The Wool Debt, the Wool Stockpile and the National Interest: Did the Garnaut Committee Get it Right?*

Abstract

In July 1993 the Wool Industry Review (Garnaut) Committee presented its recommendations on disposal of the wool stockpile, on wool marketing, and on organizational arrangements in the wool industry. This paper focuses on the Report's treatment of two issues central to the future economic benefits to Australia from wool: the approach to the industry's stockpile‐related debt, and disposal of the stockpile. There are strong grounds for thinking that the Garnaut Committee's recommendations on these issues– accepted by the government–are contrary to the best interests of the wool industry and Australia.

Auction Price Anomalies: Evidence from Wool Auctions in Australia*

“…11 The sample period coincided with changes in interventions in wool markets. Though the reserve price floor had ended, the stockpile of wool held by WI was sold off roughly in accordance with what the market could bear (Richardson 2001), which varied over the sample period (Haszler et al 1996). However, we are interested in what happens to the price of wool throughout a single auction lasting 1-4 days and not on what happens across auctions.…”

The politics and economics of wool marketing, 1950–2000

“…ABARE prepared an analysis for the Committee of ¢ve options which was subsequently strongly criticised by Haszler et al (1996) for its use of a price elasticity of demand approximating À1. Haszler et al argued that empirical estimates are that the demand for raw wool is price inelastic and that the policy option selected by government was inferior.…”

Counting the cost: the reserve price scheme for wool 1970‐2001

“…The administration of the RPS for wool, the only Australian commodity subject to such this form of market intervention, and of that dealing with the aftermath spawned a large literature from agricultural and applied economists (see, for instance, Watson ; Vines Report ; Gunasekera and Fisher ; Hone and Hope ; Hertzler ; Haszler et al . ; Turnell ; Richardson ; Abbott ). While Richardson (), Abbott (), Ville and Merrett () and Massy () have provided narratives of the political and economic imperatives that gave rise to the introduction and operation of the RPS and its ultimate demise, these authors apportion blame to many of the participants, particularly senior officials in the statutory bodies, their advisors and politicians of various hues.…”