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RIRDC Completed Projects in 2006-2007 & Research in Progress as at June 2007
To Global Completed Projects
3.5 Global Competitiveness – Research in Progress Project No Project Title Researcher Phone Organisation New market opportunities for the food sector
CIE-25A Trends in world agriculture to 2030 Dr Andrew Stoeckel 02 6245 7800 Centre for International Economics DFT-2A Agrifood globalisation and Asia (Final two volumes) Judith Laffan 02 6261 2605 Department of Foreign Affairs and Trade 2. Domestic impediments to industry performance
ACI-11A The 2002/2003 drought: Part 2: A review of information advice and producer responses Mark Barber 02 6249 8055 ACIL Tasman Pty Ltd UQ-137A Current issues in intellectual property for the Australian Rural Sector Brad Sherman 07 3365 6193 The University of Queensland 3. Trade policy reform
ABA-21A China agriculture and the WTO Neil Andrews 02 6272 2242 Australian Bureau of Agricultural and Resource Economics (ABARE) CIE-30A Pursuing trade liberalisation by enhancing eh WTO’s transparency of trade policy Dr Andrew Stoeckel 02 6245 7800 Centre for International Economics DAH-4A Special safeguards and agricultural trade liberalisation David Harris 03 9889 9879 DN Harris & Associates DAH-6A Agricultural support – Implications for industry adjustment David Harris 03 9889 9879 DN Harris & Associates UQ-131A PDOs, PGIs and TSGs: Implications for Australian agriculture A/Prof Paul Riethmuller and Philip Bodman 07 3365 6321 University of Queensland 5. Supply chain linkages
UQ-98A Converting value chain information into producer-based action Dr Ray Collins 07 5460 1328 University of Queensland UQ-128A Building effective Australia-China supply chains post-WTO: A Chinese perspective A/Prof Ray Collins and Dr Tim Sun 07 5460 1328 University of Queensland 6. Policy and institutional analysis
MS067-07 The implications of changing global animal protein demand for Australian farmers Glenn Dalton and Mick Keogh 02 9690 1388 Australian Farm Institute
RIRDC Research in Progress – 1 New market opportunities for the food sector
Project Title: Trends in world agriculture RIRDC Project No.: CIE-25A Researcher: Dr Andrew Stoeckel Organisation: Centre for International Economics Phone: (02) 6245 7800 Fax: (02) 6245 7888 Email: astoeckel@thecie.com.au Objectives To analyse the major trends in world agricultural production and consumption to 2030. Background The objective of this project is to gain a better understanding of the global forces during major work agricultural markets to 2030.A key component of this research was to review the work already undertaken by institutions such as the Food and Agriculture Organisation (FAO) and devise a methodology to cover the deficiencies of this work. This project was jointly funded with ACIAR. Research The main purpose was to review the FAO’s extensive research on this subject put out in their publication World Agriculture: Towards 2015/2030, An FAO Perspective. Extensive notes were prepared. The main finding was that the FAO’s methodology was flawed. They took a partial view of agricultural markets and they did not allow for the competition for resources from other sectors such as manufacturing or transport. Their logic was that countries, such as China, would grow through population increases and higher incomes and that would lead to higher demands for food. In their projections the FAO takes the price of oil (and other things like steel) as given. The shortcoming in their analysis was that the income and population growth in countries, such as China, led to increased demand for food and also led to higher demands for other things like motor vehicles, which use oil and steel. The price of oil and iron ore has more than doubled in real terms over the last four years. Yet agriculture uses oil for transport, cultivation and fertiliser manufacture and agricultural machinery uses steel. These changing prices will also have an impact on agriculture yet the FAO did not consider this. Outcomes A report was written to articulate what a correct methodology might consider and why it would matter. A proposal to implement the correct methodology is being prepared for ACIAR. Publications World Agriculture to 2030: A Scoping Study RIRDC Research in Progress – 1 New market opportunities for the food sector
