Economics of Crop Residue Management

Abstract

More than five billion metric tons of agricultural residues are produced annually worldwide. Despite having multiple uses and significant potential to augment crop and livestock production, a large share of crop residues is burned, especially in Asian countries. This unsustainable practice causes tremendous air pollution and health hazards while restricting soil nutrient recycling. In this review, we examine the economic rationale for unsustainable residue management. The sustainability of residue utilization is determined by several economic factors, such as local demand for and quantity of residue production, development and dissemination of technologies to absorb excess residue, and market and policy instruments to internalize the social costs of residue burning. The intervention strategy to ensure sustainable residue management depends on public awareness of the private and societal costs of open residue burning.