Nitrogen pollution policy beyond the farm

Abstract

Nitrogen is a crucial input to food production and yet its oversupply in many parts of the world contributes to a number of environmental problems. Most policies dedicated to reducing agricultural nitrogen pollution focus on changing farmer behaviour. However, farm-level policies are challenging to implement and farmers are just one of several actors in the agri-food chain. The activities of other actors — from fertilizer manufacturers to wastewater treatment companies — can also impact nitrogen losses at the farm level and beyond. Consequently, policymakers have a broader range of policy options than traditionally thought to address nitrogen pollution from field to fork. Inspired by the concept of full-chain nitrogen use efficiency, this Perspective introduces the major actors common in agri-food chains from a nitrogen standpoint, identifies nitrogen policies that could be targeted towards them and proposes several new criteria to guide ex-ante analysis of the feasibility and design of different policy interventions. Sustainably feeding ten billion people by 2050 will require fundamental changes in the global food system — a broad portfolio of policy options and a framework for how to select them is essential.

Main

Nitrogen is essential for life and to food production. However, crops only take up half of the nitrogen applied on average and, once consumed, humans and animals utilize only a fraction of this and excrete the remainder1. The rest is stored temporarily in the soil or lost to the environment. Nitrogen losses can cause nitrogen pollution — one of the most important environmental issues facing humanity — which results in impacts ranging from eutrophication and air pollution to biodiversity loss, climate change and stratospheric ozone depletion2. These impacts contribute directly and indirectly to a number of human health concerns, including respiratory ailments, cardiac disease and several cancers3. Agriculture is the dominant source of nitrogen pollution, driven by growing global food demand and inefficiencies along the entire food supply chain, from synthetic fertilizer production to waste management. The scale of human intervention in the nitrogen cycle is enormous, with human and natural sources of reactive nitrogen (any form other than sedimentary nitrogen and atmospheric dinitrogen, N2) currently at parity4. This, in turn, has generated increased attention from policymakers interested in addressing nitrogen pollution5, 6.

Policy discussions on how to reduce the impacts of nitrogen pollution tend to focus on farm management of nitrogen inputs given its dominance as a pollution source7, 8. This is not surprising: farm-level decision-making is a crucial lever for improving nitrogen management and use efficiency (NUE) — commonly defined as the ratio of farm-level nitrogen outputs to inputs — is a popular indicator for measuring improvement9. However, nitrogen is not only lost at the farm level, and farmers are not the only actors along the agri-food chain that can drive the adoption of measures to reduce agricultural nitrogen losses.

Nitrogen loss begins during the fertilizer production process and continues throughout food production, transport, consumption and waste management. These multi-stage losses stimulated the development of an amended NUE metric known as full-chain NUE4: the ratio of nitrogen in final products (for example, human food consumed) to new anthropogenic nitrogen production (for example, Haber–Bosch nitrogen, agricultural biological nitrogen fixation and NOx formation). To illustrate this, a recent global study estimated that the NUE of crop and grass cultivation is 43%; that is, 43% of global nitrogen inputs to agricultural soils end up as either feed or food. If the entire agri-food chain is considered using full-chain NUE, then NUE decreases to 8%; that is, only 8% of newly produced anthropogenic nitrogen every year is actually consumed by people4. Inspired by this concept of full-chain NUE, this Perspective introduces a new framework for analysing nitrogen pollution abatement policies, expanding the focus beyond farmers to encompass actors across the entire agri-food chain. While our focus is on policies to reduce the impact of too much nitrogen, increasing access to nitrogen inputs in regions with too little nitrogen is an area of immense importance that requires sustained attention from researchers and decision makers10.

