Is nature inclusive farming the holy grail for the Dutch dairy sector?
An interdisciplinary Multi-Criteria Analysis to test the promises
Léon Feenstra (10760636) Reineke van Tol (10313575) Sofia Caycedo (10695311) Tes Miedema (10575367)
June 5th 2017
University of Amsterdam
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Abstract
Dairy farming is the most important farming industry in The Netherlands. In the meantime, it is among the most polluting farming practices and it faces economic as well as social problems. Conventional dairy farming and organic farming both don’t seem to be able to overcome these problems. Recently, Nature Inclusive Farming (NIDF) has therefore been suggested as a new farming practice with the ambition to reduce environmental impact, stabilize yields and incomes and improve farmer and animal welfare. A formal comparison between conventional and organic dairy in contrast to NIDF to test the promises on all these criteria has not yet been made. In this study therefore a Multi-Criteria Analysis (MCA) was used to compare the three systems with an objective and interdisciplinary approach. Our MCA confirms the promises made by scientists and policy makers on the new alternative: NIDF scores the best when taking into account economic, environmental, ethical and social aspects. Although the outcomes depend on the weights assigned to each criterium, NIDF is a robust winner, only losing its first place when relatively high weights are assigned to some criteria. However, more data, especially on NIDF, is needed to develop better MCAs for the Dutch dairy farming industry.
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Table of contents
▪ Introduction p. 4
▪ Theoretical background p. 5
Farming systems p. 5
Problems related to current dairy farming practices p. 7 Promises of nature inclusive farming p. 9
▪ Methodology - MCA p. 10
▪ MCA results p. 14
▪ Analysis p. 16
▪ Conclusion & Discussion p. 17
▪ Policy Brief p. 19
▪ References p. 20
▪ Appendices
Appendix A: MCA criteria p. 26
Appendix B: MCA written results p. 30
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Introduction
The dairy sector is one of the most important drivers of the Dutch economy; its industry size is comparable to one sixth of the entire Dutch food industry. Of the arable farmland in the Netherlands, 60% is used for dairy farming (NZO, 2016). However, the sectors’ strong focus on intensification is resulting in environmental degradation and the neglect of animal health (European Commission, 2000; European Commission, 2013). In response to these issues, there is a rising interest in farming methods that take into account respect for natural surroundings. Organic dairy farms - which reject the use of external inputs in order to enhance the wellbeing of animals and nature - are steadily on the rise (Melita, 2000; Trewavas, 2001). Between 2011 and 2016, the organic dairy farming sector grew with 54 % (CBS, 2017).
A small group of dairy farmers is seeking to integrate environmental well-being even more drastically into farming practices by adopting the concept of ‘nature inclusive’ farming. The definition of a nature inclusive farm is an economically profitable farm that maximizes ecological resilience in & around the farming system through the elimination of external inputs, and the implementation of methods aiming to optimally use ecosystem services (van Doorn et al., 2016). Researchers suggest that a transition from conventional or organic dairy farming towards nature inclusive dairy farming could improve biodiversity in and around the Dutch dairy farming landscape, decrease the environmental pressures of dairy farming and increase the sustainability of dairy farming (van Doorn et al., 2016; Geerts, Korevaar & Timmerman, 2014).
The Dutch Ministry of Economic Affairs proposed that the Dutch agricultural industry should steer towards nature inclusive farming practices, in order to sustain long-term yields while conserving nature (Ministerie van Economische Zaken, 2014). However, to this date, the costs and benefits related to nature inclusive farming systems in the Netherlands have not formally been compared to the costs and benefits related to conventional or organic farming. Researchers have stated the need to objectively evaluate the sustainability and consequences of current dairy farming practices in the Netherlands, while gaining insight into potential alternatives (Elsaesser et al., 2015).
This research project aims to evaluate the sustainability of Dutch nature inclusive dairy farming practices in comparison to conventional and organic farming practices. It will make use of a Multi-Criteria Analysis (MCA), in order to give an objective overview of the relative costs and benefits of conventional, organic and nature inclusive dairy farming. The Brundlandt commission (1987) states that the sustainability of a system is a function of ecological, social and economic aspects. Therefore, the MCA will take into account the environmental impact, economic sustainability, and farmer & animal welfare aspects (to accommodate the social aspect) related to the three farming systems. The main research question is: How do the costs and benefits of nature inclusive dairy farming compare to the costs and benefits of conventional and organic dairy farming in the Netherlands?
5 information on conventional, organic and nature inclusive farming practices in the Netherlands. Secondly, the methodology will delve into the interdisciplinary character of this research project, and explain why and how an MCA will be utilized for this research project. Thirdly, the results chapter will discuss the output of the MCA analysis. Fourthly, policy recommendations will be provided on the basis of the MCA results. The aim of this research is to provide a concrete comparison of conventional, organic and nature inclusive farming, which can be used to form policy by Dutch government regarding the future of dairy farming in the Netherlands.
Theoretical Background
1. Description of different dairy systems
This research is based on three different types of dairy farming practices. In order to evaluate the sustainability of Dutch nature inclusive dairy farming practices in comparison to conventional and organic farming practices,
clear definitions of the three different practices are necessary. Therefore, the three types of farming are explained and characterised below. These definitions of the different farming systems will consistently be used throughout the research project.
Conventional dairy farming is characterized as dairy farming that focuses on
intense production to gain maximum profits (figure 1) (Cederberg & Mattsson, 2000). Conventional dairy farming systems are generally and obtain the highest yield per cow (Haas, Wetterich & Köpke, 2001). Over the course of fifty years, farms have scaled up and intensified to keep up with the cost of labour and to provide a reasonable financial income for a farmer. Improvements in the sector included the application of fertilizer and the use of large, heavy and expensive machinery. Because of the upscaling, the production of dairy per cow doubled to about 8000 kg per year and the production per hectare tripled to about 15.000 kg per year over the last 50 years. Furthermore, the average number of dairy cows per farm increased tenfold, to about 85, while the number of farms was reduced tenfold to about 18.000 (ONVZ, 2016).
