Volume 7 - 1999
or the Editors
and Exit in Meat Processing: A Queensland Case Study.
John Rolfe - Central Queensland University and
Russ Reynolds - Queensland Department of Primary Industries.
Queensland is the largest meat producing state in Australia, has
the largest processing capacity and is the major meat exporting state. The
processing sector is under substantial pressure for change, with 1998
utilisation rates of 70% or below being sub-economic. There are a number of
possible reasons for the decline in the profitability of this sector,
including the loss of supplies through the live cattle trade, increased
physical capacity and throughput, changed industrial relations and a move to
enterprise bargaining agreements, and the impost and structure of government
Of particular interest is the extent to which low utilisation rates, in spite
of the current high slaughter, are the result of competitive forces within
the processing industry. The development of excess capacity is predictable
behaviour in a declining industry where survivor firms position themselves
for increased market share. Firms may also be increasing capacity in a search
for scale efficiencies. Low profitability may also be the result of price
levelling activities in declining market conditions.
In October 1998, the Queensland Government committed $20 million to the
restructuring of the processing sector to achieve viability and
sustainability goals. Determining the effective focus of restructuring will
require a clear understanding of competitive forces within the processing
sector, and the extent to which over-capacity is exogenous to the sector.
Developments and Sustainable Agriculture in Australia
Randy Stringer and Kym Anderson - School of
Economics and Centre for International Economic Studies, University of
Until recently, Australia’s agricultural development policies
were guided by socio-economic objectives that seldom included care for the
environment, much less the concept of ecologically sustainable agriculture.
During the past decade or so, however, not only changing attitudes at home
but also increasing international economic integration and heightened
environmental concerns abroad are forcing Australian policymakers to rethink
agriculture’s role in the economy and society. This increasing emphasis on
sustainability presents today’s farmers and agricultural policymakers with
both a set of new opportunities and some new policy and research challenges.
The purpose of this paper is to contribute to the analysis and debate on
sustainable agriculture in Australia by seeking answers to the following
questions. First, what are the implications for the sustainability of
Australian agriculture of international trade agreements? And second, what
impact will recent or prospective international agreements with environmental
and health provisions, and unilateral changes to environmental policies, have
on Australian agriculture?
and Import Taxes in the World Wine Market: Australia in International
Nicholas Berger and Kym Anderson, School of
Economics and Centre for International Economic Studies University of
Virtually all countries tax the consumption of wine (and other
alcoholic beverages). However, the rates of taxation, and the tax instruments
used, vary enormously between countries. This paper details for all the OECD
members plus some other countries the consumer tax equivalents (CTEs) of wine
taxes as of 1996. It shows wholesale sales taxes, excise taxes, import
tariffs, and value-added or goods-and-services taxes, expressed both in
dollars per litre and as a percentage of what the retail price would be
without those taxes. These are shown in aggregate and also separately for
non-premium and premium wines (since many wine taxes are volumetric and so
their percentage CTE rates vary with the price of wine). The CTE tends to be
lower the larger a country’s per capita production of wine. Australia and
New Zealand are shown to have relatively very high wine CTEs. In Australia’s
case this is especially so for premium wine, because Australia uses a
percentage tax rather than the commonly used volumetric tax measure.
Moreover, the extent to which Australia is an outlier has increased
considerably during the past 15 years. This has implications for the current
debate over reforms to Australia’s tax system. The paper concludes by
pointing also to the high wine import tariffs in some countries, arguing that
there is scope for trade negotiators to expand wine market access in East
Asia especially as the next WTO trade negotiations begin at the end of 1999.
of Independent Rural Meat Retailers to a National Beef Quality Assurance
R.A. Idstein and G.R. Griffith
In the last two decades there has been a substantial reduction in
the domestic consumption of beef and veal. While most of this decline can be
attributed to a change in relative retail prices, some can also be attributed
to changes in consumer preferences. Market research has clearly shown that
consumers are increasing their demand for quality characteristics such as
tenderness, flavour and leanness. Yet the industry is still marketing an
inconsistent product to consumers who are demanding consistency.
