Economic Assessment of Compliance Costs for Laying Hen Farmers under the Nutrient Management Act and Clean Water Act of Ontario

This thesis investigates the levels of compliance costs associated with the Nutrient Management Act (2002) and the Clean Water Act (2007) of Ontario. The NMA (2002) sets standards for manure production and handling by livestock farmers in Ontario and the CWA (2007) considers nitrogen and phosphorus application in source water protection areas as a threat to water quality. Previous studies on compliance cost conclude that the timely receipt of results from manure analysis would reduce or remove the cost of complying with the nutrient regulations. I develop a model for a large scale laying hen farm using the certainty equivalent whole farm gross margin model proposed by Robison and Barry (1987). Under the NMA (2002) compliance cost is 16.4% of annual farm gross with a uniform manure application but disappears with an optimal manure application. The CWA (2007) with an optimal manure application results in compliance costs of 14.4%.