USDA, EPA sign water quality credit trading agreement

Deal offers producers incentives to improve water quality

U.S. Department of Agriculture Natural Resources and Environment Under Secretary Mark Rey and Benjamin Grumbles, assistant administrator of the U.S. Environmental Protection Agency's Office of Water, recently signed a partnership agreement to establish and promote water quality credit trading markets through cooperative conservation. The agreement features a pilot project within the Chesapeake Bay basin to showcase the effectiveness of environmental markets.

"Water quality credit trading is a flexible, cost-effective approach for implementing conservation practices that reduce runoff, help producers meet water quality standards, and pursue water quality improvement goals in watersheds," Rey said. "We believe that voluntary, incentive based approaches are the most effective way to achieve sound resource management and conservation on private lands."

"Trading for upgrading water quality is the wave of the future," said Grumbles. "We are committed to giving good stewards credit and partnering with agriculture to accelerate restoration and protection. This agreement is a big step forward."

Water quality credit trading uses a market-based approach that offers incentives to farmers and ranchers who implement conservation practices that improve water quality. While reducing pollution, they can earn credits they can trade with industrial or municipal facilities that are required by the Clean Water Act and other laws to reduce the amounts of pollution in wastewater.

Allowing the market to determine the price per credit by using the principle of supply and demand offers incentives that generate interest among a greater number of participants, which will expand conservation practices to more acres of agricultural lands. Private sector water quality markets complement existing federally supported conservation efforts by creating additional revenue streams for water quality improvement.

For more information on the market based approach and the NRCS strategic plan please go online to www.nrcs.usda.gov/about/strategicplan/.

For more information about EPA's water quality trading policy and guidelines please go online to www.epa.gov/OWOW/watershed/trading.htm.

Date: 10/26/06

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