Geoff W. Edwards

Distribution of Research Gains in Multistage Production Systems

In a multistage production system, research that reduces production costs at one stage provides benefits to producers at all stages and to consumers. Agricultural production is assumed to involve three stages: nonfarm input, farm, and marketing. Research causes a parallel drop of the supply curve. Benefits are measured as changes in economic surplus. With a competitive model, the distribution of research benefits is the same for research directed at each production stage. Implications for the distribution of research benefits of some forms of imperfect competition are investigated.

The Gains from Research into Tradable Commodities

This paper develops a model for assessing the aggregate level and distribution of the benefits of reseach into tradable commodities. It estimates gains to Australia and to the rest of the world from research into the wool and wheat industries.

Market Distortions and Benefits from Research

The benefits from cost-reducing research and their distribution under a range of price policies are compared with those that would arise in the absence of the policies. While any price policy affects the distribution of research benefits, the net national or world benefits may be reduced, lef unchanged, or increased, depending on the nature of the policy and the significance of the country in the world market for the commodity. Some implications for decisions on price policies and for distortions in incentives for the allocation of resources to research are raised.

The Story of Deregulation in the Dairy Industry

The deregulation of dairy marketing that occurred on 1 July 2000 is a fascinating case study in microeconomic reform. The role of interacting industry and institutional features in the movement to deregulation is explained, with political realities being recognised. A key part of the deregulation bundle was an unprecedented “structural adjustment” package valued at about one and a half billion dollars (in 1998–1999). Questions are raised about the rationale for this package, the process of determining it and the means of funding it.

Research Payoff from Quality Improvement: The Case of Protein in Australian Wheat

A model is developed for evaluating the size and distribution of the economic benefits from research that improves the quality of an export commodity. Quality improvement, achieved by research or by agronomic practices, shifts the domestic and/or excess demand curves for an export commodity. Research costs are not modeled, but any shift in the supply curve (due to a change in yield, for example) accompanying the quality improvement is included. The model is used to estimate the gains from research that increases protein content in Australian wheat. It is estimated that Australia has the potential to obtain net benefits up to A

Reconsidering agri-environmental policy permitted by the Uruguay round agreement

53 million per year from a one percentage point increase in the protein content in wheat. Over 90% of these gains accrue to wheat producers.

The Calculation of returns to research In distorted markets: Comment

Agri-environmental policies are increasingly being used to redress the balance between jointly-produced agricultural and environmental outputs, and are permitted by the Uruguay Round (UR) agreement with the general provision that they not distort trade. In this paper we argue that any market consequences of efficient, welfare-enhancing agri-environmental policies should not be considered trade-distorting. To consider them so is inconsistent with economic efficiency and with ecological integrity. Social cost-benefit analysis (CBA) is a more appropriate test and guide of trade-consistency for agri-environmental policies, and using trade effects as the test may not enhance social welfare. Moreover, specific provisions in the UR agreement restricting payments under agri-environmental policies to opportunity costs are not warranted on economic efficiency grounds, and consign the environment to a status subsidiary to agricultural output.

Impacts of foreign policies on the gains from research and promotion

In a recent article, Oehmke reported that a high internal rate of return for investment in research when the interaction between research and price policy costs was disregarded could become very low or even negative when the effects of research on the costs of price policy were considered. In this paper, the social returns from research in the presence of the price policies considered by Oehmke are reexamined using a simple geometric approach. The analysis suggests that an output subsidy in a small importing economy, an output subsidy in a closed economy, and a target price in a large exporting economy will - on Oehmkes assumptions - cause only small reductions in the internal rate of return from investment in research. This implies that the apparent underinvestment by governments in agricultural research cannot be explained away by a large upward bias, known to governments, in measured rates of return due to failure to account for interactions between research and the costs of price policy measures.

The Calculation of Research Benefits with Linear and Nonlinear Specifications of Demand and Supply Functions

This paper compares the direct and indirect effects of rest-of-the-world (ROW) policy on welfare in country A: the direct effect due to the change in world price caused by the policy in the absence of research/promotion-induced shifts in supply/ demand, and the additional (or indirect) effect of the policy on the welfare gain to country A from its investment in research and promotion. The results showed that the reduction in aggregate economic benefits from research/promotion due to a world price-reducing policy in ROW could be in the range of 25-50% of the direct reduction in social welfare due to the ROW policy. In the case of Australian beef/veal, it is possible for the welfare impact of the ROW policy via research payoff in country A to exceed the direct welfare cost.