USDA’s Office of Environmental Markets website offers information on how water quality trading programs work, along with tools producers can use to calculate which management practice would result in credits to sell, says Ann Mills, USDA deputy undersecretary. Farmers also are encouraged to contact the USDA Natural Resources Conservation Service or their local conservation districts.

Pilot projects are underway in Wisconsin’s Fox River watershed and the Ohio River Basin, as well as in Oklahoma, Florida, Virginia, Maryland and Pennsylvania.

In Wisconsin, NRCS, the Great Lakes Commission and the Wisconsin Department of Natural Resources launched a pilot project last summer to reduce high nutrient levels and algal blooms in Wisconsin’s Lower Fox River watershed, which flows into lower Green Bay. Excessive nutrients, including phosphorus, have resulted in a dead zone in Green Bay, says Jimmy Bramblett, state conservationist, NRCS, in Madison.

In the first phase of a three-phase project, the agencies are working with farmers (engaged in both crop and dairy production), the U.S. Geological Survey and the University of Wisconsin’s Discovery Farms to demonstrate and evaluate new and existing conservation practices to reduce phosphorus runoff. They also will set up a framework, or the guidance and policy, for trading water quality credits within the watershed.

The second phase will test the trading of credits between farms and permitted emitters. The third phase will implement the project itself, which is targeted to begin in 2016 or 2017.

In the Ohio River Basin, the Electric Power Research Institute, or EPRI, and a group of power companies, wastewater utilities, farmers, and state and federal agencies are involved in an interstate water quality pilot program.

Ohio, Indiana and Kentucky signed a trading plan in 2012, setting up the world’s largest water quality trading program. The market could gradually involve eight states, with the potential to include 230,000 farmers, 46 power plants and thousands of wastewater utilities.

EPRI contracts with state agricultural agencies, using private and federal funds. (EPA provided $1 million in 2009, and USDA awarded $2.3 million in three separate instances.) The state agencies, in turn, work with local soil and water conservation districts to provide farmers the water quality trading contracts. The local districts provide outreach services and ensure farmers are reducing pollutants above and beyond what’s required by law.