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Accessibility to financial resources is considered a prevalent problem in the agricultural sector. We develop an approach to quantify the long-term opportunity costs of financial constraints in relation to peers who do not face any financial constraints. Using data on past financial performance, we assess creditworthiness and the size of an additional accessible bank loan to farmers. Combining this with data on reported expenditure, we determine the accessible finance. We quantify the opportunity cost as the forgone dynamic profit (intertemporal profit in current-value terms) from financial constraints. Using data envelopment analysis, we apply our approach to 264 specialised Dutch dairy farms for the years 2006–2017 and explore the potential impact of changes in finance provision for several scenarios. Our results show an increasing gap between frontrunners and other farmers, as the latter generate progressively less dynamic profit in comparison to their best peers. The gap between the dynamic profit of the average farm and that of its best peers from their production and investment decisions made over the span of 1 year grew from €40,040 in 2009 to €114,548 in 2017. However, the growth is not driven by insufficient access to finance. Financial constraints can only explain 6% of the forgone dynamic profit in 2009 and as little as 1% for 2017. The number of farms classified as financially constrained in comparison to their peers decreases in our sample from 44% in 2009 to 8% in 2017. This suggests that non-financial factors are driving the growing gap.

Agricultural productivity growth can simultaneously increase profit and reduce pollution. Yet, the impact of productivity growth on both has not been quantified. The objective of our study was to develop an approach to quantify the extent to which agricultural productivity growth can increase profit and reduce pollution. Focusing on nitrogen pollution, we applied the approach to a sample of 341 intensive Dutch dairy farms for the years 2006-2017. Using a Bennet-Lowe formulation, we measured economic and nitrogen productivities over time and across farms. We applied Data Envelopment Analysis to determine the potential for productivity growth from reducing economic and nitrogen inefficiencies and assessed the impact on profit and nitrogen pollution levels. Using a two-stage by-production model, we set profit maximisation as the overarching objective to account for the economic production behaviour of farmers. We found that if laggard farmers adopted the best practices of their best peers, they could on average increase annual gross profit by 34% and simultaneously reduce the N surplus by 50% during the time period, which is a win-win situation for farmers and the environment. The magnitude of these gains corroborates the suggestion that productivity growth could be a game-changer for agricultural sustainability.