Economics of riparian beneficial management practices for improved water quality: A representative farm analysis in the Canadian Prairie region

Figures & data

Table 1. Representative farm characteristics.

Farm type	Mixed	Mixed	Crop	Crop	Crop	Crop
Province	Alberta	Saskatchewan	Alberta	Alberta	Alberta	Alberta
County/rural municipality	Lethbridge	Silverwood	Forty Mile	Starland	Camrose	Smoky River
Soil type	Dark Brown	Black	Brown	Dark Brown	Black	Dark Gray
Farm size (ha)	5115	777	1295	1295	1036	777
Annual crops	Durum wheat	Spring wheat	Spring wheat	Spring wheat	Spring wheat	Spring wheat
	Spring wheat	Barley	Barley	Barley	Barley	Barley
	Barley	Canola	Canola	Canola	Canola	Canola
	Canola	Flax	Durum wheat	Summerfallow
			Summerfallow
Forage/pasture	Alfalfa-grass hay	Alfalfa-grass hay	None	None	None	None
	Barley silage	Native pasture
	Native pasture	Tame pasture
	Tame pasture
Beef herd (number of cows)	400	116	None	None	None	None

Table 2. Characteristics of beneficial management practices (BMPs) modeled for the representative farms.

Farm	BMP^a	Prior land use^b	Width of affected area	Other relevant BMP information
Crop	Permanent cover	Cropping	10 m	Permanent cover established around riparian area and harvested for hay
Crop	Buffer strip	Cropping	10 m	Buffer strip established around riparian area; buffer strip retired from agricultural use
Alberta mixed	Riparian restoration + permanent cover	Cropping	9 m of riparian area	Riparian area is restored and protected by permanent cover which is harvested for hay and aftermath grazed
			11 m of permanent cover	Alternative scenarios modeled involving 25, 50, 75 and 100% restoration of potential riparian area
Alberta mixed	Riparian restoration + buffer strip	Cropping	9 m of riparian area	Riparian area is restored and protected by buffer strip; buffer strip is retired from agricultural use; fence installed to exclude cattle
			11 m of buffer strip	Alternative scenarios modeled involving 25, 50, 75 and 100% restoration of potential riparian area
Alberta mixed	Riparian restoration	Pasture	9 m of riparian area	Riparian area is restored and fence installed to exclude cattle
				Alternative scenarios modeled involving 25, 50, 75 and 100% restoration of potential riparian area
Alberta mixed	Off-stream watering system	Pasture	Not applicable	Off-stream watering system is installed in the pasture area; no changes in land use
Saskatchewan mixed	Riparian maintenance	Cropping	10% of cropped area	Assumes riparian area is present initially and some portion is converted to cropping use
				Alternative scenarios modeled involving 33, 67 and 100% maintenance of initial riparian area

^a “Restoration” refers to restoring riparian area; that is, converting from either cropping or pasture use. “Maintenance” refers to maintaining land as riparian area instead of converting to either cropping or pasture use. BMPs with a “+” are a combination of riparian area restoration and protection of the riparian area with permanent cover or a buffer strip.

^b Prior land use refers to the land use assuming no adoption of the BMP.

Table 3. Summary of baseline simulation results with no beneficial management practice (BMP) adoption (2010 $CAD)^a.

Farm	Mean	Standard deviation	Annualized mean NPV^c
	(NPV^b)	($/ha)
Alberta mixed cropping-beef	$1134.55	$187.69	$113.46
Saskatchewan mixed cropping-beef	$1555.28	$375.38	$155.53
Alberta Brown soil cropping	$659.59	$270.51	$65.96
Alberta Dark Brown soil cropping	$853.84	$231.93	$85.38
Alberta Black soil cropping	$2770.38	$322.56	$277.04
Alberta Dark Gray soil cropping	$3144.86	$298.83	$314.49

^a The values in this table are calculated as the farm level value, divided by the total area of the farm.

^b NPV: net present value.

^c The annualized NPV values are calculated using the perpetual annuity formula; the mean NPV per hectare is multiplied by the discount rate (0.10).

