The potential to reduce the risk of diffuse pollution from agriculture while improving economic performance at farm level

Abstract

Within the constraints of the EU Nitrates and Water Framework Directives, controlling and managing nutrient transfers to water from excessive nutrient use on agricultural land is a significant environmental policy challenge. This paper assesses whether there is room to reduce inorganic nitrogen and phosphorus fertiliser applications and imported feeds by exploring the extent to which application rates may have exceeded optimum levels using data envelopment analysis methodology. The investigation concentrates on specialist dairy and tillage farms in the Republic of Ireland stratified by land use potential as these agricultural systems are the most intensive and may pose the greatest risk in terms of managing nutrient transfers from agricultural land to water bodies. Results demonstrate inefficiency in the utilisation of nitrogen and phosphorus fertilisers across these systems. Second stage regression analysis indicates significant return to efficiency from agricultural education. Average over application of chemical fertilizers ranged from 22.8 to 32.8 kg N ha-1 and 2.9 to 3.51 kg P ha-1 in 2008 which research has shown is at least similar and greater than losses to leaching and runoff for N and P, respectively, from similar intensive agricultural land uses. Potential cost savings on chemical fertilisers across all systems on average ranged from €38.9 ha-1 to €48.5 ha-1. Additionally, potential cost reductions on imported feeds of €65 to €84 per livestock were indicated for dairy farms versus efficient cohort benchmark farms. Average excess of imported feedstuffs equated to 5.82-7.44 kg LU-1 of N and 0.92-1.17 kg LU-1 of P. Such reductions have the potential to deliver a double dividend by reducing the risk of diffuse nutrient losses from agricultural land while improving economic margins at farm level.