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Estimating the range of economic impacts on farms of nutrient leaching reduction policies


  • Carlo Fezzi
  • Dan Rigby
  • Ian J. Bateman
  • David Hadley
  • Paulette Posen


Declining agricultural incomes, increasing concern over rural poverty and sporadic crises such as those of Bovine Spongiform Encephalopathy (BSE) and Foot and Mouth Disease mean that the imposition of further costs on U.K. agriculture are likely to be politically and socially sensitive. Such additional costs are however on the agenda with the implementation of the Water Framework Directive (WFD; European Commission, 2000). The WFD aims to achieve "good ecological status" in EU water bodies reducing, "inter alia", diffuse pollution from agriculture. In this study, we assess four possible WFD measures proposed to the U.K. Department for Environment, Food, and Rural Affairs: reducing inorganic fertilizer application, conversion of arable land to ungrazed grassland, reducing livestock stocking rates, and reducing livestock dietary N and P intakes. For each measure, changes in farm gross margins (FGMs) are estimated using a dataset of over 2000 farms. In contrast to previous analyses, which have focussed upon mean responses on stylized farms, our approach allows the analysis of the range of impacts across a wide variety of real-world farms and farm types. Findings reveal high variability in impacts. Cost-effectiveness analysis indicates that, on average, cropping farms seem capable of reducing nutrient leaching in a more cost-efficient way than livestock or dairy enterprises. Copyright (c)2008 International Association of Agricultural Economists.

Suggested Citation

  • Carlo Fezzi & Dan Rigby & Ian J. Bateman & David Hadley & Paulette Posen, 2008. "Estimating the range of economic impacts on farms of nutrient leaching reduction policies," Agricultural Economics, International Association of Agricultural Economists, vol. 39(2), pages 197-205, September.
  • Handle: RePEc:bla:agecon:v:39:y:2008:i:2:p:197-205

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    References listed on IDEAS

    1. Vatn, Arild & Bakken, Lars & Bleken, Marina A. & Baadshaug, Ole Hans & Fykse, Haldor & Haugen, Lars E. & Lundekvam, Helge & Morken, John & Romstad, Eirik & Rorstad, Per Kristian & Skjelvag, Arne O. & , 2006. "A methodology for integrated economic and environmental analysis of pollution from agriculture," Agricultural Systems, Elsevier, vol. 88(2-3), pages 270-293, June.
    2. Bartolini, F. & Bazzani, G.M. & Gallerani, V. & Raggi, M. & Viaggi, D., 2007. "The impact of water and agriculture policy scenarios on irrigated farming systems in Italy: An analysis based on farm level multi-attribute linear programming models," Agricultural Systems, Elsevier, vol. 93(1-3), pages 90-114, March.
    3. Ian J. Bateman & Roy Brouwer & Helen Davies & Brett H. Day & Amelie Deflandre & Salvatore Di Falco & Stavros Georgiou & David Hadley & Michael Hutchins & Andrew P. Jones & David Kay & Graham Leeks & M, 2006. "Analysing the Agricultural Costs and Non-market Benefits of Implementing the Water Framework Directive," Journal of Agricultural Economics, Wiley Blackwell, vol. 57(2), pages 221-237, July.
    4. Rigby, Dan & Young, Trevor, 1996. "European Environmental Regulations to Reduce Water Pollution: An Analysis of Their Impact on UK Dairy Farms," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 23(1), pages 59-78.
    5. Parker, Doug, 2000. "Controlling agricultural nonpoint water pollution: costs of implementing the Maryland Water Quality Improvement Act of 1998," Agricultural Economics, Blackwell, vol. 24(1), pages 23-31, December.
    6. Dan Rigby, 1997. "European Community Guidelines To Reduce Water Pollution By Nitrates From Agriculture: An Analysis Of Their Impact On Uk Dairy Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1-3), pages 71-82.
    7. Parker, Doug, 2000. "Controlling agricultural nonpoint water pollution: costs of implementing the Maryland Water Quality Improvement Act of 1998," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 24(1), December.
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    Cited by:

    1. Happe, K. & Hutchings, N.J. & Dalgaard, T. & Kellerman, K., 2011. "Modelling the interactions between regional farming structure, nitrogen losses and environmental regulation," Agricultural Systems, Elsevier, vol. 104(3), pages 281-291, March.
    2. 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;International Farm Management Association, vol. 3(4), July.
    3. Carlo Fezzi & Ian Bateman & Tom Askew & Paul Munday & Unai Pascual & Antara Sen & Amii Harwood, 2014. "Valuing Provisioning Ecosystem Services in Agriculture: The Impact of Climate Change on Food Production in the United Kingdom," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(2), pages 197-214, February.
    4. Carlo Fezzi & Michael Hutchins & Dan Rigby & Ian J. Bateman & Paulette Posen & David Hadley, 2010. "Integrated assessment of water framework directive nitrate reduction measures," Agricultural Economics, International Association of Agricultural Economists, vol. 41(2), pages 123-134, March.
    5. Balana, Bedru Babulo & Vinten, Andy & Slee, Bill, 2011. "A review on cost-effectiveness analysis of agri-environmental measures related to the EU WFD: Key issues, methods, and applications," Ecological Economics, Elsevier, vol. 70(6), pages 1021-1031, April.
    6. Heidecke, Claudia & Kreins, Peter, 2010. "Agricultural costs for reducing nitrogen surpluses in the Weser river basin," 120th Seminar, September 2-4, 2010, Chania, Crete 109380, European Association of Agricultural Economists.
    7. Halkos, George, 2013. "Cost-effectiveness analysis in reducing nutrient loading in Baltic and Black Seas: A review," MPRA Paper 52296, University Library of Munich, Germany.
    8. Barns, Sandra A. & Willoughby, B.E. & Kaine, Geoff & Lourey, R. & Murdoch, H., 2009. "How can marketing theory be applied to policy design to deliver on sustainable agriculture in England?," 83rd Annual Conference, March 30-April 1, 2009, Dublin, Ireland 50934, Agricultural Economics Society.
    9. Fezzi, Carlo & Bateman, Ian J. & Day, Brett H. & Posen, Paulette & Rigby, Dan, 2008. "Analizing Water Framework Directive Impacts Using A Multinomial Logit Land Use Model," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6666, European Association of Agricultural Economists.

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