ABSTRACT
The dairy sector is an important sector in Northern Ireland being the single largest contributor to its agricultural economy. However, the sector contributes more to soil phosphorus (P) surplus compared to other agricultural sectors. Consequently, the goal of this research is to analyse the environmental technical efficiency of dairy farms making use of a novel parametric hyperbolic distance function approach. The model is able to internalise P surplus as undesirable output in the dairy production process by treating desirable and undesirable outputs asymmetrically. The stochastic production frontier model is analysed simultaneously with an inefficiency model to explain variability in efficiency scores assuming the existence of heteroskedasticity in the idiosyncratic error term. Additionally, we estimated the shadow price and pollution cost ratio of P surplus in dairy farms. This paper contributes to the existing literature as it provides the first attempt to empirically estimate the pollution abatement cost of P surplus in dairy farms. Besides, the hyperbolic environmental technology distance function methodology employed to achieve the study objectives is less restrictive compared to the radial output/input distance function approach employed in previous studies. This allows for the estimation of a more robust environmental efficiency measure and shadow price of P surplus that is consistent with public policy goals that seek to simultaneously reduce pollution and increase production of desirable outputs. Our results showed that the average environmental technical efficiency estimates for dairy farms in Northern Ireland is 0.93 and the shadow price (marginal abatement cost) of P surplus evaluated at the mean is £12.29/kg. Intensification resulting in increased use of concentrates feed was found to be negatively related to environmental technical efficiency. We also found that age of the farmer and share of milk output have a positive relationship with environmental technical efficiency.
ABSTRACT
There is a significant and detailed range of sustainability indicators for Irish agri-food production, but there remain areas where further indicator development or new indicators could prove valuable. This review provides an outline of potential developments in Irish assessment of agricultural sustainability following the latest research and in order to meet policy demands. Recent research findings have suggested means of improved quantitative modelling of greenhouse gas emissions, but additional dietary and soil data may be important for this, especially for the potential inclusion of any soil sequestration. This information could also benefit more detailed modelling of nutrient losses to water. Specific concerns over pesticide and antibiotic use may require additional survey work on the particular locations or types of farms of interest. Biodiversity monitoring could be improved by expanding the range of results-oriented agri-environment schemes or employing remote-sensing habitat monitoring, likely supplemented with targeted field surveys for specific objectives. Farm-level economic sustainability is largely well-covered, but additional data collection may be of benefit to address specific issues such as labour costs. Recent additional surveys on farm-level social sustainability have addressed important social indicators of isolation and access to local services, and could be rolled out on a larger number of farms in the future. Wider societal concerns such as animal welfare, genetically modified materials in foodstuffs and antibiotic resistance have limited indicators currently available, and could also benefit from additional surveys. The breadth and detail required in agri-food sustainability indicators present a significant challenge to survey design and implementation, but many developments can be achieved without additional surveys through the use of remote sensing and geospatial technologies and integration of existing datasets. Despite the important benefits of further developments in Irish sustainability indicators, consideration must also be given to farmer confidentiality and survey fatigue.
