Browsing by Subject "nutrient run-off"

In this thesis, we construct a model capable of analyzing the management of a dairy farm with relation to nutrient run-off. Overall goal is to include main characteristics of a dairy farm management, while keeping the model simple enough to allow analytical approach. Especially, animal nutrition, and its effect on milk production and manure composition, is included. The difference between private and social optima is analyzed, followed by derivation of optimal policy instruments. Also, the efficiency of certain simplified policies is examined. All decision variables gain different values in private and social optima. However, the magnitude and sign of these differences is dependent on the functional forms and parameter values. Optimal policy instruments should be implemented on manure and commercial fertilizer applications, concentrate feeding and silage production. No instrument is needed to control herd size. The optimal instruments are, however, exceedingly complex. The efficiency of the simplified policies cannot be analyzed generally; They are also dependent on functional forms and parameter values. Numerical results suggest a smaller herd size, lesser concentrate feeding, more silage acreage and lesser fertilization in the social optimum. Manure application pattern over distance differs. Both optima display a rising application rate when approaching the farm centre. In the private optimum, all left-over manure is dumped on the closest parcel, while, in the social optimum, manure is applied in a more linearly declining fashion. The difference in social welfare is relatively small, but can be magnified if the optimal herd size rises significantly, due to an increased need to dump manure on the closest parcel. Fertilization constraint and fertilizer taxes can be used successfully to improve social welfare and to mitigate run-off damages. Herd size restrictions and manure transport subsidies, on the other hand, proved to be less successfull.