WEST LAFAYETTE, Ind. — Reducing the application of nitrogen fertilizer to Midwestern cornfields can both increase the profitability of farms and improve environmental health, according to a new study led by Purdue University researchers.
Making this possible is a novel, patented nitrogen insurance tool designed to solve the environmental problem of nitrate leaching, said German Mandrini, a scientist in the laboratory of Ignacio Ciampitti, professor of agronomy and co-director of the Institute for Digital and Advanced Agricultural Systems. Ciampitti, Mandrini and their co-authors have published their findings in Nature Communications Earth and Environment.
“With current low crop prices, farmers are very interested in reducing input costs,” Ciampitti said. “This insurance tool allows them to manage the financial risk of reducing nitrogen rates, providing a safety net against the uncertainty of seasonal conditions. In the end, it improves their margins when they need it most.”
The multidisciplinary team of 12 co-authors includes agricultural economists, crop scientists, and specialists in water quality and the environment. Their solution to nitrogen overapplication addresses both the environmental and economic aspects of the issue. Other approaches to the problem, Mandrini noted, tend to focus on only one side of the problem.
Choosing the right nitrogen rate for a field is a complex challenge because it depends on unpredictable weather, crop and soil conditions, Mandrini said. Studies have shown that in the Midwest, a proportion of farmers apply extra nitrogen fertilizer to their corn fields. Some farmers apply more than the recommended rate because they fear that not doing so will put their operations at economic risk.
Other farmers suspect that the recommendations are too low for the prevailing conditions of their acreage. Because local variations can indeed render recommendations insufficient in certain years, the proposed program is designed to protect both groups. “That would be where the insurance kicks in. The insurance will cover those farmers,” Ciampitti said.
The new study explores what could happen if farmers applied the recommended nitrogen rates to their fields. Then if their crops earned them less than usual, the insurance would repay them. The researchers analyzed the economics of such a system, using a database covering more than 4,000 cornfields, incorporating 30 years of weather data and almost three dozen fertilizer application rates.
As proposed, the nitrogen insurance program works best for farmers who apply at least 36 pounds per acre above the science-based recommendations. On average, farmers will save 52 pounds per acre of nitrogen.
“We set it up so that the farmer never loses money,” Mandrini noted. “We consider the premium paid when calculating the payout, making sure that the nitrogen savings and the payouts are always higher than the premium. When we talk about this with farmers, they get it. They are very interested.”
Weather and other factors could impact the insurance payouts. As with car insurance, there is no payout if there is no accident. “We know there are accidents. That’s why we have car insurance. This is the same. In some years or in some fields, the prescribed recommendation is not the best. The nitrogen insurance will protect from that risk,” Mandrini said.
The concept has already generated interest from a variety of organizations, Ciampitti noted. The profitability aspect appeals to farmers associations. The nitrogen insurance is a market-based solution that improves environmental outcomes and increases farmers’ profits at the same time.
Previously attempted initiatives needed funding from external sources to support the payments. The new research, by contrast, has identified a way to set up such a program that avoids subsidies or continuous government support. “This is a self-funded mechanism,” Mandrini said.
The nitrogen insurance program can solve inefficiencies in farming, Ciampitti noted. By providing farmers with an incentive to apply nitrogen at the optimum rate, the program creates a “win-win” scenario where the savings are large enough to benefit everyone.
“We are essentially creating new value out of improved nutrient efficiency,” Ciampitti said. “It’s a way to grow the agricultural economy while promoting long-term resiliency of our systems. That is what makes this product so promising.”
The researchers have disclosed their innovation to the Purdue Innovates Office of Technology Commercialization, which applied for a patent from the U.S. Patent and Trademark Office to protect the intellectual property.
By: Steve Koppes, Purdue University
