Opportunity costs of providing environmental services in mixed crop-livestock farming

Mixed crop-livestock farming is often presented as a lever to conciliate agricultural production and the provision of environmental services. This paper examines the opportunity cost of providing environmental services in mixed crop-livestock farming to investigate conditions under which the double objective is achievable. To do this, we develop an analytical framework to estimate production possibility frontiers, which includes both agricultural production and environmental services, while relaxing the traditional non-negativity assumption of the opportunity costs of environmental services. Using a French dataset, we find that the opportunity costs of environmental service indicators (biodiversity and carbon sequestration) are mostly negative. In addition, econometric estimations show that the share of grasslands, high labor intensity, labeling, and direct payments could increase the probability of having non-positive opportunity costs. These results suggest that although the double objective can be pursued voluntarily by farmers (non-positive opportunity costs), it is labor-intensive and can be enhanced through subsidization and labeling.