In order to achieve maximum profits in conventional dairy farming, the focus lies on what Erisman et al. (2016) describe as a control risk management model (figure 2). According to this model, the farmer relies on external inputs such as synthetic fertilizers, pesticides, herbicides and antibiotics in order to be able to focus on short-term profits and control of risks. This system calls for continuous monitoring of farm processes, to survey risks and determine whether those risks need to be tackled (Erisman et al., 2016). Subsequently, the health of the agro-ecosystem does not
Figure Conventional dairy farming with optimized grazing (Cederberg & Mattsson, 2000) Figure 1 Conventional dairy farming with optimized grazing (Cederberg & Mattsson, 2000)
Figure Risk management model: control versus adaptation (Erisman et al., 2016).
6 play an important role in farmer’s decision making processes.
The aims of organic farming differ from conventional farming. Organic farming aims to maintain soil fertility, avoid pollution, improve animal welfare and to score better on environmental aspects in general. According to Trewavas (2001), there are mainly two principles that differentiate organic farming from other types of farming systems. The first principle is the rejection of ‘soluble mineral inputs’, meaning that chemical fertilizers are prohibited and minerals originating from the breakdown of in-place manure are used instead. The second principle is the rejection of synthetic herbicides and pesticides, in favour of organic alternatives. Moreover, in organic dairy farming, the preventive use of regular medicines and antibiotics is not allowed (Skal, 2017). Cows on organic dairy farms must be able to go outside and inside whenever they want, to simulate a more natural environment. Housing must allow enough daylight and cows should
have at least six square meters of individual space (Skal, 2017).
Lastly, nature inclusive farming is a type of farming in which farmers strive to maintain both the advantages for biodiversity on agriculture as well as the advantages for agriculture on biodiversity (Erisman, Eekeren, Wit, & Koopmans, 2016). Agricultural practices do not stand separately from nature and biodiversity. On the contrary, several ecosystem services are thought to be of critical importance to agriculture. While conventional agricultural practices tend to harm the system on which they depend, and some of the ecosystem services are replaced by external inputs, nature inclusive farming seeks to conserve the system. It relies on biodiversity and a model based on adaptation that aims to increase the adaptive capacity of the farm system (figure 2) (Erisman et al., 2016; van Eekeren, Liere, Vries, Rutgers, & Goede, 2009; Grinsven, Erisman, Vries, & Westhoek, 2010; Ward, 2008). Management of the system is focused on four interconnected pillars of biodiversity (Species, Corridors & Source areas, Landscape diversity and Functional agrobiodiversity) (figure 3). By managing these four factors, a more resilient system is created through increased biodiversity. This system is more able to cope with disturbances
Figure 2 Risk management model: control versus adaptation (Erisman et al., 2016)
7 (Erisman et al., 2016; Gunderson, 2015).
2. Problems related to dairy farming practices
While the dairy farming industry has helped the Dutch economy to flourish, there are several problems related to the current practices in the sector that deserve attention.
The environmental
performance of conventional dairy farming is poor (Elsaesser, 2015). One of the main reasons for this is that dairy farming is responsible for significant biodiversity loss. Biodiversity loss as a result of farming practices is most severe in the Netherlands of all EU countries (PBL, 2014). Mainly meadow birds suffer from intensive
dairy farming (Ecological Monitoring Network, 2013; CBS, 2015). Erisman et al. (2014) describe the major pressures of dairy farms for biodiversity to be light and noise, excess manure, water drainage, grass monocultures, mowing, use of chemicals and habitat fragmentation. This leads to loss and degradation of habitats, as well as lost connections between the mosaic of former healthy agricultural ecosystems. In the end, this results in the loss of species. Additionally, important ecosystem services are being lost at the same time. Services provided by healthy agro-ecosystems are for example water regulation, soil stabilization and nutrient supply. These are all highly relevant for farming practices (Altieri, 1999; Erisman et al., 2014).
Moreover, dairy industry is one of the main contributors to greenhouse gas (GHG) emissions (Weiske et al., 2006). The whole chain of fodder production, milk production and transport, as well as the cows themselves, contribute to GHG emissions. Especially methane (CH4),
nitrous oxides (N2O and NOx) and carbon dioxide (CO2) are emitted in the dairy sector and are
major contributors to global warming and environmental pollution.
What is more, dairy farming largely contributes to water pollution. Due to the use of fertilizers and manure on the land, in combination with degraded soils, much nitrogen (N) and phosphorous (P) ultimately end up in the environment. Through erosion, runoff and leakage these nutrients end up in surface waters and can cause eutrophication. Eutrophication is a form of nutrient pollution that in the end leads to dead waters as a result of oxygen depletion (Carpenter, 1998).
Another problem with current dairy farming practices is that they are becoming less economically viable. Aarts (2013) explains how this is partially due to fertilizers and fodder being used with a low efficiency, while these valuable resources are becoming more expensive. However, the strong focus on gaining maximum yields makes farmers reliant on these resources and has led to high input costs. To make things worse, a decreasing soil quality resulting from overgrazing exacerbates the need for more fertilizer. Additionally, the sector has struggled with
Figure Pillars of biodiversity in nature inclusive farming (Erisman et al., 2016)
Figure 3 Pillars of biodiversity in nature inclusive farming (Erisman et al., 2016)
8 price fluctuations ever since fixed milk prices were banned in 1984 (Aarts, 2013; European Commission, 2013). These issues combined have decreased the profitability of dairy farming.
