Yield Reserve Program Costs in the Virginia Coastal Plain

A proposed Yield Reserve Program designed to compensate farmers for any reduced yields resulting from nitrogen (N) application rates reduced to below recommended rates is evaluated. Assuming that farmers currently follow Extension recommendations for applying N, Yield Reserve Program participation r...

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Bibliographic Details
Published inAgricultural and Resource Economics Review Vol. 36; no. 2
Main Authors Metcalfe, Todd, Pease, James W, Bosch, Darrell Jonathan, Phillips, Steve B, Alley, Mark M
Format Journal Article
LanguageEnglish
Published Northeastern Agricultural and Resource Economics Association 2007
SeriesAgricultural and Resource Economics Review
Subjects
Agricultural and Food Policy
compliance cost
Crop Production
Industries
nitrogen fertilizer
nonpoint source pollution
policy
yield response function
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Summary:A proposed Yield Reserve Program designed to compensate farmers for any reduced yields resulting from nitrogen (N) application rates reduced to below recommended rates is evaluated. Assuming that farmers currently follow Extension recommendations for applying N, Yield Reserve Program participation reduces expected net revenue by $10 to $13/ha. The Yield Reserve Program reduces expected net revenue by $17 to $20/ha for farmers who apply N to maximize expected net revenue. Farmers’ costs of participation increase with lower probabilities of inadequate rainfall and higher corn prices and decline with higher N prices. The Yield Reserve Program can significantly reduce N applications to cropland, which may reduce N content of surface waters, but the costs to taxpayers and farmers will depend on how the program is implemented.