Are more efficient farms also better for the environment? March 12, 2015 The answer appears to be "yes" according to this paper in the journal Applied Economic Perspectives and Policy.Their motivation: The productive efficiency literature has paid very little attention to environmental performance issues. Growing social and political concerns for the environmental impacts of agriculture make it necessary to study environmental and technical performance using robust methodologies that enable scientists to derive reliable indicators. They found . . . Empirical findings suggest that our sample farms, on average, reach technical efficiency scores of 93%, and thus that they can reduce input use by 7% while leaving output levels unaltered. Environmental efficiency scores differ depending on the methodology used and indicate ample scope for improving environmental performance and reducing pesticide use and pollution. The punchline: environmentally efficient farms tend to be more allocative and technically efficient. Better agri-environmental performance is associated with good agricultural practices, supporting the notion that an efficient use of chemical inputs improves both environmental and technical performance. As opposed to previous studies that found an adverse effect of environmental regulations on productivity (Färe et al. 2001), the high correlation between TE and EE for our sample farms implies complementarity between economic and environmental sustainability.