IDEAS home Printed from https://ideas.repec.org/a/eee/jfpoli/v119y2023ics0306919223001185.html
   My bibliography  Save this article

Environmental efficiency and methane abatement costs of dairy farms from Minas Gerais, Brazil

Author

Listed:
  • Vogel, Everton
  • Dalheimer, Bernhard
  • Beber, Caetano Luiz
  • de Mori, Claudia
  • Palhares, Julio Cesar Pascale
  • Novo, André Luiz Monteiro

Abstract

Increasing dairy farm productivity while simultaneously mitigating greenhouse gases emissions is a common policy goal in many countries. In this paper, we assess trade-offs and synergies between these goals for pasture-based dairy farms in Brazil. We apply stochastic frontier analysis within a translog hyperbolic distance function specification, including methane emissions as an undesirable output and accounting for annual climatic types. Our results indicate that on average, farmers can improve their production by 9.4% while simultaneously reducing methane emissions by 8.7%. The adoption of more productive cows and improved pastures have a positive effect on the environmental efficiency of the farms. Farmers operating in warmer and dryer climate types tend to have lower environmental efficiency. Calculating shadow prices for methane emitted on farms indicates that the mean abatement costs of methane are US $2,254 per tonne. Overall, by reducing inefficiency, dairy farmers can significantly increase farm production while simultaneously reducing emissions and thus contribute to national commitments to eradicate hunger and mitigate methane emissions.

