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This article presents a guide for understanding the purposes and appropriate uses of different measures of conservation behavior. While applicable across natural resource management contexts, we primarily draw upon agricultural conservation research to illustrate our points. Farmers are often of interest to researchers, program managers, extension professionals, and non-governmental environmental organizations due to the significant impact of agricultural production practices on environmental resources. Practitioners are often interested in producer behaviors when they are planning or evaluating a project, developing or evaluating policy, or developing and testing theory. Within those bounds, we identify when it is most useful to assess an actual behavior (self-reported or observed) or behavioral intention (willingness or intent to pay/accept, support/participate in a policy or program, or engage in a conservation practice), and present examples of how they have been used in the past. We close with three recommendations for those conducting research related to agricultural producer behaviors: 1) research should be theoretically grounded, even when the purpose isn’t to develop theory; 2) great care should be used when selecting behavior measures, dependent upon the purpose of the research, and 3) composite measures should be used when possible and appropriate.

A promising program to address water contamination from nutrients is water quality trading (WQT), whereby entities with high abatement costs purchase credits from entities with lower abatement costs. The concept has found some success with point source water pollution, but very few trades have occurred in over 50 programs in the United States (U.S.) that have focused on nonpoint sources (NPSs). To understand why success has been slow, we identified three environments needed for programs to succeed: physical, economic, and institutional. We estimate that only 5% of watersheds in the U.S. currently listed as nutrient impaired provide a viable physical environment for trading nitrogen; 13% are suitable for phosphorus. Economic and institutional challenges would shrink that domain even further. Therefore, we find places with the ideal physical, economic, and institutional environments necessary for feasible WQT programs are virtual policy utopias — rare places with ideal environments. Fortunately, a growing literature provides the tools necessary to identify where these policy utopias are and to expand that domain through a better understanding about how to manage WQT programs more effectively.

This paper explores the interactions among scale and density economies, productive efficiency, water quality, and customer characteristics, and their impact on the costs of delivering treated drinking water. Implicit benefits of nitrogen abatement are also derived and hypothesis tests concerning their hypothesized drivers are conducted. Key findings are that nitrogen removal costs increase with rising raw water nitrogen concentration coming from agricultural activities, and that network density and system size matter in determining average total costs of community water systems. Merging water systems to take advantage of scale economies may be difficult due to the heterogeneity of the sector, however.

We evaluate whether expanding compliance to include nitrogen management could be an effective tool to reduce excess nitrogen applications in the Mississippi and Atchafalaya River Basin (MARB). Compliance requires farmers to meet some minimum standard of environmental protection on environmentally sensitive land as a condition for receiving federal farm program benefits. Using farm-level data on “excess” nitrogen applications and program benefits, we estimate the level of compliance and the reduction in excess nitrogen applications to cropland in the MARB. Extending compliance provisions to nitrogen management could reduce excess applications up to 60% under ideal conditions.

Voluntary approaches have traditionally been used to address environmental externalities emanating from agricultural production in the United States. However, voluntary approaches have largely failed to improve water quality in impaired waters. This paper assesses how to increase the efficiency of voluntary conservation in the context of the Chesapeake Bay. Field-level data representative of cropland in the bay watershed are analyzed using a programming model to quantify the gains of targeting technology-based incentives and of performance-based incentives. Performance-based approaches were the most efficient. The efficiency of technology-based approaches was improved by targeting cropland with features indicative of low marginal abatement costs.

A rapidly changing climate can have profound consequences on agriculture and rural communities (Broecker 1975; Parry et al. 2007; Karl et al. 2009; National Research Council 2010; Hatfield et al. 2014; Melillo et al. 2014). Knowing how a changing climate will affect agricultural production and the quality of associated natural resources is essential to developing efficient and effective plans for resource allocation that minimize negative economic and sociological impacts (Hatfield et al. 2014). Although the rate and magnitude of climate change are not known with certainty, certain actions, especially those conducted on behalf of agricultural conservation, can serve to protect social welfare and the vitality of the environment. Because actions are undertaken today to address an uncertain future economic and environmental challenge, they constitute, in effect, insurance against the negative impacts of climate change. Agricultural conservation practices on managed lands provide many environmental and societal benefits, such as improved water quality, improved habitat for wildlife, and retention of water for attenuation of flood and drought risks, in addition to sustaining agricultural production. Protecting these benefits and maintaining the sustainability of agriculture under a rapidly changing climate involves a focus not just on agricultural production, but also the health and integrity…

