Agribusiness Perspectives Papers 1997/98

Can Australia's Dairy Policy Survive Competition Policy Review?

James W. Dunn
Visiting Professor of Agricultural Economics, University of Adelaide and Professor of Agricultural Economics, Pennsylvania State University, U.S.A. 28 January, 1998
Paper 1

Abstract

Milk probably has the most highly regulated of all the world's agricultural markets. Of the major dairy countries, only New Zealand is not regulating milk prices in some way. However, many nations, including Australia, are re-examining their regulatory policies regarding milk markets. Trade agreements such as the General Agreement on Tariffs and Trade (GATT) are prompting some to move toward less regulation. Additional factors are budgetary constraints and a wider acceptance that the distortions of government market regulations often create more problems than they solve. Most dairy price regulation in Australia is by the states. Under Australia's national competition policy program (the Hilmer Report), any state legislation viewed as being anti-competitive must be reviewed to see that it is in the public interest.

Accelerating and Broadening Australia's Microeconomic Reform Agenda

Bill Scales AO,
Chairman Industry Commission, 28 January 1998
Paper 2
PDF Version (91 KB)

Paper 3

Oral Examinations as an Evaluation and Learning Technique for Agribusiness Students

L V Norina
Lecturer in Agribusiness and C W Bailey Professor of Agribusiness Massey University
Paper 3
PDF Version (18 KB)

THE "Meyers Report" & The Australian Barley Board

A. S. Watson
Freelance Economist, Melbourne.
Paper 4

Abstract

The following comments were prepared at the request of the Australian Grain Industry Taskforce (AGIT) in the context of a review by the Center for International Economics (CIE) of Victorian and South Australian legislation affecting the barley industry, in particular, legislation determining the powers and functions of the Australian Barley Board (ABB). The review is being conducted in accordance with guidelines adopted by all Australian governments to meet their obligations under the National Competition Policy the "Hilmer process".
AGIT is a group of grain producers who are critical of existing Australian grain marketing arrangements. AGIT notes that supporters of the status quo in barley marketing have drawn considerable comfort from work undertaken for the ABB by the Meyers Strategy Group in conjunction with Professor Gordon MacAulay of the University of Sydney, Department of Agricultural Economics. However, this work has not been subjected to detailed scrutiny

The Australian Dairy Industry

Mr. Philip Bruem
Deputy Chair Dairy Farmers Ltd.
Paper 5

Putting The Family Back Into The Family Farm: A series of 6 papers.

Geoff Tually
Senior Lecturer, Institute of Land and Food Resources, The University of Melbourne.
Paper 6

Abstract

A series of six (6) papers that outlines and discusses the farm family and their business, with the objective of providing ideas on widening opportunities for farm family members.
The ideas presented in this series have been discussed and explored during workshops/seminars on modern estate planning, with a range of farm family members. The family farm business will continue to be the mainstream of the agricultural produce sector of the Australian economy. However, there will be a changing focus, whereby the farm family will receive far more attention than it presently enjoys.

Keeping Up With the Mega-trends

Special Report by Peter Studley - Senior Analyst, Westpac Agribusiness
Paper 7
PDF Version (196 KB)

Forests as CO₂ Sinks - an Opportunity for Forest Growers?

Chris Borough
Margules Pöyry Pty Ltd., Max Bourke ^- CO₂ Forest Sinks, David Bennett - NRMC Pty Ltd.
Paper 8

Abstract

Plantation forests offer one choice in the array of options available to provide a sink for carbon dioxide (CO₂). CO₂ emissions have been increasing since the late 19th Century when industrialisation started to utilise stored non-renewable fossil fuels (coal, oil and gas) as a source of energy rather than the traditional fuels (firewood and dung) which are renewable resources.
The impact of increased CO₂ levels has been widely predicted to result in increased temperatures, a change in ocean levels through melting of polar ice caps, and changed weather patterns. Whether increased CO₂ levels will actually cause significant problems to man is not known. Scientists predict temperatures will rise by an average of 2^o Celsius and sea levels by 50 cm by the year 2100 (Fries, 1997). CO₂ levels were clearly higher in previous periods of the earth's history; geological records indicate that large quantities of CO₂ were sequestered into coal, gas and oil during the Carboniferous Period and into limestone deposits as early as the Silurian and Ordovician Periods.

