Contamination of the Nation's ground and surface water supplies from normal use of pesticides and fertilizers has caused growing concern about the impact of agricultural practices on water quality. Informed decisions on sustainable agricultural policies to protect soil and water quality, and also to minimize economic stress to the producers, requires integrated economic and environmental research designed to study the complex interaction of soils, weather, hydrology, chemicals, economics, and other farm management factors. The concept of studying the effects of current and emerging agricultural practices in relation to soil, weather, and management was initiated within five key Midwest sites called Management System Evaluation Areas (MSEA). Using the Comprehensive Economic and Environmental Modeling System (CEEPES), this paper evaluates six alternative sustainable agricultural policies at the Iowa MSEA site, Walnut Creek. CEEPES is an integrated modeling system capable of evaluating the economic and environmental consequences of alternative policies affecting pesticide use.

The alternative policies evaluated against the baseline calibrated to prevailing practices in the study watershed provide useful information on economic and environmental trade-offs for making informed policy decisions on agricultural nonpoint source pollution. Key results on the impacts for crop rotation, crop and tillage mix, profits and key environmental indicators such as soil loss, nitrate-N leaching/runoff and corn herbicide exposure indices in ground and surface water are summarized. A major finding is that it is possible to achieve voluntary adoption of more environmentally sound practices if producers are compensated with "green payments." The value of the simulation s is to provide estimates of the necessary size of these payments and the associated environmental impacts. The multiple environmental indicators show that there are intrinsic trade-offs for sustainability that have to be carefully considered in the final decisions on sustainable polices.