Linking Farm and Market Models to Analyse the Effects of the EU Nitrate Directive for the Dutch Agricultural Sector

This paper presents a modeling system that can be used to analyze the trade off between economy and environment. It takes into account manure policy, farm structure and manure surpluses at farm level as well as the economic effects of manure surpluses at market level. The modeling system consists of two models that are linked to each other by at the one-hand manure prices and distribution of manure over different destinations and at the other hand changes in agricultural and total manure production. One model is the so-called Manure and Ammonia Model (MAM). This model calculates manure surpluses and deficits at the farm level and distribution of manure to own farm, own region, other regions, export abroad and processing at the regional level. Moreover, MAM also calculates ammonia emissions coming from different sources. The second model is a market model that includes the most important agricultural markets. The models are calibrated for 2002. The modeling system is tested to analyze the effects of sharpened manure policies until 2006.