The Resource - Advantage Theory of Competition: Implications for Australian Agribusiness

Mr Michael O'Keeffe - Rabo Australia Ltd. -
Dr Felix Mavondo and Professor Bill Schroder - Monash University
Paper 9
PDF Version (58 KB)

Unfinished Business - Global Trade Reform in Agriculture

Lyall Howard
National Farmers Federation
Paper 10

Abstract

Trade in food and agriculture is the most distorted part of world trade. But reform through multilateral negotiations can yield multi-billion dollar benefits.
In 1999, the World Trade Organisation (WTO) will meet to decide how to mount a new round of global trade negotiations in agriculture. Without diminishing the achievements of the Uruguay Round, trade negotiators this time face a mountain of unfinished business.

Agribusiness Disciplines and Dimensions

Assoc. Prof. Bill Malcolm and Dr. Brian Davidson
Department of Food Science and Agribusiness - University of Melbourne.
Paper 11

Abstract

The outstanding characteristic of the most successful managers of businesses is their mastery of information; thus the educational requirements of people working in the agribusiness sector of the economy can be considered usefully in the broad framework of helping to equip these people to 'master information'. More specifically, the main requirement of contemporary agribusiness education is for students and practitioners to learn to bringing rigorous ways of processing information from a range of disciplines to bear in solving business problems of a multi-disciplinary and multi-dimensional nature, in managing businesses in a risky environment where much is unknown and much is unknowable. In this paper, agribusiness activity, and the scope of agribusiness study, is defined in terms of the disciplines and dimensions involved, and implications for agribusiness education are canvassed.

Strategic Alliances and the Red Meat Industry in Australia

Greg Hayes (VGC Consulting), Bill Malcolm (Institute of Land & Food Resources, University of Melbourne), Alistair Watson (Freelance Economist), Michael O'Keeffe (Rabobank), Laurie Thatcher (L.Thatcher and Associates)
Paper 12

Abstract

The environment in which businesses in the red meat industry operate is changing. World trade is becoming more open, but increasingly the terms on which access to markets is granted depends on the political and commercial alliances that are created. Food companies are extending their boundaries to gain a competitive advantage, and seeking closer relationships with their suppliers and customers. Most if not all of the forces bringing about these changes have their origins outside Australia, and are beyond the control or influence of producers or processors in the red meat industry in Australia.
In Australia the domestic market accounts for about 87 per cent of lamb production, 37 per cent of total beef production and 31 per cent of mutton production. Annual per capita consumption of beef has fluctuated, with prices, around an average of about 38 kg since 1960, while annual consumption of lamb has halved to 11 kg per capita and annual mutton consumption has decreased to about one fifth of their 1960 values.

Sanchoku - Supply Chain Management in Japanese Consumer Co-operatives

Ada, R., Kawasaki, H., & Doolan, R.
Paper 13

Abstract

The Japanese Consumer Co-operative Movement is among the largest consumer buying groups in the world. . With more than 19 million members, a 2.7% share of the Japanese retail market and a 7% share of the Japanese food market, the co-ops are the largest retail group in Japan. Based on co-operative philosophies and democratic management principles, the Japanese consumer co-ops have developed a number of unique characteristics and methods of operation, such as the joint buying (Han) groups, Co-op Brand products and a number of consumer movements. These features, including sanchoku, have given the co-ops a special place in the distribution industry in Japan and assisted in their rapid growth.

Australian Barley Prospects in China's Growing Brewery Industry

John Chudleigh, Clare Smith & Tian Weiming
University of Sydney, Orange.
Paper 14

Abstract

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.

Industry Funded Wool Promotion : An Economic Perspective

Stephen Beare
Australian Bureau of Agricultural and Resource Economics
Paper 15

Abstract

The issue of whether industry funded promotion of generic agricultural products pays has been debated for a long time. Despite a number of economic studies, the majority of which attribute significant increases in demand to the promotion of agricultural products, a considerable degree of skepticism appears to remain.
The skepticism stems, in part, from the practical difficulties in defining and measuring the impacts of promotional expenditure on product demand and then determining who are the winners along the product chain between primary producers and the final consumer. The question is difficult to answer with any degree of certainty.

