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Production Flexibility and Technical Change in Australia's Wheat-Sheep Zone

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  • McKay, Lloyd
  • Lawrence, Denis
  • Vlastuin, Chris

Abstract

The flexibility of production and the bias of technical change in the Wheat- Sheep Zone has been examined by estimating the system of derived output and input share equations from a translog variable profit function. This analysis was undertaken for three outputs (sheep and wool, crops, and beef cattle and other farm output) and five inputs (labour, materials and services, livestock, capital, and land). The supply of each of these three major groups of farm outputs has been inelastic. Sheep enterprise production has been complementary with cropping while crop and beef cattle outputs have not been complementary. The demand for materials and services inputs has been elastic while the elasticity of demand for labour has been approximately unity. Wool and other sheep output has been relatively labour intensive while crops have been relatively capital intensive. Livestock activities (sheep and cattle) have been relatively land intensive. Hence, policies that have caused the price of labour to be greater (less) than it would have been otherwise have discouraged (encouraged) the production of sheep enterprise output relatively more than other farm outputs.

Suggested Citation

  • McKay, Lloyd & Lawrence, Denis & Vlastuin, Chris, 1982. "Production Flexibility and Technical Change in Australia's Wheat-Sheep Zone," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 50(01), pages 1-18, April.
    • Handle: RePEc:ags:remaae:12290
    DOI: 10.22004/ag.econ.12290
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    References listed on IDEAS

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    1. Wicks, John A. & Dillon, John L., 1978. "APMAA Estimates of Supply Elasticities for Australian Wool, Beef and Wheat," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 46(01), pages 1-10, April.
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    Cited by:

    1. Vere, D. T., 1998. "Investigating improved pasture productivity change on the New South Wales tablelands," Agricultural Economics, Blackwell, vol. 18(1), pages 63-74, January.
    2. Kivanda, Lena & Fox, Glenn, 1993. "Falsification and the Practice of Agricultural Production Economists: A Methodological Assessment," Department of Agricultural Economics and Business 258724, University of Guelph.
    3. Chisholm, Anthony H., 1992. "Australian Agriculture: A Sustainability Story," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 36(1), pages 1-29, April.
    4. N. Islam, 2000. "An Analysis of Productivity Growth in Western Australian Agriculture," Economics Discussion / Working Papers 00-15, The University of Western Australia, Department of Economics.
    5. Martin, John F., 1982. "Induced Innovation in the High Rainfall Zone," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 50(03), pages 1-20, December.
    6. Agbola, Frank W., 2005. "Optimal intertemporal investment in Australian agriculture: An empirical investigation," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 6(2), pages 1-11.
    7. Fisher, Brian S. & Wall, Charles A., 1990. "Supply Response In The Australian Sheep Industry: A Profit Function Approach," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 34(2), pages 1-20, August.
    8. Nguyen, Duong T.M. & McLaren, Keith Robert & Zhao, Xueyan, 2008. "Multi-Output Broadacre Agricultural Production: Estimating A Cost Function Using Quasi-Micro Farm Level Data From Australia," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6009, Australian Agricultural and Resource Economics Society.
    9. H. Ahammad & N. Islam, 1999. "Estimating the WA Agricultural Production System: A profit function approach," Economics Discussion / Working Papers 99-11, The University of Western Australia, Department of Economics.
    10. Mullen, John D. & Cox, Thomas L., 1996. "Measuring Productivity Growth In Australian Broadacre Agriculture," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 40(3), pages 1-22, December.
    11. Lawrence, Denis, 1988. "Recent Developments in Applying Duality Theory," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 56(03), pages 1-8, December.
    12. Frank W. Agbola & Stephen R. Harrison, 2005. "Empirical investigation of investment behaviour in Australia's pastoral region," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(1), pages 47-62, March.
    13. Colman, David R., 1983. "A Review of the Arts of Supply Response Analysis," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 51(03), pages 1-30, December.

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