Project Title Agrifood Globalisation and Asia (final two volumes) RIRDC Project No.: DFT-2A Start Date: 05-Jan-2005 Finish Date: 30 Jan 2008 Researcher: Judith Laffan Organisation: Department of Foreign Affairs and Trade Phone: (02) 6261 2605 Fax: (02) 6261 1858 Email: judith.laffan@dfat.gov.au Objectives To provide useful and accessible, detailed information and analysis about the rapidly changing landscape of Asian agrifood markets, to the Australian agrifood sector, from farmers and fishermen, agribusiness and food companies, exporters, investors and policy-makers. Current Progress Following publication of the first four volumes of the DFAT SSII Agrifood Globalisation and Asia project* over 2001-2004, as well as a stand-alone China report in 2004, the project’s principal analyst and coordinator, Judith Laffan, is working to complete the final two volumes in the series: The current project work is focused on: drafting overviews of the main production trends of the key agrifood sectors, globally and in Asia; drafting overviews of the agrifood sector of each Asian economy (covering the whole agrifood chain from agriculture through processing to distribution and trade); and revising and updating earlier drafts of Asian agrifood company profiles for the leading Asian economies (Japan, China, Korea [ROK], Taiwan, Hong Kong, Singapore, Malaysia, Thailand, Indonesia, Philippines, India, Sri Lanka), plus drafting overviews of the main corporate agrifood sector trends and leading agrifood companies in each leading Asian economy. Research trips to China (4 weeks in 2005) and India (2 weeks in 2006) have been undertaken to interview local and foreign agrifood companies operating in those markets. ·1 Volume V: Asian Agrifood Supply Trends, and Asian Agrifood Companies (release 2007/08) ·2 Volume VI: Australia’s Outlook and Opportunities as an Agrifood Supplier to Asia (2008)
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* Summary details of the project and the series volumes can be found at <//www.dfat.gov.au/publications/agrifoodasia>. Further enquires can be made to Judith Laffan, Principal Analyst, Agrifood Research, AGB/OTN, DFAT, by email (judith.laffan@dfat.gov.au) or telephone (02-6261-2605).
RIRDC Research in Progress – 2 Domestic impediments to industry performance
Project Title The 2002/2003 drought: Part 2: A review of information, advice and producer responses RIRDC Project No.: ACI-11A Start Date: 01-Jan-2004 Finish Date: 15-Jun-2007 Researcher: Mark Barber Organisation: ACIL Tasman Pty Ltd Phone: (02) 6249 8055 Fax: (02) 6249 7455 Email: m.barber@aciltasman.com.au Objectives The aim of this research project, the second of a two stage review of the 2002/03 drought, is to reduce the impact and economic severity of drought on dry land farming by improving the understanding of how decisions are made by farm business managers and their advisors during periods of significantly below average rainfall. Stage one attached (early draft) reviewed the 2002/03 drought on a monthly basis and showed that its evolution was volatile and differed for crops and livestock.
Current Progress The results of stage one of the report also clearly demonstrates that agricultural drought is the combination of climate, production and prices not just climatic variations and that farm businesses must respond to the prevailing range of conditions not single factors. The results of stage one points to periods of highly increased activity where farm businesses were responding to a range of indicators including climatic circumstances and media reports. This volatility occurred at different times and amplitude for different broad acre enterprises. The volatility and market responses to drought and international supply and demand factors create opportunities for farm businesses to minimise the impact of drought. The objective of this report, stage two is to analyse how farm businesses respond to drought and how the decision making processes can be improved to reduce the impact of dry periods.
The aim of this project, stage two of the drought review, is to understand what farm businesses were responding too at these periods of identified activity, what information was contributing to the decisions being made and how these decisions can be improved to reduce the economic impact of drought on farm businesses.
Against this background three broad hypotheses will be tested:
1. How farmers responded to this drought, particularly in terms of strategies and information used to help in the development of those strategies. 2. Whether the level, nature and access to information for farmers, livestock producers in particular, was sufficient to enable informed decisions to be made regarding drought strategies; if not what were the gaps and how might these be addressed before or during the next drought.
3. Whether the formal analytical 'real options approach' to on-farm decision making during drought has merit and how might it be developed and applied to assist advisors, farmers and policy makers.
RIRDC Research in Progress – 2 Domestic impediments to industry performance
Project Title Current issues in intellectual property for the Australian Rural Sector RIRDC Project No.: UQ-137A Start Date: 10-Jun-2007 Finish Date: 30-May-2008 Researcher: Prof Brad Sherman Organisation: The University of Queensland Phone: (07) 3365 6193 Fax: (07) 3365 1466 Email: b.sherman@uq.edu.au Objectives This project will examine two important and related issues that currently, or in the future are likely to, impact upon Australian rural industries, namely: 1. Management of Intellectual Property for the Benefit of Australian Rural Industries; and 2. The Impact of Plant and Animal Patents on Australian Rural Industries.
