Towards a sustainable and efficient use of manure in agriculture: The Dutch case

Rapid increases in livestock production in the Netherlands have changed manure from a valuable input into a mere waste product. This is especially true for the southern and eastern parts of the country, where specialized pig and poultry farms have concentrated on sandy soils. As these farms generally own very little land, they largely depend on imported feedstuffs. As a consequence, manure is applied to the land in such large quantities that serious environmental problems have resulted: (1) eutrophication of surface water by phosphate emissions; (2) pollution of groundwater by nitrate emissions; and (3) acidification by ammonia emissions.In the last few years the Dutch government has developed a manure policy to counteract these effects. Our analysis of that policy has revealed at least three fundamental defects, which render the manure policy ineffective and inefficient. In this paper proposals are made to remove the defects in current manure policy. Much attention is paid to the problem of designing a mixture of policy instruments which is both effective as well as efficient in limiting the environmental problems caused by manure. It is shown that the use of financial incentives in regulation can substantially improve the efficiency of the manure policy. Finally, the main economic consequences of the proposed policy are examined for the public sector as well as for the agricultural sector.