Suggested Citation

  • Vogel, Everton & Dalheimer, Bernhard & Beber, Caetano Luiz & de Mori, Claudia & Palhares, Julio Cesar Pascale & Novo, André Luiz Monteiro, 2023. "Environmental efficiency and methane abatement costs of dairy farms from Minas Gerais, Brazil," Food Policy, Elsevier, vol. 119(C).
  • Handle: RePEc:eee:jfpoli:v:119:y:2023:i:c:s0306919223001185
    DOI: 10.1016/j.foodpol.2023.102520
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306919223001185
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.foodpol.2023.102520?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cortner, O. & Garrett, R.D. & Valentim, J.F. & Ferreira, J. & Niles, M.T. & Reis, J. & Gil, J., 2019. "Perceptions of integrated crop-livestock systems for sustainable intensification in the Brazilian Amazon," Land Use Policy, Elsevier, vol. 82(C), pages 841-853.
    2. Novo, André Monteiro & Slingerland, Maja & Jansen, Kees & Kanellopoulos, Argyris & Giller, Ken E., 2013. "Feasibility and competitiveness of intensive smallholder dairy farming in Brazil in comparison with soya and sugarcane: Case study of the Balde Cheio Programme," Agricultural Systems, Elsevier, vol. 121(C), pages 63-72.
    3. Cuesta, Rafael A. & Lovell, C.A. Knox & Zofío, José L., 2009. "Environmental efficiency measurement with translog distance functions: A parametric approach," Ecological Economics, Elsevier, vol. 68(8-9), pages 2232-2242, June.
    4. Atkinson, Scott E. & Tsionas, Mike G., 2016. "Directional distance functions: Optimal endogenous directions," Journal of Econometrics, Elsevier, vol. 190(2), pages 301-314.
    5. Mamardashvili, Phatima & Emvalomatis, Grigorios & Jan, Pierrick, 2016. "Environmental Performance and Shadow Value of Polluting on Swiss Dairy Farms," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(2), May.
    6. González-Quintero, Ricardo & van Wijk, Mark T. & Ruden, Alejandro & Gómez, Manuel & Pantevez, Heiber & Castro-Llanos, Fabio & Notenbaert, An & Arango, Jacobo, 2022. "Yield gap analysis to identify attainable milk and meat productivities and the potential for greenhouse gas emissions mitigation in cattle systems of Colombia," Agricultural Systems, Elsevier, vol. 195(C).
    7. Riera, Félix Sebastián & Brümmer, Bernhard, 2022. "Environmental efficiency of wine grape production in Mendoza, Argentina," Agricultural Water Management, Elsevier, vol. 262(C).
    8. Picazo-Tadeo, Andres J. & Reig-Martinez, Ernest & Hernandez-Sancho, Francesc, 2005. "Directional distance functions and environmental regulation," Resource and Energy Economics, Elsevier, vol. 27(2), pages 131-142, June.
    9. Wettemann, Patrick Johannes Christopher & Latacz-Lohmann, Uwe, 2017. "An efficiency-based concept to assess potential cost and greenhouse gas savings on German dairy farms," Agricultural Systems, Elsevier, vol. 152(C), pages 27-37.
    10. Xueqin Zhu & Alfons Oude Lansink, 2010. "Impact of CAP Subsidies on Technical Efficiency of Crop Farms in Germany, the Netherlands and Sweden," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(3), pages 545-564, September.
    11. Njuki, Eric & Bravo-Ureta, Boris E. & Mukherjee, Deep, 2016. "The Good and the Bad: Environmental Efficiency in Northeastern U.S. Dairy Farming," Agricultural and Resource Economics Review, Cambridge University Press, vol. 45(1), pages 22-43, April.
    12. Skevas, Ioannis & Zhu, Xueqin & Shestalova, Victoria & Emvalomatis, Grigorios, 2018. "The Impact of Agri-Environmental Policies and Production Intensification on the Environmental Performance of Dutch Dairy Farms," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(3), September.
    13. Rafael Cuesta & José Zofío, 2005. "Hyperbolic Efficiency and Parametric Distance Functions: With Application to Spanish Savings Banks," Journal of Productivity Analysis, Springer, vol. 24(1), pages 31-48, September.
    14. Stijn Reinhard & C. A. Knox Lovell & Geert Thijssen, 2002. "Analysis of Environmental Efficiency Variation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 1054-1065.
    15. Nigel Key & Gregoire Tallard, 2012. "Mitigating methane emissions from livestock: a global analysis of sectoral policies," Climatic Change, Springer, vol. 112(2), pages 387-414, May.
    16. Mario Herrero & Benjamin Henderson & Petr Havlík & Philip K. Thornton & Richard T. Conant & Pete Smith & Stefan Wirsenius & Alexander N. Hristov & Pierre Gerber & Margaret Gill & Klaus Butterbach-Bahl, 2016. "Greenhouse gas mitigation potentials in the livestock sector," Nature Climate Change, Nature, vol. 6(5), pages 452-461, May.
    17. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    18. Ravichandran, Thanammal & Teufel, Nils & Capezzone, Filippo & Birner, Regina & Duncan, Alan J., 2020. "Stimulating smallholder dairy market and livestock feed improvements through local innovation platforms in the Himalayan foothills of India," Food Policy, Elsevier, vol. 95(C).
    19. Jeanneaux, Philippe & Latruffe, Laure, 2016. "Modelling pollution-generating technologies in performance benchmarking: Recent developments, limits and future prospects in the nonparametric frameworkAuthor-Name: Dakpo, K. Hervé," European Journal of Operational Research, Elsevier, vol. 250(2), pages 347-359.
