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Environmental Economics

ll be rationed as fertilizer. The farmers must buy special chicken food that will reduce phosphorous output and they will have to supplement phosphorous free fertilizer for the low cost poultry litter they usually use. Maryland is making the change less costly to the farmers through subsidies. The state government is making fertilizer 50% tax free, paying $3 an acre for fertilizer and assisting the farmers in finding buyers further inland for their poultry litter. The government is even paying farmers who switch from poultry litter to approved fertilizers 4,500 dollars per year for up to three years (Parker 5). The government has not found the optimal solution in reducing Pfiesteria in the Bay because the cost of the WQIA are very high to the government and the benefits to the Bay are smaller then the costs. Since Pfiesteria has only infested small parts of the Bay, and Phosphorous is not the only agent causing the problem, it seems that the government has not found equilibrium between costs and benefits through the WQIA. Reducing Phosphorus is important, but the subsidy money could be put to better uses. For example, there are plants that use phosphorus and reduce the amount in the soil. Supplying an abundance of these plants to farmers in the critical zones around the Bay area would be a low cost alternative to subsidizing farmers. Also enforcing the poultry litter mandate would be fairly difficult and expensive. There are better solutions for the amount of money the government is spending to reduce phosphorous levels. The importance of the fishery industry in the Chesapeake Bay is obvious because the government is willing to spend huge amounts of money in order to clean it up. The most plausible solution to the problem is a sharing of cost between inland and water dependent firms. The costs to inland industry and agriculture are minimized by the governments willingness to subsidize. The benefits to the Chesapeake Bay e...

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