land

Article The Montado/Dehesa Cow-Calf Production Systems in Portugal and Spain: An Economic and Resources’ Use Approach

Maria de Belém Costa Freitas 1,* , Maria Raquel Ventura-Lucas 2, Lola Izquierdo 3 and Claus Deblitz 4 1 MED—Mediterranean Institute for Agriculture, Environment and Development, Universidade do Algarve, Faculdade de Ciências e Tecnologia, Campus de Gambelas, Edf. 8, 8005-139 Faro, Portugal 2 CEFAGE—Centre For Advanced Studies in Management and Economics, Universidade de Évora, Departamento de Gestão, Largo dos Colegiais 2, 7000 Évora, Portugal; [email protected] 3 Agralys GbR, Meistersingerstr. 18, 14471 Potsdam, Germany; [email protected] 4 Thünen Institute of Farm Economics, Bundesallee 63, 38116 Braunschweig, Germany; [email protected] * Correspondence: [email protected]

 Received: 17 April 2020; Accepted: 9 May 2020; Published: 12 May 2020 

Abstract: The Montado in Portugal and Dehesa in Spain is a unique agro-silvo-pastoral system designed to overcome food needs in a scarce resource’s environment. The system competitiveness is not clear and it is now under severe threats, caused by extensification or abandonment of less fertile areas and by intensification in more fertile ones. The aim of the undertaken research is to compare the cow-calf production within these systems in Portugal and Spain, identifying their strengths and weaknesses and the main drivers of their evolution, and to compare these systems with other European countries’ systems, ranking their competitiveness and efficiency among other systems in the EU. The research indicates that Montado/Dehesa farms systems are dependent on the type of farming system, its context and management, i.e., on the decision and its context; so, in a context of Mediterranean land system changes, the future of the Montado/Dehesa ecosystem depends on the ability of the cow-calf production systems to face the future and to perceive the modifications needed to overcome new challenges and take advantage of new opportunities.

Keywords: cow-calf systems; efficiency; competitiveness; benchmark

1. Introduction The agro-silvo-pastoral system known as Montado, in Portugal, and Dehesa, in Spain is a unique landscape occupying around 3.5–4 million ha in Spain and Portugal [1], most of which is still in production today [2]. It is a “man-made” system designed to overcome food needs in a scarce resources environment: the open Mediterranean woodlands allows pastures growth, animal production and production, and has been refined over time [3]. Land use in the Montado/Dehesa is characterized by an extensive animal production system, mainly based on under cover pastures that provide income but also shrub control while allowing the production of products—of which is the main one but , and can be referred to as well—and other uses, such as hunting, fishing and tourism. This system’s leverage of resources is a source of teachings and inspiration about agriculture and forest sustainable multifunctional models that are currently being sought and defined at the European and world level [3] because it produces ecological and economic values; as a result, it has been considered by the European Union as a High Nature Value (HNV) system. Additionally, and

Land 2020, 9, 148; doi:10.3390/land9050148 www.mdpi.com/journal/land Land 2020, 9, 148 2 of 16 according to Plieninger [4], the social value should not be neglected, as the Montado/Dehesa system is a fundamental component of regional identity. Nevertheless, the system competitiveness is not clear and the system is now facing severe threats, on one hand caused by extensification or abandonment of less fertile areas and on the other hand caused by intensification in more fertile ones [5]. The objective of this paper is to compare the cow-calf production within these systems in Portugal and Spain, identifying their strengths and weaknesses and the main drivers of their evolution and to compare these systems with other European countries’ systems, ranking their competitiveness and efficiency among other systems in the EU. The present paper is structured in five sections. Beside this introduction, the section System Description and Objectives provides a brief presentation of the Montado/Dehesa system and presents the main objectives of this study. The Material and Methods present the concepts underlying the agri benchmark network and provides a brief presentation of the cow-calf farms from Portugal and Spain. The results section presents the results of the applied methodology for the cow-calf farms considered and benchmarks these farms against other cow-calf farms in Europe. In the Discussion and Conclusions section the results obtained are discussed, considering the reasons behind them and the main conclusions of this study are provided.

2. Systems Description and Objectives The Montado in Portugal occupies around 1.2 millon ha that is mainly used for extensive livestock grazing [6]. Depending on the type of Montado (terrain, soils and characteristics of the farms) its main use is for herds of sheep or goats and Iberian pigs or cattle, although some farms still breed a combination of livestock and there is an on-going movement towards cattle breeding [6]. Despite the difficulties posed by environmental and edapho-climatic conditions, their heterogeneity assured that these systems could prosper historically. According to Plieninger [4], Montado/Dehesa is one of the most prominent and best preserved low-intensity farming systems in Europe; the integration of traditional land-use and biodiversity conservation that is characteristic of this system is considered to be an exemplar for the wise management of the countryside as a whole. Young [7] defines a sustainable land use system as one that “achieves production combined with the conservation of the resources on which that production depends, thereby permitting the maintenance of productivity”. Sassenrath et al. [8] define sustainable agricultural production as: “an approach to producing food and fiber which is profitable, uses on-farm resources efficiently to minimize adverse effects on environment and people, preserves the natural productivity and quality of the land and water, and sustains vibrant rural communities”. If the statement above [4] already pointed to an interesting system involving sustainability, then based on these definitions, we can infer that economic viability and efficiency (both production efficiency and resources´ use efficiency) are key issues for the future of Montado/Dehesa systems. Cow calf is nowadays recognized as an important production industry; in European farms and in spite of the diversified origin of animals used and different ways of breeding, cow-calf production is recognized as an important branch for agricultural development [9]. According to this author, cow-calf’s increasing importance in the European Union (it increased by almost 5% in production during 2013–2016 and 4% in consumption) may indicate that the interest in this production will increase in the coming years as an alternative to the unstable dairy market. The first objective of this study is to compare the economic indicators on a farm-to-farm basis (cow-calf and mix cow-calf/ewe) and to understand what are the reasons for any differences. Continuing on a farm-to-farm basis, production efficiency and resources use efficiency should also be compared. This will lead us to comparisons between the Montado/Dehesa system and other systems in Europe in order to learn about the strengths, weaknesses and the competitiveness and sustainability of these systems among European cow-calf production systems. Land 2020, 9, 148 3 of 16

