LIFE+2010 - Project code: LIFE+10...

LIFE+2010 -‐ Project code: LIFE+10 ENV/IT/000321 – Action 7a

LIFE+2010 - Project code: LIFE+10 ENV/IT/000321

Technical report:

Economic evaluation at farm level Deliverable product of the CURSA Research Unit Code of the associated Action: 7a


Disclaimer This report has been produced with the financial assistance of the European Union - LIFE+ Environment - GA LIFE+10ENV/IT/000321. The contents of this report are the sole responsibility of the ZeoLIFE Consortium and can under no circumstances be regarded as reflecting the position of the European Union.

Action 7 - Agro-economic and environmental analyses of the integrated zeolitite cycle

SubAction 7a: Economic evaluation at farm level

Deliverable : Study report on economic evaluation of existing economic situation

Final Report on Agro-economic analysis of zeolite integrated cycle (7a7)

Introduction 7a1. Report on agriculture statistic and pilot farm data

Area Background Data on Pilot Farm: Material and Methods The experimental field The experimental field 2013 The experimental field 2014

7a2. Evaluation on water and fertilization savings 7a3. Evaluation of transportation and distribution costs of zeolitite integrated cycle 7a4. Evaluation of investments for plants and machinery necessary for the activation and management of the integrated cycle 7a5: Zeolite integrated cycle and reduction on animals per hectare 7a6: Agro-economic and Environmental Analysis


Introduction The aim of this action is to evaluate the introduction of zeolite integrated cycle on different scales in the territory of Sacca di Goro. Starting from the main characteristics of the area has been provided a general analysis regarding the territory and the farms. In order to make an economic evaluation of the introduction of the zeolites integrated cycle, it has been collected technical data of the production, the prices of factors and products and the economic entries or advantages for a farm budget. These data are partially analyzed according to the method of “cost-benefit analysis” evaluating specific economic indicators. A general constraint regards the complexity of the evaluating methods and the amount of information needed. These data are generally available at a national and regional level, while they are hardly accessible at a smaller scale. Instead, the development of the action is based on the assumption that bibliography and research reports are available and detailed to create a complete instrument for the analysis. The issue of high animal concentration into the Sacca di Goro area shows how this management is peculiar for the environmental preservation and it could become an opportunity for who can manage it. It attend to irrigation and fertilization savings and in general to the main environmental issues (linked to transportation, distribution and use of slurries). Pigs breeding is one of the principal activity of the whole region but inside Ferrara Province is decreasing, in spite of this trend it remain one of the most dangerous (PRIP, 2010). This deliverable has analysed the convenience adoption of zeolite’s integrated cycle into a pilot farm. The main characteristics of the area have been focused stating from area’s general agricultural data. This helped into the definition of all constrains in terms of production system and many aspects of this introduction have been evaluated from economic-environmental side. First of all the main characteristics of pilot farm in term of revenues and costs have been analysed. Then the water savings effects and the fertilization saving effects thanks to the introduction of zeolite’s integrated cycle have been evaluated. Moreover the transportation and extraction costs of raw mineral have been targeted. These first assumptions have permitted and economic analysis trough Net Present Value (NPV) and Intern Return Rate (IRR) indicators on the prototype management and production capacity into the pilot farm. The results have pushed to different hypothesis based on the economic sustainability of zeolite’s integrated cycle from a farm perspective. This has lead to some hypothesis on reduction of animal (pigs) per hectare. The final results have shown the role of integrated zeolite cycle as a land improvement action.


7a1. Report on agriculture statistic and pilot farm data Area Background In central Italy the breeding farms have a huge diffusion. Many species are bred and their presence into the Emilia Romagna Region have been collected and shown as follows. The data has been collected trough the Italian Institute of Statistics (ISTAT) – VI Censimento dell’Agricoltura. The area is characterized in term of breeding as mentioned in the following table:

Table 1 - Breeding Farm in Emilia Romagna Region - Italy

Breeding Farm Cows Pigs Broilers Total by province Farm Farm Farm Farm Parma 1.628 101 120 1.849 Reggio nell'Emilia 1.491 215 75 1.781 Modena 1.295 169 143 1.607 Bologna 823 156 146 1.125 Piacenza 923 81 86 1.090 Forlì-Cesena 517 182 158 857 Rimini 323 129 97 549 Ravenna 209 109 114 432 Ferrara 148 37 40 225 TOT 7.357 1.179 979 9.515

ISTAT (2010) - VI Censimento dell’Agricoltura The Ferrara’s Province, the Nuts 3 area taken into account for this project, seem to be one of the smaller area in term of breeding farms

Table 2 – Animal in Emilia Romagna Region – Italy Animals Cows Pigs Broilers Total by province n n n n Forlì-Cesena 19.450 149.918 13.863.889 14.033.257 Ravenna 8.850 58.439 5.215.960 5.283.249 Bologna 33.180 75.340 3.997.783 4.106.303 Reggio nell'Emilia 140.163 332.168 1.619.682 2.092.013 Ferrara 21.742 46.917 1.384.743 1.453.402 Modena 94.857 338.238 889.259 1.322.354 Piacenza 79.760 120.074 414.765 614.599 Parma 150.122 111.889 318.718 580.729 Rimini 9.107 14.477 542.091 565.675 TOT 557.231 1.247.460 28.246.890 30.051.581

ISTAT (2010) - VI Censimento dell’Agricoltura

Although Ferrara Province owns the fifth place in animal terms. In the next two tables it has been shown the comparison between the nitrogen production of the whole region and Ferrara’s Province production.


Table 3 – Nitrogen produced by animals in Emilia Romagna Region – Italy

Breedings Animals Nitrogen* Total Nitrogen Sup 170 Animals n Kg/year/animals kg/year Ha Cows 557.231 71,3 39.730.570 233.709 Pigs 1.247.460 9,9 12.349.854 72.646 Broilers 28.246.890 0,4 11.298.756 66.463 TOT 30.051.581 63.379.180 372.819


Table 4 – Nitrogen produced by animals in Ferrara Province – Italy Breedings Animals Nitrogen* Total Nitrogen Sup 170 Animals n Kg/year/animals kg/year Ha Cows 21.742 71,3 1.550.205 9.119 Pigs 46.917 9,9 464.478 2.732 Broilers 1.384.743 0,4 553.897 3.258 TOT 1.453.402 2.568.580 15.109


* Piano di Sviluppo Rurale Regione Lazio – Reg. (CE) 1257/99. BUONA PRATICA AGRICOLA NORMALE (BPAN)

Ferrara Province produce about 4% nitrogen of the whole region and it seem that the agricultural province area (141.235 hectars able to be cultivated) could contain all the slurry produced. Starting from the data provided in this analysis it seems that Ferrara has no problem in terms of area and slurry management. But if it take into account the concentration of animal into each farm, Ferrara Province is the first for average cows per farm, the third for broilers and the fourth for pigs. The following tables shows the concentration of animal into the farms.

