The effectiveness and feasibility of economic incentives of input
control in the mitigation of agricultural water pollution

Asko Miettinen

Miettinen, A. 1993.The effectiveness and feasibilityof economic incentives of input
control in the mitigation of agricultural waterpollution. Agric. Sci. Finl. 2:453-463.
(Water and Environment Research Institute, FIN-00101 Helsinki, Finland.)

Agricultural water pollution in Finland is mainly caused by nutrient losses from fields.
Nutrient losses can be mitigated, e.g., by changing management practices and by plant
rotation. Adoption of the necessary measures may be voluntary, but economic incent-
ives can also be used. Nutrient losses can be regulated, e.g., by incentives to decrease
the use of fertilizers. Economic incentives include a change in product prices, an input
tax or an input quota. So far an input tax has been applied in Finnish agriculture. The
effectiveness and feasibility of these policy measures on the farm can be assessed by
calculating the change in farm profit and nutrient losses. The input quota was found to
be the least-cost measure at the farm level when the marginal abatement costs of
measures were compared on a grain farm growing barley. Alternative policy measures
caused bigger losses in profit on the farm and the reduction in nitrogen leakage was
smaller.

Key words: non-point source pollution, nitrogen, policy measure, assessment, farm
profit

Introduction

The environmental impacts of agriculture in Fin-
land mainly concern surface waters and take the
form ofsoil erosion and nutrient losses which cause
eutrophication and oxygen deficit. High nitrate
concentrations also reduce the quality of ground-
water. However, the nitrate concentration in
groundwater in Finland is generally low and con-
centrations of over 25 mg/1 (National Board of
Waters and the Environment 1988) are met only
rarely in rural wells.

In Finland the total phosphorus load from field
cultivation varies between 2,000 and 4,000 tonnes
per year, and the total nitrogen load between 20,000
and 40,000 tonnes per year (Rekolainen 1989).

The nutrient loads from manure storage are about
400 tonnes per year for phosphorus and 1,100
tonnes per year for nitrogen. The present phospho-
rus fertilization rate clearly exceeds the uptake of
phosphorus by crops (26 kg P/ha vs. 12 kg P/ha).
Moreover, the phosphorus content in the soil has
increased by 36% since the early twenties (Reko-
LAiNENetal. 1992).

According to a decision made by the Finnish
government in 1988 (Ministry of the Environment
1988), the phosphorus load from agriculture should

be reduced by 30% by the year 1995, combined
with a significant reduction in nitrogen loading.
Reduction of the phosphorus load was given prior-
ity, since phosphorus is usually the limiting factor
for algal growth in fresh waters in Finland. Since

453

Agric. Sei. Finl. 2 (1993)

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then a new program has been preparead for envir-
onmental protection in agriculture (Ministry of the
Environment 1992), in which the target for the
reduction of nutrient losses is set at 50%.

Agricultural pollution can be mitigated by
changing the management practices on farms. The
load of total phosphorus can most effectively be
controlledby decreasing therate oferosion through
reduced tillage methods (Rekolainen et al. 1992).
Nitrogen leaching cannot be prevented through re-
duced tillage methods, so it is more important to
reduce the use of nitrogen. This can be affected
through economic incentives, e.g. taxes. Nutrient
taxes have, in fact, already been used in Finland,
but there is no broader experience of the effect of
economic incentives.

In the OECD the agricultural policy measures
which address environmental issue are divided into
three groups: 1) direct regulations, 2) information
policy, and 3) economic instruments (OECD 1992).
Direct regulation is an administrative means of
achieving a particular environmental objective. The
opposite of direct regulation is information policy,
which is usually aimed at informing farmers of
research results and technical innovations, as well
as of new management practices which can be ap-
plied to obtain environmental benefits. Economic
instruments are based on market incentives to apply
methods which mitigate pollution. These instru-
ments can be divided into different categories such
as taxes and charges, tradeable discharge quotas
and permits, or subsidies. The effectiveness of
economic instruments on agriculture depends on
the impact on farm income and profitability. De-
cisions about which mitigation method is to be used
are left to the farmer.

