Efficient waste? Why farmers over-apply nutrients and the implications for policy design

Research output: Contribution to journalArticle

85 Scopus citations

Abstract

Understanding why farmers over-apply fertilizer is essential to designing effective agroenvironmental policy. If farmers are simply inefficient, possibilities exist for simultaneously improving farm profits and the environment. If not, costly trade-offs are necessary. This article examines why farmer perceptions of agronomic advice, input substitutability, hidden opportunity costs, uncertainty, and risk aversion can make it economically rational to "waste" fertilizer by applying it above agronomically recommended rates. I use this information to evaluate the relative merits of policy responses such as insurance, education, cost-shares, regulation, taxes, and land retirement.

Original languageEnglish (US)
Pages (from-to)542-557
Number of pages16
JournalReview of Agricultural Economics
Volume27
Issue number4
DOIs
StatePublished - Dec 1 2005
Externally publishedYes

ASJC Scopus subject areas

  • Agronomy and Crop Science
  • Economics and Econometrics

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