Grasslands are vital for global food security and significantly contribute to milk and meat production. However, a common perception in agriculture is that increased plant diversity leads to reduced biomass yield and forage quality, consequently lowering economic value. This perception often stems from biased comparisons: high-intensity, low-diversity grasslands usually employ highly productive species with intensive fertilization, while species-rich semi-natural grasslands are often found in less productive environments with extensive management. This contrast makes it difficult to isolate the effect of plant diversity itself. In contrast, biodiversity experiments often show that plant diversity increases biomass yield. However, the impact on forage quality remains ambiguous, with studies reporting inconsistent or small effects. A crucial factor for livestock productivity is quality-adjusted yield (biomass yield × forage quality), which integrates both biomass and nutritional value. While some studies indicated a positive diversity effect on quality-adjusted yield, mainly due to biomass increases, these lacked comprehensive assessments across a range of management intensities and quality measures. This study aims to resolve this contradiction. The research uses a conceptual framework to assess the relationship between plant diversity, forage quality, and revenue from milk production, focusing on four hypotheses: (a) both biomass and forage quality decrease with increasing diversity, (b) biomass increases while forage quality decreases, resulting in constant quality-adjusted yield, (c) biomass increases while forage quality remains constant, leading to increased quality-adjusted yield, and (d) both biomass and forage quality increase with higher diversity. The study employs data from a large-scale grassland biodiversity experiment to test these hypotheses and compare plant diversity effects to the impact of different management practices.

The literature reveals a dichotomy in understanding plant diversity effects on grassland productivity. Agricultural observations frequently associate high diversity with lower biomass and forage quality. This is often attributed to management practices, with low-diversity systems typically characterized by high-intensity management, including the use of selected high-yielding species and intensive fertilization. Conversely, high-diversity semi-natural grasslands are often found in less favorable conditions and managed extensively. This contrast confounds the direct assessment of diversity's effects. In contrast, numerous biodiversity experiments demonstrate a positive relationship between plant diversity and biomass yield. However, the effects on forage quality—crucial aspects such as protein, fiber, energy, and digestibility—are less clear. Studies report inconsistent or relatively small effects, underscoring the need for further investigation. While several studies have examined the impact of plant diversity on quality-adjusted yield (combining biomass and quality), these studies often lack the breadth of management intensities and the range of quality indicators necessary to provide a conclusive understanding. The economic implications of plant diversity, especially regarding quality-adjusted yield, remain under-explored despite the potential benefits for sustainable management. Existing research provides partial evidence of economic benefits from higher diversity through increased revenue and reduced risk, but much remains unknown regarding the interplay of management and diversity effects on economic outcomes.

This study utilizes data from the Jena Experiment, a long-term biodiversity experiment in Germany. The experiment encompasses a range of plant diversity levels (1 to 60 species) and management intensities, from extensive (one cut, no fertilization) to very highly intensive (four cuts, 200 kg N ha⁻¹ a⁻¹ fertilization). The experiment includes varying legume proportions within the plant diversity levels, recognizing their role in biomass production and forage quality. The study area consists of subplots established within larger plots representing different diversity levels. Forage quality assessment involved measuring multiple key variables: biomass yield, metabolizable energy (MJ m⁻² a⁻¹), milk production potential (kg m⁻² a⁻¹), crude protein (g m⁻² a⁻¹), utilizable crude protein (g m⁻² a⁻¹), organic matter (g m⁻² a⁻¹), and neutral detergent fiber (g m⁻² a⁻¹). Metabolizable energy was estimated using the Hohenheim Gas Test. The milk production potential was calculated from the net energy for lactation. Utilizable crude protein content was determined from the ammonia content of the incubation fluid. Chemical analyses were performed on the first and last cuts of the year 2007, with linear interpolation used to estimate qualities for treatments with more than two cuts. Data from swards with missing biomass yield were excluded. Statistical analysis employed a mixed-effects model to examine the effects of plant diversity, management intensity, legume presence/share, and other factors on biomass yield, forage quality, quality-adjusted yield, and revenues from potential milk production. The square root of plant diversity was used to account for diminishing returns in diversity effects. Robust standard errors were used to correct for heteroscedasticity. The model included interactions between plant diversity and management intensity. A Wald test was used to compare plant diversity effects across management intensities. Economic valuation used a milk price from 2016-2017 to estimate annual revenues from milk sales. The cost analysis included variable costs for fertilization and cutting, along with an assessment of two approaches to increasing species diversity: reseeding with commercially available seed mixtures and fresh hay transfer. These costs were factored into the assessment to provide a comprehensive evaluation of the economic benefits of increasing plant diversity.

