Antipodean agricultural and resource economics at 60: national and global price‐ and trade‐distorting policies

Abstract

This paper surveys significant contributions made by Australian and New Zealand (ANZ) agricultural and trade economists to our understanding of the extent to which price-and trade-distorting policies affect domestic and international prices and markets for agricultural products and economic welfare. It begins with the theory of policy impacts on producer and consumer prices and value added by farmers. It then surveys efforts to measure the extent of distortions due to such policies, first in Australia and New Zealand and then in other regions of the world. ANZ economists' efforts to use models to estimate the market and welfare effects of policies nationally and globally are then assessed, before attention turns to their ex ante estimates of the effects of trade agreements. The paper's Supporting Information includes a brief survey of attempts to understand the political economy forces behind those various policies and their recent reforms.Key words: distortions to agricultural and food markets, economy-wide modelling of trade-related policies, nominal and relative rates of assistance.

Impacts of Australia’s free trade agreements on trade in agricultural products: an aggregative and disaggregative analysis

“…The results showed consistent positive trade creation effects from ChAFTA, JAEPA and KAFTA after signing the agreements. ABARES (2018a) reported that Australia had exported about 70 per cent of total agricultural products to China, Korea, Japan, ASEAN countries and the USA in 2016. Compared to 2006, Australian agricultural export to China increased by 100 per cent in 2016(ABARES 2018a.…”

“…FTAs can have dynamic effects; mostly, the positive trade creation effects of an FTA can continue over time, but these effects can also completely diminish (Sun and Reed 2010). Unforeseen events and trade-distorting policies are also more prevalent; they can mask or overwhelm the FTA effects (Anderson 2016;Anderson 2018). Plummer et al (2010) have identified long-term cumulative effects (dynamic effects) of FTAs.…”

Early Analytical Agricultural Economics in Australia

“…Indeed, it is clear in their writings that the principal justification for the tariff was to divert production and employment from export industries in order to increase the demand for labour in manufacturing and thereby increase real wages. Virtually every assessment of trade‐distorting policies made since the early 1950s has come to the conclusion that indeed all border protection is a cost to exporters (Anderson, 2016). Many of these later studies have been undertaken within CGE frameworks under diverse labour market assumptions.…”

Antipodean agricultural and resource economics – introduction

“…A distinguishing and long‐standing feature of (agricultural) economics in Australia has been an appreciation for the nation's small, open‐economy status (except in wool) and the virtue in taking an economy‐wide perspective. This is reflected in some of the work on agricultural policy (Anderson, ). Economy‐wide modelling has also been used to look at broader economic questions related to the role of agriculture and natural resources in the economy, including the next article in this issue on booming sector economics (Freebairn).…”