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Summer 2006 - Vol. 6/No. 3


Ecological and economic indicators for sustainability

Project research assistant Stephanie Ma gathers samples after a storm at a grower’s field. (photo by Jeff Mitchell)

The notion of agricultural sustainability means different things to different people, with the definition of a sustainable system dependent upon what is to be sustained, in what form, at what scale, with what degree of certainty, and over what time period. Broadly, however, there is some consensus that "sustainability" encompasses economic (financial), environmental (ecological), and social dimensions of a system. However, unlike a typical economic problem where the goal might be to maximize profits, or an environmental problem where the goal might be to minimize pollution, the three dimensions of sustainability may be in competition. For example, increasing producer profitability might involve application of certain chemicals that have the potential to enter waterways and flow downstream, thus causing damage to individuals not directly involved in the production process. If decreasing this pollution resulted in increased costs (or lower income) for the producer, then overall profits would be lowered. Economists refer to this type of situation as a "negative externality," and it exemplifies possible tradeoffs between dimensions of the sustainability issue.

The natural question to ask, then, is what is the optimal allocation of resources for society that balance one sustainability dimension against the other? In order to answer this question, we need information about 1) the nature of the technical relationships between elements of the agricultural and broader human and environmental systems; and 2) the valuations that individuals place on alternative attributes of those systems. Of course, this task is a monumental one for complicated agroecosystems (not to mention the varied preferences of individuals), and a complete accounting of every variable and parameter is simply impossible. The inherent uncertainty about these relationships, however, drives a demand for information about these links, with the data satisfying this demand known as indicators.

Roles of Indicators

While it may be tempting to define sustainability in broad terms, such as the oft-cited World Commission on Environment and Development’s 1987 assertion that a sustainable system "meet[s] the needs of the present without compromising the ability of future generations to meet their own needs," such definitions provide little practical guidance for system management or even information collection. As there are often competing objectives of various stakeholders, the focus of indicators should be to provide information about the tradeoffs associated with various management (or resource allocation) strategies, with a focus on adequately describing the behavior of the competing elements of a system over time and/or space.

Indicators have been classified into means-based and effects-based categories, with the former referring to measures of management practices shown or assumed to have a certain impact on the larger system, while the latter refer to measures of the system attributes directly. From a purely evaluative perspective, the "effects" indicators are usually most relevant, as it is most likely the quantity or quality changes of the characteristics themselves, rather than the means of getting there, that are valued by stakeholders. Clearly, the more direct the link between the measure of particular practice and a particular outcome, the more confidence one can have in an "effect" or "management" indicator to predict system impacts. However, in many cases, the link between the management decision and the system element might be uncertain, highly variable, or both. In fact, in agronomic field trials on experimental production systems, the goal may be to identify these links; in others, the links may be well-established by previous literature, and means-based indicators may be sufficient to indicate various trade-offs.

Types of Indicators

An economic framework provides a natural way to classify alternative stakeholder impacts and conceptually describe the interface between agriculture, the broader environment, and the social systems that comprise the rural economy. Generally speaking, the framework considers the agroecosystem from the standpoint of a social planner evaluating the relationships between inputs and outputs from the production process, and the factors that influence these relationships. More specifically, farmers convert inputs (natural, man-made, human, and social) into outputs ("goods" and "bads"), subject to technological and institutional constraints and risk preferences. Examples of sustainability indicators in each category of inputs and outputs are presented in Tables 1, 2, and 3.

Developing Sets of Sustainability Indicators

Clearly, the collection of every data element listed in Tables 1-3 would be prohibitively expensive and not at all optimal once the benefits of the information gained are taken into account. How, then, should an indicator set be developed?

Indictors should be closely related to and representative of the characteristics of the agricultural system. The proper indicator set will therefore be specific to the research project and should be chosen to provide information about the tradeoffs of alternative management practices. The following guidelines should be followed:

  1. Be clear about the objectives of the monitoring effort and who will use the associated information.
    To provide information about links between practices, crop performance, and ecological impacts, care should be taken to collect data and test hypotheses about the effects of alternative management practices on variables of interest. In addition, it is critical to provide information of value to the end-users who ultimately make or influence management decisions, often in the form of the tradeoffs.
  2. Develop a conceptual model of the system and subsystems of interest.
    There is no one “right” conceptualization, or model, of complicated economic/ ecological systems. Developing an indicator set that represents the key components of the conceptual model protects against ad hoc data collection efforts, and provides the framework for information sets of significant value. A key component of the conceptual model is the identification of the various stakeholders that affect and are affected by the system, and variables that represent their (often competing) interests.
  3. Balance the costs and benefits of information collection.
    Information gathering is costly, and there are incremental benefits and costs to gathering each piece of data. To allow comparisons over space and time, indicators should also be quantitative where possible.

The agricultural sustainability indicators provided here are by no means an exhaustive list of all possible variables, nor does the list provide the optimal data set for any specific project. However, it does provide an overview of possible agricultural sustainability indicators useful in the study of tradeoffs between economic performance and environmental quality.

Sustainable management of agroecosystems involves making choices that affect the well-being of various stakeholders in differential ways across both space and time. Often, changes in technology can serve to increase the welfare of all relevant groups (such as a production technology that keeps yields and costs constant but decreases runoff), but some allocation decisions must adversely affect at least one stakeholder group. The challenge is thus to collect information that clarifies these potential tradeoffs, allowing decision-makers to make better management choices.

Sustainability Indicators for SAFS

The Sustainable Agriculture Farming Systems/Center for Integrated Farming Systems (SAFS/CIFS) project uses experiment station resources to focus on the links between alternative farming practices (e.g. conservation tillage, cover crops, and manure) and the impacts on economic and ecological system performance at the field level. A natural resource economics conceptualization of the system is used to classify indicators that are being collected, indicated by an “S” in Tables 1, 2, and 3. The indicators will be used to evaluate the feasibility and profitability of alternative production systems (producer stakeholders), as well as provide information about the potential environmental impacts of these practices (both producer and non-producer stakeholders). Future newsletters will report these results.

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