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Pricing of Queensland Sugar Cane: Appraisal of the Present Formula and a Suggestion for Reform

Author

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  • Dixon, Peter B.
  • Johnson, David T.

Abstract

Production and milling of sugar cane in Queensland occur in a highly regulated environment. In particular the price of cane is determined by a formula which has been used virtually unchanged for about 70 years. Under this formula, the returns to millers are tied to the price of sugar, not the costs of milling. It is argued in the paper that this could lead to economically unjustified changes in milling arrangements and wasteful uses of milling resources. Other weaknesses of the present formula are also identified. An alternative formula, overcoming all identified problems, is suggested.

Suggested Citation

  • Dixon, Peter B. & Johnson, David T., 1988. "Pricing of Queensland Sugar Cane: Appraisal of the Present Formula and a Suggestion for Reform," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 56(01), April.
  • Handle: RePEc:ags:remaae:9652
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    File URL: http://purl.umn.edu/9652
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    References listed on IDEAS

    as
    1. Bentley, Philip & Collins, D J & Drane, N T, 1974. "The Incidence of Australian Taxation," The Economic Record, The Economic Society of Australia, vol. 50(132), pages 489-510, December.
    2. Gruen, F H, 1986. "How Bad Is Australia's Economic Performance and Why?," The Economic Record, The Economic Society of Australia, vol. 62(177), pages 180-193, June.
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    Keywords

    Demand and Price Analysis;

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