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Readdressing the Fertilizer Problem

Author

Listed:
  • Paulson, N.D.
  • Babcock, Bruce A.

Abstract

The production literature has shown that inputs such as fertilizer can be defined as risk-increasing. However, farmers also consistently overapply nitrogen. A model of optimal input use under uncertainty is used to address this paradox. Using experimental data, a stochastic production relationship between yield and soil nitrate is estimated. Numerical results show that input uncertainty may cause farmers to overapply nitrogen. Survey data suggest that farmers are risk averse, but prefer small chances of high yields compared to small chances of crop failures when expected yields are equivalent. Furthermore, yield risk and yield variability are not equivalent.

Suggested Citation

  • Paulson, N.D. & Babcock, Bruce A., 2010. "Readdressing the Fertilizer Problem," Staff General Research Papers Archive 32437, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:32437
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    1. repec:ags:aaea22:343878 is not listed on IDEAS
    2. Ervin Prifti & Silvio Daidone & Noemi Pace & Benjamin Davis, 2019. "Unconditional cash transfers, risk attitudes and modern inputs demand," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 53, pages 100-118.
    3. Khanna, Madhu, 2021. "Digital Transformation for a Sustainable Agriculture: Opportunities and Challenges," 2021 Conference, August 17-31, 2021, Virtual 315052, International Association of Agricultural Economists.
    4. Le, V.D. & Pham, L.T., 2024. "Attitudes towards risk and optimal use of inputs in maize production in the Mekong Delta, Vietnam," 1st ASEAN University Symposium for Sustainable Food Systems, Faculty of Economics, Kasetsart University, Thailand. April 18-19, 2024 344440, Association of Southeast Asian Nations (ASEAN).
    5. Hailemariam Teklewold & Alemu Mekonnen & Gunnar Kohlin & Salvatore Di Falco, 2017. "Does Adoption Of Multiple Climate-Smart Practices Improve Farmers’ Climate Resilience? Empirical Evidence From The Nile Basin Of Ethiopia," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 8(01), pages 1-30, February.
    6. Haneishi, Yusuke & Maruyama, Atsushi & Takagaki, Michiko & Kikuchi, Masao, 2014. "Farmers’ risk attitudes to influence the productivity and planting decision: A case of rice and maize cultivation in rural Uganda," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 9(4), pages 1-14, December.
    7. Khanna, Madhu & Atallah, Shadi & Kar, Saurajyoti & Sharma, Bijay & Wu, Linghui & Yu, Chengzheng, 2021. "Digital Transformation for a Sustainable Agriculture in the US: Opportunities and Challenges," 2021 Conference, August 17-31, 2021, Virtual 313799, International Association of Agricultural Economists.
    8. English, Alicia & Tyner, Wallace E. & Sesmero, Juan P. & Owens, Phillip & Muth, David, "undated". "Environmental Impacts of Stover Removal in the Corn Belt," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124873, Agricultural and Applied Economics Association.
    9. Sellars, Sarah C. & Schnitkey, Gary D. & Gentry, Laura F., 2020. "Do Illinois Farmers Follow University-Based Nitrogen Recommendations?," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304617, Agricultural and Applied Economics Association.
    10. Jiangying Guo & Jiwei Chen, 2022. "The Impact of Heavy Rainfall Variability on Fertilizer Application Rates: Evidence from Maize Farmers in China," IJERPH, MDPI, vol. 19(23), pages 1-17, November.
    11. Sergei Schaub & Nadja El Benni, 2024. "How do price (risk) changes influence farmers’ preferences to reduce fertilizer application?," Agricultural Economics, International Association of Agricultural Economists, vol. 55(2), pages 365-383, March.
    12. Sonoda, Tadashi, 2025. "Heterogeneity in the Off-Farm Labor Market: A Panel Data Evidence from Bangladesh," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 360942, Agricultural and Applied Economics Association.
    13. Andreas Meyer-Aurich & Yusuf Nadi Karatay, 2022. "Greenhouse Gas Mitigation Costs of Reduced Nitrogen Fertilizer," Agriculture, MDPI, vol. 12(9), pages 1-13, September.
    14. repec:isu:genstf:201701010800006248 is not listed on IDEAS
    15. Teklewold, Hailemariam & Mekonnen, Alemu, 2020. "Weather at Different Growth Stages, Multiple Climate Smart Practices and Farm Level Risks: Panel Data Evidence from the Nile Basin of Ethiopia," EfD Discussion Paper 20-4, Environment for Development, University of Gothenburg.
    16. Niklas Möhring & Martina Bozzola & Stefan Hirsch & Robert Finger, 2020. "Are pesticides risk decreasing? The relevance of pesticide indicator choice in empirical analysis," Agricultural Economics, International Association of Agricultural Economists, vol. 51(3), pages 429-444, May.
    17. De Almeida Furtado, Murilo & Meuwissen, Miranda P.M. & Ang, Frederic, 2024. "Land reallocation to increase production and reduce nitrogen surplus: impacts on crop diversity in England and Wales," 2024 Annual Meeting, July 28-30, New Orleans, LA 343878, Agricultural and Applied Economics Association.
    18. Boyer, Christopher N. & Larson, James A. & Roberts, Roland K. & McClure, Angela T. & Tyler, Donald D. & Zhou, Vivian, 2013. "Stochastic Corn Yield Response Functions to Nitrogen for Corn after Corn, Corn after Cotton, and Corn after Soybeans," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 45(4), pages 669-681, November.

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