OPTIMAL PROFITS UNDER ENVIRONMENTAL CONSTRAINTS: IMPLICATIONS OF NUTRIENT AND SEDIMENT STANDARDS1

To reduce nonpoint source pollution from nutrient, chemical, and sediment runoff, a number of environmental policy standards have been proposed. Such standards could be used to reduce nonpoint source pollution from nutrient, chemical, and sediment runoff to impaired water bodies. State governments can use voluntary approaches to meet nonpoint source pollution reduction goals. However, the practices that lower net returns will not be voluntarily adopted by farmers. Crop rotations and tillage practices may help producers to comply with the environmental standards while minimizing losses in farm profits. This study compares runoff from crop rotation practices and conventional continuous row cropping systems in Mississippi. The results are compared for different tillage systems in order to examine robustness of results. Nutrient runoff and sediment runoff are simulated using the Erosion Productivity Impact Calculator (EPIC). Sensitivity analysis of the sediment and nitrate reductions at 15 percent, 25 percent, and 35 percent are conducted. Under these scenarios, net returns are optimized under environmental constraints, and the marginal cost of sediment reduction ranges from US$1.61 to US$9.63 per ton depending on soil conditions, while the corresponding nitrate and phosphorus reductions costs range from US$1.21 to US$7.08 per kg and from US$0.09 to US$31.91, respectively. The empirical results from this study indicate that a nitrate reduction policy is relatively less costly than a sediment reduction policy. The results also demonstrate the importance of geophysical conditions and policy costs, which vary across regions.     

IDENTIFICATION OF CRITICAL NONPOINT POLLUTION SOURCE AREAS USING GEOGRAPHIC INFORMATION SYSTEMS AND WATER QUALITY MODELING1

n integrated approach coupling water quality computer simulation modeling with a geographic information system (GIS) was used to delineate critical areas of nonpoint source (NPS) pollution at the watershed level. Two simplified pollutant export models were integrated with the Virginia Geographic Information System (VirGIS) to estimate soil erosion, sediment yield, and phosphorus (P) loading from the Nomini Creek watershed located in Westmoreland County, Virginia. On the basis of selected criteria for soil erosion rate, sediment yield, and P loading, model outputs were used to identily watershed areas which exhibit three categories (low, medium, high) of non-point source pollution potentials. The percentage of the watershed area in each category, and the land area with critical pollution problems were also identified. For the 1505-ha Nomini Creek watershed, about 15, 16, and 21 percent of the watershed area were delineated as sources of critical soil erosion, sediment, and phosphorus pollution problems, respectively. In general, the study demonstrated the usefulness of integrating GIS with simulation modeling for nonpoint source pollution control and planning. Such techniques can facilitate making priorities and targeting nonpoint source pollution control programs.     

Spatial Optimization of Six Conservation Practices Using Swat in Tile‐Drained Agricultural Watersheds

Targeting of agricultural conservation practices to the most effective locations in a watershed can promote wise use of conservation funds to protect surface waters from agricultural nonpoint source pollution. A spatial optimization procedure using the Soil and Water Assessment Tool was used to target six widely used conservation practices, namely no‐tillage, cereal rye cover crops (CC), filter strips (FS), grassed waterways (GW), created wetlands, and restored prairie habitats, in two west‐central Indiana watersheds. These watersheds were small, fairly flat, extensively agricultural, and heavily subsurface tile‐drained. The targeting approach was also used to evaluate the model's representation of conservation practices in cost and water quality improvement, defined as export of total nitrogen, total phosphorus, and sediment from cropped fields. FS, GW, and habitats were the most effective at improving water quality, while CC and wetlands made the greatest water quality improvement in lands with multiple existing conservation practices. Spatial optimization resulted in similar cost‐environmental benefit tradeoff curves for each watershed, with the greatest possible water quality improvement being a reduction in total pollutant loads by approximately 60%, with nitrogen reduced by 20‐30%, phosphorus by 70%, and sediment by 80‐90%.     

