Farm Management Newsletter

Quarterly Publication of Ohio State University Extension

Spring 2002

Effects of Farming Practices and Land Use on Community Water Treatment Costs

By D. Lynn Forster

Agriculture is a source of surface water pollution in intensely farmed watersheds. Besides having ecological impacts, some farming practices may have direct economic effects on downstream communities. Our recent research investigated the impact of farming practices and land use on drinking water treatment costs for a sample of communities in the Maumee River basin in northwestern Ohio. Data from each treatment plant were collected for the 1995 to 1999 period. Also, data were collected concerning farming practices and land use in the watershed upstream from each community. Some highlights of our analyses of these data are reported here.

Land use in the basin is primarily agricultural; 88% of the 4.2 million acre basin is used for this purpose, but land use is changing near some communities due to commercial and residential development. Many communities use water from nearby rivers and are required to treat their water. Eleven water treatment plants in the basin were selected for this analysis. The average population served by each plant is about 20,000, but ranges from 850 in McClure to 74,000 in Lima. Our survey of plant managers suggests that chemical costs are a large portion of the variable costs and most affected by water quality. Chemicals such as alum, chlorine, activated carbon, and polymers are used to clarify and balance the pH of the water. It is during this stage of water treatment that turbidity and agricultural chemicals are removed from the water. The annual total variable costs for each community average about $50 per capita. Chemical costs are about one-eighth of these variable costs. Several factors, most importantly land use in upstream watersheds and community size, cause these costs to vary from one community to another.

• Water turbidity and treatment costs are affected by tillage practices in the watersheds upstream from communities. For example, a 10% decrease in the amount of conventional tillage (0 to 15% crop residue on the soil surface) is estimated to lessen water turbidity by 13% and to reduce chemical costs by $6,750 annually at the average treatment plant.
• Communities' water treatment costs are affected by pesticide use in upstream watersheds. A 10% reduction in pesticide application rates decreases water treatment costs by about $4,500 at the average treatment plant.
• Land not in farms, which is mostly developed land, has more of an impact on turbidity and water treatment costs than does farmland. A 10% increase in non-farmland in a watershed causes an estimated 20% increase in turbidity, and increases water treatment costs by $10,000 at the average plant. The increase is most likely caused by the channeling of urban runoff to storm sewer overflows and into streams and by accelerating flow from road and highway drainage systems into streams.
• Residents of smaller communities pay more for water treatment. As treatment plant volume and storage capacity increase, economies of scale occur and average variable costs per million gallons decrease. For example, annual average total variable costs are about $100 per capita in Swanton (population served, 4000), about $40 per capita in Findlay (population served, 40,000), and about $24 per capita in Lima (population served, 74,000). We estimate that 1% increase in volume treated causes a 0.41% decrease in average variable costs other than chemical costs, holding all other variables constant. Also, a 1% increase in volume treated causes a 0.17% decrease in average chemical costs.
• The larger a community's upstream watershed, the more likely there is to be additional turbidity and higher water treatment costs. A 1% increase in the area of the watershed causes an estimated 0.35% increase in the average turbidity.
• Water storage prior to treatment helps reduce turbidity. A 1% increase in the storage capacity would cause an estimated 0.04% decrease in the turbidity of the water. Storage of the water prior to intake allows many of the suspended particles to settle resulting in clearer water.

Our evidence indicates that farming practices directly affect community water treatment costs. The economic magnitude of these costs is modest. For example, if farmers were to reduce their use of conventional tillage by 10%, annual water treatment costs in downstream communities would decrease by about $0.35 per person served. A 10% reduction in pesticide use would decrease water treatment costs by $0.25 per person served. In addition, farming may contribute less to water treatment costs than do other land uses such as commercial and residential development.