Analysis of policy instruments for control of nitrate pollution in irrigated agriculture in Castilla y León, Spain

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1 Insttuto Naconal de Investgacón y Tecnología Agrara y Almentacón (INIA) Spansh Journal of Agrcultural Research (1), Avalable onlne at ISSN: X Analyss of polcy nstruments for control of ntrate polluton n rrgated agrculture n Castlla y León, Span J. Gallego-Ayala and J. A. Gómez-Lmón* Departamento de Economía Agrara. ETSIIAA de Palenca, Unversdad de Valladold. Av. de Madrd Palenca. Span. Abstract Irrgated agrculture s one of the most mportant sources of ntrate polluton of water resources. For ths reason, durng the past decade, varous polces have been proposed n order to prevent ths negatve mpact of farmng actvtes. The am of ths work s therefore to analyze the effects of the ont applcaton of the last Common Agrculture Polcy (CAP) reform wth dfferent polcy nstruments desgned to mtgate ntrate polluton. To ths end, models based on Postve Mathematcal Programmng have been developed to enable smulatng rrgators productve behavour n the event of the mplementaton of these nstruments. The results ndcate that the latest CAP reform (partal decouplng of subsdes) wll by tself lead to an mportant reducton n ntrate polluton. If ths reducton s not regarded as beng suffcent, other specfc polcy nstruments could further reduce ths source of polluton. In ths sense, the most sutable one could be the applcaton of ntrogen fertlzaton quotas. Addtonal key words: agrcultural polcy, economc nstruments, envronmental polcy, postve mathematcal programmng. Resumen Análss de nstrumentos polítcos para el control de la contamnacón por ntratos de la agrcultura de regadío en Castlla y León (España) La agrcultura de regadío es una de las prncpales fuentes de contamnacón por ntratos de los recursos hídrcos. Por este motvo en los últmos años han surgdo dferentes polítcas encamnadas a evtar esta eternaldad negatva de la actvdad agrara. En este sentdo, el obetvo de este trabao es analzar los efectos de la aplcacón conunta de la últma reforma de la Polítca Agrara Común (PAC) y dferentes nstrumentos polítcos mtgadores de la contamnacón por ntratos. Para ello se han empleado modelos de smulacón basados en la programacón matemátca postva, los cuales permten smular el comportamento productvo de los regantes frente a la hpotétca mplementacón de tales nstrumentos. Los resultados obtendos ponen de manfesto que esta eternaldad negatva va a reducrse de forma sgnfcatva gracas a la últma reforma de la PAC (desacoplamento parcal de las ayudas). S esta reduccón no se consderase sufcente, otros nstrumentos específcos permtrían una reduccón adconal de esta fuente de contamnacón. En este sentdo el nstrumento que puede resultar más adecuado es el establecmento de límtes mámos a la fertlzacón ntrogenada. Palabras clave adconales: nstrumentos económcos, polítca agrara, polítca ambental, programacón matemátca postva. * Correspondng author: lmon@af.uva.es Receved: Accepted: Abbrevatons used: AL (agrcultural labour), CAP (common agrcultural polcy), CMO (Common Market Organzaton), EEA (European Envronment Agency), EU (European Unon), IA (rrgated area), LP (lnear programmng), MIMAM (Spansh Mnstry of the Envronment), NBAL (ntrogen balance), OECD (Organsaton for Economc Co-operaton and Development), PMP (postve mathematcal programmng), PUBR (publc-sector revenue), SFP (sngle farm payment), TGM (total gross margn), WATER (water use), WFD (Water Framework Drectve).

2 Polcy nstruments for ntrate polluton control 25 Introducton Average fertlzer consumpton n the EU-15 s kg ha year -1. Ths hgh applcaton rate of fertlzers, combned wth ts often napproprate use, generates a surplus of ntrogen n the sol of 83 kg N ha year -1 (OECD, 2008). Ths causes water polluton by ntrates, one of the most serous envronmental problems n developed countres (OECD, 2005). In Span the general stuaton s not so worryng, because fertlzer consumpton (121.5 kg ha year -1 average) and the ntrogen balance (33 kg N ha year -1 average) are consderably lower than those of the EU-15 (MIMAM, 2006; OECD, 2008). Nonetheless, these natonal average data hde the problem lnked to rrgated agrculture, an agrcultural subsector whch makes ntensve use of these fertlzers and s the man source of dffuse contamnaton of water resources n Span (MIMAM, 2000). Indeed, a separate analyss of ths type of agrculture confrms that both ntrogen consumpton and ntrogen balance are very hgh, even eceedng the European average (Gómez- Lmón et al., 2007; MIMAM, 2007). The envronmental mpact of such stuaton s evdent, gven that n Span most of the declared ntrate-vulnerable zones are located n rrgated areas and ther surroundngs (MIMAM, 2006). Gven ths problematc scenaro, the natonal authortes face the challenge of desgnng and mplementng the necessary nstruments to mnmze the mpact of agrculture as the man source of dffuse polluton of water resources (Martínez and Albac, 2004). Durng the past two decades, therefore, varous polces at EU level have been mplemented to deal wth ths stuaton, as ponted out by the EEA (2005). It s worth hghlghtng some of these polces, namely: a) the Ntrate Drectve, whch has the prncpal obectve of reducng ntrate polluton of water resources caused by agrculture, b) the new Common Agrcultural Polcy (CAP) n whch, snce ts 1999 reform (Agenda 2000) subsdes to farmers are condtonal on the fulflment of a set of envronmental requrements, and c) the Water Framework Drectve (WFD), whch seeks to mplement new hydrologcal plans leadng to a good ecologcal status of waterbodes. The theoretcal study of ntrate polluton control polces began n the eghtes wth the semnal works of Grffn and Bromely (1982), Shortle and Dunn (1986) and Segerson (1988). Snce then, the scentfc communty has performed ntensve studes of ths problem. Among recent works n ths feld, those of Martínez and Albac (2006), Segerson and Wu (2006), Aftab et al. (2007), Semaan et al. (2007) and Suter et al. (2008) are worth mentonng. In bref, ths lterature ponts out that polces desgned to reduce ntrate polluton of agrcultural orgn can be mplemented n varous ways, n partcular through the use of taes and/or subsdes, the settng of emsson quotas and the applcaton of certan market nstruments. For a detaled dscusson of ths ssue, see Shortle and Abler (2001). Wthn ths general framework, the man obectve of ths study s to analyse the economc, socal and envronmental mpacts of the mplementaton of dfferent polcy nstruments amed at reducng ntrate polluton (ntrogen fertlzaton quotas, eco-ta for ntrogen fertlzers, rrgaton water prcng and the lmtaton of the surface for ntensve ntrogen actvtes) wthn the contet of the new CAP, whch was establshed after the Md-Term Revew. The comparatve analyss was carred out by means of a case study of the rrgated area (IA) of Arévalo-Madrgal n the provnce of Ávla n central Span, an agrcultural system potentally vulnerable to ntrate polluton. For ths purpose, a methodology based on the postve mathematcal programmng has been developed, n order to smulate farmers behavour when facng the new CAP scenaro and the varous polcy nstruments consdered. The study ams to provde nformatve support for decson makers when desgnng and mplementng the programme of measures for ncluson n the new hydrologcal plan for the Duero rver basn, whch must be approved before 2010, as requred by the WFD. The net secton of ths paper shows a descrpton of the agrcultural system studed. The thrd secton provdes a detaled presentaton of the methodology adopted for the emprcal applcaton and the orgn of the nformaton used to feed the models bult, whle the fourth descrbes the specfc formulaton of the smulaton models used for each of the polcy nstruments beng consdered. The ffth secton syntheszes the results of these smulatons, whle the sth outlnes the most relevant conclusons reached. Case study The IA of Arévalo-Madrgal covers 13,662 ha n the southern part of the Duero rver basn n the Provnce of Ávla. Ths agrcultural system s located n the Spansh

