. They typically have a fairly rigorous M&E built monitoring and evaluation built into them. And the real logic here is we're just rewarding producers for favorable practices. Next. The next iteration came out of the rise of interest groups. So in the 80s and 90s we started seeing interest groups leveraging corporate risk. So the classic example here is Greenpeace sent a fax to Gerber basically just asking them if they use GMO products in their baby food. They got an almost instant reaction from them immediately changed their practices. A more sustained example is the McCruelty campaign by PETA in which they were able to change animal welfare standards down McDonald's supply chain. More recently we've started to see sustainability scorecards. So this is an example from Beyond the Brands by Oxfam. So they essentially take publicly available data on these firms come up with rankings of them and then ask the firms if they're willing to essentially contribute to make these more accurate. The logic here is that large retailers control enough of the market share that they can dictate the terms to the suppliers. This turns out to be not exactly true and I'll talk a little bit more about that next. So what we see now is a much more collaborative version of this. So these multi-stakeholder initiatives tend to involve industry NGOs, farmers, academics so coming together to agree on how to define sustainability. These are fairly new instruments or mechanisms so we don't have a lot of research on it. The research, the empirical research that's out there is somewhat mixed. There can be high transaction costs and accountability issues but in general what we're seeing is there's the potential to have a transformative effect from some of these mechanisms. Next. So how do they work? They generally seem to revolve around key performance indicators. So initially firms were really getting interested in life cycle analysis so sort of calculating cradle to grave emissions output for emissions estimates for anything from sort of bread to laundry detergent. They realized that that was very difficult and so they sort of backed off a bit and started just coming up with these performance indicators which are they're more like metrics than the standards that we would see with certification. You don't necessarily need to meet some bar to participate in this program to sell to this retailer etc. The basic features of these are their voluntary guidelines they involve data collection from the producers and then data sharing. So this aids in community and companies being able to communicate about sustainability to their consumers. They generally involve minimal incentive so it's not like other it's not like the certifications where you tend to have an actual premium based on your product. What often happens here is you're maybe subsidized or paid a small participation fee to fill out the forms to enroll for a year or two but they're generally aren't incentives. Next. This is a sort of look in the complex supply chain of something like a corn or a soybean crop. What retailers are really trying to do here is to communicate down the supply chain so to actually communicate directly with those producers it's difficult because of the processing and distribution and the way that crops like corn and so they move through the supply chains. What we see is that the ag retailers actually have closer relationships with the producers in terms of data. They tend to already have some data sharing agreements where they might make recommendations for seed or fertilizer etc. One of the real values here to retailers is that they can get to know more about their producers through these MSIs and these supply chain standards. Next. What are these relevant for reducing nitrogen? The first part here is that retailers have really started to experience supply chain risk. We see them not just responding to reputational risk as we did previously but really starting to think about what the impacts of climate change are going to be on their supplies in terms of price volatility and actually keep the supply chains moving. The second point is that these are relevant in a way that consumer eco labels and some of the other mechanisms that have focused on product premiums, identifying direct consumption channels and finding consumers who are willing to pay more for that. Consumer eco labels just aren't relevant in some of the similar mechanisms just aren't very promising in this area and so it just shines a little bit more light on the supply chain standards. The other point I wanted to mention is that traceability is getting a lot better so with the introduction of block chains into food systems it's a lot smoother, it's a lot easier to track commodities through the supply chain now. This is not widespread but this is going to be becoming more common I believe. There's also online platforms like Mercaris who trades and identity products so you can essentially find a buyer who's selling non-GMO corn or certified organic corn etc. That's a lot of technologies changing here. Next. How do they actually measure sustainability? I've just taken a couple of examples from a myriad of tools that are out there but really what these tools are doing is allowing farmers to enter various farm characteristics management practices etc and get essentially get very straightforward information about environmental outcomes. This often does include a water quality index it includes a bunch of other outcomes as well and farmers are really able to play with these tools to look at different scenarios to get a sense of what's possible. The real value to farmers and one of the most interesting parts to be is that there's a lot of learning that can go on here and we're able to compare with other farmers in the area see what kind of practices they're doing and then firms are able to share this data as well so they're able to use this to communicate about their supply chain and how they compare with industry averages etc. The big limitations with some of the tools really are just getting the data it's really hard it's very onerous to fill in the data first time a lot of farmers aren't willing to share it and so you see a lot of efforts made to kind of get the data flowing off farms as they say one other limitation of that is that it's often partial farm data so some of the way some of the tools work is you might just enter data for a couple of your fields and then it will extrapolate those results to the rest of your farm when it's looking at these environmental outcomes it also is just often making assumptions that are just generalized to practices and so if you switch from conventional to no-chill it might just give you a it will give you just sort of an average figure of what that change look like rather than based on actual observational data next so hurdles for supply chain standards as I'm mentioning it's the a lot of it's this data quality and farm diversity concern this is really similar to what Leo was talking about a bit but we see that a lot of the highest impact is coming from certain practices, certain operations certain farms certain fields etc but a lot of the tools are sort of capturing some of the averages and so to some extent we need to really kind of focus them down related to this is selection bias so because these are often voluntary programs we generally don't know who's participating theoretically you would expect the producers who are able to participate at the lowest cost to be the ones that are adopting quicker who are engaging with these tools but we don't really know much about that at this point incentives so there's really no carrot or stick here this is a you know this is a lot of work for both farmers and the retailers and they really sort of engaged in like temporary incentives and ways to draw farmers in but there's no sort of established incentive mechanism and then verification and feedback so a lot of farmers are really interested to see what they can learn from these tools because they're not explicitly connected to their farm they don't know for example if their switch and cropping system actually decrease nitrogen in their tile drains for example you really have to sort of pair this with a more field and farm specific data clips next alright and just to reiterate the highlights this is just an area where there's a lot of interest these are supply chain standards are growing very rapidly and groups are working together you know for firms are working with non-profits and academics to create these sustainability metrics but there's still a lot of ways we can improve the data collection around them and then this is particularly challenging for crops like soybeans and corn where we don't necessarily see these direct link to consumers we don't necessarily it's more complex supply chains etc alright thank you thank you Kurt I think we have time for one quick question looks like Kathy has a question you might squeeze in a second too we'll see maybe we lost Kathy Steve Wallander I see that Steve has a question great so Kurt I was wondering about on the incentive side whether some of the producers have greater certainty about having a buyer located I know that's been talked about as a benefit with some of the coffee and other products in South America where they're not getting a price premium I know they have a buyer for however much they can produce given the way they're producing it in a lot of ways I think when you're talking about these international supply chains it's much more focused on who the buyer is with a lot of these domestic programs we see Coke for example might go into an area of Indiana or Michigan where they know they have a lot of growers set up a program there get incentives out to farmers to participate and start getting data flowing to them in that way well thank you Kurt I think we will go ahead and we'll try to stick on time here and transition into our last set of speakers in this first part of the session we have a team from the Nature Conservancy Lee Fixon and Ben Wickerham Lee is the North America soil and nutrient strategy manager for TNC he leads their farmer advisor strategy for working with public and private organizations and businesses who service and advise farmers with the end goal of scaling adoption of soil health practices for our nutrient stewardship and edge of field practices that reduce ag's impact on our water and position agriculture as a natural climate solution and Ben is TNC's Saginaw Bay project manager he's worked for 13 years to deliver innovative conservation programs throughout the state of Michigan in a variety of roles with other organizations as well he received his bachelor of science degree in zoology for Michigan State and as a conservation practitioner his primary research interests involved farmer behavior and motivations practice permanence and using agribusiness as conservation entrepreneurs so I'll hand it off to the two of you I think I have this figured out with the intro I'm going to kick us off with kind of like a little bit of a high level overview of our overarching strategies as it relates to driving the value of manure and then Ben's going to take a little bit deeper dive and hand up an example of a partnership and project that we're touching down there in Michigan so next slide please so for those of you who aren't familiar with TNC we're a global non-profit got our start kind of in land conservation as a land trust but over the last 15 years we've built out an ag program ultimately driving towards two main goals how can we reduce impact of ag on our water and our land and also how can we use agriculture as a national climate solution but ultimately transition ag from being a greenhouse gas emitter to potentially a mitigation tool next slide please and as many of you know integrated systems offer a lot of opportunity towards both of these goals the way our ag program is touching down so how can we increase ultimately the nutrient use efficiency rating of our ag system as well as how do we get more soil health practices on the landscape livestock offer some opportunity for those goals livestock allow us to utilize products they offer opportunity in diversifying the nutrients to a four-hour nutrient stewardship management plan i.e. I'm talking about organic sources of nutrients slow release type