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Environmental and economic impacts of reducing total phosphorous runoff in an agricultural watershed

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  • Rodriguez, Hector German
  • Popp, Jennie
  • Gbur, Edward
  • Chaubey, Indrajeet

Abstract

The economy of northwest Arkansas relies greatly upon livestock and poultry production. The supply of production by-products is increasingly coming under scrutiny as an important source of water pollution in the region. This study uses stochastic dominance techniques to evaluate, environmentally and economically, a range of ten best management practice scenarios to lessen water pollution in the Lincoln Lake watershed. The goal is to generate rankings that could be useful for supporting producers' and watershed managers' selection of management practices to reduce total phosphorous losses in runoff. Specifically, this study compares scenarios in terms of net return risk reduction for bermudagrass hay producers. The results showed that environmental and economic rankings differ from each other. Although all scenarios analyzed were effective in reducing total phosphorous losses when compared to a baseline, six of them also decreased net returns. This suggests that including some best management practices may lead to increased net return risk. However, some scenarios were identified that may increase net returns, reduce total phosphorous losses and do not differ considerably from producers' current management practices. The previous results suggested that the joint environmental-economic impact was important when considering scenarios and that producers' risk attitudes and best management practices' economic impacts should be accounted for when selecting scenarios. Producers and watershed managers can weigh trade-offs between total phosphorous losses reduction and net returns variability when making water conservation decisions.

Suggested Citation

  • Rodriguez, Hector German & Popp, Jennie & Gbur, Edward & Chaubey, Indrajeet, 2011. "Environmental and economic impacts of reducing total phosphorous runoff in an agricultural watershed," Agricultural Systems, Elsevier, vol. 104(8), pages 623-633, October.
  • Handle: RePEc:eee:agisys:v:104:y:2011:i:8:p:623-633
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    References listed on IDEAS

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    1. J. Brian Hardaker & James W. Richardson & Gudbrand Lien & Keith D. Schumann, 2004. "Stochastic efficiency analysis with risk aversion bounds: a simplified approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 48(2), pages 253-270, June.
    2. Meyer, Jack & Richardson, James W. & Schumann, Keith D., 2009. "Stochastic efficiency analysis with risk aversion bounds: a correction," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 53(4), December.
    3. Grove, Bennie & Nel, F. & Maluleke, H.H., 2006. "Stochastic efficiency analysis of alternative water conservation strategies," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 45(1), March.
    4. McCarl, Bruce A., 1990. "Generalized Stochastic Dominance: An Empirical Examination," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 22(02), December.
    5. Popp, Jennie S. Hughes & Rodriguez, German, 2007. "The Role of Stakeholders' Perceptions in Addressing Water Quality Disputes in an Embattled Watershed," 2007 Annual Meeting, February 4-7, 2007, Mobile, Alabama 34808, Southern Agricultural Economics Association.
    6. Philip W. Gassman & Manuel R. Reyes & Colleen H. Green & Jeffrey G. Arnold, 2007. "Soil and Water Assessment Tool: Historical Development, Applications, and Future Research Directions, The," Center for Agricultural and Rural Development (CARD) Publications 07-wp443, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    7. Meyer, Jack, 1977. "Second Degree Stochastic Dominance with Respect to a Function," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 477-487, June.
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    Cited by:

    1. Gunasekhar Nachimuthu & Neil V. Halpin & Michael J. Bell, 2017. "Impact of Practice Change on Runoff Water Quality and Vegetable Yield—An On-Farm Case Study," Agriculture, MDPI, Open Access Journal, vol. 7(3), pages 1-22, March.
    2. Kurkalova, Lyubov A., 2014. "On optimal placement of best management practices in agricultural watersheds," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169768, Agricultural and Applied Economics Association.

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