Assessing performance of crop producers from Water-Energy-Food-Environment Nexus perspective: A composite indicator approach

Among all the economic sectors, agricultural production is characterised by intensive natural resource use and a noticeable environmental footprint. The assessment of farm performance has been receiving special attention given the increasing scarcity of natural resources and growing environmental concerns. The nexus approach is particularly useful for such types of analysis since it reflects the complex interconnections among the sectors of water, energy, food and environment (WEFE). One way to explicitly place agricultural production within the WEFE Nexus is to develop a composite indicator at the level of decision-maker – farm – that will reflect the interlinkages between agricultural production and the Nexus pillars of water, energy and environment. Our study aims to operationalise the WEFE Nexus in the agricultural sector and contributes to the existing literature in two main directions: we propose a methodology to calculate the farm-level WEFE Nexus composite indicator using endogenous weights for aggregation, and our composite indicator incorporates the environment component reflecting how the environment and agricultural production interact. Furthermore, we developed an interactive web application that calculates the WEFE Nexus composite indicator values based on uploaded farm-level data (available at: https://sigmanexus.shinyapps.io/sigmanexus/). Our analysis of olive producers in Crete reveals moderate performance from a WEFE Nexus perspective. The average WEFE Nexus composite indicator value stands at 0.74, ranging between 0 and 1. Farmers who produce olives in an environmentally friendly manner and those who are concerned with the negative consequences of climate change tend to perform better from the WEFE Nexus perspective. Thus, the adoption of sustainable intensification activities and climate-smart practices, such as fertigation and pressure-compensated drippers, is recommended to enhance further the olive producers' performance. Monitoring the subsequent changes in farm performance can be achieved through the utilization of the developed methodological approach and the web tool launched as part of this study.