Using an On-Farm Nutrient
Balance as a Monitoring Tool

Mark Muller
Institute for Agriculture and Trade Policy

Recent environmental problems that have resulted from excessive nutrients in surface waters have increased public awareness of the hazards of agricultural runoff. On-farm nutrient balances, which compare nutrient flows entering and leaving a farm, may serve as an effective and simple method of determining the likelihood of a farm contributing to water and air quality problems. Farmers in the Netherlands have used these balances voluntarily for several years. Results indicate that significant reductions in nutrient losses to the environment have occurred after farmers participated in the on-farm nutrient balance program. The tool utilized in the program, known as the "Nutrient Management Yardstick" (NM Yardstick), is based on simple mass balance worksheets. Several farmers in the Midwest have participated in a NM Yardstick pilot project. Initial results indicate that voluntary nutrient balances are a feasible method of reducing environmental impacts without imposing economic burdens on farmers.

Agricultural land has been used intensively in the Netherlands since approximately 1950, as manure production has doubled and fertilizer use has tripled since that time. These changes have developed due to economic trends; since the 1950s, wages and land values have tripled in real cost, while the price of fertilizers and feedstuffs has halved. This has led to a significant national nitrogen surplus in the Netherlands, which peaked in 1986.

In 1984, the government of the Netherlands made efforts to limit manure production by limiting the number of livestock. This legislation was unsuccessful, however, as enforcement was unmanageable. Then in 1986, the government introduced a "manure and ammonia policy" which is still in use. The policy aimed to achieve national nitrogen and phosphorous equilibrium by the year 2000. Although the goal appears unreachable, significant nutrient reductions have taken place. Key aspects of the policy include a tradable quota on manure production, improved manure handling, and the promotion of sustainable agriculture through education. Significant reductions have been realized in national nutrient surpluses; between 1986 and 1994, nitrogen and phosphorous surpluses were reduced by 23% and 25%, respectively.

Dutch governmental agencies and agricultural organizations recognized the limitations of the regulatory approaches. First, policy concentrated on the efficient use of manure, ignoring fertilizer use. Second, the variety of regulations confused farmers and did not directly address the problem of nutrient losses to the environment. Finally, the regulatory approach is prescriptive, requiring certain activities and forbidding others, which leaves farmers with little freedom of choice.

To address these limitations, an on-farm nutrient balancing system, the NM Yardstick, was implemented as a policy initiative in 1993. This approach considers the farm a whole nutrient system, measuring nutrients that enter (such as fertilizer or feed) and leave (such as animals, milk, or manure) the farm. Figure 1 contains a basic flow chart of nutrients on a typical dairy farm. If nutrient inputs to a farm exceed nutrient outputs, then some nutrients are not utilized, which may have adverse environmental impacts. Some nutrient loss is inevitable because of uncontrollable variables such as climactic and pest conditions, but a well-managed farm should rarely have large losses.

Unlike previous regulations, nutrient balances are a positive, results-oriented approach. Farmers choose for themselves how they attain the determined goal. The NM Yardstick program has several advantages over regulatory approaches:

• The method is effective. Nutrient losses are a direct measure of the principal problem -- excessive nutrients in the environment.
• Results-oriented approaches are cost-efficient. Farmers have the freedom to determine the most economical method of nutrient loss reduction.
• The process is educational. Completion of an on-farm nutrient balance may offer the farmer new insight on the workings of his/her farm.
• The necessary information is available to farmers through tax records and other documents.

The Centre for Agriculture and Environment (CLM), an independent Dutch agricultural organization has promoted the NM Yardstick for several years. CLM has organized farmers into working groups where the significance of the NM Yardstick scores is discussed. Participants in the first working group, comprised of dairy farmers, experienced an average nitrogen loss drop from 364 lb. N/acre to 222 lb. N/acre in four years. Losses were reduced by limiting inputs to the farm while outputs generally remained constant. Figure 2 graphs a participant's nutrient losses for the past ten years. The participant's nutrient losses varied due to changes in farm size and other variables, but the overall trend has been a drastic reduction in all three major nutrients.

Participation in CLM's program is voluntary. However, since January 1, 1998, the Netherlands' government has begun to phase in regulation that will eventually require nutrient balances on all farms with a livestock density greater than 4.9 dairy cows/acre (or the manure equivalent in other livestock). Farmers will be taxed for nutrient losses that exceed the allowable standards. As a positive incentive, CLM and the Dutch Water Suppliers' Association (VEWIN) have discussed a scheme that would reward farmers for minimal nutrient losses. A rewards scheme has yet to be implemented, but a similar program has been successfully piloted by VEWIN to reward farmers for reduced-impact pesticide use within designated groundwater protection areas.