To achieve improved water quality it is import-
ant to find a measure whose cost to the farmer is as
low as possible (e.g. Andréasson 1990). This
paper evaluates the effectiveness and feasibility of
various policy measures in reducing the use of ni-
trogen by comparing the changes in farm profit and
nitrogen loss resulting from different measures.
The results are especially important for the authori-
ties in deciding which measures to apply, and they
also benefit the farmers iferror-trial decision mak-
ing can be avoided.

Environmental policy measures in
agriculture

The theory of point-source pollution regulation in-
cludes means such as effluent taxes, tradeableemis-
sion permits and emission quotas. The topic has
been discussed widely in literature, e.g. Baumol
and Oates (1971, 1990), Tietenberg (1978),
Seskin et al. (1983), O’neil et al. (1983), Strass-
mann (1984), Braulke and Enders (1985),
Crowder et al. (1985), McGartland and Oates
(1985), Malueg (1989, 1990). In the case of non-
point source pollution it is not feasible to use stand-
ard pollution control measures such as direct re-
strictions or effluent taxes because of the physical
uncertainty and monitoring difficulties involved.
Although losses could be estimated, it is difficult to
determine theconnection between a discharge level
and the damage caused by the pollutant (Segerson
1988).

When assessing different measures it has to be
kept in mind that the main target is to reduce the
damage resulting from nutrient leaching. There are
three alternative ways of creating an incentive to
reduce non-point source pollution: 1) to change
farm management practices, 2) to regulate the input
of nutrients, and 3) to regulate the ambient level of
nutrients in the environment. The second alternat-
ive will be discussed in more detail since i has been
applied in Finland. So far, the regulation of inputs
has been mainly used to collect funds via nutrient
taxes for marketing excess production of Finnish
agriculture (Council of State ofFinland 1992).

Some measures for regulating the use of input are
presented in the following. The efficiency of input
taxes and input restrictions in reducing agricultural
pollution have been discussed on many occasions,
e.g. Taylor and Frohberg (1977), de Haen
(1982), Griffin and Bromley (1982), England

(1986), Shortle and Dunn (1986), Braden et al.
(1989), Andréasson (1990), Hanley (1990),
Conway (1991), Johnson et al. (1991) and Fuchs
and Muerschel-Raasch (1992).

While estimation of the socially optimal pollu-
tion level is inaccurate due to incompleteness of
information about consumers’ preferences, a target
level can be set for input use which should be

454

Agric. Sd. Fin!. 2 (1993)



reached in order to reduce damage to the environ-
ment. The level of input use can be changed by,
e.g., taxing the products (Huang and Uri 1992).
Taxation of a product reduces its total value and
thereby decreasing the optimal use of the input
which also reduces nutrient losses.

Input taxation can also be used to reduce nutrient
losses. A target level can be achieved by setting a
tax e.g. on the total use of input. In setting an input
tax, production costs shouldbe taken into account.
In Figure 1 the total cost of production is TC, and
TVP is the total value of the product. The horizontal
axis shows xi use of input X. If there are no restric-
tions, input use is x. The profit from selling the
production is [c,d]. The input tax increases the total
costs such that the curve TC changes to TC’. The
new optimum of input use is x’. Profit has been
reduced to the difference between a and b.

Assuming that the relationship between the
amount of input and nutrient losses can be estim-
ated, a direct restriction can also be set. This so-
called input quota is equal to the amount of input
after tax has been introduced. The farmers’ choice
is to maximize theirprofit when the use of one input
is restricted. An attempt can be made tocompensate
for this by using other inputs. In the case of fertil-
izer this could mean growing leguminous plants or
increasing the use of manure. Although a part of the
restricted input use can be compensated by other
inputs, the marginal productivity of these decreases

at a faster rate than in the case where no restrictions
exist.

