2002, Volume 5, Paper 52
ISSN: 2209-6612

Policy Influences on Genetic Diversity in Australian Wheat Production

David Godden – Department of Agricultural Economics, University of Sydney
John P Brennan – Wagga Wagga Agricultural Institute

Introduction

The research reported in this paper has its origins in a wider project (e.g. Brennan et al. 1999a)
examining economic dimensions of genetic diversity in the wheatgrowing industries of Australia and
China. Part of this study involved the econometric estimation of the supply of and demand for genetic
diversity in the Australian wheat industry. Especially since 1945, government policy has had a major
impact on the marketing of Australian wheat, and also on the research and development process.
Government policy is therefore a possible shifter of the supply and demand curves, and some “policy”
variable would be required to test the significance of this hypothesis. Construction of such a policy
variable required the preliminary analysis of the likely forms of government policy that might eventually affect the supply and demand for genetic diversity.
Genetic diversity in the Australian wheatgrowing industry is interesting for three principal reasons.
Firstly, individual farmers face an array of risks and uncertainties including price and production risk.
Wheat varieties, because of their different genetic makeups, respond differentially to climatic and other environmental (e.g. pest and disease) conditions. Choice of wheat variety offers some opportunities to manage risk and uncertainty in wheat production. For example, some wheat varieties are optimally sown “early” in a season, whereas others may be sown “late”. The availability of different varietal types allows farmers to exploit different climatic conditions as they emerge. This factor might be denoted “routine” risk and uncertainty.
Secondly, plant breeding is an economic activity in the sense that breeders are continually searching
for improved cultivars within the constraints of available financial resources, and within the constraints of what is genetically possible within existing knowledge. Thus breeders are continually making tradeoffs between an array of plant breeding objectives. The choices that they make – e.g. between “more genetically diverse” varieties, and higher yield or quality – govern the array of varieties that farmers have available to manage their production systems.
Thirdly, there is also an issue of the “ecological” sustainability of the wheat production industry. The
possibility of major breakdowns of, for example, disease resistance in a crop kind was recognised
following 1970 Southern Corn Leaf Blight in the USA. If the response of each genotype to
environmental conditions were perfectly known, then there would be no uncertainty about the
sustainability of crop production. Without perfect knowledge, however, there will always be some
residual uncertainty about the production stability of the existing range of varieties and nearly-available varieties.

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