sources there's some benefits to soil health directly towards soil health economic benefits to the farm i.e. as we're seeing a greater need for edge of field acres and more acres and perennial cropping systems livestock allow us to continue to make an agricultural commodity off of those acres and that goes the same for edge of field type acres so we can graze and hay those grassed acres along rivers and lakes and grass waterways but we need to be careful so we don't want to get caught off guard by the back end of that strategy both figuratively and literally both in the animal livestock industry and that growth is anticipated to grow especially as developing countries get a taste for meats and cheeses next slide please and that risk this is about water quality so that risk shows up in nutrient balances more and more we're seeing critters migrate to the Midwest for a number of different reasons but we need to be working to make sure as more livestock move to the Midwest and we see more infrastructure being developed through meat processing facilities and stuff like that we're making sure that those animals are being accounted for in nutrient management plans and Wisconsin's Discovery Farm program they did a nutrient use efficiency study here two years ago and pretty consistently a lot of their worst ranking fields basically they were coming out of a legume or they had a manure components in the natural nutrient management system next slide so what can we do and so we here at TNC we think one of the simplest ways to do this is really work to develop strategies that show manure not as a waste product but as a valuable byproduct so next slide please but to do that we have to overcome a number of different challenges and barriers one is just straight up traditionally it's been talked about as a waste product and in fact for those of you who might be working for NRCS on this call please change a couple of years practice standards when NRCS refers to where you store your manure as waste storage it has that connotation that I just need to get rid of this as simply as possible right it's not a waste this is a byproduct that has a lot of value for you and your neighbors there are some agronomic challenges right so your timing windows for getting it on are extremely tight and not necessarily when you have an active growing plant the nutrient ratios are usually fixed and then there's variability in those ratios as you may be applying that manure across the field it's tough to integrate into precision ag programs there's also economic challenges tied to the cost of storage cost of transportation with trends towards more and more CAFOs how do we economically get that manure back out across the right number of acres and the technologies that allow for that are often expensive and require additional expensive inputs into the future and going back to that procedure value right like the person taking it is saying hey you got to get rid of it why don't you pay me and the person with the manure is like hey this is a valuable resource we're seeing less of that but anyway so next slide so we at TNC we're all about conservation at a pace and scale that matters so how can we accelerate solutions that help us address some of these barriers one of the biggest ones I'm most excited about is some of the new technology that's coming out that helps us like create as-applies of the manure and so like John Deere has their well it started as their harvest lab but they're calling it their manure constituent sensor and basically it can measure MPK values of manure as it's leaving the applicator in the field and that farmer can then do a variable rate application to one of those but then create as-applies for the others which then can be integrated better into your industry stewardship plan and you can better balance and get that manure over the right number of acres so the way we're trying to accelerate the behavior change here is by offering cost share for farmers this is in Minnesota we're offering cost share to custom applicators and custom bumpers to put this technology on their equipment next slide please the other area that I'm really excited about is nutrient recovery technology this can be everything from helping you balance that nitrogen to phosphorus ratio of manure to dewatering so helping with the cost of supporting nutrients it can help with what I was just talking about integrating into season nutrient management plans and creating really accurate as-applies it can help turn that manure into a product that can be used back on the farm whether it's bedding it can help with water cycling right so if you're in a drier area like there's technology out there that can get that manure to a standard that can be fed back to the cows it can help reduce the cost of storage because of that dewatering component and ultimately it can create a value added byproduct and a lot of this is going to be driven by your specific end game and what your challenge is that you may need to be overcoming and kind of the way that T&C is thinking about and plugging into this equation like how can we accelerate this is ultimately de-risking some of these new technologies and helping pilot some of them that in Washington state T&C and a bunch of their partners out there went to the state government and advocated for a pretty good size pot of money to pilot some of these different technologies on dairy farms across the state to hopefully de-risk that adoption. Next slide please and with that you know I talked about that you know the whole renewable fertilizer is kind of a world whether it's struvite or looking at like so cedron technologies you know their system creates a 15% nitrogen certified organic aquasimonia so like I don't know of too many nitrogen sources out on the market that are certified organic and that high at percent end but you know creating how can we recover some of that technologies through the value added products that you're going to be producing from that using that manure as your base input. So next slide please and then the last section I'll kind of talk about before I hand it over to Ben and this is kind of our segue slide is you know when done right like manure can be one of these natural climate solutions it does improve soil health and so here in Minnesota I live in cities you know we're standing up an ESMC pilot ecosystem service market distortion pilot that really is going to one of the goals I should say is to look at what the potential amplifying effect of having manure integrated into acres that are enrolled in ESMC can have on like can the farmer actually see an increase and actually better words you know credits being generated off those acres. So with that I'll hand it over to Ben who's going to take a deeper dive into one of the specific pilots that kind of eyes all this together. Thanks Leif. So in the time remaining yes I'm going to share an example of how we're working here at the Michigan chapter in the Nature Conservancy to really try to institutionalize some of these farmer sustainability programs to achieve nutrient reduction outcomes and it's really the bottom line is working with supply chain partners. So for us it really represents the fundamental shift in the way that conservation is incentivized and it's really the combination of a better part of a decade of work here in Michigan by TNC to innovate and try to optimize the way traditional cost share has been delivered as a way to achieve greater environmental return on investment. This is based on a history of work I'll go over here in a minute and also a lot of time spent on social evaluation to really explore the research topic of who's the best conservation intermediary? Is it really NGOs like the Nature Conservancy? Is it the local Soil and Water Conservation District or is it the most trusted advisor of all, the agri-business partners working with farmers? Next slide please. So here's a bit of a history of our work. I'll click once more. And I'll take us back to 2015 when we first started to really get in and try to disrupt and innovate how cost share was delivered to try to institutionalize a more sustainable way to do it. We started with our CPP program which is great. It allowed us to co-lead an initiative with our Michigan Agriculture Business Association. The downfall at the end of the day was still in our CS program and rather rigid. Next slide. So from there we took the next step to innovate further and started delivering a pay for performance program that really should be more accurately titled as pay for outcomes. This got us closer to our goal. There was added flexibility. It really put us closer to the supply chain because we didn't work in the constraints of a USDA office. We could work with those farm advisors to identify farmers eligible for the program and at the end of the day it provided a higher environmental return on investment. Next slide. Excuse me. One more. And then that brings us here to today. This kind of represents a good better best scenario. This year we're launching a couple pretty exciting initiatives that are really grounded in supply chain itself. This shifts farmer incentives away from traditional public agencies or even third party entities like TNC and puts it within the supply chain itself to really deliver farmer incentives at the point of sale itself. It provides really a risk free opportunity for supply chain partners to demonstrate how this might work as sustainability program and kind of test the market. And at the end of the day it just creates a more holistic systems approach to delivering conservation on the farm. Next slide. So to be able to do this and launch a program like this you need a willing supply chain partner. And as I'm sure many on the call here today we've seen a groundswell in these types of interests from the industry, right? What I'm going to share today is actually I'm going to hone in on a partnership we're working in culminating with the dairy industry of all entities. It's really a good example of what Dr. Wildman just explained as a multi stakeholder collaboration rather than a certification program and it really provides us a direct link to the consumers. Consumers are a big part of the why but environmental solutions have to come with an economic condition to make them possible on a continual basis. And that's really the background of what led to this net zero initiative by the U.S. dairy industry and you may or may not be familiar with this. A pretty aggressive goal but dairy has been a great partner to work with and really being proactive in pioneering some of these initiatives. You got to remember a lot of the advances in reforms and animal welfare came from the dairy industry. So they're a great partner to work with and you need that overriding goal to really drive all of this to work. Click once more. So where TNC can come in is really this last bubble in terms of improving optimization of manure and nutrients. Next slide. So what did the program actually look like partnering with the U.S. dairy industry to get them closer to this net zero initiative. Well we've proposed a project that would ultimately reduce greenhouse gas as improved soil health by implementing both manure management practices in fields soil conservation practices and also feed improvement practices as well. We're now I'm kind of speaking in vague terms that the project is soon to launch here in 2021 but I'm reluctant to provide too many specifics on this particular partners involved in that net zero initiative but we do have some partners on board that are willing to provide the incentives for us to go through and work through the dairy feed supply chain to achieve these outcomes. So it's going to launch in Michigan and Wisconsin and how it works is with investment from these dairy partners we're going to work through local cooperatives, dairy co-ops and milk processing plants to really work through their network producers to identify farmers that would be eligible for this program to make improvements and achieve these environmental outcomes. So below kind of shows the work stream of how this would go our partners are in the process now for launching recruitment there's going to be a self-assessment period to really determine where the areas of greatest need are for participating farmers and then from there it's