Sustainable Agriculture Policies for Human Well-Being: Integrated Efficiency Approach

264 Pages·2022·4.3 MB·English

by  Bazyli Czyżewski, Łukasz Kryszak

Human Well-Being Research and Policy Making
Series Editors: Richard J. Estes · M. Joseph Sirgy
Bazyli Czyżewski
Łukasz Kryszak
Sustainable
Agriculture
Policies
for Human
Well-Being
Integrated Effi ciency Approach
Human Well-Being Research and Policy Making
SeriesEditors
Richard J. Estes, School of Social Policy & Practice, University of Pennsylvania,
Philadelphia,PA,USA
M.JosephSirgy ,DepartmentofMarketing,VirginiaPolytechnicInstitute&State
University,Blacksburg,VA,USA
This series includes policy-focused books on the role of the public and private
sectors in advancing quality of life and well-being. It creates a dialogue between
well-being scholars and public policy makers. Well-being theory, research and
practice are essentially interdisciplinary in nature and embrace contributions from
alldisciplineswithinthesocialsciences.Withtheexceptionofleadingeconomists,
thepolicyrelevantcontributionsofsocialscientistsarewidelyscatteredandlackthe
coherence and integration needed to more effectively inform the actions of policy
makers.Contributionsintheseriesfocusononemoreofthefollowingfouraspects
ofwell-beingandpublicpolicy:
(cid:129) Discussionsofthepublicpolicyandwell-beingfocusedonparticularnationsand
worldwideregions
(cid:129) Discussions of the public policy and well-being in specialized sectors of policy
making such as health, education, work, social welfare, housing,transportation,
useofleisuretime
(cid:129) Discussionsofpublicpolicyandwell-beingassociatedwithparticularpopulation
groupssuchaswomen,childrenandyouth,theaged,personswithdisabilitiesand
vulnerablepopulations
(cid:129) Specialtopicsinwell-beingandpublicpolicysuchastechnologyandwell-being,
terrorismandwell-being,infrastructureandwell-being.
Thisserieswasinitiated,inpart,throughfundsprovidedbytheHalloranPhilan-
thropies of West Conshohocken, Pennsylvania, USA. The commitment of the
Halloran Philanthropies is to "inspire, innovate and accelerate sustainable social
interventions that promote human well-being." The series editors and Springer
acknowledge Harry Halloran, Tony Carr and Audrey Selian for their contributions
inhelpingtomaketheseriesareality.
ż (cid:129) Ł
Bazyli Czy ewski ukasz Kryszak
Sustainable Agriculture
Policies for Human
Well-Being
fi
Integrated Ef ciency Approach
BazyliCzyżewski ŁukaszKryszak
PoznańUniversityofEconomics PoznańUniversityofEconomics
andBusiness andBusiness
Poznań,Poland Poznań,Poland
ISSN2522-5367 ISSN2522-5375 (electronic)
HumanWell-BeingResearchandPolicyMaking
ISBN978-3-031-09795-9 ISBN978-3-031-09796-6 (eBook)
https://doi.org/10.1007/978-3-031-09796-6
©TheEditor(s)(ifapplicable)andTheAuthor(s),underexclusivelicensetoSpringerNatureSwitzerland
AG2022
Thisworkissubjecttocopyright.AllrightsaresolelyandexclusivelylicensedbythePublisher,whether
thewholeorpartofthematerialisconcerned,specificallytherightsoftranslation,reprinting,reuseof
illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and
transmission or information storage and retrieval, electronic adaptation, computer software, or by
similarordissimilarmethodologynowknownorhereafterdeveloped.
Theuseofgeneraldescriptivenames,registerednames,trademarks,servicemarks,etc.inthispublication
doesnotimply,evenintheabsenceofaspecificstatement,thatsuchnamesareexemptfromtherelevant
protectivelawsandregulationsandthereforefreeforgeneraluse.
The publisher, the authors, and the editorsare safeto assume that the adviceand informationin this
bookarebelievedtobetrueandaccurateatthedateofpublication.Neitherthepublishernortheauthorsor
theeditorsgiveawarranty,expressedorimplied,withrespecttothematerialcontainedhereinorforany
errorsoromissionsthatmayhavebeenmade.Thepublisherremainsneutralwithregardtojurisdictional
claimsinpublishedmapsandinstitutionalaffiliations.
ThisSpringerimprintispublishedbytheregisteredcompanySpringerNatureSwitzerlandAG
Theregisteredcompanyaddressis:Gewerbestrasse11,6330Cham,Switzerland
Introduction
Agricultureisasectorthatcontributessignificantlytoclimatechange,althoughitis
difficulttoaccuratelyestimatethemagnitudeofthiscontributionandmakeprecise
projections. Globally, agriculture is estimated to have been responsible for 9.3
trilliontonnesofcarbondioxideequivalent–9.3GtCOeq2.,in20181(FAOSTAT,
2020).Totalemissionsfromthesectorhavedeclinedfrom9.6Gtin2000,whichhas
translatedintoadeclineinagriculture’sshareofglobalemissionsfrom24to17%.
