SWAT Literature Database for Peer-Reviewed Journal Articles

Title:Farmer preferences for conservation incentives that promote voluntary phosphorus abatement in agricultural watersheds 
Authors:Palm-Forster, L.H., S.M. Swinton and R.S. Shupp 
Journal:Journal of Soil and Water Conservation 
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Broad Application Category:pollutant only 
Primary Application Category:BMP assessment 
Secondary Application Category:economic assessment 
Watershed Description:Maumee River, which drains portions of northwest Ohio, northeast Indiana and southeast Michigan to the western part of Lake Erie, U.S. 
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Abstract:Financial incentives are commonly used to promote voluntary adoption of agricultural best management practices (BMPs), but little is known about farmer preferences among alternative incentives. Using experimental procurement auctions, we evaluate how different conservation incentives affect farmer willingness to adopt BMPs that reduce phosphorus (P) runoff, a major driver of harmful algal blooms in Lake Erie. We rank incentives (e.g., payment, BMP insurance, tax credit, and certification price premium) by the cost per pound of P runoff reduction. Payments and tax credits that target high impact areas of the watershed are more cost-effective than untargeted price premiums for product certification. Farmers demand higher payments for contracts offering BMP insurance (i.e., protection against yield loss from BMP use) due to uncertainty about how the program will be implemented and the reliability of indemnities, as well as anticipated transaction costs associated with the program. Understanding farmer preferences for different types of conservation incentives is critical to design agri-environmental programs that engage more farmers and cost-effectively enhance ecosystem services. 
Keywords:agri-environmental policy—best management practice (BMP) insurance—harmful algal blooms—Lake Erie—payments for environmental services (PES)—reverse auctions