My last post introduced the problem of hypoxia in the Gulf of Mexico, and I promised to start trying to answer that question. Today I’ll shed some light on some subsidies and federal policies that could be altered and bolstered in the right ways to stop nutrient-rich runoff from reaching the Mississippi River. I’m going to point out right away that although the most obvious way of preventing hypoxia is by reducing fertilizer use, this is also the most difficult and expensive tactic to implement. My goal is to start laying out elements of a more cost effective, pragmatic plan for ameliorating hypoxia in the Gulf of Mexico.

The agricultural subsidies that I discuss here are measures that can be implemented through various policy tools (e.g. direct payments, technical assistance, tax incentives) to reduce costs for producers and attempt to benefit the economy in doing so. One positive form of subsidy, known as a cross-compliance program, discourages creation of farmland from current wetlands or land that is highly erodible. Continue reading →