3 26 J. Gallego-Ayala and J. A. Gómez-Lmón / Span J Agrc Res (2009) 7(1), North Plateau, at an average alttude of 900 m and wth a typcal contnental clmate; long, cold and relatvely wet wnters followed by short hot and dry summers. The annual ranfall s low, averagng less than 450 mm. Irrgated agrculture s the only alternatve to the typcal ran-fed cereals monoculture n ths area, allowng summer crops to be grown. The IA comprses 1,133 farms, for an average rrgated farm sze of 12.1 ha. The predomnant crops n the zone are cereals (maze Zea mays L., barley Hordeum vulgare L. and wheat Trtcum aestvum L.) coverng 69.3% of the total surface area. Industral crops (sugar-beet Beta vulgars L. and sunflower Helanthus annuus L.) are also mportant, occupyng 22.4% of the IA. Other relevant crops are potatoes (Solanum tuberosum L.) and alfalfa (Medcago satva L.), coverng 2.4% and 1.2% of the IA, respectvely. The remanng cultures, such as legumes and vegetables, are of mnor mportance. The water used by rrgated agrculture s suppled by an mportant groundwater body, Hydrogeologcal Unt 02.17, also known as Los Arenales aqufer. Because of the orgn of the groundwater source, pumpng s requred to obtan water. The estence of these pumpng systems eplans why the predomnant system for rrgaton n ths zone s based on sprnkler technology, whch s used to rrgate all crops n the area. The ncreasngly ntensve use of groundwater for farmng n ths area s eopardzng the sustanablty of ths water resource, n both quanttatve and qualtatve terms, as etracton has surpassed natural nflow, resultng n over-eplotaton of the aqufer. Ths stuaton has led to the suspenson of new permts for water etracton snce The agrcultural system utlses a network of 14 statons for qualty control managed by the publc authorty n charge of water use (Confe - deracón Hdrográfca del Duero), whch regularly report data on groundwater ntrate concentraton (see The data reveal that the average values of ntrogen concentraton n the groundwater below the study area durng have ranged between 10 and 30 mg NO 3 - L -1, although durng summer perods these concentratons have reached mamum values rangng between 55 and 65 mg NO 3- L -1. It should also be ponted out that ths Hydrogeologcal Unt mentons problems of arsenc polluton, also of agrcultural orgn. Both types of polluton have led to the suspenson of the water supply for human consumpton n 26 muncpaltes located nsde or near ths IA (Fernández et al., 1998). Methodology Polcy scenaros and nstruments analysed CAP scenaros Two CAP scenaros have been consdered. The frst represents the prevous polcy stuaton, derved from the applcaton of Agenda 2000 ( CAP-2000 scenaro), whch s consdered as the baselne scenaro n order to compare the other results. The second scenaro analysed refers to the CAP reform ntroduced by the European Councl n 2003 and whch came nto force n Span n Ths reform ntroduced the partal decouplng of drect subsdes to herbaceous crops as ts man novel aspect. Ths scenaro also contemplates the mplementaton of the new reform of the Common Market Organzaton (CMO) of sugar n Ths scenaro s labelled CAP-reformed. The characterstcs of the two scenaros are as follows: CAP-2000 scenaro. Ths scenaro represents the CAP framework n effect untl 2005/2006, whereby publc support to the agrcultural sector was effectuated va drect payments per unt area of Mg -1 of theoretcal county yelds for cereals and olseeds. In the case of proten crops, payments ncreased to a lmt of Mg -1. CAP-reformed scenaro. Ths scenaro s characterzed by the partal decouplng of the payments receved n the prevous scenaro. Therefore, the producers of herbaceous crops receve a drect coupled payment (lnked to crop area) equal to 25% of the support receved prevously ( Mg -1 for cereals, olseed and proten crops). The remanng 75% of the support became part of the Sngle Farm Payment (SFP) that would be receved annually by farmers regardless of ther crop m (for further detals, see García Álvarez-Coque, 2006). Moreover, ths new scenaro ncludes the restructurng of the sugar sector promoted by the new sugar CMO. In ths new scenaro, the sugar sector s thus characterzed by: a) a decrease n the sugar-beet sellng prce from Mg -1 (CAP-2000 scenaro) to Mg -1, b) the ntegraton of sugar-beet nto the SFP, whch now also ncludes annually Mg -1 delvered durng the bennum , and c) the compulsory abandonment of 50% of producton, wth farmers beng compensated wth Mg -1 delvered as average durng the perod

