Modelling the economic opportunities for development of marginal hill country in a South Island high country system

Abstract

The South Island high country makes up 15% of New Zealand’s total land area. Farm systems in this environment are typified by large expanses of low producing land and extensive livestock operations. Increasingly the potential to increase system intensity in the high country through developed and specialised pastures is being realised and as a result there is a growing interest in high country land development. This interest and potential for increase in farm productivity and profitability from land development form the basis for this study. The feasibility and economic opportunity for development of marginal hill land in a South Island high country environment was investigated based on farmer case study information, and computer based modelling using Farmax Pro and Microsoft Excel linear programming. Five scenarios were produced to highlight a range of land use options and potential development outcomes above that of the baseline, Oversown Hill, model. Development scenarios include, intensively cropped pasture of Plantain/Red Clover on both areas of flat and steep topography, permanent grass/clover pasture on steep topography, and a Selective Development scenario combining areas of undeveloped land, intensive Plantain/Red Clover, and Fodderbeet winter forage crop. The scenarios were produced based on a combination of historic data gathered from farmer interviews and assumptions drawn from appropriate literature. All scenarios were constructed and analysed using Farmax Pro and then reproduced in a Microsoft Excel linear programme as a means of result validation. Scenarios were based on production from a Romney maternal ewe flock with the driver being to maximise livestock productivity from the available area, 100ha. The key metric for success of development scenarios was profitability, measured as EBIT/ha.