Phosphorus Reduction Auction in the Kalamazoo River Watershed

In partnership with the Delta Institute and the Michigan Farm Bureau, we have kicked off our latest phosphorus reduction project taking place in the Kalamazoo River Watershed.

Photo by Harrison Fitts

This project aims to reduce excessive phosphorus loading in the Kalamazoo River Watershed associated with agricultural sources through a market and performance-based agricultural incentive program. Performance-based programs can provide a more targeted approach to investing in conservation when program funding is limited. Instead of paying for implementing a particular conservation practice, such as cover crops or riparian buffers, in terms of acres or feet, farmer payments are based on the net environmental improvements that arise from that practice. To drive efficiency and optimize cost effectiveness, the performance payment for pollution reduction can be further tied to a market-based credit trading program where transactions can be structured as bilateral trades, sole-source offsets, an auction, or an exchange market.

Through this project, we will implement a reverse auction to incentivize farmers to implement conservation practices on their cropland to reduce nutrient losses. In a reverse auction, farmers will enter bids to provide phosphorus loading reductions at the lowest cost by implementing conservation practices. The program will pay farmers whose bids are accepted for those reductions. The payments will be based on estimates of reduction expected and farmers’ ability to implement the practices at a cost lower than the maximum allowable price set by the program. The project team will utilize advanced modeling tools to estimate reductions.

This project will lead to improved ecological conditions in the targeted watersheds as a result of reductions in phosphorus loading with up to 6,600 acres, roughly 24 percent of the sub-watershed’s cropland, enrolled in the program. The project aims to reduce phosphorus loading by approximately 5,000 pounds over the three year project.

If you are interested in joining the project, visit bit.ly/kzoo_auction to see if your fields fall within the project area and access more information on how to participate!