Returns to Incremental Promotion Expenditure in the Australian Fibre Industry : A Review of Some Recent Research

Dr Roley Piggott
Department of Agricultural and Resource Economics, University of New England, Armidale.
Paper 16

Abstract

Australian farmers contribute significant sums of money through taxes (levies) on output to support expenditure on generic promotion of their commodities and research and development (R&D) of various kinds which is aimed ultimately at lowering costs of production and/or increasing the demand for farm products. A perusal of annual reports of various statutory bodies will show that the bulk of expenditure has been for promotion.
In this paper the lack of attention given to evaluation of promotion programs for Australian agricultural commodities is highlighted and contrasted with the United States where recent events have thrown the spotlight on commodity promotion programs. Attention is then turned to describing recent work at the University of New England aimed at gauging the effectiveness of generic promotion campaigns. The need to consider cross-commodity relationships in measuring effectiveness is highlighted. The paper is concluded with a discussion of some future research needs and informational requirements.

Promotion : Albatross or salvation of the wool industry?

Dr. Alistair Watson
Freelance agricultural economist based in Melbourne, Victoria 
Paper 17

Abstract

Wool promotion has existed in much the same form for the last thirty years. Compulsory levies are required to finance wool promotion. Involvement by Government is therefore needed to collect revenue from producers. This is what creates the public policy issue. Promotion of wool would not be a matter of concern if it were conducted by private firms in the wool industry. It is fundamental to the debate over wool promotion that the economics of generic promotion is different in principle and practice from the promotion of branded products by private firms.
Generic promotion is the cooperative effort to increase demand by producers of products, which are more or less homogeneous, and produced by numerous firms none of which have the incentive or ability to advertise on their own account. Generic promotion of wool and other agricultural products raises many difficult issues in both the execution and evaluation of promotion. By contrast, brand promotion, whereby private firms attempt to increase their profits by advertising and other means, is uncontroversial in the sense that private firms are more than capable of judging the costs and benefits to them of advertising and promotion.

Risk Management for Agricultural Compounds and Veterinary Medicines

Bruce Burdon
Food & Animal Policy Group, Ministry of Agriculture & Forestry, New Zealand.
Paper 18

Abstract

In early 1999 new legislation will seek to control agricultural compounds and veterinary medicines. The purpose of the Agricultural Compounds and Veterinary Medicines Act 1997 is to manage risks from the use of agricultural compounds to trade in primary produce, animal welfare and agricultural security. It also ensures that the use of agricultural compounds and veterinary medicines do not breach domestic food residue standards. The Agricultural Compounds and Veterinary Medicines Act is not a stand alone piece of legislation. It is primarily responsive to international trading arrangements and to standards and outcomes set under other legislation (Meat Act 1981, Dairy Industry Act 1952, Biosecurity Act 1993, Animals Protection Act 1960, and Food Act 1981). It is overlaid by the Hazardous Substance and New Organisms Act 1996, which has the purpose of managing environmental and human health risks. The task for those administering the Agricultural Compounds and Veterinary Medicines Act is to ensure that its objectives are met efficiently without compromising or duplicating the outcomes of other statutes. A risk management approach has been used to make recommendations on the extent of regulation required, if any. Some cost benefit analysis and minimum cost techniques are also used to keep the bureaucrats honest.

Plant and Animal Health Regulation: Some Competition Policy Issues

Nick Milham and Scott Davenport
Program Leader Industry Policy Sub-Program, General Manager, Economics Services Unit, NSW Agriculture
Paper 19

Abstract

To meet their commitments under the Competition Principles Agreement, Commonwealth, State and Territory Governments are reviewing legislation that restricts competition. In relation to agriculture, the focus of the policy to date has been on statutory marketing legislation, with less emphasis placed on legislation aimed at influencing production processes. In this paper, plant and animal health legislation is briefly examined to provide an initial assessment of how these arrangements restrict competition. This is followed by a discussion of the market failure rationales for such arrangements and consequent issues that warrant consideration in public benefit assessments. Conclusions are reached concerning appropriate legislative objectives and design principles, and guidelines for determining who should pay for regulatory intervention to control plant and animal diseases.