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The Maryland Water Quality Improvement Act of 1998 (WQIA) seeks to create environmental and other benefits to the Chesapeake Bay through reductions in nonpoint source nutrient pollution. This paper analyzes the economic impacts of the WQIA on agricultural users of nutrients (commercial fertilizers or animal manures) and on poultry growers in the state of Maryland. The net economic impacts to each of these groups are estimated along with some discussion of the distribution of the impacts. Recognition of the distribution of the impacts allows for the assessment of potential policies to address negative impacts. Additional sections of the WQIA are discussed in terms of their ability to shift the distribution of the impacts or to provide partial compensation to those most affected. The WQIA is the most restrictive agricultural nonpoint pollution control law in the US. While the WQIA only regulates nutrient use in the state of Maryland, other states, as well as the federal government, are watching how this law is implemented. Many states are considering similar laws. At the national level, the United States Department of Agriculture and the United States Environmental Protection Agency have issued draft guidelines that will control nutrients from animal operations in much the same way as the WQIA. Therefore, analyses of the economic impacts of the WQIA may be important in shaping policies in other states and at the national level. © 2000 Elsevier Science B.V. All rights reserved.


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