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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, Foundation for the European Review of Agricultural Economics, 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. Iho, Antti & Laukkanen, Marita, 2012. "Precision phosphorus management and agricultural phosphorus loading," Ecological Economics, Elsevier, vol. 77(C), pages 91-102.
    2. 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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