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Testing the Empirical Relationship between Best Management Practice Adoption and Farm Profitability
Author(s) -
Valentin Luc,
Bernardo Daniel J.,
Kastens Terry L.
Publication year - 2004
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.1111/j.1467-9353.2004.00195.x
Subject(s) - profitability index , business , empirical research , best practice , operations management , industrial organization , marketing , economics , finance , management , statistics , mathematics
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.