Description

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. 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.

Purpose

The primary intention of the development of NZFARM is to provide decision-makers with information on the economic impacts of policy as well as 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).

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

Development Contact

Adam Daigneault
daigneaulta@landcareresearch.co.nz
+64 9 574 4100
Landcare Research
231 Morrin Road St Johns Auckland 1072, New Zealand

Main Developers

  • Landcare Research

Scope

Outcome Areas Economic, Environmental
Management Domains Land, Freshwater
Subdomains Contaminant Losses
Intended End Users Policy makers (central government and regional council)
Spatial Resolutions Unknown
Spatial Extents Local (i.e. Catchment or District), Regional
Spatial Dimensions Unknown
Temporal Resolutions Years
Temporal Extents Years
Steady State or Dynamic Steady State
Level of Integration Economic, Environmental

Input & Output Data

Key Input Data Micro-economic data, Land Use
Input Data Formats XLS(X)
Key Output Data Micro-economic data, Land Use GHGs and Nutrients
Output Data Formats XLS(S)

Accessibility

Open/Closed Source Closed Source
Licence Type Unknown
Licence Cost
(Non Commercial)
Price negotiable
Licence Cost
(Commercial)
Not available for commercial use

User Information

Operating Systems MS Windows, Mac OS X, Linux, Dos executable
Software Needed Matlab GAMS with CONOPT Solver
User Interface Other (please specify) GAMS IDE
Ease of Use Moderate 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)
Documentation

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.

Support none
Users Forum none

Technical Considerations

Programming Language GAMS
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
Model Structure

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. 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, and then how to allocate their land between various enterprises that will yield them the maximum net return for their land use. Production activities in each region are differentiated in several ways and each production activity uses information on input cost, input use, and output price. The model has the ability to track environmental outputs which are obtained from several sources; - Nitrogen (N) and Phosphorus (P) leaching rates for pastoral farming were obtained from the most recent version of OVERSEER while N and P leaching rates for all other enterprises were constructed using SPASMO or other literature. - Forest productivity and carbon sequestration were derived from the CenW model. - GHG emissions for all other enterprises were derived using the IPCC’s Good Practice Guidance (2000) and match the categories in the latest New Zealand GHG Inventory (manure management, agricultural soils, etc.).

Keywords Environmental policy, land use
Linkages to other Models
Links

http://www.landcareresearch.co.nz/science/soils-and-landscapes/ecosystem-services/nzfarm

Key References

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.

Associated Case Studies

  • NZFARM - Nutrient Reduction Policy in Hurunui Catchment, North Canterbury

    This paper uses an economic catchment model, NZ-FARM, to assess changes in land use, enterprise distribution, nutrient loading levels and Green House Gas emissions from a series of policies that introduce nutrient reduction caps on land-based production in Hurunui plains region of North Canterbury.  

    Read more
  • Other Key Case Studies

    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.