AREA working papers
The Working Papers Series, launched in 2025, brings together conference papers, draft manuscripts, and research outputs produced by the AREA research team. The series serves as a platform for sharing ongoing work, fostering scholarly dialogue, and disseminating emerging findings.
2026 volume 2
-
In several earlier papers, estimates of the economic values that Lao consumers in Vientiane place on different characteristics of both glutinous and non-glutinous types of rice were reported. These estimates were taken initially from a pilot study conducted in December 2024, and then from subsequent similar data collections in the March, June, September and December quarters of 2025. Most recently, pooled analyses of all of the data sets were reported separately for glutinous and non-glutinous rice types. In this paper, the pooled analysis for glutinous rice is revised based on a disaggregation of regional sources of rice offered for sale and a re-examination of those rice packs stated as being branded.
For glutinous rice types across all five data sets, the revised analysis finds that significant premiums on a per kg basis are evident for sales in the D-Mart supermarket, for A plus grade, for rice from designed northern regional sources, and for both black rice and other coloured rice. Across all of these price observations, there is no significant premium evident for organic glutinous rice. Conversely, significant discounts on a per kg basis are evident for the 12kg pack size, for B grade rice, for old season rice, and for designated branded packs. The evidence confirms earlier suggestions that consumers are showing less trust for branded packs including branded organic packs, and that they are unwilling to pay more for rice that is branded as organic.
Chitpasong Kousonsavath, Fue Yang, Lytoua Chialue, Kangbao Xaytouthao, Saysouda Lasakit, Garry Griffith, John Mullen, Alexandria Sinnett, Chinthani Rathnayake, Margaret Ayre and Bill Malcolm
-
2026 volume 1
-
-
Farm management economists use the case study approach in farm economic research. A case study could be a real farm business or a representative farm business. A representative farm business is often used as an initial step to explore research questions involving farming systems. The challenge for researchers is how to define a robust representative case-study farm business. There is limited literature outlining how researchers have defined a representative farm, as well as the challenges and limitations of this approach. In this paper, the aim is to present an approach used to describe a representative case study farm household/business. This approach was used to define a lowland wet-season rice farm household in Lao PDR. The details of the steps taken to define a representative farm, the challenges faced, the benefits, and the limitations are all discussed. Central to the approach is data triangulation - using multiple data sources to improve the validity of the representative farm. Multiple sources of evidence provide strong substantiation of the case being defined. Similarly, this approach was based on defining the characteristics of a representative farm through multiple iterations. In summary, the approach involved four steps: (i) document analysis to develop an initial description of the representative farm; (ii) industry experts reviewed and refined these characteristics; (iii) farmers and industry officers further refined the characteristics; and (iv) industry experts reviewed the final draft of the characteristics of the representative farm. The benefit of this approach is the development of a typical farm business case study for the region, supported by the literature, industry experts, and farmers. Therefore, each characteristic of such a representative case study is robust and reliable. For researchers, applying this approach also offers significant benefits, as it helps them gain a detailed understanding of farming in a specific area. After applying this method to research in a country where the researchers had not previously worked, it was found to be a useful starting point for those beginning farm economic research in unfamiliar areas.
Chinthani Rathnayake, Alexandria Sinnett, Bill Malcolm, Margaret Ayre, Chitpasong Kousonsavath, Fue Yang, Lytoua Chialue, John Mullen and Garry Griffith.
-
As a country heavily dependent on agriculture, Lao PDR has endorsed sustainability goals in recent policy decisions such as the National Green Growth Strategy and the Green and Sustainable Agriculture Framework till 2030. In Lao PDR, rice is the main crop grown, covering about 60 per cent of the arable land. Rice is the staple food providing almost 80 per cent of the daily calorie and 50 per cent of the protein intake of rural population. Food security in Lao PDR means ‘rice security’. There are many ways to grow rice in Lao PDR and judgments about sustainability are complex and uncertain. Of particular interest to the government are the consequences for farm families, the rice industry and the economy of technologies that use purchased inputs such as inorganic fertilisers, pesticides and herbicides in different proportions. To investigate these issues, ACIAR funded a project titled ‘Assessing the Social and Economic Implications of Changing to Low-input and Organic Rice Production in Lao PDR.’ This project focuses on the largest sector of the Lao rice industry – lowland rice production during the wet season. One important component of the project has been to understand rice farming in Laos, to build on work completed more than a decade ago. This is the focus of this working paper: to present a collection of notes on the findings from the initial field visits.
Chitpasong Kousonsavath, Fue Yang, Lytoua Chialue, Chinthani Rathnayake, Alexandria Sinnett, Margaret Ayre, Bill Malcolm, John Mullen and Garry Griffith.
