Top science degree for agribusiness professor

Over 40 years, Professor Allan Rae has progressed from quantifying the economic benefits of new apple varieties for local growers to helping negotiators on major trade deals in the international market.

Today, Professor Rae was conferred with one of the University’s highest academic awards, the Doctor of Science. This degree recognises scholarly achievement and a demonstrated ability to make original contributions in science; resulting in major publications, which, in the view of the examiners, mark the candidate as a creative and outstanding scholar.

While Professor Rae is situated in the College of Business, where he heads the Centre for Agribusiness Policy and Strategy, his work has focused on the economics of agriculture. His Doctor of Science thesis is made up of work spanning many years.

“Early in my career I became interested in the barriers to trade that existed for agri-food products,” he says. “I worked on models that showed the benefits that can be achieved through removing these barriers, through bilateral negotiations, either with the World Trade Organisation or through free trade agreements.”

He would go on to head a number of international programmes, including one for the Pacific Economic Co-operation Council, a taskforce on livestock development that led to a subsequent taskforce on agricultural trade and policy development. Consequently he completed many studies within Asia on consumer food trends and livestock economics, and more recently on China’s agricultural economy.

“This involved getting together a network of government officials and researchers from across the Asia-Pacific region, and leading the research. The whole idea was to find ideas they could use to take a more enlightened approach to agricultural policy in their own countries, in terms of achieving food security and rural development, at the same time as allowing more international trade in agri-food products.”

Recently, he has been working with a worldwide network of economic analysts using computer models of the global economy. The models can conduct worldwide analyses of what happens when countries reform their trade policies and reduce barriers to international trade.

The reduction of these barriers is a common theme in his work. “Trade liberalisation allows countries to better use their resources by producing goods in which they have comparative and competitive advantages,” he says. “In New Zealand’s case it’s agri-food. When countries put up trade barriers their prices may be well above those in the rest of the world and they suck too many resources into areas they may not be particularly efficient in, leaving too few resources for other areas of the economy where they might be more efficient, so that just reduces economic welfare all round. By lowering those barriers you get a better allocation of resources both within countries and between countries.”

While gains have been made in this area, Professor Rae says New Zealand still faces great challenges as it tries to sell its products to the world. “There are still quotas and extremely high tariffs in place if you want to sell over and above your quota constraint. That applies to many meats and dairy products in several countries around the world. The use of export subsidies by other countries is also a problem, particularly in Europe.”

The environmental impact of production is also becoming a major factor for exporters. "Agriculture’s interface with the environment is important, particularly to the consumers in rich countries. The environmental footprint of a product is increasingly coming into play, and consumers are demanding that the buyers, such as the supermarket chains, make good decisions when buying these products. New Zealand has to pay much more attention to the environmental consequences of its agri-food production.”

Pro Vice-Chancellor of the College of Business, Professor Laurence Rose, says he has admired Professor Rae’s career for some time. “I have seen many of his contributions to the field up close and been very impressed with both the quality and the careful thought that goes into his work, which has had a major impact on issues that are important to New Zealand’s long term economic success and vitality.”