Determinants of Sustainable Development of Agriculture in the WEFE-Nexus Approach in OECD-EU Member States

In the face of unprecedented challenges to global agricultural systems, it is imperative to comprehend the synergy between resource management and productivity in the quest for regional stability. This study is driven by the imperative to discern the long-term determinants of sustainable agriculture in the integrated context of the Water–Energy–Food–Environment nexus. In this context, the research focuses on the Organisation for Economic Co-operation and Development-European Union (OECD-EU) member countries from 1991 to 2022, examining how these world-leading economies manage the intricate nexus of trade-offs between resource use and agricultural value-added. By employing a sound panel data approach and second-generation econometric analysis to address the complexities of economic interlinkages, we assess the effect of water abstraction, food production, renewable energy transition and greenhouse gas emissions on agricultural output. The findings indicate that while water resources positively influence development, environmental degradation and the starting costs of energy transition are substantial sources of stress on productivity. Crucially, agricultural efficiency, rather than agricultural output, is revealed to be the leading engine of growth.