ESTIMATING THE BENEFITS OF PHOSPHORUS POLLUTION REDUCTIONS: AN APPLICATION IN THE MINNESOTA RIVER1

ABSTRACT: In order to make economically efficient decisions about water quality improvements, data on both the costs and benefits of these improvements is needed. However, there has been little research on the benefits of reducing phosphorus pollution which implies that policy decisions are not able to make the comparison of costs and benefits that is essential for economic efficiency. This research attempts to ameliorate this situation by providing an estimate of the benefits of a 40 percent reduction in phosphorus pollution in the Minnesota River. A 1997 mail survey gathered information on Minnesota residents'use of a recreational site on the Minnesota River, the Minnesota Valley National Wildlife Refuge, and their willingness to pay for phosphorus reductions in the Minnesota River. The random effects probit model used in this research to investigate household willingness to pay for phosphorus pollution reductions in the Minnesota River incorporates recent innovations in nonmarket valuation methodology by using both revealed and stated preference data. This model estimated annual household willingness to pay for phosphorus reductions in the Minnesota River at $140. These results may be used in combination with cost estimates to determine the economic efficiency of phosphorus clean up.     

LAWS AND PROGRAMS FOR CONTROLLING NONPOINT SOURCE POLLUTION IN FOREST AREAS1

ABSTRACT: Recent federal legislation strengthened nonpoint source pollution regulations and helped to support and standardize pollution control efforts. A comprehensive review of current state and federal programs for forest areas reveals a substantial increase in agency water quality protection activities. These new efforts emphasize monitoring to assess the use and effectiveness of best management practices (BMPs). Recent monitoring reveals that BMP use is increasing and that such use typically maintains water quality within standards. However, information is generally lacking about the cost effectiveness of BMP programs. Carefully designed and executed monitoring is the key to better specification of BMPs and more cost effective water quality protection. (KEY TERMS: water quality; nonpoint source pollution; water law; watershed management; forestry; best management practices.)     

Influence of alternative and conventional farming practices on subsurface drainage and water quality

Agricultural runoff contributes nutrients to nonpoint-source pollution of surface waters. This study was conducted to investigate the potential use of alternative farming practices to improve water quality. The study examined the effects of both alternative and conventional farming practices on subsurface drainage and nitrogen and phosphorus loss through subsurface drainage from glacial till soils (i.e., Calciaquolls, Endoaquolls, Eutrudepts, Hapludolls) in southwest Minnesota. Alternative farming practices included organic management practices, species biodiversity, and/or practices that include reduced inputs of synthetic fertilizer and pesticides. Conventional farming practices include corn-soybean (Zea mays L.-Glycine max L., respectively) rotations and their associated recommended fertilizer rates as well as pesticide usage. Precipitation was highly variable during the 3-yr study period including a below-average year (2003), an average year (2002), and an above-average year (2004). Results indicate that alternative farming practices reduced subsurface drainage discharge by 41% compared with conventional practices. Flow-weighted mean nitrate-nitrogen (nitrate N) concentrations during tile flow were 8.2 and 17.2 mg L(-1) under alternative and conventional farming practices, respectively. Alternative farming practices reduced nitrate N losses by between 59 and 62% in 2002 and 2004 compared with conventional practices. Ammonium-nitrogen (ammonium N), orthophosphorus, and total phosphorus losses in subsurface drainage were very low and did not pose a substantial risk of pollution. Results suggest that alternative farming practices have the potential to reduce agricultural impacts on water quality.     

ADDRESSING TOTAL PHOSPHORUS IMPAIRMENTS WITH WATER QUALITY TRADING1

ABSTRACT: Water quality trading is a voluntary economic process that provides an opportunity for dischargers to reduce the costs associated with meeting a discharge limitation. Trading can provide a cost effective solution for point sources (i.e., wastewater treatment plants) to meet strict effluent limitations set in response to total maximum daily loads (TMDLs). A successful trading program often depends on first determining the trading suitability of a pollutant for a particular watershed. A simple technical approach has been developed to identify sub‐watersheds within the Raritan River Basin, New Jersey, where water quality trading could provide a cost effective and scientifically feasible method for addressing total phosphorus impairments. The methodology presented will serve as a model to conduct similar analyses in other watersheds. The Raritan River Basin was divided into 12 subwatershed‐based study areas. Point‐nonpoint source trading opportunities were examined for each study area by examining the point and nonpoint source total phosphorus loading to impaired water bodies. Of the 12 subwatersheds examined, four had a high potential for implementing a successful trading program. Since instream phosphorus concentrations are closely related to soil erosion, an additional analysis was performed to examine soil erodibility. Recommendations are presented for conducting an economic analysis following the feasibility study.     