a data collection it's implementing practices to make those changes and achieve those desired outcomes that partners in the net zero initiative are after and then hopefully create a really positive feedback. And I know we're short on time here so I'll probably just gloss through this these are just kind of some of the objectives on how we're planning to deliver this it really is meant to provide a comprehensive conservation consulting service to dairy farmers it's not a one size fits all it's a suite of practices and it's really meeting the farmer where they are based on their baseline assessment and delivering conservation practices that are going to allow them to achieve those environmental services and add those. So it's a multi-tuned approach it'll be everything from no-till to cover crops in field to again manure management there's a lack of manure injection in the particular region that we'll be working and also manure application risk management as well we lack a lot of regulation in Michigan that some other great lake states have so a lot of room for improvement to achieve GHG outcomes with manure management next slide one more Sarah okay so again I apologize for the vagaries we haven't quite inked the official agreements with our supply chain partners yet so I'm reluctant to put the liability out there of stating explicit goals but I did want to share this with you just to give you an idea of the things that we'll be tracking that really the supply change partners have shown interest in that are going to track towards their sustainability goals and the net zero initiative so by implementing these practices we'll be tracking all the above by 2023 and at that point it'll really come to a tipping point where hopefully we've demonstrated a sustainable closed loop system that will attract other dairy cooperatives to follow similar models so by 2030 we really hope to scale this up to multiple co-ops and processors around the Great Lakes and I will end there I think we're at or maybe over time so I'm there and our email information is there if anybody has information that would like to follow up with any of the initiatives that Leif and I work on Excellent thank you Leif and Ben and we will be bringing these first sets of speakers back at the end for our kind of general discussion with not only all five these individuals but also our panelists who are upcoming so if you have questions there will be an opportunity there as well so before we transition into our panel who will be kind of reflecting our personal experiences and perspectives in the space and also reacting to what they've heard today I wanted to share with you if you've been participating in this series of workshops you've had an opportunity to provide some feedback on what you think some of the challenges and perhaps opportunities are moving forward in this space so they're going to be pulling up a slide here with some of the feedback from that survey on new policy and market opportunities wait for Sarah to pull it up there it is so this is just some of the feedback there was a lot of really specific comments so we just went through and tried to pull out some of the themes that we saw but this is what's been coming from participants in the workshop series so markets for conservation measures so we've heard about that today payment for ecosystem services maybe expanding those types of programs maybe paying for those actual measured outcomes versus just practices or predicted outcomes like Leah talked about markets for alternative crops small grains in the rotation so diversifying which is something I noticed with some of our farmer panelists today they're operating very diverse farms which I think is a good thing for conservation integrated nutrient and carbon markets regulatory mechanisms to more effectively deal with the release of N from fertilizer and crop and fixation sources perhaps differential regulation of potential input sources between states another idea that was a little different from a lot of the other things we saw was policies that preserve farmland so that decisions aren't driven by land payment demands and then we've heard some conversation about removing or revising the current subsidy system within U.S. agriculture there might be better ways to do that there are countries where that doesn't even happen at all and then increased leadership from ag suppliers, commodity organizations and then some examples we've heard again today a farmer led watershed collaboration so seeing more of that perhaps bottom up and business driven solutions so just some of the ideas we wanted to share that we're hearing from folks and I think again are reflecting some of the discussions we've had so far so at this point we will then just transition into our panel so we had a bit of a shift in plans today so we have one panel with representatives from the farming community across the U.S. in fact kind of widely spread across the U.S. and also a representative from the environmental defense fund who's also involved in kind of on the ground action and so what I'm going to do I think is just introduce all four of our panelists and then kind of hand off to them separately they've each asked to prepare about 10 minutes of remarks both bringing their own perspective and again responding to what they've heard and so let me do quick introductions so our first panelist today is Rod Weimer Rod's a farmer and farm manager for Fagerberg Farms in Eaton, Colorado he's been researching ways to farm more with less and believes in accomplishing this goal with drip irrigation Fagerberg Farms is one of the largest shipper growers of onions in the U.S. and has won conservationists of the year awards and steward of the land awards in 2015 Mr. Weimer was chosen national farmer of the year for his efforts in precision agriculture and then we're going to hear from Rochelle Cruzmark her husband Brad and their son AJ grow soybeans, corn, forage, grasses and cover crops custom finished swine and own a cow calf we've heard on their family farm near Trimont Minnesota her son Caleb direct markets production through farmers premier meats and the Cruzmark family uses precision technology no till strip till and cover crops to improve soil health and cohabitate with wildlife while serving as environmental stewards then we will hear from Richard Wilkins Richard is a farmer of another very diverse operation similar to Rochelle's from Greenwood Delaware he's president of the Delaware Farm Bureau and past chairman of the American Soybean Association he's been involved in helping to craft national agriculture policy during development of past as well as the current farm bill he represents farmers as a director of the supporters of agricultural research foundation board and the national coalition for food and agricultural research he has traveled internationally on numerous trade missions seeking to open and expand global access for U.S. ag products as well as developing diplomatic relationships with leaders in foreign markets and then our final panelists will be Jenny directs the environmental defense funds work to improve the sustainability of consumer goods through partnerships with the private sector her primary areas of expertise include the sustainability of food and agricultural supply chains as well as mitigating greenhouse gas impacts prior to joining EDF in 2011 she worked for the Arkansas economic development commission focusing on renewable energy policy and for ABT associates as an analyst estimating the costs and benefits of environmental regulations she has an MA in energy and environmental analysis and a BA and environmental analysis and policy from Boston University so thank you to our panelists for your reflections and I will go ahead and hand it off to Rod Rod Thank you Robin it's a pleasure to be with you all we've been working in ways to make us more efficient and being better stewards of the land I traveled the United States searching for ways to make us better at what we're doing and in our practice we found that trip irrigation is probably the best not only for saving water but using less input costs we installed our first system in 1998 so we've got our feet on the ground pretty good every year it's exciting to learn more and more it's kind of being farming fun again but through our trip irrigation we do all of our injection of our fertilizers we are eight inches deep with our tape so therefore our crop is above it and the root system is right by our tape so we were able to cut our fertility by 30 to 40 percent less nitrogen with drip irrigation because we're spoon feeding it when the plant needs it and not blasting several pounds of nitrogen on it and watching it run away from us like I said we did cut out between 30 and 40 percent less and we're maintaining a higher quality crop a higher yield and the shelf life of our crop is better with this and we owe it all to the technology that they're putting out with drip irrigation we automated I watched my inputs I can turn fertilizer on or off anywhere in the United States or anywhere in the world actually with my smartphone everything is monitored we have data it keeps all of our data all of our records online our biggest issue is food safety onions being our primary crop we have to really watch what we put through our system to make sure it's safe and I feel that there's no safer crop or food supply that's any safer than what we grow here it's taken several years to figure this out matter of fact I've had the opportunity to work with Raj Khosla when he was with CSU it's just been really fun learning and learning how to make us better like say actually grow more with less we're using 30% less water in Colorado here our water supply is probably one of our biggest issues we depend on a snowpack from the mountains from the Rocky Mountains and this year it's pretty slim up there so with drip irrigation it's a way of survival for us and management is really tough but it really works and I could go on and on and on I love talking about what we do here but I know we're running short of time and I just want you guys to know that there are places out here where they teach and try to help us farmers become better at what we do with drip irrigation your plant takes up everything you give it there's nothing running off it's not contaminating downstream waters and it's been a proven fact we have body hundred acres of drip irrigation put in right now it's very costly I think government needs to step in to help farmers be more efficient and it would also create extra water for municipalities that need more water so we could trade for some of the cost drip irrigation is about $4,000 in acres so it's like buying a farm over again but it's just a matter of quality is what we're working on to achieve that like I said I do appreciate the opportunity to tell my story we do several tours every year people from the United States and we've had people from China Africa all over the world actually coming to visit our farm so my door is always open if you ever get an opportunity to come visit we'd love to have you thank you I really appreciate that I might ask just one quick follow up question I think we have a little time for you to respond and see if anyone else has follow ups but obviously you operate at a pretty large scale so what would your thoughts be on how to encourage these sorts of changes on other operations that maybe aren't at the scale that you guys are you brought up the expense of drip irrigation and the challenge probably doing that for some operations so what sort of ideas do you have or what do you think is really the biggest challenge of kind of cross scales for operations making these sorts of changes I think our biggest problem that we're we have a tendency to over fertilize I think in our part of the country the rule of thumb is a pound of in per bushel of corn you want to raise we're raising 300 bushel of corn on 110 pounds of nitrogen so it's amazing but I see a lot of pivots running and the water running off the fields and into gutters and going downstream and if we could learn how to apply fertilizer at a less rate so it would absorb into the ground instead of running off I think that's a big area we need to improve on fun thanks we'll go ahead and turn to our next panelist Rochelle Kruzmark thank you for inviting