Integrating Economic and Physical Models for Analyzing Water Quality Impacts of Agricultural Policies in the High Plains

Abstract

Agency estimated in 1992 that 52.1 percent of all community water systems contained nitrates and 10.4 percent contained pesticides. A study by the Water Quality Task Force of the Great Plains Agricultural Council concluded that agriculture was the largest contributor of nonpoint source pollution in the Great Plains and throughout the nation. Increased public awareness of these issues continues to put significant pressure on policy makers to consider water quality impacts in agricultural legislation. The impact of government commodity programs on agricultural production has been well documented (e.g., Houck and Ryan; Houck et al.; Lidman and Bawden; Chavas, Pope, and Kao; Johnson, Wolcott, and Aradhyula). For example, Houck and Ryan found that more than 95 percent of the variation in U.S. corn acreage during 1948 to 1970 could be attributed to selected policy variables. The resulting changes in agricultural production may in turn affect water quality. Several studies have discussed possible conflicts in the objectives of agricultural and environmental policies (Just and Antle; Johnson, Wolcott, and Aradhyula; Miranowski, Hrubovcak, and Sutton). Just and Antle found that existing agricultural policies can have either positive or negative effects on nonpoint source pollution; however, they did not provide any measure of the aggregate effect because no empirical investigation was conducted. Johnson, Wolcott, and Aradhyula examined the impact of commodity programs on output supply and input demand in the U.S. agricultural sector and illustrated possible tradeoffs between agricultural and environmental policies. Miranowski, Hrubovcak, and Sutton used a general equilibrium model of the U.S. agricultural sector to examine the impact of the Acreage Reduction Programs (ARP) and the Conservation Reserve Program (CRP) on chemical use and soil erosion. The results