Economic perspectives on nitrogen in farming systems: managing trade-offs between production, risk and the environment

University of WA

Type: Conference Paper
Knowledge level: Advanced

Farm Table says:

Interesting study that looks at farmer behaviour, and the need to design strategies and policies that are more beneficial and more likely to be adopted

What is the problem?

There is an enormous literature analyzing these issues using the tools and frameworks of economics.

What did the study involve?

This paper provides a review and synthesis of this large and diverse literature, which is often neglected by technical scientists.

The economic insights that will be discussed are crucial for

  • making sound decisions about farm-level management of nitrogen
  • understanding farmers’ behaviour in relation to nitrogen
  • designing regional or national policies for nitrogen-related pollution
  • prioritising nitrogen-related research and extension.

Topics covered include:

  • Economics of nitrogen as an input to production
  • Nitrogen and economic risk
  • Economics of nitrogen fixation from legumes
  • Flat payoff functions
  • Over-application of nitrogen fertilizers
  • Nitrogen pollution
  • Nitrogen research, development and extension

What were the key findings?

The technical issues are important, but they underpin a broader set of perspectives, encompassing profitability,
risk, learning, human behaviour, human attitudes, human values, fairness, rights, markets, policy
mechanisms, the role of government, and politics.

Final comment

The insights, evidence and principles outlined here are of central relevance to management, policy and
research related to nitrogen.

Important results that have been known to economists for decades, such as flat payoff functions, remain unknown to most agronomists and scientists. Accounting for these economic issues has the potential to substantially increase the benefits to farmers and to society as a whole.

Australia - University of WA
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