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Spatially optimal steady-state phosphorus policies in crop production

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  • Antti Iho

Abstract

We analyse optimal phosphorus fertilisation and erosion control policies in a spatial, dynamic, steady-state framework. First-best instruments to incentivise farmers to undertake socially optimal choices are analysed both analytically and empirically. An empirical illustration is presented for a cereal production area of 3 hectares. We find that taxes on phosphorus use can be levied with equal effect either on fertiliser use or directly on soil phosphorus. However, a tax on soil phosphorus is simpler and poses lower information requirements for the social planner. In addition, the potential differences in socially and privately applied discount rates are shown to affect optimal tax rates. Oxford University Press and Foundation for the European Review of Agricultural Economics 2010; all rights reserved. For permissions, please email journals.permissions@oxfordjournals.org, Oxford University Press.

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  • Antti Iho, 2010. "Spatially optimal steady-state phosphorus policies in crop production," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 37(2), pages 187-208, June.
  • Handle: RePEc:oup:erevae:v:37:y:2010:i:2:p:187-208
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    File URL: http://hdl.handle.net/10.1093/erae/jbq009
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    Cited by:

    1. James Shortle & Richard D. Horan, 2017. "Nutrient Pollution: A Wicked Challenge for Economic Instruments," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(02), pages 1-39, April.
    2. Iho, Antti & Laukkanen, Marita, 2012. "Precision phosphorus management and agricultural phosphorus loading," Ecological Economics, Elsevier, vol. 77(C), pages 91-102.
    3. Iho Antti & Kitti Mitri, 2011. "A Tail-Payoff Puzzle in Dynamic Pollution Control," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-30, May.
    4. Van Asselt, Joanna & Grogan, Kelly A., 2020. "Do Fertilizer Subsidies Improve Soil Quality: Myopic vs. Dynamic Analysis of Smallholder Farmers in Ghana," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304546, Agricultural and Applied Economics Association.
    5. Janne Antero Helin, 2014. "Reducing nutrient loads from dairy farms: a bioeconomic model with endogenous feeding and land use," Agricultural Economics, International Association of Agricultural Economists, vol. 45(2), pages 167-184, March.

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