This general problem of quality inconsistency has been recognised by industry
and has been included in the Meat Industry Strategic Plan. One of the key
goals was to describe palatability accurately and guarantee food
The meat industry hopes to succeed with this by the year 2001, through the
development and implementation of value-based marketing systems that would
lead to a 50 per cent reduction in the variability of quality and volume, and
would to some degree ensure security of supply. National quality assurance
procedures would have to be a necessary component of any such marketing
systems. This has led to the development and trialing of Meat Standards
Australia, a meat grading system based on eating quality which involves
accredited pathways to achieve certain grades.
for the Japanese seafood market in the late 1990s: Implications for
Dr S. C. Williams and Professor K Taya
The domestic seafood industry in Japan in the late 1990s has been
in crisis. Competition is now so intense that the seafood retailing sections
of many department stores and supermarket chains are consistently losing
money. As a result, the seafood sections are being markedly reduced in size
and scope or the space is being leased to independent operators. These
effects are rippling downwards, causing problems for wholesalers, importers,
and Japanese producers. Radical changes to ‘traditional’ marketing
practices have occurred, new marketing solutions are being tried, and others
have been proposed. In this paper, the authors set out the current situation
of the seafood market in Japan, and the changes that are taking place. The
current strategic responses of the various sectors to these changes are
described, as well as the implications of these responses and suggested
strategies for the marketing of Australian seafood in Japan.
in dairy farm sales and factors influencing dairy land prices in New Zealand
G P Rauniyar Senior Lecturer,
Institute of Natural Resources, Massey University, Palmerston North, New
A E Dooley - College of Sciences, Massey University, Palmerston North, New
W J Parker - Dairy and Beef Division, AgResearch (Ruakura), Hamilton, New
Dairy farm sale data (1990-1997) published by Valuation New
Zealand are examined in this paper. Trends and interrelationships involving
the number and size of dairy farm sales, land prices, milk solids prices and
dairy farm productivity are explored on a national and regional basis.
Buyer-seller relationships in dairy farm sales are also analysed. An
econometric model, constructed to explain dairy farm land prices (expressed
as the logarithm of the net sale price in 1990 dollars: r2=0.78)
indicated each 10% increase in farm area would decrease the sale price by
1.5% and that a 10% increase in milk solids would improve the price by 8.7%.
In real terms dairy land sale values are projected to increase.
analysis of dairy farm income and expenditure in New Zealand: A review of 25
years of adjustment.
G P Rauniyar - College of Sciences,
Massey University, Palmerston North, New Zealand
and W J Parker - Dairy and Beef Division, AgResearch (Ruakura), Hamilton, New
The cost-price squeeze in dairy farming has forced farmers to
become more competitive in the market place. This has primarily occurred
through increased herd size and productivity gains associated with
labour-saving technology. The cost and revenue structures and changes in the
contribution of key dairy production inputs to total cash expenditure and
farm income over the 1972/73-1996/97 period were analysed. Data were taken
from the annual publications of the Livestock Improvement Corporation and the
New Zealand Dairy Board. Implications for the future growth of dairy farms
and the industry are drawn from the analysis.
Returns from Some Replanting Strategies in the Orange Industry.
K.J. Elton and R. Hutton New South
Wales Agriculture, Yanco and Dr. J.D. Mullen - New South Wales Agriculture,
Due to a downturn in concentrate juice markets, there has been a
trend within the orange industry to reduce the reliance on Valencia oranges.
Reworking (where much of the main branch system of existing healthy Valencia
trees is removed and budsticks of selected Navel orange clones or other
citrus varieties are inserted in cut ends of the main limbs) is an
alternative to replanting as it reduces the pre-production yield losses which
are associated with establishing a replant site. Using benefit/cost criteria
applied to development budgets, a reworking strategy was found to be more
profitable than strategies which involved either replanting to Navels or
delaying replanting to Valencias.
An important source of risk is the difference in expected price between
Valencia and Navel oranges and how this varies through time. Based on
stochastic dominance testing, the reworking strategy was dominant for price
conditions experienced by the industry over the last thirty years. However,
in the future, this will depend on demand and supply conditions in fresh
fruit and processing markets.
trade of processed food in APEC economies
Tina Yiping Chen and Ray Trewin -
Australia-Japan Research Centre - Asia Pacific School of Economics and
The Australian National University - Canberra.
A considerable part of the growth in world trade, particularly
amongst developed countries, is of an intra-industry trade (IIT) nature - the
simultaneous export and import of products that are very close substitute for
each other in terms of factor inputs and consumption. Since such trade is
very difficult to explain in a neoclassical model, a substantial amount of
literature has developed to explain such trade. But there is still room for
studies of such trade both theoretically in general and empirically in
particular. In light of this gap, this paper examines the trends and patterns
of IIT in the processed food sector for APEC economies.
