Study: Proposed Nitrogen Fertilizer Policies Could Protect Farmer Profits, Environment

URBANA, ILLINOIS

   Nitrogen fertilizer has major implications for crop yields and environmental health, specifically water quality in the Gulf of Mexico. Federal and state governments have shied away from regulating nitrogen fertilizer use, but voluntary and incentives-based programs have not been particularly successful; the oxygen-starved “dead zone” in the Gulf remains much larger than goals set by the federal- state Hypoxia Task Force.

   A new University of Illinois study explores potential policy solutions to reduce nitrogen loss while still protecting farmers’ bottom lines.

   “We want to generate discussions on such policies, rather than provide definitive answers on which policy will be the best. Instead, given the information we have and the limitations we know, we show what is possible,” says Nicolas Martin, assistant professor in the Department of Crop Sciences at Illinois and co-author of the study. 

   “We're trying to think of alternatives or scenarios that could improve current agriculture, considering profitability, food security, and the environment.”

   Martin and his collaborators leveraged a simulated dataset of more than 4,000 fields over a 30-year period to evaluate economically optimal nitrogen rates and leaching losses under four policy scenarios.

   The first policy would modify price ratios, imposing a tax on nitrogen at a set ratio relative to the corn price. The second policy would charge farmers a fee for excess nitrogen leaching from fields above baseline levels in soils across Illinois. The third would subtract nitrogen removed in grain at harvest from nitrogen applied as fertilizer and would charge a fee for the balance. The final policy reflected a voluntary nitrogen reduction program like current programs in the U.S. Midwest.

   In the study scenario, farmers would be compensated for nitrogen fees and profit losses, ensuring, in most scenarios, a healthy bottom line. 

   Additionally, all the policies resulted in the desired environmental outcome: less leaching.

   The study set a target for leaching at 20 percent, finding that level of reduction could be obtained with only a 3.3 percent yield hit and little impact on profits.

   Among the four policies, the nitrogen leaching fee showed the best outcome. The researchers cited greater cost-efficiency; better hot- spot control; and higher internalization, penalizing scenarios where pollution is higher. ∆