Productive Capacity of Biodiversity: Crop Diversity and Permanent Grasslands in Northwestern France

Abstract

Previous studies on the productive capacity of biodiversity emphasized that greater crop diversity increases crop yields. We examined the influence of two components of agricultural biodiversity—farm-level crop diversity and permanent grasslands—on the production of cereals and milk. We focused on productive interactions between these two biodiversity components, and between them and conventional inputs. Using a variety of estimators (seemingly unrelated regressions and general method of moments, with or without restrictions) and functional forms, we estimated systems of production functions using a sample of 3960 mixed crop-livestock farms from 2002 to 2013 in France. The estimates highlight that increasing permanent grassland proportion increased cereal yields under certain conditions and confirm that increasing crop diversity increases cereal and milk yields. Crop diversity and permanent grasslands can substitute each other and be a substitute for fertilizers and pesticides.