An overview of the cost-effectiveness of nitrogen leaching mitigation strategies based on marginal abatement cost for eighteen dairy farms in Hauraki and Horizons regions

Abstract

Nitrogen (N) management is crucial for reducing environmental impacts in New Zealand’s dairy farming
sector, particularly in minimising N leaching into freshwater systems. This study employs Marginal
Abatement Cost (MAC) analysis to assess the costeffectiveness of various N leaching mitigation
strategies across 18 dairy farms in the Hauraki and Horizons regions. These farms represent a range of
systems, soil types, and management practices. The results show that the MAC varies significantly due
to differences in farm characteristics, biophysical conditions, and economic factors. Farms with high
purchased N surplus (imported N via fertiliser and supplementary feeds minus exported N in products)
generally have lower MAC for early-stage mitigations, such as optimising N inputs and nutrient recycling
(optimal use of effluent and manure on crop or pasture). In contrast, farms with low purchased N surplus and
already efficient management practices face higher MAC, as further reductions require costly interventions
like infrastructure upgrades or stocking rate reductions. Additionally, soil type, climate, existing infrastructure
and how the mitigations complement the existing system play key roles in the effectiveness and cost of
mitigation strategies. Despite considerable variation in the MAC among farms, overall trends revealed that
the most cost-effective strategies often involve nutrient recycling, improved N use efficiency, and the use of
plantain. In contrast, de-intensification and off-paddock structures were among the most expensive mitigation
options. However, off-paddock structures can become cost-effective when they complement the existing farm
system. These findings emphasize the need for farm specific mitigation strategies to balance environmental
sustainability with economic viability.