Agriculture's impact on the environment is a complex research problem. A challenge to future economic research is to account for the interrelationship between agricultural production activities, soil productivity, erosion, and water quality. It will become increasingly important to determine not only the economic consequences, but also the environmental effectiveness of alternative policies aimed at improving resource use and quality. The application of biophysical simulation models to environmental quality problems provides a means to better understand the complex interaction between agricultural production and environmental quality.
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Lee et al. (1991) studied this question.
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