Agribusiness Perspectives Papers 2001

China's Joining the WTO: Opportunities for the Australian Agribusiness Sector

Wei-Ming Tian, College of Economics and Management, China Agricultural University, Beijing China and
Zhang-Yue Zhou, Asian Agribusiness Research Centre, The University of Sydney, Orange NSW Australia
Paper 41, February 21, 2001

Abstract

China first applied to join the GATT (now the WTO) in July 1986. After almost 16 years of painstaking negotiations, China is very close to joining the WTO. When China gets accepted into the WTO, a market with 1.3 billion consumers will be more widely open to the rest of the world. This market represents enormous opportunities for exporters and investors of many other countries. Undoubtedly, it will also bring opportunities to the agribusiness sectors of both China and other countries.

Farm Management Economic Analysis: A Few Disciplines, a Few Perspectives, a Few Figurings, a Few Futures.

Bill Malcolm
Institute of Land and Food Resources, University of Melbourne
Paper 42, February 21 2001

Abstract

The request to write this paper whose working title was ‘Something about Farm Management Economics' – a paper that was first presented to the year 2000 annual conference of the Australian Agricultural and Resource Economics Society - came from the President of the Australian Agricultural and Resource Economics Society David Pannell who, by making this request, unwittingly cast himself in the role of the piano player in the brothel: implicated but having no moral responsibility for the goings-on. My riding instructions from David Pannell were as follow:

What I'm after is someone who can speak to the large number of members whose job it is to worry about issues at the farm level, and give them something that they can take home with them and find useful in their work. I am worried that our invited speakers are virtually always on topics that are somewhat remote from the working lives of many members, particularly the younger members and rural-based ones. It's great to stimulate them with all this interesting stuff, but just occasionally it would be nice to give them something that was directly relevant to them (Pannell, pers.comm.)

That is a contract. What follows, properly titled ‘Farm Management Economic Analysis: a Few Disciplines, a Few Perspectives, a Few Figurings, a Few Futures', is intended to be about farm management economic analysis, with farm management economic analysis having both particular and general meaning. Though as is their wont, the deconstructionists will make of it what they want.

Evaluating the Export Growth Strategy of the Australian Pork Industry

Glenn Ronan, Jack Langberg and Michael Moore
Paper presented to the 45th Annual Conference of the Australian Agricultural and Resource Economics Society, Adelaide, South Australia, 22-25th January, 2001
Paper 43, April 12 2001

Abstract
Small size, dependence on domestic feed-grain and the generic nature of pork would suggest poor export prospects for Australia's pig and pigmeat industries against leading export countries in North America and Europe. The federal government challenged the industry to do just that when it began opening the domestic pigmeat market to imports in 1990.
The 1998 pig industry crisis converted industry and government from protagonists to partners in a concerted export growth strategy. The Federal Government commenced a $24 million Business Grants Program for the Pork Industry, including processing investment incentive grants and assistance to improve competitiveness through alliance formation. Industry formed an Export Marketing Group (EMG), transformed in April, 1999, into a processor alliance, the Confederation of Australian Pork Exporters (CAPE). CAPE quickly defined the industry's export marketing target to achieve 20 percent of farmed pigmeat production as exports by 2002.
After very slow export progress until the late-nineties, ‘lucky breaks' arising from pig industry disease outbreaks in Asia have led to better export opportunity in Japan and a trade alliance for pork exports to Singapore. From minimal in 1998, Australia now supplies more than 50 percent of Singapore's fresh pork requirement with Airpork, airfreighted, chilled pork.
The paper:

• Outlines the growth of pork imports and exports in the transition from protected domestic industry to open market, with government assisted restructuring;
• Presents a value chain analysis of the Australian pork industry, explaining the apparent anomaly of simultaneous growth in pork exports and imports where domestic aggregate pork production and consumption are approximately equal;
• Provides an explanation for the deviation between assessment of poor prospects and actual export performance.

A qualitative evaluation of the growth prospects for pork exports from Australia in both the short-term and the longer-term is presented with consideration of key strengths, including Australia's favourable environment for minimal-disease pig farming, product differentiation and freight logistics, weaknesses in small size and domestic feed-grain dependence and threats from imports.
Recent spectacular pork export success fits comfortably with modern trade theory, where factor endowment, economies of scale and product differentiation are all relevant to explaining intra-industry trade and the development of niche markets.

“When there is a split in the path ahead always take the hardest route.” Paraphrased quote from Nepalese proverb cited in the film, Himalaya, 1999 (released in Australia in December, 2000)

J.H. Kelly Revisited

Dr. Glen McLaren
Division of Humanities, Curtin University of Technology, GPO Box U1987, Perth, Western Australia 6845
Paper 44, May 16th 2001
Adobe PDF (76 KB)

Abstract

Historians are a capricious lot. Schools of thought wax and wane, sympathies shift and slide, and yesterday's dogma is today excused as naivety. And so it is with assessments of the Northern Territory pastoral industry. For the past several decades Northern Territory cattlemen have been intensely criticised by academics, the media and commentators for a variety of reasons, most notably their alleged mistreatment of Aboriginal employees and dependants. While some of this criticism has been warranted there is now very clear evidence that Territory cattlemen have also been subjected to intemperate, ill-informed and inaccurate charges.
Frank Stevens, for instance, who carried out extensive field work on Territory stations before writing his acclaimed work Aborigines in the Northern Territory Cattle Industry, is demonstrably guilty of highly selective use of evidence, misrepresentation and naivety. Agricultural economist J. H. Kelly is equally culpable.

