Author: John Quiggin

Dryland salinity

John Quiggin55 Comments

Jennifer Marohasy has a couple of posts on dryland salinity, including a link to an excellent survey of the recent debate by John Passioura (subscription required). Marohasy’s interpretation is (as always) that the problem has been grossly exaggerated. This kind of unvarying optimism (or the alternative position that environmental disaster is invariably impending) is a fine example of the ‘stopped clock‘ approach to punditry. If you make this kind of claim on every issue, you’re going to be right about half the time.

In the case of dryland salinity, it’s easy enough to find examples of both excess pessimism and excess optimism. Among the optimistic errors noted by Passioura are the assumption of the Western Australian government 20 to 25 years ago that the salinity problem was well in hand, and that there was no problem with large scale clearing. This was covered in a book by Beresford et al which I mentioned a couple of years ago. Another form of excess optimism is the belief that there are easy solutions. These include engineering solutions like the use of the Murray as a drain for saline water (seriously proposed in the not-so-distant past as Passioura notes) and, more recently, large-scale tree planting. As I observed in the post I’ve already mentioned, it’s turned out that in many cases, the area that has to be planted is so great and the time to fix the problem so long that, in a lot of cases, it appears not be economically feasible.

Another piece of bad news is that, whereas early studies focused almost exclusively on agriculture, dryland salinity can cause substantial economic losses through damage to roads, buildings and so on. On the other hand, remote sensing has suggested that the area affected by dryland salinity is less than first thought, and that trends are more variable. And the alarming estimate of 17 million hectares derived from the National Salinity Audit refers to the area that might (in the absence of policy change) have high water tables and therefore be at risk of dryland salinity, not the area that is likely to be actually affected.

If you want an easily accessible view of the problem (a little out of date now, but still very good), I recommend David Pannell’s 2001 AARES Presidential Address Dryland Salinity: Inevitable, Inequitable, Intractable? .

Update 8/2/06In response to a challenge to nominate an environmental issue where urgent action is needed, Jennifer Marohasy says

“In a recent blog post (a version of the same published as an article for The Land newspaper) I suggest something needs to be done about overgrazing in the Macquarie Marshes, This links back to the even more dramatic
Cattle Killing the Macquarie Marshes?.”

Despite the question mark, Marohasy is pretty confident the answer is “Yes’. Her evidence? “An aerial photo showing the line of demarcation between an overgrazed private property and ungrazed nature reserve. As she says, “the impact of grazing here is obvious and dramatic.”

But there are many, many similarly dramatic photos of environmental damage in the Murray-Darling. In these cases Marohasy rightly says that dramatic photos may be misleading and need to be backed up by scientific research (when the scientific research is produced she rejects it, but that’s by the way). [I will try to get some more info on this, and report what research has in fact been done].

How is that Marohasy is so quick, in this case, to label farmers as environmental vandals, and to call for urgent action, when she normally disputes conclusions based on decades of research?

A reading of the posts makes the answer pretty clear. The Macquarie Marsh graziers are in conflict with the irrigators she represents. Follow the money.

Whose $300 million ?

John Quiggin22 Comments

As the AWB hearings go on, one important question doesn’t seem to have been asked[1]. If $300 million was paid as bribes to Saddam, whose money was it, and should they be repaid?

Although the AWB paid the money on behalf of Australian wheatgrowers, they got it back (and probably some more on top) in the form of inflated prices. So the money was in fact stolen from the UN, which in turn held it on behalf of the Iraqi people, who were supposed to be trading oil for food, bypassing the Saddam regime.

AWB, or failing that the Australian government, should repay this money to the Iraqi government, which is in dire financial straits now that US reconstruction funding has stopped.

fn1. There’s a similar question to do with misappropriation of Iraqi money under the Coalition Provision Administration, but I need to look into this one a bit more.

Earthquake appeal update

John Quiggin1 Comment

The Pakistan earthquake appeal has been a huge success. Generous readers (see over) have donated a total of $1365 so far, easily surpassing the $1000 I promised to match. So, rather than close off early, I’ll raise my maximum contribution to $1500, and match any further contributions up to that limit, up to midnight tonight (blog time).

A few people made cash for comment offers, which I’ll address when I get a bit more free time.

