IDEAS home Printed from https://ideas.repec.org/a/bla/ecorec/v83y2007i263p461-482.html
   My bibliography  Save this article

Distortions to Agricultural Incentives in Australia Since World War II

Author

Listed:
  • 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.

Suggested Citation

  • Kym Anderson & Peter Lloyd & Donald Maclaren, 2007. "Distortions to Agricultural Incentives in Australia Since World War II," The Economic Record, The Economic Society of Australia, vol. 83(263), pages 461-482, December.
    • Handle: RePEc:bla:ecorec:v:83:y:2007:i:263:p:461-482
    DOI: 10.1111/j.1475-4932.2007.00434.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1475-4932.2007.00434.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1475-4932.2007.00434.x?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
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. James, Sallie & Anderson, Kym, 1998. "On the need for more economic assessment of quarantine/SPS policies," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 42(4), pages 1-20.
    2. Productivity Commission, 2006. "Rural Water Use and the Environment: The Role of Market Mechanisms," Research Reports, Productivity Commission, Government of Australia, number 21.
    3. Balcombe, Kelvin George & Doucouliagos, Hristos & Fraser, Iain, 2007. "Input usage, output mix and industry deregulation: an analysis of the Australian dairy manufacturing industry," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(2), pages 1-20.
    4. 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.
    5. David Card & Richard B. Freeman, 2004. "What Have Two Decades of British Economic Reform Delivered?," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980–2000, pages 9-62, National Bureau of Economic Research, Inc.
    6. Kym Anderson, 1999. "The WTO Agenda for the New Millennium," The Economic Record, The Economic Society of Australia, vol. 75(1), pages 77-88, March.
    7. 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), pages 1-19.
    8. John G. Crawford., 1935. "Tariff Level Indices," The Economic Record, The Economic Society of Australia, vol. 10(1), pages 213-221, June.
    9. Euan Fleming, 2007. "Use of the single factoral terms of trade to analyse agricultural production ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(2), pages 113-119, June.
    10. Dean Parham, 2004. "Sources of Australia's Productivity Revival," The Economic Record, The Economic Society of Australia, vol. 80(249), pages 239-257, June.
    11. 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.
    12. McKay, D.H., 1967. "The Small-Farm Problem In Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 11(2), pages 1-18, December.
    13. 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.
    14. Ben Dolman & Dean Parham & Simon Zheng, 2007. "Can Australia Match US Productivity Performance?," Staff Working Papers 0703, Productivity Commission, Government of Australia.
    15. R. H. Snape, 1984. "Australia's Relations with GATT," The Economic Record, The Economic Society of Australia, vol. 60(1), pages 16-27, March.
    16. Honma, Masayoshi & Hayami, Yujiro, 2007. "Distortions to Agricultural Incentives in Korea and Taiwan," Agricultural Distortions Working Paper Series 48479, World Bank.
    17. H. W. Arndt, 1965. "Australia‐Developed, Developing Of Midway?1," The Economic Record, The Economic Society of Australia, vol. 41(95), pages 318-340, September.
    18. Stephan Pfaffenzeller & Paul Newbold & Anthony Rayner, 2007. "A Short Note on Updating the Grilli and Yang Commodity Price Index," The World Bank Economic Review, World Bank, vol. 21(1), pages 151-163.
    19. Kym Anderson & Ernesto Valenzuela, 2007. "Do Global Trade Distortions Still Harm Developing Country Farmers?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(1), pages 108-139, April.
    20. Unknown, 2005. "Trends in Australian Agriculture," Commission Research Papers 31903, Productivity Commission.
    21. 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.
    22. Productivity Commission, 2005. "Trends in Australian Agriculture," Research Papers 0502, Productivity Commission, Government of Australia.
    23. Stuart Harris, 1975. "Tariff Compensation: Sufficient Justification For Assistance To Australian Agriculture?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 19(3), pages 131-145, December.
    24. Peter Lloyd, 2006. "Fifty Years Of Trade Policy Reform In Australia," Economic Papers, The Economic Society of Australia, vol. 25(4), pages 301-313, December.
    25. 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.
    26. Lloyd, P. J., 1974. "A more general theory of price distortions in open economies," Journal of International Economics, Elsevier, vol. 4(4), pages 365-386, November.
    27. World Bank, 2006. "World Development Indicators 2006," World Bank Publications - Books, The World Bank Group, number 8151.
    28. Productivity Commission, 2007. "Potential Benefits of the National Reform Agenda," Research Papers 0701, Productivity Commission, Government of Australia.
    29. Gardner, Bruce L., 2008. "Distortions to Agricultural Incentives in the United States and Canada," Agricultural Distortions Working Paper Series 48573, World Bank.
    30. Anderson, Kym, 1998. "Are resource-abundant economies disadvantaged?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 42(1), pages 1-23.
    31. Gopinath, Munisamy & Sheldon, Ian M. & Echeverria, Rodrigo, 2007. "Firm Heterogeneity and International Trade: Implications for Agricultural and Food Industries," Trade Issues Papers 9349, International Agricultural Trade Research Consortium.
    32. Fleming, Euan M., 2007. "Use of the single factoral terms of trade to analyse agricultural production," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(2), pages 1-7.
    33. Unknown, 2006. "Rural Water Use and the Environment: The Role of Market Mechanisms," Commissioned Studies 8020, Productivity Commission.
    34. Peter Forsyth, 2000. "Microeconomic Policies and Structural Change," RBA Annual Conference Volume (Discontinued), in: David Gruen & Sona Shrestha (ed.),The Australian Economy in the 1990s, Reserve Bank of Australia.
    35. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    36. repec:rus:hseeco:122439 is not listed on IDEAS
    37. Lloyd, Peter J., 1975. "Tariff Compensation: An Undesirable Policy," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 19(3), pages 1-8, December.
    38. Richard Baldwin, 2005. "Heterogeneous Firms and Trade: Testable and Untestable Properties of the Melitz Model," NBER Working Papers 11471, National Bureau of Economic Research, Inc.
    39. 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 961-999, October.
    40. Peter J. Lloyd, 1975. "Tariff Compensation: An Undesirable Policy," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 19(3), pages 146-153, December.
    41. Alan V. Deardorff, 1984. "An Exposition and Exploration of Krueger's Trade Model," Canadian Journal of Economics, Canadian Economics Association, vol. 17(4), pages 731-746, November.
    42. Vousden,Neil, 1990. "The Economics of Trade Protection," Cambridge Books, Cambridge University Press, number 9780521346696, September.
    43. repec:bla:ecorec:v:60:y:1984:i:168:p:16-27 is not listed on IDEAS
    44. Harris, S.F., 1964. "Some Measures Of Levels Of Protection In Australia'S Rural Industries," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 8(2), pages 1-21, December.
    45. repec:bla:ecorec:v:75:y:1999:i:228:p:77-88 is not listed on IDEAS
    46. Harris, Stuart, 1975. "Tariff Compensation: Sufficient Justification For Assistance To Australian Agriculture?," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 19(3), pages 1-15, December.
    Full references (including those not matched with items on IDEAS)

