Evaluating Input Standards for Non-Point Pollution Control under Firm Heterogeneity

The efficacy and cost of input standards for reducing nitrate pollution from New Zealand dairy production are evaluated. In contrast to previous studies, firm heterogeneity is explicitly considered through the novel integration of efficient techniques for the calibration and decomposition of large optimisation models. Nitrogen fertiliser application should not be targeted by policy given its minor role in determining emissions. In contrast, livestock intensity is an appropriate base for regulation given its strong correlation with pollutant load. Abatement cost increases as stocking rate declines, but this can be offset at low levels of regulation through utilising slack feed resources to improve per-cow milk production. Both uniform and differentiated input standards based on livestock intensity achieve substantial decreases in pollutant load at moderate cost. However, because of disparity in the slopes of abatement cost curves across firms, a differentiated policy is more cost-effective at the levels of regulation required to achieve key societal goals for improved water quality. Copyright (c) 2010 The Author. Journal compilation (c) 2010 The Agricultural Economics Society.

The role of collaborative partnerships in industry innovation: lessons from New Zealand's dairy sector

This study analyzes patterns of collaboration in research and development (R&D) for innovation in New Zealand's dairy industry. Based on a survey of agents contributing to industry innovation, it analyzes existing formal and informal partnerships between R&D organizations and the productive sector and the funding schemes that support such partnerships. The findings suggest that New Zealand's dairy innovation system depends on the capacity of a small number of public and industry agents. Government and industry organizations support innovation initiatives through various funding schemes that do not explicitly foster collaboration, and mechanisms that support informal collaboration are underdeveloped. [EconLit citations: O32, Q13, Q16]. © 2010 Wiley Periodicals, Inc.