The study's key findings strongly support the hypothesis that plant diversity enhances grassland productivity and profitability. Across various management intensities, quality-adjusted yield (the product of biomass yield and forage quality) significantly increased with plant diversity. This positive effect was primarily driven by an increase in biomass yield, as the effects on forage quality itself were small and often insignificant. The positive impact of diversity on biomass yield was most pronounced under intensive management. Specifically, increasing the number of species from 1 to 16 (up to 60) increased average metabolizable energy yield from 4.1 to 6.6 MJ m⁻² a⁻¹ and milk production potential yield from 0.8 to 1.2 kg m⁻² a⁻¹, irrespective of management intensity. These findings held true even when considering legume share instead of mere legume presence. Management intensity, as expected, also influenced productivity and quality, with yields generally increasing from extensive to very highly intensive management. Notably, there was little difference between intensive and highly intensive management. The extensive management consistently showed the lowest yield and revenue. Economically, the results show a substantial positive relationship between plant diversity and revenue from potential milk production. This positive relationship was independent of management intensity, with an increase of plant diversity from 1 to 16 species resulting in approximately €1400 ha⁻¹ a⁻¹ higher revenues on average across management intensities. Importantly, the economic benefit of increasing plant diversity was comparable in magnitude to the benefit of intensified management practices. The increase in revenue from less intensive to intensive management (+€550 ha⁻¹ a⁻¹) was similar to the effect of increasing plant diversity from 1 to 5 species in less intensive management. Likewise, increasing management from less intensive to very highly intensive (+€1500 ha⁻¹ a⁻¹) had a comparable effect to increasing plant diversity from 1 to 19 species in less intensive management. This highlights the significant economic value of plant diversity as a management strategy.

The study's findings refute the common agricultural perception of a negative correlation between plant diversity and productivity in grasslands. The consistent and robust positive effect of plant diversity on quality-adjusted yield, driven mainly by increased biomass yield, aligns with findings from other experiments, though this study provides a more comprehensive analysis across management intensities and quality variables. The positive effect on biomass yield is likely due to complementarity and selection effects: different species partitioning resources and the higher probability of including high-yielding species in more diverse mixtures. However, while diversity boosted biomass, it sometimes slightly decreased metabolizable energy and milk production potential, resulting in more comparable diversity effects on the quality-adjusted yield across different management intensities. This observation suggests that plant diversity is valuable for both extensively and intensively managed grasslands. The economic evaluation demonstrates the substantial financial benefits of maintaining and restoring plant diversity. The findings show plant diversity is economically as significant as increasing fertilization and cutting frequencies. This emphasizes the need for considering plant diversity not only in ecological conservation but also in farm management strategies and agri-environmental schemes. However, it remains challenging to maintain high plant diversity in heavily fertilized grasslands.

This study demonstrates the significant and robust positive impacts of plant diversity on the quality-adjusted yield and revenue generation of semi-natural grasslands, regardless of management intensity. Plant diversity emerges as a critical production factor, offering economic benefits comparable to intensified management practices. Maintaining and restoring plant diversity are vital for sustainable grassland management. Future research should focus on developing management systems that allow for the maintenance of high plant diversity even in fertilized grasslands, including investigating the role of livestock diversity and exploring diverse seed mixtures that offer resilience to changing climatic conditions.

While the study offers compelling evidence, some limitations should be acknowledged. The analysis is based on a single site, limiting the generalizability of the findings to other geographic locations and environmental conditions. The study period of one year might not fully capture the long-term dynamics of plant diversity effects. The economic valuation focuses solely on milk production revenue, excluding other potential benefits, such as carbon sequestration or biodiversity. Costs of establishing diverse seed mixtures were considered but varied based on sourcing, limiting the precision of the cost-benefit analysis.