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Table 2.2.3-National estimates of the damages from water pollution or the benefits from water pollution control

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Ribaudo (1986)

Nielsen and Lee

(1987)

Ribaudo (1989)

Carson and Mitchell (1993)

Feather and

Hellerstein (1997)

benefits from controlling
water pollution

National water quality

damages from soil erosion on
cropland

Regional and national water
quality benefits of reducing
soil erosion

National costs of groundwater
contamination

Regional and national water
quality benefits from the
Conservation Reserve Program
National benefits of surface-
water pollution control

National recreation benefits of
soil erosion reductions

Total damages to recreational water uses from all forms of pollution: $1.8$8.7 billion, "best guess" of $4.6 billion (1978 dollars per year).

Total benefits of $300-$966 million, depending on level of pollution control instituted.

Damages to all uses: $3.2-$13 billion, "best guess" of $6.1 billion (1980 dollars). Cropland's share of erosion-related damages: $2.2 billion.

Erosion reductions from 1983 soil conservation programs implied $340 million in offsite benefits. Benefits per ton of erosion reduced were from $0.28 to $1.50.

Monitoring costs for presence of agricultural chemicals put at $890 million$2.2 billion for private wells, and $14 million for public wells.

Reducing erosion via retirement of 40-45 million acres of highly erodible cropland would generate $3.5-$4.5 billion in surface-water quality benefits over the life of the program.

Annual household willingness to pay for maximum water quality improvement of $205-$279 per household per year, or about $29 billion nationally.

A total of $286 million in benefits from erosion reductions on agricultural lands since 1982, based on data from a recreation survey.

Source: USDA, ERS, based on Crutchfield, Feather, and Hellerstein, 1995; and Feather and Hellerstein, 1996.

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Recent ERS Reports on Water Quality Issues

Accounting for the Environment in Agriculture, TB-1847, October 1995 (James Hrubovcak, Michael LeBlanc, and B. Kelly Eakin). Detailed information derived from the national income and product accounts provides the basis for economic interpretations of changes in the Nation's income and wealth. The effects of soil erosion on agricultural productivity and income, the economic effect of decreased water quality, and depletion of water stock are presented as examples of the potential scope of accounting adjustments needed in the agricultural sector.

USDA's Water Quality Program Enters its 6th Year, AREI Update, 1995, No. 11 (Marc Ribaudo). Sixty-five water quality projects were started in 1995, and 6 projects were completed at the end of 1994. Over 400 water quality projects have been started since 1990.

Voluntary Incentives for Reducing Agricultural Nonpoint Source Water Pollution, AIB-716, May 1995 (Peter Feather and Joe Cooper). Data from the Area Studies are used to evaluate the success of existing incentive programs to control agricultural nonpoint source pollution. Because profitability drives production decisions, these programs tend to be most successful when they promote inexpensive changes in existing practices.

The Benefits of Protecting Rural Water Quality: An Empirical Analysis, AER-701, January 1995 (Stephen R. Crutchfield, Peter M. Feather, and Daniel R. Hellerstein). The use of nonmarket valuation methods to estimate the benefits of protecting or improving rural water quality from agricultural sources of pollution is explored. Two case studies show how these valuation methods can be used to include water-quality benefits estimates in economic analyses of specific policies to prevent or reduce water pollution.

Atrazine: Environmental Characteristics and Economics of Management, AER-699, September 1994 (Marc Ribaudo and Aziz Bouzaher). Atrazine is an important herbicide in the production of corn and other crops in the United States. Recent findings indicate that elevated amounts of atrazine are running off fields and entering surface-water resources. The costs and benefits of an atrazine ban, a ban on pre-plant and pre-emergent applications, and a targeted ban to achieve a surface-water standard are examined.

Cotton Production and Water Quality: Economic and Environmental Effects of Pollution Prevention, AER-664, December 1992 (Stephen Crutchfield, Marc Ribaudo, LeRoy Hansen, and Ricardo Quiroga). The most widespread potential water-quality problems from cotton production are nitrate leaching and losses of pesticides to surface waters. Alternative policies for reducing these types of pollution are evaluated.

Estimating Water Quality Benefits: Theoretical and Methodological Issues, TB-1808, September 1992 (Marc Ribaudo and Daniel Hellerstein). Knowledge of the benefits and costs to water users is required for a complete assessment of policies to create incentives for water quality-improving changes in agricultural production. A number of benefit estimation methods are required to handle the varying nature of water quality effects.

Water Quality Benefits from the Conservation Reserve Program, AER-606, February 1989 (Marc Ribaudo). The Conservation Reserve Program was estimated to generate between $3.5 and $4 billion in water quality benefits if it achieves its original enrollment goal of 40-45 million acres. Potential benefits include lower water treatment costs, lower sediment removal costs, less flood damage, less damage to equipment that uses water, and increased recreational fishing.

(Contact to obtain reports: Marc Ribaudo, (202) 501-8387 [mribaudo@econ.ag.gov])

Goolsby, D.A., E.M. Thurman, M.L. Pomes, M. Meyer, and W.A. Battaglin (1993). “Occurrence, Deposition, and Long Range Transport of Herbicides in Preceipitation in the Midwestern and Northeastern United States," in Goolsby, D.A., L.L. Boyer, and G.E. Mallard, Selected Papers on Agricultural Chemicals in Water Resources of the Midcontinental United States. Open-File Report 93-418, U.S. Geological Survey. pp. 75-88.

Goss, D.W., and D. Wauchope (1990). "The SCS/ARS/CES
Pesticide Properties Database: II, Using it With Soils
Data in a Screening Procedure," in D.L. Weigman (ed.),
Pesticides in the Next Decade: The Challenges Ahead,
Virginia Water Resources Research Center, Blacksburg,
Virginia, pp. 471-493.

