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Testing the Empirical Relationship between Best Management Practice Adoption and Farm Profitability

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  • Luc Valentin
  • Daniel J. Bernardo
  • Terry L. Kastens

Abstract

Several "best management practices" (BMPs) aimed at reducing movement of nutrients, pesticides, and sediment into surface water resources have been developed and promoted by Extension and other agencies over the past several years. This study utilizes actual farm-level economic and BMP adoption data to rigorously analyze the relationship between BMP use and farm profitability. Results indicate that adoption of nutrient BMPs has a significant positive effect on net farm income (NFI) for wheat and corn, while herbicide BMP adoption, particularly use of BMPs related to the application of atrazine on corn, has a small (but statistically significant) negative impact on income. Adoption of soil conservation BMPs is not shown to have a statistically significant impact on farm income.

Suggested Citation

  • Luc Valentin & Daniel J. Bernardo & Terry L. Kastens, 2004. "Testing the Empirical Relationship between Best Management Practice Adoption and Farm Profitability," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(4), pages 489-504.
    • Handle: RePEc:oup:revage:v:26:y:2004:i:4:p:489-504.
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    File URL: http://hdl.handle.net/10.1111/j.1467-9353.2004.00195.x
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    2. Tipparat Pongthanapanich & Eva Roth, 2006. "Toward Environmental Responsibility of Thai Shrimp Farming through a Voluntary Management Scheme," Working Papers 70/06, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.
    3. Franco, Juan Agustin & Calatrava-Requena, Javier, 2008. "Adoption and diffusion of no tillage practices in Southern Spain olive groves," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44014, European Association of Agricultural Economists.
    4. Jolejole, Christina B. & Swinton, Scott M. & Lupi, Frank, 2009. "Incentives to Supply Enhanced Ecosystem Services from Cropland," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49356, Agricultural and Applied Economics Association.
    5. Lee, Young-Jae, 2008. "Theoretical Examination of the Conditions of Best Management Practices Adoption and the Easing of Trade Distortion for Sugar," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6826, Southern Agricultural Economics Association.
    6. Maria Jose Marques & Gudrun Schwilch & Nina Lauterburg & Stephen Crittenden & Mehreteab Tesfai & Jannes Stolte & Pandi Zdruli & Claudio Zucca & Thorunn Petursdottir & Niki Evelpidou & Anna Karkani & Y, 2016. "Multifaceted Impacts of Sustainable Land Management in Drylands: A Review," Sustainability, MDPI, vol. 8(2), pages 1-34, February.
    7. Zhang, Wei, 2015. "Costs of a Practice-Based Air Quality Regulation: Dairy Farms in the San Joaquin Valley," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205304, Agricultural and Applied Economics Association.
    8. Traxler, Emilia & Li, Tongzhe, 2020. "Agricultural Best Management Practices, A summary of adoption behaviour," Working Papers 305271, University of Guelph, Institute for the Advanced Study of Food and Agricultural Policy.
    9. Bertuglia, Adriana & Calatrava-Requena, Javier, 2006. "Factors Related to the Adoption of Good Agrarian Practices (GAP) in Plastic Covered Horticulture of Southeastern Spain," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25545, International Association of Agricultural Economists.
    10. Peter C. Boxall & Orsolya Perger & Marian Weber, 2013. "Reverse Auctions for Agri-Environmental Improvements: Bid-Selection Rules and Pricing for Beneficial Management Practice Adoption," Canadian Public Policy, University of Toronto Press, vol. 39(s2), pages 23-36, August.

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