Too big to fail: explaining the timing and nature of intervention in the Australian wool market, 1916-1991

From the early twentieth century, many Australian farm products have had their prices set by some form of intervention, often administered by a statutory marketing board. Wool was different: intervention, other than war-related exigencies, came much later and in a different mechanism, a reserve price scheme (hereafter RPS). The RPS that operated from 1970 until its collapse in 1991 has been roundly criticised. Four key elements explain the belated emergence and particular form of price controls: the specific characteristics of wool - its importance to the economy, its export orientation, and its non-perishability; the shifting locus of economic and political power in favour of small farmers; the declining influence of the wool-selling brokers and their associations; and the rise of statutory bodies and their capture by key figures supporting increased government participation.