-
Agriculture plays a vital role in the Lao People's Democratic Republic's economy. Sixty per cent of the national labour force works in agriculture. The main cereal crop and staple food of the Lao population is rice. Changing climate and policies increasingly focused on agricultural practices that policy-makers deem to be ‘sustainable’ are harbingers of change on the Lao rice industry. Farmers, scientists, advisors, policy-makers, and participants in the rice value chain in the Lao rice industry will need information about the possible social and economic impacts of alternative rice production technologies and systems if the nation’s rice-growers are to adapt to their changing environment. ACIAR has funded a two-year preliminary project to assess the welfare impacts throughout the economy of the adoption of alternative rice-growing technologies in the Lao PDR. In this paper, the findings from research into the rice-producing farm-households current rice growing technologies and systems and implications of them using alternative rice-growing technologies and systems, are presented. The results, reflecting current low-input practice, show that for the representative rice growing farm -household, the current farm system is best given risk considerations. Some 70 per cent of wet-season lowland semi-subsistence rice producers in Lao PDR use relatively low levels of crop inputs. This suggests, as long identified in the literature, that smallholder farmers who are semi-subsistent have considerable degrees of aversion to risk and are responding rationally to the imperative of meeting their annual needs for rice consumption under variable rice harvest yields, while acting under financial constraints such as lack of credit and costly credit. The results also show that a typical rice farm household in the lowland areas of Laos, which produced only wet-season rice, would face significant challenges if inorganic fertilisers were not able to be used. If inorganic fertiliser could not be used to grow rice and no other changes were made to the farm system, rice production in Laos would decline, leading to reduced security of supply of rice for household consumption, less profits, and less cash flow. Investigating ‘sustainable’ rice production systems, the researchers found that limited data was available on the costs, benefits and risks of such systems. This finding suggests that if the goal of the Lao government is for rice production systems to change towards systems envisaged as being more ‘sustainable’, then information and evidence are needed on how these systems will perform over time. At the moment, these ‘sustainable’ farm systems have an added risk for farmers considering them, because it is not known how they will perform compared to what the farmers are currently doing. The researchers defined two such hypothetical alternative systems, specifically how they might look like in terms of benefits, costs, and risks. Exploratory hypothetical findings of such an analysis are no basis for changing practice: real on-farm data over time is required. Thus, if the Lao PDR government's sustainability aims are to reduce reliance on inorganic fertilisers and promote agroecological practices, further research, development, and extension involving long-term field and farm trials and demonstrations that identify the costs, benefits, and risks of these systems is essential. Finally, this ACIAR research project has demonstrated that assessing the performance of a farm system and the implications for farm households requires looking at the question from the perspectives of economic efficiency, finance (liquidity), growth in wealth, supply of food for household consumption and sale, and risk. Each measure provides unique insights to decision-makers about how well or poorly farm-households are performing.
Alexandria Sinnett, Bill Malcolm, Chinthani Rathnayake, John Mullen, Margaret Ayre, Chitpasong Kousonsavath, Fue Yang, Lytoua Chialue and Garry Griffith.
-
Nitrogen fertilisers are a key input in agricultural production when farmers aim to earn higher returns by achieving higher yields through supplementing the soil with nitrogen nutrients. However, as well as its benefits, using nitrogen in agriculture comes at a cost to society because part of the applied nitrogen fertiliser is lost to the environment without being taken up by the crop, and this adversely affects humans, animals, and the environment. The external costs to society from nitrogen pollution are usually not accounted for in the price of nitrogen fertiliser products, in fertiliser use decisions, or in the price of food products produced using nitrogen fertilisers. Decisions regarding nitrogen fertiliser use in crop production can be made at different levels of information and knowledge available on yield response to fertilisers, input and output prices, damage from nitrogen emissions on society and associated costs, and risk considerations in farming. In this paper, approaches to nitrogen fertiliser decision-making are discussed for lowland wet-season rice production in Lao PDR. Economists use the ‘marginal thinking in input use’ concept to derive fertiliser decisions under perfect information, with risk and uncertainty considerations. Farmers, influenced by risks and uncertainties, choose fertiliser rates that maximise their returns. With perfect information and uncertainty, the private economic optimal nitrogen rate for Lao PDR's lowland wet-season rice is 53 kg/ha, while the social optimum - accounting for the damages caused by nitrogen emissions - is 50 kg/ha. However, to assure a 100 per cent return on marginal capital invested in fertiliser, acknowledging the high risk they operate under in nitrogen fertiliser application, farmers’ private economic optimum nitrogen rate is just 34 kg/ha. This nitrogen rate aligns closely with the rates farmers commonly use for wet-season rice production. If farmers internalise external costs while maintaining a 100 per cent return on marginal capital invested in fertiliser, the social optimal rate would be 27 kg/ha. There is a range of policy tools available for the Lao PDR government to consider when working towards the goal of a socially efficient use of nitrogen fertiliser policies.
Chinthani Rathnayake, Alexandria Sinnett, Bill Malcolm, Chitpasong Kousonsavath, Fue Yang, Lytoua Chialue, Margaret Ayre, Garry Griffith and John Mullen.
