An economic analysis of nitrogen fertilization regimes in Virginia

The loss of nitrogen from agricultural land to ground and surface waters is currently a major concern in the Commonwealth of Virginia. Farmers use nutrients on plants to maximize profit from the selling of a crop. For them losses of nutrients through inappropriate nutrient application are undesirable. Thus more effective nutrient management is beneficial for both the farmers and the remainder of society. Achieving environmental quality goals while taking into account farmers' income risk is essential when making fertilization recommendations. This study on Richmond county, uses the EPIC model and stochastic dominance analysis to compare four different fertilization regimes at the field and farm level; and then uses a sensitivity analysis to examine how the ranking of different regimes are affected by changes in crop prices. Results suggest that regime 4 which is the EPIC automatic fertilization regime has a better performance than the other regimes. However potential costs not accounted by EPIC involved at the farm level when using regime 4 may negatively affect its adoption by farmers. Thus further studies need to be done to understand and assess the performance of regime 4. The results do not show any significant difference between farm and soil type levels of analysis. The sensitivity analysis mainly affects the less risk averse decision makers, and change only the ranking of the three fertilizer regimes specified by the researcher as opposed to the automatic fertilizer option of EPIC.