Alternative Policies to Control Nitrogen Runoff and Its Impact on Water
Resources Supply: The Case of Tai Lake Valley, China

Weiwen Zhang1*, Minjun Shi2 and Zuhui Huang3
1

College of Environmental and Natural Resource Sciences, Zhejaing University, China
23

Institute of Agriculture and Forestry, University of Tsukuba, JapanThe Center for Agricultural and Rural Development (CARD), Zhejaing University,China

Corresponding Author:
Weiwen Zhang
College of Environmental and Natural Resource Sciences
Zhejiang University, China
268 Kaixuan Road
Hangzhou 310029, P.R.China
E-mail: wwzh@zju.edu.cn
Phone: 86-571-86971987
Fax: 86-571-86971277

Abstract
The nitrogen (N) is a primary source of impairment to fresh water bodies. A linear
programming (LP) model was developed in this paper to test the effectiveness of four
nitrogen runoff control policies. The results indicate that all of the alternative policies
take effect on reducing nitrogen runoff, but the input taxes is relatively effective andfeasible if considering the transaction cost.
Keywords: NPS pollution, nitrogen fertilizer, subsidy, water quality1

Alternative Policies to Control Nitrogen Runoff and Its Impact on Water
Resources Supply: The Case of Tai Lake Valley, ChinaIntroduction
Water quality is a major environmental issue. Agricultural practices are considered thelargest contributor of surface water quality degradation in terms of sediment, runoff ofnutrients (such as nitrate and phosphorus), and leaching of chemicals (Crutchfield et al.,1995). Among the list of environmental damages, the nitrogen (N) is reported to be theprimary source of impairment to fresh water bodies (USEPA, 1998). N in the form of
NO3 is easily soluble and is transported in runoff. Excessive nitrates (NO3-) in drinking
water have been linked to methemoglobinemia disease (blue baby) in animals andinfants (Bower). At high levels, nitrogen in water can be toxic to humans and animals,
and nitrogen in ammonia can kill or injure fish (Miranowski, 1983).
As technologies to control nitrogen are beginning to take shape, there is a growing
need for economic analysis that can guide the selection and design of policy instruments(Richard D. et al., 2000). The nitrate runoff reduction policies can be designed to induce
farmers to change their production practices in ways that improve the environmental
and related economic consequences of production. Therefore, it is important tounderstand how economic incentives and other farm-level mechanisms to offset
pollution are likely to influence farmer behavior. An evaluation of the farm-level
consequences of such policies can provide insight into the effectiveness of thesepolicies and suggest whether the social goal of a sustainable food supply that meetsenvironmental demands in rural areas is attainable (Taylor et al, 1992).
The main goal of this paper is to assess farm-level responses to policies designed2

to control nitrogen effluent from farmland, with particular application to the Tai Lake
Valley of China. A linear programming (LP) model was developed to simulate four
alternative policies under the objective of farmer net income (NI) maximization.
The NPS pollution in Tai Lake Valley
Tai Lake valley is located in southeast China. It covers 36900 km2, which includes
Southern Jiangsu province, Jiaxing city, Huzhou city, part of Hangzhou city of Zhejiang
province and dominant part of Shanghai. As a typical area of South Yangzi River, Tai
Lake valley is densely dotted with drainage ditches that form a waterway network. With
the point source pollution generated by industry being gradually well controlled, thenon-point source (NPS) pollution has become the dominant pollution source in Tai Lakevalley, a developed economic region in China (Chen, et al., 2004). NPS pollution has
been identified as the major pollution of water resources environment. It was reported
that the water quality of Tai Lake valley descended one grade, from grade II to III,during the period of early 1980s and late 1990s. Meanwhile, accelerated eutrophicationof water ascended two grades, which resulted in the fact that the water quality in Tai
Lake valley was mainly in the eutrophic environment. The nitrogen (N) transport
increased from 2.80×104 t in 1990 to 7.96×104 t in 2000, from 2000 t to 5660 t forphosphorus (P), and from 5.00×104 t to 2.82×105 t for COD transport. It was statisticed
that N and P concentration generated from agricultural NPS pollution accounted for
55.1% and 27.8% of the total pollution burden, respectively. 25.1% and 60%,
respectively, for that generated from living wastewater. Whereas, N and P produced byindustry wastewater contributed 15.8% and 10.4% burden, respectively (CEPB,2000,2001). Owing to the energetical and effective control for point source pollution
induced by industry in Tai Lake valley during recent years, the NPS pollution has been

