A Carrot-and-Stick Approach to Environmental Improvement: Marrying Agri-Environmental Payments and Water Quality Regulations

• Published in: Agricultural and resource economics review Vol. 33; no. 1; pp. 91 - 104
• Main Authors: Johansson, Robert C., Kaplan, Jonathan D.
• Format: Journal Article
• Language: English
• Published: New York, US Cambridge University Press 01.04.2004
• Subjects: Agricultural production; Carrots; Contributed Papers; Daucus; Environmental quality; Fertilizers; Livestock; Manures; Nitrogen; Nutrients; Pathogens; Pesticides; Pollutants; Poultry; Prices; Regions; Regulation; Simulation; Surface water; Water quality; USA; agricultural sector simulation; water quality; agri-environmental programs; manure nutrients
• ISSN: 1068-2805; 2372-2614
• DOI: 10.1017/S1068280500005669

Agri-environmental programs, such as the Environmental Quality Incentives Program, provide payments to livestock and crop producers to generate broadly defined environmental benefits and to help them comply with federal water quality regulations, such as those that require manure nutrients generated on large animal feeding operations to be spread on cropland at no greater than agronomic rates. We couch these policy options in terms of agri-environmental “carrots” and regulatory “sticks,” respectively. The U.S. agricultural sector is likely to respond to these policies in a variety of ways. Simulation analysis suggests that meeting nutrient standards would result in decreased levels of animal production, increased prices for livestock and poultry products, increased levels of crop production, and water quality improvements. However, estimated impacts are not homogeneous across regions. In regions with relatively less cropland per ton of manure produced, the impacts of these policies are more pronounced.