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Abstract

This paper applies an economic lens to the argument that dairy farmers should increase production via supplements, which has led to concerns regarding the environmental impact of intensification. This paper finds: 1. Intensification has led to farms producing at levels incompatible with profit maximisation 2. Claims that de-intensification will result in lower farm profitability are unconvincing 3. The current suite of assessment and planning tools are likely to be causing systemic overstocking 4. Failing to recognise the difference between marginal and average costs is likely to be leading to expensive mitigation measures that treat symptoms rather than address causes.

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