me to participate in this panel today I think it's crucial that that farmers are included in these conversations about finding solutions to environmental issues and I'm passionate about the sustainability of on our farm as well as connecting with the public to better understand the needs of our consumers which is one reason why I'm a director on the united soybean board the board works on behalf of all U.S. soybean growers to achieve value for their checkoff investments and programs that drive innovation in meal and oil and sustainability and as Robin mentioned on our family farm we grow soybeans, corn, forage grass and cover crops our family also raises hogs and owns a cow calf beef herds so we're very diversified we were the first farm in our county to earn the Minnesota water quality certification program so we're proud of that you know we're stewards our goal is to continually improve the soil and environment that's held in our care as we increase the economic efficiencies so that we can successfully transition to the next generation and as far as sustainability now well U.S. farmers are not only committed to but we're actively targeting the aspirational goals for sustainable development where we can have a make positive contributions and that's the biggest difference is at our farm but also through our value chain sustainability well U.S. farmers we're on track and our goal is that we're committed to reduce land use impact reduce soil erosion increased energy efficiencies and part of that is by using the biofuels that we produce and also by reducing greenhouse gas emissions I think one of the goals for the future is for the U.S. ag industry to be the global leader in sustainability as far as water quality well protecting the water is important and a variety of farm management techniques including conservation tillage which we practice on our farm we no-till and strip-till nutrient management again on our farm we inject all of our liquid nutrients from our livestock and so nutrient management and technology improvements in seed and equipment that can all improve water quality as well as conserve water use as as Rod mentioned managing water has economic benefits too so technology including precision agricultural applications soil tests assist farmers to apply the right amount of nutrients and chemicals to each field and actually each area of every field this helps us reduce applications improve water quality and improves profitability unfortunately I think Sean McMahon was the Iowa agriculture water alliance was not able to join us today as planned so I'd like to take a couple extra minutes to share a couple of projects that the united soybean board has funded and I think Lisa Schulte more may have referenced a couple of these projects in the February 4th workshop but there was a project that was called the Native perennial filter strips to improve water quality and biodiversity for sustainable soybean production and what that research from Iowa State University science based trials of rural crops it was called the strips program that established permanent strips of diverse native vegetation called prairie strips on approximately 10% of soybean fields and it showed that that can reduce soil and nutrient loss by over 80% and it also provided or provides habitat for pollinators and wildlife so it's a geospatial analysis and I believe it was like on 150,000 acres of rural crops in multiple states ISU is compiling those results of cost benefit analysis and practice to share with farmers and funders I think here in the new future and there was some other projects that Leif and Ben talked about one of them here in Minnesota the Minnesota chapter of the nature conservancy it involves like 18 partners NRCS and Producers are working with local soil water conservation districts to collect agronomic data and soil sampling and all those results will be used to quantify soil carbon sequestration and reduce greenhouse gas emissions and improve water quality outcomes purpose driven, well when we talk about a farmer's role in sustainability we're purpose driven business so we understand that as raw material suppliers we have an enormous impact on all levels of sustainability including economic and environmental sustainability as far as environmental well our environmental practices make us globally competitive and we must continue to improve our products global competitiveness by innovating and adopting more sustainable practices I think our capacity to make continuous improvements in our production practices using innovative technology will nudge us forward and it's either going to make or break us in the future and economics while improving on farm practices and available technology advances both efficiency and environmental resilience improves the future profitability of US farming both contribute significantly to the future profitability and resilience in the economic realm as far as sustainability from a global view US farmers have pursued sustainable practices for decades not only for the benefit of our farms but for the planet we appreciate that today's consumers across the globe demand sustainable products more now than ever and they increasingly expect proof of those sustainable practices a lot like Richard I've had the opportunity to travel and meet with a lot of our international customers and our domestic customers and they all want to know what we're doing on our farm so we're transparent and you can feel free to come visit us any day as far as soil health I think that you can ask anybody in agriculture and they'll tell you that healthy soil sustain better and more efficient yields and produce higher quality products and while the ag industry has adopted innovations in seed technology equipment design and precision planting strategies the industry is also moving to aggregate and measure the beneficial effects of innovative soil management strategies healthy soil response to extreme conditions like flooding and drought by more effectively letting rain water flow in and gently releasing the nutrients and the water to plants as it's needed healthy maintained soil also requires fewer inputs like fertilizers and other treatments because it holds the nutrients rather than allowing them to leach I'm proud to serve on the united soybean board because it invests in soil management projects including the soil health partnership and some of the program's goals are to quantify the benefits of practices that support soil health from an economic as well as environmental standpoint and I think it exhibits how healthy soils also increase the economic efficiencies next slide please so to summarize my points I'm going to leave you with these three words stewardship science and solutions farmers are environmental stewards we use science-based research and data to make informed decisions and collaborate with partners to develop solutions thank you great thank you Rochelle we'll go ahead and move to our next panelist Richard Wilkins joining us from the shop good afternoon so I appreciate the opportunity to speak this afternoon my colleagues Rod and Rochelle have done a very excellent job of relating some of the experiences that we have as farmers in our industry want to spend some time telling you a little bit about my journey down this pathway of sustainability and then also I want to leave you with some potential risks of what the future may lie so 2020 was the 47th year that I planted a crop 47 seasons maybe hopefully you'll not think that I'm that old the reason why it's been 47 seasons was because my first crop with a risk, personal risk in it was planted when I was 13 years old I rented 5 acres from a neighbor and begged my father to allow me to use his farm all tractors to be able to plant some soybeans and try to start earning some money to put away in a savings account to be able to purchase my first automobile I was a forward thinker even then but you know that time 1973 in our industry what was epidemic was that many people non-farming people looked upon farmers as being country bumpkins as being hay seeds as being a low intellect I can remember my guidance counselor when I was entering middle school discouraging me from wanting to become a farmer she said that my test scores were high enough that I should be on a pathway of academics and be college bound and I shouldn't be a farmer because basically she was trying to say I was too smart to be a farmer well of course I defied her and our industry our trade associations our representative organizations worked really hard during the late 70s and the 80s to reshape that image of what an American farmer was we emphasized that agriculture was a business and in many ways agriculture was a big business that agriculture was very science based and how much science that there was involved our we were very successful at changing that image of a farmer in agriculture perhaps we were too successful because then as we entered into the 21st century we started to have consumers and customers expressing fear about the way that their food was being produced they often it's been said that they want the latest technology and the latest science and their lives except their food and there's been a lot of criticism the last 20 years about our use of advanced plant breeding methods about our use of synthetic pesticides and synthetic fertilizers in order to optimize the amount of food that we're producing from each from each unit of production but I'm optimistic and really hopeful that you know over these last four weeks so far I've been very impressed with the academia the presenters the work that they've been doing research work and I hope that that we are now on the cusp of the majority of consumers and customers seeing what the benefits are all the greatest technology and science and innovation that we have available to us in order to in order to optimize our food production in order to deliver to them the good nutrition food is medicine and to be able to enrich their lives by utilizing as few resources as we have to for each unit of production and that's what we've been really really great at in the United States at the moment I want to touch upon some of what potential unintended consequences that there could be forgive me I have an old barn cat that feels like she should not have to go outside today but you know some of these schemes that are being talked about potential whether they're government mandates whether they're incentive based programs some of my fears is that the either the food manufacturing companies or the food marketing companies that they will be the ones to benefit the most from requiring certification or requiring labeling on the products maybe it would be the facilitators the third party certifying agencies that they'll extract so much out of this added value of sustainable farming practices that the producer will be basically left in the same spot that they were before will have additional mandates or additional requirements imposed upon them without any greater per unit profitability and then the unintended consequence of this would be an even further explosion in the amount of consolidation within the American agriculture system you know and then another potential risk is that the industry could become vertically integrated you know it's if you take a look at a large company and if they're if the consumers or the NGOs or governmental entities are telling them imposing upon them requirements that say you must source all of your components for making your products from sustainable farms well would they rather deal with 100 farms versus 10,000 farms so if they would offer those greatest advantages only to the largest farm operators and that's what I mean by the unintended consequence of the risk is that we could be going down this pathway of even further consolidation and also the risk of vertical integration I enjoy what I'm doing I scaled my farm up to at 1.3 thousand acres we then decided that we would change our crop mix and work on adding more value we're now down to under a thousand acres it's an enjoyable way of life and I wouldn't trade it for anything in the world thank you for the opportunity to speak and I'd be glad to answer any questions that anybody may have great thank you so much Richard that was excellent I think we'll just move to Jenny's