Analysis of Environmental and Economic Efficiency: Application of the Overseer model and simulated data

Thiagarajah Ramilan, Francis Scrimgeour and Dan Marsh

No 97161, 2009 Conference, August 27-28, 2009, Nelson, New Zealand from New Zealand Agricultural and Resource Economics Society

Abstract: 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.

Keywords: Agricultural and Food Policy; Crop Production/Industries; Environmental Economics and Policy; Farm Management; Land Economics/Use; Livestock Production/Industries; Research Methods/ Statistical Methods (search for similar items in EconPapers)
Pages: 14
Date: 2009-08
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nzar09:97161

DOI: 10.22004/ag.econ.97161

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