ABSTRACT
In response to increasing public concern over the contribution of agricultural pollutants to the degradation of surface and groundwater supplies, the 1990 Food, Agriculture, Conservation and Trade Act (FACTA) authorized the U.S. Department of Agriculture (USDA) to initiate the Water Quality Incentive Program (WQIP). WQIP is administered by the Natural Resources Conservation Service (NRCS) through the Agricultural Conservation Program (ACP). its goal is to mitigate the negative impacts of agricultural activities on ground and surface water supplies through the use of stewardship payments and technical assistance to farmers who agree to implement approved practices. With these incentives, farmers are encouraged to experiment with more environmentally benign production practices than they otherwise would use. In 1992 and 1993, the funding levels for WQIP were $6.75 million and $15 million, respectively. Currently, farmers in only a small number of watersheds are eligible to enter the program. However, the issue has been raised (e.g., Sinner) of making this type of incentive
payment program more widely available. WQIP incentive payments are not determined
through market interaction. Instead, the payments are essentially a fixed-offer amount. As a result, a function modeling the probability of adoption of a practice as a function of the incentive payment cannot be estimated from current market data. Using the results of a survey of farmers, our goal is to model the probability of adopting a preferred farming practice as a function of the incentive payments. This response function would be useful in comparing the benefits and costs of encouraging farmers to try the various preferred management practices. In conjunction with this goal, our secondary goal is to model how many acres the farmer will devote to the new practice, given the decision to adopt.