Dairy Mergers and the National Interest

Robin Johnson
Consulting Economist, Wellington New Zealand johnsonr@clear.net.nz
Paper 45, August 8th 2001

Abstract
In the normal course of events, the merger of the two major dairy cooperative companies and the Dairy Board would require the approval of the Commerce Commission. The Commission, in a preliminary determination in 1999, rejected the case for the merger in terms of the Commerce Act. Subsequently, in December 2000, the cooperatives by-passed the Commerce Commission by presenting their case for the merger and the absorption of the Dairy Board directly to Government. In April (2001), the Government announced that it had accepted the case put forward and, at the time of writing, was still awaiting the results of the required referendum of the dairy farm-suppliers ("the shareholders") for their approval. Legislation is to follow. In this paper, I want to examine the arguments for and against the merger from the national point of view and the proposed regulations that would make the merger more acceptable. We could allow a case that the merger brought some private benefits to dairy farmers if efficiencies can be gained and market returns enhanced above what they would have been.
This would be all to their good and possibly benefit people in industries downstream from the farms. The question for the government is what action is in the national good?. This involves an analysis of all the market inter-actions that would follow the merger and how they would affect the different groups in society as a whole. In its preliminary determination, the Commerce Commission weighed up these negative and positive effects and found the negative case predominated. Hence the subsequent approach to government. At the time of writing, government has agreed to the merger, presumably after due analysis of the arguments for and against. Read on for more details of the case presented and the government's response to it.

Wheat Economy of India: Development, Nature and Trade Prospects

Vasant P. Gandhi, Zhang-Yue Zhou and John Mullen
(For contact details see Paper)
Paper 46, October 10th 2001

Abstract

Wheat production in India has increased by over ten times in the past five decades and India has become the second largest wheat producer in the world. Today wheat plays an increasingly important role in the management of India's food economy. However, studies that research the wheat economy of the country as a whole remain scarce. This present study examines the characteristics and developments of India's evolving wheat economy.
It seeks to answer questions such as, what is the nature of India's wheat economy? Will the production be able to keep pace with consumption growth? What are the prospects for international trade? Our analyses show that India's wheat production increase is driven principally by yield growth, and to some extent by shift in production from other crops to wheat and an increase in cropping intensity.
Among the major factors that affect yield, fertiliser use appears to have less effect in recent years while expansion in irrigated and high yielding variety (HYV) area seem to play a more important role in raising yield. However, with irrigation and HYV having already reached 85-90 per cent area coverage for wheat, future growth in wheat production will be constrained.
On the other hand, the demand for wheat is likely to grow fairly rapidly. Depending on the population and income growth, poverty alleviation and the rate of urbanisation, a demand-supply gap may open at a rate of about 1 to 2 per cent per year which is equivalent to 0.7 to 1.4 million tonnes of wheat, growing larger over the years. Promoting rapid economic development and income growth in India which embraces the poor, and particularly the rural poor, may lead to considerable growth in demand for wheat and thus an expansion in trade opportunities.

Changing Patterns of Feedgrain Production and Marketing in China

Xian Xin, Wei-Ming Tian and Zhang-Yue Zhou
(For contact details see Paper)
Paper 47, November 9th 2001

Abstract

Increased disposable income has, in the past two decades, led Chinese consumers to demanding more animal products. China's animal husbandry industry has responded to this demand by producing more animal products. Indeed, not only has this increase in animal products been very impressive in recent years, but it has been achieved with little feedgrain imports. The question as to whether China's domestic resources will be able to continue supplying the animal husbandry industry with the needed feedgrains has attracted much attention from government officials and academics both within and outside China. Many believe that China's future demand for feedgrain will exceed its supply and imports are inevitable. Among the many factors that affect the quantity of feedgrain that China will import are two important ones: China's own capacity to produce and its feedgrain marketing arrangements. It is thus imperative to examine closely the changing patterns of China's feedgrain production and marketing. This paper fulfils this task by providing some important facts and updating information of the latest developments that are related to China's feedgrain production and marketing.

Supply Chain Management: Fad, Panacea or Opportunity?

Anthony J. Dunne
Reader in Agribusiness, University of Queensland, School of Natural and Rural Systems Management
Paper 48, November 29th 2001

Abstract

Supply chain management has certainly been one of the hottest topics in agribusiness management circles over the past five years. But, what is supply chain management? What are its benefits? What, if anything, is its relevance to agribusiness and in particular to farmers?
The purpose of this paper is to bring together the disparate views on supply chain management so that agribusiness professionals and researchers will have a common framework within which the complex issues and problems confronting agribusiness firms can be analyzed, discussed and hopefully resolved.

A qualitative description of the benefits and costs associated with agribusiness supply chain management: A producer's perspective

Peter Nicholas
Faculty of Business, University of Southern Queensland, Toowoomba - Australia
Paper 49, December 17th 2001

Abstract

Supply Chain Management is attracting increasing attention in agribusiness worldwide. Growing consumer concerns over food safety and quality together with retailer demands for large volumes of consistent and reliable product are driving the need for closer supply chain integration. By analysing a number of existing case studies this paper seeks to identify some of the supply chain related strategies or tactics available to agribusiness companies, contextual factors related to their use, and the likely types of benefits and costs associated with their implementation.