AmericanFarm.com

PMT study answers few questions (Editorial)

(Nov. 18, 2014) For the affable Dr. Memo Diriker, the production of the carefully titled “Scenario Analysis of the Potential Costs of Implementing the Phosphorus Management Tool” was an enormous challenge.
He admitted that the project was more than he had anticipated, that he had rewritten the narrative portion several times and he made it clear, both in in-person briefings and in the text, that a lot of the questions posed by the study defied answers.
Thus what was initiated as an impact report resulted in a scenario analysis. Diriker had cautioned, nearing completion of his task, that he would lay out three courses and Annapolis could take it from there.
“They make more money than I do,” he said.
In that final analysis, the good Dr. Diriker, who founded and directs the Business, Economic, and Community Outreach Network at Salisbury University, lays out concerns. Here follows an edited version of the report.
*   *   *
The viable cost ranges of the PMT implementation that will be borne by farmers on the Eastern Shore is difficult enough. Determining the portion of the overall economic value of a clean Chesapeake Bay that can be attributed to PMT implementation is significantly more difficult.
Recent reports suggest that the Bay is on target with regards to some of the Bay Blueprint goals. The October 2014 CBF report, for the first time, quantifies the benefits of reaching the Chesapeake Clean Water Blueprint goals, as well as the costs of not reaching them, taking a very large number of factors into account, covering the entire Bay watershed. Unfortunately, neither the CBF study nor the other studies reviewed for this study shed any light on how one would isolate the benefit of reducing one of the various pollution factors in a very small portion of the total watershed.  So the question is how and when would property values, commercial fishing, recreational use, etc. increase in a predictable way if 228,000 tons of manure is removed from the nine counties of the Eastern Shore over the next six years?  
It can be assumed that, at a minimum, the removal of the extra P will help maintain the overall economic value of the Bay. But, estimating the incremental improvements to this value attributable to various reduction levels of phosphorus levels cannot be easily estimated.  Some simple assumptions were used in this project to estimate such incremental values but these assumptions cannot be fully validated without further data based on actual implementation outcomes.
Finally, in a watershed that spans many states, the PMT will apply only to Maryland. The Maryland farmers are concerned about the competitive disadvantage this will cause them in a regional commodity market environment…, the simulation models for the three scenarios used in this analysis do not include the potential impacts of such economic disadvantages.
*  *   *
At this point, Diriker suggests a multi-year test of the PMT as the only way to determine its cost impact. He writes:
“This project was designed to yield a public policy briefing document. It was not meant to serve as a comprehensive economic impact study. The lack of actual implementation data and the wide variations in the assumptions of the different stakeholders about the costs (and benefits) of PMT implementation are serious limitations. If, as the PMT is implemented, well designed data collection protocols are established, data on actual implementation costs can be compiled. With three to five years of actual implementation cost data, a panel of agriculture and environmental economists would be able to conduct a comprehensive economic impact study.”
So where does Diriker’s report, representing months of hard work and we imagine professional frustration in being unable to come up with the answers he sought, go from here?
Maryland Secretary of Agriculture Buddy Hance professes to having no knowledge about the next step. “That will be up to somebody else,” he said. A lame duck legislature could further complicate the process.
Meanwhile Dr. Diriker can return to his desk — and to his responsibilities —  at Salisbury University.
Thanks, Memo. Thanks very much, for the effort.