Table 5 - Concentration of cow into Emilia Romagna Region by province

Breedings Cows Province Farm Animals Animals/farm Ferrara 148 21.742 147 Reggio nell'Emilia 1.491 140.163 94 Parma 1.628 150.122 92 Piacenza 923 79.760 86 Modena 1.295 94.857 73 Ravenna 209 8.850 42 Bologna 823 33.180 40 Forlì-Cesena 517 19.450 38 Rimini 323 9.107 28 TOT 7.357 557.231 76



Table 6 - Concentration of broilers into Emilia Romagna Region by province Breedings Broilers Province Farm Province Animals/farm Forlì-Cesena 158 13.863.889 87.746 Ravenna 114 5.215.960 45.754 Ferrara 40 1.384.743 34.619 Bologna 146 3.997.783 27.382 Reggio nell'Emilia 75 1.619.682 21.596 Modena 143 889.259 6.219 Rimini 97 542.091 5.589 Piacenza 86 414.765 4.823 Parma 120 318.718 2.656 TOT 979 28.246.890 28.853


Table 6 - Concentration of pigs into Emilia Romagna Region by province Breedings Pigs Province Farm Province Animals/farm Modena 169 338.238 2.001 Reggio nell'Emilia 215 332.168 1.545 Piacenza 81 120.074 1.482 Ferrara 37 46.917 1.268 Parma 101 111.889 1.108 Forlì-Cesena 182 149.918 824 Ravenna 109 58.439 536 Bologna 156 75.340 483 Rimini 129 14.477 112 TOT 1.179 1.247.460 1.058


Table 7 - Concentration of pigs into Ferrara Province Raised animals/farm Farm

Animal Number

1-2 5 8 3-5 7 30 6-9 3 21 10-19 7 88 20-49 6 208 50-499 5 541 500-1999 1 1.918 4000 and more 3 44.103 Total 37 46.917



Ferrara Province is characterized by a huge concentration of animal into a small number of farms. It means that 4 pig farms own 98% of the animals of the province. Moreover only three commons (Bondeno, Argenta, Copparo) own the total amount of animals and should manage the slurry. Their land capacity in term of absorption of slurry isn’t able to absorb all the amount. Larger livestock production units result in higher local emissions of pollutants such as odour and ammonia from housing and stores. Larger production units can also lead to higher energy use for transport of livestock manure to be recycled in crop production, and the risk of disease spreading among livestock will increase. Further, high concentrations of livestock increase the risk that nutrients in the manure are used for crop production in excess of crop requirements, which may result in N and P leaching and surface run-off (Petersen, 2007). These aspects will be analysed on economic point of view in next paragraph within the zeolite fertilization into a case study farm.


Data on Pilot Farm: Material and Methods A methodology on zeolite cycle farm evaluation has been provided and checked on the experimental farm. After a first investigation by farmers direct interview, a data sheet has been created (Annex 1). Trough this tool the characteristics of the experimental farm has been collected. Five different production sites (farms) compose this holding, they are diffused into the all Region and one of these is located into Ferrara Province in the Sacca di Goro area. This farm has been the case study of the project to test the zeolite cycle production. It is located into Codigoro common, that was outside the main data on Ferrara province’s huge Pig Farms provided into the previous paragraph. This is probably due to the statistical collecting method that attribute this site to the headquarter address of the holding company (Parma province). This evidence enrich the slurry problem in the area for the average number of animal per farm and shows how deep is the slurry management topic. The farm site take into account called Santa Maria and owned by Italsuini OP, has around 300 hectares divided into cereals ad forage. In 2012 the crop system was divided as following: 100 ha corn, 70 ha durum wheat, 80 ha sorghum and 45 ha soya bean. This farm is skilled into the production of broilers and pigs. Every year this farm produce around 40.500 piglets by the breeding 1500 sows, and 7200 lactones. This farm invest resources as reported into the following table

Table 8 – Pilot Farm, details on Crop Cultivation costs

Crop Cultivation Costs € %

Labour € 40.000 13,0%

Sub contract € 100.000 32,6%

Seeds € 35.000 11,4%

Fertilizers € 30.000 9,8%

Weeds and Pest control products € 15.000 4,9%

Irrigation € 70.000 22,8%

Other costs € 17.000 5,5%

Total Crops € 307.000 100,0%

Table 9 – Pilot Farm, details on Animal costs

Livestocks Costs € %

Labour € 440.000 21,5%

Animal purchases € 554.000 27,1%


Fedings € 1.000.000 48,9%

Veterinary expenses € 20.000 1,0%

Waste managment € 12.500 0,6%

Energetic Cost € 12.000 0,6%

Other costs € 8.000 0,4%

Total Livestocks € 2.046.500 100,0%

Table 10 – Pilot Farm, details on General costs

General Cost € %

Administration € 60.000 32,4%

Amortizations € 50.000 27,0%

Taxes € 10.000 5,4%

Manteinance expences € 30.000 16,2%

Other cost € 35.000 18,9%

Total General € 185.000 100,0%

Table 11 – Pilot Farm overview on costs

Costs € % Total Crops € 307.000 12,09% Total Livestocks € 2.046.500 80,62% Total General € 185.000 7,29% Total € 2.538.500 100%

The farm is organized for the production of piglets and heavy pigs (170 kg). The production is organized through the sows that breed around 40.500 piglets/year; all the animal are raised on slatted floor into fences. When the piglets reach around 7kg weight, the farm sell them. At the same time this farm buy the lactones with 30 kg weight and feed them till 170 kg weight. For this phase the lactones are fed for 200 day with about 430 kg of concentred feedings per animal, while the sow are fed with about 1200 kg of concentred feedings per year/animal. Into the following table the main characteristics of heavy pig production are resumed. This give an idea of swine manure production and costs during the year.


Heavy Pig

Piglets: they born into the farm; they have sold with 7kg weight (43€); new piglets 30 kg weight have purchased (70 Euro)=> cost 27 Euro/unit

BREEDING DATA

Category Heavy pigs

Description Open cycle

Housing free in boxes

General Data Number of animal at the beginning 1 Number of animals at the ent of cycle 1 Live weight (kg) beginning 30 Live weight (kg) end 170

Breeding days 200 Meat produced 140 Piglet price € 27,00

Animal swine manure production Heavy Pig phase Growth and fattening

Housing charactheristics floor slatted in multiple box

Animals n 1 Average weight (into whole cycle) kg/unit 70 Swine manure characteristics Kg swine/dd/unit 4,5 % ds 9,2 % N 6,5 N° dd breeding cycle 107 Nitrogen produced (kg) 2,88

Raw Materials Material N. Piglets (n) 1 Veterenary expences (euro) 6,8 Cleaning Water (m3) 2,8 Energy Elettricity (kwh)* 18 * Warming energy supply and electricity

Feedings Quantity Price [€] Feeds [tons] 0,43 3,00 Water [m3] 0,37 0,12


Operation Unskilled work Skilled work Total

[h] [h] [h] Feeding * 1,2 1 2,2 Cleaning 1,2 1 2,2 Others 1,2 0 1,2 Totale 3,6 2,0 5,6

Variable Costs Commodities Unit Quantity Price Total

Feedings 1 Feeds [tons] 0,43 € 3,00 € 1,29 2 Water [m3] 0,37 € 0,12 € 0,04 Feedings € 1,33

Other raw material

1 Sow feedings 0,04 €

437,50 € 16,20 2 Piglets purchase 1 € 27,00 € 27,00 3 Sow Medical Care 1 € 1,60 € 1,60 4 Sow water m3 0,27 € 1,20 € 0,32 Other raw material

€ 45,13

Health product 1 Others 1 € 6,80 € 6,80 Health products € 6,80

Cleaning 1 Others 1 € 0,01 € 0,01 2 Water 2,8 € 1,20 € 3,36 Cleaning € 3,37

Mechanization 1 Fuel [kg]

€ 0,05 € -

2 Electricity [kwh] 18 € 0,15 € 2,56 Mechanization € 2,56

Labour 1 Skilled [hours] 2,00 € 10,61 € 21,22 2 Unskilled [hours] 3,60 € 7,60 € 27,36 Labour cost

€ 48,58

Total variable costs for heavy pig €

104,40 Total variable costs per kg of meat € 0,75 Every year this farm is able to produce around 10 tones of slurry, to test the possibilities on the issue a prototype machine for zeolite charging has been set next to the main building.


The experimental field In 2012 has been chosen the experimental field into the pilot farm. This has an area of 6,132 hectares. This area, following the main results of action 5, has been divided in parcels as follows: 1 – Control 1 (1.5 ha) 2 - ZeoCharged (0.5 ha, 7 kg/m2,


operations has been provided by a contractor. The duration of the difference phases and the cost has been resumed in the next table.