Policy measures in Finland

In Finland environmental measures in agriculture
are mainly enacted through direct regulation. There
is no general and consistent environmental legisla-
tion, but a number of laws have been introduced to
protect nature. Legislation concerning agriculture
comprises, e.g., the Water Act, the Chemicals Act,
the Air Protection Act and the Fertilizer Act
(VAINIO-M ATTILA 1990).

Market-based incentives in Finland have so far
been established for fertilizers. In 1979 a fertilizer
tax ofFIM 0.20/kg was imposed, mainly as a means
of collecting funds for marketing excess agricul-
turalproduction (Council of State ofFinland 1978).
The effect of this tax remained modest with respect
to environmental benefits. In 1990 the first nutrient
tax was introduced for phosphorus (FIM 0.50/kg
P). It was raised after six months to FIM 1.00/kg P
and one year later to FIM 1.50/kg P. At the begin-
ning of 1992 the fertilizer tax and the phosphorus
tax were combined, and a nitrogen tax was intro-
duced. The tax for nitrogen was FIM 2.90/kg P and
for phosphorus FIM 1.70/kg N. The tax for phos-
phorus has remained the same since September
1992,but the nitrogen tax has been reduced to FIM
2.60/kg N due to general fall in agricultural profit-
ability (Kettunen 1993).

Methods

Background to the assessment

When comparing environmental policy alternatives
for reducing non-point source pollution, the main
interest is on optimality, efficiency and feasibility
(Weinberg 1991). Optimality means social opti-
mality, which shouldbe achieved by a policy meas-
ure. Efficiency means cost-efficiency, i.e. which
measures are most profitably applied to achieve
goals for nonpoint source pollution. Feasibility
means the possibility of achieving those goals.

Fig. 1. Input tax increases total production costs TC (total
cost) to TC’ and the economically optimal use of input de-
creases according to the TVP-curve (total value of product)
from x to x’. The farm profit declines from [c, d] to [a, b].

455

Agric. Sei. Fint. 2 (1993)



If all three conditions are fulfdled, the so-called
first-best measure has been found. The socially op-
timal level of pollution is difficult to define owing
to the huge amount of information needed. The
costs incurred in obtaining this information could
be so high that they would be override benefits
gained. If the first-best conditions cannot be
reached, we can try to find a situation with a poten-
tial improvement in welfare. This so-called second-
best situation is different from the Pareto improve-
ment, since it is possible for an individual to be
worse off, although total welfare is increased. Still,
there is a problem in evaluating the effects on the
environment and on society. Let us denote the
change in total utility by AU, which should be
positive for a measure to be carried out.

(1) AU = Auc + Aup + Alls > O

where Au c is the change in consumer’s utility, Au p
is the change in producer’s utility and Au s is the
change in the utility of society caused by a reduc-
tion in costs for water purification and health serv-
ices. The change in consumer’s and society’s utility
is positive, and in producer’s utility mainly negat-
ive although positive changes are possible.

To solve the problem of pollution we should
determine those conditions by which the social op-
timum is reached, and the means by which profit-
maximizing firms and welfare-maximizing citizens
meet these conditions. Different factors of
economic action may be determined inefficiently
due to externalities and improperly defined prop-
erty rights (see e.g. Tietenberg 1992). Inefficient
determination can also result in incomplete market
information about resource use and differences in
social valuation.

Another way of assessing policy measures, in-
stead of social and private utility, is to consider the
cost-effectiveness of the different measures. To as-
sess cost-effectiveness we should be able to evalu-
ate the costs ofpollution abatement. The most prof-
itable measure can be found by comparing abate-
ment costs. At the farm level, pollution abatement
costs are related to changes in total yield, use of
technical and chemical inputs, and work. These
costs vary depending on the set production target.

On a farm specialized in cereal crop production,
losses from the whole field area are possible,
whereas on a dairy farm the share of grassland of
the total cultivated area is much larger and nutrient
losses consequently lower.

