Cost effects of the Nitrate Directive

Hoffmann, András – Somogyi, Tamás

The Nitrate Directive set different deadlines for building liquid manure storage units on nitrate-sensitive versus non-sensitive areas. Our study investigates the effect of this at two agricultural firms. The one operating over a non-sensitive area can generate a significant environmental burden without any financial consequences. The other firm, operating over a nitrate-sensitive area, was forced to establish a system for storing and treating liquid manure at a cost of several hundred million forints, in order to comply with the decree. In the year operations began, the value of this system reached 10% of the corporation's tangible assets. There are also further costs of operation. Against these expenses one might set the yield from the nitrogen content of the liquid manure. However, our investigations revealed with statistical tests that there was no excess crop production in the 2002-2004 period on the fields irrigated with liquid manure. This implies that, under the conditions of the treatment, almost all nitrogen content must have escaped into the atmosphere as ammonia. Therefore the goal targeted by the decree was reached at great investment cost and produces atmospheric pollution rather than nutrients useful for crop production.