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Land and Environment : Agribusiness Assoc. of Australia

Australasian Agribusiness Review
ISSN 1442-6951

Volume 23 - 2015 - Paper 7 (100 - 119)

Value Chain Investment for Sustainable Rural Development and Poverty Alleviation: A Case Study of the Indonesian Boiled Fish Market

Ade Wiguna Nur Yasin and Garry Griffith

Poverty is serious and widespread in the rural coastal areas of Indonesia. Government data suggests that more than 7.8 million people in more than 10,500 villages live below the poverty line. A rapid poverty reduction program has been conducted since 2011 through the provision of infrastructure that supports more productive industries. However, even if the infrastructure is available, can small-scale food producers in coastal areas achieve self-propelled development if they are still poor? The value chain approach to development is suggested as a complement to the existing infrastructure development program by opening up market channels for high value products through vertical linkages. Pindang or boiled fish is used as a case study, since the industry is quite large and it involves many low-income people. Its current value chain is analysed to define the bottlenecks. This leads to a conclusion that to achieve greater economic development, small-scale pindang producers could consider (a) improving their product quality and diversifying their product range, (b) increasing economies of scale by upgrading horizontal linkages, and (c) introducing new leading firms within vertical linkages.

Volume 23 - 2015 - Paper 6 (83 - 99)

Plantation forestry and economic development in the Tiwi islands

John Hicks, G.P. Samsa and Bill Malcolm

The Tiwi Islanders currently have 30,000 ha of mature Acacia to harvest. They have relatively small landowner debt to service, an established port and confirmed buyers. Re-investment of the cash returns from the current harvest into more plantation forestry to secure future community benefit is not a compelling attraction; re-investing these revenues to grow-out Acacia over further rotations is unlikely to benefit landowners as much as investing the proceeds in a sovereign wealth fund. In this paper, a social benefit cost framework is used to appraise the potential contribution to Tiwi Islanders of plantation forestry on the Melville Island. Analysis of the priced benefits and costs of investment of a ten year cycle of A.mangium under most likely yields and prices indicates that the investment in Acacia plantation forestry has a 35 per cent probability of earning a 4 per cent p.a. or greater real return on capital. To double the odds to two chances in three of earning the annual required return on capital of 4 per cent real return on capital, an additional $100m of unpriced benefits need to be generated over the forty years life of the plantation rotation. This would require unpriced annual benefits of $5.1m or $2550 per Tiwi Islander.

Volume 23 - 2015 - Paper 5 (56-82)

Is the Australian wool industry efficient at converting wool into value?

Euan Fleming and David Cottle

The marketing strategies of agricultural producers have become increasingly focussed on the sale of differentiated products to intermediary buyers rather than the sale of homogeneous commodities directly to retailers. We measure the overall efficiency with which wool is converted into value across different processing routes and end products in the Australian wool value chain and decompose it into its technical, scale and mix efficiency components. Results show that considerable scope exists to increase the value of most sale lots, and indicate that the overall efficiency in extracting value is lower for wool supplied to processes that produce high-value wool garments.

Volume 23 - 2015 - Paper 4 (36 - 55)

Policy Options to Improve the Performance of Housewives’ Groups in the Cottage Food Industry in Thailand

Renato A. Villano, Phanin Khrueathai and Euan Fleming

This paper highlights the potential to improve the performance of housewives’ groups and stimulate its growth as a key income-generating activity for rural households in developing countries. The analytical framework is based on an analysis of private and value chain-level net benefits from alternative policy actions and research and training initiatives. Seven candidates for policy implementation with the best prospects for success are examined: industrial policy; improving food quality; branding and labelling; encouraging strategic alliances; increasing the managerial role of members in housewives’ groups; educating members of housewives’ groups and group leaders; and improving the organisational structure of housewives’ groups.

Volume 23 - 2015 - Paper 3 (26-35)

PrimeAg Australia 2007-13: A Suitable Structure for Long Term Investment in Agriculture?
Brad Plunkett

Prime Agriculture Australia Limited, 2007–2013, was a listed investor in, and operator of, agricultural properties spread between the Australian States of Queensland (Qld) and New South Wales (NSW). PAG operated as a listed entity for six years. Yet by November 2013, PAG was delisted, with its assets sold and its capital returned to shareholders. The company’s shares only briefly traded above Net Asset Value (NAV), which has been a frequent occurrence with listed Australian agricultural stocks. 

