ANNOUNCEMENTS
This thesis examines how government preferences over macroeconomic and environmental stability, along with farmer productivity, shape fertilizer pricing and usage. In agrarian economies, input subsidies help stabilize food prices, but often exacerbate nitrogen pollution from agriculture. Using bilateral models under complete and incomplete information, and a multiperiod bargaining framework, we analyze strategic interactions between the government and a farmer. In both information structures, greater concern for macroeconomic stability leads to lower fertilizer prices and higher usage, while stronger environmental preferences result in higher prices and reduced input use. In the bargaining model with complete information, bargain price rise in an ascending order in subsequent periods. These prices rise with macroeconomic sensitivity and farmer productivity, and fall with environmental sensitivity. Additionally, we also find that the prices in complete information setup without bargaining are lower than those with bargaining. Finally, using panel data for the top 14 fertilizer-consuming countries over 20 years, we assess empirically how imported quantities of anhydrous ammonia— a key fertilizer input—relate to nitrogen-based air pollution.
Keywords: Fertilizer, Macroeconomic Stability, Environmental Stability, Bargaining, Information JEL Classification: C78, Q18, D74, C63, H23.
