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The use of riparian land buffers is widely promoted as a method of mitigating the effects of sediment and nutrient runoff from intensive land use in New Zealand. Farmers receive advice and financial assistance from Regional Councils for activities such as establishment and planting of riparian buffers, but funding is limited. The effect of buffers on water quality goals varies across land types so the optimum size of riparian buffer width varies across farms. We build a stylised model to determine the optimum buffer width and apply it to the Karapiro catchment. The model can easily be extended to model salinity removal, conservation reserve programmes, establishing wetlands and carbon sequestration.

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.

Nitrogen levels in water resources in the Waikato region are increasing, mainly as a result of non-point source pollution from agricultural activities. Non-point pollution management is a complex issue requiring sufficient information and appropriate institutions. This paper considers the environmental policy literature and analyse how institutions, contract design, and monitoring and transaction costs in the presence of farm heterogeneity encourage optimal abatement. The analysis identifies the key institutional issues to be addressed in the design of appropriate policy measures to address water quality in Waikato river sub-catchment.

Energy is a significant agricultural input in both Australia and New Zealand. Likewise agriculture in NZ Australia has the potential to produce significant energy sources - the extent to which depends on the price of competing energy sources - particularly oil. Higher energy prices, resulting in changes in land use in North America also have the potential to significantly impact the demand for, and prices received, for Australian and New Zealand agricultural commodities. This paper analyses recent statistics on agricultural energy consumption in both Australia and New Zealand and considers the relationship between energy prices and aggregate economic activity and economic activity in the farm and farm processing sector. It explores the impact of alternative energy price scenarios on Australian and NZ agriculture. It is informed by both CGE analysis of the NZ economy and results of international studies. The evolution of outcomes is sensitive to both global energy prices and the policy responses of the Australian and New Zealand Governments.

New Zealand's biodiversity consists of over 80,000 types of native plants, animals and fungi, a considerable number of which are indigenous and located on private property. To preserve and enhance native biodiversity and discourage activities that may deplete it, economic values can be calculated which can, in turn, guide the use of policy tools, such as incentives, that can be used. This can support behavioural changes by encouraging individual self-interest to coincide with social interest. In this project, we used the contingent valuation, choice modelling and well-being approaches to estimate native biodiversity values for Wellington residents. In this paper, we present a summary of our initial results.

Nitrogen discharge into the Waikato River has been identified as the primary source of potential water quality degradation. Rising nitrogen levels in water are attributed to non point source pollution from agricultural activities. Pastoral farming is the predominant agricultural land use in the catchment. Increased nitrogen fertilizer use and higher stocking rates have the potential to increase the nitrogen loading into water. There is a range of best management practices and policies proposed to reduce nitrogen discharge from farming systems. Water quality trading is a policy tool that could improve the cost effectiveness of achieving environmental goals. Economic theory suggests that tradable pollution permit systems encourage polluters to reallocate pollution burdens to take advantage of any differences in marginal abatement costs. This paper develops an analytical frame work to derive nitrogen abatement costs for farms in a Waikato river sub-catchment. Policies and practices are evaluated using a bio-economic model of a typical pastoral farm in the Waikato river sub-catchment. Implications of pollution trading at the farm level are examined using programming simulation models.

This study describes the development of bio economic models examining the economic and water quality impact of various proposed policy options in the Upper Waikato catchment. In the first phase nitrogen emissions are determined for representative farming systems using the Overseer nutrient budget model. These model components are integrated into an economic model, which predicts producer responses to various policy options. The second phase determines catchment wide costs and water quality impacts of riparian buffers by combining geographic information system, bio economic modelling and experimental data. The results of the study signals directions for policy initiatives and further analysis exploring policy design and all costs associated with production adjustment.

This paper presents the results obtained from two experimental auctions regarding consumer willingness-to-pay (WTP) for food safety improvements. The research found a positive WTP for food safety. However WTP amounts are different when participants bid with objective risk information as compared with the naive (bid without this risk information. There appears to be no significant difference in WTP regarding different magnitudes of risk reduction.

This paper presents estimates of the benefits of clearing landmines in two provinces in rural Cambodia using the contingent-valuation (CV) method. The data came from a survey where we asked respondents referendum-type questions that elicit their willingness to pay for landmine clearance. The survey also provides estimates of the injury risk-death risk trade-off and the implicit value of statistical injury. These estimates suggest that the value of lives and injuries saved from mine clearing is likely to be at least an order of magnitude greater than those used in existing studies of mine clearing. We show that the value of lives and injuries saved is likely to dominate benefit assessments when VSL estimates are used. Estimates previously obtained for rural Thailand are contrasted with the results for Cambodia, and the determinants of the VSL investigated using econometric techniques. While Harris (2000) found a significantly negative net present value of landmine clearance in Cambodia we show that when using VSL estimates the net present value is less negative, and the value of lives and injuries saved dominates the benefits

In New Zealand, the Animal Products Act (1999) required all animal product processing businesses to have a Hazard Analysis and Critical Control Points (HACCP) based Risk Management Program (RMP) by the end of 2002. The purpose of the Act is to manage food safety risks and to facilitate overseas market access. However the new regulation will potentially bring costs to businesses. This paper attempts to measure the effects of RMP requirements on the variable cost of production of the New Zealand seafood industry. Using the framework developed by Antle (2000), a cost function is estimated using census of production data from 1929 to 1998. Results show that variable costs could increase from 2 percent to 22 percent or from 2 cents to 19 cents per kilogram.

In this paper we conduct an analysis of the implementation of HACCP/RMP in the NZ Meat Industry based on the data collected from our recent survey. Nonparametric methods are used to measure the association between plant characteristics such as size, age, activities, and food safety management practices and HACCP/RMP adoption motivations, implementation problems, benefits, and costs. Results give insights into the ongoing process of mandatory RMP in New Zealand.

In New Zealand, the Animal Products Act 1999 requires that all animal product primary processing businesses must have a risk management programme (RMP) based on the principles of Hazards Analysis and Critical Control Point (HACCP). However, due to market access requirements, many primary food exporters have voluntarily adopted HACCP systems for food safety management since the 1990s. This paper studies the process of HACCP/RMP adoption and the transition from voluntary HACCP to mandatory RMP in New Zealand Meat Industry. The main issues explored are plants' motivations, implementation problems, costs and benefits associated with the implementation of HACCP/RMP. The paper concludes with implications for policy design and further research.

In New Zealand, the Animal Products Act 1999 requires all animal product processing businesses to have a HACCP-based risk management program by the end of 2002. This paper attempts to measure the effects of such regulation on the variable cost of production of the New Zealand seafood industry. Using the framework developed by Antle (2000), a model of quality-adjusted translog cost function is estimated using census of production data from 1929 to 1998. Our results show that variable costs could increase from 2% to 22% or from 2 cents to 19 cents per kilogram.