The coconut industry of North Sulawesi is dominated by a small number of products which are primarily exported from the province. Accordingly, demand for these products 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. From this context an equilibrium displacement model is used to examine the intra-industry consequences of investments into farm and marketing sector efficiency. These investments are assessed in terms of the distribution of producer surplus benefits that they generate, and their ability to improve the position of coconut farmers.


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