3becoming a dominant and threatening pollution source. The water quality of Tai Lake
valley has experienced a historical period. It was still good in 1960s and 1970s.
However, with the rapid economic development in Tai Lake valley, significant quantityof wastewater transported in rivers and lakes without any disposal, consequently, waterpollution spread from city to country, branch to river way, river to lake, and surface
water to subsurface flow in the past 30 years, eventually had affected the water source
quality and people’s health.
The water supplying in Tai Lake valley is mainly for living survival, agriculture
and industry. The total water consume, which is supplied by water repeating using andthe Yangzi River supply, is more than the total water resources in local region. In 1997,
the level of modernization of city in Tai Lake valley was 49%, much higher than 30%,
average level in China. It is estimated that it would achieve over 60% in 2010 andexceed 70% in 2020. Such rapid step of modernization of cities and towns in Tai Lake
valley will bring forward more and more water resources requirements, not only inquantity but also in quality. Whereas, the fact is that the water quality has been
gradually descending. Consequently, how to solve this conflict is among the mostimportant and difficult problems facing water quality managers today.
The main agricultural NPS pollution sources in Tai Lake valley are domestic
animals manure, fertilizer, domestic living pollution, runoff and pesticide, etc, which
has become the key factors constraining the sustainable development of the agriculture
and environment in this region. In order to settle this problem, series of methods has
been put forward. Among which the most prominent were conservation buffer strips
including buffer wetlands, buffer forest strips and buffer grass strips (Ni, et al., 2002).
These techniques could prevent NPS pollution and protect the agro-environment, in the4other hand, contribute to agricultural landscaping. Moreover, a series of techniques tocontrol NPS pollution such as optimal fertilization technique, pesticide application
design, agricultural waste disposal and integrative utilization, control of water and soil
runoff. These techniques were integrated and tested in Xindai County, a typical area in
Tai Lake valley, and showed satisfied results.
Although the technologies to control agricultural NPS pollution have taken shapein the testing area, they haven’t been applied in practice by most of the farmer. In otherwords, farmers have no incentive to adopt the new technologies or to reduce thepollution. Thus, the agricultural NPS pollution in Tai Lake valley is still very serious.
There is little literature in China to guide the design of agricultural NPS pollution
control policies. The economic analysis of farmer activities involving NPS pollution islacking too.
Methodology
A linear programming (LP) model was developed here to quantify the economic andenvironmental quality impacts from differential restrictions. The LP model was appliedin Xindai Town, Pinghu County, Zhejiang province, south edge of Tai Lake Valley(Fig.1). Pinghu County was the main commercial-grain-base of Zhejiang province with
71.2% of its total land is arable land. Xindai Town ranks in the hignest category ofchemical oxygen demand (CODcr), total phosphorus levels (TP) and total nitrogenlevels (TN) around the county, which are shown in table 1.
After elaborate investigation, the 13rd Group in Tongxin village was selected forthe study case in this study. The basic data of 13rd Group are in table 2. Rice (Oryzasativa) is a dominant crop in this area. The other main crops include wheat, rape andbean. The dominant cultivation patterns are paddy-wheat rotation and paddy-rape5

