Nitrogen in Agricultural Systems: Implications for Conservation Policy
by Marc Ribaudo
, Jorge Delgado, LeRoy Hansen
, Michael Livingston
, Roberto Mosheim
, and James Williamson
Economic Research Report No. (ERR-127) 89 pp, September 2011
What Is the Issue?
Nitrogen is an agricultural input that is critical for crop
production. Human-induced production and release of reactive
nitrogen has greatly affected the Earth's natural balance of
nitrogen, contributing to changes in ecosystems, both beneficial
and harmful, including increased agricultural productivity in
nitrogen-limited areas, ozone-induced injury to crops and forests,
overenrichment of aquatic ecosystems, biodiversity losses,
visibility-impairing haze, and global
climate change. Incentives for encouraging farmers to adopt
improved nitrogen management can take many forms, from purely
voluntary to regulatory. Designing a cost-effective policy requires
that factors influencing fertilizer use be fully understood. Also,
an understanding of how farmers are likely to respond to different
incentives may help policymakers assess potential environmental
tradeoffs driven by nitrogen's ability to change forms and cycle
through different environmental media.
What Did the Study Find?
• Emission of reactive nitrogen to the environment can be
reduced by matching nitrogen applications more closely with the
needs of growing crops. This can be achieved by adopting three"best
management practices" (BMPs):
• Rate: Applying an amount of nitrogen at a rate that
accounts for all other sources of nitrogen, carryover from previous
crops, irrigation water, and atmospheric deposits.
• Timing: Applying nitrogen as close to the time that the
crop needs it as is practical (as opposed to the season before the
crop is planted).
• Method: Injecting or incorporating the nutrients into
the soil to reduce runoff and losses to the atmosphere.
• Among all U.S. field crops planted in 2006 that received
nitrogen fertilizers, 35 percent are estimated to have met all
three of the nutrient BMPs. For the remaining cropland,
improvements in management are needed to increase nitrogen use
efficiency (i.e., reduce the amount of nitrogen available for loss
to the environment).
• Corn is the most intensive user of nitrogen fertilizer, on a
per acre basis and in total use. Fertilizer applied to corn is
least likely to be applied in accordance with all three BMPs.
• Incentives for improving nitrogen use efficiency by adopting
the rate, timing, and method BMPs can come from policy or market
• Government programs that provide financial assistance for
adopting BMPs can be effective if they encourage the participation
of farmers with land most in need of improvement and if the farmers
choose the most costeffective practices. Data suggest that the
amount of cropland needing improvement would require a substantial
increase in the current Federal budget devoted to nutrient
• Including nitrogen management in compliance provisions for
receiving Federal farm payments could encourage farmers to adopt
more effective management practices. In 2005, producers of U.S.
corn received Government payments that were much higher than the
cost of improving nitrogen management. The strength of this
incentive, however, has declined in recent years because of
increases in crop prices and a decline in direct commodity
• Emissions markets, such as water quality trading and greenhouse
gas cap-and-trade, could provide financial incentives to farmers to
adopt improved nitrogen management and produce nitrogen credits
that can be sold in these markets. The effectiveness of such
markets would depend on market design, including rules defining who
can participate and what needs to be done to produce credits.
• Onfield improvements to nitrogen use efficiency could be
supplemented with off-field practices, such as wetlands restoration
and vegetative filter strips that can filter and trap reactive
nitrogen that leaves the field through surface runoff and
groundwater flow. Of the two practices, restored wetlands can be
more cost effective at removing nitrogen and provide additional
environmental benefits, but they are limited to areas with suitable
soils and hydrology. Vegetative filters can be employed more widely
across the landscape but are not effective when existing tile
drains bypass the filters.
• Policies for increasing nitrogen use efficiency should
recognize the potential environmental tradeoffs when addressing
particular issues related to reactive nitrogen. Focusing strictly
on one issue, such as nitrate leaching, could lead to increased
emissions of other nitrogen compounds, such as nitrous oxide, even
when total reactive nitrogen emissions are reduced.
How Was the Study Conducted?
ERS researchers used an extensive literature review, modeling,
and data from USDA's Agricultural Resource Management Survey (ARMS)
of major field crops. ARMS data provided information on nitrogen
use, defined by the rate, method, and timing application criteria.
This, in turn, helped researchers determine the types of management
improvements needed the most.
The following market forces and policy instruments were
evaluated to measure their influence on nitrogen management:
nitrogen fertilizer taxes, Federal financial assistance offered to
farmers to adopt practices that improve nitrogen use efficiency or
filter and trap nitrogen runoff, emissions markets such as water
quality trading and greenhouse gas cap-and-trade, compliance with
nitrogen BMPs as a condition for receiving farm program benefits,
Because reactive nitrogen is mobile and able to transform into
different compounds, researchers used a field-level nitrogen loss
simulator developed by USDA's Agricultural Research Service to
track how improving nitrogen use efficiency by meeting all three
BMPs affects emissions of different reactive nitrogen compounds.
These interactions were taken into account when evaluating
alternative policy options.