AEPA
United States
Environmental Protection
Agency
Environmental Research
Laboratory
Athens GA 3061 3
Research and Development	EPA-600/S5-82-002 Dec. 1982
Project Summary
Formulating Agricultural
Nonpoint Source Policy:
Analysis and Issues
W. D. Seitz, C. Osteen, R. Hewett, D. M. Gardner, J. C. van Es, and J. B. Stall
In a two-year study the social,
economic, legal and institutional
issues involved in the management and
control of pollutants emanating from
agricultural nonpoint sources were
investigated. The primary focus was
on nonirrigated agriculture in the Corn
Belt production region. The study was
performed in four parts: 1) analysis of
the economic impacts of selected
erosion control policies and their
distribution among Corn Belt states,
2)	evaluation of the equity issues
involved in public policy formulation,
3)	examination of the role of farmer
attitudes and corresponding com-
munication activities in the imple-
mentation of nonpoint source water
pollution control programs, and 4)
comparative analysis of two approaches
to the agricultural nonpoint source
problem — source control and instream
water quality management.
This study builds on work reported
in Alternative Policies for Controlling
Nonpoint Agricultural Sources of Water
Pollution (EPA-600/5-78-055), and
focuses on issues raised in earlier
analyses. Although the work reported
here does not reflect an integrated set
of analyses, the parts do, when
summed, represent a unified picture
that must be viewed in toto if imple-
mentable and economically efficient
agricultural nonpoint source control
policies are to be developed.
These analyses show that substan-
tial reductions in erosion-related resid-
uals can be realized at a fairly small
cost to society. There may be, however,
significant equity issues that should
be factored into the development of
control strategies. Furthermore, strat-
egy development must include various
kinds of incentives targeted toward
specific factors that affect farmers'
willingness to adopt and maintain best
management practices. Long-term
solutions will likely demand that larger
problem solving frameworks (e.g., at
the watershed level) be utilized if
water quality management goals are
to be achieved efficiently.
This Project Summary was devel-
oped by EPA's Environmental Research
Laboratory, Athens. GA. to announce
key findings of the research projects
that are fully documented in separate
reports (see Project Report ordering
information at back).
Economic Impacts
Introduction
Economic Impacts of Selected Erosion
Control Policies focused on two ques-
tions: (1) If states in the Corn Belt adopt
varying soil loss limits as part of a
nonpoint source water pollution control
program, will there be adverse economic
consequences? and (2) If so, what
impacts would occur and would they be
severe? An analysis was conducted,
then, of the economic impacts on and
expected changes in agriculture if
various agricultural nonpoint source
control strategies are implemented by
different states. The focus is on soil

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erosion as an indirect contributor to the
nonpoint source pollution problem.
Because individual states and areas
within states have prepared separate
water quality plans under P L. 92-500,
erosion and sedimentation controls may
vary widely in the region. It is important
therefore to see what spatial economic
impacts may occur if different states
apply different degrees of control.
The economic impact analysis looked
specifically at Illinois and Wisconsin as
subareas of the Corn Belt. The earlier
research on which this report is based
investigated a number of different
agricultural management policies using
a modified version of the corn-belt
model. These policies included the
application of per-acre soil loss restric-
tions: (1) only in Illinois, (2) only in
Wisconsin, (3) uniformly in all areas of
the Corn Belt, excluding Illinois, and (4)
uniformly in the entire Corn Belt. The
policies were aimed specifically at soil
erosion control even though the rela-
tionships between erosion control
policies and water quality have not yet
been well defined.
A linear programming model of the
corn-belt economy was used that
accounts for production costs, soil
erosion, and demand functions for corn
and soybeans. As a result, prices for
crops can change as production changes.
The model predicts soil loss and
responds to soil loss restrictions.
Conclusions
This study predicts that the application
of soil loss restrictions in different
states in the Corn Belt will result in
relatively low costs to society. The costs
will be borne by producers under some
circumstances and by consumers in
others. An important factor in determin-
ing who bears the costs is how crop
prices and production change. Soybean
prices will undoubtedly increase when
soil loss restrictions are applied because
it is the most erosive of the major crops
grown in the Corn Belt. The distribution
of crops across various soil types at the
time of application of a soil loss
restriction will affect changes in crop
prices and the distribution of costs
between producers and consumers.