Finally, animal welfare is an issue within conventional dairy farming systems (Groot & van’t Hooft, 2016). The United Nations identified the five freedoms for animal welfare (Table 1). In the conventional agricultural practice, some of the five freedoms are easily obtained. No farmer will let their cows be hungry, because this would immediately influence the amount of milk produced. However, the sector falls short on providing cows with some of the other freedoms. The strong focus on high yields has led to a shortening of the life span of cows due to diseases and illnesses (Borell & Sorensen). This in turn has forced farmers to turn to high antibiotic usages to keep cows relatively healthy (Aarts, 2013). Thus, within conventional agricultural practices, one cannot state that cows are free from pain, injury or disease. Moreover, it is hard to identify whether cows experience discomfort, are able to show natural behaviour and are free from fear and distress. This can already be seen as a problem of the current system since these problems can easily follow from a lack of space, crowdedness, open floors, muddy fields, tight passages and too little feeding and drinking opportunities. Most of these problems are related to intensive production and too many cows on a small surface area. In organic dairy farming, many of these problems are already dealt with, by providing more space, more natural food and less antibiotics.
Table 1 Five freedoms of animal welfare (WUR, 2016)
Although there are many problems related to conventional dairy farming, farmers are still somewhat reluctant to invest in a new farming system. A key problem is that research on sustainable practices often fails to take into account problems that farmers face when they implement effective nature conservation methods as a form of nature inclusive farming (Runhaar, 2017). For example, when farmers decide to change their farm management from conventional to organic or nature inclusive, a large capital investment is needed. Furthermore, farmers face reduced net income in the transition period because of production losses in this period. Besides this, nature inclusive farms are not highly mechanised and cannot produce milk all year round. These issues result in the fact that new farming systems only contribute to a small share of farming investments in the Netherlands. Moreover, in terms of working hours, expanding farm size and complying with higher environmental restrictions leads to more labour hours and higher labour costs (Gu, 2016). It is therefore important to approach new farming systems not only from an environmental perspective, but also from the farmers’ perspective (Runhaar, 2017).
Researchers and policy makers present nature inclusive farming as the solution for the above stated problems (Erisman et al., 2016). The next section sheds light on the promises of
Five Freedoms of animal welfare 1 Freedom from thirst and hunger 2 Freedom from discomfort
3 Freedom from pain, injury and disease 4 Freedom to express most normal behaviour 5 Freedom from fear and distress
9 nature-inclusive farming. Thereafter, nature-inclusive farming will be tested against conventional and organic dairy farming in a MCA.
3. Promises of nature inclusive dairy farming
The Dutch Ministry of Economic Affairs, as well as several researchers, propose that the Dutch dairy farming industry should steer towards nature inclusive farming, as it is assumed that this type of farming will bring ecological, economic and social benefits compared to current dairy farming practices (Ministerie van Economische Zaken, 2014; Erisman et al., 2016; van Doorn et
al., 2016; Geerts, Korevaar & Timmerman, 2014; Sanders et al., 2015; Polman et al., 2015).
The aim of nature inclusive farming is to counteract above discussed problems related to current dairy farming practices. Nature inclusive farming aims to work with nature, thus allowing more biodiversity in the farmland. This is not only beneficial for farmland and surrounding biodiversity, but also contributes to essential ecosystem services from which farmers can profit. Due to more biodiversity in the farmland, soils have better water and nutrient retention capacity and the grassland is much stronger, allowing cows to graze outside all year long. Additionally, pests can be naturally controlled due to the presence of natural enemies. This reduces needs for chemical fertilizers and pesticides (Erisman et al., 2014; Erisman et al., 2016). Moreover, nature inclusive farming has the potential to enhance surrounding biodiversity by contributing to the national nature network as a high-quality habitat (Erisman et al., 2016; van Tol, 2017).
Besides this, Erisman et al. (2016) describe how the adaptation model (figure 2) can secure long-term yields and thus farmer income. Other researchers confirm how diminishing the reliance on external inputs might increase yield and profit stability (Pimentel et al., 2005). Therefore, one can conclude that nature inclusive farming has the potential to bring economic benefits to the farmer. However, since nature inclusive farming is a relatively new phenomenon, no long-term data is currently available on the stability of yields and farmer income for nature inclusive farming systems.
Moreover, nature inclusive farming is assumed to enhance animal welfare compared to current farming practices. The nature inclusive approach calls for completely natural food, natural behaviour and a low grazing pressure of cows outside, ergo for more room. More space, less treatment with antibiotics, a lower milking pressure and more natural food all contribute to the Five Freedoms.
The risk faced by farmers that change to nature inclusive farming may be buffered with the growing demand for organic milk. Nature inclusive farms can, in theory, produce completely organic or even biodynamic milk. The higher market price for this milk type might lighten the burden of the investment (Gu, 2016; Wageningen University, 2016). Currently the gap in question and demand for organic milk is filled by importing organic milk from abroad (Gu, 2016). An increase in organic milk production by nature inclusive farms provides the opportunity for farmers to drill a large domestic market share. Furthermore, farmers with a lower milk yield tend to spread their income risk and social sustainability by spreading their income sources. Other sources of
10 income for them are: production of cheese or ice cream (Gu, 2016).
When nature-inclusive farms are more integrated and have higher efficiency rates due to a learning process over time, the working hours and labour cost for these farms can decrease. An overall opportunity to secure farmer welfare in a nature-inclusive farming system can be found in the flexibility of this system. Because it is a fairly new concept, it is still open for farmers, stakeholders and policy-makers to negotiate shared meanings and interests (Runhaar, 2017).
Whether seen from an economic, social or ecological viewpoint, nature inclusive farming promises to fill many existing gaps while meeting current demands. These promises will be investigated further in the next section through the use of a Multi-Criteria Analysis (MCA).
Methodology
The aim of this research, as well as the criteria to measure it, are visualized in the objective tree that is depicted in figure 4. The goals form the basis of our analysis, the criteria the tools to measure them. As becomes clear from the figure, the goals and criteria span over multiple disciplines. The problems in this research therefore suffer from complexity and cannot be dealt with in a disciplinary fashion (Menken & Keestra, 2014). Research areas that are part of this problem are stretching from economics to ecology and back to political science. Interactions within and between disciplines and evaluations based on aspects from different disciplines ask for a more interdisciplinary approach to answer the research question (Boulton & Allen, 2007). By combining knowledge from several disciplines and using principles that overcome disciplinary boundaries, such as an MCA, interdisciplinarity can lead to better insight into this complex system.
