Agri-environmental policy in Germany: soil and water conservation

This paper is concerned with agri-environmental policy in Germany and focuses in particular on soil and water conservation. At first it discusses to what extent agriculture contributes to erosion and the pollution of surface waters and groundwater with nutrients and pesticides. Whereas erosion is a minor problem in Germany water pollution due to modern and intensive agriculture is of major concern. In theory, a broad range of environmental policy instruments exists. In practice, agri-environmental policy in Germany is dominated by command-and-control-measures, whereas incentivebased measures are of minor importance. In this paper recent developments of the most important legal and institutional settings concerning soil and water conservation policies are surveyed with special emphasis on the Federal Water Act and the Implementation of the EU Nitrate Directive into German legislation by the Fertilizer Ordinance. Since the Common Agricultural Policy (CAP) of the EU heavily affects farm structure, production intensity and regional specialization in agriculture, agri-environmental issues cannot be discussed without taking into account agricultural policy. Hence, the paper argues, that for different reasons the CAP is likely to become more environmentally friendly in future. Furthermore, impacts of alternative water conservation policies are investigated by using a regionalized agricultural sector model. Information obtained by the model analysis cover the development of nitrogen balances, potential nitrate concentrations in the soil percolation water, potentially resulting costs and effects on the agricultural incomes in the former FRG on the county level.