Recently, in Wisconsin, public furor arose from a recent Wall Street Journal article entitled “Farms, More Productive than Ever, are Poisoning our Drinking Water” (a copy of which is attached). As a result, the Department of Environment Safety (DES) of the State of Wisconsin (on admittedly short notice which is reflected in the structure of the) proposed a new regulation implementing an escalating ban on the use of selected chemical fertilizers and manure by Wisconsin farmers. While the DES came under intense pressure to “do something very quickly,” the purpose of the ban is to protect the ground water for rural Wisconsin residents (most of whom use well water for drinking) from excessive nitrates and other contaminants/pollutants caused by farmers use of fertilizers. Under the proposed regulation, effective June 1, 2019, farmers would be required to report to the DES the average amounts/levels of chemical fertilizers and approximate pounds of manure used as a fertilizer over the previous calendar year. To ensure that farmers were accurately reporting their fertilizer usage(s), the DES would audit their filed reports. Effective within sixty (60) days of the audit, the DES would certify the current amount of natural and chemical fertilizers used by each farmer. Once certified, farmers would be required to reduce their usage of both natural and chemical fertilizers by twenty-five (25%) by the end of 2020 and then another twenty-five (25%) percent by the end of 2021. At the end of 2021, the DES would then establish a maximum usage of certain natural and chemical fertilizers per acre of farmland generally applicable to all Wisconsin farmers thus implementing a uniform standard. (The DES has stated that it needs at least 18 months to study and determine the impact of the fertilizers on drinking water sources and then establish uniform standards of allowance.)
You are the Economics and Government Affairs editor of the Wisconsin State Journal published in Madison, Wisconsin. This has become a very “hot topic” in Wisconsin pitting environmentalists (and many rural residents) against the state farming community and its allies. The Journal’s Managing Editor has asked you to write a short commentary essay for the Journal’s readers regarding the “economics” of the DES’s proposed regulation. The Editor wants you to state your position on whether or not the proposal makes “economic” sense. She also wants you to discuss why this is an issue for the DES and its cause(s). Then you are to present the alternative solutions (both market and non-market) that are available to the DES in seeking to address the issue. You should then tell the readers the “bucket” in which the proposed regulation falls. (Your conclusion as to the regulation’s economic efficacy is tied to whether (or not) you think that the DES has selected the “right regulatory lever or should have selected one at all.”) You should assume the facts in the article are generally true and that the use of fertilizers by Wisconsin farmers has contaminated ground water sources.