Integrated Farm Optimisation and Resource Allocation Model (INFORM)

Description

“INFORM” (Integrated Farm Optimisation and Resource Allocation Model) is a new farm systems model that integrates biological data from each land management unit (similar natural resources and management practices) (LMU) within the farm. It uses LMU information to identify the mix of production enterprises and management regimes that maximise profit (EBIDTA) for the business.

This method helps isolate and examine the value of investments targeted at specific parts of the farm on the whole farm business, and could potentially offer analysis that will make best use of resources within defined boundaries, for targeted performance of ecosystem services delivery.

 

The challenge of maximising the value of an onfarm investment is dependent on two factors: first, ensuring the full potential of the investment is realised by adjusting current practices to capture the gains; and second, the challenge of isolating, quantifying and valuing the contribution that investment makes to the whole farm business.

A new generation farm optimisation model (INFORM) addresses both these issues. Two distinctly different on-farm investments, planting of a forestry block and sowing a multi-year forage crop, both on a hill country sheep and beef operation, are presented to illustrate the capability the model has for first optimising the investment and then using this information to conduct a farm system capital investment investigation. The investment analysis includes consideration of the capital requirements, and also calculates the maximum amount that can be spent on each of the investments to add value to the current business.

 

The new integrated Farm Optimisation and Resource Allocation Model (INFORM) (Rendel et al. 2013; Rendel et. al. 2015) was used in this study. It has the ability to integrate independently obtained biological data from each of the land management units (similar natural resources and management practices) within the farm system and place operational boundaries on the use or emissions from each land management unit before optimising profit. The optimisation routine within the model uses the information from each land management unit to identify the mix of production enterprises and management regimes that maximise profit (EBITDA) for the business. This represents a step change over a standard approach that typically explores economic outcome first and then mitigates for specific losses (e.g. Nitrates (N03-), Phosphorus (P), Greenhouse Gases (GHGs)) and conditions. Optimisation of the farm system within operational boundaries considers the consequences of multiple drivers simultaneously as an integral part of the farm system design and analysis.

As INFORM does not output
environmental footprints of optimised farm systems,
the OVERSEER® nutrient budget was used, based on
the optimal systems generated by INFORM, to model
N, P and GHGs losses from the three scenarios.

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Steady State or Dynamic Unknown

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Keywords Farm optimisation, resource allocation
Key References

Estelle Dominati, Alec Mackay, J.Rendel, and P. Smale (2016): Looking to the future of land evaluation and farm planning. Journal of New Zealand Grasslands 78: 67-72.

Estelle Dominati, Murray Patterson, Alec Mackay (2010): A framework for classifying and quantifying the natural capital and ecosystem services of soil. Ecological Economics, Volume 69, Issue 9, Pages 1858-1868.

Rendel, J.M.; Mackay, A.D.; Manderson, A.; O’Neill, K. 2013. Optimising farm resource allocation to maximise profit using a new generation integrated whole farm planning model. Proceedings of the New Zealand Grasslands Association 75: 85-90.

Rendel, J.M.; Mackay, A.D.; Smale, P. 2015: Valuing on-farm investments. Journal of New Zealand Grasslands 77: 83-88.