Improving Water Quality through Environmental Policies and Farm Management: an Environmental Economics Analysis of Dairy Farming in Karapiro Catchment

This research explores the environmental and economic implications of nitrogen discharge abatement from dairy farms. This thesis develops a framework to analyse agri-environmental policies using bio economic modelling. A novel approach has been developed using farm survey data for catchment scale modelling and policy analysis. Policy analysis is facilitated by various modelling techniques and software. Geographic Information Systems (GIS) are used to convert data from multiple sources to a common platform for policy analysis. Whole dairy farm system simulations coupled with a Metamodel built on the Overseer software are used to establish the relationship between farm economic returns and nitrogen discharges. This relationship is used to derive abatement costs and resolve policy implementation challenges. Data Envelopment Analysis is used to develop Environmental economic efficiency measures. Finally a stylized model is used to determine spatially optimal riparian buffer strips. The results show that the differences in abatement costs and environmental efficiency between farming systems are significant. The adverse effects of information asymmetry can be effectively minimized by adopting differentiated incentives and target monitoring. Riparian buffers are a cost effective abatement tool that complement abatement at the intensive margin. Clear understanding of farm heterogeneity will help to design effective policies. Techniques for the measurement of policy impact have been successfully developed and add significantly to our knowledge of the underlying relationships. The use of simulated data for agri-environmental policy analysis is versatile and is expected to have several valuable applications. These methods can be applied to other geographic areas and research domains. This thesis provides useful tools for policy makers seeking to develop empirically informed agri environmental policy

Modelling Waikato Farm Nitrogen Discharges for Policy Analysis

This study describes the development of bio economic models examining the economic and water quality impact of various proposed policy options in the Upper Waikato catchment. In the first phase nitrogen emissions are determined for representative farming systems using the Overseer nutrient budget model. These model components are integrated into an economic model, which predicts producer responses to various policy options. The second phase determines catchment wide costs and water quality impacts of riparian buffers by combining geographic information system, bio economic modelling and experimental data. The results of the study signals directions for policy initiatives and further analysis exploring policy design and all costs associated with production adjustment.Riparian margins, Non point pollution, Nitrogen, Linear programming, and Environmental policy, Community/Rural/Urban Development, Crop Production/Industries, Environmental Economics and Policy, Farm Management, Health Economics and Policy, Industrial Organization, Land Economics/Use, Livestock Production/Industries, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy,

Evaluation of agri-environmental policies for water quality improvement accounting for firm heterogeneity

Policy makers worldwide are interested in the identification of cost-effective policy instruments to reduce diffuse pollution. A large economic model representing heterogeneous farms is used to evaluate a broad set of policies for reducing nitrate regulation within a large catchment dominated by dairy production. A policy instrument that allows the level of abatement to vary among producers according to differences in abatement cost is most cost-effective. The primary goal of 26 kg N ha⁻¹ can be achieved at a cost of $15 ha⁻¹ under this cap and trade policy, while a uniform cap on emissions for all farmers would be more than three times as expensive ($49 ha⁻¹). In contrast, requiring uniform reductions in stocking rate, banning the application of nitrogen fertiliser, and land retirement perform poorly. These instruments are at least three times more costly than a cap and trade policy over all simulated reductions. Moreover, the differentiated policy does not greatly alter the distribution of farm profit, relative to what exists without regulation. The use of a large, complex economic model incorporating disaggregated farms provides unique insight into the economic benefits accruing to a differentiated policy

Abatement Cost Heterogeneity and its Impact on Tradable Nitrogen Discharge Permits

Nitrogen discharge into the Waikato River has been identified as the primary source of potential water quality degradation. Rising nitrogen levels in water are attributed to non point source pollution from agricultural activities. Pastoral farming is the predominant agricultural land use in the catchment. Increased nitrogen fertilizer use and higher stocking rates have the potential to increase the nitrogen loading into water. There is a range of best management practices and policies proposed to reduce nitrogen discharge from farming systems. Water quality trading is a policy tool that could improve the cost effectiveness of achieving environmental goals. Economic theory suggests that tradable pollution permit systems encourage polluters to reallocate pollution burdens to take advantage of any differences in marginal abatement costs. This paper develops an analytical frame work to derive nitrogen abatement costs for farms in a Waikato river sub-catchment. Policies and practices are evaluated using a bio-economic model of a typical pastoral farm in the Waikato river sub-catchment. Implications of pollution trading at the farm level are examined using programming simulation models.Heterogeneity, tradable discharge permits, non-point pollution, marginal abatement cost, Environmental Economics and Policy,

