Fully funding the farm pollution-reduction practices needed to restore the Chesapeake Bay would inject $655 million annually into the region’s economy, including $269 million per year in higher earnings for businesses and workers, according to a new report released today by the Chesapeake Bay Foundation (CBF).
The increased economic activity would also support more than 6,600 jobs through 2025.
The report, Agricultural Conservation Practices: Clean Water and Climate Smart Investments, calculates that for every dollar spent helping farmers adopt practices that improve water quality in the Bay and its tributaries, the Bay region would see $1.75 in higher sales and earnings. This investment would also support an average of 6,673 full-time, part-time, and seasonal jobs a year through 2025.
The report was prepared for CBF by Key-Log Economics, an ecological economics research and consulting firm based in Charlottesville, Va.
The study examined 17 conservation practices states are implementing to achieve the Chesapeake Clean Water Blueprint’s pollution cuts. It used 2020 data from the states’ Bay cleanup plans, Chesapeake Bay Program, and U.S. Department of Agriculture (USDA) to estimate the cost of implementing each practice. The study then looked at how much implementation work states have left to complete by 2025. It ran those numbers through the Bureau of Economic Analysis’ Regional Input-Output Modeling System to calculate the economic impacts.
The new research is being released as Congress works on next year’s Farm Bill and USDA decides how to allocate the $20 billion the Inflation Reduction Act (IRA) added to existing Farm Bill conservation programs. The report makes a strong case for USDA and Congress to devote a significant share of funding from the IRA and the 2023 Farm Bill to helping Bay states meet their pollution-reduction requirements.
“We already know investing in agricultural conservation pays big dividends in cleaner water, more productive soil, climate-resilient farms, and healthier fish and wildlife habitat,” said CBF Director of Science and Agricultural Policy Beth McGee. “Today’s report makes it clear these investments produce economic benefits for local businesses and workers as well.
“To get the most bang for their conservation buck—and curb the largest single source of pollution in the Bay and its waterways—we urge USDA to direct a significant share of the IRA’s $20 billion conservation funding boost to farmers in the Bay watershed,” McGee added. “We also urge lawmakers to consider the many economic, environmental, climate, and community benefits investing in agricultural conservation brings as they draft the 2023 Farm Bill.”
Conservation practices that improve soil and water quality, like planting forested buffers or fencing livestock out of streams, are the most efficient and cost-effective way to achieve the pollution cuts needed from agriculture. Implementing them benefits businesses such as tree nurseries, landscapers, lumberyards, building supply companies, contractors, and environmental engineering firms.
“Using widely accepted economic tools, our study quantified the economic stimulus and job creation the Bay region would experience as a result of spending on full implementation of agricultural practices in the states’ watershed implementation plans,” said Key-Log senior economist Carolyn Alkire. “These results highlight how investing in conservation can stimulate the region’s economy while advancing Bay restoration.”
More than 90 percent of the states’ remaining pollution reductions must come from agriculture.
The report estimates that implementing the conservation practices necessary for Pennsylvania to achieve its remaining pollution cuts under the Blueprint would yield an estimated $352.5 million in economic benefits a year. That total includes $145.1 million in higher annual earnings for Pennsylvania businesses and workers. It also would support 3,457 jobs a year.
Virginia would see an annual return of $191.2 million, including $78.6 million in added yearly earnings for businesses and workers, from investment in conservation practices to meet its pollution-reduction commitments. The investment would also support 2,067 jobs annually through 2025.
In Maryland, investment in the needed conservation practices would generate around $41.2 million a year in economic benefits, including $16.5 million in higher annual earnings for businesses and workers, and would support 423 jobs each year.
The report also illustrates how conservation practices vary in how much they cost to reduce pollution and produce additional benefits for communities and the environment. For example, it takes a $7.62 investment in forested buffers, compared with investing $2,350 in animal waste management systems, to reduce a pound of nitrogen.
Forested buffers provide many other benefits, such as shade and habitat for wildlife, carbon storage, and flood mitigation. Buffers can also be a source of additional revenue for farmers who use them to produce nuts, fruit, livestock forage, and even honey.
“Targeting funding to practices like forested buffers that are cost‑effective and provide a holistic range of benefits can, and should, help ensure the greatest outcomes for the region’s water quality and community wellbeing.” McGee said.
Additional related research:
Earlier this year, CBF evaluated how conservation practices protect the environment, mitigate climate change and its effects, and improve farmers’ bottom line in the Farm Forward report.
A 2016 economic report concluded that a healthy Bay ecosystem would provide $130 billion annually in natural resource benefits such as air and water filtration, agricultural and seafood production, greater recreational opportunities, higher property values, and protection from floods and hurricanes.
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