AGRICULTURAL REFORMS IN CHILE AND NEW ZEALAND: A REVIEW*

Chile and New Zealand are both small countries for which agricultural exports are important: both undertook comprehensive economic reforms during the 1970s and 1980s respectively. Comparison of the experiences shows that macroeconomic policy, above all the resulting movements in the real exchange rate and in interest rates, has a critical impact on agriculture. In both cases, rolling back the state has encouraged private responses. In Chile the challenges ahead lie in continuing productivity improvements, and in raising the welfare of smallholders in marginal areas. Six years after the initiation of reforms, New Zealand agriculture shows a healthy recovery. Once committed to economy-wide reforms – stabilisation, adjustment, and trade liberalisation – and companion reforms of institutions, how do governments best proceed? With what reforms and in what mix, sequence, strength, and speed? For agriculture, specifically, this paper takes a close look at which reforms, or aspects of their implementation, can accelerate or slow down private investment and aggregate supply response.     

TOWARDS AN AGRICULTURAL CO-OPERATIVE CLASSIFICATION

In 1981 Agricultural Co-operatives in the UK had total sales of £1.9 billion yet the behaviour of firms entitled ‘co-operative’ remains little understood. The paper presents a system for classifying agricultural co-operatives based on their financial structure and the means by which corporate financing is pursued. It is argued that differing co-operatives, irrespective of their function, adopt quite separate and distinct capitalisation philosophies. Two basic types of co-operative are identified—Capital Accumulative Co-operatives and Capital Specific Co-operatives. The latter type can be sub-divided into Capital Extensive Co-operatives and Capital Intensive Co-operatives depending on the level of assets and finance controlled by the organisation. The paper details a number of organisational and operational differences between the co-operative types and suggests that these have important implications where co-operatives become instruments of Government policy.     

RURAL SOCIOLOGY AND ITS RELEVANCE TO THE AGRICULTURAL ECONOMIST: A REVIEW*

Following a discussion of the relationship between agricultural economics and rural sociology, the current status of the latter is discussed, including the differences between European and American approaches. The background to an emerging ‘sociology of agriculture’ is described and recent developments in the sociological analysis of some of its constituent components are considered. Particular attention is paid to the relationship between landholding and the social structure and to the development of ‘agribusiness’ as a vertically-integrated food-production complex. The impact of these on labour relations in agriculture and on the rural community are outlined. The article concludes with an assessment of future trends in rural sociology, concentrating on themes of rural development, the sociology of agriculture and the sociology of natural resources.     

PUBLIC CHOICE THEORY AND AUSTRALIAN AGRICULTURAL POLICY REFORM*

Recent discussion of the process of policy reform has tended to focus on public and private interest theories of public choice as alternative models. The analysis of Australian agricultural policy presented in this paper draws on several extensions of the private interest model including the contractarian framework, extra-rational considerations such as moral attitudes and the desire to participate. Recent agricultural policy reforms in Australia are examined in the light of those theories. This examination highlights the importance of ideas and changes in the rules for policy formulation in influencing policy outcomes. In some cases the private interest theory appears to offer an adequate explanation while, in others, it provides only a partial explanation of policy change, and requires extension if policy choice is to be influenced, or even understood. An important independent role for economists and policy makers is seen both in the formulation of policies and in the design of rules for policy choice.     

A REVIEW OF THREE RESEARCH PROGRAMS IN QUANTITATIVE MODELLING IN THE BUREAU OF AGRICULTURAL ECONOMICS*

Elements of three of the BAE's research programs in economic modelling of the rural sector, namely, the modelling of agricultural production systems, rural commodity markets and agriculture within a general equilibrium framework, are reviewed with emphasis on the use of such models in policy work. Suggestions are made for further modelling in these areas.     

THE THEORY OF AGRICULTURAL RESEARCH BENEFITS

This paper describes a new approach to the theory of agricultural research benefits based on component benefits rather than, as is customary, on surpluses. The surplus concept nevertheless emerges when the distribution of the national benefit is considered. Various published methods (Grossfield-Heath, Lindner-Jarrett, Akino-Hayami, Griliches I and II) are derived as special cases of the theory and numerically compared. Applications are briefly considered; Griliches II is used for the variability of crop yields and some typical results for the distribution of benefits are given.     

A QUARTERLY MODEL OF AGRICULTURAL INVESTMENT IN AUSTRALIA*

The aims of this study were (a) to attempt to develop a quarterly model to explain aggregate farm investment in Australia, and (b) to examine the concept of the implicit rental price of capital services as a method of taking account of taxation concessions in an investment equation.     

TOWARD A FRAMEWORK FOR EVALUATING AGRICULTURAL ECONOMICS RESEARCH*

Agricultural economists need to evaluate their own research priorities. The main difficulty in doing so is to value the types of information generated by economic research. Bayesian decision theory provides a framework for valuing information, and the results of selected studies using this methodology are collated. Most of the other determinants of research priorities can be encapsulated in a target return ratio measure. How such a framework might be used is illustrated by three 'hypotheticals'.     

A QUARTERLY MODEL OF THE AUSTRALIAN AGRICULTURAL SECTOR*

Several farm sector econometric models are reviewed initially and the aggregation problem highlighted. A thirty-equation model of the Australian agricultural sector is specified in which farm output, stocks and exports and the domestic demand for farm products are endogenous, as well as farm, export and retail prices. Disaggregation is into food and non-food components of unprocessed output, and the processing of food is traced through to final demand. The model is estimated by a modified 2SLS procedure using quarterly data covering the period 1960-1970.     

AGRICULTURAL SELLING CARTELS: RELATIVE CO-OPERATOR AND NON-COOPERATOR GAINS*

An analytical framework is developed for assessing the relative gains accruing to co-operators and non co-operators in a cartel arrangement involving production quotas. Key parameters determining the relative gains are identified. The values of these parameters in the context of Australian agriculture could result in greater gains for non co-operators than for co-operators. Suggestions are offered on some types of information that should be sought in feasibility studies before cartels are established.     

THE IAC'S APPROACH TO AGRICULTURAL POLICY*

The main recommendations contained in the IAC's reports on rural references are outlined. The Commission's reasoning on four issues that are widely viewed as important to the formulation of rural policy is examined. The four issues are: assistance to industry; terms of trade; uncertainty and instability; and adjustment policy. Criticisms are made of the IAC's argument on these issues, and some inconsistencies between reports are indicated. It is concluded that the IAC has made a valuable contribution to the discussion of rural policy in Australia even though its recommendations are sometimes sounder than the argument offered to support them.