A concern for any program that offers payment for environmental services is that those services be additional. Non-additional services are those that would have been provided without the payment. One source of non-additionality is farmer misrepresentation of their pre-program management. Farm management practices are often difficult to observe, particularly those that do not involve structural changes, such as nutrient management. If practices are difficult to observe, management oversight lax, and enforcement weak, the farmer has an incentive to provide biased information that increases the likelihood that he will receive a more favorable baseline for calculating services created, and a larger payment. This is a moral hazard problem. The presence of non-additional credits in a water quality trading program can result in the degradation of water quality. Point source discharges above permitted levels are replaced by equivalent reductions from unregulated nonpoint sources. If the abatement that point sources purchase from nonpoint sources is non-additional, discharges will be higher than if the abatement was truly additional. Preventing non-additional credits from entering a water quality trading market is one of the goals of program design. In this paper we assess how program eligibility baseline choice affects the incentive to misrepresent baseline nutrient management practices using data from the Chesapeake Bay Watershed.

Water quality regulations in the United States apply almost exclusively to point sources. In impaired watersheds where both point and nonpoint sources contribute to pollution, the U.S. Environmental Protection Agency (EPA) is encouraging the use of point-nonpoint trading to reduce the cost of point sources to meet their permit requirement, and to encourage nonpoint sources to voluntarily contribute more towards meeting overall water quality goals. The EPA guidance encourages trading programs to set a nonpoint source eligibility baseline that extracts some "extra" abatement from nonpoint sources. Research has shown that setting an eligibility baseline that is substantially more stringent than current management could discourage nonpoint source participation and significantly hinder trading. In this paper we examine how choosing the eligibility baseline for agricultural sources affects the efficiency goal of trading (reducing costs to point sources), as well as how it affects the EPA goal of encouraging nonpoint abatement. Using data from the Chesapeake Bay Watershed we find that eligibility baselines set to encourage additional nonpoint source abatement reduce the supply of credits in a market; the more stringent the baseline, the fewer the trades and the smaller the overall abatement from nonpoint sources. A subsidy to farmers for reducing the cost of meeting a baseline encourages greater nonpoint source abatement, but may not benefit the trading market.

Pollution in the Chesapeake Bay is a problem and has been a focus of federal and state initiatives to reduce nutrient pollution from agriculture and other sources since 1983. In 2010 EPA established a TMDL for the watershed. Producers may voluntarily respond to intense and focused policy scrutiny by adopting best management practices. A detailed analysis of water quality best management practices by animal feeding operations inside and outside the watershed yield insight into this relationship. Our findings support the hypothesis that farmers will adopt water quality measures if links are made clear and there is an expectation of future regulations.

Agricultural nonpoint source water pollution has long been recognized as an important contributor to U.S. water quality problems and the subject of an array of local, state, and federal initiatives to reduce the problem. A "pay-the-polluter" approach to getting farmers to adopt best management practices has not succeeded in improving water quality in many impaired watersheds. With the prospects of reduced funding for the types of financial and technical assistance programs that have been the mainstay of agricultural water quality policy, alternative approaches need to be considered. Some changes to the way current conservation programs are implemented could increase their efficiency, but there are limits to how effective a purely voluntary approach can be. An alternative paradigm is the "polluter pays" approach, which has been successfully employed to reduce point source pollution. A wholesale implementation of the polluter-pays approach to agriculture is likely infeasible, but elements of the polluter-pays approach could be incorporated into agricultural water quality policy.

Ribaudo, Marc O. and Jessica Gottlieb, 2011. Point-Nonpoint Trading – Can It Work? Journal of the American Water Resources Association (JAWRA) 47(1):5-14. DOI: 10.1111/j.1752-1688.2010.00454.x Abstract: Water quality trading between point and nonpoint sources is of great interest as an alternative to strict command and control regulations on point sources for achieving water quality goals. The expectation is that trading will reduce the costs of water quality protection, and may speed compliance. The United States Environmental Protection Agency has issued guidance to the States on developing point-nonpoint trading programs, and United States Department of Agriculture is encouraging farmer participation. However, existing point-nonpoint trading programs have resulted in very few trades. Supply side and demand side impediments seem to be preventing trades from occurring in most trading programs. These include uncertainty over the number of discharge allowances different management practices can produce, high transactions costs of identifying trading partners, baseline requirements that eliminate low-cost credits, the reluctance of point sources to trade with unfamiliar agents, and the perception of some farmers that entering contracts with regulated point sources leads to greater scrutiny and potential future regulation. Many of these problems can be addressed through research and program design.