Table –Costs for Crop management by contractor

Cultivation technique Timing Contractor costs Total Cost

Crop cultivation hours/ha €/h €/ha Plowing 1,5 120 180 Herbicide Treatments 10 22 220 Harrowing 1,8 60 108 Seeding 3 40 120 Fertilization 5 15 75 Harvest (€/tons) 4 105 420 Total 1123

The technical costs are based on direct data collected into the pilot farm. The data on seeds, fertilizer, herbicides and selling price have been collected through an average price of three list in the Region. These data has been reported into the next table.

Table – Hypotesis of costs based on Regional prices

Seeds €/tons Sorghum € 70,00 Technical tools €/tons Urea € 460 Biammonium phosphate € 530 Herbicide (€/liter) € 2,50 Irrigation €/cycle Consorzio acque basse Selling price €/tons Sorghum € 240,00

This technique use 120 kg of Biammonium phosphate for the first fertilization and a urea 220 kg/ha of Urea for the second fertilization. There are no sufficient data on irrigation cost that in the next months will be collected. Starting from this technique the four thesis have been taken into account regarding the amount of zeolite used as fertilizer or soil improver. In a experimental farm’s area (61320 mq) the four thesis have been tested:

• Control – standard technique cultivation with a little increase on quantity of Urea in the attemps

• Charged zeolite, fertilization with about 7 tons/ha of charged zeolite coming from the prototype

• Raw zeolite 5 tons, fertilization with 5 tons/ha of raw zeolite • Raw zeolite 15 tons, fertilization with 15 tons/ha of raw zeolite

The results, based on the main yield and depending on fertilizer, soil improver action have been explained into the next table:


Table – Experimental Field 2013

Technical Data Area Charged Zeolite Uncharged Zeolite

Diammonium

Phosphate 18-46

Urea 46 Herbicide Yield

mq t/ha t/ha kg/ha kg/ha l/ha t/ha 1° - Control 15.120 - - 120 334 1 5,818 2° - Charged Zeolite 5.040 64 - 120 129 1 6,627 3° - Raw Zeolite 5tons 10.080 - 50 120 218 1 6,032 4° - Control 15.120 - - 120 351 1 6,548 5° - Raw Zeolite 15tons 10.080 - 150 120 228 1 6,032 6° - Control 5.880 - - 120 374 1 5,154

The yield depends on seeding concentration quantity, on variety chosen, on the preceding crop and on exogenous factors. The increasing of yield for the charged zeolite proof has been around + 13,5% in comparison with control parcel, moreover in “Raw Zeolite 5 tons” and “Raw Zeolite 15tons” the zeolite has shown a soil improver attitude with a little increase in yield +3,7%. Moreover, looking at the costs and revenues coming from the sorghum cultivation, the different parcel behaviour are reported into the next table (excluding the zeolite costs).

Table – Experimental Farm Accounting

Economic Accounting Area Production Value Seeds Technical

tools Contractor

and Harvest Gross

Incomes 1° - Control 15.120 € 2.111,24 € 31,75 € 351,12 € 1.697,98 € 30,39 2° - Charged Zeolite 5.040 € 801,60 € 10,58 € 62,28 € 565,99 € 162,75 3° - Raw Zeolite 5tons 10.080 € 1.459,26 € 21,17 € 172,11 € 1.131,98 € 134,00 4° - Control 15.120 € 2.376,14 € 31,75 € 364,74 € 1.697,98 € 281,67 5° - Raw Zeolite 15tons 10.080 € 1.459,26 € 21,17 € 177,45 € 1.131,98 € 128,66 6° - Control 5.880 € 727,33 € 12,35 € 149,01 € 660,32 -€ 94,35

These results take into account the parcel area invested by the crop to proof the performances the same results has been reported on hectare base into the following table.

Table – Experimental Farm Accounting hectare based

Economic Accounting Production Value Seeds Technical

tools Contractor and

Harvest Gross

Incomes 1° - Control € 1.396,32 € 21,00 € 232,22 € 1.123,00 € 20,10 2° - Charged Zeolite € 1.590,48 € 21,00 € 123,57 € 1.123,00 € 322,91 3° - Raw Zeolite 5tons € 1.447,68 € 21,00 € 170,74 € 1.123,00 € 132,94 4° - Control € 1.571,52 € 21,00 € 241,23 € 1.123,00 € 186,29 5° - Raw Zeolite 15tons € 1.447,68 € 21,00 € 176,04 € 1.123,00 € 127,64 6° - Control € 1.236,96 € 21,00 € 253,42 € 1.123,00 -€ 160,46

From the data provided in this analysis the “charged zeolite” furnished the best performance in terms of incomes as reported into the next table (+13,9%) as shown in the following table.


Table – Experimental Farm Expected Increase

Yield and incomes Yield increaese Incomes increase

1° - Control - - 2° - Charged Zeolite 13% 13% 3° - Raw Zeolite 5tons 3% 3% 4° - Control - - 5° - Raw Zeolite 15tons 3% 3% 6° - Control - .

This comparison take place starting from the average of control parcel performances. The experimental crop 2014 In 2014 has been provided the cultivation on corn with the zeolite fertilization. During the analysis data have been direct collected, to run and to test the model. For checking the effects of a zeolite application to the soil in the experimental farm has been applied the same cultivation technique for all parcels. This technique is based on a plowing - milling, an harrowing, a weeding treatments with a herbicide , harrowing, the seeding and a fertilization, and a second fertilization. All the technique’s operations has been provided by a contractor. The duration of the difference phases and the cost has been resumed in the next table.

Cultivation technique Timing

Contractor costs Total Cost

hours/ha €/h €/ha

Plowing 1,5 165 247,5 Herbicide Treatments 10 25 250

Harrowing 1,8 66 118,8 Seeding 3 55 165 Fertilization 5 27,5 137,5 Harvest (€/tons) 4 110 440 Totals 1358,8

The technical costs are based on direct data collected into the pilot farm. The data on seeds, fertilizer, herbicides and selling price have been collected through direct interview. These data has been reported into the next table.

Table –Prices

Seeds €/dose Corn € 70,00 Technical tools €/tons Urea € 460


Biammonium phosphate € 450 Herbicide (€/liter) € 8,00 Irrigation €/cycle Consorzio acque basse Selling price €/tons Corn € 152,00

This technique use 20 kg of Biammonium phosphate for the first fertilization and a urea 300 kg/ha of Urea for the second fertilization. There are no sufficient data on irrigation cost. Starting from this technique the four thesis have been taken into account regarding the amount of zeolite used as fertilizer or soil improver. In a experimental farm’s area (61320 mq) the four thesis have been tested:

• Control – standard technique cultivation with a little increase on quantity of Urea in the attemps

• Charged zeolite, fertilization with about 7 tons/ha of charged zeolite coming from the prototype

• Raw zeolite 5 tons, fertilization with 5 tons/ha of raw zeolite • Raw zeolite 15 tons, fertilization with 15 tons/ha of raw zeolite

The results, based on direct data have been explained into the next table:

Technical Data Area Charged Zeolite Uncharged

Zeolite

Diammonium Phosphate 18-

46

Urea 46

Herbicide Yield

mq t/ha t/ha kg/ha kg/ha l/ha t/ha 1° - Control 15.120 - - 20 372 1 9,486 2° - Charged Zeolite 5.040 64 - 20 133 1 9,709 3° - Raw Zeolite 5tons 10.080 - 50 20 235 1 10,03 4° - Control 15.120 - - 20 271 1 10,772 5° - Raw Zeolite 15tons 10.080 - 150 20 216 1 11,804 6° - Control 5.880 - - 20 495 1 8,835

The yield depends on seeding concentration quantity, on variety chosen, on the preceding crop and on exogenous factors. The increasing of yield for the charged zeolite proof has been around + 13,5% in comparison with control parcel, moreover in “Raw Zeolite 5 tons” and “Raw Zeolite 15tons” the zeolite has shown a soil improver attitude with an increase in yield (+22%). Moreover, looking at the costs and revenues coming from the corn cultivation, the different parcel behaviour are reported into the next table (excluding the zeolite costs).