3. Material and Methods The research was conducted using the agri benchmark database. Established in 2001 as part of the International Farm Comparison Network, agri benchmark is a global, non-profit network of agricultural economists, advisors, producers and specialists in key sectors of agricultural and horticultural value chains that use internationally standardized methods to analyze farms, production systems and their profitability. The farm-level knowledge provided by partners all around the world is combined with an analysis of international commodity markets and value chains, allowing the provision of scientifically consistent and soundly based answers on strategic issues to decision-makers in policy, agriculture and agribusiness (http://www.agribenchmark.org/agri%20benchmark/who-we-are.html). This is an exploratory study because it compares the Montado and Dehesa cow-calf production systems and benchmarks these systems using other European cow-calf production systems. The study began with data collection from secondary sources, namely a literature review and statistical data, and then analyzed the data from the agri benchmark Beef and Sheep branch database to compare the Portuguese and Spanish systems and benchmark them against other systems in Europe. The agri benchmark database contains farms from both Montado and Dehesa production systems. These are typical farms, defined as: being an existing farm or a data set describing a farm, • being in a specific region which represents a major share of output for the product considered, • running the prevailing production system for the product considered, • reflecting the prevailing combination of enterprises as well as land and capital resources, • reflecting the prevailing type of labor organization. • The typical farms are never averages of survey data because averages do not provide consistent production system data sets. They are the result of a panel meeting with 4–6 farmers and an advisor, where each figure is obtained in a consensus, or are based on individual farms which were ‘typified’ by replacing farm individual particularities with prevailing characteristics, figures, technologies and procedures. In the Beef and Sheep branch of agri benchmark, farms are mainly characterized by their beef and sheep production (cow-calf, beef fattening, dairy, ewe, lamb finishing or sheep milk) and their land and labor characteristics. The Portuguese farms are: PT_625_0: A cow-calf farm, with 623 cows and 1650 ha of land. All the land is rented and the • labor is totally hired; PT_250_0: A cow calf + ewe farm, with 250 cows and 650 ewes, and 756 ha of land, of which 700 • of owned land and 56 ha rented, and the labor is totally hired. The Spanish farms are: ES_180_0: A cow-calf farm, with 180 cows and 1700 ha of land. All the land is rented and the • labor is all family labor; ES_80_0: A cow-calf farm, with 80 cows and 149 ha of owned land. They use family (30%) and • hired (70%) labor; The study compared these farms on a whole farm basis and on an enterprise basis, to understand what are the reasons for their differences and how their efficiency compares to that of other farms. As Montado/Dehesa systems are very particular systems, with a non-negligible environmental role, it was also important to compare them with the other systems in the EU (+UK) in order to rank their competitiveness among other systems in EU (+UK) and anticipate their future sustainability. The economic situation of the farms was assessed using standard economic indicators both on the structure of the farm and on the economic viability of the productions. The agri benchmark calculation model TIPI-CAL [10] was used for the calculations. TIPI-CAL is a production and accounting model, a pure simulation without algorithms or optimization, which Land 2020, 9, 148 4 of 16

Land 2020, 9, x FORcovers PEER REVIEW the whole farm and enterprise levels. It is an Excel based model offered as4 of shareware 16 for agri benchmark partners. TIPI-CAL consists of a basic model and additional modules for cost analysis and benchmark partners. TIPI-CAL consists of a basic model and additional modules for cost analysis data management. and data management. Agri benchmark provides whole farm analysis, considering the main indicators of a whole farm Agri benchmark provides whole farm analysis, considering the main indicators of a whole farm that are important to analyze the system in place as each decision, at the farm level, impacts not only the that are important to analyze the system in place as each decision, at the farm level, impacts not only production activity for which the decision was taken but also the entire farm—any agricultural system the production activity for which the decision was taken but also the entire farm—any agricultural moves together as a consequence of every decision. The network also provides enterprise analysis for system moves together as a consequence of every decision. The network also provides enterprise each of the network’s enterprises that compose the farm (cow-calf, beef fattening, dairy, ewe, lamb analysis for each of the network’s enterprises that compose the farm (cow-calf, beef fattening, dairy, finishing or sheep milk), to allow a more in-depth analysis of these activities and their particularities. ewe, lamb finishing or sheep milk), to allow a more in-depth analysis of these activities and their particularities.3.1. Whole-Farm Analysis Return structure: this indicator weights the different farm activities on the farm returns. 3.1. Whole-Farm• Analysis Profit margin whole farm: this indicator gives the % share of farm income in total returns. • Return• structure: this indicator weights the different farm activities on the farm returns. Percentage composition of whole farm returns: this indicator shows where, in a percentage basis, • Profit• margin whole farm: this indicator gives the % share of farm income in total the whole farm returns come from. returns. Whole farm costs: both in absolute and % values. This indicator details the enterprises’ • Percentage• composition of whole farm returns: this indicator shows where, in a cost structure. percentage basis, the whole farm returns come from. Whole farm profitability: this indicator identifies the various components of the farm profitability, • Whole• farm costs: both in absolute and % values. This indicator details the enterprises’ cost structure.comparing the costs with the market returns and the coupled and decoupled payments. • Whole3.2. Enterprise farm profitability: Analysis this indicator identifies the various components of the farm profitability, comparing the costs with the market returns and the coupled and decoupledThe enterprisepayments. indicators chosen access production efficiency, resources’ use efficiency and economic situations. 3.2. Enterprise AnalysisThe production efficiency and the resources’ use efficiency were assessed using the following standard indicators: The enterprise indicators chosen access production efficiency, resources’ use efficiency and economic situations.Weaned calves per 100 cows and year: this indicator compares production efficiency regardless of • The productionmother’s efficiency weight and orthe breed. resources’ use efficiency were assessed using the following standard indicators:Share of purchased feed: together with the previous one this indicator can be seen as a proxy to • • Weanedfarm calves resources’ per 100 effi cowsciency and use. year: this indicator compares production efficiency regardless of mother’s weight or breed. • Share Theof purchased economic feed: indicators together can with be expressed the previous per one animal, this indicator per ha and can per be 100 seen kg as live a weight sold, proxyand are: to farm resources’ efficiency use. The economicTotal indicators cost by can factor be expressed and non-factor per an costs.imal, per ha and per 100 kg live weight sold, and are: • Total cost by cash costs, depreciation and opportunity costs. • Total• cost by factor and non-factor costs. • Total costProductivity by cash costs, figures depr are:eciation and opportunity costs. Productivity figures are: Economic labor productivity. • Economic• labor productivity. Physical vs. economic • Physical• vs. economic labor productivity. These indicators measure the labor productivity. These indicators measure the • Land intensity/productivity. production system Land intensity/productivity. production system • Capital• intensity/productivity. resources’ use efficiency. Capital resources’ use efficiency. • intensity/productivity. 4. Results

4.1. Whole Farm Analysis 4. Results The return structure of the four farms analyzed (Figure 1) shows that those that have bigger areas (PT_625_04.1. and Whole ES_180_0) Farm Analysis mainly depend on cow-calf to assure their returns, while the other two have a more diverseThe return return structure structure—in of the four the farmscase of analyzed ES_80_0, (Figure around1) shows30% of that the thosereturns that come have bigger areas from Iberian pigs,(PT_625_0 while andfor ES_180_0)the other Portuguese mainly depend farm, on almost cow-calf 30% to assureof the theirreturns returns, also come while from the other two have ewes and from the rental of land for pig fattening or other activities. This diversification is desirable and is in line with the targets of the United Nations Sustainable Development Goals to be achieved by 2030 in terms of food security and the sustainability of farm systems and producers [11]. Land 2020, 9, 148 5 of 16 a more diverse return structure—in the case of ES_80_0, around 30% of the returns come from Iberian

Landpigs, 2020 while, 9, xfor FOR the PEER other REVIEW Portuguese farm, almost 30% of the returns also come from ewes and from5 of the 16 rental of land for pig fattening or other activities. This diversification is desirable and is in line with the100 targets of the United Nations Sustainable Development Goals to be achieved by 2030 in terms of Land 2020, 9, x FOR PEER REVIEW 5 of 16 food90 security and the sustainability of farm systems and producers [11]. 80 100 70 90 60 80 % 50 70 40 60 30 % 50 20 40 10 30 0 20 PT_250_0 PT_625_0 ES_80_0 ES_180_0 10 Cow calf Cash crops Sheep (ewe) Other farm enterprises (forestry, manure, etc.) 0 Figure 1. ReturnPT_250_0 Structure (% of different PT_625_0 farm activities on total ES_80_0 farm returns). Source: model ES_180_0 results. Cow calf Cash crops Sheep (ewe) Other farm enterprises (forestry, manure, etc.)

