Production Response and Input Demand in Decision Making: Nitrogen Fertilizer and Wheat Growers

Abstract

The use of economic analysis to aid farm input investment decisions has been contentious because of observed flatness of economic response in the region of the optimum input. In this paper an application of a crop simulation model, to specify the production response, in conjunction with production economic theory has been used to develop fertiliser input demand functions. These have been combined with return on investment criteria in a graphical presentation for wheat growers in making nitrogen fertilization decisions at a particular location. The approach provides objective information to which growers can apply their own subjective preferences in making fertilizer input decisions.