Incentive Payments to Encourage Farmer Adoption of Water Quality Protection Practices

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Abstract
Farmers can be encouraged to voluntarily adopt environmentally sound management practices through the use of incentive payments. This paper uses both a bivariate probit with sample selection model and a double hurdle model on data from a survey of farmers to predict farmer adoption of the practices as a function of the payment offer. The five management practices addressed here are integrated pest management, legume crediting, manure testing, split applications of nitrogen, and soil moisture testing. Also estimated are models that predict the acreage on which these practices would be applied given the decision to accept the incentive payments estimated.

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