**Table 9. Base Scenario – FUNPI contribution and complementary policies on costs (3)**

|**Policy**|**(I) Base**<br>**Scenario -**<br>**no FUNPI**|**(II) = (I) +**<br>**FUNPI**|% change<br>(vs I)|**(IX) = (I) +**<br>**FUNPI + 2**<br>**efficent**<br>**exporters**|% change<br>(vs I)|**(X) = (I) +**<br>**FUNPI + 38**<br>**efficent**<br>**exporters**|% change<br>(vs I)|
|---|---|---|---|---|---|---|---|
|_International Price (USD/ton)_|799.88|799.88||799.88||799.88||
|_Trade taxes (USD/ton)_|93.50|199.88||199.88||199.88||
|_International Price net of taxes (USD/ton)_|706.38|600.00|-15.1%|600.00|-15.1%|600.00|-15.1%|
|_Intermediate Price (USD/ton)_|519.54|426.66|-17.9%|444.92|-14.4%|519.66|0.0%|
|_Farm-gate Price (USD/ton)_|435.95|351.00|-19.5%|367.68|-15.7%|436.06|0.0%|
|_Exporters + cashew processors profit (USD/ton)_|73.80|67.20|-8.9%|61.57|-16.6%|23.17|-68.6%|
|_of which, exporters (USD/ton)_|70.23|61.78|-12.0%|56.45|-19.6%|18.96|-73.0%|
|_of which, cashew processors (USD/ton)_|348.26|441.14|26.7%|422.88|21.4%|348.14|0.0%|
|_HHI exporters and cashew processors_|487|510||558||241||
|_Traders profit (USD/ton)_|40.94|34.66|-15.3%|35.91|-12.3%|40.95|0.0%|
|_HHI traders_|256|256||256||256||
|_Quantity (tons)_|156024|140000|-10.3%|143287|-8.2%|156045|0.0%|

For leveling the playing field of high-cost exporters to be an effective instrument in recovering farmer prices to pre-FUNPI levels, the policy must be aggressive (in the simulation, bringing 38 exporters to the efficient cost structure). Balancing the export segment in the direction of more efficient players intensifies competition and reduces exporters’ profits, while at the same time deconcentrates the segment (HHI goes from 510 without complementary policy to 241 with an aggressive policy).

Columns XI to XIII in Table 10 simulate the joint effect of the FUNPI contribution and a complementary policy that fosters competition by 10 percent at the exporter segment, trader segment and both segments, respectively. The main difference with exercises V to X is that the number of competitors increases but cost structures remain unaltered. Qualitative results are similar as those in Table 7 and Table 8. An important result, however, is the need to reduce costs (at the exporter or trader segment of the value chain) as the after-FUNPI contribution perfectly competitive solution would take the farmer price to 393 USD/ton (still below the pre tax level of 435.95 USD/ton under the current competitive conditions).

**Table 10. Base Scenario – FUNPI contribution and complementary policies on entry**

|**Policy**|**(I) Base**<br>**Scenario -**<br>**no FUNPI**|**(II) = (I) +**<br>**FUNPI**<br>|% change<br>(vs I)|**(XI) = (I) +**<br>**FUNPI + 10%**<br>**additional**<br>**exporters**|% change<br>(vs I)|**(XII) = (I) +**<br>**FUNPI + 10%**<br>**additional**<br>**traders**|% change<br>(vs I)|**(XIII) = (I) + FUNPI**<br>**+ 10% additional**<br>**exporters and**<br>**traders**|% change<br>(vs I)|
|---|---|---|---|---|---|---|---|---|---|
|_International Price (USD/ton)_|799.88|799.88||799.88||799.88||799.88||
|_Trade taxes (USD/ton)_|93.50|199.88||199.88||199.88||199.88||
|_International Price net of taxes (USD/ton)_|706.38|600.00|-15.1%|600.00|-15.1%|600.00|-15.1%|600.00|-15.1%|
|_Intermediate Price (USD/ton)_|519.54|426.66|-17.9%|434.63|-16.3%|426.25|-18.0%|434.26|-16.4%|
|_Farm-gate Price (USD/ton)_|435.95|351.00|-19.5%|358.28|-17.8%|354.85|-18.6%|362.22|-16.9%|
|_Exporters + cashew processors profit (USD/ton)_|73.80|67.20|-8.9%|62.40|-15.4%|67.39|-8.7%|62.57|-15.2%|
|_of which, exporters (USD/ton)_|70.23|61.78|-12.0%|57.08|-18.7%|62.00|-11.7%|57.28|-18.4%|
|_of which, cashew processors (USD/ton)_|348.26|441.14|26.7%|433.17|24.4%|441.55|26.8%|433.54|24.5%|
|_HHI exporters and cashew processors_|487|510||473||511||473||
|_Traders profit (USD/ton)_|40.94|34.66|-15.3%|35.21|-14.0%|31.65|-22.7%|32.15|-21.5%|
|_HHI traders_|256|256||256||233||233||
|_Quantity (tons)_|156024|140000|-10.3%|141444|-9.3%|140766|-9.8%|142221|-8.8%|

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