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Integrating environmental and economic accounting at the farm level

FAO, E. Montville Oro

Where farm record-keeping exists to calculate farm-household income, it commonly considers only financial accounts. Awareness of resource degradation or improvement calls urgently for a better understanding of the interrelations between environmental and socio-economic aspects in decision-making. Integrating calculations on resources deterioration/restitution in the financial accounts will help to determine differentiated productivity and efficiency of farming activities according to the applied technologies. Extended production cost and benefit calculations permit the formulation of technical recommendations that integrate economic and environmental factors in a clear and simple way for use by decision-makers and agricultural producers. Such recommendations should provide insights to farmers on how to improve, or at least to maintain resource availability and capability, making their livelihoods sustainable.

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