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Porträttfoto

Joakim Gullstrand

Dean, Professor

Porträttfoto

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

Author

  • Joakim Gullstrand
  • Rembert De Blander
  • Staffan Waldo

Summary, in English

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.

Department/s

  • Department of Economics
  • AgriFood Economics Centre, SLU

Publishing year

2014

Language

English

Pages

87-111

Publication/Series

Journal of Agricultural Economics

Volume

65

Issue

1

Document type

Journal article

Publisher

Wiley-Blackwell

Topic

  • Economics

Keywords

  • Biodiversity
  • marginal cost
  • dairy
  • environmental support

Status

Published

ISBN/ISSN/Other

  • ISSN: 1477-9552