This paper explores whether this listed entity was a sufficiently suitable fit for investment into the highly volatile agricultural sector by outlining the key major developments in PAG’s six-year history.  The rest of the paper is organised into four sections around background on the rural land market in Australia, the key documents of the 2007 Prospectus, the 2011 Rights Issue and the 2013 Scheme of Arrangement.

Volume 23 - 2015 - Paper 2 (12- 25)                 

Towards a holistic framework for impact assessment of agricultural research for development – understanding complexity in remote, culturally diverse regions of Vietnam

Huu Nhuan Nguyen, Elske van de Fliert and Oleg Nicetic

Since the late 1990s, there has been a great deal of investment by both the Vietnamese government and international development agencies in the economic development of the Northwest Highlands of Vietnam. A shift towards a research for development approach, targeting the immediate use of research outputs for development purposes, became more visible especially since the late 2000s. This paper describes the results of a study that aimed to review and analyse the theories and practice of AR4D impact assessment approaches and the merits and limitations of such approaches to AR4D in the Northwest Highlands of Vietnam. The study employed documentary research, focus group discussions with farmers and in-depth interviews with key informants, while thematic analysis was used for data analysis. The study concludes that a holistic approach towards impact assessment is best suited to an economically and culturally diverse region such as the Northwest Highlands of Vietnam, and suggests a framework for impact assessment that is based on a comprehensive livelihoods perspective. 

Volume 23 - 2015 - Paper 1 (pp.1-11)                    
Impact of Contract Farming with Farmer Organizations on Farmers’ Income: A Case Study of Reasmey Stung Sen Agricultural Development Cooperative in Cambodia

An Sokchea and Richard J. Culas

 This study examines the impact of contract farming with Farmer Organizations on farmers’ income. Contract farming with farmer organizations is a smallholder farmer-inclusive contract farming system.  Field surveys were conducted in August 2010 with 75 farmers (including 39 contract farmers) in Kampong Thom province, Cambodia. The analysis—i.e., using a treatment effects model—indicates that contract farming with farmer organizations significantly raises farmers’ income.  The econometric model and qualitative data show that the contract farming can attribute to an increase of farming productivity, quality of produce and farming cost efficiency.

Volume 22 - 2014 - Paper 1 (pp. 1 - 13)

Can we explain variations in winery ratings in Victoria?

Euan Fleming, Stuart Mounter, Bligh Grant and Garry Griffith

The scoring of wines and the ratings of wineries is the source of much debate. In this paper we attempt to explain variations in winery ratings in Victoria by examining two winery rating systems, the winery 5-star ratings system of Halliday and the WineBoss version that modifies the Halliday system, to obtain a consensus industry rating from a variety of sources; in conjunction with a limited number of other data about the wineries that are rated. We use ordered logit models and odds ratios on a sample of rated Victorian wineries (291 in the Halliday sample and 331 in the WineBoss sample) to see which predictor variables increase the odds of a winery being in a higher-rated category.
Wineries that are older, use a consultant winemaker and/or produce predominantly red wines are more likely to be in a higher-rated category than those wineries that do not; conversely, wineries that use a contract winemaker and/or are located in a number of particular regions of Victoria are more likely to be in a lower-rated category than those wineries that do not. All of these results are as expected and confirm previous research. However, neither the size of the winery in terms of output nor whether the winery has other revenue sources, such as a restaurant, has any significant correlation with winery rating. The paper concludes with some suggestions for further research.

Volume 22 - 2014 - Paper 2 (pp. 14 - 26)

Economic issues surrounding wheat quality assurance: the case of late maturing alpha-amylase policy in Australia

Ross Kingwell and Chris Carter

Late maturing α-amylase (LMA) is a genetic defect in some wheat lines that when triggered by particular environmental conditions damages the grains’ starch and reduces its suitability in processing. To lessen the risk of LMA expression in Australia’s wheat crops, a testing regime is now part of the nation’s varietal classification system.  This paper analyses the impact of relaxing the testing regime and thereby providing farmers with the option to grow higher yielding varieties with higher risks of expressing an LMA defect that causes a price downgrade. We model the potential for quality downgrade by incorporating an expected price into the wheat supply and demand functions. The expected price is generated using the price differential between milling and feed grades and the probability of LMA exhibition. The net benefit from shifting between the current and more relaxed testing regimes is evaluated as the change in producer surplus. The analysis is based on the Western Australian wheat industry that supplies around half of Australia’s wheat exports. Initial findings indicate that the expected net benefit to the wheat industry in Western Australia from a relaxation of the current LMA policy is around $18m per annum.


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