Pollutionabatement costs of a farm

In the following we consider a cereal farm with
production input x with unit price w , producing
product Y with unit price p. The farmer’s objective
is to maximize farms profit n by the optimal use of
inputs, i.e.

(2) max Ki =pYi- w xi

where Yi = f(xi) is the yield without control meas-
ures and xi is the use of input. An optimal solution
can be found by differentiating Jti with respect to x
(first order condition):

arc, df(x,) 5f (x,) w(3) 3 = O«P3 w = 0«-3 = -

ox dx dx p

which shows us that, in order to maximize profit,
marginal product (MR) with respect to input use
should equal the price relation between input price
and product price. The optimal level of input use
xi can be solved as a function of input price and
product price xi = x(w,p). To make sure that the
maximum exists at that point also a second order
condition must be fullfilled:

d2 7l 32f(N)(4) =

0N2 0N“

When measures for the mitigation of environ-
mental problems are considered, the costs of the
measures are included in profitmaximizing equa-
tion such that product tax T Y decreases the unit
price of product p, input tax Tx raises the unit price
of the input and effluent tax TL sets a value on the
emitted dischargeL i.e.

(5) max rt2 = (p-Ty) Y2-(w + Tx )x2 -LTl

456

Agric. Sei. Fin!. 2 (1993)



where Y 2 and X 2 are the yield and the use of input
when control measures are introduced. The mar-
ginal loss in profits (Art) on a farm are obtained by
subtracting 7t2 from Jti :

(6) An - pAY + T yY2 + LTl + wAx + Txx2

When comparing different measures it is import-
ant to know their cost-effectiveness. Cost-effect-
iveness can be compared using the marginal abate-
ment cost, MAC, for a given measure which can be
calculated by dividing the change in profit At: by
the change in loss AL:

At:
(7) MAC =

AL

The MAC is affected by losses, and it varies
depending on the crop and soil type. In this analysis
the idea is to assess the relative effectiveness of
different measures. The loss function parameters
are kept constant in all calculations.

Farm costs of controlling the use of input

Structure of the model

Control of the use of inputs by economic means can
be performed by raising prices administratively or
through taxation. When the price of an input rises,
the economically optimal level of the input de-
creases. Another factor affecting the use of input is
total yield. Therefore the following costs have to be
considered when calculating the cost-effectiveness
of various measures: input price and loss of total
revenue. The effect of a nitrogen tax depends on the
response of the yield to nitrogen fertilization, the
relation of the price of nitrogen fertilizer and the
price of product, and the rate of nitrogen tax. If the
yield function of a plant is Y=f(N), the optimal
level of (nitrogen) input use can be obtained by
setting marginal revenue MR equal to the marginal
cost of input MC (see Eq. 3).

Barley is the most common crop in southern and
western Finland (National Board of Agriculture
1992f) where environmentalproblems are most se-

vere (Rekolainen et al. 1992). A quadratic nitro-
gen yield function was estimated for barley (see
Appendix 1) assuming no nitrogen carryover. This
function is used in comparing the effects of differ-
ent policy measures on farm profit. The optimal
level of input use depends on the shape of the yield
function. Paris (1992) has criticized the use of the
quadratic function because it overestimates the op-
timal nitrogen level. The non-linear von Liebig -

function would be more feasible (Paris 1992), but
the Finnish data required for that are incompatible
(Sumelius 1993).

A condition for the farmer’s production decision
can be formulated on the basis of Equation 3. The
production costs of barley (Association of Rural
Advisory Centres 1991) are divided into harvest
costs which include harvesting, drying and work,
and other production costs which include other
variable costs and fixed costs. The maximization
problem is:

(8) max n = (p-HC-TY )Y-PC-(wN + Tn)N*

where n is profit, p is the unit price of barley,
Y=f(N ) is the yield function of barley, HC the
harvest cost per kg of barley yield, PC other pro-
duction costs, Ty product tax, wn price ofnitrogen,
Tn nitrogen tax, and N the optimal level of nitro-
gen fertilizing. Other production costs include costs
that depend on the fertilization level, but their ef-
fects on profit calculation are negligible.

