Cane Payment Systems

Cane payment systems play a central role in establishing the incentives that growers and millers face. Not only do they influence heavily the incentives to improve technical efficiency, they also have far-reaching implications for investment decisions. This article analyses the different types of cane payment systems that can be found in cane industries around the world. This includes a discussion of how cane payment systems allocate revenue between growers and millers, and how the incentives embodied in different cane payment systems can influence the technical performance of an industry and the incentives to expand production. In doing so, we demonstrate the far-reaching influence that different cane payment systems have on the world's major sugar industries.