PT_625_0: A cow-calf farm, with 623 cows and 1650 ha of land. All the land is rented and the labor is totally Figure 1. Return Structure (% of different farm activities on total farm returns). Source: model results. hired;Figure PT_250_0: 1. Return A cow Structure calf + ewe (% farm, of different with 250 farm cows activities and 650 on ewes, total andfarm 756 returns) ha of .land, Source: of which model 700 results. of owned PT_625_0: A cow-calf farm, with 623 cows and 1650 ha of land. All the land is rented and the labor is land and 56 ha rented, and the labor is totally hired; ES_180_0: A cow-calf farm, with 180 cows and 1700 ha of PT_625_0:totally A hired;cow-calf PT_250_0: farm, with A cow 623 calfcows+ eweand farm,1650 ha with of 250land. cows All andthe land 650 ewes,is rented and and 756 hathe oflabor land, is oftotally land. All the land is rented and the labor is all family labor; ES_80_0: A cow-calf farm, with 80 cows and 149 ha hired;which PT_250_0: 700 of A ownedcow calf land + ewe and farm, 56 ha with rented, 250 andcows the and labor 650 isewes, totally and hired; 756 ha ES_180_0: of land, of A which cow-calf 700 farm, of owned of owned land. They use family (30%) and hired (70%) labor; land andwith 56 180 ha cows rented, and and 1700 the ha labor of land. is totally All the hired; land ES_180_0: is rented A and cow-calf the labor farm, is allwith family 180 cows labor; and ES_80_0: 1700 ha of land. AAll cow-calf the land farm, is rented with 80and cows the andlabor 149 is all ha family of owned labor; land. ES_80_0: They use A familycow-calf (30%) farm, and with hired 80 (70%)cows and labor. 149 ha of ownedFor theland. whole They usefarm family profit (30%) margin and hired (Figure (70%) 2), labor; it ca n be seen that in these systems, the share of For the whole farm profit margin (Figure2), it can be seen that in these systems, the share of farm farmincome income in total in returnstotal returns is low. is Thelow. more The diversifiedmore diversified Portuguese Portuguese farm (PT_250)farm (PT_250) has the has biggest the biggest share, share, reaching its farm income at around 42% of the farm returns. reachingFor the its farmwhole income farm profit at around margin 42% (Figure of the farm 2), it returns. can be seen that in these systems, the share of farm income in total returns is low. The more diversified Portuguese farm (PT_250) has the biggest 50 share, reaching its farm income at around 42% of the farm returns. 45 40 50 35 45 30 40 25 % 35 20 30 15 % 25 10 20 5 15 0 10 PT_250_0 PT_625_0 ES_80_0 ES_180_0 5 Figure 2. Profit margin whole farm (% share of farm income in total returns). Source: model results. 0Figure 2. Profit margin whole farm (% share of farm income in total returns). Source: model results. PT_250_0 PT_625_0 ES_80_0 ES_180_0 In fact, we can observe the percentage composition of whole farm returns in Figure3, which In fact, we can observe the percentage composition of whole farm returns in Figure 3, which indicates that for these farms, an important share of farm returns comes from coupled and indicatesFigure that 2. Profit for marginthese farms, whole farman important(% share of farmshare income of farm in total returns returns). comes Source: from model coupled results. and decoupled payments. decoupled payments. In fact, we can observe the percentage composition of whole farm returns in Figure 3, which indicates that for these farms, an important share of farm returns comes from coupled and decoupled payments. Land 2020, 9, x FOR PEER REVIEW 6 of 16

Land 2020, 9, 148 6 of 16 100 Land 2020, 9, x FOR PEER REVIEW 6 of 16 90 100 80 90 70 80 60 70 % 50 60 40 % 50 30 40 20 30 10 20 0 10 PT_250_0 PT_625_0 ES_80_0 ES_180_0

0 Decoupled payments Coupled payments Market returns (incl. other farm income) PT_250_0 PT_625_0 ES_80_0 ES_180_0 DecoupledFigure payments 3. Composition Coupled of whole payments farm returns (%). Market Source: returns model (incl. results. other farm income)

Figures 4 andFigureFigure 5 present 3. 3. CompositionComposition the detaile of ofd whole wholecost structure farm farm return returns ofs the (%). (%). farms. Source: Source: model model results. results. The two larger farms (PT_625_0 and ES_180_0) have big differences in their absolute costs. WhileFiguresFigures both farms 4 and 5 have5 present present almost thethe the detaileddetaile samed cost costamount structure structure of land, of of the thethe farms. farms. Portuguese farm has almost six times the costsTheThe twoof two the larger larger Spanish farms farms farm, (PT_625_0 (PT_625_0 even though and and ES_180_0) ES_180_0)it has only havehave 3.5 timesbig big differencesdi morefferences cows. in in Thus,their their absolutethe absolute diversified costs. costs. WhilescaleWhile and both structure farms havehave of productionalmostalmost thethe samesameinfluenced amount amount the of of land,costs land, theand, the Portuguese consequentlyPortuguese farm farm the has hasincome almost almost sixreceived six times times theby theindividualcosts costs of theof farms. the Spanish Spanish Nevertheless, farm, farm, even even the though main though it differences has it onlyhas only 3.5 are times 3.5due times to more rents more cows. paid cows. Thus,and paidThus, the labor: diversified the diversified in fact scale the scalevaluesand structureand for structureland of rents production of are production much influenced higher influenced in the Portugal costs the and, ;costs for consequently these and, twoconsequently farms the income (which the received asincome mentioned byreceived individual before by individualalmostfarms. have Nevertheless, farms. the same Nevertheless, thearea, main i.e., di notheff erencesscaling main differences differen are dueces), to are rents the due paidPortuguese to rents andpaid paid rent/halabor: and ispaid in3 times fact labor: the the in values Spanishfact the for valuesone.land For rents for labor, land are much therents Spanish higherare much infarm Portugal; higher has noin for Portugalhired these labor, two; for farms whichthese (which twointroduces farms as mentioned (which a big difference as beforementioned almostin the before havecost almoststructurethe same have of area, farms.the i.e., same noWhen scalingarea, comparing i.e., di ffnoerences), scaling the costs thedifferen Portuguese withouces),t theconsidering rent Portuguese/ha is 3the times rent/ha origin the of Spanishis land3 times and one. the labor ForSpanish labor,(i.e., one.thethe differences SpanishFor labor, farm amongthe has Spanish nocountries hired farm labor, for has these whichno twohired introduces groups labor, ofwhich afactors) big diintroducesff anderence the in overheada thebig costdifference costs, structure the in costs ofthe farms. cost per structurecowWhen are comparing very of farms. similar. the When costs comparing without considering the costs withou the origint considering of land and the labor origin (i.e., of the land diff anderences labor among (i.e., the countries differences for these among two countries groups of for factors) these two and groups the overhead of factors) costs, and the the costs overhead per cow costs, are verythe costs similar. per cow are very similar. 600

Depreciation

600500 Interest paid DepreciationRents paid PaidInterest labor paid 500400 RentsOverhead paid costs Paid Direct labor costs enterprises 400300 Overhead costs Direct costs enterprises 300200