List of donors so far

Harry Clark 100
James Farrell 100
Robert Merkel 25
Wilful 50
Jack & Claire 20
Craig Malam 100
Steve Edwards 100
Tim Dymond 150
Dave 30
Steve Munn 50
Helen 20
Kim Weatherall 50
James White 100
Nabakov 50
Hirvi 30 (20 euros)
dj 50
Peter D 60
rnr 100
Ian 50
Emma 30
anonymous 100
Total 1365

A few people made cash for comment offers, which I’ll address when I get a bit more free time.

The greatest generation ?

John Quiggin48 Comments

One of the journalistic tropes I most dislike is the generation game. It’s essentially a young person’s game, so lately we’ve mostly seen people under 45 (the so-called generations X and Y) putting the boot into those aged between 45 and 60 (Boomers). The results have been reliably silly, and also repetitious – the complaints and responses are little changed from 30 to 40 years ago, when boomers were mouthing slogans like “Never trust anyone over 30” .

But the game is even sillier when played by those old enough to know better, like Richard Neville. In Salon, Gary Kamiya gently skewers the latest of the genre, a book claiming that the Boomers are a “Greater Generation” than the one that fought World War II by virtue of their struggles for civil rights, equality and so on. Crucial quote

Leaving aside the obvious definitional and chronological difficulties — many of the boomers’ achievements were set in motion by men and women from the Greatest Generation — is it really fair to say that a group consisting of millions of people “did” anything?

As I’ve said before, I look forward to a time when the idea that you can classify a person by the date on their birth certificate is accepted only in the astrology columns.

Weekend reflections

John Quiggin73 Comments

Weekend Reflections is on again. Please comment on any topic of interest (civilised discussion and no coarse language, please). Feel free to put in contributions more lengthy than for the Monday Message Board or standard comments.

Earthquake appeal update 2

John Quiggin1 Comment

As at 4 pm today, donations for the Pakistan earthquake appeal totalled $695, which I will match for a total of $1390. I’m hoping we can raise this to $1000 + a matching $1000 from me, so I’m going to keep running the appeal until Sunday. Thanks to everyone who’s donated, and specially to those for even a small subtraction from the weekly budget is a big effort. Please add your promises to the earthquake appeal comment thread, not this one.

Some thoughts on the AWB monopoly

John Quiggin40 Comments

Although I’ve worked on agricultural economics for nearly thirty years, I’ve never given much thought to “single desk selling”, the policy under which Australia nominates a single source (formerly a government agency and now a quasi-private business) to supply exports of commodities such as wheat and sugar. The scandal engulfing AWB (the former Australian Wheat Board, now privatised) has naturally raised the issue of whether this export monopoly should continue. On reflection, I think it should not.

There are a couple of reasons why we might favour an export monopoly. The first is the classic idea of exploiting Australian monopoly power to generate higher returns. There are a few problems with this. First, our monopoly power in the world wheat market is very limited, even allowing for the fact that wheat is not a homogeneous commodity. Second, in the absence of restrictions on the aggregate supply of wheat, this implies diverting additional wheat to the domestic market, depressing prices there. While that’s a benefit to consumers, it means that the net gain to wheatgrowers from the operation of the AWB will be pretty modest. Finally, it doesn’t appear to me that AWB acts in the way required. Far from that of a tightfisted monopolist, the AWB culture comes across as that of hotshot sales types, eager to do whatever is necessary to bring home a deal.

The second case for an export monopoly is that of countervailing power. Here the idea is that the buying side of the market is dominated by big players who will, if left unchecked, divide and conquer Australian wheatgrowers. In a situation where Australian growers were bargaining individually with monopsony buyers, the establishment of a publicly-supported export supplier might be a good idea. But, given that such a supplier exists, it’s hard to see why it needs to retain monopoly rights. If, as claimed, it gets better prices for wheatgrowers than they can get for themselves, or through other exporters, why would they switch?

As far as wheat is concerned, the question is, I think, academic. AWB’s reputation has been so badly shredded that any deal they make from now on will be open to attack by foreign competitors, unless it is at such a discount as to make it clear that it could not possibly incorporate a bribe. This is already happening in Iraq, (though the Americans had grabbed the market for themselves in any case). So if want to keep the single-desk policy, we’ll have to establish a completely new enterprise to work it.