Revealing the cost of environmental services in dairy farms

Kofivi Dzegle and Aude Ridier ()
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Kofivi Dzegle: SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement
Aude Ridier: SMART - Structures et Marché Agricoles, Ressources et Territoires - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Rennes Angers - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement

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Abstract: The objective of this paper is to evaluate the impact of environmental performance of dairy farms on milk production cost. Five classes of dairy farms' environmental performance are set based on the aggregation of two indicators linked to environmental services: climate regulation (GHG emissions) and water quality regulation (pollutant pressure in phytosanitary products). The analysis is based on accounting data from a panel of conventional dairy farms in Bretagne region between 2018 and 2021. Two methods are compared to asses the own cost of environmental services: the linear mixed effects model and the treatment effect method. Our results show that the marginal production costs induced by a higher environmental performance are marginaly increasing as a function of the performance classes. The results of both methods tested are consistent, mixed effects model better accounts for unobservable heterogeneity.

Keywords: Environmental performance; Production cost; Dairy farms; Mixed effects model; Generalised propensity score (search for similar items in EconPapers)
Date: 2023-06-08
New Economics Papers: this item is included in nep-agr and nep-eff
Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-04679325v1
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Published in 39. Journées Microéconomie Appliquée, Université de Strasbourg; INRAE, Jun 2023, Strasbourg, France

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