In general, the impacts on the various
states' shares of farm income in the
Corn Belt will be relatively small. Costs
to producers will not be evenlydistribut-
ed within a state, Costs will be concen-
trated on the owners of more erodable
soils. The income of owners of less
erodable soils could actually increase if
crop prices increase.
Soil loss will decrease in areas
applying soil loss restrictions. In some
cases, soil losses could increase in
areas not applying soil loss restrictions
because of crop shifts between states.
Finally, market incentives and educa-
tional programs may encouragefarmers
to adopt conservation tillage practices
and reduce soil loss without government
intervention. In many instances, sup-
plementary conservation practices
would be needed to reduce soil losses to
SCS soil tolerance limits.
Equity Analysis
Introduction
Equity Analysis in Public Policy
Formation extends and develops in
considerably more detail several equity
criteria developed in earlier work. A
procedure for making numerical esti-
mates of the equity impacts of various
policies is presented.
A standard test of whether any public
policy is desirable from an economic
perspective is to determine whether it is
efficient and equitable. A policy that
makes some individuals better off and
none worse off is classified as efficient.
In general, those policies for which the
sum of the benefits is greater than the
sum of the costs are also considered
efficient. Obviously, any policy that
makes all individuals worse off is
inefficient, and, in general, any policy
for which the sum of the costs is
greater than the sum of the benefits is
also classified as inefficient. Techniques
that measure the efficiency of public
policy changes, such as cost-benefit
analyses, have been used for a number
of years and are the subject of continuing
reappraisal.
The goal here is to suggest an
approach that can be used in analyzing
the equity implications of alternative
public policies being considered as a
means of accomplishing objectives
other than equity. The analysis begins
with a brief discussion of the founda-
tions of the concept of equity and
concludes that a single measure, such
as the distribution of income, is not
adequate for the type of analysis
suggested here. Rather, it is suggested
that several equity criteria need to be
considered by a policy analyst who is
seriously attempting to reflect the
beliefs of society.
The report then details the selection
of an equity measurement statistic.
While recognizing that no statistic can
be completely acceptable, one believed
to be workable is selected and proce-
dures are developed for implementing
each suggested criterion. Some obser
vations are then made on how these
statistics could be developed especially
in the analysis of a soil erosion-water
quality management policy
Conclusion
The analysis implies that income and
impacts on income are important to
attempts to specify equity criteria. Thus,
occupation will also be an important
characteristic. Policy makers may also
need to consider groups of individuals in
categories such asconsumers, workers,
recreationists, the elderly, renters,
homeowners, and students when they
analyze policy alternatives that would
affect these groups.
Several criteria of fairness or equity,
each implicitly specifying a general set
of significant characteristics for judging
equity, are possible. The four equity
criteria suggested here are believed to
have broad popular appeal although
they may not be appealing when
pressed to their extremes. Public
policies should at least have favorable
equity impacts to the extent "possible.''
Stated briefly, the criteria are:
1.	Equality — The benefits of society
should be shared equally by all.
2.	Shared Consequences — The
benefits or costs of public policies
should be shared equally by all.
3.	Earned Rewards — Individuals
should pay for benefits received
and be compensated for costs
incurred.
4.	Intertemporal Fairness — Long-
term risks associated with public
policies should be minimized.
It appears that broadening the concept
of equity to include several criteria
reflecting values held by individuals in
society will allow a policy analyst and a
decision maker to more accurately
assess the impacts of a policy under
analysis and to thereby assess the
acceptance of that policy by individual
citizens. By understanding a more
complete range of the equity impacts of
the several policy alternatives, the
decision maker can more accurately
select the policies believed to be in the
public interest.
The report suggests an approach that
shows some promise for quantifying the
several equity criteria discussed, al-
though it is presumed that it is impossible
to develop a measurement technique
for the intertemporal criterion. The
primary value of the development ol
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such measurement techniques is that
(he equity implication can be placedon a
more nearly equal footing with the
efficiency implications of alternative
policy choices. Doing so should facili-
tate the policy makers' subjective analy-
sis of the alternatives and, as such,
should make the economists' input to
the decision process more valuable The
authors do not expect and would argue
against an attempt to establish firm
decision rules based on such numerical
estimates. Remaining for future work is
the application of this procedure to a
real problem.
