No one-size-fits-all: modeling regional environmental and economic performance of diversification from dairy farming

Agriculture in New Zealand has historically prioritized specialized monocultures such as dairying, now under increasing scrutiny for environmental impacts. This study evaluated the potential of land-use diversification to improve environmental outcomes, measured as greenhouse gas emissions and nitrogen and phosphorus losses to water, while maintaining economic performance, assessed through profitability and labor demand (full-time equivalents). Scenarios incorporated varying proportions of arable, horticultural, and forestry land uses on farms representative of six major dairy regions. Results demonstrated that horticulture often improved profitability and labor demand while reducing nutrient losses, although the magnitude varied by region. Arable systems showed mixed effects on nutrients and greenhouse gas losses and profitability. Forestry consistently reduced nutrient losses and greenhouse gas emissions. A loss of jobs at the catchment and community scale can be avoided if employment decreases from forestry are confined to noncontiguous areas at farm scale. These findings have direct implications for those trying to use diversification to achieve catchment scale environmental and economic objectives. The contrasting outcomes highlight the need for collective, regionally specific decision-making to manage the role that on-farm diversification may play in achieving catchment outcomes.