Economic Accounting Area

Production Value Seeds

Technical tools

Contractor and Harvest

Gross Incomes

1° - Control 15.120 € 2.180,11 € 18,14 € 267,03 € 2.054,51 -€ 159,57 2° - Charged Zeolite 5.040 € 743,79 € 6,05 € 34,81 € 684,84 € 18,10 3° - Raw Zeolite 5tons 10.080 € 1.536,76 € 12,10 € 115,88 € 1.369,67 € 39,11 4° - Control 15.120 € 2.475,66 € 18,14 € 198,31 € 2.054,51 € 204,70 5° - Raw Zeolite 15tons 10.080 € 1.808,56 € 12,10 € 107,26 € 1.369,67 € 319,54


6° - Control 5.880 € 789,64 € 7,06 € 136,39 € 798,97 -€ 152,78 These results take into account the parcel area invested by the crop to proof the performances the same results has been reported on hectare base into the following table.

Economic Accounting Production Value Seeds Technical tools Contractor and

Harvest Gross Incomes

1° - Control € 1.441,87 € 12,00 € 176,61 € 1.358,80 -€ 105,54 2° - Charged Zeolite € 1.475,77 € 12,00 € 69,06 € 1.358,80 € 35,91 3° - Raw Zeolite 5tons € 1.524,56 € 12,00 € 114,96 € 1.358,80 € 38,80 4° - Control € 1.637,34 € 12,00 € 131,16 € 1.358,80 € 135,39 5° - Raw Zeolite 15tons € 1.794,21 € 12,00 € 106,41 € 1.358,80 € 317,00 6° - Control € 1.342,92 € 12,00 € 231,96 € 1.358,80 -€ 259,84

From the data provided in this analysis the “charged zeolite” furnished the best performance in terms of incomes as reported into the next table (+22%) as shown in the following table.

Yield and incomes Yield increaese Incomes increase 1° - Control - - 2° - Charged Zeolite 0% 0% 3° - Raw Zeolite 5tons 3% 3% 4° - Control - - 5° - Raw Zeolite 15tons 22% 22% 6° - Control - .


7a2. Evaluation on water and fertilization savings Water and fertilization savings benefits have been raised by other actions (Action 4 and 5). In particular the results show that the use of zeolite’s integrated cycle have a positive effects on fertilization management: the zeolite integrated into the soil increase the rate of efficiency of fertilizer use (around 50%), causing a saving in terms of quantity of fertilizer used into the crop. This practice deletes also the fertilization ground operation with tractor that can be optimized. The zeolite has also the attitude on water retention, so it means more efficiency into water use. The action 4 have raised the capacity of retention around 13%. Into the following table are shown the consequences of integrated zeolite cycle into farm cultivation costs.

Table –

Crop Cultivation Costs Farm All farm zeo++

€ € Labour € 40.000 € 40.000 Sub contract € 100.000 € 85.000 Seeds € 35.000 € 35.000 Fertilizers € 30.000 € 15.000 Weeds and Pest control products € 15.000 € 15.000 Irrigation € 70.000 € 60.900 Other costs € 17.000 € 17.000 Total Crops € 307.000 € 267.900

The effects on water and fertilization saving involve the economic aspects with savings on ground operation, calculated around -15%, fertilization costs and water costs. The whole farm, managed within the zeolite integrated cycle can save more than 39.000€ during one season. Moreover, considering the effects of zeolite, the soil permeability and persistence of positive effects for water and fertilizers remain into the soil in long term.


7a3. Evaluation of transportation and distribution costs of zeolitite integrated cycle The material selected for ZeoLIFE project (see Action 2, Deliverable “Mineralogical features of the quarry material”) is quarried from a particular lithostratigraphic unit of the Sorano Formation, the Lithic Yellow Tuff body, where K-Chabasite is the overall prevalent zeolite specie (Passaglia et al. 1990 and references therein). The town of Sorano (Grosseto Province, Tuscany) is about 80 km SE of the provincial capital and 20 km NW of the Bolsena lake. It is about 380 km away from the town of Codigoro (Ferrara Province), where the experimental field is located. The analyzed sample comes from a quarry named by the inhabitants as Piandirena, located on the N side of the road S.P. n.4, between km 12.5 and km 12.9. As a whole, the quarry extends over an area of about 60.000 m2. At present this is the most important active quarry in the zone. The exploited material comes from a tough, highly zeolitized body known as Lithic Yellow Tuff (Sorano Formation, distributed over the N, S, and W sectors of the Làtera Volcanic Complex; Vezzoli et al., 1987). This unit consists of two similar types of deposits. The lower is an ash deposit, with an overall light yellowish grey color, containing white or light grey, very vesicular pumice. The average size of pumice fragments ranges between 1 and 2 cm. The upper deposit is constituted by an ashy or micropumiceous matrix of light, yellowish grey color, containing pumice fragments up to centimetric size. Although the whole unit is very consolidated and tough, thin layers of poorly consolidated or even loose material may occur at the base of the lower deposit. The Lithic Yellow Tuff overlies the Red Tuff with Black Pumice unit, the contact between the two units being clearly visible on the quarry walls. These fragments are a waste material and they are most of all useful and not marketable. The price for these material is 30 €/ton and their transportation till Codigoro town costs about 150€/trip. The distribution cost on field depends on the shape and the humidity of charged zeolite after integrated cycle. Taking into account the similarity with a common dusty fertilizer and the circumstances of fertilization (one time) this operation can be assimilate to fertilization on field. Another cost to take into account is the distribution cost from the charged zeolite production site to the fields. The hypothesis is a range of 30-50 km from production site. This transportation range is esteemed around 4€/tons delivered. The un-charged zeolite has been delivered on field directly with a truck, so in this case the distribution cost can be included into the delivery. Otherwise the charged zeolite, after the delivery on the field, has to be distributed by a tractor with ground operation on land.


7a4. Evaluation of investments for plants and machinery necessary for the activation and management of the integrated cycle Starting from the data furnished by the other units (Action 4, Subaction 4B) it has been estimated the cost of a zeolite integrated cycle based on a study conducted on a prototype located into the pilot farm. The prototype has composed by a 2.2 m (∅) x 5.3 m (h) main vessel for the swine manure storage (about 10 m3), with 2 inflow and almost 2 outflow valves. The loading of swine manure has performed using 30 m3/h pumps (Pmax = 1.5 bar) for the transport of the liquid fraction from the second storage pool into the prototype. The second storage pool has been selected on the basis of evaluation performed in Sub- action 4b, considering the ammonia content (almost 2000 mg/kg) and the available quantitative of swine manure. A variable amount of zeolite (100 – 250 kg) can be introduced from the top into the vessel by a motorized pulley, optimizing the mixture without losing zeolite substrates. Alternatively, the zeolite can be introduced manually from a secondary hole, at the bottom of the vessel. The prototype tank has been equipped with a vertical mixer (mechanical agitator), with a top speed of 300 m3/h and equipped with a timer (set to 45 minutes), for the mix of zeolitite and swine manure. After the resting phase (minimum 4 h, to 20 h), the swine manure has discharged from 2 exhaust valves (at 2 different levels to facilitate the escape of the exhausted liquid) into an existing drain well. For recovery of the NH4-loaded zeolite, the treated material has discharged opening the ball valve at the bottom of the vessel and manually pushing the zeolite towards the exit. The prototype cycle has been reported in the following table:

Table - Prototype timing managment Manure loading 10 min Manual or automatic zeolitite loading 20 min Manure download and washing 10 min Resting phase 10 hours Zeolitite recovery 30 min H20 used during zeolitite washing about 0,05 m3 H20 used during prototype washing about 0,8 – 1 m3

It means that the prototype can provide 730 cycles in a year (about 2 cycles in 24 hours) and it can produce a total amount of 182,5 tons/year. The zeolite is able to charge itself with the main pollutant melted into the slurry, becoming a fertilizer with the attitude on enriching the soil framework. Zeolitite employed in the prototype can host around 0,8% of Nitrogen total amount loaded into the slurry and significant amount of K but also Ca, Na and Mg (cfr. Action 2 Technical Report “Mineralogical features of the quarry materials”), that can be successfully exchanged with manure. In the following table are explained the main costs of the zeolite integrated production:

Table – Prototype costs


Prototype purchase € 93.090,00

Project € 10.682,00 Installation € 7.205,00 Protopype cost € 75.203,00

Table – Zeolite cycle cost

Variable cost unit q.ty price/unit €/cycle €/ton zeolite tranport included ton 0,25 € 36,00 € 9,00 € 36,00

water mc 0,80 € 1,10 € 1,26 € 5,04 electric pump kwh 0,41 € 0,23 € 0,09 € 0,38 electric stirrer kwh 1,65 € 0,23 € 0,38 € 1,52 electric vibrating screen kwh 0,38 € 0,23 € 0,09 € 0,35

electricity kwh 2,25 € 0,23 € 0,52 € 2,07 labour hours 1,50 € 7,50 € 11,25 € 45,00 mantainance operation 1,00 € 200,00 € 0,82 € 3,29 Total Cycle/Ton € 23,41 € 93,64

Depending on the technical life, the residual prototype value changes. In the first hypothesis the residual value is 20.000€ because of 10 year using, in the second hypothesis the residual value is 1.000€ because of the values of raw materials (iron, pumps, ecc.) and the third is mid –term perspective using the prototype for 15 years with a residual value of 5.000€. The perspectives are analysed in the next table.

Table – Prototype amortization perspectives

Fixed Cost 20.000€ -10 year 1.000€ - 20 year 5.000€ - 15 year

Annual amortization € 7.309,00 € 4.604,50 € 5.872,67 Stocking container rent € 1.950,00 € 1.950,00 € 1.950,00

Fixed costs €/Ton € 50,73 € 35,92 € 42,86

Starting from the three different hypotheses on fixed cost it has been built an analysis to evaluate the total cost. Taking into account the mid-term cost perspective 42,86€/ton the total cost is 136,5€. An application made with the charged zeolite could reach till 6.825€/ha.

Table – Total cost

Total Cost 20k-10 years 1k-20 years 5k-15 years

€/ton € 144,37 € 129,56 € 136,50


This is only a price attempt, based on the main characteristics of prototype and can serve only a little area. In fact if all farm have to be applied with charged zeolite an investment of 136,5€/ton x 50 ton/ha x 295ha = 2.013.375€ is needed for applying to all farm charged zeolite. This prototype can produce 182,5 ton per year, it means around 3,5 ha. The Codigoro production unit, only after about 84 year could think to sell the zeolite produced (after inside application). Still this hypothesis doesn’t take into account the market condition and other competitor products and all the risks, there are no marketing costs, and moreover this investment (size, productivity and returns) is not convenient for the farm where the plants and machineries have been established. For testing more feasible scenarios, three hypotheses on the market of charged zeolite have been built and so the point of view has been changed from farm producer (the production size should satisfy only farm needs) to an entrepreneur producer of charged zeolite that sells charged zeolite on the market. It has been supposed an increase of machinery size, it has been passed from prototype to a market d tools. This assumption leads to an increase into production capacity (x4) with impacts on production cost around. This scenario changes the prototype cost as reported into the following table.

Prototype Industrial

development

Project € 10.682 € 1.068 Installation € 7.205 € 3.603 Machinery cost € 75.203 € 37.602 Total € 93.090 € 42.272

It has been supposed that the project, mainly due to the industrial development, has a 10% cost of prototype; at the same time installation and machinery costs decrease in comparison with the prototype around 50%. In term of production this scenario is 4 times more productive and is able to produce till 2 tons/day.

unit Prototype Industrial development cycles n. 730 730

Tons/ year ton/y 182,5 730 Tons/ day ton/dd 0,25 2

Starting from this scenario 3 sub scenarios have been built. The first sub scenario take into account that the charged zeolite producer use to produce and sell raw charged zeolite during the year. As all new activities it increase year by year with 100 working days into the first year till 200 the 20th year. Variable costs unit quantity price/unit €/ton Zeolite delivery included ton 1,00 36,00 36,00 water cm 3,20 1,10 3,52 pump electricity kwh 1,65 0,23 0,38 agitator electricity kwh 6,60 0,23 1,52 vibrovaglio electicity kwh 1,50 0,23 0,35


alimentation electricity kwh 9,00 0,23 2,07 labour hours 2,00 7,50 15,00 maintenance operation 1,00 200,00 0,27 total Cycle/Ton 59,11

Total Cost 20k-10 years 1k-20 years 5k-15 years €/ton 62,16 61,66 62,51

This scenario shows the production cost around is 62,51€/ton and the first hypothesis is to sell it as a similar soil improver for 73€/ton. This price for soil improver has been esteemed within a market analysis of similar products (soil improvers with an organic base).

Zeolite ++ Unit

Production cost €/ton 62,51 Selling price €/ton 73

The cost for this kind of ground operation (50 ton/ha) is 3.650€. So to take into account the convenience of this investment NPV and IRR have been calculated starting from the data shown into the next table.

Year Working Days Revenues Plant

expences Production

cost Amortization Total cost Operating

Margin Taxes Outcomes

1 100 € 14.819,00 € 42.272,20 € 11.998,61 € 2.484,81 € 14.483,43 € 335,57 € 92,28 € 54.363,10 2 100 € 15.041,29 € - € 12.178,59 2.484,81 € 14.663,41 € 377,88 € 103,92 € 12.282,51 3 100 € 15.266,90 € - € 12.361,27 2.484,81 € 14.846,09 € 420,82 € 115,73 € 12.477,00 4 100 € 15.495,91 € - € 12.546,69 2.484,81 € 15.031,50 € 464,40 € 127,71 € 12.674,40 5 130 € 20.446,85 € - € 16.555,36 2.484,81 € 19.040,17 € 1.406,68 € 386,84 € 16.942,20 6 130 € 20.753,55 € - € 16.803,69 2.484,81 € 19.288,50 € 1.465,05 € 402,89 € 17.206,58 7 130 € 21.064,86 € - € 17.055,74 2.484,81 € 19.540,56 € 1.524,30 € 419,18 € 17.474,93 8 140 € 23.025,51 € - € 18.643,24 2.484,81 € 21.128,05 € 1.897,45 € 521,80 € 19.165,04 9 140 € 23.370,89 € - € 18.922,89 2.484,81 € 21.407,70 € 1.963,19 € 539,88 € 19.462,77

10 140 € 23.721,45 € - € 19.206,73 2.484,81 € 21.691,55 € 2.029,91 € 558,22 € 19.764,96 11 140 € 24.077,28 € - € 19.494,83 2.484,81 € 21.979,65 € 2.097,63 € 576,85 € 20.071,68 12 140 € 24.438,44 € - € 19.787,26 2.484,81 € 22.272,07 € 2.166,37 € 595,75 € 20.383,01 13 150 € 26.576,80 € - € 21.518,64 2.484,81 € 24.003,45 € 2.573,34 € 707,67 € 22.226,31 14 150 € 26.975,45 € - € 21.841,42 2.484,81 € 24.326,23 € 2.649,22 € 728,53 € 22.569,96 15 170 € 31.030,76 € - € 25.124,91 2.484,81 € 27.609,73 € 3.421,03 € 940,78 € 26.065,70

Estimation on economic Results Inflation rate 1,5% Capital cost rate 3,00% NPV 1967,5 IRR 3,68% Payback period [years] 13


This hypothesis, more feasible with the market condition, shows a low net present value and low internal rate of return in comparison with the prototype. This investment is at least quite convenient for an entrepreneur and the low IRR shows the small risk of this initiative. The payback period is quite long for this kind of investment. The second scenario take into account that the charged zeolite producer use to produce and sell raw charged zeolite during the year. He takes care also of delivery and spreading service (truck 25 ton) 4€/ton. The firm delivers 30 km around.