-
In recent years the Lao PDR government has advocated for agriculture to be conducted in ways that are more sustainable. To achieve this, changes will be required in how Lao rice farmers use fertilisers, weedicides and pesticides. Such changes will lead to changes in farm incomes and may have implications for the broader rice market. In this paper a simple total economic surplus formula is used to estimate these market level changes for four alternate levels of inorganic fertiliser use, as well as an organic scenario and a GAP/agroecology scenario. Data required are industry-level price and quantity at the farm gate before the introduction of the technology, the relevant elasticities of demand and supply at the farm gate, and a measure of the proportional increase or decrease in farm profit from the different scenarios. A ‘representative farm’ model of a lowland, wet season rice farm is used to estimate the farm level changes in costs, returns and profits from the different scenarios. Two bags of inorganic fertiliser (‘low input’) is the base case. Of the four inorganic fertiliser scenarios only the shift from the low to medium scenario gives a gain in total surplus – of 220,185 million kip which is about 1.5 per cent of the value of rice produced under the low input scenario. Thus, the gains from this move are small and offer only a weak incentive for farmers to change. Further, no account has been taken of risk in this analysis. It is likely that as fertiliser use is increased so too does the variability of yield in a risky climate. The gain in surplus from a switch from two bags to organic is large at 1,402,400 million kip or almost 10 per cent of the value of low input rice production. However, for organic (and GAP) rice, various certifications have to be obtained which require large upfront investments of time and money and a sustained commitment to a new way of producing rice. To examine these issues, as well as the likely regional and seasonal differences in production systems, this simple model needs to be extended to a more disaggregated marketing chain both vertically and horizontally to gain more appreciation of how total economic surplus changes are distributed.
John Mullen, Garry Griffith, Chinthani Rathnayake, Alexandria Sinnett, Bill Malcolm, Chitpasong Kousonsavath, Fue Yang, Lytoua Chialue and Margaret Ayer
-
A prototype equilibrium displacement model of the Lao PRD rice market is specified and some hypothetical simulations are run. The model is based on the proportion of Lao rice production that reaches commercial markets, and is calibrated with the best available estimates of market prices and quantities and the required parameter values. For hypothetical 1 per cent shifts in farm supply, in other input supply into rice processing and in retail demand, rice producers receive between 12 and 27 per cent of total surplus, domestic consumers receive between 71 and 82 per cent, and rice processors receive between 2 and 6 per cent. Sensitivity of surplus shares to elasticity assumptions are provided, and some areas for enhancement of this simple prototype model are suggested.
John Mullen, Garry Griffith, Chinthani Rathnayake, Alexandria Sinnett, Bill Malcolm, Chitpasong Kousonsavath, Fue Yang, Lytoua Chialue and Margaret Ayer.
-
-
Rice is a staple crop for many farm families in Lao PDR operating on a subsistence basis. Food security is synonymous with rice security. The government of Lao PDR aims to ensure that agriculture is conducted sustainably. The Australian Centre for International Agricultural Research have funded a Small Research Activity (SSS/2023/137) to explore the implications of changing to alternative rice production systems that use less chemicals such as inorganic fertilisers, weedicides and pesticides. The goal of this project is to contribute to the evidence base that supports the government of Lao PDR in making informed decisions regarding the transition to more sustainable and efficient agricultural practices that balance economic growth, environmental sustainability, and social equity. This is one of a number of working papers reporting on the findings from this project. This paper reports on some of the results from the consumer analysis component of the project. The consumer study is designed to explore domestic consumers rice buying behaviour and perceptions toward organic rice.
Chitpasong Kousonsavath, Fue Yang, Lytoua Chialue, John Mullen, Garry Griffith, Chinthani Rathnayake, Margaret Ayre and Alexandria Sinnett
-
According to Foodbank Australia, approximately one in three Australian households experienced food insecurity during 2025, where food insecurity refers to limited or uncertain access to adequate food due to financial or other resource constraints. This level of food insecurity has been evident for several years. Food insecure people frequently suffer from malnutrition, which has wide-ranging effects on different people. Other concerns of food insecurity are diet-related risks such as obesity, diabetes, and heart disease. There are also tertiary health impacts including poorer oral health, bone and joint problems, and mental health disorders, including depression, anxiety and mood disorders. These effects are amplified when present in children, who are approximately 50 per cent more likely to be food insecure than adults.
On 29 November 2023, the Legislative Council of Victoria requested the Legal and Social Issues Committee to review aspects of food insecurity in Victoria. The final report Food Security in Victoria was tabled on 14 November 2024 and included 33 findings and 25 recommendations for the Victorian Government to alleviate food insecurity. The Victorian Government responded to the inquiry on 31 July 2025, outlining which recommendations in the report the Government intended to implement, which needed further research, and which would not be adopted.
In this paper, four of the recommendations are examined. These recommendations received support in principle from the Victorian Government, but without a commitment to implement, indicating a desire for further information before a final decision was made. The review found that the recommendations were potentially effective from an economic theory perspective. However, the recommendations were often not supported by empirical evidence or directly conflicted with the international evidence on outcomes. The Victorian Government would benefit from further independent research into the recommendations explored in this review to determine feasibility and predicted outcomes. A range of suggested recommendations for further research are proposed.
Benjamin Boyd, Garry Griffith and Alex Sinnett
-
In several earlier papers, estimates of the economic values that Lao consumers in Vientiane place on different characteristics of both glutinous and non-glutinous types of rice were reported. These estimates were taken from a pilot study conducted in December 2024, and then from subsequent similar data collections in the March and June quarters of 2025. In this paper, the results for the subsequent September and December data collections for glutinous rice types are reported and compared to those found in the pilot study and in the March and June data collections. An analysis is also done on all the five quarterly data sets pooled together. For glutinous rice types across all five data sets, significant premiums on a per kg basis are evident for sales in the D-Mart supermarket, for A plus grade, for rice from designed regional sources, and for both black rice and other coloured rice. Across all of these price observations, there is no significant premium for organic glutinous rice. Conversely, significant discounts on a per kg basis are evident for the 12kg pack size, for B grade rice, for old season rice and for designated branded packs. The evidence seems to be that consumers are showing less trust for branded packs including branded organic packs.
