Erosion mitigation in the Waikato District,New Zealand: economic implications for agriculture

Soil erosion, in its various forms, is caused or aggravated by agricultural activities. Mitigation of surface erosion comprises the construction of shelterbelts, fencing, riparian buffering, and stock reduction. Mitigation of mass‐movement erosion, in turn, takes the form of spaced planting of trees to maintain a persistent, healthy, and complete ground cover. In this article, we assess the economic implications to agriculture of the adoption of mitigation alternatives for erosion control in the Waikato District, New Zealand. The Waikato District presents a spatial pattern of erosion that affects profitability of dairy, and sheep and beef enterprises. We use the Universal Soil Loss Equation and the New Zealand Empirical Erosion Model to estimate erosion figures that are then fed into an economic‐focused, nonlinear, partial equilibrium mathematical programming model of New Zealand land use. Different scenarios are constructed for surface and mass‐movement soil erosion targets ranging from 0% to 50% below baseline levels. We find that achieving surface erosion targets is more expensive than mass‐movement targets, and results in different responses in regional‐level costs, land use, enterprise net revenue, and adoption of mitigation alternatives.     

Innovation and networks in New Zealand farming

The New Zealand government seeks to dramatically increase the value of agricultural exports while concurrently protecting the natural environment. Thus, farmers are expected to adopt pro‐environmental management practices and novel farm technologies. We show that farmers are more likely to adopt new practices and technologies after seeing them demonstrated, but earlier evidence indicates that demonstration is most effectively undertaken within farmer networks. We use multivariate regression to identify the traits of livestock farmers who are innovative by focusing on adoption of pro‐environmental management practices (managing nutrients, soils and pugging) and novel farm technologies (e.g., windmills, computer‐based management systems, automatic sensors and specialised grasses), considering both numbers adopted and timing. We find that dairy farmers are more innovative than other livestock farmers and that higher education levels and stronger environmental norms within the family are strongly associated with innovativeness. In addition, we find that innovators and early adopters have larger networks than other farmers. Moreover, the composition of these networks is much more varied than the networks of less innovative farmers. These findings imply that innovative farmers in New Zealand may also act as connectors for the diffusion of new ideas in farming.     

Quantifying the impact of farmers' social networks on the effectiveness of climate change mitigation policies in agriculture

To reduce agricultural greenhouse gas (GHG) emissions, farmers need to change current farming practices. However, farmers' climate change mitigation behaviour and particularly the role of social and individual characteristics remains poorly understood. Using an agent-based modelling approach, we investigate how knowledge exchange within farmers' social networks affects the adoption of mitigation measures and the effectiveness of a payment per ton of GHG emissions abated. Our simulations are based on census, survey and interview data for 49 Swiss dairy and cattle farms to simulate the effect of social networks on overall GHG reduction and marginal abatement costs. We find that considering social networks increases overall reduction of GHG emissions by 45% at a given payment of 120 Swiss Francs (CHF) per ton of reduced GHG emissions. The per ton payment would have to increase by 380 CHF (i.e., 500 CHF/tCO₂eq) to reach the same overall GHG reduction level without any social network effects. Moreover, marginal abatement costs for emissions are lower when farmers exchange relevant knowledge through social networks. The effectiveness of policy incentives aiming at agricultural climate change mitigation can hence be improved by simultaneously supporting knowledge exchange and opportunities of social learning in farming communities.     

Farmer perspectives of the on-farm and off-farm pros and cons of planted multifunctional riparian margins

The planting of riparian margins is a policy option for pastoral farmers in response to land use induced environmental issues such as declining water quality, stream bank erosion, and loss of aquatic and terrestrial habitat. We elicited the views and experiences as to pros and cons of planting riparian margins from two sets of dairy farmers from Taranaki, New Zealand: those who are or have planted riparian margins, and those who have not yet done so. Those farmers who have planted riparian margins identified 21 positive aspects of riparian margin plantings and 11 negative aspects of riparian margin plantings. Perceived benefits identified by this group include water quality, increased biodiversity, the provision of cultural ecosystem services, immediate direct benefits to farm management and the farm system, and in some instances increased productivity on-farm. In contrast, those farmers that had fenced but not planted their riparian margins did not consider that riparian margin plantings could add further benefits to that which could be achieved by excluding stock from waterways, and associated only negative perceptions with riparian margin plantings. Planting riparian margins is not cost neutral and will not deliver anticipated environmental benefits in every situation. However, we argue that riparian margin plantings are an important ecological infrastructure investment that needs to be captured within a wider policy framework, the benefits of which extend beyond the mitigation of a single negative externality generated by land use practices, such as nutrient loss, and contribute to a multifunctional landscape.     