Agricultural water pollution in the model is con-
sidered as nitrogen leaching. A Danish nitrogen
loss function presented by Simmelsgaard (1991)
is a function of nitrogen application as a fraction of
the average nitrogen use:

(9) = b 0 + bN«y = yn ebo+bN
¥ n

where y = nitrogen leaching, kg/ha
yn = nitrogen leaching at average nitroge

use
N = applied nitrogen as a fraction of

average nitrogen use
There are not enough results for Finland to

estimate an accurate loss function for nitrogen. In

457

Agric. Sei. Fint. 2 (1993)



this paper the Danish function form was adopted
and parameters fittedfor Finnish conditions accord-
ing to present expert information (Turtola and
Jaakkola 1985, Rekolainen 1989). This hypo-
tetic function is:

(10) L= u + vez(N' 1)

where L is total loss of nitrogen (kg/ha), N is ap-
plied nitrogen as a fraction of average nitrogen use,
and u, v and z are parameters. The values of these
parameters are u = 10, v= 10 and z = 1.8. Average
nitrogen use is set at 100kg N/ha annually, accord-
ing to latest data on the use of fertilizers in Finland
(Kemira 1992). The loss function presented here is
not the only possible function. The parameters of
the loss function could be adjusted and an analysis
of different loss functions could be made, but the
type of function used here gives a good example
and a possibility to assess relative changes in profits
and losses.

The profit maximizing equation can, in theory,
be used to assess the effects ofchanges in producer
prices, fertilizer taxes, fertilizer quotas and effluent
taxes on the profit of a farm. This evaluation is
static and gives the outlines for the effects of policy
measures on input regulation.

Results

Effects ofchanges in product prices

As an environmentalpolicy measure, a reduction in
product price can be considered as taxing environ-
mentally harmful production. In an open economy,
the tax would be transferred to consumer prices and
the demand for environmentally harmful products
would subsequently decline. In a closed economy,
the taxing of prices would lead to diminished re-
turns for farmers, but no change in the prices of
products would take place because prices are de-
fined administratively. By differentiating product
prices on the basis of the environmental effects of
production, it might be possible to change to less
polluting production. However, the differentiation

of prices requires a political decision and could,
therefore, be difficult to carry out.

A static assessment of the effects of a change in
product price was made for barley. The effects of
price change on production costs were not taken
into account because of the dynamic nature of cost
adaptation to price changes. The producer price of
barley was decreased until it finally reaches the
so-called world market level.Figure 2 shows barley
yield, farm profit and nitrogen loss as percentages
of situation when no policy measures are imple-
mented. The horizontalaxis shows the farm price of
barley.

In order to obtain a significant reduction in nutri-
ent losses, the price of barley should be lowered
very dramatically, and thereduction in nutrient loss
would be very expensive for farmers. When the
price of barley goes down to FIM 0.70/kg, the
calculated farm profit becomes negative and it is
not possible to continue production. Neither are
there any more negative environmental effects
from agricultural production.

The low efficiency ofa price change as an envir-
onmental measure can be explained partly by the
shape of the yield function Y(N). The economically
optimal level of fertilization remains relatively
high, despite the reduction in profitability. The
other reason is the relationship between fertilizer
and product price. Fertilizer can be seen as a

Fig. 2. Estimated relative yield of barley, nitrogen loss and
profit at optimum as a function of the price of barley.

458

Agric. Sei. Fint. 2(1993)



relatively low-cost production input and, therefore,
there is no incentive to compensate it with other
inputs as long as the given conditions apply.

Effects of an input tax

The input tax in agriculture is an application of the
effluent tax in industry. The difficulty is how to
measure the amount of discharge from agriculture.
A nitrogen tax increases the price of all units of
nitrogen applied. In Figure 3 the amount of nitrogen
tax varies from 0 to 22FIM per kg of nitrogen. The
increase in fertilizer price reduces its economically
optimal use. The farm profit does not decrease as
rapidly as in the case of a change in price.