Chitpasong Kousonsavath, Fue Yang, Lytoua Chialue, Kangbao Xaytouthao, Saysouda Lasakit, Garry Griffith, John Mullen, Alexandria Sinnett, Chinthani Rathnayake, Margaret Ayer and Bill Malcolm
-
In several earlier papers, estimates of the economic values that Lao consumers in Vientiane place on different characteristics of both glutinous and non-glutinous types of rice were reported. These estimates were taken from a pilot study conducted in December 2024, and then from similar data collections in the March and June quarters of 2025. In this paper, the results for the subsequent September and December data collections for non-glutinous rice types are reported and compared to those found in the pilot study and in the March and June data collections. An analysis is also done on four of the five quarterly data sets pooled together. For non-glutinous rice types across all four data sets, significant premiums are evident for sales in the D-Mart supermarket, for A plus grade rice, for rice from designed regional sources, for organic rice, for imported rice, for old season rice, for black rice and for brown rice. Significant discounts are evident for sales in the Huakhua and Nonsavang markets, for the 12kg pack size and for B grade rice. Across all of these price observations, there were no significant effects of season or year, of other pack sizes, or of upland rice or of aromatic rice. Further, there is no significant premium or discount for branded non-glutinous rice. As with glutinous rice, the evidence seems to be that consumers are showing less trust for branded packs including in some cases branded organic packs.
Chitpasong Kousonsavath, Fue Yang, Lytoua Chialue, Kangbao Xaytouthao, Saysouda Lasakit, Garry Griffith, John Mullen, Alexandria Sinnett, Chinthani Rathnayake, Margaret Ayer and Bill Malcolm
2025 volume 1
-
Analysts and advocates of farmers and farms characterised as practicing ‘regenerative agriculture’ typically focus narrowly on some aspects of the phenomenon they are keen to promote – this is not ever the whole system. Regenerative agriculture’s proponents do not consider the whole system, especially the economic and financial viability of the business. Farm businesses, which are regenerative, which can and do regenerate by passing from generation to generation, are ultimately what matters to many farmers. To regenerate the farm business, farm owners and managers understand and manage well all the bits and pieces of the business under their control, including those with major economic and finance implications for survival and success. Blinkered, partial farm analysis may help identify elements of the problems to be mastered to achieve the goal of regenerating the farm business, but this alone is not enough. The whole farm approach to regenerative agriculture is needed.
Mike Stephens, Bill Malcolm, Alex Sinnett, Paul Deane and Richard Shephard.
-
There is substantial global evidence of long-term, predictable price and production cycles in beef cattle industries that are driven by biological processes. Cattle breeding herds are held back from slaughter leading to an increased number of cattle over several years (herd rebuilding) followed eventually by slaughter of breeding animals and declining herd numbers (herd liquidation), until the rebuilding cycle recommences. The periods of rebuilding are accompanied by higher prices for cattle and reduced beef production, whereas the reverse is the case when herds are being liquidated. These opposite cycles in prices and output last 8-12 years and have been observed in the United States for more than 180 years. Conventional wisdom has been that these beef cycles also existed in Australia, and that the cycles in the two countries were closely connected. Current industry extension advice in Australia still mentions this cyclical influence. The research reported in this paper using autocorrelation techniques and more than 50 years of data has confirmed the existence of the 8-12 year cycle in the United States beef industry. However, a similar analysis of Australian beef industry data did not show any evidence of significant regular patterns of the same order of magnitude as the long-term United States cycle. Further, there was no significant relationship between the prices of cattle in the United States and in Australia. The only significant regular patterns revealed in the Australian industry were in the numbers of cattle slaughtered and in cattle prices, and these are for a four-year lag between changes in these series. These trends are indicative of much shorter-term beef industry variability in Australia that is more likely to be caused by the transmission of increasing volatility in world market conditions on the demand side, and by increasingly volatile environmental conditions on the supply side. The results suggest the need for a primary focus along the beef supply chain on market risk management.
Garry Griffith, Selwyn Heilbron and Chinthani Rathnayake.
-
The smoothing of prices along the domestic value chain from producers to retailers is known as ‘price levelling’ and it is a well-known feature of price transmission in the meat industry in Australia and elsewhere. This levelling has been analysed in detail for almost 60 years. Given the recent concerns of livestock producers and anecdotal evidence provided by industry organisations, in this paper the practice of price levelling (and its companion, ‘price averaging’) are examined using a recent set of quarterly Australian farm and retail prices for beef and lamb. In the estimated regression models, none of the cost, throughput or trend variables are significant but a lagged dependent variable is positive and significant, suggesting a conscious policy to keep beef and lamb price differentials stable. Further, on top of this general preference for stability, there is clear evidence of price levelling in both meats, where changes in the current price differential are negatively and significantly related to changes in the current farm price. However, this is only a short-term response, as in the next quarter part of that contraction in the price differential is given up and the price differential moves in the same direction as the farm price. This result matches previous research. However, there is no evidence of price averaging across beef and lamb price differentials in this data set which is different from previous research.
Garry Griffith, Selwyn Heilbron, Bill Malcolm and Chinthani Rathnayake.
