Industry Structure and the Reform of the Queensland Sugar Industry: A Computational Model
AbstractA computational model of pricing and profitability in the Queensland sugar industry is applied to a comparative analysis of likely alternative industry structures that may arise in the wake of industry reform. Implementation of proposals suggested by the sugar industry review working party and in some of the submissions to it are also examined. The model is a simple static optimisation model of the trade in sugarcane in a local mill area. Numerical results are presented to compare prices and profitability for both a representative mill and growers in a monopsony situation, a contestable market, and under the current institutional arrangement. The results indicate that although deregulation has the potential to lead to improved welfare for both growers and the mills, this will only be the case if mills price competitively, i.e. in the contestable market case where the threat of competition from neighbouring and competing mills is sufficient to force the incumbent mill to pay for cane at a competitive price to prevent the entry of potential competitors.
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Bibliographic InfoArticle provided by Queensland University of Technology (QUT), School of Economics and Finance in its journal Economic Analysis and Policy (EAP).
Volume (Year): 31 (2001)
Issue (Month): 2 (September)
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Postal: GPO Box 2434, BRISBANE QLD 4001
Web page: http://www.journals.elsevier.com/economic-analysis-and-policy/
More information through EDIRC
Pricing; Sugar; Sugarcane;
Find related papers by JEL classification:
- Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
- Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Joseph Farrell & Matthew Rabin, 1996. "Cheap Talk," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 103-118, Summer.
- Beard, Rodney, 2007. "Rent seeking, interest groups and environmental lobbying: Cane Farmers versus Great Barrier Reef Protectionists," MPRA Paper 5351, University Library of Munich, Germany.
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