Farmers in the United States produce a wide variety of commodities for food and fiber. Farmers can also produce a variety of non-commodity ecosystem services for which markets do not exist or are imperfectly formed. Such services may be valued by society, but due to their nature or institutional arrangements, farmers often do not receive a price signal for them. This results in inefficient allocations of resources, in that farmers under-produce non-commodity ecosystem services. One possible way to increase private investment in ecosystem services is to create a market for them. We draw lessons from six different markets for providing ecosystem services from farms (water quality trading, wetland mitigation, carbon cap-and-trade, over-the-counter carbon, eco-labeling, and fee hunting) on what is required for a market to function, and the problems these markets might face.

There are relatively few Federal environmental regulations that influence agricultural production in the US. However, many local and state environmental rules may influence the management practices on US farms as might interactions between urban population centers and agricultural producers. Detailed analysis of corn farms gives insight into these relationships and suggests that stringent environmental regulations could increase the likelihood of adoption of certain conservation practices, all else being constant, but that the interaction between urban populations has less of an effect on the adoption decisions.

There are relatively few federal regulations that influence U.S. agricultural production. However, local concerns over environmental quality may influence the management practices on farms. A detailed analysis of corn farms yields insight into this relationship and its implications for the use of cropland best management practices. Our findings suggest that increased contact between working farms and suburban and exurban populations likely increase the use of nutrient management plans, a management-intensive conservation practice. However, nutrient management practices were not found to be associated with waters listed as impaired because of nutrient pollution. Copyright 2007, Oxford University Press.

The Baltic Sea and the Chesapeake Bay share many characteristics. Both are shallow, brackish marine areas that suffer from eutrophication. Successful policies targeting point source pollution have lowered nutrient loads in both areas, but achieving the desired marine quality will require further abatement: efforts may be extended to more complicated and expensive pollution sources, notably agricultural nonpoint loads. Despite their ecological similarities, the two watersheds have different histories and institutional settings and have thus adopted different policies. Comparing and contrasting the policies reveal ways to improve the efficiency of each and ways to avoid the path of trial and error. No comparison of the parallel protection efforts, which involve expenditures of hundreds of millions of dollars annually, has been carried out to date. The present paper analyzes the policies applied in the two regions, distilling the results into six recommendations for future steps in preserving what are valuable sea areas.

A zone of hypoxic and anoxic waters has become a dominant feature of the northern Gulf of Mexico. Nitrogen draining into the Gulf from the Mississippi Basin has been identified as the primary source of the problem. Reducing nitrogen loads from point and nonpoint sources in the basin is the primary goal of an action plan developed to address the problem. In this paper, we use data on point source dischargers and a model of the agriculture sector to examine whether the purchase of nitrogen reduction bcreditsQ from nonpoint sources would reduce the cost of nitrogen control if point sources are required to reduce nitrogen discharges. Results indicate that a substantial degree of credit trading could affect agricultural commodity prices, thereby affecting agricultural production outside the basin. D 2004 Elsevier B.V. All rights reserved.

The Environmental Protection Agency requires concentrated animal feeding operations to develop and implement a comprehensive nutrient management plan. Changes in manure management to meet nutrient application standards will increase production costs. Some of these costs can be offset by savings from replacing commercial fertilizer with manure nutrients, and through financial assistance programs such as the U.S. Department of Agriculture's Environmental Quality Incentives Program (EQIP). A manure application cost model was used to examine the costs to confined hog farms of meeting nutrient application standards, and the ability of fertilizer offsets and EQIP to reduce these costs. Copyright 2004, Oxford University Press.

