IDEAS home Printed from https://ideas.repec.org/a/ags/aareaj/333859.html
   My bibliography  Save this article

Counting the cost: the reserve price scheme for wool 1970-2001

Author

Listed:
  • Abbott, Malcolm
  • Merrett, David

Abstract

This paper provides a policy commentary on the collapse in 1991 of the Australian Reserve Price Scheme for wool. A key cause of the collapse in the Scheme was a change in the RPS’s governance arrangements, which led to increased political pressures to raise prices to unsustainable levels. In addition, in this paper an estimation has been made of the direct, upfront costs of the operation of the scheme, drawing on the financial accounts of the various agencies operating the RPS and subsequent wool stockpile. This was undertaken to determine the scale of the policy failure.

Suggested Citation

  • Abbott, Malcolm & Merrett, David, 2019. "Counting the cost: the reserve price scheme for wool 1970-2001," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(4), October.
    • Handle: RePEc:ags:aareaj:333859
    DOI: 10.22004/ag.econ.333859
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/333859/files/ajar12337.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.333859?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Wright, Brian D, 1979. "The Effects of Ideal Production Stabilization: A Welfare Analysis Under Rational Behavior," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 1011-1033, October.
    2. Salant, Stephen W, 1983. "The Vulnerability of Price Stabilization Schemes to Speculative Attack," Journal of Political Economy, University of Chicago Press, vol. 91(1), pages 1-38, February.
    3. Henry Haszler & Geoff Edwards & Anthony Chisholm & Phillip Hone, 1996. "The Wool Debt, the Wool Stockpile and the National Interest: Did the Garnaut Committee Get it Right?," The Economic Record, The Economic Society of Australia, vol. 72(218), pages 260-271, September.
    4. Greg Hertzler, 1994. "Coordinating Production And Disposal Of Commodity Stockpiles With Application To Australia'S Wool Industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 38(1), pages 49-76, April.
    5. Bob Richardson, 1982. "On The Hidden Revenue Effects Of Wool Price Stabilisation In Australia: Initial Results — A Comment," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 26(1), pages 63-65, April.
    6. Gruen, Fred H.G., 1964. "Some Hidden Gains And Losses Of A Wool Reserve Scheme," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 8(2), pages 1-8, December.
    7. Williams,Jeffrey C. & Wright,Brian D., 2005. "Storage and Commodity Markets," Cambridge Books, Cambridge University Press, number 9780521023399, September.
    8. Richardson, Bob, 1982. "On The Hidden Revenue Effects Of Wool Price Stabilisation In Australia: Initial Results - A Comment," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 26(1), pages 1-3, April.
    9. H. Don & B.H. Gunasekera & Brian S. Fisher, 1992. "Australias's Recent Experience with the Collapse of its Wool Buffer Stock Scheme: Some Key Lessons," The World Economy, Wiley Blackwell, vol. 15(2), pages 251-269, March.
    10. Lewis, Jack Neville, 1979. "Floor Prices and Wool Promotion: Some Further Hidden Costs?," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 47(02), pages 1-9, August.
    11. Richardson, Bob, 2001. "The politics and economics of wool marketing, 1950-2000," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(1), pages 1-21.
    12. R. Campbell & B. Gardiner & H. Haszler, 1980. "On The Hidden Revenue Effects Of Wool Price Stabilisation In Australia: Initial Results," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 24(1), pages 1-15, April.
    13. Gilbert, Christopher L., 1996. "International Commodity Agreements: An obituary notice," World Development, Elsevier, vol. 24(1), pages 1-19, January.
    14. Henry Haszler & Bill Curran, 1982. "On The Hidden Revenue Effects Of Wool Price Stabilisation In Australia: Initial Results‐ A Reply," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 26(1), pages 66-71, April.
    15. repec:bla:ecorec:v:72:y:1996:i:218:p:260-71 is not listed on IDEAS
    16. Wright, Brian D & Williams, Jeffrey C, 1982. "The Economic Role of Commodity Storage," Economic Journal, Royal Economic Society, vol. 92(367), pages 596-614, September.
    17. Malcolm Abbott, 2013. "Market support schemes and their interaction: the case of the wool industry," Agrekon, Taylor & Francis Journals, vol. 52(3), pages 63-82, September.