comments and then I think we will just be opening it up for discussion for the full panel and our earlier speakers to join as well so I've queued up a few questions that have been popping up but we'll circle back to that in a minute so Jenny thank you and I need to thank Kurt because he gave a great kind of precursor to some of what I'm going to talk about today just in terms of supply chains and their involvement with nitrogen fertilizer so maybe just a brief bit about Environmental Defense Fund we work on a number of pressing environmental issues and one of those has been for a number of years impacts from fertilizer runoff and fertilizer that's lost to the atmosphere is a greenhouse gas and we spent a lot of time early on starting 20 years ago or so focused in the Chesapeake Bay working with farmers to understand what were the practices that could be deployed that would help them manage risk and also still produce the yields they wanted to maximize lost to the environment of fertilizer in particular and we did a lot of that work and found some ways to be successful but also realized that it wasn't scaling and that we needed a way to get more resources kind of dedicated to this effort and so that kind of leads us to another part of Environmental Defense Fund which is where I work which is our private sector partnerships and so in that capacity we partner with leading companies to try and advance our environmental goals as a non-profit we don't take money from our corporate partners and so we're really trying to find ways to maximize the environmental benefit just as a little bit of context so I want to maybe share a little bit about just the timeline from my perspective and some of the highlights we've seen with nitrogen fertilizer and you can go ahead and go to the next slide so Kurt mentioned this as well Field to Market I kind of say that was maybe an early step towards more corporate engagement in this space the organization formed in 2006 and later became its own non-profit but it had some food brands involved from the beginning and it was really focused on the sustainability of row crop production which until that point hadn't I think been very high on the list of priorities for food companies at that point had been more focused on commodities tied to deforestation and other countries in particular and so I would say from there momentum started building and then go to the next slide in 2011 they launched their four hours program so really trying to bring this idea of fertilizer stewardship more to the forefront and doing kind of outreach along those lines as this issue was getting more attention and picking up a little more momentum then if you go to the next slide I would say in 2013 things really picked up when Walmart launched an initiative focused on what they called fertilizer optimization and this was part of an effort that Walmart had really focused on actually addressing greenhouse gases in their supply chain and so where EDF had for a long time been focused on the water quality impacts from fertilizer runoff we realized that as more and more companies were setting climate targets and as you started digging into the hotspots of where companies had a lot of greenhouse gas impacts in their supply chains fertilizer tended to actually be pretty high on the list in terms of size of impact as well as kind of a ready set of tools to be deployed that could help minimize some of that impact so in 2013 Walmart launched their fertilizer optimization program and in that they challenged a number of their kind of leading brands, leading suppliers to set fertilizer goals for the next five years to really try and figure out what could work how could they engage in these really complex supply chains as Kurt mentioned earlier and so from there a number of companies like Smithfield Smithfield Foods, a big pork producer Campbell Soup Company and others developed goals for how they wanted to engage their supply chains and so from there if you go to the next slide there was because of Walmart there was this momentum and work that was starting to happen and then I would say the issue got more and more attention so this here in 2017 a group called Mighty Earth released they're kind of more of an activist NGO and they released this report really focusing in on fertilizer impacts in the companies who have a lot of grain in their supply chain so a lot of retail restaurant food brands that have a lot of meat in particular in their supply chains as well as corn, wheat and soy and so I would say like through these years EDF was partnering with companies to work on some of these initiatives we were trying lots of different approaches I would say they all had a certain common element of how do we get resources whether that's technical assistance or additional funding like how do we get resources into the hands of farmers so that these practices can be adopted more widely and I think we saw a lot of things fail and a few things that actually I think worked out fairly well two examples to maybe highlight if you go to the next slide include Smithfield Foods so they set a goal in 2013 when Walmart asked them to engage in the topic that they wanted to improve the sustainability the fertilizer and soil health on 75% of the grain acres they sourced as feed for their hogs and they were able to then successfully meet and exceed that goal which they announced in 2019 they had reached over 560,000 acres and I think one of the keys to their success is that they were in fact doing direct grain procurement with the farmers and so the length of the conversation between the food company and the farmer was very short so you didn't have to translate it through multiple steps in the supply chain and I think it allowed Smithfield to more quickly understand what would be helpful from the farmer's perspective and how could they be more engaged whether that was increasing the number of agronomists on their staff to provide technical assistance at one point they bought some optical sensors that they would loan to farmers to use so they could try them out from a precision fertilizer application standpoint and so they were able to find a model that worked and that worked from the standpoint too I think of who pays for this which strikes me as a team throughout a lot of the presentations and I think one of the biggest challenges you know I think Richard mentioned this in his comments just a moment ago that you know I think a perception that brands potentially have a lot to gain from this work but I think at the same time you know they're typically selling through a retailer through a fast food restaurant chain basically through entities who are not interested in charging their customers more for a product and so I think there is this conundrum of you know how much does it cost to really do this and who should pay for it and how do you create a system that then can scale impact and so in this instance I think Smithfield found a model that provided enough business value in terms of strengthening relationships with farmers being able to source more grain locally so cutting down on transportation costs that they could basically find the business case without being able to charge a price premium for their end product I would say a lot of other companies haven't been as fortunate to kind of find that sweet spot that allows them to fund the program long term and you know not need a retailer or a restaurant to kind of okay a price increase another example if you go to the next slide of maybe a success story is Campbell Soup Company so they were also part of that original cohort of 15 major suppliers that Walmart asked to set goals and their goal was actually around improving fertilizer use on wheat so they targeted 70,000 acres of wheat and their approach was to partner with True Terra which was formerly Land O'Lakes to really kind of use a model where you go to the farmer's trusted advisor so in this instance like the local ag retailer as the point of information transfer and technical assistance so instead of creating a new person that a farmer would need to engage with instead really focusing in on a relationship that was strong and existing to be the conduit for that information and so Campbell Soup was able to successfully set their goal which they announced this year and so I think there are some cases where this has worked I don't think that any of it has scaled as quickly or as broadly as we wanted it to I think again because who pays for this is still a big challenge and I think also to Kurt's earlier point around certifications they're valuable because they would presumably allow a brand like a Smithfield or a Campbell Soup company to promote a more premium product but without a high quality third party verified standard most retailers or other retail outlets probably wouldn't permit that or encourage it or promote it because of a legal liability issue and so you get stuck in this conundrum where you're then forced if you do a standard to have a segregated supply chain to have a more expensive product again and then likely not an ability to scale beyond the small percentage of consumers who are willing to pay more for that kind of premium sustainability product so I think the big takeaway for me from all of this work is that there's no silver bullet we need lots of different interventions to help farmers get the resources they need to succeed and to create the incentives that will perpetuate that long term and I think part of our work with companies as we've done more and more of this is to also just think about how can we use their voices in the policy landscape to help advocate for programs that will help farmers and help increase conservation programs and funding towards that end so maybe stop there thank you Thank you Jenny well at this point we're going to bring back all of the speakers so our kind of first part of the session speaker is all of our panelists who just gave comments if you can all turn your videos on that will bring you on to the webcast and we are monitoring questions and slack also for kind of participants within the panels to post questions I'll keep an eye on that but I think I will start with one that I think is somewhat distracted perhaps to the farmer but when I see Ken's hand raise so Ken will be up next directed maybe a bit to the farmer participants but if others have thoughts and ideas that are quite interesting to me and I grew up on a farm and my family is very active in conservation and you all shared really great success stories of the way that you've managed to solve some of these problems so why is it that not everyone's doing it because I feel like you know you hear these success stories you see lots of great examples of people finding a way either through their own personal motivation or through the you know the positive economic benefits they're finding that are really great and I think that's really important and I think that's really important to me. I think that's really important to me is that you know the fact that the land is in cover crops only 5% of the land is in cover crops less than half is in limited tillage what is really going on there and I was thinking of like Rod's example we know larger farms often are more engaged in these things because of economies of scale and being able to do it we also know more diverse farms with majority into the successes that you're having. Yeah I could speak on that for a second here we deal directly in the food chain business so we for instance Walmart we deal directly with Walmart, Safeway Albertsons and they require us to meet their satisfaction you know to meet their guidelines and we have to implement this or we lose the business so does that answer your question? It does I mean you have a strong economic motivation that this is part of the relationship have but maybe because of your direct relationship with the with that part of the market yeah. But they still don't understand the extra inputs we have to go through to make up for that cost so we're still working on trying to figure that part of the process out so. Yeah okay. Michelle or Richard? Yeah so from our perspective our customers for you know soybeans more than corn because most of our corn we live in in a in an area that is corn negative so most all the corn goes for livestock feed or ethanol