rotation. NH4HCO3, (NH)2CO, KCl and Ca(H2PO4)2.H2O are mainly applied infarmland. As to the livestock in this group, the dominating livestock are sows andpiglets. The sows live on wheat and part of paddy, however, the feedstuff bought forpiglets.
Five policy scenarios are designed. These include: (1) a tax on nitrogen fertilizer,
implemented as a tax equal to 50% of the cost of nitrogen; (2) a ban of spring fertilizer
applications to reduce summer runoff; (3) a requirement for use of CA fertilizer, a kindof new fertilizer; and (4) per unit land subsidy for using manure, implemented by land
rent free or paying 100 to 200 RMB subsidy per mu (667m2).
Results
Table 2 provides a summary of results for the base run or current situation (unrestrictedscenario). The solutions generated represent the most profitable crop and livestock
mixes given the resources, soils, and production constraints. Paddies was planted as
hobby main-food and feed feeding piglets mainly but a kind of commodity. Although
the study region was the main commercial-grain-base of Zhejiang province, mostfarmers haven’t sell grains since the grain marketlization reform began in 2001. Rape isthe only crop for selling because farmer can’t consume rapeseed directly. The otherreason for planting rape is that farmers have no more choices in spring period. Local
farmers also plant other crops such as barely, potato and all kinds of vegetables, which
aren’t considered in the model because the quantity is very small. For example, only one
family plants barely in 2003, with total 0.08ha.
With the price of pork going up, it arouses the enthusiasm of farmers at large to sell
piglets, which can bring considerable revenue for them. That’s why averagely every
family has a sow ( to procreate piglet). But compared to off-farm benefit, farm benefit is6

still low. Therefore, more than 50% of the labor forces are full-time worker at factory
initiated by village or town; 26% of the labor forces are part-time worker who work outof farmland during the non-farming period; and only less than 20% of the labor force
are full-time farmer, most of them are old-women. Both the activities of farming andfeeding result in nitrogen runoff, which includes organic nitrogen (from fertilizer) andinorganic nitrogen (from brute manure).
Four specific control policy scenarios are tested; and the results of farmer’s net
income and nitrogen runoff are summarized in figure 2. Apparently, input taxes of 50%of the price of nitrogen fertilizer (S1) reduce nitrogen applications; meanwhile thefarmers’ net income has a little bit increase. Compared with the S1, a ban of spring
fertilizer applications to reduce summer runoff (S2) is more effective to control thenitrogen runoff; however farmers’ net income goes down rapidly at the same time. Theeffect of S3 (a requirement for use of CA fertilizer) is close to but not as good as S1. If
local government compensates 150RMB per mu (equal to 667m2) cultivated land to
those farmers who use sow and piglet manure to fertilize soil, the computer-run result isjust as figure 2 showed. It seems that S4 is the most effective policy both in abating
pollution and increasing farmers’ net income. But except for S1, all the other three
N-runoff control measures have highly monitoring difficulty and implementation costs.
Since inclusion of transaction costs in policy evaluation is very important, input taxes isa relatively effective and feasible policy as a whole.
Conclusions
This research tested the effectiveness of agricultural NPS pollution control policies
based on the LP model in developed rural area in China. The analyses above indicatethat all of the scenarios designed here take effect on reducing nitrogen runoff, but the7scenario of input taxes is relatively effective and feasible if considering the transaction
cost. This conclusion is also applicable in the other types of NPS pollution control. An
obvious characteristic of the study area is that the commercial rate of agricultural
products are very low, and 85.3% of farmers’ income from non-agriculture. In order toexamine further the effectiveness of the NPS pollution control policy, a highcommercial rate case is needed to compare with this study case.

References:Chen, H. and Hua Y. 2004. “Control and Prevention of Nonpoint Source Pollution in Tai
Lake Valley”. Water Resources Protection. 1: 33-36.
ChineseEnvironmental
http://www.zhb.gov.cn/.

Protection

Bureau(CEPB).

2000,2001.