Table 4. Net benefits ($/ha/yr) of beneficial management practice (BMP) adoption for representative cropping farms (2010 $CAD).

	Mean net benefits
	($/ha/yr)^a
Farm	Permanent cover BMP^b	Buffer strip BMP^b
Alberta Brown soil zone	–$20.63	–$96.72
Alberta Dark Brown soil zone	–$27.59	–$115.84
Alberta Black soil zone	–$226.29	–$304.30
Alberta Dark Gray soil zone	–$283.14	–$345.74

^a Mean net benefits are calculated on a per-hectare basis based on the area directly affected by the BMP (i.e. restored, converted or maintained).

^b These BMPs involve establishing a buffer around undrained wetlands that are present on the representative farm operation, perennial forage in the case of permanent cover and idle land in the case of a buffer strip.

Table 5. Net benefits ($/ha/yr) of beneficial management practice (BMP) adoption for representative mixed cropping-beef farms (2010 $CAD).

Farm	Prior land use^a	BMP^b	Mean net benefits
			($/ha/yr)^c
			Restoration scenario
Alberta			25%	50%		75%		100%
	Cropping	Riparian restoration + permanent cover	–$202	–$199		–$198		–$198
	Cropping	Riparian restoration + buffer strip	–$459	–$469		–$473		–$475
	Pasture	Riparian restoration	–$544	–$461		–$434		–$419
	Pasture	Off-stream watering (OSW) system	–$0.98^d
			Maintenance scenario
Saskatchewan			33%		67%		100%
	Cropping	Riparian maintenance	–$213		–$202		–$201

^a Prior land use refers to the land use assuming no adoption of the BMP.

^b ”Restoration” refers to restoring riparian area; that is, converting from either cropping or pasture use. “Maintenance” refers to maintaining land as riparian area instead of converting to either cropping or pasture use. BMPs with a “+” are a combination of riparian area restoration and protection of the riparian area with permanent cover or a buffer strip.

^c Mean net benefits are calculated on a per-hectare basis based on the area directly affected by the BMP (i.e. restored, converted or maintained). In the case of the OSW BMP, the entire pasture area is used in the calculation. For the Alberta farm, the restoration scenarios refer to the percentage of total potential area that is restored to riparian area. The restoration scenarios do not apply to the off-stream watering system BMP. For the Saskatchewan farm, the maintenance scenario refers to the percentage of initial riparian area that is maintained.

^d The annualized change in net present value (NPV) for this BMP (i.e. the annual net impact for the farm business) is –$3,603.28.

Table 6. Estimates of annual public benefits for restored riparian areas (2010 $CAD)^a.

	Gascoigne et al. (2011)	Johnson et al. (2012)
	CRP/WRP	Buffer-25 m	Buffer-100 m	Buffer + upland
Riparian scenario^b		$/ha/year
Climate regulation^c	$80.60	$191.93	$174.66	$184.53
Water quality		$1,703.76	$753.37	$255.47
Reduced soil loss/sedimentation	$16.84
Waterfowl habitat	$37.98
Total public benefit	$135.42	$1,895.69	$928.03	$440.00

^a Results are adapted from Gascoigne et al. (2011, Tables 2 and 3) and Johnson et al. (2012, Tables 2 and A-1). The Johnson et al. (2012) results presented are for the scenario in their paper using a willingness-to-pay for water quality improvements of $131 per household (2001 $US) and a 2% annual increase in the social cost of carbon.

^b The riparian scenario modeled in Gascoigne et al. (2011) is a conversion of cropland to conservation (CRP) or wetland (WRP) reserve. In Johnson et al. (2012), three scenarios involve the retirement of agricultural lands, the creation of 25- or 100-m stream buffers by restoring land to perennial vegetation (Buffer-25 m and Buffer-100 m), and 100-m stream buffers and the retirement of all low productive agricultural land (Buffer + upland).

^c Climate regulation values are calculated using a social cost of carbon of $21 per tonne of carbon dioxide equivalent (CO₂e; 2010 $US). Values for both studies include carbon sequestration estimates. In addition, the Johnson et al. (2012) estimate includes the value of reduced nitrous oxide emissions.

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