IntheEUthisshareislower—theoverallshareofagricultureintotalgreenhouse
gases(GHG)emissionsinEuropeisabout10.1%(EEA,2021).Despitetheoverall
decrease in emissions, agriculture still remains one of the major emitters of GHG.
Furthermore, it is important to note that while emissions from activities related to
land use have decreased, emissions related to crop and livestock activities have
increasedby14%between2000and2018.
Agricultureinparticularisthesourceofmethane(CH )andnitrousoxide(N O)
4 2
emissions–49%and66%ofglobalemissions,respectively.Incontrast,only15%of
carbon dioxide (CO ) comes from anthropogenic management in agriculture. CH
2 4
emissionsfromentericfermentationandN Oemissionsfromagriculturalsoilsstand
2
for about 80% of total agricultural GHG emissions, of which CH emissions from
4
manure management have a share of about 10%. CH and N O have very high
4 2
conversion factors to their CO equivalent (21 and 310, respectively). Therefore,
2
emission reductions can be primarily achieved by improving the efficiency of
resource management in agriculture—by this means alone it is possible to achieve
asmuchas20%oftherequiredreductioninagriculturalemissions.
Thisbookisanattempttoaddresstheproblem,whichaffectscountriesallover
theworld,thatparticularsustainableagriculturestrategiesaregenerallyevaluatedas
ineffective.Thequestioniswhetheritisreallynecessarytolookfornewandbetter
policy measures for sustainable agriculture, or whether the key issue is the
1Thisincludesdirectagriculturalemission(mainlyCH andN O)andemissionarisingfromrelated
4 2
land-usechange.Withoutthelatter,totalemissionsarebetween5and6GtCO eperyear.
2
v
vi Introduction
divergenceoftheappliedeffectivenesscriteriaandthedifferentunderstandingofthe
ideaofsustainabledevelopmentinagriculture.Thediscrepanciesoccuratdifferent
levels—especially in the juxtaposition of global targets with policies built at the
nationalorthelocallevel.Thecreationofasustainableagriculturepolicyhastodeal
withvariousfallaciesofcomposition.
We begin by organizing the definition of sustainable agriculture, its systemic
origins,andimplicationsforlandeconomics.Wethenconsiderthepossibilitiesfor
operationalizing the trade-offs that occur in a comprehensive approach to sustain-
ability,betweeneconomic,social,andenvironmentaldimensions.Apromisingline
of research in this regard is the concept of eco-efficiency, which has been steadily
developing, in a better way integrating trade-offs occurring in the definition of
sustainable agriculture. We attempt to contribute to this development by testing a
newapproachcalled“integratedefficiency”.
From “eco-efficiency”, through “green efficiency” to “integrated efficiency”—
this is how one could describe the evolution of the concept, which aims at a
multidimensionaloptimizationoffarmingpractices,takingintoaccountthecriteria
of sustainable agriculture that seem difficult to reconcile. There is a clash of
microeconomic optimization optics—i.e. the maximization of the individual utility
function, with the necessity of taking into account the collective utility which is
addressed by providing public goods. This necessity is becoming increasingly
unavoidable in the context of a worsening climate crisis, biodiversity loss, natural
resource degradation, and widespread environmental capacity overruns that may
already become irreversible on a global scale within the next 50 years. Integrated
efficiency combines individual and collective (social) criteria through an environ-
mentally and socially adjusted classical production function (ESAF), which seeks
the most efficient combination of agricultural production resources, agricultural
output,sociallydesirableoutput,andundesirableoutput,andthenassesseswhether
thetargetvaluesmeettheconditionofnotexceedingenvironmentalcapacity.
Meanwhile, authors argue that the implementation of environmental and social
goalswillalwaysbeineffectivewhenitcontradictsthePareto-optimalallocationof
resources.Inotherwords,areductionofaninputcanbeacceptedonlyifitfulfilsthe
Paretoimprovementcondition,i.e.makingafarmerbetteroffinoneaspectwhilethe
othersremainatleastunchanged.
Therefore, targeting agricultural policy to improve efficiency under an environ-
mentally and socially adjusted production function can be seen as the necessary
conditionsofpolicyeffectivenessintermsofimplementingsustainablepracticesin
agriculture.Thus,ageneralpostulateshouldbeconsidered—letusdesignenviron-
mentalpolicyinagricultureinsuchawaythatitreducesthelevelofinefficienciesin
therealizationoftheproductionfunctionmodifiedbytheconsiderationofcollective
utilities. In this context, we should consider whether it is worth focusing on the
optimization of environmental subsidies in the context of single ecological indica-
tors, or whetheronly holistic evaluations using synthetic environmental indicators,
orevensyntheticmeasuresofsustainability,makesense?
