The coordination and design of point-nonpoint trading programs and agri-environmental policies

Richard D. Horan, James S. Shortle, David G. Abler

Research output: Contribution to journalArticlepeer-review

33 Scopus citations


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 agri-environmental 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, double-dipping 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.

Original languageEnglish (US)
Pages (from-to)61-78
Number of pages18
JournalAgricultural and Resource Economics Review
Issue number1
StatePublished - Apr 2004

All Science Journal Classification (ASJC) codes

  • Agronomy and Crop Science
  • Economics and Econometrics


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