Volume 31, Issue 2, 2001

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Articles:

  • Price and Subsidy Policy on Soil Conservation: Application to Smallholder Tea Growers (Jayanath Ananda, Gamini Herath)
  • The Offshore Services Industry in the Caribbean: A Conseptual and Sub-Regional Analysis (Nand C. Bardouille)
  • Industry Structure and the Reform of the Queensland Sugar Industry: A Computational Model (Rodney Beard, Malcolm Wegener)
  • The Internal and External Transfers of the Turkish Economy: A Financial Computable General Equilibrium Analysis (Gül Ipek Tunç)
  • Australian Rainforest Timbers as a Valuable Resource: Community Perceptions and Purchase Habits of Rainforest Timber Products (D.B. Smorfitt, J.L. Herbohn, S.R. Harrison)
  • Analysis of Property Values, Local Government Finances and Reservation of Land for National Parks and Similar Purposes (Clem Tisdell, Leonie Pearson)
  • Regulation and Measurement of the Productivity Offset (Noel D. Uri)
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Price and Subsidy Policy on Soil Conservation: Application to Smallholder Tea Growers

Jayanath Ananda, Gamini Herath

Pages: 99-110

Abstract:
The role of commodity prices and subsidies on the adoption of soil conservation has been widely debated yet is poorly understood. One reason for this is the complex nature of the relationship between soil loss and yield damage. This paper examines the effects of price and subsidy policy in adoption of soil conservation measures in tea lands in Sri Lanka. The soil conservation technologies considered are lateral drains, stone terraces and Sloping Agricultural Land Technique (SALT). The study uses a non-linear yield damage function to estimate tea yield loss due to soil erosion. The yield function is then used in conjunction with a simple analytical model to examine the effects if changes in price and subsidies on the incentives to adopt various soil conservation technologies. When there is a yield increment with soil conservation, increases in both prices and subsidies are found to make soil conservation economically attractive.  

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The Offshore Services Industry in the Caribbean: A Conceptual and Sub-Regional Analysis

Nand C. Bardouille

Pages: 111-124

Abstract:
The proliferation of offshore centres in the Caribbean is providing recourse for the precipitate decline of national revenue and terms-of-trade for Caribbean primary commodity exporting nations. This is particularly the case in the Windward Islands, which have traditionally relied on banana export. The article contends, therefore, that the development of offshore sector frameworks constitute deliberate public policy-making aimed at crafting a revised national development dynamic as well as economic diversification imperatives in the region. This represents an important shift in approaches to national development planting – especially amongst emerging offshore jurisdictions like Grenada and the Commonwealth of Dominica.
This article maintains, however, that while Caribbean islands especially in the Organization of Eastern Caribbean States (OECS) sub-region are attempting to harness a strategic growth industry as a principal agent in national and sub-regional economic transformation, it is premature for OECS policy-makers to view the offshore sector as replacing the agricultural sector at least in the short- to medium-term. This argument is advanced through an explicit review of the offshore banking and international business companies (IBC) sub-sectors of Dominica’s offshore services regime.

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Industry Structure and the Reform of the Queensland Sugar Industry: A Computational Model

Rodney Beard, Malcolm Wegener

Pages: 125-137

Abstract:
A 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. Implementations 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 on a monophony situation, a contestable market, and under the current institutional agreement. 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 place where the threat of competition form 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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The Internal and External Transfers of the Turkish Economy: A Financial Computable General Equilibrium Analysis

Gül Ipek Tunç

Pages: 139-159

Abstract:
After the introduction of 1980 stabilization program, both the internal and external transfer problems gained importance for the Turkish economy. This study analyses interactions between the real and financial sectors of the Turkish economy within the framework of a Financial Computable General Equilibrium model, based on the 1990 data. In the model, real and financial sub-models are interrelated through various channels such as flow of funds, interest rate and monetary policy. One of the main conclusions to be drawn from the analyses is that in the case of fixed real wages the adverse effects of policy changes on the economy are much larger compared to the case of fixed nominal wages.

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Australian Rainforest Timbers as a Valuable Resource: Community Perceptions and Purchase Habits of Rainforest Timber Products

D.B. Smorfitt, J.L. Herbohn, S.R. Harrison

Pages: 161-173

Abstract:
Australia has some of the highest quality cabinet timber species in the world, sourced primarily from tropical rainforests, and this has been a long tradition of using these to produce furniture. Cessation of logging of crown rainforest land has reduced resource supply, but there is now considerable interest in growing rainforest timbers on private land. In order to formulate reforestation policy and industry development, it is desirable to know how the community views these timbers. This study provides the first quantitative description of the public’s perceptions and purchases of Australian rainforest cabinet timber (ARCT) products in North Queensland. It provides information that contributes to understanding the factors affecting the demand for products made from rainforest cabinet timbers. The majority of the North Queensland community consider Australian rainforest cabinet timbers to be vastly superior to composite wood products. Eucalypt species are also considered superior to exotic conifers which are the main species grown by Australian state forest services. Reasons for reluctance to purchase products made from RFTs include high cost but also desire to protect the rainforests and ‘stage of life’. The main purchasing group are clustered on the 25-54 year age category. These findings have implications for government initiatives to promote afforestation with rainforest species.

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Analysis of Property Values, Local Government Finances and Reservation of Land for National Parks and Similar Purposes

Clem Tisdell, Leonie Pearson

Pages: 175-185

Abstract:
The impact on local government finances of the reservation of land for national parks in local government areas has been a bone of contention. This article identifies conditions in which the reservation of land for national parks increases total rateable unimproved property values in a local government area. The level of a local government’s receipts from rates tends to move in the same direction as the total value of rateable property in its local government area. Thus, even through national parks and similar natural areas are not rateable, it is possible that the reservation of some local government areas for such protection can increase in local government revenue are specified. Local governments may wish to maximise their income for discretionary expenditures rather than total receipts. Conditions are specified in which the reservation of local areas for national parks fosters – and conflicts with – this objective. Depending upon the nature of the relevant functions, local government finances may benefit from the existence of national parks in a local government area or to be adversely affected by their presence. As far as we are aware, the conditions for this have not been previously specified.

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Regulation and Measurement of the Productivity Offset

Noel D. Uri

Pages: 187-203

Abstract:
Calculation of the productivity offset or the X-factor used in setting price caps has a fundamental flaw when it is based on conventional growth accounting total factor productivity analysis. The problem is discussed in the context of incentive regulation used by the Federal Communications Commission in the United States and the appropriate correction is indicated. An example of the problem and its correction, using the access charge for interstate service in telecommunications, is provided. The correction shows that the appropriate X-factor is 9% greater than that based on conventional growth accounting total factor productivity analysis.

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