The constraints of the Nitrates Directive have significant effects on the farms in terms of future investments, work organization and costs increase, with significant impacts, in Italy, on dairy cattle farms. The aim of this work is to evaluate the economic and managerial impacts of adaptation to the Directive’s constraints on dairy cattle farms into a Nitrate Vulnerable Zone. These farms are located in Arborea (Oristano), an important area for cow milk production of Central and Southern Italy, and where the Directive is fully implemented. By reconstructing the farm budgets, the costs of adaptation to the Directive’s constraints were evaluated, in terms of investments in sewage storage structures and disposal vehicles, of work’s organization and of higher costs for chemical fertilizers. Moreover, the effects of these costs in reducing incomes and in worsen the economic performance of farms were estimated. The current situation could worsen if the trend of precipitation of the last fifty years continues in the future, by reducing the available days for the sewage disposal in the spring, and by requiring more external labor. The obtained results are interesting also for the Pianura Padana area, where the Italian milk production is concentrated, and in which, actually, the Directive is applied with derogation, with less constraints in the sewage management. In this area, it will be required to adopt an approach different from that adopted in Arborea, because the availability of land outside the NVZ is lower and, also, the cost for the farms to use this resource is higher. In this area, investing to reevaluate livestock sewage will be important, to improve soil fertility and to generate energy.
Keywords: Nitrates Directive, Nitrate Vulnerable Zone, water pollution, economics effects, farm budget analysis, climate change
Jel Code: Q12, Q52, Q58