AGRICULTURE IN A WORLD OF TRADING BLOCS

The recent trend towards the negotiation of free trade areas has potentially important implications for agriculture. Agricultural trade will increasingly be influenced by the treatment of agriculture within free-trade areas and other regional trade associations. Such blocs will have to deal internally with many of the same issues as face the GATT. This will tend to reinforce the move to less trade-disruptive domestic policies. Moreover, independent trade policies become difficult to maintain in a trade bloc, even if there is no common external tariff. This could lead to harmonisation of external policies. As a consequence, the inclusion of agriculture in free-trade areas could be an important part of overall trade liberalisation in years to come.     

STABILISATION AND RISK REDUCTION IN AUSTRALIAN AGRICULTURE*

Agricultural producers typically are faced with risk about the yields they will experience and the prices they will receive. Stabilisation schemes can spread risk and thereby reduce the risk faced by individual producers. The risk-reducing capacity of a scheme and the cost of risk reduction depend upon the design of the scheme. In particular, it is important to distinguish between risk and instability. A classification of scheme designs is presented to bring out the effects of various design types. Schemes for the wheat industry are given most attention.     

THE MEASUREMENT OF MANAGERIAL EFFICIENCY IN AGRICULTURE*

This paper is an outline only of a Ph.D. thesis submitted to the University of Nottingham. The paper proposes a socio-economic model of farm production with special emphasis placed on the role of management: formulates an econometric model, to represent the socio-economic model, in which the degree of managerial efficiency appears as a variable, and suggests means of interpretation of the econometric model to aid farm planning at the individual farm level.     

APPLICATIONS OF GAME THEORY MODELS IN AGRICULTURE*

Due to the time lag between investment and payoff, the price-taking nature of agriculture, stochastic weather variables and other factors, the uncertainty faced by decision makers in agriculture is greater than and different from that confronting managers of most other sectors of economy. In this paper, game theory models have been applied to the problem of decision making under uncertainty in agriculture. The authors examine and compare the pros and cons of the four conventional theories of choice in decision making in agriculture. The four theories are: (a) Wald's maximin criterion, (b) Laplace's principle of “insufficient reason”, (c) Hurwicz's “optimism-pessimism” criterion and (d) Savage's “regret” criterion. In this study, applications have been made to the choice of type of farming, optimum dosage of fertiliser and manure and the most appropriate time of selling agricultural produce. The authors propose an additional theory of choice—the criterion of “benefit”—which seems more appropriate than the conventional theories under many situations.     

THE RETURNS FROM RESEARCH IN AUSTRALIAN BROADACRE AGRICULTURE*

Many people share the view that too little is invested in R & D in agriculture. The relationship between several measures of productivity and research expenditure was estimated using data from ABARE's surveys of broadacre industries and a new data series on R & D expenditure for the period 1953 to 1988. The internal rate of return to research was estimated to be in the range of 15 to 40 percent which does not provide strong evidence that Australia is either under- or over-investing in public research.     

MEASUREMENT OF MALNUTRITION IN THE THIRD WORLD*

This paper focuses on the measurement of malnutrition in the Third World. Given the lack of adequate data on malnutrition, its quantification involves the use of fairly roundabout methods. This paper reviews two World Bank studies, which link calorie consumption to income using a semi-log functional form. The first employs arbitrarily imposed equation parameters to arrive at estimates of malnutrition. We calculate alternative nutritional scenarios to illustrate the sensitivity of their results to the arbitrarily imposed parameters. For the second study, which has been empirically estimated, we calculate forecast confidence intervals to evaluate the estimated equations' forecasting performance. Our results indicate that the first study is highly sensitive to the arbitrarily imposed parameters, while the second is not very reliable in forecasting malnutrition. The importance of further work on the subject is therefore stressed.     

PRODUCTIVITY GROWTH IN AGRICULTURE (REVISITED): A MEASUREMENT FRAMEWORK AND SOME EMPIRICAL RESULTS

This paper explores the methodology of sectoral productivity growth measurement within the framework of input-output analysis. A method which ensures that sectoral productivity growth rates are consistent with productivity growth rates for the economy as a whole (as well as allowing for external trade) is suggested. New estimates are presented on total factor productivity in UK agriculture using a Tornqvist index procedure. In addition, new estimates of agricultural labour productivity growth are presented, taking account not only of labour employed in agriculture but also of labour employed in ancillary industries on the supply side. The empirical results confirm that part of the labour previously employed on farms has shifted “upstream” to industries providing agriculture with fertilises, machinery and other inputs.     

