Potential Payoff from R&D in the Coconut Industry of North Sulawesi, Indonesia |
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Authors: | Benjamin Henderson Lynn Henry Gordon MacAulay Jen Tatuh |
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Affiliation: | Food and Agricultural Organization of the United Nations, Italy; The University of Sydney, Faculty of Agriculture, Food and Natural Resources, Australia; Socio-economic Department, Faculty of Agriculture, Sam Ratulangi University, Manado, North Sulawesi, Indonesia |
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Abstract: | The coconut industry of North Sulawesi, one of the primary coconut-producing provinces of Indonesia, is dominated by a small number of products that are primarily exported overseas. As they only comprise a small share of the global coconut product export market, demand for coconut products from North Sulawesi is generally very elastic. Conversely, the supply of coconuts is highly inelastic, especially in the short to medium term. Hence, small shifts in supply and demand lead to large fluctuations in farmer incomes. In this context, an equilibrium displacement model is used to examine the intra-industry consequences of R&D investments in farm productivity and product development. These investments are assessed in terms of the producer surplus benefits that they generate. |
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Keywords: | equilibrium displacement model coconuts producer surplus |
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