Nitrogen Quota System, Denmark
Background
The first action plan for the Aquatic Environment (I) was introduced in 1987. The aim was to reduce nitrogen emissions released to the aquatic waters by 50% before 1993. The process for this to be achieved was aimed at individual farmers by building slurry tanks with nine-month storage capacity and obligations to grow winter crops on 65% of the area. The success of this first action plan was limited, with little noteworthy changes in agricultural practices. An action plan for Sustainable agriculture was adopted in 1991 with the target to reduce nitrogen emissions pushed out to 2000. A levy system was introduced and obligations imposed on farmers to submit nitrogen accounts to the Ministry of Agriculture. Restrictions were placed on the actual utilisation of fertilisers and manure as well. Even still these measures did not reduce nitrogen emissions to the desired levels. A second Action Plan for the Aquatic Environment (II) was adopted in 1998 with the target reduction in nitrogen emissions postponed until 2003 (Grant and Blicher-Mathiesen, 2004).
Jacobsen et al., 2005 discuss the economic calculations carried out prior to the Plan for the Aquatic Environment (III) that included a comparison of regulation systems aimed at reducing nitrogen leaching and estimation of administrative costs. The conclusions were that taxation of the N-surplus introduced at the sector level was the most cost effective regulation when compared with administrative regulation and set a side. ‘The final plan for the Aquatic Environment III from 2004 included a 13% reduction of N-leaching until 2015 based on cost effective administrative measures like wetlands and catch crops. The measures in the Plan will have to be supplemented by more measures to meet the targets in the EU's Water Framework Directive' (Jacobsen et al., 2005).
Introduced
The Nitrogen Quota System was introduced in 1994.
Design
The obligatory, detailed accounting system for the use of nitrogen in inorganic and organic fertilizers and the use of cash crops on farm level, with set limits on the plant-available nitrogen applied to different crops. For each farm under this system, a preliminary, yearly nitrogen quota is calculated, depending on the size of the arable land, the crops planted, the soil category, etc.
From 1994 to 1998 the nitrogen standards were the economic optimum values whereas Action Plan (II) stipulated that the quotas for nitrogen application are set 10% below the estimated economic optimum for the different crops, thus causing the crop production per area unit to be lower than what it otherwise could have been (Braachen, 2006 and Grant and Blicher-Mathiesen, 2004).
Performance
According to Grant and Blicher-Mathiesen (2004), the average application quota per area in Denmark is 134 kg N per ha. Without the quota reduction, the average norm would have been 148 kg N per ha. According to the first Action Plan the target for reduction in nitrogen emissions was to be achieved by 1993; this date was deferred to 2000 and again in the latest Action Plan to 2003. It has been a slow and difficult process to reduce agricultural and nitrogen emissions. Where the measures introduced by farmers were at a slower pace than expected. These difficulties arose because the implementation of various measures severely interfered with agricultural practices and production, and with the economy of individual farmers, and also because different measures affect individual farmers differently (Grant and Blicher-Mathiesen, 2004: 98).
References
Braachen, Nils Axel, 2006, Instrument mixes for Environmental Purposes, How many stones should be used to kill a bird?, OECD, forthcoming.
Grant, R. & Blicher-Mathiesen, G., 2004, Danish policy measures to reduce diffuse nitrogen emissions from agriculture to the aquatic environment, Water Science and Technology 49(3): 91-99.
Jacobsen, B H., Abildtrup,J., Jensen, J.D., and Hasler, B. 2005. Costs of reducing nutrient losses in Denmark: analyses of different regulation systems and cost effective measures, Fødevareøkonomisk Institut, Afdeling for Miljø og Regional Udvikling. Poster presented at the Congress of the European Association of Agricultural Economists (EAAE), August 2005, Denmark. Abstract available at: http://www.forskningsbase.kvl.dk/research/(511747).
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