Culling Cows or Cutting Costs? The Economic Impact of Nitrates Derogation in Ireland

Nitrates derogation is a scheme that allows farmers in Ireland to apply more organic nitrogen (from livestock manure) per hectare than the limit set by the EU Nitrates Directive, which aims to protect water quality from pollution by agricultural sources. The scheme is available to grassland farmers who have at least 80% of their land under grass and who follow certain environmental measures. However, in 2023, the Irish government introduced new rules for nitrates derogation, which require farmers to reduce the crude protein content of their feed, use low emission slurry spreading equipment, adopt a farm-scale liming programme, and participate in environmental training courses. These changes are expected to affect about 7,000 farmers who have a derogation, and who account for about 10% of the national dairy herd.

The main reason for these changes is to reduce the greenhouse gas emissions and ammonia emissions from the agricultural sector, which are among the highest in Europe. According to the Environmental Protection Agency (EPA), agriculture was responsible for 35.3% of Ireland’s total greenhouse gas emissions and 98% of its ammonia emissions in 2020. Ammonia is a precursor of fine particulate matter, which can cause respiratory and cardiovascular problems in humans and animals. Greenhouse gases, such as carbon dioxide and methane, contribute to global warming and climate change, which can have negative impacts on agriculture, biodiversity, and human health.

The new rules for nitrates derogation are expected to have significant economic implications for the affected farmers. According to a survey by the Irish Farmers Journal, 37% of the derogation farmers intend to reduce their cow numbers by an average of 13% in order to comply with the new rules. This means that up to 41,000 cows could be culled in the next 10 weeks, which could lead to a loss of income for the farmers and a reduction in milk production for the dairy industry. The survey also found that 35% of the derogation farmers plan to seek additional land to maintain their stocking rates, which could increase their costs and reduce their profitability. Moreover, the new rules could also affect the competitiveness of Irish dairy products in the international market, as they could increase the production costs and lower the quality of milk.

However, there are also potential benefits from the new rules for nitrates derogation. The reduction in cow numbers and feed protein content could lower the emissions intensity of milk production, which is a measure of greenhouse gas emissions per unit of output. This could improve the environmental performance and reputation of Irish dairy products, which could enhance their market access and demand. The use of low emission slurry spreading equipment and liming could also improve soil fertility and crop yields, which could increase farm productivity and income. Furthermore, the participation in environmental training courses could raise awareness and knowledge among farmers about sustainable farming practices, which could help them adapt to climate change and mitigate its impacts.

Therefore, the new rules for nitrates derogation pose both challenges and opportunities for the Irish agricultural sector. The economic impact of these rules will depend on how farmers respond to them and how they balance their environmental and economic objectives. The government should provide adequate support and incentives for farmers to comply with the new rules and to adopt more efficient and environmentally friendly farming methods. The government should also monitor and evaluate the effects of these rules on water quality, greenhouse gas emissions, ammonia emissions, farm income, milk production, and milk quality. The government should also engage with stakeholders and experts to review and revise these rules as needed to ensure that they achieve their intended goals without compromising the viability and competitiveness of Irish agriculture. However, in real-world terms, it is difficult to see how such measures as these can have any meaningful impact across the planet, particularly considering the rate of increase in the global bovine population.


Image from Our World in Data.