Comment 2 on ‘Agricultural Adjustment’ by Edwards and Bates

Abstract

A contention in this Comment is that agricultural economists have had more influence than Bates and Edwards (2016) seem to admit. Also, it seems reasonable to take a broader view of adjustment than just adjustment policy as there have been many changes in Australian agriculture, analysed and debated by agricultural economists, that have impacted on the ways in which adjustment has occurred. However, as Edwards and Bates note, structural change in the farm sector is subject to many forces other than agricultural policy change and there are other major economic forces including human capital development, technological change and relative price shifts that bring about changes in the structure of agriculture. A brief search of some parliamentary documents relating to agricultural adjustment and a scan of the references clearly reflect the fact that many Australian agricultural economists have been involved and have contributed to the ideas relating to agricultural adjustment (e.g. Harris et al. 1974; Wilkinson 1999). Further, it does not take long to find agricultural economists who have led and contributed to major reviews of many industry policies that have had adjustment consequences, for example the McColl (1988) Royal Commission into Grain Storage, Handling and Transport, reviews of the wool industry, reviews of the dairy industry (Drane and Edwards 1961) and many others even more recently. Of course, the impact on agricultural adjustment is difficult to assess, but the input efforts have been significant. Also, general deregulation in agriculture has had impacts on farm size and farm numbers in addition to the direct changes in agricultural adjustment policies. Many agricultural economists, far too numerous to list, from academia, government and the private sector including farmer groups, have contributed to deregulation. Another major impact of agricultural economists has been through ABARES and the former Bureau of Agricultural Economics, and the Productivity Commission and its predecessors. The impact in both cases is direct through ministerial briefings and other advice provided to government organisations and the information provided to the public more generally. Many agricultural economists have been involved in these organisations. A number of high-profile agricultural economists with great influence over agricultural policy at various points in their careers have impacted agricultural adjustment policies – Sir John Crawford and his role in the formation of the Industries Assistance Commission (Parker 1987), the considerable number of directors of the BAE, ABARE and ABARES, John Kerin as Minister for Primary Industries, Geoff Miller as Secretary of the Department of Primary Industries (and Energy) and the many agricultural economists in leadership roles in State Departments of Agriculture. Difficult to measure and hard to draw a direct connection to agricultural adjustment is the contribution of academics in agricultural economics. Training in applied analysis has provided the human resources and technical support for many of the analyses, reviews and policy developments that have occurred in relation to agricultural adjustment. This is a somewhat hidden contribution but provides a background that has strengthened the rational analysis of many policies. Then, there is the role of those publishing in the Australian Journal of Agricultural and Resource Economics and the related journal, the Review of Marketing and Agricultural Economics, where there has been a significant number of contributions, many referred to by Bates and Edwards. It is thus reasonable to conclude that agricultural economists have played a significant role in the area of agricultural adjustment when measured against the counterfactual position of not having agricultural economists contributing to the area.