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Trust and Communication: Mechanisms for Increasing Farmers’ Participation in Water Quality Trading

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  • Hanna L. Breetz
  • Karen Fisher-Vanden
  • Hannah Jacobs
  • Claire Schary
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    Abstract

    Trust and communication barriers have contributed significantly to the lethargic performance of many point-nonpoint source water quality trading programs—farmers are often reluctant to participate despite direct financial incentives— yet the literature lacks a comprehensive investigation of how the social context affects trading outcomes.We draw on social embeddedness theory to analyze three mechanisms of communicating with farmers and conduct a case study analysis of 12 water quality trading programs. We find that employing trustworthy third parties or embedded ties may reduce farmers’ reluctance to participate, although the most effective mechanism ultimately depends on local conditions and program objectives.

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    Bibliographic Info

    Article provided by University of Wisconsin Press in its journal Land Economics.

    Volume (Year): 81 (2005)
    Issue (Month): 2 ()
    Pages:

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    Handle: RePEc:uwp:landec:v:81:y:2005:i:2:p170-190

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    Web page: http://le.uwpress.org/

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    References

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    1. Soderqvist, Tore, 2003. "Are farmers prosocial? Determinants of the willingness to participate in a Swedish catchment-based wetland creation programme," Ecological Economics, Elsevier, vol. 47(1), pages 105-120, November.
    2. Aaron Hatcher & Shabbar Jaffry & Olivier Thébaud & Elizabeth Bennett, 2000. "Normative and Social Influences Affecting Compliance with Fishery Regulations," Land Economics, University of Wisconsin Press, vol. 76(3), pages 448-461.
    3. Joseph C. Cooper & Russ W. Keim, 1996. "Incentive Payments to Encourage Farmer Adoption of Water Quality Protection Practices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(1), pages 54-64.
    4. Kurt Stephenson & Patricia Norris & Leonard Shabman, 1998. "Watershed-Based Effluent Trading: The Nonpoint Source Challenge," Contemporary Economic Policy, Western Economic Association International, vol. 16(4), pages 412-421, October.
    5. Guilherme S. Bastos & Erik Lichtenberg, 2001. "Priorities in Cost Sharing for Soil and Water Conservation: A Revealed Preference Study," Land Economics, University of Wisconsin Press, vol. 77(4), pages 533-547.
    6. William T. McSweeny & Randall A. Kramer, 1986. "The Integration of Farm Programs for Achieving Soil Conservation and Nonpoint Pollution Control Objectives," Land Economics, University of Wisconsin Press, vol. 62(2), pages 159-173.
    7. Houston, Jack E. & Sun, Henglun, 1999. "Cost-Share Incentives And Best Management Practices In A Pilot Water Quality Program," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(01), July.
    8. McCann, Laura M.J. & Easter, K. William, 1998. "Differences Between Farmer And Agency Attitudes Regarding Policies To Reduce Phosphorus Pollution In The Minnesota River Basin," Staff Papers 14268, University of Minnesota, Department of Applied Economics.
    9. Leonard Shabman & Kurt Stephenson & William Shobe, 2002. "Trading Programs for Environmental Management: Reflections on the Air and Water Experiences," Working Papers 2002-01, Center for Economic and Policy Studies.
    10. Joyce Willock & Ian J. Deary & Gareth Edwards-Jones & Gavin J. Gibson & Murray J. McGregor & Alistair Sutherland & J. Barry Dent & Oliver Morgan & Robert Grieve, 1999. "The Role of Attitudes and Objectives in Farmer Decision Making: Business and Environmentally-Oriented Behaviour in Scotland," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(2), pages 286-303.
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    Cited by:
    1. James Shortle & Richard D. Horan, 2013. "Policy Instruments for Water Quality Protection," Annual Review of Resource Economics, Annual Reviews, vol. 5(1), pages 111-138, June.
    2. Andrew Manale & Cynthia Morgan & Glenn Sheriff & David Simpson, 2011. "Offset markets for nutrient and sediment discharges in the Chesapeake Bay Watershed: Policy tradeoffs and potential steps forward," NCEE Working Paper Series 201105, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2011.
    3. Hugh McDonald & Suzi Kerr, 2011. "Trading Efficiency in Water Quality Trading Markets: An Assessment of Trade-Offs," Working Papers 11_15, Motu Economic and Public Policy Research.
    4. Sheila M. Olmstead, 2010. "The Economics of Water Quality," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 4(1), pages 44-62, Winter.
    5. Karen Fisher-Vanden & Sheila Olmstead, 2013. "Moving Pollution Trading from Air to Water: Potential, Problems, and Prognosis," Journal of Economic Perspectives, American Economic Association, vol. 27(1), pages 147-72, Winter.
    6. Khatri-Chhetri, Arun & Collins, Alan R, 2013. "Reducing Phosphorus Impairments with Nutrient Trading," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149686, Agricultural and Applied Economics Association.
    7. Collins, Alan R. & Maille, Peter, 2008. "Farmers as Producers of Clean Water: Getting Incentive Payments Right and Encouraging Farmer Participation," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6342, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Shortle, James, 2013. "Economics and Environmental Markets: Lessons from Water-Quality Trading," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 42(1), April.
    9. O'Hara, Jeffrey K. & Walsh, Michael J. & Marchetti, Paul K., 2012. "Establishing a Clearinghouse to Reduce Impediments to Water Quality Trading," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 42(2).
    10. Asai, Masayasu & Langer, Vibeke & Frederiksen, Pia & Jacobsen, Brian H., 2014. "Livestock farmer perceptions of successful collaborative arrangements for manure exchange: A study in Denmark," Agricultural Systems, Elsevier, vol. 128(C), pages 55-65.
    11. Arthur J. Caplan & Yuya Sasaki, 2009. "Sharing the Surplus Generated from Noncooperative Cost Sharing: The Case of Nonpoint Associations and Water Quality Trading," Working Papers 2009-09, Utah State University, Department of Economics.

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