MINAS: a post mortem?

Abstract

The study is an in-depth analysis of the problems that occurred with the Dutch Mineral Accounting System (MINAS) after it was introduced in 1998. MINAS targets mineral surpluses from agriculture and combines nutrient accounting with a tax system. It was the Dutch government’s policy tool of choice for implementing the Nitrate Directive and has been successful in that it has lead to a reduction in nutrient surpluses. The study focused on the pig sector, and aimed to identify the problems that have occurred with the policy, how and why these problems transpired, and the manner in which they contributed to the erosion of the policy. The theme was approached by means of an empirical study, based on a series of interviews with key personnel within organisations involved with MINAS in The Netherlands. The difficulties with MINAS centre on the correct estimation of the mineral flows on and off the farm. As a policy based on sampling and measurement, the system is subject to various uncertainties, in particular relating to the estimation of the mineral content in manure. The inherent uncertainties can result in the imposition of unjustified levies, since the minerals imported and exported on paper do not tally with the flow in practice, and a mineral surplus may thus appear to exist on the farm. This was especially true for intensive livestock producers, and various farmers within this sector received MINAS levies in the range of thousands of euros, despite having disposed of all their manure. As a result of the manifested problems, the NVV (the Dutch pig farmers union) financed research into the various sources of inaccuracy that they perceived, in order to obtain scientific evidence and attack MINAS on legal grounds. Resistance to the policy within the target group took the form of litigation procedures, the occurrence of fraud and the exploitation of loopholes. The result of the increased resistance was a significant increase in the bureaucratic load, as the administrative organisation dealt with an escalating number of complaints in addition to an increase in the complexity as the system was continually adapted in an effort to address the various weaknesses. The roots of the problems that materialised during the implementation phase of MINAS can be traced back to the conceptualisation stage of the policy-making process, when it appears that inadequate research was undertaken into the consequences of applying the instrument, originally developed for use on dairy farms, across all agricultural sectors. Furthermore, the design of MINAS did not offer any economic incentive for intensive livestock producers to reduce their mineral inputs, and only entailed an increase in operational costs. The weakening of the economic position of pig farmers during the late 1990’s, due to a number of external pressures, had a contributory effect in that it made the sector susceptible to any increase in costs, such as those imposed by MINAS. The financial implications of the uncertainties were later magnified when the tax rates were increased, and the loss standards were decreased faster than originally anticipated, as a result of the ongoing discussion with the European Commission regarding the ability of MINAS to satisfy the requirements of the Nitrate Directive. Thus, the erosion of MINAS was the result of the combination of a number of factors. The inherent problems could have been avoided, or at least foreseen, had the effect on all sectors been given equivalent attention. However, policy makers were incapable of preventing other developments, such as the increase in the stringency of MINAS as directed by the European Commission, and the negative economic climate that then contributed to a loss of support for MINAS.