Attitudes, Acceptability and
Implementation
Introduction
Recognizing Farmers' Attitudes and
Implementing Nonpoint Source Control
Policies examines the role of farmer
attitudes and corresponding commu-
nication activities in the implementation
of nonpoint source water pollution
control programs. Introducing remedial
policies into agriculture hasprovedtobe
quite complex. Because farmers are the
principal decision makers regarding on-
the-farm activities, the success of most
programs, whether voluntary or manda-
»ory. depends upon their participation. It
is argued that voluntary participation is
preferable because it maintains a farm-
er's control over his affairs, allows for
local decisions, and encourages adapta-
tions to local conditions. Much of the
technology introduced voluntarily to
farmers in the past has helped them to
increase their productivity. Pollution-
control policies whose purpose is to im-
prove public welfare, however, may re-
quire activities not profitable to the
farmer.
Policies that are based on mandatory
participation can involve significant
interference with farm operations. The
gravity of the NPS problem and/or the
necessity to bring critical acreage in an
area under a pollution control program,
however, may lead policy makers to
decide that mandatory participation is
called for. The drawbacks of mandatory
programs, however, are well known.
They tend to be accompanied by
cumbersome administrative machinery
that may be both costly and annoying to
those affected by the regulations. Also,
poor communications and misunder-
standings between the regulatory
agency and those regulated are a
familiar part of most scenarios. Manda-
fory regulations are usually created by a
central authority, frequently causing
inequities and inefficiencies. Agriculture
may be particularly vulnerable to such
inequities because its needs are more
sensitive to local conditions than almost
any other sphere in which activity is
regulated.
Farmers place a high value on
exercising their autonomy in farm
decision making and on unrestricted
property rights. Farmers have, however,
accepted regulatory activity interfering
with their decision-making autonomy in
such areas as grading standards for
farm products, milk-marketing orders,
and many public health regulations.
While they have not necessarily cher-
ished these regulations, there is little
evidence that noncompliance has been
widespread once the regulations have
been introduced, probably because the
farmers were persuaded that the
regulations were justified. Their attitude
toward the regulations, then, was
important in securing their cooperation.
The report begins with a discussion of
attitudes — how they are formulated
and changed and how they influence
behavior. The process of communication
is then examined as it influences an
individual's behavior by modifying what
that person knows orfeels. It is apparent
that the proper use of communication
and educational programs will be
ci ucial to the successful implementation
of NPS pollution control programs.
Methods of achieving better implemen-
tation, such as the development of better
communication, incentive programs,
and citizen participation are then
examined.
Conclusions
A program of NPS pollution abatement
will have to operate under certain
restrictions. In the near future it does
not seem likely that a widespread
centrally organized program of manda-
tory participation will be initiated. At the
same time, complete reliance on volun-
tary programs will probably not get the
job done; all indications from previous
research are that certain farmers will
not participate in voluntary programs
and that many farmers, including those
more economically innovative, will not
participate in programs that will be
costly to them. Although incentive
programs induce farmers to participate,
such programs will need to be restruc-
tured if they are to meet the needs of a
NPS pollution control program. The
following program steps should strength-
en a NPS pollution-control program in
agriculture.
(1)	A strong educational program pro-
viding technical information as well
as stressing the conservation and
environmental values involved should
create an awareness of and recep
tivity to the need for NPS pollution
control. A strong educational cam-
paign will be necessary for any type
of implementation program and
may, of course, on its own merits
increase participation in NPS pollu-
tion control.
(2)	While general standards and norms
may be set at the state or federal
level, local units such as Soil and
Water Conservation Districts will be
charged with local implementation
and will thus make decisions on
priorities and resource allocations.
In the future, because local governing
agencies may have to allocate
resources according to the greatest
need or impact, the local citizens
they select for decision-making
groups will have to be representative
of the persons affected by the
decision making, rather than just
those who express an interest in
program participation.
In addition, local decision makers
will need to have the technical
information necessary to make
priority and resource-distribution
decisions, and technical agencies
will need to have the authority and
capability to provide this information.
This practice would also be a
departure from the past, when
information was typically provided
on the basis of individual farmer
interest.
(3)	Incentives should be structured in
such a way that the money spent
would yield results. We know little
about those levels at which farmers
will respond well to specific incen-
tives, but it is clear that the cost of
providing financial incentives to
individual farmers will be substantial.
State and federal governments,
however, already have a large
number of specialized financial
transactions with farmers. Policies
that would make the reception of
other government benefits contin-
gent upon participation in NPS
pollution-control programs would
increase the magnitude of the
incentives systems without requiring
large new outlays of money. Some
of these steps have, of course,
already been taken at the federal
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level, but further integration of NPS
pollution control programs into
agricultural policy would be helpful.
