working paperWith the deadline identified by the Water Framework Directive (2000/60/EC)
approaching in 2015 there is increasing pressure on policymakers to introduce new
regulations to achieve water quality targets. Agriculture is one of the contributors of
diffuse pollution entering watercourses and will come under pressure to reduce pollutant
loads. This paper produces Marginal Abatement Cost (MAC) Curves for eight policy
measures that could potentially reduce nitrate leaching from agricultural land on Irish
dairy farms. These include: 1) reduction of fertiliser application by 10%; 2) reduction
of fertiliser application by 20%; 3) livestock unit reduction to limit organic N to 170 kg
ha-1; 4) reduction of livestock units by 20%; 5) change of feed mix to reduce cow
dietary N intake; 6) fencing off watercourses to introduce a buffer zone; 7) improved
dairy cow genetic merit by introducing higher performing dairy breeds; 8) more
efficient slurry application. Results from this study indicate that there will be reductions
in farm gross margins across nearly all policy measures. However, MAC and the
ranking of MAC vary across individual farms and aggregate MAC does not reflect the
heterogeneity of impacts across individual farms. This paper shows that any measure
introduced in a “one size fits all command-control” fashion will not yield efficient
economic results
