Methods for Policy Analysis of Fertilizer Production, Import and Utilization in Economic Integration Situation

Abstract

Fertilizer is an important input for crop production, especially for rice. The farmer's decision on volume of fertilizer utilization depend on many factors such as price of fertilizers, time of delivery to the farm, price of products. The farmers will use more fertilizer when value of marginal product of each input not less than price of that input. The country will produce fertilizer when having comparative advantage in producing that input, otherwise import from abroad to save the domestic resources for other production activities. Since Vietnam is an agricultural production country, then fertilizer policy plays an important role in regulating social welfare among farmers, fertilizer producers as well as fertilizer importers and distributors. Using buffer stock model, the government can effectively adjust the actual fertilizer price into designed level of price