    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. 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. Kym Anderson, 2020. "Trade Protectionism In Australia: Its Growth And Dismantling," Journal of Economic Surveys, Wiley Blackwell, vol. 34(5), pages 1044-1067, December.
    3. Anderson, Kym & de Nicola, Francesca & Jara, Esteban & Kurzweil, Marianne & Sandri, Damiano & Valenzuela, Ernesto, 2007. "Distortions in farmer prices since 1950s: South Africa in international perspective," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 46(4), pages 1-33, December.
    4. Peter Lloyd & Peter Lloyd, 2013. "Relative Assistance to Agriculture and Manufacturing since Federation," Department of Economics - Working Papers Series 1173, The University of Melbourne.
    5. Kym Anderson, 2016. "Agricultural Trade, Policy Reforms, and Global Food Security," Palgrave Studies in Agricultural Economics and Food Policy, Palgrave Macmillan, number 978-1-137-46925-0.
    6. Roger G. Mauldon, 2021. "Early Analytical Agricultural Economics in Australia," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 61(1), pages 45-63, March.
    7. William J. Martin, 1990. "Public Choice Theory And Australian Agricultural Policy Reform," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 34(3), pages 189-211, December.
    8. Peter G. Warr, 1979. "Tariff Compensation Without Omniscience," The Economic Record, The Economic Society of Australia, vol. 55(1), pages 20-32, March.
    9. 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.
    10. Peter G. Warr, 1977. "Tariff Compensation via Input Subsidies," The Economic Record, The Economic Society of Australia, vol. 53(4), pages 508-516, December.
    11. Anderson, Kym & Kurzweil, Marianne & Martin, William J. & Sandri, Damiano & Valenzuela, Ernesto, 2008. "Methodology for Measuring Distortions to Agricultural Incentives," Agricultural Distortions Working Paper Series 48326, World Bank.
    12. Anderson, Kym, 2016. "Sectoral Trends and Shocks in Australia’s Economic Growth," CEPR Discussion Papers 11598, C.E.P.R. Discussion Papers.
    13. Richard Pomfret & Kym Anderson, 2014. "Globalisation and Agricultural Trade," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 54(3), pages 285-306, November.
    14. D. MacLaren, 1991. "Agricultural Trade Policy Analysis And International Trade Theory: A Review Of Recent Developments," Journal of Agricultural Economics, Wiley Blackwell, vol. 42(3), pages 250-297, September.
    15. Ayre L. Hillman, 1977. "The Brigden Theorem: The Inefficiency of Tariffs, Public Sophistication and the Merit‐Want Market Failure," The Economic Record, The Economic Society of Australia, vol. 53(3), pages 434-446, September.
    16. Kym Anderson & Anna Strutt, 2014. "Emerging economies, productivity growth and trade with resource-rich economies by 2030," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 58(4), pages 590-606, October.
    17. Kym Anderson & James Giesecke & Ernesto Valenzuela, 2010. "How would global trade liberalization affect rural and regional incomes in Australia?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(4), pages 389-406, October.
    18. Anderson, Kym & Valenzuela, Ernesto & van der Mensbrugghe, Dominique, 2009. "Welfare and Poverty Effects of Global Agricultural and Trade Policies Using the Linkage Model," Agricultural Distortions Working Paper Series 52785, World Bank.
    19. Kym Anderson & Gordon Rausser & Johan Swinnen, 2013. "Political Economy of Public Policies: Insights from Distortions to Agricultural and Food Markets," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 423-477, June.
    20. Kym Anderson, 2009. "Distorted Agricultural Incentives and Economic Development: Asia's Experience," The World Economy, Wiley Blackwell, vol. 32(3), pages 351-384, March.

    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

    Statistics

    Access and download statistics

    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:bla:ecorec:v:83:y:2007:i:263:p:461-482. 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: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/esausea.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.