200100

1000 PT_250_0 PT_625_0 ES_80_0 ES_180_0

0 Figure 4. Whole farm costs in absolute values (€/farm). Source: model results. PT_250_0Figure 4. Whole farm costs PT_625_0 in absolute values (€/farm). ES_80_0 Source: model results. ES_180_0 For the % values, we can observe that the main differences are in three important aspects: the proportionFor the of % rents Figurevalues, on 4. totalwe Whole can costs; farm observe the costs overhead thatin absolute the cost,main values with differences (€/farm). the biggest Source:are Spanishin threemodel farmimportant results. managing aspects: to keep the proportionoverhead costs of rents very on low total compared costs; the with overhead the other co enterprisest, with the costs; biggest and Spanish the direct farm costs, managing with the to biggest keep overheadFor the costs % values,very low we comparedcan observe with that the the other main en differencesterprise costs; are inand three the important direct costs, aspects: with the proportion of rents on total costs; the overhead cost, with the biggest Spanish farm managing to keep overhead costs very low compared with the other enterprise costs; and the direct costs, with the Land 2020, 9, x FOR PEER REVIEW 7 of 16 LandLand 20202020,, 99,, x 148 FOR PEER REVIEW 7 7of of 16 16 biggest Portuguese farm managing also to keep these costs as a low % of total costs. In both cases, thisbiggest gives Portuguese them some farmspace managing to accommodate also to keepthe other thes costs.e costs as a low % of total costs. In both cases, thisPortuguese gives them farm some managing space to also accommodate to keep these the costs other as costs. a low % of total costs. In both cases, this gives them some space to accommodate the other costs. 100 90100 8090 7080 6070 % 5060 % 4050 3040 2030 1020 010 0 PT_250_0 PT_625_0 ES_80_0 ES_180_0 PT_250_0 PT_625_0 ES_80_0 ES_180_0 Depreciation Interest paid Rents paid Paid labor Overhead costs Direct costs enterprises Depreciation Interest paid Rents paid Paid labor Overhead costs Direct costs enterprises Figure 5. Whole farm costs in % values. Source: model results. Figure 5. Whole farm costs in % values. Source: model results. Figure 5. Whole farm costs in % values. Source: model results. WholeWhole farm farm profitability profitability identifi identifieses the the various various components components of of a afarm’s farm’s profitability, profitability, comparing comparing thethe costs costsWhole with with farm the the marketprofitability market returns returns identifi and and thees the thecoupled coupled various and and components decoupled decoupled payments.of payments. a farm’s Thisprofitability, This gives gives us us acomparing adetailed detailed picturethepicture costs on on with the marketthemarket market competitiveness competitiveness returns and the of theseof coupled thes farmse farmsand and decoupled onand the on importance payments.the importance of This coupled givesof andcoupled us decoupleda detailed and decoupledpicturepayments on payments (Figurethe market6). (Figure competitiveness 6). of these farms and on the importance of coupled and decoupled payments (Figure 6). 700 Total cost from P&L account 700 600 Total cost from P&L account Market returns 600 500 Market returns Market returns + other income + coupled payments 500 400 Market returns + other income + coupled payments Market returns + other income + coupled + 400 decoupled payments 300 Market returns + other income + coupled + decoupled payments 300 200 200 100 100 0 0 PT_250_0 PT_625_0 ES_80_0 ES_180_0

PT_250_0Figure 6. Whole farm profitabilityPT_625_0 (1000 €/farm). ES_80_0 Source: model results. ES_180_0 Figure 6. Whole farm profitability (1000 €/farm). Source: model results. This indicatorFigure shows 6. thatWhole the farm biggest profitability Portuguese (1000 farm€/farm). relies Source: entirely model on results. decoupled payments to maintainThis indicator its activity. shows The biggestthat the Spanish biggest farmPortuguese and both farm the smallerrelies entirely Portuguese on decoupled and Spanish payments farms need to maintainthe coupledThis its indicator activity. payments shows The and biggest that the the other Spanish biggest incomes farm Portuguese toan coverd both farm total the relies costs,smaller entirely which Portuguese meanon decoupled their and competitivenessSpanish payments farms to needmaintaindepends the onitscoupled coupledactivity. payments paymentsThe biggest and and Spanish the other other incomes.farm incomes and both to the cover smaller total Portuguese costs, which and Spanish mean theirfarms competitivenessneed the coupled depends payments on coupled and paymentsthe other andincomes other incomes.to cover total costs, which mean their competitiveness4.2. Enterprise Analysis depends on coupled payments and other incomes. The production efficiency and the resources’ use efficiency are important indicators used to analyze production systems. Even when systems are not competitive in the market, their efficient use of resources can be an important measure of their sustainability. Land 2020, 9, x FOR PEER REVIEW 8 of 16

4.2. Enterprise Analysis The production efficiency and the resources’ use efficiency are important indicators used to analyze production systems. Even when systems are not competitive in the market, their efficient useLand of 2020resources, 9, 148 can be an important measure of their sustainability. 8 of 16

4.2.1. Production Efficiency 4.2.1. Production Efficiency Despite the differences on cow’s weight or breed, the weaned calves per 100 cows and different Despite the differences on cow’s weight or breed, the weaned calves per 100 cows and different years can be used to compare each system’s production efficiency. For the farms being analyzed, we years can be used to compare each system’s production efficiency. For the farms being analyzed, we can observe on Figure 7 that there are no remarkable differences between Portuguese and Spanish can observe on Figure7 that there are no remarkable di fferences between Portuguese and Spanish systems. Nevertheless, it can be observed that the least market competitive farm (PT_625_0) systems. Nevertheless, it can be observed that the least market competitive farm (PT_625_0) produces produces a higher number of calves per 100 cows and year. a higher number of calves per 100 cows and year.

120

110

100

90

80

70

60

50

40 PT_250_0 PT_625_0 ES_80_0 ES_180_0

Figure 7. Weaned calves per 100 cows and year (n◦). Source: model results. Figure 7. Weaned calves per 100 cows and year (n°). Source: model results. Finally, the share of purchased feed, combined with the previous indicator, highlights the farm resources’Finally, ethefficiency share use.of purchased We can observe feed, combined in Figure8 wi thatth boththe previous Portuguese indicator, farms havehighlights a very the low farm input resources’of purchased efficiency feed. use. In fact, We thecan feeding observe of in their Figure animals 8 that is both based Portuguese on a pasture farms under have cover, a very which low is inputcomplemented of purchased by somefeed. homeIn fact, grown the feeding hay and of/or their silage. animals The Spanish is based approach on a pasture is different. under The cover, bigger whichfarm is does complemented not sow anything by some (which home leads grown to lesshay operationaland/or silage. costs) The andSpanish buys, approach beside the is concentratedifferent. Thefood, bigger almost farm 50% does of thenot roughagesow anything food (which the animals leads need. to less The operational smaller farm costs) has and only buys, 149 habeside of pasture the concentrateand due to food, land almost limitations 50% of (beside the roughage the area, food there the is animals a strong need. seasonal The smaller pasture farm production, has only due 149 to haa of long pasture dry season and due and to low land soil limitations quality) it is(besid necessarye the area, to supplement there is a thestrong animals’ seasonal food pasture with hay Land 2020, 9, x FOR PEER REVIEW 9 of 16 production,and concentrates. due to a long dry season and low soil quality) it is necessary to supplement the animals’ food with hay and concentrates. 100 90 80 70 60 % 50 40 30 20 10 0 PT_250_0 PT_625_0 ES_80_0 ES_180_0

Figure 8. Share of purchased feed. Source: model results. Figure 8. Share of purchased feed. Source: model results. 4.2.2. Resources’ Use Efficiency 4.2.2. Resources’ Use Efficiency The enterprise costs can be calculated per animal, per ha and per 100 kg live weight. The relation betweenThe costenterprise and production costs can (translated,be calculated in per this an case,imal, as per cost ha/100 and kg per LW) 100 is onekg oflive the weight. most usedThe relation between cost and production (translated, in this case, as cost/100 kg LW) is one of the most used measures of enterprise efficiency. Figure 9 shows the cost by factor and non-factor costs, expressed as €/100 kg LW. The PT_250_0 is, from this point of view, the most efficient enterprise. Nonetheless, we can observe that three of these farms have similar (below 200€) non-factor costs per 100 kg LW; for the other Spanish farm, the heavy non-factor costs have a direct linkage with the feed costs observed before. It is remarkable that although Spanish farms have a much lower price of land, the cost of land per 100 kg LW only reflects this fact on the smaller farm, which is certainly due to the very low stocking rate. Finally, it is also remarkable that all enterprises show a very low level of capital costs per 100 kg LW.