POINT‐NONPOINT SOURCE WATER QUALITY TRADING: A CASE STUDY IN THE MINNESOTA RIVER BASIN1

ABSTRACT: Contrary to the general trend of only a few actual trades occurring within point‐nonpoint source water quality trading programs in the United States, two trading projects in the Minnesota River Basin, created under the provisions of National Pollutant Discharge Elimination System (NPDES) permits, have generated five major trades and numerous smaller ones. In this paper, these two projects are described to illustrate their origins, implementation, and results. It was found that several factors contributed to the relatively high number of trades in these projects, including the offsetting nature of the projects (hence a fixed number of credits that the point sources were required to obtain), readily available information on potential nonpoint source trading partners, and an effectively internal trading scheme used by one of the two projects. It was also found that long term structural pollution control measures, such as streambank stabilization, offered substantial cost savings over point source controls. Estimates of transaction costs showed that the total costs of the trading projects were increased by at least 35 percent after transaction costs were taken into account. Evidence also showed that in addition to pollution reduction, these two trading projects brought other benefits to the watershed, such as helping balance environmental protection and regional economic growth.     

Landscape Planning for Agricultural Nonpoint Source Pollution Reduction III: Assessing Phosphorus and Sediment Reduction Potential

Riparian buffers have the potential to improve stream water quality in agricultural landscapes. This potential may vary in response to landscape characteristics such as soils, topography, land use, and human activities, including legacies of historical land management. We built a predictive model to estimate the sediment and phosphorus load reduction that should be achievable following the implementation of riparian buffers; then we estimated load reduction potential for a set of 1598 watersheds (average 54 km²) in Wisconsin. Our results indicate that land cover is generally the most important driver of constituent loads in Wisconsin streams, but its influence varies among pollutants and according to the scale at which it is measured. Physiographic (drainage density) variation also influenced sediment and phosphorus loads. The effect of historical land use on present-day channel erosion and variation in soil texture are the most important sources of phosphorus and sediment that riparian buffers cannot attenuate. However, in most watersheds, a large proportion (approximately 70%) of these pollutants can be eliminated from streams with buffers. Cumulative frequency distributions of load reduction potential indicate that targeting pollution reduction in the highest 10% of Wisconsin watersheds would reduce total phosphorus and sediment loads in the entire state by approximately 20%. These results support our approach of geographically targeting nonpoint source pollution reduction at multiple scales, including the watershed scale.     

Modeling Nitrate-Nitrogen Load Reduction Strategies for the Des Moines River,Iowa Using SWAT

The Des Moines River that drains a watershed of 16,175 km² in portions of Iowa and Minnesota is impaired for nitrate-nitrogen (nitrate) due to concentrations that exceed regulatory limits for public water supplies. The Soil Water Assessment Tool (SWAT) model was used to model streamflow and nitrate loads and evaluate a suite of basin-wide changes and targeting configurations to potentially reduce nitrate loads in the river. The SWAT model comprised 173 subbasins and 2,516 hydrologic response units and included point and nonpoint nitrogen sources. The model was calibrated for an 11-year period and three basin-wide and four targeting strategies were evaluated. Results indicated that nonpoint sources accounted for 95% of the total nitrate export. Reduction in fertilizer applications from 170 to 50 kg/ha achieved the 38% reduction in nitrate loads, exceeding the 34% reduction required. In terms of targeting, the most efficient load reductions occurred when fertilizer applications were reduced in subbasins nearest the watershed outlet. The greatest load reduction for the area of land treated was associated with reducing loads from 55 subbasins with the highest nitrate loads, achieving a 14% reduction in nitrate loads achieved by reducing applications on 30% of the land area. SWAT model results provide much needed guidance on how to begin implementing load reduction strategies most efficiently in the Des Moines River watershed.     

Soil and water conservation method adoption in a highly erosive watershed: the case of Southwest Oklahoma's Fort Cobb watershed

A major source of pollution in agricultural landscapes is surface runoff and non-point source pollution generated from agricultural production practices. In-stream, stream bank and riparian conservation/management practices can be implemented to reduce sediment loading solely or in conjunction with upland practices. Survey results from producers in the Fort Cobb Reservoir watershed, a highly erosive watershed in southwest Oklahoma with a history of state and federal conservation programs, provide information required for improving understanding of operators’ likelihood of adoption. Two models of soil and water conservation were estimated, a logit model of likelihood of enrollment and a Poisson model of the total number of practices adopted. Results reinforced previous findings that attitudes, gender and education influence conservation program enrollment. Farming experience, gender and attitudes towards conservation increased the total number of practices adopted.     

