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Reducing Nutrient Application Rates for Water Quality Protection in Intensive Livestock Areas: Policy Implications of Alternative Producer Behavior

Published online by Cambridge University Press:  10 May 2017

William T. McSweeny  and
James S. Shortle
William T. McSweeny
Affiliation:
Department of Agricultural Economics and Rural Sociology at Penn State University
James S. Shortle
Affiliation:
Department of Agricultural Economics and Rural Sociology at Penn State University
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Abstract

High rates of commercial fertilizer and animal manure application on cropland have been identified as an important cause of ground and surface water degradation in many areas of the country. Suggested remedies are often based on the idea that fertilization levels are economically irrational for the individual farmer. The received wisdom is that farmers could simultaneously improve their own economic well being and reduce the degradation of the ground and surface waters by fertilizing only to meet crop nutrient needs. Rather than assuming that farmers act irrationally, this study examines the fertilization problem on a mixed crop-livestock farm from the perspective of a risk-averse farmer coping with two key uncertainties: crop yield response to nitrogen applications and the nitrogen content of manure. The effects on fertilization decisions by such a farmer of various policy prescriptions for reducing surface and ground water pollution are examined. The results underscore the importance of understanding producer behavior for the design of economically sound policy.

Type
Research Article
Information
Northeastern Journal of Agricultural and Resource Economics , Volume 18 , Issue 1 , April 1989 , pp. 1 - 11
Copyright
Copyright © 1989 Northeastern Agricultural and Resource Economics Association 

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Footnotes

The authors wish to express their thanks to two anonymous reviewers whose comments helped shape the final draft. Journal Series No. 8141 of the Pennsylvania Agricultural Experiment Station.

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