4 Polcy nstruments for ntrate polluton control 27 Polcy nstruments for ntrate polluton control Takng nto account the varous polcy nstruments that would theoretcally be sutable for dffuse ntrate polluton control (Martínez and Albac, 2004, 2006; Semaan et al., 2007) and the partcular characterstcs of the IA analysed (prvate rrgaton ntatves and groundwater resources), for ths study the followng four alternatve polcy nstruments have been selected as the most nterestng ones for ther potental mplementaton: Instrument 1 proposes restrctons on the consumpton of ntrogen fertlzers (ntrogen fertlzaton quotas). For the mplementaton of ths polcy nstrument fve dfferent mamum levels of ntrogen fertlzaton are proposed: 120, 100, 80, 60 and 40 kg N ha -1. These fgures were chosen consderng that current average ntrogen fertlzaton n the IA s kg N ha -1. Thus, the frst level (120 kg N ha -1 ) would be fed n order to assure that most farmers wll be under ths average. Lower quotas would force further decreases n ntrogen use by farmers. Instrument 2 suggests the mplementaton of an ecologcal ta on the use of ntrogen fertlzers, targeted to reduce ntrogen demand for agrcultural producton. Fve dfferent levels of applcaton of ths eco-ta have been consdered, rangng from 0.20 to 1.00 per klogram of ntrogen appled n fertlzaton. These values were chosen consderng current applcaton of ths nstrument n the dfferent European countres where t s mplemented (Sweden, Austra and Fnland; see Nam et al., 2007). Instrument 3 consders the ntroducton of volumetrc water prcng. Water and ntrogen are one of the most mportant nputs n rrgated systems, beng both characterzed by lmted substtuton (ther use can be adusted by a von Lebg producton functon, as eplaned n Pars and Knapp. 1989, Pars, 1992 and Knapp and Schwabe, 2008). Ths s why water prcng (reducng water demand) s at the same tme an nstrument to reduced ntrogen use. Followng ths ratonale, s prce levels were selected for the smulaton of ths polcy nstruments, rangng between 0.01 and 0.06 m -3, n a hypothetcal attempt to mplement the cost recovery prncple as set out by the WFD n the Duero basn (Gómez-Lmón and Resgo, 2004; Resgo and Gómez-Lmón, 2006). Instrument 4 proposes lmtng the cultvated area of the most ntrogen-ntensve crops, whch are the potentally most pollutng ones. In ths case study, ths restrcton would affect sugar-beet, maze and potato, whch ntrogen requrements are above 200 kg N ha -1. Thus, fve dfferent smulaton scenaros are proposed, whch lmt the mamum area of ths set of crops to 25, 20, 15, 10 and 5% of the total avalable. Decson-makng heterogenety and cluster analyss Modellng farmng actvty at agrcultural system level (or at any other level that deals wth a set of ndvdual farms) mples problems of aggregaton bas. Indeed, modellng a set of farms n a unque programmng model overestmates the moblty of resources, allowng the modelled farms to combne resources n proportons that are not possble n the real world (Hazell and Norton, 1986). Ths aggregaton bas can only be avoded f the farms ncluded n the models fulfl strct homogenety crtera (Day, 1963): technologcal homogenety, pecunary proportonalty and nsttutonal proportonalty. The IA under consderaton as a case study s located n a sngle agrcultural county and uses a sngle source of water. Hence, bearng n mnd sol-qualty homogenety, and technologcal, nsttutonal and market characterstcs, t could be consdered that the case study area s an analytcal unt that fulfls the abovementoned homogenety crtera. Thus, t mght seem reasonable to assume smlar behavour for all farmers n the study area, whch would mean that the operaton of the polcy nstruments beng consdered could be analysed through a sngle smulaton model wth relatvely small problems of aggregaton bas. However, ths assumpton must be reected, snce eperence demonstrates that the behavour of ndvdual farmers can dffer wdely due to the heterogenety of crop cost and/or the dsparty n ther obectves. Ths eplans why farmers operatng n the same agrcultural system, wth smlar resources avalablty, nvest n a wde range of crop plans (Gómez-Lmón et al., 2004). For ths reason, n order to avod the aggregaton bas n smulaton, t s needed the classfcaton of farmers nto homogeneous groups wth regard to ther crop mes. For ths purpose, the most approprate statstcal technque s cluster analyss, whch utlses farmers

5 28 J. Gallego-Ayala and J. A. Gómez-Lmón / Span J Agrc Res (2009) 7(1), actual crop mes as classfcaton crtera (Berbel and Rodríguez, 1998). In order to develop a typology of producers, a survey was carred out among producers, wth the am of gatherng nformaton on crop mes that would allow the farmers producton to be charactersed. Ths nformaton enabled to apply cluster analyss, takng Eucldean squared dstance as a measure among actual crop mes (vector crop area epressed n percentages). The Ward or mnmum varance method was utlsed as the aggregaton crteron. The smulaton technque: postve mathematcal programmng Postve mathematcal programmng (PMP) s a modellng technque developed by Howtt (1995) whch allows calbratng Lnear Programmng (LP) models usng the nformaton contaned n dual values. PMP has been wdely accepted by economsts as a means of analysng polcy scenaros and nstruments affectng farmng actvtes. A large number of Spansh studes that use PMP nclude those of Calatrava and Garrdo (2001), Júdez et al. (2001), Arraza and Gómez-Lmón (2003), Atance and Barrero (2006), Oñate et al. (2007) and Iglesas and Blanco (2008). The PMP assumes that the productve actvty observed n a gven farm or set of farms s a consequence of the farmer s proft mamzaton behavour. Thus, the dfferences observed among farmers are due to the dfferent producton costs faced by each one of them. On the bass of ths assumpton, ths mathematcal programmng technque attempts to estmate the costs of dfferent crops, whch permts the same crop m dstrbuton as the one observed n the real world to be obtaned through a mathematcal programmng model. The PMP calbraton descrbed by Howtt (1995), also known as the standard PMP approach, s based on three steps. The frst step conssts of buldng a LP model n order to obtan the dual values varables for each of the actvtes (crops) consdered. The followng step uses the dual values varables to calbrate the cost functon of the ndvdual crops. Fnally, the cost functon parameters are used to defne a new obectve functon for the PMP model. Thus, the LP model developed n the frst step s transformed nto a non-lnear programmng model that wll reproduce the base year crop dstrbuton, and can be used to smulate future or hypothetc scenaros whch would lead nto new productve behavour. However, ths prmtve focus has been strongly crtczed, and some mportant shortcomngs of ths technque have been dentfed (Heckele and Brtz, 2005; Henry de Frahan et al., 2007). Ths led to further development of the PMP wth the am of mtgatng the drawbacks of the orgnal method. In ths respect, the works of Pars and Howtt (1998), Heckele and Brtz (2000), Júdez et al. (2001), Pars (2001), Pars and Howtt (2001), Preckel et al. (2002), Brtz et al. (2003), Heckele and Wolff (2003) and Röhm and Dabbert (2003) are of partcular relevance. Wthn the contet of PMP development, Röhm and Dabbert (2003) present an etenson whch permts a hgher degree of substtuton between smlar crops (called varant actvtes ), rather than between other less close crops (actvtes). These varant actvtes are taken nto account n order to obtan more realstc results. Thus, the concept of varant actvtes can be appled to the same crop that s grown under dfferent technques, as well as to crops from the same famly whch are equally well adapted to local condtons and are equally susceptble to the same pests (Röhm and Dabbert, 2003). The mathematcal formulaton of ths etenson of the PMP can be summarzed as follows. Bearng n mnd the dfferent actvtes () and the possble varants (), the ntal model takes the followng formulaton: Subect to: ( p y c s ) Ma TGM =, 0 ( ) ( ), 0 ( ) ( )( ) 1 [1a] [1b] [1c] [1d] [1e] [1f] Eq. [1a] represents the LP model obectve functon, where TGM s the total gross margn (assumng proft mamzaton). The TGM s calculated as the sum of the gross margns resultng from each actvty. For ths reason, the obectve functon s logcally a functon of the area allocated to each crop,, (hectares devoted to crop ( ) > 1 1

