Abatement costs for agricultural nitrogen and phosphorus loads: a case study of crop farming in south-western Finland

Designing efficient agri-environmental policies for agricultural nutrient load reductions calls for information on the costs of emission reduction measures. This study develops an empirical framework for estimating abatement costs for nutrient loading from agricultural land. Nitrogen abatement costs and the phosphorus load reductions associated with nitrogen abatement are derived for crop farming in south-western Finland. The model is used to evaluate the effect of the Common Agricultural Policy reform currently underway on nutrient abatement costs. Results indicate that an efficiently designed policy aimed at a 50% reduction in agricultural nitrogen load would cost EURO 48 to EURO 35 million, or EURO 3756 to EURO 2752 per farm.