Profitability of Crop Cultivation in Small Arable Fields When Taking Economic Values of Ecosystem Services into Account

Daniel Nilsson and Håkan Rosenqvist
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Daniel Nilsson: Department of Biosystems and Technology, Swedish University of Agricultural Sciences, P.O. Box 190, S-234 22 Lomma, Sweden
Håkan Rosenqvist: Independent Researcher, Prästvägen 5, S-268 73 Billeberga, Sweden

Sustainability, 2021, vol. 13, issue 23, 1-20

Abstract: Small arable fields are beneficial with regard to ecosystem services, e.g., concerning biodiversity. By selecting appropriate crops and cultivation practices, arable fields can also be used as carbon sinks. The objectives of this study were to investigate what impact field conditions (e.g., field size and shape) and payments (subsidies) for environmental benefits have on profitability. A dynamic simulation model was used to simulate machine operations in fields of two different shapes and five different sizes (from 0.75 to 12.00 ha). A wide range of crops cultivated in Sweden were investigated (fallow land and plantation of Norway spruce were also included). A perimeter-based subsidy was suggested in order to conserve and promote biodiversity, and an area- and crop-based subsidy was suggested in order to promote sequestration of soil organic carbon (SOC). The results showed that, without financial support and from a purely economic point of view, most field types investigated should be planted with Norway spruce. With currently available subsidies, e.g., EU Common Agricultural Policy (CAP) direct payments, hybrid aspen, poplar, fallow, and extensive ley cultivation are the most profitable crops. Perimeter-based subsidies favoured the net gain for small fields. As expected, a subsidy for sequestration of SOC favoured cultivation of specific SOC-sequestering crops such as ley, willow, and poplar. Our recommendation for future studies is to investigate a well-balanced combination of perimeter-based support and SOC sequestration support that benefits biodiversity and climate under different cultivation conditions.

Keywords: profitability; small fields; biodiversity; field perimeter; carbon sequestration; direct payment (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:23:p:13354-:d:693734

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