Integrating economic and physical models for analyzing water quality impacts of agricultural policies in the High Plains

Government commodity programs directly affect agricultural production, and the changes in agricultural production may in turn affect water quality. Although the impact of commodity programs on agricultural production has been well documented, the effect of commodity programs on water quality has received only limited attention. The main objective of this study is to develop an empirical framework to quantify the effects of government commodity programs on cropping patterns and the resulting impact on nitrate water pollution in the High Plains. The empirical framework developed in this study integrates a set of acreage response equations, the 1987 National Resources Inventory (NRI), and the EPIC-PST crop growth/chemical transport model. Acreage response equations are estimated to predict the acreage of each crop under the policies evaluated; the 1987 NRI is used to identify the distribution of each crop by site characteristics and management practices; and EPIC-PST is used to simulate nitrogen losses in runoff and percolation under alternative combinations of site characteristics and management practices. This framework integrates site-specific information on soil, climate, and cropping systems in evaluating policy effects at the regional level. The impact of price supports and Acreage Reduction Programs on nitrogen runoff and leaching through changes in crop mix is evaluated. Results indicate the impact of price supports and Acreage Reduction Programs (ARP) on nitrogen runoff and leaching is statistically significant; however, because the impact is small, adjusting target prices or the ARP rates is not likely to generate a large reduction in nitrate water contamination potential at the extensive margin. Results also indicate the impact of government commodity programs on nitrate water pollution varies widely across regions in the High Plains.