Themultidimensional(holistic)perspectivecanbeclosertofarmers.Giventhat
theproblems of adverse selection andmoralhazard occur in thecase ofindividual
Introduction vii
measures, the effectiveness of environmental policy in agriculture should be
assessed from a broader perspective. Hence, a condition for the design of socially
andenvironmentallyeffectivepolicymeasuresforenvironmentalservicesshouldbe
a balance above zero of positive and negative external effects in the provision of
publicgoodsinagriculture.Webelievetheassessmentoftheimpactofagricultural
policy on inefficiencies under the ESAF should be an important criterion of the
environmentalpolicyevaluation.
As aforementioned, despite the adoption of collective utility criteria by
policymakers,farmersinpracticecanstilloptimizeindividualproductionfunctions
and choose Pareto-optimal solutions from the microeconomic point of view. It
should be remembered that the optimal provision of public goods depends on the
aggregated willingness to pay (WTP), which may significantly differ from the
individual WTP. If the proposed policy measures do not qualify as Pareto optimal
from the farmers’ perspective, then public goods will not be delivered or moral
hazard and adverse selection will occur, which will give only the appearance of
sustainablepractices.
Therefore, to show the validity of the above approach, the book discusses
different sustainable agricultural policies focusing on synergies and the trade-offs
between them, and the empirical part estimates what is the potential impact of
different policy schemes on allocative efficiency under the ESAF. The potential
forimprovingallocativeefficiencyinthesenseofParetoprogressisexaminedusing
the well-established concept of “slacks”, which reflect room for improvement in
terms of the particular input/output assuming that others’ resources or agricultural
productsarenotaffected.
The review of available sustainable agriculture strategies was divided into sec-
tions on direct GHG emissions, carbon sequestration, bioenergy, biodiversity, and
other landscape goods. It was observed that the implementation of sustainable
practices in agriculture in the world has a dual character, as it focuses on either a
cropssystemoragrasslandsystemaccompaniedbypublicgoodsfocusedareas.In
both directions, specific strategies were identified, e.g. The Good Agricultural and
Environmental Conditions (GAEC) supporting CO sequestration in field crops,
2
reducing the use of fertilizers by command and control measures (under crops
farming systems), or the development of permanent grassland and public goods
focused areas (under grassland farming systems). Then, the potential effectiveness
and side effects of the mentioned strategies were evaluated. In this respect, a
comprehensive procedure of assessing the holistic cost-effectiveness of agri-
environmental policies was proposedandtested onseveralclusters ofcountries on
aglobalscale.
To sum up, the book consists of theoretical and review chapters devoted to the
conceptofsustainableagriculture,effectivenessofpublicpolicies,andthemethod-
ology of assessing this effectiveness. The conclusions drawn were subjected to
empirical verification in the author’s concept of “integrated efficiency” and slack-
basedeffectivenessassessment.Attheend,thesustainableagriculturepoliciesofthe
EU,theUSA,andChinaarediscussedindetail.
viii Introduction
Theempiricalresearchismadeupofseveralsteps.First,wepresentdescriptive
statisticsregardinginputsandoutputsusedintheagriculturalsectorindifferentparts
of the world. We present data on labour and land productivity as well as average
dietaryenergysupplyadequacysincewetreatagriculturalproductionandthedegree
to which food needs are met as desirable outputs of agricultural activity. Data on
GHG emission are then presented to illustrate the problem of undesirable outputs
thatarethesideeffectofproduction.Furthermore,wediscussinputsintensity,such
asnutrientuse,thenumberoflivestockunits,orpesticidesuse.Wepresentalldata
for the EU, China, the USA, developing states, and other countries. Developing
economiesarefurtherdividedintosubgroupsfollowingtheFAOclassification.
In the second step, we perform a cluster analysis based on partial productivity
indicators(i.e.grossproductionvaluedividedbychoseninputs)toobtaingroupsof
countries that share a similar model of agriculture. The result revealed two big
clusters (comprised of 29 and 50 countries), while the EU Members are treated as
aseparatethirdgroup.
For these three groups, an integrated efficiency analysis is performed, which is
third step of the research. More specifically, we employ a super-efficiency hybrid
DEAmodelwithGHGasanundesirableoutputanddietaryadequacyasadesirable
socialoutput.Thehybridapproachimposesthatsomevariablesaretreatedasradial,
whileothersareassumedtobenon-radialmeaningthattheyarechangingindepen-
dently.Weobtaintheintegratedefficiencyscores,butspecialattentionispaidtothe
calculationofslacklevelanditsdynamics.Byslackanalysis,wesearchpossibilities
thatcountrieshavetodecreasebadoutputlevelandinputuseorincreasetheirgood
output level. Finally, we employ Malmquist index to evaluate the dynamics of
integrated efficiencies in the study period (2005–2018). Following the assumption
thattechnicalregressisnotpossibleamodifiedsequentialMalmquistindexisused.