Institutional analysis for nitrogen pollution abatement in a Waikato river sub-catchment in New Zealand

Nitrogen levels in water resources in the Waikato region are increasing, mainly as a result of non-point source pollution from agricultural activities. Non-point pollution management is a complex issue requiring sufficient information and appropriate institutions. This paper considers the environmental policy literature and analyse how institutions, contract design, and monitoring and transaction costs in the presence of farm heterogeneity encourage optimal abatement. The analysis identifies the key institutional issues to be addressed in the design of appropriate policy measures to address water quality in Waikato river sub-catchment.Environmental policy, Transaction cost, Compliance, Contract design, Heterogeneity, Environmental Economics and Policy,

Analysis of Environmental and Economic Efficiency: Application of the Overseer model and simulated data

New Zealand’s success in raising agricultural productivity has been accompanied by higher input use, leading to adverse effects on the environment. Until recently, analysis of farm performance has tended to ignore such negative externalities. The current emphasis on environmental issues has led dairy farmers to target improvements in both environmental performance and productivity. Therefore measuring the environmental performance of farms and integrating this information into farm productivity calculations should assist informed policy decisions which promote sustainable development. However this is a challenging process since conventional environmental efficiency measures are usually based on simple input and output flows but nitrogen discharge is a complex process which depends on climate variability, pasture and cow physiology and geophysical variability. Furthermore the outdoor, pastoral nature of New Zealand farming means that it is difficult to control input and output flows, particularly of nitrogen. Therefore this paper proposes a novel approach to measure environmental and economic efficiency of farms using the Overseer nutrient budget model and a spatially micro-simulated virtual population data. Empirical analysis is based on dairy farms in the Karapiro catchment, where nitrogen discharge from dairy farming is major source of nonpoint pollution.Data Envelopment Analysis, Economic, Efficiency, Environment, Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, Farm Management, Land Economics/Use, Livestock Production/Industries, Research Methods/ Statistical Methods,

Modelling riparian buffers for water quality enhancement in the Karapiro catchment

The use of riparian land buffers is widely promoted as a method of mitigating the effects of sediment and nutrient runoff from intensive land use in New Zealand. Farmers receive advice and financial assistance from Regional Councils for activities such as establishment and planting of riparian buffers, but funding is limited. The effect of buffers on water quality goals varies across land types so the optimum size of riparian buffer width varies across farms. We build a stylised model to determine the optimum buffer width and apply it to the Karapiro catchment. The model can easily be extended to model salinity removal, conservation reserve programmes, establishing wetlands and carbon sequestration.Resource /Energy Economics and Policy,

Institutional and Technological Options for Sustainable Intensification of Community Based Silvi-pasture Systems in Arid Eco-regions of South Asia

In arid eco-region of Rajasthan, India, common pool resources (CPRs) like common pastures and village water bodies provide ecosystem services such as fodder, fuel, timber, water and medicinal plants which are crucial for the livelihoods in particular of the poor. In western Rajasthan livestock keeping is the most important and resilient component of the agricultural systems which strongly depends on common pastures. However, the grazing areas have become severely degraded making the rural poor more vulnerable. A number of efforts have been made to improve the management of and rehabilitate the community pastures (Conroy and Lobo, 2002). The success of such initiatives was unreliable and even the strong involvement of elected village councils (Panchayats) has not helped. Post-project sustainability of new management practices remains uncertain due to cumbersome social dynamics, neglect of institutional arrangements as well as an overemphasis on technical and externally controlled interventions (Jodha, 2001; Mishra and Kumar, 2007). Previous empirical research using the social-ecological systems thinking and framework (Ostrom, 1990; Wade, 1988; Baland and Plateau, 1999) has helped to better understand CPR governance challenges. Nevertheless, there is still no clear answer to the question why common pasture management works out in some Rajasthan communities and fails in others. As part of the CRP Dryland Systems, this study was conducted on the people’s perceptions on the causes leading to degradation of common pastures and the factors hindering sustainable management and rehabilitation efforts and to facilitate the participatory assessment of NRM and institutional options for sustainable intensification of community silvipasture systems in western Rajasthan

