Environmental Impact of Reducing Chemical Fertilizer Subsidies (Agricultural Crops in Zarandieh, Markazi Province)

Document Type : Research Article

Authors

• S.M.J. Esfahani ¹
• E. Barikani ²

¹ natural resource and environmental economics, Agricultural Planning, Economics and Rural Development Research Institute (APERDRI)

² Agricultural Planning, Economics and Rural Development Research Institute (APERDRI), Tehran, Iran

10.22067/jead.2024.88266.1273

Abstract

Introduction
Many governments provide subsidies to members of the agricultural supply chain to ensure food security, maintain economic stability, and uphold the social benefits associated with the agriculture sector. The conflicting goals of food security and environmental protection have become a major problem, especially in developing countries. On the one hand, the government aims to boost food production by offering agricultural subsidies. On the other hand, the excessive use of chemical inputs due to these subsidies has raised concerns about environmental pollution. Therefore, one of the most significant global challenges is to balance agricultural production to meet the increasing demand of the growing population while maintaining the quality of the environment. Any changes in government support policies for the agricultural sector can lead to fluctuations in input and product prices, directly impacting farmers' profits. As a result, these changes can influence cultivation patterns and the use of agricultural inputs, ultimately affecting the environment. Therefore, before implementing any policy changes, it is crucial to assess both the economic and environmental impacts and make informed decisions based on these considerations.
Materials and Methods
This study uses positive mathematical programming (PMP) on the environmental impact of chemical fertilizers’ subsidies change and transfer subsidies to crops in Zarandieh city of Markazi province. The necessary information was collected through the statistical sources of the Ministry of Agricultural Jihad for the crop year 2023 for the three crops including irrigated wheat, irrigated barley, and silage corn, which occupies more than 85 percent of the cultivated area of this region. At the first stage, the amount of greenhouse gas (GHG) emissions by each product was calculated, and then the environmental impact of different subsidy policies was investigated. To calculate the greenhouse gas emissions, the emission coefficient of each of the inputs that have been cited in various studies was used. To model and analyze the data, positive mathematical programming with the cost function approach was used. Excel and GAMS software has been used to run the models.
Results and Discussion
The results of the study showed that the highest amount of greenhouse gas emissions is related to corn silage, and electricity, diesel, and chemical fertilizers have the largest share of the greenhouse gas emissions. The simulation results for the region’s cultivation patterns, considering scenarios where only chemical fertilizers—N-fertilizer, P-fertilizer, and K-fertilizer—were used separately and together with increases of 25%, 50%, 75%, and 100%, indicate that as input prices rise, both the cultivated area and farmers' income decrease. Additionally, increasing the price of P-fertilizer has a greater potential to reduce environmental impact compared to raising the price of other chemical fertilizers.To assess the environmental impact of reallocating subsidies from chemical inputs to agricultural products, a scenario was simulated in which the price of chemical inputs increased by 100%, while product prices rose by 5% and 10%, respectively. The model results revealed that the lowest environmental impact per hectare of crop production occurs when chemical fertilizer prices increase by 100% and product prices rise by 5%.Based on these findings, reallocating subsidies to agricultural products rather than production inputs appears to yield more favorable environmental outcomes. In other words, when the subsidy is allocated to the product instead of chemical inputs, the environmental impact of crop production in this area would be reduced and the amount of emissions per hectare of farm or million Tomans of gross profit would be less compared to other situations.
Conclusion
It is necessary to support the agricultural sector to boost food production but these supports should be done with the least environmental impact. According to the findings of this study, if subsidies are given to agricultural products instead of inputs, greenhouse gas emissions will be reduced while maintaining the area of crops and the amount of gross profit of farmers. The policy of setting a guaranteed price for basic agricultural products in Iran can be a suitable tool to realize this. In other words, transferring the credits allocated for purchasing chemical fertilizers to the guaranteed purchase of agricultural products will be an effective step in reducing the emission of greenhouse gases and their impact, as well as maintaining the country's food security.

Keywords

• Crop pattern
• Green house gas emission
• Markazi province
• Positive mathematical programming
• Zarandieh city

Main Subjects

• Environment and Natural Resources Economics

©2024 The author(s). This is an open access article distributed under Creative Commons Attribution 4.0 International License (CC BY 4.0)

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