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Deregulation and regional specialization: Evidence from Canadian agriculture

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  • Colin A. Carter
  • Shon M. Ferguson

Abstract

For about 70 years, the Canadian Wheat Board (CWB) was one of the world's largest export “single desk” state traders in agriculture, until it was deregulated in 2012 and stripped of its marketing powers. One of the main crops controlled by the CWB was barley. We estimate the impact of the removal of the CWB's single desk on the spatial pattern of malting barley production in Western Canada. We find that deregulation encouraged growers located closer to malt barley processing plants to increase production relative to growers located further from the plants. This change in cropping patterns after deregulation can be explained by efficiency gains, combined with transportation and handling cost savings. Dérégulation et spécialisation régionale : l'exemple de l'agriculture canadienne. Pendant près de soixante‐dix ans, la Commission canadienne du blé (CCB) représenta l'un des plus grands guichets uniques monopolistiques de négoce agricole dans le monde jusqu'à sa déréglementation en 2012, date à laquelle elle perdit toutes ses prérogatives commerciales. L'une des principales cultures contrôlées par la CCB était l'orge. Nous avons évalué l'impact de la suppression du guichet unique de la CCB sur la distribution géographique de la production d'orge de brasserie dans l'Ouest canadien. Consécutivement à la déréglementation, nous avons remarqué que plus les producteurs étaient situés à proximité des usines de transformation d'orge brassicole, plus ils augmentaient leur production. Ce changement dans le système de culture, postérieur à la déréglementation, peut s'expliquer par des gains en efficacité ainsi que des économies en matière de coûts de transport et de manutention.

Suggested Citation

  • Colin A. Carter & Shon M. Ferguson, 2019. "Deregulation and regional specialization: Evidence from Canadian agriculture," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(4), pages 1497-1522, November.
    • Handle: RePEc:wly:canjec:v:52:y:2019:i:4:p:1497-1522
    DOI: 10.1111/caje.12411
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    Cited by:

    1. Cardwell, Ryan & Ghazalian, Pascal L., 2022. "State-trading enterprises and productivity: Farm-level evidence from Canadian agriculture," 96th Annual Conference, April 4-6, 2022, K U Leuven, Belgium 321159, Agricultural Economics Society - AES.
    2. Colin A. Carter & Shon M. Ferguson, 2020. "State trading deregulation and prairie durum wheat production," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 68(1), pages 107-116, March.

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    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation

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