LAUSR

Abstract The increasing and often conflicting challenges that agricultural production systems face today require a more comprehensive approach to planning in the sector, integrating the economic principles of production with its social characteristics and ecological impacts. The paper presents an innovative attempt to incorporate biophysical criteria into a standard socio-economic optimisation model, illustrated through a study of the Slovenian dairy sector. The biophysical perspective on the system's functioning is determined by means of emergy analysis. This is an environmental accounting approach which reflects the cumulative environmental support needed to produce a certain output. The eco-centric perspective on the emergy approach complements the standard socioeconomic perspective of value that reflects the utility of a product (anthropocentric perspective). The model is developed based on a preceding analysis of socio-economic and emergy-based performance characteristics of different production types at the farm level that, when aggregated, constitute the sector. The multi-criteria optimisation model is supported by weighted goal programming (WGP) and aims to investigate the effects of two opposing agricultural policy paradigms on the organisation of the sector at the national level. The results show that a protectionist or eco-social focus of public interventions results in the sector's organisation with rather contrasting performance characteristics. The model outcome that represents a compromise between the two agro-political paradigms clearly suggests that incorporation of the emergy criterion into the optimisation model leads to a diverse and balanced structure and a more favourable economic and biophysical performance of the sector. Accordingly, the results confirm the complementarity of economic and emergy approaches and provide implications for a more comprehensive planning of agricultural activity.