production but our soybeans a lot of them also go for livestock production the meal does but a lot of our customers like I mentioned earlier they they want that qualification that our products are grown sustainably and so we need to verify that and the the United Soybean Board has worked with the U.S. Soybean Export Council to develop a soybean sustainability protocol called SSAP and it's third party verified and I believe there's about 95% of the soybeans are produced under this qualification so there again if we want consumers and our customers to purchase products we need to verify the sustainability I'm hearing a market demand theme market is demanding it and that's okay and that's okay because it's it's the right thing to do it's best management practices Richard do you have thoughts on that? Yeah I do Robin that's a very very excellent question so let me answer it first with a story so when I was a young person learning to farm from my father my father instilled in me that cover cropping growing a crop during the winter months was just something that he did it was a normal practice he couldn't really explain exactly to me why other than you were providing cultivation to the soil my mother explained he said well the Wilkins family is very stingy and they're very tight and they don't want to see anything wasted so we didn't want to waste our soil we didn't want to waste unused plant nutrients so we grew cover crops during the winter time in order to do that so cover cropping in our family has just been a standard practice in a way of life now I tell that story to make my point that I believe that the reality is that the majority of farmers are doing these things okay it's in the farmers' interest to make sure that they optimize the pounds of plant nutrients that they apply to each crop to do a thorough analysis of what the expectation what the yield potential is of each production unit and only to apply the amount of resources that are needed in order to meet that optimum yield so I would say that we already are doing these things it's just that in many cases many farmers aren't telling their story and aren't talking about it so that's yes as I said in my opening we are on this journey and this pathway towards there is no point in time where you can say okay I've got here I'm sustainable now it's a pathway of continuous improvement and each production season we're trying to be better than we were the year before the other theme I'm hearing which is again consistent with what I would expect there's also a conservation ethic that you all have a strong conservation ethic you know in addition to perhaps some of those external pressures to meet qualifications and to meet the demand that's there but I think that conservation ethic is critical and it sounds like you were raised with that Richard so there's all kinds of questions flowing in so I'm going to hand it up to Ken to ask a question oh you're on mute Ken we see you but that's perfect so I have a quick comment and a question and the comment and it's to the three first speakers the effectiveness of policies and markets that address the end problem in agriculture ultimately depend on the ability to identify end loss reduction options for which we have robust estimates about how much they reduce end losses the challenge is though that we often lack the capacity of such estimates across the wide range of soils and climates and production systems in U.S. agriculture so my question to the speakers Leigh, Kurt and Kurt what steps are taken by companies and government programs to ensure that the management practices being promoted actually deliver the benefits that they are receiving subsidies or environmental service payments for thank you thoughts from the first couple of speakers well I mean I'll hop in just because we're in the process of standing up a pilot for the ecosystem service market that is very much so an outcome based program it's not necessarily tied to incentive payments or farm bill programs but it very much is a performance based program much like the normal marketplaces that we're familiar with are and that you know if you don't see the change in the soil at that five year kind of soil test true up there's a consequence there so there's that and I don't know there's lots of impact in that statement but I think there's growing questions on both the is this the change that's happening but also what's the return on investment of some of these programs just on a broad level both for the farm and for the environmental outcome that we're seeking to achieve just to follow up on that Ken that's a great question and I can't speak nationally but I can have knowledge of what's going on with the Chesapeake and that's a real challenge in our cost share programs as well as the trading programs that have been developed here they develop tools and basically what we end up doing is counting practices and we don't have at least in our neck of the woods we don't have these intermediate metrics like like soils or soil P levels we don't have this we don't have a strong connection other than the models that we trust that there's a connection between practices and demonstrated outcomes and I can tell you for a fact that if you look you're struggling with that right now in the Chesapeake we've been at this for 30 years and we're looking at the water quality outcomes in terms of estimating nitrogen and phosphorus loads coming over the fall line in various rivers contributing to Chesapeake Bay and we're just not seeing a strong signal so there's a disconnect somewhere any other follow up thoughts on that I had a I guess a question playing off of that that I'll raise that's just related to this question it just struck me maybe it was in Leah's comments originally about paying for practices versus predicted or modeled outcomes like you're talking about Kurt or actual outcomes but how in the world would you ever hold people accountable to actual outcomes at the scale that would be necessary so I know with the TNC project it seems that's an example where you are measuring actual outcomes but that seems like a gigantic undertaking and if I remember right we maybe tried that in the past before too and it's nearly impossible to pull off so I'm just curious if people are into the farmer panel too I'm very curious if you have thoughts about yeah I think we have a lot of question marks about why these programs aren't working and is it that we have bad expectations about what the potential effects of some of these interventions are or is it because something else going on in the natural system that's hiding that signal so I'm just curious what thoughts people have I like the idea of shifting towards measuring actual outcomes and paying for that but thoughts about how we would actually do that I mean I mean I think that you know there's I think the situation depends on the type of agriculture and the type of situation you're talking about but I think that you know there are suggest there are intermediate indicators that you could use in terms of you know for instance phosphorus P levels soil P levels and you know and they people have tried various other types of mechanism so you know I mean there was a pilot program in West Virginia that that rewarded a group of landowners who could move the needle and nitrate levels at the outlet of a watershed so you know it wasn't it wasn't punitive or anything like that it's like it was a performance payment so you know it's and oh and the other thing is you know and if you're dealing with large scale systems like if you have it vertically integrated systems you know where you have large stores of nitrogen in manure and you know you're treating those those large movements of nutrients are and particularly if you like a waste to energy project or are directly measurable and easy to track so in some instances that is it depends on the type of agriculture and type of system you're looking at I think it's creative I don't think there's a one size fits all type of a I know that's cliche but I don't but I think you have to sort of look at the circumstances and try to figure out well you know where can we sort some indicators there to measure outcomes I also don't think we're going to get that you know like you know we're just in the process of launching a big kind of edge of field strategy you know push in that like we're not going to get we're not going to meet our water quality outcomes by looking at in-field practices alone right and especially kind of in the face of of our changing climate in that doesn't matter if you're doing soil health or reduced tillage or whatever like if we get three inches of rain in an hour there's going to be sediment and nutrients leaving that field and so we need that kind of setup and in place to help mitigate that impact anyway that's part of it too and part of that ties into what skill you talking about your outcome you know like like what skill we thinking about outcomes at so anyway I'll just so I'd like to bring up two points one I think the matrix that we use to analyze or measure organic matter or whatever nutrients are in the soil is pretty diverse and we have seen samples that you know when you take a soil sample and we've participated in in equip and in other conservation practices you know through NRCS and local soil water and everything CSP programs and stuff but when you're taking a soil sample I've seen a pretty big difference in for instance the measurement of organic matter you can take a vial and it'll give you one measurement and then if you take a root here and take it out of that same sample that sample might change six tenths of a percent so if you're getting paid to increase your organic matter by say 0.3 percent where are you going to get that sample from and so that's one of my concerns and a point that I wanted to make and the other one is that I think it was alluded to before is that as part of the nitrogen problem I think is in the several years ago animal agriculture was encouraged to apply liquid nutrients according to the N value and what we found is that that's over application and so what we do is we apply our liquid nutrients from our hog burns from the pits according to the N value and then we spoon feed the nitrogen as the plant needs it and it's not only better for the environment but it's more economical I can't remember I think it was a rod that mentioned you can produce 240 bushel corn and 140 pounds of ant in our soils I'll tell you that we rented some ground on a 2 year lease and produced corn on it last year and all we did was apply nitrogen no other nutrients and had hardly any rain after the 4th of July and still produced 190 bushel corn on that ground and it is not premium southern Minnesota soil on those two farms so we're doing a lot of conservation practices I think the majority I think Richard said it too farmers use agronomic consultants and soil samples because part of it is economics it's not only like I said earlier it's an innate characteristic in farmers that we just want to care for our soil because you know that if you take care of the soil it's going to take care of all of us not just produce crops but it's better for everybody and so I'm not saying that we're all doing everything right and it's definitely continuous improvement and I really appreciate the technology in the 41 years that I've been a farmer of anything I appreciate the technology so that we can use to make better decisions thanks Richelle Lee I saw you were going to reply yes I thank you I have a follow-up comment that's going to generate a question for the farmers on the call so first of all I think this is a fantastic discussion because it really highlights a serious challenge with our pay for performance programs and that it is very difficult to measure these outcomes and I think this links back to the question Kathy posed to me earlier about the scale at which we are trying to motivate management changes it's really difficult for me to envision that we are going to be able to accurately track outcomes if we're only impacting a relatively small proportion of the landscape if only a relatively small proportion of the land managers are making a practice change we may not be able to detect the outcome unless we really invest in some high cost sensors or something like that but with our