Study shows water quality certified farms earn higher profits

Farmers enrolled in the Minnesota Agricultural Water Quality Certification Program (MAWQCP) have higher profits than non-certified farms, according to a recent study by the Minnesota State Agricultural Centers of Excellence. This marks the third year of data highlighting improved financial outcomes.

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 94 MAWQCP farms in the study saw 2021 profits that were an average of more than $16,000 or 6% higher (median of almost $32,000 higher) than non-certified farms.

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Looking at three years of data, the average income was more than $25,000 higher for MAWQCP farms, or $16,000 higher for median income.

Other key financial metrics are also better for those enrolled in the MAWQCP, such as debt-to-asset ratios and operating expense ratios.

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

“We see that farms in the Minnesota Ag Water Quality Certification Program have major benefits on the environment, and now we see with three years of data that our certified farmers are, on average, also looking at better economic outcomes,” said Agriculture Commissioner Thom Petersen. “I encourage all farmers and landowners to look into the advantages of certifying their land and contact their local Soil and Water Conservation District for more information.”

“Minnesota Farm Business Management is excited to partner with the MDA to define the economic metrics around farmers who are water quality certified compared to their peers in the database,” said Keith Olander, Executive Director of AgCentric. “We have developed a three-year trend on the performance of these farms and find that those who are water quality certified use a management strategy that supports stronger farm profitability compared to their peers.”

To find details on the economic study, click here.

The MAWQCP puts 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. After being certified, each farm is deemed in compliance with new water quality laws and regulations for 10 years.

Since the program’s statewide launch in 2016, 1,197 farms totaling over 845,000 acres have been certified across Minnesota. Farms have added 2,414 new conservation practices, which protect Minnesota’s waters. Those new practices help to reduce of greenhouse gas emissions by over 44,000 metric tons each year.

Governor Tim Walz has announced a 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.