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On-farm compliance costs with the EU-Nitrates Directive: A modelling approach for specialized livestock production in northwest Germany

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  • Kuhn, Till
  • Schäfer, David
  • Holm-Müller, Karin
  • Britz, Wolfgang

Abstract

In the EU, several environmental regulations aim at protecting the environment from agricultural nitrogen and phosphorus losses. The German regulation on farmers' nutrient management, especially implementing the EU Nitrates Directive, was revised in 2017. It comprises considerable tightening of numerous measures and costs for farmers to comply with. We provide the first systematic farm-level analysis of compliance costs of the recent revision in a case study for the federal state of North Rhine-Westphalia. To do so, we apply a bio-economic optimisation model at farm level to a representative sample of specialized dairy and pig farms. The sample is derived by Latin Hypercube sampling based on the observed distribution of farm characteristics from official agricultural statistics. Modelling results are evaluated by grouping of farms and a statistical meta-model. Results show highly heterogeneous compliance costs reaching from 0 to 2.66 Euro per pig and 0 to 0.83 cent per kg milk. 47.3% of pig and 38.4% of dairy farms do not face any costs. Pig farms with high compliance costs are characterized by high stocking density, the absence of low-emission manure application techniques and phosphorus-enriched soils. Dairy farms with high compliance costs have no low-emission manure application techniques and a high share of grassland. For dairy farms, stricter thresholds for nutrient application do not cause any compliance costs. The meta-model reveals the large effect of prices and assumptions regarding the fertilizer management on compliance costs. Results are of relevance beyond the case study area as other regions in the EU have a similar agricultural structure and need to fulfill the same EU directives. Policymakers need to be aware that high compliance costs increase the incentive of non-compliance and also consider heterogeneous impacts when designing complementary policies. Future research should focus on long-term adaption of farmers and include transaction costs as well as technical progress.

Suggested Citation

  • Kuhn, Till & Schäfer, David & Holm-Müller, Karin & Britz, Wolfgang, 2019. "On-farm compliance costs with the EU-Nitrates Directive: A modelling approach for specialized livestock production in northwest Germany," Agricultural Systems, Elsevier, vol. 173(C), pages 233-243.
    • Handle: RePEc:eee:agisys:v:173:y:2019:i:c:p:233-243
    DOI: 10.1016/j.agsy.2019.02.017
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    Cited by:

    1. Pahmeyer, Christoph & Kuhn, Till & Britz, Wolfgang, 2020. "‘Fruchtfolge’: A crop rotation decision support system for optimizing cropping choices with big data and spatially explicit modeling," Discussion Papers 305287, University of Bonn, Institute for Food and Resource Economics.
    2. Schaefer, David & Britz, Wolfgang & Kuhn, Till, 2020. "Modelling policy induced manure transports at large scale using an agent-based simulation model," Discussion Papers 305270, University of Bonn, Institute for Food and Resource Economics.
    3. Julia Jouan & Julia Heinrichs & Wolfgang Britz & Christoph Pahmeyer, 2019. "Integrated assessment of legume production challenged by European policy interaction: a case-study approach from French and German dairy farms," Working Papers hal-02501428, HAL.
    4. Britz, Wolfgang & Ciaian, Pavel & Gocht, Alexander & Kanellopoulos, Argyris & Kremmydas, Dimitrios & Müller, Marc & Petsakos, Athanasios & Reidsma, Pytrik, 2021. "A design for a generic and modular bio-economic farm model," Agricultural Systems, Elsevier, vol. 191(C).
    5. Kuhn, T. & Möhring, N. & Töpel, A. & Jakob, F. & Britz, W. & Bröring, S. & Pich, A. & Schwaneberg, U. & Rennings, M., 2022. "Using a bio-economic farm model to evaluate the economic potential and pesticide load reduction of the greenRelease technology," Agricultural Systems, Elsevier, vol. 201(C).
    6. Dillis, Christopher & Biber, Eric & Bodwitch, Hekia & Butsic, Van & Carah, Jennifer & Parker-Shames, Phoebe & Polson, Michael & Grantham, Theodore, 2021. "Shifting geographies of legal cannabis production in California," Land Use Policy, Elsevier, vol. 105(C).
    7. Kuhn, T. & Enders, A. & Gaiser, T. & Schäfer, D. & Srivastava, A.K. & Britz, W., 2020. "Coupling crop and bio-economic farm modelling to evaluate the revised fertilization regulations in Germany," Agricultural Systems, Elsevier, vol. 177(C).
    8. Freytag, J. & Britz, W. & Kuhn, T., 2023. "The economic potential of organic production for stockless arable farms importing biogas digestate: A case study analysis for western Germany," Agricultural Systems, Elsevier, vol. 209(C).
    9. Žiga Kotnik & Maja Klun & Renata Slabe-Erker, 2020. "Identification of the Factors That Affect the Environmental Administrative Burden for Businesses," Sustainability, MDPI, vol. 12(16), pages 1-15, August.

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