    20. R. G. Chambers & Y. Chung & R. Färe, 1998. "Profit, Directional Distance Functions, and Nerlovian Efficiency," Journal of Optimization Theory and Applications, Springer, vol. 98(2), pages 351-364, August.
    21. Murty, Sushama & Robert Russell, R. & Levkoff, Steven B., 2012. "On modeling pollution-generating technologies," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 117-135.
    22. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
    23. Jose A. Perez‐Mendez & David Roibas & Alan Wall, 2019. "The influence of weather conditions on dairy production," Agricultural Economics, International Association of Agricultural Economists, vol. 50(2), pages 165-175, March.
    24. Fare, Rolf & Grosskopf, Shawna & Noh, Dong-Woon & Weber, William, 2005. "Characteristics of a polluting technology: theory and practice," Journal of Econometrics, Elsevier, vol. 126(2), pages 469-492, June.
    25. Fare, Rolf & Grosskopf, Shawna & Zaim, Osman, 2002. "Hyperbolic efficiency and return to the dollar," European Journal of Operational Research, Elsevier, vol. 136(3), pages 671-679, February.
    26. Rolf Färe & Shawna Grosskopf, 1998. "Shadow Pricing of Good and Bad Commodities," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 584-590.
    27. Reinhard, Stijn & Knox Lovell, C. A. & Thijssen, Geert J., 2000. "Environmental efficiency with multiple environmentally detrimental variables; estimated with SFA and DEA," European Journal of Operational Research, Elsevier, vol. 121(2), pages 287-303, March.
    28. Zhou, P. & Zhou, X. & Fan, L.W., 2014. "On estimating shadow prices of undesirable outputs with efficiency models: A literature review," Applied Energy, Elsevier, vol. 130(C), pages 799-806.
    29. Eric Njuki & Boris E. Bravo-Ureta, 2015. "The Economic Costs of Environmental Regulation in U.S. Dairy Farming: A Directional Distance Function Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(4), pages 1087-1106.
    30. Susanne Hoischen-Taubner & Jonas Habel & Verena Uhlig & Eva-Marie Schwabenbauer & Theresa Rumphorst & Lara Ebert & Detlev Möller & Albert Sundrum, 2021. "The Whole and the Parts—A New Perspective on Production Diseases and Economic Sustainability in Dairy Farming," Sustainability, MDPI, vol. 13(16), pages 1-20, August.
    31. Caudill, Steven B & Ford, Jon M & Gropper, Daniel M, 1995. "Frontier Estimation and Firm-Specific Inefficiency Measures in the Presence of Heteroscedasticity," Journal of Business & Economic Statistics, American Statistical Association, vol. 13(1), pages 105-111, January.
    32. Sushama Murty & R. Robert Russell, 2021. "A commentary on “Performance measurement and joint production of intended and unintended outputs” by Finn Førsund," Journal of Productivity Analysis, Springer, vol. 55(3), pages 177-184, June.
    33. Hung-Jen Wang, 2002. "Heteroscedasticity and Non-Monotonic Efficiency Effects of a Stochastic Frontier Model," Journal of Productivity Analysis, Springer, vol. 18(3), pages 241-253, November.
    34. Le, Stephanie & Jeffrey, Scott & An, Henry, 2020. "Greenhouse Gas Emissions and Technical Efficiency in Alberta Dairy Production: What Are the Trade-Offs?," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 52(2), pages 177-193, May.
    35. Fare, Rolf, et al, 1989. "Multilateral Productivity Comparisons When Some Outputs Are Undesirable: A Nonparametric Approach," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 90-98, February.
    36. F. Ang & K. H. Dakpo, 2021. "Comment: Performance measurement and joint production of intended and unintended outputs," Journal of Productivity Analysis, Springer, vol. 55(3), pages 185-188, June.
    37. Stijn Reinhard & C.A. Knox Lovell & Geert Thijssen, 1999. "Econometric Estimation of Technical and Environmental Efficiency: An Application to Dutch Dairy Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(1), pages 44-60.
    38. Rolf Färe & Shawna Grosskopf, 2000. "Theory and Application of Directional Distance Functions," Journal of Productivity Analysis, Springer, vol. 13(2), pages 93-103, March.
    39. Antonio Peyrache Tim Coelli & Tim Coelli, 2009. "A Multiplicative Directional Distance Function," CEPA Working Papers Series WP022009, School of Economics, University of Queensland, Australia.
    40. F. Ang & K. Dakpo, 2021. "Comment: Performance measurement and joint production of intended and unintended outputs," Post-Print hal-03361414, HAL.
    41. Chambers, Robert G. & Chung, Yangho & Fare, Rolf, 1996. "Benefit and Distance Functions," Journal of Economic Theory, Elsevier, vol. 70(2), pages 407-419, August.
    42. Adewale Henry Adenuga & John Davis & George Hutchinson & Trevor Donnellan & Myles Patton, 2019. "Environmental Efficiency and Pollution Costs of Nitrogen Surplus in Dairy Farms: A Parametric Hyperbolic Technology Distance Function Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(3), pages 1273-1298, November.
