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Perennial crop production may be a cost-effective practice for meeting environmental goals
W. F. LAZARUS (1), D. Mulla (2). (1) University of Minnesota, Department of Applied Economics, St. Paul, MN, U.S.A.; (2) University of Minnesota, Department of Soil, Water and Climate, St. Paul, MN, U.S.A.

Perennial crops such as intermediate wheatgrass may benefit the environment in addition to providing valuable food ingredients.  Nitrogen reduction in Minnesota’s surface waters is one example environmental issue that perennial crops can help address.  Excess surface water nitrogen (N) is of concern both because of toxicity to aquatic organisms locally and because many Minnesota watersheds feed into the Mississippi River and the Gulf of Mexico, where a 45% reduction in both N and phosphorus (P) has been proposed.  The Minnesota Pollution Control Agency (MPCA) is developing a statewide nutrient reduction strategy to reduce these nutrients in the Mississippi River.
Practices that can reduce N loads include reducing fertilizer rates, switching fall N applications to the spring, installing controls on tile lines, planting cover crops, and planting buffers along streams and planting perennial crops on marginal cropland.  The cost-effectiveness of the perennial crop practice depends on whether it produces a marketable product.  Without a marketable product, our modelling work suggests that these practices would reduce overall N loads in Minnesota by 21% but the cost would be $292 million/year or $6.19/lb of load reduction.  That assumes that 10% of the marginal corn and soybean acreage is planted to a perennial crop, along with likely adoption rates for the other practices.  That cost represents 1.3% of the value of the state’s ten major crops including corn grain valued at $5/bushel. 
If a perennial crop such as intermediate wheatgrass can be developed to the point where it has a market value of even half that of corn, or to an (arbitrarily-chosen) $350/acre, marketing that crop would shave around $20 million off the annual cost of achieving that 21% N load reduction.  The cost/lb of load reduction would be reduced from $6.19 to $5.76.

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