Trade-Offs Between Agricultural and Chemical Policy

Stanley R. Johnson
March 1990  [90-WP 54]

In modern U.S. agriculture, there are numerous trade-offs between agricultural and chemical policies. This study provides an empirical context for general observations of trade-offs between commodity policies designed to stabilize income and chemical policies that affect the availability and prices of chemical inputs. Four examples of policies involving trade-offs between agricultural and chemical policies are reviewed. These illustrate conservation compliance, taxation of commercial nitrogen, targeting of conservation reserve enrollment, and banning of corn rootworm insecticides.

Generally, these analyses showed that environmentally motivated changes in agricultural production patterns and practices could be accommodated in U.S. agriculture with relatively modest increases in production costs. Results indicate considerable opportunity for bringing agricultural price and income stabilization policy mechanisms into closer harmony with environmental policy. Clearly, outcomes from linked policies are highly conditioned by the market supply/demand situation as well as the agricultural policy framework. The argument, then, is for flexible policies and a recognition that settings of policy instruments for policymakers will require adjustment as the factors conditioning agriculture and the environment change.

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