-
Parliamentarians, the rural media and the Australian Competition and Consumer Commission (ACCC) and other government bodies have continued to express their interest in competitiveness in the Australian domestic meat industry in the form of numerous reviews and legal proceedings. Using the New Empirical Industrial Organisation (NEIO) framework, this study re-assesses the question of whether there is any market power present in the domestic fresh beef, lamb, pork and chicken markets within Australia, using aggregate data covering the period 1970-2021. Overall, the study concludes that there is no evidence of market power in either the input or output markets of beef and lamb, that there is consistent evidence of market power in the fresh pork input market and that there is some weak evidence of market power in the chicken input market. However, there is no evidence of market power in the pork or chicken output markets.
Garry Griffith, Selwyn Heilbron and Chinthani Rathnayake.
-
The objective of this paper is to present a revised analysis of the net benefits to the Australian beef, sheep meat and pig meat industries of the R&D program Advanced Measurement Technologies for Globally Competitive Australian Meat (ALMTech), that was funded over the period 2016-2023. The current analysis updates a previous study completed in 2020 (Griffith et al., 2020, 2022) on Phase 1 of the program. It follows the same general approach and uses the same sources of input data and the same equilibrium displacement modelling tools to generate annual changes in producer and consumer surplus. Adoption profiles are then used to predict benefits out to 2040, R&D and user costs are estimated, all values are discounted to a common 2023 time period, and NPVs and benefit cost ratios are calculated. Major changes in this current analysis are: (a) MLA data for R&D costs for animal health that is directly related to objective measurement have been accessed, so the original scenario on on-farm reductions in animal health costs has been added back in; (b) a new scenario based on savings from offal rejection has been developed, a new scenario has been added for eating quality developments in sheep meat, and the on-farm benefit calculations have been revised upwards; and (c) some of the adoption profiles have been changed to account for the recent rapid developments in accreditation and uptake by processors, and to better reflect the more optimistic longer-term trajectories developed in earlier MLA reports. The estimated NPV for net benefits was $858 million, while the discounted R&D cost was $128 million. The MLA Objective Measurement program resulted in a discounted net benefit of $730 million with an estimated BCR of 6.7:1; for the ALMTech component program it was $123 million with the same BCR. The estimated NPV of net benefits of $780 million estimated in this report is somewhat higher than that estimated in the Phase 1 report ($510 million) (Griffith et al., 2020, 2022), with changes in adoption profiles being the main difference.
Garry Griffith
-
In this paper a pilot study is reported that estimates the economic values that Lao consumers place on different attributes of both glutinous and non-glutinous types of rice. The pilot study demonstrates that market data on rice price attributes can be collected and analysed to provide useful results for policy analysis. Both the data collection method and the data analysis method have proved to be easy to implement and interpret. The results show strong similarities across both glutinous and non-glutinous data sets. There are consistent premiums evident for organic rice and for coloured rice, and there are consistent discounts evident for B grade rice, for large pack sizes and for designated upland rice. However, there are some differences as well. Jasmine rice and old season rice are discounted in the non-glutinous data set, there is a strong premium evident for non-glutinous rice sold in the D-Mart supermarket, and region of origin is important for glutinous rice but not for non-glutinous rice. Of particular interest is that the premium evident for organic rice can be compared to the extra costs incurred in producing organic rice arising out of farming systems modelling, and some judgements can then be made about the economic feasibility of the government’s focus on the wider adoption of alternative technologies for rice farming households in Lao PDR.
Chitpasong Kousonsavath, Fue Yang, Lytoua Chialue, Kangbao Xaitouthao, Saysouda Lasakit, Garry Griffith, John Mullen, Alexandria Sinnett, Chinthani Rathnayake, Margaret Ayers and Bill Malcolm.
-
The Mac Troup Oration is delivered at the Annual Conference on a topic of interest to grassland farming. Mac Troup was a founding member of the Grassland Society of Victoria in 1959. He was President of the Society in 1963. Mac was a highly perceptive grazier and an astute observer of pasture growth, particularly sub clover. In this paper, a tribute to Mac Troup and the Grasslands Society, I want to put on record some of the useful information, useful influences and useful influencers which have contributed to my thinking in general about the question of how to grow more grass in Australia and how to use it well - two blades. In particular, to my own understanding and thinking about the challenge of making two blades of grass grow where one grew before, the answer to which forms the foundation of all economic success in the grazing industries. We are not mutton or lamb or wool or beef or milk farmers: we are grass farmers.
Bill Malcolm
-
Australia is recognised globally as a leader in the beef cattle industry. One of the key reasons for its global recognition has been the design, implementation and ongoing improvement of the Meat Standards Australia (MSA) quality assurance scheme which was first trialled in 1998 and celebrated 25 years since commencement in 2023. In this paper the history of the development and implementation of MSA is reviewed, including its alignment with the theoretical principles of the economics of grading and the way in which the initial model has been modified over time. Then, publicly available data is used to estimate the aggregate economic benefits to the industry from its implementation, and these benefits are compared with estimates of the costs incurred in researching, developing and operating the MSA beef grading model. The analysis shows that cattle producers, beef processors and beef consumers have all been beneficiaries of the program through the price premiums available for MSA graded beef and cattle. Measured at the retail level, annual gross benefits have risen substantially to over $400 million in the three years to 2022-23. The cumulative value to 2022-23 is estimated to be $3,125 million. These annual gross benefits are eventually distributed to producers, processors, wholesalers, retailers and consumers as the market adjusts over time to the new level of domestic consumer willingness-to-pay for guaranteed tenderness. At the farm level in the last four years, aggregate returns as measured by over-the-hook premiums have averaged around $200 million per year. The cumulative value to 2022-23 is estimated to be just under $2,200 million. Over the whole period since implementation, producers have received about 70 per cent of the total available willingness to pay. Impact assessment studies have shown that all past R&D expenditure in MSA has been covered, all industry adoption costs have been covered, all annual operating expenses have been covered, and on top of that, a substantial additional benefit has been generated for the Australian beef cattle industry.
