Optimal levels of fertilization under risk: the potential for corn and wheat fertilization under alternative price policies in Argentina
American Journal of Agricultural Economics 54(1): 1-10
Because economic return from fertilization is stochastic, a precise assessment of the risk in fertilizer investment is critical, especially in less-developed countries. Using maize and wheat fertilizer response data from the Argentine Pampa, production conditions under which use of fertilizer would be economical are determined. Government protection of an obsolete fertilizer industry, high fertilizer prices, and inadequate tax concessions for users retard development of modern fertilizer technology. Despite current prices, fertilization would be possible on a majority of Argentinian farms. Lack of use is attributed to the unavailability to farmers of technical and economic information. Social gains from alternative fertilizer price policies are calculated.