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Impacts Of Taxes To Reduce Agrichemical Use When Farm Policy Is Endogenous

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  • James S. Shortle
  • Andrew Laughland

Abstract

The economic impacts of policies to reduce water pollution from agriculture have been explored in a number of studies. A standard assumption in this literature is that farm income support policies are given. However, the modern public choice view of agricultural policy suggests that significant environmental initiatives in agriculture would likely be accompanied by changes in farm income policies to protect those with a significant stake in agriculture. We explore the potential effects of such compensating adjustments on the costs and effectiveness of taxes on polluting chemical inputs in US corn production. We find that compensating farm policy adjustments can greatly increase the costs and reduce the effectiveness of the environmental protection measure. The results also indicate the potentially high costs of poor policy co‐ordination.

Suggested Citation

  • James S. Shortle & Andrew Laughland, 1994. "Impacts Of Taxes To Reduce Agrichemical Use When Farm Policy Is Endogenous," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(1), pages 3-14, January.
    • Handle: RePEc:bla:jageco:v:45:y:1994:i:1:p:3-14
    DOI: 10.1111/j.1477-9552.1994.tb00373.x
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    References listed on IDEAS

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    1. Phoebe Koundouri, 2004. "Current Issues in the Economics of Groundwater Resource Management," Journal of Economic Surveys, Wiley Blackwell, vol. 18(5), pages 703-740, December.
    2. Asci, Serhat & Borisova, Tatiana & VanSickle, John J. & Zotarelli, Lincoln, 2012. "Risk and Nitrogen Application Decisions in Florida Potato Production," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119797, Southern Agricultural Economics Association.
    3. Abrahams, Nii Adote & Shortle, James S., 1997. "Uncertainty And The Regulation Of Nitrate Pollution From Agriculture," 1997 Annual meeting, July 27-30, Toronto, Canada 21027, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Friedrich Schneider & Klaus Salhofer & Erwin Schmid & Gerhard Streicher, 2001. "Was the Austrian agricultural policy least cost efficient?," Economics working papers 2001-03, Department of Economics, Johannes Kepler University Linz, Austria.
    5. Richard Horan & James Shortle & Erwin Bulte, 1999. "Renewable Resource Policy When Distributional Impacts Matter," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 14(2), pages 191-215, September.
    6. Ibendahl, Gregory & Fleming, Ronald A., 2007. "Controlling aquifer nitrogen levels when fertilizing crops: A study of groundwater contamination and denitrification," Ecological Modelling, Elsevier, vol. 205(3), pages 507-514.
    7. Aihoon, J. K. & Kirsten, J. F., 1994. "A Review Of The Environmental Impacts Of Agriculture In The Developing World: Lessons For South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 33(3), September.
    8. Aihoon, John Komo & Groenewald, Jan A. & von Bach, Helmke J. Sartorius, 1997. "The Potential Use Of Pollution Insurance As Environmental Policy: An Empirical Analysis," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 36(2), pages 1-22, June.
    9. Pearce, David & Koundouri, Phoebe, 2003. "Diffuse Pollution and the Role of Agriculture," MPRA Paper 38443, University Library of Munich, Germany.

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