Mr Frank Scrimgeour, University of Waikato, New Zealand. Global Symposium on Soil Erosion (GSER19), 15 - 17 May 2019 at FAO HQ.

1. Economic Analysis of Soil Erosion
Control in New Zealand:
Preliminary Identification of Benefits,
Costs and Investment Priorities at
the National Level
Frank Scrimgeour
University of Waikato
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2. Introduction -Soil Erosion Control in NZ
The challenge
• Pastoral agriculture associated with unstable hills and
mountains
• Damage to productive land and offsite environments
The origins of the challenge
• Grazing the high-country
• Converting bushland to pasture
• Careless earthwork
Contemporary action
• Legislation
• Scientific research and monitoring
• Improved farm practice
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3. Economic Analysis of Soil Erosion Control
History
• Theory – Burt (1981); McConnell (1983)
• Krause et al (1991); Jones et al (2008); Daigneault et al (2017)
The motivation
• To inform investment decisions
• The level of investment
• The priorities for investment
The obstacles
• Diverse bio-physical environments & diverse land-use
• Cost estimation through time
• On-site benefit estimation though time
• Off-site benefit estimation though time
• Aggregation of benefits and costs
• The combination continuing erosion and occasional shocks
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4. An Economic Model of Soil Erosion
The objective
• Maximising the net benefits from soil through time
• Addressing on-farm and off-farm benefits and costs
The benefits from soil
• Agricultural production
The costs of soil erosion
• Lost farm production
• Lost farm infrastructure
• Adverse effects on external lands
• Adverse effects on external water quality
The costs of controlling soil erosion
• Reduced production
• Investment in structure and vegetation
• Overhead costs falling on land owners and government
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5. 5
An Economic Model of Soil Erosion Control

6. Agricultural Land-use in NZ
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# of properties size (ha)Total area Erodability
1 Sheep & Beef: South Island High country 215 7,975 1,714,625 High
2 Sheep & Beef: South Island Hill country 810 1,495 1,210,950 Medium
3 Sheep & Beef: North Island Hard hill country 1,065 771 821,115 High
4 Sheep & Beef: North Island Hill country 3,640 420 1,528,800 Medium
5 Sheep & Beef: North Island Intensive finishing 1,275 281 358,275 Low
6 Sheep & Beef: South Island Finishing breeding 2,505 443 1,109,715 Low
7 Sheep & Beef: South Island Intensive finishing 1,290 227 292,830 Low
8 Sheep & Beef: South Island Mixed finishing 495 394 195,030 Medium
9 Dairy: North Island 8,377 127 1,063,879 Low
10 Dairy: South Island 3,213 214 687,582 Low
11 Forestry: North Island na na 1,204,318 High
12 Forestry-South Island na na 502,112 Medium
13 & 14 Horticulture na na 126,135 Medium
22,885 * 10,815,366
* The number of forestry and horticulture units is subject to dialogue about definition.

7. Estimation of Costs and Benefits at the
Property Level
• An initial approach using secondary data
• Review of publications describing soil erosion
and remediation
• Review of published data on farm costs and
expenditure on erosion control
• Review of publications on river water quality.
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8. Annual Costs of SEC
Per farm
costs
Total On farm
costs
Total Off farm
costs
Total Erosion
Costs
Sheep & Beef $126,192,638 18,928,896 145,121,533
Dairy $91,951,703 4,597,585 96,549,288
Forestry na $60,596,086 6,059,609 66,655,694
Horticulture na $49,770,601 3,732,795 53,503,396
Total na $328,511,026 33,318,884 361,829,911
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9. Annual Benefits of SEC
Total On farm
Benefits
Total Off farm
Benefits
Total Benefits
Sheep & Beef $94,644,478 $141,966,717 $236,611,195
Dairy $73,561,362 $147,122,724 $220,684,086
Forestry $15,149,021 $75,745,107 $90,894,129
Horticulture $42,305,010 $52,881,263 $95,186,274
Total $225,659,872 $417,715,811 $643,375,684
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10. Per Farm Net Benefit to NZ from SEC
Farm Type Ranking
SI High Country (C1) 1
NI Hard Hill Country (C3) 2
SI Hill Country (C2) 3
NI Hill Country (C4) 4
SI Mixed (C8) 5
SI Intensive (C7) 6
SI Finishing (C6) 7
NI Intensive (C5) 8
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11. Conclusions
• There is significant benefit from investment in soil
erosion control.
• Further modelling is required to refine the estimates
• There is significant heterogeneity in benefits and
costs across land use and location.
• The refined results are sufficiently robust to inform
high level investment and policy analysis.
• The off-farm benefits are sensitive to benefit
transfer calculations which in turn are sensitive to
the interaction with policy and the changing
economic and social environment.
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12. Caveats
• Estimates are preliminary and will be revised
• Results are sensitive to:
• Input data on on-farm benefits and costs
• Input data on off-farm benefits and costs
• Levels and methods of aggregation
• The challenge can be categorised as:
• Biophysical data challenges
• Economic analysis challenges; and
• Environmental accounting challenges;
• Information system challenges
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