Economic and Environmental Sustainability Trade-Off Analysis in Sheep Farming Using the Farm Accountancy Data Network Database

Abstract

Agriculture and livestock farming significantly contribute to the success of all United Nations Sustainable Development Goals of Agenda 2030 and are pivotal in the sustainability transition of the European agri-food sector. However, those sectors have been criticized for generating negative environmental externalities. In this context, adopting indicators able to evaluate agriculture and sheep farming sustainability is essential for fostering sustainable development in the primary sector and defining appropriate policies to support it. Such indicators are crucial for understanding if European Union policies striving to realize win–win opportunities based on synergy between farms’ environmental and economic dimensions are realistic. This paper focuses on this wave of interest and has two aims. First, it intends to investigate the existence of synergies or trade-offs between those dimensions using a trade-off analysis. To this end, a significant set of economic and environmental farm indicators was selected, and two composite indicators were created. Second, it aims to investigate the relationship between those two indicators and some pivotal structural and socio-demographic variables. This study was carried out on 219 Sardinian sheep farms included in the Italian Farm Accountancy Data Network. The findings showed a low synergy between the economic and environmental spheres, a relationship between economic indicators and farmers’ ages and organic production variables, and no relationships between the environmental dimension and the analyzed variables.