In the simulation the nitrogen tax has to be relat-
ively high in order to bring about a significant
reduction in nutrient losses. Flere, as well as in the
previous case, the estimated response of barley to
nitrogen shows such a small marginal productivity
for nitrogen at the optimal input level that the effect
of the input tax remains weak.

This analysis does not take into account the pos-
sibility of compensation of nitrogen fertilizer with
other inputs such as growing of leguminous crops
or increased manure use, because there is no data
available in Finland about the costs of compensat-
ing inputs in cereal crop production.

Effects of an input quota

The input quota can be defined by the desired qual-
ity level of the environment. It is determined by the
biological toleranceof the environment for nutrient
loading. This same limit can also be used for other
measures such as the input tax. The setting of an
input quota is an administrative measure only, and
can be implemented by legislation which fixes
these limits. There is no market incentive in this
case, and an administrative control system is, there-
fore, needed to successfully introduce this abate-
ment measure. Figure 4 shows the input quota on
the horizontal axis and the respective relative
changes of yield, farm profit and nitrogen loss are
presented by curves.

When the quota is set, the farmers reduce their
use of input so that the quota is fullfilled. A input
quota does not affect farm profit as drastically as
a change in product price, but the nutrient loss
decreases quite rapidly. The input quota could lead
to inefficiency in production if no compensating
inputs exist. Some ways of compensating the lim-
ited input use have already been presented. An
additional possibility would be to increase the field
area of a farm by renting fields or by clearing new
ones.

Fig. 3. Estimated relative yield of barley, profit and nitrogen
loss at optimum as a function of the nitrogen tax.

Fig. 4. Estimated relative yield of barley, profit and nitrogen
loss at optimum as a function of the nitrogen quota.

459

Agric. Sei. Fint. 2 (1993)



Table 1. Marginal abatement cost of reducing leaching by
30%.

change in profit MAC
FIM/ha FIM/kg N

Product tax 5728 572.8
Nitrogen quota 147 14.7
Nitrogen tax 1441 144.1

Marginal abatement costs of the measures

In order to compare the cost-effectiveness of the
different measures, marginal abatement costs
(MAC) were calculated for each abatement meas-
ure considered in this study. MAC was calculated
for a 30% reduction in nitrogen loss. The marginal
abatement cost is therelationship between the total
change in profit and the change in nitrogen loss.
The abatement measures not only affected the use
ofnitrogen butalso the useofphosphorus due to the
fact that fertilizers used in Finnish agriculture are
mainly compound fertilizers. Table I shows the
change in farm profit and the marginal abatement
cost for each of the simulated measures.

If only farm costs were considered, the input
quota wouldbe the most profitable alternative at the
farm level. A similar conclusion has been drawn,
e.g., by Johnson et al. (1991). However, it should
be kept in mind that the adoption of an input quota
would also cause administrative costs. These costs
cannot be easily verified, and they do not affect the
decision making of farmers. Changing the product
price cannot be a feasible measure because of its
high expenses for farmers (see also Huang and Uri
1992).

Conclusions

Agricultural non-point source water pollution is
mainly caused by nutrient losses from fields. Sev-
eral mitigation methods and techniques have been
proposed for reducing runoff and erosion. One of
the most effective measures to get farmers to adopt
these methods is the use of economic incentives.

Product tax, input tax and input quota for control-
ling input use were evaluated in this study.

When introducing control measures, the target is
to achieve a pollution level which reduces the det-
rimental effects of discharges. It is not possible to
determine the social optimum because economists
are incapable of knowing all the preferences of
individuals concerning the environment. However,
a socially desirable pollution level can be deter-
mined administratively. To be able to do this, infor-
mation is required about the state of the environ-
ment and its tolerance for discharges. In order to
reach the desired pollution level, environmentally
beneficial production methods can be used that
can be promoted either voluntarily or through
economic instruments (legislation, charges, taxes).

