Economic impact of reductions in exposure of agricultural crops to nitrogen- and sulphuroxides in the Netherlands

This paper measures the economic impact of reductions in the exposure of ag ricultural crops to mixtures of nitrogen oxides (NOx) and sulphurdioxide (S O2) in the Netherlands. This provides an indication of the benefits of poli cy measures directed to reducing nitrogen and sulphur emissions. A reductio n in air pollution raises crop yield and supply. The prices of some crops a re regulated by the EU. An increase in the supply of these crops affects fa rmer income through the effect on the quantity sold. The price of non-regul ated crops, however, decreases with a rise in supply. For these crops, farm er income is affected both by the effects on quantity and price. Consumer s urplus is positively affected by price decreases. A reduction in NOx and SO 2 of 20% and 60% respectively is estimated to increase producer income with 96 million guilders annually and consumer surplus with 90 million guilders . These increases sum to 1% of crop turnover and 6% of total income from cr op production.