The Effect of Declining Wool Prices, Wheat Quotas and Debt Reconstruction on the Financial Viability of Australian Farmers
An examination of the decline in net farm income between 1966-67 and 1969-70 indicates that in the three major zones the following size groups will be non-viable (l) In the High Rainfall Zone, farms with less than 2,000 and more than 10,000 sheep, comprising 85 per cent of farms in the Zone. (2) In the Wheat Sheep Zone, farms with less than 1,000 sheep, comprising 56 per cent of farms. (3) In the Pastoral Zone, farms with less than 20,000 sheep, comprising 98 per cent of farms. This situation could be alleviated to some extent by extending the period of debt repayment from the present average period of 7 years to a period of 20 to 30 years.
AN ECONOMIC ALTERNATIVE TO CONCESSIONAL FARM INTEREST RATES: REPLY
A variable amortization plan is proposed, indexing annual payments made by farm mortgage borrowers. A debt reserve balance also is proposed to stabilize payments received by lenders. Research implied by the proposal is outlined, together with modelling suggestions for investigating effects of the plan on farm income after debt servicing requirements have been met.
OPTIMAL MECHANISMS FOR INCOME TRANSFERS
Abstract : The poor receive a sub-optimal amount of material goods through the natural economic processes of our society. Poor and non-poor alike seek to institute mechanisms that give something to the poor beyond what they get from the normal workings of the 'competitive' system. The fact that the non-poor share in this desire indicates that an externality is generated when the economic welfare of the poor is improved. On a collective basis, the non-poor are willing to pay for this externality. They sacrifice some of their income in support of redistributive programs that benefit the poor. In this paper we will not be concerned with moral or ethical values. We develop our analysis with the aid of a simple two-party model. One party is the representative poor man, the other the representative citizen. The representative citizen asks himself the central question of this essay. How should assistance programs to the poor be structured so as to maximize the utility function of the representative citizen. (Author)