500 450 400 350 300 250 200 150 100 50 0 PT_250_0 PT_625_0 ES_80_0 ES_180_0

Non-factor costs Total labour cost Total land cost Total capital cost

Figure 9. Cost by factor and non-factor costs (€/100 kg LW). Source: model results.

The productivity of labor is also an important measure of efficiency. The question is, in this case, if the extensive systems of Montado/Dehesa also have an extensive use of labor or if the scale of production implies inefficiency on labor use. Figure 10 shows the economic labor productivity, measured in EUR returns/EUR labor costs. Land 2020, 9, x FOR PEER REVIEW 9 of 16

100 90 80 70 60 % 50 40 30 20 10 0 PT_250_0 PT_625_0 ES_80_0 ES_180_0

Figure 8. Share of purchased feed. Source: model results.

4.2.2. Resources’ Use Efficiency LandThe2020 , enterprise9, 148 costs can be calculated per animal, per ha and per 100 kg live weight. 9The of 16 relation between cost and production (translated, in this case, as cost/100 kg LW) is one of the most used measures of enterprise efficiency. Figure 9 shows the cost by factor and non-factor costs, measures of enterprise efficiency. Figure9 shows the cost by factor and non-factor costs, expressed as expressed as €/100 kg LW. The PT_250_0 is, from this point of view, the most efficient enterprise. €/100 kg LW. The PT_250_0 is, from this point of view, the most efficient enterprise. Nonetheless, we Nonetheless, we can observe that three of these farms have similar (below 200€) non-factor costs per can observe that three of these farms have similar (below 200€) non-factor costs per 100 kg LW; for 100 kg LW; for the other Spanish farm, the heavy non-factor costs have a direct linkage with the feed the other Spanish farm, the heavy non-factor costs have a direct linkage with the feed costs observed costs observed before. It is remarkable that although Spanish farms have a much lower price of land, before. It is remarkable that although Spanish farms have a much lower price of land, the cost of the cost of land per 100 kg LW only reflects this fact on the smaller farm, which is certainly due to the land per 100 kg LW only reflects this fact on the smaller farm, which is certainly due to the very low very low stocking rate. Finally, it is also remarkable that all enterprises show a very low level of stocking rate. Finally, it is also remarkable that all enterprises show a very low level of capital costs per capital costs per 100 kg LW. 100 kg LW.

500 450 400 350 300 250 200 150 100 50 0 PT_250_0 PT_625_0 ES_80_0 ES_180_0

Non-factor costs Total labour cost Total land cost Total capital cost

Figure 9. Cost by factor and non-factor costs (€/100 kg LW). Source: model results. Figure 9. Cost by factor and non-factor costs (€/100 kg LW). Source: model results. The productivity of labor is also an important measure of efficiency. The question is, in this case, if The productivity of labor is also an important measure of efficiency. The question is, in this the extensive systems of Montado/Dehesa also have an extensive use of labor or if the scale of production case, if the extensive systems of Montado/Dehesa also have an extensive use of labor or if the scale of implies inefficiency on labor use. Figure 10 shows the economic labor productivity, measured in EUR Landproduction 2020, 9, x FOR implies PEER REVIEWinefficiency on labor use. Figure 10 shows the economic labor productivity,10 of 16 returns/EUR labor costs. measured in EUR returns/EUR labor costs. 7

6

5

4

3

2

1

0 PT_250_0 PT_625_0 ES_80_0 ES_180_0

Figure 10. Economic labor productivity (EUR returns/EUR labor costs). Source: model results. Figure 10. Economic labor productivity (EUR returns/EUR labor costs). Source: model results. It can be seen that economic labor productivity is lower on the biggest farms, but attention should nowIt becan paid be seen to physical that economic productivity labor of resourcesproductivity (labor, is lower land and on capital).the biggest Figure farms, 11 shows but attention an unclear shouldpattern now for be labor paid (kg to physical LW/h) with productivity the biggest of Portugueseresources (labor, farm land having and a capital). better performance, Figure 11 shows which anmay unclear be linked pattern to a diforff erentlabor management (kg LW/h) option—thiswith the biggest is the onlyPortuguese farm that farm has twohaving diff erenta better mobs, performance,reflecting a particularwhich may management be linked to optiona different (the ma productionnagement of option—this pure limousine is the and only cross farm breed that calves). has two different mobs, reflecting a particular management option (the production of pure limousine and cross breed calves). For land productivity, it should be highlighted that although we are considering extensive systems, which of course have low land productivity, it is interesting to observe that the best land productivity is achieved by the smaller Portuguese farm (which, in any case, is much bigger than the smaller Spanish farm). It is also interesting to see that the larger farms have very different land productivity. This is linked with the big difference on the animals they have, since cow-calf production is the only activity participated in by both farms. PT_625_0 runs a farm with 623 cows, while ES_180_0 has only 180 cows. Finally, for capital productivity, we can see that the efficiency on capital use has a different pattern. In this case, the smaller farms are more efficient but, for the bigger ones, the Spanish farm is more capital efficient, which is probably linked to the smaller structural investment needed for this type of enterprise.

ES_80_0 Labour 0.800 productivity Land 0.600 productivity Capital 0.400 productivity 0.200 ES_180_0 PT_250_0 0.000

PT_625_0

Figure 11. Productivity: Labor (kg LW/h), Land (kg LW/ha) and Capital (kg LW/1000 €). Source: model results. Land 2020, 9, x FOR PEER REVIEW 10 of 16

7

6

5

4

3

2

1

0 PT_250_0 PT_625_0 ES_80_0 ES_180_0

Figure 10. Economic labor productivity (EUR returns/EUR labor costs). Source: model results.

It can be seen that economic labor productivity is lower on the biggest farms, but attention should now be paid to physical productivity of resources (labor, land and capital). Figure 11 shows an unclear pattern for labor (kg LW/h) with the biggest Portuguese farm having a better performance, which may be linked to a different management option—this is the only farm that has Landtwo 2020different, 9, 148 mobs, reflecting a particular management option (the production of pure limousine10 of 16 and cross breed calves). For land productivity, it should be highlighted that although we are considering extensive systems,For landwhich productivity, of course have it should low beland highlighted productivity, that although it is interesting we are consideringto observe extensivethat the best systems, land whichproductivity of course is achieved have low by land the productivity, smaller Portuguese it is interesting farm (which, to observe in any that case, the bestis much land bigger productivity than the is achievedsmaller Spanish by the smaller farm). PortugueseIt is also interesting farm (which, to s inee any that case, the islarger much farms bigger have than very the smaller different Spanish land farm).productivity. It is also This interesting is linked to seewith that the the big larger difference farms haveon the very animals different they land have, productivity. since cow-calf This is linkedproduction with theis the big only diff erenceactivity on participated the animals in they by have,both farms. since cow-calf PT_625_0 production runs a farm is the with only 623 activity cows, participatedwhile ES_180_0 in by has both only farms. 180 cows. PT_625_0 runs a farm with 623 cows, while ES_180_0 has only 180 cows. Finally, forfor capital capital productivity, productivity, we we can can see see that that the ethefficiency efficiency on capital on capital use has use a di hasfferent a different pattern. Inpattern. this case, In this the case, smaller the smaller farms are farms more are e ffimorecient effi but,cient for but, the for bigger the bigger ones, the ones, Spanish the Spanish farm isfarm more is capitalmore capital efficient, efficient, which which is probably is probably linked linked to the to smaller the smaller structural structural investment investment needed needed for this for type this oftype enterprise. of enterprise.

