Farm scale assessment of the impacts of biodiversity enhancement on the financial and environmental performance of mixed livestock farms in New Zealand

In New Zealand, 25% of the remaining indigenous vegetation cover is found on mixed livestock farms located predominantly in hill country. Despite evidence that adding natural capital stocks in the form of biodiversity enhancement is likely to increase the provision of ecosystem services on and off farmland, quantitative data are largely lacking. This research takes a case study approach to providing an evaluation of the implications of advancing a biodiversity enhancement programme on the financial and environmental performance of three mixed livestock farms across New Zealand. The research used a farm system optimisation model to quantify the effects of biodiversity enhancement on different aspects of the farm business. The three farms studied varied in size, geo-climatic zones, amount of indigenous vegetation and the size of the proposed biodiversity enhancement programme. Shifting even a small part of farmland from grazing to biodiversity enhancement affects farm system design, resulting in changes to the livestock policy, sale and purchase dates of livestock and the grazing management plan. These changes also affect farm revenue, Net Present Value and annuity, all of which declined by 3–9% across the three farms over the 10 years modelled. However, after implementation of the biodiversity enhancement programme, there was a small increase in the annuity per hectare grazed compared with the Base farm scenario for two of the three farms studied. The provision of other ecosystem services was quantified on one farm, and in sharp contrast, these increased, which included greenhouse gas regulation with additional C storage and decreased GHG emissions, and increased filtering and nutrient retention resulting in a reduction in N and P losses to water. Biodiversity enhancement on farm has the potential to improve aesthetics, increase sense of place, recreational and spiritual values and provision of other food products. The current study highlighted the fact that our current farm system models lack the capability to provide quantitative information on the provision of ecosystem services at the farm scale, and do not include all the natural resources across different areas of the farm. This should be a priority in the future.