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Study highlights higher profits for ag water quality certified farms

A new study by the Minnesota State Agricultural Centers of Excellence shows that farmers enrolled in the Minnesota Agricultural Water Quality Certification Program (MAWQCP) had higher profits than non-certified farms. This marks the second year of data highlighting improved financial outcomes, according to a press release.

The “Influence of Intensified Environmental Practices on Farm Profitability” study examined financial and crop production information from farmers enrolled in the Minnesota State Farm Business Management education program. The 64 MAWQCP farms in the study saw 2020 profits that were an average of $40,000 or 18% higher (median of $11,000) than non-certified farms. The 2019 data showed an average of $19,000 or 20% in higher profits (median of $7,000) for certified producers. Other key financial metrics are also better for those enrolled in the MAWQCP, such as debt-to-asset ratios and operating expense ratios.

The two years of data serve as an early indicator of a positive return on investment for whole-farm conservation management farmers implement in order to become certified.

“The Minnesota Ag Water Quality Certification Program is a double-win for the state,” said Agriculture Commissioner Thom Petersen. “We see that certified farms have a major impact on our environment for the better; now we also know that those farmers see better economic outlooks which helps our ag economy. I encourage all farmers and landowners to look into the advantages of certifying their land.”

“While this study is in its infancy, capturing two years of data and 3% of the Minnesota database, it does look encouraging that producers who are water quality certified enjoy an increase in farm profitability,” said Keith Olander, executive director of AgCentric. “As we expand this dataset in future years, we will look to incorporate enterprise level management data that may explain more about what is driving these profit levels.”

To view, download, or request a copy of this report, visit agcentric.org.

The MAWQCP is a voluntary program for farmers and landowners that protects the state’s water resources by putting farmers in touch with local conservation district experts to identify and mitigate any risks their farm poses to water quality. Producers going through the certification process have priority access to financial assistance.

Since the program’s statewide launch in 2016, 1,038 farms totaling over 734,000 acres have been certified across Minnesota. Farms have added 2,095 new conservation practices, which protect Minnesota’s waters. Those new practices help to reduce of greenhouse gas emissions by over 40,500 metric tons each year. That annual saving is equal to 4.5 million gallons of gasoline, or 44.6 million pounds of coal, or eliminating more than 100 million miles driven by an average passenger vehicle.

The program is on target to meet Governor Tim Walz’s goal of enrolling one million acres by the end of 2022.

Farmers and landowners interested in becoming water quality certified can contact their local Soil and Water Conservation District or visit MyLandMyLegacy.com.