What is it about?
We chose the 20 most important agricultural commodities produced in Australia before the Second World War and categorised them as either importables (6) or exportables (14). For each commodity we classified the policy instruments that were used; there were five in number: production bounties, tariffs, export bounties, specific instruments for the dairy sector, and specific measures for the wheat sector. For each commodity we calculated the nominal rate of assistance provided in each of the years from 1903-04 to 1945-46 inclusive, from the several different instruments of assistance provided, and found that importables had received much more assistance exportables. Thus, resource allocation within the sector was less efficient than it could have been because exportables were being implicitly taxed.
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Why is it important?
The 'story' being told highlights the changing policy dynamic over the four decades as measures of assistance were introduced and, in some cases, removed as economic circumstances altered. This was especially true for the period between 1930 and 1939. The description of the policy instruments of course only tells part of the story; the nominal rates of assistance, commodity by commodity, provide quantification of the effects of the instruments on the transfers to producers of each of the commodities.
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This page is a summary of: Assistance to Australian agriculture from Federation to World War II, Australian Journal of Agricultural and Resource Economics, August 2014, Wiley,
DOI: 10.1111/1467-8489.12069.
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