The government's historical intervention in the pricing, procurement and storage of agricultural commodities, along with the presence of import tariffs on input commodities, have resulted in negative effective rates of protection
, reducing the incentive to shift towards high value-added production.
In a paper that had a huge impact on the analysis and measurement of protection in Australia, Max Corden (1963) introduced to Australia the concept of effective rates of protection.
The Committee obtained estimates of effective rates of protection for a sample of commodities and product groups from the Tariff Board and the Committee secretariat.
The measurement of effective rates of protection changed our perception of tariff protection and industry assistance more generally.
This is what Lloyd and MacLaren call a semi-general equilibrium measure as it is the partial equilibrium measure with the addition of the effects of tariffs on inputs of producers on effective rates of protection.
Comparison of the average effective rates of protection in the manufacturing sector calculated by the TB/IAC/IC/PC with those in the agriculture sectors gives us a much clearer view of this picture.
Among other things I suggested calculation of effective rates of protection.
The various measurement problems or issues I had raised in my 1966 article were endlessly analysed but, more important, an opportunity was provided for students to do empirical dissertations of a relatively simple (but laborious) kind, namely calculating effective rates of protection for their own countries.
The United States tariff structure: estimates of effective rates of protection of United States industries and industrial labor', Review of Economics and Statistics 48, May, pp.