Garry Griffith, Maxwell Lawrie, Stuart Mounter and John Thompson.
-
In this talk two broad themes are explored. First, it is possible to argue that the growing doubts about the capacity of the agricultural RD&E systems of New Zealand and Australia to deliver the suite of new technologies that farmers urgently require, are well-founded. Second, the capacity of the farm services sector broadly defined, to deliver sound information to farmers about the many and varied farm benefit-cost questions farmers face when making decisions about choices between inputs and alternative ways of changing their systems is significantly deficient; with the significant deficiency in the analyses conducted and advice provided being a lack of understanding of farm economics.
Bill Malcolm
-
The project ‘Sustainable Cropping Rotations in a Mediterranean Environment’ (SCRIME) was established in 1998 on the alkaline grey self-mulching clay of the Wimmera Research Station, Longerenong. In this paper is reported the results from economic analysis of the different rotational/tillage treatments in SCRIME. The economic performance of the different SCRIME rotations has been analysed using the measures ‘Rotation Gross Margin/Ha’ and ‘Variation of the Rotation Gross Margin/Ha’ around the average over the time. This measure accounts for price received for different commodities, variable cost of growing the crops, and year to year volatility (risk). These factors are key considerations that affect decisions by growers to change cropping practice. In more favourable seasons the crop sequences that included cereals (wheat and barley), the pulse crop field pea and the oilseed crop canola delivered higher annual and cumulative gross margins/rotation ha compared to rotations based on a 3 year phase of the perennial pasture legume Lucerne, a single annual non-crop component such as vetch (treated as a green manure), the annual pasture legume annual medic or ‘fallow’. However, the rotation based on continuous cropping of wheat - field pea – canola which had the potential for high returns under current commodity prices involved greater financial risk with more variable annual net cash flows (resulting from predominantly below average rainfall) than the other crop sequences examined in the experiment.
Bill Malcolm and Roger Armstrong.
-
It is helpful to understand risk in agricultural decision-making through distinctions. Such ‘distinctions in risk’ can enhance our understanding of risk research or the practical application of managing risk. In some instances, these distinctions are congruent, or best thought of in terms of a continuum. The distinctions or terms represent poles at either end of the spectrum. The concept and differences between risk and uncertainty are best viewed from this angle. For other combinations, the distinctions are a duality, trade-off or balance between the two terms relating to risk. One cannot be considered without the other. This is a central theme in this paper. Operating or capital investment decisions in agriculture must balance the likely returns relative to risk (compared with alternative investments). Business and financial risk are similar. The two risks combined better represent the firm's total risk. An increase in business risks in the agribusiness firm can have implications for financial risk. To keep risk constant, a manager can balance or trade-off changes between business and financial risk.
Paul Deane, Bill Malcolm, Alexandria Sinnett, Garry Griffith and Ross Kingwell.
-
In an earlier stage of this research project on cycles using annual data, the analysis of the Australian beef market did not show evidence of significant regular patterns in breeding cow numbers of the same order of magnitude as the long-established, medium-term (8-12 years) United States beef cycle. Further, there was no significant relationship between cattle prices in the United States and in Australia. The only significant correlations between current and lagged values were found in the beef slaughterings series (negative at lags 2 and 3 (cycles of around 4 years)) and in the cattle price series (negative at lag 2 (cycle of 4 years)), so in the opposite direction. These shorter-term lags between changes in prices and slaughtered numbers were considered more likely to be caused by the transmission of volatility in world market conditions on the demand side, and by volatile environmental conditions on the supply side, than by the collective decisions of beef cattle producers on which the persistence of a medium-term cattle cycle is predicated. In this study, those same Australian beef industry data series are analysed but on a quarterly basis rather than an annual basis so as to provide a more disaggregated examination of these shorter-term cyclical patterns.
Garry Griffith, Selwyn Heilbron and Chinthani Rathnayake.
2025 volume 2
-
In this paper, an analysis is conducted using quarterly data to investigate whether there are medium-term production and price cycles in the Australian sheep industry as evident in many cattle and pig industries around the world. In all of the series studied there were found to be significant seasonal patterns. In the lamb sector, no evidence of medium-term cyclical behaviour was found apart from cross linkages with the beef industry through prices. However, in the mutton sector, significant 2-3 year cycles were found in both prices and quantities. Therefore, there is mixed evidence about whether production and price cycles exist in the Australian sheep industry. External influences on world and Australian sheep markets (human- and animal-health related disruptions, exchange rates, trade disruptions, political instability, market access, drought and flood and the growing industrialisation of production), appear to have become increasingly significant and relevant in recent years, and have effectively outweighed any cyclical tendencies embedded in expectations processes and biological lags. More attention needs to be paid to risk management in the light of uncertainties in the future about these external influences.
