COST-SHARE INCENTIVES AND BEST MANAGEMENT PRACTICES IN A PILOT WATER QUALITY PROGRAM
By: Houston, Jack E.; Sun, Henglun
Houston, Jack E.; Sun, Henglun, COST-SHARE INCENTIVES AND BEST MANAGEMENT PRACTICES IN A PILOT WATER QUALITY PROGRAM, Journal of Agricultural and Resource Economics, Volume 24, Issue 1, July 1999, Pages 239-252
This study integrates three biophysical simulators to predict crop yields, water-soil pollution emissions, and farmers' net returns under uncertain weather and market conditions. Multiple-objective programming incorporates farmer attitudes toward voluntary participation under alternate rates of government cost-share subsidies to search for efficient pollution abatement solutions as best management practices (BMPs). Net returns decline an estimated 9.6% when farmers adopt a cost-share program with a $2.50/acre subsidy, while reducing N leaching by 2.7%. For a $10/acre subsidy, N leaching can be reduced by almost 6%, but farmer net returns decline by 15%.