Paying for performance is increasingly important in the allocation of public funding for projects to ensure taxpayers’ monies are well spent. This concept is also gaining popularity in many conservation and development arenas as a method to better identify potentially high-yielding environmental projects. In an agricultural context, paying for performance means that payments are based on the environmental outcomes resulting from the agricultural best management practice (BMP) rather than the implementation of the practice itself. This is a small but important distinction, as the environmental outcomes of BMPs vary depending on factors such as location and how they are implemented. For example, installing a manure management facility in a barnyard located immediately adjacent to a stream will typically result in a greater reduction in nutrients reaching the stream than installing the same facility in a barnyard that is 500 feet from a stream. If farmers were paid for the performance of their BMP, they would be paid for the estimated or measured reduction in nutrient runoff to the stream that resulted from installing the manure management facility. These estimates can be made before a BMP is implemented, or estimated/measured after the BMP is fully functional. This can be important when deciding who should receive funding in a conservation program with a constrained budget.