11 Figure 4 Objective tree. Visualisation of the main goal (left) the sub goals (middle) that we stated for Dutch dairy farming. On the right the criteria used to measure these goals are depicted.
The objective tree is the starting point of our research. We envisage a client for whom we are assessing the different dairy farming practices. The main wish of this client is to maximize the gains of dairy farming in the Netherlands. Our main goal for assessing the different forms of dairy farming, is thus to determine which farming system maximizes these gains. The term ‘gains’ in this respect is related to sustainability, as we are interested in determining which farming practices will allow the dairy farming sector to thrive in the long run. Several authors (Brundlandt, 1987; Heinen, 1994; Berkes, Folke & Colding, 2000; Yunlong and Smith 1994) state that sustainable agriculture can be viewed in the light of environmental, economic and social perspectives. With this in mind, several sub goals were chosen that include economic, social and environmental aspects of sustainability.
In order to objectively compare the sustainability of the different farming systems, this research project makes use of a Multi-Criteria Analysis (MCA). The main goal of an MCA is to
Maximizing the gains from dairy farming in the
Netherlands Minimize environmental impact Nutrient surplus Use of chemicals Species diversity GHG emissions
Maximize economic gains
Land productivity Yield stability
profitability
Maximize farmer welfare
Income Working hours
Maximize animal welfare
Quality of fodder Space per cow
12 provide a clear overview of alternatives (Blom et al., 2002). As the aim of this research is to provide a clear and objective overview of the alternatives for dairy farming practices, it is justified to apply an MCA.
In order to perform an MCA, indicators and criteria must be defined. Indicators are defined here as the objectives related to the specific project or goal. Thus, the indicators are based on the sub goals that were defined: they include measuring environmental, economic and social aspects of the different dairy farms. This relates back to the importance of interdisciplinarity within this research project: the expertise of researchers from different fields must be merged into a synergistic whole in order to successfully perform the MCA and answer our research question.
The first indicator chosen is environmental impact. Environmental impact is defined as: “the direct effect of socio-economic activities and natural events on the components of the environment” (OECD, page 1., 2001). The second indicator is economic sustainability. Economic sustainability is defined as the ability of the farm to remain financially viable in the long-run (Lien, Hardaker & Flaten, 2007; van Calker et al., 2005). It is a precondition for a well-functioning farm system (Westerink-Peterson et al., 2013). With regard to the social aspects of dairy farming, farmer welfare is included as the third indicator for the MCA. Additionally, animal welfare is included as an indicator that relates to the treatment of cows in dairy farming.
Criteria are the aspects of the indicator that define the objective. Several criteria were selected for each of the four indicators. A schematic overview is provided in the operationalization scheme (Table 2). Appendix A describes the chosen criteria in more detail.
For this research project, we looked at the ‘triple bottom line’ approach. This is a framework used to assess the sustainability of an organization or system by looking at environmental, social and economic aspects. All three aspects are assigned an equal importance in the process of decision-making (Pope, Annandale & Morrison-Saunders, 2004). In line with this approach towards decision-making, this research project used equal and standardized weighting in the MCA to assess the ecological, social and economic aspects of Dutch dairy farming.
13 Table 2 Operationalization scheme
Alternatives Conventional dairy farming Organic dairy farming Nature-inclusive dairy farming Aspects Environmental impact Economical sustainability
Animal Welfare Farmer welfare
Criteria Nutrient Surplus Land
productivity
Quality of fodder Income
Use of Chemicals
Profitability Space per Cow Working hours
Species diversity Yield stability Animal Health GHG emission
There are some downfalls when applying an MCA for this research that need to be mentioned. Firstly, we cannot measure all criteria ourselves, so data is obtained from literature. Additionally, we could not derive exact numbers for all criteria. In that case, relative numbers were assigned to the different types of farming or scientifically supported estimates were made. For nature inclusive dairy farming it was especially hard to find concrete data, since little research has been performed on this new type of farming. Here comes a little loop into a research as sometimes we have to measure the promises of NIDF based on the promises, since no other data is available. Furthermore, assigning weights to criteria often leads to discussion between scholars. Some argue that it is not possible to leave out subjectivity in this process and therefore, an MCA can never be a hundred percent reliable (Bonte et al., 1997). In our case, weights are not assessed by experts but were considered equal for all indicators and criteria, making the MCA more objective, but probably less representative. Finally, MCAs work best when there are a large number of alternatives. However, in our case we provide only three alternatives. This may exaggerate small differences between categories and result in biased outcomes, but on the other hand, no other dairy farming sectors could have been relevant here. More details on the how the MCA was performed are outlined in the analysis section and in appendix C.
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MCA Results
Table 3 shows the results of the literature analysis, which provided the raw data for an effects table as input for the MCA. Appendix B provides a written results section that makes clear how we came to the numbers. The column Cost/Benefit is added to make clear if higher numbers are positive (benefit) or negative (cost).
