Chemical Fertilizer Imports and the Environment: Evidence-based Approach for a Green Economy Accounting for the Tradeoff

Abstract

The direct and indirect impact of high-input use agriculture- popularised by the Green Revolution- on the environment is the major thrust of this perspective. The paper discusses an integrated approach to minimise the negative impacts, accounting for the proposed ban of synthetic fertilizers and the tradeoff between the environment and productivity resulting from such a ban. Noteworthy stylised facts of the discussion are threefold. First, the Green Revolution reduced the growth of extensive expansion of agricultural lands via intensification, which subdued the pressure on forest cover. Additionally, productivity increase releases marginal lands for vital ecological services such as pollinator habitats. Second, synthetic fertilizer resulted in higher productivity in the agriculture sector, increasing the GDP and facilitating structural transformation. Given that a quarter of the workforce is in the agriculture sector, gradual movement of the labor force to the industrial sector is vital, while the agriculture sector workforce become self-reliant in facing environmental and climatic events. Thus, continuous investment in agricultural productivity growth should be a priority to create fiscal space for the investments in meaningful green initiatives and reduce the vulnerability of the rural poor. Third, evidence-based solutions such as site-specific fertilizer recommendations, soil testing, and discouraging overuse of nitrogenous fertilizer through tariffs should be practised to mitigate the adverse environmental impact of synthetic fertilizer, especially nitrogen fertilizer. Complete removal of the subsidy may generate overreaching welfare and environmental ramifications, although it is widely suggested.