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Much land has been cleared of indigenous forest for pastoral agriculture worldwide. In New Zealand, the clearance of indigenous forest on hill country has resulted in high food production, but waterways have become turbid, with high nutrient and E. coli concentrations. A range of on-farm mitigations are available, but it is unclear how they should be applied catchment-wide. We have developed a catchment-scale model that integrates economics with ecosystem services to find a better balance between agriculture and nature. In the upper Wairua catchment, Northland, if three actions are prioritised—(1) keeping stock out of streams, (2) constructing flood retention bunds in first-order catchments, and (3) planting trees on highly erodible land—then sediment loads, E. coli levels, and flooding are significantly reduced. Implementing these actions would cost approximately 10% of catchment net revenue, so it is feasible with a combination of regulation and subsidy. Many catchments in New Zealand are primarily pastoral agriculture, as in other countries (in North and South America, Australasia, and the United Kingdom), and would benefit from the analysis presented here to guide development along sustainable pathways. While pastoral agriculture typically stresses waterways, with increased sedimentation and freshwater contaminants, much can be done to mitigate these effects with improved farm and riparian management. [ABSTRACT FROM AUTHOR]

Agriculture is important to New Zealand’s economy. Like other primary producers, New Zealand strives to increase agricultural output while maintaining environmental integrity. Utilising modelling to explore the economic, environmental and land use impacts of policy is critical to understand the likely effects on the sector. Key deficiencies within existing land use and land cover change models are the lack of heterogeneity in farmers and their behaviour, the role that social networks play in information transfer, and the abstraction of the global and regional economic aspects within local-scale approaches. To resolve these issues we developed the Agent-based Rural Land Use New Zealand model. The model utilises a partial equilibrium economic model and an agent-based decision-making framework to explore how the cumulative effects of individual farmer’s decisions affect farm conversion and the resulting land use at a catchment scale. The model is intended to assist in the development of policy to shape agricultural land use intensification in New Zealand. We illustrate the model, by modelling the impact of a greenhouse gas price on farm-level land use, net revenue, and environmental indicators such as nutrient losses and soil erosion for key enterprises in the Hurunui and Waiau catchments of North Canterbury in New Zealand. Key results from the model show that farm net revenue is estimated to increase over time regardless of the greenhouse gas price. Net greenhouse gas emissions are estimated to decline over time, even under a no GHG price baseline, due to an expansion of forestry on low productivity land. Higher GHG prices provide a greater net reduction of emissions. While social and geographic network effects have minimal impact on net revenue and environmental outputs for the catchment, they do have an effect on the spatial arrangement of land use and in particular the clustering of enterprises. [ABSTRACT FROM AUTHOR]