Production Risks and Food Security under Alternative Technology Choices in Malawi: Application of a Multinomial Endogenous Switching Regression

Employing nationally representative data, we investigate the impact of Sustainable Intensification Practices (SIPs) on farm households’ food security, downside risk and the cost of risk in Malawi. The analysis relies on a flexible moment‐based specification of a stochastic production function in a multinomial endogenous switching regression framework to correct for the selection bias stemming both from observed and unobserved heterogeneity. A quantile moment approach is used to estimate the cost of risk. After controlling for the effects of unobserved heterogeneity and several observable variables on maize production and downside risk functions, estimation results show that the adoption of SIPs increases food security and reduces downside risk exposure and the cost of risk. We estimate greater food security and larger reduction in downside risk from simultaneous adoption of both crop diversification (maize–legume intercropping and rotations) and minimum tillage, suggesting that there are complementary benefits from these practices. We find most of the cost of risk comes from exposure to downside risk. Our findings imply that in dealing with production risks development agents should encourage the adoption of agronomic and resource‐management practices along with other risk mitigation and food security improving strategies.     

Evaluating environmental policies under uncertainty through application of robust nonlinear programming

Environmental policy evaluation is characterised by a paucity of information. The novel technique of robust mathematical programming is introduced as a means to proactively account for this uncertainty in policy analysis. The procedure allows identification of expected bounds on the range of abatement costs associated with environmental policy. It also has the advantage of not limiting conclusions to realisations of specific point estimates or probability distributions. Empirical insights are provided in an application to a New Zealand inland lake threatened by nitrate pollution from dairy farming. Overall, this novel framework is demonstrated to have several key advantages, including explicit treatment of severe uncertainty, capacity to bound the range of expected abatement costs accruing to a given policy instrument, and the opportunity to identify robust plans that are immune to parametric variation.     

Agents for diffusion of agricultural innovations for environmental outcomes

In New Zealand, local governments are tasked with both sustainably managing natural resources and supporting adoption of practices and technologies for environmental outcomes. Unfortunately, farmers in New Zealand lack trust in advice on environmental performance provided by local governments. Hence, local governments may seek to partner with others to disseminate information about environmentally friendly practices and technologies to farmers. Empirical evidence indicates that New Zealand farmers are more likely to adopt new practices after seeing them successfully demonstrated; therefore, local government would do well to partner with those who have tried the practices themselves and those with large farmer networks. In this paper, we use unique survey data to identify the characteristics of such “innovators” and “connectors”. We also identify the characteristics of individuals who trust environmental information provided by local governments. We find that sex, age, education level, financial robustness, farm size, and the number of distinct land uses are correlated with both innovativeness and connectedness. However, among these characteristics, only education and financial robustness predict trust in environmental information provided by local governments.     

Values,trust, and management in New Zealand agriculture

This study provides empirical evidence of the link between outlook and practice among farmers, foresters, and growers in New Zealand. Specifically, we use a large, nationally representative survey to assess how foci on production and environmental outcomes influence the adoption of six good management practices aimed at increasing agricultural sustainability. We then show that while environmentally oriented and production-oriented decision-makers are statistically more prepared to take risks, all rural decision-makers are more likely to adopt new technologies and good practices after seeing their relative advantages successfully demonstrated. Next, we show that social and professional networks are small, often limited to five or fewer operators, which begs the question about how the risk-averse operators become informed about good practice. Hence, we ultimately analyse trust in order to identify other credible demonstrators or informants. We find that veterinarians are the most trusted source of information and that government (at all levels) is the least.     

