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The potential cost to New Zealand dairy farmers from the introduction of nitrate-based stocking rate restrictions

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  • Mark Neal

    (Risk and Sustainable Management Group, University of Queensland)

Abstract

Introducing a stocking rate restriction is one possible course of action for regulators to improve water quality where it is affected by nitrate pollution. To determine the impact of a stocking rate restriction on a range of New Zealand dairy farms, a whole-farm model was optimised with and without a maximum stocking rate of 2.5 cows per hectare. Three farm systems, which differ by their level of feed-related capital, were examined for the changes to the optimal stocking rate and optimal level of animal milk production genetics when utility was maximised. The whole-farm model was optimised through the use of an evolutionary algorithm called differential evolution. The introduction of a stocking rate restriction would have a very large impact on the optimally organised high feed-related capital farm systems, reducing their certainty equivalent by almost half. However, there was no impact on the certainty equivalent of low feed-related capital systems.

Suggested Citation

  • Mark Neal, 2005. "The potential cost to New Zealand dairy farmers from the introduction of nitrate-based stocking rate restrictions," Murray-Darling Program Working Papers WP8M05, Risk and Sustainable Management Group, University of Queensland.
    • Handle: RePEc:rsm:murray:m05_8
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    File URL: http://www.uq.edu.au/rsmg/WP/WPM05_8.pdf
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    References listed on IDEAS

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    1. Mayer, D. G. & Kinghorn, B. P. & Archer, A. A., 2005. "Differential evolution - an easy and efficient evolutionary algorithm for model optimisation," Agricultural Systems, Elsevier, vol. 83(3), pages 315-328, March.
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    Cited by:

    1. Neal, Mark & Fulkerson, Bill, 2006. ""One size fits all"? - The relationship between the value of genetic traits and the farm system," Risk and Sustainable Management Group Working Papers 149855, University of Queensland, School of Economics.
    2. Neal, Mark & Fulkerson, William, 2006. "One size fits all? – The relationship between the value of genetic traits and the farm system," 2006 Conference (50th), February 8-10, 2006, Sydney, Australia 139884, Australian Agricultural and Resource Economics Society.

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    More about this item

    Keywords

    environmental regulation; dairy farms; whole-farm model; evolutionary algorithm;
    All these keywords.

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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