Modeling the Impacts of Farming Practices on Water Quality in the Little Miami River Basin

Since intensive farming practices are essential to produce enough food for the increasing population, farmers have been using more inorganic fertilizers, pesticides, and herbicides. Agricultural lands are currently one of the major sources of non-point source pollution. However, by changing farming practices in terms of tillage and crop rotation, the levels of contamination can be reduced and the quality of soil and water resources can be improved. Thus, there is a need to investigate the amalgamated hydrologic effects when various tillage and crop rotation practices are operated in tandem. In this study, the Soil Water Assessment Tool (SWAT) was utilized to evaluate the individual and combined impacts of various farming practices on flow, sediment, ammonia, and total phosphorus loads in the Little Miami River basin. The model was calibrated and validated using the 1990–1994 and 1980–1984 data sets, respectively. The simulated results revealed that the SWAT model provided a good simulation performance. For those tested farming scenarios, no-tillage (NT) offered more environmental benefits than moldboard plowing (MP). Flow, sediment, ammonia, and total phosphorus under NT were lower than those under MP. In terms of crop rotation, continuous soybean and corn–soybean rotation were able to reduce sediment, ammonia, and total phosphorus loads. When the combined effects of tillage and crop rotation were examined, it was found that NT with continuous soybean or corn–soybean rotation could greatly restrain the loss of sediments and nutrients to receiving waters. Since corn–soybean rotation provides higher economic revenue, a combination of NT and corn–soybean rotation can be a viable system for successful farming.     

WATERSHED LEVEL BEST MANAGEMENT PRACTICE SELECTION AND PLACEMENT IN THE TOWN BROOK WATERSHED, NEW YORK1

Abstract: For a number of years, best management practices (BMPs) have been implemented within the Town Brook watershed as part of a watershed wide effort to reduce phosphorus losses to the New York City water supply reservoirs. Currently, there are no quantitative indications of the effectiveness of these practices at the watershed scale. Additionally, work is needed to evaluate management practice solutions for costs in relation to effectiveness. In this study we develop a methodology for evaluating management solutions to determine the best way(s) to select and place management practices so that pollutant removal targets are met at minimum cost. The study combines phosphorus losses as simulated by the Soil and Water Assessment Tool (SWAT), management practice effectiveness estimates from a predeveloped characterization tool, and practice costs in optimizations using a genetic algorithm. For a user defined target phosphorus removal (60 percent for this study), optimization favors nutrient management plans, crop rotations, contour strip cropping, and riparian forest buffers; the most cost effective scenario achieves a cost effectiveness of 24/kg phosphorus removal per year compared to the 34/kg phosphorus removal per year associated with the current basic implementation scheme. The study suggests that there is a need to evaluate potential solutions prior to implementation and offers a means of generating and evaluating the solutions.     

Modeling Flow,Nutrient, and Sediment Delivery from a Large International Watershed Using a Field‐Scale SWAT Model

A large international watershed, the St. Clair‐Detroit River System, containing both extensive urban and agricultural areas, was modeled using the Soil and Water Assessment Tool (SWAT) model. The watershed, located in southeastern Michigan, United States, and southwestern Ontario, Canada, encompasses the St. Clair, Clinton, Detroit (DT), Sydenham (SY), Upper, and Lower Thames subwatersheds. The SWAT input data and model resolution (i.e., hydrologic response units, HRUs), were established to mimic farm boundaries, the first time this has been done for a watershed of this size. The model was calibrated (2007–2015) and validated (2001–2006) with a mix of manual and automatic methods at six locations for flow and water quality at various time scales. The model was evaluated using Nash–Sutcliffe efficiency and percent bias and was used to explore major water quality issues. We showed the importance of allowing key parameters to vary among subwatersheds to improve goodness of fit, and the resulting parameters were consistent with subwatershed characteristics. Agricultural sources in the Thames and SY subwatersheds and point sources from DT subwatershed were major contributors of phosphorus. Spatial distribution of phosphorus yields at HRU and subbasin levels identified locations for potential management targeting for both point and nonpoint sources and revealed that in some subwatersheds nonpoint sources are dominated by urban sources.     