The focus of this paper on processed food IIT in APEC economies is important
for three broad reasons. First, most empirical work on IIT has focussed
almost entirely on manufactured products in general. Processed food products
are more or less regarded as one component of broad agricultural products
whose trade is dominated by comparative advantage (inter-industry trade in
nature). But being a component of manufactured industry, processed food
industries tend to have imperfectly competitive market structures
characterized by high seller concentration, some degree of plant level
economies of scale, and product differentiation.
Econometric Analysis of the Demand for Eggs in Australia
Edward Oczkowski - School of Management,
Charles Sturt University –Riverina, Wagga Wagga and Tom Murphy - Western
Research Institute, Charles Sturt University, Bathurst
This paper provides the first comprehensive econometric analysis
of Australian State egg demand behaviour. Explicit diagnostic testing of
models is employed to help gain robust demand elasticities. Demand is found
to be own price and income inelastic, with price elasticity being effectively
zero for the majority of states. Prices of related products tend to have only
a minor overall influence. The proportion of paid working females is
statistically important for the majority of states. A worldwide cholesterol
information index appears to capture the health concerns held about egg
consumption. Interestingly, results for advertising expenditure are mixed
with both significant and insignificant effects identified.
Rice Market Integration in China: The Case of Guangdong and Jiangxi
Zhang-Yue Zhou - Asian Agribusiness
Research Centre, Orange Agricultural College, The University of Sydney,
Wei-Ming Tian - College of Economics and Management, China Agricultural
University Beijing China
Guang-Hua Wan - Department of Agricultural Economics, The University of
Recent studies that examine the integration of grain markets in
China reveal that, for inter-provincial markets, there is generally a lack of
integration. A logical question to ask is: are markets that are close to each
other in two neighbouring provinces with one being grain deficit and the
other being grain surplus more integrated?
This study examines the integration of rice markets between two neighbouring
provinces: Guangdong (grain deficit) and Jiangxi (grain surplus). It is found
that there exist inter-market price relationships exist between markets in
these two provinces. Policy implications are discussed.
in Western Australia - Research, Development and Extension
Ross Kingwell - visiting Senior
Lecturer at the University of Western Australia and Senior Adviser at
Agriculture Western Australia (AGWEST), Andrew Bathgate - Project Manager,
AGWEST and Michael O’Connell - Research Officer, AGWEST
wool industry in Western Australia, as in other parts of Australia, has
experienced a prolonged downturn. Wool specialists have experienced negative
farm business profit in most years of the 1990s. Sheep numbers have declined
and the enterprise mix on many farms has shifted away from wool.
In this paper the wool industry R,D&E response in
Western Australia is discussed. In particular, the relative merits of
investing in on-farm productivity and off-farm processing and promotion are
reviewed. Conclusions are drawn about future research directions.
The wool industry in Western Australia has increased its reliance on
taxpayers funds. Hence, R,D&E cannot focus solely on the degree to which
farmers or others in the marketing chain mainly will benefit. Instead R,D&E
needs to be directed to areas in which farmers or others in the supply chain
will under-invest regarding the level of public benefits, and where the level
of public benefit represents an attractive social return.
Objectives on NSW Dairy Farms: Assigned importance and related satisfaction
Jennifer L. Harrison and Dennis T. O’Brien -
School of Business, Southern Cross University - Coffs Harbour, Australia.
Dairying is a major rural industry in New South Wales (NSW). It contributes
significantly to local economies through farm level activities, by generating
substantial downstream employment and value adding through processing. In
recent years dairy farm management has become increasingly complex with a
need to balance numerous, perhaps conflicting, objectives. Farmers must
reconcile their own private goals with those of society. They face intense
pressures to increase production, reduce production costs and increase
product quality while simultaneously conserving natural resources,
maintaining lifestyle and achieving other personal objectives. The extent to
which these objectives are mutually achievable may have implications for both
the importance attached to them and related farmer satisfaction. Using survey
data from two hundred NSW dairy farms, this study examines the importance
farmers assign to a selection of objectives and the satisfaction farmers feel
in terms of achieving these objectives. Results of analysis indicate both
conflicts and concurrence in the weights assigned. The findings have
implications for farm management, industry policy, the assessment of farm
performance and for putting into operation actions to achieve sustainability