Applying and Extending the Sustainable Value Method related to Agriculture - an Overview

Abstract

Sustainable Value is a method to measure the contribution of an economic entity, such as a farm or the entire agricultural sector, towards the sustainability (sustainable development) of a region, a country or on a global scale. A positive sustainable value is created once resources are used more efficiently than by a benchmark. It shows the excess return that is created or lost by the use of economic, environmental and social resources by an economic entity relative to a benchmark. The purpose of this paper is to give an overview on the characteristics and requirements of the SV and to provide information on (a) possible applications and (b) extensions of the SV method related to the agricultural sector. A particular emphasis is put on the choice of sustainability indicators (resource figures, welfare figure) to be included, the generic steps of SV calculation, the meaning of weighting and aggregation in the SV, the role of the Return-to-Cost Ratio in taking farm size into consideration, and the interpretation and communication of the results of an agriculture-related SV assessment. After sketching out possible extensions and variations of the SV method, the paper closes with a summary of those aspects to keep in mind when applying the SV to agriculture.