Every acre of agricultural land can be managed to generate many societal benefits. As these benefits become more apparent, Congress is considering a new approach to farm policy. The Conservation Security Act of 2001 (S1731) proposed to compensate agricultural owners and operators for the environmental benefits that accrue from their activities which conserve soil, water, and other natural resources, such as wildlife and wetlands. Agricultural operations that would reduce air and water pollution, mitigate flooding, sequester carbon and restore wildlife habitats and receive compensation.
The recognition of the benefits produced by agricultural land has stimulated programs to preserve agriculture in metropolitan areas through the purchase of development rights. The underlying assumption is that a farmer can continue to farm his land if receives some cash payment for the development he forgoes. One can question whether this single purpose “real estate transaction” will make agriculture sustainable in growing metropolitan areas. However, compensation for development rights does not compensate for the range of environmental benefits which accrue to society from a managed acre of farm land. These benefits can be identified and to a degree quantified and could form the basis for the payments active agricultural endeavors should receive annually.
Agricultural subsidies of $20 per acre do not reflect the cost of the benefits the acre produces. When this payment per acre is compared to the benefits the acre generated for society, the farmer would receive a token payment for the benefits he provides to the urban area.
Lake, Porter, and La Porte Counties in Northwest Indiana comprise an urban area approaching 800,000 in population and an agricultural area with over 500,000 acres in farms.
Table 1 shows the benefits that accrue from an acre of active farmland in Northwest Indiana. Each of the identified benefits is discussed in the following passages to illustrate how the benefit was derived and quantified.
Table 1: Environmental Benefits from an Acre of Farmland in an Urban Area
1. Open Spaces
2. Recycled Plant Nutrients in Wastewater
3. Drainage/Flood Control
Table 2: A Comparison of Runoff from a Developing Urban Area and Small Grain Farm in Northwest Indiana
Table 2 presents a comparison of the runoff from an acre of developing urban area and the small grain farmland in Northwest Indiana according to four different soil types. The acre of farmland detains/retains approximately one acre foot more storm water per year (325,851 gallons) than the developing urban area. This is a volume of 1,613 cubic yeads or a one-time cost of $4,033 (1,613 x $2.50). When this cost is amortized over 20 yearn at five percent interest, the annual cost would be $323.61.
4. Goundwater Recharge
5. Carbon Sequestering
What a bargain for society which realizes $2,441 of benefits per acre and compensates the farmer $20 or less than 1 cent for each dollar of benefits. When these matters are taken into consideration, we find that farmers are subsidizing society rather than society subsidizing the farmer. If farmers were reimbursed for the benefits they provide, agriculture would be sustainable. Also, society is benefiting from a benefit/cost ratio of 100 to 1. It would be difficult to identify a federal program with such a favorable benefit/cost ratio.
For information on the Hammond Water Reuse Project or the Center for the Transformation of Waste Technology, call (630) 456-8585.