A Comparison of Farmers' Compliance Costs to Reduce Excess Nitrogen Fertilizer Use under Alternative Policy Options

Abstract

Farmers' compliance associated with using different crop rotation patterns under alternative farm policy options are estimated. The policy options considered include the Current Farm Program, a No Farm Program Option, a Nitrogen Fertilizer Tax Option, a Corn Sales Tax Option, and a Limiting Nitrogen Fertilizer Use Option. To achieve an objective of zero excess nitrogen fertilizer available for potential leaching into ground-water, crop rotation patterns associated with the Limiting Nitrogen Fertilizer Use Option have the lowest cost to the farmer. If some excess nitrogen is allowed, crop rotation compliance under the Farm Program has the lowest cost.