Economic Valuation of the Agricultural Impact on Nitrogen in the Water Environment by a Newly Proposed Replacement Cost Method

Abstract

Agriculture is multifunctional, and the value of each function should be expressed in a form that is easy for anyone to understand. One function, for example, is water purification, and recently much effort has been expended to quantify this function. The author proposed a new replacement cost method for the economic valuation of the nitrogen (N) removal function of paddy fields and of the N effusing function of upland fields, and then economically valuated cultivated lands Japan-wide. The N removal function of cultivated paddy fields and fallow paddy fields was valued at approximately 0.3 JPY m –2 d –1 and 0.6 JPY m –2 d –1 , respectively, when replaced by the sum of maintenance and depreciation costs of water quality improvement facilities. Upland fields have a negative economic value of approximately 0.08 JPY m –2 d –1 . However, paddy fields function effectively in N removal only when the irrigation water is strongly contaminated with N. Consequently, 85% of the area used for paddy fields does not function in N removal. The use of N-contaminated water from upland fields for paddy field irrigation throughout the year might be environmentally and economically effective with respect to the conservation of water quality in agricultural areas.