Mandatory participation in an on-farm nutrient balance is consistent with other Dutch environmental policy. The tax on excessive nutrient losses applies the "polluter pays" principle—non-polluting farmers do not experience any extra costs. However, nutrient balances as a regulatory tool also present difficulties, notably regarding enforcement and variability. Since farmers are responsible for recording their nutrient inputs and outputs, the potential for fraud exists. Second, farmers may not operate the same every year. For example, if a farmer purchases feed for the next two years, the score would increase the present year and decrease the following year. The significance of these issues will be clearer after several years of experience with this system.

The Institute for Agriculture and Trade Policy (IATP) in Minneapolis, Minnesota, began working with CLM in 1995 to adapt the NM Yardstick tool for use in the United States. In 1996, IATP organized a group of farmers from around the United States to travel to the Netherlands and meet with the Dutch farmers and researchers to learn from those who first developed the nutrient balance method. Subsequently, IATP has established demonstration projects in Minnesota, Wisconsin, Michigan and New York, and farmers have also used the tool in Nebraska, Missouri and Arkansas.

Table 1 shows the average reduction in fertilizer application for two Wisconsin dairy farms that have participated in the program for the past two years. The decreases are primarily due to improved manure management. Upon completion of the nutrient balance, farmers realized the amount of nutrients not being utilized and took measures to more effectively use manure.

Figure 3 is a graph of first year results for eight farmers in Minnesota. Four farms show slight nitrogen deficits, and all farms have surpluses significantly less than farms in the Netherlands. The deficits are most likely due to changes in farm size or inventory, and will probably be positive in subsequent years. The low nutrient loss scores indicate that nutrients are not as intensively used in Minnesota as the Netherlands, as expected. Although the effectiveness of the program will not be known until several years of data are collected, the program has prompted discussions on soil testing, feed rations, and other topics pertinent to nutrient management.

Initial farmer feedback indicates that farmers are very willing to use the nutrient balance as a voluntary tool. Extension agents participating in the pilot projects have found the tool to be an effective method of initiating conversation about manure storage, yield goals, soil tests and other related topics. The NM Yardstick is an ideal introductory tool because of the simplicity of the worksheets.

Additionally, scores can be used as a measure of a farm's contribution to a watershed's overall nutrient load. Nonpoint source nutrient contributors, such as agriculture, have traditionally been difficult to include in nutrient trading schemes; nutrient balances, however, allow a farm's nutrient load to be quantified. A nutrient balance can also be used as a requirement for participation in government-subsidized programs. For example, The Fish and Wildlife Service subsidizes the creation of farm ponds; a nutrient balance is a method of checking the likelihood of a future pond becoming eutrophied.

Furthermore, nutrient balances are a method of quantifying one aspect of a farm's environmental performance. A nutrient-balanced farm can convey this information to the public through the NM Yardstick score. Environmental indicators increase public awareness of the environmental benefits of well-managed farms, such as clean water, wildlife habitat, clean air and pleasing aesthetics.

Initial results indicate that on-farm nutrient balance tools are an effective method of measuring the potential for adverse environmental impacts due to nutrient losses. Farmers have been accepting of the NM Yardstick as a voluntary tool because it assesses excessive fertilizer use, which results in reduced fertilizer costs. The NM Yardstick does not give the farmer specific nutrient management advice, but it may make a farmer aware that a nutrient problem exists. Perhaps most importantly, on-farm nutrient balances could be used to improve public awareness of the benefits of environmentally sound agriculture.

Policy Document on Manure and Ammonia. 1997 Landbouw, Natuurbeheer en Visserij (Ministry of Agriculture, Nature Management and Fisheries), the Netherlands.

Biewinga, Edo E. 1996. Mineral Emissions from Dutch Agriculture. The Centre for Agriculture and Environment (CLM), the Netherlands.

Van Miltenburg, Jose and Emily Green. 1997. The Nutrient Management Yardstick: A Tool for Promoting On-farm Efficiency and Environmental Protection. IATP.

Table 1 - Nutrient Reduction for Two "Yardstick" Farms   Duck-Apple-Ashwaubenon Watershed, Wisconsin, 1996-1997