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IFCN Conference 2015

Assessing farmers’ cost of compliance with

legislation in the fields of environment, animal

welfare and food safety

The dairy sector

Presented by:

Dorothee Boelling

IFCN, Dairy Farm Analysis

Dorothee.Boelling@ifcndairy.org

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Participating partners

• Anna-Maija Heikkilä, Sami Ovaska, Finland

• Dorothee Boelling, IFCN, Germany

• Fiona Thorne, Cathal Buckley, Ireland

• Michel de Haan, the Netherlands

• Ewa Koloszycz, Poland

• Hugo Quattrochi, Argentina

• Nicola Shadbolt, New Zealand

• Project coordinator Alberto Menghi, CRPA, Italy

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Outline/Agenda

1. Introduction to the project

2. Examples for some cost calculations

3. Results: cost of compliance

Thanks to the contributing partners:

Sami + Anna-Maija, Fiona + Cathal, Michel,

Ewa, Hugo, and Nicola for the case studies

Alberto for the project management

Dorothee for compilation of the dairy data

and report writing

The output:

This presentation gives a summary of an

EU-project where partners of IFCN worked

successfully together.

Introduction to the project

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Country specifics

Country Cow no. Production

system Housing Breed Milk yield

DE 31/ 95,

650

Stanchion barn/

free stall

Summer grazing/

indoor Si, HF, HF 6.8, 9.2, 7.8 t

FI 25, 69 Stanchion barn,

free stall

Summer grazing,

indoor Ayr*HF ~ 8.7 t

IE 48, 115 Grazing Grazing HF ~ 7 t

NL 76 Free stall Summer grazing HF 8.4 t

PL 15, 65 Stanchion barn,

free stall Summer grazing

Local/HF,

HF 6.7 t, 8.5 t

AR 170, 400 Grazing Grazing HF 5.2 – 5.8 t

NZ 974 Grazing Grazing Jer*HF 5.8 t

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EU legislation under consideration

Directive: Guideline for the individual countries to establish the national law

Regulation: Law is uniform across the Member States

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Our guiding question:

What would the farmer do differently

if the legislation was not in place?

Examples for cost calculations

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Environment: Nitrate Directive

Environment: Nitrate Directive FI DE IE NL PL AR NZ

Max level of N from animal manure (kg N/ha) 170 170 170 250 170

No nitrogen on water logged or frozen land x x x x x

Obligatory fertiliser planning + soil samples x x x x x

Annually farm based nutrient balance x x x x x

Application of fertilisers has to be recorded x x x x x

Buffer strips to water courses inside NVZ x x x x x x

Minimum storage capacity required x x x x x

Special equipment to avoid leakage x x x x

Catch crops on maize land x

Correct transport of excess manure x

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Germany: Nitrate Directive

• EU: Storage capacity required for 180 days

• Farmer: storage capacity necessary for 135 days

additional storage capacity is needed

• Investment costs

• Depreciation

• Maintenance

Benefit: better utilisation of slurry, therefore less fertiliser costs

Change in costs between -0,04% and -0,16%

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Food safety: Id & reg of bovine animals

Food Safety: Regulation on

Identification and registration of

bovine animals

FI DE IE NL PL AR NZ

Marking each animal after birth or arrival on

farm with 2 ear tags x x x x x x x

Replacement of lost ear tags x x x x x x x

Registration of all births, deaths, animal

movements x x x x x x x

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Germany: Identification and registration

• EU: Two ear tags all the time

Lost ear tags are to be replaced within one week

• Farmer: Animal identification is needed

BUT: Two ear tags are not necessary

No replacement of lost ear tags within one week

Additional work for replacing lost ear tags and for record keeping is needed

Change in costs between -0,05% and -0,10%

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Argentina: Identification and registration

• AR: all bovine animals have to be tagged and recorded

• Farmer: enough to tag and identify only female animals,

males are for fattening and slaughtering

Tagging of male calves

• Purchase of ear tags

• Labour for tagging the animals

• Labour for record keeping

Change in costs between -0,06%

Results: Cost of compliance

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Cost of milk production

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Cost of compliance: Environment

0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

0,8

FI-25 FI-69 DE-31 DE-95 DE-650 IE-48 IE-115 NL-76 PL-15 PL-65 AR-170 AR-400 NZ-974

€/1

00

kg

mil

k

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Cost of compliance: Animal Welfare

0

0,05

0,1

0,15

0,2

0,25

0,3

FI-25 FI-69 DE-31 DE-95 DE-650 IE-48 IE-115 NL-76 PL-15 PL-65 AR-170 AR-400 NZ-974

€/1

00

kg

mil

k

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Cost of compliance: Food Safety

0

0,2

0,4

0,6

0,8

1

1,2

FI-25 FI-69 DE-31 DE-95 DE-650 IE-48 IE-115 NL-76 PL-15 PL-65 AR-170 AR-400 NZ-974

€/1

00

kg

mil

k

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Cost of compliance

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Summary

1. Finland, Germany, and Ireland had compliance costs of 1 to 1.5%

2. The Netherlands had high compliance costs of ~2.7% due to the nitrate directive which already caused costs of 1.5%

3. In Poland, EU legislation is introduced only stepwise and many legislations were not yet implemented. Costs were on the same level as non-member states (AR and NZ) and accounted for < 1% compliance costs

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Thank you for your attention!

The final report can be found at:

http://ec.europa.eu/agriculture/external-studies/farmer-costs-2014_en.htm

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Germany: Costs of Nitrate Directive

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Germany: Costs of id & reg

Germany Unit Base

DE-31 Id+regist

Base

DE-95 Id+regist

Base

DE-650 Id+regist

Land €/100 kg 5.23 5.23 3.92 3.92 2.03 2.03

Labour €/100 kg 22.77 22.73 6.59 6.56 7.08 7.07

Capital €/100 kg 2.65 2.65 1.90 1.90 1.54 1.54

Non-factor costs €/100 kg 34.70 34.70 22.58 22.58 24.07 24.07

Total cost of the dairy

enterprise €/100 kg 65.35 65.31 35.00 34.96 34.72 34.70

Change of the milk

production costs % -0.07% -0.10% -0.05%

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Argentina: Costs of id & reg

Argentina Unit Base

AR-170 Id+Regist

Base

AR-400 Id+Regist

Land €/100 kg 2.32 2.32 2.66 2.66

Labour €/100 kg 4.22 4.21 3.92 3.91

Capital €/100 kg 0.75 0.75 0.73 0.73

Non-factor costs €/100 kg 12.67 12.67 14.85 14.85

Total cost of the dairy enterprise €/100 kg 19.95 19.94 22.16 22.15

Change of the milk production costs % -0.06 -0.06