Economic incentives can be aimed at, e.g., an
ambient pollutant level, a discharge level, produc-
tion techniques or input use. In this paper,
economic incentives for the regulation of the use of
fertilizers were considered. Of the studied alternat-
ives, the input quota was the most efficient measure
at the farm level. In reality, a variable input like
fertilizer, which can be easily transported, cannot
be controlledand the possibility ofa "black market"
does exist.

The input tax on nitrogen has to be considerably
high in order to bring about the desired reduction in
the use of input, and therespective abatement costs
would greatly reduce the farm profit. Nitrogen was
used as an example here, but a similar tax could be
set on phosphorus. A change in product price was
also examined. This measure is not feasible due to
the severe reduction it causes in farm profit. Fur-
thermore, the decrease in input use was quite frac-
tional.

Incentives to regulate input use can be set in
several ways, but the heterogeneity of different
geographical areas - e.g. southwestern and eastern
Finland - may cause problems in the application of
measures. Most of the nutrient losses inFinland are
discharged from cereal farms (Rekolainen et al.
1992). On dairy farms, storaging and spreading of
manure is a major environmental problem. If a
nitrogen tax is imposed, it will lead to certain im-
balances; production costs wouldrise also on farms
with less discharge, and a reduction in input use

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Agric. Sei. Fint. 2 (1993)



would not guarantee any improvement in water
quality even if losses mightbe reduced. Dairy farms
basically use more nitrogen per unit of field area,
but the losses of nutrients from grass fields are
lower than from, e.g., cereal crop fields.

More research is needed to validate the assess-
ment of different environmental policy measures.
According to the results of this study show that for
environmental measures to be both feasible and

effective at the farm level, new solutions or combi-
nations of measures will have to be introduced. The
assessment of measures can be developed by calcu-
lating more accurate yield responses and loss re-
sponses for both nitrogen and phosphorus. More-
over, soils and different management practices, e.g.
reduced tillage and buffer stripes, have to be con-
sidered.

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Asko Miettinen
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462

Agric. Sei. Finl. 2 (1993)



SELOSTUS

Taloudellisten ohjauskeinojen tehokkuus maatalouden vesiensuojelussa

Asko Miettinen

Vesien ja ympäristöntutkimuslaitos

Maatalouden aiheuttamaa vesistökuormitusta pyritään rajoit-
tamaan mm. vähentämällä lannoitusta. Lannoitteiden käyttö-
määriin voidaan vaikuttaa kiintiöinnillä, lannoitteiden hinta-
muutoksilla tai maataloustuotteiden (limamuutoksilla. Näitä
vaihtoehtoja tarkasteltiin tutkimuksessa. Päätös lannoitteiden
käyttömäärästä jää siis viljelijän ratkaistavaksi riippuen pa-
nosten ja tuotteiden hinnoista ts. tuotannonkannattavuudesta.
Mikäli lannoitteille asetetaan kiitiö, voi viljelijä valita enin-
täänkiintiön edellyttämän määrän lannoitteita.

Lannoitteiden käytön vähentämiseen tähtäävien taloudel-
listen ohjauskeinojen vaikutuksia simuloitiin mahdollisim-
man yksinkertaisella mallilla, jossa tilalla oletettiin tuotetta-
van vain yhtä tuotteita, rehuohraa. Mallissa kuvattiin viljelijän
päätöksentekotilanne, jossa annettujen rajoitusten puitteissa
oli löydettävä taloudellinen optimi. Vertailukohteeksi otettiin
tilan voitto, joka muodostui kokonaistuotosta vähennettynä
tuotantokustannuksilla. Muuttuvina kustannuksina otettiin
lannoituskustannus typen osalta sekä puintikustannukset,
muut kustannukset laskettiin kiinteisiin kustannuksiin. Tuo-
tantopanosten käytön taloudellinen optimi saatiin selvitettyä
asettamalla tuotannonrajatuotto jarajakustannus yhtäsuuriksi.

