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Abstract
Market-based environmental policies have been forwarded as alternatives to current pollution
control policies. Implementation of the "polluter pays" principle and governmental enforcement
of pollution clean-up have led to astronomical environmental liabilities and clean-up costs,
which may threaten the survival of many productive ventures, unless producers can spread
pollution risk through insurance. An emission constrained target MOTAD LP (TMLP) model
showed that pollution insurance for irrigation farmers can be a feasible and efficient solution to
agricultural salinization problems in the Loskop Valley, and fairly low salinity standards with
pollution insurance will still be reconcilable with profitable farming. Pollution insurance
appears to hold promise for applying the "polluter pays" principles also to non-point pollution.
Site specific studies are needed for pollution policy, and more research is needed on pollution
standards.