Supply Response in the Australian Extensive Livestock and Cropping Industries: A Study of Intentions and Expectations*

Abstract

Most of the supply elasticity estimates reported for Australian agriculture are derived from equations estimated using time series data and incorporating ad hoc assumptions about price expectations. The authors' aim is to compare previously obtained supply elasticity estimates with those derived using theoretically more acceptable survey data on both producers' intentions and price expectations. Surveys were conducted in three regions in N.S.W., namely, the Southern Tablelands, the South‐West Slopes and a portion of the Western Division centred on Cobar. The results of the research show that there are no major differences between the supply elasticities derived using the traditional time series approach and those obtained using the survey data. This finding is reassuring, given the cost of collecting survey data.

The impact of climate change on labour demand in the plantation sector: the case of tea production in Sri Lanka

“…Several studies have used a structural profit function approach to explain farmer's optimising behaviour when confronted with changes in institutional and environmental factors. Examples include studies by Fisher and Munro (), Roberts (), Fisher and Wall (), Kherallah and Govindan (), Lang (), Suleiman (), Abrar and Morrissey (), Mullen et al . () and Fezzi and Bateman ().…”

Microeconometric models of the livestock sector

“…There was also an incidence of an unexpected negative sign on the influence of pastureland variable to the number of cattle sold in some region. Significant cross-elasticity effects were apparent in the estimates in Fisher-Munro (1983) study; they indicate competitive relationship, for example, between beef and sheep products. Freebairn (1973), in his study of the New South Wales livestock sector, also found positive cross-price elasticities between beef and wool, and beef and lamb products.…”

“…In this study, the supply response of each of these three significant groups of farm outputs has been inelastic. In the same spirit, Fisher-Munro (1983) observed that most of the supply elasticity estimates reported for Australian agriculture are derived from equations estimated using time series data and incorporating ad hoc assumptions about price expectations. The authors' aim is to compare previously obtained supply elasticity estimates with those derived using theoretically more acceptable survey data on both producers' intentions and price expectations.…”

“…The list of variables used for econometric estimation of the livestock products supply and input demand responsiveness was based mainly on work by Fisher-Munro (1983), Abrar et al (2002 and Olwande et al (2009). The variables are grouped into three categories:…”

“…Regarding the expected sign, as found in our earlier case study (Manyeki et al 2016) and in study in Kajiado, own price is expected to influence the decision of the farmer to sell positively. Fisher-Munro (1983) study on supply response in the Australian extensive livestock and cropping industries found that the decisionmaker intention to increase cattle numbers was influenced by price for beef price, sheep products prices and proportion of the improved pasture on the land property. There was also an incidence of an unexpected negative sign on the influence of pastureland variable to the number of cattle sold in some region.…”