This study integrates economic and physical models to estimate the social costs of several commonly suggested policies (chemical-use tax and three types of conservation payments) for reducing nitrogen loads to the Mississippi River and for controlling hypoxia in the Gulf of Mexico. The economic models predict farmersÂf crop rotations, tillage practices, and participation in the Conservation Reserve Program (CRP) at more than 44,000 Natural Resource Inventory sites in the Upper Mississippi River Basin. The estimated land use changes under the four policies are incorporated into a physical model to assess their impact on nitrate-N concentrations in the Mississippi River. Results suggest that the fertilizer-use tax is much more cost-effective than the three conservation easement policies. Incentive payments for conservation tillage are most cost-effective among the three conservation easement policies, but can reduce nitrate-N concentrations only to a limited level. The potential for incentive payments for corn-soybean rotations is even more limited as an instrument for reducing nitrate-N concentrations in the Mississippi River. These payments also impose a higher cost to society than payments for conservation tillage. Payments for cropland retirement can be used to achieve the largest reduction in nitrate-N concentrations, but also impose the largest cost to society among the four policies considered in this paper. Results also suggest that, in contrast to previous studies, the targeted fertilizer-use tax reduces the aggregate farm profit loss under the uniform fertilizer-use tax by up to 30 percent.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2004 Annual meeting, August 1-4, Denver, CO with number
20135.
Length: Date of creation: 2004 Date of revision: Handle: RePEc:ags:aaea04:20135
Contact details of provider: Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202 Phone: (414) 918-3190 Fax: (414) 276-3349 Email: Web page: http://www.aaea.org More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (AgEcon Search).
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.: