Submitted to: Agricultural Economics Review
Publication Type: Peer reviewed journal
Publication Acceptance Date: 1/5/2006
Publication Date: 5/1/2006
Citation: Petrolia, D.R., Gowda, P. 2006. Missing the boat: Midwest farm drainage and Gulf of Mexico hypoxia. Review of Agricultural Economics. 28(2):240-253. Interpretive Summary: The Mississippi River/Gulf of Mexico Watershed Nutrient Task Force set a coastal goal of reducing areal extent of hypoxia in the Gulf to 5,000 sq. km. by 2015. They estimated that this would require a 30% reduction in nitrogen discharges from the Mississippi and Atchafalaya Rivers to the Gulf. It is well known that subsurface tile drainage is a major pathway for agricultural nitrogen losses and more than 30% of the crop land in the Upper Midwest is tile drained. In this study, a constrained-optimization model was used to evaluate the environmental and economic impact of subsurface drainage focused abatement policies for reducing nitrogen losses. Results indicate that drained land dominates in nitrogen abatement and has substantially lower abatement costs relative to no-drained land. However, policies that remove drainage were not cost effective.
Technical Abstract: Research addressing Gulf hypoxia has failed to account for agricultural drainage, the major pathway of nitrate loads in Upper-Midwest states. Focusing on two Minnesota watersheds, simulation results were combined with a constrained-optimization model to evaluate the cost-effectiveness of nitrogen abatement policies, with explicit focus on drainage. Results indicate that drained land dominates in nitrogen abatement and has substantially lower abatement costs relative to no-drained land. However, policies that remove drainage were not cost-effective. Further, it was found that nutrient management, a policy strongly recommended by prior research, is completely ineffective as a means of abatement on non-drained land.