ES_80_0 Labour 0.800 productivity Land 0.600 productivity Capital 0.400 productivity 0.200 ES_180_0 PT_250_0 0.000

PT_625_0

Figure 11.11. Productivity: Labor Labor (kg (kg LW/h), LW/h), Land Land (kg LW/ha) LW/ha) and Capital (kg LWLW/1000/1000 €€).). Source: model results. 4.3. The Montado/Dehesa Farms in Europe The Montado/Dehesa system is a very particular and less common system in Europe. In fact, in the other European countries, animals are not outside all year, being in barns at least during winter. If we compare the Montado/Dehesa system with other systems used in EU countries, which share the same EU policies, some of these figures show interesting results. The comparison is made with all typical cow-calf farms of the agri benchmark database in the EU for the countries: Austria, Czechia, Germany, France, the United Kingdom, Ireland and Poland. The UK is still in this comparison because until now the country has followed the Common Agricultural Policy rules. The composition of whole farm returns (Figure 12) shows that the Portuguese Montado/Dehesa farms are among those where a bigger share of returns comes from coupled and decoupled payments. Land 2020, 9, x FOR PEER REVIEW 11 of 16 Land 2020, 9, x FOR PEER REVIEW 11 of 16 4.3. The Montado/Dehesa Farms in Europe 4.3. The Montado/Dehesa Farms in Europe The Montado/Dehesa system is a very particular and less common system in Europe. In fact, in the otherThe EuropeanMontado/Dehesa countries, system animals is a very are notparticular outside and all year,less commonbeing in barnssystem at in least Europe. during In winter. fact, in Ifthe we other compare European the Montado/Dehesa countries, animals system are withnot outside other systems all year, used being in inEU barns countries, at least which during share winter. the sameIf we EUcompare policies, the someMontado/Dehesa of these figures system show with inte otherresting systems results. used The in EUcomparison countries, is which made share with theall typicalsame EU cow-calf policies, farms some of ofthe these agri benchmarkfigures show database interesting in the results. EU for The the comparison countries: Austria, is made Czechia, with all Germany,typical cow-calf France, farms the ofUnited the agri Kingdom, benchmark Ireland database and Poland.in the EU The for UKthe countries:is still in Austria,this comparison Czechia, becauseGermany, until France, now thethe country United hasKingdom, followed Ireland the Common and Poland. Agricultur The alUK Policy is still rules. in this comparison becauseThe untilcomposition now the ofcountry whole hasfarm followed returns the(Figure Common 12) shows Agricultur that theal Policy Portuguese rules. Montado/Dehesa farmsThe are composition among those of wholewhere farma bigger returns share (Figure of returns12) shows comes that fromthe Portuguese coupled andMontado/Dehesa decoupled payments.Landfarms2020 are, 9, 148among those where a bigger share of returns comes from coupled and decoupled11 of 16 payments. 100 10090 8090 7080 6070 % 5060 % 4050 3040 2030 1020 100 0 ES_80_0 FR_85_0 AT_25_0 IE_35_30 UK_65_0 ES_180_0 PT_250_0 PT_625_0 PL_45_20 DE_100_0 DE_300_0 AT_30_25 UK_70_45 FR_80B_60 CZ_420_50 DE_1100_0 UK_100_80 FR_80A_70 IE_85_200T ES_180_520 ES_80_0 FR_85_0 AT_25_0 IE_35_30 UK_65_0 ES_180_0 PT_250_0 PT_625_0 PL_45_20 DE_1400_800 DE_100_0 DE_300_0 AT_30_25 UK_70_45 FR_80B_60 CZ_420_50 DE_1100_0 UK_100_80 FR_80A_70 IE_85_200T ES_180_520

Decoupled payments Coupled paymentsDE_1400_800 Market returns (incl. other farm income) Decoupled payments Coupled payments Market returns (incl. other farm income) Figure 12. Composition of whole farm returns (%). Source: model results. Figure 12.12. Composition of whole farm returnsreturns (%). Source: model results. When we look at the percentage composition of whole farm costs (Figure 13) it is clear that Montado/DehesaWhen we lookfarms at belong the percentage to a smaller composition group of farms of whole in which farm depreciation costs (Figure costs 1313)) represent it is clear 10% that orMontadoMontado/Dehesa less of/ Dehesawhole farms farmfarms costs, belong belong which to to a a smaller indicatessmaller group group a less of ofcapital farms farms inintensive in which which depreciation system. depreciation costs costs represent represent 10% 10% or lessor less of wholeof whole farm farm costs, costs, which which indicates indicates a less a less capital capital intensive intensive system. system.

