Pay for Performance

USDA farm conservation programs have traditionally been designed to maximize utilization of various approved practices broadly and equitably among all states. This is done without regard for where specific environmental impacts occur.  

The Pay-for-Performance approach takes a more targeted approach to investing limited conservation program funding. Instead of paying for specific farm practices, such as cover crops or riparian buffers, it calculates farmer payments based on the net environmental improvements that arise from a comprehensive set of practices.  

Pay-for-Performance may be thought of as using taxpayers dollars to achieve specific environmental outcomes. Results of this work with partners (Winrock International, and Delta Institute) will guide future implementation of Pay-for-Performance programs in other states. This project was funded by the Great Lakes Protection Fund.

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Pay for Performance pays farmers to use conservation practices on their cropland based on estimates of how effective those practices will be, specifically at reducing phosphorus runoff. Sand County Foundation and our partners use advanced in-stream and edge-of-field monitoring devices to help verify the estimates, and better understand how agriculture impacts water quality.

This is a fundamental change from the traditional approach of paying farmers a percentage of what conservation practices cost them to apply. We believe Pay for Performance may prove to be a more cost-effective way of reducing phosphorus pollution. It may also save money for municipal ratepayers by preventing pollution in the first place instead of adding expensive water treatment capacity downstream.

Our work led to the creation of a guidance document that outlines a process for working with the agricultural community to meet phosphorus reduction needs within a watershed. 

BOTTOM LINE

Fertilizer and manure containing phosphorus help crops grow, but when runoff carries phosphorus to surface water it can lead to algae blooms and dead zones. Current conservation programs aim to reduce water pollution, but don't quantify reductions or track water quality improvements.

We’ve got a better idea: reward farmers according to science-based outcomes. 

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