Starve you wife if she refuses sex

[Ryeland]

I'm not familiar with the Australian wheat crops, and have no idea why a private company couldn't come in and profit from it, but I find it quite strange. Were they not allowed to? Does anybody own the land? Is there a market for it?

I am familiar with another example.

http://www.cato.org/pub_display.php?pub_id=3411

New Zealand started eliminating farm subsidies in the mid 80's, which at the time consisted of 30 separate production payments and export incentives and accounted for more than 30 percent of the value of production. Initially, people naturally bitched and moaned, "wah wah government, where's my handout?

" They thought the industry would go down the tubes, people would go out of business, production would hault, etc etc....


what happened? Only 1% percent of farms went under, and the industry has flourished. Farm output in New Zealand has soared 40 percent in constant dollar terms since the mid-1980s. Agriculture's share of New Zealand's economic output has risen slightly, from a pre-reform 14 percent to 17 percent today, and productivity in the industry has averaged 6 percent growth annually, compared with just 1 percent before reform.

Why did this happen?

They cut costs, diversified their land use, sought non-farm income opportunities and altered production as market signals advised -- for example, by reducing sheep numbers and boosting cattle ranching. Farmers were aided on the cost side as input prices fell, because suppliers could no longer count on subsidies to inflate demand.

The striving for greater efficiency also supported environmental protection as marginal land farmed only to collect subsidies was replaced with native bush, and overuse of fertilizers ended when fertilizer subsidies were removed.

It's an example of the removal of subsidies forcing them to be more effective and efficient, and more in tune with consumer demands.

This is quite a solid example of how the market can work. Seems to have worked wonders for them in many scenarios. However the agriculture market is based very heavily on physical products to sell. Farming, compared to more social applications, is relatively straight forward. There are very established methods of farming and relationships between most of the important variables (fertilizer, sunlight, temperature, soil pH, etc) are well defined. For something as service oriented as education one would have to wonder if the same gains could be made if privatized. The relationships between all the variables are more complex than farming.

Tim brings up a very good point, many times government research projects are things that would be cost prohibitive to the private market yet yield great results (eg, the hubble telescope, or most of NASA for that matter). It is doubtful that any private organization would have advanced our knowledge of the universe as much as NASA has by this time.

 

[tim290280]

I'm not familiar with the Australian wheat crops, and have no idea why a private company couldn't come in and profit from it, but I find it quite strange. Were they not allowed to? Does anybody own the land? Is there a market for it?

I thought I was pretty clear. The private companies have only become interested in the last 5 or so years (well 15 really but they weren't significant until recently). There was money to be made, there was a market, there was plenty a private company could do but didn't. That was my point. Govt had to kick start that entire field of research and development and waited for roughly 50yrs before private guys got serious.

So it can't always be about relying on private industry to know and do what is best. You wanted an example, there it is.

I am familiar with another example.

http://www.cato.org/pub_display.php?pub_id=3411

New Zealand started eliminating farm subsidies in the mid 80's, which at the time consisted of 30 separate production payments and export incentives and accounted for more than 30 percent of the value of production. Initially, people naturally bitched and moaned, "wah wah government, where's my handout? " They thought the industry would go down the tubes, people would go out of business, production would hault, etc etc....

I find this kinda funny coming from Americans as the US Ag is the most heavily protected and subsidised in the world.

what happened? Only 1% percent of farms went under, and the industry has flourished. Farm output in New Zealand has soared 40 percent in constant dollar terms since the mid-1980s. Agriculture's share of New Zealand's economic output has risen slightly, from a pre-reform 14 percent to 17 percent today, and productivity in the industry has averaged 6 percent growth annually, compared with just 1 percent before reform.

Why did this happen?

They cut costs, diversified their land use, sought non-farm income opportunities and altered production as market signals advised -- for example, by reducing sheep numbers and boosting cattle ranching. Farmers were aided on the cost side as input prices fell, because suppliers could no longer count on subsidies to inflate demand.

The striving for greater efficiency also supported environmental protection as marginal land farmed only to collect subsidies was replaced with native bush, and overuse of fertilizers ended when fertilizer subsidies were removed.

It's an example of the removal of subsidies forcing them to be more effective and efficient, and more in tune with consumer demands.

This may be the view from afar..... I'll also say that I'm not a fan of subsidies and price systems.

But it has to be said that agriculture has been fighting cost price squeeze for decades to the point were most farms are only profitable when you remove owner/family labour units from the cost equation. Another point is that off-farm income is often sunk into farm businesses and is nothing more than another subsidy.

I think that particular example is a might more complicated and deeper than you'd think and not the win-win you are painting it to be.

Simply put most people don't pay enough for food. Most of the costs involved with food are not actually related to the food itself, rather the supply chain markup/profit. As a result price increases in food have not been passed on to producers. This has been both good and bad. It encourages both efficiency and economies of scale, but it also encourages resource mining (erosion, degradation, etc) and poor production practices (e.g. animal confinement feeding with grain, illegal chemical swathing of crops).

Tim brings up a very good point, many times government research projects are things that would be cost prohibitive to the private market yet yield great results (eg, the hubble telescope, or most of NASA for that matter). It is doubtful that any private organization would have advanced our knowledge of the universe as much as NASA has by this time.

That was what I was driving at. Those sorts of things just wouldn't be done otherwise.