The development of a simulation model of an extensive pastoral farming system to assist analysts in their assessment of government policy measures is described. The model was designed to simulate, over a number of years, the physical and financial operation of a sheep and beef production system typically found in the North Island hill country of New Zealand. By manipulating model parameters and data related to prices, costs, taxation and credit, a range of policies can be represented and their effects simulated. The model is used to undertake an ex post analysis of the farm-level impact of the supplementary minimum price scheme in New Zealand and to project farm performance following the abolition of the scheme. Consideration is given to the use of the model to represent sheep and beef production systems elsewhere.Extensive pastoral production systems are widespread throughout the world and there has been a significant research effort over recent years aimed at improving animal production and management standards in these systems. An important contribution to this effort has been made through the development of bio-economic simulation models which facilitate the evaluation of alternative management strategies under a range of environmental and economic conditions.A number of such models which specifically relate to extensive beef production systems were reviewed by Chudleigh and Cezar (1 982) and include models applicable to the Pampas area of Argentina (Brava 1 970; Fujita 1974), the Cerrado region of central Brazil (Monteiro, Gardner and Chudleigh 1980), semi-arid areas of Kenya (Simpson, Cunawardena and Wynne 1977) and Botswana (Anderson and Trail 1978), and pastoral areas in Australia (Reeves, Sekavs, Abel and Cottingham 1974; Beck, Harrison and Johnston 1982).In contrast to this development of 'management' models for extensive pastoral systems, relatively little work appears to have been done to facilitate the assessment of the effect of government policy and other external socio-economic factors in such systems. Methodology to achieve this objective is available and could be expected to make a useful contribution to the process of policy planning and evaluation (Baum and Schertz 1983).This paper is concerned with the development and application of a farm-level policy model of an extensive pastoral farming system. Within the context of policy evaluation models, such farm-level models are justified on the grounds that they can be used to simulate, explicitly and in detail, the physical and financial operation of farming systems. In this way they indicate farm-level response to changes in various aspects of the physical, financial and socio-economic environment. Some of 7 Dent * Tony Beck is now at the Bureau of Agricultural Economics, Canberra and Bar is at the School of Agriculture, University of Edinburgh. The research was partly unded by the New Zealand Ministry of Agriculture and Fisheries.29 Copyright 1987 The Australian Agricultural Economics Society.
AUSTRALIAN JOURNAL OF AGRICULTURAL ECONOMICS
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