6 Polcy nstruments for ntrate polluton control 29 wth varant ). These, are consdered to be the decson varables of the model. In order to calculate the TGM t s also necessary to have the followng techncal coeffcent data: prce (p, ), yeld (y, ), varable cost (c, ) and CAP drect subsdes, coupled to the producton per unt area (s, ) for each crop that can be regarded as alternatves. The above-mentoned model presents a set of constrants, whch can be nterpreted as follows. Eq. [1b] lmts the total agrcultural land avalable, where 0 represents the crop m observed n the base year. Eq. [1c] represents the constrants for total actvtes, ε 1 beng a small postve number. Fnally, Eq. [1d] represents the constrants for the varant actvty, wth ε 2 another small postve number that must satsfy Eq. [1f]. The addton of Eqs. [1c] and [1d] forces an optmal soluton n the LP model whch reproduces the actvtes observed n the base year ( 0 ). As a result of the ntroducton of the fnal two constrants, the model soluton generates the dual values for the dfferent actvtes. Eq. [1c] produces the dual values of actvtes λ and Eq. [1d] ndcates the dual values of the varant actvty λ. Nonetheless, as n the prmal the number of constrants eceeds the number of varables, some of the varables have dual values equal to zero. Ths crcumstance s observed n the dual value of the least proftable actvty (λ ) and n the dual value of the least proftable varant actvty (λ ). Nevertheless, ths stuaton can be solved by calbratng the least proftable crops, at the same tme changng the dual values obtaned prevously (see Röhm and Dabbert, 2003). Once the transformed dual values have been obtaned, Eq. [2] represents the general obectve functon for a PMP model, takng nto account the varant actvtes: Ma TGM = GM [2] From ths equaton, after a seres of transformatons, Eq. [3] emerges, beng the etended verson of the PMP: Ma TGM = y p 1 s c 0, 0, y p y p y p, [3],,,, Ths etended verson of PMP has been also crtczed, partcularly because of the mplct subectvty n the defnton of the groups of varant actvtes, consderng that ths groupng mght nfluence the response of the models (Blanco et al., 2008). However, the etended verson of the PMP method has been wdely adopted by the scentfc communty, and s the technque chosen for several recent studes: Key and Kaplan (2007), Schmd et al. (2007), Wrsg et al. (2007) and Henseler et al. (2008). Economc, socal and envronmental attrbutes Irrgated agrculture s closely lnked to economc, socal and envronmental ssues (Gómez-Lmón et al., 2007). Bearng ths n mnd, as well as the man obectve of ths work, a set of ndcators that enable the effects of the ndvdual proposed polcy nstruments to be quantfed has been chosen: Economc mpact. Ths mpact wll be measured by the total gross margn obtaned by farmng actvty (TGM). Ths ndcator s the dfference between ncome (sales and subsdes, both coupled and decoupled ncluded n the SFP) and total varable costs. The gross margn can be regarded as a vald estmator of the prvate proftablty n the agrcultural actvty, whch s measured n ha -1. Socal mpact. Agrcultural labour (AL) demand can be consdered as a socal ndcator that enables the contrbuton of the agrcultural sector to rural development and terrtory balance (populaton settlement, ncome dstrbuton, etc.) to be quantfed. The measurement unt of ths ndcator s work-days ha -1. Envronmental mpact. Ths mpact s measured va two ndcators. The ntrogen balance (NBAL), used as an ndcator s calculated by the dfference between ntrogen nputs and outputs. The dfference represents the amount of ntrogen leached nto the surroundng envronment, whch n turn s an ndcator of the envronmental mpact of rrgated agrculture on water qualty. Ths ndcator s epressed n kg N ha -1. The second ndcator s the water use (WATER), quantfed n terms of volume of water per rrgated hectare. Ths ndcator allows the quanttatve pressure to be measured n m 3 ha -1, that eerted by agrculture on the aqufer. All the above-mentoned ndcators have been calculated by usng techncal coeffcents per unt area (ha) for each crop and varant (for further detals, see

7 30 J. Gallego-Ayala and J. A. Gómez-Lmón / Span J Agrc Res (2009) 7(1), OECD, 2001; and Bazzan et al., 2004). The fnal value obtaned for each smulated polcy scenaro and economc nstrument has been derved from farmers optmal crop plans ( ) based on the models bult for each case. Data sources for feedng the models The data needed to feed the smulaton models were gathered from prmary and secondary sources. Secondary data were etracted from the Anuaros Agroalmentaros de Castlla y León (CAG, varous years). In partcular, data regardng prces and yeld productons were collected from ths offcal source. Prmary data were obtaned from two surveys. The frst focused on agrcultural techncans workng n the IA (agrcultural etensonsts, farmers organzaton advsors, unversty teachers and researchers), and was amed at collectng nformaton about producton technques and nput prces. A total of seven eperts were consulted. The second survey focused on rrgators workng n the IA, and ths collected nformaton about crop m, structural varables of farms and soco-demographc characterstcs of the farmers. A total of 62 farmers were ntervewed. Modellng Typology of farms As a result of the cluster analyss (see Secton Decson-makng heterogenety and cluster analyss ), three dfferent homogeneous groups were defned, as can be observed n Table 1. The man features of the dfferent farm types dentfed are summarzed as follows: Cluster 1. Ths frst group ncludes 31% of the farmers ntervewed, representng 68% of the area of the IA. Ths group s characterzed by mddleaged farmers (around 50 yr old) who manage large rrgated farms (an average of 115 ha per holdng). The man crops of ths farm type are wnter cereals (wheat and barley), coverng about 70% of the rrgated area. Ths group has been labelled as large cereal growers. Cluster 2. The second group of farmers comprses about half of the farmers sampled, representng around 30% of the total rrgated area. Ths group conssts of older farmers, wth an average age of 54 yr, who manage medum-szed rrgated farms (an average of 31 ha). The characterstc crop m manly ncludes of wnter cereals and sugar-beet, representng 65% and 21% respectvely of the rrgated area. Ths group has been labelled as cereals and sugar-beet growers. Cluster 3. Ths thrd homogeneous group comprsed 19% of the farmers, and they worked only 2% of the IA. Ths group profle s characterzed by rrgators wth an average age of 50 years, who manage small farms (average of 6 ha). The man crop n ths farm-type s sugar-beet, coverng 93% of the total rrgated area. Ths group has been labelled as small sugar-beet growers. The proposed modellng approach was then ndvdually mplemented for each cluster. In order to obtan results at the IA level, the ndvdual results were aggregated by weghtng the sum of the land represented by each farm type, n order to mnmze aggregaton bas regardng the whole IA results (see Secton Decsonmakng heterogenety and cluster analyss ). Modellng baselne scenaro (CAP-2000) In order to buld the smulaton models for each farm type t was necessary to take nto account the area gven over to each crop n the area, as decson varables ( ). Before enumeratng the decson varables selected, and takng nto account the PMP etenson followed, the group of rrgated wnter cereals was defned n terms of two dfferent varant actvtes 1 : rrgated wheat and rrgated barley. The actvtes chosen for modellng were thus defned as follows: rrgated wnter cereals ( 1 ), wth the two varants of rrgated wheat ( 1,1 ), and rrgated barley ( 1,2 ), ran-fed wheat ( 2 ), ran-fed barley ( 3 ), maze ( 4 ), rrgated sunflower ( 5 ), ran-fed sunflower ( 6 ), sugar-beet ( 7 ), potato ( 8 ), rrgated alfalfa ( 9 ), ran-fed alfalfa ( 10 ) and set-asde ( 11 ). It s worth notng the usefulness of the ncluson of ran-fed crops as alternatves, wth the purpose of ncreasng the fleblty of the model, allowng farmers the opton of ceasng rrgaton and 1 For the case study presented n ths work, the ran-fed crops have not been adopted as varant actvtes, because the crop m observed n the base year dd not present these actvtes.