Zeolite ++ unit quantity

Production cost €/ton 66,51 Selling price €/ton 77

This scenario shows the average production cost is 66,51€/ton, in this case charged zeolite and delivery price is 77€/ton. The cost for this kind of ground operation (50 ton/ha) is 3.850€. So to take into account the convenience of this investment NPV and IRR have been calculated starting from the data shown into the next table.

Year Working Days Revenues Plant

expences Production

cost Amortization Total cost Operating


1 100 € 15.631,00 € 42.272,20 € 11.998,61 € 2.484,81 € 14.483,43 € 3.632,39 € 998,91 € 55.269,72 2 100 € 15.865,47 € - € 12.178,59 € 2.484,81 € 14.663,41 € 3.686,87 € 1.013,89 € 13.192,48 3 100 € 16.103,45 € - € 12.361,27 € 2.484,81 € 14.846,09 € 3.742,17 € 1.029,10 € 13.390,37 4 100 € 16.345,00 € - € 12.546,69 € 2.484,81 € 15.031,50 € 3.798,31 € 1.044,53 € 13.591,23 5 130 € 21.567,23 € - € 16.555,36 € 2.484,81 € 19.040,17 € 5.011,87 € 1.378,26 € 17.933,62 6 130 € 21.890,73 € - € 16.803,69 € 2.484,81 € 19.288,50 € 5.087,04 € 1.398,94 € 18.202,63 7 130 € 22.219,10 € - € 17.055,74 € 2.484,81 € 19.540,56 € 5.163,35 € 1.419,92 € 18.475,67 8 140 € 24.287,18 € - € 18.643,24 € 2.484,81 € 21.128,05 € 5.643,94 € 1.552,08 € 20.195,32 9 140 € 24.651,49 € - € 18.922,89 € 2.484,81 € 21.407,70 € 5.728,60 € 1.575,36 € 20.498,25

10 140 € 25.021,26 € - € 19.206,73 € 2.484,81 € 21.691,55 € 5.814,53 € 1.599,00 € 20.805,73 11 140 € 25.396,58 € - € 19.494,83 € 2.484,81 € 21.979,65 € 5.901,75 € 1.622,98 € 21.117,81 12 140 € 25.777,53 € - € 19.787,26 € 2.484,81 € 22.272,07 € 5.990,27 € 1.647,32 € 21.434,58 13 150 € 28.033,06 € - € 21.518,64 € 2.484,81 € 24.003,45 € 6.514,42 € 1.791,47 € 23.310,11 14 150 € 28.453,56 € - € 21.841,42 € 2.484,81 € 24.326,23 € 6.612,14 € 1.818,34 € 23.659,76 15 170 € 32.731,08 € - € 25.124,91 € 2.484,81 € 27.609,73 € 7.606,16 € 2.091,69 € 27.216,61

Estimation on economic Results Inflation rate 1,5% Capital cost rate 3,00% NPV 3843,8


IRR 4,28% Payback period [years] 12

This hypothesis, a little different from the first one, shows an increase into the net present value and but still a low internal rate of return in comparison with the prototype. This investment is at least quite convenient for an entrepreneur and the low IRR shows the small risk of this initiative. The payback period is quite long for this kind of investment. The Net present value is high because it has been supposed that the productivity increases thanks to the higher number of services furnished (delivery). A soil improver is a product common into gardening and in particular green nursery practices, so taking into account the main characteristics of charged zeolite, a third hypothesis has been set. The third hypothesis take into account that the charged zeolite producer use to produce raw charged zeolite during the year and pack it for gardening and green nursery. This is a new business line and a different initiative that starting from the same product could interest new markets. It has been taken into account a firm that produce 25 kg for fresh horticultural and flower nursery. The firm add into the investment a packaging machine (15.000€) and but as a new product a start up period is needed (increase in sales in first 5 years).

unit Industrial development cycles n. 730

Tons/ year ton/y 730 Tons/ day ton/dd 2 Pack size kg 25 Pack/Ton n/ton 40 Pack/day n/dd 80

Variable cost unit quantity price/unit €/ton Zeolite delivery included ton 1,00 36,00 36,00 water cm 3,20 1,10 3,52 pump electricity kwh 1,65 0,23 0,38 agitator electricity kwh 6,60 0,23 1,52 vibrovaglio electicity kwh 1,50 0,23 0,35 alimentation electricity kwh 9,00 0,23 2,07 labour hours 2,00 7,50 15,00

maintenance operation 1,00 200,00 0,27 total Cycle/Ton 59,11 Fixed costs 20k-10 anni 1k-20 anni 5k-15 anni

annual amortization 3.731,28 2.815,64 3.487,52 Fixed costs /cycle 5,11 3,86 4,78 Fixed costs/Ton 5,11 3,86 4,78


Total cost per pack unit quantity price/unit €/pack charged zeolite ton 0,03 63,88 1,60 packaging machine electricity kwh 0,05 0,23 0,01 packaging n 1,00 0,27 0,27 labour hours 0,06 7,50 0,47 maintenance operation 1,00 0,20 0,20 total pack 2,55 Differently from the other two hypothesis this initiative increase the risk into the first investment but shows a higher NPP and IRR.

Year Working Days Packs Revenues Plant

expences Production

cost Amortizatio

n Total cost Operating


1 50 4.000,00 € 14.210,00 € 57.312,80 € 9.857,32 € 3.487,52 € 13.344,84 € 4.352,68 € 1.196,99 € 68.367,11 2 50 4.000,00 € 14.423,15 € - € 10.005,18 € 3.487,52 € 13.492,70 € 4.417,97 € 1.214,94 € 11.220,12 3 50 4.000,00 € 14.639,50 € - € 10.155,26 € 3.487,52 € 13.642,78 € 4.484,24 € 1.233,17 € 11.388,42 4 50 4.000,00 € 14.859,09 € - € 10.307,59 € 3.487,52 € 13.795,11 € 4.551,50 € 1.251,66 € 11.559,25 5 50 4.000,00 € 15.081,98 € - € 10.462,20 € 3.487,52 € 13.949,72 € 4.619,77 € 1.270,44 € 11.732,64 6 75 6.000,00 € 22.962,31 € - € 15.928,70 € 3.487,52 € 19.416,22 € 7.033,61 € 1.934,24 € 17.862,94 7 75 6.000,00 € 23.306,74 € - € 16.167,63 € 3.487,52 € 19.655,15 € 7.139,11 € 1.963,26 € 18.130,89 8 75 6.000,00 € 23.656,34 € - € 16.410,15 € 3.487,52 € 19.897,67 € 7.246,20 € 1.992,70 € 18.402,85 9 75 6.000,00 € 24.011,19 € - € 16.656,30 € 3.487,52 € 20.143,82 € 7.354,89 € 2.022,59 € 18.678,89

10 100 8.000,00 € 32.495,14 € - € 22.541,53 € 3.487,52 € 26.029,05 € 9.953,62 € 2.737,24 € 25.278,77 11 100 8.000,00 € 32.982,57 € - € 22.879,65 € 3.487,52 € 26.367,17 € 10.102,92 € 2.778,30 € 25.657,95 12 100 8.000,00 € 33.477,31 € - € 23.222,84 € 3.487,52 € 26.710,36 € 10.254,46 € 2.819,98 € 26.042,82 13 100 8.000,00 € 33.979,47 € - € 23.571,19 € 3.487,52 € 27.058,71 € 10.408,28 € 2.862,28 € 26.433,46 14 100 8.000,00 € 34.489,16 € - € 23.924,75 € 3.487,52 € 27.412,27 € 10.564,41 € 2.905,21 € 26.829,97 15 100 8.000,00 € 35.006,50 € - € 24.283,63 € 3.487,52 € 27.771,15 € 10.722,87 € 2.948,79 € 27.232,42

Estimation on economic Results Inflation rate 1,5% Capital cost rate 3,00% NPV 7016,2 IRR 4,59% Payback period [years] 12

High net present value and high internal rate of return in comparison with the prototype. This investment is at least convenient for an entrepreneur The payback period is still quite long for this kind of investment.


