A Nitrogen Tax for Agriculture?

A large, modern fertilizer spreader Photo by Rasbak – Own work, CC BY-SA 3.0

By Stuart Meikle

After the recent suggestion that there should be a tax levied on GHG emissions from agriculture, will a proposal to tax nitrogen fertilizers be next?

Whilst I have doubts about the workability of the former, a nitrogen tax may not be as fraught with implementation difficulties. Poorly thought out a GHG tax might not even deliver the desired results whereas anyone who has studied agricultural economics will understand what a nitrogen response curve is and appreciate that an increase in the price of nitrogen should reduce its usage. The consequences for farm incomes and food production may, however, not be so easily identified.

Why the concern about nitrogen fertilizers [and nitrogen ‘leakage’ from agriculture per se]? There are health concerns about nitrates in drinking water and ecological concerns about the quality of our rivers and lakes. Only a few days ago the British Geological Survey published a report about the slow seepage of nitrates from soils through the underlying rocks and into aquafers used for drinking water. And then there are nitrous oxide losses into the atmosphere from applying nitrogen fertilizers to add to GHG levels and ozone depletion. And then there is the usage of fossil fuels [natural gas] in the production of the nitrogen fertilizers themselves. The charge sheet is rather long.

In defense of artificial nitrogen, one can say that the Haber-Bosch process has made a major contribution to global food production over the last century. Food prices would not be as cheap today without the ready availability of artificial nitrogen to stimulate plant growth. One also doubts if urbanization would have been able to occur to the same degree without society being freed from the constraints of having to locally recycle nutrients back to the land from whence the urbanites food originated. Artificial nitrogen allowed the revolution in the way humans live.

“Topsoil as well as farm fertilizers and other potential pollutants run off unprotected farm fields when heavy rains occur.” Photo by USDA

Sustainable Food Trust

The Sustainable Food Trust in the UK has just published a report that highlights the externalities [the costs of our food that are not measured by the market price alone] of our current methods of food production. It is far from an exact science but as they acknowledge, “this report attempts to help address the knowledge gap… by bringing together the most up-to-date evidence which quantifies and monetises the diverse negative impacts of the UK food system” (The Hidden Cost of UK Food, The Sustainable Food Trust, November 2017).

The report has specific comments to make about nitrogen fertilizers; “conversion of inert nitrogen in the air we breathe to reactive nitrogen (essentially ammonia, artificial nitrogen fertilisers and oxides of nitrogen) has increased 20-fold over the last century… activities and processes related to agriculture – such as fertiliser manufacture, animal manure storage and application, and soil nitrification, denitrification and degradation – make the farming sector by far the largest source of pollution from reactive nitrogen, responsible for approximately two-thirds of all nitrogen pollution of the atmosphere and aquatic environment, while transport and energy production account for one-third between them”. It goes onto state that, “the negative costs to society of nitrogen fertilisation in the EU27 exceeds its contribution to the gross value added to the primary agricultural sector by its use, by €70 billion per year”.

And one can also add that the availability of artificial fertilizers has allowed the extensive development of monoculture-based farming that is divorced from soil fertility building practices. Monocultures are also being implicated in soil degradation, biodiversity loss and the development of naturally-evolving resistance to our modern food-producing solutions. It is difficult to ignore the probability that the food systems that we have developed over the last 60-70 years have come at a yet to be fully unquantified cost to society. Then again, as with climate change, one can be pretty sure that there will be those who prefer denial to entering a constructive debate about change.

Both sides

Agree or disagree with such findings, it is quite an opening salvo to make in a debate about the true cost of our food. Interestingly, the report was discussed on the BBC’s Farming Today and a spokesperson for Nestle immediately responded by expressing their willingness to engage in the debate over the environmental and social costs of food. If the wider farming community chooses to ignore the issue, there will be those further along the food supply chain who will not, and they will, as through their demands for the implementation of earlier quality assurance schemes, force the issue. The question for farmers is, do they want to be ahead of the curve or to wait until they must dance to the tune called by others?

True, artificial nitrogen has facilitated social and economic development as we know it. Without it, societal change would have been limited by the need to use farming systems that directly secure nitrogen from the atmosphere. Nevertheless, food systems based upon artificial nitrogen have, apparently, generated significant external costs that we are now only just beginning to understand and to quantify. And the more we understand them, the greater will be the pressure placed upon food producers to change to mitigate them. It is why we are heading into a period of unprecedented change for farming and food systems. To carry on as before will not be an option.

The above said, we must ensure that an external cost of change is not farm incomes and the welfare of farmers. To do so we need to adopt a changed mindset; we need to engage, and we need to actively seek out the truly sustainable alternatives that work for the environment and farmers. They are thankfully appearing, albeit often not from within the mainstream of farming or research.

A case in point is Ireland’s Smartgrass project [similar research is occurring elsewhere] that seeks out “how to produce high quality/high yielding grassland forage in an environmentally sustainable way”. One aspect of their work is the use of multi-species swards to maintain production while using less nitrogen fertilizers. The adoption of precision agricultural techniques that better target nitrogen use is another. Such work should have multiple benefits to all, the farmer included. In theory, the losers will be those who manufacture nitrogen fertilizers but, as with those who build the soon to be defunct combustion engine, one can expect that they will adapt and change to keep the economic wolf from their own door. Nobody really likes change, but sometimes it is inevitable.

photo by sara’mer Pea roots – spidery house for nitrogen-fixing bacteria CC BY-NC 2.0
This article originally appeared on Stuart Miekle’s blog as two articles, here and here
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About Stuart Meikle 29 Articles

Stuart Meikle is an agricultural management and policy specialist, an economist, a writer and an advisor. He was brought up with agriculture and studied at the University of London. He joined the faculty on graduating and spent several years teaching, researching and consulting. His last 25 years have seen him advising governments, the World Bank and the IFC, NGOs, universities and private businesses in places as far afield as SE and Central Asia, the Caucuses, the Levant, SE Europe and the UK. Over the years he has developed a particular focus on agricultural and food sector strategy at the national and regional levels and linking rural development initiatives with the consumer through the food supply chains. He first arrived in Romania to work on a Commission project in 1997 and he lived in Transylvania for more than a decade from 2002; a location to which he was appointed as the United Kingdom's first Honorary Consul. Nowadays he and his family live in the Republic of Ireland.

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