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The Potential Cost to New Zealand Dairy Farmers from the Introduction of Nitrate-Based Stocking Rate Restrictions

Author

Listed:
  • Neal, Mark
  • Fulkerson, William
  • Levy, Gil
  • Wastney, Meryl
  • Thorrold, Bruce S.
  • Palliser, Chris
  • Beukes, Pierre
  • Folkers, Chris

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

  • Neal, Mark & Fulkerson, William & Levy, Gil & Wastney, Meryl & Thorrold, Bruce S. & Palliser, Chris & Beukes, Pierre & Folkers, Chris, 2006. "The Potential Cost to New Zealand Dairy Farmers from the Introduction of Nitrate-Based Stocking Rate Restrictions," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25620, International Association of Agricultural Economists.
  • Handle: RePEc:ags:iaae06:25620
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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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    Keywords

    environmental regulation; dairy farms; whole-farm model; evolutionary algorithm; Environmental Economics and Policy; Livestock Production/Industries; Q12; Q52; C61;

    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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