Nutrient management strategies on Dutch dairy farms: an empirical analysis

Abstract

Key Words: MINAS; nitrogen surplus; phosphate surplus; nutrient efficiency; nutrient productivity; financial consequences; strategic management; perceived environmental uncertainty; nutrient management planning; dairy farming; The Netherlands.Agricultural nutrients are a possible pollutant of (ground)water bodies. For prevention and control purposes, the European Nitrate Directive (91/676/EC) was issued, which was implemented in The Netherlands by means of the Mineral Accounting System (MINAS). MINAS tracks nutrient flows on farms and taxes farmers with high nutrient surpluses. The taxes are such, that MINAS can pose a threat to the financial viability of individual farms. In order to prevent taxation, farmers will have to alter nutrient management on their farm in an economically sound manner. To assess the (financial) feasibility of the MINAS-surplus standards a project called 'Farm Data in Practice' (Project Praktijkcijfers in Dutch) was initiated by the Dutch government in co-operation with farm organisations. The research presented in this thesis describes an empirical analysis of the relationship between farm and farmer characteristics, the way nutrients are managed on the farm, and the financial consequences, based on the bookkeeping and survey data of specialised dairy farms collected by the FDP-project. The nutrient management changes that were implemented over the course of 1997-1999 and the nutrient management plans of 2000 to meet the nutrient surplus standards set in MINAS for 2003 were evaluated using statistical methods (e.g. LISREL and (tobit-) regression) Data Envelopment Analysis, and case-study research. The results of this thesis show that farm management is a more important factor in the improvement of nutrient efficiency and reduction of nutrient surpluses than farm structure. An improvement of nutrient management (either through efficiency or technology improvements) proved to be financially beneficial as well. Furthermore, farmer characteristics like education and perceived environmental uncertainty, and farm strategy (growth, diversification, and process-control) direct the course of change in nutrient management (both farm structure and farm management). Result-oriented policy measures like MINAS appear to be more effective than measure-oriented policies like the Nitrate Directive because the former allow farmers to find a fit between external en internal farm characteristics and give them the responsibility to find a solution for the environmental problem on their farm