Effects of import tariff implementation policy of refined sugar products on its competitiveness in indonesia

Abstract

This study was aimed at determining the effects of applied import tariff on welfare distribution, consumer expenditures, producer revenues, and efficiency losses (in production, consumption and net effect), as well as the level of competitiveness of cane sugar in Indonesia by calculating the Domestic Resource Cost (DRC). The evaluation showed that the welfare distribution of the government revenues, changes in consumer and producer surpluses, net economic losses in production and consumption, and economics of foreign exchange were influenced by import tariff and the price elasticity of supply and demand. Increasing the import tariff caused the welfare distribution rate to grow higher. The competitiveness of sugar products in Indonesia was evaluated using the of East Java wet and dry farmlands and was found to be higher than similar products from overseas as shown by DRC value of less than 1.

Keyword: Sugar, Welfare distribution, Domestic Resource Cost (DRC), import tariff, Indonesia