A farm level approach to explore farm gross margin effects of soil organic carbon management

Abstract

This paper investigates farm gross margin effects of management measures aimed at enhancing soil organic carbon (SOC) stocks to maintain soil fertility while providing important ecosystem services. An optimising farm level model, ScotFarm, is used to investigate the farm gross margin effects of selected SOC management measures for arable farms in Scotland (UK) and Aragon (Spain). The sensitivity of model results to effects on crop yields and costs of production is tested for each measure. The results suggest that considerable regional differences in the financial viability of SOC measures exist. Tillage management is the only measure with positive effects on farm gross margins of Scottish farms at baseline levels of yield effects and input costs. In the case of farms in Aragon, Spain, fertiliser management, crop rotations (with legumes) and tillage management (in later years) show improvements in gross margins. Residue management is estimated to have a negative effect on farm gross margins for both Scottish and Spanish crop farms. Results of the sensitivity analysis indicate that effects of SOC management on farm gross margins are more sensitive to a change in crop yields than to changes in input costs. The findings point to further research needs with respect to the trade-offs between yield effects and changes in input costs arising from the adoption of SOC management measures, and have implications for agricultural policy design aimed at enhancing SOC stocks under a changing climate.