In 2010, a Total Maximum Daily Load (TMDL) was established for the Chesapeake Bay, defining the limits on emissions of nitrogen, phosphorus, and sediment necessary to reverse declines in the Bay’s quality and associated biological resources. Agriculture is the largest single source of nutrients and sediment in the watershed. We use data on crop and animal agriculture in the watershed to assess the relative effectiveness of alternative policy approaches for achieving the nutrient and sediment reduction goals of the TMDL, ranging from voluntary financial incentives to regulations. The cost of achieving water quality goals depends heavily on which policy choices are selected and how they are implemented. We found that policies that provide incentives for water quality improvements are the most efficient, assuming necessary information on pollutant delivery is available for each field. Policies that directly encourage adoption of management systems that protect water quality (referred to as design-based) are the most practical, given the limited information that is generally available to farmers and resource agencies. Information on field characteristics can be used to target design-based policies to improve efficiency.

Environmental indicators can be used to target public programs to provide a variety of benefits. Social scientists, physical scientists, and politicians have roles in developing indicators that reflect the demands of diverse interest groups. We review the US Department of Agriculture’s Conservation Reserve Program (CRP), the largest agricultural conservation program the United States, to determine how a set of environmental indicators were developed and used, and assess results of their application. The use of such indicators has helped the CRP increase and broaden the program’s environmental benefits beyond erosion reduction, which was the primary focus of early program efforts, to meet other demands. This case study provides an example about how integration and assessment for the purpose of managing public resources requires more than natural science disciplines. Social science can help explain how public values influence what information is collected and how it is interpreted. Examples are given to show how the indices used for the CRP integrated science, politics and social values. In the end, the environmental benefits index (EBI) used to target US$ 20 billion of CRP funds reflects compromises made between science and policy considerations. It is our intention that studying this index will yield ideas and understanding from the natural science community that develops ecosystem indices about how to better plug in to programs in the future.

Nutrient pollution is one of the major sources of water quality impairments in the U.S. Agriculture is a major source of nutrients. Two alternative strategies for reducing nutrient loads from cropland are to reduce fertilizer application rates and to filter nutrients coming off cropland with restored wetlands. These two approaches are evaluated in the Mississippi Basin, where nutrient loadings to the Gulf of Mexico have caused a large zone of hypoxic waters. Because of the easement and restoration costs of wetlands, a fertilizer standard was found to be more cost effective than restoring wetlands for achieving a water quality goal up to a particular level of total nitrogen loss reduction. Beyond this point, wetland restorations are more cost-effective.

Economic analysis can be a guide to determining the level of actions taken to reduce nitrogen (N) losses and reduce environmental risk in a cost-effective manner while also allowing consideration of relative costs of controls to various groups. The biophysical science of N control, especially from nonpoint sources such as agriculture, is not certain. Widespread precise data do not exist for a river basin (or often even for a watershed) that couples management practices and other actions to reduce nonpoint N losses with specific delivery from the basin. The causal relationships are clouded by other factors influencing N flows, such as weather, temperature, and soil characteristics. Even when the science is certain, economic analysis has its own sets of uncertainties and simplifying economic assumptions. The economic analysis of the National Hypoxia Assessment provides an example of economic analysis based on less than complete scientific information that can still provide guidance to policy makers about the economic consequences of alternative approaches. One critical value to policy makers comes from bounding the economic magnitude of the consequences of alternative actions. Another value is the identification of impacts outside the sphere of initial concerns. Such analysis can successfully assess relative impacts of different degrees of control of N losses within the basin as well as outside the basin. It can demonstrate the extent to which costs of control of any one action increase with the intensity of application of control.

Education is often used to provide producers with information on how to operate more efficiently with current technologies or on profitable new technologies that generate less pollution. While such "win-win" solutions to water quality problems are attractive, we use a simple economic framework to show that education cannot be considered a strong tool for water quality protection. Its success depends on a number of factors related to profitability and altruism, and "win-win" solutions are not always guaranteed, even when they appear to exist. Evidence suggests that net returns are the chief concern of producers when they adopt alternative management practices.