Health and Environment Digest (1994). "Cryptosporidium and Public Health," Vol. 8, No. 8. pp. 61-63.

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PRODUCTION INPUTS

3.1 Nutrients

Nutrients need to be applied to most fields to maintain high crop yield. Most nutrients applied are from commercial fertilizer. Commercial fertilizer use in the United States has declined from a peak in 1981 because of fewer planted acres and stable or falling application rates. Fertilizer prices paid by farmers were relatively stable from 1989 to 1993, but increased dramatically in 1994 and 1995.

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Crops take up nutrients—primarily nitrogen (N);

phosphate (P205), the oxide form of phosphorus (P); and potash (K20), the oxide form of potassium (K)—from the soil as they grow (see Glossary for more on the roles of nutrients in food and fiber production). Plants require other nutrients than nitrogen, phosphate, and potash, but in smaller amounts. Magnesium, calcium, and sulphur are also essential nutrients for plant growth and development. Sulphur, for example, is important to plants for protein formation. Nutrients that plants need in only small or trace amounts (called micronutrients) include boron, chlorine, copper, iron, manganese, molybdenum, cobalt, sodium, and zinc. Commercial fertilizers are applied by farmers to ensure sufficient nutrients for high yields.

Lime is also applied to some soils as a soil

conditioner, rather than as a nutrient. Lime reduces soil acidity (pH) so that crops can better utilize available nutrients and micronutrients.

From the settlement of the United States until the 19th century, increased food production came almost entirely from expanding the cropland base and mining the nutrients in the soil. However, the expanding demand for agricultural commodities required soil nutrient replacement to maintain or expand crop yields. First, manure and other farm refuse were applied to the soils. Later, applications of manure

were supplemented with fish, seaweed, peatmoss, leaves, straw, leached ashes, bonemeal, and Peruvian guano, materials that contained a higher percentage of nitrogen, phosphate, and potash than did manure (Wines, 1985). As manufacturing developed, production of chemical fertilizers like superphosphates and, later, urea and anhydrous ammonia (see Glossary) replaced most fertilizers produced from recycled wastes. Commercial fertilizers provided low-cost nutrients to help realize the yield potential of new crop varieties and hybrids (Ibach and Williams, 1971). Since 1960, yields per unit of land area for major crops have increased dramatically. For example, average corn yield has increased from 55 bushels per acre in 1960 to 139 bushels in 1994 and average wheat yield from 26 to 38 bushels per acre (fig. 3.1.1). If nutrients were not applied, today's crops would rapidly deplete the soil's store of nutrients and yields would plummet.

Nutrient Sources

Commercial fertilizer is by far the major source of applied plant nutrients in the United States, followed by animal manure. Treated or composted municipal and industrial wastes are applied as sources of plant nutrients in some areas, but little data are available and overall use is likely limited, although increasing. Specific aspects of these three sources of nutrients are described in the following sections.

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U.S. capacity to produce anhydrous ammonia and other nitrogen fertilizers increased since 1950 in response to rising demand. Capacity increased from 7.8 million tons in 1964 to 20 million tons in 1981, but has declined to about 17 million tons due to plant closures and lack of new plant construction (International Fertilizer Development Center, 1995). Plants built before 1960 were scattered around the country in areas of high market demand. However, plants built since then are located near natural gas regions of the Delta (Mississippi, Arkansas, and Louisiana) and the Southern Plains (Texas and Oklahoma).

The United States is a net importer of nitrogen. In 1995, the United States exported more than 3 million nutrient tons of nitrogen and imported over 5 million nutrient tons; however, imports are understated because anhydrous ammonia imports from the former Soviet Union are not reported by the Department of Commerce due to a disclosure claim. The major fertilizer import is anhydrous ammonia while the major export is diammonium phosphate, which contains nitrogen.

Nearly all phosphate fertilizer is produced by treating phosphate rock with sulfuric acid to produce phosphoric acid, which is further processed into various phosphatic fertilizer materials such as superphosphates and diammonium phosphates. The United States has become the world's largest phosphate fertilizer exporter. Approximately 3.3 tons of phosphate rock and about 2.8 tons of sulfuric acid are required to produce a ton of phosphate fertilizer. U.S. annual phosphoric acid capacity is over 14 million tons. Phosphate rock is obtained from mines mainly in Florida and North Carolina, with annual capacity estimated at 65 million tons.

Potash can be used as a fertilizer with less processing or refining than nitrogen or phosphate. Most potash deposits in the United States are located near Carlsbad, New Mexico. However, these deposits supply less than 10 percent of U.S. demand. Vast potash deposits in Saskatchewan and New Brunswick, Canada are cheaper to mine than the dwindling U.S. reserves because of the large size, uniformity, and high quality of the Canadian deposits, and the modern mining techniques used. The United States currently imports over 5 million tons of potash and over 95 percent of these imports come from Canada. U.S. and Canadian annual potash capacity is about 1.6 and 13.9 million tons, respectively.

Calcium, magnesium, and sulfur are often added to soils to correct plant conditions such as empty peanut shells due to the failure of fruit to develop, failure of new emerging corn leaves to unfold, yellowing between veins of older leaves, and pale yellow or light green leaves. Applying lime to bring soil pH into proper range for optimum plant growth usually supplies sufficient calcium. Primary sources of calcium are the liming materials and gypsum, which are considered soil amendments rather than fertilizers. The most common source of magnesium is dolomite limestone, which contains up to 12 percent magnesium (Fertilizer Institute, 1982). The main forms of sulfur in soil are inorganic sulfates and sulfur in organic matter. Atmospheric sulfur dioxide

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