Estimating Input Complementarities with Unobserved Heterogeneity: Evidence from Ethiopia

The level of technology adoption is often characterised as low in Africa. Recent evidence, however, points to the coexistence of substantial heterogeneity across farm households and the lack of a suitable mix of inputs for farmers to take advantage of input complementarities. We use a random coefficients multivariate probit model to quantify the complementarities between agricultural inputs and alternative forms of unobserved heterogeneity effects in modeling farmers' technology adoption decisions. The empirical analysis reveals that, conditional on various types of unobserved heterogeneity effects, farmers' technology adoption decisions exhibit strong complementarity for some inputs. The analysis also reveals substantial unobserved heterogeneity effects. We show that ignoring these behavioural features (unobserved heterogeneity and input complementarity) has important implications in quantifying the effect of some policy interventions that are meant to facilitate technology adoption. In particular, ignoring these features leads to significant overestimation of the effectiveness of extension services.     

The optimal diffusion of mitigation options for environmental management

A new direction for evaluating pollution policy is proposed, focused on optimal investment pathways for mitigation capital. The approach allows practitioners to draw directly from key principles in the diffusion literature. A two‐stage, policy‐development framework is introduced. The first stage consists of empirical modelling to assess optimal diffusion pathways for diverse mitigation options. The second involves determining the relative strengths of different policy actions to address diffusion rates or maximum levels of adoption that diverge from optimal levels. The advantages of this new approach are demonstrated in an agri‐environmental context, concerning the off‐site impacts of intensive agriculture on water quality. The viewpoint provided by the novel approach establishes the importance of adoptability – alongside the traditional measures of abatement effectiveness and cost – for mitigation practices in policy assessment. The key role that durable mitigation capital plays in addressing dynamic externalities is demonstrated, alongside the importance of structured diffusion cascades for alternate mitigation options.     

A pragmatic approach for soil erosion risk assessment within policy hierarchies

This paper presents a methodological framework for scale-specific assessment of soil erosion by water. The framework enables the definition of hierarchical, functional and modular nested reference units which result from the integrated consideration of policy, process and model hierarchies. The framework is applied on three planning levels: at first, large scale zones are designated that show a defined risk potential for soil erosion (first level: catchments and drainage areas in the German Federal State of Saxony-Anhalt, ca. 20,000 km²). By both increasing model complexity and spatio-temporal resolution of input data, the results are locally specified within these risk zones (second level: designated farms and fields in a study area of 141 km²). This is the basis for the prediction of soil erosion areas and sediment transport to hydrologic drainage networks as well as for small scale management and measure planning (third level: designated field blocks in the study area). On this level, the mitigation of soil erosion and sediment entry to the river system is demonstrated by simulating the introduction of conservation management practices, vegetation and riparian buffer strips.     

Adoption of soil conservation practices in Belgium: An examination of the theory of planned behaviour in the agri-environmental domain

Soil erosion is a problem with serious on-site and off-site consequences. There exists a broad series of measures to mitigate soil erosion, unfortunately policy makers observe little voluntary adoption. This paper reports on a study to elicit the factors explaining adoption of soil erosion control practices in Belgium. Following a socio-psychological approach, the theory of planned behaviour (TPB), adoption of cover crops, reduced tillage and buffer strips is evaluated using linear regression techniques. Results show that the most explaining factor is attitude towards the soil conservation practice. The TPB adapted to include perceived control and difficulty appears to provide a suitable framework for evaluating adoption of erosion control measures in Belgium. Future interventions directed at promoting erosion control measures should be directed at changing the attitude of farmers. Further study is, however, required in order to elucidate the cognitive foundations of the negative attitude of a majority of farmers towards the implementation of erosion control practices.     

