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The Influence of Biodiversity Provision on the Cost Structure of Swedish Dairy Farming

Gullstrand, Joakim LU ; De Blander, Rembert and Waldo, Staffan LU (2014) In Journal of Agricultural Economics 65(1). p.87-111
Abstract
Multi-functionality and the provision of eco-system services are politically highly prioritised aspects of farming. This study uses a Symmetric Generalised McFadden cost function to analyze the relationship between costs of production and the provision of biodiversity for Swedish milk farms. Biodiversity indicators are based on the number of valuable plant species present at the farm and are modeled as an output in the cost function. The results show that the marginal cost of biodiversity increases with higher provision, and that an increased provision of biodiversity also increases the costs of market commodities such as milk and beef. The upward slope of the marginal cost of biodiversity and its competitive relationship with market goods... (More)
Multi-functionality and the provision of eco-system services are politically highly prioritised aspects of farming. This study uses a Symmetric Generalised McFadden cost function to analyze the relationship between costs of production and the provision of biodiversity for Swedish milk farms. Biodiversity indicators are based on the number of valuable plant species present at the farm and are modeled as an output in the cost function. The results show that the marginal cost of biodiversity increases with higher provision, and that an increased provision of biodiversity also increases the costs of market commodities such as milk and beef. The upward slope of the marginal cost of biodiversity and its competitive relationship with market goods questions the efficiency of support schemes based on voluntary programmes with a flat-rate per hectare compensation. Instead, the results support targeted environmental policy schemes with zonings and/or the use of biodiversity indicators. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Biodiversity, marginal cost, dairy, environmental support
in
Journal of Agricultural Economics
volume
65
issue
1
pages
87 - 111
publisher
Wiley-Blackwell
external identifiers
  • wos:000331148600005
  • scopus:84893003724
ISSN
1477-9552
DOI
10.1111/1477-9552.12028
language
English
LU publication?
yes
id
eff254a3-4396-41e7-a8fe-99b813c7e596 (old id 4419014)
date added to LUP
2014-04-29 12:39:40
date last changed
2017-05-29 14:52:33
@article{eff254a3-4396-41e7-a8fe-99b813c7e596,
  abstract     = {Multi-functionality and the provision of eco-system services are politically highly prioritised aspects of farming. This study uses a Symmetric Generalised McFadden cost function to analyze the relationship between costs of production and the provision of biodiversity for Swedish milk farms. Biodiversity indicators are based on the number of valuable plant species present at the farm and are modeled as an output in the cost function. The results show that the marginal cost of biodiversity increases with higher provision, and that an increased provision of biodiversity also increases the costs of market commodities such as milk and beef. The upward slope of the marginal cost of biodiversity and its competitive relationship with market goods questions the efficiency of support schemes based on voluntary programmes with a flat-rate per hectare compensation. Instead, the results support targeted environmental policy schemes with zonings and/or the use of biodiversity indicators.},
  author       = {Gullstrand, Joakim and De Blander, Rembert and Waldo, Staffan},
  issn         = {1477-9552},
  keyword      = {Biodiversity,marginal cost,dairy,environmental support},
  language     = {eng},
  number       = {1},
  pages        = {87--111},
  publisher    = {Wiley-Blackwell},
  series       = {Journal of Agricultural Economics},
  title        = {The Influence of Biodiversity Provision on the Cost Structure of Swedish Dairy Farming},
  url          = {http://dx.doi.org/10.1111/1477-9552.12028},
  volume       = {65},
  year         = {2014},
}