The adoption of best management practices to reduce agricultural water contamination

Nonpoint source water pollution generated by agricultural production is considered a major environmental issue in the United States and Europe. One strategy in the United States has been to adopt various measures, called best management practices (BMPs), to reduce water pollution. Our research addresses legal institutions and the applied use of BMPs, and discusses compensatory payments to reduce nitrogen fertilization levels. Models employed in Georgia and Baden-Wuerttemberg evaluate institutional constraints of payments to reduce nitrogen usage, penalties for excessive leaching, and financial incentives for meeting minimum mineralized nitrogen levels. By modeling net returns, preferred economic strategies for producers are identified. Results show that while BMPs can reduce agricultural nonpoint contamination, pollution abatement may be costly to producers. Thus, reduced pollution probably will require some type of government intervention.