Land titling policy and soil conservation in the northern uplands of Vietnam

In Vietnam, a quasi-private property regime has been established in 1993 with the issuance of exchangeable and mortgageable long-term land use right certificates. Using primary qualitative and quantitative data collected in a mountainous district of Northern Vietnam, this paper investigates the role of the land policy in the adoption of soil conservation technologies by farmers. This issue is of crucial importance in the region where population growth and growing market demands have induced farmers to intensify agricultural production. While poverty has been reduced, environmental problems such as soil erosion, landslides, and declining soil fertility have become more severe over the past years. Our findings suggest that despite farmers’ awareness of erosion, soil conservation technologies are perceived as being economically unattractive; therefore, most upland farmers continue to practice the prevailing erosion-prone cultivation system. Focusing on agroforestry as one major soil conservation option, we estimate household and plot-level econometric models to empirically assess the determinants of adoption. We find that the possession of a formal land title positively influences adoption, but that the threat of land reallocations in villages discourages adoption by creating uncertainty and tenure insecurity. The analyses reveal that these two effects interact with each other but are of small magnitude. We conclude that the issuance of land titles is a necessary but not sufficient prerequisite to encouraging the adoption of soil conservation practices. However, current practices remain economically unattractive to farmers. This deficiency needs to be addressed by interdisciplinary research and complemented by strong efforts by local authorities to promote sustainable land use.     

Changes in Brazil’s Forest Code can erode the potential of riparian buffers to supply watershed services

In Brazil, the Forest Code requires landholders to maintain fixed-width buffers of native vegetation along watercourses – legally called Areas of Permanent Preservation (APPs). In 2012, agricultural activities started to be partially allowed in APPs, but only if best management practices on soil and water conservation are adopted and if a narrow buffer strip with native vegetation is restored adjacently to the watercourse. In this paper, we present a modeling framework to investigate the capacity of legal compliant APPs to supply watershed services (erosion control and stream bank stabilization) in a 2,200 ha watershed in São Paulo State, Brazil. Our results suggest that the narrower the riparian buffer the lower the control of soil erosion dynamic within APPs, and that riparian buffers smaller than 8 m can act as a source of sediments to streams. The adoption of best management practices can contribute to controlling soil erosion within APPs but the presence of native forests in the first 15 m is necessary to guarantee equivalent protection to streams when compared to APPs completely covered by forests. Moreover, we observed that forest restoration within APPs helped to reduce the average soil loss of the watershed by only 20 %, compared to a reduction of 55 % when best practices are implemented in all watershed agricultural areas. We conclude that (i) the reduced requirements for APP restoration may contribute to stream sedimentation, which will likely affect the supply of watershed services by stream ecosystems; (ii) the implementation of best management practices in APPs will not have the same effect as native forests to reduce stream sedimentation; and (iii) the adoption of best management practices in all agricultural production areas – and not only within APPs as required by law – is the best strategy to promote the supply of watershed services to society.     

Enhancing ecosystem services through afforestation: How policy can help

We employ an integrated spatial economic model to assess the net private and public benefits of converting marginal agricultural land into forest plantations (afforestation) in New Zealand. For numerous locations, we conduct policy analysis considering the magnitudes of net private and public benefits of land use changes to determine whether a policy response is justified and, if so, to identify the appropriate policy instruments to encourage adoption of afforestation. Net private benefit is commonly negative, so much so, that in most cases no policy response is justified. However, in certain cases, net private benefits are slightly negative and public benefits are significantly positive justifying the use of positive incentives as the most appropriate policy instrument to encourage afforestation in New Zealand. The most commonly used policy instruments for afforestation in New Zealand, extension and awareness training, are found to be appropriate in only a minority of situations.     

The influence of farm input subsidies on the adoption of natural resource management technologies

Farm input subsidies are often criticised on economic and ecological grounds. The promotion of natural resource management (NRM) technologies is widely seen as more sustainable to increase agricultural productivity and food security. Relatively little is known about how input subsidies affect farmers’ decisions to adopt NRM technologies. There are concerns of incompatibility, because NRM technologies are one strategy to reduce the use of external inputs in intensive production systems. However, in smallholder systems of Africa, where the average use of external inputs is low, there may possibly be interesting complementarities. Here, we analyse the situation of Malawi's Farm Input Subsidy Program (FISP). Using panel data from smallholder farm households, we develop a multivariate probit model and examine how FISP participation affects farmers’ decisions to adopt various NRM technologies, such as intercropping of maize with legumes, use of organic manure, water conservation practices and vegetative strips. As expected, FISP increases the use of inorganic fertilizer and improved maize seeds. Yet, we also observe a positive association between FISP and the adoption of certain NRM technologies. For other NRM technologies, we find no significant effect. We conclude that input subsidies and the promotion of NRM technologies can be compatible strategies.     

