Nitrate leaching in dairy farming: economic effects of environmental restrictions

Nitrate leaching is an important environmental problem, because it causes pollution of groundwater and surface water. Dairy farming makes an important contribution to nitrate leaching. This study analyses the economic impacts of reductions in nitrate leaching for dairy farms in the Netherlands. Using a non-linear partial optimisation model for the economic and ecological aspects of the problem, the study shows how the financial balances of dairy farms change when nitrate losses are reduced to the maximum admissible nitrate leakage of 34 kg N ha-I year-I. Model results indicate that the differences in the reduction of financial balance vary between NLG 0 and 549 ha-I year-I, while in some cases it is extremely difficult, if not impossible, to reach the maximum admissible level. (Note: NLG 1 = US$ 0.50 as at 22 July 1998).