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Do farmers overuse nitrogen fertilizer to the detriment of the environment?

Environmental and Resource Economics volume 9, pages 323–340 (1997)Cite this article

Abstract

Increasing use of nitrogen fertilizer in U.S. agriculture has led to nitrate contamination of water resources. The main objective of the study is to determine if the current use of nitrogen exceeds the profit-maximizing level, since reducing such discrepancy, if any, could raise farmers' profitability and enhance water quality making it a win-win situation. Specific objectives of the study, however, are two-fold. First, develop an appropriate methodology for estimation of an agronomic production function utilizing panel data with several treatments from experimental plots. Second, using experimental data from 1987 through 1990 for three farm sites in southeastern Minnesota, empirically estimate the production function and profit maximizing level of nitrogen application.

Our results show that both the current recommended rate, 150 1b/acre, and farmers' use, 176 1b/acre, of nitrogen exceed the profit maximizing level of nitrogen in the region. It is shown that the recommended rate needs to be revised and made more site or area specific rather than a general figure for the entire region. The study shows considerable residual nitrogen build-up in the soil profile, implying that farmers have been applying more nitrogen than could be utilized by corn plants. The later finding highlights the importance of soil testing for plant nutrients when making decisions on fertilizer application.

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Authors and Affiliations

  1. Department of Agricultural Economics & Rural Sociology, University of Arkansas, 221, Agricultural Building, 7270, Fayetteville, AR, USA

    Satya N. Yadav

  2. Department of Applied Economics, University of Minnesota, 55108, St. Paul, MN, USA

    Willis Peterson & K. William Easter

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  1. Satya N. Yadav
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  2. Willis Peterson
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  3. K. William Easter
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Yadav, S.N., Peterson, W. & Easter, K.W. Do farmers overuse nitrogen fertilizer to the detriment of the environment?. Environ Resource Econ 9, 323–340 (1997). https://doi.org/10.1007/BF02441403

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  • DOI: https://doi.org/10.1007/BF02441403

Key words

  • ground water contamination
  • nitrate contamination
  • nitrogen overuse
  • profit maximization