current technologies we probably won't be able to measure it and so then if we plan to hold people accountable for outcomes I think we'll end up with a situation where people will be very risk averse and worried that they will take costly actions and they will not be credited for doing so because an outcome may not be able to be measured so the way that I think this links to Kathy's comment is that leads us to a question of whether we can have farmers coming together in collaborative ways to impact a larger area of a watershed and so my question to the farmers on the call is do you see opportunities there of creating programs for more collaboration or does that kind of ruffle your feathers and make you say oh my gosh there's a lot of work that that's going to take and I don't know how much I want to work with all the neighbors around me to make this happen. What is your reaction to that idea of group programs and mechanisms? Thank you. They're thinking about it. For us being one of the largest super growers of onions we have to work with our neighbors because we can't produce enough and still have a four year rotation on our 4,000 acres to make it work so they are learning with us there is no well I shouldn't say there is none but I have not heard of any class or what I want to call it a program where you can go sit and listen and have them make us aware of all the things that we could be doing better I say American farmers come a long way and we continually want to get better If I could if I could also just see I form in here in Delaware so long about 1997 Delaware about 80% of the water that drains into the Chesapeake Bay comes from Delaware but because we are in the Chesapeake Bay watershed we're under the magnifying glass so in 1997 here in our state we started devising a pathway based primarily upon education and based upon voluntary participation in incentive based programs so we established a basically a voluntary nutrient management program whereby it did require that you receive a minimum number of hours of classroom education in order to become a source slide and then you had to receive continuing education credits in order to keep your certification but there was no stick the governor at that time Tom Carper, our governor at that time who's now I believe he's now the chairman of the senate environment and public works committee but he said let's do it the Delaware way let's create a program based upon voluntary compliance based upon education based upon providing financial incentives in order to adopt good behavior positive reinforcement rather than the negative stick it worked I can remember a situation where a poultry farmer in my community had to flock of chickens had gone out the poultry manure was removed from the production facilities but was he didn't have a manure shed so it was outside on the pads of the chickens and then he had a heart attack and he had no family members to help well the community got together and moved that poultry manure and got it protected either under cover or applied on some productive fields because we didn't want the social we didn't want the social kickback of a farm being seen with manure staged outside of the production area so that was that was collaboration now unfortunately what happened here in Delaware was about 10 years ago and Lea may be able to correct me but about 10 years ago the region 3 EPA administrator came to Delaware and said we don't like your voluntary program we don't like that your department of agriculture oversees it they should be under the department of environmental control and they wanted to impose many mandates and restrictions upon us and they were successful at threatening to withhold federal funding for our incentive based programs in order to make us change the rules now the farmers say the government is just regulating this so they so in my opinion there was a lot of damage that was done to a very very good program by bringing the stick in and trying to and trying to force us to adopt the instructor rules and regulations Michelle did you have anything to add it looked like maybe you were going to yeah so we we experienced something kind of similar so a few years ago with the buffer mandate and it was in response to trying to reduce runoff into the water streams and so there was just a blanket law passed that any public water anything that drained into public water had to have a 50 foot buffer I said for years that there is no such thing as common sense because it's not common it should be called practical sense and my point in sharing that is that there is no practical sense requiring a 50 foot buffer to an open drainage ditch that has a negative slope and nothing nothing nothing slopes into it right so I would agree with Richard that incentives to collaborate and develop partnerships across this and quite frankly that is why I agreed to participate in this workshop because I think any partnerships and relationships that we can develop are going to have a better solution to concerns and issues than any stick I personally love the idea of 20 to 30 farmers within a small scale getting together figuring out a collective solution and being able to measure that impact of that scale and we talked about doing that here in Ohio as a way of addressing water quality issues locally so it's good to get your thoughts on that. David has had his hand raised for a while so I'm going to call on David to answer his question. Can you hear me and see me? Thank you so much for a great session today. Two things that I wanted to get the first few speakers to respond to one and this is building on Ken Kasman's comment about the difficulty of actually monitoring practice adoption and outcomes and I was just wondering keen to hear their thoughts on other bottlenecks in the broader agri-food system that might be easier to monitor so for example we had a paper out a couple years ago putting forward a case for imposing design standards or performance standards on fertilizer products and their fertilizer manufacturers would be the ones that would be monitored for that it's similar in the ways that the cafe standards for cars have been done instead of monitoring the driving habits of 120 million drivers you monitor production or you enforce production standards on a smaller number of companies and there are several other examples of that so that was just one thing thinking kind of beyond the farm in some way beyond this more traditional policymaking relationship of either government to farm or these other private sector initiatives if there are more innovative ways and second to that and this is the way a lot of policy in this area often is drafted but it's often within the existing system and by that I mean you know probably some of the more transformative change that is going to happen are going to be from changes that have nothing to do with incremental changes in nitrogen use efficiency you know it will be to do with the fact once consumers realize that an impossible whopper tastes the same as a normal Burger King whopper right or it'll be once these startups that are promoting nitrogen fixing corn actually take root and work just to give a couple of examples and so in that context policy plays a different role right in terms of either reducing regulatory barriers or making sure that they you know meet certain standards so I was just interested in hearing the panel's thoughts on those two things one on kind of looking at other parts in the food system that might be easier to implement policy on and what the role of policy is in these areas a more transformative change thank you thank you David looks like Lea's going to jump in well I do have a comment to your first question I know that in the past five years there's been some really innovative work done trying to work directly with ag retailers and Robin can speak to this probably more than me because I believe you've been involved with some of this work Robin but specifically I know in the western Lake Erie Basin trying to work through these ag retailers who influence a larger portion of the landscape right so if the point that we're making is that we need to scale up and figure out what levers would help us do that then maybe working with those individuals who then go out and work with farmers is a good approach and so I can't speak a lot of the results because I haven't been directly involved with this project but I've really been very interested in that and I think it's a neat approach and we have seen, well Carrie Volmer Sanders shared I think a slide was it just in the workshop this last week and showed that we are seeing some positive effect of working with the certified retailers still trying to kind of tease out what that effect is at the end of the day but we also see a high level of current nutrient service providers so they're not necessarily going to switch to a certified one but if they're working with a certified one then certainly we're seeing some I think some positive impact on like the field level management. I was just going to say like on that note you know we have a board member who's a hog farmer in southern Minnesota and she talks about her agronomy team making sure that like the foundation staff at SWCD or NRCS is kind of integrated into that you know agronomic team is so important right like so many of these practices they're just straight up not going to work if that side of the operation isn't on board with it anyway I'll just leave it with that it's just such an important part of this that the entire system get integrated it's not viewed as there's the agronomy set of things and then there's the conservation set it needs to be well I just wanted to I didn't have anything to add other than to say second what David said because I thought it was spot on and you know some of that and I just add to that you know what happens if the entire fleet of cars goes to electric in 30 years and then all of a sudden ethanol demand dries up I mean there's just you think about those types of things but I do think that's a very productive way to think about the problem and that's why it was one of the things I was thinking about in terms of intervention in an integrated type of a system like you talk about poultry where you have a vertical integration through the whole system and you know changing the liability rule so you can manage you know that whole stream differently because you're taking the management of waste out of from the individual growers and putting it into the vertically integrated system and making integrators responsible for the waste you know things like that you know I think that that sort of fits into the spirit of what you're talking about and you know on the urban side for instance it doesn't relate to nitrogen but you know they're talking about you know for phosphorus phosphorus bands and urban fertilizers for instance that would be another sort of the system type of changes you're talking about David um further up or further back depending on you know further up in the causal chain or further back in the causal change where there's these big system changes you can make or societal changes that are pressing I think it's just an excellent point that we shouldn't lose sight of Can I just jump in about supply chain standards and MSI's I mean you know in terms of vertical integration there's you know they really are working across the supply chain they tend not to work with ag retailers as far as I know and there really is separate data collection going on there and if you you know if you sort of bring these data collection efforts together I know some of the calculators actually allow you to like import some data you may have entered in like Syngenta's tool or something like that um but you know once once we sort of get everyone together I think I think the you know the data can be exchanged a little bit easier there excellent any other thoughts on that we move to a next question I was just going to add that um we've been doing that in one of our pilot projects um that we have with Tyson foods where our science team has been doing a lot of work on using nitrogen as a metric you know to both kind of understand how much fertilizer both manure and synthetics being added to a field and then looking at how much crop and residues being removed using that as the proxy for how much