The next (fourth) step of the empirical research is devoted to the cost-
effectiveness of agri-environmental policy. We construct a panel tobit model in
which previously identified slacks are treated as a dependent variable, while mon-
etaryoutlaysfromenvironmentalpolicyaretreatedasanexplanatoryvariable.The
analysis is performed for all three clusters. For the EU a more detailed analysis
includingmorecategoriesofenvironmentalexpendituresisadditionallycarriedout.
The analysis in step four is complemented by a principal component analysis
which attemtps to search for synergies and trade-offs between different slacks.
Knowing which slack is (positively or negatively) correlated can be very useful
for an adequate policy design. The final 5th step of the empirical strategy is also
relatedtotheproblemofpolicyeffectiveness.Weinvestigatewhethertheinclusion
ofanuncontrollablevariable(i.e.environmentalpolicyexpenditures)tothehybrid
DEAmodelaffectstheintegratedefficiencyscores.
The structure of the book is as follows. The focus of the first chapter is the
conceptofsustainableagriculture.Wereviewdifferentapproachesanddefinitionsof
what exactly sustainability means. Special attention is paid to the problem of
the market treadmill which could be seen as a vicious circle in which farmers are
trapped.Theywouldneedtoincreasetheirefforttoovercometheincomedisparity
problem, but it is not possible under intensive agriculture. We describe how
Introduction ix
sustainableagriculturemaycontributetothesolvingofthemarkettreadmillproblem
andpresentmainimplicationsofanewfarmingparadigmforthelandrenttheory.In
the second chapter, we show how different aspects of sustainability (economic,
social, and environmental) can be integrated in synthetic measures, such as
eco-efficiency. Special focus is paid to the problem of trade-offs between different
aspectsofsustainabilityandpracticalwayofeco-efficiencyandintegratedefficiency
calculations.Wealsoshowhowtostudythedriversofefficiency.
The first part of the third chapter is devoted to calculations of the level and
change of basic indicators related to different aspects of farm sustainability. This
overview isbased on theclustering ofcountries by theFAO. Inthesecond part of
thischapter,wegroupallstudiedcountriesbasedontherelationbetweenproduction
factorstodistinguishmainagriculturalmodels.Thenwedescribeourmethodolog-
icalapproachforintegratedefficiencycalculationsandpresenttheresultsofcalcu-
lationswithaspecialfocusontheidentificationofslacks,i.e.ontheaspectswhere
agriculturalactivitycouldimproveintheParetosense.
In the fourth chapter, we discuss the problem of the effectiveness of agri-
environmental policy. We review different methods used for effectiveness assess-
ment and strategies concerning greenhouse gas emissions, carbon sequestration,
bioenergy, biodiversity and landscape public goods. Then, pointing at synergies
andtrade-offsofpolicymeasures,weexplorewhyanalysesofpolicyeffectiveness
oftenfailtoproduceclear-cutresults.WeproposeaPareto-inefficienciescriterionas
aholistictoolforevaluatingtheeffectivenessofpublicpolicies.
Thecontentofthefifthchapterisanattempttoassesspolicycost-effectiveness
usingtheproposedslack-basedapproach. Weaddressthecallmadeintheprevious
partforaholisticway toidentifycost-effective policies.Werefertothethesis that
suchapolicycanbeeffectiveonlyifithasapositiveinfluenceontheefficiencyof
production by creating conditions for progress in the Pareto-like sense. This is a
necessary,thoughnotsufficient,conditionforaneffectivepolicy.Therefore,thefirst
sectionofthechapterelaboratesathree-stagestrategyforholisticallyassessingthe
cost-effectiveness of agri-environmental policy. Next, each stage is empirically
illustrated based on the clusters of countries from different parts of the world
(usingtheFAOdatabase).
The sixth chapter is entirely devoted to the detailed description of agricultural
policyinthreemajoragriculturalsystems:theEU,China,andtheUSA.Wecompare
different philosophies of agricultural support and try to establish some general
guidelinesthatcouldbeimplementedelsewhere.
The last chapter concludes the analysis. We show the potential benefits of
implementing the proposed approach on a wider scale. There is a discussion of
directional and systemic solutions for agricultural policies, ones that take into
accountthetrade-offsandsynergiesbetweendifferentaspectsofsustainability.
This book is intended for both academics and those responsible for agricultural
policy.Itcanbeusedbyresearchersworkinginthefieldofsustainabledevelopment,
andcanalsoserveasanadvancedtextbookforstudentsandPhDstudentsworkingin
agriculturalornaturalresourceeconomics.Forpolicymakers,thisbookcanprovide