8 Polcy nstruments for ntrate polluton control 31 Table 1. Man features of the dfferent farm types n the rrgated area (IA) Code Label Percentage Percentage Average sze over total over total per holdng farmers n surface of (ha) IA IA Man crops G1 Large cereal growers 31.2% 68.4% 115 Wnter cereals, maze, and sugar-beet G2 Cereals and sugar-beet growers 50.0% 29.5% 31 Wnter cereals and sugar-beet G3 Small sugar-beet growers 18.8% 2.1% 6 Sugar-beet ntroducng these crops as n ran-fed areas, as happens n the real world. The obectve functon for the CAP-2000 scenaro s adusted to the prncple of proft mamzaton, as presented n Eq. [3]. Ths obectve functon, however, was subected to the followng constrants 2 : Surface constrant: Alfalfa rotaton constrant: SUR 55% SUR 9 10 [4a] [4b] Modellng CAP-reformed scenaro model From the calbraton made through the etended PMP verson utlsed, t s possble to buld a model n whch the CAP-reformed scenaro s shaped. Eq. [5a] descrbes the obectve functon n whch the new SFP scheme s ncluded, as a consequence of the reformed CAP, calculated on the bass of subsdes hstorcally receved by the producers, and the compensaton for the compulsory abandonment of sugar-beet (SUBAB). Ths addtonal payment of per non-produced tonne of sugarbeet s receved only once. Therefore, ths amount s annualzed at an nterest rate of 5%,.e Mg year - 1. Thus, SUBAB equals % sugar-beet quota. Sugar-beet CAP constrant: 7 sugar-beet quota sugar-beet yeld [4c] Ma TGM, y p 1 0, y p y p y p = 0, s, c SFP SUBAB [5a] Potato market constrant: Subect to: 8 hstorc mamum value [4d] Base model constrants: Alfalfa market constrant: AX B [5b] 9 10 hstorc mamum value [4e] Sugar-beet abandonment constrant: Ths s the model from whch the calbraton parameters λ and λ were estmated, allowng for the smulaton of the CAP-reformed scenaro and the dfferent polcy nstruments for ntrate polluton control (see Secton The smulaton technque: postve mathematcal programmng ). % 50 7 sugar-beet quota sugar-beet yeld [5c] In addton, as reflected n constrant [5c], t must be noted that the model for ths new CAP scenaro ncludes the compulsory abandonment of 50% of sugar-beet producton by all farmers. 2 The set of contrants [4a], [4b], [4d] y [4e], wll be represented hereaflter as AX B.

9 32 J. Gallego-Ayala and J. A. Gómez-Lmón / Span J Agrc Res (2009) 7(1), Modellng selected nstruments for polluton control Model for nstrument 1: ntrogen fertlzaton quotas Ths model smulates the mplementaton of a compulsory lmt for the applcaton of ntrogen fertlzers. The obectve functon for ths scenaro thus corresponds to Eq. [5a]. However, n order to smulate ths hypothetcal nstrument, the model s subect to the followng constrants: Base model constrants: Sugar-beet abandonment constrant: 7 50% Mamum ntrogen applcaton constrant: AX [6a] [6b] [6c] where NA refers to the ntrogen applcaton for each crop, and NALF k s the ntrogen applcaton lmt for each of the suggested levels (k = 120, 100, 80, 60 and 40 kg N ha -1 ). Model for nstrument 2: eco-ta for ntrogen fertlzers For the mplementaton of an ecologcal ta on the use of ntrogen fertlzers, the suggested smulaton model s represented as follows: Ma TGM = B sugar-beet quota sugar-beet yeld ( ) NA NALF SUR y s, p 1 y p 0 0 y p y p,,,,,,,, c SFP SUBAB ( t NA ) N k [7a] where t N s the eco-ta for the ntrogen fertlzer applcaton, whose values range from 0.20 up to 1.00 kgn -1. Model for nstrument 3: rrgaton water prcng In order to smulate farmers behavour when facng rrgaton water prcng, Eq. [8a] defnes the obectve functon used for the smulaton: Ma TGM = s 1 y p Subect to: Base model constrants: y p 0 0, y p y p c SFP SUBAB ( t WR ) Sugar-beet abandonment constrant: 7 50% [8a] [8b] [8c] where t w s the value of volumetrc water prcng and WR, are the water requrements for crops. In ths case, t w ranges between 0.01 and 0.06 m -3. Model for nstrument 4: lmtaton of the surface for ntensve ntrogen actvtes Ths model smulates the applcaton of a lmtaton on the cultvated area of the most ntrogen-ntensve actvtes. The obectve functon for ths scenaro thus also corresponds to Eq. [5a]. Nevertheless, n order to smulate ths nstrument the model s subect to: Base model constrants: AX B Sugar-beet abandonment constrant: w AX B sugar-beet quota sugar-beet yeld [9a] Subect to: Base model constrants: Sugar-beet abandonment constrant: 7 50% AX B sugar-beet quota sugar-beet yeld [7b] [7c] sugar-beet quota 7 50% sugar-beet yeld Surface lmt constrant: MSL SUR [9b] [9c] where MSL k refers to the mamum area allocated to ntrogen-ntensve crops, epressed n percentage terms (k = 25, 20, 15, 10 and 5%). k

10 Polcy nstruments for ntrate polluton control 33 Results The resoluton of the models descrbed above enabled, frst, to obtan results for each of the three analyzed farm types. Subsequently, through the weghted aggregaton of partal results, the results for the whole IA have been calculated. However, n order to synthesze the presentaton of results, ths secton focuses on the analyss of the aggregated results at the IA level only, snce these are the most relevant to the support of publc-sector decson makng. In any case, ndvdual results for each farm type can be consulted n Append. ntroducton of SFP mantans proftablty, and even ncreases t slghtly from ts level n the CAP-2000 scenaro. On the other hand, the AL ndcator decreases substantally (-22.9%). Ths loss n employment s also a result of the replacement of more labour-ntensve crops, e.g. sugar-beet, by other less ntensve crops (ran-fed crops). Fnally, regardng the mpact on rrgaton water consumpton (WATER ndcator), the CAP has also a postve effect on the demand for water, generatng sgnfcant savngs n water consumpton, more specfcally 37.4% of the consumpton n the CAP-2000 scenaro. CAP-reformed polcy scenaro Wth regard to the results of the new polcy scenaro (CAP-reformed), the frst pont to be hghlghted s that the latest CAP reform wll n tself have an mportant mpact on groundwater qualty. It s thus epected that ths reform wll produce a decrease of the NBAL ndcator of about 28.0% (from to kg N ha -1 ), due to two man causes: a) the decouplng of farm subsdes, whch promotes the spread of agrcultural producton (ntroducton of less ntrogen-ntensve actvtes n the crop plans) and b) the new sugar CMO reform, whch has forced a consderable reducton n the area devoted to sugar-beet, one of the most ntrogen-ntensve crops n ths IA. The TGM ndcator also ncreased after the applcaton of the recent CAP reform by about 4.8% compared wth the baselne scenaro. Although the new crop plans are more etensve and have lower added value, the Polcy nstrument 1: Ntrogen fertlzaton quotas The results obtaned for ths polcy nstrument under the new CAP framework (CAP-reformed Instrument 1) can be seen n Table 2, whch shows that less restrctve lmtatons on ntrogen fertlzaton, as represented by the frst two levels consdered (120 and 100 kg N ha - 1 ), would generate an mperceptble decrease n ntrogen balance. In fact, the NBAL ndcator would advance from -28.0% smply due to the applcaton of the new CAP, to -28.4% and -31.2%, respectvely. Nonetheless, ths ndcator s much more senstve to more restrcted fertlzaton quotas, producng notceable decreases n the ntrogen balance for the remanng levels consdered. Ths drop s above 50% for quotas of 60 and 40 kg N ha -1. Puttng ths polcy nstrument nto operaton would also brng about a decrease n the TGM. As already com- Table 2. Evoluton of ndcators selected for the rrgated area. Ntrogen fertlzaton quotas Polcy Scenaro/Instrument Indcators 1 NBAL TGM AL WATER (kg N ha -1 ) ( ha -1 ) (days ha -1 ) (m 3 ha -1 ) CAP-2000 (baselne scenaro) ,557 CAP-reformed -28.0% 4.8% -22.9% -37.4% CAP-reformed Instrument kg N ha % 4.8% -23.4% -37.9% 100 kg N ha % 4.6% -25.9% -41.1% 80 kg N ha % 2.9% -34.5% -44.6% 60 kg N ha % 0.5% -45.3% -54.7% 40 kg N ha % -3.9% -56.9% -67.4% 1 NBAL: ntrogen balance, TGM: total gross margn, AL: agrcultural labour, WATER: water use.

