Modeling voluntary participation in a cost-sharing agricultural water quality management program

This economic analysis of farmers' voluntary adoption of water quality management alternatives integrates three biophysical simulators to predict crop yields and soil erosion/water quality impacts under uncertain weather and market conditions. Farmers' willingness to cost-share was used to estimate expectations of net returns and associated water and soil pollution based upon government cost-share scenarios. Simulations integrated into mathematical programming results indicate that irrigation and nitrogen fertilizer applications do not alter water quality in the Gum Creek Watershed as much as generally anticipated. Under limited government payments, pollution abatement through reduction of irrigation and/or nitrogen fertilizer applications significantly reduces farmers' net revenues and hence, without threats of other regulatory means, more farmers opt out of a voluntary program. Abatement of nitrogen runoff and leaching should consider other managment alternatives and include non-agricultural sources of pollution.