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The influence of the Environmental Quality Incentives Program on local water quality

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  • Pengfei Liu
  • Yu Wang
  • Wei Zhang

Abstract

The Environmental Quality Incentives Program (EQIP) is the primary conservation program on working agricultural land. The United States Department of Agriculture obligated over $15 billion through EQIP cost‐sharing contracts during the fiscal years 2009–2019. The voluntary nature of the program and the lack of performance assessment have led to speculations regarding the effectiveness of the program in delivering environmental benefits, in particular for improving water quality. This study provides quantitative estimates of the influence of EQIP payments on local water quality at a national scale. We link monitoring station level water quality readings with EQIP contract data and exploit the direction of river flow for identification. The estimated effects of EQIP vary across water quality measures. Estimates indicate that EQIP payments have significantly reduced biochemical oxygen demand and nitrogen, indicating improvements in water quality, but increased total suspended solids, fecal coliform, and phosphorus, suggesting that the implementation of certain conservation practices might have increased soil erosion and pathogen transfer, especially in watersheds with more agricultural production.

Suggested Citation

  • Pengfei Liu & Yu Wang & Wei Zhang, 2023. "The influence of the Environmental Quality Incentives Program on local water quality," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(1), pages 27-51, January.
    • Handle: RePEc:wly:ajagec:v:105:y:2023:i:1:p:27-51
    DOI: 10.1111/ajae.12316
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    3. Karwowski, Nicole & Hrozencik, Robert A. & Skidmore, Marin & Rosenberg, Andrew B., 2024. "Water Quality and the Conservation Reserve Program: Empirical Evidence from the Mississippi River Basin," 2024 Annual Meeting, July 28-30, New Orleans, LA 343739, Agricultural and Applied Economics Association.
    4. Benami, Elinor & Bell, Anne & Messer, Kent D. & Zhang, Wei & Cecil, Michael, 2024. "Seeding Change to Manage Climate Change: Growing Insights from Four USDA Programs to Support Climate-Smart Agriculture," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344333, International Association of Agricultural Economists (IAAE).
    5. James C. Davis & Krishna P. Paudel & Anil Rupasingha, 2024. "Role of income and policy in reducing water pollution: Evidence from the Mississippi River Basin Healthy Watersheds Initiative," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 46(2), pages 627-647, June.

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