ABSTRACT
In recent years, research focussing on modelling agricultural trade issues has been an important activity for many economists. The most notable attempts — for example, those by OECD (1987), Roningen and Dixit (1990), and Tyers and Anderson (1992) -- have increased awareness of the costs of agricultural support policies and have identified the likely winners and losers from agricultural policy reform. However, one failing of these empirical models is that they ignore issues associated with market structure, assuming that agricultural produce is directly transferred from farmers to consumers, thus omitting the existence of the food processing and distribution industries. Further, given the structural and behavioral characteristics of these industries (see Sutton 1991), by making this exclusion, the role of market structure and its potential influence on the outcome of policy reform is ignored.
