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The Northern Gulf of Mexico’s hypox-ic zone represents one of the WesternHemisphere’s largest areas of oxygen defi-cient waters, where lack of oxygen killsfish, crabs, and other marine life. The sizeof the zone varies but at its peak, itstretches along the inner continental shelffrom the mouth of the Mississippi Riverwestward to the upper Texas coast, cover-ing about 7,000 square miles, an area aslarge as New Jersey. Long-term conse-quences to biodiversity, species abun-dance, and biomass in the Gulf are not yetknown, but experience with other coastaldead zones has shown significant ecologi-cal deterioration and depleted fisheries.

Scientists believe that Gulf hypoxia iscaused by nitrogen loads from theMississippi River. Nitrogen fuels the rapidgrowth of large populations of algae andplankton. When they die and sink to thebottom, their decay robs the water of oxygen.

Because two-thirds of the nitrogen inthe Mississippi River comes from use offertilizer and manure on agriculturallands, reducing agricultural nitrogen is amajor component of the strategy for con-trolling the hypoxic zone. Two basic

approaches can betaken: (1) inducechanges in the appli-cation and manage-ment of nitrogen fer-tilizer on farm fields,or (2) restore wet-lands along riversand streams to inter-cept and filter outthe nitrogen beforeit reaches surfacewaters. Because thegeographic scale ofthe problem is so large, any policy toreduce nitrogen from agriculture willaffect commodity prices, and consequent-ly farmers and consumers both inside andoutside the basin.

An ERS analysis of the two approach-es found farm-based controls on nitrogenfertilizer use to be more cost-effectivethan restoring wetlands when up to 1.2million metric tons (26 percent) of basin-wide nitrogen losses (nitrogen leaving theland and entering the water system) mustbe eliminated. Until that point, crop yieldsare little affected by the controls on nitro-gen use. But when nitrogen losses must be

cut by more than 1.2 mil-lion metric tons, a turn-around occurs and wet-land restoration becomesthe more cost-effectivestrategy. The reason forthe turnaround is thatwhen reduction in nitro-gen use reaches a certainpoint, crop yields declinesignificantly, causing sub-sequent increases in pricesof some agricultural prod-

ucts. The price increases also result inmore intense production of the commodi-ties outside the Mississippi Basin, increas-ing erosion and nutrient runoff in thoseregions. However, these calculations don’tinclude (because of insufficient data)other environmental benefits of wetlandsnot related to nitrogen reduction, such asincreased habitat for wildlife. Inclusion ofthese benefits would cause the wetlandoption to become the more cost-effectiveapproach at a lower level of nitrogen

reduction.

Marc Ribaudo, mribaudo@ers.usda.gov

This finding is drawn from . . .“Least-cost Management of Nonpoint SourcePollution: Source Reduction VersusInterception Strategies for ControllingNitrogen Loss in the Mississippi Basin,” byMarc O. Ribaudo, Ralph E. Heimlich, RogerClaassen, and Mark Peters, in EcologicalEconomics, May 2001.Abstract available at:www.ers.usda.gov/publications/erselsewhere/eejs0207/

The Questions and Answers page of the ERSBriefing Room on Conservation andEnvironmental Policy, www.ers.usda.gov/briefing/conservationandenvironment/questions/consenvcoast1.htm

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Controls on nitrogen fertilizer use are more cost- effective than wetland restoration up to 1.2 million tons of nitrogen loss reduction

0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8

Reduction in nitrogen loss within the Mississippi Basin (million tons)

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Originally published Vol. 1, Issue 5 (November 2003)

Hypoxia in the Gulf:Addressing Agriculture’sContribution

AGRICULTURE AND THE ENVIRONMENT: EMERGING ISSUESJ

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