Watershed modeling, farm tenancy and adoption of conservation measures to facilitate water quality trading in the Upper Scioto watershed, Ohio

Water quality trading (WQT) can occur when the point source (PS) dischargers are allowed to claim credits through paying the farmers for adopting Best Management Practices (BMPs) so as to economically achieve pollution-control goals. Although the benefits of WQT have been modeled as effective, only a few trades have taken place. Limited knowledge about the supply side is one important impediment. Based on the case study in the Upper Scioto Watershed (USW) of Ohio, where a WQT program was proposed to help the wastewater treatment plants to meet a more stringent regulation of nutrient discharge, this study evaluates: 1) the extent to which agricultural NPS has the potential for creating a supply of credits from BMPs in a cost-effective manner, and 2) the mechanism that determines BMP adoption by farmers. The Soil and Water Assessment Tool (SWAT) model was employed to appraise the agricultural NPS and BMPs. Interviews with 79 active farmers and 113 non-farming landowners in the USW were performed to elicit information on farm tenancy and conservation. BMPs involving nutrient management (NM), conservation tillage (CST), cover crops (CC), diversified crop rotations (DCR), grassed waterways (GW), and filter strips (FS) were considered.;First, by coupling the SWAT simulation with the BMP cost-effectiveness analysis, it was found that: 1) cropland, accounting for about 60% of the USW, exported 4 and 3 times more TN and TP, respectively, to the watershed than the PS counterparts, which provided a possibility for trades to occur; 2) credits generated through CST, CC, and NM were generally more attractive than that from FS; and 3) prices of credits varied from field to field, depending on the baseline nutrient loads and crop yields. Second, the survey showed that farm tenancy, occurring on over 60% of the farmland in the USW, potentially affected conservation adoption. Tenancy rate was positively correlated with the adoption of CST. Adoption rate of DCR and GW/FS by farmers on the ground they rented was apparently lower than which they owned. Minor differences were found in the adoption rate of NM and CC between the owned and rented ground. The rental relationship between landlords and renters was fairly stable. Renters' conservation behavior was significantly associated with attributes of the leasing arrangement. Third, statistics derived from the survey were incorporated into SWAT to tackle the water quality effect of different farm tenancy scenarios, which were formulated through various combinations of crop rotation, tillage, and application of CC, NM, and subsurface drainage. By increasing tenancy rate from 0% to 100%, the average annual sediment, TN, and TP loads were projected to increase by 2.6%, 4.2%, and 4.5%, respectively. Although farm tenancy possessed a negative effect on water quality, the effect was fairly minor. Finally, a broad scrutiny was conducted to identify characteristics of farmers who were prone to conservation. Barriers to convert to BMPs were summarized. Overall, farmers' education level, farm structure variables, farm tenancy and the perceived economic effectiveness of BMPs were the most important factors in determining adoption or non-adoption.