Abstract: Climate and socio-economic change will affect the land use and the economic viability of Dutch dairy farms. Explorations of future scenarios, which include different drivers and impacts, are needed to perform ex-ante policy assessment. This study uses a bio-economic farm model to assess impacts of climate and socio-economic change on dairy farms in a sandy area in the Netherlands. Farm data from the Farm Accountancy Data Network provided information on the current production levels and available farm resources. First, the farm plans of individual farms were optimized in the current situation to benchmark farms and assess the current scope for improvement. Secondly, simulations for two scenarios were included: a Global Economy with 2 °C global temperature rise (GE/W+) and a Regional Community with 1 °C global temperature rise (RC/G). The impacts of climate change, extreme events, juridical change (including abolishment of milk quota), technological change and price changes were evaluated in separate model runs within the predefined scenarios. We found that farms can increase profit both by intensification and land expansion; the latter especially for medium sized farms (less than 70 cows). Climate change including the effect of increased occurrence of extreme events may negatively affect farm gross margin in the GE/W+ scenario. Lower gross margins are compensated for by the effects of technology and price changes. In contrast with the GE/W+ scenario, climate change has positive impacts on farm profit in RC/G, but less favourable farm input-output price ratios have a negative effect. Technological change is needed to compensate for revenue losses due to higher input prices. In both GE/W+ and RC/G scenarios, dairy farms increase production and the use of artificial fertilizer. Medium sized farms have more options to increase profit than the large farms: they benefit more from the abolishment of the milk quota and better adapt to negative and positive impacts of climate change. While the exact impact of different drivers will always remain uncertain, this study showed that changes in prices, technology and markets have a relatively larger impact than climate change, even when extreme events are taken into account. By using whole farm plans as activities that can be selected, the model is grounded in observations, and it was shown that half of the farms are gross margin maximizers as assumed in the model. The model therefore indicates ‘what could happen if’, and gives insights in drivers and impacts of dairy farming in the region.

Abstract: Future farming systems are challenged to adapt to the changing socio-economic and bio-physical environment in order to remain competitive and to meet the increasing requirements for food and fibres. The scientific challenge is to evaluate the consequences of predefined scenarios, identify current “best” practices and explore future adaptation strategies at farm level. The objective of this article is to assess the impact of different climate change and socio-economic scenarios on arable farming systems in Flevoland (the Netherlands) and to explore possible adaptation strategies. Data Envelopment Analysis was used to identify these current “best” practices while bio-economic modelling was used to calculate a number of important economic and environmental indicators in scenarios for 2050. Relative differences between yields with and without climate change and technological change were simulated with a crop bio-physical model and used as a correction factors for the observed crop yields of current “best” practices. We demonstrated the capacity of the proposed methodology to explore multiple scenarios by analysing the importance of drivers of change, while accounting for variation between individual farms. It was found that farmers in Flevoland are in general technically efficient and a substantial share of the arable land is currently under profit maximization. We found that climate change increased productivity in all tested scenarios. However, the effects of different socio-economic scenarios (globalized and regionalized economies) on the economic and environmental performance of the farms were variable. Scenarios of a globalized economy where the prices of outputs were simulated to increase substantially might result in increased average gross margin and lower average (per ha) applications of crop protection and fertilizers. However, the effects might differ between different farm types. It was found that, the abolishment of sugar beet quota and changes of future prices of agricultural inputs and outputs in such socio-economic scenario (i.e. globalized economy) caused a decrease in gross margins of smaller (in terms of economic size) farms, while gross margin of larger farms increased. In scenarios where more regionalized economies and a moderate climate change are assumed, the future price ratios between inputs and outputs are shown to be the key factors for the viability of arable farms in our simulations. (C) 2013 Elsevier B.V. All rights reserved.