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Microeconomic Reform in the Australian Sugar Industry?

Author

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  • Simmons, Phil

    (University of New England)

Abstract

The Industry Commission proposals for removal of the sugar tariff and of the statutory acquisition powers of the Queensland Sugar Corporation (QSC) are examined using a linear model. Measures of change in surplus resulting from the proposed policy changes are supported by an analysis of their sensitivity to different values of the elasticities. It is concluded that tariff reform is unlikely to be justified on welfare grounds when adjustment costs are considered and that the net gains from the proposed removal of the QSC statutory powers are likely to be small. A more general point is made that the focus of the broader microeconomic reform debate on transfer effects rather than efficiency effects and emphasis on general principles rather than empirical issues could lead to policy errors.

Suggested Citation

  • Simmons, Phil, 1997. "Microeconomic Reform in the Australian Sugar Industry?," Economic Analysis and Policy, Elsevier, vol. 27(1), pages 85-99, March.
    • Handle: RePEc:eee:ecanpo:v:27:y:1997:i:1:p:85-99
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    Keywords

    Sugar;

    JEL classification:

    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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