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Distortions to Agricultural Incentives in Australia Since World War II

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  • KYM ANDERSON
  • PETER LLOYD
  • DONALD MACLAREN

Abstract

Australia's lacklustre economic growth performance in the first four decades following World War II was in part due to an antitrade, antiprimary sector bias in government assistance policies. This paper provides new annual estimates of the extent of those biases since 1946 and their gradual phase-out during the past two decades. In doing so it reveals that the timing of the sectoral assistance cuts was such as sometimes to improve but sometimes to worsen the distortions to incentives faced by farmers. Also, the changes increased the variation of assistance rates within agriculture during the 1950s and 1960s, reducing the welfare contribution of those programmes in that period. While the assistance pattern within agriculture appears not to have been strongly biased against exporters, its reform has coincided with a substantial increase in export orientation of many farm industries. The overall pattern for Australia is contrasted with that revealed by comparable new estimates for other high-income countries. Copyright © 2007 The Economic Society of Australia.

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Bibliographic Info

Article provided by The Economic Society of Australia in its journal Economic Record.

Volume (Year): 83 (2007)
Issue (Month): 263 (December)
Pages: 461-482

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Handle: RePEc:bla:ecorec:v:83:y:2007:i:263:p:461-482

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References

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  1. Anderson, Kym & Lattimore, Ralph G. & Lloyd, Peter J. & MacLaren, Donald, 2007. "Distortions to Agricultural Incentives in Australia and New Zealand," 2007 Conference (51st), February 13-16, 2007, Queenstown, New Zealand 10407, Australian Agricultural and Resource Economics Society.
  2. Peter G. Warr, 1978. "The Case Against Tariff Compensation," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 22(2-3), pages 85-98, 08-12.
  3. Melitz, Marc J, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," CEPR Discussion Papers 3381, C.E.P.R. Discussion Papers.
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  5. Kym Anderson & Ernesto Valenzuela, 2007. "Do Global Trade Distortions Still Harm Developing Country Farmers?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 143(1), pages 108-139, April.
  6. Alan V. Deardorff, 1984. "An Exposition and Exploration of Krueger's Trade Model," Canadian Journal of Economics, Canadian Economics Association, vol. 17(4), pages 731-46, November.
  7. David Card & Richard B. Freeman, 2002. "What Have Two Decades of British Economic Reform Delivered?," NBER Working Papers 8801, National Bureau of Economic Research, Inc.
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  11. Honma, Masayoshi & Hayami, Yujiro, 2007. "Distortions to Agricultural Incentives in Korea and Taiwan," Agricultural Distortions Working Paper 48479, World Bank.
  12. Anderson, Kym, 1997. "Are Resource-Abundant Economies Disadvantaged?," 1997 Conference (41st), January 22-24, 1997, Gold Coast, Australia 135403, Australian Agricultural and Resource Economics Society.
  13. Anderson, Kym, 1999. "The WTO Agenda for the New Millennium," The Economic Record, The Economic Society of Australia, vol. 75(228), pages 77-88, March.
  14. Anonymous, 2006. "Rural Water Use and the Environment: The Role of Market Mechanisms," Commissioned Studies 8020, Productivity Commission.
  15. Ben Dolman & Dean Parham & Simon Zheng, 2007. "Can Australia Match US Productivity Performance?," Staff Working Papers 0703, Productivity Commission, Government of Australia.
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  17. Stephan Pfaffenzeller & Paul Newbold & Anthony Rayner, 2007. "A Short Note on Updating the Grilli and Yang Commodity Price Index," World Bank Economic Review, World Bank Group, vol. 21(1), pages 151-163.
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  20. Kym Anderson & Lee Ann Jackson, 2005. "GM crop technology and trade restraints: economic implications for Australia and New Zealand ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(3), pages 263-281, 09.
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  23. Kym Anderson & Will Martin & Dominique van der Mensbrugghe, 2006. "Distortions to World Trade: Impacts on Agricultural Markets and Farm Incomes," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(2), pages 168-194.
  24. Anderson, Kym & Jackson, Lee Ann, 2005. "GM crop technology and trade restraints: economic implications for Australia and New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(3), September.
  25. Productivity Commission, 2005. "Trends in Australian Agriculture," Research Papers 0502, Productivity Commission, Government of Australia.
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  27. Leamer, Edward E, 1987. "Paths of Development in the Three-Factor, n-Good General Equilibrium Model," Journal of Political Economy, University of Chicago Press, vol. 95(5), pages 961-99, October.
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  29. S.F. Harris, 1964. "Some Measures Of Levels Of Protection In Australia'S Rural Industries," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 8(2), pages 124-144, December.
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  31. Peter Forsyth, 2000. "Microeconomic Policies and Structural Change," RBA Annual Conference Volume, in: David Gruen & Sona Shrestha (ed.), The Australian Economy in the 1990s Reserve Bank of Australia.
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