Garry Griffith, Selwyn Heilbron and Chinthani Rathnayake.
-
The objective for this talk was to examine land and farm management practices in Australia, and how that might be changing beyond 2020; and to discuss managing risk in a changing climate and how farmers and policy makers could consider responding. The conclusions were that investment in agricultural RD&E makes possible improvements in agricultural productivity that over time maintain and improve farm profitability, that removing impediments to farmers coping with change will help them, and so too will a wider understanding of the farm economic framework for farm analysis and decision analysis, allied to more and better economic and technical information that assists farm decision making about strategic changes to farm systems, under greater uncertainty than ever.
Bill Malcolm
-
The Victorian Drought Hub conducted trials over the two years 2022 and 2023 of applying plant-available silica to a range of cereal and legume crops to investigate the effects silica may have on mitigating drought stress in crops. The economic analysis showed mixed results. In 2022, silica on Scepter wheat increased net gross margin/ha, approximately broke even with the no silica cases for the Kittyhawk wheat ungrazed crop and exceeded the gross margin/ha of the no silica Kitthawk with grazing. Faba bean with silica was outperformed by the beans without silica. In 2023, silica on the Scepter and the ungrazed and grazed Kittyhawk wheat reduced gross margin/ha to less than the ‘Without Silica’ crops. Faba bean with silica was again outperformed by the beans without silica.
Additionally, the Scepter wheat in 2022 with the extremely wet Spring showed an actual benefit greater than the benefit that was required to return 15 or 30 per cent on the extra cost of the foliar silica spray applied. The grazed Kittyhawk wheat in 2022 would have earned enough to be a worthwhile investment. The other crops with silica in 2022 did not show enough gain (if any) over the crops without silica to make it worthwhile. In 2023, compared to the crops without silica, none of the crops with silica showed gains that earned the opportunity cost of 15 or 30 per cent to the extra capital investment in silica.
Bill Malcolm, Alex Sinnett, Paul Deane and Nanette Esparon.
-
The Victorian Drought Hub conducted trials over the two years 2022 and 2023 of applying plant-available silica to a range of cereal and legume crops to investigate the effects silica may have on mitigating drought stress in crops. Economic analysis was conducted of the change in yield and income and extra cost from using silica applications. The results of this analysis for the Dookie and Birchip Cropping Group trial sites are presented here.
Silica fertiliser was associated with positive effects on yields in some crops at both the Dookie and BCG sites under the seasonal conditions of 2022 and 2023. In some instances - particularly the pulses – net income per hectare of the crop with silica fertiliser was greater than net income without silica fertiliser. If the silica fertiliser was the major cause of the increases in yield and net income, then in some cases the yield and income gains meant that investing in silica would have been a good use of scarce funds as the years turned out.
Bill Malcolm, Alex Sinnett, Paul Deane and Nanette Esparon
-
Concern about meat market price transmission processes has re-emerged with the recent rapid increases then decreases in prices for cattle and lamb in Australia. Most of the concern has been about impacts on supermarket prices. However, given that the large majority of Australian beef and sheep meat production is sold in world markets, it is necessary to include in this discussion the nature of price transmission from world markets into the Australian domestic market. A causality analysis was done on the beef export value chain to the United States. All of the tests done reject any significant degree of causation in either direction between Australian farm prices for cattle and United States farm prices for cattle and wholesale or import prices for beef. Statistically, on a quarterly basis, the prices of cattle in Australia and the prices of cattle and beef in the United States are determined independently of each other.
Garry Griffitha, Selwyn Heilbronab and Chinthani Rathnayakea.
-
The island-wide ban on glyphosate in Sri Lanka that was imposed in 2015 and operated until 2018 placed a heavy cost burden on the farm sector with unintended consequences and economic losses to the tea industry. In this paper the effect of the glyphosate ban on producers in the smallholder and estate sector is analysed, with an emphasis on changes in variable cost structures and input use decisions on weed management that resulted. The findings of this study will help to foresee potential impacts of similar future policy changes affecting weed management decisions in tea production. The ban on using glyphosate to control weeds led to costs of weed control soaring in both grower sectors because of increasing labour requirements for weeding and also replacing glyphosate with expensive alternative weedicides that also include illicit glyphosate products. The smallholder sector was flexible in response to the ban on glyphosate, changing mixes and switching between different weeding methods, while the estate sector had limited capacity to adjust to the ban. Consequently, the impact of the ban on glyphosate was more severe in the estate sector. Fortuitously, improved prices for green tea leaves prevailed during the ban which enabled growers in both sectors to achieve gross margins that were better than otherwise would have been the case with the ban in place.
Chinthani Rathnayake, Bill Malcolm, Garry Griffith and Alexandria Sinnett.