Expanding the boundaries for NUE has significant policy implications which are yet to be explored. Full-chain NUE encourages policymakers to consider actors other than farmers when developing measures to reduce agricultural nitrogen pollution, from fertilizer companies and food traders, to retailers and consumers. This is important because farm-level policies often face considerable implementation barriers: influencing, monitoring and enforcing changes in farmer behaviour can be extremely difficult7, 11, 12. As an alternative, policies targeting different actors along the agri-food chain to share responsibility for nitrogen abatement might prove more effective and efficient at reducing nitrogen pollution. Moreover, farm-level nitrogen losses could be reduced by implementing policies targeting non-farmers, given the considerable influence non-farmers can have on farm-level decision-making12. For example, a policy mandating retailers to adopt or strengthen sustainable supply chain codes that include stringent nitrogen management plans could ultimately increase field-level NUE as farmers implement them. This illustrates how agriculture is a complex system with farms enmeshed in large and complex technological, market, cultural, and government networks, the dynamics of which significantly shape farmer decisions.

While a handful of studies have outlined NUE-improving measures at isolated points along the agri-food chain (notably farmers and consumers)13, 14, none have identified all the major public and private actors that provide and derive value from each point along the chain. And, while previous agri-food chain analyses have covered a number of different commodities (for example, palm oiland soybeans15, 16) and issues (for example, public health17), this Perspective is the first to focus exclusively on nitrogen. It also introduces a new set of criteria to help determine where along the agri-food chain a government intervention to address nitrogen pollution may have the most impact.

The agri-food chain

We define the agri-food chain as the string of processes and actors that help generate value, from the production of synthetic fertilizer to food products for final consumption (and the ensuing waste streams). Figure 1 represents the agri-food supply chain from a nitrogen perspective and the losses that occur at each link in the chain. While agri-food chains will look different for crop versus livestock production systems, or across regions and political systems, the fundamental components presented in Fig. 1 remain largely the same18. For certain systems, such as intensive livestock systems, where feed production is decoupled from animal production, actors may be spread across several countries and thus subject to different national policies. The major actors within the agri-food chain are fertilizer manufacturers, farmers (crop and livestock producers), farm advisors, processors, traders, retailers, consumers, wastewater treatment companies, financial organizations and civil society. Farmers who apply too much nitrogen can range from smallholders growing their own food with subsidized fertilizers to large-scale commodity producers19. Farm advisors provide counsel on farm-level management decisions and policy requirements. Processors transform the raw agricultural products supplied by farmers into products for consumers, while traders are the link between producers, processors and markets. Retailers can range from local corner shops to large supermarkets. Financial organizations provide funding to actors across the agri-food chain, and civil society raises awareness via activities such as reports, labelling initiatives and public protests. Each actor contributes to nitrogen pollution directly and indirectly, the former through their own activities (with the exception of farm advisors, financial organizations and civil society), the latter via their influence on up- or downstream decision making. State actors are not included in Fig. 1 as they are the subject, rather than the objects, of possible policy interventions. Table 1 is a compendium of both direct and indirect policies for each actor. An example of a direct policy for fertilizer manufacturers is NOx emission standards for nitric acid production, while an indirect policy would be product standards for new enhanced efficiency fertilizers20. This is an important distinction given the dominant role that farm-level decision making has in determining nitrogen pollution flows. Some of the policies listed in Table 1 have already been implemented in different countries and regions with varying levels of success, some are recommendations that have been published in the academic and grey literature, and others are ideas conceived for this Perspective. See the Supplementary materials for more information on each actor and policy option.

Fig. 1: The agri-food chain from a nitrogen perspective.
figure1

Each blue box is a major actor in the chain that contributes directly to nitrogen pollution. The grey boxes represent other major actors in the agri-food chain, but whose actions do not directly contribute to nitrogen pollution. The orange boxes refer to nitrogen loss pathways that are the result of actions at that point in the chain. The numbers below the orange boxes refer to global nitrogen losses in teragrams of nitrogen per year from these pathways. Data taken from refs. 45 and 46. The details of the role of each actor in the agri-food chain and the policy interventions that could be targeted towards them are discussed in the Supplementary Information. aThis number is the sum of food waste and losses across traders and processors, retailers and consumers

Table 1 Government policy interventions that could directly improve nitrogen management for major agri-food chain actors and indirectly influence farm-level decision making