Assessment of manure phosphorus export through turfgrass sod production in Erath County, Texas

A best management practice (BMP) for exporting manure phosphorus (P) in turfgrass sod from the North Bosque River (NBR) watershed in central Texas was assessed using a geographic information system (GIS). The NBR watershed has a mandate to reduce the total annual P load to the NBR by 50% as a result of total maximum daily load regulation. Since dairy waste applications to fields are identified as the major nonpoint source of P to the river, innovative BMPs, such as export of manure P in turfgrass, will be needed to achieve the 50% reduction. However, methods are needed to evaluate the feasibility of these innovative management practices prior to their implementation. A geospatial database of suitable turfgrass production sites was developed for Erath County using GIS. Erath County largely encompasses the upper portion of the NBR watershed. Information from field experiments, production practices, and ground-truthing was used to search, analyze, and verify a geospatial database developed from national and regional sources. The integration and analyses of large databases supports the search by turf producers for sites suitable for turfgrass sod production in Erath County. In addition, GIS enables researchers and regulators to estimate manure P exports and reduced P loading due to implementation of the manure export BMP on a county scale. Under optimal conditions 198,000 kg manure P yr(-1) could be used and 114,840 kg manure P yr(-1) exported from the NBR watershed through implementation of a system using dairy manure to produce turfgrass sod. This is the equivalent of the manure P applied from 10,032 dairy cows yr(-1) and exported from 5808 dairy cows yr(-1). Application of GIS to large-scale planning and decision-making transcends traditional field-scale applications in precision agriculture.     

Landscape Planning for Agricultural Nonpoint Source Pollution Reduction I: A Geographical Allocation Framework

Agricultural nonpoint source pollution remains a persistent environmental problem, despite the large amount of money that has been spent on its abatement. At local scales, agricultural best management practices (BMPs) have been shown to be effective at reducing nutrient and sediment inputs to surface waters. However, these effects have rarely been found to act in concert to produce measurable, broad-scale improvements in water quality. We investigated potential causes for this failure through an effort to develop recommendations for the use of riparian buffers in addressing nonpoint source pollution in Wisconsin. We used frequency distributions of phosphorus pollution at two spatial scales (watershed and field), along with typical stream phosphorus (P) concentration variability, to simulate benefit/cost curves for four approaches to geographically allocating conservation effort. The approaches differ in two ways: (1) whether effort is aggregated within certain watersheds or distributed without regard to watershed boundaries (dispersed), and (2) whether effort is targeted toward the most highly P-polluting fields or is distributed randomly with regard to field-scale P pollution levels. In realistic implementation scenarios, the aggregated and targeted approach most efficiently improves water quality. For example, with effort on only 10% of a model landscape, 26% of the total P load is retained and 25% of watersheds significantly improve. Our results indicate that agricultural conservation can be more efficient if it accounts for the uneven spatial distribution of potential pollution sources and the cumulative aspects of environmental benefits.     

Nonpoint Source Pollution Responses Simulation for Conversion Cropland to Forest in Mountains by SWAT in China

Several environmental protection policies have been implemented to prevent soil erosion and nonpoint source (NPS) pollutions in China. After severe Yangtze River floods, the “conversion cropland to forest policy” (CCFP) was carried out throughout China, especially in the middle and upper reaches of Yangtze River. The research area of the current study is located in Bazhong City, Sichuan Province in Yangtze River watershed, where soil erosion and NPS pollution are serious concerns. Major NPS pollutants include nitrogen (N) and phosphorus (P). The objective of this study is to evaluate the long-term impact of implementation of the CCFP on stream flow, sediment yields, and the main NPS pollutant loading at watershed level. The Soil and Water Assessment Tool (SWAT) is a watershed environmental model and is applied here to simulate and quantify the impacts. Four scenarios are constructed representing different patterns of conversion from cropland to forest under various conditions set by the CCFP. Scenario A represented the baseline, i.e., the cropland and forest area conditions before the implementation of CCFP. Scenario B represents the condition under which all hillside cropland with slope larger than 25° was converted into forest. In scenario C and D, hillside cropland with slope larger than 15° and 7.5° was substituted by forest, respectively. Under the various scenarios, the NPS pollution reduction due to CCFP implementation from 1996–2005 is estimated by SWAT. The results are presented as percentage change of water flow, sediment, organic N, and organic P at watershed level. Furthermore, a regression analysis is conducted between forest area ratio and ten years’ average NPS load estimations, which confirmed the benefits of implementing CCFP in reducing nonpoint source pollution by increasing forest area in mountainous areas. The reduction of organic N and organic P is significant (decrease 42.1% and 62.7%, respectively) at watershed level. In addition, this study also proves that SWAT modeling approach can be used to estimate NPS pollutants’ impacts of land use conversions in large watershed.     