(4) Local implementation groups should
be given definite and realistic
targets on what is to be accomplished
by what date Although local imple-
mentation authority appears to be
the most efficient and equitable,
clearly defined objectives would do
more than just provide benchmarks
against which progress can be
measured. If they acquire the proper
authority, local decision-making
units will be in a better position to
introduce mandatory participation
by pointing to outside requirements
In addition, the optimal time for
mandatory participation will fre-
quently be when, through educa-
tional and incentive programs, local
support has been obtained. Local
support, however, will be gained at
different times in various localities.
Water Quality Management
Introduction
Toward Instream Water Quality
Management compares two approaches
to the agricultural nonpoint source
pollution control problem: source control
and instream water quality management
(ISWQM). This report views controlling
sediment as a water quality problem. It
is recognized, however, that there are
other nonpoint pollutants such as
pesticides and fertilizers. Much of the
discussion in this report applies to non-
sediment pollutants
Source control is a strategy of
controlling pollution loadings by using
standards such as soil loss limits or best
management practices (BMPs) without
relating them directly to water quality
goals. ISWQM is a strategy of determin-
ing water-quality goals by examining
pollution effects and other considera-
tions and developing a resource man-
agement planforachieving those goals.
ISWQM relates land management more
closely to water quality goals. Source
control focuses on a more manageable
piece of the overall problem because the
techniques to be used are relatively well
understood and the institutional frame-
work is in place to implement such an
approach. Nevertheless, while the
impacts of such a program on water
quality may be significant and positive,
the precise impacts are not well known,
and the most effective source controls
to improve water quality may be hard to
specify. ISWQM, on the other hand,
would capture a larger subset of prob-
lems, so the analytical problem would
become much more difficult. The report
discusses the strengths and weak-
nesses of each approach and suggests
some intermediate alternatives that
could be explored.
Institutionally, ISWQM requires a
close integration of nonpoint source
pollution control with the management
of water uses and formulation of water
quality goals. A land management plan
defining BMPs or effluent standards
would be related to water quality goals
for a stream and could be changed if the
water quality goals are not met. Under
source control, the land management
plan is typically applied without analysis
of the impacts on changes in waterqual
ity in a particular stream The ISWQM
planning process requires an institu-
tional structure such that agencies de-
fining water uses and managing vyater
resources, agencies defining water-
quality goals and standards, and agencies
developing land-management plans
must work together to relate land
management to desired water quality.
Under source controls, agencies planning
land management could work inde-
pendently of agencies defining water
uses and managing waterways
There is also an intermediate approach
between source control and ISWQM.
An initial source control plan might be
developed that simply applies technical
standards. The performance of the plan
is reassessed in light of water quality
goals and changed where performance
is inadequate. This approach will be
considered to be an ISWQM approach
because land management plans and
water quality goals are being integrated
in the planning process and a feedback
mechanism exists to assess perform-
ance and change the plan.
The information base needed and the
state of the art of NPS modeling and
economic evaluation methodologies is
evaluated in light of both control
approaches.
Conclusions
The source control approach to water
quality management is currently feasible,
an example being the soil conservation
program. Economic and physical models
are readily available for use under this
approach. Institutions to implement
such an approach on agricultural lands
already exist. Some changes in existing
institutions, specifically Soil and Water
Conservation Districts, would likely be
desirable: (1) A role in planning land
management should be provided for
people living outside of the boundarie
of an SWCD who have an interest in the
impact of the management of land
within the SWCD on water quality, (2)
Nonlandowners should be allowed to
vote in elections concerning land-use
regulations, and (3) Urban residents
should be brought into the planning
process. These changes in institutions,
however, could require changes in state
soil and conservation laws, a process
that could be time-consuming and could
encounter political resistance.
ISWQM encounters more problems
than source control because the infor-
mation and planning costs and technical
problems of implementation and polit-
ical resistance to implementation would
be greater It would not, however, be
impossible to implement ISWQM.
Institutional changes are needed for
ISWQM in addition to those outlined for
source control. A closer integration of
land management and water use and
water quality goals is needed for
ISWQM than for source control. Agen-
cies managing waterways, defining
water uses, defining water quality
goals, and developing land management
plans need to work more closely
together in the ISWQM planning process
than under source control.