    43. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    44. Kumbhakar,Subal C. & Lovell,C. A. Knox, 2003. "Stochastic Frontier Analysis," Cambridge Books, Cambridge University Press, number 9780521666633, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Headey, Derek D. & Alderman, Harold & Hoddinott, John & Narayanan, Sudha, 2024. "The glass of milk half-empty? Dairy development and nutrition in low and middle income countries," Food Policy, Elsevier, vol. 122(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Adewale Henry Adenuga & John Davis & George Hutchinson & Trevor Donnellan & Myles Patton, 2019. "Environmental Efficiency and Pollution Costs of Nitrogen Surplus in Dairy Farms: A Parametric Hyperbolic Technology Distance Function Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(3), pages 1273-1298, November.
    2. Imane Bounadi & Khalil Allali & Aziz Fadlaoui & Mohammed Dehhaoui, 2023. "Water Pollution Abatement in Olive Oil Industry in Morocco: Cost Estimates and Policy Implications," Sustainability, MDPI, vol. 15(5), pages 1-19, February.
    3. Skevas, Ioannis & Zhu, Xueqin & Shestalova, Victoria & Emvalomatis, Grigorios, 2018. "The Impact of Agri-Environmental Policies and Production Intensification on the Environmental Performance of Dutch Dairy Farms," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(3), September.
    4. Cuesta, Rafael A. & Lovell, C.A. Knox & Zofío, José L., 2009. "Environmental efficiency measurement with translog distance functions: A parametric approach," Ecological Economics, Elsevier, vol. 68(8-9), pages 2232-2242, June.
    5. Aparicio, Juan & Kapelko, Magdalena & Zofío, José L., 2020. "The measurement of environmental economic inefficiency with pollution-generating technologies," Resource and Energy Economics, Elsevier, vol. 62(C).
    6. K. Hervé Dakpo & Yann Desjeux & Laure Latruffe, 2023. "Cost of abating excess nitrogen on wheat plots in France: An assessment with multi‐technology modelling," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(3), pages 800-815, September.
    7. Tateishi, Henrique Ryosuke & Bragagnolo, Cassiano & de Faria, Rosane Nunes, 2020. "Economic and environmental efficiencies of greenhouse gases’ emissions under institutional influence," Technological Forecasting and Social Change, Elsevier, vol. 161(C).
    8. Wettemann, Patrick, 2015. "Die Entwicklung der Produktivität von Marktfruchtbetrieben unter Berücksichtigung von Treibhausgasemissionen," 55th Annual Conference, Giessen, Germany, September 23-25, 2015 209213, German Association of Agricultural Economists (GEWISOLA).
    9. Emir Malikov & Raushan Bokusheva & Subal C. Kumbhakar, 2018. "A hedonic-output-index-based approach to modeling polluting technologies," Empirical Economics, Springer, vol. 54(1), pages 287-308, February.
    10. Hang Xiong, 2012. "Effects of One-Sided Fiscal Decentralization on Environmental Efficiency of Chinese Provinces," Working Papers halshs-00672450, HAL.
    11. Hang Xiong, 2012. "Effects of One-Sided Fiscal Decentralization on Environmental Efficiency of Chinese Provinces," CERDI Working papers halshs-00672450, HAL.
    12. Jean Joseph Minviel & Timo Sipiläinen, 2021. "A dynamic stochastic frontier approach with persistent and transient inefficiency and unobserved heterogeneity," Agricultural Economics, International Association of Agricultural Economists, vol. 52(4), pages 575-589, July.
    13. Huang, Wei & Bruemmer, Bernhard & Huntsinger, Lynn, 2016. "Incorporating measures of grassland productivity into efficiency estimates for livestock grazing on the Qinghai-Tibetan Plateau in China," Ecological Economics, Elsevier, vol. 122(C), pages 1-11.
    14. Bokusheva, Raushan & Kumbhakar, Subal C., 2014. "A Distance Function Model with Good and Bad Outputs," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182765, European Association of Agricultural Economists.
    15. Holtkamp, A.M. & Brummer, B., 2018. "Environmental efficiency of smallholder rubber production," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277518, International Association of Agricultural Economists.
    16. Hang XIONG, 2012. "Effects of One-Sided Fiscal Decentralization on Environmental Efficiency of Chinese Provinces," Working Papers 201208, CERDI.
    17. Jean Joseph Minviel & Timo Sipiläinen, 2018. "Dynamic stochastic analysis of the farm subsidy-efficiency link: evidence from France," Journal of Productivity Analysis, Springer, vol. 50(1), pages 41-54, October.
    18. D’Inverno, Giovanna & Carosi, Laura & Romano, Giulia & Guerrini, Andrea, 2018. "Water pollution in wastewater treatment plants: An efficiency analysis with undesirable output," European Journal of Operational Research, Elsevier, vol. 269(1), pages 24-34.
    19. Soledad Moya & Jordi Perramon & Anselm Constans, 2005. "IFRS Adoption in Europe: The Case of Germany," Working Papers 0501, Departament Empresa, Universitat Autònoma de Barcelona, revised Feb 2005.
    20. Magambo, Isaiah & Dikgang, Johane & Gelo, Dambala & Tregenna, Fiona, 2021. "Environmental and Technical Efficiency in Large Gold Mines in Developing Countries," MPRA Paper 108068, University Library of Munich, Germany.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jfpoli:v:119:y:2023:i:c:s0306919223001185. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/foodpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.