Table 3 MCA effects table
Criteria Unit Cost /
Benefit
Conventional Organic Nature inclusive Economic Sustainability Yield stability1 Standard deviation of yield over 10 year period (2006-2015) Cost 888.212 870.53 8654 Cow productivity5
Litres milk / cow / year Benefit 77676 66027 65728 Profit margin9 (Profit / 100 litres) / (revenue / 100 litres)) * 100 = Benefit 3510 3111 3712 Environmental impact Nutrient surplus 13 Kg N / ha Cost 19814 6515 32.516
Nutrient surplus17 Kg P / ha Cost 10.318 1.119 0.5520 Use of chemicals 21 Ordinal scale (1-10) Cost 922 123 224 Species diversity25 Species / 25 ha Benefit 726 1727 2828 GHG emissions29 (CO2-equivalent / kg milk) Cost 1.0430 1.1231 1.0032
15
Animal welfare
Quality of fodder33
% high fibre food Benefit 70%34 60%
(minimum)35
100%36
Space per cow37
M2 / cow Benefit 9.238 11
(minimum)39
>9.240
Animal health41 Scale (0-10) Benefit 742 843 844
Farmer welfare
Working hours45 AWY/ha Cost 233.30046 233.58147 233.86248
Income49 euro/cow/yr Benefit 280050 285651 284352
1 Rasul & Thapa (2004) 27 de Wit et al. (2004)
2 Gu (2016) 28 Geerts et al. (2014)
3 Gu (2016) 29 Elsaesser et al. (2015); Cabell & Oelofse (2012)
4 Estimate based on: van Doorn et al. (2016), 30 Oenema et al. (2010)
Erisman et al. (2016) 31 Oenema et al. (2010)
5 Oenema et al. (2015) 32 Sanders & Westerink (2015)
6 Oenema et al. (2015) 33 Wageningen Livestock Research (2017)
7 Oenema et al. (2015) 34 IFCN (2016)
8 Polman et al. (2015) 35 Skal (2016)
9 Nemes (2009); Fairfield & Yohn (2001) 36 Skal (2016), Erisman et al. (2016)
10 Thillo et al. (2011) 37 Skal (2017)
11 Thillo et al. (2011) 38 GD (2016)
12 Estimate based on: Erisman et al. (2016) 39 Skal (2016)
13 Elsaesser et al. (2015), Cabell & Oelofse (2012) 40 Estimate based on: Skal (2016)
14 van Kerkhof (1999) 41 Remmelink et al. (2016)
15 van Kerkhof (1999) 42 Estimate based on: Borell & Sorensen (2004)
16 Estimate based on: Erisman et al. (2014) 43 Estimate based on: Borell & Sorensen (2004)
17 Elsaesser et al. (2015), Cabell & Oelofse (2012) 44 Estimate based on: Borell & Sorensen (2004)
18 van Kerkhof (1999) 45 Durant (2015)
19 van Kerkhof (1999) 46 Offerman & Nieber (2000)
20 Estimate based on: Erisman et al. (2014) 47 Offerman & Nieber (2000)
21 Elsaesser et al. (2015), Cabell & Oelofse (2012) 48 Estimate based on: Runhaar (2016)
22 Cederberg & Mattson (2000) 49 Mishra et al. (2002)
23 Cederberg & Mattson (2000) 50 Wageningen Un. & Research (2016), Oenema et al. (2010
24 Estimate based on: Erisman et al. (2014) 51 Wageningen Un. & Research (2016), Oenema et al. (2010)
25 Elsaesser et al. (2015), Cabell & Oelofse (2012) 52 Wageningen Un. & Research (2016), Polman et al. (2015)
26 Geerts et al., (2014)
The final results of the MCA are visualized in figure 5. The graphs show for each research domain the combined result of all criteria per farming alternative. The top graph gives the overall result, taking into account all criteria in from all indicators. From the figure, it becomes clear that NIDF
16 ranks highest, followed by organic and then conventional dairy farming. The next section elaborates on the analysis and interpretation of this result. The full MCA report is added in appendix C.
Figure 5 MCA results. Weighted summation for each criterium per indicator. The top graph shows the overall result.
Analysis
Overall, the new alternative, nature inclusive dairy farming scores best in this MCA (0.63 versus 0.50 and 0.41). This is mainly due to its environmental benefits (0.97 versus 0.49 and 0.42). Also on economic aspects, nature inclusive dairy farming scores well (0.67 versus 0.26 and 0.56). However, for animal welfare, nature inclusive dairy farming is equal to organic, but both are much better than conventional farming (0.50 versus 0.50 and 0.17). For farmer welfare nature inclusive
17 dairy farming scores the poorest of the three (0.38 versus 0.75 and 0.50). Note that this is the result for the most objective approach. Changing weights of aspects and criteria could result in different outcomes. The section below elaborates on this implication.
An interval standardization was used for all criteria (exc. on ordinal scale) and weights for each category were set equal. However, standardization on an MCA with only three categories can exaggerate small differences. This should be taken into account while using the results for advice and decisions. For example for farmer welfare, all values lay very close to each other, while the standardization leads to the suggestion of are larger differences.
Different decision makers have different interests and will probably want to give more weight to some criteria than others. Therefore, a sensitivity analysis was performed to see how changing weights would influence the outcome. Changing the weights of the four categories does have some influence on the overall results (see appendix C for figures and exact values). For environmental impact, changing the weights had no effect; nature inclusive always comes out best, followed by organic and then conventional. The same holds for animal welfare. For economic sustainability, it also does not really matter what the weight is; nature inclusive always wins. However, above ~0.42, conventional becomes more preferred than organic. In contrast, assigning different weights to farmer welfare, does have an essential influence on the end result. Up to a weight of ~0.43, NIDF is the preferred alternative, whereas with higher weights, organic farming ranks first. Weighing farmer welfare above ~0.73 even pushes nature inclusive dairy farming into the least preferred position. Assigning weights greater than 0.43 or even 0.73 might be valuable options for some decision makers.
Also for each individual criterion, a sensitivity analysis was performed. This didn’t have a profound influence on the end result, except for one criterion, being cow productivity. Nature inclusive dairy farming is the best option up to a weight of ~0.84. Above that, conventional farming would be the preferred alternative. It is imaginable that some decision makers will assign a very high weight to cow productivity.
This result thus once more stresses the complexity of interdisciplinary research. Which option comes out best, totally depends on the stakeholders and decision makers that are involved. They should decide what is considered as more important and for whom. Therefore, this result should always be placed in the perspective of the involved stakeholders in decision making. Repeating the MCA with different weights and probably even other or additional criteria might be useful.
