Document Type

Article

Publication Version

Published Version

Publication Date

12-1995

Journal or Book Title

Journal of Agricultural and Resource Economics

Volume

20

Issue

2

First Page or Article ID Number

316

Last Page

327

Abstract

Green payment programs, where the government pays farmers directly for environmental benefits, are an alternative to the current method of achieving environmental benefits which restricts farming practices in exchange for deficiency payments. This article presents a voluntary green payment program using the principles of mechanism design under asymmetric information. Information asymmetry arises because the government knows only the distribution of farmers' production situations, rather than farm-specific information. The program is demonstrated with irrigated corn production in the Oklahoma high plains. A green payment program can reduce budget costs and pollution, while increasing the net social value of corn production.

Comments

This article is from Journal of Agricultural and Resource Economics 20 (1995): 316–327. Posted with permission.

Copyright Owner

Western Agricultural Economics Association

Language

en

File Format

application/pdf