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Estimating the range of economic impacts on farms of nutrient leaching reduction policies
Author(s) -
Fezzi Carlo,
Rigby Dan,
Bateman Ian J.,
Hadley David,
Posen Paulette
Publication year - 2008
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.2008.00323.x
Subject(s) - arable land , livestock , agriculture , gross margin , environmental science , cropping , business , water framework directive , agricultural economics , natural resource economics , agricultural science , environmental protection , geography , economics , water quality , ecology , forestry , archaeology , biology
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.