The creation of nonlocal coordinating
agencies, such as 208 planning agencies,
would provide the changes needed in
institutions and the planning process
for ISWQM. These agencies will require
some legal powers to coordinate the
activities of SWCDs. There would
probably be political resistance to giving
a coordinating agency a role in local
decision-making. Another problem
would be the cost of funding the
coordination agency. The implementa-
tion of ISWQM would thus be more
difficult than source control because of
these institutional problems.
There are a number of technical
difficulties for developing land and
water resource plans under ISWQM
Lists of water quality criteria have
already been developed and could be
used to define water quality goals for
uses. The lists are incomplete, however
Criteria have not been developed for
sediment and many other pollutants
Some criteria refer only to general uses
when specific breakdowns might be
desirable. Research to estimate values
for these criteria would be time-
consuming and expensive. Waiting for
more complete lists of water-quality
criteria to be developed would preclud
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implementation of ISWQM in the
foreseeable future.
There are no particular problems for
the implementation of ISWQM in the
area of land management modeling
Land management models have been
developed that could be applied to a
ISWQM study, but more realistic models
would be desirable. There is also a need
to develop a better understanding of the
impacts of agricultural land manage-
ment on noncrop production values.
Modeling the land management/wa-
ter quality relationships is the biggest
technical problem in applying the
ISWQM. A number of planning models
of physical processes are available All
of the physical process models have
strengths and weaknesses. The more
sophisticated models require an iterative
procedure to develop land management
plans when they are linked to a land
management model.
These significant technical problems
for the application of ISWQM are the
important areas for further research.
More work needs to be directed toward
studying: the impacts of resource
management on natural processes
affecting water quality, the development
of models of these processes, the
impact of stream processes on water
quality in small and large watersheds,
the water quality needs for various uses
to aid in defining water quality goals,
and the benefits and damages of water
quality changes.
In summary, ISWQM is a feasible
approach to agricultural nonpoint
source pollution control. ISWQM will be
more expensive and difficult to apply
than source control. ISWQM can,
however, define goals and problems
more accurately and plan resource
management to control problems more
efficiently than source control. If
ISWQM is to be applied, the greater
analytical and administrative expense
and difficulty of applying ISWQM as
compared to source control will have to
be justified by the more efficient
allocation of resources to alleviate
water quality problems than would
occur under source control. Because of
relatively high expense and difficulties
of application, however, a sophisticated
ISWQM approach of developing a land
management plan to meet a precisely
defined set of water quality goals seems
most appropriate for waterways with
complex management problems or crit-
ical values to protect. Other waterways
could be managed with a simple
ISWQM approach of defining priorities
for pollutants and critical source areas
or with a source control approach. In
some cases, a source control approach
might solve water quality problems.
W. D. Seitz, R. Hewitt, D. M. Gardner, and J. C. van Es are with the University of
Illinois, Urbana, IL 61801; C. Osteen is with the U.S. Department of Agricul-
ture, Washington, DC 20250: J. B. Stall is a consultant to the Institute for
Environmental Studies, University of Illinois, Urbana, 61801.
T. E. Waddell is the EPA Project Officer (see below).
This Project Summary covers four reports, entitled:
"Toward Instream Water Quality Management," (Order No. PB83-110957;
Cost: $10.00, subject to change)
"Recognizing Farmers' Attitudes and Implementing Nonpoint Source
Pollution Control Policies," (Order No. PB 83-111 013: Cost: $8.50, subject
to change)
"Equity Analysis in Public Policy Formation," (Order No. PB 83-111 047;
Cost: $8.50, subject to change)
"Economic Impacts of Selected Erosion Control Policies: Distribution
Among Corn Belt States," (Order No. PB 83-112 797; Cost: $8.50, subject to
change)
The above reports will be available only from:
National Technical Information Service
5285 Port Royal Road
Springfield. VA 22161
Telephone: 703-487-4650
The EPA Project Officer can be contacted at:
Environmental Research Laboratory
U.S. Environmental Protection Agency
College Station Road
Athens, GA 30613
5
~U. S. GOVERNMENT PRINTING OFFICE: 1983/659-095/568

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United States
Environmental Protection
Agency
Center for Environmental Research
Information
Cincinnati OH 45268
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Penalty for Private Use $300
MR. WILL LAVEILLE
WATER & LAND DIVISION (RD-682)
EPA/ORD, 401 M STREET, S.W.
WASHINGTON, DC 20460

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