Conclusion & Discussion
The question asked at the start of this research was: How do the costs and benefits of nature-inclusive dairy farming compare to the cost and benefits of organic and conventional dairy farming in the Netherlands? Based on the different criteria in the four different categories that were used here, nature-inclusive farming proves to score higher in a multi-criteria analysis compared to
18 organic and conventional dairy farming in the Netherlands. Does this mean that nature-inclusive dairy farming is the holy grail for the Dutch dairy farming sector? Here, some elaboration is necessary, considering the fact that the weighing of the different categories and criteria can influence the outcome of the MCA. If the different criteria used in the MCA are not weighted equally as a consequence of an unequal valuation of the different criteria, nature-inclusive farming might come second or third in the analysis or come first with a smaller margin. However, only farmer welfare turned out to be a criterium that can change the MCA result. Assigning a higher weight to farmer welfare in general pushes NIDF from the first place. Cow productivity, could in theory do the same, but the weight must be extremely high. Since for all other aspects and criteria NIDF always wins, the benefits seem to weigh out the costs. The new system seems quite a robust winner and therefore a potentially better alternative.
Another question is related to whether the promises of nature-inclusive dairy farming hold according to the MCA. Above, in the section promises, it became clear that nature-inclusive dairy farming should be able to solve some of the current problems in the agricultural sector. As the results from the MCA show, the environmental potential of nature-inclusive farming is regarded as the highest by quite a margin. This leads us to conclude that nature-inclusive farming will have more potential to provide the necessary ecosystem services that are currently under pressure or missing. The MCA also provides a rating for the economic stability of NIDF. The promise was that nature-inclusive farming would be more economically sustainable, since less external input is required and more stable yields can be expected. This promise seems to hold fine. Another promise of nature-inclusive farming was the increase in animal welfare that was expected from a transition between a conventional or organic and nature-inclusive farming practice. The MCA shows that for animal welfare, NIDF does not score worse than conventional farming and tends to score equal to organic dairy farming. NIDF does not proof its promises regarding farmer welfare, since NIDF end last here.
However, the MCA methodology could still be improved. Weighing the aspects and criteria based on expert knowledge and in cooperation with stakeholders, of whom farmers are the most important, would improve the reliability and accuracy of the results. Also, more data, especially on NIDF is needed to overcome loops in the research.
The interest of the Dutch government and of researchers into the costs and benefits of nature inclusive farming makes research focusing on it interesting, dynamic and necessary. Although for the first time a formal comparison is made between conventional, organic and nature inclusive dairy farming in the Netherlands, there is a demand for more research. If a better comparison between the different systems is to be made, much more data should be available on different categories and criteria. The authors therefore suggest that more research is done on experimental nature inclusive farms, on the economic possibilities and sustainability of these systems and on the factors influencing animal and farmer welfare. Moreover, further research into the shortcomings of the current system should not be neglected so as to create a firm base of agricultural data from different systems and the impact of these systems on the environment, the
19 biosphere, farmers, animals and the economy.
Policy brief
This policy brief provides the Dutch government with the main findings of this research. Furthermore, it will provides some recommendations to boost the change towards nature inclusive dairy farming in the Dutch Dairy sector.
First of all, this project made it clear that more data is needed on especially nature inclusive farming, in order to make a proper comparison between farming systems. For instance, it is not yet clear what the price will be at which nature inclusive dairy farmers can sell their milk, or how the yield stability of nature inclusive dairy farms compares to other farms. More research is necessary that focuses on monitoring and measuring the performance of nature inclusive dairy farms. Therefore, it is desirable that the Dutch government stimulates this type of research.
Secondly, it is very important for the Dutch government to clearly define the concept of nature inclusive farming. Currently there are disagreements between farmers and between farmers and other stakeholders about what nature inclusive farming entails. This can cause potential deadlocks in the development of this type of farming because it leads to distrust and the idea that farmer efforts are not recognized (Runhaar, 2017). Better defining the concept, as well as making more data available, could give farmers insight into the potential benefits of nature inclusive farming compared to conventional or organic farming. This might motivate them to shift to nature inclusive farming practices. However, simultaneously, it is expected that when more farms actually converge to nature inclusive farming more data will become available.
Thirdly, the government should actively involve farmers, and work to motivate them to transition towards nature inclusive farming practices as it is not very likely they will do this totally on their own. There are some top-down arrangements such as the Common Agricultural Policy that requires farmers in the Netherlands to contribute to the preservation of natural habitats. At the same time, bottom-up self-government by farmers that organised themselves to contribute to conserve or restore landscapes also exists (Runhaar, 2017). An existing system that is both top-down and bottom-up regulated is the agri-environmental scheme (AES). This scheme provides a financial compensation for farmers that decide to take conservation measures to protect species (Runhaar, 2017). Participation under these existing arrangements and their ecological performance is quite low. This can be mainly explained by a lack of motivation for farmers to participate and the voluntary base of participation. Which can again be explained by a lack of knowledge on the potential benefits.
One way that farmers could be stimulated to make the transition towards is to reward them for their conservation efforts through the use of agricultural subsidies. Conventional farming is currently highly subsidized, which only stimulates conventional farmers to continue upscaling and intensifying. A part of the agricultural subsidies should be reserved for nature inclusive farmers as these farmers provide services to society through a reduction in pollution and greenhouse gases, and an enhancement of the natural landscape. Moreover, allocation plans could be used to protect and conserve important areas in and around the farming landscape. This is similarly to how monuments are protected; the owners of the land would be compensated for land conservation through special conservation subsidies (Folmer & van der Meer-Kooistra, 2017).
20 It is important to give stakeholders themselves the tools to choose whether or not they want to make the transition. This MCA could contribute to a better decision making process. If the input data for such an MCA can be improved in the future, even better funded decisions can be made about the future of dairy farming in The Netherlands. It is therefore most important that the Dutch government as well as scientist hand over the tools for decision making to the ones that most closely involved and that they provide sufficient financial support to make a transition possible.
Acknowledgements
We would like to thank first of all our supervisor Jaap Rothuizen for his enthusiastic attitude and dedication to our project. We are very grateful to Dr. Alison Gilbert for running the MCA and also for her critical feedback to get the best out of us. Lastly we want to thank Prof. Dr. Ing. Jan Willem Erisman for inspiring us and sharing his expert knowledge.