Current Progress This project commenced in June 2007.
RIRDC Research in Progress – 3 Trade policy reform
Project Title China agriculture and the WTO RIRDC Project No.: ABA-21A Start Date: 1 May 2006 Finish Date: 30 May 2008 Researcher: Mr Neil Andrews Organisation: ABARE Phone: (02) 6272 2242 Fax: (02) 6272 2346 Email: nandrews@abare.gov.au Objectives ·1 Assess China's experience in implementing its WTO accession commitments for agriculture. ·2 Analyse the potential trade impacts of further multilateral agricultural liberalisation for China.
·3 Identify priority areas for further WTO reforms for agriculture.
Current Progress The first part of the project is an assessment of the implementation of China’s WTO accession commitments for agriculture. This assessment was undertaken in terms of three broad policy areas – market access, domestic support and export subsidies. A draft report has been completed. The second component involves a quantitative analysis of the impacts on both China and Australia of further WTO agricultural trade liberalisation. A reference case using ABARE’s GTEM model has been established.
The first meeting of the project advisory committee was held on 23 November 2006. A key outcome of the meeting was that a decision to proceed with the regional modelling (third component of the project) will be made after consideration of the simulation results at the global level. A second meeting of the project advisory committee will be held to assess the preliminary results once the model simulations have been completed.
RIRDC Research in Progress – 3 Trade policy reform
Project Title Pursuing trade liberalisation by enhancing the WTO's transparency of trade policy RIRDC Project No.: CIE-30A Start Date: 31-Aug-2006 Finish Date: 31-Jul-2007 Researcher: Dr Andrew Stoeckel Organisation: Centre for International Economics Phone: (02) 6245 7800 Fax: (02) 6247 7484 Email: astoeckel@thecie.com.au Objectives To enhance transparency of trade policy in the World Trade organisation (WTO). Current Progress This study expands on RIRDC project CIE-28A, which led to a conference paper being presented to the 26th Conference of the International Association of Agricultural Economists (IAAE): Contributions of Agricultural Economics to Critical Policy program on transparency, Wednesday, 16 August 2006. A paper titled Services trade: the need for better transparency on the same subject was presented to the Lowy conference on Enhancing Transparency in the Multilateral Trading System on Wednesday, 4 July and the author is a member of the Tasman Transparency Group, which has its own website.
Drafting is underway on the main report, taking all the above preliminary work into account.
RIRDC Research in Progress – 3 Trade policy reform
Project Title Special safeguards and agricultural trade liberalisation RIRDC Project No.: DAH-4A Start Date: 1 Jan 2006 Finish Date: 30 Jul 2007 Researcher: Mr David Harris Organisation: DN Harris & Associates Phone: (03) 9889 9879 Fax: Email: dnharris@hotkey.net.au Objectives To investigate how special safeguards (SSGs) affect agricultural trade and examine issues related to the protective effect of higher import duties, the design of safeguard trigger mechanisms and the implications for market access improvements in the major developed economies. Current Progress A review of WTO SSGs in the major developed economies has been completed. A database of imported products with SSG status was complied for a range of countries. A number of products have SSG status but the safeguards have not been activated. The research was focused on the major developed economies. The analysis was extended to review the type of safeguards that have been used. A comparative analysis of selected SSG formulas and import duty conditions was undertaken. An assessment of how much trade is affected by SSGs was completed with an extensive review of WTO SSG notifications since 1995. Data for a case study of a product regularly affected by SSG actions was collected. The case study will be used as an example of how SSGs affect market access conditions
The Doha proposals for SSGs, special products and sensitive products when the talks were suspended, were reviewed following discussions with DAFF and ABARE. An update of more recent WTO notifications was undertaken. These extra tasks have delayed work on the case study analysis and the assessment of implications for trade policy. Discussions with ABARE have required the proposal for a model based assessment of a selected SSG action to be modified.