7a5: Zeolite integrated cycle and reduction on animals per hectare The progressive reduction in mineral nitrogen fertilizer consumption, which started in the early 1990s, stabilized during the period 2004-2007 for the EU 15. At EU 27 level the nitrogen consumption shows a slightly increasing trend. As compared to the last reporting period, the yearly total amount of mineral nitrogen fertilizer consumption remained stable around 9 million tons in the EU-15 whereas it has increased by 6%, from 11.4 to 12.1 million tons, in the EU 27. Adequate monitoring of waters is crucial for water quality assessment and requires a representative monitoring network throughout the territory for ground, surface as well as marine waters (COM, 2010) . The Council Directive of 12 December 1991 (91/676/EEC) concerning the protection of waters against pollution caused by nitrates from agricultural sources and the Italian Law D.M. 07.04.2006 n. 209, establish the behaviour with slurry and manure carrying capacity of soils during a year. As seen in previous paragraph, the zeolite has the charging capacity of hosting around 0,8% of Nitrogen that is into the slurry, so it’s contribution to general reduction of animals per hectare it’s quite limited. Taking into account the levels established by the EU and Italian law the limit (170 kg N/ha), the land improvement with charged zeolite doesn’t affect the total amount of Nitrogen. What changes are the ground operation and field management: Action 4 has shown that there is a zeolite action into Nitrogen cycle. It seems that the number of Nitrates decrease into the soil water and canal water. Probably they are hold by zeolite that has the capacity to leave the charged ones and to hold the others free into the soil water, make them available for plant roots. Still, the limit doesn’t change and so the number of animals has not sensible reduction per hectare.


7a6: Agro-economic and Environmental Analysis As shown into the previous paragraph, the introduction of charged zeolite into a field cultivation has certain effects that go over the single crop. Introduced into the soil profile, zeolite brings positive effects that remain through the years (water retention, fertilization savings). Instead considering charged zeolite as a compound for single crop cultivation, it should be focused as a land improvement; its effects are suitable through the years. As an irrigation system or a ground operation that is fix on land (e.i. vineyard) the distribution of charged zeolite is a land improvement, an investment performed on land in order to increase the productive potential or the value. Who performs the improvement should evaluate the cost-efficiency. The Codigoro’s production unit is organized in 295 hectares and its cultivation program involves 4 different crops: corn, sorghum, durum wheat and soya bean. During the year the rotation of fields is organized to guarantee exploitation of soil with a respect on pest and disease management. This could be targeted as a integrated cultivation technique that exploits the resources but in line with the main cultivation constrains. The cropping system into the farm is every year almost the same: Corn 100ha; Sorghum 45ha; Wheat 80ha; Soya bean 70ha. Taking into account these data it is possible to set a first estimation on fields management costs and revenues. This first elaboration has been set on hectare based as follows.

Crop Cultivation Area [ha] Production [ton] Revenues[€] Cost[€] Gross

Margin[€] Corn 1 10 2.000,00 1.014,67 985,33

Sorghum 1 6 1.440,00 832,60 607,40 Durum Wheat 1 6 1.440,00 534,00 906,00

Soya bean 1 3,7 1.683,50 408,70 1.274,80 This prices used for calculating the revenues are provided by Borsa Merci di Bologna 2014, an institutional organization that monitor the prices of products during the years, the data on cost has been collected by direct interview and the gross margin has been set. The same analysis has been conducted for the ordinary cropping system in 295ha.

Crop Cultivation Area [ha] Production [ton] Revenues[€] Cost[€] Gross Margin[€] Corn 100 1000 200.000,00 101.467,30 98.532,70

Sorghum 45 270 64.800,00 37.466,82 27.333,18 Durum Wheat 80 480 115.200,00 42.720,00 72.480,00

Soya bean 70 259 117.845,00 28.608,83 89.236,18 If the charged zeolite has to be focused as a land improvement, taking into account 50 tons/ha, the spreading system and the delivery the price has been fixed into 3.850€/ha in the previous paragraph. This means that the Codigoro’s Production Unit have to invest around 1.017.750,00 € for the whole farm. Looking at the findings of convenience an estimation analysis has been set. The hypothesis is the effects of charged zeolite are forever on. It means deep effects on land, for value, fertility and


management of fields. This is due to the expenditure savings (irrigation and fertilization cost) that direct influence the incomes on annual crops. So, taking into account that to obtain the same amount of production (evaluated at market prices), with a land improvement of charged zeolite, it is possible to save inputs or in other words costs three different findings of convenience have been calculated. This analysis, taking into account the high land improvement costs per hectare, has been set in 10 years. This means that the farm should invest for the land improvement 10% (29,5ha) of farm area every year for 10 years. It means to invest 3450€/ha to delivery into field 50 tons of charged zeolite; spreading this data into 10% of farm area, mean invest 101.775,00€ per year. The first step has been to analyse the Revenues and Cost of two different management profile with and with out land improvement for 10% of whole farm. These data are into the following table.

Crop Area Revenues Cost Gross Margin [ha] [€] [€] [€]

Corn 10 € 20.000,00 € 10.146,73 € 9.853,27 Sorghum 4,5 € 6.480,00 € 3.746,68 € 2.733,32

Durum Wheat 8 € 11.520,00 € 4.272,00 € 7.248,00 Soya bean 7 € 11.784,50 € 2.860,88 € 8.923,62

Corn Zeo++ 10 € 20.000,00 € 7.569,34 € 12.430,66 Sorghum Zeo++ 4,5 € 6.480,00 € 3.119,20 € 3.360,80

Durum Wheat Zeo++ 8 € 11.520,00 € 3.452,00 € 8.068,00 Soya Bean Zeo++ 7 € 11.784,50 € 2.510,11 € 9.274,39

The revenues are the same for both scenarios, it has been supposed that the land improvement acts on cost efficiency (expenses savings) with the same quantity produced and so the same revenues. Starting from these data a Revenues, Variable Costs, Gross Margin have been calculated. Into year 1 the 10% of farm area has been involved with the land improvement and the other 90% is following the normal management without any land improvement. At tenth year 100% of area has been involved with the land improvement.

