We study from economic and environmental angles under what conditions no-till technology is socially optimal. We demonstrate theoretically that if yield under no-till is equal to or greater than under conventional technology, its adoption is socially optimal provided that herbicide runoff damages under both technologies are close enough. Finnish data shows, however, that only in one case out of three no-till provides higher social returns. In terms of nutrient runoffs no-till performs better than conventional technology. No-till reduces surface runoffs of nitrogen by 58%, and surface runoffs of particulate phosphorus by 70% relative to conventional technology, but causes more than three times higher dissolved phosphorus surface runoffs. The amount of total phosphorus surface runoff is, however, lower under no-till. No-till produces higher total herbicide runoff because of higher use of herbicides to control perennial weeds.


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