Vincent de Leijster

73 Almond farm profitability under agroecological management 4 Table 4-4. Net present value for the management regimes under payments for environmental services scenarios. The management regimes include: conventional tillage (CT), no tillage (NT), green manure (GM) and compost (CM). The scenarios include: voluntary carbon market (VCM), where the soil organic carbon stocks of NT and GM are valued with the VCM price (€5.54); EU Emission Trading System (EU-ETS), where the soil organic carbon stocks of NT and GM are valued using the VCM price (€20); Erosion, where the external costs of erosion are included; EU-ETS+Erosion, which combines the latter two scenarios. *The first three and the last two scenarios have the same input variables, but outcomes differ due to the random variation that is inherent to the model. **NPV of NT was lower in the VCM scenario compared to baseline, which is explained by random variation that is inherent to the model. Unit PES scenario CT* NT GM CM Mean SD Mean SD Mean SD Mean SD NPV (€ ha -1 ) Baseline 7,364 1,388 732 807 2,284 1,294 8631 2942 VCM 7,384 1,420 724 ** 841 2,307 1,344 EU-ETS 7,333 1,411 759 774 2,344 1,259 Erosion 5,447 1,400 195 775 1,836 1,254 EU-ETS + Erosion 5,454 1,410 245 803 1,844 1,315 4.4 DISCUSSION To our knowledge this is the first study that investigated the economic costs, benefits and profitability of agroecological management in Mediterranean tree-crops including externalities and the effect of public and private compensation schemes. By applying a stochastic model and using empirical input data, we were able to incorporate management- specific annual variance in yields, market prices and operational costs. We demonstrated that each of the investigated agroecological practices were profitable, but net revenues differed considerably among treatments. Compost (CM) application improved economic performance (NPV) by 17.2% compared to conventional tillage (CT) practice (Table 4-2). Both CM and CT had the fastest payback time (DPBT) of 11-12 years after starting a new almond farm. Agroecological practices aiming to maintain vegetation cover, no tillage (NT) and green manure (GM), resulted in 90.1% and 69.0% lower NPV levels respectively, which can be explained by lower yields (Appendix Figure A4-1&2). This study showed that relatively small differences in yields can result in large effects on the long-term economic performance. The opportunity costs related to NT and GM can be compensated for by price premiums or public greening payments but cannot —under the current conditions— fully be compensated by payments for soil organic carbon storage or by internalizing externality costs of soil erosion. Although not all farmers recorded their expenses, therefore we only included costs farmers