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Controlling Agricultural Emissions of Nitrates: Regulations versus Taxes

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  • Lally, Breda
  • Riordan, Brendan
  • van Rensburg, Tom M.

Abstract

Two policy instruments, input taxes and regulations, can be used to deal with nitrate pollution. However, in practice command and control (CAC) measures such as input regulations and management practices, as outlined in Action Programmes under the EU Nitrates Directive, rather than economic instruments, are commonly used to deal with nitrate pollution from agricultural sources. Action Programmes are to meant to ensure that the applications of nitrogen to farmland are within limits calculated to avoid a level of nitrate emissions to water supplies that would put them above the concentration limit of 50mg/litre specified in the Directive. The premise of the Action Programmes is that farmers should take all reasonable steps to prevent or minimise the application to land of fertilisers in excess of crop requirements. To this end the Irish Action Programme specifies that the amount of livestock manure applied in any year to land on a holding, together with that deposited to land by livestock, cannot exceed an amount containing 170 kg nitrogen per hectare (ha) and also sets limits on the application of inorganic (manufactured) nitrogen. However, the objective of the Nitrates Directive, at least in terms of organic and inorganic nitrogen application rates, could theoretically be achieved by imposing a tax on nitrogen inputs. This paper tests the hypotheses that the objectives of the Nitrates Directive, in terms of organic and inorganic N application rates, would be more effectively and more equitably achieved by regulation, than by a tax. The results of the analysis indicate that this is the case.

Suggested Citation

  • Lally, Breda & Riordan, Brendan & van Rensburg, Tom M., 2007. "Controlling Agricultural Emissions of Nitrates: Regulations versus Taxes," 81st Annual Conference, April 2-4, 2007, Reading University, UK 7981, Agricultural Economics Society.
  • Handle: RePEc:ags:aes007:7981
    DOI: 10.22004/ag.econ.7981
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    References listed on IDEAS

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    1. Rüdiger Parsche & Doina Maria Radulescu, 2004. "Taxing Means of Agricultural Production in Germany: A Relatively High Tax Burden Compared to Other Important EU Competitors," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 2(2), pages 48-54, 07.
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    6. Berentsen, P. B. M. & Giesen, G. W. J., 1995. "An environmental-economic model at farm level to analyse institutional and technical change in dairy farming," Agricultural Systems, Elsevier, vol. 49(2), pages 153-175.
    7. Rüdiger Parsche & Doina Radulescu & Doina Maria Radulescu, 2004. "Taxing Means of Agricultural Production in Germany: A RelativelyHigh Tax Burden Compared to Other Important EU Competitors," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 2(02), pages 48-54, July.
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    1. Chyzheuskaya, Aksana & O'Donoghue, Cathal & O'Neill, Stephen, 2014. "Using a farm micro-simulation model to evaluate the impact of the nitrogen reduct," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 3(4), pages 1-11.
    2. Lally, Breda & van Rensburg, Tom M., 2014. "Reducing nitrogen applications on Irish dairy farms: effectiveness and efficiency of different strategies," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 4(1), October.
    3. Jelić, Ozana Nadoveza, 2020. "Implications of Initial Assumptions in Agri-Environmental Nitrogen Pollution Reduction Policy Design: Quasi-Empirical Evidence from Croatia," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 69(4), December.
    4. Doole, Graeme J. & Romera, Alvaro J., 2014. "Cost-effective regulation of nonpoint emissions from pastoral agriculture: a stochastic analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(3), July.
    5. Buckley, Cathal & Wall, David P. & Moran, Brian & O'Neill, Stephen & Murphy, Paul N.C., 2016. "Phosphorus management on Irish dairy farms post controls introduced under the EU Nitrates Directive," Agricultural Systems, Elsevier, vol. 142(C), pages 1-8.
    6. Daigneault, Adam & Greenhalgh, Suzie & Samarasinghe, Oshadhi, 2017. "Equitably slicing the pie: Water policy and allocation," Ecological Economics, Elsevier, vol. 131(C), pages 449-459.

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    Keywords

    Agricultural and Food Policy; Environmental Economics and Policy;

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