This study explores using large language models (LLMs) to simulate policy-making in land systems. We integrated LLMs into a land use model and simulated LLM-powered institutional agents steering meat production by taxation. The results show LLMs can generate boundedly rational policy-making behaviours that can hardly be modelled using conventional methods; LLMs can offer the reasoning behind policy actions. We also discussed LLMs’ potential and challenges in large-scale simulations.