Farmers Need Policy Incentives, Not Just Technological Ones, To Reduce Nitrogen

A Response to Breakthrough’s Essay on Cutting Nitrogen Pollution

The analysis by Dan Blaustein-Rejto, Kenton de Kirby, and Linus Blomqvist shows that a polarized debate on the use of synthetic fertilizer vs. organic manure will not reduce nitrogen losses. I am least convinced by their final discussion, focused on incentivizing change. The shortcomings of the section are not due to the authors' inattention, but reflect the structure of agricultural policy in industrialized countries more broadly. Policy and economic incentives are set up to increase yields in nitrogen-hungry crops, especially corn (maize), while providing little incentive to reduce nitrogen (N) loss.

The incentives in the United States Farm Bill to increase yield are part and parcel of the historic yield- and acreage-related formula for row crop subsidies. According to the U.S. Department of Agriculture, in most years prices for row crops are below the cost of production.1 These subsidies, then, together with non-farm jobs, are crucial to the survival of most farm operations — regardless of their scale. Although the USDA estimates that fertilizer accounts for about 40% of the annual operating costs of conventional farming operations, the yield imperative for subsidies that keep the farm in business is a powerful incentive to maintain fertilizer use, regardless of N loss. There is no proportionately strong incentive to decrease fertilizer use.

Farmers have to decide whether the cost of increasing subsidies revenue is more or less than the savings from reduced fertilizer use. It is not an easy calculation, and all the more difficult if the farmer takes into account the environmental costs of fertilizer overuse, like leaching nitrates into groundwater and emitting nitrous oxide, a very potent greenhouse gas.

In addition to the good agricultural practices and technologies that Dan outlines in his essay, there are others that can reduce N loss. For example, a 2002-2013 USDA field experiment produced an average 55% reduction in nitrate loss in a corn-soy rotation by planting a single cover crop, winter rye.2 However, farmers who use cover crops to build soil health complain that USDA’s Risk Management Agency rules on terminating cover crops prior to planting cash crops reduce the benefits of planting cover crops.

The use of nitrogen inhibitors and so-called Smart Fertilizer, e.g. controlled release fertilizer wrapped in a gradually degrading polymer, may be eligible for subsidies. But the farmer must weigh the value of those subsidies against the estimated 33% greater cost of Smart Fertilizer. The value proposition of nanotechnology-enabled fertilizers may be even harder to prove to farmers, even with larger taxpayer subsidies, relative to the cost of conventional fertilizer conventionally applied. Nanotechnology applications attempt to provide a more predictable controlled release that would reduce the loss of N and other fertilizer macronutrients. Despite U.S. and Brazilian government support for nanotechnology-enabled fertilizers that have shown N loss reduction in a 76-day field experiment, the experimental results have yet to be reproduced elsewhere.3

Scientists are attempting to engineer non-legume plants to fix their own nitrogen.4 This research is far from development into a commercially viable product. If corn could be engineered to fix its own nitrogen, corn-on-corn planting would result in much less N loss, but other soil health harms of fertilizer use could persist. Likewise, the economic treadmill of adopting a new technology in a low crop price environment would still apply.5

Reducing N loss in agricultural production, like other problems of agro-environmental remediation, is not just a technology issue to be solved by technological means. As long as agricultural policy and taxpayer subsidies support ever greater production and allow good agricultural practices to be a voluntary, individual choice, farmers facing below cost of production prices in most years will find it difficult to resist maximizing yields, regardless of the added costs of fertilizer use and of the expensive machinery of precision agriculture. There is an environmental and public health cost to maximizing production, even if we as a society choose to allow somebody else to pay that cost some time in the future.

Stevesuppan Web

Steve Suppan

Steve Suppan is a policy analyst at the Institute for Agriculture & Trade Policy.

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