Nitrate leaching is an important environmental problem, because it causes p
ollution of groundwater and surface water. Dairy farming makes an important
contribution to nitrate leaching. This study analyses the economic impacts
of reductions in nitrate leaching for dairy farms in the Netherlands. Usin
g a non-linear partial optimisation model for the economic and ecological a
spects of the problem, the study shows how the financial balances of dairy
farms change when nitrate losses are reduced to the maximum admissible nitr
ate leakage of 34 kg N ha(-1) year(-1). Model results indicate that the dif
ferences in the reduction of financial balance vary between NLG 0 and 549 h
a(-1) year(-1), while in some cases it is extremely difficult, if not impos
sible, to reach the maximum admissible level. (Note: NLG 1 = US$ 0.50 as at
22 July 1998).