TARGETING NONPOINT SOURCE POLLUTION CONTROL: PHOSPHORUS IN THE MINNESOTA RIVER BASIN

Keywords: economic analysis; simulation; mathematical programming; transaction costs; takings ABSTRACT: The state of Minnesota seeks to reduce phosphorus loading to the Minnesota River by 40 percent from current levels. Looking at one major watershed in the river basin, we examined the cost effectiveness of targeting versus not targeting specific practices or regions within a watershed for controlling nonpoint phosphorus pollution from agriculture. Integrating biophysical simulation results from current and alternative farming systems with production cost and return estimates enabled us to analyze this policy. Our results indicated it is more cost effective to reduce nonpoint pollution by targeting particular regions or practices in a watershed compared to not targeting. Specifically, producers farming on cropland susceptible to erosion in close proximity to water will appreciably reduce phosphorus nonpoint pollution loading potential by switching from conventional tillage to conservation tillage and by reducing phosphorus fertilization levels to those recommended by the state extension service. Efforts to target those producers in the Minnesota River Basin could reduce potential transaction costs and compensation from takings by approximately $50 million (74 percent) over not targeting.""