In this paper, we review the physical characteristics of agricultural non point pollution and discuss the implications for setting appropriate pollution control objectives and designing incentive-based pollution control policies. First, we discuss that policy objectives must be designed carefully to ensure positive economic net benefits can be expected from pollution control. Next, we review several classes of incentives and recommend the use of design-based incentives (i.e., incentives based on variable input use, management practices, and land use) for controlling non point pollution. Cost-effectiveness requires that incentives elicit three types of responses from farmers: (1) use variable inputs at appropriate levels, (2) adopt appropriate management practices, and (3) make appropriate land use decisions at the extensive margin of production. If a set of incentives fails to induce the correct responses, the resulting runoff levels and hence ambient pollution levels and damages will be too large relative to policy goals. A review of existing programs suggests that greater program coordination and improved targeting of incentives are needed for further water quality improvements. Alternatively, properly designed market-based systems may be effective alternatives. These systems would reduce overall pollution control costs by allowing markets to allocate point source and non point source control costs more efficiently.

Economic incentives created by the commodity programs are hypothesized to cause program participants to apply agrichemicals at greater rates than nonparticipants. Corn producers who participate in the USDA feedgrain program are shown to apply nitrogen, herbicides, and insecticides at statistically greater rates than those who do not participate.

Nitrous oxide is a powerful greenhouse gas that is emitted from cropland treated with nitrogen fertilizer. Reducing such emissions through nutrient management might be able to produce offsets for sale in a cap and trade program aimed at reducing greenhouse gases. We use the Nitrate Leaching and Economic Analysis Program (NLEAP) model and data from the Agricultural and Resource Management Survey to examine what changes in rate, timing, or method of application a farmer would take to produce offsets. We find that reducing the application rate is the most favored approach for producing offsets. We also find that some management choices may increase nitrate losses to water.

The U.S. Environmental Protection Agency (USEPA) and the U.S. Department of Agriculture (USDA) are promoting point/nonpoint trading as a way of reducing the costs of meeting water quality goals. Farms can create offsets by implementing management practices such as conservation tillage, nutrient management and buffer strips. To be eligible to sell offsets or credits, farmers must first comply with baseline requirements. USEPA guidance recommends that the baseline for nonpoint sources be management practices that are consistent with the water quality goal. A farmer would not be able to create offsets until the minimum practice standards are met. An alternative baseline is those practices being implemented at the time the trading program starts, or when the farmer enters the program. The selection of the baseline affects the efficiency and equity of the trading program. It has major implications for which farmers benefit from trading, the cost of nonpoint source offsets, and ultimately the number of offsets that nonpoint sources can sell to regulated point sources. We use a simple model of the average profit-maximizing dairy farmer operating in the Conestoga watershed in Pennsylvania to evaluate the implications of baseline requirements on the cost and quantity of offsets that can be produced for sale in a water quality trading market, and which farmers benefit most from trading.

The 2002 and 2008 Farm Acts increased funding for conservation programs that provide financial assistance to farmers to implement conservation practices on working farmland. Along with seeking cost-effective environmental benefits, these programs have a goal of spreading conservation funding equitably across States. The 2002 and 2008 Farm Acts strengthened this allocative goal by setting a minimum threshold for conservation funding for each State — one that exceeds historical funding for some States — for enrolling agricultural producers in specified conservation programs. This study uses conservation program data to examine evidence of the impacts of the Regional Equity provision of the 2002 Farm Act, and explores the tradeoffs that can occur among conservation program goals when legislation gives primacy to fund allocation. The study found that cross-State shifts in funding reduced the acres receiving conservation treatment for many resource problems, but increased the net economic benefits from treatments on some of them. Overall impacts on the types of producers enrolled were small.

The Environmental Protection Agency and the U.S. Department of Agriculture are promoting point/nonpoint trading as a way of reducing the costs of meeting water quality goals while giving nonpoint sources a larger role in meeting those goals. Farms can create offsets or credits in a point/nonpoint trading program by implementing management practices such as conservation tillage, nutrient management, and buffer strips. To be eligible to sell credits, farmers must first comply with baseline requirements. The EPA defines a baseline as the pollutant control requirements that apply to a seller in the absence of trading. EPA guidance recommends that the baseline for nonpoint sources be management practices that are consistent with the water quality goal. A farmer would not be able to create credits until the minimum practice standards are met. An alternative baseline is those practices being implemented at the time the trading program starts. The selection of the baseline has major implications for which farmers benefit from trading, the cost of nonpoint source credits, and ultimately the number of credits that nonpoint sources can sell to regulated point sources. We use a simple model of the average profit-maximizing dairy farmer operating in the Conestoga (PA) watershed to evaluate the implications of baseline requirements on the cost and quantity of credits that can be produced for sale in a water quality trading market, and which farmers benefit most from trading.

