DAYTON, Ohio — The Miami Conservancy District (MCD) has had a water trading program in the Great Miami River watershed since 2005. Currently 342 projects are in progress, and approximately $1.5 million has been paid out for more than 500 tons of nutrient reduction.

The mission of the MCD is to protect communities in the Great Miami River watershed from flooding, to preserve the quality and quantity of the water and to promote enjoyment on the river. Seventy percent of the watershed is in agriculture, said Douglas “Dusty “Hall, MCD’s manager of program development.

A definition of the water trading program, according to Hall, is, “We have what is called a point source-nonpoint source trading program, where operations like municipal wastewater treatment plants acquire from producers ‘credits’ that arise from reductions in phosphorous and nitrogen levels from the farms. The credits are quantified as part of the program.”

Producers voluntarily participate in the program through a reverse auction, Hall said; they bid to implement certain practices that generate a certain number of credits. Whichever farmers can offer the most pollutant reductions for the least amount of money will ultimately be funded to generate the credits, which then become, essentially, the property of the wastewater treatment plant. The plants will use those credits toward their environmental compliance requirements.

“In theory, agriculture can produce these credits much more cost-effectively than wastewater treatment plants can install new technology and upgrade their plants in order to further cleanup their discharges,” Hall said.

The Soil and Water Conservation Districts identify the projects, work with the producer to determine what practices may be installed and how many credits each practice will generate, Hall said. If they receive an award, the district has an agreement with the producer to implement the project.

When the market is fully active, the money paid to producers will come from credit buyers. Because MCD is in the pilot development phase of the program it received significant support from the USDA and the U.S. Environmental Protection Agency (EPA), plus more than $1 million from wastewater treatment plants.

Six years ago the conservancy district was advised by the Ohio EPA that nutrient criteria were going to be put into place, Hall said. Once those criteria come into being, the scale of the program will have to jump about tenfold. The program will probably be putting a couple of million dollars a year into agricultural practices, versus right now, about $200,000.

The Great Miami River watershed continues to be rated as one of the worst, as a source of nitrogen and phosphorous that adversely impacts the Gulf of Mexico. The U.S. Geological Survey in 2009, for the Journal of the American Water Resources Association, produced a ranking of the 818 sub-watersheds of the Gulf of Mexico.

The best was ranked 818 because it had the lowest levels of contribution to the Gulf. For total nitrogen, the upper Great Miami River (GMR) watershed was ranked 27; the lower GMR watershed was ranked 31. For total phosphorous, the upper GMR watershed was 289; the lower ranked 58.

“The river is getting cleaner over decades as a result of improved wastewater treatment,” Hall said. “Now we’re faced with trying to address some of these nonpoint sources, to make any additional progress.”