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Yield Reserve Program Costs in the Virginia Coastal Plain

Published online by Cambridge University Press:  15 September 2016

Todd Metcalfe ,
Darrell J. Bosch ,
James W. Pease ,
Mark M. Alley  and
Steve B. Phillips
Todd Metcalfe
Affiliation:
Department of Agricultural and Applied Economics at Virginia Tech in Blacksburg, Virginia
Darrell J. Bosch
Affiliation:
Department of Agricultural and Applied Economics at Virginia Tech in Blacksburg, Virginia
James W. Pease
Affiliation:
Department of Agricultural and Applied Economics at Virginia Tech in Blacksburg, Virginia
Mark M. Alley
Affiliation:
Department of Crop and Soil Environmental Sciences, also at Virginia Tech in Blacksburg
Steve B. Phillips
Affiliation:
Eastern Shore Agricultural Research and Extension Center at Virginia Tech in Painter, Virginia
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Abstract

A proposed Yield Reserve Program designed to compensate farmers for any reduced yields resulting from nitrogen (N) application rates reduced to below recommended rates is evaluated. Assuming that farmers currently follow Extension recommendations for applying N, Yield Reserve Program participation reduces expected net revenue by $10 to $13/ha. The Yield Reserve Program reduces expected net revenue by $17 to $20/ha for farmers who apply N to maximize expected net revenue. Farmers' costs of participation increase with lower probabilities of inadequate rainfall and higher corn prices and decline with higher N prices. The Yield Reserve Program can significantly reduce N applications to cropland, which may reduce N content of surface waters, but the costs to taxpayers and farmers will depend on how the program is implemented.

Keywords

compliance costnitrogen fertilizernonpoint source pollutionpolicyyield response function
Type
Contributed Papers
Information
Agricultural and Resource Economics Review , Volume 36 , Issue 2 , October 2007 , pp. 197 - 212
Copyright
Copyright © 2007 Northeastern Agricultural and Resource Economics Association 

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