is then vulnerable to loss and so we've been building that science into tech platforms like farmers business network so that they can do the outreach with the farmer collect all of that data be able to do the calculations to instead of discounting practices something that is more outcome based um to then connect back to the effort that you know Tyson is doing as part of their supply chain and so I do think there's some progress being made to try and make those connections between the tech platforms and some of the other supply chain efforts thanks Jenny we have a question from Eric Eric do you want to turn on your video and ask your question hi thank you so interestingly this morning I listen to a seminar put on by the economist magazine and they had experts talking about the carbon issue of carbon sequestration in agriculture and they were struggling with many of the same issues here about verification and I can't help but think that maybe there's a cultural issue that we have here that we were so worried about whether it's worried about cheaters or whether we're worried about being able to prove that in each and every case that we apply a policy or an incentive that it's going to have an impact on that particular farm and if it doesn't it's not fair for that farmer to get the payment you know in public policy about in other areas in public policy we deal on averages whether it's some policy that is implemented to try to hope that people get better healthcare or better nutrition or maybe tax policy that's going to influence people's behaviors we don't actually audit to see it really did influence each individual's behavior but we have the policy is based on enough experience that we know that on average if enough people adopt it it will have an impact and there may be some cases where it won't have an impact so cover crops may not work everywhere and they have to be a different kind of cover crop in some place than in others but in general if we have enough research and enough confidence that the best practice best management practice is on average likely to yield a result whether it be better carbon sequestration or less erosion or better nitrogen management on average it's going to have a benefit for the region or for the country or for society in general so why do we have to put so much emphasis on validation of the policy impact at the individual farm level if we can take another approach of simply validating that best management practice has been implemented they followed the rules and maybe it didn't work on this farm but it probably is working on five other farms and so at the end of the day it's probably yielding the advantage that we want to have in the future but it's not going to be as good as it might be can we not make our job a little easier by going to verifiable things rather than trying to actually measure the change in carbon content in the soil or the change in nitrogen content or the change in nitrogen leaching or the change in nitrous oxide very many farms, let alone a lot of farms so I'd be interested in hearing a response from either of the panels who would like to respond it's a great question hi Lidia, you want to hear first go ahead Richard well thank you there you go go ahead we can hear you now mentioned something in her opening presentation called the United States Soybean Sustainability Assurance Protocol. And first, you know, Eric, that's an excellent question. You know, why can't we be more concerned about the aggregate and as long as we are moving the bubble, as long as we are becoming better in the aggregate, why is that not enough? Well, the United States soybean sustainability assurance protocol is kind of based on that. It's based on the fact that 97% of the soybean acres in the United States are grown on acres with a USDA conservation plan. That means that that land has to be in compliance with all federal government conservation compliance standards in order to be able to qualify for EQUIP, in order to be able to qualify for Title I and Farm Bill support programs in order to be able to qualify in many areas for crop insurance. So in the aggregate, those soybeans are being produced in a sustainable manner. So yeah, and there's some of the points that I made in my opening presentation about the unintended consequences of adding in all of this extra expense of third-party certifying agencies, the extra expense of laboratory fees in order to prove something. Yeah, I think that if we concentrate more so on incentive-based positive reinforcement programs to help cost-share farmers, we want to do the right thing. We're willing to invest our own money into longer-term conservation practices as long as we are able to get some cost-share assistance to help implement those long-term practices. And so yeah, I totally agree. Let's concentrate on providing continuous improvement in the aggregate rather than being specifically looking at each and every individual farm. I think another to add to Richard's points is that the incentives or the cost-share need to be managed at a more regional or local level instead of a federal level. Because to Eric's point and question or comments is that practices are very different by region or by soil types or what watershed even you're in. And so one of the concerns of the agriculture, the production agricultural organizations is that we don't try to make blanket policies that are tried to make all of us fit in to a cookie cutter, right? Any more than I don't want to be told what color car I need to drive, right? So I think that's something to keep in mind. Yeah, Leah? Yes, I just wanted to say, I mean, one of the reasons, though, that I feel it is important to go beyond averages is because we do currently rely primarily on voluntary programs. And these are costly programs and we have limited budgets. So if we're not being careful with how this money is being spent and where it is being, who it is being given to for which practices and which locations of the landscape, then we're going to continue to not move the needle. I mean, that is the problem that we're in right now and where I think we would stay. So I appreciate the comment a lot. And I agree that it is very costly to try to measure at every field a number of different metrics. So I don't want to be naive and say that that's what I'm proposing. I'm not proposing every field. But I do think that we need to be careful about thinking about local characteristics, the goals, just as Rochelle just mentioned. And maybe that will also help us with this targeting. Yeah, absolutely. Yeah, if we had all the money in the world, then I think the averages would be fine. But we don't. And I think to Rochelle's point, and this was in some of Leah's slides, but we know that the lack of flexibility in a lot of federal programs is one of the big turnoffs for people. And so if we could create more of those localized opportunities and those do exist, not the scale that the federal programs do. And so that's what's tricky about that. I think we have maybe time for one more question. And this was from Tom Burke. I'll just ask it unless Tom wants to jump in and ask it. But he was wondering, given this is the Environmental Health Matters Initiative, he's a little puzzled by the absence of public health and the discussion of incentives and rewards. So is it time to shift the discussion from rewards for good practices to accountability for bad practices? So I don't know, Tom, if you want to add anything else to that, but I think it flows with what we've been talking about and comments made by speakers about, well, the problem might be driven by a minority. Some of our former panelists have said a lot of us are doing the right thing. So when do we drill down and start to say, here's where the problems are and let's really fix the problems where they need to be fixed. Yeah, thanks, Robin. And thanks to all of you for presenting today, what great panels. But since our mission is the environment and health link, and I know it's implicit in what all of you do, particularly for food safety and crop safety, that health is on the radar screen. But I was wondering, as an incentive and as a reward, as you think about balancing those things, whether the public health impacts of sustainability come into the equation, or how can we in the public health community be supportive of your efforts? Because they do have profound effects on health. I'm not sure I totally understand your question, Tom. Are you asking how we can partner to? Well, that'd be great. But really, the conference started off with really a great discussion and a day devoted to looking at the human health impacts of nitrogen. And one of the things that is probably apparent from the subsequent discussions is that, although there's localized issues with contaminated groundwater and things like that, that the downstream effects, particularly the effects that might be public health impacts, don't seem to be in the equation when we look at balancing the benefits versus costs, or looking at incentives for sustainability. And I'm just wanting to get your take on that. Do you think about the downstream health effects? Or is there a way for us to be part of that discussion in the public health community? Because obviously, lots of local health officers and lots of communities have been impacted by nitrate contamination in their water supplies. Can I offer some answer here? Very, very wonderful concept. So here I get here in my home state of Delaware. We're on the cusp to create a basically a water quality trust fund that would be seeded with part of our Delaware State revenue stream. And as I see it, the challenge that we're going to have is that, again, there's going to be competing interests and competing stakeholders for what still is going to be limited resources. No matter how much money you throw at something, there still is a limit to how much you have available to spend. And what I mean by that is that within this clean water trust fund or there's the potential that those stakeholders that believe the solution is more public water systems, public water supply systems. So they're going to want the money funding to install more public water distribution systems so that more citizens will have cleaner water. There's going to be the tourism aspect. And what they're going to want is they're going to be wanting to compete for those dollars to be able to make the bodies of water where the tourists come to play in to be fishable, swimmable, drinkable. And then in the agriculture sector, say our state roughly is around 45 feet above sea level. We have drainage infrastructure and maintenance of that drainage infrastructure is extremely important. And there's lots of things that we can do in that drainage infrastructure to keep the water quality good, putting in basically nitrogen capturing basins, putting in phosphorous traps in those drainage systems. So we are going to be competing for again, those limited resources in order to not only maintain and improve our drainage infrastructure, but to be able to be more in compliance with our with our WIP, our watershed implementation plan requirements that are imposed upon us. So there's there are lots of challenges. No matter the matter of what you do, there's competing interest and competing stakeholders for limited resources. You know, I'm afraid I have to get richer the last word because we are out of time. So thank you everyone for the thoughtful discussion and engagement. And I'm going to hand it back to Kathy to wrap things up. Thank you, everybody. That was a remarkably engaging discussion. So appreciative of the farmers and all the academics who joined today to share their ideas and help us think about what next steps might be. So with that, I'm going to sign off. I'm going to remind you all that we do have one more session next week. And we will be trying to wrap things up. We will hope very much that there will be lots of input from people will be focusing on health impacts of nitrogen, as well as solution pathways. And we're going to draw heavily from the things we've heard about in the workshop, as well as will welcome more ideas and brainstorming from the all of you who hopefully will come next week. So thank you very much. Stay healthy. And if you're in a cold part of the country, stay warm. See you in a week.