Sustainability of crop and livestock dominant dryland systems of Alentejo region: differences in economic returns and environmental consequences

This paper presents a case study with two traditional Mediterranean-type farming systems: cropping dominant and grazing or livestock dominant. Traditional farming systems from the Mediterranean area in the Alentejo, southern region of Portugal, are compared in terms of economic returns, environmental impacts and trade-offs. A linear programming model that considers the economic and environmental issues for each farming system was developed. The models maximize farm profit subject to managerial, resource and environmental constraints. Environmental impacts were evaluated from cradle-to-grave and assessed following an input-output (I/O) analysis of environmental accounts and a Life Cycle Assessment (LCA) methodology. Results are used for economic evaluation and environmental impacts of farming systems. Results show that livestock predominant farming has larger environmental impact and lower net farm income than the crop farming system. Shadow prices of environmental constraints are compared for both systems to evaluate cost and efficiency of policies that constrains environmental consequences and promote sustainability. Costs required to compensate farmers for reductions of environmental impacts are lower for livestock predominant farming than for crop farms. Therefore, policy priorities should be targeted firstly to livestock predominant farming system effects. Subsidies represent a substantial part of the net farm income in both cases. Hence, in both cases, but particularly with the livestock predominant farming, there is considerable margin to improve policy effectiveness to control environmental impacts