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Modelling interactions between farm-level structural adjustment and a regional economy: A case of the Australian rice industry

Mushtaq, Shahbaz and Cockfield, Geoff and White, Neil and Jakeman, Guy (2014) Modelling interactions between farm-level structural adjustment and a regional economy: A case of the Australian rice industry. Agricultural Systems, 123 . pp. 34-42. ISSN 0308-521X

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Article Link(s): http://dx.doi.org/10.1016/j.agsy.2013.08.010

Publisher URL: http://www.sciencedirect.com/science/article/pii/S0308521X1300111X

Abstract

Climate change and on-going water policy reforms will likely contribute to on-farm and regional structural adjustment in Australia. This paper gathers empirical evidence of farm-level structural adjustments and integrates these with a regional equilibrium model to investigate sectoral and regional impacts of climate change and recent water use policy on rice industry. We find strong evidence of adjustments to the farming system, enabled by existing diversity in on-farm production. A further loss of water with additional pressures to adopt less intensive and larger-scale farming, will however reduce the net number of farm businesses, which may affect regional rice production. The results from a regional CGE model show impacts on the regional economy over and above the direct cost of the environmental water, although a net reduction in real economic output and real income is partially offset by gains in rest of the Australia through the reallocation or resources. There is some interest within the industry and from potential new corporate entrants in the relocation of some rice production to the north. However, strong government support would be crucial to implement such relocation.

Item Type:Article
Business groups:Horticulture and Forestry Science
Keywords:Climate change Water and environmental policy Structural adjustment Rice Geographic relocation Regional economic model
Subjects:Agriculture > Agriculture (General) > Agricultural meteorology. Crops and climate
Plant culture > Field crops > Rice
Science > Statistics > Mathematical statistics
Agriculture > Agriculture (General) > Agricultural economics
Deposited On:19 Aug 2014 02:53
Last Modified:19 Aug 2014 02:53

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