The primary intention of the development of NZFARM is to provide decision-makers with information on the economic impacts of policy. It also provide information on how a policy aimed at one environmental issue could affect other environmental indicators (e.g., how a cap on nutrient leaching could affect Greenhouse Gas emissions).
Key objectives include:
NZ-FARM is a comparative-static, partial equilibrium model of regional New Zealand land use that maximises rural income across a catchment, accounting for the environmental impacts of land use and land use changes.
The model determines the level of production outputs that will maximise the net revenue of production across an entire catchment area. The model assesses an internally nested framework land use and land management options against agricultural production costs and output prices, environmental factors (i.e. soil type, water availability), and regulated environmental outputs (i.e. nutrient leaching limits) within a region.
In the model production activities in each region of NZ-FARM are differentiated in a variety of ways, including a set of fixed and variable input costs, use of inputs such as fertiliser and water, and output price. Production and land use are endogenously determined in a nested framework such that landowners simultaneously decide on the optimal mix of land use for their fixed area, given their land use classification (LUC) and soil type. This then allows landowners to allocate their land between various enterprises that will yield them the maximum net return for their land use.
Two other land uses are also tracked in the model: scrub land, which is allowed to vary across scenarios, and Department of Conservation (DOC) land that is assumed to be fixed as land use change for DOC land is not typically driven by economic forces. The model is written and maintained in General Algebraic Modeling System (GAMS).
The model has been developed by Landcare Research and has been applied in policy formulation, policy evaluation and policy review.
|Latest Version||Updated in May 2012|
|State of Development||Unknown|
|Current Development Activity||Current process of adding more catchments and ecosystem services values for New Zealand|
|Outcome Areas||Economic, Environmental|
|Management Domains||Land, Freshwater|
|Intended End Users||Policy makers (central government and regional council)|
|Spatial Extents||Local (i.e. Catchment or District), Regional|
|Steady State or Dynamic||Steady State|
|Level of Integration||Economic, Environmental|
|Key Input Data||Micro-economic data, Land Use, Land Cover soil type, climate and water availability, fertiliser regimes and nutrient leaching rates|
|Input Data Formats||XLS(X)|
|Key Output Data||Micro-economic data, Land Use GHGs and Nutrients|
|Output Data Formats||XLS(S)|
|Open/Closed Source||Closed Source|
|Not available for commercial use|
|Operating Systems||MS Windows, Mac OS X, Linux, Dos executable|
|Software Needed||Matlab GAMS with CONOPT Solver, GAMS IDE user interface, Matlab|
|User Interface||Other (please specify) GAMS IDE|
|Ease of Use||
Relatively easy to use if know how to programme in GAMS.
Currently working on NZFARM-lite that will work in Excel with a GAMS demo license. Expected to be released in August 2012
|Use in Policy Process||Plan (Policy Formulation), Check (Policy Evaluation), Review (Issue Identification)|
See Landcare Research Website - http://www.landcareresearch.co.nz/science/soils-and-landscapes/ecosystem-services/nzfarm
Manual under development. Expected to be released in August 2012.
|Methods included for calibration and validation||Positive mathematical programming with parameter adjustment of constant elasticity of transformation (CET) functions . Empirical verification for 2010 land use and output.|
|Methods included for managing uncertainty||Sensitivity analysis around key economic and environmental parameters.|
|Analytical Techniques||Partial Equilibrium|
NZ-FARM is a comparative-static, mathematical programming model which maximizes rural farm income across a catchment, accounting for the environmental impacts of land use and land-use changes.
|Keywords||Environmental policy, land use|
|Linkages to other Models|
Lennox, J. and A. Daigneault. 2011. “Quantitative economic analysis of water policies and developments in New Zealand’s regions and catchments.” In: Old Problems, New Solutions. Russel., S. B. Frame, and J. Lennox, eds. Lincoln, NZ: Manaaki Whenua Press. 59-69.
Greenhalgh, S., A. Daigneault, O. Samarasinghe, and R. Sinclair. 2012. “Capitalizing on Water and Climate Policies in the New Zealand Agricultural and Forestry Sectors.” The International Journal of Climate Change: Impacts and Responses 3(2): 15-32.
Samarasinghe, O., A. Daigneault, and Greenhalgh, S. Under Review. “Modelling Economic Impacts of Nutrient Reduction Policies in North Canterbury: A Catchment Level Analysis.” Submitted to New Zealand Journal of Agricultural Research.
Estimates are made using NZ-FARM of changes in net revenue, land use, enterprise mix, and environmental outputs when landowners in the Hurunui plains sub-catchment must reduce their aggregate nitrogen and phosphorous loading targets of 15% and 30% below baseline levels.
Study used NZFARM to assess the economic and environmental impacts of different policy scenarios to reduce losses from diffuse sources in the Hinds catchment, Central Canterbury
Daigneault, A. (2011) Assessment of Increased Irrigation in Hurunui Catchment, North Canterbury. Landcare Research, Auckland, Sept 2011, 4p.
Daigneault, A. (2012) Assessment of Multiple Agro-Environmental Policies in North Canterbury. Landcare Research, Auckland, Jan 2012, 6p.