Year: 2021

Often in introductory economics courses, diagrams are drawn of downward sloping demand curves and upward sloping supply curves and their intersection is known as the market clearing price. Implicit in these diagrams are a range of assumptions not always made evident to students. One of the key assumptions is the homogeneity of the good being produced and demanded.

Australia’s national anthem says it all: Our land abounds in nature’s gifts of beauty rich and rare. For decades we’ve been selling off our mineral wealth; coal, iron ore, nickel, zinc and gold to name a few. Lands have been cleared; crops planted, sheep and cattle introduced, and agricultural wealth generated. People with skill and opportunity have flocked to Australia and helped develop a rich, diverse economy.

Consumers in different countries pay different relative prices for bread and cereals, and grain flows and market prospects are affected. For various reasons, governments in some countries introduce policies to make bread and other cereal-based foods more affordable to their populations. Egypt subsidises bread consumption. Russia imposes wheat export taxes to make its wheat domestically more affordable. India imposes a raft of policies to ensure grain-based foods are affordably available to its low-income groups. At the other end of policy spectrum, the Japanese government controls the importation and sale of certain types of grain to provide income support to Japanese farmers, with Japanese consumers then paying more for certain bread and cereal foods.

There is an adage that “an apple a day keeps the doctor away”. It could be just as true to say that “a daily handful of oats keeps the doctor away” because oats bestow an impressive array of health benefits.

Upholding its supply reputation for safe and healthy grains, Australia could help South East Asian governments combat their emerging dietary problems.