ECONOMIC IMPLICATIONS OF PHOSPHORUS LOADING POLICIES FOR PASTURE LAND APPLICATIONS OF POULTRY LITTER1

ABSTRACT: Non-point source pollution created by agriculture is one of the major issues of intensive production. Recent studies indicate that the eutrophication from agricultural non-point source pollution, especially from phosphorus, is of growing concern. The objectives of this paper are to measure the economic opportunity costs of a proposed phosphorus management policy that targets soils with elevated phosphorus levels and examine the impacts of alternative policies such as Pigouvian taxes on the optimal use of litter. The study focuses on land applications of poultry litter in the Muddy Fork watershed of the Illinois River in Northwest Arkansas. The analysis indicates that restriction of litter applications on soils with elevated phosphorus levels will significantly reduce the net returns generated from forage production, resulting in an environmental policy with a high opportunity cost for producers. An analysis of alternative Pigouvian tax policies shows that a smaller tax per ton of litter applied can achieve the same litter control as that of a larger tax on a per acre basis.     

Application of a Multi-Objective Optimization Method to Provide Least Cost Alternatives for NPS Pollution Control

Nonpoint source (NPS) pollutants such as phosphorus, nitrogen, sediment, and pesticides are the foremost sources of water contamination in many of the water bodies in the Midwestern agricultural watersheds. This problem is expected to increase in the future with the increasing demand to provide corn as grain or stover for biofuel production. Best management practices (BMPs) have been proven to effectively reduce the NPS pollutant loads from agricultural areas. However, in a watershed with multiple farms and multiple BMPs feasible for implementation, it becomes a daunting task to choose a right combination of BMPs that provide maximum pollution reduction for least implementation costs. Multi-objective algorithms capable of searching from a large number of solutions are required to meet the given watershed management objectives. Genetic algorithms have been the most popular optimization algorithms for the BMP selection and placement. However, previous BMP optimization models did not study pesticide which is very commonly used in corn areas. Also, with corn stover being projected as a viable alternative for biofuel production there might be unintended consequences of the reduced residue in the corn fields on water quality. Therefore, there is a need to study the impact of different levels of residue management in combination with other BMPs at a watershed scale. In this research the following BMPs were selected for placement in the watershed: (a) residue management, (b) filter strips, (c) parallel terraces, (d) contour farming, and (e) tillage. We present a novel method of combing different NPS pollutants into a single objective function, which, along with the net costs, were used as the two objective functions during optimization. In this study we used BMP tool, a database that contains the pollution reduction and cost information of different BMPs under consideration which provides pollutant loads during optimization. The BMP optimization was performed using a NSGA-II based search method. The model was tested for the selection and placement of BMPs in Wildcat Creek Watershed, a corn dominated watershed located in northcentral Indiana, to reduce nitrogen, phosphorus, sediment, and pesticide losses from the watershed. The Pareto optimal fronts (plotted as spider plots) generated between the optimized objective functions can be used to make management decisions to achieve desired water quality goals with minimum BMP implementation and maintenance cost for the watershed. Also these solutions were geographically mapped to show the locations where various BMPs should be implemented. The solutions with larger pollution reduction consisted of buffer filter strips that lead to larger pollution reduction with greater costs compared to other alternatives.     

BIOECONOMIC ANALYSIS OF SELECTED CONSERVATION PRACTICES ON SOIL EROSION AND FRESHWATER FISHERIES1

ABSTRACT: Farmers can generate environmental benefits (improved water quality and fisheries and wildlife habitat), but they may not be able to quantify them. Furthermore, farmers may reduce their incomes from managing lands to produce these positive externalities but receive little monetary compensation in return. This study simulated the relationship between agricultural practices, water quality, fish responses to suspended sediment and farm income within two small watersheds, one of a cool water stream and one of a warm water stream. Using the Agricultural Drainage and Pesticide Transport (ADAPT) model, this study related best management practices (BMPs) to calculated instream suspended sediment concentrations by estimating sediment delivery, runoff, base flow, and streambank erosion to quantify the effects of suspended sediment exposure on fish communities. By implementing selected BMPs in each watershed, annual net farm income declined $18,000 to $28,000 (1 to 3 percent) from previous levels. “Lethal” fish events from suspended sediments in the cool water watershed decreased by 60 percent as conservation tillage and riparian buffers increased. Despite reducing suspended sediments by 25 percent, BMPs in the warm water watershed did not reduce the negative response of the fisheries. Differences in responses (physical and biological) between watersheds highlight potential gains in economic efficiency by targeting BMPs or by offering performance based “green payments.”