Economic and Environmental Effects of Manure Processing on Dutch Dairy Farms

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Abstract
Lower manure application limits increase off-farm manure disposal costs for Dutch dairy farmers and are expected to raise the use of energy-intensive chemical fertilizers, increasing fossil fuel dependency and exposure to energy price volatility. This study uses a bio-economic farm-level model, extended with an energy module, to assess the economic and environmental effects of four manure processing techniques for conventional dairy farms in the Netherlands, using data from the Dutch Farm Accountancy Data Network. A regression-based meta-model is applied to identify key farm characteristics explaining variation in impacts. Results show that manure processing reduces greenhouse gas emissions by 1-13% and ammonia emissions by 16-39% at the farm level. Energy use declines by 2-33%, with the largest reductions observed for mono-digestion due to substitution of chemical nitrogen fertilizer and on-farm energy production. However, most technologies reduce farm income by up to 35%, primarily due to high investment and operational costs. Impacts vary substantially across farms, with larger and more intensive farms benefiting more due to economies of scale and higher substitution potential of chemical nitrogen fertilizers, while increased grazing reduces the effectiveness of these technologies. Manure processing offers considerable potential to improve environmental performance and reduce fossil energy use, but adoption is unlikely as it remains economically unviable for most Dutch dairy farmers. Targeted policies are therefore likely to be more cost-effective than uniform policies.

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