    18. Hertzler, Greg, 1994. "Coordinating Production And Disposal Of Commodity Stockpiles With Application To Australia'S Wool Industry," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 38(1), pages 1-28, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nelson, Rohan & Cameron, Andrew & Xia, Charley & Gooday, Peter, 2022. "The ABARES Approach to Forecasting Agricultural Commodity Markets," Australasian Agribusiness Review, University of Melbourne, Department of Agriculture and Food Systems, vol. 30(6), November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Donald F. Larson & Julian Lampietti & Christophe Gouel & Carlo Cafiero & John Roberts, 2014. "Food Security and Storage in the Middle East and North Africa," The World Bank Economic Review, World Bank, vol. 28(1), pages 48-73.
    2. Richardson, Bob, 2001. "The politics and economics of wool marketing, 1950-2000," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(1), pages 1-21.
    3. Brian D. Wright, 2012. "International Grain Reserves And Other Instruments to Address Volatility in Grain Markets," The World Bank Research Observer, World Bank, vol. 27(2), pages 222-260, August.
    4. Gouel, Christophe, 2013. "Optimal food price stabilisation policy," European Economic Review, Elsevier, vol. 57(C), pages 118-134.
    5. Geoff W. Edwards, 1987. "Agricultural Policy Debate: A Survey," The Economic Record, The Economic Society of Australia, vol. 63(2), pages 129-143, June.
    6. Christophe Gouel, 2012. "Agricultural Price Instability: A Survey Of Competing Explanations And Remedies," Journal of Economic Surveys, Wiley Blackwell, vol. 26(1), pages 129-156, February.
    7. Abbott, Malcolm, 2016. "A long-term view of the effectiveness of wool promotion schemes," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 54(3), January.
    8. Christophe Gouel, 2013. "Rules versus Discretion in Food Storage Policies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(4), pages 1029-1044.
    9. Moir, Brian & Piggott, Roley R., 1991. "Combinations Of Buffer-Stocks And Buffer-Funds For Wool Price Stabilisation In Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 35(1), pages 1-13, April.
    10. Robert J. Myers & Roley R. Piggott & William G. Tomek, 1990. "Estimating Sources Of Fluctuations In The Australian Wool Market: An Application Of Var Methods," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 34(3), pages 242-262, December.
    11. Galtier, F., 2009. "How to Manage Food Price Instability in Developing Countries ?," Working Papers MoISA 200905, UMR MoISA : Montpellier Interdisciplinary center on Sustainable Agri-food systems (social and nutritional sciences): CIHEAM-IAMM, CIRAD, INRAE, L'Institut Agro, Montpellier SupAgro, IRD - Montpellier, France.
    12. John C. Quiggin, 1983. "Wool Price Stabilisation And Profit Risk For Wool Users," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 27(1), pages 31-43, April.
    13. repec:ags:ijag24:345255 is not listed on IDEAS
    14. Salant, Stephen & Shobe, William & Uler, Neslihan, 2022. "The effects of “nonbinding” price floors," European Economic Review, Elsevier, vol. 145(C).
    15. Abbott, Malcolm, 2013. "Market support schemes and their interaction: the case of the wool industry," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 52(3), March.
    16. repec:ags:ijag24:346844 is not listed on IDEAS
    17. Galtier, F., 2009. "Comment gérer l'instabilité des prix alimentaires dans les pays en développement ?," Working Papers MoISA 200904, UMR MoISA : Montpellier Interdisciplinary center on Sustainable Agri-food systems (social and nutritional sciences): CIHEAM-IAMM, CIRAD, INRAE, L'Institut Agro, Montpellier SupAgro, IRD - Montpellier, France.
    18. Diagne, Youssoupha S & Fall, Alsim, 2009. "La spéculation contribue- t- elle à expliquer la dynamique des prix des produits alimentaires au Sénégal ? [Does speculation explain food prices movements in Senegal?]," MPRA Paper 54880, University Library of Munich, Germany.
    19. Guerra Vallejos, Ernesto & Bobenrieth Hochfarber, Eugenio & Bobenrieth Hochfarber, Juan & Wright, Brian D., 2021. "Solving dynamic stochastic models with multiple occasionally binding constraints," Economic Modelling, Elsevier, vol. 105(C).
    20. Durmaz, Tunç, 2016. "Precautionary Storage in Electricity Markets," Discussion Papers 2016/5, Norwegian School of Economics, Department of Business and Management Science.
    21. Christophe Gouel, 2014. "Food Price Volatility and Domestic Stabilization Policies in Developing Countries," NBER Chapters, in: The Economics of Food Price Volatility, pages 261-306, National Bureau of Economic Research, Inc.
    22. Quemin, Simon & Trotignon, Raphaël, 2021. "Emissions trading with rolling horizons," Journal of Economic Dynamics and Control, Elsevier, vol. 125(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aareaj:333859. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaresea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.