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Appendix A: MCA criteria
Environmental impact
In order to assess environmental impact, the effects of the farming systems on soil, biodiversity and environment are included in the MCA. Based on Elsaesser et al. (2015) and Cabell & Oelofse (2012), we decided to measure environmental impact by the following criteria: 1. Nutrient surplus (kg/ha)
The nutrient balance of a dairy farm depends on the inputs and outputs of mainly Nitrogen (N) and Phosphorus (P). Figure 5 was derived from Cederberg & Mattson (2000) and shows flows of inputs and outputs of nutrients on dairy farms on which calculations can be based. Differences in nutrient input over the different farming systems mainly derive from varying quantities of
imported feed, manure and fertilizer. Ideally, nutrients circulate within the system between livestock, plants and land, as in the middle of the figure. Output is formed by production and emission through air and water.
Figure 6 Nutrient balance of a dairy farm (Cederberg & Mattson, 2000)
2. Use of chemicals
In conventional dairy farming often herbicides, pesticides and antibiotics are used to optimize yields. However, chemicals in these substances end up in the environment and pose a threat to ecosystems, specific vulnerable species and human health. The use of herbicides, pesticides and antibiotics will be scored on an ordinal scale for the three farming systems, in order to help assess environmental impact.
3. Species diversity (different species / ha)
Including all soil and grassland species such as worms, insects, fungi, grass types, plants and birds. Species diversity highly depends on habitat heterogeneity. Habitat heterogeneity implies
temporal and spatial variation in habitat niches that can sustain different organisms. When there is variation in abiotic conditions such as elevation, soil water, light and nutrient availability, variability in vegetation will also arise. Niches with different abiotic conditions and as a result different plant species, provide a habitat for a range of different organisms with varying needs. Farmland usually offers a very homogenous habitat and thus sustains very low biodiversity. However, mixing different grass species and adding shrubs and trees to the farmland, creates a
27 heterogenic habitat for multiple species (Benton et al., 2013). Species diversity is measured as the amount of different species forming the grassland. Sanders & Westerink (2015) make clear that the diversity of the grassland determines the diversity of additional biodiversity, such as soil organisms and birds. Also, diversity in the grassland stimulates functional biodiversity,
contributing to productivity of the grassland. Functional biodiversity contributes to ecosystem services such as water and nutrient regulation, reducing the needs for additional inputs. 4. Greenhouse gas (GHG) emissions (kg CO2-eq Mg-1 milk)
Greenhouse gas emissions, especially methane (NH4), nitrous oxide (N2O) and carbon dioxide (CO2) are important indicators for the impact on global warming. The dairy industry is one of the main contributors to GHG emissions (Weiske et al., 2006). The whole chain of fodder production, milk production and transport contributes to GHG emission. Additionally, the cows produce GHG emissions. GHG emission is calculated in CO2 equivalents, according to Oenema
et al. (2010).
Economic sustainability
For the indicator economic sustainability, several criteria were chosen on the basis of literature and a consultation with an agroecology expert.
1. Cow productivity
This study includes the criteria cow productivity as a measure of economic sustainability. Cow productivity will be compared by estimating milk yields in litres of milk per cow per year (Oenema et al., 2015). It is important to take into account cow productivity, as this determines the yield for the farmer and dictates how much he will be able to sell on the market.
2. Yield stability
The second criteria for economic sustainability is yield stability. Rasul & Thapa used yield stability as a measure of economic sustainability by taking into account the physical yield of crops (Rasul & Thapa, 2004). For organic and conventional farming, this research project will measure yield stability as the standard deviation of the yield of the three different farming systems between 2006 and 2015 (2016). Due to a lack of data regarding the yield stability of nature inclusive farming, an estimate will be made for this farming category, based on literature van Doorn et al., 2016; Erisman et al., 2015; Erisman, van Eekeren, Cuijpers & de Wit, 2016). 3. Profit margin
Rasul & Thapa took profitability as a measure of economic sustainability, as measured according to a complex analysis that took into account financial return, economic return and value addition / land unit (Rasul and Thapa, 2004). Due to a lack of data, profitability will not be used as a criteria. Instead, the profit margin will be used as a replacement. The profit margin is the percentage a business earns per unit of sales, calculated as the net profit (revenue minus costs) divided by the revenue. It is an indicator of business profitability, and is often used as an way to
28 compare the economic performance of different farm systems (Nemes, 2009; Fairfield & Yohn, 2001). The choice for the criteria profit margin was further justified after consultation with Jan Willem Erisman, who is an expert on nature inclusive farming (pers. Communication Jan Willem Erisman, Louis Bolk Institute).
Animal Welfare
1. Quality of fodder
Diets of dairy cows in the Netherlands are based on a variety of food sources. Dairy cows receive food from three categories, namely: high dry matter foods such as hay and straw but also silage; foods with a dry matter content lower than 50% (arbitrary) such as residues from beer or sugar production; compound feeds, mainly grains, soy and maize, often in the form of pellets, but this also includes premixes with hormones, vitamins, minerals and antibiotics (Federatie Nederlandse Diervoederketen, 2016). The diet of dairy cows is adjusted to the phase of life the cow is in and her production requirements. Farmers often dedicate part of their farm to the production of fodder. However, a lot of food is imported from outside the farm as well. Due to the production purpose of dairy farming cows, the nutrient requirements should be met very neatly. The fodder has to be high in fibre, protein, vitamins and minerals. In general, the natural diet of the cow consists of food with a high fibre content (grasses), this should also be the staple crop the cows receive most (Müller-lindenlauf, Deittert, & Köpke, 2010).
2. Space per cow
The space per cow is taken as a measure for the welfare of the animal. This space per cow is expressed here as the space inside and outside separately. This criteria also touches on other indicators of animal welfare based on which a proper assessment can be made. All these qualitative indicators are elaborately mentioned in the discussion of the different assessments that are attached to the forms of dairy farming (Skal, 2017).