11 34 J. Gallego-Ayala and J. A. Gómez-Lmón / Span J Agrc Res (2009) 7(1), mented on for the prevous ndcator, the frst two fertlzaton levels do not affect the TGM. Ths mpact s only sgnfcant for quotas below 100 kg N ha -1. Nonetheless, the resultng decrease s moderated, and n the worstcase scenaro, the applcaton of restrcton level 40 kg N ha -1, t changes from 4.8% (CAP-reformed scenaro) to -3.9%. Smlarly, the mplementaton of the frst two levels of restrcton of ntrogen fertlzaton consdered would have lttle mpact on the EMP ndcator. Nevertheless, the socal mpact of ths nstrument s consderable for the most restrctve levels, leadng to reductons n employment of more than 50% for the 40 kg N ha -1 quota. Fnally, wth regard to the WATER ndcator, ths nstrument produces a postve mpact, n the sense that t leads to an addtonal reducton n demand for rrgaton water. Because of hgh ntrogen use crops are also hgh water use, n the case of the mplementaton of quotas, a drop n the use of ntrogen causes a decrease n water consumpton at the same tme. In any case, n order to be able to observe sgnfcant addtonal decreases n water use, the lmtaton n ntrogen fertlzaton would need to be below 100 kg N ha -1, as already ponted out for the prevous ndcators. In ths case, the mamum reducton n the WATER ndcator can reach % for a quota of 40 kg N ha -1. Polcy nstrument 2: Eco-ta for ntrogen fertlzers The results of smulaton models for ths second polcy nstrument (CAP-reformed Instrument 2) can be seen n Table 3. The mplementaton of an economc charge of 0.20 kg N -1 for ntrogen fertlzers would produce, by tself, an almost nsgnfcant decrease n the lberaton of ntrogen nto the ecosystem. In fact, the NBAL ndcator would merely decrease from -28.0% (CAP-reformed scenaro) to -31.1%. However, hgher values of ths eco-ta would produce larger falls n the ntrogen balance e.g. an eco-ta hgher than 0.40 kg N - 1 would lead to a more than 50% declne n the NBAL ndcator, reachng -64.4% for a charge of 1.00 kg N -1. Ths nstrument would also have a negatve effect on farm proftablty. Thus, the mplementaton of an ecota of 0.20 kg N -1 would practcally elmnate the ncrease n the TGM ndcator caused by the CAP reform. The applcaton of hgher charges would generate negatve varatons of the TGM compared wth the baselne scenaro (CAP-2000), rangng from -3.7% ( 0.40 kg N -1 ) to -12.1% ( 1.00 kg N -1 ). It should be noted that ths decrease n proftablty would be produced both by the rrgators payments of taes (ncomes transferred from prvate to publc sector), as well as the changes n crop plans dscussed above (less ncome from the market due to the substtuton of the most value-added crops). In any case, from a publc pont of vew the economc mpact for ths nstrument needs to be analyzed ontly wth ts effects on the publc-sector revenues (PUBR ndcator) generated by the eco-ta. It thus worth pontng out that the applcaton of dfferent levels of eco-ta would generate a revenue to the state rangng between ha -1 ( 0.20 kg N -1 ) and ha -1 ( 1.00 kg N -1 ). These results show that for a low eco-ta the loss n the rrgators net ncome s almost equal to the gan n publc revenue. Thus, lower levels of eco-ta hardly result n overall economc lost, Table 3. Evoluton of ndcators selected for the rrgated area. Eco-ta for ntrogen fertlzers Polcy Scenaro/Instrument Indcators 1 NBAL TGM PUBR 2 AL WATER (kg N ha -1 ) ( ha -1 ) ( ha -1 ) (days ha -1 ) (m 3 ha -1 ) CAP-2000 (baselne scenaro) ,557 CAP-reformed -28.0% 4.8% % -37.4% CAP-reformed Instrument kg N % 0.3% % -41.1% 0.40 kg N % -3.7% % -45.9% 0.60 kg N % -7.0% % -51.2% 0.80 kg N % -9.8% % -56.9% 1.00 kg N % -12.1% % -62.6% 1 See Table 2. 2 PUBR: publc - sector revenue.

