As Charles Massy ( 2011) has described in great detail, there was a sustained push by the woolgrowers in positions of authority of the AWC to shift the rationale of the RPS from a modest ‘stabilisation’ to increasing the price of wool in a rapidly rising market with the assistance from time to time by Country/National Party ministers. However, the parameters of decision-making autonomy by the woolgrower dominated Australian Wool Corporation (AWC), which operated the scheme underwent important changes during its lifetime. The calculation of costs provides us with a broader and more substantial measure of policy failure than simply noting its demise. We broaden the calculation to include ‘hidden’ costs and benefits. Moreover, we provide an estimate of the cost of the RPS from its beginnings until the sale of the last bale of stockpiled wool in 2001. We provide a narrative with differences in emphasis, notably the reasons for a sudden change in the governance of the RPS that effectively handed decision-making authority to wool producers and the environmental changes that took place, especially the floating of the Australia dollar.
Why did the Reserve Price Scheme for Australian wool end in collapse in 1991? That story has been told in a wide literature. The impact of the collapse of this centralised attempt had a considerable impact on the Australian wool industry, and internationally, and helped to discredit in Australia the organised marketing of rural produce.
Its decline in importance to this development took place at the same time that heated debates occurred of whether a centralised attempt should be made to stabilise prices, both before this approach was implemented in the early 1970s and after its collapse in 1991. The wool industry for a long time played a central role in the economic development of Australia (Barnard 1962, 475-479).
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