Skip past navigation to main part of page
Land and Environment : Agribusiness Assoc. of Australia

Agribusiness Perspectives Papers 1999

Venturing In Food and Agribusiness

Brian Hanley, Chief Executive Officer and Stuart Giglia, Associate - Gresham Rabo Management Limited

Paper 20, 9 June 1999


The food and agribusiness industries of Australia and New Zealand are economically important, diverse, largely inaccessible to public capital markets and entering the threshold of fundamental change.
Australia may have abandoned its "riding on the sheep's back" rhetoric, but the investment community at large has yet to fully appreciated the difference between Agriculture and Agribusiness. Agribusiness refers to the industry or activity that is involved in the transfer of primary products, such as wheat and wool, to manufactured goods or services - value adding. Agriculture is the production of the previously mentioned commodities.
The economic credentials of the food and agribusiness sectors highlight the important levers of change that will generate investment opportunities, and demonstrate the case for venture capital to these industries

A Simplified Benefit- Cost Calculator to Foster Research Evaluation and Monitoring

Barry White,
AGEC Consulting, Indooroopilly, Queensland

Paper 21, 22 June 1999


Increasing use of Benefit-Cost Analysis (BCA) in ex ante research evaluation has not been accompanied by consensus on the increased returns flowing from the evaluation effort. There are likely to be a wide range of views held by researchers, agricultural economists and research managers on how evaluation can be made more effective. The paper draws on the author's experience in the evolution of BCA in research evaluation to propose how the current state of the art might be advanced.
A BCA calculator is presented which enables a BC ratio to be simply and accurately determined. Inputs are total costs and their duration, potential benefits, and the adoption lag and rate. The adoption data, for example, is used in a table to look up the appropriate factor for the sum of discounted benefits. The calculator is likely to be seen as a somewhat oblique approach for those now accustomed to using the same inputs in a spreadsheet. 
However, the more likely role is as an introductory tool for researchers and research managers which is easier to understand, convenient and transparent. Further, the calculator shows that the effort in BCA calculations is trivial compared to that required to determine the input data. The calculator could also add to an evaluation approach which is competitive and indeed superior to more intuitive and less accountable approaches to resource allocation decisions. More widespread use of ex ante BCA, coupled with ongoing monitoring, are seen as the essential priorities for research evaluation. Monitoring can convert estimates of key inputs such as adoption patterns from an artful art to a science.

The Asia-Pacific Rice Trade: A preliminary investigation of the issues

Dr. Brian Davidson and Nanette Esparon
Department of Food Science and Agribusiness, Institute of Land and Food Resources, The University of Melbourne, Parkville

Paper 22, 25 June 1999


Rice is a vital food crop to a vast majority of the world's population. With continuing growth in world population and with the added concerns of the Asian Economic Crisis, the pressure is growing to create another green revolution to meet the world's food needs. Under such a scenario, it has been argued that investment in irrigation infrastructure projects and higher yielding varieties of rice is needed to feed more people. The importance of rice to many countries, especially in Asia, has meant that governments have instituted policies that promote greater self-sufficiency in rice. Consequently only four per cent of world production of rice is traded across national boarders. 
From a theoretical standpoint, the approach of promoting self-sufficiency by restricting trade is not beneficial to either the country that imposes the policy or to exporting countries, and yet it is the approach most commonly favored by legislators and producers concerned with food shortages. 
The aim in this study is to investigate the literature on patterns of rice production and trade in the Asia - Pacific region to ascertain whether the issues of trade liberalisation have been adequately addressed. It is concluded that what is required is an assessment of the political economy of the rice trade, so that the political economic processes are understood, and not just the economic and technical processes. The construction of current, comprehensive trade model would assist in the estimation of the effects of the trade liberalisation process. This dual political and economic approach overcomes many of the shortcomings of previous partial economic analyses of the rice trade.