12 Polcy nstruments for ntrate polluton control 35 as ths nstrument only leads to a transfer of ncome from the prvate to the publc sector. However, hgher charges would nvolve losses n rrgators proftablty that would be greater than the ncrease n publc-sector revenue, thus generatng a negatve economc mpact (overall economc lost). From a socal pont of vew the applcaton of the frst eco-ta level would generate a slght decrease n the EMP ndcator, because t has practcally no mpact on the crop plan adopted by rrgators. Nevertheless, an eco-ta above 0.40 kg N -1 would have a sgnfcant socal mpact, producng a decrease n the demand for labour generated by the agrcultural system, that could be 50% hgher than the baselne scenaro ( 1.00 kg N -1 eco-ta). Fnally, t should be emphassed that the mplementaton of ths polcy nstrument would have a postve mpact on the WATER ndcator. In fact, although the mplementaton of the two frst eco-ta levels proposed would lead to a small reducton n demand for rrgaton water, the applcaton of an ecota of 0.60 kgn -1 or more would produce savngs n rrgaton water of more than 50% relatve to the CAP scenaro. Polcy nstrument 3: Irrgaton water prcng The mplementaton of water prcng n addton to the CAP-reformed scenaro produces the results shown n Table 4. Soft water tarffs ( 0.01 or 0.02 m -3 ) would result n a small addtonal decrease n the NBAL ndcator, n such a way that the ntrogen balance would drop from the -28.0% obtaned by mplementng the new CAP alone, to -32.9% and -37.7% when the above prces are pad. However, hgher water prces would generate much more sgnfcant decreases n the NBAL ndcator. Indeed, hard water tarffs ( 0.05 or 0.06 m -3 ) would reduce the NBAL ndcator by more than 50% wth respect to the baselne scenaro. When the economc mpact of the mplementaton of rrgaton water prcng s analysed, t can be observed a negatve effect n the TGM ndcator. Thus, wth a water tarff of 0.06 m -3, farmers proftablty would progressvely decrease from 4.8% for the CAP-reformed scenaro to up to -15.2%. As mentoned above for polcy nstrument 2, the decrease n the TGM ndcator s due both to the payments made by rrgators to the publc admnstraton for water tarffs, and to the changes generated n the producton plan. By comparng the loss n the TGM ndcator wth the ncrease n the PUBR ndcator, t can be found that for low water tarffs ths nstrument bascally leads to an ncome transfer from the prvate to the publc sector. For hgher tarffs, however, t can be apprecated how overall economc lost appear;.e. the payments receved by the authortes cannot compensate for the losses n prvate proftablty. On the other hand, as far as the AL ndcator s concerned, the negatve mpact of water prcng needs to be emphassed, and t s worth notng that ths nstrument would generate addtonal decreases rangng from % for the lowest tarff ( 0.01 m -3 ) to -48.8% when the water prce s 0.06 m -3. However, ths polcy nstrument would have a postve effect on the demand for rrgaton water, producng mportant savngs of Table 4. Evoluton of ndcators selected for the rrgated area. Irrgaton water prcng Polcy Scenaro/Instrument Indcators 1 NBAL TGM PUBR AL WATER (kg N ha -1 ) ( ha -1 ) ( ha -1 ) (days ha -1 ) (m 3 ha -1 ) CAP-2000 (baselne scenaro) ,557 CAP-reformed -28.0% 4.8% % -37.4% CAP-reformed Instrument m % 0.3% % -44.4% 0.02 m % -3.9% % -51.0% 0.03 m % -7.5% % -57.9% 0.04 m % -10.5% % -64.6% 0.05 m % -13.0% % -70.2% 0.06 m % -15.2% % -73.0% 1 See Table 3.

13 36 J. Gallego-Ayala and J. A. Gómez-Lmón / Span J Agrc Res (2009) 7(1), water resources. In fact, the WATER ndcator would dsplay a fall of as much as 73.0% vs-à-vs the baselne scenaro at water prce of 0.06 m -3. Polcy nstrument 4: Lmtaton of the surface for ntensve ntrogen actvtes The smulatons made for ths polcy nstrument produce the results shown n Table 5. Wth ths combnaton of the CAP-reformed polcy and polcy nstrument 4, the ntrogen leached nto the envronment (NBAL) would hardly be reduced for the frst three levels of restrcton proposed (15%, 20% and 25%). Ths can be ustfed by the spread of producton n the IA after the applcaton of the last CAP reform, whch has reduced, by tself, the surface allocated to sugar-beet and maze. In ths sense, addtonal reductons n the NBAL ndcator would requre a more restrctve lmtaton n the surface of the potentally most pollutant crops. Thus, merely restrctng the area of the most ntrogen-ntensve crops by 10 and 5% would result n reductons n NBAL of -38.7% and -48.4%, respectvely. For the reasons mentoned above (sugar-beet and maze surface reducton caused by the last CAP reform), the mplementaton of the frst three proposed levels of lmtaton of area under crop would not generate sgnfcant changes n the remanng ndcators. These ndcators would only be sgnfcantly affected by the ntroducton of restrctons around 10 or 5%. In the case of TGM, wth these constrant values, farm proftablty would be reduced by up to -0.6 and -9.8% respectvely, vs-à-vs the baselne scenaro. The ncreasngly lmted applcaton of ths nstrument would also aggravate ts socal effects (AL ndcator). In fact, the decrease n demand for labour would reach 33.7% for the most restrctve case (a mamum of 5% of the area). To conclude, t could also be ponted out that the mplementaton of ths polcy nstrument would generate a sgnfcant decrease n the WATER ndcator for restrcton levels lower than 15%. Thus, water consumpton would be reduced n more than 50% due to the lmtatons of the area sown for the more ntensve ntrogen actvtes of 10 and 5%. Ths crcumstance can be eplaned by the postve correlaton between ntrogen and water nput, as commented above (the most ntrogen-ntensve crops are also those ones wth the greatest water requrements). Concludng remarks The results of ths study lead to conclude that the latest CAP reform (partal decouplng of subsdes), whch has been n force snce 2006, wll tself lead to an mportant reducton n ntrate polluton n the IA studed here. Moreover, ths reform wll mprove the envronmental sustanablty of agrculture by defntely reducng the demand for rrgaton water demand. Ths wll be acheved wthout ether eopardzng farm proftablty or ncreasng the publc cost of support for the agrcultural sector. The only negatve result of ths reform s the reducton n agrcultural labour demand, whch mght be a dsncentve n terms of rural development and populaton polcy. At any rate, the overall valuaton of ths agrcultural polcy reform s postve. Table 5. Evoluton of ndcators selected for the Irrgated Area. Lmtaton of the surface for ntensve ntrogen actvtes Polcy Scenaro/Instrument Indcators 1 NBAL TGM AL WATER (kg N ha -1 ) ( ha -1 ) (days ha -1 ) (m 3 ha -1 ) CAP-2000 (baselne scenaro) ,557 CAP-reformed -28.0% 4.8% -22.9% -37.4% CAP-reformed Instrument 4 25% -28.5% 4.4% -23.3% -38.0% 20% -28.6% 4.3% -23.4% -38.1% 15% -30.6% 3.9% -24.4% -40.4% 10% -38.7% -0.6% -28.5% -50.0% 5% -48.4% -9.8% -33.7% -60.0% 1 See Table 2.

