Energy and Agriculture in Australia and New Zealand: Politics, Prices and Economic Outcomes

Energy is a significant agricultural input in both Australia and New Zealand. Likewise agriculture in NZ Australia has the potential to produce significant energy sources - the extent to which depends on the price of competing energy sources - particularly oil. Higher energy prices, resulting in changes in land use in North America also have the potential to significantly impact the demand for, and prices received, for Australian and New Zealand agricultural commodities. This paper analyses recent statistics on agricultural energy consumption in both Australia and New Zealand and considers the relationship between energy prices and aggregate economic activity and economic activity in the farm and farm processing sector. It explores the impact of alternative energy price scenarios on Australian and NZ agriculture. It is informed by both CGE analysis of the NZ economy and results of international studies. The evolution of outcomes is sensitive to both global energy prices and the policy responses of the Australian and New Zealand Governments.Farm Management, Resource /Energy Economics and Policy,

Maori/Non-Maori Income Gaps: Do Differences in Worker Mobility Play a Role?

We estimate a model of net migration between Regional Councils for three age cohorts to test whether or not there are significant Maori/non-Maori differences. We find little evidence of a statistically significant link between worker mobility and labor market conditions. Only in the case of the youngest individuals (20-24 years of age) do we find a significant wage response, and this wage response does not differ significantly between Maori and non-Maori. Unemployment is no case found to be significantly related to migration. We conclude from this that differences in worker mobility and attendant differences in the propensity to take advantage of spatially dispersed economic opportunities has limited potential for explaining Maori/non-Maori income differentials.Labor and Human Capital, J61, R11,

HACCP/RMP Adoption in the New Zealand Meat Industry

In New Zealand, the Animal Products Act 1999 requires that all animal product primary processing businesses must have a risk management programme (RMP) based on the principles of Hazards Analysis and Critical Control Point (HACCP). However, due to market access requirements, many primary food exporters have voluntarily adopted HACCP systems for food safety management since the 1990s. This paper studies the process of HACCP/RMP adoption and the transition from voluntary HACCP to mandatory RMP in New Zealand Meat Industry. The main issues explored are plants' motivations, implementation problems, costs and benefits associated with the implementation of HACCP/RMP. The paper concludes with implications for policy design and further research.HACCP/RMP implementation, HACCP/RMP benefits and costs, New Zealand Meat Industry, Agricultural and Food 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,

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,

A Nonparametric Approach to The Analysis of HACCP/RMP Implementation Process

In this paper we conduct an analysis of the implementation of HACCP/RMP in the NZ Meat Industry based on the data collected from our recent survey. Nonparametric methods are used to measure the association between plant characteristics such as size, age, activities, and food safety management practices and HACCP/RMP adoption motivations, implementation problems, benefits, and costs. Results give insights into the ongoing process of mandatory RMP in New Zealand.HACCP/RMP implementation, New Zealand Meat Industry, nonparametric methods, Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, Farm Management, Land Economics/Use, Livestock Production/Industries, Research Methods/ Statistical Methods,

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,

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,

ESTIMATING THE COST OF FOOD SAFETY REGULATION TO THE NEW ZEALAND SEAFOOD INDUSTRY

In New Zealand, the Animal Products Act 1999 requires all animal product processing businesses to have a HACCP-based risk management program by the end of 2002. This paper attempts to measure the effects of such regulation on the variable cost of production of the New Zealand seafood industry. Using the framework developed by Antle (2000), a model of quality-adjusted translog cost function is estimated using census of production data from 1929 to 1998. Our results show that variable costs could increase from 2% to 22% or from 2 cents to 19 cents per kilogram.HACCP, compliance costs, seafood, Production Economics,

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,