This Land Allocation and Management (LAM) model case study set out to explore the economic impacts that various changes to policy surrounding water quality could have in the upper Waikato catchment.
In response to the National Policy Statement (NPS) for Freshwater Management 2011 this case study was commissioned to assess the possible economic impacts of various proposed policies that were focused on the improvement of water quality nationally using the upper Waikato River as an example. The Land Allocation Model (LAM) seeks to optimise land use in such a way that maximises profit. LAM was used for its ability to set constrains within the model that represent the real word changes or limitations that changes to agri-environmental policy could cause. One example of this is a limit to the amount of nitrate entering waterways as determined by national policy, which could be set as a bounding limit in this model.
Within this case study it was promoted that the use of the LAM framework provided a flexible and rich framework in which both economic and hydrological implications of changes to policies for water quality improvement could be explored. By modelling a series of scenarios in this frame work it was possible to see how changes and developments within the catchment as a whole as well as sub catchment areas could affect water quality guidelines as set out in the NPS. In doing so LAM also highlighted the economic impacts of such changes, such as the dollar figure of operating surplus that dairy conversion in the catchment could have as well additional labour units on dairy farms and the amount of forestry conversion that could take place (in hectares) without out dropping below national bottom lines as set out in policy.
Within this case study several scenarios were modelled. Scenario 8 was one example of how an effort to meet National policy averages (NPS-av) resulted in changes to land use and operating surplus within the catchment area when modelled.
“Maintenance of average nitrate and chlorophyll-A levels across the catchment under the LMAT case (Scenario 8) lowers operating surplus by 4%, with 90% and 40% of the hard and easy sheep land, respectively, being planted to forest. Surplus is not greatly impacted, given the relative value of forestry and sheep and beef returns, though the time required to achieve forestry returns, relative to the current use, is obviously broadly dissimilar. The intensity of dairy farming is also reduced. Cow number is reduced by 8%, while N fertiliser and supplement use decrease by 20% and 25%, respectively. Moreover, 9% of producers use holding ponds, instead of spraying effluent directly from the sump, while over half use stand-off pads.”
The Land Allocation and Management (LAM) model is an optimisation model.