The U.S. Environmental Protection Agency requires concentrated animal feeding operations to develop and implement a comprehensive nutrient management plan. Changes in manure management to meet nutrient application standards will generally increase production costs. Some of these costs can be offset by savings from replacing commercial fertilizer with manure nutrients, and through financial assistance programs such as the U.S. Department of Agriculture's Environmental Quality Incentives Program (EQIP). A manure application cost model was used to examine the costs to confined dairy farms of meeting nutrient application standards, and the ability of fertilizer offsets and EQIP to reduce these costs.

Nutrients from livestock and poultry manure are key sources of water pollution. Ever-growing numbers of animals per farm and per acre have increased the risk of water pollution. New Clean Water Act regulations compel the largest confined animal producers to meet nutrient application standards when applying manure to the land, and USDA encourages all animal feeding operations to do the same. The additional costs for managing manure (such as hauling manure off the farm) have implications for feedgrain producers and consumers as well. This report's farm-level analysis examines on-farm technical choice and producer costs across major U.S. production areas for hauling manure to the minimum amount of land needed to assimilate manure nutrients. A regional analysis then focuses on off-farm competition for land to spread surplus manure, using the Chesapeake Bay region as a case study. Finally, a sectorwide analysis addresses potential long-term structural adjustments at the national level and ultimate costs to consumers and producers.

Agriculture in the United States has been the subject of numerous government incentive programs over the years. These programs have been designed to achieve a wide variety of goals that include supply control, cropland conversion, soil conservation and environmental quality. A variety of incentive mechanisms have been used to achieve these goals. Incentives for protecting and enhancing water quality come from two different programmatic directions. The U.S. Department of Agriculture (USDA) has a long history of promoting natural resource stewardship through various forms of voluntary assistance (carrots), such as education, technical assistance and cost sharing. Water quality programs that have arisen from the Clean Water Act (CWA) and state water quality protection laws can be of the variety (stick), where farmers are forced through command-and-control or other incentive mechanisms to adopt alternative management practices.

Restricting or eliminating the use of atrazine in the Midwest would have important economic consequences for farmers, consumers, and the environment. These consequences can only be evaluated with cooperation between economists and weed scientists. The weed control choice set available to farmers cannot be observed through deductive research. Economists and weed scientists worked together to identify all possible weed control strategies for corn and sorghum in the Midwest and to incorporate them into an economic model. An atrazine ban was found to be the costliest strategy, and a targeted, water-quality based strategy the most cost effective.

A framework for estimating the water quality benefits from soil erosion was developed. The framework is based on the linkages between soil erosion and offsite damages. The linkages are: erosion on the field, movement of eroded materials to waterways, impact of discharged material on water quality parameters, impact of water quality changes on ability of water to provide economic services, and the economic value of the changes in water use. These linkages need to be modeled in order to estimate the water quality benefits from reductions in soil erosion. Methods for modeling each link on a geographic level, which enables the analyses of national soil conservation, were examined. Areas where data or models were found to be lacking include transport of sediment and nutrients to water systems, impact of discharged materials on water quality parameters, and impact of water quality on ability of water to provide economic services. An economic evaluation of 1983 soil conservation programs was presented as an example of how the framework could be used. A number of simplifying assumptions were made to represent links that could not be modeled with available data.

The failure to allow for significant crop quality effects in a partial-equilibrium model can lead to misleading inferences about the price, output and welfare implications of air quality improvements. It has been observed that air pollutants such as ozone, sulphur dioxide, and nitrogen dioxide affect the yield and quality of many crops. The economic benefit from improving air quality in crop producing regions has been measured using a partial-equilibrium approach which accounts only for supply shifting yield effects. It is shown that a yield-effect only model will underestimate output increases and benefits from an air quality improvement when commodity quality improvements as well as yield increases are forthcoming.

Excess nutrients from agricultural runoff have led to accelerated algae growth in Oakwood Lakes and Lake Poinsett, South Dakota, resulting in impaired recreational use of the lakes. Partially in response to the algae problem, an agricultural land use improvement program is currently underway to reduce lake nutrients. The travel cost method is used to estimate the recreational benefits from reduced algae growth at the lakes. Total recreational benefits from a reduction in algae growth are estimated to be about $3.5 million annually.