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Readdressing the Fertilizer Problem

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  • Paulson, Nicholas D.
  • Babcock, Bruce A.

Abstract

The production literature has shown that inputs such as fertilizer can be defined as riskincreasing. 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, Nicholas D. & Babcock, Bruce A., 2010. "Readdressing the Fertilizer Problem," ISU General Staff Papers 201001010800001536, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:201001010800001536
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    3. 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.
    4. Prifti, Ervin & Daidone, Silvio & Pace, Noemi & Davis, Benjamin, 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.
    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. Agarwal, Sandip Kumar, 2017. "Subjective beliefs and decision making under uncertainty in the field," ISU General Staff Papers 201701010800006248, Iowa State University, Department of Economics.
    8. 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.
    9. 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.
    10. 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.
    11. English, Alicia & Tyner, Wallace E. & Sesmero, Juan P. & Owens, Phillip & Muth, David, 2012. "Environmental Impacts of Stover Removal in the Corn Belt," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124873, Agricultural and Applied Economics Association.
    12. 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.
    13. 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.

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