-
The purpose of this paper is to describe the characteristics of a representative farm engaging in lowland wet-season rice production in the Lao PDR. Farm management economists often use representative farms to demonstrate methods of economic analysis as a first look. A case study research design is used to define the representative wet-season rice farm household system using the ‘single case study method’. The case - the representative farm - is described by triangulating multiple sources of data, thereby gaining an in-depth, holistic, and nuanced understanding of the farming system's dynamics. The representative farm is built initially on the basis of past research. Characteristics defining the representative farm are then updated, refined, and validated using a range of information obtained from primary and secondary data sources. Accordingly, the representative farm consists of a smallholder farming household engaging in wet-season rice production in the lowlands of Savannakhet. The level of detail used to describe the representative farm informs about the goals of farming, technologies or practices, inputs and resource use, and expected yields in rice production. The main simplifying assumption used for analytical purposes is that the representative farm only produces rice for subsistence and is involved in no other production or economic activity. This assumption is acknowledged as being far from reality. This exercise is, however, to demonstrate a method to evaluate the economic and social impacts on a farm household system from a change in rice farming practices. To address this limitation, future research could build on the work in this project and define detailed case studies from real farms that capture the complexity of rice production systems.
Chinthani Rathnayake, Alexandria Sinnett, Chitpasong Kousonsavath, Fue Yang, Lytoua Chialue, Margaret Ayers, John Mullen, Bill Malcolm and Garry Griffith.
-
In this paper, the question of how apple and pear growers can remain competitive and achieve goals by responding to change and managing risk in the dynamic horticultural economy, is addressed. To do this, three themes are covered. First, what will be the features of the economic and natural environment that will create pressures for change? second, what are the factors affecting and determining the survival, success and growth of firms that make up ‘an industry’, whether agricultural or horticultural? and third, what are the characteristics of the operators of agricultural businesses that survive, succeed and grow?
Bill Malcolm
-
In earlier papers, estimates of the economic values that Lao consumers in Vientiane place on different characteristics of both glutinous and non-glutinous types of rice were reported. These estimates were taken from a pilot study conducted in December 2024. Both the data collection method and the data analysis method proved to be easy to implement and interpret, and a follow-up study was designed whereby the same types of data would be collected and analysed during each quarter of 2025. In this paper, the results for the March and June data collections are reported and compared to those found in the pilot study. There are strong similarities across the results from the two data sets. There are consistent premiums evident for coloured rice, and there are consistent discounts evident for B grade rice and for large pack sizes. There are also variable premiums and discounts over time and over the different types of rice, for example for designated upland rice, for jasmine rice and for old season rice. In terms of quality characteristics, the non-glutinous rice types have consistently higher proportions available of A+ grade rice, designated organic rice and branded packs, while the proportions of offerings from designated regions is similar across both rice types. However, premiums for these quality characteristics are not consistently available. Four of the six observations (glutinous vs non-glutinous over December, March and June quarters) are positive and significant for A+ grade rice, three of the six are positive and significant for organic rice, and three of the six are positive and significant for specified regional rice. But there is one instance of a significant discount for organic non-glutinous rice and during 2025 the brand variable shows either no effect or a significant discount. Consumers seem to be showing less trust for branded packs including branded organic packs.
Chitpasong Kousonsavath, Fue Yang, Lytoua Chialue, Kangbao Xaytouthao, Saysouda Lasakit, Garry Griffith, John Mullen, Alexandria Sinnett, Chinthani Rathnayake, Margaret Ayer and Bill Malcolm.
-
Meeting the Paris Agreement target and path (PTP) is vital to protect humanity from the worse impacts of global warming. Using a large dimensional and unique Global Trade Analysis Project (GTAP) model for energy and international trade, we calculated the needed change in the energy mix and fall in carbon emissions to meet a minimal PTP of less than 2oC warming. Covering 30 countries/regions and 31 commodity sectors, the model shows the PTP in annual time steps to 2100 in terms of emissions reduction and the shift in energy mix allowing for changes in energy intensity, renewables growth, and rising carbon prices. By 2050, using a year 2019 baseline, model results show carbon emissions must decrease on a compound basis by at least 5.7% globally, per year, on average, and coal consumption must fall continuously from 2025, complemented by large increases in renewable energy that allow for continued economic growth. We nd that global carbon emissions must decline by almost 40% in 2030 and 80% in 2050 to meet a less than 2oC warming path by 2100. Coal consumption must decline between 8599% by 2050 among the key emitters (China, the USA, and India), compared to 2019 (the model baseline), complemented by a continuous transition to renewables. For Net-Zero Emissions Targets (NZET), carbon sequestration, such as from re-forestation and land use change, is also essential, although with substantial uncertainty. Model results indicate a net-zero outcome, even with assumed carbon sequestration, occurs no earlier than 2058, at best.
Tom Kompas, Tuong Nhu Che, Pham Van Ha, Matthew Cantele, R. Quentin Grafton.
To be beneficial to society, the benefits from investments of capital must cover all the private costs and all the external costs that are caused by the investment. Adverse effects/costs that are not included in a private transaction (the negative externalities) but which will adversely affect someone else, the public, have to be taken account of to ascertain the true total benefits and costs of an investment. The analytical process for comparing all of these private and external costs and benefits is called social benefit cost analysis. It is the recommended procedure by government departments which are involved in such decisions. Although the theory and practice of ‘public economics’ or ‘welfare economics’ has been known for more than a century, governments still sometimes get it wrong. In this paper the principles of social benefit cost analysis are outlined and some examples are provided of how it should be used. The conclusion is that if a formal social benefit cost analysis of proposed changes in the use of a nation’s resources, such as in major changes in agricultural land use, is not done, there is no way of knowing if the change in the use of the resources is likely to be beneficial or not to the nation.
Bill Malcolm, Alexandria Sinnett, Paul Deane, Tom Kompas and Garry Griffith.
Download the full paper