How-to for Sellers

“Water quality in the Lower Fox and Green Bay is everyone’s problem, and farmers want to be part of the solution.”

Bob Van De Loo

Local Farmer (Credit Seller)

Before you sell…

I am interested in generating revenue from conservation practices

i

I have at least 5 years of good records for my farm

I am willing to do more or different conservation practices to sell water quality credits

Step 1: Consider Conservation Scenario Options

  • Step 1 of 5 20%
Who Pays for This?

The Agricultural Producer

Completed by:

The producer, in consultation with the farm’s agronomist or the County Land &Water Conservation Department

Related Resources

For agricultural producers interested in water quality trading, different conservation scenarios are modeled to determine the amount of pollution that could be reduced at the farm and sold as credits. Consult with your County Land & Water Conservation Department, your agronomist, and fellow farmers you trust for ideas about how to improve practices on your farm. Conservation scenarios may include a mix of annual practices such as cover cropping and reduced tillage, along with permanent practices such as filter strips.

Step 2: Calculate Load and Credit Potential

  • Step 2 of 5 40%
Who Pays for This?

The agricultural producer (although costs may be incorporated into the final sale price of a credit)

Completed by:

The farm’s agronomist or the County Land & Water Conservation Department

Related Resources

Your County Land & Water Conservation Department is well-equipped to conduct the required modeling and analysis for calculating load reduction and credit generation potential. Their expertise will save time and headaches for those unfamiliar with the pollution reduction models recommended for trading by the Wisconsin Department of Natural Resources (WDNR).

The models compare pollution from the farm under a “business as usual” scenario to positive changes in pollution loads (specifically, total phosphorus or total suspended solids lost from the farm operation to adjacent waterways) when different conservation practices are put in place.

Step 3: Select Your Conservation Scenario

  • Step 3 of 5 60%
Who Pays for This?

The agricultural producer (although costs may be incorporated into the final sale price of a credit)

Completed by:

The producer, in consultation with the farm’s agronomist or the Land & Water Conservation Department

Related Resources

Once the appropriate trade ratios have been determined, then the producer is well-positioned to select the best conservation scenario for the farm. In addition to considering differences in credit generation potential, a producer should consider the impact of adjustments in planned crop rotations, acreage taken out of production, and any plans for future sale of property that may be relied on to generate credits (and, of course, the cost of practice installation and maintenance). Water quality credit trading contracts are unlikely to be less than a five-year term, so think long-term when considering the best conservation scenario for your farm.

Step 4: Contract to Sell Credits

  • Step 4 of 5 80%
Who Pays for This?

The agricultural producer. The administrative costs of this step may be incorporated into the final sale price of a credit.

Completed by:

The agricultural producer or a qualified broker

Related Resources

Before investing further in this process, a wise step will be to ensure that someone is interested in buying the farm’s field-specific water quality credits.  A broker is uniquely positioned to help you find a Buyer. If you choose not to use a broker, you may seek out a Buyer on your own.  Either way, once a Buyer is identified, agreement on the terms of the trade will need to be negotiated between you (the Seller) and the Buyer. These terms are written down in a Trade Agreement (or Water Quality Trading Contract) that is ultimately signed by both the Seller and the Buyer before any credit generating practices are installed.

Step 5:  Install, Verify, and Receive Payments

  • Step 5 of 5 100%
Who Pays for This?

Administrative costs of this step can be incorporated into the price of a credit.

Completed by:

The credit generator in partnership with an agronomist or the County Land & Water Conservation Department

Related Resources

Generally, payment under a Trade Agreement will look a lot like federal cost share under various Conservation Title programs: the farm installs a practice and once installation is demonstrated, payments are made by the Buyer. Because water quality Trade Agreements span a number of years, continued checks on conservation practice performance are necessary, particularly for conservation practices that require annual installation (like cover crops or conservation tillage). These performance reviews are called “verification.” A Management Practice Registration Form needs to be submitted to WDNR in the first year and an Annual Credit Verification Report will be completed in subsequent years.