The purpose of this study was to determine whether cross-compliance strategies, administered in the North Fork of the Forked Deer River Basin in Western Tennessee, would be likely to provide farmers with benefits great enough to offset costs of compliance, thereby providing an incentive for increased conservation efforts. The cross-compliance strategies examined in this study included Agricultural Stabilization and Conservation Service commodity programs, Commodity Credit Corporation loans, Small Business Administration loans, and Federal Crop Insurance. Cross-compliance strategies were then designed such that program benefits would be contingent upon a farmer's compliance with maximu;n erosion rate limits of 5, 10, 15, or 20 tons per acre per year. No consideration was given to water quality impacts of the various selected erosion rates. A random sample of farmers in the watershed were surveyed, and information from these surveys, combined with information from government agency offices, provided estimates of average benefits which farmers in the area have received from government programs. Survey information was then used to estimate present erosion rates, with the Universal Soil Loss Equation. Costs which farmers could expect to incur in order to achieve each of the four soil loss limits were then determined using standard budgetary techniques. These discounted costs were then compared with discounted expected program benefits, over a ten-year period. Results indicated that cross-compliance strategies with the higher soil loss limits of 15 or 20 tons could provide benefits which may outweigh compliance costs. However, lower soil loss limits may be too costly, discouraging participation in the program. / M.S.

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