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

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  • Kaplan, Jonathan D.
  • Johansson, Robert C.

Abstract

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.

Suggested Citation

  • Kaplan, Jonathan D. & Johansson, Robert C., 2004. "A Carrot-and-Stick Approach to Environmental Improvement: Marrying Agri-Environmental Payments and Water Quality Regulations," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 33(1), April.
  • Handle: RePEc:ags:arerjl:31369
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    Cited by:

    1. Johansson, Robert C. & Livingston, Michael J. & Westra, John V. & Guidry, Kurt M., 2006. "Simulating the U.S. Impacts of Alternative Asian Soybean Rust Treatment Regimes," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 35(1), April.
    2. Cattaneo, Andrea & Claassen, Roger & Johansson, Robert C. & Weinberg, Marca, 2005. "Flexible Conservation Measures on Working Land: What Challenges Lie Ahead?," Economic Research Report 7248, United States Department of Agriculture, Economic Research Service.
    3. Kenneth A. Baerenklau & Nermin Nergis & Kurt A. Schwabe, 2008. "Effects of Nutrient Restrictions on Confined Animal Facilities: Insights from a Structural-Dynamic Model," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(2), pages 219-241, June.
    4. Johansson, Robert C. & Cooper, Joseph C. & Vasavada, Utpal, 2005. "Greener Acres or Greener Waters? Potential U.S. Impacts of Agricultural Trade Liberalization," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 34(1), April.
    5. Ribaudo, Marc & Agapoff, Jean, 2005. "Importance of Cost Offsets for Dairy Farms Meeting a Nutrient Application Standard," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 34(2), October.
    6. O'Donoghue, Erik J. & MacDonald, James M. & Nehring, Richard F., 2005. "At What Rate Do Farmers Substitute Manure For Commercial Fertilizers?," 2005 Annual meeting, July 24-27, Providence, RI 19252, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Claassen, Roger & Cattaneo, Andrea & Johansson, Robert, 2008. "Cost-effective design of agri-environmental payment programs: U.S. experience in theory and practice," Ecological Economics, Elsevier, vol. 65(4), pages 737-752, May.
    8. Aillery, Marcel P. & Gollehon, Noel R. & Johansson, Robert C. & Kaplan, Jonathan D. & Key, Nigel D. & Ribaudo, Marc, 2005. "Managing Manure To Improve Air And Water Quality," Economic Research Report 33593, United States Department of Agriculture, Economic Research Service.
    9. Spencer, Daniel S. & Barnes, James N. & Coatney, Kalyn T. & Parman, Bryon J. & Coble, Keith H., 2017. "Property Rights And The Economics Of Non-Point Source Water Regulations In Agriculture: A New Biophysical-Economic Methodological Approach," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252835, Southern Agricultural Economics Association.
    10. Key, Nigel D., 2004. "Manure Application Standards and EQIP Payments: The Distribution of Economic and Environmental Costs and Benefits across US Hog Farms," 2004 Annual meeting, August 1-4, Denver, CO 19937, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Johansson, Robert & Peters, Mark & House, Robert, 2007. "Regional Environment and Agriculture Programming Model," Technical Bulletins 184314, United States Department of Agriculture, Economic Research Service.
    12. Johansson, Robert C. & Cooper, Joseph & Peters, Mark, 2006. "An agri-environmental assessment of trade liberalization," Ecological Economics, Elsevier, vol. 58(1), pages 37-48, June.

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    Keywords

    Environmental Economics and Policy;

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