Measuring sustainability at the farm level : an integrated environmental and economic accounting approach in Scottish agriculture
There is an increasing demand for information regarding the role of individual businesses in achieving sustainable development. In agriculture, quantitative indicators of farm sustainability have focused on financial performance or physical environmental impacts. Examples of attempts to integrate multiple financial and environmental indicators into single economic indicators are characterised by limited theoretical links and a lack of transparency in the accounting framework. Consequently, the interpretation of these indicators in a sustainability context is often unclear. Two farm-level integrated environmental and economic sustainability indicators are developed, the environmentally adjusted net value added (ENVA) indicator of weak sustainability, and the sustainability gap (SGAP) indicator of strong sustainability. Drawing on financial and management resources, the sustainability of five Scottish case study farms is examined, taking into account the economic costs associated with nitrate and greenhouse gas pollution. The farms were contrasting in both type and location. The results show that all five farms are weakly sustainable, although the sustainability of the grazing livestock farms is subsidy dependent. Only one farm, an organic arable/livestock farm, is strongly sustainable. The other four farms failed to meet at least one of the four sustainability standards considered. The results also show that current classifications of sustainability based on farm type are not a sufficient method for determining it in Scotland. An area for future enquiry is to extend the accounting methods to other elements of natural capital and apply the indicators to a wider range of farm types in order to draw general conclusions about the relative sustainability of different farming systems in different locations in Scotland.