100 10090 8090 7080 6070 % 5060 % 4050 3040 2030 1020 100 0 ES_80_0 FR_85_0 AT_25_0 IE_35_30 UK_65_0 ES_180_0 PL_45_20 PT_250_0 PT_625_0 DE_100_0 DE_300_0 AT_30_25 UK_70_45 FR_80B_60 CZ_420_50 DE_1100_0 FR_80A_70 UK_100_80 IE_85_200T ES_180_520 ES_80_0 FR_85_0 AT_25_0 IE_35_30 UK_65_0 ES_180_0 PL_45_20 PT_250_0 PT_625_0 DE_1400_800 DE_100_0 DE_300_0 AT_30_25 UK_70_45 FR_80B_60 CZ_420_50 DE_1100_0 FR_80A_70 UK_100_80 IE_85_200T Direct costs enterprises Overhead costs Paid labour Rents paidES_180_520 Interest paid Depreciation DE_1400_800 Direct costs enterprises Overhead costs Paid labour Rents paid Interest paid Depreciation Figure 13. Whole farm costs—% values. Source: model results. Figure 13. Whole farm costs—% values. Source: model results. The whole farm profitabilityFigure 13. Whole shows farm that costs—% cow-calf values. systems, Source: in model the EU results. (+ UK), depend on policy support. For the Montado/Dehesa farms, most of the typical farms do not pay their costs only from market returns (Figure 14). In fact, only 46% of the farms in the database can pay their costs without decoupled payments and in only 25% of the sum of market returns do other incomes and decoupled payments exceed more than 5% the total costs. Land 2020, 9, x FOR PEER REVIEW 12 of 16 Land 2020, 9, x FOR PEER REVIEW 12 of 16 The whole farm profitability shows that cow-calf systems, in the EU (+ UK), depend on policy support.The wholeFor the farm Montado/Dehesa profitability farms,shows mostthat cow-calfof the typical systems, farms in thedo notEU (+pay UK), their depend costs onlyon policy from support.market returns For the (Figure Montado/Dehesa 14). In fact, farms, only 46%most of of th thee farms typical in thefarms database do not can pay pay their their costs costs only without from marketdecoupled returns payments (Figure and 14). in In only fact, 25% only of 46% the sumof th eof farms market in returnsthe database do other can incomespay their and costs decoupled without decoupledpayments exceedpayments more and than in only5% the 25% total of thecosts. sum of market returns do other incomes and decoupled Landpayments2020, 9, 148exceed more than 5% the total costs. 12 of 16 4,000 Total cost from P&L account 4,000 3,500 Total cost from P&L account 3,500 Market returns 3,000 Market returns 3,000 Market returns + other income + coupled payments 2,500 Market returns + other income + coupled payments 2,500 Market returns + other income + coupled + decoupled 2,000 paymentsMarket returns + other income + coupled + decoupled 2,000 1,500 payments 1,500 1,000 1,000 500 500 0 0 ES_80_0 ES_180_… FR_85_0 DE_1400… AT_25_0 IE_35_30 UK_65_0 ES_180_0 PT_250_0 PT_625_0 PL_45_20 DE_100_0 DE_300_0 AT_30_25 UK_70_45 FR_80B_60 CZ_420_50 DE_1100_0 FR_80A_70 UK_100_80 IE_85_200T ES_80_0 ES_180_… FR_85_0 DE_1400… AT_25_0 IE_35_30 UK_65_0 ES_180_0 PT_250_0 PT_625_0 PL_45_20 DE_100_0 DE_300_0 AT_30_25 UK_70_45 FR_80B_60 CZ_420_50 DE_1100_0 FR_80A_70 UK_100_80 IE_85_200T Figure 14. Whole farm profitability (1000 €/farm). Source: model results. Figure 14. Whole farm profitabilityprofitability (1000 €€//farm).farm). Source: model results. For the enterprise analysis, 57% of the farms analyzed, including three of the Montado/Dehesa For the enterprise analysis, 57% of the farms analyzed, including three of the Montado/Dehesa farms,For wean the enterprisebetween 80analysis, and 90 57%calves of theper farms100 cows analyzed, a year. including The least three productive of the Montado/Dehesafarm weans 78 farms, wean between 80 and 90 calves per 100 cows a year. The least productive farm weans 78 calves farms,calves perwean 100 between cows a year80 and and 90 the calves most productiveper 100 cows one a weansyear. The98. least productive farm weans 78 per 100 cows a year and the most productive one weans 98. calvesThe per share 100 cows of purchased a year and feed the does most not productive have a clear one pattern. weans 98. A total of 25% of the farms purchase The share of purchased feed does not have a clear pattern. A total of 25% of the farms purchase moreThe than share 50% of of purchased the feed available feed does and not 23% have purchase a clear pattern.less than A 5% total of theof 25% feed. of the farms purchase more than 50% of the feed available and 23% purchase less than 5% of the feed. moreThe than economic 50% of the productivity feed available of andlabor 23% shows purchase also lessa diverse than 5% pattern. of the feed.Nevertheless, the smaller The economic productivity of labor shows also a diverse pattern. Nevertheless, the smaller Montado/DehesaThe economic farms productivity are among ofthe labor best basedshows on also this a indicator diverse pattern.(Figure 15).Nevertheless, the smaller MontadoMontado/Dehesa/Dehesa farmsfarms areare amongamong thethe bestbest basedbased onon thisthis indicatorindicator (Figure(Figure 15 15).).

14 14 12 12 10 10 8 8 6 6 4 4 2 2 0 0 ES_80_0 FR_85_0 AT_25_0 IE_35_30 UK_65_0 ES_180_0 PL_45_20 PT_250_0 PT_625_0 AT_30_25 DE_100_0 DE_300_0 UK_70_45 FR_80B_60 CZ_420_50 DE_1100_0 UK_100_80 FR_80A_70 IE_85_200T ES_80_0 ES_180_520 FR_85_0 AT_25_0 IE_35_30 UK_65_0 ES_180_0 PL_45_20 PT_250_0 PT_625_0 AT_30_25 DE_100_0 DE_300_0 DE_1400_800 UK_70_45 FR_80B_60 CZ_420_50 DE_1100_0 UK_100_80 FR_80A_70

IE_85_200T ES_180_520 DE_1400_800 FigureFigure 15.15. Economic labor productivityproductivity (EUR(EUR returnsreturns/EUR/EUR laborlabor costs).costs). Source:Source: model results. Figure 15. Economic labor productivity (EUR returns/EUR labor costs). Source: model results. Finally,Finally, wewe can can observe observe on on Figures Figures 16 16–18–18 the the relative relative position position of Montadoof Montado/Dehesa/Dehesa farms farms within within the groupthe groupFinally, of EU of +weEUUK can+ UK cow-calf observe cow-calf farms on farms Figures for thefor 16–18 productivitythe productivity the relative of labor, of position labor, land land andof Montado/Dehesa and capital. capital. farms within the groupForFor labor,labor, of EUMontado Montado/Dehesa + UK cow-calf/Dehesa farms farmsfarms have forhave the considerable considerable productivity di differences, ffoferences, labor, land as as was andwas already capital. already seen seen on on Figure Figure 11. Except11. ExceptFor for labor, thefor biggerthe Montado/Dehesa bigger Spanish Spanish farm, farms farm, which have which has considerable ahas labor a labor productivity differences,productivity clearly as clearl was belowy already below the average the seen average on rate Figure asrate a consequence11. Except for ofthe the bigger assumption Spanish thatfarm, the which two familyhas a labor members productivity have full clearl timey below work onthe the average farm, rate the others have a comfortable position that is close to average or clearly above it. Land 2020, 9, x FOR PEER REVIEW 13 of 16

Landas a2020 consequence, 9, 148 of the assumption that the two family members have full time work on the13 farm, of 16 the others have a comfortable position that is close to average or clearly above it.

Labour productivity

PT_250_0 25.00

20.00

23.8523.85 12.4012.40 Top 25% farms 20.9020.90PT_625_0 15.00

10.00

5.00

0.00

5.305.30

Bottom 25% farms 19.5319.53 ES_80_0

7.867.86

13.0913.09

Average all farms ES_180_0

FigureFigure 16.16. Productivity ofof LaborLabor (kg(kg LWLW/h)./h). Source:Source: modelmodel results.results.

FigureFigure 1717 showsshows thethe productivityproductivity ofof land.land. For this indicator, as expected,expected, thethe valuesvalues forfor thethe MontadoMontado/Dehesa/Dehesa systemsystem areare veryvery low.low. InIn fact,fact, beingbeing anan extensiveextensive system,system, oneone ofof itsits characteristicscharacteristics isis toto havehave aa veryvery lowlow productivityproductivity ofof land,land, whichwhich isis confirmedconfirmed byby thethe figure.figure.

Land productivity

PT_250_0 800.0 700.0

787.020573787.020573 600.0 Top 25% farms 500.0 PT_625_0 400.0 300.0 140.6140.6

200.0 97.3 200.0 97.3 100.0 0.0 120.2046267 120.2046267 128.3128.3

Bottom 25% farms 19.419.4 ES_80_0

363.4652176363.4652176

Average all farms ES_180_0

FigureFigure 17.17. LandLand (kg(kg LWLW/ha)./ha). Source:Source: model results.

