Agribusiness Review - Vol. 12 - 2004

Beef Feedlot Supply Response in Australia

G.R. Griffith, A. Coddington and S. Murdoch
Paper 1, March 20, 2004
PDF Version 133 Kb

Abstract

Reliable estimates of demand and supply elasticities are required for industry-wide evaluations of new agricultural technologies, new primary product promotion campaigns or new policy initiatives impacting on agricultural industries. In developing an equilibrium displacement model of the Australian beef industry, recent supply elasticities for feedlot beef in Australia were not available. The issue of consistency of throughput of feedlot beef and utilisation of feedlot capacity is also an important industry concern. Feedlot survey data were used to estimate supply response functions for feedlot beef. The results indicated that price response was much more inelastic than shown in previous work, reflecting perhaps the industrialisation of the industry in recent years and the significant level of foreign investment. The price of fed cattle plays the largest role in influencing decisions to place cattle on feed. The price of feed is also a major input affecting utilisation of feedlot capacity, however the price of feeder steers plays a lesser role in feedlot decision making than previously thought.

Productivity in the Australian Dairy Industry

Tom Kompas and Tuong Nhu Che
Paper 2, March 29, 2004
PDF Version 70 Kb

Abstract

Although the Australian dairy industry has performed well it has also faced considerable pressure over the past twenty years. A decline in the terms of trade and major structural change has provided added incentives for the industry to improve productivity. This paper constructs Tornqvist index values to measure and analyse movements in inputs, outputs, total factor productivity (TFP) and the terms of trade for the dairy industry as a whole and for each state over the years 1979 to 1999. Overall, there is clear evidence of a significant increase in the TFP index in the 1990s relative to the 1980s. However, in terms of fitted annual growth rates, there is also evidence of a productivity 'slow down' in the 1990s, with the principal exception of New South Wales . Average annual growth in dairy total factor productivity in Australia over the entire twenty-year period is 1.5 per cent, but decreases from 1.8 per cent in the first to 0.9 per cent in the second decade. In Victoria, the largest dairy producer, the growth in TFP in the second decade of the study is virtually zero, with poor weather conditions in the second half of the decade partly to blame. Much of the impressive growth in dairy output in the 1990s can thus be simply attributed to a growth in inputs. Index values for the terms of trade, the share of input costs in total costs and potential drives of productivity change are also examined.

The Intellectual Property Strategy of International Agricultural Research Centres

Eran Binenbaum
Paper 3, March 29, 2004
PDF Version 189 Kb

Abstract

This paper discusses the main problems, principles, concepts, and solutions that characterise the intellectually property (IP) challenges that the CGIAR Research Centres face. The Centres' IP challenges must be seen against the background of five revolutions. Due to the biotechnology, information and communication technology, and intellectual property revolutions, a management revolution is necessary for the Centres to follow up on their initial success in the Green Revolution. The requisite management revolution would implement the principles of systemic thinking, relational thinking, analysis of incentive problems, bundle thinking, and portfolio thinking. These principles can be applied to IP-related challenges, including technology access and freedom-to-operate issues, relations with the private sector, secrecy versus openness, decisions on IP protection, exclusivity versus non-exclusivity in partnerships, the proper level of investment in IP expertise and information systems, and higher-level initiatives.

How Much Animal Product do the Chinese Consume? Empirical Evidence from Household Surveys

Ji-Min Wang, Zhang-Yue Zhou and Jun Yang
Paper 4, April 1, 2004
PDF Version 131 Kb

Abstract

Reliable information about animal product consumption in China is extremely important for policy formulation and marketing activities. However, publications by China 's State Statistical Bureau underestimate animal product consumption. Such underestimated statistics affect policy making and marketing initiatives and also lead to the estimation of distorted parameters that are crucial for other research work. Based on a large-scale household survey, this paper presents findings on animal product consumption in China . Our results show that the consumption of animal products in China has reached a much higher level than was previously held and the SSB statistics underestimate this consumption by as much as 30 to 60%. The paper also identifies the major factors that affect animal product consumption in China . Implications of the findings are discussed.

Agricultural Processing and the WA Economy: A General Equilibrium Analysis

Peter Johnson and Nazrul Islam
Paper 5, April 21, 2004
PDF Version 73 Kb

Abstract

This paper investigates the impact of an expansion in agricultural processing on the Western Australian economy by modifying and applying a Computable General Equilibrium (CGE) economic model of Western Australia (called WAM). WAM was used to simulate the effects of a $1 million expansion in eight agricultural processing industries. The results show that there is a range of positive impacts from agricultural processing. On average, a $1 million expansion in agricultural processing is estimated to increase the State's GSP (Gross State Product) by $649,000, and total output by $1.9 million. The expansion of the Wine and spirits industry is estimated to have the largest impact while the Textile fibres, yarns and woven fabrics industry has the smallest impact on the Western Australian economy.

