Integrating public demands into model-based design for multifunctional agriculture: An application to intensive Dutch dairy landscapes

The contribution of agriculture to the welfare of society is determined by its economic, social and environmental performance. Although theoretical discussions can be found in the literature, few reports exist that integrate the social demand for multifunctional agriculture in the evaluation of the sustainability and the global welfare of society. This paper presents a methodology that combines economic valuation, integrated modelling, stakeholder analysis, and multi-criteria evaluation. It consists of three steps to determine: (1) social demands for multifunctional agriculture; (2) feasible technical alternatives available from the supply part of the market; (3) the net utility of alternatives for society measured as the change in social net benefit, i.e. the sum of changes compared to the current situation expressed in utility of market and non-market net benefits. Market net benefits are represented by their monetary value. Quality Function Deployment combined with Analytic Network Process (QFD/ANP) were used to estimate the non-market net benefits. The methodology is applied to the case study of a dairy-farming based agricultural landscape in the Northern Friesian Woodlands, The Netherlands. Social net benefit depended on land use, i.e. pasture management regimes on each of the agricultural fields and on presence or absence of hedgerows around the fields. Changes in market net utility were expressed in terms of changes for farmers, consumers and government. Changes in non-market net utility were expressed in terms of changes in landscape quality, nature value and environmental health for Dutch society as a whole, as estimated from European public surveys (Eurobarometer). The complete solution space defined by the market and non-market net benefits of landscapes with alternative patterns of land use was estimated to offer insight in the trade-off between market and non-market performance and enable selection of 'icon' landscapes to target or avoid. Improvement of the current landscape towards the social optimum would involve changes in pasture management resulting in higher gross margin for farmers, slightly relaxing current environmental restrictions, which could be reached at lower levels of subsidies in agri-environmental programs. In addition to such overall optimum the results demonstrate the trade-off between market and non-market benefits and the characteristics of current, utopian and dystopian landscapes. The approach provides an alternative to current economic valuation methods which focus on assessment of economic value as an input to analysis. Here, economic value emerges as the trade-off between market and non-market functions which is an output of the analysis.