Policy criteria for government intervention

An inventory of existing and potential policy options is only the first step in discussing the policies available to improve agricultural nitrogen management. The next step is to develop a set of principles to help policymakers decide which actor(s) along the agri-food chain might be best to target in a given policy context. While the private sector and civil society have established initiatives to address nitrogen pollution21 the focus here is on state authority, for two reasons: first, a full-chain NUE approach requires the ability to intervene at a series of points along the agri-food chain simultaneously. Only state authority is capable of forcing changes in the behaviour of any actor in the chain, regardless of the actors’ willingness. By contrast, private sector and civil society initiatives tend to focus on a specific actor, or subset of actors, that are usually participating voluntarily. This leads to the second reason: non-governmental initiatives tend to be ‘softer’ than governmental initiatives — introducing new guidelines or labels, for example, rather than instituting specific targets with penalties for non-compliance22. The latter is crucial given the severity of nitrogen pollution from local to global scales, and the short timelines for action23. This should not be taken to mean that different intervention sources are incompatible, but rather that private sector and civil society interventions should be seen as supplements rather than substitutes to government interventions24.

Furthermore, we are not proposing new criteria for evaluating specific policy instruments and measures related to nitrogen pollution, such as environmental effectiveness and cost efficiency25. Such criteria have already been proposed and evaluated comprehensively in the environmental policy literature26, 27. Instead, we are proposing a preliminary set of criteria for determining promising points along the agri-food chain where nitrogen policies may be most effective and efficient, independent of the policy instrument selected. These criteria are enforcement feasibility, knowledge landscape, regulatory system and spill-over potential. Enforcement feasibility is the ability to hold actors accountable for their actions. Knowledge landscape refers to the availability and deployability of mitigation actions and the willingness of actors to adopt them. Regulatory system refers to the unique system of laws and regulations that characterizes every nation state. Spill-over potential is the capacity of a policy to influence the behaviour of actors not directly targeted by it and generate benefits beyond the directly intended ones. The common element across all of these criteria is the minimization of the transaction costs associated with policy implementation28.

Enforcement feasibility

The ability to hold actors accountable for their behaviour under a specific policy, through monitoring and enforcement, is a crucial consideration for policy makers. This is partly an issue of policy choice and design: providing clarity as to whom the policy applies, what the expected behaviour of the targeted actor is and how behaviour inconsistent with the policy is sanctioned. Other determinants of effective enforcement exist independently of a policy itself, such as group size and distribution. For example, it is generally harder to monitor and enforce the activities of a large, more dispersed group of actors such as farmers and the general public compared to a smaller, more concentrated group of actors, particularly when a policy regulates a non-point source pollutant. This is reflected in several successful environmental policies in the United States which forced a relatively small number of actors and pollution sources to develop technological improvements; for example, the six corporations controlling over half of the US automobile market that were mandated by the Corporate Average Fuel Economy (CAFE) standards to increase the fuel efficiency of their vehicle fleets29, 30. From a nitrogen perspective, this approach suggests a focus on actors that are small in number and highly concentrated, such as the fertilizer industry or multinational retailers20. If the policy is a relatively straightforward economic instrument that can be imposed uniformly on a group with little monitoring, such as a fertilizer tax on farmers, or a meat tax on consumers, then group size and distribution is less of an important factor in determining the potential for feasible enforcement.

