Environmental management on agricultural land: Cost benefit analysis of an integrated cropping system for provision of environmental public goods

Abstract

Agricultural land covers a significant portion of the earths land surface. Although the predominant function of agricultural land is food production, environmental public goods, such as biodiversity or soil maintenance, are also essential for long-term sustainability. In arable farms the type of cropping system used has a major impact on delivery of these environmental goods. Low input, integrated and regenerative cropping systems aim to improve environmental outcomes of arable farming, with the goal of reducing external inputs by supporting internal regulation of system processes. However, the production of environmental goods does not have an immediate market value to the farmer, and often comes at a cost, particularly in the early stages of transition to a more sustainable system. We estimate the on-farm costs and benefits of an integrated cropping system during the first six years of transition from intensive conventional management at the Centre for Sustainable Cropping in north east Scotland. Although integrated cropping had better environmental outcomes, all crops had higher financial margins in the conventional system compared to the integrated system, which suffered a loss of over £500 per ha per year across the full rotation. This indicates that financial incentives are likely to be important to allow farmers to transition towards a more environmentally friendly cropping system.

Keywords: Agroecology; Cost-benefit; Cost-effectiveness; Extensive farming; Payment for ecosystem services.