Designing Policy for Reducing the Off‐farm Effects of Soil Erosion Using Choice Experiments

Soil erosion produces both on‐site private costs and off‐site social costs, such as desertification, rural depopulation, siltation of waterways and reductions in biodiversity. To design efficient policies, land use planners and decision makers need information on the relative weights of changes in these consequences, since policy alternatives, such as different management restrictions, will have varying impacts on these consequences of erosion. The research presented here uses the choice experiment method to evaluate these relative weights, using a case study in the Alto Genil and Guadajoz watersheds in southern Spain. We find that reductions in desertification, protection of water quality, protection of biodiversity, the area covered by the scheme, and the number of rural jobs safeguarded are all significant determinants of preferences over alternative policy designs.     

Cost‐effective regulation of nonpoint emissions from pastoral agriculture: a stochastic analysis

Nutrient emissions from pastoral agriculture are a global cause of declining water quality. Their management is complicated through variability arising from climate and soil influences. This paper compares the implications of input‐based policies and direct restrictions on leaching to achieve 10 and 20 per cent reductions in nitrogen (N) load, in the context of pasture‐based New Zealand dairy farms. The most important mitigation practices on these farms are de‐intensification (involving reductions in N fertiliser application and stocking rate) and the application of nitrification inhibitors. A stylised conceptual model, incorporating both sources of variability, is used to identify the implications of alternative policies. Direct restriction of estimated N leaching is the most cost‐effective policy to reduce N leaching by 10 and 20 per cent. These results indicate the general insufficiency of input‐based mechanisms for water quality improvement, given the low correlation between input use and leaching, possible substitution with unrestricted inputs and their failure to motivate the use of mitigation strategies. Additionally, model output indicates that inherent variability in water quality, mainly due to climate influences, can dominate the benefits of regulatory action in any given year.     

Combining management plans and payment schemes for targeted grassland conservation within the Habitats Directive in Saxony,Eastern Germany

As central policies for biodiversity conservation in agricultural landscapes in the European Union (EU), the Habitats Directive and Agri-environmental programmes (AEP) have largely failed to halt biodiversity loss. In response, the German federal state of Saxony combined the instrument of management plans with AEPs to support the implementation of the Habitat Directive. In this study, we investigate the determinants of a farmers’ decisions to adjust their farming practices. Our data set consists of a quantitative survey with 131 farmers conducted between 2004 and 2011, complemented by implementation data from 333 grassland-plots. Determinants of farmers’ decisions to conserve grassland were estimated using a multinomial logit model. Our results show that a combination of management plans and AEPs can increase farmers’ disposition to adopt nature conservation measures. As central determinants, structural and location factors as well as the complementary provisiion of specifically designed AEPs increase farmers’ willingness to adopt conservation practices for grassland management. It can be concluded that additional costs are a major barrier to farmers’ adoption, particularly to those farms directing their farm management towards the optimisation of productivity and profitability . The findings highlight the complementary potential of integrated policy packages to incentivise specific measures of nature conservation within the framework of the Habitats Directive.     

Empirical evaluation of nonpoint pollution policies under agent heterogeneity: regulating intensive dairy production in the Waikato region of New Zealand*

Models used for policy evaluation rarely consider firm heterogeneity, despite its importance for instrument design. This study considers agent heterogeneity explicitly in the evaluation of policies for nonpoint pollution control through the integration of decomposition and calibration procedures for programming models. The application concerns the regulation of nitrate leaching from intensive dairy production in the Waikato region of New Zealand. Failing to represent firm heterogeneity leads to widely different estimates of mitigation costs, relative to where heterogeneity is considered. Variation in baseline emissions and the slopes of abatement cost curves between firms renders a differentiated policy less costly than a uniform standard. However, the relative values of these policies are not broadly different, as firms required to do the most abatement – intensive farms with large baseline pollutant loads – can do so more cheaply, on average.