Abstract: This paper studied the exterior cost of applying chemical fertilizer on the farmland in Dongting Lake area, one of the main foodstuff production regions in China, aimed to search for an optimal chemical fertilizer application rate accorded with local economic and ecological benefits. The exterior cost was estimated by the method of economic and environmental evaluation, while the optimal application rate was calculated based on Exterior Diseconomy Theory and by using production function model, with both ecological and farmers’ economic benefits considered. The results showed that in 2002, the exterior cost of inappropriately applying chemical fertilizer was about 1.35×10⁸ yuan, equivalent to 0.3 yuan·kg^-1 fertilizer N.Under current situation of test area, the optimal application rate of chemical fertilizer should be 208.26～210.65 kg·hm^-2, and the corresponding foodstuff supply would be 5528～5539 kg·hm^-2.However,the actual fertilizer application rate in 2002 exceeded the optimal one. A suggestion was made to impose tax for the environmental pollution of over-using chemical fertilizer.

Key words: Temperature effectiveness, Methanogen, Methanotroph