Economic Issues for Plant Breeding - Public Funding and Private Ownership

Bob Lindner
Paper 6, April 20, 2004
PDF Version 66 Kb

Abstract

The world of plant breeding is changing rapidly in response both to scientific developments and to economic forces. In particular, there is a growing trend to widespread privatisation of crop breeding. An economist's perspective on some of the key differences between traditional public plant breeding and private plant breeding will be presented together with some of the key driving forces behind the emerging trend to privatisation of plant breeding.

A possible consequence of much greater private involvement in Australian plant breeding is the crowding-out of all other competition by a very small number of large multi-national firms, who might then exploit their market power to capture almost all of the value created by plant breeding. Australian grain growers have already demonstrate a willingness to fund local plant breeding firms to forestall such a threat, and to ensure ongoing access to locally bred varieties that maintain Australia's competitive advantage in international grain markets.

Another threat is the risk that government and grower support of pre-breeding research will decline without any compensating investment by the private sector. As this type of research provides the foundation for ongoing long-term variety improvement and productivity gains, eventually private investment in plant breeding may stall as a result. Alternatively there may be wasteful duplication and/or inefficient utilisation of such related R&D as firms strive for competitive advantage in the market place.

In any event, the access regime for both public and private plant breeders to output from all government and/or collective industry funded research and other generic services will be an important policy issue. Some of the principles under-pinning National Competition Policy will be reviewed as a possible basis for the formulation of an appropriate policy. 

Assessing demands for irrigation water in North Queensland

John Rolfe
Paper 7, May 6, 2004
PDF Version 189 Kb

Abstract

Irrigation underpins approximately one-third of the value of Queensland 's agricultural production.  There have been calls for further development of water infrastructure in northern Queensland to enhance the production of sugar cane, horticulture, aquaculture and other crops.  One of the steps in assessing potential new developments is to establish which groups have demands for additional water, and how sensitive they are to price.  Surveys are one mechanism that can be used to gauge this information.  Surveys to assess water demands have been carried out in the Mackay and Atherton Tablelands regions and the results are reported in this paper.

The cost to the Bali beef industry of the October 2002 terrorist attack

I Gusti Agung Ayu Ambarawati, Xueyan Zhao, Garry Griffith and Roley Piggott
Paper 8, May 11, 2004
PDF Version 189 Kb

Abstract

The is land of Bali is one of the main cattle producing areas for Indonesia. Bali is also known for its extensive tourist sector.  Frozen and chilled beef are imported to fulfil the tourist demand.  This imported beef, most of it from Australia, competes with the local beef in the tourist sector. The terrorist attack in October 2002 caused the tourist industry to collapse and this impact has been passed down to the demand for local and imported beef. The objective of this paper is to use an economic model of the Bali beef industry to assess the impact of this attack on the Bali beef sector. The results show that there is expected to be a significant welfare loss of Rp 5.43 billion (A$ 1.09 million) to the Bali beef industry over the medium term. Of this, Bali cattle producers are expected to lose Rp 2.57 billion (47 per cent). The quantity of Bali beef demanded by the HRI markets is forecast to drop by about 5 per cent, while imported beef demand is forecast to reduce by about 2 per cent.

May 31, 2004

Projections of Dairy Product Consumption and Trade Opportunities in China

Hengyun Ma and Allan Rae

Abstract
China has been rapidly increasing its consumption and imports of dairy products in recent years. A two-stage demand system was estimated for livestock product consumption in urban China over the 1990s. Total expenditure elasticities for the livestock commodity group and expenditure elasticities for dairy products within the livestock commodity group were calculated. The results suggest that dairy products, even in urban areas, remain luxury goods because of a high expenditure elasticity (1.14). Due to rapidly increasing consumption and the likelihood of inadequate supply growth, China will continue to increase its imports of dairy products to meet its domestic demand. Projections imply that China’s imports of dairy products may range between 13-30 percent of its total domestic consumption by 2006. Due to differences in regional income and population growth rates, increases in dairy products consumption may occur especially in the Coastal, South and North areas, where potential trade opportunities may exist.

Paper 10

June 8th , 2004

Feed versus Food: The Future Challenge and Balance for Farming

Zhang-Yue Zhou

Abstract
Demand for livestock products in the past three decades has increased rapidly, especially in developing countries. This increase has resulted in, and will continue to cause, increased demand for feed. This paper examines existing projections of global feed demand and supply with an emphasis on China. It first presents the emerging trends in demand for feed and food, followed by global perspectives of feed demand and supply. It then highlights the challenges facing future farming in its endeavour to meet the increasing demand for feed. Finally, the paper sheds light on whether the livestock revolution will offer much opportunity to farmers, especially small farmers in the developing countries and those at home in Australia.