InCrutchfield, S.R., P.M. Feather, and D.R. Hellerstein. 1995. The Benefits of Protecting
Rural Water Quality: An Empirical Analysis. AER-701, U.S. Dept. Agr., Econ.Res.
Serv., January.
Miranowski, J. A. 1983."Agricultural Impacts on Environmental Quality." In Water
Resources Research: Problems and Potentials for Agriculture and Rural Communities,eds., T. L. Napier et al. Ankeny IA: Soil Conservation Society of America.
Ni, J., Fu T. and Lu Y. et al. 2002. Study on pollution control of agricultural nonpoint
source by means of buffer strips. Environmental Pollution and Prevention. 24(4):229-231.
Qian, X. and J. Xu. 2002. "Comprehensive Survey and Evaluation of Agricultural
Nonpoint Source Pollution in Hang-Jia-Hu Waternet Plain." Journal of Zhejaing
university (Agri. & Life, China). 28(2): 147-150.
Horan, R.D., R. Claassen and J. Cooper. 2000. “Environmental Risk andAgri-environmental Policy Design”. Selected paper, AAEA Meetings.
Taylor, M. L. 1992. "Farm-Level Response to Agricultural Effluent Control Strategies:
The Case of the Willamette Valley." Journal of Agricultural and Resource Economics,17(1): 173-185.
U.S. Environmental Protection Agency, Office of Ground Water and Drinking Water.
1998. Wellhead Program and State Ground Water Protection Programs (CSGWPP).
http://www.epa.gov/OGWDW/csgwell.htm.

8

Figure 1.

Location of the study areaNI

N- r unof f700. 0618000. 0600. 0614000. 0612000. 0500. 0610000. 0

400. 0608000. 0606000. 0300. 0604000. 0

200. 0602000. 0

100. 0600000. 0598000. 00. 0S0Figure 2.

S1

S2
Scenar i os

S3

Location of the study area

9S4

N-runoff (kg/year)

Net Income(yuan/year)

616000. 0Table 1

Various Sorts of Pollution Sources in Tongxin Village in 2000
Pollution Capacity (kg)Contribution
Rate(%)

CODcr

TNTP

Total

Equal-standard
Drainage Capacity (m3)Brute Manure

1876.61683.89191.472751.97

2.72

20.22

Domestic Pollution

6032.72

603.27150.826786.81

2.51

18.66

Human Manure

2045.34

316.1

54.13

2415.57

0.99

7.36

Village Runoff

875.86

59.37

17.09

952.320.29

2.16

Paddy Field Runoff

9002.57

1281.52207.1510491.24

3.95

29.37

Upland Runoff

1598.51137.5523.36

1759.42

0.48

3.57

Paddy Field Leakage

5441.641064.72

66.82

6573.18

2.10

15.61

Food-supplied Fishpond

1132.4153.5216.72

1302.64

0.40

2.97

Total

28005.65

4299.94

727.5633033.15

13.45

100

1.87

4.30

7.28

13.45

Pollution Sources

Equal-standard Drainage Capacity
Source: Qian and Xu, 2002

10

Table 2

Results of Base Run Solution

Categories

Variable

Unit

Base Run

Production

Paddy

mu

89.7

Wheat

mu

56.5

Rape

mu

56.5

Bean

mu

9.9

Sow

head

26.6

Piglet

head

612.3

Paddy

kg

0.0

Rapekg7824.3

Soy-beankg

0.0

Piglet

head

612.3

Ricekg28350.0

Soybeankg

560.0

Urea

kg

3203.0

Ammonium bicarbonate

kg4925.8superphosphate

kg3954.8

Potassium Chloride

kg

672.6

Pesticideyuan3608.0Paddy Feedkg

16559.5

Wheat Feedkg

8333.0Manurekg

56294.3

Paddy field

mu

89.7

Uplandmu

3.8

Farm labor

person13.0

Off-farm labor yearly

person40.0

Off-farm labor monthly
Nitrogen Runoff

personkg/year

19.0
591.5

Livestock
Sell

Self-consumption

Purchase

Self-supply

Land supply
Labor supply

NPS pollution
Note: mu=667m2

11