There are many non point sources (NPS) of pollution issues across the state of Arkansas. Each region of the state has different concerns. Many watersheds have been included in the Arkansas’s 2008 303(d) list for NPS impairments with sediment and nutrients being the primary causes of concern.

This research hypothesized that there are no cost or net returns risks when adopting best management practices (BMPs) to control nutrients runoff and that selection, timing, placement and cost have no impact on the implementation of BMPs. Using two priority watersheds, the L’Anguille River and the Lincoln Lake, as examples, the environmental benefits and the cost-effectiveness of several BMPs were compared to representative systems that producers currently use.

Current systems were rice and soybeans production under various tillage, buffers and nutrient management practices. Also analyzed were alternative pasture management systems, buffers and poultry litter applications for bermudagrass production. For each system, total phosphorous (TP) loss estimates were linked with production costs, BMP costs and risk premiums within a watershed to create an environmental-economic model.

The model was used to analyze the impact of BMPs in reducing nutrient runoff while minimizing the producers’ exposure to additional risk. To accomplish this goal, two mathematical techniques were used: stochastic dominance and genetic algorithm.

Findings showed that BMPs have the potential for reducing nutrient pollutant losses from agricultural land areas. However, ranking BMPs solely in terms of their effectiveness to reduce nutrient runoff can lead to cost-prohibited recommendations. Since producer’s risk aversion level matters, for producers to adopt any of the BMPs analyzed in this study, they would have to receive a risk premium. This is true for both row crop and forage producers. Still, there are some BMPs that can reduce nutrient runoff, maintain agricultural production and improve water quality without affecting producers’ cost or net returns dramatically. Consequently, decision makers need to weight trade-offs between nutrient runoff reduction and net cost increase when selecting BMPs. Cost-savings from selecting BMPs become evident when critical factors for reducing TP runoff are analyzed using an environmental-economic model.