European SMEs operating in livestock farming (>2.21million) are under increasing pressure from supermarket purchasing powers, legislation, biofuel crops (as they compete with the livestock farmers for land) and environmental issues, which has resulted in substantially reduced profits for the community. In 2010, the average income for a farmer dropped by 27% compared to its value in 2003.
The Common Agricultural Policy (CAP) in the EU unevenly distributes subsidies to large farms and land owners while small- and medium-sized farms struggle to survive on less than minimum wage.
For example, in Spain, the top 18% of big farms received 76% of all subsidies and 37,000 family-run farms disappear each year. In addition, the livestock sector is faced with increasing legislation that, in time, will ban current methods for disposal of manure. Currently >90% of the 1,578 million tonnes of cow and pig manure produced per year are disposed of by being spread on fields as fertiliser. As manure contains high amounts of nitrogen and phosphorus, its disposal by this spreading method has become a problem.
Application of excessive amounts of manure to land can lead to surface and ground water contamination through the accumulation of minerals in the soil. Nitrate and phosphate levels in many European waters are increasing to dangerous levels with over 70% of nitrate entering water from over-fertilisation of agricultural land. As a result, farmers in the EU are confronted with an increasing number of essential regulations and administration that limits the degree of freedom in farming, especially in intensive animal production.
For example, the Nitrates Action Directive places a severe restriction on the quantity of organic manure that can be applied to land (170 kg N/ha/year) in addition to regulations forbidding land application during 4 months of the year and minimum storage periods of 6 months. In addition, the level of spreadlands currently available is inadequate for the amount of manure produced and would need to drastically increase in order to meet the limits set by the Nitrates Directive.
In order to meet vital legislation, livestock farmers may have to export the manure off the farm to landfill; this practice will expose the farming community to substantial increases in cost (>70% increase on current cost), due to landfill tax and transport costs. In addition export of manure off the farm is not always a viable alternative as transport of raw manure further than 15km is uneconomical due to its high water content (>70% by weight).
In order to meet on-farm nitrate and phosphate balance, the livestock sector has already been using low-protein animal feed, and low emissions techniques for the storage, handling and application of animal manure. These methods now used by farmers are proving expensive for the farming community and relatively inefficient. In addition improved farming practices alone will not be sufficient to meet the demanding environmental objectives for phosphates in surface waters as part of the European Nitrate Directive and Water Framework Directive, in which livestock manure loadings are limited to an overall farm limit of 170kg/ha total nitrogen on arable land; this is equivalent to limits for phosphorus of 19 kg/ha and 43 kg/ha respectively for cattle and pig manure.