Alternative enterprises on New Zealand farms: Obstacles, challenges and potential

C. Nicholas Taylor and Heather McCrostie Little. Taylor Baines and Associates, Rangiora, North Canterbury, New Zealand and Ruris Consultancy Cust, North Canterbury, New Zealand
Paper 23, 14 July 1999


Family farming remains the organisational platform for agricultural production in New Zealand. Since the early 1980s, New Zealand farm families have increasingly sought to diversify their sources of income away from the core farm business operation including off-farm employment and on-farm enterprises. Alternative farm enterprises are a response to economic restructuring and reflect an emerging private enterprise culture. 
These enterprises range across a number of sectors and a characteristic is their niche nature and the ability of the farm entrepreneurs to adapt to market demands and command competitive marketing strategies. The enterprises can be run separately from the farm operation having no connection with or influence on land use. Or, they can be integrated with existing or changed forms of land use. Unlike the farm operation, there is no distinct gender division of roles or decision making, and the enterprises offer distinct entrepreneurial opportunities for women. 
Obstacles are not so much capital, skills or flair, but lie in legislation and administrative barriers, or 'red tape'. Scale is important and requires decisions about growth and diversification of enterprises in relation to personal and family goals. Enterprise cultures at the farm level require supportive networks, community awareness and pro-active business policies from local and central government.

From Farm Labourer To Food Technologist - A Century Of Radical Change In Farm Employment 1900-1999.

Rupert S. Tipples,
Senior Lecturer in Employment Relations, Lincoln University, Canterbury, New Zealand
Paper 24, 20 July 1999

The Virtually Integrated Enterprise: A Case Study

Cliff Johnson & Dr Ernst Luthi
Paper 25


Developing an organizational chart that ignores traditional boundaries of ownership and management.

Legal Aspects of Exporting: Risks and How to Reduce Them

S.C. Williams
Graduate School of Management - University of Queensland

Paper 26


Australian producers, manufacturers, processors, and service providers have been exporting successfully for more than two hundred years. They are part of a system of international trading activity and business conduct that has evolved over the centuries from the independent business dealings of many (mainly small) entrepreneurs . This has generated a set of agreed principles that have resulted in not only the creation and maintenance of an informal "international businessman's code" that governs the way business is done, but also forms the basis for much of the international law , public and private, that governs trade and stands ready to enforce compliance with the rules. Such principles include the keeping of promises, fair dealing, good faith, courtesy and communication. One might expect that exporters would be sure they had some understanding of the legal systems and environments they are dealing with, but research done by the author and others suggests otherwise.

The Australian Pig Industry Crisis - An Unexceptional Circumstance!

Glenn Ronan
Principal Economics Consultant - Cattle & Intensive Animal Industries - Primary industries and Resources, South Australia.

Paper 27, 26 August 1999


The collapse in Australian pig prices during 1997/98 to their lowest levels in three decades triggered the third industry economic crisis for the nineties, appeals for government assistance and relief from pigmeat import competition. Two national inquiries were instigated in 1998: a Rural Adjustment Scheme Advisory Council (RASAC) Exceptional Circumstances inquiry and later, a Productivity Commission (PC) inquiry, "Pig and Pigmeat Industries: Safeguard Action Against Imports". The PC inquiry also examined factors affecting the competitiveness of the Australian pig and pigmeat industries.
RASAC concluded that the pig industry crisis did not fit the criteria for 'exceptional circumstances' assistance. The Federal Government response has included: the National Pork Industry Development Program (NPIDP) to help adjust the industry to an export focus and the Pigmeat Processing Grants (PPG) program for upgrading pig abattoirs to export standard. Economic studies to benchmark the production and processing industries are proceeding and an Export Marketing Council has been formed to facilitate export trade. Funding for pig farmer training under the FarmBis program was also promised.
A 1992 inquiry by the Australian Customs Service into dumping and subsidisation of Canadian pork found no injury from imports and a 1995 Industry Commission inquiry, Pigs and Pigmeat, found little influence of imported pigmeat on domestic pig prices. The 1998 PC inquiry, which reported in November, 1998, is of particular interest because it is a precedent 'safeguard action against imports' inquiry by Australia under World Trade Organisation (WTO) rules.