Huuhtoutuminen arvioitiin pohjautuen Tanskassa estimoi-

luihin huuhtoutumafunktioon, jota muokattiin vastaamaan
suomalaisia olosuhteita. Toistaiseksi ei vielä pystytä nykyis-
ten kenttäkoetulosten perusteella estimoimaan varsinaisesti
suomalaisiin olosuhteisiin soveltuvaa huuhtoutumafunktiota.
Vertailtaessa toimenpiteiden keskinäistä edullisuutta, ei huuh-
toutumafunktion muodolla ole kuitenkaan niin ratkaisevaa
merkitystä kuin tuotantoakuvaavalla funktiolla.

Ohjauskeinojen arvioinnissa vertailtavana suureena käytet-
tiin huuhtoutumisen vähentämisen rajakustannusta, joka on se
kustannus, mikä viljelijälle aiheutuu tuotannostasaatavan voi-
ton pienentymisenä, kun pellolta huuhtoutuvaa ravinnekuor-
mitusta pyritään vähentämään. Vertailun edullisimmaksi toi-
menpiteeksi osoittautui lannoitekiintiö, joka ei varsinaisesti
ole taloudellinen ohjauskeino. Lannoitekiintiö edullisuus pe-
rustui siihen, että kiintiöinnistä ei aiheudu muita kustannuksia
kuin sadon aleneminen. Lannoiteveron vaikutuksen voimak-
kuuteen vaikuttavat lannoitteen hinnan ja tuotteen hinnan vä-
linen hintasuhde, lannoitteelle asetettavan veron suuruus sekä
lannoitteen tuotantovaikutus ts. lannoitteella saatava sadonli-
sä. Tuottajahinnan muutos aiheutti hyvin voimakkaan pudo-
tuksen viljelijän tuottoihin, eikä saavutettu huuhtoutumisen
vähentyminen ollut kovin voimakasta.

463

Agric. Sei. Fint. 2 (1993)



APPENDIX 1.

Estimation of a yield function for barley

Nitrogen yield functions for barley were estimated on the basis of the empirical results of Esala and
Larpes (1984). The nitrogen response of barley and wheat was tested at five different levels (0, 50, 100,
150,200kg N/ha) on different soils in 1969-1980. Otherfactors affecting production (weather, soil, tillage,

pests, etc.) were considered as constant.

Average yields of barley on siltclay soil with injection fertilization have been used in estimating the yield
functions (linear, squareroot, quadratic). The coefficients in all functions are linear and the ordinary least
squares method is used in all estimations. In practice the estimates of coefficients were calculated by
SHAZAM computer program.

Coefficients Estimate t-value

Linear, a 1898.0(676.6) 2.8052* F = 16.38;p < 0.05
Y=a+bN b 22.360(5.524) 4.0475* R 2 = 0.8452

d = 1.4869
MSrcsid.= 762960

Squareroot,
Y=a+bN l/2

a
b

1137.2 (207.2) 5.4883** F = 169.3; p < 0.001
344.77 (20.70) 16.656*** R 2 = 0.9826

d = 1.4416
MS reSid .= 85834

Quadratic,
Y=a+bN+cN2

1103.7 (1 19.6)
54.131 (3.793)

-0.1589 (0.2846)

9.2266**
14.273***

-5.5815**

F = 182.1; p < 0.01
R 2 = 0.9945

a
b
c d = 2.6187

* significant at 0.05
** significant at 0.01
*** significant at 0.001

F test showed significance for linear function at 5% risk level, for quadratic function at 1% risk level and
for squareroot function even at 0.1% risk level. A quadratic function was selected because of its highest

2 .. ,significance (R“) compared to the linear and squareroot functions, and because the mean square of residual
was smallest in the quadratic function. The t-values of the estmated coefficients also showed the highest
statistical significance for the quadratic function. The Durbin-Watson test was indecisive for all the
functions estimated.

Agric. Sei. Fint. 2(1993)