AUSTRALIAN AGRICULTURE AND WORLD COMMODITY TRADING ARRANGEMENTS

A long period of international discussion and negotiation about new global trading arrangements ended in 1979. Despite changed economic and institutional circumstances, and growing deficiencies in the. existing arrangements for agricultural trade, these negotiations have done little to improve the efficiency with which the world's agricultural resources are used. Rather, they have tended to institutionalise the status quo. This is likely further to disadvantage efficient producers and to lead to a growing bilateralism in trading relationships, with consequent increased politicisation and potential for conflicts and instability.     

THE ECONOMIC SURPLUS OF AGRICULTURE IN THE UNITED KINGDOM*

The economic surplus of an industry is defined as the difference between its real product, and the real income accruing to it. The surplus from U.K. agriculture measured at 1964/65–66/67 prices is estimated to have risen by about 20 million per year in recent years. The absorption of this surplus by other sectors is identified and an approximate indication is given of the equivalent surpluses and deficits of other industry groups. The economic surplus from agriculture is transferred principally through changes in relative prices, the necessity of which tends to create an unavoidable minimum rate of inflation. There is an international equivalent of these transfers of real income through price changes, but without the institutional constraints on the market which in the domestic economy preserve some measure of equity in the distribution of income.     

PROBLEMS,POLICIES AND DATA NEEDS IN CANADIAN AGRICULTURE*

This study maintains that the development of Canadian agriculture requires a reassessment of the values, constraints and goals relating to the sector, with a view to conceive and implement a goals-means-targets structure more amenable to progress. The solution of the economic, socio-psychological and organizational problems which beset Canadian agriculture is presently hindered by a paucity of adequate, timely data in crucial areas. The performance of the policy-maker and the agricultural producer have been generally suboptimal, as exemplified by extemporization in the case of the former and secular inefficiencies and forgone opportunities in the case of the latter. Cette étude maintienl que le développement de ?agriculture canadienne impose un réajustment des valeurs, des conlrainles et des objectifs agricoles. afin de concevoir et ?aménager des structures évolutives englobant les fins et les moyens. Le manque de données valables et opportuns dans les domaines cruciaux nous empêche d.apporter une solution aux problémes économiques, socio-psychologiques el structured auxquels ?agriculture canadienne se heurle aujourd'hui. Ni les responsables de la politique agricole ni les producteurs n'ont atteint un optimum ?efficacité, c'esl ce que démontre ?improvisation qui règne dans la politique agricole et ?inefficacité séculaire et les occasions manquées dans le cas des producteurs.     

CANADA'S FUTURE ROLE IN THE WORLD WHEAT MARKET*

Many indicators point to increasing surpluses in the world wheat market. This study presents evidence of this trend by examining the present and projected 1975 levels of import demand and export supply for wheat in the major wheat importing and exporting countries. Domestic policies which directly or indirectly affect the level of wheat trade are also taken into account.
The implications for Canada resulting from these developments are indicated in terms of its anticipated level of exports, required wheat acreage adjustments and indirect effects to other sectors of the Canadian economy.
LA PARTICIPATION DU CANADA SUR LE MARCHÉ INTERNATIONAL DU BLÉ - Plusieurs changements indiquent une augmentation dans le surplus de blé sur le marché international. Cette étude présente une indication de cette tendance en examinant le nrveau actuel et celui de 1975 de la demande d'importation et l'offre d'exportations dans les principaux pays qui importent et exponent le blé. La politique intérieure qui touche directement ou indirectement le commerce du blé est aussi considérée.
L'implication du Canada est exprimée en fonction du niveau d'exportation anticipé, un ajustement dans la superfine et l'influence apportée aux autres secteurs de l'économie canadienne.     

TAXATION,COST OF CAPITAL AND INVESTMENT IN AUSTRALIAN AGRICULTURE*

The concept and measurement of the cost of capital is developed to include particularly the role of taxation in investment behaviour. The relative importance of factors influencing investment in plant and machinery is examined for five sectors which make up the broadacre industry of Australia. It is shown that residual funds are important in determining plant and machinery investment, but not through the normally hypothesised channels. It is not the increased liquidity from increased income which raises investment, but the fall in the cost of capital, which is associated with the marginal rate of tax.     

THE IMPACT OF CHANGES IN TRADE POLICY ON DEVELOPING COUNTRY AGRICULTURE*

The Uruguay Round of trade negotiations has attracted much attention in the developing countries. It promises to weaken moves towards bilateral trade agreements, break open trade in temperate agricultural products, and should remove the last vestiges of protection against tropical products – although tariff escalation will remain. Overall, the main gains for the developing world will probably accrue to exporters of temperate products, above all those in Latin America; whilst for some of the poorer countries, losses may occur as the benefits of special and favoured access to the industrialised countries' markets will be eroded.