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Pulling the Plug on Monopoly Power: Reform for the Canadian Wheat Board

Author

Listed:
  • Richard Pedde

    (Farmer)

  • Al Loyns

    (University of Manitoba)

Abstract

Change is in store for the Canadian Wheat Board (CWB), which has the legal authority to purchase all Western Canadian wheat and barley produced for export and for domestic human consumption. The CWB defends the continuation of this legal authority on the premise that by selling together, Western Canadian farmers exert more market power in wheat markets and receive higher returns than they could if competing against each other. However, the declining global market share of Canadian wheat makes it increasingly unlikely that the CWB is able to exert market power: the CWB is a price taker in many markets. In the absence of strong evidence that the CWB is able to achieve its policy goal of higher returns to farmers because of the compulsory purchase of grains, its monopoly over Western Canadian wheat and most barley sales should be reconsidered with an eye to ending it.

Suggested Citation

  • Richard Pedde & Al Loyns, 2011. "Pulling the Plug on Monopoly Power: Reform for the Canadian Wheat Board," e-briefs 118, C.D. Howe Institute.
    • Handle: RePEc:cdh:ebrief:118
    as

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    File URL: https://www.cdhowe.org/public-policy-research/pulling-plug-monopoly-power-%C2%A0reform-canadian-wheat-board
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    References listed on IDEAS

    as
    1. W. H. Furtan & D. F. Kraft & E. W. Tyrchniewicz, 1999. "Can the Canadian Wheat Board Extract Monopoly Rents? The Case of the Spring Wheat Market," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 6(3), pages 417-437.
    2. Peter G. Helmberger & Sidney Hoos, 1963. "Economic Theory of Bargaining in Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 45(5), pages 1272-1280.
    3. Kranti Mulik & Won. W. Koo, 2011. "Substitution between U.S. and Canadian Wheat by Class," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 59(4), pages 417-433, December.
    4. Sylvain Charlebois & Richard Pedde, 2008. "A bushel Half Full: Reforming the Canadian Wheat Board," e-briefs 68, C.D. Howe Institute.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Governance & Public Institutions; Canadian Wheat Board (CWB); monopoly;
    All these keywords.

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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