Abstract: The loss of nitrogen induced by irrational nitrogen application in the rice-garlic rotation system is the important cause of the nonpoint source pollution in the Erhai lake basin, which the small farmers couldn’t extricated themselves due to the excessive N input. Encouraging agricultural moderate scale operation and the shifting production mode are the breakthrough of bottleneck of agricultural sustainable development, which has been getting more and more attention. In this paper, the cost-benefit and inorganic nitrogen input under rice-garlic rotation system from different scale farmers in the Erhai lake basin were examined through the face to face survey way. The results indicated that agricultural scale-moderated management organization not only realized source control of agricultural pollution by reducing inorganic nitrogen input, but also obtained high economic profit and nonpoint source pollution mitigation by transferring agricultural production mode with the adoption of environmental-friendly technology, such as organic rice planting mode, rice-fish ecological cultivation mode and traditional fertilization innovation. However, the number of agricultural scale management organizations in the Erhai lake basin grows slowly and needs comprehensive policy support from governments at all levels.