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Economic and Water Quality Impacts of Reducing Nitrogen and Pesticide Use in Agriculture

Published online by Cambridge University Press:  15 September 2016

Timothy O. Randhir  and
John G. Lee
Timothy O. Randhir
Affiliation:
Department of Agricultural Economics, Purdue University
John G. Lee
Affiliation:
Department of Agricultural Economics, Purdue University
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Abstract

A multiyear regional risk programming model was used in evaluating the impacts of different environmental policies on cropping systems, input use, nonpoint source pollution, farm income, and risk. A direct expected utility maximizing problem (DEMP) objective with a Von Neuman Morgenstern utility function was used in deriving optimal cropping systems. A biophysical simulation model provided input for the optimization. Three types of policies—taxing, regulating the aggregate, and regulating the per acre level—were studied for two farm inputs—nitrogen and atrazine. It was observed that policies had varied and multiple cross-effects on pollutant loads, farm income, and risk. This information is crucial in developing successful policies toward improving water quality. If an appropriate input policy is chosen, both targeted and nontargeted pollutant loads can be managed. The three policies varied in their effects on pollutant loads and involved tradeoffs in water quality and economic attributes.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 26 , Issue 1 , April 1997 , pp. 39 - 51
Copyright
Copyright © 1997 Northeastern Agricultural and Resource Economics Association 

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