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Efficiency losses in milk marketing boards - the importance of exports

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  • Rolf Jens Brunstad
  • Ivar Gaasland
  • Erling Vårdal

Abstract

A milk marketing board (MMB) is a well known instrument for regulating the markets for dairy products. MMBs are based on price discrimination, and receipts from sales are pooled so that the farmers receive a single price adjusted for composition and quality. Using a numerical model, we find that the economic welfare cost of the Norwegian MMB, is as much as 26.3% of the milk production value. This computed cost is far larger than for the other countries with MMBs. The main reasons are that exports are a major ingredient of the Norwegian system, and that production costs are very high

Suggested Citation

  • Rolf Jens Brunstad & Ivar Gaasland & Erling Vårdal, 2005. "Efficiency losses in milk marketing boards - the importance of exports," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 31, pages 77-97.
    • Handle: RePEc:noj:journl:v:31:y:2005:p:77-97
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    References listed on IDEAS

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    Cited by:

    1. Malikov, Emir, 2016. "Estimating Multi-Product Production Functions and Productivity using Control Functions," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235108, Agricultural and Applied Economics Association.
    2. Gaasland, Ivar, 2009. "Agriculture versus fish - Norway in WTO," Food Policy, Elsevier, vol. 34(4), pages 393-397, August.
    3. Özkan Gülzari, Şeyda & Åby, Bente Aspeholen & Persson, Tomas & Höglind, Mats & Mittenzwei, Klaus, 2017. "Combining models to estimate the impacts of future climate scenarios on feed supply, greenhouse gas emissions and economic performance on dairy farms in Norway," Agricultural Systems, Elsevier, vol. 157(C), pages 157-169.

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    More about this item

    Keywords

    Milk marketing boards; Norwegian dairy policy; price discrimination;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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