Economic and environmental benefits of increased nitrogen use efficiency on crops

Nitrogen is a key input to food production. Its use in agriculture increases crop productivity, but at the same time is responsible for environmental issues. A number of concepts are being pursued to increase nitrogen use efficiency (NUE), which would result in lower-cost food production, better income for farmers, and decreased environmental impacts. While many published reports discuss the benefits of increased NUE, we quantify them using an economic simulation model of US agriculture. In this analysis we estimate the economic and environmental impacts of increased NUE (i.e. price impacts, net farmer incomes, land allocation, and water quality changes). Results suggest that a 20% increase in nitrogen use efficiency in row crops would result in reduction of 1.58 million tons of applied N, an annual 1.6% increase in farmer net returns ($743 million), and a cumulative economic benefit of $5.5 billion over a 10-year period with full adoption. Overall consumption increases and expenditures for commodity crops decrease. Land effects are inconclusive. Using a watershed-scale hydrological model of the Arkansas-White-Red river basin (AWR) we estimate the water quality impacts of increased NUE. Results suggest that a 20% reduction in N use corresponds to a 5.8% reduction in nitrate loadings and 2.6% decrease in overall nitrogen concentration in drainage waterbodies. The report concludes with a discussion of the application of these results to the social value of nitrogen and nitrogen reduction strategies.