is a major source for nonpoint pollution sources, including nutrients, sediments, pesticides and salts, etc. Disaster insurance for agricultural sector could be necessary for preventing nonpoint pollution based on its characteristics. The uncertainty associate with nonpoint pollution may demand an "insurance policy" to protect water quality. Information and education A number of policies have been developed that are intended to inform regulators and private citizens as to how NPS effluent can be better controlled. One example is with the CZMA mentioned earlier, the EPA is required to provide states with a listing of BMPs for controlling NPS coastal pollution. BMPs are state-of-the-art methods to treat NPS pollution. There is no shortage of BMPs to reduce NPS pollution. For agriculture, examples of BMPs include: conservation easements, cover crops, drainage management, grid sampling, manure injection, manure staging, reduced tillage practices, rotational grazing, and two stage ditches. The obvious problem with educational and informational tools, however, is there is no guarantee they will be implemented. Other potential policy instruments for nonpoint pollution To evaluate these tools' potential, some economic, distributional and political characteristics should be considered: economic performance, administration and enforcement costs, flexibility, incentives for innovation and political feasibility. Challenge regulation or environmental contracting could also be applied. With challenge regulation, the government could establish a clear environmental performance target, while the regulated community could design and implement a program for achieving it. Environmental contracting involved an agreement between a government agency and a source to waive certain regulatory requirements in return for an enforceable commitment to achieve superior performances. Challenges for regulation Nonpoint source controls are difficult to coordinate because they are usually administered by local rather than state government. Local governments do not have an incentive to adopt nonpoint source controls because their nonpoint pollution usually is exported elsewhere. Another problem is the pervasiveness of nonpoint pollution. A major strategy controls nonpoint pollution at the source by reducing surface runoff through the use of BMPs. BMPs are fragmented and difficult to coordinate because of the great variety in nonpoint sources and because they are administered by local governments. Another obstacle to control nonpoint pollution is that the nonpoint source may be unable to internalize the cost of the control or pass it on to consumers. Besides, policy instruments and policy combination should have strong legal enforcement like liability to insure transparency in transaction and prevent failure in market based instruments. Characteristics