The Coordination and Design of Point-Nonpoint Trading Programs and Agri-Environmental Policies

Agricultural agencies have long offered agri-environmental payments that are inadequate to achieve water quality goals, and many state water quality agencies are considering point-nonpoint trading to achieve the needed pollution reductions. This analysis considers both targeted and nontargeted agrienvironmental payment schemes, along with a trading program which is not spatially targeted. The degree of improved performance among these policies is found to depend on whether the programs are coordinated or not, whether double-dipping (i.e., when farmers are paid twice-once by each program-to undertake particular pollution control actions) is allowed, and whether the agri-environmental payments are targeted. Under coordination, efficiency gains only occur with double-dipping, so that both programs jointly influence farmers' marginal decisions. Without coordination, doubledipping may increase or decrease efficiency, depending on how the agri-environmental policy is targeted. Finally, double-dipping may not solely benefit farmers, but can result in a transfer of agricultural subsidies to point sources.


Issue Date:
2004-04
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/31374
Published in:
Agricultural and Resource Economics Review, Volume 33, Number 1
Page range:
61-78
Total Pages:
18




 Record created 2017-04-01, last modified 2017-04-04

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