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Economies of Scope in the Agricultural Provision of Ecosystem Services: An Application to a High Cost Production Region

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  • Huber, Robert
  • Lehmann, Bernard

Abstract

Joint production of agriculture commodities and environmental goods and services is a key attribute of multifunctionality. However, complex natural and economic interactions make a sound analysis difficult. In this regard, the concept of economies of scope provides a simple policy oriented indicator of jointness. Thus, the existence of economies of scope can be regarded as a precondition for the implementation of agricultural policies with respect to environmental goods and services. We apply the concept of economies of scope to the provision of ecosystem services in the Swiss lowlands using a spatially explicit economic-ecological programming model. Thereby, the consideration of non-agricultural competitors in the provision of ecosystem services allows a simultaneous assessment of economies of scope. A cost-effectiveness analysis shows the leastcost supplier of ecosystem services and spatial patterns in the supply for these services. Results imply the existence of economies of scope and hence strong jointness between agricultural production and the provision of ecosystem services. However, the potential for public cost savings due to structural change in agriculture is considerable. Moreover, the development of the second generation in biomass conversion technologies may enhance a non-agricultural provision of these services. Therefore, a continuous improvement in agricultural production efficiency is a precondition for strong jointness and thus multifunctionality. Die Koppelproduktion (jointness) ist ein zentrales Element im Konzept der Multifunktionalität. Komplexe ökonomische und ökologische Zusammenhänge erschweren jedoch deren sorgfältige Analyse. Das Konzept der Verbundeffekte (economies of scope) kann jedoch als Indikator für die Koppelproduktion dienen. Das Vorhandensein dieser Verbundeffekten kann als Voraussetzung für die Implementierung von Politikmaßnahmen zur Bereitstellung von Umweltleistungen betrachtet werden. Der vorliegende Artikel untersucht, ob die Landwirtschaft in der Bereitstellung von Ökosystemleistungen Verbundeffekte aufweist. Mit Hilfe eines räumlich expliziten Optimierungsmodells wird die landwirtschaftliche Nutzung von Flächen einer industriellen Erzeugung von Energie auf denselben Flächen gegenübergestellt. Eine entsprechende Kosten-Effektivitätsanalyse zeigt den kostengünstigeren Anbieter von Ökosystemleistungen und ein räumliches Muster im Angebot derselben. Die Resultate zeigen, dass die Landwirtschaft über Verbundeffekte verfügt. Der im Modell implementierte Strukturwandel in der Landwirtschaft impliziert jedoch im Vergleich zur bestehenden Situation ein großes Einsparungspotenzial für zielgerichtete Direktzahlungen. Da die Entwicklung von Bioraffinerien der zweiten Generation diese Verhältnisse verschieben könnten, ist eine möglichst effiziente Landwirtschaft eine Voraussetzung für Verbundeffekte und damit auch für eine multifunktionale Landwirtschaft.

Suggested Citation

  • Huber, Robert & Lehmann, Bernard, 2010. "Economies of Scope in the Agricultural Provision of Ecosystem Services: An Application to a High Cost Production Region," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 59(02), pages 1-15, June.
  • Handle: RePEc:ags:gjagec:145225
    DOI: 10.22004/ag.econ.145225
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    References listed on IDEAS

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