14 Polcy nstruments for ntrate polluton control 37 These results can be etrapolated to other rrgated areas wth smlar characterstcs: maor presence of CAP subsdy-dependent crops and rrgaton water from groundwater sources (hgh volumetrc pumpng cost, whch renders decson-makng more dependent on the relatve proftablty of crops). The change n CAP subsdes by tself can thus be regarded as the most mpactng nstrument for solvng the problem of ntrate polluton n senstve agrcultural areas n nland Span. In fact, although the man obectve of the CAP s to mantan agrcultural ncome rather than reducng ntrogen emssons, the way n whch these payments are assgned (ncludng cross-complance mplementaton) s a key ssue to modulate nput use (producton ntensty) and envronmental mpacts of farmng sector. It should also be remembered that potental envronmental mprovements regardng ntrogen emssons due to ths agrcultural polcy are stll not ehausted. In the future ths mpact could be ntensfed by the total decouplng of subsdes, as has been proposed for the net CAP reform, known as Health Check, whch s stll to be approved. If the reducton n ntrogen emssons due to the applcaton of the last CAP reform, or any further reforms of ths European polcy, s not regarded as suffcent to solve the problem of polluton caused by agrculture, other complementary polcy nstruments, specfcally desgned for ntrate polluton reducton, could be adopted. The results of the smulatons confrm that the set of nstruments analysed s effectve from an envronmental pont of vew (reducton of ntrogen balance and water demand), although they could have serous negatve effects on farmers ncomes and would eacerbate the negatve mpact on demand for agrcultural labour. In any case, among the nstruments analysed here, the most sutable one from a techncal pont of vew s the applcaton of ntrogen fertlzaton quotas. Indeed, for a gven reducton n ntrogen balance, ths nstrument would have the least negatve effect on the economc and socal sustanablty of agrculture n ths IA. Fnally, t s worth mentonng that more accurate analyss are needed n order to take also nto account montorng and transacton costs and the estence of mperfect nformaton (Kampas and Whte, 2004; Ozanne and Whte, 2007). All of them are key ssues when these polcy nstruments are to be mplemented n real agrcultural systems. Consderng these addtonal costs, for both rrgators and the publc authortes, new smulatons mght well modfy the evaluaton reached n ths paper. For eample, ta on fertlzers could be more preferred than a quota because t s more easly appled (lower montorng and transacton costs). In addton, other alternatve nstruments desgned to control ntrate polluton would be worth to be compared. In ths sense, a partcular agro-envronmental programme could be thought n order to compensate farmers for mposng lmtaton to the use of ntrogen (Bartoln et al., 2007). Acknowledgments The authors are n debt to two anonymous revewers, whose comments led to mprovements n the paper. The research was co-fnanced by the Spansh Mnstry of Scence and Innovaton (research proect FUTURPAC, AGL C04-01) and the Regonal Government of Castlla y León (Conseería de Educacón research proect FUTURCYL, VA036A08). References AFTAB A., HANLEY N., KAMPAS A., Co-ordnated envronmental regulaton: controllng non-pont ntrate polluton whle mantanng rver flows. Envron Resour Econ 38(4), do: /s y. ARRIAZA M., GÓMEZ-LIMÓN J.A., Comparatve performance of selected mathematcal programmng models. Agr Syst 77(2), do: /S X(02) ATANCE I., BARREIRO J., CAP MTR versus envronmentally targeted agrcultural polcy n margnal arable areas: mpact analyss combnng smulaton and survey data. Agr Econ 34(3), do: / BARTOLINI F., GALLERANI V., RAGGI M., VIAGGI D., Contract desgn and cost of measures to reduce ntrogen polluton from agrculture. Envron Manag 40(4), do: /s z. BAZZANI G.M., VIAGGI D., BERBEL J., LÓPEZ M.J., GUTIÉRREZ C., A methodology for the analyss of rrgated farmng n Europe. In: Sustanablty of European Agrculture under Water Framework Drectve and Agenda 2000 (Berbel J., Gutérrez C., eds.). European Commsson, Brussels. pp BERBEL J., RODRÍGUEZ A., An MCDM approach to producton analyss. An applcaton to rrgated farms n Southern Span. Eur J Oper Res 107, do: /S (97)

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17 40 J. Gallego-Ayala and J. A. Gómez-Lmón / Span J Agrc Res (2009) 7(1), Append. Evoluton of ndcators selected for the farms-type n the dfferent scenaros analyzed Polcy Scenaro Instrument NBAL (kg N ha -1 ) Cluster 1: Large cereal growers TGM ( ha -1 ) PUBR ( ha -1 ) AL (day ha -1 ) WATER (m 3 ha -1 ) NBAL (kg N ha -1 ) Cluster 2: Cereals sugar-beet growers TGM ( ha -1 ) PUBR ( ha -1 ) AL (day ha -1 ) WATER (m 3 ha -1 ) NBAL (kg N ha -1 ) Cluster 3: Small sugar-beet growers TGM ( ha -1 ) PUBR ( ha -1 ) AL (day ha -1 ) WATER (m 3 ha -1 ) CAP-2000 no nstrument (baselne scenaro) , , , ,125 CAP-reformed no nstrument -26.1% 2.8% % -35.9% -32.2% 8.1% % -41.3% -30.2% 26.4% % -32.2% CAP-reformed Instrument kg N ha % 2.8% % -35.9% -32.2% 8.1% % -41.3% -51.3% 22.7% % -51.8% 100 kg N ha % 2.7% % -39.0% -34.9% 7.9% % -44.7% -59.1% 18.3% % -60.0% 80 kg N ha % 1.5% % -42.1% -45.4% 5.7% % -48.7% -67.3% 12.1% % -68.0% 60 kg N ha % -0.6% % -53.1% -47.4% 2.8% % -56.7% -75.4% 4.1% % -76.0% 40 kg N ha % -4.5% % -66.3% -69.9% -2.5% % -69.0% -83.6% -4.5% % -84.0% CAP-reformed Instrument kgn % -2.0% % -40.3% -34.0% 3.8% % -43.6% -30.3% 23.2% % -32.4% 0.40 kgn % -5.9% % -45.8% -36.0% -0.3% % -46.0% -40.3% 20.3% % -46.9% 0.60 kgn % -9.0% % -52.2% -49.2% -4.2% % -49.1% -40.4% 17.4% % -47.2% 0.80 kgn % -11.7% % -58.8% -53.5% -7.1% % -53.2% -48.0% 14.9% % -47.5% 1.00 kgn % -13.9% % -65.3% -57.8% -9.6% % -57.4% -48.3% 12.7% % -47.9% CAP-reformed Instrument m % -2.0% % -43.7% -35.1% 3.9% % -45.6% -40.3% 22.7% % -46.9% 0.02 m % -6.3% % -51.5% -38.1% 0.0% % -50.0% -40.7% 19.5% % -47.6% 0.03 m % -9.9% % -59.5% -41.5% -3.5% % -54.9% -41.0% 16.3% % -48.0% 0.04 m % -12.9% % -67.2% -44.9% -6.7% % -59.8% -41.4% 13.1% % -48.8% 0.05 m % -15.2% % -73.3% -48.5% -9.5% % -64.4% -42.5% 10.0% % -50.7% 0.06 m % -17.3% % -75.5% -52.2% -12.0% % -68.8% -43.2% 7.0% % -51.7% CAP-reformed Instrument 4 25 % -26.1% 2.8% % -35.9% -32.2% 8.1% % -41.3% -55.7% 7.6% % -59,4% 20 % -26.1% 2.8% % -35.9% -32.2% 8.1% % -41.3% -60.8% 1.8% % -64,4% 15 % -27.8% 2.7% % -37.9% -34.4% 7.5% % -44.1% -65.9% -4.8% % -69,4% 10 % -36.2% -1.2% % -47.9% -42.1% 1.8% % -53.0% -71.0% -12.0% % -74,4% 5 % -45.7% -10.0% % -58.1% -52.7% -8.5% % -63.1% -76.1% -20.0% % -79,4%