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Decision-making and environmental impacts

a dynamic simulation model of a farm business

Elmquist, Helena and Lindgren, Urban and Mäkilä, Kalle (2004). Decision-making and environmental impacts. Technical Report. Uppsala: (NL, NJ) > Department of Biometry and Engineering, Sveriges lantbruksuniversitet. Rapport (Mat 21) ; 3/2004

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This report describes an interdisciplinary study combining social sciences and natural sciences in an integrated simulation model. The integrated dynamic simulation model consists of the interplay between the decision-making farmer, the physical flows at the farm and the structural conditions that influence the business. The central question studied here concerned the energy use, environmental impacts and business economics of various decision models in comparison to different levels of environmental concern, costs and revenues. A basic feature of the simulation model is that human decision-making is integrated with the physical flows at the farm. As a decision-maker in the model, the farmer is allocated different attributes and subjected to various constraints. For example, different levels of knowledge are attributed to him via the decision models, as are variations in acceptance of environmental loadings. Moreover, he has to cope with different levels of prices and subsidies. Three pre-specified crop rotations are implemented and whenever monoculture is employed, the farmer encounters yield reductions. Emissions to the air and water are connected to soil and plant processes, but also to the production-related choices made by the farmer. Yields, emissions and energy use for the farm production are calculated using a physical flow model – the SALSA model (Systems AnaLysis for Sustainable Agricultural production). Simulation outputs are evaluated in terms of their environmental impacts using life cycle assessment methodology. The outputs are expressed as potential contributions to eutrophication, global warming, and acidification, as well as primary energy use per hectare and per kilo product. The model results show that from an economic point of view, the farmer can choose between two relatively sustainable strategies: either he specialises in organic production or he continues with conventional cultivation and uses large amounts of pesticides and fertilisers. The worst strategy is to combine conventional cultivation with minimal use of pesticides and fertilisers. These findings can be explained by higher prices for organic products and additional financial support via the common agricultural policy (CAP) to organic producers. It seems clear that the conventional farmer’s potential to improve his economic situation by making 'better' production-related choices (the difference between the purely rational farmer reflecting the best possible solution and the bounded rational farmer reflecting the everyday situation) is much more confined compared to specializing in organic production. The importance of public spending on farming via subsidies is too extensive in this respect. The economic potential of improved production-related choices is likely to be less than that related to the differences between the subsidies provided to conventional and organic farmers. Differences in crop prices also play a role in this context. Given the crop prices and yield reductions applied, the results of the simulation model suggest that it is beneficial to the farmer to continue with the pre-specified crop rotations. Looking at the environmental variables, it turns out that there is no clear-cut divide between the organic and conventional farming scenarios. If conventional and organic feed production systems are to be compared, the system boundary needs to be expanded to include livestock production and upstream inflow of nitrogen. Regarding crops, there are considerable differences in terms of their environmental effects. In terms of emissions and energy use from a production perspective (emissions/energy use per hectare), rye, barley and oats prove to generate less environmental loading compared to wheat, spring oilseed rape and spring turnip rape. However, if the amounts of loading are related to the crop yield, (emissions/energy use per kg product), a somewhat different pattern appears. For example, rye and barley turn out to perform much worse in terms of eutrophication, whereas winter wheat and spring wheat perform much better in this respect. Moreover, rye appears to have a small environmental impact irrespective of the method of calculation (kg/ha or kg/kg). Another conclusion from the study was that the choice of using RME instead of ordinary diesel did not reduce the environmental impact, which is a consequence of the emissions occurring during the production of artificial fertiliser.

Authors/Creators:Elmquist, Helena and Lindgren, Urban and Mäkilä, Kalle
Title:Decision-making and environmental impacts
Subtitle:a dynamic simulation model of a farm business
Series Name/Journal:Rapport (Mat 21)
Year of publishing :2004
Number of Pages:166
Place of Publication:Uppsala
Publisher:Institutionen för biometri och teknik, Sveriges lantbruksuniversitet
ISBN for printed version:91-576-6640-7
Additional Information:Rapporten finns i två serier: Miljö, teknik och lantbruk MAT 21
Publication Type:Report
Full Text Status:Public
Subjects:Obsolete subject words > FORESTRY, AGRICULTURAL SCIENCES and LANDSCAPE PLANNING > Area economics
Keywords:environmental impact
Permanent URL:
ID Code:3803
Department:(NL, NJ) > Department of Biometry and Engineering
Deposited By: Erica Lövgren
Deposited On:17 Dec 2009 00:00
Metadata Last Modified:02 Dec 2014 10:25

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