Finally,Finally, thethe comparison comparison of Montadoof Montado/Dehesa/Dehesa farms farms with the with others the in others regards in to capitalregards productivity to capital isproductivity shown on Figure is shown 18. on For Figure this figure, 18. For a farmthis figure, from Ireland a farm wasfrom discarded Ireland was for discarded having an for outlier having value an thatoutlier would value have that prevented would have a correct prevented analysis. a correct analysis. AsAs cancan bebe seen,seen, capitalcapital productivityproductivity ofof thethe lessless extensiveextensive MontadoMontado/Dehesa/Dehesa farmsfarms isis closeclose toto thethe average,average, thoughthough forfor thethe biggerbigger andand moremore extensiveextensive farmsfarms it isis lowerlower thanthan thethe average,average, whilewhile clearlyclearly remainingremaining aboveabove thethe lowerlower 25%25% ofof farms.farms. Land 2020, 9, 148 14 of 16 Land 2020, 9, x FOR PEER REVIEW 14 of 16

Capital productivity

PT_250_0 350 300

313.6089853 250 Top 25% farms PT_625_0

200 119 150

100 94 50 0

68.23375928

139 Bottom 25% farms ES_80_0

104

163.2183208

Average all farms ES_180_0

FigureFigure 18. 18. –Capital Capital (kg (kg LW LW/1000/1000 € ).€). Source: Source: model model results. results. 5. Discussion and Conclusions 5. Discussion and Conclusions Montado/Dehesa areas represent an important ecosystem for Portugal and Spain. The usually low Montado/Dehesa areas represent an important ecosystem for Portugal and Spain. The usually capacity soils, the long dry season and the consequent strong seasonal pasture production are big low capacity soils, the long dry season and the consequent strong seasonal pasture production are threats to the future of these systems. For the traditional farms in the agri benchmark database, the big threats to the future of these systems. For the traditional farms in the agri benchmark database, main risk is abandonment. the main risk is abandonment. The comparison of Portuguese and Spanish farms shows clearly that in these farms the main The comparison of Portuguese and Spanish farms shows clearly that in these farms the main returns come from cow-calf activity. Farmers have different strategies to deal with costs—these returns come from cow-calf activity. Farmers have different strategies to deal with costs—these are are linked with different cost for factors or to differences in the enterprise type. Nonetheless, the linked with different cost for factors or to differences in the enterprise type. Nonetheless, the Montado/Dehesa farms are, compared with other EU farms, clearly less capital intensive. Montado/Dehesa farms are, compared with other EU farms, clearly less capital intensive. One of the main results of this study is the profitability comparison. As it is clear in Figure 14 data, One of the main results of this study is the profitability comparison. As it is clear in Figure 14 most of the EU typical farms do not pay their costs only from market returns. The Montado/Dehesa data, most of the EU typical farms do not pay their costs only from market returns. The farms belong to this category. Dupraz and Rainelli [12] and Arnaud and Dupraz [13] state that the Montado/Dehesa farms belong to this category. Dupraz and Rainelli [12] and Arnaud and Dupraz [13] maintenance of extensive cattle farming may have an important role in maintaining the ecological state that the maintenance of extensive cattle farming may have an important role in maintaining the value of a rural area. It can be argued that coupled and decoupled payments are in fact paying an ecological value of a rural area. It can be argued that coupled and decoupled payments are in fact ecological service, the maintenance of which, in the case of Montado/Dehesa farms, relies on human paying an ecological service, the maintenance of which, in the case of Montado/Dehesa farms, relies occupation and management. on human occupation and management. The efficiency on resources’ use is surely a concern for society as a whole. From this point of view The efficiency on resources’ use is surely a concern for society as a whole. From this point of and without considering the land productivity that is traditionally low in extensive systems such as view and without considering the land productivity that is traditionally low in extensive systems the Montado/Dehesa system, the farms analyzed have intermediate positions on the EU ranking for such as the Montado/Dehesa system, the farms analyzed have intermediate positions on the EU economic labor, physical labor and capital productivity, which means they are competitive among EU ranking for economic labor, physical labor and capital productivity, which means they are cow-calf production. It can be argued that the combination of land use and capital’s extensiveness with competitive among EU cow-calf production. It can be argued that the combination of land use and this competitiveness gives these systems resilience to changes in the internal and external environment, capital’s extensiveness with this competitiveness gives these systems resilience to changes in the which provides a good indicator on the future sustainability of these Montado/Dehesa systems among internal and external environment, which provides a good indicator on the future sustainability of EU cow-calf production systems in general. these Montado/Dehesa systems among EU cow-calf production systems in general. We can argue that these systems’ strengths are their less intensive capital needs and the unique We can argue that these systems’ strengths are their less intensive capital needs and the unique Mediterranean landscape with protected and habitats. Mediterranean landscape with protected trees and habitats. Their weaknesses are related to a growing concern regarding the sustainability of these Their weaknesses are related to a growing concern regarding the sustainability of these pasture-based ruminant systems, the lack of scale and some political and social demotivation. pasture-based ruminant systems, the lack of scale and some political and social demotivation. As a conclusion, the main driver for the future of the Montado/Dehesa ecosystem depends on As a conclusion, the main driver for the future of the Montado/Dehesa ecosystem depends on the the ability of these systems to face the future and to perceive the modifications needed to overcome ability of these systems to face the future and to perceive the modifications needed to overcome new new challenges and take advantage of new opportunities. Both positive and negative aspects of challenges and take advantage of new opportunities. Both positive and negative aspects of Montado/Dehesa farm systems are dependent on the type of farming system, its context and management. Montado/Dehesa farm systems are dependent on the type of farming system, its context and management. According to Olesen [14], active resource management and the utilization of renewable raw materials as substitutes for metal and oil-based products and fossil fuels will be the main challenge Land 2020, 9, 148 15 of 16

According to Olesen [14], active resource management and the utilization of renewable raw materials as substitutes for metal and oil-based products and fossil fuels will be the main challenge for future policies; this will need to considerate the provision of for food, feed, bioenergy and biomaterials within the bioeconomy, the recycling of nutrients and resilient organic matter within agricultural systems, the maintenance of soil carbon stocks and the provision of other ecosystem goods and services, such as clean water and air and a diverse natural environment. Montado/Dehesa systems may be key actors for this strategy. Rouquette and Aiken [15] state that natural resource principles should encourage animal production systems management to practice environmental stewardship with adaptive management; adopt practices to improve air quality and minimize net greenhouse gas emissions; protect grasslands, native ecosystems and valuable conservation areas from land conversion and degradation; implement land management practices that conserve and enhance ecosystem health; incorporate efficient management practices to maintain or improve soil health; enhance native plants and animal biological diversity; and implement management practices for sustainable-product feed sources. With this in mind, future EU support for farming should be used strategically to support these adaptations and the correct balance between environmental and agricultural resource base protection and high-production output of healthy and safe foods.

Author Contributions: All authors have read and agree to the published version of the manuscript. Formal analysis, M.d.B.C.F. and M.R.V.-L.; Methodology, L.I. and C.D.; Validation, M.d.B.C.F., M.R.V.-L. and L.I.; Writing—original draft, M.d.B.C.F. and M.R.V.-L.; Writing—review & editing, M.d.B.C.F., M.R.V.-L., L.I. and C.D. Funding: This research was funded by National Funds through Fundação para a Ciência e Tecnologia, grant numbers UIDB/05183/2020 and UID/04007/2020. Acknowledgments: The authors acknowledge the collaboration of Red Nacional de Granjas Típicas—RENGRATI (National Network of Typical Farms) | TRAGSATEC & Ministerio de Agricultura, Pesca y Alimentación. Madrid, Spain https://www.mapa.gob.es/es/ganaderia/temas/produccion-y-mercados-ganaderos/sectores-ganaderos/red- de-granjas-tipicas/. Conflicts of Interest: The authors declare no conflict of interest.

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