RIRDC Research in Progress – 3 Trade policy reform
Project Title Agricultural support – Implications for industry adjustment RIRDC Project No.: DAH-6A Start Date: 1 Jan 2007 Finish Date: 31 Jul 2008 Researcher: David Harris Organisation: DN Harris & Associates Phone: (03) 9889 9879 Fax: Email: dnharris@hotkey.net.au Objectives Compare structural adjustment and economic performance in highly protected industries in the developed economies to industry performance in countries that do not provide support. Investigate the distribution of financial transfers from policy support measures between small scale family farms and large scale commercialised farming operations. Current Progress The approach to the project has been discussed with ABARE and some industry representatives. A proposed project meeting was replaced by individual discussions because of scheduling difficulties. There will be further discussions with interested parties as the project is progressed. The initial discussions identified three issues that would need to be the focus of the preliminary research in Stage 1 of the project:
·1 defining appropriate indicators of differences in industry performance under alternative policy environments; A review of highly protected industries in the major developed countries has commenced. OECD estimates of agricultural support for selected industries have been collected and are being assessed. Initial results suggest sugar, dairy, rice and cotton are the industries where countries have taken contrasting approaches to fostering industry development (i.e. protection versus undistorted market forces).·2 the availability of data to allow comparisons of industry performance in different countries; and
·3 the selection of suitable industry case studies.
A review of research on performance indicators and studies that make international comparisons of industry performance has been completed. A preliminary set of performance indicators have been identified. An investigation of data availability for the industries identified is underway. Industry case study selections will be finalised when this process is completed.
RIRDC Research in Progress – 3 Trade policy reform
Project Title PDOs, PGIs and TSGs: Implications for Australian agriculture RIRDC Project No.: UQ-131A Start Date: 1 Jul 2006 Finish Date: 31 Oct 2007 Researcher: A/Prof Paul Riethmuller, Philip Bodman Organisation: School of Economics, University of Queensland Phone: (07) 3365 6321 Fax: (07) 3365 7299 Email: p.riethmuller@economics.uq.edu.au; p.bodman@economics.uq.edu.au Objectives 1. Assemble information on the types of products affected by PDOs, PGIs and TSG regulations. 2. Assess whether these forms of regulation constitute a non-tariff barrier.
3. Evaluate what implications these forms of regulation/intervention might have for Australian agriculture.
4. Identify other related areas where further research may be warranted.
Current Progress This study sets out to investigate a set of regulations introduced in the EU that allow products to be certified as coming from a particular geographic area. Products gaining this certification are able to claim that they possess certain unique characteristics differentiating them from competitor products. Most of the research that has been conducted into the issue of geographical indications has been by lawyers and there has been limited economic analysis of the issue. Progress in the study has been delayed due to the illness of one of the principal investigators and certain other events largely beyond the control of the research team. In light of this, RIRDC has indicated that it is willing to extend the project until December 2007. RIRDC Research in Progress – 5 Supply chain linkages
Project Title Converting value chain information into producer-based action RIRDC Project No.: UQ-98A Start Date: 01-Jul-2001 Finish Date: 30 May 2008 Researcher: Dr Ray Collins Organisation: The University of Queensland Phone: (07) 5460 1328 Fax: (07) 5460 1324 Email: rcollins@uqg.uq.edu.au Objectives Working in partnership with the Queensland Farmers' Federation and the Agricultural Business Alliance of Queensland, this project aims to research, develop and implement the most effective strategies to: 1. Raise producer awareness of the role of value chain alliances in improving farm competitiveness (the outcome will be a very large number of producers across most primary industries exposed to generic information about value chains). 2. Transform generic awareness of value chains into applied knowledge that is specific to individual enterprises in individual industries (the outcome will be a large number of producers actively involved in transforming value chain information into knowledge that is specific to their own circumstances).
3. Create a small number of best practice (role model) examples of how to use this knowledge to develop and implement chain based strategies to improve competitiveness (the outcome will be a smaller number of producers actively involved in transforming value chain knowledge that is specific to their industry and their personal circumstances into actual chain building activities).
4. Monitor and evaluate the effectiveness of this approach to engaging producers with their value chains (the outcome will be a formally researched process whereby value chain information is turned into producer based commercial action - a process that can be applied in other Australian primary industries.
Current Progress Continuing problems have hampered the conduct of this project over the last 12 months. The citrus case study supply chain is overcoming the effects of citrus canker, but the cotton case study is still severely affected by on-going drought and some uncertainty as to future ownership of the company.
Monitoring of both case studies has continued, though no data collection has been possible.
A picture of the relationships between the information needs of chain members and improving the performance of the supply chain has emerged since the project began, and the interruption to the research should not impact negatively on final outcomes, provided work can recommence in the next year. It is hoped that one successful season of monitoring and assessment will enable final conclusions to be reached and results released.
