Exploring Whether and How to Pay Farmers for More Than Food



Vermont must clean up Its waterways while fostering a vibrant farm economy. Water pollution has a stifling effect on Vermont’s economy, compromising tourism and recreational businesses and lowering property values. The general public is impatient with the apparent slow rate of progress in cleaning up our lakes and rivers, even after investing millions of state and federal dollars. We know that farmlands contribute 40% of runoff that is causing algae blooms in Lake Champlain and other lakes. The scientific research and high profile individual farm violations leave many to conclude that farmers are not doing enough to improve water quality in our lakes and streams.

Vermont farmers are dealing with many challenges as they try to be a part of the solution. Farmers face enormous economic challenges that include a global commodity market and national “cheap food” policies that drive prices below production costs, and distribution mechanisms that disconnect consumers from the environmental, workforce justice, and other costs embedded in our food choices. The challenges are well-summarized in  last year’s report, A 2018 Exploration of the Future of Vermont Agriculture.

Even in the face of economic challenges, the farming community is adjusting its practices. UVM Extension, regional farmer coalitions, and new regulations are coaching, advising, and requiring change. Farmers are implementing new manure management systems, switching to new crops or grass-based meat and dairy, and building soil health. These changes take money and time when farmers don’t have an excess of either.

Climate change is adding even greater force to both toxic algae blooms and farm vulnerability. More frequent and severe storms erode phosphorus-heavy soils and wash nutrients from farm fields into waterways. Those same storms, along with new diseases, invasive plants and pests, and temperature volatility, add new layers of exposure to the already risky proposition of making a living growing, harvesting and marketing local food.

How can Vermont come to a solution everyone can support? Given the urgency, scale, and complexity of these challenges, HMF is one of the partners looking for collaborative, inclusive approaches to improving climate resilience and farm viability – and with them water quality – in Vermont. We don’t know what the solutions are yet, but we’re confident that they can only emerge from discussions that bring farmers and environmentalists to the table. The Vermont Dairy & Water Collaborative, Rural Vermont and Vermont’s Agency of Agriculture, Food, & Markets have all hosted these kinds of inclusive conversations on this subject, highlighting promising ideas and including diverse voices in the process.

These conversations have suggested an approach to pay farmers for more than just food, examining what it would look like to compensate farmers for their role in improving Vermont’s water quality, slowing the force of storm waters, and keeping carbon out of the atmosphere.

One approach, known as Payment for Ecosystem Services (PES), would pay farmers based on performance metrics that demonstrate the environmental benefits they produce. The Gund Institute for Environment, NOFA-VT, UVM Extension, and a working group assembled by the Agency of Agriculture, Food, & Markets, among others, have been exploring this approach.

The Payment for Ecosystem Services approach brings up a number of questions: Who administers the program? Who pays farmers?  How do we measure the services that farmers provide? Would PES be layered on top of existing regulations and incentives, or replace them? What about the farmers who already follow practices that generate new soil and avoid sending nutrients into the lake – how are they rewarded if the system only pays for improvements to current water quality measures?

We haven’t found anyone with the answers to all these questions. But we believe that those whose livelihoods depend on building and retaining healthy soil and the scientists and economists who can measure and model new approaches can forge an equitable and sustainable solution. Frankly, they need each other to make the approach work.

Fundamental economic system change on the scale of PES takes time and money. The environmental and economic challenges evoke a sense of urgency that is necessary to drive change. In this case, leaders need to balance that urgency with an imperative to bring all Vermonters – eaters, fishers, swimmers, and food producers – along with them as they solve the problem. We all have a stake in the solution and will contribute to paying for it, so we each need to understand our role in the solution.