Water sharing for the environment and agriculture in the Broken catchment

The Commonwealth of Australia Water Act 2007 changed the priority for water use in the Murray-Darling Basin (MDB) to first ensure environmentally sustainable levels of extraction and then to maximise net economic returns to the community from water use. The Murray- Darling Basin Authority (MDBA) is expected to deliver a draft Basin Plan in 2011 providing a framework for future water planning. The Plan will include Sustainable Diversion Limits (SDLs) which define water diversions for consumption while maintaining environmental assets and ecosystem functions. The 2009 MDBA Concept Statement acknowledged that in some areas less information is available to determine the SDLs. The 2010 MDBA Guide to the Basin Plan proposed SDLs reducing the current long-term average surface water diversions to between 25 and 34% for the Goulburn-Broken region. Representative farm-level models of irrigated dairy, horticulture and viticulture, and dryland broadacre, industries were developed to determine the likely impacts on farm income and farm enterprise mix if the price and quantity of irrigation water changes. Water for ecological benefits and ecosystem functioning was determined for a range of river health levels using a bottom-up approach identifying flow requirements for fish, riparian vegetation, invertebrates, and geomorphic and nutrient processes. A novel part of the analysis is the conjunctive use of water for both purposes, e.g. wetland filling and then pumping for irrigation. The linkages between changed land use and surface/ground water outcomes are assessed using a Catchment Analysis Tool. An experimental design of different proportions of water going to the environment and consumptive uses showed potential trade-offs between agricultural, environmental and surface/ground water outcomes. These trade-offs were examined to assess the impact of alternative water management on catchment welfare, and provide information about setting SDLs.Water sharing, environment, agriculture, Murray-Darling Basin, Broken catchment, Resource /Energy Economics and Policy, Q18, Q25, Q28,

Suitability Evaluation of Three Tropical Pasture Species (Mulato II, Gatton Panic, and Rhodes Grass) for Cultivation under a Subtropical Climate of Australia

Exploring improved tropical forages is considered to be an important approach in delivering quality and consistent feed options for dairy cattle in tropical and subtropical regions. The present study aimed to study the suitability of three improved tropical grasses, Chloris gayana ‘Rhodes grass cv. Reclaimer’ (RR), Megathyrsus maximus ‘Gatton Panic’ (GP), and Brachiaria ruziziensis x B. decumbens x B. brizantha ‘Brachiaria Mulato II’ (BM) evaluating their carbon assimilation, canopy structure, herbage plant–part accumulation and quality parameters under irrigated conditions. An experiment was conducted at Gatton Research Dairy (27°54′ S, 152°33′ E, 89 m asl) Queensland, Australia, which has a predominantly subtropical climate. Photosynthesis biochemistry, canopy structure, herbage accumulation, plant part composition, and nutritive value were evaluated. Photosynthesis biochemistry differed between pasture species. Efficiency of CO2 assimilation was highest for GP and quantum efficiency was highest for BM. Pasture canopy structure was significantly affected by an interaction between pasture species and harvest. Forage biomass accumulation was highest in GP, while BM produced more leaf and less stem compared to both GP and RR. A greater leafy stratum and lower stemmy stratum depth were observed in the vertical sward structure of BM. Brachiaria Mulato II showed greater carbon partitioning to leaves, leaf: stem ratio, canopy, and leaf bulk density. It also demonstrated greater nutritive value (Total digestible nutrients (TDN), acid detergent fibre (ADF), neutral detergent fibre (NDF), neutral detergent insoluble protein (NDICP), Starch, nonfibre carbohydrates (NFC), metabolisable energy (ME), mineral profile (Mg, P, K, Fe, Zn) and dietary cation–anion difference (DCAD) for leaf, stem, and the whole plant. Greater quantum efficiency, leaf accumulation, and nutritive value of BM observed in the present study suggest BM as an attractive forage option for dairying that warrants further research in pasture-based systems in tropical and subtropical climates