RIRDC Research in Progress – 5 Supply chain linkages
Project Title Building effective Australia-China supply chains post WTO: A Chinese perspective RIRDC Project No.: UQ-128A Start Date: 1 Jul 2006 Finish Date: 30 Nov 2007 Researcher: A/Prof Ray Collins, Dr Tim Sun Organisation: University of Queensland Phone: (07) 54 60 1328 Fax: (07) 54 60 1324 Email: rcollins@uqg.uq.edu.au Objectives The aim of this research is to produce a unique blend of Chinese and Australian insights into the building of effective supply chains between the two countries in a free trade agreement (FTA) environment. The objectives are to: 1. Identify potential post-FTA opportunities for Australian agribusinesses to access Chinese markets. 2. Analyse existing approaches to supply chain management (SCM) between firms in chains that span developed and developing countries.
3. Identify drivers of successful SCM from the approaches and examples analysed in (2) above.
4. Taking a Chinese perspective, evaluate these drivers for their relevance, effectiveness and ability to be implemented in building effective agribusiness supply chains between Australia and China.
5. Using the range of opportunities identified in (1) above, propose supply chain building approaches for Australian agribusinesses.
6. Validate these approaches with Chinese researchers, Australian firms and their potential Chinese customers.
Current Progress ·1 An industry by industry analysis of potential opportunities to build supply chains with China has been completed. ·2 Literature relating to supply chain management between developed and developing countries has been reviewed and drivers of successful SCM identified.
·3 A survey instrument based on the findings from the stages above was developed and tested with importers and wholesalers in China.
·4 Following testing, surveys of importers, wholesalers and retailers in Shenzhen, Guangzhou and Wuhan were carried out. Results are being analysed.
·5 Based on preliminary findings from surveys in China, the survey instrument was modified for use with Australian exporters. The modified instrument is currently being pilot tested.
·6 One potential case study with an Australian fruit exporter has been identified.
Research in Progress – 6 Policy and institutional analysis
Project Title: The implications of changing global animal protein demand for Australian farmers RIRDC Project No.: MS067-07 Researcher: Glenn Dalton and Mick Keogh Organisation: Australian Farm Institute Phone: (02) 9690 1388 Fax: (02) 9699 7270 Email: info@farminstitute.org.au Objectives The broad aim of the project is understand the impact of changing global diets and energy use on Australian agriculture and predict the likely changes in demand for agricultural products that will arise as these changes occur. The project also aims to identify the strategic policy steps that Australian agriculture should take in order to prepare for these changes. Background Growing wealth in developing nations is leading to increased demand for animal protein – specifically poultry, pork, red meat, dairy and fish products. This, in turn, is leading to changes in the nature of agriculture imports by developing nations, depending on the make-up of agriculture in those nations and the availability of natural resources such as land and water. Research The research involved a relatively small-scale ‘desk study’ of official reports and information drawn from a variety of government and commercial sources. The research also involved an analysis of a large body of peer-reviewed papers and publications on these and related issues. Outcomes The most compelling need identified by this study is the urgent need for Australia to build up maize and oilseeds production capacity to underpin expanded livestock production and contribute to the production of fuel from crops. The study also concluded that the Australian Government should tread carefully in expanding a crop-based ethanol-production industry in Australia. At best, crop-based ethanol could only provide a small part of the answer to future energy needs for a limited period. As a fuel, biodiesel appears to have a much better long-term future than ethanol, and its development should be encouraged, as it will provide a suitable alternative fuel for heavy haulage and agricultural purposes.
The study also highlighted that Australia needs to develop closer trade links with the group loosely known as the Tiger II countries in order to increase exports of animal protein – specifically red meat, dairy products and live cattle and sheep exports.
Implications For Australia to take advantage of this future demand for animal protein, a greater focus on research and development will be required of suitable maize and oilseed varieties and associated production technology. Of the countries under review, Australia has a long-term trade agreement with Thailand and is in negotiations with China and Japan, which have every prospect of being successful if based on mutual self interest. Australia needs to develop closer trade links with the group loosely known as the Tiger II countries, including Malaysia, Thailand, the Philippines, Vietnam and Taiwan to take advantage of changes in demand for agricultural products.
Publications Dalton, G & Keogh, M 2007, The Implications for Australian Agriculture of Changing Demand for Animal Protein in Asia, Research Report, Australian Farm Institute, Surry Hills, Australia.
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