Knowledge landscape

The knowledge landscape comprises several elements: the availability of nitrogen mitigation technologies and practices, the capacity and willingness of an actor in the agri-food chain to learn and apply this knowledge, and the broader social, economic and legal infrastructure required to ensure this knowledge can be put into practice effectively. Each of these elements is made up of a number of aspects — for nitrogen mitigation technologies and practices, one has to consider effectiveness in terms of how capable a technology or practice is at reducing nitrogen pollution and what proportion of total nitrogen pollution it can address. This includes a consideration of whether a particular technology or practice could help or hinder compliance with several different environmental regulations, given the close links between different forms of nitrogen pollution and its multiple environmental impacts. It is also important to distinguish between technologies or practices that are ‘drop-in’ or ‘end-of-pipe’ solutions, requiring little change to a current process, compared to those that involve a more fundamental transformation. For example, non-selective catalytic reduction techniques can reduce N2O and NOx emissions from nitric acid production (a key feedstock for several synthetic nitrogen fertilizers) without changing the hub of the production facility, whereas improving manure recycling to reduce nitrogen losses could require a major transformation of industrial agriculture systems by more thoroughly integrating crop and livestock production4, 31. This connects to the second element described above — the capacity and willingness of an actor to learn and apply this knowledge. Questions that need to be addressed here include: what is the innovation culture, that is, how rapidly and frequently does an actor in the agri-food chain adopt new knowledge and how? How much expertise is needed to implement and operate a particular technology or practice? And how many people need to be trained to ensure widespread adoption? For example, the North American fertilizer industry has a conservative innovation culture, investing less than 1% of annual revenue on research and development. Such a case may require policy intervention to accelerate technology development20. Technology availability and actor willingness have to also be enabled by a broader social, economic and legal infrastructure. This can encourage collaboration between actors in the agri-food chain, police intellectual property and generate the incentives necessary to stimulate research and development — issues intimately linked with a country’s regulatory system. For example, policy efforts to address food waste in Japan were enhanced by initiatives such as stakeholder roundtables and certification schemes which created the environment and incentive structure for knowledge exchange, as well as research into new uses for and technologies to reduce food waste32.

Regulatory system

Each country has its own regulatory system — a unique system of laws and regulations, with varying levels of stringency, which impact the incentive structure and environmental performance of stakeholders along the agri-food chain. Understanding this system, and where existing policies might provide the most leverage to improve nitrogen management is an important consideration in determining the most promising policy intervention points. For example, in the United States, almost no federal agricultural policy related to nutrient management requires mandatory participation from farmers. Instead, voluntary programmes such as the Environmental Quality Incentives Programme have attempted to incentivize improved nutrient management via direct payments, and have been largely ineffective at increasing farmer best management practices and enhanced efficiency fertilizer adoption rates — possibly due to the incentives being insufficient, or the inadequacy of monitoring and enforcement33. Regardless of the cause, the weak regulatory system at the farm-level means that federal policymakers in the United States could target other actors along the agri-food chain to influence farm-level nitrogen management, such as the fertilizer industry or retailers, using legal authority granted in legislation such as the Clean Air Act34. By contrast, farmers in the European Union are subject to a number of mandatory regulations on nitrogen pollution, including the European Union Nitrates Directive and the National Emissions Ceiling Directive, with moderate levels of success35. This indicates a significantly stronger regulatory system (and enforcement capacity, see Enforcement feasibility) at the farm-level than the United States. Another important example is that if farmers wish to receive payments under the European Union Common Agricultural Policy’s Single Payment Scheme they must follow a variety of environmental and other regulations, including those related to nitrogen pollution — an application of the cross-compliance concept7. In short, a country’s regulatory system is a key determinant in deciding where along the agri-food chain it may be most effective to intervene.

Spillover potential

A fourth important consideration is the possible spillover effects — both positive and negative — of a particular policy on other actors along the agri-food chain. Could policy X directed at actor Y also impact the behaviour of actor Z, thereby amplifying (or dampening) the impact of policy X? The more likely a policy is to impact the behaviour of an actor not explicitly targeted by it, the higher its spill-over potential is36. Furthermore, integrating spill-over potential into the evaluation of potential policy interventions enables the consideration of social equity concerns, that is, how a particular policy may disproportionately impact farmers, or other less powerful actors, within the agri-food system37. One example of spill-over potential is the Danish Council of Ethics’ proposal to tax meat — the direct aim of which was to reduce public meat consumption. A reduction in meat consumption would not only lower Denmark’s per capita environmental footprint, it would also likely have a positive impact on public health given the risks associated with excess red meat consumption38. A meat tax could also have significant implications for upstream actors such as livestock farmers, who may have to diversify their production to stay in business, and retailers, who may have to provide more meat-free alternatives on their shelves. In other words, the spill-over potential of such a policy is high. An additional level of complexity is that Denmark is a net exporter of meat products, and so lowering domestic consumption could lead to greater exports due to increasing demand for meat in other parts of the world such as China, with implications for domestic nitrogen pollution39. Regardless, the potentially extensive societal impact of such a policy stands in contrast to policies such as Ghana’s Riparian Buffer Zone Policy for Managing Freshwater Bodies, which aims to ensure the sustainable management of riparian buffer zones to reduce nutrient loading of waterways40. The policy mandates farmers to implement a range of best management practices to improve riparian buffer zones. While an important initiative, from a spill-over potential it is limited as the protection of a riparian buffer zone is unlikely to impact the behaviour of other actors along the agri-food chain (though it could provide a win-win — a subdivision of spill-over potential discussed below — by way of reduced nitrogen run-off and increased on-farm biodiversity). Consequently, while spill-over potential may not be a relevant criterion for all nitrogen policy options, it can encourage policymakers to explore, and possibly take advantage of, previously overlooked opportunities.

