Evaluating the economic and environmental impact of environmental compensation payment policy under uniform and variable-rate nitrogen management

Site-specific nitrogen (N) management has been suggested as a management tool to increase N fertilizer efficiency and reduce environmental impact. Environmental laws are being implemented throughout Europe to limit N fertilization on arable land, especially to protect drinking water areas. In response to the EU legislation, the State of Baden-Württemberg (southwest Germany) passed a law to further reduce the loss of N to groundwater from agricultural sources. Farmers in governmental designated water saving regions will be paid a compensation for following N management plans that reduce N levels below a target threshold value in the soil after harvest, making an efficient use of N input crucial. Precision agriculture aims at increasing this efficiency by incorporating spatial and temporal variation into N management. Crop models can help to determine the optimum N rate across a field.The purpose of this paper was to use the CERES-Maize crop growth model and the APOLLO precision agriculture decision support system to asses the importance of accounting for spatial variation in the design of policies to control groundwater nitrate concentration under the EU legislation. The policy was evaluated for uniform and variable-rate N management on a small-scale field, which was divided into 30 grid cells. The model was calibrated using 5 years of data from 30 grid cells in the field in the Upper Rhine Valley, Germany. The model simulated yield variability in the different grid cells quite well and explained approximately 60% of the yield variability. Once the model was calibrated, optimum N rate to maximize the marginal net return considering the given target threshold value of soil N after harvest was computed for each grid cell using 28 years of historical weather data. Results indicated a spatial distribution of optimum N rates for grid cells across the field. Variable-rate management required lower amounts of N fertilizer (20–25%), achieved similar yield levels and resulted in higher net returns over the 28 years of weather data when compared to current N management. Higher marginal net return in variable-rate management was achieved because the target N level left in the soil was satisfied in most grid cells under variable-rate management resulting in a compensation payment for the farmer. This did not occur as often under current uniform management practices, especially under extreme weather conditions. These results support the relevance of managing temporal and spatial variation on fields for groundwater protection applying dynamic N management strategies.