Cost‐effective nitrogen leaching reduction as influenced by linkages between farm‐level decisions

Abstract

This article focuses on how the linkages between various farm-level decisions affect the choice of measures to reduce nitrogen leaching from crop production. A mathematical programming model is developed. The model considers not only management decisions that affect nitrogen leaching directly, but also other decision variables such as scheduling of field operations and machinery investments. A simplified analysis that ignores the latter management decisions, and the linkages between the various decisions, may result in abatement policies that are not cost-effective because the policies will have other effects than expected. As an example, the empirical results show that subsidies to catch crops and spring ploughing may contribute to increased nitrogen load, quite contrary to the purpose of these subsidies. Further, it is noted that the characteristics of the production system make it costly to change land use, tillage practices, or fertilizer use drastically. Instead, cost-effective nitrogen abatement includes a mix of various adjustments of farm-level production practices. The EU set-aside payment appears to reduce abatement costs.JEL classification: C61, Q12, Q24