Great potential for environmentally friendly and profitable production

Do farmers who produce in environmentally friendly ways earn less income? As an Agroscope study shows, this needs not be the case, and farmers can actually generate more revenue by protecting the environment.

In the NRP 73 project ‘Interaction of economy and ecology in Swiss farms’, Agroscope researchers set out to discover whether and how farmers can produce in ways that are both environmentally friendly and financially profitable. To do so, they used 239 farm data sets from the ‘Zentrale Auswertung von Ökobilanzen landwirtschaftlicher Betriebe’ (ZA-ÖB). Based on this data, they studied the relationship between income and environmental impact for different farms and product groups. The analysis focused specifically on dairy and beef production as well as cereal, potato and sugar beet cultivation. A life cycle assessment was carried out using the tool SALCA (Swiss Agricultural Life Cycle Assessment).

Major differences between farms

Environmental efficiency showed substantial variability for all product groups studied. For profitability, assessed on the basis of earned income per family work unit, the differences were even more marked. Production region (valley, hill or mountain region) and type of farming (organic or “proof of ecological performance”, PEP) account for some of the differences.

Except in cereal production, organic farms had 5 to 10% higher environmental efficiency and 5 to 26% higher earned income than PEP farms.

Inter-farm differences in environmental efficiency were the smallest in sugar beet cultivation. This is because sugar beet is grown mainly in the valley region and its cultivation is highly standardised and mechanised.

Dairy and beef production showed the greatest variability in terms of environmental efficiency. This is because cattle farming takes place in different regions, production systems and intensities. Milk yield per cow in mountain areas is slightly lower than in valley farms, but the higher proportion of meadow and pasture forage brings benefits for the environment. In the case of organic dairy and beef farms, the higher prices commanded by organic products and the subsidies paid for producing under more difficult conditions allow good profitability.

Good incomes do not have to come at the expense of the environment

For dairy and beef production, there is a positive relationship between profitability and environmental protection. In cereal, potato and sugar beet cultivation, environmental efficiency and economic performance are not significantly interrelated. However, even in the latter product groups, there is no evidence that income increases at the expense of the environment.

The wide inter-farm variation in environmental efficiency and profitability indicates a great potential for optimisation on many farms, allowing them to become both more environmentally friendly and more profitable.

This study shows that it is possible in Switzerland to produce in ways that are both financially sound and environmentally sustainable. Good incomes are not necessarily achieved at the expense of the environment.