From a political feasibility standpoint, it is important to emphasize positive spill-over potential, or win-wins. Win-wins are defined as any financial, social, reputational or environmental benefit that accrues to an actor as the result of a policy, in addition to the directly intended benefits. Policies that can generate win-wins for the regulated actors are more likely to be supported by those actors, increasing the chances of a policy’s success and consequently its political feasibility. For example, DuPont, a multinational chemical corporation and top producer of chlorofluorocarbons in the 1980s, supported the United States and global efforts to phase out their production because they had the patents for several chlorofluorocarbon alternatives and could thus profit from a new market41. From a nitrogen perspective, a policy to improve farm-level NUE could not only lead to increased enhanced efficiency fertilizer and best management practices use, which could generate savings for farmers in the form of reduced fertilizer expenditures and increased yields, but could also increase revenue for the fertilizer companies that produce and provide them, given that many enhanced efficiency fertilizer and best management practices services are patent-protected and thus have a higher profit margin42. Furthermore, policies to reduce nitrogen losses at the processing, trading and retailer stages could boost how much consumers are attracted to the entities that effectively implement them43. Nevertheless, barriers can exist — financial, infrastructural, regulatory and value-driven — that limit the ability of actors to accept, receive or take advantage of these win-wins. For example, it is well documented that many farmers tend to over-apply nitrogen as an insurance policy, and are sceptical of many NUE-improving technologies and practices. In this case, identifying the right channels for persuading farmers to try new technologies and practices is key12.

Conclusion

Current approaches to agricultural nitrogen policy do not take into account all the actors in the agri-food chain. A narrow focus on farmer behaviour is not only a challenge for policymakers but it also omits a much broader range of actors across the agri-food chain. By introducing the main actors common across almost all agri-food chains and the range of policy interventions that apply to them, coupled with criteria to aid policymakers in selecting where and how to intervene, this study broadens the scope of policy opportunities for countries suffering the impacts of excess nitrogen. This is an important step in providing policymakers with the tools to develop effective and efficient nitrogen management policies that could lead to significant, long-lasting reductions in nitrogen pollution through improvements in full-chain NUE. The next steps include application of the agri-food chain analysis and policy criteria to, and across, specific countries and supply chains. Furthermore, the ubiquity of nitrogen as a contributor to a number of environmental concerns means that any policy interventions need to consider potential trade-offs (for example, pollution swapping) and synergies (such as health co-benefits)44. A full-chain approach is not limited to nitrogen pollution: next candidates could include other forms of nutrient pollution, notably phosphorus. Other agricultural inputs and environmental impacts caused by agricultural production such as pesticides, biodiversity loss, climate change and others would all benefit from a broader consideration of the policy space given the numerous challenges associated with regulating the agricultural sector. Sustainably feeding ten billion people by 2050 is one of the greatest challenges facing humanity — a comprehensive understanding of the policy options available for doing so is imperative.

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D.R.K. developed the idea and led the writing, with contributions from F.B., S.K., A.L., O.O. and A.U.

Correspondence to David R. Kanter.

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Kanter, D.R., Bartolini, F., Kugelberg, S. et al. Nitrogen pollution policy beyond the farm. Nat Food 1, 27–32 (2020). https://doi.org/10.1038/s43016-019-0001-5

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