Year Before After

Revenues Costs Gross Margin Revenues Costs Gross Margin

1 € 497.845,00 € 210.262,95 € 287.582,06 € 497.845,00 € 205.887,31 € 291.957,69 2 € 497.845,00 € 210.262,95 € 287.582,06 € 497.845,00 € 201.511,67 € 296.333,33 3 € 497.845,00 € 210.262,95 € 287.582,06 € 497.845,00 € 197.136,04 € 300.708,96 4 € 497.845,00 € 210.262,95 € 287.582,06 € 497.845,00 € 192.760,40 € 305.084,60 5 € 497.845,00 € 210.262,95 € 287.582,06 € 497.845,00 € 188.384,77 € 309.460,24 6 € 497.845,00 € 210.262,95 € 287.582,06 € 497.845,00 € 184.009,13 € 313.835,87 7 € 497.845,00 € 210.262,95 € 287.582,06 € 497.845,00 € 179.633,49 € 318.211,51 8 € 497.845,00 € 210.262,95 € 287.582,06 € 497.845,00 € 175.257,86 € 322.587,14 9 € 497.845,00 € 210.262,95 € 287.582,06 € 497.845,00 € 170.882,22 € 326.962,78

10 € 497.845,00 € 210.262,95 € 287.582,06 € 497.845,00 € 166.506,59 € 331.338,42 To test the convenience of this scenario two different methods on land improvement evaluation have been provided, these are:

• findings of convenience in terms of fruitfulness


• findings of convenience in terms of capital Findings of convenience in terms of fruitfulness For fruitfulness has to be intended the rate of return of the spent capital for the land improvement. This is the ratio beetwen the increase of gross margin (after and before land improvement) and the costs, if this rate is higher than the interest rate, this land improvement is convenient. To calculate the convenience the investment the Operative Margin (RO) has to be found:

!" = !" − (!" + !" + !") where RO is the Operating income Rf is the gross margin Sa are the wage St are the salary Bi is the industrial benefit (variation on passive interests for working capital)

! =!"! − !"!

!! + !! ∗ (1+ !)!

! > !

where: ROt: Operating income into the farm after the land improvement RO0: Operating income into the farm after the land improvement C0: Land improvement cost K0: Δ on variable costs into transition period r: interest rate f: fruitfulness rate The land improvement is convenient if the fruitfulness rate (f) is higher than the annual rate of capital (r); or higher than the ratio on alternative investments. As for previous scenarios, 10 years estimation has been set. The hypothesis is to calculate the weight of every 10 ha land improvement during the years.

Year Land

Improvement cost

Land improvement actualized to

1st year

Variable cost Before Land Improvement

Variable cost After Land

Improvement

Δ Variable Cost

Actualized Δ Variable Cost

1 € 113.575,00 € 113.575,00 € 210.262,95 € 205.887,31 € 4.375,64 € 4.289,84 2 € 113.575,00 € 111.348,04 € 210.262,95 € 201.511,67 € 8.751,27 € 8.411,45 3 € 113.575,00 € 109.164,74 € 210.262,95 € 197.136,04 € 13.126,91 € 12.369,78 4 € 113.575,00 € 107.024,26 € 210.262,95 € 192.760,40 € 17.502,54 € 16.169,65 5 € 113.575,00 € 104.925,74 € 210.262,95 € 188.384,77 € 21.878,18 € 19.815,74 6 € 113.575,00 € 102.868,38 € 210.262,95 € 184.009,13 € 26.253,82 € 23.312,64 7 € 113.575,00 € 100.851,35 € 210.262,95 € 179.633,49 € 30.629,45 € 26.664,78 8 € 113.575,00 € 98.873,87 € 210.262,95 € 175.257,86 € 35.005,09 € 29.876,51


9 € 113.575,00 € 96.935,17 € 210.262,95 € 170.882,22 € 39.380,72 € 32.952,03 10 € 113.575,00 € 95.034,48 € 210.262,95 € 166.506,59 € 43.756,36 € 35.895,46

€ 1.135.750,00 € 1.040.601,03

€ 209.757,86

The interest rate on capital has been set on 2%. Taking into account the values reporte into the previous table the main factors has been calculated:

Bi Δ Variable Cost € 43.756,36

r/2 0,01 Bi = Δ VC*r/2 € 437,56

C0 € 1.040.601,03

K0 € 209.757,86 as direct savings in terms of fertilizes

C0+K0*(1+r)t € 1.012.793,19

ROt € 331.338,42

RO0 € 287.582,06

ROt-RO0+Bi € 44.193,92

Taking into account there are no variation on wages and salaries before and after the investments, only industrial benefit influence the final result on Operating income.

!"! − !"!!! + !! ∗ (1+ !)!

= 4,36%

In this case the fruitfulness ratio of land improvement is higher than the capital rate (2%). So under this profile land improvement is convenient.


Findings of convenience in terms of capital The land improvement is convenient if the increase of land value, after the land improvement, is higher of realization cost.

!! − !! > (!! + !!)

where: Vt Land value after the land improvement V0 Land value before the land improvement Ct: Land improvement cost at 10th year Kt: Δ on variable costs into transition period at 10th year In this case the land value before land improvement has been esteemed into € 25.000/ha. This data come from direct research into the area for similar fields. The land value after the improvement, taking into account the characteristics of charged zeolite has been established into 30.000€/ha, this value comes from other investments that as this land improvement can increase the productivity and the commodities of the field (irrigation plant). So the finding of convenience in terms of capital has been set.

Year Ha without

land improvement

Ha with land imporvement

Whole farm Land Value

Before

Whole farm Land Value

After Δ Land Value

1 265,5 29,5 € 7.375.000,00 € 7.522.500,00 € 147.500,00 2 236 59 € 7.375.000,00 € 7.670.000,00 € 295.000,00 3 206,5 88,5 € 7.375.000,00 € 7.817.500,00 € 442.500,00 4 177 118 € 7.375.000,00 € 7.965.000,00 € 590.000,00 5 147,5 147,5 € 7.375.000,00 € 8.112.500,00 € 737.500,00 6 118 177 € 7.375.000,00 € 8.260.000,00 € 885.000,00 7 88,5 206,5 € 7.375.000,00 € 8.407.500,00 € 1.032.500,00 8 59 236 € 7.375.000,00 € 8.555.000,00 € 1.180.000,00 9 29,5 265,5 € 7.375.000,00 € 8.702.500,00 € 1.327.500,00

10 0 295 € 7.375.000,00 € 8.850.000,00 € 1.475.000,00

Vt € 8.850.000,00 Vo € 7.375.000,00

Vt-V0 € 1.475.000,00

Ct+Kt

€ 1.012.793,19

The table shows how the value of land increases year by year thanks to land improvement. After 10 year the land value increases till 1.475.000,00€ higher than the land improvement investment (1.012.793,19 €), so also in this case this investment is convenient.


References Ager Bologna 2013, Listino Borsa Merci Mercato di Bologna available on www.agerborsamerci.it (last access

July 2013)

Bruni F., Franco S. (2003), Economia dell’impresa e dell’azienda agraria, Franco Angeli, Milano.

De Benedictis M., Cosentino M. (1979), Economia dell’azienda agraria, Il Mulino, Bologna.

ISTAT (2010), VI Censimento dell’Agricoltura, available on www.istat.it (last access March 2013)

Petersen S.O., Sommer S.G. , Béline F. , Burton C., Dach J. Dourmad J.Y., Leip A., Misselbrook T. Nicholson

F., Poulsen H.D., Provolo G. , Sørensen P., Vinnerås B., Weiske A. , Bernal M.P., Böhm R. , Juhász C.,

Mihelic R. (2007), Recycling of livestock manure in a whole-farm perspective, Livestock Science 112 (2007)

180–191

PRIP - PROGRAMMA RURALE INTEGRATO PROVINCIALE 2007-2013 Allegato “A” alla delibera di

Consiglio Provinciale Prot. nn.88/70587 del 22.9.2010 (2010), Provincia di Ferrara Settore Agricoltura e

Sviluppo Economico, PROGRAMMA DI SVILUPPO RURALE 2007-2013 Reg. (CE) N. 1698/2005

available on www.provincia.fe.it (last access April 2013)

COM(2010) 47 Report From The Commission To The Council And The European Parliament On implementation

of Council Directive 91/676/EEC concerning the protection of waters against pollution caused by nitrates

from agricultural sources based on Member State reports for the period 2004-2007

European Council, 1991, Council Directive of 12 December 1991concerning the protection of waters against

pollution caused by nitrates from agricultural sources (91/676/EEC)


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Annex 1

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