The impact of river access rules on dairy farm incomes: A case study of the Williams River

Concern over river health has prompted the New South Wales (Australian) Government to consider the imposition of minimum flow standards in the state's rivers. In this paper, a case study of dairy farms in the Williams River valley is presented, which quantifies the opportunity cost of the irrigator access rules proposed for this river. The analysis is conducted using a bioeconomic model which combines the simulation of climatic conditions and pasture growth, with an optimisation procedure that represents farmers' responses to realised seasonal conditions. The approach allows the dynamic aspects of the pasture management problem to be simulated whereby fodder storage can be used as a means of managing the increased climatic risk brought about by restricting access to the river. (C) 1998 Elsevier Science Ltd. All rights reserved.