ON-FARM COSTS OF REDUCING NITROGEN POLLUTION THROUGH BMP

This study presents a methodology to assess on-farm costs of reducing nitrogen leachate through 'best management practices' (BMP). A simulation as well as a linear multi- objective programming model was used linking environmental and economic data. The Non-Inferior Set Estimation method is used to generate the extreme efficient pts for the problem considered. The BMP for every level of admissible nitrogen pollution are elicited. Results show that the adoption of the BMP may lead to considerable economic losses for farmers. This implies that the BMP will not be accepted by farmers unless targeted subsidies are allocated to avoid their incurring losses. The methodology used in this paper provides a powerful instrument to link economic to environmental objectives. However, the sensitivity of the results to the type of crops considered as well as to weather and soil conditions should be kept in mind.