Sustainability Effects of the Uptake of More Grass‐Based Feeding Practices: Evidence From Sweden

ABSTRACT We examine the effects of the uptake of grass‐based feeding practices on the economic, environmental, and social dimensions of farm sustainability. More specifically, we analyse the predictive effects of an increase in grassland or ley area on farm net income, total working hours, and fertiliser expenditure. Our analysis utilises farm‐level data from Swedish dairy farms spanning the period 2002–2021. Drawing on a directed acyclic graph (DAG), we assess both the average and distributional effects using panel regression with fixed effects and penalised panel quantile regression methods, respectively. Our results show that an increase in either grassland or ley area is associated with a decrease in both farm net income and fertiliser expenditure, alongside an increase in total working hours on average. Our distributional analysis further indicates that these effects vary across the quantile distribution of the outcome variables. Finally, the results show that an increase in either grassland or ley area leads to a reduction in milk yield, feed cost and the cost of veterinary services. Overall, our findings highlight the trade‐offs associated with farmers' transition towards the uptake of more grass‐based feeding practices and the policy implications.