Green Economy in a Blue World-Full Report

in a Blue World

and delivered about a 10 per cent reduction in fertilizer consumption (ECOTEC, 2001). However, analyses suggest the tax would have to be 6-8 times larger to deliver the nitrogen pollution reduction targets the Swedish government was seeking to achieve. A 2004 study (Bel, et al., 2004) of application of fertilizer taxes in Europe ranging from 3 to 70 per cent delivered negligible changes in fertilizer use with the possible exception of one country, Austria. The study concluded that fertilizer demand was far more sensitive to agricultural output demand than to fertilizer price. Other studies identified fertilizer consumption levels falling from 33 to 50 per cent for taxes ranging from 50 to 100 per cent of base fertilizer price. Clearly fertilizer taxes can be effective in sending price signals that can alter fertilizer consumption and usage patterns but application of such taxes at local, national and even regional scales can create concerns with putting farmers subject to such taxes at a competitive disadvantage. Small grants for nutrient-reduction at local level A number of initiatives have promoted improved nutrient management through small grants to local farmers and other relevant stakeholders. The Small Grants Programme of

the UNDP-GEF Danube Regional Project (REC, 2006) awarded 65 grants to train farmers in best nutrient management practices, build improved manure enclosures, restore vegetation (nutrient sinks) along river banks, promote organic agriculture, build constructed wetlands for waste water polishing, phosphorus detergent phase-outs, and many others. While the projects did not specifically measure and track pollution reduction against initial baselines, it seems clear that many if not most of the projects did deliver nutrient pollution reduction benefits. Through its Common Agricultural Policy (CAP) following the legal definition of organic farming in 1991, the EU has provided subsidies to organic farms; farmer dependency on such schemes is very high in countries like the UK, Denmark and Germany. Total subsidies to organic agriculture in the EU-25 in 2005 amounted to €660 million or 17 per cent of total EU subsidies to the sector and represented support to 46 per cent of the organically farmed land area (European Commission, 2010). Organic farms receive higher subsidies than conventional farms in both absolute terms and on a per hectare basis but this appears to be driven more by the Subsidies to organic farming and fertilizers

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