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Circular agriculture is vital to achieve a substantial reduction of greenhouse gas (GHG) emissions. Optimizing resources and land use are an essential circularity principle. The objective of this article is to assess the extent to which land optimization can simultaneously reduce GHG emissions and increase production on dairy farms. In addition, we explore the potential reduction of GHG emissions under four different pathways. The empirical application combines the network Data Envelopment Analysis (DEA) with the by‐production approach. This study focuses on a representative sample of Dutch dairy farms over the period of 2010–2019. Our results suggest that farms can simultaneously increase production and reduce GHG emissions by both 5.1%. However, only 0.6% can be attributed to land optimization. The land optimization results show that on average 25.3% of total farm size should be allocated to cropland, which is 6.7% more than the actual land allocation. GHG emissions could be reduced by 11.79% without changing the level of inputs and outputs. This can be achieved by catching up with the mitigation practices of the best performing peers.
Distance functions are increasingly being augmented, with environmental goods treated as conventional outputs. A common approach to evaluate the opportunity cost of providing an environmental good is the exploitation of the distance function's dual relationship to the value function. This implies that the opportunity cost is assumed to be non-negative. This approach also requires a convex technology set. Focusing on crop diversification for a balanced sample of 44 cereal farms in the East of England for the years 2007-2013, this paper develops a novel opportunity cost measure that does not depend on these strong assumptions. We find that the opportunity cost of crop diversification is negative for most farms.
The agricultural sector is currently confronted with the challenge to reduce greenhouse gas (GHG) emissions, whilst maintaining or increasing production. Energy-saving technologies are often proposed as a partial solution, but the evidence on their ability to reduce GHG emissions remains mixed.Production economics provides methodological tools to analyse the nexus of agricultural production, energy use and GHG emissions. Convexity is predominantly maintained in agricultural production economics, despite various theoretical and empirical reasons to question it. Employing nonconvex and convex frontier frameworks, this contribution evaluates energy productivity change (the ratio of aggregate output change to energy use change) and GHG emission intensity change (the ratio of GHG emission change to polluting input change) using Hicks-Moorsteen productivity formulations. We consider GHG emissions as byproducts of the production process by using a multi-equation model. Given our empirical specification, nonconvex and convex Hicks-Moorsteen indices can coincide under certain circumstances, which leads to a series of theoretical equivalence results. The empirical application focuses on 1,510 observations of Dutch dairy farms for the period of 2010-2019. The results show a positive association between energy productivity change and GHG emission intensity change, which calls into question the potential of on-farm, energy-efficiency-increasing measures to reduce GHG emission intensity.
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