Policies on Managing Risk in Agricultural Markets

Over the past dozen years, policymakers have largely abandonedlong-standing popular approaches for addressing risk in agriculturewithout fully resolving the question of how best to manage thenegative consequences of volatile agricultural markets. Thearticle reviews the transition from past policies and describescurrent approaches that distinguish between the trade-relatedfiscal consequences of commodity market volatility and the consequencesof price and production risks for vulnerable rural householdsand communities. Current policies rely more heavily on markets,even though markets for risk are incomplete in numerous ways.The benefits and limitations of market-based instruments areexamined in the context of risk management strategies, and innovativeapproaches to extend the reach of risk markets are discussed.      

Food risk and the poor

This article consists of two parts. The first is a theoretical linkage of the risky performance of food production with the risky incomes of consumers, especially poor people, to result in what is termed “food risk”. The second features some empirical estimates intended to illustrate and quantify these conceptual risks.     

CHANCE AND CHOICE WEST OF THE DARLING

Twenty-one pastoralists in the West Darling region of New South Wales were interviewed to gain an understanding of the attitudes of managers in this high-risk pastoral area to uncertain prospects. It was found that pastoralists had no difficulty in specifying subjective probabilities but in modifying probabilistic information they were conservative relative to the 'correct' revision implied by Bayes' Theorem. All the surveyed pastoralists were non-indifferent to risk, as evidenced by their non-linear utility functions for gains and losses.     

A NOTE ON THE EFFECTS OF EFFICIENCY CRITERIA AND PORTFOLIO SIZE ON CHARACTERISTICS OF EFFICIENT PORTFOLIOS*

Comparisons of the results of using alternative efficiency criteria for portfolio selection, while plentiful overseas, are seemingly scarce in Australia. Here, mean-variance efficient sets are compared with and found to be not too different from sets efficient according to second and third degree stochastic dominance. In examining the effect of increasing the number of securities allowed in each portfolio, it is found that the size of efficient sets of portfolios diminishes, as does the mean return and, most significantly, the variance of return for efficient portfolios.     

ECONOMICS OF SIZE IN AUSTRALIAN FARMING

Economics of size is an important but relatively neglected aspect of Australian agriculture. The theory and methodology for analysis of economics of size are summarized and a survey made of evidence for Australian agricultural industries. The conclusion is reached that economies of size exist, particularly for small to medium farms and diseconomies appear to be absent. Further research is needed and some important areas are indicated.     

Agricultural Extension: Good Intentions and Hard Realities

What considerations lead policymakers to invest in agriculturalextension as a key public responsibility, and what factors andagency incentives explain differences in extension system performance?To help answer these questions, this article provides a frameworkoutlining farmers' demand for information, the public goodscharacter of extension services, and the organizational andpolitical attributes affecting the performance of extensionsystems. This conceptual framework is used to analyze severalextension modalities and their likely and actual effectiveness.The analysis highlights the efficiency gains that can come fromlocally decentralized delivery systems with incentive structuresbased on largely private provision, although in most poorercountries extension services will remain publicly funded.      

Born Global,Made Local: Multinational Enterprise and Australia's Early Wireless Industry

This article analyses the evolution of multinational enterprise through a case study of the Australasian wireless company, AWA, in the first half of the twentieth century. Ownership, location, and internalisation advantages explain aspects of the industry's rapid internationalisation, but other factors, including restrictive domestic legislation and oligopolistic competition, are also important. The imperialism of the era encouraged globalisation while binding companies to host nations' strategic imperatives and coordinated policy frameworks. Location factors included government desires to control wireless, especially once broadcasting developed in the 1920s, and to expand local manufacturing capacity for the emerging consumer electrical economy.