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Efficiency losses in milk marketing boards : the importance of exports

Brunstad, Rolf Jens; Gaasland, Ivar; Vårdal, Erling
Working paper
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URI
http://hdl.handle.net/11250/162740
Date
2006-02
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  • Discussion papers (SAM) [640]
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.
Publisher
Norwegian School of Economics and Business Administration. Department of Economics
Series
Discussion paper
2006:8

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