The following policy instruments in the Table 2 could govern the better implementation of nitrogen emission reduction from fertilizer application practice. Use of chemical fertilizers in the Asian region has increased considerably in recent years. Application of fertilizers per unit area is the maximum in Korea followed by China and the minimum in Myanmar. During the past few years, total fertilizer use in Bangladesh has increased significantly. A further increase in fertilizer use needs to occur in those countries where more production has to be realized from the limited areas of land. The increasing trend of fertilizer use, particularly urea-N, still continues and it is 80 percent higher of other organic fertilizer. Because of N fertilizer found comparatively cheap for agricultural production. The scientist claim that use of urea per hectare per year is over the optimum.
For nitrogen fertilizer based emission control usually EU country and U.S. used tax on fertilizer but in Bangladesh, the country has a very sensitive to food security issue to handle by the government. Therefore most feasible way of fertilizer emission controlled through economic or market based instrument is abolishment of existing subsidy policy of fertilizer. These instruments at least ensure optimum allocation of fertilizer and reduce nitrogen release in technical point of view. In farmer’s point of view the subsidy withdrawal policy instruments helps to reduce nitrogen fertilizer use keeping the maximum attainable output by assumption of following mathematical formulation of two factor least cost combination.
Assume, Cob Douglas production function
Where Y= output, A= constant, H= labor F = fertilizer α=elasticity of production in response to labor β= elasticity of production in response to fertilizer.
Given the iso-cost line
C = wH+Pm
W= wage rate Pm
= market price
Therefore maximizing Y= A.Hα
Subject to C = wH+Pm
F by using Lagranzian as:
+ γ(C- wH-Pm
Now FOC (First Order Condition)
From equation 3 and 4 optimum level of labor ( H ) and fertilizer (F) found
H = (αPmF)/w
F = (βwH)/Pm
When we consider subsidy constraint function would be
C = wH + (Pm-S)F (5)
S= per unit of fertilizer subsidy.
Therefore with the subsidy, maximizing Y= AHα Fβ Subject to C = wH + (Pm-S) F
First order Condition (FOC)
Same as before.
From equation (3)
From equation (7)
From equation (8) and (9) optimum allocation of fertilizer could be found when it is subsidized derived as:
Therefore if we compare two case with subsidy and abolishment of subsidy
Optimum fertilizer allocation is
-S) (with subsidy)> (βw
H)/ Pm (withdrawal of subsidy)
The abolishment of subsidy is a significant policy instrument of nitrogen use control without hampering the threshold output.
Different study argued that willingness to pay for urea price is higher than the existing subsidized price if they get the supply timely. So there will be a possible risk of timely availability of urea at fair price because of world market price of fertilizer is volatile in nature. The agricultural support is always necessary for subsistence farming but not in the input subsidy form. The farer facing liquidity problem in production season, if the market price of fertilizer raises abnormally their inputs use will be sub optimal. That will hamper the production as a whole and aggravate the food security problem.
To overcome the problem compensation payment system will work as effective policy instruments. The government provides compensation payment for unanticipated price hike of inputs according to their area allocation to crop and balance amount of fertilizer they use. This is the payment over the government pre-declared administrative price to the existing market price.
The best fertilizer management practice is a labor-intensive technique, which required extra human resources and motivation about the side effect of agro-chemicals. For popularizing the technique of nitrogen emission reduction from agriculture there should be incentive and certification of environmental friendly practice [Table 3]. If they economizing the nitrogen use for crop growing his compensation payment will be high in this regard. For extensive user or wasteful user will disqualify for having compensation payment.
Some regulative measures will be helpful for system operation like identification nitrogen vulnerable area where incidence of sea or normal flooding is high. The urea application restriction in flooding season could be good administrative policy.
It is proved that urea application in Bangladesh is over optimal or some time it cross the technical efficiency limit. With the guild line of fertilizer balance dozes a regulation of ceiling per hectare per year urea application should be fixed according to agro-ecological zone.
Finally, all suggested instruments well work effectively and efficiently when a comprehensive extension service work whole over the nitrogen vulnerable zone. The continued research and extension funding will significantly reduce the nitrogen emission from agriculture.