Conversion from Conventional to Biological Dairy Farming: Economic and Environmental Consequences at Farm Level

ABSTRACT

Biological dairy farming is often advocated as a solution for environmental problems caused by Dutch dairy farming. At the same time, biological farming can improve animal welfare and increase income due to a higher milk price. In this paper the central issue is to quantify economic and environmental consequences for dairy farms when converting to biological dairy farming. A linear programming model is used to model an extensive and an intensive dairy farm typical for the Province of Utrecht, The Netherlands. The objective function of the model maximizes labour income of the farm. From the results it appears that the extensive farm benefits from conversion while the intensive farm loses income. The environmental consequences are quite diverse. The nitrogen surplus after conversion is much lower than before because nitrogen fixation by legumes is omitted from the calculation. On the other hand, ammonia emission is higher after conversion to biological farming due to a higher number of animals. On the extensive farm the phosphate surplus in the biological situation is much higher than in the conventional situation due to the fact that a shortage of nitrogen in the biological situation can only be made up by applying animal manure (slurry) from other farms with consequential overfertilization of phosphate. When environmental legislation is introduced, the biological farms appear to lose more income than the conventional farms. From the sensitivity analysis it appears that assumptions about milk yield per cow and milk price are crucial for the economic results of biological farms.