3. Animal health
This indicator of welfare is especially hard to measure. Although the amount of treatment is quite easy to measure by the proxy of antibiotic use, this is not a good proxy for animal health since antibiotics are used preventively as well. Therefore, the use of antibiotics will be considered in the qualitative assessment of animal health, but general comparative reviews are taken as the prime indicator of animal health. Health then is defined as the absence of disease, or the negative presence of disease (Remmelink et al., 2016).
Farmer Welfare
Farmers are the actors that operate in the action level and thus the ones that realize an actual change towards another type of farming system if necessary. Establishing the correlation between farmer welfare and the type of farming system is then important because it helps us decide which option would improve their wellbeing and would thus be easiest accepted by farmers.
29 We can distinguish between two types wellfare: subjective and objective. Subjective well being can be defined as ‘’Good mental states, including all of the various evaluations, positive and negative, that people make of their lives and the affective reactions of people to their experiences’’ (Durant, 2015). This definition includes important aspects such as how people experience their life as a whole, but also at particular parts in their life for example satisfaction with their work situations (Durant, 2015). However, as we do not have the time and resources to take large scale surveys to measure subjective wellbeing, this research aimed at measuring the objective well being of farmers.
We decided to measure farmer welfare based on the following criteria: 1. Working time of farmers (hours/yr)
Working time of farmers was chosen as a criteria because it tells us something about how time consuming a specific type of farming system is. It is interesting to measure if working time of nature inclusive farming would exceed that of conventional farming or if working time is equal. The hypothesis here is that the more time a person spends on his job, the more this can lead to stress. Thereby, having a shorter working time leads to more time the farmer has for hobbies or other satisfactory activities (Spector et al., 2004).
2. Income of farmers (euro’s/cow)
Furthermore, due to the limited time and scope of this research, ‘’Farmer Welfare’’ includes solely the welfare of the farmer as an individual and not those individuals that are financially dependent on the household for financial support. To measure this we chose income of farmers as an objective criteria. This way we exclude factors that can influence individual choices of the farmer based on family characteristics or those that work together with the farmer (Mishra et al., 2002).
30
Appendix B: MCA written results
Environmental impact
1. Nutrient surplus
In organic dairy farming no synthetic fertilizers are used, which greatly reduces nutrient inputs. Surpluses of nitrate that pollute the environment, were calculated to be more than 50% lower in organic than in conventional dairy farming in the Netherlands (van Kerkhof, 1999). The table below shows a nutrient balance from two farms in Sweden. It is just a case study and can be different on other farms. However, similar results were found in other studies and differences are quite significant.
Nature inclusive farming aims to close nutrient cycles by promoting biodiversity.
Increased nutrient efficiency is expected to reduce nutrient surpluses. Although, this was not yet exactly measured, nutrient surpluses can be considered considerably lower than in conventional and organic systems (Erisman et al., 2014).
Numbers given in the table can vary per individual farm and also vary for different soil types (Daatselaar et al., 2015), but they give a good indication of the scale differences between the three farming systems.
Table 4 Nutrient balance of a conventional and an organic dairy farm compared (Cederberg & Mattson, 2000)
2. Use of chemicals
Antibiotics: In conventional farming, antibiotics are preventively used, leading to high doses of antibiotics (5,8 daily doses/cow/year). In organic farming, antibiotics are only used for sick animals and animals are taken out of production during use of antibiotics, leading to lower use (1,75 daily doses/cow/year) (Smolders et al., 2011). The aim of nature inclusive farming is to
31 improve cow health by providing better food, due to mixed herb and grasslands. Use of
antibiotics can in this case be reduced even more. Unfortunately, no numbers are available, so we will consider the use of antibiotic the same as in organic dairy farming.
Pesticides: In a Swedish study from 2000, Cederberg & Mattson showed that pesticide use was more than 10 times higher in conventional than in organic farming (10.8 versus 118 g / 1000 kg milk). In organic farming, no chemical pesticides and herbicides are used. Nature inclusive farming aims to reduce pesticide and herbicide use as much as possible by using natural enemies for pest control.
Because different chemicals are measured in different units, an ordinal scale from 1-10 is used to show differences between the three farming systems.
3. Species diversity
In conventional dairy farming, grasslands are usually monocultures of English rye-grass (Lolium
perenne). Due to environmental interaction, about 5-10 plant species per 25 ha are found in a
conventional meadow, which is a low biodiversity. Low grassland biodiversity also supports low additional biodiversity such as insects and meadow birds (Geerts et al., 2014).
In organic farming, usually a mix of grass species and clover is used, resulting in slightly higher (functional) diversity of the grassland. Clover also contributes to N fixation, reducing nutrient runoff and need for fertilizer (de Wit et al., 2004). Clover-mixed grasslands is more diverse than monoculture English rye-grass, but less diverse than grass, herb and flower mixes and is therefore considered as intermediate species diverse.
An important aspect of nature inclusive farming, is that the grassland is highly diverse. Grass, herb and flower mixes are used or stimulated that harbour high species diversity, stimulating functional biodiversity and insect and meadow bird richness and diversity. These grassland mixes contain 15 to 40 species per 25 ha and are defined as highly species diverse (Geerts et al., 2014).
In the effects table mean numbers are given and for organic dairy farming a number in between the other two is estimated, since literature research showed that grassland diversity in organic systems lies in between conventional and nature inclusive.
4. GHG emissions
Oenema et al. (2010) performed an analysis of GHG emissions in conventional and organic dairy farming in the Netherlands, taking into account the whole food chain. They calculated all sources of GHG emission in equivalents of the impact of 1 kg CO2 and found that total GHG emissions per kg milk are slightly higher in organic dairy farming than in conventional dairy farming (resp. 1.12 and 1.04 kg CO2-eq / kg milk).
In nature inclusive farming, more CO2 is captured in the grassland due to more diverse plant species. Also, better soil structure and higher soil biodiversity reduces GHG emissions (Sanders & Westerink, 2015). Moreover, to be sustainable, nature inclusive farming reduces the total number of cows, which lowers the GHG emission per hectare. Unfortunately, no numbers of GHG emissions are available, so I will consider it just slightly lower than conventional and organic.
