Integrated assessment of sheep production systems and the agricultural value chain
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This thesis describes the development of an integrated, farm level, bioeconomic systems model of Irish sheep production using nationally representative data from the National Farm Survey (NFS). A systems approach is applied to develop three sub-model components which enable an integrated assessment of the impact of policy reform and farm management practice on the financial, technical and environmental performance of Irish sheep farms. The framework is bioeconomic in that, alongside financial analysis it seeks to capture the biophysical attributes of livestock and crops and the variability in farm environmental conditions that are an inherent feature of agriculture production systems. The framework is subsequently applied to provide input to the Irish Bioeconomy Input-Output model (BIO) in order to simulate the economy wide economic and environmental impact of achieving Food Wise 2025 (FW 2025) National policy objectives in terms of economic output, and greenhouse gas (GHG) emissions. This systems approach, using NFS data, enables the disaggregation of the agriculture sector and the extension of I-O tables to an environmental account of GHG emissions. It is proposed that the linking of micro and macro analysis is necessary for integrated systems assessment in the context of national policy, which straddles both farm level production targets and national macroeconomic targets. A number of economic models of production are specified to analyse the distribution in technical management performance and associated financial performance across the distribution of sheep farms and to examine the farm level effects of a policy reform. In the context of the growing emphasis on production efficiency per unit output, as promoted by recent EU Common Agriculture Policy (CAP) reform, World Trade Organisation (WTO) agreements, and international climate change legislation, Chapter 2 describes the “Animal Nutrition” component of the systems model. This is applied to assess the impact of flock nutrition management practices on financial and technical performance across all sheep farms. Results from a single equation econometric input demand model finds concentrate demand on Irish sheep farms to be elastic and thus sensitive to price changes. A second model specification indicates the presence of spatially heterogeneous effects of lambing date on concentrate demand across regions. Chapter 3 describes the ‘animal demographics’ subcomponent which is applied to estimate the impact of an improved efficiency simulation on farm income. Results indicate the potential impacts on farm output and gross margins for a series of improved animal performance scenarios which are achievable through specific technology adoptions and which are in-line with national policy objections for the sector as set down under Food Harvest 2020 (FH 2020). Chapter 4 describes the ‘environmental component’ of the model by performing a Life Cycle Assessment (LCA) of Irish sheep farms to account for GHG emissions and land occupation. Results provide an estimate of the farm level carbon footprint and land occupation of sheep farms. The distribution in performance witnessed across farms points towards higher technical performance and increased production intensity as a means of mitigating GHG emissions from sheep production systems. This is in line with previous `hypothetical’ or average production systems LCAs for Ireland. Chapter 5 takes data generated from the systems model developed previously and scales results to be representative at the national economy level. This information is used as input to the Bioeconomy Input-Output (BIO) model for Ireland, adapted here to simulate the environmental and economic impacts of meeting FW 2025 growth targets. This is achieved through an extension of the BIO model to include an environmental account of GHG emissions and land occupation. In the context of potentially conflicting economic and environmental policies for Irish Agriculture, a scenario analysis is undertaken which assesses the potential increase in GHG emissions arising from the achievement of agriculture sector expansion plans. This thesis informs the current production literature through an analysis of the full distribution of Irish sheep producers. Detailed farm level production data not previously used in applied economic research provides information here on animal and crop performance, and the technical proficiency and management choices of the range of producers. This new information illuminates the management behaviour of these agents in response to policy and environmental stimulus. This provides a unique contribution to knowledge by establishing a framework under which the economic and environmental impacts of policy and farm management for the full distribution of sheep farms can be assessed. Unlike previous systems models applied to Irish agriculture, which modelled `representative’, average farms or `hypothetical’ farms based on experiment from research farms, this thesis models actual farms. Using NFS data means results are representative of the national population of farms and inference can be made on distribution of performance taking account of site specific environmental and agronomic conditions. Furthermore, results can be scaled to the national level to incorporate an integrated assessment of the impact of policy shocks on economic and environmental outputs across the entire value chain from `cradle to grave’.