Economic Analysis of Honey Bee Disease Management Strategies for the South Australian Apiary Industry

Glenn Ronan and Elena Petrenas - Principal Economics Consultant, Cattle & Intensive Animal Industries and Project Officer, Apiary Industry & Meat Hygiene - Primary Industries & Resources SA
Paper 28


A range of honey bee disease management options were evaluated on disease prevalence and economic criteria as part of an SA Government appointed Apiary Task Force to select and implement a 'best' strategy for industry and government. Importantly, the terms of reference specified that the strategy should also lead to greater self-reliance in disease control by the apiary industry in the next two years.
Three economic 'screens' were applied to aid program evaluation - market failure, public:private benefit and benefit:cost analysis. 'Quality assurance' (QA) had the best benefit:cost ratio (BCR) at 9.0, but a poor apiary operation disease prevalence (AODP) of 50 percent by 2002. 'Eradication' had the best AODP projection (7 percent) but the worst BCR (1.0). A mandatory disease control strategy (BCR=1.8; AODP=20%), which includes QA, has been recommended by the Task Force to wind-in the current 32 percent AODP before considering QA as a stand-alone strategy.
Market failure, due to negative externalities (infection from diseased apiaries to disease-free apiaries) is at the root of the industry's disease management problems and provides grounds for government intervention. Information gaps about disease diagnosis and management are a contributing factor.

Creating Competitive Advantage using the Internet: Evidence from New Zealand Primary Sector Industries

Nicholas J Ashill - Lecturer in Marketing, School of Business & Government, Victoria University of Wellington, New Zealand
Lisa Casagranda - Electronic Commerce Consultant, KPMG Wellington, New Zealand and Peter M. Stevens: Marketing Manager, Standards New Zealand, Wellington, New Zealand.
Paper 29, 6 October 1999


The study investigates the relationship between Internet strategy development and competitive advantage. Four theory-based propositions based on the work of Porter and Millar (1985) and others are examined in relation to four primary sector multinationals. These propositions examine the relationship between an industry's Internet strategy and the integration of this strategy into the industry's marketing infrastructure to support the development of competitive advantage. The authors suggest that the value system, and the leverage of information and networking technologies to reconfigure value system relationships is becoming strategically significant to these primary sector multinationals.

Australian Barley Prospects in China's Growing Brewery Industry

John Chudleigh and Clare Smith - Asian Agribusiness Research Centre, Orange Agricultural College The University of Sydney, Orange and Tian Weiming - Asian Agribusiness Research Centre, Orange Agricultural College and College of Economics and Management, China Agricultural University - Beijing, China

Paper 30, 26 November, 1999


Australian barley production has varied between 3 and 7 million tonnes over the 10 years to 1997 and, despite seasonal fluctuations, has been slowly increasing over that period. Most Australian barley is produced in the states of South Australia and Western Australia with significant quantities produced in New South Wales and Victoria. Approximately one third of barley produced is sold as malting barley. Of this the majority is exported with Australian exports comprising over half the world trade in malting barley of about 1.8 million tonnes.
Available records indicate that China imports about half Australia's total exports of malting barley and is thus Australia's major market. Increasing demand for malting barley in China due to increasing demand for beer indicates a potential market of about 1 to 1.5 million tonnes of malting barley imports. Australia has renewed its efforts in plant breeding, quality control and industry deregulation in order to improve quality and ensure its future competitiveness in world malting barley markets. Growth in production of malting barley in Australia, which could help satisfy Chinese demand, will depend mainly on these initiatives as well as the world price being attractive enough compared with its main competitor for cropping land in Australia being wheat.

Sense and Nonsense in Dairy Farm Management Economic Analysis

By Alexandria Ferris and Bill Malcolm
Department of Food Science and Agribusiness - Institute of Land and Food Resources - University of Melbourne.

Paper 31, 29 November 1999


The standard analytical approaches and methods of farm management economics are simple, sensible and powerful. Still, examples of inappropriate nonsensical, approaches to farm management economics questions proliferate. In this paper, the focus is on some inappropriate, nonsensical, approaches to so-called management analysis of dairy farming operations. Included in the analytical eccentricities which abound are such things as trying to evaluate farm performance and changes but not distinguishing between cash (financial feasibility) and profit (economic efficiency), nor considering the time value of earning of capital invested; trying to estimate the cost of pasture; trying to show to lift productivity on one family farm by having a good hard look at the average performance of other farms; and the folly of inventing measures of performance such as Economic Farm Surplus, that are designed and adjusted to facilitate comparisons between farms, and then trying to use such measures for something mostly different, farm management analysis. It is as easy to get it right as it is to get it wrong; so more sense and less non-sense is the call.

top of pagetop of page

Contact us

Contact the University : Disclaimer & Copyright : Privacy : Accessibility